Banks: Cheques

Lord Elystan-Morgan Excerpts

Monday 6th June 2011 Lords Chamber

[Lord Sassoon]

My Lords, I am happy to confirm to my noble friend that competition is key to so much of making our banking system work better than it has in some respects in the recent past. That is precisely why the Independent Commission on Banking was given competition as the heart of its remit. Whether in relation to alternative payment mechanisms or to so many other things in banking, I completely agree that competition has to be at the heart of it. Again, when it comes to the Government’s shareholdings in the banks, the independent commission has made some provisional findings which very much touch on the banks that the Government control.

[Lord Elystan-Morgan]

My Lords, does the Minister agree that our forebears might regard the capacity to extract Treasury notes from a hole in the wall as the greatest miracle since Moses struck the rock? Will he undertake, however, that if this matter is raised seriously again by the banks there should be a wholesale study into the question of third-party rights in relation to bills of exchange, choses in action and garnishee orders?

[Lord Sassoon]

My Lords, we are straying a bit from the rather important and focused question of cheques and the Payments Council, which those other forms of payment extend rather beyond. The critical thing is that no decisions are to be taken precipitately. As I have said a couple of times, the banks recognise what they have to do. This issue will remain a matter of considerable public focus, not least because the Treasury Committee in another place recently announced that it is reopening its own inquiry into the future of cheques. The issue will remain very much in the public eye and the pressure will be on the banks and the Payments Council to come up with a solution that works for the whole country.