HL Deb 01 May 1969 vol 301 cc972-96

4.31 p.m.

House again in Committee.


I rise to oppose both Amendments, and in doing so I rather regret that the noble Lord, Lord Crowther, with whom I work and cooperate on such a good and friendly basis in some activities outside this House, and for whose ability I have profound respect, has by his support of these Amendments diverged from the views which I am conscientiously bound to reflect. I think that on an earlier occasion in this House I may have mentioned something which I repeat to-day only because of its rather humorous coincidence. Until a couple of years or so ago my official telegraphic address was "Ellessdee, Westcent." I hasten to add that the spelling was "Ellessdee", and not just "LSD", for I would not want it to be thought that I am an emergency supply centre for "pot". That telegraphic address may have carried the implication that I supported both an £ s. d. currency and a cent or decimal currency. Recently, however, the G.P.O. authorities eliminated "Westcent.", leaving me with only "Ellessdee," by which nomenclature messages reach me now.

It was a good telegraphic address but I am not such a sentimentalist as to be upset by its very diminished meaning under a decimalisation of coinage. After all, the farthing and the silver 3d. bit passed away quite peacefully. Some of your Lordships may remember the particular popularity of the tiny 3d. bit and the quantities of that coin which used to come into London with the arrival of the express steam trains from the North. Other money or coin orientated names which were once famous may have lost their effectiveness, but I believe that the organisations which used them continue to develop and prosper. I have in mind the Yorkshire Penny Bank, the Five Shilling Shirt Company, the "Fifty Bob Tailors" and the Woolworth 3d. and 6d. Stores, or, as they were known in America, the 5 and 10 cent Stores. One recognises that past inflation largely produced those changes. Now the "copper" is going, and the "bob"; and I hope also the "tanner". New pet names will undoubtedly emerge for some of the new coins, but I will not proffer any suggestions to-day.

We are in a period of rapid technological change, and we must show a more ready acceptance of its various aspects. With the adoption of decimalisation, which is to Britain's obvious benefit in its international transactions, as well as internally, we must remember that 6d. belongs to £ s. d. currency. It really should have no place in decimalised currency if we are going to be sensible from the outset with our new coinage.

The argument which we are considering on this Amendment is generally regarded as an argument about the 6d. The question at issue is expressed as: "Should the 6d. be retained?" It is significant that the argument should be expressed in these terms—significant, but also misleading. In a sense, there is no argument about the 6d.; so long as we are using the £.s.d. currency system we shall be able to use the 6d. The 6d. will be available as current coin and legal tender throughout the changeover period of dual currency working which will follow D-day. It may be with us for as long as 18 months after D-day; that is to say, until the middle of 1972. Until that time, when we stop using the £.s.d. system, shops can, if they wish, continue to sell goods for £.s.d. prices, including 6d.; and shopkeepers and anyone else who wants them will be able to draw 6d. pieces from the banks.

About all this there is no question and no argument. The argument is about whether this coin should continue in use after the end of the changeover period, when we are working entirely in decimal currency. In that context we cannot think of the coin as a 6d.; it is positively unhelpful to do so; we can think of it only as a 2½p piece. But it is significant that the argument is in general conducted in terms of the 6d., because it shows that the advocates of the retention of this coin have not thought through their arguments in a pure decimal currency context, and are falling into the trap of supposing that because a coin is useful in the £.s.d. system it will be equally useful in a decimal system.

The implication of the Amendment appears to be twofold: first, that after the end of the changeover the present 6d. coin should continue in circulation, presumably re-denominated as a 2½p coin, just as our present shillings and florins will be redenominated as 5p and lop coins; second, that a 2½p coin identical in specification with the present 6d. should be minted as a permanent feature of the new decimal coinage.


Would the noble Lord give way? Is he not referring to the second Amendment? There is no mention of any of this in the first Amendment.


We are taking both Amendments together.



The noble Lord is quite entitled to talk to both Amendments, but his argument, as the noble Lord has said, relates to the second Amendment.


The decimal coinage would therefore be: new halfpenny (½p,), new penny (1p), 2 new pence (2p), 2½ new pence (2½p), 5 new pence (5p), 10 new pence (10p) and 50 new pence (50p). This would give the United Kingdom a unique sequence of coins. Most of the countries of the world have a decimal currency system in which there is a major unit divided into 100 minor units. For convenience, let us call the minor unit a cent. Many of these countries have a 2 cent coin, as we shall. A few, very few, such as Portugal, have a 2½ unit coin. Not one—I repeat, not one—has both a 2 and a 2½ cent coin. We may be certain that if this were a desirable feature of a decimal coinage someone would have thought of it before now. In fact, it is a thoroughly undesirable feature. If you have a new halfpenny (½p) a new penny (1p) and a new 2d. piece (2p), there is no reason for another coin so close in value to the two. It does not enable you to carry out any transaction that could not otherwise be carried out. it merely means that there is an extra denomination to be recognised, accounted for, handled and so on. It is an unnecessary complication.

