Do you REALLY want to kill off the coppers in our pockets, Mr Hammond?
(or is this a PR disaster in the making)
PHILIP Hammond risked a public backlash last night after unveiling plans to kill off copper coins.
Documents published as part of his Spring Statement suggested that one and two- pence coins should be removed from circulation.
The move sparked immediate warnings that businesses would exploit the change to hike their prices.
And there were warnings that charities could lose millions in donations.
Tory MP Ian Liddell-Grainger branded the move a ‘bad mistake’ and urged the Chancellor to think again. ‘A lot of charities live for those pennies,’ he said.
‘This is a level of laziness from the Treasury. They just want to stop something, even though people still use it. It is the same issue we had over cheques. I think the Government has got this wrong. They need to have a long think about this.’
Sara Coles, personal finance expert at investment firm Hargreaves Lansdown, warned that savers could be hit.
She said: ‘Coppers play a small but vital role in the nation’s savings habits. In many cases people collect their small change at the end of the week and add it to their savings jar. The sums can add up and can establish a regular savings habit.’
Mr Hammond’s move comes less than three years after David Cameron vetoed similar plans by his chancellor, George Osborne, for fear of a public backlash.
The Treasury last night insisted it had no firm plans to scrap coppers. But a consultation issued by the department suggests they are becoming redundant in an increasingly cash-less world and asks whether they should be taken out of circulation. The £50 note could also be scrapped.
It comes amid a plunge in the volume of cash transactions as card payments and digital transactions soar. As a result, banks have built up vast stock-piles of 1p and 2p coins, and businesses have complained that the cost of handling small change has increased.
There are around 18 billion 1p and 2p coins in circulation, and the Royal Mint pumps out 500 million new coppers every year to replace those that get lost or end up in piggy banks.
They claim that around twothirds of one and two penny pieces are used only once, and roughly one in 12 are thrown away.
The Treasury report found that many shops are reluctant to accept coppers, while vending machines no longer accept them.
Phil Mussell, director of Coin News Magazine, said: ‘It’s a great shame that we are getting rid of 1,000 years of history just because some politicians don’t like it.
‘They can cite economics all they like but this is about moving us to a cashless society where everything we spend is tracked.’
Neil Duncan Jordan of campaign group the National Pensioners’ Convention, said: ‘The Government will need to make sure it doesn’t get its fingers burned on this. There will always be a need for cash from pensioners who are not comfortable paying online.
‘We don’t want decisions that will affect how older generations live their lives made by some Smart Alec in their 30s who only uses online payments.’
Anna Bowes of website Savings Champion said: ‘You can bet your bottom dollar that shops will round things up by 1p rather than down by 1p. People will be quite cross about that.’
Downing Street said the Treasury had ‘issued a call for evidence’ and was ‘not proposing any specific changes’ at this stage.