The new £5 polymer note with its long-awaited portrait of Sir Winston Churchill has been one of the most anticipated and talked-about British banknotes and represents the greatest change since the introduction of color £5 notes in 1957. The May 2016 unveiling of the Bank of England’s latest superstar was just that—as if a great celebrity had come to town and was looking forward to meeting their excited and awaiting fans. Blenheim Palace, ancestral home of the Churchills, was the setting—no less for such a superstar—and much of the country’s media had sent representatives for the occasion to catch a first glimpse of the note in question.
I had an opportunity to speak with Victoria Cleland, chief cashier of the Bank of England (whose signature appears on all Bank of England notes), before the note’s official launch date of September 13. She is directly responsible for insuring the integrity, safety, security, and overall supply of the country’s notes—among other accountabilities. We spoke about the behind-the-scenes of preparing for a new banknote, which posed more challenges than any ordinary change-over from one paper note to another due to the new polymer substrate being introduced. The newly launched “G” series of banknotes will continue to undergo change and addition; the upcoming £10 “Austen” note will also be printed on polymer, and it will be reduced in size to correspond with the new £5 note (which is 15% smaller than the 1990 version) and will change in design. The £20 denomination will also undergo change by 2020; it will include a portrait of 19th-century painter JMW Turner and will correspond to the new changes in terms of polymer substrate and size. It is clear that the Bank of England are poised to ensure that their notes are well suited to the demands the public expect of their banknotes as well as to guarantee their integrity, and have made great investment in this pursuit. The Bank seems to be looking long-term for continued banknote use, and where the demise of physical notes and coins are predicted to be the “norm” in other countries due to increasing electronic payment methods, don’t count out the pound in your pocket just yet where Bank of England notes are concerned.
Michael Alexander: Hello Victoria, your department unveiled the newly anticipated £5 banknote on June 2, anticipated because of the inclusion of Sir Winston Churchill’s image on the reverse and of course, because it’s the Bank of England’s first note printed on polymer. My first question is when did the Bank of England decide that polymer would be used for this new series—what were the considerations behind the decision?
Victoria Cleland: The Bank of England undertook a research project for about three years, really trying to understand the benefits of polymer compared to other banknote substrates. We looked at polymer, we looked at paper, and we looked at a number of hybrids between paper and polymer. The first one the team was looking at was whether or not polymer would give us increased counterfeit resilience. I think it’s very important to say, it’s not just the substrate, it’s the combination of the substrate and advanced security features that we’re trying to assess. My team spent a lot of time trying to literally counterfeit the notes themselves and they were quite good, quite brilliant. From that, it was essentially showing that polymer notes took longer to counterfeit and it was more difficult to come up with a good-quality polymer note with advanced security features than it was with paper—it’s really raising the bar for counterfeiters.
We also looked at the life of the note and durability, and our tests found out that the polymer notes were cleaner and stronger. So actually, they’re more durable. I keep telling people “they are not indestructible, they’re more difficult to tear than paper ones, but then, it’s not impossible.” But they’ll actually last longer and they tend to stay cleaner. It’s one of the things we’ve had in the post was “we don’t like tatty fivers.” We thought while we have introduced polymer, it should be more difficult to counterfeit and no more tatty notes. We also found out that aside from the longevity, they had environmental impacts that were positive.
Because we know that banknotes are so important to everybody, pretty much everybody in the country is going to have some in their pocket or their wallet or at home, you want to test this with the public before you make your final decision. In the autumn of 2013, we had a consultation where we were in shopping centers, universities, schools, talking to the public and getting their views. We also had some independent surveys done, and 87% of people who responded were in favor or strongly in favor of polymer. Of the remaining 13% about half were neutral and half didn’t like it so, we thought that was a positive sign. Also, we worked very close with industry, trying to understand their thoughts on polymer. We brought together our own sort of in-depth research and analysis, which suggested the notes should be more difficult to counterfeit and cleaner and stronger. Coupled with real excitement from the public actually and the industry seeing long-term benefits for them, we decided in December 2013 to move to polymer.
MA: The current governor of the Bank of England, Mark Carney, who was previously the governor of the Bank of Canada, presided over the changeover in Canada to polymer—can we conclude that perhaps Governor Carney had significant input to this decision?
