A NEW £1 coin will be introduced to beat clever fraudsters targeting the current one, George Osborne will reveal today.
The Chancellor will use his Budget speech to announce “the most secure coin in circulation in the world” – to be in banks and tills in 2017.
And he will delight traditionalists by modelling the replacement £1 on the ‘Threepenny bit’, the 12-sided three pence coin which was scrapped in 1971.
A Treasury source said: “After thirty years loyal service, the time is right to retire the current £1 coin and replace it with the most secure coin in the world.
“With advances in technology making high value coins like the £1 ever more vulnerable to counterfeiters, it’s vital that we keep several paces ahead of the criminals to maintain the integrity of our currency.”
The Royal Mint estimates that a staggering 45m £1 coins – three per cent of the total – are now forgeries. In some areas, that proportion is six per cent.
Around 2m counterfeits are removed from circulation each year, imposing a cost on the banks, cash handling centres and the wider economy.
Now the replacement will be bi-metallic, with two colours and boast Integrated Secure Identification System (iSIS) technology, with three tiers of security.
That means it can be authenticated via high-speed automated detection at all points within the cash cycle, experts said.
One side will carry Queen’s head, but there will be a public competition to decide the design for the reverse, or ‘tails’ side, of the coin.
The Treasury designed to put a cost on the switch, but said savings would come from cutting down on fraud and said it had widespread support across industry.
The Chancellor will deliver his Budget against the backdrop of a fast-improving economy, with unemployment falling and healthy growth predicted through to the general election.
Mr Osborne is expected to fight back against Labour’s criticism of a ‘cost of living’ crisis by arguing wage increases are now outstripping inflation.
But Labour hit back, pointing to 24 tax hikes since 2010 and saying: “We need a Budget that tackles the cost-of-living crisis which has left working people £1,600 a year worse off under the Tories.”
Yesterday, David Cameron and Nick Clegg jointly unveiled beefed-up plans to give parents a tax break for childcare worth up to £2,000-a-year, from autumn 2015.
It would help around 1.9m families where both parents work – plus single working parents - allowing them to opt for longer hours, the prime minister said.
Parents will escape paying basic rate income tax of 20 per cent on childcare costs of up to £10,000 - up from the proposed £6,000.
But the scheme came under fire because it will be available to high-earning households with a joint income of as much as £300,000.
And the Institute for Fiscal Studies think-tank questioned how the scheme was more generous than originally floated, yet was no additional money to fund it.