By Richard Giedroyc
The penny may have been the money of account in 1066 when William I conquered England, but that was nearly a thousand years ago. Today things are quite different, as can be seen through the rise and fall of the ‘round pound’ as Britain’s money of account.
Perhaps the many non-redeemed round pound coins are of concern to the British Treasury, but at the same time, the proliferation of penny denomination coins in circulation might not be. On Aug. 12, the British Treasury announced it would cease producing the denomination due to the overabundance of pennies already in circulation.
According to recently released statistics, it appears there are about 10.5 billion penny and another 6.3 billion twopenny coins currently in use throughout the United Kingdom. The government has made it clear that although it will cease production of the penny, this is not meant to be a permanent move. The intention is not to change the mix of coins and bank notes, nor is it to phase out the copper composition coins.
On Aug. 12 the British Broadcasting Corporation reported, “Cash use has fallen across the UK, and some feared the end of copper coins when the government announced a consultation on the mix of cash in circulation earlier this year.
The BBC report continues, “But the Treasury concluded that the coins were still needed, and said they would continue to be used ‘for years to come.’ Over two million people are estimated to be almost entirely reliant on cash in their daily lives, with the elderly, vulnerable and those in rural communities likely to be hardest hit by any decline in cash availability.
This isn’t a first for Britain. There have been lags in production of 20-pence and £2 coins since decimalization was introduced, each time due to sufficient numbers to meet current demand. What might make penny enthusiasts nervous is the cost of producing the denomination, which could make the Exchequer and the British Royal Mint reconsider its value in circulation at some later date.
Recent surveys indicate six in 10 penny and twopence coins are used only once after having been placed into circulation. One in 12, according to the same surveys, is thrown away and the balance likely stored somewhere.
The British penny is also being ravaged by inflation. The penny can now purchase less than a halfpenny could when that denomination was abolished in 1984.
According to BRM information, penny and twopence coins are legal tender up to 20 pence in value. The coins contravene the Coinage Act 1971 when used in a single transaction in excess of that face value.
The British government made a statement May 2 ensuring that the two coin denominations, as well as the £50 bank note, will continue to be honored as legal tender.
The copper-zinc or bronze composition penny was introduced in 1860 during the reign of Queen Victoria. It replaced the copper penny, which in turn replaced the penny composed of silver. Bronzed copper proof pennies were struck in 1839 and 1841. Silver composition penny coins are still struck annually, but only for use in Maundy coin sets given away by the monarch on Maundy Thursday just prior to Easter.
According to Coincraft’s Standard Catalogue English and UK Coins 1066 to Date by Richard Lobel with Mark Davidson, Allan Hailstone, and Elenia Calligas, “Although [Master of the Mint Sir Isaac] Newton had considered minting a copper penny in 1702, the first were struck in 1797, coincidentally with the copper twopence…Following Matthew Boulton’s ideals about intrinsic value, the weight of the penny is exactly half that of the twopence.”
Great Britain struck quarter and third farthing denomination copper coins through 1853 and 1885 respectively, with half farthing coin production ceasing in 1856. The farthing or quarter penny continued until 1956 [demonetized in 1961] during the reign of Queen Elizabeth II.