Cycling UK Forum

AIUI legal tender is for payment after the goods or services has been provided. A plumber fixes your boiler then posts an invoice to you then BoE notes and royal mint coins are then legal tender that he/she has to accept to pay off that debt. It's a debt payment it's relevant to not an up front payment like in a shop.

I think in some ways a shop agrees with the purchaser what payment method they'll accept. As in it's up to the vendor not the purchaser what is acceptable for payment.

In that way there's no legal tender in the whole of the UK for buying goods in shops. Any shop can accept or refuse any method of payment they wish to. Does that make all bank notes simply promissory notes?

Tangled Metal wrote:Does that make all bank notes simply promissory notes?

The legal status is different in Scotland and Northern Ireland from England and Wales:
https://en.wikipedia.org/wiki/Legal_tender#United_Kingdom

Jonathan

For many rears we took regular family holidays in Scotland and it could be a PITA if we returned home with Scottish banknotes; whatever their status, shopkeepers didn't like them. Then we discovered that our milkman was relaxed about accepting them so problem solved.

Tangled Metal wrote:AIUI legal tender is for payment after the goods or services has been provided

BoE say

Legal tender has a narrow technical meaning which has no use in everyday life. It means that if you offer to fully pay off a debt to someone in legal tender, they can’t sue you for failing to repay.

Useful to know

Paulatic wrote:

Tangled Metal wrote:AIUI legal tender is for payment after the goods or services has been provided

BoE say

Legal tender has a narrow technical meaning which has no use in everyday life. It means that if you offer to fully pay off a debt to someone in legal tender, they can’t sue you for failing to repay.

Useful to know

I read something about the opposite from another reliable source. A banking body or trading standards I think. They basically said legal tender refers to debts such as where the service provider does something up front and then notifies your via invoice or similar that your then owe a payment for it. That then allows you to use legal tender. I think the article referred to specific legislation or instruments that covered it. Who's right?

Tangled Metal wrote:Who's right?

Hmmm... the Bank of England or another source that you can't remember?

That's a tough call. ; - )

Jonathan

There's another angle to post-independence Scottish use of the £ that has become pertinent since Brexit and which I hadn't realised:

A decade ago, pro-independence Scots sought a monetary union with a rump UK. Scotland would then continue to receive the lender-of-last-resort services and reputational benefits of association with the Bank of England. But the UK government quickly put the kibosh on that idea. Anyway, this possibility has been rendered moot by Brexit, because an independent Scotland that was already in a monetary union with an extra-EU country would be unable to rejoin the EU.

Whole Guardian article is here: https://www.theguardian.com/business/20 ... rling-euro

Ben@Forest wrote:A decade ago, pro-independence Scots sought a monetary union with a rump UK. Scotland would then continue to receive the lender-of-last-resort services and reputational benefits of association with the Bank of England. But the UK government quickly put the kibosh on that idea. Anyway, this possibility has been rendered moot by Brexit, because an independent Scotland that was already in a monetary union with an extra-EU country would be unable to rejoin the EU.

Unfortunately he doesn't support that statement with any reasons or sources.

Jonathan

Ben@Forest wrote:

Jdsk wrote:

Ben@Forest wrote:The Scots could the £ without a formal currency agreement (just as Panama uses the US $ and Kosovo uses the Euro). But this would mean they wouldn't meet some of the criteria to join the Euro which is their ultimate aim.

Yes. But it isn't mandatory at the time of Joining...

Yes it is. Just because a country is joining the EU but not the eurozone straight away does not mean it does not have to comply with the Copenhagen criteria. Which in a nutshell include:

Five points are of key interest in a country’s economy, and these are the exchange rate stability of its currency, the long-term interest rates, the government budget deficit, HICP inflation and the government debt-to-GDP ratio.

The two emboldened could not possibly be in Scotland's control if it did not have either its own currency or central bank or a currency agreement with rUK. I highlight them only because they're easy to understand, as Scotland couldn't control the other three either if it was using the £ without an agreement.

I fear we may have two different meanings for "it".

I was saying that joining the Euro wasn't mandatory at the time of Joining the EU...

