§ 9.20 p.m.
§ Mr. Geoffrey Finsberg (Hampstead)
I am glad to have this unexpected opportunity to raise the subject of the 2½p coin. I make no apology for raising it. I know that I have been persistent, so far as the Minister of State is concerned to the point of annoyance, although he has been ever courteous and has assisted wherever possible. I do not wish to retain the 2½p coin for retention's sake. Although I may from time to time forget and call it a sixpence, it should be remembered that this is now officially renamed the 2½p coin, and any similarity between the 2½p coin and the sixpence is purely coincidental.
I do not want to take this opportunity to discuss the entire new decimal currency system. This is not the time to do so, and, in spite of the teething troubles, it has not worked out as badly as some people thought. There is obviously room for some changes and these can be made under the legislation. At some time the House may wish to press on my right hon. Friend the necessity to put into public circulation a coin between the l0p and 50p, namely a 25p coin. This will reduce the weight of coins in our pockets. A good opportunity for the first issue would be the commemoration of a certain royal silver wedding in two years' time.
I want to discuss the future of the 2½p coin and its dual contribution to a reduction in the cost of living and to aid our general convenience. The joint stock banks and the food shops in particular are not using the coin. Any hon. Gentleman who looks in his pocket or any hon. Lady who looks in her purse will not 847 find many 2½p coins. I can claim to have some, because I go out of my way to ask for them. Someone had first to sow the seeds before we could reap this harvest. The seeds were sown by the unlamented Decimal Currency Board. In issue No. 21 of its newsletter, published some while ago, it said:The decimal bronze coins are the only new coins to appear on D-day. They will replace "—these are the significant words—the low value £.s.d. coins (the penny, threepenny bit and sixpence).In a large footnote headed: "Ordering for D-day "the same issue went on to say:"Shopkeepers should order now what they will want, but they do not need to draw the coins all at one time. Some will be needed a month or so before D-day for final staff training and can then be used in tills on D-day. More will be needed from the banks before their shut down on 11th and 12th February, 1971; and more can be drawn on after D-day as unwanted 1d., 3d. and 6d. coins are paid in.From the start the Board was doing its best to kill the sixpence. It printed vast quantities of something called "Your guide to Decimal Currency". Much of the stuff of this book was left as publisher's remainders like, I trust the memoirs of the Leader of the Opposition, because the postal strike prevented its distribution. I was fortunate enough to see an advance copy of this guide. It made exactly the same point about the sixpence being an unwanted coin and not being used in the new system.
I was told when I took this up with the Treasury that had it seen this before it was printed it might have wished to make one or two changes. As it was, far too many of the print had been ordered and run through the printers, so it was too late. I accept that, but had the Treasury been consulted it would have made the point about the retention of the sixpence for the period which was then under review.
The Board still was not satisfied. In Issue No. 22 it stated:New bags will help.It was talking about bagging up silver.That leaves the 6d., 1s. and 2s. coins. The 6d. will be wanted for £.s.d. shops and using red bag for £5 lots will help segregate it.848 This meant segregate, siphon off, and use only in the £.s.d. shops.
On 13th January, 1971, London Transport sounded the alarm. In a Press statement its Chairman, Sir Richard Way, stated:We said that 6d. steps in the scale of fares were practicable only as long as the 6d. piece continued in widespread general use after decimalisation. There would be serious operational difficulties, particularly on the buses, if the number of sixpences in people's pockets or purses declined to such an extent that change-giving became difficult and time consuming … Any floats, however large, would soon disappear.London Transport laid in a float of £¾ million in sixpences.We also stressed that if the difficulties became great London Transport would have to consider seeking approval … for fare changes … probably involving the use of only whole new pennies … I repeat what we said long ago … about the real life expectancy of the sixpence—and by that I mean the time during which it is circulating freely. … The Decimal Currency Board has expressed the view that the sixpence will quickly decline in popularity.Of course—because it had already decided to be its judge and executioner and was bitterly disappointed when the Government reversed its decision.If shops bank all the sixpences they get, and do not give them as change for re-circulation … If the shops do not give sixpenny coins in change, then the sixpence could disappear, perhaps within weeks.D-Day was in February. We are today in October and many of the sixpences have disappeared. The decline has occurred.
I place primary responsibility on the banks. I want to read extracts from two letters I have received from people in different parts of the country. Someone wrote to me in these terms on 7th August, 1971:Ever since decimalisation I have asked for the 2½p in the bank when drawing money, but on the last occasion I was told there were 'none available'.Over 1,500 million of this coin were minted in the reign of Her Majesty alone. Several hundred million were minted going back a long time, even to 1948 when the coin ceased to have anything in it other than cupro-nickel.
