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Coinage (Measurement) Bill

Volume 526: debated on Friday 1 April 2011

Bill, not amended in the Public Bill Committee, considered.

Third Reading

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

Although today is April fools’ day, I can assure hon. Members that the Bill is no joke. It is relatively simple, but it will have a weighty impact, for it enables the Royal Mint to commemorate events of cultural significance and national importance with kilogram coins, starting with, but not limited to, the London 2012 Olympic and Paralympic games. Indeed, the only question raised in Committee was from the hon. Member for Dundee East (Stewart Hosie), who queried whether the Bill will enable future events such as the Commonwealth games to be similarly commemorated. The answer, of course, is that it will do so, subject to the permission of Her Majesty and the agreement of the Chancellor.

By making two small amendments to the Coinage Act 1971, the Bill removes a technical obstacle that currently prevents the Royal Mint from striking kilogram coins. The Act governs the striking of coins by the Royal Mint and contains various standards in respect of a coin’s weight, fineness, composition and dimensions, with which coins struck by the Royal Mint must comply.

The Act 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 1 kg of that coin. As I have said before, that is perfectly fit for the everyday coins that we have in our pockets, but in the competitive collector-coin market it is important to be able to push the boundaries and exploit growing technical capabilities and expertise to develop new and exciting products that will provide an enduring and lasting way of commemorating special events.

The Royal Mint intends to strike the coins in fine gold and in fine silver. They will have a standard diameter of 10 cm, and will weigh 1 kg. The coins will be legal tender, although their inherent metal value will far outweigh their nominal face value, which will be £1,000 for the gold coins and £500 for the silver coins. Their retail price will be heavily dependent on metal prices at the time of release. The choice of design will ultimately be a matter for Her Majesty the Queen and the Chancellor of the Exchequer, on the advice of the Royal Mint advisory committee on the design of coins, medals, seals and decorations.

The striking of kilogram coins has recently become part of the Olympic games tradition. Most other host nations in recent years, such as Australia, Canada and China, have issued coins of this type, and they have proved extremely popular with collectors internationally. Indeed, kilogram coins have featured in the international commemorative coin market since they were first issued in 1992. In the past 10 years, more than 40,000 Olympic kilogram coins have been issued around the world, and their ongoing popularity makes them an important addition to any international mint’s commemorative coin range. Not only are these coins highly attractive to numismatists across the world, but due to their size and the high-profile artists who will be approached to design them, they become works of art as well as an investment opportunity.

Obviously the word “kilogram” makes me slightly nervous, because it is not really British. However, my hon. Friend was referring to the other countries that have done this. When the Olympic games were held in America, did the Americans issue a kilogram coin?

That is a good point. I have some sympathy with my hon. Friend over the use of the word “kilogram”, but he will appreciate that the coins would be sold on the international market, which is why a kilogram coin is more appropriate. There seems to be some doubt about whether the United States issued such a coin. I think that it did, but I might have to come back to him. Inspiration might arrive before I finish my speech.

The Royal Mint anticipates similar demand for kilogram coins for London 2012, and plans to produce approximately 60 gold coins and 14,000 silver coins. This plan is based on more than 50 years’ experience in the international commemorative coin market. The Royal Mint also attends regular international seminars with other mints, numismatists, collectors and trade partners, from which it is clear that there is a sizeable international market for kilogram coins. In anticipation of the London 2012 Olympics, the Royal Mint has put together an Olympic coin programme that, if this Bill is successful, is likely to be the largest ever seen.

This Bill will allow the Royal Mint to produce kilogram coins that will form the pinnacle of the programme. It has been endorsed by Jacques Rogge, President of the International Olympic Committee, who wrote:

“I have no doubt that the Royal Mint’s Olympic Coin Programme will continue the worldwide success story of Olympic coins, and will take its place in the Olympic Museum at Lausanne alongside the 700 or so Olympic Coins of past years”.

The Bill will allow the Royal Mint to crown its Olympic coin programme with kilogram coins, but they are just part of a range of products designed to offer something for everyone. By providing royalties to the London Organising Committee of the Olympic Games and Paralympic Games, the kilogram coins will contribute to financing London 2012. I understand that royalties will also be paid to the Treasury.

