New banknotes give an edge to HBOS for longer lasting fivers

SHOPPERS and retailers across Britain will have to get used to some new designs from today, as the Bank of Scotland issues its first complete new set of banknotes in more than a decade.

The notes celebrate some of Scotland's major and most recognisable engineering achievements, including the Forth Bridge and Glenfinnan Viaduct.

More importantly, there will be a step forward in tackling the problem of scruffy fivers. Banks and shops have a particular problem with 5 notes because they spend more time scrunched up in consumers' pockets or in cash tills than they do in bank storage. Cash machines do not dispense them and shops like to keep hold of them in order to give them out as change - a situation which reduces the opportunities for banks to take tatty notes out of circulation.

Today's new Bank of Scotland fivers, featuring the Brig o' Doon near Alloway in South Ayrshire, will appear with strengthened corners to extend their lifespan and reduce wear and tear.

A Bank of Scotland spokesman said: "The general lifespan of a banknote is around two years - although 50 and 100 notes can often survive for much longer. The problem of fivers is a longstanding one and affects every bank. The new design incorporates cornerstones on the 5 note in the form of a watermark, which should address this issue."

Mervyn King, the Governor of the Bank of England, recently admitted the criticism of the poor condition of 5 notes was justified. He fired a warning shot across the bows of the high street banks, which prefer not to deal with 5 notes. "Mutual convenience [of access to 5 notes] is a public good, and may not correspond to the private interests of commercial banks."

Today's new issue is the 47th new series of notes issued in the 312 years of Bank of Scotland's history. The last was issued in 1995.

While the colours and sizes of all of the new notes are the same as previous designs, text on the notes is larger than before. The raised large denomination also acts as an aid for the partially sighted. Sir Walter Scott continues to feature on the front of the notes, as well as a larger image of The Mound, HBOS's corporate headquarters in Edinburgh and the historical home of Bank of Scotland. A new hologram and foil patch has been introduced on the front of the 20, 50 and 100 notes, which features the Bank of Scotland logo and the numerical value of the note.

It will take at least three years for the 1995 issue of Bank of Scotland notes to be phased out of circulation. On any given week, Bank of Scotland has around 800 million of notes in circulation.

Reto Tschan, assistant archivist at HBOS, explained: "The production of Scottish bank notes is not because of a special allowance for Scotland but because of the longevity of Scottish banks. All banks are allowed to issue their own notes provided they were established before 1844, when an Act of Parliament took away the right for all new banks to issue notes. In 1844, there were 15 banks in Scotland eligible to issue their own notes, but over the years mergers and closures have reduced this number to three. In England and Wales, the last private banknote was issued in 1921 by the Fox, Fowler and Co bank in Somerset, leaving the Bank of England as the sole source of notes."

The Museum on The Mound - at HBOS's Edinburgh headquarters - which is open free from Tuesdays to Sundays, will also be changing its display of 1 million of notes to reflect the new designs.

WHY LEGALITY OF SCOTS MONEY IS A TENDER TRAP

THE concept of legal tender is often misunderstood. Contrary to popular opinion, it is not a means of payment that must be accepted, but a legally defined means of payment that should not be refused by a creditor in satisfaction of a debt.

Under this narrow definition, legal tender is not relevant to whether traders accept or refuse payment of any kind. Unless a customer is settling a debt, a shop is entitled to refuse any banknote for the same practical reasons that parking machines do not have to accept every type of coin in circulation.

Scottish banknotes have never, even in Scotland, been legal tender, except for two very short periods during the two world wars.

Bank of England banknotes are also not legal tender in Scotland.

Only coins from the Royal Mint are legal tender in Scotland, subject to various limitations: for example, 1 worth of 1p coins is legal tender, but 1.01 is not.

Whether or not notes have legal tender status, their acceptability as a means of payment is essentially a matter for agreement between the parties involved.

Legal tender does not affect the value of Scottish banknotes.

They carry a promise to pay which means that, should a note be presented at the headquarters of the issuing bank, the bank promises to exchange it for an equal amount of legal tender, hence cancelling the debt.