UK Government to withdraw from discarding 1p and 2p

UK Government to withdraw from discarding 1p and 2p

The UK Government has reached the conclusion of not changing the types of cash in use. A statement by Philip Hammond, Chancellor of the Exchequer confirmed that Britain’s 1p and 2p coins and £50 notes will no longer face the extinction threat. Talks of scraping some of lower demonetization coins was making rounds since spring 2018.  The government was allegedly set to scrap the lesser-used 1p and 2p coins, together with £50 notes. Reasons stated for the demolition of £50 notes was money laundering by criminals.  A consultation which considered the decision of the ditch was unveiled in a spring statement in 2018. An adamant campaign of small businesses, charities and groups representing older and vulnerable people prompted to deny there were proposals to scrap the coins and notes but reports allege that the consultation went ahead with the decision anyway. The study revealed that about 2.2 million people in the UK are still reliant on cash.

Mike Cherry, the national chairman of the Federation of Small Businesses, said in a statement, that to keep smaller coins was ‘a right call’. A complete withdrawal would have hampered the businesses of small retailers.  Furthermore, he also added that charging prices that end in 99p rather than an entire pound can also encourage the sale of lower value items. In another statement by Natalie Ceeney, who chairs the access to cash review, said that although cash inflow was rapidly falling, digital payments isn’t affordable to everyone. In order to keep them away from feeling the pinch, the scraping was rebuked.

Previously, the Treasury had stated that it was inefficient and inexpensive to retain large numbers of smaller denomination coins, given to its steeply falling demand. In a similar episode, the UK removed the halfpenny coins from circulation in 1984, since their production was becoming expensive than its face value.