DECIMAL COINAGE BILL

HC Deb 04 May 1962 vol 658 cc1404-49

1.37 p.m.

Mr. Wilfred Proudfoot (Cleveland)

I beg to move, That the Bill be now read a Second time.

I am pleased that today the House has been debating non-party matters. This also is a non-party matter. From my researches into this subject, I believe that this is the first debate which the House of Commons has had on this subject for over 100 years. Tribute should be paid to the late Mont Follick, who tried so hard and for so long to have it fully debated but who never quite succeeded. He had Adjournment debates, such as that which my hon. Friend the Member for Taunton (Mr. du Cann) attempted to have earlier this Session but which was ruled out of order by the Chair because the matter involved legislation.

Two years ago, when I first took an interest in this subject, I was lucky enough to get a place in the Ballot for Private Members' Motions. Unfortunately, I was second on the list and I was not able to make the speech which I wished to make. I have certainly learned a great deal about the procedure of the House and about decimal coinage since that day. In the last two years, the public's outlook and, indeed, the Government's outlook on decimal coinage have changed enormously. Perhaps typical of the British way of going about things is the fact that we have done it gently without spilling any blood. Russia got decimal coinage at the time of her revolution. I am sure that we do not want such a thing as that in order to have decimal coinage here.

Out of 231 currencies in use in the world today, 203 are decimal currencies. Since this subject received so much publicity, a great deal has been said in the newspapers and in discussions about other types of coinage systems which we might adopt. A great body of opinion supports a duodecimal system. Professor A. C. Aitken has become quite prominent in this sphere, and he has sent me many letters on this subject. However, I cannot agree with him that a duodecimal system would be helpful. We should be the only country to have such a system. I do not think that the public would ever take to a system under which we had to invent two new figures. I am not a sufficiently good mathematician to be able to deal in duodecimals, although I believe that some professions in our community do so.

When I first approached this subject I told the older of my two small sons about it and he said, "Hooray, if it will save me time in arithmetic". That is one of the advantages to be gained from the use of decimals. The saving of teaching time in mathematics alone for children under 11 would be between 5 and 10 per cent., while for 11-year-olds it would be 2 per cent. of total teaching time. A few weeks ago the headmaster of a school in my constituency said that if he could drop the teaching of £ s. d. and go straight to decimals he could start the teaching of a second language. With the Common Market negotiations and the present shape of the world that would be very useful. He said that he could start the teaching of that second language for 7 or 8-year-olds. I tremble to think of what my small boy might think about that.

I am glad to see that the Economic Secretary has a copy of the most useful Joint Report of the British Association for the Advancement of Science and the Association of British Chambers of Commerce. Since reading this report, I have tested some of the calculations and find that the figure of a saving of 30 per cent. in time in the normal office calculations is completely accurate and that of a 50 per cent. reduction in errors in similar problems in offices very accurate.

The amount of arithmetic which has to be used in our antiquated system of money is surprising. If there is a simple addition involving five sums of money, one has to start in the halfpenny column and add up all the halfpennies and then divide by two; one then adds up all the pence in tens and units and divides by twelve; then one adds up all the shillings in tens and units and divides by twenty; and finally one arrives at the main unit.

The complication of that is incredible, and we are able to do it only because we are taught how at a very youthful age. The system is awkward and cumbersome. Its awkwardness was brought home to me a few weeks ago when I was eating in a London restaurant. I saw four American ladies—they looked like school teachers on a round-the-world trip—whose bill came to £5 3s. 9d. Hon. Members can imagine someone with a lifelong experience of only decimal coinage trying to divide up that sort of sum.

I think that I should tell the House how far the campaign for decimal coinage has gone. On 19th December, last year, the Chancellor made a statement when he said: I can promise a quick decision. In reply to the Leader of the Opposition, he said: … the Committee is not being asked to consider the question of 'whether', but … 'how'. I can say quite frankly that, should its recommendations, or the results of its investigations, appear to present very grave financial and other difficulties, the Government would have to reconsider the question of 'whether'; but the Committee is being asked to consider not 'whether', but methods."—[OFFICIAL REPORT, 19th December, 1961; Vol. 651, c. 1135–36.] That is quite an advance. The Halsbury Committee was set up to find out how much a decimal system would cost and what system should be used. Because the Government have decided to have a decimal coinage, if the cost is right—the House cannot today decide how much the cost will be—the debate should swing on what to call the coins which would be created by a new system and the choice of system.

Personally, I find that the names of these things do not worry me very much so long as the money in my pocket is spendable; in other words, so long as I can exchange my efforts for the goods and services I want, I am concerned only with whether the arithmetic involved is easy enough to be of great use to the community.

Mr. Peter Emery (Reading)

It is all very well for my hon. Friend the Member for Cleveland (Mr. Proudfoot) to say that the names of these coins do not worry him very much, but he must be cognisant of the fact that many people are concerned about the names of the money with which they have grown up and which they associate with part of British history and British prestige. Would he not say that there is a great deal more in the naming of the new units of money than he has suggested?

Mr. Proudfoot

Indeed I would, but, as I have tried carefully to explain, my personal attitude is to ask, "What is in a name?" In the last few months I have heard names like royals, nobles, sovereigns and even "Selwyns" bandied about as possible names for the units.

What has surprised me is that none of the feature editors of our more popular daily newspapers has run a competition about what to call the new coins, offering half a dozen of the latest model automobiles as prizes. The Daily Express ran a competition when television began about what the new medium should be called—Video, T.V., or television. Public usage, of course, decided the issue in the end. I am sure that my hon. Friend, the Member for Reading (Mr. Emery) will agree that whatever the House decides to call the coins, the public will have a nickname. He has only to cast his mind over "quid" for £, "tanner" for sixpence and "diddler" for threepenny-piece.

Strangely enough, to judge from the many letters which I have had about various systems, letters running into several hundreds, I have found that this subject appears to be the preserve of retired brigadiers. They seem to spend a high proportion of their time working out systems of decimal coinage and names for them.

Today we have to consider the conditions which a system of decimal coinage must fulfil. I acknowledge that there is a mystique of the symbol £ which means so much in the world's currencies. The great barrier to a decimal system is that to change the value of the £ might be regarded by foreigners as devaluation and not just a change of system. But I am sure that that barrier would be at its strongest in the Treasury itself. I am sure that if the Treasury were worried by the fear that to change to a system of decimal coinage would be regarded as devaluation, the Government would not have their present attitude. I think that these fears can be exaggerated, especially in a world where Africa has changed or is changing and India, New Zealand and Australia are having reports on or are considering changing over to decimal coinage. I am sure that those changes would lighten any possible blow in that respect.

While referring to this symbol of the £, I should refer to at least two letters which I have had from residents in Britain which were concerned with the fear of Americanisation and the use of cents and dollars instead of £ s. d. One of the letters was from a Mr. Vencatarahmen, which is an Indian name, and the other gentleman had a Chinese name which I cannot remember although I can assure the House that it was not Chou En-lai. They were worried about losing the £ sterling!

A few months ago I was in Germany at a convention considering voluntary chains in the food business. The day after the convention I found myself among some British wholesalers at a Press conference and I was startled when, half way through that Press conference, the assembled German journalists suddenly said that I was interested in decimal coinage. Lo and behold! much to my surprise, I found that the rest of the conference was devoted to the nature of such a decimal coinage. I spoke of this to someone who knows Europe well and who said that I should not be astounded at this turn of events because, although as an Englishman I would not appreciate it, the coinage barrier was probably a greater mental barrier between Europe and Britain than the physical barrier of the English Channel. Until those German journalists turned on me like that, I had not appreciated what a barrier our coinage was.

