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Mon, 3 August 2020

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Shock as Treasury paves the way for abolition of 1p and 2p coins

Shock as Treasury paves the way for abolition of 1p and 2p coins

Liz Bates

2 min read

Treasury officials have paved the way for the abolition of 1p and 2p coins after declaring they are no longer "cost-effective".

A public consultation on the future of cash and digital payments said coppers are becoming increasingly defunct as shops have begun to phase them out and people keep them "in savings jars" rather than spend them. A recent survey also found that 8% are thrown away.

Chancellor Philip Hammond launched the consultation during the first ever Spring Statement.

He said: "We will call for evidence… on how to encourage cashless and digital payments, while ensuring cash remains available to those who need it.”

The Treasury document published alongside the consultation says: "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 used in circulation does not contribute to an efficient or cost effective cash cycle."

It also hinted that the £50 note could be axed as it is "rarely used for routine purchases and is instead held as a store of value".

But the Prime Minister’s official spokesman attempted to play down the prospect of 1p and 2p coins being consigned to history.

He said: "This is a call for evidence intended to enable the Government to better understand the role of cash and digital payments in the new economy.

“The Government is not proposing any specific policy changes."   

Read the most recent article written by Liz Bates - Jeremy Corbyn admits he would rather see a Brexit deal than a second referendum


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