§ 3.15 p.m.
§ Lord Oakeshott of Seagrove Bayasked Her Majesty's Government:
Whether they will encourage banks in England and Wales to make more £5 notes available in cash machines and at branch counters.
§ Lord McIntosh of HaringeyMy Lords, the production, issue and distribution of bank notes is the responsibility of the Bank of England. It is for the Bank to ensure that sufficient £5 notes are in circulation and that they are of suitable quality. Some banks have made a commercial decision to limit their stock of £5 notes and not to use them in cash machines for reasons of cost effectiveness and demand. 794 However, the Bank is working with high street banks, the Post Office and key retailers to improve the quantity and quality of £5 notes in circulation.
§ Lord Oakeshott of Seagrove BayMy Lords, I thank the Minister for that reply. Does he realise, and do the Government accept, that people want more fivers rather than pockets full of coins or large, inconvenient notes? The Bank of England is having to work through Marks & Spencer and Consignia because the banks are being extremely unhelpful in making £5 notes available. It is quite possible, as Northern Ireland shows, to make available £5 notes, but it is extremely difficult to get them from tills. Leading retailers have been conducting a survey. When will the banks begin to pay attention to the needs of their customers so we do not all have to make do with a few filthy fivers because they are not doing their job properly?
§ Lord McIntosh of HaringeyMy Lords, fivers are filthy not because there are not enough of them, but because people shove them in their pockets with their change. They only last nine months; £10 and £20 notes last two to three years. Fivers last for much less time. However, the Bank of England is introducing new £5 notes on 21st May with the portrait of Elizabeth Fry instead of George Stephenson. I understand that they will be considerably tougher.
Cash machines normally have only two cassettes and it is the commercial judgment of the banks that, except in some cases like university towns, their customers want £10 and £20 notes rather than £5 notes.
§ Lord BrookmanMy Lords, has my noble friend any idea as to whether or not the Government wish to reintroduce the old white £5 notes? Some on these Benches still have many in their possession.
§ Lord McIntosh of HaringeyMy Lords, a share-out is called for! I remember them with affection. Perhaps my noble friend would like to go back to before 1855 when all bank notes had to be filled in by the cashier with the name of the payee. We do not intend to go that far back.
§ Lord SheldonMy Lords, since the present £5 note is worth approximately the same amount as half-a-crown in 1939, has any consideration been given to producing a £5 coin?
§ Lord McIntosh of HaringeyMy Lords, yes. The Bank of England does not believe that that would be appropriate at the present time. The £2 coins are doing rather well; let us wait until they settle in.
§ Lord MarlesfordMy Lords, is the Minister aware that if the £50 note was adjusted for inflation since its original introduction, it would now be worth over £115? Is there not a case for introducing at least a £100 note given that euro notes go up to 500 euros, which is about £300?
§ Lord McIntosh of HaringeyMy Lords, I am not sure we want to follow the euro in having such large denominational notes. They are only in circulation in some European countries. There is a risk of money laundering being made easier because one can carry an awful lot of money in a single briefcase. I should have thought we had to be quite careful about introducing larger denomination notes.
§ Lord Graham of EdmontonMy Lords, has the Minister seen the survey carried out among its members by the British Retail Consortium? It clearly shows that the £5 note remains a popular and vital part of our currency. Will the Minister take on board the fact that banks are acting in their own interests and not in the interests of the general public?
§ Lord McIntosh of HaringeyMy Lords, that is why we are grateful to high street retailers, members of the British Retail Consortium, for the help that they are giving to the Bank of England to keep £5 notes in circulation. Clearly, we shall not interfere in the commercial decisions of banks, but the Bank of England is taking steps to circumvent them.
§ Baroness Gardner of ParkesMy Lords, when people mention £5 coins, an automatic answer seems to be that they are too large and too heavy. Has consideration been given to the possibility of making higher value coins much smaller and lighter than lower value coins, as happens in Australia? Would not that be an answer with the £5 coin?
§ Lord McIntosh of HaringeyMy Lords, for many years there has been a tendency for coins of any given denomination to become smaller and lighter. That is clearly welcome, but we still find heavy weights in our pockets and any additional coins, as opposed to notes, would not be attractive.
§ Lord WeatherillMy Lords, without wishing to prolong this discussion, if your Lordships wish to have brand new £5 notes, or even brand new £5 coins, they need go only to the post office in Central Lobby.
§ Lord McIntosh of HaringeyMy Lords, that is a helpful suggestion.
§ Baroness TrumpingtonMy Lords, my ambition in life is to be smaller and lighter. Following a conversation at lunch, does the Minister agree that it is important to maintain the difference in size of different notes to help blind people, to whom size is important?
§ Lord McIntosh of HaringeyMy Lords, whatever changes the noble Baroness, Lady Trumpington, makes, she will never be less impressive. Let me make clear that her lunch was not with me, but the new £5 note will be the same size as the existing £5 note and the difference in size between existing denominations will be maintained.