Page last updated at 16:06 GMT, Monday, 6 June 2011 17:06 UK

Peers criticise plan to phase out cheques

The government's stake in the bailed-out banks should be used to ensure that cheques are not phased out, ministers in the Lords have been told.

The UK Payments Council is planning to phase out cheques by 2018, but only if viable alternatives are found.

At question time on 6 June 2011, Conservative former chancellor Lord Lawson of Blaby said the government should encourage at least one bank to continue to offer cheques.

He asked the minister: "Will you undertake to use the power of the government's holdings in a number of banks, and indeed the way these are privatised when they will be as I hope, to encourage competition in retail banking in this country and as part of that competition to try and encourage at least one of the new entrants will continue to provide a chequing service?"

Treasury Commercial Secretary Lord Sassoon said the government believed cheques should not be phased out unless "suitable alternatives are in place for all users".

He added: "There has to be, in the view of the government, also a paper-based system."

Labour Treasury spokesman Lord Eatwell asked how the government would assess the alternatives, adding: "If those criteria are not met will they require that cheque payments be maintained?"

Lord Sassoon noted that the UK Payments Council has said that the new system "had to be generally available, it had to be generally acceptable to the users and it had to be widely adopted".

Peers also asked questions on NHS reform, supporting the Brittle Bone Society and strengthening economic and monetary co-ordination within the EU.

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