§ 2.43 p.m.
§ The Earl of KinnoullMy Lords, I beg leave to ask the Question standing in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government whether, in the light of popular opinion, a £2 note will now be issued before the £1 note is finally withdrawn.
§ Lord Brabazon of TaraMy Lords, no. The possibility of issuing a £2 note was fully considered before the £1 coin was introduced. In practice it would probably circulate much as the £1 note does now and would therefore reach the same sorry state just as quickly.
§ The Earl of KinnoullMy Lords, I thank my noble friend for that disappointing reply. Is he aware that we are the only country now within Europe—and including the United States—with a heavy preponderance of coinage to paper currency? Who are the committee which recommend this policy? What is their justification, and will they publish their report?
§ Lord Brabazon of TaraMy Lords, as regards being the only country to do this, other countries have tried two unit notes and they have not, on the whole, been successful: France and the United States of America are examples. Other countries have also introduced coins instead of notes. Australia, New Zealand, Germany and France have all replaced their lower value notes with coins. As for the composition of the committee, I am afraid that I do not have those details with me. I shall have to write to my noble friend.
§ Lord BarnettMy Lords, does the Minister agree that there must be very few countries around the world 604 where the lowest value of a note starts at £5, unless the Government have in mind to bring down its value to a level that we have not yet seen? Will he not seriously put to his right honourable friend the Chancellor of the Exchequer—despite what the noble Earl is whispering in his ear—that the vast majority of people in this country would much prefer a lower denomination note? Following the answer he gave us just now, would he not accept that most people would prefer to pay the £3 million cost—and the cost is the only real argument we have ever been given on this matter—rather than have a note starting at £5?
§ Lord Brabazon of TaraMy Lords, the cost of £3 million is not the only reason for our having withdrawn the pound note. The fact is that the notes were becoming increasingly tatty. They were being returned to banks much less than they used to be and were circulating like coins. That is why the notes became very tatty. I find the coin most attractive—
§ Lord Brabazon of Tara—and many people will soon get used to it.
§ The Earl of LauderdaleMy. Lords, is my noble friend aware that the tattiness of English pound notes does not apply to Scottish pound notes? The discriminating person could go to Scotland for a supply of clean notes which he can use down here.
§ Lord Brabazon of TaraMy Lords, not being a frequent visitor to Scotland, I cannot say how tatty their notes become. But I can say again that the pound coin, the Scottish pound coin and the Welsh pound coin are just as good.
§ Baroness Burton of CoventryMy Lords, is the Minister aware that the notes became increasingly tatty because of the poor quality paper that was used for them? Does he recall that the last time this matter was raised he was told that the notes in Hong Kong lasted five times as long? Why could we not have a better quality paper?
§ Lord Brabazon of TaraMy Lords, it was considered whether to make notes out of a better quality paper or from plastic. However, the tougher material would not solve the main problem which is, as I have mentioned, that the pound circulates like a coin nowadays. The coin also has advantages for use in vending and slot machines.
Lord Campbell of CroyMy Lords, is my noble friend aware that the pound coin is not becoming popular, despite what he said, and that this is reflected in a healthy import of Scottish pound notes which can still continue to be issued south of the border?
§ Lord Brabazon of TaraMy Lords, as I said, it is perfectly possible for Scottish pound notes to circulate south of the border, but in time they will deteriorate in the same way as the English pound notes.
§ Baroness Macleod of BorveMy Lords, while I entirely agree with the question put down by my noble 605 friend Lord Kinnoull, may I ask my noble friend the Minister whether he is aware that charities will suffer greatly because the lowest denomination note that can be put into an envelope is £5? That is one of the reasons why I would back my noble friend Lord Kinnoull, for many of those who contribute to and support charities could not afford to donate a £5 note. That is why I want a £2 note.
§ Lord Brabazon of TaraMy Lords, I shall certainly take note of what my noble friend has said.
§ Lord John-MackieMy Lords, the Minister has said that notes were unsuccessful in some other countries. In what way were they unsuccessful?
§ Lord Brabazon of TaraMy Lords, I gather that they were unpopular.
§ Lord MonsonMy Lords, can the noble Lord say whether Her Majesty's Government are yet in a position to disprove my earlier contention that abolition of the pound note is costing British taxpayers collectively a net £14 million per annum in the form of additional wear and tear on their clothing?
§ Lord Brabazon of TaraMy Lords, 1 have absolutely no evidence for that figure. I think it is very unlikely to be true.
§ Lord LeatherlandMy Lords, may I ask the noble Lord whether he would not agree, when it is said that these notes are getting tatty, that that is in full keeping with general policy?
§ Lord Brabazon of TaraMy Lords, certainly not. Perhaps they are becoming tatty, but at least they are holding their value better than they used to do.