Coinage (Measurement) Bill

Lord Lancaster of Kimbolton Excerpts

Friday 4th February 2011 Commons Chamber

[Mark Lancaster (Milton Keynes North) (Con)]

I beg to move, That the Bill be now read a Second time.

I am grateful for the opportunity to present the Coinage (Measurement) Bill to the House. Hon. Members may not be aware that coins have a special resonance for my constituency of Milton Keynes North. Despite being a very modern city, Milton Keynes is an area of rich historical findings that span a timeline of approximately 4,000 years. Indeed, it was near Milton Keynes that possibly the oldest known gold coin in Britain, a gold stater from the second century BC, was discovered. Numerous discoveries of iron age, bronze age and Roman coins have been made in Milton Keynes and the surrounding area. It is exactly that sort of historical legacy that the Bill is intended to address.

My two-clause Bill would make a minor technical amendment to the Coinage Act 1971, which governs the striking of coins by the Royal Mint and contains various standards in respect of weight, fineness, composition and dimensions that coins struck by the Royal Mint must comply with. It also makes provision for permitted variations from those standards. Section 1(6) requires that the variation from the standard weight of any coin

“be measured as the average of a sample of not more than one kilogram of that coin.”

That is perfectly fit for the purpose for which it was originally conceived. The current weights of UK circulating coins range from the 5p coin at 3.25 grams to the £2 coin at 12 grams, so a sample of a kilogram would contain 307 5p coins or 83 £2 coins, an ample number to fulfil the requirement to measure average weight. Having seen the Royal Mint’s impressive production line in action on Monday, with presses that typically strike about 750 coins a minute with less than 0.08 mm variance in diameter and less than 0.238 grams variance in weight, I know that a sample of kilogram is therefore a perfectly reasonable measure of the tolerated variation from the standard weight. It was not until 1992, 21 years after the Coinage Act was introduced, that the first 1 kg coin was minted.

Members may well be interested to know what the environmental impact of minting coins is. All the Royal Mint’s operations are conducted under an environmental management system certified to ISO 14001, the internationally recognised standard for the environmental management of businesses. It prescribes controls for activities that have an effect on the environment, including the use of natural resources, the handling and treatment of waste, and energy consumption. Furthermore, in June last year the Royal Mint became the first mint in the world, and the largest UK manufacturer, to achieve SA 8000 accreditation, the international standard for socially responsible businesses.

Circulating coins is just one part of the Royal Mint’s business, and as with all good businesses, it is constantly seeking to evolve, expand and explore new technologies and commercial opportunities. I am glad to see my hon. Friend the Economic Secretary to the Treasury in her place. As the Minister responsible for the Royal Mint and coinage policy, no doubt she will be able to elaborate on recent developments in the Royal Mint’s commemorative coin activities. From its 2009-10 annual report, I see that the commemorative coin division had a turnover of £89 million in that year, with an operating profit of some £5 million. That was due in part to the commencement of the London 2012 Olympic coin programme, with the 2009 £5 countdown silver proof and silver proof piedfort coins selling out.

The full range of 2012 Olympics products is available on the Royal Mail website, but some of the features of the coin programme are the countdown collection, the London 2012 sports collection, the “Celebration of Britain” collection and the “Gold Series: Faster, Higher, Stronger” set. On its current trajectory, and on the assumption that the Bill successfully completes its passage through this House and the other place and the planned kilogram coins are issued, the programme for London 2012 is on course to be the biggest Olympic coin programme to date.

[Christopher Pincher (Tamworth) (Con)]

My hon. Friend mentions the motto of the Olympics, “Faster, Higher, Stronger”, which I think in Latin is “Citius, Altius, Fortius”. Given that we are likely to have the heaviest coin ever circulated in the United Kingdom, would it be sensible to add “Gravius”—heavier—to the motto on the coins?

[Mark Lancaster]

I thank my hon. Friend for his excellent suggestion, and I think it probably would. Perhaps we should put that suggestion to the International Olympic Committee. I am sure that he would like the Economic Secretary to do that on his behalf, but we will see what she has to say about it.

That brings me to the purpose of the Bill. As part of the Olympic programme, the Royal Mint is keen to strike those kilogram coins that my hon. Friend the Member for Tamworth (Christopher Pincher) mentions. As I said earlier, the current wording of the Coinage Act would effectively prohibit that. It is not possible to measure the variation from the standard weight in the case of the proposed Olympic coins because the weight of each coin is likely to be equal to or greater than the 1 kg aggregate limit for a sample under section 1.

Clause 1 therefore amends the Coinage Act so that the variation from the standard weight can be specified by royal proclamation, for which section 3 provides. That would grant the flexibility to adjust the size of the sample for the purposes of the section 1(6) weight variation test. I am sure that hon. Members will appreciate that that removes a technical legislative obstacle to the proposed Olympic coins, allows the Royal Mint to continue to develop new and innovative designs and provides exciting opportunities to push coinage boundaries.

