Inside a British plot to kill off ‘pointless’ coins
Coppers are expensive to mint, weigh down a wallet and, these days, can rarely be used to buy anything in the shop.
More often than not, they end up in a jar on the mantelpiece, waiting to be exchanged for a crisp £20 note at the bank.
Despite this, attempts to get rid of our smallest denomination coins have caused outrage and swiftly been abandoned.
When new coin designs featuring natural imagery from the British Isles were unveiled last year, the Royal Mint said it expected all of the coins to enter circulation by the end of 2024, including 1p and 2ps.
But one corner of the British Isles has come much closer to scrapping the coins – and is still working hard to phase them out.
Last year, the Isle of Man held a consultation on whether it should keep coppers. The public’s response to the Manx government’s survey was, “no thanks”.
The Manx government decided instead to encourage businesses to introduce “cash rounding”, which is the practice of rounding the total bill to the nearest five or zero, thereby eliminating the need for coppers – although they are still legal tender.
Cash rounding, which was first used in Sweden in the 1970s, has since been adopted by Canada, New Zealand, and the Republic of Ireland.
Dr Alex Allinson MHK, the Isle of Man’s treasury minister, said that while the respondents to the consultation cited inflation as one of their key concerns, research from other countries suggested it wouldn’t be a problem.
He said: “Most of the businesses here didn’t think it would cause significant inflation. But certainly the public perception is that it would do.”
The minister said there were worries about British tourists coming over and being unable to use the coppers – and that the coins from the UK would have to be separated and sent back.
“If the UK were to [get rid of coppers], we would probably follow suit,” Dr Allinson said.
He clarified: “We’re not going to withdraw the coins, [but] we got loads of them. So we are not going to mint anymore. There will, I think, come a time when people might run out. So we’ve asked businesses to look at voluntary rounding up.”
He said: “Part of it is the overall move towards a cashless society. Part of it is just the economics – that to make a 1p coin now costs more than a 1p coin is worth. We haven’t minted them in a while.
“Even the 5p pieces, we calculate now that each one is about 20p. It is getting more and more expensive to produce currency. We’ve also got significant quantities in storage in various banks, which has an extra cost,” Dr Allinson explained.
The island mints its own currency, the Manx pound, but also accepts British coinage and has not minted new coppers since 2016.
The coins form a significant part of the island’s identity, and are popular collectors’ items, featuring the Manx cat, historical buildings and a 50p which depicts motorcyclists in the annual TT race.
But many young people on the island, which has a population of just 84,000, don’t carry cash at all, preferring to rely entirely on cards – as is commonplace across urban areas in the UK.
Spencer Benham, who runs The Book Company in the centre of the capital Douglas, said he had seen customers throw away coppers when they left his shop.
“We’re finding, again with inflation, that the one or two pence pieces are so small that it doesn’t really mean anything. Sometimes the younger generation don’t carry cash on them whatsoever.
“I’ve even seen some kids, if they get pennies in their change, they just walk down the street and throw them on the floor. They don’t even see it as money, just a burden in their pocket,” he said.
Mr Benham said that he thought the concerns about inflation were wrong, because businesses would prefer to round down prices in order to be more competitive.
“If anything, they are not going to round up, they are going to round down to 95p. I think the five pence piece will become the new penny, eventually, if they get rid of the pennies and twos,” he said.
One waitress in a café said she thought the coins were “pointless”, something that Mark Kneen, of Hydro Hotel on the promenade in the city, agreed with.
The prices at the hotel’s Mexican restaurant have already been rounded to the nearest five pence. Mr Kneen said that while tourists enjoy collecting the coins, most would choose to pay by card, and that he didn’t personally understand the obsession.
But public opinion remains starkly divided on the issue. Businesses said that 30pc of islanders still pay in cash, primarily older people.
Andy Gibbs, owner of pub Jaks and the newly opened Frank Matcham’s in Douglas, explained that the island had been forced to adapt to card payments during the pandemic.
He said: “It really is everyone, even the oldest. It’s just easy, especially with Apple Pay and things like that coming along.”
There are only a couple of places on the island which are card-only, but Mr Gibbs said it was something he was considering for his own businesses, as the machines are easier for his staff to manage.
He said he has informally employed cash rounding for decades, preferring round numbers for prices.
“I’ve been here 33 years, and 33 years ago you went into a pub and you’d pay £1.01 a pint. But we didn’t do that, we did £1, or £1.05, £1.10. We didn’t use twos and ones,” he explained.
Mr Gibbs added: “I think if they do get rid of them [low-value coins] all then all the banks on the Isle of Man will be inundated with everyone clearing their piggy bank out.”
But other islanders say that if more businesses stop accepting cash, they won’t be able to use them.
‘They want to get rid of small coins – it will just push up the price of everything’
Sandra Brennan, 78, said: “There’s a lot of places now that prefer cards.” She said that she felt pressured to use cards or to give her email address to get receipts in shops.
Mrs Brennan added: “I like to keep a cheque. I hated it when they took the chequebooks away. I used to use the cheque and the stub and now my kids look at me like, ‘Mother, will you come into this world?’ I say: ‘No, I am staying in my world, you come into my world.’”
She said: “They’re wanting to get rid of the small coins. It will just put the price of everything up again.
“You’ve got to keep your Manx coins. I save £2 coins – I start every January to December, and it’s my Christmas money for the grandchildren,” Mrs Brennan added.
Some objections to scrapping cash edge into the realm of conspiracy, with concerns about privacy and tracking if electronic payments are the only option available.
One fishmonger, who refused to be named, said the Government should retain cash, because, “it’s all crooked, isn’t it, and they all like to track everybody”.
Across the Irish sea, the number of cash payments hovers at an even smaller percentage, 15pc, down from 23pc before the pandemic and 60pc just over a decade ago.
It is thought that the large banks – who are responsible for storing a lot of the small coinage when it is deposited with them – are not pleased about the ongoing costs of doing so.
According to figures from the Royal Mint, no new 2p coins were minted in 2022. No new pennies were minted in 2018 or 2019.
But tackling the issue is not high on any political agenda. Concerns about diluting the Conservative brand of tradition and respect for institutions meant politicians quickly backtracked on radical 2015 proposals to make the UK cash-free from 2020.
George Osborne came within weeks of scrapping coppers in 2017 before plans were swiftly halted by then prime minister David Cameron.
Then, in 2019, chancellor Philip Hammond pledged to protect the future of cash, ending speculation about the future of the coins.
Prime Minister Rishi Sunak said last summer that he would ensure that all Britons live near a cash machine, and a range of other measures to ensure that cash access is maintained in the face of continued bank branch closures.
A Treasury spokesman said that there are no plans to change the denominational mix of coins in the UK.
If the Isle of Man is waiting on the UK to take the lead on scrapping coppers, it might be waiting a while longer yet.
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