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Budget 2014: New £1 Coin Is Blast From The Past

(c) Sky News 2014
Budget 2014: New £1 Coin Is Blast From The Past

George Osborne will use his Budget to announce a major change for the nation's pockets, with a new pound coin to be introduced in 2017.

The new coin, aimed at stamping out forgeries and counterfeits, will replace the £1 coin that was introduced more than 30 years ago and resemble the pre-decimalisation 12-sided "threepenny bit".

According to the Treasury, the new coin will be the most secure in the world.

The new coin will be revealed in a Budget the Chancellor hopes will provide the springboard for a Tory victory at next year's General Election.

Mr Osborne will raise the rate at which people start paying income tax to £10,500, which he claims will benefit all but those on incomes of over £100,000.

But he will reject calls from senior Tories to raise the threshold at which people start paying tax at 40p in the pound, already due to increase to £42,286 next year.

Labour has already started its response putting up posters this morning claiming: "hard-working people are £1,600 worse off with the Tories."

Speaking on Wednesday morning, Ed Miliband said: "I hope we don't see complacency from the Chancellor today because I think so many families across the country are incredibly hard pressed. They are seeing their wages falling, they faced 24 Tory tax rises since 2010.

"What I hope we see from the Chancellor is an understanding of the difficulties families are facing an a response to make life easier and better for them."

The Chancellor will have to respond to Labour's charges that the Tories are out of touch, ordinary families are facing a cost of living crisis and only the rich are benefiting from the economic recovery.

Mr Osborne posted on Twitter (NYSE: TWTR - news) on Wednesday morning: "Today I will deliver a Budget for a resilient economy - starting with a resilient pound coin."

Mr Osborne will go on the attack against Labour, claiming the opposition was to blame for the economic crisis when in government and has been proved wrong in opposing the Coalition's austerity measures.

"This will be a Budget for a resilient economy," a Treasury source told Sky News.

"The Government's long-term economic plan is providing economic security by dealing with our record deficit and helping businesses create new jobs at record rates.

"As a country, we have held our nerve, the plan is working, but the job is very far from done. Britain is still borrowing too much.

"We have to invest more and export more, and support growth in every region of our country and all parts of our economy."

The new £1 coin is backed by organisations including the Automatic Vending Association, which said the cost for adapting existing machines would be "minimal".

Kelvin Reynolds, of the British Parking Association, added: "Parking operators have long expressed concerns about a rise in counterfeit £1 coins and the inconvenience this causes to motorists when coins are rejected by parking payment machines and the losses incurred as a result."

The current £1 coin has been in circulation for much longer than the normal lifecycle of a modern British coin.

Its technology is no longer suitable for a coin of its value, leaving it vulnerable to ever more sophisticated counterfeiters.

The Royal Mint estimates about 3% of all £1 coins - around 45 million in total - are now forgeries, although in some parts of the UK, the number is as high as 6%.

Around two million counterfeit £1 coins are removed from circulation annually - a direct cost to the banks and cash handling centres, as well as the economy.

As with all British coins, the new-look £1 piece will feature the Queen's head on one side.

A public competition will be held to decide the design for the reverse, or "tails", side.

Introduced in 1937, the threepenny bit was in the first group of coins ever to feature the portrait of HRH Queen Elizabeth II.

It was the first British coin to use a 12-sided shape, which enhanced its popularity during the Second World War as its distinctive size and shape made it the easiest coin to recognise during the blackout.

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