Chancellor of the Exchequer Nigel Lawson announced on this day in 1984 that the halfpenny coin – universally regarded unfavourably since its inception in 1971 – would cease to be legal tender by the end of the year.
Introduced as part of decimalisation, the halfpenny was worth the equivalent of 1.2 pre-decimal pence. Made from tin, it was created in order to allow low-value pre-decimalisation items to be accurately priced when the new currency was brought in.
It was generally an unpopular coin, both due to its fiddly size and practical worth. It was a regular topic of discussion – and complaint - in the Letters section of The Times newspaper, and in 1983 it was branded ‘worthless’ by the National Consumer Council.
Until the end of that year, Treasury officials had maintained that the halfpenny should be retained as it was important in the fight against inflation – if every shopkeeper rounded up prices to the nearest penny, it was considered likely to have a significant effect on the Retail Price Index.
But even this argument failed to convince after it was suggested that the cost of producing each individual coin now outweighed its monetary value. Production of the halfpenny came to a halt at the end of the month.
At the time of the announcement, some 2.5 billion halfpennies – worth £12.5 million – were still in circulation. Charities were quick to launch drives to collect the unwanted coins; tens of thousands were collected in appeals.
The coin was demonetised and withdrawn in December 1984 – and fears of price rounding up proved to be largely unfounded: a Second Class stamp went from 12.5p in 1983 to 13p in 1984, but dropped to 12p in 1985, while the price of a dog licence went from 37.5p in 1984 to 37p in 1985.
Main photo credit: Sarah Joy/ Flickr