Associatability of values is part of the crux of the matter when one considers the conditions which a system must fulfil. It is important that the public should be able easily to associate the new with the old coins, or people would otherwise feel that they were being robbed when they went into a retailer's store. Such a feeling would make the change-over more difficult. Associatability must also recognise that in business and government there have to be comparisons with previous figures and statistics so that performance may be judged. When I speak on this subject I always feel the need for a blackboard, because it is an awkward subject to discuss in the House. It may be much easier in Committee when one can answer each point as it arises.

When one discusses what system is to be adopted, one must first decide whether to start at the top level, with the £, and work downwards, or at the bottom with the halfpenny and build up. It is here that the debate becomes most interesting. If we take the £, we will obviously have to split it into units of hundreds or thousands, and if we take the halfpenny we will obviously have to build upwards in hundreds.

This decision also involves the decision on having a two-point or three-point system, in other words, two or three places to the right of the decimal point. In discussing this one must consider the usefulness of the halfpenny. When the Chamber of Commerce report was published, the farthing was still legal tender, but now, thank goodness, it has gone. The report points out that the present halfpenny is worth less than a farthing of fifty years ago and we have to ask whether in any system today it is necessary to have a coin as small as a halfpenny.

A few weeks ago, I took stock in one of my stores and was interested to discover that halfpennies in my stock accounted for only 1 per cent. of total stock. The halfpenny could vanish without a great deal of change to the cost of living and to the cost of retail goods in stores because, while one would gain on some commodities, one would lose on others. The report said that one of the reasons for the use of halfpennies was that daily newspapers cost 2½d., but today they cost 3d. The need for the halfpenny can be over-emphasised. As hon. Members know, banks and accounting firms do not recognise them in their calculations and I think that we can probably get along quite happily without them.

Once it is decided that the £ must be kept I think that I can explain this system better by using the word cent, which will only be a term for use in this discussion, to show that we have a reduction of the £ into a hundred parts and if I use the word mil., that means a thousandth part. I am frightened of using the word cent or dollar during the debate because I feel that the public may have a distaste of the use of these words in connection with their currency.

If we take the £ and divide it by one hundred, our minimum unit would be 2.4d. or about 2½d. This is too great a unit for smaller transactions, such as bus fares and the hundred and one things still purchasable below the cost of 2½d.

We should then be forced for retail transactions to go into quarter, half and three-quarter cents, as it were, to enable smaller purchases to be made. This is the reason why this system should not be adopted. Our business machines in offices could ignore the quarter, half, and three-quarter cents but not the whole cent, which would be 2.4d. When we come to the cash registers there would have to be a different attitude. We should have to retain the quarter, half and three-quarter cent on cash registers for retail transactions, and for this reason it would make it very difficult to adopt it. Incidentally, the new half cent in this respect would be equal to l.2d., a difference of 20 per cent., but as we go higher the difference vanishes. It would make virtually no difference to retail prices and the cost of living.

The £ mil. system would mean that we would take the £ and split it into 1,000 parts. If we did that the smallest unit that we could have would be less than 4 per cent. of yesterday's farthing, which in my opinion would be too small. We should have to do it with coins of 5 mils which again would be the equivalent of l.2d.

This would mean a three-point system. In other words, there would be three decimal places to the right of the main unit. This is not impossible. It is done in Italy and Egypt, but I believe that the two-point system would be more desirable. It would give greater capacity for our accounting machines and it is the more normal system throughout the rest of the world. Adding up these figures in small retail transactions, of which there are millions every day, would be awkward for the housewife to calculate in these coins. The shilling or the medium unit would vanish completely in this respect.

There is also the fact that accountants and bankers could not use the last point, as it were. If they did so, and they would be forced to, it would need an unnecessary amount of accuracy to the third decimal place. They would be back to working with farthings. This would be both awkward and unnecessary.

The next system which should be considered and rejected is the shilling decime—that is one-tenth of a shilling. It would mean making the shilling the biggest unit, and dividing by ten. If this were done, it would be known that a half decime would come in at a value of l.2d.

This would cut down the value of business machines for a different reason. In other words, a person might find himself buying a Triumph Herald for 14,000 shillings, as it were. When one looks at the Deutschmark or the Spanish peseta one can get an idea of the retail prices in the stores. They look enormous, and this, again, is an unnecessary complication.

When tackling this business of decimalising our coinage we have to remember that our £ is still the biggest unit of currency in the world. This has its drawbacks. In this respect, we have had almost enough inflation, but if the £ had been worth less we could have decimalised our currency much more easily.

The other system that one must consider is that of starting at the smallest unit and building upwards. It would mean taking the penny and building up to 100d. or 8s. 4d. which would be the main unit. This would have the great advantage that the smaller articles would have no alterations made in their price. We would still be able to buy a packet of chewing gum for 2d. But when we got to the main unit there would be confusion in people's minds. Also, in regard to the associatability of values, the working out of old statistics for comparison purposes would be that much more difficult than preserving the £, or adopting any other system.

The other thing that we could do would be to use the ½d. as the main unit, build up to the 4s. 2d. unit and give it a new name. I believe that the system which is most desirable should be called a 10s. cent system. In the Bill, I have called the main unit a new £. I admit that I cribbed this from the introduction by the French of the new franc. If we call it a new £, eventually we will get back to the title of the £, and in this way today's £ will be worth two new £s. It has the advantage of being an easy ratio for comparison pur poses. It would lead to a new penny of 1.2 pence, and the difference at the smaller amounts would be 20 per cent., but as soon as we got above 2½d. the greatest variance in value would be 5 per cent.

Since the Chancellor made his announcement, many trade organisations, representing accountants, sales managers, etc., and their associations, have decided that if we are to have decimal coinage this would be the system which would suit them best. If this system were adopted, everyone's bank balance would double overnight. I must frankly admit that at the same time my overdraft would be doubled, but I think that the public would rapidly learn to use this new system of coinage. Indeed, in India, with 80 per cent. illiteracy, we see them moving over rapidly and easily to decimal coinage. South Africa provides much the same sort of picture and in the last two years I have collected an enormous amount of material on this subject. It has been sent to me from various parts of the world.

In South Africa a broadsheet such as the one I have here was published in two languages at Government expense and distributed to everyone to let them know how the new system would work. The people who sell cash registers and accounting machines produced simple well-illustrated booklets to demonstrate how the arithmetic of the new system would affect retailers, and so on, and it is the retailers and bus conductors of this country who would virtually take on the job of teaching the public how to use the new coinage.

It must be admitted that it would take perhaps two or three years to change over to the new system. In other words, we would have two kinds of currency being used at the same time, just as we have the old and new £ notes in circulation together. The old £ notes are now beginning to vanish, and eventually the old coins would vanish.

It would not be difficult to operate the two coinages until the old one disappeared. I have talked to people who operate cash registers in Bermuda. They deal with three kinds of currency. They accept Canadian dollars, American dollars, and English money. The cashiers there are able to deal with the different coinages, and so are the public.

One of the smaller thrills in going on a Continental holiday is starting to use a new type of coin. Whenever I go to a country with a decimal coinage system, I do not experience any great difficulty in doing the arithmetic necessary to convert my money. In fact, one has only to stay in another country for about a month, to find on returning home that one starts working out the cost of the goods in the currency of the country which one has just left.

One retailer in my town recently adopted dual pricing of his goods. He put the two prices on the goods in his windows—the sterling price, and its equivalent in decimal coinage. It was a kind of gimmick and people went to his shop to see how the system would work.

The House will have noticed that this Bill is based on a South African Bill of a similar nature. I think that the setting up of a decimalisation board is the most obvious and practical way of going about dealing with this problem. This is referred to in the Bill, and I imagine that this is a "must" if we are eventually to achieve decimal coinage. Another Clause also refers to compensation, and I admit that it would be the responsibility of the community to compensate people who own adding machines and cash registers and were put to some expense to change over to the new system. From talks that I have had with people who sell cash registers, I learn that it would be possible to convert registers up to fifteen years' old. No difficulty has been experienced in South Africa in converting these machines.

