B1539 – Coinage Reduction Bill 2019 Watch

This discussion is closed.
CatusStarbright
Badges: 22
Rep:
?
#1
Report Thread starter 3 weeks ago
#1
What is this thread about?
This is a bill in the Model House of Commons (MHoC). It's a piece of proposed legislation that is currently being debated, and there's a good chance that the House will later vote on whether to pass it into TSR law. All are welcome and encouraged to ask questions about the bill's content and join in the debate – you don't have to be in a party or be an MP to do so.

What is the MHoC?
It's a political role-playing game where we pretend to be the House of Commons, and it's been going since 2005. We have formed parties, we have elections twice a year, and we debate bills and motions just like the real-life parliament. If you want to know more about how the MHoC works, your first port of call is the user manual. If you'd like to get involved and possibly join a party, you want the welcome thread.


B1539 - Coinage Reduction Bill 2019, TSR Conservative and Unionist Party, TSR Labour Party




An Act to reduce the number of physical coin in circulation in the context of an increasingly digital payment world.

BE IT ENACTED by The Queen's most Excellent Majesty, by and with the advice and consent of the Commons in this present Parliament assembled, in accordance with the provisions of the Parliament Acts 1911 and 1949, and by the authority of the same, as follows:—

1: Ceasing Production of Small Coinage
(1) The Royal Mint shall hereby cease production of the two pence, five pence and twenty pence coins from the 1st January 2020.
(2) All two pence, five pence and twenty pence coins shall remain legal tender.
(3) On the use of two pence, five pence and twenty pence coins to make a transaction between a consumer and a business, that business shall be expected to sell the coins back to the royal mint, where the coins may be removed from circulation and melted down.

2: Extent, Commencement and Short Title
(1) This Act extends to the whole of the United Kingdom.
(2) This Act comes into force upon Royal Assent.
(3) This Act may be cited as the Coinage Reform Act 2019.

Notes
Spoiler:
Show


The point of coinage and other physical money is as a medium of exchange, allowing people to trade goods. To avoid over- or under-paying for them, cash must be divisible into pieces. Over time the appropriate distribution of this changes.

In recent years we have seen a significant move away from cash transactions such that less than 50% of purchases made in the UK are now in cash. This requires the Royal Mint and Bank Of England to keep pace and as such this bill aims to simplify production by reducing the level of surplus coin in an increasingly cashless world.

By reducing the number of coins in distribution it is the hope of this government that this will encourage further ‘cashless’ transactions and allow for the eventual move away from coin.

Pennies have already been abolished in Australia, Canada, Finland, The Netherlands, and New Zealand with little-to-no effect on charitable donations and prices of goods, and we in the UK have already abolished the half-pence coin.

Note that this is a heavily amended version of B1364 and that the Labour Party were offered the opportunity to second this bill.

https://www.thestudentroom.co.uk/sho....php?t=5306978
Last edited by CatusStarbright; 3 weeks ago
0
Jammy Duel
  • Political Ambassador
Badges: 21
Rep:
?
#2
Report 3 weeks ago
#2
One must ask: why keep 1p and 10p if getting rid of 2, 5, and 20? or for that matter abolish 5 and 20 given normally this sort of thing is to get rid of coppers

It should also be noted the demise of the half penny was not due to low value, rather decimalisation.

If the desire is to remove these coins from circulation all you need to do is remove their status as legal tender, just as is done with old notes when a new series is released

We also have one in eight members of the public still relies on cash, among our generation cash might seem archaic, but this is not the reality for all

A final thing to consider is that the amount of coinage in circulation is dictated by demand, as the usage of cash decreases so should the supply of coinage. It is demand driven to the extent that if you look at the M0 money supply chart there is a little peak every single year in the run up to Christmas. We have also seen the M0 supply remain pretty flat over the last couple of years whereas historically it has increased roughly in line with nominal growth which suggests the Mint and BoE are already reacting to the reducing level of cash usage and thus demand.
Last edited by Jammy Duel; 3 weeks ago
1
Aph
Badges: 22
Rep:
?
#3
Report 3 weeks ago
#3
(Original post by Jammy Duel)
One must ask: why keep 10p if getting rid of 1, 2, 5, and 20? or for that matter abolish 5 and 20

It should also be noted the demise of the half penny was not due to low value, rather decimalisation.

