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Mr. Heath:
I am grateful to the hon. Lady. To return to the point I was making, when people are familiar with the notes on a daily basis, the notes do not pose a problem. In Scotland, people dealing with Scottish notes would have no problem recognising those that are in common circulation, even if, rather than the Queen of the United Kingdom, they showed the golfer Jack Nicklaus instead. Some people might expect that to be a joke, but it is not—it is a serious proposal that has been thought up in Scotland to celebrate its national sport and the pre-eminence of golf in Scotland. Nevertheless, if I were sitting in a little shop in Kingsbury Episcopi—I cannot do so, because it has closed down—I would not recognise a note featuring Jack Nicklaus as a familiar banknote, so I would have grave doubts. I would hold such a note up to the light and take a look at it, thus
causing the offence about which the hon. Member for Dumfriesshire, Clydesdale and Tweeddale is concerned, as it would not immediately tell me that it was a proper promissory note from a clearing bank of the United Kingdom. I would take great care before accepting such a note.
I would not be equipped with the helpful poster issued by the Scottish clearing bank, and while a queue built up, and the next person waited to buy a pint of milk, I would not have easy access to the internet, to check whether it was right. I would be in some difficulty if I was serving in that shop. That is what concerns me, which is why—I certainly do not intend to oppose the Bill—the implications of the measure require careful consideration in Committee. The hon. Member for Thurrock has suggested a solution that would require a great deal of co-operation between the various note-issuing authorities across the UK to come up with a form of commonality. In the long run, if it were acceptable to the Scottish clearing banks, the people of Scotland, the Northern Irish Banks and the people of Northern Ireland, it would be an excellent idea to find some commonality and recognise that a note was a UK banknote that reflected the nations of the UK as well. That would be splendid.
Andrew Mackinlay: Yes, it should have a common side, like the euro.
Mr. Heath: As the hon. Gentleman correctly says, it reflects what already happens with the euro coinage—not the notes. When the euro was being designed, no one suggested that each country should issue its own notes, or that in each country, the €5 note should have a different pattern reflecting the different EU nations that are part of the eurozone. No one would suggest that that was a sensible way of doing business in Europe, and I have my doubts as to whether it is a sensible way of doing business in this country, either.
There are details of the Bill that I am not entirely happy with. It is light on definition. I would have expected at least a clause on definition so that we know what we are talking about. I hope the hon. Member for Dumfriesshire, Clydesdale and Tweeddale will not consider this unnecessarily derogatory, but in some ways the Bill reads more like an early-day motion than a law governing the currency of this country. It does not have sufficient precision in its drafting to be an adequate Act, but I accept that that can be dealt with in Committee. Cross-references to the Banking Bill are needed, apart from anything else.
David Mundell: Indeed. The point that the hon. Gentleman makes is to some extent valid. I sought to keep the Bill as open for discussion as I could. The subject of Northern Ireland notes does not come within the title. I am hoping for a positive response from the Government, with the benefit of their vast resource of draftsmen to assist in taking the Bill forward so that it does not create other difficulties in what we have already identified as a very complicated area.
Mr. Heath:
It is indeed a complicated area. The hon. Gentleman has made a valid point that must be of interest to his constituents and to many other Scottish
people who find themselves south of the border with their pockets full of Scottish banknotes issued by banks that we, as English taxpayers, so carefully support. I understand that the issue is important to him. I am simply saying that the Bill is not yet in its final form. It will need careful consideration in Committee. Most importantly, we need to hear what the Minister has to say about it. She may well have more fundamental criticisms, which I shall be interested to hear.
1.57 pm
Mark Pritchard (The Wrekin) (Con): I shall be brief, as we want to hear from those on the Front Benches and give my hon. Friend the Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) an opportunity to reply, and I believe there is other business.
