Only a few days to go: We’re raising £25,000 to keep TheyWorkForYou running and make sure people across the UK can hold their elected representatives to account.

Donate to our crowdfunder

Clause 193

Part of Banking Bill – in a Public Bill Committee at 6:00 pm on 28th October 2008.

Alert me about debates like this

Photo of Angela Eagle Angela Eagle The Exchequer Secretary, Member, Labour Party National Executive Committee 6:00 pm, 28th October 2008

The hon. Member for South-West Hertfordshire asked me to list the seven remaining banks that have rights of issuance. In Scotland, they are the Bank of Scotland, which as has been mentioned is a subsidiary of HBOS; the Clydesdale; and the Royal Bank of Scotland. In Northern Ireland, they are the Bank of Ireland, First Trust Bank, the Northern bank and the Ulster bank.

The hon. Member for Wellingborough asked whether the legislation was brought about because of the financial crisis that we are living through. It was not. As the hon. Member for Dundee, East hinted, this is the end of a process that began in 2005 with consultations that have been ongoing since then between the Bank of England, the Treasury, the authorities and the banks that issue to try to bring more reassurance in the backing assets issue.

The hon. Member for Wellingborough asked whether current banknotes were in danger, or were not worth as much as they are meant to represent. Clearly that is not the case, but some aspects of how the notes are backed are old-fashioned—they date to 1845—and do not fit in with current approaches, so they need tightening up. That is what part 6 will do. There is nothing wrong with the current legislation that cannot be put right by modernising and refocusing bits of it, and part 6 seeks to do so. I hope that, with those reassurances, the Committee will be able to agree that clause 193 should stand part of the Bill.