If the desire is to remove these coins from circulation all you need to do is remove their status as legal tender, just as is done with old notes when a new series is released

We also have one in eight members of the public still relies on cash, among our generation cash might seem archaic, but this is not the reality for all

A final thing to consider is that the amount of coinage in circulation is dictated by demand, as the usage of cash decreases so should the supply of coinage. It is demand driven to the extent that if you look at the M0 money supply chart there is a little peak every single year in the run up to Christmas. We have also seen the M0 supply remain pretty flat over the last couple of years whereas historically it has increased roughly in line with nominal growth which suggests the Mint and BoE are already reacting to the reducing level of cash usage and thus demand.
They aren’t abolishing the 1p, unless it’s already been abolished?

Also, I’m against moves towards a cashless society. Without cash there is a real risk that interest rates will become negative, thus encouraging people to spend and get into debt and discouraging fiscal prudence. Basically turning the entire system of money on its head and no one should want that.
0
Jammy Duel
  • Political Ambassador
Badges: 21
Rep:
?
#4
Report 3 weeks ago
#4
(Original post by Aph)
They aren’t abolishing the 1p, unless it’s already been abolished?

Also, I’m against moves towards a cashless society. Without cash there is a real risk that interest rates will become negative, thus encouraging people to spend and get into debt and discouraging fiscal prudence. Basically turning the entire system of money on its head and no one should want that.
Question corrected then

Also you have the likes of the Eurozone and Japan showing negative interest rates are a real risk regardless
Last edited by Jammy Duel; 3 weeks ago
0
Baron of Sealand
Badges: 21
Rep:
?
#5
Report 3 weeks ago
#5
A bipartisan moment!
0
Saracen's Fez
Badges: 20
Rep:
?
#6
Report 3 weeks ago
#6
Not sure I agree with 5p and 20p. There's something to be said for 1p and 2p, but 20ps in particular are useful. I'm also not sure I like the justification being to make it harder for people to use cash.

(Original post by Jammy Duel)
It should also be noted the demise of the half penny was not due to low value, rather decimalisation.
Was it though? It was still being minted until 13 years after decimalisation.
0
barnetlad
Badges: 19
Rep:
?
#7
Report 3 weeks ago
#7
The basic idea is sound though I am not sure about the choice of coins.

As for the comments about becoming cashless, I want cash to remain as an option given that without it banks would probably increase charges to retailers which are a burden on small shops. Notice how many have a minimum for debit card spend.

Systems fail sometimes too and the internet providers are not quick to fix things.
0
LiberOfLondon
Badges: 17
Rep:
?
#8
Report 3 weeks ago
#8
I don't see the point - besides, we don't all live in London and have easy access to cashless shops.
2
Joinedup
Badges: 20
Rep:
?
#9
Report 3 weeks ago
#9
The move to cashless is something to be resisted.
When everything works properly it's more psychologically painful to pay for day to day purchases with cash taken from a limited amount you have to carry about with you. This pain is in fact the consumers friend and causes reflection on the utility of every purchase reducing overexpenditure.

Cashless depends on bank IT and telecoms being constantly available... Banks and telecoms companies are occasionaly incompetent (see TSB and other recent cases) IT is potentially vulnerable to hackers and cyber criminals. In a completely cashless system you could lose your ability to use money for considerable periods when it might be really important that you are able to use it.

Payment processors have refused to provide service to some controversial figures after social media pressure campaigns. There's no due process to it. Is it right that a twitter mob could bully processors into denying you the ability to use money because you expressed an unpopular political opinion online?

