§ 20. Mr. Dempseyasked the Chancellor of the Exchequer whether he will introduce legislation to allow Scottish and English banknotes to be accepted as legal tender in all parts of the United Kingdom.
§ Mr. MacDermotNo, Sir.
§ Mr. DempseyIs my hon. and learned Friend aware that it is rather incongruous that notes in circulation in Scotland by Scottish banks are not legal tender in England, while English Treasury notes are not legal tender in Scotland and that this is especially incongruous as it arises out of an archaic Act? Will he consider, in the age of law reform, bringing this legislation up to date and making it convenient for all to exchange these notes in any part of the realm?
§ Mr. MacDermotMy hon. Friend is treading on dangerous ground in asking for law reform on this subject. Scottish banks enjoy a privilege in being allowed to retain their own note issues. This is a special privilege granted to them in the Peel legislation of 1844 to 1845 under which English banks were deprived of their power to issue notes. These Scottish notes were never legal tender and I do not think at this stage that a proposal to confer an additional benefit on the Scottish banks would be widely welcomed, and nor is it being asked for by the Scottish banks themselves. Bank of England £1 and 10s. notes are legal tender in Scotland.
§ Mr. George Y. MackieIn view of the difference of the employment situation in Scotland as compared with England and the declared regional policy of the Government, would not the hon. and learned Gentleman be prepared to release those Scottish banknotes which he proposes to put into the Bank of England and thus enable Scotland to prosper on a different basis?
§ Mr. MacDermotOnce again, Scotland, was given preferential treatment by my right hon. Friend in the matter of special deposits.
The Earl of DalkeithWill the hon. and learned Gentleman confirm that Bank of England banknotes are legal currency in Scotland? At the same time, will he bear in mind that there are certain advantages in the present system of Scottish banknotes in that in London on more than one occasion one has received £4 15s. change for an article costing 5s. when giving a Scottish £ note? Will he consider keeping the status quo?
§ Mr. MacDermotBank of England £1 and 10s. notes are legal tender in Scotland. For some reason of which I am not sure, £5 and £10 notes are not.
§ Mr. LiptonIs it necessary in this small and overcrowded island for two forms of currency to be in circulation? Is my hon. and learned Friend aware that in public houses and other places in northern and southern England proffering Scottish notes causes alarm, confusion and discontent?
§ Mr. MacDermotThat is a further reason for not seeking further legislation to alter the situation.
§ 21. Mr. Dempseyasked the Chancellor of the Exchequer if he will seek to amend the Bank Notes Act of 1765 so as to enable Scottish banks to issue 10s. notes; and if he will make a statement.
§ Mr. MacDermotNo, Sir. There are already at least twenty different types of Scottish banknote, and I do not think any move to increase that number is necessary or would indeed be generally welcomed.
§ Mr. DempseyBut is my hon. and learned Friend aware that Scottish banks issue certain notes with the exception, generally speaking, of 10s. notes? Would it not complete the picture and retain Scotland's distinctive characteristics in the issue of currency to give the facility to issue a greater number of 10s. notes?
§ Mr. MacDermotPerhaps the absence of this characteristic makes it even more distinctive.