The second letter, which is dated 28th July, is even more significant:After being informed on a number of occasions at my bank that no sixpences were 849 available, I questioned the counter assistant of this branch and was told he never kept any stocks … despite the fact that sixpences are supposed to be available on demand. When I wrote to the manager requesting him either to confirm this or have stocks available in future, no attempt was made to deny the lack of supply (which was put down to a lack of demand).That is Tweedledum and Tweedledee nonsense. The writer goes on:I was ludicrously offered a private supply if I let the branch know my future requirements of sixpences each week.The joint stock banks of this country surely do not expect each individual customer to give notice of the private supply which he wants each week. I thought the banks were there to suit our convenience and to deal with their customers' needs and not to continue some mystical banking system to suit themselves.
Continuing to look at the situation, one will notice that if, for example, Mr. Deputy Speaker, you go to a bank and cash a cheque and ask, let us say, for £11, £10 in notes and £1 in mixed silver, you will not find a sixpence in the mixed silver. I shall come on to the question why in a moment, but it is a fact that if you ask for a bag of mixed silver no sixpence will ever appear in it. If, Mr. Deputy Speaker, you ask specifically for 2½p coins they are not taken from the normal place in the till. The bank teller will take out a little brown envelope, which has already been opened, take off a paper clip, pour the things out on to the counter in front of you and give them to you. If you are less lucky the bank teller will go along to the next counter point, reach underneath and bring out a little dirty bag, rip it open—with, I think, a feeling of annoyance—come back and give you what is, in effect, a private supply of 2½p coins which his colleague has been keeping. I should have thought that in this age of the computer the banks could behave a little more modernly and try to help their customers.
What happens if a customer wishes to pay into the bank a sum of money including a 2½p coin and a ½p coin, making, I am sure the House will accept, a total of 3p, a round figure which, to every member of the public, certainly every Member of this House, is common sense? I have to tell that the customer's offer to credit his account will be rejected by 850 the bank. It will accept a 2½p coin or a ½p. coin only if one has them in pairs—Tweedledum and Tweedledee again. I repeat that a 2½p coin and a ½p coin making a toal of 3p does not mean that to the bank. It means something entirely different. The only bank which will accept 3p in this form, I say to its credit, is the National Savings Bank run by the Post Office, but it is not able to do every banking transaction and it is not, therefore, as useful as it might otherwise be.
I think this last example, about the addition of 2½p and ½p to make 3p being disregarded by banks, shows that banks are the real villains of the story. They are, in my submission, behaving both anti-socially and irresponsibly, because they decided that the sixpence would not be reprieved. I do not blame them because the Decimal Currency Board told them, "Do not worry: the sixpence will not be reprieved". The Government asked the Decimal Currency Board to carry out a survey and report on whether the sixpence should be reprieved, and if one reads what I can only describe as that work of fiction it did the reverse of what the detective story does. It started off by concluding that the sixpence should not be kept and then tried to pluck out of the air evidence to substantiate that point of view. I am glad to say the Government disregarded it. The banks, because they had been told that the sixpence would not be reprieved, decided to ignore the reprieve and made no provision for the training of tellers or for space in counter tills, and that is their position still.
This gives rise to problems in shops, in parking cars and in a limited number of gas meters, and so on. Many shops, for whatever reason, tend now to make their price increase in whole pennies. They recognise that many people find the little ½p. a useful but desperately small coin which disappears through the slightest chink in the bottom of one's pocket and which it is not worth while cutting a hole in the lining to rescue.
The recent increase in the price of bread was of ½p in many places, and this is the equivalent of the old 2½d. I can imagine the outcry there would have been before D-Day had the price of a loaf of bread gone up by 2½d. I can imagine the gnashing of teeth and the moaning of 851 the Labour Party who, incidentally, do not appear to be interested in items which might reduce the cost of living. There is no political mileage for them there, so they go home and do not take a real interest either in the needs of the housewife or of anyone else.
What about the problems the disappearance of the 2½p is causing to the motorist? In May, 1971, according to the bulletin issued by the R.A.C., the Chairman of the R.A.C., Mr. Wilfrid Andrews, was assured by the Treasury that—supplies of sixpences will not be allowed to become inadequate to meet public demand.I am sure that that was an assurance given in good faith by the Treasury. The Treasury, however, has not followed this through as well as it might. The bulletin went on to say:An R.A.C. spokesman has urged the public not to be brainwashed by statements of the Decimal Currency Board and the banks suggesting that sixpences are no longer being used. The motoring public must continually get sixpences from banks to ensure the coins will always be available to pay parking meter charges where necessary. This will maintain supply.But, as I said earlier, the Treasury assured Mr. Andrews that supplies of sixpences "will not be allowed"—that is the key phrase—to become inadequate.
