LONDON (Reuters) - Britain’s plan to become the biggest economy to use plastic bank notes took a step forward on Wednesday when the Bank of England said it had signed a contract for a supplier of material for the new notes.
The BoE entered into an agreement with Innovia Security, whose polymers are already used for bank notes by more than 20 countries. It will provide the material for new five- and 10- pound plastic bank notes to be created in Britain.
The Bank and Innovia declined to say how much the contract was worth. When the BoE asked for tenders for the contract, it said it would run just under 10 years, with a transition period to start and an option to extend the contract for three years. The BoE typically changes the design of bank notes every 10-15 years.
Apart from surviving spins in a washing machine, the notes are more dirt-resistant than paper. They consist of a transparent plastic film coated with an ink layer which can be wiped clean. They are harder to fake thanks to features like a transparent window.
The BoE said earlier that it will spend around 1 billion pounds ($1.67 billion) over the next 10 years on materials and printing for all new bank notes, including 20- and 50-pound variants.
Innovia will open a plant in 2016 in Wigton, in northwest England, to produce the materials for the five- and 10-pound notes. The Bank said the notes will still be printed at its works in Debden in southeast England, which is run by De La Rue.
A spokesman for De Le Rue said the Bank’s announcement was unrelated to a tender open for the printing contract held by De La Rue since 2003 that expires in 2015.
Innovia Security is an Australian division of UK-based Innovia Group.
Polymer notes were first adopted by Australia in 1988 and are now in use in more than 20 countries including Canada, the homeland of BoE governor Mark Carney.
In December, the BoE said the move to plastic will save an estimated 100 million pounds over a decade. It said it will begin with five-pound notes in 2016 at the earliest, with 10-pound notes arriving the following year.
They will feature World War Two leader Winston Churchill on the five-pound note and 19th-century author Jane Austen on the tenner.
The BoE has issued paper banknotes since it was founded in 1694. As of February 2013, there were around three billion in circulation with a face value of about 58 billion pounds.
Editing by Larry King