PP19: Penny pinching

This is another quick fix designed to nibble away at the edges of our excessive consumption. We should phase out the one and two penny piece. Since their introduction over 6.5 billion one-penny pieces have gone missing from circulation and millions more have to be made each year just to keep their levels constant. Add to that that they are quite simply an inconvenience for many (a poll in 2004 indicated 25% were in favour of getting rid of them, with 14% admitting they threw them straight in the bin) then I can’t see a justification for continuing this chronic waste of metals. With the rising cost of raw materials it is also becoming increasingly costly to produce coins, even after the 1992 switch to a copper plated steel base.

The downsides I admit will be the near bankruptcy of ‘Coinstar’, the company that makes the coin converting machines in supermarkets, and at least an initial decrease in the money given to charities. However it still seems like a worthwhile exchange, charities will be able to replace these lost revenues by using just a little imagination, and a little extra competition for our charitable donations can only be good for the not for profit sector. Many also fear that rounding to the nearest five pence would cause an inflationary effect. I can’t deny that this may well happen, but I’m sure it won’t bring us to our knees and the convenience factor is probably more than worth it. In 1984 we got rid of the ½ penny without too much fuss and New Zealand, Australia and a handful of European countries have successfully phased out their own pennies in recent decades without ill effect.

This would have to go hand in hand with incentives for banks to speed up the roll out of the much talked about cash free swipe card, whereby your credit/debit card could be used to make purchases under £5 without requiring a pin. Much like an Oyster Card all you would need to do is swipe it over a sensor when you buy your morning paper or cup of coffee. The wide scale adoption of this technology could further reduce the need for minting coins of all types, and dramatically reduce queues in shops. Why would anyone be against saving everyone, from consumers to retailers to the treasury, their time, money and effort?