The conclusion of a Treasury consultation process is this week expected to rule out the prospect of withdrawing low denomination coins from the British economy.
The chancellor of the exchequer is this week expected to rule out controversial plans which would have seen both 1p and 2p coins taken out of circulation – a year after he called both penny pieces “obsolete.”
As part of his Spring Statement last year, Phillip Hammond launched a Treasury consultation process which seemed to query the ongoing utility of the £50 note, as well as both 1p and 2p coins.
Hammond’s belligerent stance on coppers drew on Treasury surveys which apparently indicated as many as six in ten of the low denomination coins are involved in just one transaction, before being consigned to storage or discarded. Indeed, the same document suggested that British consumers are now throwing one out of every twelve coppers straight in the bin.
But a government source quoted by The Mail on Sunday earlier this week seemed to dispel fears that the coins would face imminent retraction.
“We will confirm the penny coin won’t be scrapped,” said the source. “You’ll still be able to spend a penny under this government.”
It isn’t the first time that pennies have come under threat of abolition in recent years. In 2017, then chancellor George Osborne apparently came within weeks of a similar decision to banish the coins – but was ultimately over-ruled by former PM David Cameron. At the time, the prime minister was supposedly concerned as to the optics of the Conservative party doing away with small-change, upon which charities are often reliant.
The office of Theresa May similarly distanced itself from Hammond’s suggestion that the coins could be scrapped last year – issuing its own statement hot-on-the-heels of the Treasury announcement in which it said it would not counter such a measure.
With amusements still heavily reliant not just on cash in general, but on 2p pushers in the specific, any low denomination retraction without simultaneous legislative amendments could devastate the arcade industry.
Nevertheless, such a move would by no means be unprecedented. Inflation has now reduced the value of the 1p piece to less than the value of the halfpenny upon its retirement in 1984 – and the Treasury claims that it is obliged to mint more than 500m new coppers every year to keep up with the rate at which they are disposed of by the public. In the meantime, several major international economies have already rid themselves of their copper equivalents – including Canada, Sweden and Brazil.
To this end, whilst Hammond may well be on the cusp of granting a reprieve to the 1p and 2p pieces, the Treasury’s long-term stance on the value of their contribution to the economy is unlikely to change.
The amusements industry thinks otherwise.