The Olympic coin programme in its entirety has been designed to ensure the widest possible participation. Design competitions have been run for “Blue Peter” viewers, for secondary school children, for art and design college students, and indeed for members of the public in general. The intention throughout has been to maximise the social and educational benefits of the programme. At the other end of the scale to the kilogram coin is the London 2012 sports collection, which features 29 50p pieces, each representing a different Olympic or Paralympic sport. Indeed, I thought that the hon. Member for Bristol East (Kerry McCarthy) was slightly cruel to me in Committee when she suggested that each coin should have a picture of me doing different decathlon events, whether the discus, javelin, the 100 metres, or perhaps even the 800 metres. I fear that that will not be the case.

The Royal Mint launched a competition inviting the British public to design the 50p sports series, and received more than 30,000 entries. The athletics 50p was designed by the nine-year-old winner of a “Blue Peter” competition—the first child ever to design a UK coin. Of particular relevance to my own constituency, the goalball 50p was designed by a Buckinghamshire artist, Jonathan Wren. I am pleased for the opportunity to be sponsoring a Bill that has wide-reaching implications for the whole UK and beyond. My constituency is home to one of the Olympic training villages—and indeed was the birthplace of the Paralympic games—so this Bill further cements a long-standing and important association between my constituency and the London 2012 Olympic and Paralympic games. I am grateful for the swift passage and warm welcome the Bill has enjoyed throughout the House to date, and I would like to thank hon. Members for their support so far. I commend the Bill to the House.

I congratulate the hon. Member for Milton Keynes North (Mark Lancaster) on piloting the Bill to Third Reading and through Committee and Second Reading. He will know that my hon. Friend the Member for Bristol East (Kerry McCarthy) has supported the Bill to date. That support from the official Opposition will continue today.

The Bill makes an important contribution to ensuring that we can celebrate the Olympics next year and potentially, as the hon. Gentleman mentioned, consider the provision, through Her Majesty the Queen and the Chancellor, of further commemorative coins at suitable occasions in the future. As he said, the Bill is required to ensure that we establish a legal background for the change in size of the coins. I am particularly pleased that we can put in place this coin for the Olympic games. As the then Northern Ireland sports Minister, I remember standing in Trafalgar square on 6 July 2005 when the Olympics were awarded to the United Kingdom. I think it is fair to say that it was one of the achievements of the previous Labour Government that the Olympics were awarded to the UK, with cross-party support from both sides of the House. It is certainly something that we look forward to next year.

The coin itself will provide an opportunity to add value to the Olympics, allow us to celebrate them and send the message to the rest of the world and collectors across the globe that London is a place to do business. I hope that the sale of the coins will bring some value to the Treasury. We have had many discussions with the Minister about the level of the deficit. I am sure that this will bring in at least some money to offset some of the draconian measures that the Government will introduce. However, far be it from me to inject a note of discord into what is a day when we accept that the Bill is needed, fulfils a purpose and will serve a useful function. I congratulate the hon. Gentleman on piloting the Bill. He has our full support, and I look forward to many sales of the commemorative coin next year and to a successful Olympics. In future years, when commemorative coins are introduced on the many more occasions when we require them, he will be noted as the Member who introduced the Bill. I trust that the hon. Member for Wellingborough (Mr Bone) does not take too unkindly to the fact that kilograms are in place today. I am sure that there are many areas on which we can agree, and although his scepticism about Europe reaches into a number of areas, I hope that he, too, will fully support the Bill and its objectives.

I congratulate my hon. Friend the Member for Milton Keynes North (Mark Lancaster) on piloting the Bill so swiftly through its stages in the House. I should like to make a couple of points following on from the remarks made already.

