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Mr. Dalyell: The hon. and learned Member for Orkney and Shetland (Mr. Wallace) has covered the point that I wish to raise about the Law Society of Scotland and I look forward to the Minister's response.

Mr. McLeish: Although we were slightly critical of the previous group of amendments, I may have some better news about the present group.

Amendments Nos. 317 to 319 deal with the definition of Scots private law contained in clause 111(3), the interpretation clause of the Bill. I understand that they were proposed by the Law Society of Scotland. They raise important, although clearly technical, questions about the words chosen to describe what is meant by the term "Scots private law" for the purposes of the Bill. Lord Gill, chairman of the Scottish Law Commission, has also made some helpful comments about this part of the Bill. I am willing to consider the issues further in the context of what is meant by Scots private law for the purposes of the Bill. If any amendments are required I shall introduce them on Report. I hope that, with that assurance, the hon. and learned Member for Orkney and Shetland (Mr. Wallace) will not seek to press the amendments.

The same applies to amendment No. 467, which seeks to delete the Scots private law provision in the part of schedule 5 which reserves fiscal, economic and monetary policy. The provision makes it clear that, despite the legislative competence of the Scottish Parliament in respect of Scots private law, which is conveyed by clause 28(4), the Parliament cannot legislate in relation to interest due on payments or refunds in respect of taxes or excise duties. The Scottish Parliament will, however, be able to legislate on interest and refunds arising from other payments or liabilities.

We are considering whether the provision is required and whether we can rely on other provisions in the Bill to achieve the desired effect. If any amendments are required, I shall introduce them at a later stage. Again, having given the reassurance that we shall consider the

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points that have been raised, I hope that the hon. Member for North Essex (Mr. Jenkin) will withdraw the amendment.

Mr. Jenkin: I am grateful to the Minister for his comments and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Gorrie: I beg to move amendment No. 320, in schedule 5, page 61, line 3, at end insert--

'Exception from reservation

The issue of bank notes by Scottish banks.'.

The Chairman: With this, it will be convenient to discuss amendment No. 468, in page 61, line 3, at end insert--'Exception from reservation--

Scottish bank notes issued by the Scottish banks'.

Mr. Gorrie: The amendment deals with the issue of bank notes by Scottish banks--and amendment No. 468 would have the same effect. The Conservatives are certainly following in the excellent tradition of Sir Walter Scott. One of his defects was that he was high Tory Unionist, but he led a strong campaign to save Scottish bank notes when there was a risk to them in about 1827. On this issue, the Tories are on the right lines.

Mr. Jenkin: We were also on the right lines when we saved the Scottish pound note when the pound coin was introduced in the 1980s.

Mr. Gorrie: The Minister may be able to assure us that there is no threat to Scottish bank notes, but the Bill and the explanatory document provided by the Scottish Office do not make that clear in that the reserved items are financial services, banking and deposit taking, all of which could cover bank notes.

Scottish bank notes are a highly prized part of Scottish culture. They sometimes cause us problems elsewhere in the United Kingdom or abroad, but we greatly value the independence that they give us.

6.45 pm

Mr. John McAllion (Dundee, East): If, as the hon. Gentleman's party suggests, Britain joins the single currency in 1999, how would he then save the Scottish bank note?

Mr. Gorrie: I am not an expert in these matters, but I understand that, although one side of a European bank note or coin would have a standard European symbol denoting that it was worth one or 10 euros, countries could have their own symbols on the other side. So it would be quite possible to have a Scottish or English note worth a certain number of euros.

We are keen for the Minister either to accept our amendment--which seems the easiest thing to do, although it is always hard for Ministers--or, if there is no threat to Scottish bank notes, to put such an assurance in black and white in the Bill. Scottish bank notes are a significant part of Scottish life and it would be very sad if in future there was a threat to them that the Scottish Parliament could not address.

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Mr. Jenkin: This group of amendments falls into exactly the same category as the previous one, in that if there was one matter over which the Scottish Parliament would be expected to take control, it would be an issue of such symbolic importance as the Scottish bank note.

I understand that the hon. Member for Edinburgh, West (Mr. Gorrie) is not correct about the issue of the euro, as Scottish bank notes are not themselves legal tender; they are merely promissory notes issued under the Bank Notes (Scotland) Act 1845 and the Currency and Bank Notes Act 1928. They are backed by reserves in the banks concerned, but they are not themselves legal tender. For that reason, they could remain in circulation as promissory notes if they were reissued as euro notes in the event that we joined the single currency. Of course, the European central bank and the other member states would not recognise them as legal tender, but, as they do not have such recognition in England or, indeed, in Scotland, that would not be a problem. However, it would be interesting to hear on the record whether that is also the Government's view.

The issue has symbolic importance. As the United Kingdom Parliament allowed Scottish notes to continue in issue long after the currency union between England and Scotland, it is extraordinary that they should not become the responsibility of the Scottish Parliament.

Of course, the Government must reserve legal tender as United Kingdom issue over anything to do directly with currency, but, as Scottish bank notes are technically not currency, I fail to understand, and ask the Minister to explain, why promissory notes could not become a matter for the Scottish Parliament, rather than the United Kingdom Government, to supervise.

Mr. Swinney: The hon. Member for Dundee, East (Mr. McAllion) asked the hon. Member for Edinburgh, West (Mr. Gorrie) about what would happen if the United Kingdom joined a single European currency. Some years ago, my hon. Friend the Member for Banff and Buchan (Mr. Salmond) asked the director of the European Monetary Institute about the status of Scottish bank notes in those circumstances. He was told that the Maastricht treaty made provision for existing banking practice in member states to be respected, as far as possible, as the single currency developed. That shows that even in the debate about the emergence of the single currency, there is a role for the continued use of Scottish bank notes, particularly given their distinctive position in Scottish financial history.

The director of the EMI also told my hon. Friend that the previous Government had--not surprisingly--made no representations about the future of Scottish bank notes in those circumstances. Have the new Government made any such representations?

I associate the Scottish National party with the remarks of the hon. Member for Edinburgh, West. That important and distinctive aspect of Scottish financial history should be respected and borne in mind as deliberations on a single European currency move forward.

Various anachronistic issues arise from a detailed scrutiny of the reserved powers. That does not suggest a logical pattern. It is legitimate to argue that promissory notes issued by a Scottish clearing bank should retain their current status. The Scottish Parliament should be responsible for them.

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This is an important debate, because it deals with the symbolism of the Scottish Parliament and some of the issues that it should address. I hope that the Minister will have something positive to say about the amendments, which have been proposed in a positive spirit across the different views of the Opposition parties.

Mr. McAllion: I had not intended to intervene, but a mini-debate within the debate has been conjured up about the future of Scottish bank notes in the event of a single currency and whether the Scottish Parliament or the United Kingdom Parliament would be able to preserve those notes. I take the point of the hon. Member for North Tayside (Mr. Swinney) about the conversation that the leader of his party had with the director of the EMI. Is he suggesting that the Bank of Scotland tenner, the Royal Bank of Scotland tenner and the Clydesdale bank tenner--which we still have difficulty in getting recognised down here after 300 years of Union with England--will immediately be recognised throughout the 15 member states of the European Union?

The United Kingdom joining a single European currency could be the death knell for the Scottish bank note. It is unrealistic to argue for the benefits of a single currency--not having to worry about exchange rates or changing money for every holiday--and also to expect £100 notes from the Clydesdale bank to be recognised in Germany as worth the same as the notes that they have. It would be interesting to hear the Government's position on that.

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