There is, of course, an argument for providing a 2½p coin instead of a 2p coin, although this is not what the Amendment proposes. Provision of a 2½p coin rather than a 2p coin was considered by the Halsbury Committee who took the view that the use of this additional fractional coin was a weakness. They regarded the 2½p as tolerable in a decimal system but inferior to the 2p and were much influenced by the fact that experiments had shown that 2½p was more difficult to reckon with than 2. It is hardly surprising that the experiment had this result. Our own experience tells us that we can count: "2, 4, 6, 8, 10", and so on, almost as easily as: "1, 2, 3, 4, 5." But we do not naturally or easily count: "2½, 5, 7½, 10, 12½" and so on.

This vividly illustrates the point I was trying to make at the beginning; namely, that there is an important difference between the 6d. and the 2½p coin and it is not as easy to add, let alone subtract in the latter as in the former. It is hardly surprising therefore that few countries have a 2½ cent coin and that none has a 2 cent and a 2½ cent. There cannot be a long-term case either for a 2½p as well as a 2p or for a 2½p instead of a 2p. It would be a great mistake to burden ourselves with the wrong denominations of coins, or too many denominations, for purely short-term reasons. Yet the arguments for letting the 6d. continue as a 2½p after the end of the changeover period can only be short-term arguments and really amount to saying that the interests affected cannot make the necessary adjustments between now and 1972.

In fact, the only interests affected are the coin-operated machine interests. Anyone else who sells goods or services for 6d. can do so now without a 6d. coin and can do so for 2½p without a 2½p coin. The coin-operated machine interests will have to make changes but they are no. alone in this. Every firm and organisation in the country will have to make changes of one sort or another as a result of currency decimalisation; but in the majority of cases changes in the denomination of coin which operates a machine can be accompanied by commensurate changes in the quantities of goods or services sold, so that there is no change in the value of what is provided.

Do not let us be too greatly impressed or permit our thoughts to be governed by the interests of vending machine manufacturers or coin box operators. The machines are often aids to consumer spending or amusement of the kind where the scales are loaded in favour of the operator. On the contrary, when we think about coin boxes let us rather be promoting the use of those coin boxes which are aids to personal savings; the savings boxes of our kiddies and the adult population. I am sure that no costs will be involved in converting those boxes to receive the new coinage.

Now that we have at last decided to change over to a decimal coinage, it is important that we should, wherever possible, go for the best solution in the long run; that we should not adopt inferior courses of action which seem attractive only as an easy way out of a short-term but soluble problem. So far as coinage is concerned, the important thing is to get the denominations right from the outset and to get people used to working in those denominations. There is an economic cost in having the wrong denominations. Let us not needlessly complicate a system which is designed to aid productivity by simplifying our money calculations and our cash transactions.

It is sometimes suggested that professional accountants have too great an influence in industrial affairs and policy making. Naturally, I do not share that view but I can inform the Committee that the leading accountancy bodies of our country, including the Institutes of Chartered Accountants, have not expressed any official views on the withdrawal or retention of the 6d. This is because under modern and sophisticated auditing techniques professional accountants are less concerned with the aspects of cash handling than they are with conversion tables. Those most vitally concerned with cash handling are of course the retail tradesmen and the public, most especially the large chain-store groups. The position on this subject of both Marks and Spencer and of Sainsbury's can best be indicated by other noble Lords who are connected with those firms and better qualified than I to give the considered views of their experts.

Fortunately, we have heard one such view expressed this afternoon by the noble Lord, Lord Sainsbury, and I know, if others do not, that Marks and Spencer share the views which he has expressed. One announcement I am authorised to make to your Lordships to-day concerns the considerable retail chain of Tesco Stores. Their managing director has informed me that on the advice of the organisation's experts Tescos Stores most definitely favour the withdrawal of the 6d. If the position in this matter of Marks and Spencer and Sainsbury's is the same as Tesco, as it seems to be, then it becomes clear that within these three groups the aggregate of change-giving transactions represent a very high proportion of the nation-wide volume of small money change-giving.

I urge that we do not lightly overlook the considered position adopted by those three great British organisations and by many others like them. Moreover, we must not forget that firms engaged in retail selling on a large scale, as well as others, must train their staffs in the use of the new coinage and consequential pricing policy. They must make headway with their training schemes, and we should decide quickly about the future of the 6d.

In your Lordships' House I speak from the Government Benches, but I hope and believe it is recognised that I am usually capable of expressing a frank and politically unprejudiced view on subjects which, either directly or indirectly, are within my sphere of activity and experience. I am being frank now, and after mature thought I sincerely recommend your Lordships to oppose these Amendments.

4.48 p.m.


The case for the 6d. is somewhat different. It is this. A coin which represents 5 per cent, of the pound will always be a key coin in our currency. and whether we call it 1s. or 5p makes no difference. In the past it has been convenient to have another coin which was half the value of that key coin, and we argue that it will be equally convenient in the future.

I should like to thank the noble Baroness for the reply which she gave to the point that I raised in the debate on the Second reading. In effect, she said two things. The first was that there has been research which has shown that two-thirds of the use of the 6d. was in pairs, in substitution for the 1s. Because of that, there will be no public inconvenience when the 2s. 6d. coin is withdrawn in January of next year, provided that more shillings are introduced so that the 6d. will be liberated and may be used with other coins in substitution for the 2s. 6d.

