Plastic fivers That will really devalue the pound
23:25 GMT, 17 December 2012
Should you believe that Britain is in terminal decline, an announcement by the Bank of England seems to offer incontrovertible proof.
I jest, but only slightly. For a tender has been put out for the printing of banknotes, and by 2015, it seems, they may be plastic.
Those of us old enough to remember life before decimalisation — and before the rampant inflation of the Seventies butchered the value of our money — have seen the destruction of our currency over more than 40 years.
Cheap Banknotes could be made from plastic come 2015, a sign that our economy is really in trouble
As the value has declined because of the mismanagement of our economy, the tokens we use to represent it have become more tacky, too. Coins that used to look distinguished now look third-world cheap.
Of course, the idea of plastic banknotes is a fitting representation of a nation that is mired in monstrous debt. And the arguments for using them are well-rehearsed. They last longer— nearly seven times as long as paper notes. Australia — a rather admirable country and one that, unlike us, avoided economic disaster in 2008 — uses them, so they can’t be all bad.
And, in an era when the State is obsessed by health and safety, they are cleaner, too, and do not harbour so many germs. Mind you, one scours the newspapers or the internet in vain for stories about the people cut down by epidemics transmitted by fivers and tenners.
But nothing can get round the fact that when Britain was a serious country, we had serious money. The currency was, in the days of the guinea, sovereign and half-sovereign, literally worth its weight in gold: and St George slaying the dragon on the reverse of the coinage told you all you needed to know about Britain’s confident idea of itself.
Until 1920, our silver coinage was just that, and adorned with ravishing heraldic designs that symbolised our imperial power.
Then it became half-silver and, after another world war and the loss of empire, base metal. This may not have been worth a fraction of the face value, but an effort was made for the coins to look attractive, and to keep up the morale of the people using them.
Clean sweep: In an era when the State is obsessed with health and safety, the proposed plastic notes will be cleaner and harbour less germs
Banknotes were a different matter. From the foundation of the Bank of England in 1694, the bearer could take a big, white banknote issued by the Bank into its head office and, on demand, be given its face value in gold. That ended with the national near-bankruptcy of the Great War.
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From then on, the bearer would receive debased coins or other bank-notes: but the white fiver (and other, higher denomination notes) remained unchanged, beautifully engraved, looking as though they were worth every penny they represented.
That fiver — the most legendary banknote in our history — was printed from 1793 until 1957 and remained in circulation until 1961. To fit in most wallets it would have to be folded in four, or eight.
Even if a plastic note had been possible in those days, no one would have contemplated it. It would have been like admitting the end of the power of the sterling zone.
When somebody flashed a big white notes, people took notice. When the Bank first issued it, at the start of the Napoleonic wars, the fiver was worth the equivalent of 437 today. Even in 1957, after the humiliation of Suez, it was worth the equivalent of 83 today: and therein lies the problem.
Eventually, it became commonplace as it was more freely used in everyday circulation — although it was not small change, as today’s 5 note is.
Today, in a London pub, a fiver won’t even buy you a pint and half of beer. In 1957, it would buy between 50 and 60.
Now, with money being increasingly worthless, a fiver is passed round like confetti. The pound note disappeared in 1984, and the fiver today is not worth very much more than the pound was then. So its days, plastic or otherwise, are probably numbered, too.
At that stage, there will be two options. One is a 5 coin, allowing designers a presumably large canvas — it would have to be bigger than the 2 coin, perhaps the same size as the much-lamented half-crown — on which to do something spectacular.
Money for nothing: Today's 5 note is small change: in a London pub, a fiver won't even buy you a pint and half of beer. In 1957, it would buy between 50 and 60
Sadly, with so little to shout about as a nation, such a design might be hard to conceive. Something that depicts, for example, our new commitment to diversity and inclusiveness might be regarded as not quite the ticket.
The other option is to pretend we don’t need the 5 denomination at all since, in 1957 terms, you could buy for six shillings, or 30p, what would cost 5 today. Another consideration is that our society is increasingly cashless. Those people with no bank account or credit card are regarded as being on the very margins of civilisation.
Meanwhile, technological advances mean cash is increasingly unpractical. If you buy something on the internet — and, as the retail business will tell you, most of us do — you don’t have to put coins in a slot on your computer.
Meanwhile, the near-abolition of the cheque has boosted the credit card in the High Street. While the predations of Her Majesty’s Revenue & Customs on tradesmen who accept payment in cash — ‘very aggressive tax avoidance’, as Chancellor George Osborne would describe it — have reduced the need to have large quantities of cash.
Pubs seem to take credit cards, for those expensive pints of beer. You pay with your credit card at the pump of the petrol station. On public transport, you are likely to have an electronic ticket (such as the Oyster Card in London) — which you’ll probably top up using your credit card. And even many parking meters don’t require coins: you pay using your mobile phone.
You might, I suppose, use cash to buy your newspaper, or a packet of sweets. Otherwise, it is increasingly a thing of the past.
Our notes and coins, with their poverty of design and lack of charm, reflect the loss of national power and self-esteem that a crippled economy brings. A similar disease has afflicted our stamps, with the endless silly commemorative issues that the Royal Mint now imitates with various commemorative coin designs.
As cash becomes less important in transactions, and the value of money so low, perhaps nobody thinks it is necessary to take care over how it is designed.
No need for cash With the increased use of electronic paying devices such as Oyster cards and credit cards, will we need cash in the future
I strongly disagree, and have a suggestion to make: perhaps the Government should agree to move the decimal point back two notches for currency so that something that costs 100 today would then cost 1. A pound note would, then, be something worth having — and a fiver would be worth almost the same as it was in 1793.
The number of banknotes that would need to be printed would slump dramatically. The ones in circulation would last longer.
And, as such, we might prevail upon the Bank of England to make them look more handsome, and to have them made of nice, woven, watermarked paper — to make us feel good about ourselves, even if we have no reason to be so.
And if plastic notes need to be trialled, why not inflict them on the ailing eurozone The plastic euro Now that would be appropriate.