New banknotes


Last week I was given a special preview at the House of Commons of the new £10 note.  To be introduced in September, it is made of a polymer - like the new £5 note - rather than cotton, and for the first time it includes special tactile features so that the notes may be more easily used by the visually impaired.

Naturally the note still bears the image of The Queen, but on the reverse out goes Charles Darwin and in comes Jane Austen.  This apparently followed a protest campaign after Elizabeth Fry was replaced by Churchill on the new £5 note.

We will have to wait until 2020 for the new £20 note, which will feature the artist J M W Turner instead of Adam Smith.  It seems that the humanities are triumphing over the sciences.

There are no plans to replace the £50 note, which depicts engineer and scientist James Watt and industrialist and entrepreneur Matthew Boulton.  Some have suggested that the little-used note will be withdrawn, on the grounds that high value notes like this and the 100 euro note assist financial crime, but the Bank of England denies this.

Inflation has steadily eroded the value of our currency.  The £1 note has been replaced by a coin.  The tenner when I was first elected twelve years ago is equivalent to £13 now.

When the £10 note was first introduced in 1759, the equivalent value today was £1,800.  The notes were issued by the Bank of England as a consequence of gold shortages caused by the Seven Years' War.  Is money undergoing a similar transformation today?

More and more people are using contactless payment cards.  One in seven people in the UK no longer carry cash.  Over half of our payments are done by non cash methods.  There are huge variations between countries even in the EU - in Sweden nearly 60 per cent of payments are non-cash, but in Greece it’s only 2 per cent.

South Korea has made the decision to end coins as legal tender by 2020.  E-payment reduces the opportunities for tax evasion in the black economy, but in turn ever more is recorded about our daily spending.

Surprisingly, more currency is in circulation in the UK than ever before - 800 million banknotes.  The total value of all the cash and coins is over £8 billion.  For the time being at least, some people still want a tenner in their wallets.

Alexander BlackEconomy