§ Mr. Michael Forsythasked the Chancellor of the Exchequer if he will estimate the return to the Government from the note issue.
§ Mr. Ian StewartThe net return to the Government from the Bank of England note issue for the year ending 28 February 1983 was £1,130 million. Details are published in the Bank of England report and accounts 1983.
§ Mr. Michael Forsythasked the Chancellor of the Exchequer (1) if he will estimate the reduction in the return on the note issue arising from the Scottish banks' right to (a) fiduciary issue of bank notes and (b) non-fiduciary issue of bank notes;
(2) if he will estimate the increased cost of Government borrowing arising from the Scottish banks' right to (a) fiduciary issue of bank notes and (b) non-fiduciary issue of bank's notes.
§ Mr. Ian StewartThe exercise by Scottish banks of their right to a fiduciary issue of bank notes under existing legislation reduces the return of the note issue and hence increases Government borrowing costs by a negligible amount. This is because the permitted fiduciary issue— £2.7 million—which, if replaced by Bank of England notes could save the cost of that amount of central Government borrowing, is itself small. The non-fiduciary issues of the Scottish banks backed under legislation by Bank of England notes and coin involve no reduction in the return on the note isssue and no increase in borrowing costs.