Reinstate The Bank of England £1 Banknote in Polymer format within England and Wales

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History of the Bank of England £1 Banknote

The Bank of England £1 note was a banknote of the pound sterling. After the ten shilling note was withdrawn in 1970 it became the smallest denomination note issued by the Bank of England. The one pound note was issued by the Bank of England for the first time in 1797 and continued to be printed until 1984. The note was withdrawn in 1988 in favour of the one pound coin.

On November 12, 1984, Chancellor of the Exchequer Nigel Lawson called time on the pound note after 187 years.

Lawson said the note, first issued in 1797 in response to shortages of gold coins during the French Revolutionary wars, would be phased out following the introduction of the £1 coin in April 1983.

Although the pound note was expected to be withdrawn soon after the coins became legal tender, the £1 coins and notes had existed side-by-side for 18 months after Prime Minister Margaret Thatcher had told MPs in the Commons that the new coin was not very popular.

Lawson, giving his Autumn Budget Statement to the House, pointed out that while the coins were slightly more expensive to produce, they did last more than 50 times longer than their paper equivalents – some 40 years for coins as opposed to just nine months for the paper banknotes.

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Reasons For Banknotes

(i) Economical:

Paper money (Polymer) practically costs nothing to the Government. Currency notes, therefore, are the cheapest media of exchange. If a country uses paper money, it need not spend anything on the purchase of gold or minting coins. The loss which a country suffers from the wear and tear of metallic money is also avoided.

(ii) Convenient:

Paper money (Polymer) is the most convenient form of money. A large amount can be carried conveniently in the pocket without anybody knowing it. In a very small bulk, it can contain a very large value.

(iii) Homogeneous:

One essential quality in money is that it must be exactly of the same type. Even among the coins there are good and bad coins. But currency notes are all exactly similar. It is, therefore, a very suitable medium of exchange.

(iv) Stability:

The value of paper (Polymer) money can be kept stable by properly regulating its issue. That is why there are many advocates of ‘managed’ paper (Polymer) currency.

(v) Elasticity:

Paper money (Polymer) is absolutely elastic. Its quantity can be increased or decreased at the will of the currency authority. Thus paper money can better meet the requirements of trade and industry.

(vi) Cheap Remittance:

Money in the form of currency notes can be cheaply remitted from one place to another in an insured cover.

(vii) Advantageous to Banks:

Paper money (Polymer) is of very great advantage to the banks. They can keep their cash reserves against liabilities in this form, for currency notes are full legal tender.

(viii) Fiscal advantages to the Government of the paper (Polymer) currency are undoubtedly very great, especially in times of national emergencies like a war. A modern war cannot be prosecuted by taxes or loans alone. All governments have to resort to the printing press.

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Why are we using polymer for banknotes?

Polymer banknotes are:

Cleaner: polymer banknotes are more resistant to dirt and moisture, so they stay cleaner for longer than paper banknotes.

Safer: the polymer material allows us to include enhanced security features, which make polymer banknotes harder to counterfeit. 

Stronger: improving the quality of banknotes in circulation.
Polymer banknotes last longer, so they are more environmentally friendly than paper banknotes. The waste from old polymer banknotes is turned into pellets before being transformed into new plastic items, such as plant pots.

So far, The Bank of England have issued a polymer £5 note and a new polymer £10 note. The next £20 note will also be made of polymer. It will be issued by 2020.

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