I must express some surprise at the figure of two-thirds, but nevertheless I believe that is an effective answer to the proposition that coins marked 2½p should be put into circulation next year when the 2s. 6d. goes. The second point made in reply to the debate was on the long-term. At the present time we have a currency which has eight coins below the value of a pound. We are proposing to commence the new decimal currency with only six units, and only one of these will have a fractional value—namely the ½p. All experience has shown that a coin of such a small value eventually becomes redundant because of inflation. Therefore, why frustrate this admirable purpose of getting in due course a rationalised. coinage of five coins with no fractions by introducing now a 2½p piece?

Although it is too late, I think it should be mentioned that we could have had such a rationalised currency at once, and not at some time in the future if the Government had taken note of the view of organised consumers and retailers who wanted a 10s. unit. It would' have been rationalised forthwith. There would have been no halves. However, it is now too late for that. But let us look at the question of inflation and its effect. I suppose that in a democratic society, with a mixed economy and with full employment, some inflation is inevitable. Let us look at the value of the new ½p. At the time when it is introduced, the new ½p will be equal to 1.2 old pennies, so that if we wait until the price has dropped and the value of money is halved, that new ½p will still be worth .6 of an old penny—more than ½d.is worth to-day. On the basis of that evidence one can say that it is likely to be twenty years and more before we are in a position to discard the ½p.

Why cannot we use the 6d. in the meantime? My noble friend, in replying to the debate on Second Reading, said: The Government are convinced that by the end of the change-over period the sixpence will have ceased to be a useful coin."—[OFFICIAL REPORT, 15/4/69, col. 51.] Are not the Government prepared to put their conviction to the test? The Government set up the national economic development councils and the N.E.D.C. for the trade concerned—distribution—put forward very reasonable advice. They said: The sixpence should not cease to be legal tender until there has been an objective research in the changeover period which shows that it is redundant. I would put two questions, to which I hope I shall get a reply from the Government. First, are they prepared for this research? Secondly, if this research shows that the 6d. is not redundant, will they give it a new lease of life, if need be, for the period between now and the time when we dispense with the new ½p?


I will be brief, but I feel that this debate on the Amendment, which I support, will be incomplete without a slight embellishment of the reference which my noble friend Lord Sinclair of Cleeve made to the problem of the 6d. in relation to the parking meter. He pointed out—and I know this is a point made by motoring organizations—that the absence of the 6d. means a departure to the shilling, the "bob", the 5p piece. It is clear from the Press that local authorities are not thinking in terms of bringing down the rate for a period at a meter to the new 2p level, but of putting up the price.

I believe that, as my noble friend said, this will have the effect of encouraging illegal parking, because of the higher cost of going to a meter for a short period. As everybody knows, motor vehicles parked in the wrong places are a high contributory factor to road accidents and to accidents to pedestrians as well. It is also fair to say that in many townships a number of retailers suffer because their customers cannot get to their doors without going to a meter. If these meters are going to be at a "bob" for one hour, or perhaps half-an-hour, that is a high price to pay and too long a period for a visit to one shop.

I would differ from the noble Lord, Lord Hirshfield, and agree with the last speaker the noble Lord, Lord Jacques, that the new 2½p piece would be just "half-a-bob". That is the important thing about it. When we originally debated decimal coinage I made an appeal that we should stick to this meritorious term, the "bob", although no one knows why the shilling got that name. I believe that in terms of the cost of living, which is forever creeping up, this problem of the meter and of the new coins should not be overlooked when we are considering this Amendment.


I rise in defence of the new 2.5p coin. The point has been made that in the coinages of other countries there are no fractions. I would point out that in practically every case this applies to a 10s. system and not a pound system. Besides, these other countries have coins of very small values. We are only in this jam because we do not have a small enough coin to prevent large jumps and difficulties. We have recognised that by having a new ½p, so that to begin with we have been illogical. If we are as illogical as that, let us keep the direct equivalent, which is the useful one of half of 10p.

Vending machines have been mentioned this afternoon. The point about vending machines is not the volume of trade done by these machines but their convenience to the consumers. The longer we can leave these machines in circulation, the longer we put off the time when the owners who have paid for them will have to spend money converting them or buying new ones. Let us wear these machines out first. It is perfectly easy to have new vending machines to suit the new decimal currency, but let us keep the existing machines going for as long as we can, so that we do not voluntarily use them to contribute to inflation, as scrapping them would do. I would ask whether the figures for vending machines include such things as prepayment meters belonging to the Electricity and Gas Boards. Also, when we are told of machines being weighted in favour of the owner, does that apply to telephones? I have long suspected that it does, and we have heard to-day that it might.

On the question of the ease of handling change, I should like to know exactly how one is going to hand out the 2s. 6d. fee for crossing the Forth Bridge. You will have to use lots of bits and pieces. Finally, as the Scottish thistle appears on the back of a 6d., may I ask whether anybody has asked the Scots whether they want their emblem destroyed?


I should like strongly to support this Amendment. Naturally, I cannot claim even one-tenth of the knowledge of the retail trade possessed by the noble Lord, Lord Sainsbury, but I can say that every small retailer I have spoken to on this subject is strongly in favour of retaining the 6d., or its equivalent. I must confess that I speak as one who would like to see the entire Bill abolished. I was against it from the beginning, and I remain against it still. But obviously it is too late to do anything about that. However, I think we should try to make it as convenient for the public as we possibly can.