The Government have said that they will decide the future of the 2½p coin in 1973. The problem that will arise if we wait until then is that by the strangling and smothering approach of the banks and some of the shopkeepers, the sixpence will disappear and will become almost a curio, except for some which may appear when the Chancellor of the Exchequer announces his decision on whether we are to have a souvenir issue of sterling coins. If he decides to do so, that will pump a vast quantity into the hands of the public, but the general circulation will dry up by collusion between banks and some traders long before 1973.
I have received widespread support from hon. Members on both sides of the House. I have had letters from all over the United Kingdom, and that really does mean England, Scotland, Ireland and Wales. I have had good support in at least three national newspapers, the Sunday Telegraph, the Daily Telegraph and the Daily Mail.
852 My hon. Friend the Member for Birmingham, Handsworth (Mr. Chapman), in putting down an Amendment to my Early Day Motion, made the point that he considered the situation might be eased by withdrawing the 2p in favour of the 2½p. I am not necessarily in favour of this, but it is a point of view. However, it does not detract from the necessity of making quite certain that the 2½p coin is kept in permanent circulation.
When the original request to keep the 6d.—now the 2½p—coin was first made it was strongly supported by the Confederation of British Industry, the Trades Union Congress and a horde of representative associations of all kinds. Today, the latest of the consumer bodies, the Consumer Union, comes out strongly in favour of the retention and widespread circulation of the 2½p coin. Indeed, I have had a warm and friendly letter from one of the more militant left-wing trade union branches thanking me for what I am doing and saying that it had instucted its branch members each to draw sixpences from the Post Office and circulate them. One sometimes has strange allies, but all are welcome in this battle.
I referred earlier to the statement by Sir Richard Way, Chairman of London Transport Executive, that if the sixpence went out of widespread circulation London Transport would have problems. I would point out that in July this year London Transport issued this leaflet:Your new bus fare: the acute shortage of sixpenny coins has meant extra change-giving and consequent serious delays to you. Now all fares on split entrance one-man buses are to be in whole new pennies.So that within seven months of D-day, because London Transport could not get enough sixpences in general circulation it has been forced to put up its fares and to get rid of the 2½p unit. This adds another twist to rising prices.
I have already mentioned that the last round of bread increases was in whole penny units. This is hard on the pensioner and those on low wages. If the ½p had been more sensibly sized, I believe it would have been more widely popularised, but none the less it is there and is being used. However, if the 2½p were in free circulation, this in itself would substantially ease the problem. It is easier for change-giving and much easier to 853 understand. On many items change could be handed back in 2½p coins, which would reduce the weight of copper in one's pocket, and the coin would be more familiar to a large number of people. As I have said, since 1953 over 1,500 million of the coins were minted.
It may be argued that there is no place permanently for a 2½p coin in our decimal currency system, but in many countries with long-established decimal currency systems there is a place for both the ½p and the 2½p. I have in mind the fact that the 2½p coin or its equivalent, the 2.50 piece, circulates in Ghana, Spain, Portugal, Holland, and many other countries. Why cannot it do the same here?
I suggest that there are two needs. The first is a clear Government statement of intent. The second is the implementation of the assurance given to the R.A.C., which I am sure was given in good faith, possibly by a Treasury official, but which may not have been seen or underwritten by a Treasury Minister, to make sure that supplies are not allowed to become inadequate.
The Government could play their part in two ways. They could insist that wherever they have coinage transactions—every Government Department and Government agency pays out money, in many cases in cash—they should use the 2½p coin and make certain that it was issued. Secondly, banks should be asked by means of a letter from the Bank of England or the Treasury to issue this coin more freely and not hold private supplies for customers or withhold it from mixed bags of silver. It should be issued freely.
I pay tribute again to my hon. Friend the Minister of State. I have pressed him over and over again in Questions and in correspondence, as I said. It is not unfair to him to say that, before he reached his exalted position, he was known as a supporter of the sixpence. I do not think that I shall appeal to him in vain to make a dash for freedom, to shake himself clear of some of his Treasury advisers, and to say that the Government have decided that the 2½p coin is to remain a permanent feature of our currency. If he does this, he will be widely acclaimed. More than that, who knows, perhaps like that great aid to road safety, the beacon which was named after its inventor, Leslie Hore- 854 Belisha, the humble "tanner" might be renamed the "Terry".
§ 9.47 p.m.
