Northern Ireland Banknote (Designation of Authorised Bank) Regulations 2020

Baroness Kramer Excerpts

Tuesday 2nd June 2020 Lords Chamber

[Baroness Kramer (LD)]

My Lords, this is also my first opportunity to welcome the noble Baroness, Lady Penn, to her position. I agree with many noble Lords who have spoken that this statutory instrument is not contentious. This is a time of change for banknotes and coins, and consequently I have three questions for the Minister. The first is very simple: are polymer notes meeting the expectations of acceptance, ease and durability?

More significantly, how have Covid and lockdown impacted on the use of cash? I think earlier this year, before the virus struck, cash was used for around 28% of transactions across the UK. I cannot find a separate number for Northern Ireland, but perhaps the Minister knows. That is part of a trend of rapidly reducing cash use. Can the Government assure us that they will support easy access to cash for those who wish to continue to use it? We lost several thousand free-to-use ATMs in the UK in 2018 and 2019, and rural areas of Northern Ireland were the hardest hit. Has Covid made that any worse, especially as many small post offices have been closed? Will the Government make sure that any contraction in access to cash is rapidly reversed?

Lastly, I have a more esoteric question, but it is important. As cashless transactions grow, the Bank of England, like other central banks, is considering a fiat, or a central bank digital currency. The Bank of England is focused particularly on the retail use of such a currency. Such a currency could advance financial inclusion, especially if it was based on a token system, but there are many complexities, from privacy and the stability of the banking system to international power and trade politics. In the context of Northern Ireland, how would such a switch towards a digital currency impact on some of the unique cultural aspects represented in the current Northern Ireland banknotes? The same would apply to Scotland.

The Bank of England has been consulting on this, but of course its consultation has overlapped almost entirely with lockdown. Will the Minister therefore commit to an update on the Government’s thinking on this and give us the opportunity for a proper debate in the House on the issue? The ramifications are, quite frankly, sweeping.