The penny won’t be dropped: copper coins to remain in circulation
Someone in government rapidly spared more than a penny for the nation’s thoughts, as the possibility of scrapping 1p and 2p pieces, mooted this week by the Treasury, was scrapped within 24 hours.
The Prime Minister’s Official Spokesman confirmed that lower value copper coins would not be removed from circulation. The idea had been floated by the Treasury as part of a consultation on the role of cash (including the £50 note) in an increasingly digital economy.
The threat to the penny and 2p piece made headlines. Much coverage mentioned the value to charities of small coins donated in collecting boxes.
SEE ALSO: ‘Every penny helps’ outperforms ‘please give generously’ on collecting tins (1 May 2007)
Former Chancellor of the Exchequer George Osborne “came within weeks of announcing plans to take 1p and 2p pieces out of circulation” according to The Guardian. He “was stopped by David Cameron who feared the symbolism of the Conservative party scrapping the penny”.
Former Charities Minister Rob Wilson welcomed the initial indications that the copper coins would be scrapped, suggesting that the charity sector would actually benefit.
Sorry this is wrong. Government needs to work closely with sector, but Charities are more likely to benefit from the phase out and the rest is just nostalgia. Come on sector start Govt backed campaign for all 1/2p coins handed in to fund small charities! https://t.co/vLybZlYOdU
— Rob Wilson (@RobWilson_RDG) March 14, 2018
The Treasury’s consultation notes that “Cash has fallen from being 62% of all payments by volume in 2006, to 40% in 2016, and is predicted by industry to fall to 21% by 2026. It represented only 15% of the total value of consumer spending in 2015.”
Remarkably, many low denomination coins are used only once!
The consultation explains: “Surveys suggest that six in ten 1p and 2p coins are used in a transaction once before they leave the cash cycle. They are either saved, or in 8% of cases are thrown away. To meet demand created by such losses from circulation, in previous years the government and the Royal Mint have needed to produce and issue over 500 million 1p and 2p coins each year to replace those falling out of circulation.”
The Treasury said of the £50 note: “At the other end of the denominational scale the £50 note is believed to be rarely used for routine purchases and is instead held as a store of value.”
Charities and small coins
Charities are often in for a penny, in for a pound. They receive small coins in various ways:
- public street collections
- home collecting boxes
- counter-top collecting boxes in shops
- collecting boxes at venues e.g. theatres, art galleries and museums
If any @NisaRetail retailers would like to give me their comments I’ll gladly pass them to Dan and @IoFtweets We introduced the collecting tins last year @MADLcharity in almost 300 stores, banked £20k+ so far – majority has been 1 & 2ps https://t.co/jzFQBc0YFy
— Kate Carroll (@katercarroll) March 14, 2018
We've got a super easy fundraiser for #CharityTuesday!
Find a jar or any sort of collecting pot and fill it with spare change through April. It soon adds up 👍 then donate your total to support people affected by #MND! #AprilFills pic.twitter.com/i0h7nv6mm8
— MND Association (@mndassoc) March 13, 2018
IoF to respond
The Institute of Fundraising will respond to the Treasury’s consultation to reflect charities’ views on the value to them of copper coins.
We’ll be looking at this from @IoFtweets and asking members soon about the potential impact of this proposed change. If you’ve got any views or info on the value of 1p 2p donations then do let us know! https://t.co/ata3gTfocI
— Daniel Fluskey (@danielfluskey) March 14, 2018
Commenting before the Government confirmed that the coins were safe, Daniel Fluskey, Head of Policy and External Affairs at the IoF, said: “Charities and donors benefit from being able to use a diverse range of payment methods. While many charities are implementing contactless in order to suit donor preferences and respond to consumer habits, there is likely to be an important and ongoing role for cash payments for a range of fundraising activities.
“The Institute of Fundraising has heard some concerns from our members around the potential scrappage of 1p and 2p coins. While the proposed change might not have a huge impact on the overall value of donations, there is potentially a wider impact that we should be aware of.
“Our members have shared examples of how collecting small change on a regular basis provides much needed funds for local and smaller charities, and noted the importance of spare change for many young children’s first experience of donating. This is symbolic of wider and more long-term change in how people give, and how people use cash more generally.
“There needs to be a strategic approach to looking at the issues as the consultation proposed big structural changes across society in how we carry and use money. The IoF will engage with our members on the potential impact of this proposed change.”
A last hurrah for small coins?
When (it is unlikely to be ‘if’) small coins are phased out, fundraising consultant John Thompson has an idea ready to go. He came up with the #FirstFiver and #FinalFiver campaigns which raised over £12.5 million according to CAF.
He suggests that the Bank of England (or Royal Mint) “should create a charitable fund from which to distribute nominal and melt-down values” of the coins.
Future of 1p and 2p coins questioned by Treasury. If we are really looking at scrapping these then @bankofengland should create a charitable fund from which to distribute accumulated nominal and melt-down values #Last1p #Last2p 🙂https://t.co/4Wibfdajky
— Johnny Five (@JTCHANGINGBIZ) March 13, 2018
- Penny for London introduces contactless microdonations via public transport (7 November 2014)
- M&S Penny bazaars raise £750,000 for hundreds of charities (8 December 2009)
- Water agency asks people to donate £1 when they spend a penny (19 November 2008)