HM Treasury has reported that no new 1p or 2p coins were produced in the UK last year, prompting the Labour Party’s shadow charities minister Vicky Foxcroft to express concern about the potential impact on donations.
According to the accounts of the Royal Mint Trading Fund, published last week, no new 1p or 2p coins were produced in the year to March 2019, the first time this has occured in decades.
The last time no new 1p coins were struck was 1972 and the last time for 2p coins was 1982.
The news comes after the Treasury pulled a planned consultation on scrapping the coins last year, after hearing concerns over the effect it could have on charity donations.
One of those warning of the potential negative impacts on charities at the time was Labour’s former shadow civil society minister Steve Reed.
Now his successor Vicky Foxcroft has expressed similar concerns over the latest figures from the Treasury.
Speaking to Civil Society News, the shadow civil society minister said: "I am concerned that the government has decided to phase out 1p and 2p coins.
“Donating loose change remains one of the easiest and most popular ways for people to donate to charities - think about the number of times you pay for something which is 99p and pop the penny in a charity box afterwards.
“These small, one-off donations add up for charities and ditching small coins will have a damaging knock on effect on small charities, and the causes they support.”
However, a spokesperson for the Treasury is quoted in the Guardian as saying the lack of production of 1p and 2p coins last year does not signify a phasing out, pointing out that the Royal Mint accounts also show that no £2 coins were produced in 2018/19.
They said: “We didn’t ask the Mint to issue any £2 or 1p/2p coins this past year because there are already enough of these in circulation.
“Our coins are of the highest quality and the amount we ask the Royal Mint to produce every year depends on demand from banks and Post Offices.”
‘Charities should not worry’
The Association of Accounting Technicians has said charities should not be worried even if coins were being phased out.
Phil Hall, head of public affairs and public policy, said: “AAT recognises that the only real argument against the removal of such coins comes from the charity sector.
“The Small Charities Coalition and others have raised concerns about increased costs, as charities might have to move to contactless collection tins which have a transaction cost.
“However, with no 1p or 2p coins to give, members of the public may well give 5p coins instead - potentially increasing charitable giving rather than decreasing it. It’s not a clear cut situation and is certainly something that the Treasury should look at.”
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