Where Is Britain’s Money Made?
The original London mint, from which the Royal Mint is the successor, was established in 886 AD and operated within the Tower of London for approximately 800 years before moving to what is now called Royal Mint Court where it remained until the 1960s. As Britain followed the rest of the world in decimalising its currency, the Mint moved from London to a new 38 acres (15 ha) plant in Llantrisant, Waleswhere it has remained since.
In 2009 after recommendations for the mint to be privatised the Royal Mint ceased being an executive government agency and became a state-owned company wholly owned by HM Treasury. Since then the mint has expanded its business interests by reviving its bullion trade and developing a £9 million visitor centre.
The word “mint” is used to describe a place where coins are manufactured, usually with the authority of the state. Gold, Silver and base metal coins were being used by various tribes in Britain before the Roman occupation. In the 3rd Century the Emperor Marcus Aurelius Carausius opened three English mints, one of which was in London. These were soon closed however, and not until the 6th Century was there further definite record of a mint in England.
Seventy mints were in existence in England at the time William the Conqueror landed because the transport of money from one place to another was so risky. As conditions improved, the number of mints declined. Since the 16th Century, all English gold and silver coins, with one or two important exceptions, such as the Great Recoinage of 1696 to 1698, have been struck in the London Mint.
To enable decimal coinage to be produced without interrupting current output, it was announced in 1967 that a mint would open in Llantrisant, South Wales. Queen Elizabeth II struck the first decimal coin on December 17, 1968, when, accompanied by the Duke of Edinburgh and the Prince of Wales, she officially opened the new mint. The South Wales mint eventually took over coin production in Britain in 1975.
After moving to Wales, the mint struggled to become profitable as the Western world fell into a deep recession during the early 1970s. To combat a rising national debt, the mint was established as a trading fund on 1 April 1975 which required it to become self-financing. This measure proved successful and the mint started to become profitable through heavy exports.To allow for more financial freedom and better management the mint became an Executive Agency in April 1990.
During the 2008 global financial crisis, a rescue package costing £500 billion was announced to help stabilise Britain’s banking system. This led to fear that the government would attempt to finance the cost by selling off state-owned organisations. In a 2009 pre-budget report the Chancellor of the Exchequer, Alistair Darling stated that the treasury would “explore the potential benefits of alternative future models for the Royal Mint”. A month later in his 2009 United Kingdom budget he recommended that the mint be made a company with a view of it being sold.
The decision was met with outrage by unions and opposition parties in parliament who called it the “selling off the family silver” and that it would result in jobs losses. In contrast, the chief executive of the mint Andrew Stafford welcomed the decision stating that it would lead to further growth and secure the future of the business. On 31 December 2009, rather than being fully privatised, the mint ceased to be an executive agency and its assets vested in a limited company, Royal Mint Ltd. The owner of the new company became The Royal Mint trading fund, which itself continued to be owned by HM Treasury.
As its sole shareholder the mint pays an annual dividend of £4 million to treasury with the remaining profits being reinvested into the mint. In 2015 Chancellor of the Exchequer George Osborne announced a £20 billion privatisation drive to raise funds with the Royal Mint being up for sale alongside other institutions including the Met Office and Companies House.
With its new found financial freedom the Mint began diversifying their product range through expanding to offer items outside their usual coin-related merchandise. By the early 2000s the Mint was selling different types of jewellery, commemorative plates and figurines, eventually creating its own Royal Mint Classics range of collectable goods.
This part of the business proved popular in attracting new customers however suffered from poor product development. Example of its products included a hip flask with an embedded £2 coin, an Edinburgh Crystal clock combined with a millennium Crown, and a Wedgwood plate featuring Britannia. In 2007 the Mint decided to resume its focus on coins, downsizing non-coin related business and discontinuing its Classics range.
In 2015, after nearly 50 years, the mint began producing its own line of bullion bars and coins under its revived Royal Mint Refinery brand. Then in 2016, the mint announced plans for Royal Mint Gold (RMG), a digital gold currency that uses blockchain to trade and invests in gold. Operated by CME Group, the technology is to be created by technology companies AlphaPoint and BitGo. The system currency which was due to launch in 2017 will be on the gold standard, whereby one RMG token equates to 1 gram of physical gold held within in a Royal Mint vault. Up to $1 billion worth of RMG is set to be issued by the mint.
As the sole body responsible for minting legal tender coins in the United Kingdom under contract from HM Treasury, the mint produces all of the country’s physical currency apart from banknotes which are printed by the Bank of England. On average it produces 2 billion pound sterling coins struck for general circulation every year with an estimated 28 billion pieces circulating altogether. Outside of the UK, the mint provides services to over 60 different countries including New Zealand and many Caribbean nations in the form of producing national currencies or supplying ready to strike planchets.
In 2015 it was estimated that 2.4 billion coins were minted for overseas countries outweighing that of domestic coinage and providing over 60% of the mint’s revenue from circulating currencies. The sale of commemorative coins also form part of the mint’s operations with coins of varying quality and made of different precious metals released yearly for the collector’s market.