The reasons for selecting certain coins for elimination while keeping others of lower value in circulation is not given. It is close to ideal to have coins and notes in denominations going up 1,2,5 then 10,20,50 etc between upper and lower limits.
0
Jammy Duel
  • Political Ambassador
Badges: 21
Rep:
?
#10
Report 3 weeks ago
#10
cashlessness isn't necessarily something to be avoided absolutely, but it is certainly something to be avoided right now.

There are a number of benefits to a cashless society, particularly when it comes to handling the black economy and to a lesser extent the grey economy, also should reduce the tax gap because cash in hand work is trivially impossible. With the necessary infrastructure it also makes paying for things faster due to the lack of need to be counting cash etc.

That being said cash gas its benefits, one being in some circumstances it's actually easier to manage spending with cash, drinking for instance: when you run out of cash it's time to go home before the missus tells you off for being at the pub too long, with plastic you can keep going and going (although virtual cards could solve this). The other benefit it privacy, a lot harder (near impossible) to trace cash, hence why it's used for dodgy stuff.

On balance the benefits of a cashless society probably outweigh the benefits of cash, but the transition should not be forced, certainly not when an eighth of the country still relies on cash.
0
Jammy Duel
  • Political Ambassador
Badges: 21
Rep:
?
#11
Report 3 weeks ago
#11
(Original post by Baron of Sealand)
A bipartisan moment!
So you've finally learnt a vital aspect of brute forcing bad bills is to make sure you actually have the numbers before ignoring the issues with the bill
1
Jammy Duel
  • Political Ambassador
Badges: 21
Rep:
?
#12
Report 3 weeks ago
#12
if we want more issues we have the likely outcome being *more* coins, where a 5p was once needed we will instead need five 1p coins and where formerly a 20 now two 10s.

Not only are we attempting to inconvenience pensioners by trying to force them onto payment methods they aren't comfortable with, bit we're trying to inconvenience them by weighing down their purses and wallets even further while doing so!
0
shadowdweller
Badges: 21
Rep:
?
#13
Report 3 weeks ago
#13
In principle I agree with the idea of coin reduction, but I don't think the coins selected here will actually address the problem. As has been said we'll simply need more coins to make up the removed amounts now, rather than fewer.

It would seem more logical to me to abolish, for example, 1p coins as per the example given in the notes.
0
Jammy Duel
  • Political Ambassador
Badges: 21
Rep:
?
#14
Report 3 weeks ago
#14
(Original post by shadowdweller)
In principle I agree with the idea of coin reduction, but I don't think the coins selected here will actually address the problem. As has been said we'll simply need more coins to make up the removed amounts now, rather than fewer.

It would seem more logical to me to abolish, for example, 1p coins as per the example given in the notes.
But even that doesn't lead to coin reduction, just a shift in the demand distribution
0
shadowdweller
Badges: 21
Rep:
?
#15
Report 3 weeks ago
#15
(Original post by Jammy Duel)
But even that doesn't lead to coin reduction, just a shift in the demand distribution
I suppose it would depend how it was implemented - for example, by moving prices inline with a 1p removal, you would pay £2 for something that would have been £1.99. But from the point of view of the person paying, they would use the exact same coins as they would have before, but they would receive one less back.
0
TheRadishPrince
  • Political Ambassador
Badges: 15
Rep:
?
#16
Report 3 weeks ago
#16
I expected this to be about the 1p coin but the choice of coins is pretty awful.

The 20p coin is still very useful and is worth producing and I would say the same about the 10p coin (which I guess you forgot existed if it isn't mentioned, yet the 20p is).

Quite frankly this Bill is a joke without the 1p coin, and without the 10p coin when the 20p coin is included.