One reason why I am against the Bill is that it is going to cost many millions of pounds to make this changeover and at a time when we are finding it difficult to bridge our balance of payments I do not feel that a totally unnecessary change like this is justified. And if we abolish the 6d. coin, it will just about double the expense. Just think of the number of coin-operated machines throughout the country which use the 6d.: telephones, ticket machines at Underground stations, confectionery machines, parking meters, which have been mentioned, and innumerable others. These will all have to be adapted, and this adaptation will involve a considerable addition to the cost of this changeover. I, for one, do not feel that it is warranted.

One noble Lord seemed to think that 2½ is going to be a very clumsy figure. I do not think that there is anybody in the country who is not aware of the fact that 2½ is half of 5—after all, we once had 2½d. stamps. I cannot remember that anybody found these difficult to deal with. That was just about half the present postage, because then all postage was first-class. Therefore, I feel that unless we retain the 6d. we are jus: about going to double the expense of this extremely unnecessary change.


I should like to say just a few words in support of this Amendment. I want to emphasise the human side of the problem. Let us make no mistake: during the changeover period this whole business is going to be most unpopular with the ordinary man and woman in the street. If they also see that their favourite coin, from their earliest childhood, is to be arbitrarily swept away, rightly or wrongly they will regard this as a calamity. Everybody in this House, I am sure, wants to see this changeover carried out as smoothly and as favourably as possible. Therefore it seems to me common sense to allow the public's favourite coin to remain, until we can see quite clearly whether it is going to be required or not. I therefore support the Amendment.

5.5 p.m.


I should like to thank those of your Lordships who have participated in this interesting debate. I was sorry that it appeared to be suggested as "only the 6d., and all that" because it is about this that we are attempting in this Bill to decide not a short-term change but a long-term change. I hope your Lordships will bear this in mind when voting, if we have to vote this afternoon. The noble Lord in introducing the Amendment pointed out—and I should like to emphasise this—that this cuts right across Party lines. Therefore I hope that noble Lords will approach it with an open mind, mud will make up their minds on the arguments that have been advanced.

First of all, I think we must accept that we are arguing on existing currency. It is argued that, because the 6d. is a popular coin in the £.s.d. system, it will therefore be a necessary coin in the decimal system. This is not so. Reference has been made to the coins which we have seen disappear in our lifetime, and there is little doubt that the British people have a great capacity for adaptability. I was interested that the noble Lord, Lord Crowther, made some reference to the price endings. As a woman, I naturally enjoy shopping, whether it is window shopping or shopping for cash, and I can assure the noble Lord that many of the price endings are not 6d.; many of the price endings are 11d. and 11½d. But I have not found it necessary to have one coin in order to purchase something which was 19s. 11½d. So it does not seem to me that the price ending necessarily calls for one complete coin. Indeed, as your Lordships will have noticed, one popular form of description still is the guinea. Most ladies' clothes are still priced in guineas. But I cannot remember in my lifetime ever having gone to a shop and presented a guinea. The price ending seems to be a very small point in this discussion. What is important is that we have to think all the time of the simplicity of the system; and the more halves we introduce, whether they are called 0.5 or a half, the more the cash transactions are slowed down.

The noble Lord, Lord Crowther, and the noble Lord, Lord Sinclair, called in aid very powerful battalions of people who were supporting the retention of the 6d. I do not think it is necessary for me to linger on that because, on the other hand, we have had equally big battalions speaking in the voices of the noble Lord, Lord Sainsbury, in his very able speech, and the noble Lord, Lord Hirshfield, who of course handles figures all the time. I feel it is unnecessary for me to attempt to answer the argument that this particular federation is in favour of the retention of the 6d. But I should like to emphasise the point made by the Chairman of the Retail Distributors' Association in a letter to the Financial Times, in which he said: Most sectors of retailing are now well advanced with their plans for decimalisation and these plans do not include the use of the sixpenny coin. I talked this week with a group of headmasters who are very concerned that they are not yet able to get on with the training of the children in this system because they are still waiting on events. If we are to wait, as the noble Lord, Lord Jacques, suggested, to have yet more research during the changeover period, surely it will again complicate this system which we want to see in operation. I thought that the noble Lord, Lord Jaques, was rather skilful in calling in aid of his argument my reply to him. I would say that I did not at any stage suggest the retention of the 6d.; I said that the banks would have to provide more shillings. I just want to put that right for the Record, in case I am re-shuffled next week on this account.

If we were starting the system from scratch, I would suggest it is quite unlikely that we should have 5p and also have the 6d. It is equally unlikely that we should think in terms of 2½. Certainly 2½ is half of 5, but, whether we call it 2.5 or 2½, we are introducing into the system a slowing-down factor.

I have here several replies to various of your Lordships who have raised specific points. The noble Lord, Lord Crowther, asked how you would buy something for 2½p. Well, I have worked that one out pretty quickly. You would give 1p, 1p and ½p, which I think would be roughly what you would be giving now. I have frequently bought things worth 5d. and given five pennies, or a 3d. piece and two pennies. In fact the number of coins handled would not be very different. That is in relation to what is now called the "tanner" and would be called the 2½p.