Striking kilogram coins has recently become part of the Olympic games tradition. Most host nations in recent years—for example, Australia, Canada and China— issued such coins, and they proved extremely popular with collectors internationally. The Bill would allow the Royal Mint to continue that tradition in commemoration of the London 2012 Olympic and Paralympic games.

The large size means that the kilogram coins will be an exciting, artistic and eye-catching part of the Olympic games. The intention is for them to be significant works of numismatic art. The Royal Mint will approach high-profile British artists to prepare the designs—that is already under way.

After royal and ministerial approval, a commitment to strike kilogram coins was given to the International Olympic Committee during the United Kingdom’s bid to host the 2012 games. If the Bill is not passed, the kilogram coin element of the Olympic coin programme will unfortunately have to be scrapped. The Royal Mint, in consultation with the London Organising Committee, would need to consider an alternative product to fill the gap in the programme. However, none of the alternatives would have anything like the appeal of the 1 kg coin. There is a global expectation that the Royal Mint and the London 2012 Olympic coin programme will follow in the footsteps of London’s predecessors.

[Mr Christopher Chope (Christchurch) (Con)]

Will my hon. Friend assure the House that none of the coins will be given free to members of the International Olympic Committee, who seem to go in for lots of freebies?

[Mark Lancaster]

My hon. Friend makes a valid point. I would like to think that that would be the case. It is my understanding that the coins will be put up for sale—and sale only.

The Royal Mint wants to ensure that the two commemorative kilogram coins will crown the range of coins. Judging from the reception of similar coins around the world, and after consulting representatives of the coin trade and collectors, the Royal Mint is confident that the UK kilogram coins will be well received—but hopefully not by the IOC.

[Iain Stewart (Milton Keynes South) (Con)]

I congratulate my hon. Friend on introducing the Bill. Does he agree that the coins, as well as being of interest to collectors around the world, could usefully serve as prizes for different communities, which will try to emulate the Olympic games by hosting, for example, inter-village competitions? A kilogram coin would be a fitting award to the community that triumphed in those sporting contests.

[Mark Lancaster]

My hon. Friend makes a powerful point. Indeed, the coins will be for sale, and there is an opportunity for doing what he suggests.

[Tom Brake (Carshalton and Wallington) (LD)]

The hon. Gentleman is making a serious case. Has he had any discussions with vending machine manufacturers about whether they would want to use the coin?

[Mark Lancaster]

There will be coins in the range that vending machine manufacturers may want to use, but I am not sure whether they will want 1 kg coins. That could prove something of a challenge and perhaps rather expensive.

[Christopher Pincher]

On the design of this coin—or should I say “paperweight”—is my hon. Friend aware of whether the College of Arms will be consulted over the design on the reverse? He might be aware that the college and its former head, Sir Peter Gwynn-Jones, were concerned about the design of the smaller coinage in 2008.

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[Mark Lancaster]

The Royal Mint has an advisory committee made up of a number of distinguished gentlemen and ladies in this field. I am not sure whether the College of Arms was consulted, but I am more than happy to find out and come back to my hon. Friend. We would like to think that the quality of these coins would be something of which the nation can be proud, and hopefully the committee will ensure that that is the case.

The Royal Mint proposes to make its kilogram coin from 22-carat gold and fine silver—so there would be two separate coins. They would be the largest ever UK coins, with a diameter of 10 cm and a face value of £1,000 for gold and £500 for silver. Based on demand from previous Olympic games, we anticipate minting 60 of the gold coins at an estimated cost of about £40,000, and 14,000 silver coins at an estimated cost of £1,250. However, the exact price of the coins will depend on the cost of gold and silver at the time.

[Christopher Pincher]

Will the coins be solid gold or mixed with baser metals? My hon. Friend might know the story that the first inflationist in our country was King Stephen, who debased the coinage in the 1140s—a rather inglorious path trodden by several Governments down the centuries, notably the Attlee, Wilson and Callaghan Governments. Will we have gold in our coins, or will they be debased?

[Mark Lancaster]

Having seen the production line for myself, I am confident that they will indeed be 100% gold and 100% silver. I would hate to think that what my hon. Friend describes would happen again, and after my visit I am quite confident that that will not be the case.

It may interest hon. Members to hear that there is a common misconception about the meaning of legal tender. The face value of the coins will be very different from the cost of buying them. The parties involved in a transaction are free to agree the means of payment, whether bank notes, credit card or other payment arrangements. However, in the absence of any such agreement, the creditor is entitled to require payment in legal tender. Conversely, the debtor is entitled to use it. Bank of England bank notes are legal tender in England and Wales, but not in Scotland or Northern Ireland. However, Scottish and Northern Irish bank notes are not legal tender anywhere in the United Kingdom. I see my hon. Friend the Member for Milton Keynes South (Iain Stewart) nodding. I am sure that he has suffered from this. Coin is also legal tender throughout the UK, although in most cases only up to certain specific limits.

