Tuesday, February 10, 2009

Separated by sterling

I've posted on the subject before, but this kind of idiocy really needs to be sorted out fast
TRAVELLERS at one of Britain’s busiest airports are being charged for changing money - but it’s for exchanging Scottish banknotes for their English equivalent.

The Travelex booth at Newcastle airport charges Scots £3 for the privilege of swapping their notes.

In many branches the commission rate for foreign currency transactions applies to the sterling swap, treating both Scottish and Irish notes like a foreign currency.

A spokesman said: “Travelex charges a standard £3 commission charge on all currency transactions under £500 at its shop at Newcastle airport and if a customer was trying to change English bank notes into Scottish notes the £3 standard charge would apply.

The official currency of the United Kingdom is the pound Sterling...so switching Pound Sterling into Pound Sterling ((no matter what pretty design may be on the note) is not a "currency" transaction.*
“Scottish bank notes are however legal tender throughout the UK and Travelex would not advise customers to exchange English bank notes into Scottish notes as they will incur the charge.

It's a bit difficult if you're coming from a place (like, say, off the top of my head...Scotland) where the vast majority of notes in circulation are Scottish ones.
For once I'm in total agreement with the SNP:
The SNP MSP Ian McKee, who was born in South Shields, Newcastle, thinks that work needs to be done to change perceptions of the Scottish bank note.

“What we need is parity of esteem between Scottish and Bank of England notes."




*Some banks do, of course, charge for switching coins into notes for non-customers; it's still a money-grabbing nonsense but can be justified, to an extent, for the amount of time involved in carrying out the transaction...but switching two notes of exactly the same value??

8 comments:

wildgoose said...

Looks perfectly reasonable to me. It's a business not a charity.

After all, nobody's forcing them to change the notes and pay the charge.

Guess what? I can't use Manx pound notes and coins in England and Wales either.

Some shops will accept Euros, US dollars ... or even Scottish notes.

But only Bank of England notes and coins are legal tender in England and Wales. Anything else can be legally refused.

It seems to me that the answer is simple enough. Scottish businesses should refuse to accept payment with Bank of England notes and coins. Their English customers can then either change BoE notes to Scottish ones - or go elsewhere...

Toque said...

Seems reasonable to me too. I don't accept Scottish notes, and I wouldn't expect a business to accept them from me.

When I was 18 I got a Northern Irish £20 in a pay envelope, and it took me about two weeks to get rid of the damn thing.

The Aberdonian said...

Scottish and (Northern) Irish banknotes were subject to commission charges when being exchanged for Bank of England notes before World War Two. However this was banned during World War Two as Scottish servicemen coming from Scotland (and ditto NI) to England with Scottish/NI notes from their pay were being forced to pay for them to become "legal" by changing them in banks for BoE notes.

The ban on commmission charging is still in place for banks. Unfortunately it seems not for money changers who seem to be able to exploit this loophole.

Abroad of course Scottish notes recieve lower rates of exchange at money changers who accept them compared to BoE notes. Unfortunately.
I am aware that

O'Neill said...

Toque/Wildgoose,

As individual businesses, there may well be an inconvenience caused presently by accepting Scottish/NIrish notes. However, all that happens to banks and I guess also currency bureaus is that at the end of the day the Scottish/N.Irish notes are bundled up into 500s, 1000s, etc and sent off to a central collection point. in exactly the same way as happens with the BOE notes- so no extra charge or even inconvenience to the institution involved. Of course bureaus like banks are businesses and within the law they can charge whatever the hell they like for whatever service they are providing, doesn't make it necessarily a moral course of action.

wildgoose said...

Scottish bank notes are just yet another source of free money for Scottish banks.

Currently, they have to deposit money at the Bank of England to cover the notes they have printed. BUT, they only have to deposit this money for part of the week, meaning that they can earn interest on the notes they have just printed for the rest of the week.

It adds up to millions of pounds.

English banks can't do it. It is just yet more free money for Scottish (and presumably Northern Irish) banks only.

You want a level playing field? Fine. If Scottish/Northern Irish banks want to print their own notes then they should deposit the cash for these notes for the whole week, not just part of it.

Of course, this still doesn't get around the fact that I would be unable to recognise a completely fake Scottish banknote that would be obvious to any Scot. Which would make them another obvious scam. I don't see how you could be prosecuted for counterfeiting notes if they don't look anything like any note that has ever been in circulation - perhaps even for a non-existent bank, just to be sure.

O'Neill said...

Of course, this still doesn't get around the fact that I would be unable to recognise a completely fake Scottish banknote that would be obvious to any Scot.

That is a more valid point than the one about having to deposit the notes at the BOE I think. By having to deposit notes (presumably BOE and presumably it is virtual as opposed to real) they're prevented from taking advantage of better rates that can be obtained for sterm deposits elsewhere?

wildgoose said...

No, the point about not having to cover the notes they print for the whole of the week is that they can print and distribute money on their own behalf without having to cover the notes they are putting out.

It's a bit like me writing cheques but only needing to have enough money in my account to cover those cheques 4 days out of every week, the rest of the time it being free money.

O'Neill said...

OK, got you.