Bank of England Note Issue (Hansard, 3 February 1988)

§ Lord Stodart of Leaston
My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

§ The Secretary of State for Trade and Industry (Lord Young of Graffham)
My Lords, the Bank of England is constantly reviewing its note issue in the light of developments in security printing and in note handling. A modified version of the £5 note, with a 1mm wide embedded thread, was first issued in July 1987. Any further changes will, as usual be preceded by adequate notice to all parties.

§ Lord Stodart of Leaston
My Lords, I thank my noble friend for that Answer, but does he agree that there has been in past years a tendency to reduce the size of bank notes? Is he aware that there is some anxiety, which has already been expressed in Scotland, that a reduction in the size of the £5 note might coincide with the Scottish £1 note, the size of which is extremely popular north of the Border? Can my noble friend persuade the Governor of the Bank of England to take note of this? As a token of the increased prosperity of the nation does he not consider that it would be an admirable move for us to return to those £5 and £10 white notes of blessed memory?

§ Lord Young of Graffham
My Lords, I hope that my noble friend will understand when I say that I am more concerned that the value of a £5 note should not be reduced rather than its actual size. Not long ago I returned from the United States of America where I noticed that all hank notes were of the same size. That does not seem to have harmed that country over the past decades. However, I shall pass on my noble friend's comments to the Governor of the Bank of England.

Lord Bruce of Donington
My Lords, while giving general consideration to all the currency in domestic circulation, will the noble Lord bear in mind the experiences of our American cousins, which indicate that they much prefer to carry wads of notes than pockets full of metal? Will he therefore consider favourably the reintroduction of notes of a denomination lower than £5?

§ Lord Young of Graffham
My Lords, I believe that the £1 coin has now received wide acceptance within the country and that it would perhaps not be too sensible to go back to producing £1 notes. The existing £5 note has a life of some nine months. It seems to me that if we were to return to the £1 note the cost would begin to outweigh any benefit.

§ Baroness Robson of Kiddington
My Lords, will the Secretary of State please tell me whether the Government are considering and studying the production of the kind of paper money which is now being produced in Australia? It is not exactly paper but rather a kind of plastic money.

§ Lord Young of Graffham
My Lords, I cannot tell your Lordships whether we have been studying the kind of notes produced in Australia, but we have been paying considerable attention to what other countries have been doing. Holland has been experimenting with plastic coated notes. There may well be something in the notion that changing the quality of the paper might prolong the life of the notes a little. However, the present feeling is that such a cost would be disproportionate to the benefits obtained.

§ Lord Moyne
My Lords, does not the noble Lord agree that in paying a taxi driver by modern lamplight it is often difficult to distinguish between the colours of a £5 note and a £10 note? Would it not therefore be better to have different sized notes?

§ Lord Young of Graffham
My Lords, the last time I saw a £10 note it was a different size.

§ Lord Parry
My Lords, does the Minister accept that in the experience of many of us a £5 note lasts five minutes?

§ Lord Young of Graffham
My Lords, it is not for me to comment on the noble Lord's spending habits.

§ Lord Ferrier
My Lords, is my noble friend aware that the £1 coin is not very common currency in Scotland, where people prefer the £1 note?

§ Lord Young of Graffham
My Lords, I have long been aware that Scotland is indeed a different land.

The Earl of Halsbury
My Lords, does the noble Lord agree that the endeavour to match a static coinage to a dynamic currency is a quagmire in which much scar tissue will be generated, because whatever one does is wrong?

§ Lord Young of Graffham
My Lords, I can certainly tell the noble Earl that that is a quagmire into which I shall not descend.