Crown cash king again - Let's have a one thousand pound note

Crown cash king again - Let's have a one thousand pound note

by Jonathan Stanley
article from Thursday 10, August, 2017

PLAY IT COOL Rodney, play it cool, know what I mean? That scene where David Jason as Del Boy falls through the bar is a British classic. Comedy gold, and so very 1980s. The carnations, the camel coats, cash in the back pocket to strike a quick deal. Done. You have been!

Only Fools and Horses first aired in 1981. So did the Bank of England Series D 50 pound note, that one with Christopher Wren on it. When adjusted for inflation that fifty quid would buy 197 pounds 25 pence today; let's call it 200 quid. Yet few think a 200 pound note would be possible today. So many transactions are done by card or online.

Yet there are many reasons to call for a very high denomination note in the UK, be it 200 or even 1000 pounds. People still like cash, small businesses wait several days for card transactions to come through, people do not like the state snooping on them, cyberattacks on banks and bank fraud can empty a bank account rapidly. What to do in the meantime, when one's account is frozen by error or one loses one's card?

Who spends over a thousand pounds in one sitting? Quite a lot of people actually! If you buy a used car, pay rent and council tax, fill up a lorry with fuel, need to transfer assets across borders, buy foreign currency, purchase luxury goods for the wife (or mistress etc), pay for a short trip including hotel bills – there are many reasons.

With rates in bank accounts so dismally low, why not just keep the cash under the bed or even in your wallet? A few thousand pound notes could be very useful for businesses, savers storing their cash, and making cash transactions.

I am genuinely concerned about the erosion of the cash economy. Markets are about individuals making free and informed choices. When the payment system is scrutinised and no longer anonymous markets are distorted and personal liberties compromised.

The Swiss rightly have their 1000 Franc note, worth about 700 pounds. Brunei has a crazy 10,000 dollar note as does Singapore, though it isn't printed anymore.

The Euro has the 500 Euro, a direct descendant of the 1000 Mark note. It is claimed organised crime uses high denomination notes to store cash. Fine, and if there weren't any they would use smaller notes or gold. Once one is in the realm of deciding whether to transport 10 grams or a kilo of notes you are in a very small number of people who could easily shift to other ways of transporting large amounts. It just isn't an argument.

A thousand pound note would be a stand by for the cash economy and bring in hundreds of millions in seigniorage easily. There is currently 200 billion euros out there in 500 euro notes; printed at virtually no cost so why not Sterling? It would add prestige to the UK economy and bring flexibility for high-end consumers who we so wisely welcome.

It would allow small enterprising companies to pay rapid payments to suppliers, especially local suppliers where that hand to hand conveyance of funds helps reinforce commercial relationships. It would put pressure on banks too, to offer more credible rates for savers and current account holders who would have the choice of being their own banker instead. We used to have one thousand pound notes before 1945, why not again now?

Above all else it allows a genuine level of privacy for people, something in ever dwindling supply. Government will complain a thousand pound note would make it harder for them to monitor the economy.

If that isn't a selling point I wonder what is?

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