§ Mr. Favellasked the Chancellor of the Exchequer what assessment he made, before deciding to discontinue the £1 note, of the extra costs that would arise to users from the switch to the £1 coin; if he will set out his assessment of these costs by category; and if he will make a statement.
§ Mr. Ian StewartIt is impractical to make a precise calculation of the relative advantages and disadvantages to specific sectors for many reasons, including the likelihood of behavioural changes following the discontinuation of the note. However, many interests outside central Government who might be involved in cash handling on any scale were consulted.
§ Mr. Favellasked the Chancellor of the Exchequer what additional transport costs will arise from the discontinuance of the £1 note relating to the transport from the Mint to the banks of additional £1 coins; who will bear these costs; and if he will make a statement.
§ Mr. Ian StewartTransport costs of maintaining the £1 unit will be reduced as a result of replacing the £1 note with a £1 coin. Although the cost of transporting a given quantity of £1 coins is greater than the cost of transporting an equivalent value of £1 notes, the notes need replacing very frequently.
§ Mr. Favellasked the Chancellor of the Exchequer what is the weight of £10,000 worth of new £1 notes; and what is the corresponding weight of the same sum in £1 coins.
§ Mr. Ian StewartThe weight of £10,000 in new notes is 7.31 kilograms; the weight of the same value in coins is 95 kilograms.
§ Mr. Favellasked the Chancellor of the Exchequer what are the implications for staffing levels in the relevant production departments of the switch from £1 notes to £1 coins.
§ Mr. Ian StewartFollowing the introduction of the £1 coin the Bank of England has pursued a policy of minimal replacement of staff leaving its printing works. Natural wastage has, therefore, accounted for a large part of the staff reduction which will be consequent upon ceasing to issue the £1 note. Combined with early pension and voluntary severance arrangements it is anticipated that staff reductions will be achieved without the need for compulsory redundancy.
It is not possible precisely to forecast future annual demand for the £1 coin after the initial stage of bulk replacement has taken place, but the direct effect of staffing levels is expected to be negligible.
§ Mr. Favellasked the Chancellor of the Exchequer how many £1 notes were issued in each of the last five years; and how many £1 coins were issued in 1983 and 1984, respectively.
§ Mr. Ian StewartIssues of £1 units over the last five years were as follows:486W
Notes (millions) Coins (millions) 1980 928 — 1981 795 — 1982 746 — 1983 659 171 1984 744 42
§ Mr. Favellasked the Chancellor of the Exchequer how many man hours are required to produce (a) a £1 note and (b) a £1 coin.
§ Mr. Ian StewartIt takes 0.25 man hours to produce 1000 £1 notes from the receipt of bank notepaper up to but not including final distribution. The corresponding production time for 1000 £1 coins is 0.13 man hours. Because of the need for much more frequent replacement, the note is more expensive to distribute.
§ Mr. Favellasked the Chancellor of the Exchequer what costs in terms of new or adapted machinery have been incurred for the production of £1 coins in each financial year to date.
§ Mr. Ian StewartNo machinery has been purchased or adapted specifically for production of £1 coins.
§ Mr. Peter Bruinvelsasked the Chancellor of the Exchequer whether he will consider extending the deadline for printing £1 notes.
§ Mr. Ian StewartThe Bank of England has ceased to print £1 notes in line with the announcement made by my right hon. Friend the Chancellor of the Exchequer En his autumn statement that issue of £1 notes would cease after 31 December.
§ Mr. Peter Bruinvelsasked the Chancellor of the Exchequer if he will consider introducing a higher denomination note, such as a £2.50 note, to replace the £1 note.
§ Mr. Ian StewartI shall let my hon. Friend have a reply as soon as possible.
§ Mr. Peter Bruinvelsasked the Chancellor of the Exchequer how many representations he has received in favour of keeping the £1 note to date.
§ Mr. Ian StewartAbout 1,350 letters have been received to date in response to the decision to cease issuing £1 notes. Most of them are critical of the decision in one way or another, although many of these concentrate on aspects of the £1 coin rather than the note.
§ Mr. Peter Bruinvelsasked the Chancellor of the Exchequer whether he has any views on the possibility of some clearing banks producing their own £1 notes.
§ Mr. Ian StewartI shall let my hon. Friend have a reply as soon as possible.