UK: All change at the Mint. (1 of 2)

UK: All change at the Mint. (1 of 2) - The brief for the Royal Mint has now changed: it must not only make money but also a profit. By Charles Darwent.

by
Last Updated: 31 Aug 2010

The brief for the Royal Mint has now changed: it must not only make money but also a profit. By Charles Darwent.

In the summer of 1984 a petty thief on the lam from the magistrates' court at Pontyclun, Mid-Glamorgan, decided to hide out in a light industrial complex sprawled on a hillside above the village of Llantrisant. Accordingly, he clambered his way over a formidable chain fence, across an area of shingle, over another fence and into the waiting maws of a pack of Alsation dogs. He had, unwittingly, just pulled off the biggest job of his life. He had broken into the Royal Mint.

This unfortunate was not the first visitor to evince surprise at what he found inside the Mint's 30-acre site. There is, for most, something of a surprise in finding it to be in South Wales at all. For 800 years of its 1,100-year history the Royal Mint resided in the Tower of London. (Petulant London mandarins, transplanted to Mid-Glamorgan, grumpily dubbed Llantrisant "the hole with the Mint in it".) The buildings themselves are another surprise: beyond an impressively guarded entrance lie half a dozen defiantly commonplace breezeblock-and-cladding units. Nostalgic visitors wistfully recall the Georgian elegance of the old Mint buildings, the gallantry of the half crown, the chic of the sixpence.

The Mint's biggest coup de foudre is attitudinal rather than tangible, however. Until 1975 Deputy Mastership (Mastership goes with the job of Chancellor of the Exchequer) was given as a pre-retirement reward to suitably deserving Treasury officials. In that year, however, the Mint found itself metamorphosed into a profit-making, annual-report publishing, proto-Thatcherite government trading fund; in April 1990 it pupated further into an executive agency, as part of the Government's "Next Steps" programme aimed at commercialising those sections of the Civil Service deemed most likely to benefit from the existence. The day of the mandarin was over.

In January 1988 the Chancellor had announced that his next "DM" would be drawn not from the purple of Whitehall but the rough red of the plutocracy: the midwife for this latest Thatcher child was named as Anthony Garrett, former vice-president international (Europe) at Procter and Gamble. Garrett's brief was clear. Henceforth the Royal Mint must no longer simply make money: it must also, as it were, "make money".

And that, in both senses, it has proceeded to do. Turning out some 3,000 million coins annually, Garrett's Mint chalked up £103,295,000 worth of sales in the year ended March 1990, with an operating profit of £12,199,000, taking the average return on capital employed over a three-year period to 12.7%. HMG, clearly pleased to find itself the possessor of this cupro-nickel-egg-laying goose, has decided that such returns should be sustainable, and looks to Garrett to produce a round 12.5% annually over the next three years - a task that he describes as "tough rather than strict".

These demands in themselves underline something of the anomaly in the position of the Royal Mint, however. On the one hand, Garrett is insistent that "an uninformed observer walking into the Mint would not believe that this was a government department. Although the Mint has statutory duties, they are not constraining on our operations, and make very little difference to the way we run our business." His own Deputy Mastership has seen the introduction of private sector moves to Llantrisant, the Mint even recently acquiring its own, natty blue-and-silver corporate logo, complete with a stylised rendering of the Tower of London. One Garrett invention has been the creation of a customer services department - a management neologism that would make his predecessors wince. On the other hand, the Mint's business is clearly inextricably bound up with ideas of national "amour propre" as well as of national profitability.

A case in point was the creation of the UK's answer to the krugerrand, the Britannia. In 1983 the Mint found itself the unwilling possessor of 23 million gold sovereigns, a stockpile large enough to satisfy demand for a decade. Or so it was thought: in fact, thanks to the imposition of VAT on gold in the subsequent Lawson Budget, a fall in demand for the beleaguered sovereign meant that the Mint's stockpile would probably have seen it into the 22nd century. The Treasury scratched its collective head and came up with the Britannia: recycled sovereigns issued in four denominations of 22-carat gold and aimed heavily at the gold-hungry Far Eastern market. No sooner had the first Britannia tinkled off the production line, however, than gold spot prices began to fall. The Mint's sovereign mountain has now been replaced by a Britannia alp. The lesson has been expensive, and one that it was forced to learn at Treasury insistence.

Find this article useful?

Get more great articles like this in your inbox every lunchtime