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Scottish Banknotes (Acceptability in United Kingdom) Bill

I am coming to an interesting resumé of the meaning of "legal tender" and why that does not strike at the heart of the issue. Basically, what concerns my constituents and other people in Scotland is not the legal definition, but the need for their money to be accepted, not questioned, when they are in a retail outlet. As I shall say in due course, the status of legal tender would not necessarily achieve that objective. The Bill is not designed to force unwilling retailers to take Scottish banknotes or to impose draconian sanctions on anyone who does not. I am very aware of the regulation that business faces already, and I want less regulation, not more. Unnecessary additional burdens are to be avoided. The Bill simply seeks to put Scottish notes on an equal footing with any other banknote that is accepted. For the benefit of hon. Members, I shall now provide a little background detail on Scottish banknotes. The first Scottish bank to issue notes was the Bank of Scotland, which has done so almost since its foundation in 1695. At that time, coinage from the Scots mint was scarce, and of uncertain value in any case. Most Scots relied on a mixture of English, French, Dutch and Flemish coins. As we would expect, the lack of adequate currency severely restricted the growth of trade. The new Scottish banknotes were grasped first by the merchants and then by the population at large, as a solution to the problem. The notes' success was such that, in the words of the committee of Scottish clearing bankers, Scotland became one of the first countries to use paper currency from choice. The National Museum of Scotland says that one of the remarkable things about the country is that, from a very early stage, banknotes had a high degree of acceptability. It says that the Scots became known for preferring their paper money to gold, because it was easier to carry around. It was very different here in England, where paper money took longer to gain widespread acceptance. Scotland's innovative approach to banknotes went further than just being an early adopter. Vast amounts of ingenuity were connected with making them more difficult to forge. After all, the only punishment that Scots law could mete out to forgers was death and tongue amputation, probably not necessarily in that order. The Royal Bank of Scotland pioneered the use of colour in banknotes, with a blue rectangle displaying the words "One guinea" and the King's head shown in red. Yet colour did not come into widespread use until nearly a century later. The Royal Bank was also the first to use notes in three different colours. The Scottish economy once had to handle a vast array of different designs of banknote. I know that the Minister feels that the current number, 22, is a vast array, but previously there were even more. Nowadays, many of the former note-issuing banks have been absorbed through mergers and acquisitions, and we are left with just the Bank of Scotland, Royal Bank of Scotland and Clydesdale bank. This year's Banking Act ensures that no further banks can join that list. Between them, the three banks issue a core of 16 note designs in denominations of £5, £10, £20, £50 and £100, with the Royal Bank of Scotland still printing a small number of £1 notes. As with the Bank of England, there are also sometimes additional designs in circulation to allow a transition to take place between an old and a new series of notes. In addition, some notes have images or words added to them to commemorate an event or person of particular importance to Scotland at that time. Although of a manageable number, the core designs give a true overview of the range of pre-eminent Scottish buildings, landscapes and historical figures. The commemorative editions, meanwhile, are a way of uniting the public behind celebrations of what, as a nation, Scots cherish.