Let’s scrap 1p and 2p coins

As a bus driver refuses to take a fare in coppers, HARRY MOUNT says small change is more trouble than it’s worth

Coppers are fiddly, heavy and now close to worthless In New Zealand, the loss of small coins cut prices

See a penny, pick it up,’ says the old nursery rhyme, ‘and all day long you’ll have good luck.’ Not if you’re Laura Pulley you won’t. She’s the mother-of-two who tried to pay 25p of a 60p bus fare in essex in 1p and 2p coins.

The bus driver refused to accept the coppers. When Miss Pulley, 35, refused to get off the bus with her four-year- old daughter, he promptly called the police.

The stand- off only ended when the policeman paid for part of the fare using a 5p coin.

The staggering thing is that the bus driver was legally within his rights to refuse poor Miss Pulley. Under the Coinage Act 1971 — which the bus driver cited — a combination of 1p and 2p coins can be used up to a maximum of 20p. So above 20p, you can refuse payment in coppers.

A similar rule applies to 5p and 10p pieces: payments above £5 in these coins can also be refused; while 20p and 50p coins can be refused for payments of £10 or more. You can, at least, pay for anything in £1 coins.

The Act has been invoked successfully in court. In 2012, an accountant sued a client for paying an £804 debt in coppers and won.

And however silly the jobsworth bus conductor may seem, his altercation with Miss Pulley carries a simple but important lesson: it now surely makes sense to send coppers to the scrapheap.

According to the latest estimate by the Royal Mint, there are 11,278 million pennies in circulation and 6,557 million 2p pieces — more than any other type of coin. How wonderful it would be to say good riddance to the lot of them.

Coppers are so fiddly, heavy and now so close to worthless that their time is surely up. I know one friend who throws away pennies rather than having to bother with the infuriating things — and, no, he’s not a gazillionaire.

If you’re the kind of person who piles coppers up in a jar or on your bedside table, you, too, are essentially thinking of them as worthless. Who leaves stacks of £20 notes lying around in a jar?

And it isn’t just humans who’ve had enough of them. Plenty of automatic tills and vending machines simply don’t deal with the blasted things, regurgitating them as soon as you pour them in.

The days when a few pennies bought you a slap-up dinner and a night at the pictures are long gone.

Over the centuries, voracious inflation has eaten away at the penny’s value.

The coin’s origins go all the way back to the Romans. Before decimalisation, pounds, shillings and pence were abbreviated as ‘l’, ‘s’ and ‘d’ — short for the Roman currency terms librae, solidi and denarii.

A denarius — the Roman equivalent of a penny — was quite a considerable sum. In 20 BC, a denarius was worth around £12.70 — enough to pay for dozens of bus rides around ancient Rome.

The British penny was formally introduced by Offa, King of Mercia (now the Midlands), in the mid-8th century AD. These first pennies were said to be enough to buy a dozen loaves of wheat bread. Five pence got you a sheep; 10p a pig; 20p a cow; and 30p a whole ox.

Currency experts suggest that those first pennies were worth over £20 each.

In 1840, a penny could still buy you a stamp: the Penny Black. Now, even a second- class stamp costs 54p.

Well into the Victorian period, the penny was a useful coin, not least when it came to ‘spending a penny’.

The origin of the euphemism comes from the days when it cost a penny to get into coin- operated public lavatories. The earliest recorded use of a penny for toilet entry was at the Great exhibition in London in 1851.

even in 1901, a penny was worth the equivalent of 46p today. By 1951, that had fallen to 13p, but even in the 1960s, you could still buy a cigarette for a penny. In 1971, the year of decimalisation, a penny was worth 6p in today’s terms. Yet the penny is now so worthless that we are in danger of its value being less than the cost of production.

The Royal Mint won’t disclose how much it costs to make coins, for security reasons. But are today’s pennies actually worth the bother of producing them?

Until 1992, pennies and 2p pieces were made of 97 per cent copper, 2.5 per cent zinc and 0.5 per cent tin. When copper prices boomed in the mid-2000s, the metal value of the pre-1992 coppers was greater than the coins’ face value.

Today they’re made of cheaper, copper-related steel.

And, certainly, coppers are disproportionately heavy in relation to their near-worthlessness: the penny is 3.56g; the 2p is 7.12g. So, a pound’s-worth of coppers in your pocket weighs more than threequarters of a pound.

We’ve got rid of near-worthless coins before. In 1984, the halfpenny — introduced with decimalisation in 1971 — was withdrawn from circulation. Its value then was the equivalent of 1½p today — and yet we still got rid of it. It’s time for the penny to follow in its wake. The big worry is that, if you get rid of the penny — and the 2p piece, too — then retailers will start to round up all prices to the next 5p or 10p level. Things that once cost, say, £2.96 will be priced at £3.

But it doesn’t have to be like that. When the halfpenny was abolished, it’s true that a second-class stamp went up from 12.5p to 13p. But in the following year, 1985, it dropped back to 12p. A dog licence dropped from 37.5p in 1984 to 37p in 1985.

In other words, the abolished coin was so small in value that its disappearance had minimal effect on inflation; not least at a time of minimal inflation, like now.

It’s just been announced this week that the deflation rate of April — minus 0.1 per cent — jumped in May to a tiny 0.1 per cent positive inflation rate.

Getting rid of the penny isn’t going to turn us into Zimbabwe — where they’re phasing out the Zimbabwean dollar because inflation has rocketed out of control: 175,000,000,000,000,000 ( 175 quadrillion) Zimbabwean dollars will get you a grand total of five U.S. dollars.

Several countries have got rid of their coppers without unfair inflation kicking in.

Canada said goodbye to its pennies in 2012, when they worked out that it cost 1.6 cents to produce each one-cent coin.

They then rounded retail prices down or up to the nearest five-cent figure — a fair solution. And the Government saved £6 million a year by getting rid of them.

In New Zealand, they were even fairer to the public. They got rid of their cent and two-cent pieces in 1990. Afterwards, as in Canada, they rounded up or down to the nearest five cents.

But many retailers chose only to round down to the nearest five cents. So that meant all those prices ending in 99 cents decreased to 95 cents — a great PR coup, and one that our own retailers would be crazy not to follow.

Yes, it would be sad to say goodbye to such an ancient coin, but can you honestly say you now miss the ha’penny?

What a relief it will be when we no longer see pennies — let alone feel the completely pointless need to pick them up.