VC: We’d already done an enormous amount of work looking at whether or not to move to polymer, before Mark Carney arrived, and part of that was actually going and talking to staff at the Bank of Canada, but this was a few years ago. The governor arrived in the summer of 2013, our research project was started in 2010 so by then we’d done a lot of the research. When Mark joined, he was very supportive of this having the public consultation process, and then he was involved and helped to make the final decision. But it was the culmination of a lot of research, good response from the public and also the governor, who would see polymer introduced and reap the benefits as well, it all came together.
MA: I spoke with your predecessor, Chris Salmon, in November 2011 on the occasion of the issue of the present £50 note and I asked him about the possibility of a polymer note in the future. I got the impression the Bank wasn’t sufficiently satisfied that polymer notes didn’t then offer enough counterfeit-proof properties to merit the change from paper to the new substrate. Can you outline the changes which took place in the five years since I asked about polymer, which essentially won the Bank over?
VC: I think when you spoke to Chris, as you say we just issued the new £50 note on paper with the motion thread secure note. We’d started our polymer research but we were at the early stages of field work. At that time, it was just too difficult to make a call that was very much at the information-gathering stage. It’s something we’ve looked at for a number of years. I think just looking at the substrate polymer itself but also the security features that can be combined with it, and if you look at when the first polymer note was introduced in Australia in 1988, since then, the number of different types of security features has increased, the size of the “windows” that are being used has increased. You’ll see on the Churchill £5 note, we’ve got a very large window and a very sophisticated foil on it, and you can see different colors on each side. So I think the thing that swayed us in 2013 was just looking at the strength of the various security features, and there was a lot more choice. More countries are moving to polymer, it’s a more competitive market to make security features for polymer bank notes, and so it’s a bigger choice.
The foil that we’ve got is a very sophisticated foil and it’s bimetallic. There is a silver St. Edward’s Crown and a gold Elizabeth tower and then you see silver again, which flips through five to pounds. You’ve got that bimetallic nature on the front and then if you turn the note over, the gold on the front becomes silver and then the silver crown becomes a green maze. This security feature is very much a first and it’s very difficult to create as you need absolute perfect registration between the gold and the silver elements.
MA: For the Bank of England’s polymer series, which will also include the new £10 Austen note scheduled for issue next year and the £20 Turner note scheduled for issue by 2020, does the Bank of England utilize their own unique type of polymer, or is it the same as other countries’ banknotes?
VC: Yes, the Austen note will be released by the summer of 2017, and the Turner £20 note by 2020 . . . it could be earlier. The polymer is produced by Innovia Security, who have set up a plant in Wigton, Cumbria, that will produce the polymer for our notes going forward. But for the £20 note, now that De La Rue have entered the polymer market with their own Safeguard™ product, we’re actually holding a tender and we’ll see who wins. Innovia was the biggest supplier of polymer and a lot of that is made in Australia, who also have a plant in Mexico. Innovia and De La Rue both produce polymer at the moment for the £5 and the £10. We buy the polymer from Innovia but the notes are actually printed by De La Rue in the Bank of England’s site in Debden.
MA: Aside from the new substrate, the £5 Churchill note—which has been dubbed “the high-tech note” due to its advanced security inclusions—is also 15% smaller than the current Elizabeth Fry note. With the size reduction and new material, can you point out some significant challenges your department faced with the production or security elements—especially with professional cash handlers?
VC: I think the most important thing to bear in mind is that over 30 countries have tried polymer so far, and we’re not the first. We’ve been really fortunate in learning lessons from them and other central banks have been incredibly helpful in talking us through their lessons, both in terms of the significant reduction in counterfeits but also just a few tips about handling polymer. The polymer is much more durable, it’s hard to tear but if you do nick it with a knife, it can tear quite quickly. So, we’re learning from the central banks how to actually advise cash handlers for instance not to open (banknote bundles) with a big knife, and it makes common sense. I think it’s important to note that we’re not the first country to move to polymer, nor is it the first time we’ve changed the size of our notes—we changed our £5 note back in 1990.
We found that our notes were quite large compared to notes internationally. That was one of the reasons we decided to change them, just so they were slightly easier to handle. But you’re right, we’re combining polymer, new security features and the change of size and that’s where we found it really important to work with the cash industry. We consulted with them before making the decision to move to polymer and since then, we’ve been holding a number of industry forums. I hosted a forum every six months with about 150 attendees, and we’ve also got a series of five industry-led working groups. For example, one was looking at ATMs, one looking at CIT (Cash in Transit), one looking at the whole cash center, another one looking at communications, another one at machine adaptation. It’s trying to bring together all of their thoughts and experience.
