Under the proposals BoE banknotes, currently printed on cotton paper, would be printed instead on thin transparent flexible film made from polypropylene.
If the plans go ahead, the first notes to be printed on polymer would be the new-style £5 note featuring Winston Churchill, followed by the new Jane Austen £10 note and larger denominations after that.
At the same time as switching to polymer, the BoE also intends to reduce the size of the notes. The new £5 notes will measure 125x65mm, while £10 notes will measure 132x69mm. Each subsequent denomination will be 7mm longer and 4mm higher than the previous one, making them slightly larger than Euro notes.
Polymer banknotes have been used in Australia since 1988 and are now issued in more than 20 countries globally.
The notes are produced by coating the film on both sides, in multiple layers of white ink, with a ‘window’ usually left clear, often used for security purposes. The white ink forms the base layer used to carry the printed design of each banknote, while security features can be embedded or laid onto the banknotes.
The BoE banknote printing contract, which has been held by De La Rue since 2003, was put out to tender at the end of last year with up to five potential operators invited to bid for the new £1bn contract, due to start in 2015.
A stipulation of the tender was that the selected supplier would need to accommodate any changes in substrates requested by the governing body.
A spokesman for De La Rue, which operates BoE’s Debden, Essex facility, said: "We understand that the Bank of England is considering alternative substrates and we await their decision on that. We are perfectly able to accommodate changes as we have both polymer and cotton paper options. Our methods for both are tried and tested."
A key benefit of polymer notes highlighted by the BoE is cost savings: In the short-term polymer notes would be more expensive than cotton paper to produce because of their increased cost over cotton paper and because of the significant quantities initially needed. But in the long term, because the notes last on average 2.5x longer than cotton paper, fewer would need to be printed to replace worn notes.
Announcing the consultation today the BoE’s deputy governor for monetary policy Charlie Bean, said as well as cost savings the notes would bring a raft of other benefits such as greater counterfeit resilience, better durability and higher environmental credentials than paper.
He added: "Given these benefits, we are confident that a switch to printing notes on polymer makes sense. But we also recognise that the public takes pride in their banknotes, and that changes to the design and format of notes are consequently of great interest. Because of this, we have decided to consult with the public before making any final decisions."
The consultation will run across the country until 15 November 2013 and a decision will be announced in December.
