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Volume 470: debated on Wednesday 23 January 2008

2. What recent discussions he has had with the Chancellor of the Exchequer on the acceptance of Scottish banknotes outside Scotland. (179988)

I have regular discussions with Cabinet colleagues on a range of issues.

May I suggest that the Secretary of State impress on the Chancellor and the Governor of the Bank of England that it is high time Scottish banknotes were fully legally acceptable throughout the UK? They are authorised by the Bank of England and should have exactly the same status. If dollars and euros are acceptable to traders in England, surely Scottish notes can and should be, too. Will the Secretary of State endeavour to ensure that this anomaly is brought to an end?

I am delighted to have the opportunity to expand a little on the status of Scottish banknotes.

And, indeed, banknotes from Northern Ireland. One of the great successes of the very successful financial services sector in Scotland is the privilege enjoyed by commercial banks to publish banknotes when other banks, including commercial banks in England, do not. The fact is that under the law Scottish banknotes enjoy exactly the same status as all other methods of payment throughout the United Kingdom, although that is not widely known. They are perfectly legal, and people should know and respect that. I know that on occasion some of my countrymen have had their banknotes refused, but I have been in London a great deal over the past 11 years, and in connection with my ministerial responsibilities have periodically had Northern Ireland banknotes in my wallet. No one has ever refused to accept one of them.

Does the Secretary of State agree that Scottish banknotes, collected by the Treasury in the form of taxes, could be used to pay for aircraft carriers from the Clyde shipyards? Did he see the headline in Monday’s Glasgow Evening Times? It read “We’re Sunk”, and below that, “Delays set to kill off Clyde yards in 2 years”. Does the Secretary of State agree that that is simply dangerous nonsense, deliberately designed to undermine the position of the yards, and that those engaging in it are being unhelpful?

Order. I think that the hon. Gentleman should engage in a letter to the Secretary of State, who can then reply to it. His supplementary is far too wide of the main question.

During his recent discussions with the Chancellor, did the Secretary of State discuss fiscal autonomy for the Scottish Parliament? Does he agree that handing over greater fiscal powers to Holyrood reeks of appeasement of the SNP, and that just one more devolutionary heave will not serve the Union or Scotland well?

The Secretary of State says it is a matter of fact that Scottish banknotes can be accepted throughout the United Kingdom, and he is right, but it is also a matter of fact that often they are not. That was highlighted in an excellent article in the Sunday Mail on 6 January. The paper conducted a random sample, and found that it was difficult to get notes accepted in Liverpool, Tadcaster, Coventry, Manchester, Ashton-under-Lyne and London, where even the railway ticket vending machines would not accept them. Will the Secretary of State acknowledge that although this may not be a massive problem, it is a source of embarrassment and irritation to many of our constituents every year, and will he use his office to address the problem?

I welcome the opportunity to repeat what I have already said. Scottish banknotes are legal, and enjoy exactly the same status as any other method of payment. The fundamental problem is that the law of contract throughout the United Kingdom allows people not to engage in a transaction at the point of payment if they do not wish to do so. I should be happy to join the hon. Gentleman and his party in a discussion about reforming the law of contract if that is what he wishes to do, although I suspect that we would find it difficult to obtain the necessary legislative time or the necessary support. But he is right: in the 21st century, this irritation should not exist for people who are tendering legal notes in payment. I think the best thing for us all to do is to take every opportunity to tell people that those notes are as good as anyone else’s, and should be accepted.