Yesterday the Treasury launched a consultation on the future of cash, asking whether any tweaks are needed in light of the advance of digital payments. One issue they've raised is the fate of copper coins. Apparently 60% of 1p and 2p coins are used only once before they leave the cash cycle (either set aside and saved or, in 8% of cases, thrown away). Nothing's been explicitly stated, but there is a heavy hint that 1p and 2p coins might ultimately be withdrawn from circulation. So this post is about how that might work.
If you remove 1p and 2p coins from circulation, various amounts of money suddenly become impossible to pay. £1.38 can't be made, £2.71 isn't chargeable, and £4.99 would disappear from our shelves. Instead the smallest value coin would be the 5p piece, and every price would have to be a multiple of five. To lose the penny as our basic unit of currency would be to break a history stretching back over a thousand years. But perhaps its disappearance is long overdue - a single penny back in 1978 was worth more than a 5p coin is today.
So my suggestion, for the day copper coins ultimately die, is this. Overnight the only amounts anyone could pay would be £0.05, £0.10, £0.15, £0.20, £0.25, etc. Without 1p and 2p coins, there are only twenty possible prices in every pound. So let's ditch the penny and reintroduce an old-favourite unit which was always based on twentieths.
The shilling was introduced in Tudor times, and twenty shillings made a pound. Effectively the shilling disappeared in 1971, but decimalisation ensured it lived on as the 5p coin. Reversing this equivalence would mean every amount in a copper-free economy could be precisely paid in pounds and shillings. Switching back to the old money would be seamless, plus it would perfectly embrace the backward-looking Brexit zeitgeist.
A 50p Creme Egg would cost 10/-. A £1.20 newspaper would cost 24/-, or more likely £1.4s. A flat white might go from £2.35 to £2.7s. The National Minimum Wage would be rounded up from £7.83 to £7.85, and then translated to £7.17s. Using shillings would be simple and convenient... and best of all the over-55s still remember how shillings work, so there'd be no need for a massive programme of re-education which our old people would find difficult. Bring it on?