On this day 27 July in 1694, the Bank of England was established and granted a 12 year charter by an Act of Parliament.
It was established as a private bank which lent to the government, by among others, the Scotsman William Paterson.
This was prior to the Union of Parliaments.
When 1707 came about, it should have changed its name to something like "the Bank of Britain", or the "Union Bank", or something suitable which would reflect the changed political circumstances.
However, perhaps because it was a private bank, then its status may have been unclear; certainly as far as the wider nation of Britain was concerned.
Astonishingly, it was not officially nationalised until 1st March 1946.
That was certainly the time to correct its name, in order to reflect the fact that it was the "national" Central Bank, which had been "nationalised", and that "national" meant Britain.
But that did not happen. Possibly because of the lack of care and imagination which plagues British government to this day.
This was quite wrong, for several reasons.
Firstly, it is a matter of "equality of dignity" for all parts of the UK. It is about saying, "This is the Central Bank for all of the UK and so it should have an appropriate name"!
Secondly, its misname gives rise to considerable political misunderstanding. It gives the impression that all the banks in the UK are equivalent to each other.
This in turn introduces confusion into basic comprehension of the British economic system.
For example, Scotland has a "Bank of Scotland". It was given that name (1695) – as was the "Royal Bank of Scotland" (1727) – way before there were proper laws about calling a private company after the name of a country, least it gives the wrong impression that it is indeed a nationally-owned organisation.
Of course, the Bank of Scotland and the Royal are both private companies (albeit the latter heavily bailed out by the British taxpayer).
They are definitely not nationalised in the manner of the "Bank of England". Nevertheless, it is easy to see how their names create a confusion about them all being equivalent to each other.
Scottish nationalists will say "Why do we need the Bank of England when we've got the Bank of Scotland?" It is an understandable mistake!
"The Scottish Pound" is not Equivalent to "the English Pound"
Thirdly, this apparent equivalency between the Bank of England and the Bank of Scotland and the others, means that there is confusion about the ability of the "Scottish Banks" to print their own money.
This confusion manifests itself in very serious debates about Scotland's ability to use "the English pound".
The Scottish Nationalists will say, "Why do we need 'the English pound' when we have Bank of Scotland pounds in our pocket?"
However, the fact is that the Scottish private banks cannot create their own currency in the form of bank notes, or digital money.
The reality is that all bank notes, and their digital equivalent, circulating in the UK are British currency – called British Sterling – and they are all created by the publicly-owned and (misnamed) Bank of England.
A Plaque to one of the Founders of the Bank of England, at Sweetheart Abbey in New Abbey, Dumfries and Galloway. (Courtesy of A Force For Good 29-7-13). The Plaque states:
Near this spot is the unmarked grave of
Who died in 1719.
A Founder of the Bank of England (1694)
And Originator of the Darien Scheme (1698)
Paterson was born in 1658
At Skipmyre Farm, Tinwald, Lochmaben
Here is How "the Scottish Pound" is Created
All currency in the UK has to be purchased from the British Central Bank (the misnamed "Bank of England").
For example if the Bank of Scotland wants to run off a million pounds, then it has to give one million pounds of its own money (which it holds in its account with the Bank of England in digital form) to the Bank of England.
The Bank of England then allows the Bank of Scotland to run off one million pounds worth of its own specially-designed notes. The same process occurs with the Royal and the Clydesdale.
That is, all cash is British currency from the Bank of England. It is all British Sterling created by the permission of what is, in fact, the British Central Bank.
Yet, because of the misnaming of what is, in reality, the British Central Bank, as "England", many people in Scotland do not understand that all the cash in circulation, including the "Scottish notes" is created centrally by permission of the British Central Bank.
Our Policy: Every Banknote to carry the Statement that it is British Sterling
If changing the name of the Bank of England to the British Central Bank is too politically difficult, then here is what can be done in the meantime...
And this suggestion would also allow us to make a significant change to the acceptability of the cash which is used throughout the UK.
What is this about?
A common Scottish nationalist complaint is that the bank notes of the Scottish private banks are sometimes not accepted in England. This is largely not so. However, it does sometimes happen – especially with large denominations.
There is an easy way to prevent this happening, while retaining the quirky ability of the Scottish private banks to have their own specially-designed notes.
We could do this by an Act of Parliament which states that all the notes of all the private banks in the UK must carry the Imprint, "This Note is Standard British Sterling which is backed by the British Central Bank".
At a stroke, that would render all these notes absolutely legitimate in the eyes of every holder anywhere in the UK and it would help people to realise that it is all British Currency.
The Matter of "The Bank of England" at another Referendum
If there were to be another referendum on separation, then the question of the currency could be pivotal.
That means it must be clear that we would be breaking from a common British currency, and a common British Central Bank rather than an "English" currency and an "English" bank.
Therefore, it will be necessary to have the Britishness of the British Central Bank and its currency properly clarified in name and action, so the nationalists can obtain no traction over confusion about the supposed role of "England", or an "English bank", or the "English pound" in the proceedings.
What we Can do in the Meantime
Until such time as the misnamed Bank of England is properly called the British Central Bank (BCB) we suggest simply referring to it as the British Central Bank, anyway – because that is what it is!
We addressed this matter in our show "Good Evening Britain" on Wednesday 1st March 2023, the 77th anniversary of its nationalisation:
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