30,000 jobs bounced out

Around one in ten banking jobs could be lost as a result of a change in the law which will mean cheques could be "bounced" electronically.

The 30,000 redundancies - caused by a system in which there would no longer be a physical exchange of cheques between banks - would come on top of an estimated 37,000 job losses already predicted to go under the general drive for increasing productivity.

Treasury ministers want to relax the Bills of Exchange and the Cheques Acts which stipulate that cheques have to move between banks. If, for instance, an account holder at Lloyds accepts a cheque as payment from a Barclays customer, Lloyds has to pass the cheque back to Barclays so that it can verify there are funds to meet the debt.

The Government is planning to change the law so that the verification can be completed on screen. Ministers are hoping to amend the law before the summer, or by autumn at the latest.

That would mean thousands of jobs would go in high-street branches, plus 40 per cent of staff dedicated to the clearing system, the Banking Insurance and Finance Union says. The estimate of job losses comes from a senior source in Lloyds, according to the union which wants to ensure that all staff displaced are redeployed.

Ed Sweeney, general secretary of the union, said that while a Treasury consultation paper on the subject concerned itself with safeguards to protect customers from fraud, it made no reference to the social consequences of the change. "It's time we ended the scandal of overworked and understaffed branches who get by only on overtime, paid and unpaid."

A spokeswoman for Lloyds-TSB said that even with a change in the law it would be "a long time" before banks agreed on implementation of the new system. She added: "We don't know what the implications for jobs are, but the union estimate has no basis in fact ... at Lloyds we have a record of redeploying employees and cutting staff through natural wastage."