Coinage: Supply (Hansard, 1 July 2003)

§ Lord Razzall
asked Her Majesty's Government:
Whether there is adequate competition to supply United Kingdom coinage following the collapse of the Birmingham Mint.

§ The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord McIntosh of Haringey)
My Lords, the Government have an agreement with the Royal Mint for the supply of circulation coinage that has some time to run. The Royal Mint will continue to meet demand for the duration of this agreement.

§ Lord Razzall
My Lords, does the Minister accept that Birmingham Mint is now in administration primarily as a result of the termination by the Treasury of the Royal Mint's market-sharing agreement with Birmingham Mint? Does he further accept that, as a result, a significant reduction has taken place in competition for the supply of UK coinage?

§ Lord McIntosh of Haringey
My Lords, I am afraid that I am not able to comment on the commercial relationship between Birmingham Mint and the Royal Mint because it is a matter of legal dispute. I cannot give the assurance being sought by the noble Lord, Lord Razzall.

§ Lord Corbett of Castle Vale
My Lords, is my noble friend aware that many in the City of Birmingham and beyond will be saddened that the Mint has a hole in it? Can he confirm that part of the reason for the loss of business has been the introduction of the euro? Will he have a word with his colleagues in the Department for Work and Pensions to ensure that every assistance is given to those who may lose their jobs at the Mint to find work elsewhere in the manufacturing sector?

§ Lord McIntosh of Haringey
My Lords, it is not true to say that the Royal Mint has a hold of the Birmingham Mint.

Noble Lords
A hole!

§ Lord McIntosh of Haringey
My Lords, I have not seen the ads recently. I thought that they had been discontinued, but I may be wrong.
The Birmingham Mint went into administration and the administrators sought a purchaser. The only thing to have happened since is that the Royal Mint 728 has bought some of the equipment belonging to the Birmingham Mint and that is the limit of their connection. No, it is not true that the Birmingham Mint has gone into administration because of the euro. We expect—and have always expected—that we shall be responsible in this country for the production of most, if not all, of our coinage under the euro. Therefore there should be no loss of business.

§ Lord Skelmersdale
My Lords, the original Question of the noble Lord, Lord Razzall, was about competition. I did not hear the Minister refer to competition in his Answer. Be that as it may, the Royal Mint is a failing organisation and has been losing money hand over fist. When will it live up to the Government's trading fund rules by at least breaking even? When will it stop entering into costly plots such as contracting to mint euros, for which it was always ill equipped?

§ Lord McIntosh of Haringey
My Lords, perhaps I may concentrate on the last part of the noble Lord's question. The Royal Mint did not succeed in its tender to mint euros for other member states which were entering stage three of European monetary union. There are indeed lessons to be learnt from that. I do not believe that it was well enough prepared; I do not believe that it appreciated the extent of the competition; and I do not believe that it appreciated the quality requirements demanded for the euro coins. So, to that extent, the noble Lord, Lord Skelmersdale, is right.
As to the relationship between the Treasury and the Royal Mint, clearly the Crown has a contract with the Royal Mint which is reviewed from time to time. It was last reviewed in 1997–98; it will come up for review fairly shortly.