I congratulate my hon. Friend on introducing the Bill and on a sterling speech. He is right that businesses should not make a distinction between Scottish and other banknotes issued in the United Kingdom. There has, as we know, been much issuing of banknotes, including Scottish banknotes, over recent days. In this week of aggressive easing, it would be very odd if the Government stood in the way of making it easier for businesses to transact business in Scottish notes. Ministers should end the short-changing of and discrimination against the fine people of Scotland, Scottish businesses and Scottish banknotes.
The hon. Member for Thurrock (Andrew Mackinlay) mentioned doors in a story about his late grandmother, Catharine. Too many Scottish people have for too long faced doors that say, “Do not enter,” and the Bill will open those doors. With the Prime Minister—who is, of course, Prime Minister of Scotland as well—this week issuing a licence to print up to £150 billion of money, much of it in Scottish banknotes, the United Kingdom is entering uncharted waters. That is troubling in itself, but perhaps more troubling because the captain on the bridge of the ship is the Prime Minister—Captain Desperado on the bridge, while the country faces the worst money supply and conditions since the 1930s.
I hope that the Prime Minister will keep one of those £50 Scottish notes that he is printing, especially the Clydesdale bank £50 note, which features the great Scottish economist Adam Smith. The problem at the moment is not so much to do with the production of goods and services as with people’s having access to credit to purchase them, but as we reflect on that note, we realise that cash is king. It is cash and liquidity in businesses both sides of the border that will help us out of the current economic difficulties.
One of the great banknote mysteries of our age is why Adam Smith appears on the £50 note in Scotland but on the £20 note in the rest of the United Kingdom; I do not know whether that is a reflection of the expensive tastes of the Scottish First Minister. The Scottish National party is notable by its absence here today, irrespective of conferences. This is an important issue for Scotland and I am glad that my hon. Friend the Member for Dumfriesshire, Clydesdale and Tweeddale has taken time on his busy Friday to make the effort to bring in this Bill.
David Mundell:
My hon. Friend might be interested to note that although the First Minister of Scotland says that he shares the view that Scottish notes should
be accepted in the rest of the United Kingdom, he is firmly of the view that they should not be accepted in Scotland; he is keen to see the introduction of the euro.
Mark Pritchard: Well, the euro is doing pretty well, isn’t it? Perhaps that remark should be followed by an exclamation mark in brackets. I think that introducing the euro would be an error for Scotland and for the United Kingdom as a whole, and I am saddened that the SNP has taken a narrow view and that, rather than trying to help struggling businesses in Scotland—and, indeed, the whole of the country—it is at odds with the stream of public opinion, which is manifest in the many letters to which my hon. Friend referred.
What happens if the quantitative easing, which will include Scottish banknotes, does not work? What if that new supply of money does not improve growth and increase output? It is vital that banks should lend their banknotes, including the new ones about which we have heard today and Scottish banknotes. Whatever the banknotes involved, whether they are printed in Scotland or elsewhere, banks need to lend them. That applies especially now, given that the Prime Minister himself has become the chief cashier. The banknotes that are being printed, including the Scottish ones, need to go into the economy and must not be held back for the future bad debts of banks. Banks should be givers, not just takers, of banknotes, including Scottish banknotes.
I welcome the Bill, which I hope will help businesses on both sides of the border and improve and increase transactions. I hope that it will help provide the liquidity that this nation so needs at the moment.
2.2 pm
Mr. Greg Hands (Hammersmith and Fulham) (Con): I congratulate my hon. Friend the Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) and shadow Secretary of State for Scotland on introducing the Bill and making an extremely powerful speech in its favour. I should declare an interest: I am half Scottish and half English. My mother is from Edinburgh, so my family has some experience of travelling between the two great countries and seeing first hand the frustrations discussed today about the acceptance of banknotes.
My late Scottish grandfather was called William Brown. In fact, Gordon Brown—although, thankfully, not the one who is Prime Minister—is my cousin. The last time I checked, my cousin Gordon Brown was an electrician living in Edinburgh. However, there is the tantalising possibility that I am related to the Prime Minister. That really would be a turn up for the books.
