News

News | Published May 03 2019

1p and 2p coins will remain in circulation

The Treasury announced they will retain the 1p and 2p coins for the foreseeable future today.

This comes after fears that the coins would be abandoned due to their costing more to make than their economic utility warrants.

The cost alone seemed to be prima facie reason to remove them from circulation, something ostensibly made even more likely by the Treasury-inspired review into the matter.

However, the independent review published last month revealed that roughly eight million people relied on the coins as a necessity.

On the other hand, a survey commissioned by the government also revealed that over half of the 1p and 2p coins end up extracted from the economy by being held or misplaced in jars and elsewhere.

In the end, Philip Hammond said that he wanted to see the coins continued because they offer a degree of freedom and flexibility in the economy.

Mike Cherry, the national chairman of the Federation for Small Businesses, welcomed this move.

According to the BBC, he said: “Keeping 1p and 2p coins in circulation is the right call.”

The problem of coinage in today’s world falls into the broader debate about the role of cash in an economy that depends increasingly less on physical currency.

In the 2017 financial year, for the first time, the majority of the money in circulation in the UK was card-based rather than cash.

A similar state of affairs exists in other developed economies, with many including Sweden, Canada and Australia getting rid of their 1p and 2p coins.


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Authored by

Thomas Wilson
Political Editor
@theparlreview
May 03 2019

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