BANK OF ENGLAND TO ISSUE POLYMER BANKNOTE

The Bank of England is today announcing that the next £5 and £10 banknotes will be printed on polymer, a thin flexible plastic film, rather than on the cotton paper used for notes currently in issue.

The new polymer notes will retain the familiar look of Bank of England banknotes, including the portrait of Her Majesty the Queen and a historical character. The first polymer note will be the £5 note featuring Sir Winston Churchill and will be issued in 2016. It will be followed around a year later by a polymer £10 note featuring Jane Austen.

The decision follows a three-year research programme by the Bank looking at the materials on which banknotes are printed, and which concluded that there were compelling reasons to move to printing on polymer. In particular, the research indicated that:

Polymer banknotes are resistant to dirt and moisture so stay cleaner for longer than paper banknotes.

Polymer banknotes are secure. They incorporate advanced security features making them difficult to counterfeit and further enhancing the strong security of Bank of England banknotes.

Polymer banknotes are more durable. They last at least 2.5 times longer than paper banknotes so will take much longer to become “tatty”, improving the quality of banknotes in circulation.

In addition, polymer banknotes are more environmentally friendly and, because they last longer are, over time, cheaper than paper banknotes. Being thin and flexible they fit into wallets and purses as easily as paper banknotes.

Despite these benefits, the Bank announced in September that it would print notes on polymer only if persuaded that the public would continue to have confidence in, and be comfortable with, notes printed on polymer. A programme of public consultation was therefore a vital part of the assessment of the merits of polymer notes.

The response to that consultation was overwhelmingly supportive of polymer notes. Over the course of two months, the Bank hosted events across the United Kingdom to give the public the opportunity to learn more about polymer banknotes, to handle the notes, and to provide feedback. Nearly 13,000 individuals gave feedback during the public consultation programme. 87% of those who responded were in favour of polymer, only 6% were opposed and 7% were neutral.

E-Sylum reader Robert J. Leuver was Director of the Bureau of Engraving and Printing 1983 - 1988. I asked him for his thoughts. Bob writes:

Frankly, I was expecting this announcement. BoE had raised the issue previously. Canada has successfully launched polymer.

Polymer notes have improved since their development c1981. They are durable, more expensive to produce but are highly cost-effective due to the life of the note, and singularly secure. The US has had problems reconciling the "green" aspects of polymer, the fact that notes tend to stick together when bundled, raise concerns for ATMs, are more difficult to fold, slippery thus inducing problems when counting, and do not fare well in humid conditions. The US banknote circulates worldwide and is held by many national and third-world local banks as an asset similar to or in lieu of gold.

C 1981, BEP director Harry Clements phoned me from Australia, where he was meeting with the Four Nations Group (anti-counterfeiting: US, England, Canada and Australia). Harry was an aeronautical engineer with a strong penchant for science, then recently with Gruman. Harry was intrigued by the prospect of polymer notes. We did a quick study. We had the $10 million required for a 50% ownership. Carl Ichan would have lived the deal. However, we felt we could not sell the idea up the street at Main Treasury, nor on the Hill. We had no study or data relative to use, durability, acceptance, etc.

So, although I have not talked to Harry Clements in a long time, I am certain that he with Maurie Schneider--former BEP financial officer, and I wonder what might have been, if the BEP had a 50% interest in the highly successful and broad country use of polymer notes by Securrency--at least still owned whole or in part by Reserve Bank Australia.

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