§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer whether the Bank of England will continue to have the authority to authorise the issue of bank notes by domestic clearing banks in Scotland under the provisions of the Maastricht treaty.
§ Mr. NelsonThe Scottish note-issuing banks currently have statutory authority to issue their own bank notes, subject to certain requirements to hold Bank of England notes. Scottish notes are not formally legal tender but they may nevertheless be used in ordinary transactions.
Under article 105a of the Maastricht treaty, the European central bank—ECB—would have the exclusive right to authorise the issue of bank notes in member states participating in stage 3 of economic and monetary union —EMU. Article 16 of the protocol on the statute of the ECB, requires the ECB to respect as far as possible existing practices regarding the issue and design of banknotes. If the United Kingdom were to participate in stage 3 of EMU these articles would permit the ECB to authorise the 61W Scottish banks to continue to issue their own notes. In stage 2 of EMU, and in stage 3 were the United Kingdom not to participate, the United Kingdom could continue to maintain its existing arrangements.