Would the noble Baroness forgive me? The noble Lord, Lord Beswick, intervened in the middle of my speech to say that he could not follow my argument. I fear that I must now return the compliment: I have difficulty in following the noble Baroness's argument. If it is now maintained that there is to be a long-term or semipermanent retention of the ½p coin, does not that destroy at once, at one blow, both of the arguments against this Amendment: about the difficulties of change-giving and also about the undesirability of retaining fractions.


The noble Lord made the point that he seemed to be under the impression that somebody (he did not make it quite clear which member of the Government) had said that the ½p— the new halfpenny—was likely to disappear. This, of course, is not true. It is unlikely to disappear for at least a generation. I am sure the noble Lord would not want, just because we have a ½p (and I get the feeling this was in response to some appeals made on the lines of the debate which we have had to-day; the ease of the consumer, and so on) to add to this, and have yet another fractional coin. In fact the ½p will be used as we now use the penny. And probably it will be used only in a very small number of cases, because—and I pointed this out to your Lordships in the last debate—if you were to look into your pockets right now you would find that you had far more coins of a larger rather than a smaller demomination. You call in aid the smaller ones only on certain occasions, unless you have been rather deliberately looking for sixpences in order to fill in the points in this debate.

Some reference has been made to the expense of abolishing the 6d. coin; or, it noble Lords prefer it, quite a number of noble Lords made reference to the abolition of the 6d., and the cost of doing so. Several figures have been given. The conversion of the 6d. machine was put by the Halsbury Committee at £3½ million. I am now prepared to advance the figure of £5 million. I think the noble Lord, Lord Ferrier (or perhaps it was the noble Viscount, Lord Stonehaven) suggested a larger figure. But that is the figure, for the Record, of changing the machines.

Now I come to the question of parking meters. There are something like 50,000 parking meters (perhaps the noble Lord, Lord Ferrier, knew this) which take 6d. That is the figure which is estimated, and that is quite a number. Those of us who live in London are certainly not used to the 6d. meter. I take it from reading the Reports of the debates on these occasions that the 6d. meters were to be found outside London. But if in fact a 6d. meter has now been changed to a 1s. one, I am sure the noble Lord will accept this is not decimalisation, but something that was going to happen. I do not think this is because of decimalisation.


I do not think there are any 1s. meters in Scotland.


I will not comment on that.


Before the noble Baroness leaves those figures, could she by any chance give any breakdown of that £5 million as between the Post Office telephone machines, and the private machines?


No, I cannot do this now; but I will let the noble Lord have that in due course.

So far as Scotland is concerned, I think it was the noble Viscount, Lord Stone-haven, who wanted some reassurance, and I am very happy to tell him that the Scottish thistle appears on the new 5p coin. So we hope that the Scottish Peers will not vote against us, at any rate on that score.

I think that if we were to go on for a long time debating this subject many of us would have already established a point of view—indeed, one of your Lordships mentioned that in any case he was committed to the 10s. system, and his argument stemmed, therefore, from this. What I do beg your Lordships to appreciate is this: if industry, education, and the trades generally, are to get on with the training schemes for this new currency, we cannot delay any longer. We have to think in different terms; we have to think in decimals. We must not continue to think in the old system. I beg your Lordships to appreciate that much research has been done on this matter. Lord Sainsbury's firm has done very interesting experiments on this, and has shown that the shoppers do not need the 6d. May I beg your Lordships to think into the future. I believe that we are getting a reputation for being a very forward-thinking House. May I to-day ask you to think into the future, into decimal coinage, and not back to the 6d.; and, therefore, to reject the Amendment?

5.18 p.m.


The noble Baroness always disarms criticism by the great charm and courtesy with which she speaks. I am sorry the Government have taken an intransigent view in regard to this Amendment. For the information of those of your Lordships who do net take the Opposition Whip, so far as we are concerned on this side of the House it will be an entirely free vote, and I wish that on matters of this kind there could always be a free vote in all parts of your Lordships' House. This is such a good example of a subject on which your Lordships can benefit so much from the advice of those Members of the House who have special knowledge on this subject, more than perhaps any other Assembly in the world, and this knowledge can he more valuably used if it is not guided too much by the usual channels. I thought that the noble Lord, Lord Hirshfield, seemed to take credit to himself for the fact that he was not taking a Party political view on this question. I cannot imagine how anybody could find it remotely possible to take a Party political view on this question of whether we are going to keep 6d. or whether we are going to be content with 2p instead.

I have put my name down to this Amendment, although I know much less about the subject, and have had much less experience of these matters than any of your Lordships who have spoken. But I listened with very great interest to all that has been said, both for and against the Amendment. I think the noble Lord, Lord Sainsbury, who has very great business experience in these matters, will probably agree that, although he may he right, he is the minority among those interests and bodies who have expressed their views to many of your Lordships. I thought the noble Lord was quite right when he said that 2½ cents, which is 6d., will be illogical under our new currency. It is illogical, but so is the new ½p—much more illogical—and it is the new ½p which makes it necessary to have three places of decimals instead of two.