Also, we worked very closely with the banknote-equipment manufacturers and gave them test notes at an early stage rather than giving the exemplar notes just once you started mass production. We’ve given them two sets of test notes instead and posed the question, “How does this work, is there any way you would like us to refine the design that might work better at the machine?” I think all of that coming together has really helped the industry and every time anyone changes the banknote, all the machinery needs to be changed—the algorithm changes. We’ve been working with the industry, giving them as much information as possible; ultimately it’s for them to deliver.
MA: The durability of polymer notes, as we will soon experience, can be on average four years for a moderately used denomination. Because of this “long life” it’s been experienced in countries such as Australia that the production of notes decreases significantly as does the work force—has this been considered with the Bank of England’s printers? Is this something they are prepared for?
VC: I think there are two things. One, as you say, the advantage of polymer is it lasts longer, so you should need to produce fewer replacement notes. We also need to look at the actual changes and demand for notes, and the demand is still increasing about 5% year on year, so that will be driving the supply.
As you know, De La Rue print the notes for us, so the staff issues will be for them to decide, but I think it’s also important to stress that in the contract that the bank signed with De La Rue, following a full open tender, it enables them to produce notes for other countries in their print works. It’s not only Bank of England notes being printed there, it’s the flexibility to bring in other countries notes as well.
They can produce other countries’ notes and also, when you’re issuing your note, you need an enormous launch stock. But it’s certainly something we were conscious of when we were renewing the contract. I think it’s something that all central banks are thinking about: “What is the future cash and the future demand?” For investment, the role that we’ve seen in the U.K. shows a continued demand for notes, so we think it’s really important we make sure those notes are state of the art, fit for purpose, and that we invest properly in them.
MA: On an aesthetic or design point, I thought the Bank of England might take this opportunity to “update” the portrait of Her Majesty. The portrait we are all familiar with is now 26 years old; was there ever a consideration to change this? The Royal Mint introduced their fifth effigy of the Queen for circulation coins last year—shouldn’t the Bank of England follow suit with a new portrait?
VC: We tend to aim for an “enduring image” of the Queen, and we had some initial focus groups early in 2013 before the big public consultation. One of the things that came across very strongly was that people quite like the traditional elements of Bank of England notes, and they like the Queen. There was a conscious decision, while we’re moving to polymer—which is new, a different size, and slightly brighter colours—we thought, “Let’s keep it” [the existing portrait of the Queen]. It’s an image that people know and associate with banknotes so there’s certain continuity in some elements of the notes, the same way that we keep the ornate text or the swirl in the words “Bank of England.”
MA: On a personal note, I remember speaking to Andrew Bailey in 2007 on the occasion of his becoming chief cashier and on is seeing his signature for the first time on Bank of England notes. How was this experience for you when you first saw your signature on the notes—has this had any significant impact on your day-to-day routine?
VC: It’s a phenomenal honor to be able to sign your country’s currency. I’m incredibly lucky to do that and I do still get a buzz most of the time if I look at a note that I’ve signed. I definitely remember very clearly signing on the piece of paper—there are four boxes, you sign four times and then choose the one that you want every member of the British public to see, so that was quite daunting. But it is exciting and I do notice it, particularly if I get some cash out in the ATM and it’s got my name (on the note) I’ll notice it. I think my friends and family find it quite exciting and I’ll get stories of different places around the country and sometimes overseas where people are finding notes that I’ve signed.
I don’t think it really changes my daily routine, though. I use quite a lot of cash, I will use cards for some things as well. But it is, as I say, it’s a great honor and it’s fun. But the only reason I can do that is because of all the work that the team do in preparing the notes. The Churchill £5 has been a phenomenal team effort that’s been going on. The earliest research was back in 2010 and some of the team are still here, so, I get all the fun of signing it but there is an awful lot of work and effort for everyone else and their action to get us to that stage.
MA: Victoria Cleland, Chief Cashier of the Bank of England, thank you again for your time today.
VC: It’s a pleasure.
I would like to thank the Press and Media Relations department of the Bank of England for their kind assistance with this article, it is greatly appreciated. Further information about the new £5 polymer note and forthcoming notes can be obtained from the Bank of England’s website.