Cash registers are, of course, not the only machines that would have to be altered, and perhaps I might give the House a list of the machines that would need to be adapted. Cash registers—and the number is surprisingly low—390,000; adding machines—225,000; calculating machines—65,000; accounting machines—85,000; franking machines—40,000; price computing scales—800,000; petrol pumps—25,000; coin operated vending machines—150,000; telephone kiosks—150,000; G.P.O. stamp machines—22,000; and 13,500 taxi-meters. This report was issued before parking meters were introduced, so they too would have to be added to the list.

It is estimated that the cost of altering those machines would be about £128 million, but in case that figure staggers the House, the report points out that savings to the community would amount to £44 million a year. Of course nobody, no matter how enthusiastic about this, could claim that five years after decimalisation we should still be saving £44 million a year, but the increase in efficiency would obviously be there ad infinitum.

This is merely a business decision, and I do not think that it ought to be rated higher than that. It is a business decision that ought to be taken in the interests of efficiency. When one considers it, one realises that decimal coinage would affect the community with extraordinary rapidity. Indeed, I think that its effect would be felt more rapidly even than the advent of war. In the wilder parts of Yorkshire the only significance of the commencement of the war was that the price of ham jumped extraordinarily high. Overnight everybody would realise that something had happened in the community if the change that I am proposing were brought about. I think that we are on the threshold of great changes. If we can break through and discard some of the more useless and cumbersome traditions and accept the Bill, it will enable us to condition ourselves to what lies ahead.

2.8 p.m.

Sir Barnett Janner (Leicester, North-West)

I congratulate the hon. Member for Cleveland (Mr. Proudfoot), on introducing this Measure and on the simple way in which he has managed to present what must necessarily be a complicated and technical Bill.

The important point is that we are considering whether some method should be utilised now to bring ourselves into line with general opinion in the world, that the decimal system should be used universally. Decimal coinage, of course, is not used in every part of the world, but in those countries where it is used it is regarded as being extremely effective and simple. It does not require the calculations that not only disturb the minds of our youngsters who have to learn complicated tables and variations of those tables but cause considerable difficulties in accounting in all aspects of industrial and general life.

When I travel abroad I sometimes wonder why this country has remained for so long in its present confused state of calculation. It only requires the examination of a set of tables and a glance at the bemused look that comes upon the face of the visitor who is trying to work out here the value of various articles in his own coinage—apart altogether from the difficulty which teachers experience when trying to drive into the heads of our youngsters what it is all about—to realise that our present system is untidy, if nothing else.

To anyone coming here from a country which uses the decimal system our system is ununderstandable. Our whole lives would be made a little more pleasant if we did not have to delve into the fractions and calculations that have to be made in dealing with the most ordinary incidents. Ultimately, much expense would be saved if we used a decimal coinage, and employed decimals in other measurements. Calculating machines would be very much simpler. At present even the housewife has difficulty in making calculations when she is shopping. The position would be considerably eased and we should become more reasonable human beings if we used the decimal system.

I know of no system of calculation which is more easily understandable and easier to use than the decimal system. It so happens that we are ten fingered. This is the origin of the decimal system, as it is of our numbers—Roman figures, up to the use of the upright five and the upside down five to give the figure ten which very few people realise represents the farthest extent to which digits can take us—and it has worked in such a way as to create a very simple form of calculation. Our numbers are arranged in tens—we do not seem to be able to get beyond ten in our basic figures—but the strange thing is that when we deal with coinage, weights and measures, we work in twelves and other various artificial multiples, which have no basis. Perhaps there is a kind of tradition attached to them, and we have become used to them.

The third "R" would be very much easier to learn for everybody, including hon. Members, if we had a decimal system. The real question is: would it be too big a step to take to change to a decimal system? It certainly would be a big step. The Conservative Government dislike change. They must do, or they would stop using the word "Conservative", and would use the word "Progressive" or "Labour". They say, "Let things remain as they are, and make the best of them". That has been all very well up to now, but I am sure that in their hearts they know that the position is ridiculous. When we make calculations concerning foreign exchange we begin messing things up and making mistakes. The Government make mistakes. I am told that even the Treasury occasionally makes mistakes. I am sure that it is not beyond the highly qualified and eminently skilful people in the Treasury to make an occasional mistake in all these fractional calculations.

It would be much easier for the machines of the electronic age. They would be much more simply constructed if they had to deal only with tens.

Mr. Bruce Millan (Glasgow, Craigton) indicated dissent.

Sir B. Janner

My hon. Friend the Member for Glasgow, Craigton (Mr. Millan) disagrees. I should have thought that even an electronic brain would find it easier to deal with decimals than with our present fractions.

The question is, what is the best way to change? I hope that we shall hear that from the Minister. Is the system which the hon. Member for Cleveland proposes the one that we should adopt, or has the ingenuity of the Minister's Department devised a better one? Having looked through the Bill, I have come to the conclusion that the system laid down in it is as good as any, but I am not an authority on the matter. I have not studied it as deeply as has the hon. Member for Cleveland. He has put forward a reasonable suggestion. We cannot force this kind of thing upon a community which has been accustomed for so many years to a different system, and the hon. Member therefore suggests that there should be an interim arrangement to enable the change-over to take place by easy stages.

Not that it will be all that easy; there is bound to be a certain amount of confusion in changing to a new system, especially on the part of those who cannot work it out, or are too tired or too lazy to do so, or simply do not want to do so. We all know that the human mind often does not want to be bothered. That is what is wrong with the Conservative Government. That is why they now find themselves in an awful mess. But I do not want to upset the chances of the hon. Member's Bill by entering into political controversies.

While the switch-over takes place, there is bound to be some difficulty. As the hon. Member says, we must therefore have two systems running at the same time, for a certain period. That will not be a happy position, but in this age of curiosity it might even turn out that people will like dabbling with two kinds of money. They may find that it creates a little spice in life. What we want to know from the Minister is whether it will be the right kind of spice.

The important thing is that we should realise that we are behind the times. We are living in changing times. I do not know what will happen and I do not want to couple this subject with any political argument about the Common Market, but obviously if we enter the Common Market we shall have to do something about it and people' will have to think in these terms. We are a stolid people. I have had complaints made to me. Merchants abroad have said, "If you want trade and you send out catalogues, why don't you send them out in the language of the people with whom you want to do business and give your prices in terms of their coinage?" Many business houses do not do this. If it were done it would bring us closer towards explaining to people abroad what we want by way of trade. If our customers abroad have to work out prices in twelfths they will sometimes go mad. They want something which is easy to grasp.

I want the Minister to say today that he agrees that an alteration is necessary. Intelligent and capable as he is, I am sure that he will say what is in his mind. I hope that he will say that the present position is silly and that whilst we are all happy to remain in our ignorance, which may be bliss, and to carry on as we are, we know that it would be wise to introduce a change and make the decimal system our system.

I should also like the Minister to say something else. I appreciate that it is difficult to incorporate in a Private Member's Bill provisions which define the machinery of a complicated issue of this sort, but the hon. Member for Cleveland is to be congratulated on having put forward his suggestion. It may well be that the Treasury will think that it is the Tight suggestion. If not, I ask the Minister to compliment his hon. Friend, as no doubt he will do, and I ask him to say that it is the considered opinion of the Government that the time has come when we should make a change.

I also ask the Minister to say that there is no real merit, apart from a desire for laissez faire, in remaining attached to a system which is arbitrary and artificial and has no logic in it. Perhaps this system arose from a desire to be different. If so, it is an undesirable desire. If the Bill represents substantially what the Minister feels is the right method to pursue, he should allow it to be read a Second time so that it can be amended if necessary in Committee, If, on the other hand, he is satisfied that the provisions of the Bill are not the right ones he should at least say that this Measure is an inducement and incentive to the Government to introduce very soon a Measure which will incorporate what they think to be the correct method. We can then move Amendments in Committee on that Bill on the basis of the proposals in this Bill if we desire to do so.

