Coppers perhaps welcoming any reduced punishment (7)
I believe the answer is:
penance
'punishment' is the definition.
(penance is a kind of punishment)
'coppers perhaps welcoming any reduced' is the wordplay.
'coppers perhaps' becomes 'pence' (copper is a kind of penny).
'welcoming' means one lot of letters goes inside another (in sense of 'inviting in').
'reduced' means to remove the last letter.
'any' with its last letter removed is 'an'.
'pence' placed around 'an' is 'PENANCE'.
(Other definitions for penance that I've seen before include "Punishment imposed for sin" , "Punishment for wrongdoing, by religion perhaps" , "Voluntary self-punishment" , "Voluntary self-abasement" , "Act performed in sorrow for sin" .)