December 10 2013 Latest news:
Shaun Lowthorpe, Business editor
Wednesday, September 25, 2013
Businesses in Norfolk got a chance to get their hands on the Bank of England’s proposed new ‘plastic’ bank notes yesterday.
Chris Salmon, executive director for Banking Services and Chief Cashier outlined the case for the new £5 and £10 notes during a public consultation during a Norfolk Chamber of Commerce event at Norwich City Football Club.
He said the bank’s key objective in issuing banknotes was to maintain public confidence in the currency.
He said: “For the public to be confident in banknotes, we need to make sure that demand for banknotes is met, that notes are in a good condition, and that notes are resilient to the threat of counterfeiting.”
Despite the emergence of many other payment methods, banknotes remain an essential part of everyday life: the value of cash-financed transactions during 2012 was £267bn and the value of notes in circulation increased once again. And maintaining confidence in the physical currency continues to be important for broader monetary stability.
The growth in the number of cash point machines had also the unintended consequence of causing a drop in the average quality of £5 notes while it was also taking longer for them to be returned to the wholesale system, while notes which would normally have been withdrawn on quality grounds remained in circulation, leading to concerns about ‘tatty’ fivers.
Explaining why the bank was now looking to move away from paper notes, he said that until relatively recently, there had not been sufficient drivers to warrant any change.
“Confidence in the currency remains high and our banknotes are secure,” he added. “Yet, over the past few years, a number of ‘push’ and ‘pull’ factors have prompted the Bank to reconsider whether paper remains the best long-term solution for our banknotes. These factors include the improvement in banknote technology, the enhanced capability of counterfeiting gangs and the desire to improve the quality of notes in circulation.
“Our aim was to provide as comprehensive a picture as possible of the issues associated with any change. Recognising that changes like this are rare events, we have taken our time and have sought to undertake as comprehensive analysis as possible before reaching the point we are at today.
“Notwithstanding the conclusions of our research, there would be no point in changing if the public-at-large had material misgivings, and a clear wish to retain banknotes printed on paper,” he said.
In addition to playing a part in the Bank’s final decision, he said the information gathered during the consultation will prove invaluable in planning for a transition should the switch go ahead.
He added: “Ahead of making a final announcement in December, the Bank will consider the feedback received from the public alongside the information gathered from the research programme and industry consultations. We are committed to being transparent about the justification for our final decision.”
Two hundred jobs are set to be created after one of west Norfolk’s largest businesses was granted permission to expand its King’s Lynn facilities.