§ Miss Joan Hall (Keighley)
I am very pleased to be called immediately after listening to the speech of my hon. Friend the Member for Hampstead (Mr. Geoffrey Finsberg), because I have great admiration for the persistence that he has shown in pressing for the retention of the 2½p coin, which I prefer to call the "tanner", though I am glad that my hon. Friend mentioned it at the end of his speech.
The "tanner" has largely disappeared from our shops, where most peoples' currency exchanges occur. In view of that, there are three questions which I wish to ask my hon. Friend the Minister of State. First, why has it disappeared? Secondly, how has it disappeared? Thirdly, who sanctioned its disappearance?
I do not know whether the Government are aware that it is no longer easy or even practicable to shop with a "tanner". It is probable that someone, somewhere, decided that 2½ was a very untidy sum, that it did not conform to the unfortunately growing movement towards metrication, and that it was only to be allowed to continue in circulation for a very limited time.
I appreciate that many right hon. and hon. Members, especially Ministers, who do not shop regularly every day do not realise the problems of people, especially the elderly and the housewives, who have to go into a shop with a purse. One opens it up, only to find a conglomeration of coins. The one which is easiest to pick out is the 10p coin. When one comes to the dark brown and rather dirty ones, it is very difficult to pick out the 2p, the 1p and the ½p.
If by any miracle, as it now happens to be, one gets a "tanner", it is easy to see and helps considerably when shopping. I would not make a plea for the retention of something which I did not feel had value. I believe that the "tanner" is of value because it is known and understood.
I disagree slightly with my hon. Friend the Member for Hampstead when he says that decimalisation has settled in fairly easily. I think that initially it did, but when I go shopping I find more and more that I am told the price in shillings and old pennies rather than in new pence. The 855 "tanner" is useful because one can see it easily. I presume that gentlemen, when they put their hands in their pockets, can feel the "tanner" easily. The most outstanding reason for having the "tanner" is that it is wanted by people.
I also add a plea on the cost of living. When I meet and talk to people I find that the cost of living is a question of dynamic nature. I fear that if we lose the "tanner" we shall very quickly lose the ½p because, as my hon. Friend said, it is very small and unpopular. I see this going next. All this adds up to an increase in the cost of living. Anything which we can do to halt the rise in the cost of living is of vital importance. But, most of all, I believe that we should have the "tanner" because people want it.
I ask the Minister to tell us why it has disappeared, how it has disappeared, and who has sanctioned its disappearance.
§ 9.52 p.m.
§ Mr. Robert Redmond (Bolton, West)
I am pleased to take part in this debate. My hon. Friend the Member for Hampstead (Mr. Geoffrey Finsberg) has a bee in his bonnet about the humble "tanner" just as I have a bee in my bonnet about metrication. We are really rather cross that the great British public is being bewitched, bothered and bewildered by both movements. I have maintained in this House that the Metrication Board is performing a confidence trick on the public and I think that the Decimal Currency Board has performed a confidence trick.
The problem of the sixpence or "tanner", if I may call it that, because it should be called 2½p now, is not isolated. It is a symptom of a much wider malaise caused by the decimal currency system which has been wished upon us by the last Government. If we can talk about the "tanner" in isolation, the cause for its disappearance is the size, shape and make-up of the inside of the cash register drawer in most shops. I am not a shopkeeper and I am not familiar with the inside of a cash register, but shopkeeper friends have told me that there is no space in the till which allows the "tanner" to fit in easily.
I have tried to work this out. With the old currency we had the half-crown, the 856 two-shilling piece, the shilling, the sixpence, the penny, the halfpenny and the threepenny piece making seven different coins. Now we have the 50p, 10p, 5p, 2p, 1p and ½p, making six different coins. There seems to be one over somehow where the "tanner" could fit in, but shopkeepers tell me that it cannot be done. I believe that what they are saying is true because so many have said this to me.
My hon. Friend has said that the banks do not keep the "tanner" in the till. Is it for the same reason? If so, then the problem is not just simply getting the banks to stock the "tanner". It may not be possible for them physically to do so without great expense.
I do not think that the Government can do very much about this, because they cannot do the impossible. The Government must look at the whole currency system to see whether we can get at the root of the disease, rather than tinker with the symptoms. I agree with my hon. Friend the Member for Keighley (Miss Joan Hall) when she says that decimal currency got going quite well to begin with but that many people are now confused.
Because of what my right hon. Friend the Minister of Agriculture has called the decimal diddle, people are now converting back to the old currency. The honorary secretary of Bolton Chamber of Trade told me the other day that whereas he had been putting out the propaganda, through his members, that people should be encouraged to think decimal, everybody is now being advised to convert back to the old currency to prove that the decimal diddle does not exist.
