Bank of England and Financial Services Bill [Lords]

Hywel Williams Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 19th April 2016 Commons Chamber

[Hywel Williams (Arfon) (PC)]

Does my hon. Friend agree that a worthwhile commercial advantage would be gained by issuing banknotes? That value would then accrue to Lloyds bank, and possibly to taxpayers in Wales and the rest of the UK, which would be a good move.

[Jonathan Edwards]

I am grateful to my parliamentary leader for his intervention. He is completely right, and that is why four banks in Northern Ireland and three in Scotland have continued the practice. There is a commercial interest for Lloyds, but also a public interest due to our part ownership of the bank.

Permission to issue Welsh banknotes would be a welcome boost to brand Wales, recognising our country as an equal and economic entity. Notes in Northern Ireland celebrate individuals such as J.B. Dunlop, Harry Ferguson and James Martin, as well as architectural splendour such as that of Belfast city hall. Notes in Scotland pay tribute to that country’s fantastic bridges and recognise the contribution of people such as Sir Walter Scott and Robbie Burns. Notes currently used in Wales recognise people such as Elizabeth Fry, Adam Smith and Matthew Boulton, and previous notes have portrayed Charles Dickens, Michael Faraday, Sir Isaac Newton, William Shakespeare, George Stephenson and the first Duke of Wellington. They are all great people, but none, to my knowledge, has anything to do with my country.

Is it not fair and sensible for us in Wales to use notes that recognise our historic landmarks, such as the incredible Castell Carreg Cennen in my constituency, Pont Menai in north Wales, Yr Wyddfa—Snowdon, the largest mountain in our country—and our historic greats such as Owain Glyndwr, who was nominated the seventh most important person of the last millennium by The Times, of all papers? There is also David Lloyd George, the originator of the welfare state, Aneurin Bevan, the architect of the NHS, and Gwynfor Evans, the first Plaid Member of Parliament and the father of modern Wales.

A case could also be made for what is arguably the most famous Welsh painting of all: “Salem”, painted by Sydney Curnow Vosper in 1908. His painting of Siân Owen aged 71 at Capel Salem, a Baptist chapel at Pentre Gwynfryn in the north of Wales, is a national icon, much as Constable’s “The Hay Wain” is in England. The Royal Mint already produces Welsh-specific coins, so my proposals raise no major issue of principle—indeed, the Minister referred to the Royal Mint earlier in the debate.

A national poll by ITV Cymru/Wales found that more than 80%—indeed, it was 82.6% when I looked at the website today—of the Welsh public supported these calls. If we are unsuccessful in the Division, I hope that the UK Government will support Plaid Cymru in putting right this historical anomaly and bring forward their own proposals.

[Hywel Williams]

I have a Welsh pound coin with me, and it reeks of nationalist propaganda because around the edge it states “Pleidiol wyf i’m gwlad”, which means “True am I to my country”. I certainly agree with that, but it is issued by the Royal Mint.

[Jonathan Edwards]

My hon. Friend makes my point entirely. There is no issue of principle at stake; this is about finding the mechanism for delivery.

This issue has received considerable media coverage in Wales. Considering that we are only two weeks from the Welsh general election, I suggest to Treasury Ministers that the election prospects of their candidates in Wales may be damaged if they choose to ignore the strong views of the people of Wales on this matter.

--- Later in debate ---

First, let me give the House a history lesson. The UK is a rare example in the world of a country that allows certain commercial banks to issue banknotes. As the hon. Gentleman said, since the 1840s, when the House passed the Bank Charter Act 1844, no new bank has been allowed to issue commercial banknotes in the United Kingdom. Let me put that in context. The 1840s happened a long time ago: it was the time of both Elizabeth Fry, whom we celebrate on the Bank of England £5 note, and Charles Darwin, whom we find on the £10 note. Since then, many of the banks that were originally authorised to issue banknotes have lost or surrendered their rights. The last private note issuer in Wales was the North and South Wales Bank, which lost its note-issuing rights in 1908 when it was taken over by the Midland Bank, now rebranded as HSBC. Today, only seven commercial note issuers remain: three banks in Scotland, and four in Northern Ireland. The Government are committed to preserving the long-standing tradition of commercial issuance in Scotland and Northern Ireland, as is clear from the amendments made in clause 36.

[Hywel Williams]

Does the Minister agree with my earlier point that there is a commercial advantage to be gained from issuing one’s own notes? Why can that advantage not be extended to bank operations in Wales?

[Harriett Baldwin]

That is the very point that I was about to make. The amendment seeks to confer the right to issue commercial banknotes in Wales—a clear commercial advantage—on just one bank, Lloyds Banking Group. That appears to be based on a link to a right to issuance that was broken more than 100 years ago. Today, the Government—the taxpayer—owns just under 10% of Lloyds Banking Group. Part of Lloyds Banking Group already has a commercial banknotes issuance operation, which may be why the hon. Member for Carmarthen East and Dinefwr chose to focus on a single bank in his amendment. That is due to the acquisition of the Bank of Scotland operation, which is authorised to issue banknotes in Scotland. However, extending the privilege and the commercial advantage of issuing banknotes in Wales to just one bank would raise competition and commercial issues for others.

I liked the wide range of suggestions about who should be represented on Welsh banknotes, and, as I said earlier, the coins in our pockets are minted in Wales. I appreciate that the motive behind the amendment—the symbolic issue about which the hon. Gentleman feels so strongly—is to create a symbol, rather than to deal with a pressing economic or practical need for different banknotes.

The Bank of England has already announced that future banknotes, starting with the polymer £5 note which will be issued in September 2016, will include symbols representing all four home nations. For Wales, the imagery will be taken from the Royal Coat of Arms and the Royal Badge of Wales. The Bank recently announced that the design for the £5 note would be revealed on 2 June 2016.

I am very glad that we have had a chance to discuss the merits of the amendment. The hon. Gentleman will understand why I cannot support it. However, I welcome the opportunity to convey the message that an important symbol of Wales will appear on our new banknotes.

Question put, That the amendment be made.