Scottish and Northern Ireland Banknote Regulations 2009

My Lords, normally in the Chamber or in Committee I am seen by Members opposite as one of a band of loyal supporters of Her Majesty’s Government, here to defend at all costs, in all circumstances and in every way possible what the Government are doing. However, today I have one or two questions. I hope they are not too awkward for my noble friend, because I do not want to cause him undue problems on this special day that I look forward to celebrating with him later. I do not want to sour the occasion, but I have two or three questions that I hope he will answer. The issue is not theoretical, as we in Scotland know. The Explanatory Memorandum includes the line, ""in the event of the insolvency of a note issuing bank"." We were within 24 hours of that happening in the case of the Royal Bank of Scotland, so it is not a theoretical issue. Now we are being told that banks will be disaggregated in line with competition legislation and because of representations from, and the requirements of, the European Union. What happens to the note-issuing responsibilities if a bank is disaggregated? The Royal Bank of Scotland, Lloyds Banking Group and the Clydesdale Bank have responsibility for issuing RBS notes, Bank of Scotland notes and Clydesdale Bank notes. If the Lloyds Group is disaggregated, as some people have suggested will happen, and an independent Bank of Scotland is set up, does the responsibility for issuing banknotes automatically transfer to the Bank of Scotland and its new owners? Heaven forbid that someone like Sir Fred Goodwin or Sir George Mathewson would be part of that new ownership. Would that worry my noble friend? I hope that he would be concerned if those who were involved in the near-collapse of a bank were then to take over responsibility for running a bank that had responsibility for issuing banknotes. My second question relates to the excellent speech by the Prime Minister—here I am reverting to type—at St Andrews at the weekend. He suggested a number of alternative ways in which funds might be raised to finance banks that get into difficulties. He suggested the so-called Tobin tax on transactions, and also insurance arrangements under which either the banks might put money into a fund to provide insurance or have an external insurer provide it. How does this relate to the proposal today? It seems to conflict with what is being suggested. The noble Baroness opposite referred to costs and other aspects of it. It would be interesting to know whether any suggestions made by the Prime Minister in St Andrews will be adopted. Finally, as a former Member representing a Scottish constituency in the other place and now a Peer with a Scottish title—not all Peers from Scotland have Scottish titles, but I am one of them, although the title is not as distinguished as that of one Member opposite—I welcome the fact that the banks in Scotland will be allowed to continued to issue notes, subject to these provisions, and I hope that that will continue for many years to come. However, I hope that the Minister will be able to give me and others some assurance by answering my questions, as well as those raised by the noble Baroness and the noble Lord opposite.