Curiously, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr. Brown) and Prime Minister has, in 12 years in charge of the Treasury, in fact or in practice, done nothing to solve the problems outlined so eloquently by my hon. Friend. These days, the Prime Minister seems desperate to downplay his Scottish background, so it came as no surprise to see the Government’s efforts during the recent Banking Bill to jeopardise the future of Scottish and Northern Irish banknotes.
I have seen first hand widespread misconceptions about English and Scottish banknotes, sometimes in the most unlikely of places. In 2001, I was in Baku in Azerbaijan, and was surprised to see an exchange bureau quoting separate exchange rates for Scottish pounds and English pounds. Not only were Scottish pounds
accepted there, but perhaps because of the large number of Scottish oilmen in the city one received a better rate for “Shotland funtu” than for “Angliya funtu”. It seems strange that notes that are readily accepted in Baku, some 2,500 miles away from Edinburgh, should not be accepted in London, only 332 miles away and in the same country.
The Opposition welcome the Bill, and I again congratulate my hon. Friend on introducing it. That action alone has already done much to raise awareness of the issues surrounding Scottish banknotes. He spoke eloquently for his borders constituents and for all Scotland in his defence of the Bill. He spoke of the difficulties faced and the wounds to national pride sometimes involved, and said that almost everybody from Scotland was affected.
I want to return to my hon. Friend’s example of Mr. Derek MacLachlan at Newcastle airport, who was asked to pay a charge of £3 for converting Scottish pounds into English pounds. It struck me that that individual was being punished twice for having come from Scotland: first, he had no confidence that his Scottish pounds would be accepted in Newcastle, which presumably explains why he went to the Travelex office in the first place; and secondly, a foreign exchange bureau, which normally, and perhaps rightly, charges commission on the basis of the risk of holding foreign banknotes, attempted to charge him commission.
My hon. Friend outlined the proud history of Scottish banknotes. He mentioned the risk in ancient times of losing one’s tongue, which probably struck fear into various hon. Members in this Chamber. He referred to the importance of the notes in building Scottish identity and the flourishing of Scottish culture, citing the example of the 250th anniversary of the birth of Robert Burns and other details. He also mentioned some alarming signs, including one saying that Scottish banknotes were not accepted. Most importantly, he outlined how his Bill would strengthen the Union on the grounds of equality between the two banknotes.
The hon. Member for Thurrock (Andrew Mackinlay) spoke with great knowledge, including personal experience from his family past. He also raised the interesting case of Northern Ireland. We, too, would want that to be considered in more detail in Committee. He raised the interesting possibility that this proposal might excite interest from banknote collectors and be a potential revenue earner. We agree with that. I will come to the issue of tourism in due course.
I was a little confused by the speech of the hon. Member for Somerton and Frome (Mr. Heath). He said that he was not opposed to the Bill, but appeared to be extremely sceptical about its contents. He seemed to say that it is perfectly reasonable for Scottish banknotes to be rejected in England.
Perhaps the most interesting speech was the one that was not made. My hon. Friend the Member for The Wrekin (Mark Pritchard) pointed to the absence of any Scottish National party Member. We heard about the Scottish Labour and Scottish Lib Dem conferences that are going on this weekend, but if there is some kind of SNP conference, nobody seems to be aware of it.
South of the border, many people are a little perplexed, or sometimes pretend to be, when they come across these banknotes. It is about time that their acceptability
in shops, pubs and restaurants was given some legal recognition, because there is no reason for people in England and Wales to have any doubt about them. Besides adding a welcome dash of variety, Scottish notes are backed pound for pound by assets held at the Bank of England. Those assets are held in the form of special notes known as Giants and Titans, each worth £1 million and £100 million respectively. The average shopkeeper might be rather more suspicious of one of those notes than any Scottish note, but it seems that the Bank of England is fortunate enough to be able to print money whenever it wants to do so—rather a lot of it at the moment, with this so-called quantitative easing.
