by Gordon Hamilton

Created on: March 03, 2009

The United Kingdom must be fairly unique in that it issues seven different types of its own currency. I am not talking about the denominations of the notes, I am specifically talking about who issues the notes. The currency of the United Kingdom is of course Pounds Sterling and the official issuer of notes representing same is the Bank of England, but there are three Scottish banks and three Ulster banks who have special licensing agreements to allow them to do likewise.

The Royal Bank of Scotland, the Bank of Scotland and the Clydesdale Bank in Scotland all issue their own notes. They are in 1, 5, 10, 20 and in some cases 50 and 100 denominations. These notes are far more frequently used in Scotland than the Bank of England or treasury notes, though all are equally acceptable.

It is when Scots go out of Scotland bearing these notes to elsewhere in the United Kingdom, particularly England, however, that problems can arise. Many outwith Scotland are not even aware of the existence of these notes, never mind their legality or acceptability. This can lead to Scots experiencing problems in having their currency accepted and bad feeling among other issues arising on both sides. Taking Scottish currency overseas is an even worse idea. The likelihood of finding anywhere which will exchange them is small and even if we do, the rate of exchange on Scottish notes is likely to be less than that of treasury Bank of England notes.

In the early 1990's I was working in a building society and regularly experienced customers coming in looking to exchange their Scottish bank notes for Bank of England notes as they were travelling either to England or overseas. I heard many tales of how sometimes the notes would be accepted without question and at other times they would not be accepted under any circumstances, I decided one day, therefore, to determine the precise position regarding these notes and telephoned the Head Office of the Bank of England in Threadneedle Street, in London.

I spoke to an extremely helpful gentleman who explained to me the circumstances in which Scottish and Ulster notes are issued. They are basically issued on special licence from the treasury as a form of advertising for the issuing banks in Scotland or Ulster only. They should not be taken out of Scotland. In the strictest and most literal interpretation of the agreement, these notes are not legal tender anywhere, even in Scotland or Ulster! They can be taken in other parts of the UK and there will be no problems experienced by those accepting them but if a person or retail outlet refuses these notes in payment, they are perfectly within their rights to do so.

The message therefore is that if you are in Scotland or Ulster and are in the habit of using locally printed bank notes, do not take them with you on your travels if you don't want to run the risk of encountering problems. Either exchange them before you go for Bank of England notes in your bank, or simply wait until you get to your destination and withdraw English notes from an ATM.

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