As many of your Lordships have pointed out in this discussion, all these troubles and difficulties would have been avoided if, as many of us wanted, we had adopted the 10s. pound instead of the 20s. pound. We should then have had the present new ½p, which would have been a penny or a cent, and we should have had the present 6d., which would have been 5 cents, instead of 2½p as it is going to be temporarily now; and 1s. would have been 10 cents and so on. But what we must consider now is what to do about the 6d. having lost our fight on the 10s. pound.

I would just point out again to your Lordships that this is not an Amendment, as I think the mover clearly explained, to make the 6d. permanent in our new currency. It is only an Amendment to prevent us from committing ourselves to the abolition of the 6d. 18 months after the changeover period has come to an end. That is all that the Amendment does. The reasons I will not go into again because they have been gone into thoroughly already. I think there is a good deal to be said on the point of temporary saving of expense in regard to meters and coin machines. I do not think that any of your Lordships has really put this forward, or would wish to put it forward, on grounds of sentiment or feeling of tradition about this coin. But what most of us do feel very apprehensive about is that the premature disappearance of this coin will have a real adverse effect on the rise of prices, especially to small people making small purchases—consumers who are buying goods in the shops.

No one, I think, has suggested keeping the 6d. after the ½p is abolished, if that should happen; and it was foreshadowed, your Lordships will remember, by the Halsbury Committee. They took the rather large view that in twenty or thirty years' time we should have had so much inflation that this ½p would be of no service at all. I thought that that was a rather pessimistic view. However, it may be a true one. But if for any reason the should eventually be abolished—the noble Baroness said she thought it would go on for twenty years, and she may be about right—no one would suggest continuing the 6d. after that. We are not arguing for having 2½p without a ½p; we are arguing only for having temporarily a ½d. and 2½d. And we are not proposing that the 2½p should necessarily be prolonged for as long a period as the ½d. What I should have hoped is that the Government would have adopted the suggestion of the noble Lord, Lord Jacques, which I thought was a very sensible one, that they should set up a research body to find out what is happening, what the effect on prices was as we went along, and that we should not abolish the 6d. until after we were quite satisfied that it would have no adverse effect on the rise in prices.

There are going to be so many factors which in any event will tend to push up prices. People who attack the Conservative agricultural policy say that it will put up prices; and people who defend it say, "Yes, it will, but not so much as the Government, who are putting up prices every six months anyhow". But however that may be, there are a great many factors which are going to tend to create inflationary pressure. And we fear that the abolition of the 6d. will encourage a rounding up. It may get some encouragement from the last table in this Blue Paper which I have in my hand, in which it is proposed that after the changeover the 6d. will be exchangeable for 3p, which is a move in favour of inflation.

Of course, some of the new equivalents go the other way, and to do the Paper justice I must add that paragraph 48 says that it is meant to be fair to both sides and a balance is intended to be struck which overall, says the Paper, is equitable both to creditors and to debtors; and I accept that that is the intention of this new valuation. But so many prices are habitually fixed in terms of 6d. pieces. The fact that the 6d. in this last statement is equivalent to 7.2d. means an increase in value by something like one-fifth in favour of inflation,

and while some of the other equivalents may correct that, what we fear is that the great multiplicity of traditional prices which have been fixed in sixpences will have the effect of making the average round-up upwards instead of downwards. It is for that reason that I would have wished that Lord Jacques's suggestion could have been accepted by the Government. I do not think it will do any harm to keep the 6d. a little longer. We are not ourselves seeking to keep it for ever. All we are asking your Lordships to do is to say that we are not going to commit ourselves to abolishing it 18 months after the changeover.

5.26 p.m.

On Question, Whether the said Amendment (No. 1) shall be agreed to?

Their Lordships divided: Contents 74; Not Contents 66.