My first comment concerns the value that the coin will bring to the Treasury. I understand that there are to be two coins—a gold coin with a face value of £1,000, and a silver coin with a face value of £500. I also understand that 60 of the gold coins and an estimated 14,000 of the silver coins are to be minted. The value of the coins will depend on the prevailing cost of precious metals, but if we were to base the cost on the best current estimate, a gold coin is likely to fetch about £40,000 and a silver coin about £500. Taking those together and doing a quick bit of maths, that makes £19.9 million—not bad for a morning’s work—which I am sure would be gratefully received by the Treasury. Indeed, I understand that 20,000 coins were sold in the Beijing Olympics, so I wonder whether there might be scope for minting more than is currently allowed for.

I fear that the figure might even be slightly larger than my hon. Friend realises. The estimated retail value of the silver coin will actually be £1,250.

In that case the amount from the silver coins would be more than doubled, and there are more of them as well.

Let me turn to the size. On Second Reading I mentioned my disappointment that the coins were to be minted in kilograms, and suggested that they be minted in a multiple of a troy ounce. It was said that the coins are for the international market. If the object of the enterprise is to raise as much money as possible for the Treasury, the coins might be worth even more—with more collectors for them, raising even more money for the Treasury—if they are minted as a multiple of a troy ounce, because of their rarity on the international market.

Mention has been made of the suggestion made in Committee that the coin should perhaps bear an image of my hon. Friend in an athletic pose. He has been very modest today, because he has not mentioned the fact that, as he told the Committee, on the weekend before it sat he did his combat fitness test for the Army, running 8 miles while carrying 25 kg on his back. That is no mean feat, and I am not sure that many of us in the Chamber this morning could do that.

I wonder whether the 25 kg that my hon. Friend the Member for Milton Keynes North (Mark Lancaster) was carrying was made up of coins.

Indeed, it would have been easier if they had been, but the pack on my hon. Friend’s back was probably rather bulkier. I thank him for his work for the Army.

Finally, it is often said that too few private Member’s Bills—in fact, hardly any—make it through the House. I would draw hon. Members’ attention to the fact that this Bill—which will, I am sure, shortly complete its stages through this House—will be the fourth Bill to complete its passage on a Friday, in addition to the Estates of Deceased Persons (Forfeiture Rule and Law of Succession) Bill, the Sports Grounds Safety Authority Bill and the Wreck Removal Convention Bill. That shows that passing a private Member’s Bill is possible, and as this Bill has shown, it is also possible to do it fairly swiftly. The Bill received its Second Reading on 4 February, went to Committee on 16 March and today, on 1 April, will pass safely to the other place for consideration, where I hope it will receive swift approval, so that the Royal Mint can crack on with producing the coins and bringing in much needed funds to our Treasury. I congratulate my hon. Friend on piloting the Bill to this stage and wish it well in its future consideration.

I congratulate my hon. Friend the Member for Milton Keynes North (Mark Lancaster) on bringing the Bill successfully to this stage. As we have heard, the Bill is wholly supported by the Government and, I think, by Members across the House.

I am pleased that, as my hon. Friend observed, the Bill will allow the Royal Mint to provide an Olympic coin programme that will surpass its predecessors and ensure the Royal Mint’s place as a leading international provider of commemorative coins. As my right hon. Friend the Prime Minister said in an endorsement letter to the Royal Mint:

“As we move towards the Games it is wonderful to see British companies, such as the Royal Mint, commemorating the journey in a way that brings British skill and craftsmanship to the attention of the world.”

In doing so, the Royal Mint will also generate a revenue stream for the Exchequer, as my hon. Friend the Member for Bury North (Mr Nuttall) noted. Under the UK coin contract, the Royal Mint pays a royalty to Her Majesty’s Treasury for commemorative coins. It is estimated that the Olympic coin programme, including the kilogram coins, will generate a royalty payment of approximately £1.8 million, although the exact amount will depend on sales volumes, retail price and metal prices. However, the mint will no doubt receive additional profits, which it can invest in developing the Royal Mint and its business over the coming years, which will be welcome. The Royal Mint has similar royalty arrangements with the London Organising Committee of the Olympic Games, and the International Olympic Committee. As this Bill is not limited to the Olympic coin programme, future events celebrated with kilogram coins would generate similar revenue.

