Should we get rid of the penny and 2p coins?

The new twelve-sided £1 coin, for 2017, already has retailers and fruit-machine makers moaning. Sean O'Grady asks whether we really need such small currency any more

The other day I noticed something odd. Some change I had lying around stuck to the cover of my iPad. That’s because the cover has some sort of magnet in it, and nowadays our coins are just painted steel. The older coins didn’t stick to it, being made out of copper and nickel, but our currency has been so devalued by inflation that even these base metals are too valuable to make coins of such low face value.

So we are left, pretty much, with scrap metal in our pockets and purses. The latest designs are also pretty debased, bits of the national arms making for a literally disjointed set of images. Plus, they’re the first coins in decades not to have their values in universally understood numerals, and therefore confusing to tourists.

Our money is also easier to copy than ever. Forgers make a nice line out of knocking out counterfeit £1 coins, now so common that they comprise about 3 per cent of the total in circulation. That’s some £46m worth of dud coins knocking around. Which is why in 2017 the pound coin gets a makeover. Of course, that needs to be put against the £72.8m in labour costs that the vending-machine industry said yesterday it will cost to convert all coffee, snack and cold-drinks machines. Long-term, it does make sense to change the design – provided the coins really will stay in circulation for years, and not be ravaged further by inflation.

So the Royal Mint has come up with a new 12-sided design that is redolent of the old thruppeny-bit (which died with decimalisation back in 1971). It is not as fresh as the modernist shock-of-the-new 50p back in 1969, the world’s first seven-sided coin formed as an equilaterally curved heptagon (which meant it has smoothed edges and could roll). Despite the new £1’s more antique inspiration, it’s a refreshing sort of look and much harder to copy. A new design will be needed for it; not, as rumoured, Mister Blobby. I’m afraid we have all missed the deadline for the Mint’s public competition for a design for the new coin. Had I had the presence of mind to enter for the £10,000 prize, I would have gone for something that symbolised our record of fine innovation – Concorde, perhaps, or the Mini, or Stephenson’s Rocket.

Once upon a time the British coinage was hard, heavy and here to stay. Hard because it was linked to gold, abandoned finally in 1931. Heavy because the basic unit, the pound, was a lot of money, compared to say a franc, a mark or a dollar. Back in medieval times a groat (4d, or 1p) was the daily salary of an archer in Henry V’s army. In the last century, those big old pennies with Britannia on, and majestic half crowns, were literally heavy, and reassuringly so. They kept their value and had a certain dignity born of the fact that they would buy something. No longer true, of course, when a £2 coin will barely pay for a cup of coffee. The old system of pounds, shillings and pence, and crowns and florins and groats, lasted for nearly 1,000 years, until 1971 when it was replaced by the decimal system we know today.

The real question we need to answer is whether we need so many coins at all, given that they buy so little. The penny is virtually worthless and useless; the 2p is absurdly large for what it is. So when it was introduced 40-odd years ago, one 2p coin was about enough to buy a second class stamp, or a Mars bar. Today you’d have to have a pile of 20 or 30 to do the same. The 5p should probably be the minimum unit, and prices rounded down to cope with it, as has happened in other countries in the same situation (though the Americans still cling to their 1 cent “Lincoln Penny”, which costs more to manufacture than it will purchase).

Conversely, we should have a new £5 coin to replace all those ragged fivers; it will certainly be a bit sad to see Winston Churchill, soon to grace that note, looking so grubby. My only hope is that we don’t follow the Australians and have plastic banknotes. That really would be the final insult for the poor old pound.