Saturday, 16 March 2013

Why Are Small Changes So Difficult To Achieve?

In my local shop, the Financial Times costs £2.50, a litre of milk £1 and one bun 49p. Tender £4 and the penny change represents 0.0025 of the transaction value. And transactions don't come much smaller than £4. Nonetheless, people probably feel virtuous dropping their unwanted penny in to the obligingly provided collecting box. Whether it is economic for charities to collect so much weight for so little reward is another question.

The United Kingdom "went decimal" - or nearly so - in 1971. Since Halfpenny coins were issued as part of the new coinage, it wasn't fully decimal. The Halfpenny was irritatingly small, had little use, but struggled on until 1984 when it was demonetized.

I know politicians go all funny when the I - word is mentioned but even my maiden aunt talks about prices having gone up in the past fifty years. So much so that it costs the Royal Mint more to make penny, two penny and five penny coins than the exchange value stamped on them.

It's time to demonetize these coins which people don't want in their pockets, which pile up in jam jars on kitchen shelves, and which belong to a time when prices were very considerably lower.  That my bun would cost 50p in consequence does not bring Hyperinflation a jot closer. As for the charities, they should settle for no less than 10p a throw.

This small change to our small change would be easy to accomplish, would save the Government a lot of money on the costs of minting coins, and would be welcomed by most people. Does anyone really enjoy fiddling with 5p coins?

Can I imagine this small change being brought about in a trouble-free manner, as a result of a simple administrative decision? No. Think of what they would say in the Daily Express. Think of all the Penny Martyrs who would suddenly emerge.

Since 1971 prices have risen - what - ten times or more? The house you could have bought for ten grand back then would cost at least a hundred grand today. But for some reason our basic coin is still the penny. Even my maiden aunt thinks its silly. But then maiden aunts have nerves of steel; unlike wibbly-wobbly-jelly Government Ministers.

1 comment:

  1. What is alarming is that kids today (apparently) aren't bothered about being given 20p as change, even though they're broke and jobless. The saying about taking care of the pennies has no resonance. Your suggestion contributes to that frame of mind.

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