I wouldn't even consider supporting this unless it was 1p and, perhaps, 2p coins only.
0
Jammy Duel
  • Political Ambassador
Badges: 21
Rep:
?
#17
Report 3 weeks ago
#17
(Original post by shadowdweller)
I suppose it would depend how it was implemented - for example, by moving prices inline with a 1p removal, you would pay £2 for something that would have been £1.99. But from the point of view of the person paying, they would use the exact same coins as they would have before, but they would receive one less back.
Except how often do you buy only one item? I suspect when you look at actual transactions the amount that are £xx.x9 are going to be pretty low, probably about 10%. We also see no noticeable changes in M0 trends for Australia, Canada, or Finland, although that could just be down to how little your low denominations contribute to M0.

--------------------------

Going back to the fact that production of cash is supply based the Royal Mint is kind enough to tell us how many of each coin are minted each year, 2018 tells us they're reacting to reduced cash usage and thus lower supply, and the data is consistent with the M0 being nominally unchanged for a few years, beyond what would be expected just from people emptying their piggy banks to get rid of their old £1 coins.

1p - 0 mintage
2p - 0 mintage
5p - 0 mintage
10p - 0 regular mintage, although 220,000 coins with each letter on, or 5.72m total, were minted for the Great British Coin Hunt
20p - 0 mintage (there were also none minted in 2017)
50p - 0 regular mintage, although 28,302,000 coins were minted for Beatrix Potter, Paddington, and Representation of the People
£1 - 130,560,000 mintage
£2 - 0 mintage (there were also none minted in 2017)

Meanwhile vast volumes of coins are exiting circulation, either officially in that they are being returned to the mint and being melted down, or unofficially in that they are becoming unusable/lost/filling up piggy banks again.

Can't remove a surplus of coins when there is no such surplus and the mint already manages money supply to prevent surpluses or deficits of coins.
Last edited by Jammy Duel; 3 weeks ago
1
Baron of Sealand
Badges: 21
Rep:
?
#18
Report 3 weeks ago
#18
(Original post by Jammy Duel)
So you've finally learnt a vital aspect of brute forcing bad bills is to make sure you actually have the numbers before ignoring the issues with the bill
I've never ignored issues with a bill. You've almost always ignored my responses to your comments.
0
Jammy Duel
  • Political Ambassador
Badges: 21
Rep:
?
#19
Report 3 weeks ago
#19
(Original post by Baron of Sealand)
I've never ignored issues with a bill. You've almost always ignored my responses to your comments.
Kinda hard to respond when the threads are closed. I guess this is also why on your attempt to openly ban foreign aid there was total silence and failure to answer even an incredibly simple question (off to division to try to brute force it when?)? Maybe the latest set of £15bn p/a borrowing too where there has been near total silence with the exception of Rakas saying that at some point he'll respond (with mere hours remaining to do so)? UC post first reading had silence with the exception of a single post...2 minutes before closing and the "Reeee, people are defecting from the Tories" bill also had much silence (and a promise of a second reading that never happened).

You're also off to a good start with this bill with the justification shown to be #FakeNews and it pointed out that the objectives are undesirable, further reinforcing the idea that much of the house seem to be oblivious to life beyond the yuppies, and the best we can get is praising bipartisanship instead of tacking the issues at hand. They're there for you.
0
CatusStarbright
Badges: 22
Rep:
?
#20
Report Thread starter 3 weeks ago
#20
Now I can comment:

Congrats to the Conservatives and Labour for the bi-partisan effort. I am nevertheless opposed to this, as I do not see the need to eliminate our coins and indeed do not think that we should force people to move to a cashless society. For some people that would be an inconvenience and for some it would be impossible (for example, the homeless who have issues with setting up bank accounts).
0
X
new posts
Back
to top
Latest
My Feed

See more of what you like on
The Student Room

You can personalise what you see on TSR. Tell us a little about yourself to get started.

Personalise

Did you vote in the 2019 general election?

Yes (280)
47.14%
No (69)
11.62%
I'm not old enough (245)
41.25%

Watched Threads

View All