Nick Goodway: Let's scrap copper coinsComments Off on Nick Goodway: Let's scrap copper coins
Today’s launch of the polymer fiver featuring Winston Churchill marks another move by the Bank of England into the 21st century.
It will be followed by the polymer tenner next year and a plastic £20 note before 2020.
The Bank has highlighted the extra security provided by polymer notes and the fact that they remain cleaner than paper ones because they are more resistant to moisture and dirt.
Their extra durability means that they will last on average two and half times as long as their paper equivalents. And then there’s the Bank’s statement that: “In addition, polymer banknotes are more environmentally friendly and, because they last longer are, over time, cheaper than paper.”
In fact, experts reckon the Bank is likely to save about £100 million over the next decade in printing costs by switching to polymer.
All the above factors make perfect sense and the Bank is to be applauded for its progress.
Which brings me, naturally, to the next area where the country can save money on its currency — and that is on copper coins.
Unlike with notes, neither the Bank nor the Royal Mint — which produces them — will say anything about how much it costs to make penny and twopence pieces.
Evidence from overseas, including Canada and Ireland, is that the penny certainly costs more to make than it is worth and the twopence is probably worth roughly what it costs.
But that’s only half the story: there are more than 11 billion pennies and 6.6 billion twopences in circulation. Banks and retailers spend tens of millions of pounds handling those coppers which nobody actually wants every year.
So as we welcome polymer, let’s scrap coppers.
Saudi’s Uber hedge
Is Saudi Arabia’s massive $3.5 billion (£2.4 billion) investment in Uber actually a sophisticated hedging ploy?
As Opec ministers convened in Vienna today, no one expects them to reach any kind of breakthrough on production cuts and the price of crude looks set to stay at about $50.
That is not good but not dire news for the kingdom which relies on oil exports for the vast part of its wealth but has substantial investments in non-oil businesses across the globe. Low oil prices mean low petrol prices — and that is good news for Uber. Not only will more people use its services if cheap petrol means lower fares but, presumably, more of those fares will drop through to the bottom line. Ultimately, those benefits will come back to shareholders.
That means that for every dollar the Saudis might not be making on each barrel of crude, at least they will make back at least several cents from taxi fares.