Written question asked by Lord McFall of Alcluith (Labour), in the House of Lords. It was answered by Lord Sassoon (Conservative) on Tuesday, 21 June 2011.

Banking: Cheques

Question: To ask Her Majesty’s Government what information they have received from the Payments Council regarding a cost-benefit analysis of its proposal to phase out cheques by 2018.

Answer: The Payments Council has said that a decision on the future of the cheque will be taken in 2016, when a full cost benefit analysis has been completed. The Payments Council has commissioned an independent consultancy to advise on the cost-benefit analysis. A first report has found that definitive conclusions cannot be drawn in the face of uncertainty about the alternatives to the cheque that may emerge. A second report has provided an analysis of each of the users who will be affected, proposed a model of the costs and benefits and identified what information is available and the gaps that need to be filled. Further work on this is ongoing. A summary of that report is available on the Payments Council website. The Government are clear that any alternative system will need to replicate the flexibility and ease of use of cheques, while improving processing times, and be cost effective. An alternative will need to have been tested in practice and be widely available, widely acceptable and widely adopted by users who do not currently have a suitable alternative. Until this is demonstrated, there is not a credible and coherent case for abolishing cheques.

Secondary information