I think it is time that we removed low denomination, copper coins from circulation. There are an archaic hold-over from days gone-by when penny sweets really did cost a penny and post the inflation that this country has experienced since decimalisation are no longer a relevant unit of currency. Most people, I would argue, find one and two penny coins an inconvenience and while in aggregate they can of course be useful when buying a newspaper or chocolate bar, there is nothing that counted by accomplished with a five penny coin.

Of course removing these coins from circulation would have an inflationary effect, probably by more than one of two percent given the cover that such a change would give retailers to raise prices, but then given current concerns over deflation (a debate for another day perhaps), this would surely be a useful, albeit one-time boost. It would require some capital investment in new signage by most of the retail / consumer-facing industries, changes to cash registers etc, but all useful investment and positive for business activity.

And lastly, there would be limited, but certainly positive effect from taking all the current copper coins (6bn 2p coins alone) and re-using and selling the steel and copper-plating.

 

Why is this idea important?

This idea removes what many see as an inconvenience in our daily lives given the rise in real costs of living since decimalisation. It is inlfationary (one off admittedly), but this is helpful given we are repeatably told that deflation more than inflation is the issue for the UK and globally.  It would prompt some capital investment / business activity. And indeed the costs of such a project would almost certainly be covered by the proceeds from removing  these coins from circulation.

 

Matthew Beesley

matthewbeesley@yahoo.com

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