If the Minister can find it in his heart and mind to do so, I should prefer that he should say that the Bill in its framework is sufficiently important and adaptable to go to Committee. I hope that he will not ask why a subject of this importance should be left to a Private Member's Bill. Even a private Member sometimes has the ingenuity and knowledge that the sum total of a Department may display. We private Members may be presumptuous in believing that, but I am sure that the hon. Member for Cleveland thinks that his Measure is the correct way of dealing with this problem. I hope that the Minister will not only say these things which I have asked him to say but will put them into effect in a practical way.

2.27 p.m.

Mr. Peter Emery (Reading)

I am not in favour of change for the sake of change, but I think it essential that when there is an obvious need for a radical change, any Government ought to have the strength and the courage to take that action and to take it briskly and take the lead in any alterations that might be considered essential. I believe that this Bill is that kind of change and I should like to congratulate my hon. Friend the Member for Cleveland (Mr. Proudfoot) on bringing the Measure before the House. His perseverance on decimal coinage, which I have done my best to support, has been admirable. The fact that in some way or another, without coming up in the Ballot and without obtaining permission under the Ten Minutes Rule, he has been able to have a Second Reading debate on this Bill shows considerable ingenuity. The obviously learned manner in which he presented the Bill does credit to his researches and to his knowledge of the subject.

Whilst I am congratulating my hon. Friend, I am sure that all hon. Members will join with me in another matter. It is not often that a back bencher can make that statement with confidence, but I am sure that I can do so today in congratulating the hon. Member for Glasgow, Craigton (Mr. Millan) on appearing at the Dispatch Box. I believe that this is the first time and I hope that we shall see him there on many more occasions. I am particularly pleased because I think that he represents some of the younger thought in his party which, as one of the younger Members myself, I like to see reaching fruition. I hope that the hon. Gentleman will be able to welcome this provision and lend the support of his party to it. The hon. Member for Leicester, North-West (Sir B. Janner), who makes very helpful speeches in this House, made a contribution today which was extremely good and which I am certain will be considered carefully by those who study this problem.

There are certain aspects relating to the Bill which I should like to consider. The historical background must be borne in mind. We must think of the advantages or disadvantages of a change to decimal coinage in relation to industry and commerce, internal and inter national finance and education. We must think what would be the cost of the change and who would bear it; how long the change would take to achieve; how much dislocation would be involved and which system of decimalisation should be adopted. After giving the matter careful thought, I believe it to be impossible to separate the decision in principle from the system which we adopt. The integration between the two is so important that they must go together. Secondly—I do not think that this problem has been mentioned—there is no need, in my view, to link a change to decimalisation with a change to the metric system. That is a different problem and cannot be used in arguments against a change to decimalisation.

Historically, the £ sterling has been the basis of the strength of British finance abroad. It has helped to create stability and has promoted investment. Its use as an international currency in transactions between third and fourth parties with no interests in or dealings with "-his country has been part of the strength which we associate with sterling and sterling is the £. Such arguments as these are difficult to substantiate with facts, but I believe that, emotionally, there is in international finance a great feeling towards the concept of the £ sterling. I believe, further, that this Bill need do nothing to destroy that concept or undermine the strength of sterling.

It is interesting to note that in the United Kingdom serious consideration has been given to a change towards the decimal system on occasions for over 150 years. The florin was minted in 1850 in order that a change could be made to decimal coinage but now, in 1962, we do not seem to be much forrader. A number of Royal Commissions have considered the matter and most have recommended a change. The last reported in 1918. After that the matter seemed to die, nothing much more being heard of it until the Federation of British Industries conducted a survey on the attitude of British industry in 1951. This was followed, eight years later, by the British Association for the Advancement of Science combining with industry, in the form of the Association of British Chambers of Commerce, in setting up a joint committee to produce what I believe is the finest report ever compiled on the problem of decimalisation and the aspects of decimal coinage.

The reaction of industry is a matter of interest. With a few exceptions the idea of a change has received increasing support. In my view, the British Government have been moving towards a change, but much too slowly. In May, 1960, in another place, when considering the force of recommendations for a change to decimal coinage, a Minister said: On the other hand, there are evident objections, in which Her Majesty's Government see great force, to giving up the pound as the main unit of currency, bearing in mind the rôle which it has for long played in international trade. …"—[OFFICIAL REPORT, House of Lords, 31st May, 1960; Vol. 224, c. 107.] I accept the latter point but, as I have made clear, I do not accept the former.

I wish now to deal with some of the objections to a change. What are the arguments against decimalisation? Perhaps the first is that there is no general or popular demand for such change. People are happy with things the way they are. The present system works well for us and has stood up to centuries of use. Those are statements of fact. But because that is so it does not mean that the public is against a change. So long as it were done in a simple manner and with force and fairness, I think that the public would be willing and happy to adopt what, in my view, would be a more simple money system. Often people are happy in their ignorance, and I do not believe that sufficient people realise the benefits which could easily accrue from the adoption of a decimal system.

Another argument is that any new scheme would not have the same international confidence as the present £ sterling. The reason why I commend this Bill to the House is that there need be no alteration in the overall value of sterling by the adoption of its provisions. In fact, the advantage of this system, which in my view is much better than any other system, is that there need be no alteration in real values of our coinage, with the exception of the penny. The value of 10s. and £1 would be the same. The crown, halfcrown, florin and shilling would remain the same value.

That, I think, does much to dispose of the arguments mentioned by my hon. Friend the Member for Cleveland on the cost of the alteration of slot machines using coins. The obvious example is the parking meter into which one has to put a 6d. piece. If decimal coinage as envisaged by the Bill were brought about the parking meter would remain. The coin to be inserted would remain exactly as it is, the present 6d. or 1s., and its value would be the same. The only alteration would be that the "6d." instead of being made up of six pennies would represent five pennies. The 1s. would have exactly the same value.

It is only at the bottom end of the scale that one can see any alteration in values. It is only when we begin talking of goods priced at 1d., 2d. and 3d. that there is any change. Many people have suggested that this new concept would bring about a rise in the cost of living. I cannot accept that as a fair argument. What I have attempted to show is that this can only affect the pricing at the very bottom of the scale. I should be very strongly against any alteration which allowed for a sudden rise in the cost of living hidden in an alteration in the system of coinage, but the concept outlined in this Bill does not do that.

The third argument against decimalisation is that nearly every step would cost money. At the moment the financial position of the United Kingdom is such that we need every penny invested in more productive investment rather than on this project which perhaps would bear no new wealth for the economy. Let us face the facts quite squarely. A very considerable amount of money is likely to be involved. Having given this matter very serious thought, it seemed to me that it would be very nearly impossible to do this under £100 million. I believe that is the very lowest figure if fair allowances are to be made to industries on the costs of the changeover.

Another argument is that new methods would have to be evolved in industry both in the concept of bookkeeping and in commerce, and new methods of education. Time would be wasted in working out these new methods. I think that is pretty good nonsense. Obviously in education decimalisation is taught now completely and utterly throughout British schools. What is of particular interest and of which the House should be informed is that many firms in this country today convert £s, shillings and pence into decimals for their internal auditing and for pricing abroad and their prices are in point so much to a pound. Nothing could be more foolish than to have a £s, shillings and pence system with each industry, in ever-growing numbers, converting into a decimal system which is its own conception rather than one accepted as the coinage of the nation.

It is argued that the labour provision which would be necessary to create the new change machines used in shops and the alterations necessary in present calculating money machines would be very considerable. It is said that there is not enough trained manpower to deal with this problem at the moment and that we should not take technicians from their other work to do this alteration.

