Former Treasury permanent secretary Lord Macpherson has pledged to launch a campaign to retain the 1p coin after the government launched a consultation into their cost effectiveness that could pave the way for their abolition.
A public consultation on the future of cash and digital payments said coppers are becoming increasingly defunct as shops have begun to phase them out and people keep them "in savings jars" rather than spend them. A recent survey also found that 8% are thrown away.
Chancellor Philip Hammond launched the consultation during the first ever Spring Statement.
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He said: "We will call for evidence… on how to encourage cashless and digital payments, while ensuring cash remains available to those who need it.”
The Treasury document published alongside the consultation says: "From an economic perspective, having large numbers of denominations that are not in demand, saved by the public, or in long-term storage at cash processors rather than used in circulation does not contribute to an efficient or cost effective cash cycle."
It also hinted that the £50 note could be axed as it is "rarely used for routine purchases and is instead held as a store of value".
But the prime minister’s official spokesman attempted to play down the prospect of 1p and 2p coins being consigned to history.
He said: "This is a call for evidence intended to enable the government to better understand the role of cash and digital payments in the new economy.
“The government is not proposing any specific policy changes."
Responding to the consultation, former Treasury perm sec Macpherson said “only banana republics don't have a coin representing the lowest denomination of their currency”.
He added: “Campaign to retain the 1p coin starts now. To abolish penny would be to give into inflation and to trash 1000 years of history.”
Campaign to retain the 1p coin starts now. To abolish penny would be to give into inflation and to trash 1000 years of history. #soundmoney
— Nick Macpherson (@nickmacpherson2) March 13, 2018
Only banana republics don't have a coin representing the lowest denomination of their currency. #soundmoney
— Nick Macpherson (@nickmacpherson2) March 13, 2018