Aberdeen and Temair, M. Douglas of Barloch, L. Mowbray and Stourton, L.
Airedale, L. Dudley, L. Perth, E.
Albemarle, E. Dundee, E. Rankeillour, L.
Amherst of Hackney, L. Elgin and Kincardine, E. Redesdale, L.
Amulree, L. Ferrier, L. Rennell, L.
Ashbourne, L. Foot, L. St. Helens, L.
Auckland, L. Glasgow, E. St. Oswald, L.
Audley, Bs. Goschen, V. Salisbury, M.
Balerno, L. Gray, L. Sandford, L.
Barrington, V. Grenfell, L. Sandys, L.
Belstead, L. Gridley, L. Selkirk, E.
Berkeley, Bs. Grimston of Westbury, L. Sempill, Ly.
Brecon, L. Hacking, L. Sinclair of Cleeve, L. [Teller.]
Brooke of Cumnor, L. Hanworth, V. Somers, L.
Brooke of Ystradfellte, Bs. Hawke, L. Stamp, L.
Carrington, L. Howard of Glossop, L. Stonehaven, V.
Conesford, L. Hylton-Foster, Bs. Stradbroke, E.
Cork and Orrery, E. Ironside, L. Strang, L.
Craigavon, V. Jellicoe, E. Strange, L.
Cranbrook, E. Killearn, L. Strange of Knokin, Bs.
Crowther, L. [Teller.] Lauderdale, E. Strathcarron, L.
Daventry, V. McCorquodale of Newton, L. Vivian, L.
Denham, L. Merrivale, L. Wakefield of Kendal, L.
Devonport, V. Milverton, L. Yarborough, E.
Dilhorne, V. Morrison, L.
Addison, V. Delacourt-Smith, L. Hilton of Upton, L. [Teller.]
Aylestone, L. Douglass of Cleveland, L. Hirshfield, L.
Bessborough, E. Emmet of Amberley, Bs. Jacques, L.
Beswick, L. Erroll of Hale, L. Kennet, L.
Boothby, L. Evans of Hungershall, L. Lindgren, L.
Bowles, L. [Teller.] Gardiner, L. (L. Chancellor.) Llewelyn-Davies of Hastoe, Bs.
Brown, L. Garnsworthy, L. Lloyd of Hampstead, L.
Buckinghamshire, E. Geddes of Epsom, L. McLeavy, L.
Burden, L. Gifford, L. Milner of Leeds, L.
Burton of Coventry, Bs. Granville-West, L. Mitchison, L.
Chalfont, L. Haddington, E. Molson, L.
Champion, L. Hall, V. Morris of Kenwood, L.
Chorley, L. Hankey, L. Nunburnholme, L.
Clwyd, L. Hill of Wivenhoe, L. Phillips, Bs.
Platt, L. Shackleton, L. (L. Privy Seal.) Taylor of Mansfield, L.
Plummer, Bs. Shannon, E. Walston, L.
Poppleweil, L. Snow, L. Wilberforce, L.
Royle, L. Sorensen, L. Wilson of Langside, L.
Ruthven of Freeland, Ly. Stonham, L. Winterbottom, L.
Sainsbury, L. Stow Hill, L. Wise, L.
St. Davids, V. Strabolgi, L. Wootton of Abinger, Bs
Serota, Bs. Summerskill, Bs. Wynne-Jones, L.

On Question, Motion agreed to.

Resolved in the affirmative, and Amendment agreed to accordingly.

Clause 1, as amended, agreed to.

5.37 p.m.

LORD SINCLAIR OF CLEEVE moved Amendment No. 2:

After Clause 1 insert the following new clause:

Additional coinage of the new currency

". Schedule 1 to the Decimal Currency Act 1967 shall be amended by inserting after the entry relating to Five new pence the entry

Two-and-a-half new pence 2.82759 1.9405 Three quarters copper, one-quarter nickel .0188"

The noble Lord said: As I explained earlier this afternoon, this Amendment is a necessary corollary to the first Amendment which has just been carried. This Amendment puts the new 2½p coin in its proper shape, designation and form. I beg to move.


Although the noble Lord says this is a necessary corollary, it is not that at all. The implication of this Amendment is that the 6d. coin would be retained as a permanent feature of the currency. My feeling was that there were a number of noble Lords who felt that there should be a further trial period during which the 6d. should be allowed, as some noble Lords put it, to "die out". If this Amendment were to be incorporated in the Bill it would not be possible for the coin to die out. I feel we should take another Division here to find out the opinion of the Committee, and I very much hope noble Lords will come to the conclusion that it is not necessary for this House to say that in the future, in what purports to be a decimal currency system, there shall be this obsolete 6d.


I should like to answer that. In terms of the Amendment which was earlier debated we were seeking to secure—and by the carrying of the Amendment I hope we have secured—a continuance of the 6d. beyond the transitional period. In order that it shall continue beyond the transitional period it is desirable and necessary that it should have a form which is consistent with the general proposals for the new decimal currency—that is to say, half a shilling—and that is what this will be. It is in exactly the same terms as regards size and description and weight as was moved in another place. Acceptance of this Amendment does not mean that the 6d. must be with us for ever. It merely means that it can take its place after the transitional period to serve such a life as may prove to be convenient and useful. It means no more than that. It can be subsequently demonetised, if the Government of the day so decide. That, at any rate, is what I understand to be the purpose of this Amendment.


If it was felt necessary after adopting the previous Amendment, what the noble Lord intends to secure could be secured by proclamation under Section 11 of the Coinage Act 1870 and Section 2(3) of the Decimal Currency Act 1967. If this Amendment were carried, it would give the impression that we are proposing for the future that there should be a 2½p piece, and we should be adding another element of uncertainty. Much of the argument was on the basis of helping the consumer over the period of uncertainty. If this Amendment goes in, the machine manufacturers about whom the noble Lord, Lord Crowther, speaks really will not know where they stand.


I think my noble friend Lord Sinclair has made it quite plain that he does not intend to do more than remove the commitment to abolish the 6d. in the middle of 1972. I think he may be right in saying that this second Amendment is properly related to that. But if the Government tell us that in their opinion that is not the effect of this Amendment, I am sure my noble friend would not wish to press the matter now.


I will not press it so long as we understand—and I take it from what the noble Lord said that we can understand—that the Government will give serious consideration to the point I just made, that there would seem to be strong practical reasons for having such an Amendment as this. I will not press the Amendment at the moment, if the Government undertake to consider it in the light of the best technical advice they can obtain.


I have told the noble Lord that so far as the practical considerations that he has in mind are concerned, they can be covered, if necessary, by other means.

