English shopkeepers urged to take note and accept Scottish money

The idea was put forward by Angela Eagle, the Treasury minister, after she rejected a proposal to introduce laws to force shopkeepers to accept Scottish bills.

Scottish politicians have raised concerns that notes bearing the Bank of Scotland, Royal Bank of Scotland or Clydesdale Bank emblem are often rejected by retailers in England and Wales.

There is no legal onus on retailers to accept these, as Bank of England notes are the only legal tender across the UK, apart from coins under 1.

David Mundell, the shadow Scottish secretary, tried yesterday to put forward a back-bench bill that would force retailers to accept the note.

But the Scottish Banknotes (Acceptability in the UK) Bill, which would put Scottish notes on an "equal footing" with any other acceptable banknote now has little chance of becoming law.

Ms Eagle said she understood how "potentially embarrassing, inconvenient and annoying" it could be to have Scottish bank notes refused.

But she added: "I am sceptical that the legislative vehicle is the best way to solve this problem."

She said the UK was highly unusual in allowing a number of commercial banks to issue banknotes and the government was committed to maintaining this long-standing tradition. "Before we resort to the legislative sledgehammer, we should think about whether we can put in place a campaign that would enable and encourage retailers to become more familiar with different sorts of banknotes."

Mr Mundell later said he asked for more details of any forthcoming campaign.

The Conservative MP for Dumfriesshire, Clydesdale and Tweeddale said Scottish people were often "hurt by the implicit suggestion that there's something wrong" with their notes.

He told MPs that, despite their different appearance, "there is no difference in the financial value of Scottish notes".

Three Scottish banks, the Bank of Scotland, Royal Bank of Scotland and the Clydesdale, currently issue a core of 16 note designs.

"There's absolutely no reason why Scottish notes should be questioned, unless there's a substantial reason to believe they are forgeries," Mr Mundell said.

Reluctance to accept Scottish notes was a "long-standing problem" and not to do with the public's recent perception about the safety of Scottish banks, he said.

His bill was backed by English MPs from the other main parties. Andrew MacKinley, the Labour MP for Thurrock, said it should have been extended to cover notes from Northern Ireland.