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 answer is that the issuing rights are vested in the underlying corporate entity. What happens to the issuing rights depends on the individual circumstances of a takeover. I can assure the hon. Gentleman that in the specific case of Lloyds TSB and HBOS, the Bank of Scotland, which is a subsidiary of the latter, is the issuing bank, and the issuing rights attach to that corporate entity alone. The change in ownership—in this instance, of Bank of Scotland—would not mean that a bank would be forced to stop issuing banknotes, so it continues under the current proposals to be eligible to issue banknotes. I hope that that reassures him.

I was discussing the history of the matter—it might seem odd to do so, but it creates a context for subsequent debate. To reassure the hon. Gentleman even more, the Government are committed to maintaining the long-standing tradition of commercial banknote issuance in Scotland and Northern Ireland and we are not seeking to discourage commercial issuers of banknotes from continuing the practice. However, our priority is to ensure that holders of Scottish and Northern Ireland banknotes have a level of protection similar to the holders of Bank of England notes, so that in the event that an issuing bank fails, they can expect to obtain full face value for their notes. This is an important part of the Government’s commitment to protect consumers. There is more detail in part 6 on how that is to be achieved.

With that small history lesson and my reassurance to the hon. Gentleman, I commend the clause to the Committee.