Mr. Proudfoot

Would not my hon. Friend admit that we are on the thresh-hold of more and more mechanisation in business? Businesses are getting increased mechanisation. This is another reason why we should go in for this change as rapidly as possible.

Mr. Emery

My hon. Friend was always very quick off the mark. He has taken my argument on the point I was trying to make. The longer we hold up this matter, the bigger will be the problem of conversion.

What I hope will go out from this debate is that all producers and manufacturers of any form of calculating or money machines should ensure that the new machines can be most simply converted to a decimal system. Any businessman or company who buys machinery of this sort should demand from the firm selling the machinery that it can be easily converted. In that way many businesses and much industry would be able to save considerable costs in future.

Mr. Proudfoot

I also assume that my hon. Friend acknowledges that if we go in for this change the buyers of these machines will have a much wider selection. There will be more competition in the market, which I believe would be a good thing.

Mr. Emery

I agree entirely with my hon. Friend. As he knows, I am asso ciated with the professional association of buyers, the Purchasing Officers' Association. That is a body of over 6,000 men who are spending thousands of millions of pounds every year. At their annual conference last year, after much consideration they came out nearly unanimously in favour of this proposal and asked to be able to wait on the Chancellor of the Exchequer and the President of the Board of Trade to urge the Government to takes these steps as soon as possible. That is not the only professional association concerned. Nearly every professional and industrial association in the country has been urging this action on the Government.

Another argument against decimalisation is that during the period of alteration there would be chaos and no one would know where he was. There would have to be a period in which two systems of money were running together and firms would not know which system to use. They might receive orders in one system and give invoices in the other. In marketing the operation might be open to fraud or fast practice because people would not fully understand the new money and the different values. The advantage about the values is that there would be hardly any alteration.

Secondly—and this is overwhelming—if in India in 1958 and in South Africa in 1961 they were able to bring about decimalisation of their coinages with a large section of the population illiterate, surely we in this country ought not to have any real problems. Of course, it would take a little time to get used to and there would be a certain amount of confusion, but I believe that basically it would be infinitesimal compared with the advantages which could accrue.

It is to the arguments for decimalisation that I want now to turn attention. Surely no one can deny that decimals work more smoothly, more quickly, more easily and are much more earlier understood by children and people who do not understand the language, than our present system of coinage. That seems irrefutable and of the greatest importance.

The second argument in favour is the economy that could be obtained in industry and business by working with a decimal system. The time of accounting and dealing with financial transactions, it is estimated, would be cut by 75 per cent.

Economies in the teaching of the arithmetic of money in schools, it is estimated by the report of the Association of British Chambers of Commerce, would be about 7 per cent. This is very considerable, and there is surely no doubt that younger children would be able to grasp the working of money much earlier in their lives than they are on the present system. In the same way, in business the clerical position is such that one would find it much simpler to recruit bookkeepers, who find, on the whole, more often than not, that the system of £ s. d. is complicated, whereas the decimal system would be largely a matter of plain addition without any major problems.

It is right and proper to consider that we should be conforming to the rest of the world. I do not think that one need conform for the sake of conformity or change for the sake of change, but I believe that commercially and internationally there would be great value and great strength in being able to fit in with the monetary system which is understood by so many other countries. It seems to me that when we are dealing with this matter it is imperative that in this vast international field of competition we, as Parliament, should be able to give every advantage to our industry in order that they may compete with firms abroad. This is just another method which we could use.

I should like to turn for a moment to the length of time which it would be necessary to take in making any change. The general view on this matter seems to be that a number of years would be necessary before the proposed action was taken. In other words, after the statement that we were to change, it would be essential to have a period of time before the change took effect. It would be absurd for the Chancellor of the Exchequer to make the announcement today and to expect to have a change-over at the end of the year. It would be necessary to have two or three years in which industry could prepare itself for this operation. It would then be able to consider the problem of the dislocation which might arise, and there would be a feeling that the Government were taking every step to ensure that when the system was introduced it worked easily and efficiently.

I shall close with three questions to my hon. Friend the Economic Secretary. Have the Treasury any views on what the total cost of this change would be, without waiting for the report of Lord Halsbury's Committee on decimal coinage? Have they any views on what the length of time of change-over should be? I am interested that my hon. Friend the Economic Secretary is here to reply because his own family, the Milton Asquiths, have contributed to funds to bring about a change in this direction, and I hope that he will follow the very sound teachings of some of the elders associated in family with him to bring this about.

Will he comment on the most ingenious suggestion made by my hon. Friend the Member for Cleveland about a decimalisation fund and the method of producing the money for this fund? The raiding of the Chancery Division of the High Court and the using of the funds dormant there to bring about such a major economic change has great originality and might considerably ease the burden on the taxpayer in bringing this about.

Will my hon. Friend ask Lord Halsbury's Committee on decimal coinage to get a move on? Will he ask the Commitee to report as soon as possible? Obviously it will be many years before the final effects of this debate are felt throughout the country, and I believe that it is only right and proper to exercise as much haste in the preparations now as possible and to show it in the statements which are made. We have put this off and procrastinated long enough.

Will my hon. Friend urge that we should have this report from the Committee at the very earliest moment? If not, will he support the Bill and take it to Committee and alter it there? I know that my hon. Friend the Member for Cleveland and myself, as sponsors of the Bill, would be only too delighted to listen to sensible and well-reasoned Amendments and perhaps even to alterations in part of the principle. But the point is, will he get a move on, because that is what I believe the people of this country want?

2.57 p.m.

Mr. Airey Neave (Abingdon)

I did not have the opportunity of hearing my hon. Friend the Member for Cleveland (Mr. Proudfoot) introduce the Bill, and I apologise for not being present then and also to the hon. Member for Leicester, North-West (Sir B. Janner) for not hearing his speech. I want briefly to say something about the industrial aspect of the problem of decimal coinage and its importance.

I congratulate my hon. Friend on introducing the Bill. I imagine that my hon. Friend the Economic Secretary, in his reply, will refer to the Halsbury Committee and will say that we cannot go much further until he hears what that Committee reports, but it is true, as my hon. Friend the Member for Reading (Mr. Peter Emery) said, that we ought to get a move on with this matter. I do not know whether other hon. Members have previously made historical references to what Mr. Gladstone said about decimal coinage in 1845, when he was Chancellor of the Exchequer. He said, I cannot doubt that the decimal system of coinage would be of universal advantage in monetary transactions. The weight of authority on that head is irresistible. Since then there have been a great many Royal Commissions and Select Committees. We must bring the matter to a head, because we must settle the question of decimal coinage. There are four main reasons for this from the business and industrial point of view, and I should like to state what they are. The first is the possibility of our joining the Common Market and the rapid growth in potential trading importance of Asian countries, all with decimal coinage, such as Russia, Japan, India and China. The second reason is the rapid increase in mechanisation of typing and other business methods and the increase in the importance of our export trade which is related to that. Most other countries have already adopted decimal coinage. One hundred and forty-five countries have done so, seventy of which have changed since 1900. Thirty out of forty-eight countries in the Commonwealth have already changed. In my view, the balance of advantage is clear, although I agree that there are great complications in bringing it about.

Those of us who are concerned with business think that calculating and accounting machines would then be standardised, which would be a great advantage. The key question is which system should be adopted. This is the biggest problem. That is what will no doubt mostly engage the attention of the Halsbury Committee. The Bill is based on the ten shilling/cent system, as introduced in South Africa. Many students believe that this is the best system. I am associated with the Association of British Chambers of Commerce which produced a report with the British Association for the Advancement of Science. There is very little doubt that the choice lies between the ten shilling/cent system and the pound/mil system. In these circumstances, I hope that the Halsbury Committee will very soon report on a choice of systems.