On Question, Amendment negatived.

Remaining clauses agreed to.

Schedule 1 [Method of calculating in certain cases the amount in new pence corresponding to an amount in shillings and pence]:

5.45 p.m.

LORD AIREDALE moved Amendment No. 3: Page 16, leave out lines 32 to 42.

The noble Lord said: This is an Amendment to Schedule 1, which attaches to Clause 3 of the Bill, which provides for conversion at the appointed time of money in writing in the form of, for instance, cheques, postal orders, bank statements and so on. The accepted principle is that these newly expressed sums of money shall be in whole new pence without any fractions. Therefore it is necessary to have a conversion table for converting the old shillings and pence into whole new pence. The question is whether we have a table going up to 1s. or, as the Government propose, a table going up to 1s. 11d.

I think that anyone looking at this problem completely afresh would say that the obvious solution must be to have a table going up to 1s., because surely you convert first your old shillings and then your old pence. The shillings are very easy to convert, because the shilling is 5p, and the only problem is the conversion of the old pence. It is a bit of a problem because in no case, I think I am right in saying, does any number of old pence up to 1s. convert exactly into any whole number of new pence. It is not a very difficult problem in most cases, because in most cases there is an obvious r umber of new pence which is almost the equivalent of the old pence; and it is only when you come to the 6d.—I am sorry we are back with that—that a bit of a problem arises. As every noble Lord knows by now, the old 6d. is 2½p. The question is, do you round it up to 3p or down to 2½p? Her Majesty's Government had to decide one way or the other, and they have decided to round it up to 3p.

Having done that, they were apparently rather appalled at what they had done, and they said, "We must atone. How shall we do it?" And apparently they had the bright notion that they could round down the 1s. 6d. in compensation for having rounded up the 6d. So they published a 2s. table, or, to be quite exact, a 1s. 11d. conversion table, in which your Lordships will see that whereas the 6d. has been rounded up from 2½p to 3p, the 1s. 6d. has been rounded down from 7½p to 7p. This, I think I am right in saying—and I shall surely be told if I am wrong—is the sole reason for having the 1s. 11d. conversion table instead of the simpler one only to 1s.

The Government's argument, as I understand it, is that you get equalisation this way, because what people will lose or win on the 6d. conversion they will win or lose on the 1s. 6d. conversion. But this is false; it does not follow. I know what my luck will be on conversion day: in all my 6d. transactions I shall be a debtor and I shall lose by the rounding up, and in all my 1s. 6d. transactions I shall be the creditor and shall lose by the rounding down. If we were all born creditors or debtors and remained so for all our lives no doubt this wonderful equalisation scheme would work in practice. But in fact it will not.

The Bankers Association, the Finance Houses Association, the Trustees Savings Bank Association and others are most strongly in favour of abandoning this tiresome 1s. 11d. conversion table and sticking to the much simpler 1s. conversion table. What is rather striking about this is that the banks are going to lose money if they have their way. The banks point out that most of their customers' accounts are in credit, so that every time a bank converts a banking account ending in 6d., under their own proposals they will be rounding it up from 2½p to 3p and the banks will be losing on the deal. I do not usually find the banks setting out to lose money without a good reason, and I should have thought if they were prepared, for the sake of this simplicity of operation, to lose money over it, that was a pretty weighty reason for Her Majesty's Government to think again whether it was not more practical and better to have a conversion table going up to 1s. in preference to this 1s. 11d. monstrosity. I beg to move.

5.50 p.m.


Of course I remember that the noble Lord, Lord Airedale, made this point on Second Reading and I had anticipated that he would move an Amendment to the same effect. I would at once say to the noble Lord that it is true that the short table which he suggests would be more convenient administratively, and the long table which it is my business to defend is based on equity. I am sorry that the noble Lord feels that the banks are going to cheat themselves; but I am sure he will agree that it has always been common practice, even in general book-keeping, with which I have been a great deal concerned, that what one called the rounding-up in connection with ½d. was that you took the ½d. off and you transferred it on to something else.

This is, in fact, merely another technique within that transaction; and while the noble Lord says that we are not all debtors and creditors, in connection with the transactions with which these tables will be concerned surely it is true that we are all either debtors or creditors. This is really a rounding-off, merely carrying out the old principle in the £ s. d. system but transferring it to the decimal system. Therefore I hope that the noble Lord will accept that this table will be quite fair in application, that there is no need to memorise these figures because people will be working on tables, and that in the end it will work out quite fairly because the rounding-off will apply both ways. I hope that the noble Lord will accept that.


I should have thought there was a great advantage in not having to use tables, and that people who will have to operate this system in banks, building societies and so on, would quickly be able to memorise a table of pence up to 11d. but that they would not be able to memorise a table up to 1s. 11d. and would continually have to be looking at the table. If for the sake of simplicity, by having a simple table instead of a complicated one, the banks were prepared to lose money, I should have thought there was something to be said for it. But I have not got the overwhelming support from your Lordships that I hoped to receive, and I do not think it would be worth my taking this matter to a Division; so I propose to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

First Schedule agreed to.

Remaining Schedules agreed to.

House resumed: Bill reported with an Amendment.