I believe that suspicion about Scottish notes owes more to unfamiliarity than to anything else. I suppose that it could be argued that some smaller outlets would find it harder to spot fakes if they were made to accept Scottish notes. However, that argument shows a lack of willing. Clear images of every banknote design can be found on the website of the Committee of Scottish Clearing Bankers, which even sports banknote tutorials to train staff on how to pick out any forged notes. Unfamiliarity can relatively easily be overcome, and it should be.
As my hon. Friend the shadow Secretary of State for Scotland noted, all good Unionists should support these measures. No one in Scotland, or anywhere else, should be left to feel that their banknotes are somehow second-rate or inferior. Notes can surely operate side by side in the same way as the constituent parts of the UK. The Bill is important also for UK tourism. We need more people to visit both Scotland and England, and it would surely help to remove any doubts that they might have about banknotes. The great variety of notes in the UK also boosts interest in visiting all its constituent parts.
The Bill’s provisions would not be overly draconian or burdensome on businesses if they were sensibly enforced, which I believe they would be. Under the criteria set out in clause 2, at first a business will simply receive a letter after three reports of refusal. It will face investigation only if it displays a persistent pattern of behaviour, and rather than take it to court, the Office of Fair Trading will take sensible enforcement measures such as requiring it to display a notice for the benefit of customers.
Legitimate concerns about forgery are also addressed in my hon. Friend’s Bill. As I said, it is fairly straightforward for anyone to clarify whether a note is genuine. Under clause 3, a business would still be able to refuse any note that it had reasonable grounds to suspect. The Opposition warmly welcome the Bill. We believe that it could be further improved in Committee, and we hope that it receives the further parliamentary consideration that it so much deserves.
2.12 pm
The Exchequer Secretary to the Treasury (Angela Eagle):
We have had a fascinating debate about a vibrant and lively part of our monetary culture, of which we are all proud. I congratulate the hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) on his selection in the ballot—which I have never managed
in all my years in Parliament, many of which have been spent on the Back Benches—and on getting the Bill to the Floor of the House. It clearly represents the concerns and experiences of his constituents and many others in Scotland, as he vividly demonstrated. We discussed Scottish banknotes in connection with the recent Banking Bill, and I understand how frustrating and potentially embarrassing, inconvenient and annoying it is if someone’s money is refused by retailers, even though it is UK money.
The hon. Gentleman made many important points, and his Bill is intended to address the acceptability of Scottish banknotes. I am sceptical that a legislative vehicle is the best way to solve the problems that he outlined, and I remain to be convinced that the Bill, as drafted, would solve the problem. I know that, as he said, he has spoken to my right hon. Friend the Secretary of State for Scotland, who shares his concerns and is also keen to safeguard the long-standing tradition of Scottish banknotes.
I believe that there are some effective ways forward, which I hope to outline to hon. Members, that will begin to put right some of the inconvenience and embarrassment that the hon. Gentleman’s constituents experience south of the border when attempting to spend what are, after all, pounds sterling.
Mark Pritchard: The Exchequer Secretary mentions embarrassment. Given that, even as we sit here, the largest number of Scottish banknotes in United Kingdom history is being printed, is it not incumbent on the Treasury to send a Minister to the House, either later today or on Monday, to make an urgent statement about quantitative easing and the billions being spent—
Mr. Deputy Speaker (Sir Michael Lord): Order. The hon. Gentleman knows full well that that is not the subject of the debate. I do not encourage the Minister to respond to that intervention.
Angela Eagle: I always like to respond to questions that are put to me in the House, but I hear your comments, Mr. Deputy Speaker. I say only that it is wrong to believe that Scottish—or, indeed, any—banknotes will be printed as a result of the measures that the Bank of England set out yesterday.
I would like to explain the reasons behind the Government’s position, especially our scepticism about some of the enforcement methods that the Bill proposes. The issuance of national banknotes is usually a function undertaken by the central bank, which is the Bank of England in the United Kingdom. As the hon. Member for Somerton and Frome (Mr. Heath) said, with the exception of Hong Kong, the UK is highly unusual in allowing several commercial banks to issue their own banknotes.
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