The next question will be that of conversion and replacing machines. My hon. Friend the Member for Reading said that he regarded £100 million as the minimum cost. The A.B.C.C. report estimates that between £128 million and £135 million is much more likely to be the figure if the cost is to be covered by savings within about ten years. If the Halsbury Committee has made a study of this, as I am sure that it has, I hope that business people connected with the problem of conversion will be informed as soon as possible.

Mr. Peter Emery

Does not the cost vary according to how much alteration there would have to be in slot and money machines? Under the system envisaged in the Bill there would not have to be any alteration because the same system and size of coinage would be used—one shilling, the florin, the half-crown and the sixpence, which would be worth fivepence. Therefore, we should cut out quite a considerable cost. It is on this basis that I estimate a cost of £100 million.

Mr. Neave

I agree with my hon. Friend. For that reason the decision on the choice of coinage system to be used is important. Once we know the system of coinage to be used people will be very much better informed and reassured about what their position will be on conversion. I hope that my hon. Friend the Economic Secretary will have something to say about that, because I know that there is a good deal of uncertainty and anxiety in the business world about what this would mean. Subject to this, I support the Bill and hope that the Halsbury Committee, whose terms of reference are well known to the House, will be able to report as soon as possible. There cannot be any doubt that a system of decimal coinage will be to our great advantage if we join the Common Market, which I very much hope we shall. If we do, I hope that conversion will take place as smoothly as possible. The choice of system is the key matter. It is a very technical matter and I hope that the Economic Secretary will be able to give us some assurances about the progress of the Halsbury Committee.

3.3 p.m.

Mr. Bruce Millan (Glasgow, Craigton)

I should like to start, as others have done, by congratulating the hon. Member for Cleveland (Mr. Proudfoot) on his introduction of the Bill. Anything he tackles he tackles with great zeal and enthusiasm, and he has carried on his campaign for decimal coinage with these characteristics. Having said that, however, I must say that I do not think that this is the type of major change which can be made by a Private Member's Bill. I therefore hope that the House will not accept the Bill today.

The hon. Member for Reading (Mr. Peter Emery) was kind enough to say some nice things about me, for which I thank him very much. I hope that I shall not disappoint him too much in some of the things I shall say this afternoon, because I think that he, unlike the hon. Member for Cleveland, made rather exaggerated claims for the value of a changeover to a decimal system of coinage.

It is extremely important that we should have this debate now, because the Government have set up the Halsbury Committee to look into the whole question. The Government took a really extraordinary decision; the Committee was set up not to decide whether or not we should have decimal coinage but how we should bring decimal coinage about. The Government are, therefore, committed in principle to the idea of decimal coinage, although with the qualification that if the cost should prove too heavy they will not necessarily carry out that principle. They have not yet stated their reasons for coming even to that decision in principle. This debate will, therefore, be useful, particularly if the Economic Secretary indicates what the Government have in mind. We must, of course, first see how the Halsbury Committee reports before dealing with the various detailed decisions that will have to be taken if the Government go ahead.

The first of a number of preliminary points that I have in mind is that there is sometimes a confusion between the decimal coinage system and the metric system of weights and measures. It is important to get out of our minds that the two systems are necessarily connected. They are obviously connected in a fairly intimate way, but it would be possible for us to have decimal coinage without the metric system of weights and measures. Several countries do so, the most outstanding example being the United States.

The difficulties of changing over to the metric system are considerably greater than those involved in the change-over to decimal coinage. Unlike the decimal system, the metric system is not predominant in the world. For example, it is not predominant in engineering, where the 1b.-inch system, largely because of the influence of Great Britain, the United States and some other countries is dominant at present. But although we do not expect the Government to say anything about the metric system of weights and measures, we ought, because decimal coinage and the metric system are closely connected, to be applying our minds, in particular, to the rationalisation of our weights and measures. Even if we do not accept the idea of going over to the metric system, there is much to be said for some nationalisation, and I hope that, among the other things the Government are considering, they are considering that.

The basic argument so far used by hon. Members who favour this Bill is that it would represent a much more logical and simpler method of coinage than the present one. Our present coinage suffers from the two fundamental disadvantages that we have a double standard of unit—twelve pennies to a shilling and twenty shillings to a £—and that calculation in twelves and twenties is contrary to our normal system of notation, which works in tens. Nevertheless, we should be rather careful about making exaggerated claims for the ease and simplicity of the decimal system.

There is a common misconception, for instance, that it is only with the decimal system—which, strictly speaking, means working with a unit of ten—that we can have anything like a decimal point or a decimal place, but the fact is that we can work a decimal or a point system with any system of arithmetic, whatever unit is used. The really up-to-date arithmetic is done, presumably, by the electronic computers. It is interesting to note that computers do not work on a decimal system, but use binary arithmetic—and my hon. Friend the Member for Leicester, North-West (Sir B. Janner) might be interested in this—which only has two units, zero and one.

I suppose that if it is perfectly possible for electronic computers to do this it would be possible to use the binary arithmetical system for our ordinary transactions. I suppose that that could be done and the fact that the decimal system is not the only one which gives this facility for using a points or placing system is worth bearing in mind.

Some mathematicians think that the duo-decimal system—which employs the base of twelve rather than ten—is more convenient than the ordinary decimal system. I do not imagine that we could easily get the public, at the moment, anyway, to accept the idea that we should go over to a duo-decimal system because world movement is in favour of the decimal system. Yet it is worth mentioning this point because those who are most enthusiastic about decimal coinage talk as if those who make certain qualifications and cautionary remarks about it are somehow impossibly conservative and are not willing to get up to date with a progressive system.

In fact, the decimal coinage system has a long history. It was introduced in France more than 150 years ago, so that getting up to date by having it is really only relative. The arguments adduced today, particularly by the hon. Member for Reading, are worth considering in some detail because it is easy to make exaggerated claims about the benefits that would accrue to us if we had decimal coinage. There is no doubt that for office work it would be very much simpler to work with decimal coinage than with £ s. d., although it is difficult to estimate what the eventual saving in office time would be.

The hon. Member for Reading mentioned the possible saving of 75 per cent. I would not be rash enough to suggest an exact figure, but it is not risking a great deal to say that it is grossly exaggerating the matter to suggest that it would be as high as 75 per cent. There would be a saving, but it would not be anything like as high as that.

The transitional cost would be very high. The figure quoted in the joint report of the British Association for the Advancement of Science and the Association of British Chambers of Commerce was £128 million, but that was not for every machine that would be involved. It was for cash registers and adding and accounting machines generally. But if we add the cost of other machines specifically excluded from the figure, but which would also be affected, including the cost in ordinary man hours apart from anything else involved in offices and other commercial organisations, the cost would be extremely high indeed.

It could be reduced if there was sufficient notice given in advance of the change. Once we decide to change, if we do, the sooner the decision is made the lower the cost is likely to be. As I say, this will happen as long as there is a proper transitional period because the number of office machines in use is increasing all the time. This brings me to the question, about which I hope we shall receive some news from the Government, of who shall bear this substantial cost. Should it be industry and commerce or should the Government take a share in it? In any case, in the ordinary way of things, the Government would take a share because any cost of conversion would be deductible for tax purposes. Thus the Government, at least indirectly, would bear a part of the cost. But there are some in industry and commerce, no doubt, who would like the Government to bear the whole cost. I think that we should have some idea of what the Government think about this. I for one would be very reluctant to support a Measure in which the full cost of the conversion fell on the Exchequer. There are many more important and desirable things on which the Government could be spending money at this time.

We are told by supporters of decimal coinage that a change to the decimal system would help us considerably in international trade since most countries in the world are far more accustomed to using a decimal coinage. I have no doubt that there would, at least, be a certain psychological advantage in it, but, interestingly enough, when the British Association committee took evidence from our overseas trade commissioners, the view was that any difficulties which people overseas had with our coinage were really negligible in their effect on international trade. I think that that is the reasonable view. A good deal of any difficulties we have, if there be such, could be overcome quite simply by our exporters quoting prices not only in £ s. d. but in foreign currencies as well. This is the simple thing to do, and there is no evidence at present that our trade is suffering substantially because of our form of coinage.

