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Last Updated: Friday, 23 April, 2004, 05:47 GMT 06:47 UK
Scots still bank on paper notes

Sandy Murray
BBC News Online Scotland

Although coins have taken the place of Bank of England 1 notes, the paper version is still in use in Scotland.

The UK's 1 coin has been in circulation for 21 years, having been issued for the first time on 23 April 1983.

But the Royal Bank of Scotland has continued to issue the paper version, with millions of the notes still in circulation.

Two pounds
Pound notes still circulate alongside coins in Scotland

The reverse side of the Scottish pound note features one of the most famous views in Scotland, Edinburgh castle.

Scottish banknotes have an unusual status, with roots in the country's history.

In 1826, the British parliament passed legislation preventing banks from issuing their own pound notes, a practice which was threatening to get out of hand.

But a vigorous campaign in Scotland, which enlisted figures such as the writer Sir Walter Scott, ensured that it was exempted from the new law.

In Scotland, three banks retain the right to print their own money: the Royal Bank of Scotland, the Bank of Scotland and the Clydesdale Bank.

Of these, only the Royal Bank still issues 1 notes.

Inflation surge

Most of the Scottish currency is backed by holdings of Bank of England notes, but the banks are allowed to issue an additional sum equivalent to the notes and coins in circulation in 1845.

At 3m, this figure now represents a very small proportion of the value of all Scottish banknotes.

Elsewhere in the UK, the surge of inflation in the 1970s sealed the fate of the pound note.

It had become worth too little to justify the costs of printing notes which had a much shorter life than coins.

The initial move from paper was kick-started with the minting of more than 400m pound coins in 1983.

Made from a nickel-brass alloy, each of the new coins added 9.5g in weight to pockets and purses.

In 1997, it was joined in general circulation by the even-larger 2 coin.

For major retailers with branches throughout the UK, the pound note is only likely to be presented in their Scottish outlets.

But they appear to be happy to continue larger quantities of paper money in Scotland.

Elinor Jayne of the Scottish Retail Consortium said: "Retailers will accept customers' money in whatever form.

"As long as customers want to use paper notes, retailers will be happy to accept them."




SEE ALSO:
New 5 notes reissued
21 Aug 02  |  UK News
Jobs at risk at printing works
26 Nov 03  |  Cambridgeshire
Euro forgeries soar
10 Nov 03  |  Business


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