The Olympic programme would generate royalties for London 2012 and the Exchequer, because the Royal Mint corporate entity is 100% owned by Her Majesty’s Treasury. Of course, the royalty payable would depend on sales and the final price of the coins, which will be determined by the price of gold, as I have said. However, as I mentioned, it is expected that demand will be similar to, if not greater than, that associated with previous Olympics. It is also important to note that the project is self-funding. The coins form just part of a wide range of products the Royal Mint is issuing to commemorate the 2012 Olympics. As Lord Coe, the London 2012 chairman, said in 2009:

“we’re thrilled to be working with the Royal Mint to commemorate three years to go. As the excitement builds over the next three years, it is fantastic to know that the Royal Mint will be alongside us, helping the whole country to join in with our celebrations.”

It is important to remember that the sporting, cultural and historical significance of London 2012 is not limited to the area within the M25 boundary. The athletes aspiring to compete under the Great Britain banner come from all over the United Kingdom. I would particularly like to recognise those from my own constituency and its environs: Greg Rutherford, Nathan Robertson, Bobby White, Joey Duck and Mervyn Luckwell are just a few of the Buckinghamshire athletes hoping to take part in the Olympic and Paralympic games in 2012. Furthermore, in recent weeks, my hon. Friend the Member for Milton Keynes South and I have been to a number of local events organised by Roger Fennemore and his wife, Sally, helping to raise funds for our local athletes and their training for the Olympic programme. I pay tribute to them. I am pleased that Milton Keynes has also been selected as the site of one of the 2012 Olympic training villages, owing to its strategic location and strong infrastructure, offering training for five Olympic and four Paralympic sports. Her Majesty the Queen planted the first tree on the Olympic park—next to the waterways, adjacent to the stadium—a mature willow tree grown in Milton Keynes, the first of more than 300 that will be planted on the stadium site.

[Iain Stewart]

My hon. Friend makes an important point about the significance of the Olympic games to towns, villages and cities throughout the United Kingdom. As well as supporting the elite athletes who will be competing in the games, an important part of the Olympic legacy will be inspiring young people to take part in sport and to develop their talents. This Bill, in addition to the measures that he has mentioned, will be instrumental in inspiring that new generation.

[Mark Lancaster]

My hon. Friend makes an important point. The whole programme is excellent, particularly the 50p coins, of which I think there are 29 versions, celebrating each individual sport. One of those coins was designed by a “Blue Peter” viewer, so we have indeed managed to engage the whole country in the programme. That is important if we are to continue to inspire young people to take part in the Olympic programme.

Let us not forget the Paralympic mascot, Mandeville, named after the Buckinghamshire village where the precursor to the Paralympics was born. I would also like to mention Dr William Penny Brookes, the founder of the Wenlock Olympic games, which have been held almost every year since 1850 in the historic town of Much Wenlock, in the constituency of my hon. Friend the Member for Ludlow (Mr Dunne). As the House knows, the Wenlock games were the inspiration—here, in England—of the modern Olympic games, which started in 1896 in Athens, after Baron Pierre de Coubertin, a Frenchmen, had witnessed them. The London Organising Committee of the Olympic Games and Paralympic Games has recognised Much Wenlock’s place in British Olympic history by naming the London 2012 mascot Wenlock. That is an excellent tribute to my hon. Friend’s constituency town.

The striking of kilogram coins will not be limited to commemorating the Olympics. Future events of cultural significance and historical anniversaries, as well as sporting occasions, could all be celebrated in that way. The Coinage (Measurement) Bill therefore presents an exciting opportunity, with far-reaching implications. I am looking forward to a lively debate, but would urge hon. Members to let the Bill pass unopposed to the Committee stage.

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[Mark Lancaster]

I start by thanking hon. Members on both sides of the House for their support for the Bill, and in particular my hon. Friend the Economic Secretary. I am grateful to the hon. Member for Bristol East (Kerry McCarthy), from the Opposition Benches, who also supported the Bill, although her comments about the Mayor were a touch cruel, not least since I have seen him out jogging recently and that weight problem is coming down rapidly.

I am afraid that I make no apologies to my hon. Friend the Member for Carshalton and Wallington (Tom Brake) for promoting the Bill. Milton Keynes is a fantastic sporting city. We were set to be a host city for the 2010 World cup, had we got it. We have a fantastic football team, a basketball team, an ice hockey team and the country’s largest indoor snow dome. We are also home to the National Badminton Centre. Having worked very closely with many of my young people, I know that they are absolutely captivated by this Olympic programme and I make no apologies for doing my bit to ensure that there will be a strong Olympic legacy.

I have great sympathy with the point made by my hon. Friend the Member for Bury North (Mr Nuttall), but as the coin is set for international markets it is appropriate that it should be struck as a 1 kg coin. This is an uncontroversial and short Bill. I thank hon. Members for their support and commend it to the House.

Question put and agreed to.

Bill accordingly read a Second time; to stand committed to a Public Bill Committee (Standing Order No. 63).