As my hon. Friend the Member for Milton Keynes North noted, today is indeed April fools’ day. This debate brings to mind a 2008 April fool, when a Canadian radio station interviewed a Royal Canadian Mint spokesman who revealed plans to replace the Canadian $5 bill with a $3 coin. The coin was dubbed a “threenie”, in line with the nicknames of Canada’s $1 coin—which is commonly called a “loonie”, as it depicts a common loon on the reverse—and the $2 coin, which is affectionately known as the “toonie”.

Not as an April fool, but in commemoration of the fact that my hon. Friend the Member for Milton Keynes North (Mark Lancaster) has taken this Bill through the House, can the coin be called “The Lancaster”?

It may well end up with that nickname, which would be appropriate for a coin that, as we heard, will not just be minted to commemorate the Olympics but could be used to commemorate a whole range of special events in this country where we think that coin collectors might be interested in adding to their collections.

With their large size, the kilogram coins will be an exciting, artistic and eye-catching piece of numismatic art that will no doubt be treasured and passed on to future generations. At almost 1,100 years old, the Royal Mint is a tradition in itself. The production processes—from design and modelling, to the blast furnaces, and the striking of blanks and ultimately coins—are the epitome of a successful manufacturing company. As my right hon. Friend the Chancellor of the Exchequer said in last week’s Budget speech, manufacturing is crucial to the rebalancing of our economy. Under this Government manufacturing is now growing at a record rate, with 14,000 more jobs created in the sector in the last three months alone.

As the House will be aware, the Budget announced several measures to help promote and further develop British manufacturing, over and above the efforts that the sector is already making. I have no doubt that the Royal Mint will continue to pioneer new processes and develop as a pivotal part of British manufacturing. The Royal Mint has been based in south Wales since the 1960s and employs 850 people. I had the chance to meet them last year when I went down there to look at their production process and learn more about the practicalities of minting coins. I had a fascinating trip, but also learned an awful lot about the skill that the employees have to use to ensure that the coins that are minted—the coins that end up in our pockets and that we spend in shops every day—are ones that we can rely on.

Does the Minister recall that the establishment of the Royal Mint in south Wales was the result of a decision by the then Chancellor of the Exchequer, James Callaghan, to decentralise government activity from London to the regions? I would like to impress on the Minister the advantages of considering such moves again in the future.

The right hon. Gentleman makes a valid point. It struck me how important the Mint was to the local economy when I visited it. The broader point that he rightly makes is that, as the economy grows in the coming years, we need to ensure that more growth is in manufacturing, and that more of that manufacturing growth takes place outside London and the south-east, so that we end up with a more balanced economy.

It is also worth pointing out that the Royal Mint produces not only coins but all our British military medals except the Victoria cross, and, as we have heard, it has won competitive tender procedures to produce medals for sporting events such as the 2005 Ashes series and the 2012 London Olympic and Paralympic games.

My hon. Friend the Member for Milton Keynes North also mentioned the 50p sports series, and the House should note that the 29 designs are not only available as collectors’ items but featured on circulating coins currently being issued to the general public. Fourteen of the 29 designs have already been issued in line with natural demand for coin, with the remainder entering our pockets in the lead-up to next summer’s games. The 50p sports series also helped the Royal Mint to enter the record books when, last October, 1,697 newly minted Olympic 50p coins were flipped simultaneously, setting a new world record. I doubt that that record will be surpassed using kilogram coins, but that shows that the Royal Mint is part of the fabric of our British culture in a broader way than many of us realise.

The London 2012 Olympic games will be an event of huge importance for the whole country, and this legislation is important in ensuring that it can be appropriately celebrated. I believe that my right hon. Friend the Prime Minister was right in saying:

“I know that everyone in the UK is eager to make London 2012 the best Olympic and Paralympic Games ever seen, and I believe that the London 2012 Coin Programme will be one of the greatest and most successful in the history of the Games”.

I would like to thank my hon. Friend the Member for Milton Keynes North for introducing the Bill, which will help the Royal Mint to achieve such an ambition. We all wish it a safe and swift passage through the other place.

Question put and agreed to.

Bill accordingly read the Third time and passed.