The fact is that our coinage is confusing many people. Elderly people find themselves with pockets and handbags full of loose change. They go to the bank, or to the Post Office, and ask for the money to be converted back to notes. They then go to the shops, produce their pound notes and get change which they are not able to count because of the confusion which has arisen due to unfamiliarity with the currency, which is now made up of funny bits and pieces which they do not understand.
This is not the fault of the disappearing "tanner" but that of the coinage itself, its size and its distribution, and I ask 857 my hon. Friend to consider the problem in the wider term, rather than to isolate consideration of the problem to the "tanner", because somehow or other the new currency is fitting into the adage of "better means worse". I do not think that it is the fault of the banks that the 2½p piece or the "tanner", is not accepted. The point is that half is a vulgar fraction, and we are supposed to be dealing with decimal fractions.
I am not a backwoodsman. I have always advocated a decimal currency for this country, but not this one. This is what is wrong. I realised what was happening the moment this currency was suggested in the first place by the Royal Commission. At a meeting that I attended of the C.B.I. regional council I repeated a story which I remembered very well from my days as a young officer in the Army, about to go to Egypt for the first time. An old colonel who had spent a lot of time in Egypt said to me, "Be careful when you get there. You will find that the cost of living is enormously high. Your pocket money disappears in no time at all because a piastre is one one-hundredth of a pound and you are inclined to think of it as a penny. You start spending piastres thinking they are each worth a penny, but every time you spend a piastre you spend 2½d.". That is what is happening with our currency. The whole thing is wrong. The disappearing "tanner" is a symptom of a great malaise about which I hope the Government can do something.
§ 9.58 p.m.
§ Mr. Alan Haselhurst (Middleton and Prestwich)
I am sure that many people would wish to commend the worthy motives of my hon. Friend the Member for Hampstead (Mr. Geoffrey Finsberg) in raising this matter in the House today and also in the campaign that he has been waging generally to protect the consumer. However, I cannot find myself in entire agreement with him on the narrow base on which he has placed his argument tonight. I believe that to talk in terms of defence of the 2½p coin as being a dash for freedom is going too far.
I believe, too, that my hon. Friends the Members for Keighley (Miss Joan Hall) and Bolton, West (Mr. Redmond) have extended the argument more widely than they should have done. All those taking part in this debate need to do 858 so with circumspection because, if we are talking about a decimal currency system, we should recall that it was when you, Mr. Speaker, were Chancellor of the Exchequer that a decision was taken in principle to decimalise, although what happened subsequently was based upon a recommendation of a committee, which was endorsed by the last Labour Government.
We ought not to conduct the argument in terms of anti-decimalisation, and I think that—
§ Mr. Redmond
I do not want it to be thought that I am trying to go back to the old £.s.d. system. I am merely criticising this decimal system and saying that what we have in the tanner is a symptom of a great malaise.
§ It being Ten o'clock, the Motion for the Adjournment of the House lapsed, without Question put.
§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Rossi.]
§ Mr. Haselhurst
I am pleased to have given my hon. Friend the Member for Bolton, West (Mr. Redmond) an opportunity to set the record straight. I did not try to point too much criticism in his direction. I was about to add that I believe that the system of decimal currency recommended by the Halsbury Committee and endorsed by the Labour Government was the wrong system. That is what has given rise to many of the ills mentioned tonight.
However, I do not go on to say that all the ills could be solved by the injection back into the system of the 2½p coin. While I greatly sympathise with the shopper whom my hon. Friend the Member for Keighley mentioned, particularly the elderly person, struggling with the new coins in her purse, that is no argument for the retention of the 2½p piece. It is an argument about lack of familiarity with the system, particularly among elderly people. There are many other people in the community who do not have difficulty understanding the system.
There are arguments to be made about the effect of the new system on rising prices and inflation. These arguments may be right, but they are not overcome by saying that things would have been different if only we had had the 2½p 859 coin in wider circulation, or that things will be different in future if it comes back into wider circulation.
The battle for the 2½p coin is almost effectively lost. Following the copious advice and advertisements of the Decimal Currency Board, people made a serious effort to adapt to the new system. They accepted it on the basis of the new coins and, therefore, whatever assurances were given and however genuine the assurances, they never accepted that the 2½p coin, or the old sixpence, would be part of the new system. In helping themselves to change to the new system they dismissed the sixpenny piece from their minds.
We ought not to criticise them too much for it. The British public were showing that good practical sense of which they give many demonstrations and saying, "This is the system; it may not be the best, but we will make the best of it." That is what they set out to do, and in so doing they relegated the sixpence or the 2½p coin from their reckoning. I do not dismiss his particular examples, but my hon. Friend the Member for Hampstead drew an untrue picture when he cast the banks and other agencies as the real villains of the piece.
