David Mundell's bill to establish equal UK-wide status for Scottish banknotes

I have been remiss in not reporting on Shadow Scottish Secretary David Mundell's Scottish Banknotes (Acceptability in United Kingdom) Bill, which had its second reading on Friday.

Mr Mundell told the House of Commons:

"My constituents were instrumental in the Bill’s inception. After my position in the ballot for private Members’ Bills was announced, I sought their views on what piece of legislation I might introduce. The acceptance or, I should say, non-acceptance of Scottish banknotes was certainly to the fore. It was an issue with which I was personally familiar and a problem, at least anecdotally, that most Scots have experienced. There is also a phenomenon to which my constituency of Dumfriesshire, Clydesdale and Tweeddale bears witnesses. My constituency has as its backbone the M74 corridor linking central Scotland with the north of England. Increasingly, people who are heading back to England, having spent time in Scotland and found themselves in possession of Scottish banknotes, are going to local banks and businesses and asking to have their Scottish notes changed to Bank of England notes, for fear that they will run into difficulty with the use of the Scottish notes back in England. My constituents deal politely with such requests when they can be accommodated, but they are irked by the implicit suggestion that there is something wrong with the Scots notes.

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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.

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All Members will have seen Scottish banknotes, and some will even have used them daily, but few will have considered all the issues that are being aired today. If they have not had cause to ponder them before, they might believe that the deeper significance of Scottish banknotes does not resonate with the public. However, I would tell them that the existence of Scottish banknotes is one of those things that we see before us every day but take for granted. Only when Governments have conspired to do away with them, either through carelessness or small-mindedness, has the attention of the public and the media flashed on to what they stand for. Only then do we realise the historical, cultural and promotional value that the notes have in addition to their monetary value.

For example, this Government hatched proposals that might have done away with Scottish banknotes by making their issue uneconomical for the banks concerned. Those proposals first appeared in a Treasury consultation of July 2005, of which nothing came, and were revived in another consultation in January 2008 as part of the measures proposed for inclusion in what was then the Banking Bill. The Chancellor saw what a public outcry the proposals had provoked, just as Robert Peel’s Government had incurred the wrath of Scottish public opinion and of luminaries such as Sir Walter Scott when they threatened Scottish notes more than a century earlier. Like the Peel Administration, this Government were forced into an entirely unexpected U-turn and dropped the threat to Scottish banknotes.

Now the Government have accepted that Scottish notes are here to stay, and indeed enshrined them in the Banking Act 2009. That is the first time that there has been new legislation governing their issue since 1845. I therefore cannot see why the Treasury will not take the final step and ensure that the notes work effectively in all day-to-day transactions, in every part of the United Kingdom.

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I have no difficulty in relying on my constituents and the Scottish public at large. I refer, of course, to the personal experience of almost everyone in Scotland to whom I have spoken about the Bill. They have all been in a shop or taxi somewhere in England, Wales or Northern Ireland and presented Scottish banknotes, which have been treated suspiciously or refused. The House will appreciate that when a person offers a banknote and it is treated with suspicion, it causes embarrassment, as the person who e-mailed me this morning reminded us, particularly if it is held aloft and the shop manager is summoned.

The House will further understand that when a note is actually refused, there can be considerable inconvenience. Examples are legion, and the consequences can be worse than leaving a shop empty-handed. I have received several letters and e-mails from members of the public who were left unable to pay for takeaway food or for dining in restaurants, or stuck in rural petrol stations, with no means to pay for the fuel with which they had already filled their cars."

Shadow Treasury Minister Greg Hands supported the bill:

"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.

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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."

Exchequer Secretary to the Treasury Angela Eagle spoke for the Government:

"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."

Tom Greeves