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MP ‘sees nothing but a fudge’ on phasing out of cheques

If charities thought cheques being phased out by 2018 was a foregone conclusion, they might have to think again.

The Payments Council proposed the move last year and has been consulting charities and sector umbrella bodies, as well as small businesses and other groups. Many, including Citizen’s Advice and the Institute of Fundraising, had come round to the idea that the end of cheques was inevitable and it was better to help the Payments Council manage the process than to campaign against it.

But the MPs on the Treasury select committee, which met at Portcullis House, Westminster, on Tuesday, were less easily swayed by the idea.

“I want to keep cheques,” John McFall, Labour and Co-operative Party MP and chair of the committee, told Paul Smee, the Payments Council’s chief executive, as he pulled a chequebook out of his pocket with a flourish.

“It’s beyond belief that the use of cheques is in terminal decline,” he said, pointing out that they accounted for transactions worth £1.4 trillion in 2008.

Andrew Tyrie, Conservative MP for Chichester, put Smee even more firmly non the spot. “Your members benefit from the decline of cheques,” he said. “What gives you the right to decide this?” Tyrie criticised Smee for being unable to provide an estimated figure for the how much the move would cost consumers.

Smee said the decision had been taken in a transparent way and in consultation with those affected by the phasing out of cheques. He said there would be a review in 2016, by which time the alternatives would have to be “available, accessible and already being used” in order for cheques to be phased out.

But that wasn’t enough to satisfy the MPs. “I can’t see anything other than a fudge here,” said McFall. Sir Peter Viggers, the Conservative MP for Gosport, summarised his view to laughs from the panel. “You and I are in terminal decline,” he said. “But we wouldn’t welcome the setting of an end date to close us down!”

So, should charities stop worrying about how they’ll live without cheques? The committee has no powers to prevent the move, but it has asked Smee to produce an independently verified cost-benefit analysis and then return to answer more questions. Smee was also warned that Parliament could, if necessary, intervene on the issue.

  • Scott Gray

    It’s natural to worry about the loss of a payment method that so many people have been comfortable with for such a long time. After all, cheques have been around for 350 years.

    But, that doesn’t mean that – come 2018 – we can’t find another cost-effective, paper-based payment scheme to replace cheques. Going back 8 years, the Euro became legal tender for the first time and Smartcards (eg. the Oyster card) weren’t yet on the scene. Now smartcards are used by millions within the UK every day.

    The Payments Council’s plan and timeline will prevent cheques from being ditched before suitable alternatives are in place. The most important thing is to stay on top of what those alternatives might be and then to explore how they could work for your charity.

    Scott Gray
    Managing Director
    Rapidata Services Plc