Dr. Alan Glyn (Clapham)

Has the hon. Gentleman read the Report? It refers to the very point he has just raised and suggests that there is difficulty, especially in Latin American countries, as a result of our coinage system. The hon. Gentleman has put a different interpretation on it.

Mr. Millan

The Report refers to it, I agree. I have not a copy by me, but I think that the hon. Gentleman will find, if he refers again to the conclusions, that the general consensus of opinion was that this was not a substantial factor. I do not say that there have not been difficulties in certain areas, but the effect of the Report is that, although these difficulties might have caused a bit of irritation or annoyance, they were not a substantial factor in determining the level of our overseas trade.

The same goes for tourism. I imagine that difficulties about coinage are considerably less than difficulties about language. If we wanted to encourage more tourists to come to this country, we might take the trouble to induce our ordinary citizens to learn foreign languages so that they could occasionally talk to visitors in their own language, as people overseas talk to us in English, rather than force them always to learn English if they wish to talk to English people when they come here. This cannot be a substantial factor. It may put off a small number of particularly sensitive people, but I could not accept that its effect was substantial. Nor do I think that it would necessarily follow, if we went into the Common Market, that we should want to go over to a decimal coinage for any reasons of trade there, although there might be psychological or even political advantages, if we were in the Common Market, in having a decimal coinage as the other Common Market countries do.

My main criticism of the Report of the British Association is not of its consideration of how a decimal coinage would affect trade and commerce but of the rather less attention it gave, for example, to the education aspects of the matter. The evidence which the British Association took about education was very slight in comparison with the evidence it took about trade and commerce. Since its evidence has not been published—there is no complaint about that, of course, and we are extremely grateful to the British Association for the amount of work it has done—it is a little difficult to judge some of the claims which are made. I think that the hon. Member for Reading exaggerated the claims he made about the savings there would be in education and the teaching of mathematics.

There is a great deal of dissatisfaction about the teaching of mathematics nowadays, and far too many children leave school without having any real facility for numbering at all. Something must be done about this in any case. It was pointed out in the Report of the British Association that one advantage, at least, of our present system of coinage is that it does involve children in the exercise of more mental arithmetic than a decimal coinage would, so that, by the age of 12, our children are very much more facile in mental arithmetic that, for instance, French children who work with a decimal coinage. That is not an argument against decimal coinage. It is simply an argument that the educational aspects, both transitionally and from a permanent point of view, should not rest exclusively on the point that decimal coinage would be easier to work with than £ s. d. Other implications have to be taken into account.

I was disappointed and rather disturbed that when the Chancellor of the Exchequer announced the appointment of the Halsbury Committee, nothing was said about the educational aspect. I should like to be assured that among the other things that it considers, that Committee will consider the educational implications of the change to decimal coinage.

The general public also has to be taken into account. By and large, the general public would not want to change, if only because of inertia. I do not suggest that that should make us reluctant to make the change, but in a democratic assembly we ought to remind ourselves that the general public need to be considered to a certain extent. If we were going over to decimal coinage, there would have to be a fairly intensive period of what might be called public education to get ordinary people used to the idea that a new coinage was coming into circulation, with all the difficulties and the transitional period of unfamiliarity and the facilities for fraud on the part of unscrupulous traders and all the rest.

The question also has been mentioned of the unit of currency and the extent to which the £ is a familiar currency in international trade. I am not sure that there is not a considerable amount of mystique about this. Some of the fears about it are grossly exaggerated. We should, however, know what the Government think about this, because there is a strong practical difficulty in keeping the £ as the basic unit of currency under a decimal coinage system, the simple reason being that if we divide £1 by 100 we get a basic unit of 2.4d., which, even at today's cost of living and even with the present Government and the inflation that we have been having over the last year or so, is too high a basic unit of currency. Without going into the technicalities, we need an idea of what the Government are thinking.

What I have said so far may sound rather churlish and unenthusiastic, tout it is not meant to be, because I believe that a decimal coinage system would give us quite considerable advantages. Nevertheless, if we went over to decimal coinage this would not be a great mental breakthrough, as the hon. Member for Cleveland described it, but a comparatively minor reform that might be, in the hon. Member's words, a useful one as an ordinary business decision.

Any advantages that we should get from decimal coinage would accrue indefinitely. It is difficult to put a figure upon them. It is easier to estimate the cost of conversion but much more difficult to estimate the advantages in financial terms, but any advantages—which, obviously, would be substantial—would accrue indefinitely.

To sum up, there could be great advantages, but we ought to keep the matter in prosper perspective and we should have answers to the kind of questions which I have raised this afternoon. I hope that use will be taken of this opportunity to give answers from the Government, because we need a great deal more public discussion of the matter, not simply among mathematicians, economists and newspaper editors, but among the public and in this House.

For the reasons I gave at the outset, we cannot press the Bill as it stands today. However admirable the enthusiasm with which it has been introduced, I do not consider it possible to do the kind of thing that is intended by means of a Private Member's Bill. It has, however, given us this opportunity of discussion and I hope that at the end of it, when we have heard what the Government say, a whole lot of us, myself included, will be much clearer about all the implications of the matter and the kind of decision that we ought in all the circumstances to make about it.

3.25 p.m.

The Economic Secretary to the Treasury (Mr. Anthony Barber)

I am delighted to have the opportunity of following the hon. Member for Glasgow, Craigton (Mr. Millan) and of offering him my congratulations on his first appearance on the Opposition Front Bench. Having debated with him in past years during the Committee stage of Finance Bills, I am not surprised that the Labour Party has asked him to take on additional duties on its behalf. I have no doubt that we shall again be discussing one or two aspects of the current Finance Bill in the forthcoming weeks. When I saw the hon. Member for Leicester, North-West (Sir B. Janner) sitting immediately behind the hon. Gentleman, I wondered whether he had been appointed the hon. Member's P.P.S. However, that was perhaps a little premature.

This matter we are discussing is one of great general interest and, as my hon. Friend the Member for Reading (Mr. Peter Emery) pointed out, of some slight personal embarrassment to me, because I understand that my father-in-law has sent a subscription to my hon. Friend the Member for Cleveland (Mr. Proudfoot) since he considered that the Treasury was being too dilatory in this matter. However, my hon. Friend the Member for Cleveland wisely consulted me about what he should do with the money, and we came to the conclusion that he should use the funds to take me out to dinner so that we may discuss the matter thoroughly.

I congratulate my hon. Friend the Member for Cleveland for the consistent interest which he has shown in this matter and also on his most knowledgeable speech this afternoon. Since the publication, in 1960, of the Report by the Committees of the British Association and the Association of British Chambers of Commerce, he has put down a number of Questions on the subject of decimalisation. In addition, during the last Session, he tabled a Motion to which there were about eighty signatures but which, unfortunately was never debated.

The House will recall that the last statement in Parliament on this question was made by my right hon. and learned Friend the Chancellor of the Exchequer on 19th December last year when he announced the setting up of a Committee of Inquiry, which has been referred to by almost every hon. Member who has spoken in this short debate. In considering this Bill, the terms of reference of that Committee are important and, perhaps, I may remind the House of them. They were:

1. (a) to advise on the most convenient and practical form which a decimal currency might take, including the major and minor units to be adopted;
2. (b) to advise on the timing and phasing the changeover best calculated to minimise the cost;
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3. (c) to estimate the probable amount and incidence of the cost to the economy of proposals based on (a) and (b).

My hon. Friend the Member for Reading asked whether I would say anything today about the Government's view on the likely costs involved and on the period of change which would be required. I am very reluctant to do that because, as hon. Members have said, both these matters are within the preserve of the Committee of Inquiry. Further, as has been pointed out by hon. Members on both sides, the costs involved and the period of change must, to some extent, depend on the major and minor units eventually selected.

