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Coinage (Measurement) Bill

My Lords, apparently, the Olympic Games organisers some 2,531 years ago introduced the idea of coins for those games to appease those who were not able to get seats to watch them. I do not know if there is any particular parallel to be drawn from our current situation, but that is not the essence of what this Bill is all about. I am grateful for the opportunity to present the Bill to the House this morning. Initially, therefore, I will deal with its technical aspects. This two-clause Bill makes 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 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) of the Coinage Act 1971 requires that the variation from the standard weight of any coin be measured as the average of a sample of not more than 1 kilogram of that coin. This is perfectly fit for the purpose for which it was originally conceived. The current weights of UK circulating coins range from the 5-pence piece at 3.25 grams to the £2 coin at 12 grams. A sample of a kilogram is therefore a perfectly reasonable measure of the tolerated variation from the standard weight. However, circulating coins is just once part of the Royal Mint’s business. As with all good businesses, it is constantly seeking to evolve, expand and explore new technologies and commercial opportunities. Such a commercial opportunity, of course, is presenting itself in that London will next year be hosting the Olympic and Paralympic Games. To commemorate this historic occasion the Royal Mint has designed an Olympic coin programme that is likely to be one of the largest ever in the history of the Olympics. It is worth visiting the Royal Mint’s website. Its 29 coins have been struck for each of the 29 participating sports. We should congratulate the Royal Mint on the quality of its designs. As part of that programme, the Royal Mint is keen to strike kilogram coins. As I set out earlier, the current wording of the coinage act would effectively prohibit this. It is not possible to measure the variation from the standard weight in the case of the proposed Olympics coins because the weight of each coin is likely to be equal to or greater than the 1 kilogram aggregate limit in Section 1(6) of the Act. Clause 1 of the Bill therefore amends the Coinage Act so that the variation from the standard weight of any coin can be specified by royal proclamation as provided for in Section 3 of the Coinage Act 1971. That provides flexibility. I am sure that your Lordships will appreciate that this removes a technical and legislative obstacle to the proposed Olympic coins and will allow the Royal Mint to develop and continue to develop new and innovative designs and exciting opportunities to continue to push coinage boundaries. We hope that our 2012 Olympics will be the best Olympic coin programme to date—and, of course, it will be self-funding. 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 been extremely popular. Indeed, in the past 10 years over 40,000 Olympic kilogram coins have been issued around the world. The Bill will allow the Royal Mint to continue this tradition in commemoration of the London 2012 Olympic and Paralympic Games—and, indeed, any future important cultural or national events, subject to the approval of Her Majesty the Queen, the Chancellor of the Exchequer and the Royal Mint Advisory Committee. Because of their large size, 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 would approach high-profile artists to prepare these designs, and that is under way. Currently, the plan is to produce 60 gold coins and 14,000 silver coins, with a nominal value of £1,000 and £500 respectively. Judging from the reception that similar coins have had around the world, and after consulting with representatives of the coin trade and collectors, the Royal Mint is confident that United Kingdom kilogram coins will be extremely well received. These coins are being produced to the highest standards of socially responsible business, and the accreditation has been given. The Royal Mint proposes to make its kilogram coins from 22-carat gold and fine silver. These coins will be the largest ever UK coins, with a diameter of 10 centimetres. The Olympic programme would generate royalties for both London 2012 and the Exchequer, as the Royal Mint corporate entity is 100 per cent owned by Her Majesty’s Treasury. 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, would generate an estimated royalty payment of approximately £2 million. At the current prices, 1 kilogram of gold costs approximately £32,000 and 1 kilogram of silver costs approximately £750. The retail prices are therefore likely, on today’s estimates, to be £40,000 and £1,250 respectively. Through these royalties, the Olympic coin programme will contribute to funding the London 2012 Olympic and Paralympic Games. This is of course a commercial enterprise and the Olympic coin programme will also generate revenue for the Royal Mint. The amount that the Royal Mint will make will depend on sales and on the final price of the coins, which will largely be determined by the price of gold and silver closer to the event. The Royal Mint being 100 per cent owned by the Treasury, all profits will end up in the public purse. For the past three years, the Royal Mint has paid a dividend from profits directly back to the Treasury as a shareholder. Noble Lords will be reassured to hear that these kilogram coins form just one part of a whole range of products that the Royal Mint is issuing to commemorate the 2012 Olympics. The striking of kilogram coins will not be limited to commemorating the Olympics. To ensure that London 2012 and future events of national significance can be appropriately celebrated with commemorative coins that will be held in posterity for years to come, it is first necessary to make these minor amendments to the Coinage Act 1971. Therefore, I commend the Bill to the House. I beg to move.