Acceptance of Scottish bank notes to be compulsory?
Just as Scottish banks look set to disappear into history, an old issue about their notes’ lack of status as legal tender in the United Kingdom has resurfaced at Westminster.
The Shadow Scottish Secretary David Mundell, MP for the Borders constituency of Dumfries-shire Clydesdale and Tweeddale, proposes to bring a Private Members Bill at Westminster, the gist of which would be to compel acceptance of Scottish bank notes as payment throughout the United Kingdom without seeking to give them the status of legal tender. The BBC reports that he was moved to do this by constituents concerned that their notes were often not accepted in England, and also by the anxieties of English visitors to his constituency that Scottish notes acquired during their stay would not be usable upon return to their native heath.
As a footnote, we may observe that the takeover of HBOS (which included Bank of Scotland) by Lloyds TSB to become part of what will now be known as Lloyds Banking Group was finally approved in the Court of Session by Lord Glennie on 12 January 2009, with the UK Government owning just over 43% of the group’s shares. A petition had been lodged by shareholders questioning the Scheme of Arrangement under which the merger was to go ahead. The Group began trading as such on 19 January. The Royal Bank of Scotland announced on the same day that it would post a new record annual loss for a British company when its 2008 figures were completed, the sum of between £20 and 30 billion easily worsting the previous record of £15 billion set by Vodafone in 2006. The UK Government took its shareholding in RBS to nearly 70% to keep it afloat as the share price immediately dropped 67% to just over 11 pence. Ouch, ouch, ouch – especially for Mr Ian Hamilton QC and all those other trusting (and possibly patriotic too) souls who took up the RBS rights issue at £2 a share in spring 2008.
No such bad news yet about the Clydesdale, the third Scottish bank to issue its own banknotes.