Jonathan

It's probably a good idea at this point to link to the EU's own positions on economic criteria for joining the EU:
https://ec.europa.eu/info/business-economy-euro/economic-and-fiscal-policy-coordination/international-economic-relations/enlargement-and-neighbouring-countries/enlargement/economic-accession-criteria_en

and for joining the euro area:
https://www.consilium.europa.eu/en/policies/joining-the-euro-area/convergence-criteria/#

As observed by several people earlier in this thread the first of those means whatever the Member States want it to mean.

Jonathan

Jdsk wrote:

Ben@Forest wrote:A decade ago, pro-independence Scots sought a monetary union with a rump UK. Scotland would then continue to receive the lender-of-last-resort services and reputational benefits of association with the Bank of England. But the UK government quickly put the kibosh on that idea. Anyway, this possibility has been rendered moot by Brexit, because an independent Scotland that was already in a monetary union with an extra-EU country would be unable to rejoin the EU.

Unfortunately he doesn't support that statement with any reasons or sources.

Newspapers rarely do, but it will have been checked before print, it was published more than two months ago, there's no correction or clarification and there's nearly 1,000 comments. It makes sense anyway, otherwise applicant countries could be in monetary union with a range of currencies alien to the EU.

(Who to believe? - a professor of economics at the University of California, Berkeley, who's also a former senior policy adviser at the International Monetary Fund writing in a respected broadsheet newspaper which checks things both for accuracy and against libel actions or something you think? )

Ben@Forest wrote:(Who to believe? - a professor of economics at the University of California, Berkeley, who's also a former senior policy adviser at the International Monetary Fund writing in a respected broadsheet newspaper which checks things both for accuracy and against libel actions or something you think? )

Do I get the option to believe the EU's own published positions?

Jonathan

Ben@Forest wrote:There's another angle to post-independence Scottish use of the £ that has become pertinent since Brexit and which I hadn't realised:

A decade ago, pro-independence Scots sought a monetary union with a rump UK. Scotland would then continue to receive the lender-of-last-resort services and reputational benefits of association with the Bank of England. But the UK government quickly put the kibosh on that idea. Anyway, this possibility has been rendered moot by Brexit, because an independent Scotland that was already in a monetary union with an extra-EU country would be unable to rejoin the EU.

Whole Guardian article is here: https://www.theguardian.com/business/20 ... rling-euro

But the currently favoured option is for the use of Sterling to be temporary until a Scottish currency was established.

Jdsk wrote:

Ben@Forest wrote:

Jdsk wrote:Yes. But it isn't mandatory at the time of Joining...

Yes it is. Just because a country is joining the EU but not the eurozone straight away does not mean it does not have to comply with the Copenhagen criteria. Which in a nutshell include:

Five points are of key interest in a country’s economy, and these are the exchange rate stability of its currency, the long-term interest rates, the government budget deficit, HICP inflation and the government debt-to-GDP ratio.

The two emboldened could not possibly be in Scotland's control if it did not have either its own currency or central bank or a currency agreement with rUK. I highlight them only because they're easy to understand, as Scotland couldn't control the other three either if it was using the £ without an agreement.

I fear we may have two different meanings for "it".

I was saying that joining the Euro wasn't mandatory at the time of Joining the EU...

The Copenhagen criteria are for joining the EU not the euro. Essentially the economics of a country must be sound without even starting the eventual transition to the eurozone the EU is going to expect anyway. It's sensible - given there's an EU budget why would they allow a country with a very poor or uncertain economy to join. It took Spain 10 years and for the first few years after acceding it had to be net contributor, despite the fact it was undeveloped compared to the other contributing nations of the time.

rualexander wrote:

Ben@Forest wrote:There's another angle to post-independence Scottish use of the £ that has become pertinent since Brexit and which I hadn't realised:

A decade ago, pro-independence Scots sought a monetary union with a rump UK. Scotland would then continue to receive the lender-of-last-resort services and reputational benefits of association with the Bank of England. But the UK government quickly put the kibosh on that idea. Anyway, this possibility has been rendered moot by Brexit, because an independent Scotland that was already in a monetary union with an extra-EU country would be unable to rejoin the EU.

Whole Guardian article is here: https://www.theguardian.com/business/20 ... rling-euro

But the currently favoured option is for the use of Sterling to be temporary until a Scottish currency was established.

Or temporary until the Euro is adopted. But the crucial point for independence is that the decisions and changes can be phased... with independence coming before the decision on currency. And that's why that option should have had much more discussion in the article.

Jonathan