§ Mr. Geoffrey Finsberg
I quoted merely two examples. I could have quoted 17 or 18 from different parts of the country. The practice is far too common for these to be coincidences. The banks are pursuing a deliberate policy.
§ Mr. Haselhurst
I will not attempt to rebut the assertion that there have been attempts in certain quarters to withdraw the coin, but that does not tell the whole story. My father is in the retail trade and I know that it is a matter of practical convenience.
When we were changing to the new system, as a retailer my father made an effort to work the new system, having got a supply of the new coins. It was certainly no plot, but simply a matter of practical convenience for everybody when the new system was coming in. The battle is lost, for many retailers, small and large, were prepared to play in with the new system and, therefore, deliberately perhaps, but not with evil 860 intent, they tended to reject the 2½p piece from their change-giving.
The other reason why the battle is almost lost is that so many machines have been altered. I would have rejoiced if the system had been different and the 2½p coin still existed as a 5p coin in a 10s unit system. This would have made a lot of sense and many machines need not have been altered. But because we were committed to this system and a good deal of money was spent on financing the changeover, many machines have been altered.
§ Mr. Patrick Cormack (Cannock)
I hesitate to interrupt the eloquent flow of my hon. Friend's language, but since we have the 2p coin and the ½p coin, why is it totally impossible to have a 2½p coin?
§ Mr. Haselhurst
I would not say that adjustments to the system are not possible, but an argument in favour of a particular coin which no longer fits certain types of machines, although that point might have been good before we had gone all this way, does not hold the same validity today. The die is cast, and we cannot go back without further expenditure and inconvenience which would not produce the results which my hon. Friend might think.
Telephones have been changed. Most vending machines have been changed. One obvious exception is parking meters and another, for those hon. Members who indulge, is the tabletop football games. But too much money has been spent on this system for it to be a responsible act of government to have a compulsory retreat to the sixpenny coin. The system is not perfect, nor is it the one which I would have chosen. But a sentimental attachment to a coin of the old system is not the way to iron out the imperfections of the present system.
§ 10.7 p.m.
§ The Minister of State, Treasury (Mr. Terence Higgins)
My hon. Friend the Member for Hampstead (Mr. Geoffrey Finsberg) has made a number of interesting points about what, as he rightly says, we must now learn to call the 2½p coin rather than the sixpence. I congratulate him on taking this rather unusual opportunity to put forward his views.
861 The whole question of decimalisation has aroused great interest and controversy in recent years. Having been involved myself, I find it tempting to look back at our battles, as some of my hon. Friends have done. But it would be wrong to consider at this stage the whole question of the system. What we have to consider is the main point—namely, the future of this coin.
Since my hon. Friend has been elected, he has been a persistent campaigner for the retention of a coin of this denomination. I believe that he will acknowledge that I, too, have played some part in this matter. Had it not been for the pressure which we put on the previous Government when we were in opposition, which culminated in a Motion which we moved on 19th February, 1970, matters might have gone beyond recall by the time we took office. As it was, that pressure made the Government review the question and the outcome was that, in April, 1970, they decided that the sixpence could remain legal tender for at least two years after the introduction of decimal currency in February this year. On coming to office, we reaffirmed that policy.
Perhaps I may remind the House, particularly my hon. Friend the Member for Keighley (Miss Hall), of the precise words of the Financial Secretary in a Parliamentary reply on 3rd November last year. He said:The Government's policy is that the 6d. will remain legal tender for at least two years after Decimal Day. Its future thereafter will fall to be decided in the light of public demand for it".—[OFFICIAL REPORT, 3rd November, 1970; Vol. 805, c. 318.]I am sure it is true to say that but for the campaign we waged in opposition, the sixpence might have been demonetised with the old pennies and threepenny bits when the decimal currency change-over period was brought to an end on 31st August.
As it is, the coin is now legal tender as 2½p by virtue of a Royal Proclamation made on 28th July. And, as the Financial Secretary said, we shall review the position in due course and reach a final decision about what is to happen at the end of the two-year period to which I referred.
862 I would not myself go along with the view expressed by my hon. Friend the Member for Middleton and Prestwich (Mr. Haselhurst) that the 2½p piece is inconsistent with the system which we now have. Nor would I agree with him that the battle on this matter is lost or that this is an issue which is cut and dried. I have tried to describe precisely what the position is from the Government's point of view—namely, that the 2½p piece will continue as legal tender for the specified period and that we shall have to judge the matter in the light of the public demand for it.
In addition, we have taken steps to ensure that ample stocks of this coin are available for those who want to use it, and the banks have agreed to keep it in stock for as long as it remains legal tender. I will return to this subject shortly.
