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Scottish Banknotes

Volume 391: debated on Tuesday 13 July 1943

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asked the Chancellor of the Exchequer to whom the profit arising from the issue of Scottish banknotes accrues; and whether he will take steps to ensure that this profit shall in future accrue to the Treasury as in the case of the issue of English banknotes?

The profits accrue to the banks of issue. My hon. Friend will, how- ever, realise that the banks are liable to taxation on these as on other profits earned in their business. Further the amount the banks can earn by their note issues is restricted by the limits fixed by Statute for the fiduciary issues of the Scottish banks. Stamp Duty is payable on all notes issued, and those issued in excess of the limits must be covered pound for pound by coin and Bank of England notes. In reply to the last part of the Question, and without entering into the merits of the proposal, I could not consider a change at the present time which would involve legislation.

Can the Chancellor say what was the profit during 1942 owing to the issue of Scottish banknotes?