Clause 199
Banking Bill
6:15 pm
Angela Eagle (Parliamentary Secretary, HM Treasury; Wallasey, Labour)
The hon. Member for South-West Hertfordshire asked, “Why no new issuers?” As I said in my prefacing remarks about part 6, banknote issuance is usually a function reserved for central banks. The UK is almost, but not quite, unique—if we count Hong Kong—in allowing a number of commercial banks to issue their own banknotes. Under the existing legislation, only the banks that had issuing rights at the time of the enactment of the legislation in 1845 that sought the necessary certifications to continue issuing in accordance with those enactments may issue banknotes—and only in Scotland and Northern Ireland. As I said earlier, only seven of the original 21 entities remain after 160 years of commercial operation. That is the attrition rate.
The Government support the continuation of this tradition of commercial issuance, simply because it is a—