Northern Ireland Banknote (Designation of Authorised Bank) Regulations 2020

Lord Bruce of Bennachie Excerpts

Tuesday 2nd June 2020 Lords Chamber

[Lord Bruce of Bennachie (LD)]

My Lords, I have, of course, supported the campaign by the noble Lord, Lord Hain, on behalf of those suffering historical injuries, but I will concentrate on the instrument in question. This is relatively uncontentious and arises as a result of the restructuring of the Royal Bank of Scotland Group, which is, of course, majority-owned by the Government. In Northern Ireland, as in Scotland, the public are attached to their own local-issue bank notes and are resistant, I would suggest, to any reduction, although the number of issuing banks has been cut over the years. So can we be assured, in the Scottish context, that there will be no move to transfer the note-issuing rights of the Royal Bank of Scotland to NatWest in Scotland? Can the Minister indicate whether the instrument will lead to any change in the number and value of Ulster Bank notes in circulation? Can the Minister tell us the current value and volume of Northern Ireland-issued notes altogether, and what proportion are held or issued by Ulster Bank? In this context, will existing notes be withdrawn and replaced with designs incorporating the NatWest logo? Given historical problems, are the Government and the Bank of England satisfied that measures are in place to eliminate fraud or counterfeiting, and that they are robust?

Although during lockdown there has been a reduction in cash transactions, will the Minister assure us that, as lockdown eases, there will be adequate supplies of cash and that Northern Ireland notes will be as freely available as before? Is there any consideration that, as the economy starts moving again, there will be sufficient cash for what might well be a much greater demand than has been the case in the past? Many will seek the assurance of cash transactions rather than credit. Is that likely to lead to raising the amount of Northern Ireland banknotes issued above the most recent aggregate, which I understand was £2.86 billion?

Will the announcement by Allied Irish Banks that it will cease to issue its own banknotes in Northern Ireland after the end of this month affect the total value of notes issued? Will other banks be able or willing to take up the difference, or will it just lead to more Bank of England notes in circulation in Northern Ireland?

As banks in Northern Ireland also operate through associated companies in the Republic of Ireland, is the Minister satisfied that resources to support bounce-back loans are adequate? What arrangements, if any, are in place between the UK Government and the Government of the Republic to underwrite these loans?

What responsibility for any of this lies with the Northern Ireland Executive and Assembly? I know that in my own lifetime—the history of note issuing in Scotland and Northern Ireland goes back way before that—issuing banks have disappeared: I remember the North of Scotland Bank and the British Linen Bank, both of which are long gone. Nevertheless, people wish to see this continued. The fact that note issuing is authorised and monitored by the Bank of England was a detail to which I referred in a pamphlet I produced when I was Treasury spokesman for my party, making the case for the operational independence of the Bank. I suggested that, as part of the reform, it should be renamed the “United Kingdom Reserve Bank”, because that is effectively what it is.

The reality is that Scotland and Northern Ireland have benefited in the past few months from massive injections of funds from the Bank and the Treasury. It has shown that we are better together and raises the question of how Scotland could have coped on its own. Northern Ireland is even more exposed. If the ending of lockdown coincides with a no-deal Brexit, the resources of all the components of the United Kingdom might be stretched to breaking point.