Virtually all of the 2½p coins which are surplus to the banks' requirements and have been returned to the Royal Mint are stockpiled there. My hon. Friend will be interested to know that less than 3 per cent. have been melted down; this was partly to recover the silver from those minted before 1947 and partly because there was some need for cupronickel for new coinage.
I mentioned the Labour Government's change of heart over this matter. In opposition we had been campaigning for the retention of the sixpenny piece for a considerable time before April, 1970, when they decided to have a period during which it would remain legal tender to test public demand for it. Certainly it would have been better had they listened to our argument earlier.
Looking back over the debates that we had on this issue, I cannot help but feel nostalgic, not least about one occasion, on 27th February, 1969, when, in Standing Committee upstairs on the Bill, as it then was, something happened which resulted in the OFFICIAL REPORT containing the words "New Clause disagreed to" because we defeated the Government, having made it clear that we were making a stand on the question of the sixpenny piece. However, the Government of the day reinstated the Clause on Report. When a similar thing happened in the House of Lords, they again reinstated it, though it was subsequently that they changed their mind 863 about keeping the coin for an experimental period.
I cannot help but feel that if they had made a decision of that kind earlier, rather than adopting the dogmatic attitude that they took many firms which were quite rightly planning ahead would not have made firm commitments which meant that they were unable to reverse the decision when the situation changed and it was decided to keep the sixpenny piece to see how things went. Had that not been done and had the Government of the day made their intention clear at the beginning rather than at the end, it is probably true to say—indeed, I am sure that it is—that the level at which the coin is now circulating would be higher than it is.
I would like to make clear the attitude of the Government now and, in particular—this is extremely important—try to distinguish between what the Government can and cannot do in this matter. We have made it clear that we have given, are giving and will give public demand an opportunity to make itself felt.
The attitude of the previous Government, at least until they belatedly changed their mind, was that the coin would go at the end of the change-over period, whether the public liked it or not. This has never been our attitude. Secondly, as I say, we have ensured that supplies of the coin are available for those who wish to use it. But we are not taking a decision whether the coin ought or ought not to remain a permanent feature of the coinage, or whether its life ought to be prolonged after February, 1973. That, as I have said, is a matter which will have to be reviewed and a decision taken then.
It is up to the public to make their wishes clear by the use which they make of the coin. That is what matters—whether it is actually found to be a useful and convenient coin as a permanent feature of the decimal currency system. Despite my hon. Friend's arguments, and the significant support which has been given for the Early Day Motion on the minting of a new 2½p coin, it seems to me that it would be just as premature now to decide that the coin should have a permanent place in our currency as it would be to decide now that it should finally be extinguished. It is right that 864 we should wait till the end of the period before we come to a conclusion on that.
Given the prolonged interest which I have had in this matter, I am sure that it is not necessary for me to say that it is no part of the Government's policy to try to force the coin out of circulation. Equally, however, there is no point in the Government trying to make it circulate above its natural level. I do not believe that there are any significant and effective steps which a Government can take artificially to stimulate circulation of a coin above the level at which it circulates naturally. The question is whether the public demand it, and I am sure that the points which my hon. Friend the Member for Hampstead made in saying that the public ought, therefore, to demand it, and that this would increase the level of circulation, are of great importance.
My hon. Friend mentioned the position of the banks, too. As he knows, we have been in considerable correspondence about it, and I am grateful to my hon. Friend for the kind things which he said about me personally in this connection. I am sure that he appreciates that it is not for the Government to involve themselves in the detailed arrangements which the banks make with their individual customers. Clearly, this is a matter at a detailed level which it must be for them to decide. But what the banks have said is that they will make 2½p coins available to those customers who want them.
My hon. Friend referred specifically to a statement that supplies of the sixpence, or as it now is, the 2½ piece, will not be allowed to become inadequate to meet public demand. As I have already sought to explain, there are adequate stocks available. It is a question of the public demanding them. There is a distinction between making certain that the supplies are available to meet public demand and what the public demand actually is.
It is a question, therefore, of the banks serving the public. My hon. Friend referred to a number of letters which he has received, and I was somewhat surprised to hear that he has some 70 cases on his file. As I have already explained, I do not consider that it would be right for the Government to intervene directly in these matters, but if he would care to send any cases to me, I should be very 865 willing to look at them. My understanding of the position is that the banks will certainly provide coins for those who wish to have them.
