Royal Mint sus­pends pro­duc­tion of cop­pers

De­spite as­sur­ances cop­pers are here to stay, pro­duc­tion is halted as there are more than enough in cir­cu­la­tion

The Daily Telegraph - - Front page - By Lizzie Roberts

The Royal Mint struck no new cop­pers last year for the first time in decades, af­ter it ruled that there are more than enough of them in cir­cu­la­tion al­ready. It was the first time since 1972 that no new pen­nies were struck and the first time since 1984 that no new 2p coins were pro­duced. There are around 10.5bil­lion 1ps in cir­cu­la­tion, plus 6.3bil­lion 2ps. There have been doubts over the fu­ture of cop­per coins, although the Gov­ern­ment has said there are no plans to scrap them.

WHEN the Bank of Eng­land sug­gested cop­per coins should be scrapped, the re­sponse was out­rage.

But de­spite the Gov­ern­ment’s pledge that 1p and 2p coins are here to stay, the Trea­sury or­dered no new cop­pers last year for the first time in decades, af­ter it ruled that there were more than enough of them al­ready.

It was the first time since 1972 that no new 1p coins were struck for cir­cu­la­tion and the first time since 1984 that no new 2p coins were pro­duced.

The Trea­sury said it did not ask the Royal Mint to pro­duce any as there were “al­ready enough”.

The death of the cop­per seemed to be nigh when, in his March 2018 spring state­ment, Philip Ham­mond, the for­mer chan­cel­lor, called for views on the mix of notes and coins in cir­cu­la­tion. “From an eco­nomic per­spec­tive, hav­ing large num­bers of de­nom­i­na­tions that are not in de­mand, saved by the pub­lic, or in long-term storage at cash pro­ces­sors rather than in cir­cu­la­tion, does not con­trib­ute to an ef­fi­cient or cost-ef­fec­tive cash cy­cle,” the Trea­sury con­sul­ta­tion doc­u­ment stated.

In Au­gust 2018, the Bank of Eng­land also seemed to sup­port scrap­ping 1ps and 2ps. A blog by two of the bank’s econ­o­mists said: “As in­fla­tion steadily erodes the pur­chas­ing power of low de­nom­i­na­tion coinage, the case for its re­moval be­comes stronger.”

How­ever, fol­low­ing anger among the pub­lic, MPS and the char­ity sec­tor, the Gov­ern­ment was forced to clar­ify and said there were “no pro­pos­als” to scrap the penny.

Such was the level of con­cern, that Mr Ham­mond felt the need to re­con­firm in May this year that cop­pers were not go­ing to be scrapped.

There are around 10.5bil­lion 1ps in cir­cu­la­tion, plus 6.3bil­lion 2ps sit­ting in wal­lets, tills, jars and piggy banks.

Usu­ally, more than 500 mil­lion 1p and 2p coins are pro­duced ev­ery year, but the Trea­sury has pre­vi­ously said around 8 per cent are thrown away. The Trea­sury also an­nounced no £2 coins were pro­duced last year, as there were al­ready suf­fi­cient num­bers in cir­cu­la­tion at around 494mil­lion.

A Trea­sury spokesman said: “We didn’t ask the Mint to is­sue any £2 or 1p/2p coins this past year be­cause there are al­ready enough in cir­cu­la­tion. The amount we ask the Royal Mint to pro­duce de­pends on de­mand.”

In May when Mr Ham­mond safe­guarded the fu­ture of the 1p and 2p coin, the Trea­sury also an­nounced plans to lead a group to plan, co­or­di­nate and safe­guard ac­cess to cash for those who need it, amid con­cerns over the fu­ture of high street banks and free-to-use cash­points.

Cash use has fallen sharply in re­cent years as the pop­u­lar­ity of con­tact­less pay­ments has surged.

Re­duced de­mand for coins means banks may not need to or­der as many new ones. How­ever, around 2.2mil­lion peo­ple are es­ti­mated to be al­most en­tirely re­liant on cash, with the el­derly, the vul­ner­a­ble and those in ru­ral com­mu­ni­ties likely to be hard­est hit by any de­cline in cash avail­abil­ity.

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