Scottish and Northern Ireland Banknote Regulations 2009

My Lords, this is a timely matter in the present circumstances of banks in both the United Kingdom and the Republic of Ireland because those in business and those who handle notes have increasing concerns about banking in both territories. The regulations mention that we have four issuing banks’ notes in Northern Ireland: those of the Bank of Ireland, the Ulster Bank, the Northern Bank and the First Trust Bank. The Northern Bank and Ulster Bank are not matters of great concern in Northern Ireland because the Ulster Bank is, after all, a British bank owned in Scotland and the Northern Bank is owned by a Danish bank. Our problems in Northern Ireland relate increasingly to notes issued by the Bank of Ireland and the First Trust Bank, which is not really a separate bank as it is 100 per cent owned by the Allied Irish Bank. Banking in the Republic of Ireland is pretty serious. Sometimes the press in Ireland refer to it as the next Iceland, and it is scary when you see language such as that. The Anglo Irish Bank in the Republic of Ireland has already collapsed, and the other two, the Bank of Ireland and Allied Irish Bank, which is the First Trust Bank, are often referred to in the press as being insolvent. Of course, the Republic of Ireland may have to seek support from the eurozone, but some economic journalists are saying that Germany may not come to its rescue and that it may have to go to the IMF in the first six months of 2010. That is why I say that these regulations are timely. They are a means of further guaranteeing to people in Northern Ireland that the pound notes issued by the four banks, and in particular the two in the Republic of Ireland, will be guaranteed by the Bank of England. However, I want to comment on that. First, I agree that the cost of this is amazing—£600,000 a year, and for what? For nothing. It would be much better to have a standard bank note in the whole United Kingdom, and here I disagree with the noble Lord from Scotland. Today, I have just three notes with me: from the Northern Bank, the First Trust Bank, which I stress is the Allied Irish Bank in the Republic, and the Bank of Ireland, which once again is a Republic of Ireland note. Those notes are an embarrassment because when you go to Scotland, England, Wales, the eurozone or indeed the whole of the European Union, people do not recognise them. They are not even recognised in England, the reason being that they are not exchangeable with other currencies, be it the euro or any other foreign currency. Therefore, they are an embarrassment and cause difficulty. One thing that would be much better would be to have the word "sterling" on the notes in larger print. It is the smallest word on each of the notes. When you try to explain to English people that the note has the same value as the Bank of England note, they look at you in horror. You look for the word "sterling" and find it. After some debate they might accept it, but you can be refused on many occasions. These notes are a hindrance and an embarrassment. They have one advantage; England still does not have £100 notes. We, however, need lots of money in Northern Ireland for our farmers, who deal in £100 notes. That is one advantage of having notes of our own in Northern Ireland, but the only one; there are disadvantages in the design. Many banks in Northern Ireland, such as HSBC, Santander, Alliance & Leicester and Abbey, do not issue notes but work mainly with Bank of England notes. In this case, however, some consideration should be given in the future to the withdrawal of the right to issue local notes, which, as I say, are an embarrassment wherever you travel.