It would be wrong for the Government to try, as my hon. Friend seems to suggest, to insist that the banks should issue the coin to customers who do not want them. There would be a real danger, if they did that, of the Government getting into a position rather like that of King Canute, constantly trying to push back each wave, depending on which way the tide went. However, in saying that, I stress that this is not to prejudge the level at which the circulation may actually settle. To try constantly to push out coins to people who do not want them would be likely to result in their just flowing back. Most coins are drawn from the banks by retailers and get into the pockets and purses of the general public in the form of change. Retailers normally draw the coins from the bank in bags, and because the old sixpence, shilling and florin and the new decimal cupronickel coins are in a weight-value relationship, the value of a bag can be checked by weighing. Therefore, the banks and their customers are involved in least cost if those customers who draw coins are simply issued with bags handed in by other customers, the only check being to weigh them.
Most bags are paid in mixed, and some of them may contain 2½p coins. Where the customers are willing to take a mixed bag, there is no problem, and obviously some 2½p coins get into circulation in that way. Therefore, I am very surprised by my hon. Friend's statement that if one asks for a bag of mixed silver one has no 2½p coins in it, because I understand that the normal practice is that the bags are paid in, checked by weighing and paid out again, and the banks normally will not know whether there are 2½p coins in them. I should be very surprised if my hon. Friend's point is valid, that if one asks for a bag of mixed silver one will never receive any 2½p coins.
§ Mr. Geoffrey Finsberg
The ordinary individual goes to the bank, asks for £1-worth of 2½p coins and spends them. The shopkeeper then puts them back in the bank, and they do not come out again, so the demand cannot be met, because the shopkeeper and the banks do not use 866 them. Therefore, the poor customer must again ask for them, but instead of free circulation they go back into the bank. I have tested this at innumerable bank branches. I have obtained bags of £1-worth of mixed silver, but have not yet in seven months found a 2½p coin in them. Perhaps that is coincidence.
§ Mr. Higgins
I am surprised, because I understand that the position is as I have described it. It depends whether people ask for the 2½p coins—whether retailers in particular ask for them—whether the coins continue to circulate. If it were true that shops constantly give back bags of 2½p coins, then inevitably, whatever one did, they would be flowing back, but it appears from the figures available that they are continuing to circulate. To the extent that they are going around in mixed bags, they will continue to circulate. Obviously, it depends on how many retailers, in addition to those asking for mixed coins, ask for specific 2½p bags.
I understand that many retailers want separate bags of 5p or 10p coins, and it would not help the circulation of the 2½p coin if the banks included them willy-nilly in bags when the customer has specifically said that he does not want 2½p coins. Some retailers ask for them specifically, in which case they will receive a whole bag-full. The more people who do that, the more likely it is that the circulation will continue. For the banks to add 2½p coins by taking out other coins from bags which are already mixed would involve them in considerable cost. It is a matter which must be left to the banks.
My hon. Friend made one or two points about the position of London Transport. I think that the difficulty here was confined to one-man-operated buses, where the fares may be paid by insertion of coins in machines at the entrance to the bus. The minimum fare was increased from 2½p to 3p in August, but some other fares containing ½p—7½p and so on were reduced by ½p. There have been subsequent changes as well. It may well be the case that the fare structure will include elements such as 7½p, 12½p and 17½p in which the 2½p coin may be used in part payment. But my hon. Friend will appreciate that it would be wrong for me to go into details of the position of London Transport.
867 I take up the point in regard to the Amendment which has been put down to my hon. Friend's Early Day Motion—the suggestion that it would help if the Government were to decide that a new 2½p coin should be minted. I do not feel that that would make any significant difference and it would be expensive to start minting new 2½p coins as such when we already have a plentiful supply of coins which, by proclamation, are designated 2½p. Only about 3 per cent. of these coins have been melted down so that 97 per cent. of the original coins are still available, even though demand for them, inevitably to some extent in a decimal system, has declined. Adequate stocks are available.
There would be some practical problems in getting such a new coin into general circulation. That being so, it would make little practical difference whether the design on the coin indicated that it was the old 6d. or the new 2½p. Many of us in our day-to-day cash transactions do not distinguish between the old 1s. or the new 5p, or between the old florin and the new 10p. We do not always examine the faces of the coins all that closely, and I do not feel that minting a new 2½p coin as against continuing the experiment with the 6d. would make a significant difference to the level of circulation.
I hope that I have to some extent clarified the position. It is not an easy one. The Government adhere to the previous view that the right course of action is to carry out the experiment over the two-year period to see exactly how 868 it works in practice. The currency of the country is now decimal. We are using coins with exclusively decimal values. This is very much the testing time for the future of the 2½p coin.
But I am sure that my hon. Friends are right to bring this matter to public attention and to take this opportunity to do so, because it is important that if people want to retain a coin they should he aware of the issue. The Government are making this opportunity available, and it is now up to the public to make their wishes felt. We must see what happens in practice.