Now that the Committee of Inquiry has been set up, I hope that the House will agree that it would be unwise to go further until we have its Report. Therefore, I am afraid that, with the best will in the world to my hon. Friend the Member for Cleveland, I cannot advise the House to give the Bill a Second Reading. Nevertheless, the expressions of view which have been made will, I am sure, be of help to the Committee. I say to my hon. Friends the Members for Abingdon (Mr. Neave) and Reading that the Committee is certainly pressing ahead with its work as fast as possible and that it is likely that its Report will be available early next year. I quite agree with my hon. Friend the Member for Abingdon that in the interests of the business world it is highly desirable that a decision should be made known as soon as possible.

Decimalisation is not a question which the House can discuss with the feeling that much fresh ground is being covered. The matter has been under consideration in this country ever since a decimal coinage was introduced in France in 1799. In the early part of the nineteenth century, opinion was rather more in favour of the change than in later years. My hon. Friend the Member for Reading referred to Royal Commissions which were in favour of a change to a decimal coinage, and I have no doubt that he had in mind the Royal Commissions of 1838 and 1843.

Those Commissions recommended decimalising the £ by dividing it into 1,000 farthings and introducing the "double shilling", the florin, which came into being in 1849. Still decimal coinage has not been introduced, but I think that the House should also know, to get the matter into perspective, that in 1856 and 1868 two more Royal Commissions reported against disturbing the existing system.

In 1918, the Report of the most recently Royal Commission on coinage came out against any change in the existing system, because its view was that: the advantages to be gained by a change to the £ and mil scheme as regards keeping accounts is in no way commensurate with the loss of the convenience of the existing system for other purposes. In 1960, of course, the joint report of the Committees of the British Association and the Association of British Chambers of Commerce was published urging the Government to take an early decision in principle for or against decimalisation. Certainly that report has revived widespread public interest.

If the existing system is changed, any new currency system will be a decimal one as distinct from a duo-decimal one or any other system involving a multiplier other than ten. There are undoubtedly many theoretical advantages in a duo-decimal system and it has some distinguished protagonists. My hon. Friend the Member for Cleveland referred to the distinguished mathematician Professor Aitken. In the Treasury we recently came across a letter from the late Lord Keynes, written in 1945 from Washington and containing the following passage: I confess to some emotions of duo-decimal conservatism. I have always thought that the decimalisation which the Aryans brought in was a trifle vulgar and that the Sumerian origins of our civilisation were more distinguished when they duo-decimalised the fundamental concepts for measuring time and money which they invented. Bradbury who, like me, had no answer to the arguments of the decimaliser, used to say that he could always defeat them by asking the question whether they proposed to decimalise the £ sterling or the penny. In other words, would the £ remain as it is and the penny be altered, or vice versa? By this means he considered the decimalisers would be divided into equal halves and be defeated by the fact that the Sumerian fundamentalists would always include at least one-third of the population. However strong the intellectual arguments in favour of duo-decimalisation may be, I certainly agree with the hon. Member for Glasgow, Craigton that this system of currency is not in practice a starter. I say this because it is the decimal system which is preponderantly used throughout the world, and it is only by bringing ourselves into line with those other countries that we can hope to reap the benefit of two of the principal potential advantages of decimalisation. These are that international trading and banking transactions would be easier and that our export trade in business machines and so on would be assisted.

I should like now to deal in general terms with one or two points which have come up during the debate. One hon. Member asked why it was necessary to set up another committee and asked whether this was not just delaying the matter a little too much. Although the Joint Report of the Committees of the British Association and the Association of British Chambers of Commerce was in many ways a valuable study of the subject, it had a number of serious gaps from the Government's point of view. For example, it did not examine at all exhaustively what the main unit of currency should be.

The question was also raised as to why, since the joint report of these two Committees was published in May, 1960, it has taken the Government so long to consider the question of decimalisation. The answer is that the Government thought it necessary to allow time for public opinion to express itself on this question—this matter was referred to by the hon. Member for Craigton—because the convenience of the community is, of course, one of the main considerations involved.

In the interval between May, 1960, and December, 1961, the interest shown here in Parliament, in the Press and in public discussion and in correspondence with Members of Parliament has been a measure of how wide that interest is and how diverse are the views which are held not only on the question of whether to decimalise, but also on the system to be adopted. Who is better qualified to express an opinion than my hon. Friend the Member for Cleveland, who himself is practically concerned with the grocery trade?

Hon. Members will want to know what happens after the Committee's report has been published. Naturally, the Government will need some time to consider the report and to decide what action to take on it, but there will certainly not be any undue delay. I agree with the view, expressed almost universally this afternoon, that we must reach a decision as soon as possible. The answer to the question of how long it would take to introduce a decimal currency if we decided to go ahead would depend partly on the views of the Committee on the timing and phasing of the changeover to minimise the cost. However, I must tell the House quite frankly that some considerable preliminary period would undoubtedly be necessary in the event of a decision in favour of decimalisation in order to enable all sections of the community to make preparations for the changeover. Much detailed planning would be necessary, for example, for the orderly conversion of machinery, and time would be needed to pass the necessary legislation and to provide any new notes or coins which would be required.

It might be appropriate at this stage if I mentioned some of the advantages of decimalisation as I see them. I think that it is fair to say that most educationalists, but certainly not all, favour decimalisation. This was a matter which was referred to by the hon. Member for Leicester, North-West. Of course, the principle reason is that the notation applied to money would be consistent with that used for ordinary numbers, whereas with pounds, shillings and pence it is markedly different and much more difficulty.

A change to decimal currency would lead to a noticeable saving in time and effort on the part of pupils and teachers. I am sure that that must be accepted by all. Estimates of the time saved in the teaching of money sums have varied from 7 per cent., the figure quoted by the hon. Member for Reading to a suggestion that all the time involved would be saved. This latter somewhat optimistic view is based on the assumption that there is no need to teach money as a separate subject when it is expressed in the same terms as the ordinary notation.

Decimalisation would also lead to some undoubted advantages in the business and commercial world. Whether clerical operations are carried out manually or mechanically, they would be simpler if we changed over to decimal coinage. The handling of cash, the calculation of bills, the preparation of salaries and wages would all be made easier. International trading and banking transactions would be simplified as so many countries now use decimal coinage that a decimal currency system in one country is obviously easily understood in another. Finally, United Kingdom manufacturers of mechanised calculating and accounting equipment for export to markets with decimal currency could cease to produce £ s. d. types of machines, with some consequent reduction in costs.

As for the disadvantages of changing over to decimal currency, probably the most important is the transitional cost. It is therefore most important to get as reliable an estimate as possible of the cost to the economy and to the Exchequer so that this can be considered both in relation to the claims of other demands on the economy and to the economic benefits to be derived from the changeover. It is equally important to consider how the operation could best be timed to minimise the cost, consistent with avoiding what we do not want to have—too long and drawn out a period of transition.

These are difficult and complicated matters because of the number of variable factors that have to be taken into account. Amongst these variable factors are the different possible systems which we might use, the extent to which new denominations will have to be minted, and the period of the changeover. The Committee of Inquiry will be considering these, and its advice and finding on these matters will, of course, be of great importance.

The other disadvantages of the changeover are mainly, I think, the temporary inconvenience and confusion that would be caused, but I agree with my hon. Friend the Member for Reading that this should not be one of the primary considerations.

Mr. Peter Emery

Before my hon. Friend leaves the matter of cost, will he comment on Clause 6 of the Bill which deals with meeting some of this cost in a rather original way?

Mr. Barber

I would rather not. I appreciate the attraction of trying to assist my hon. Friend to reach a conclusion on the Bill, but in the circumstances I should prefer to await the Report of the Committee of Inquiry. The terms of reference do not inhibit the Committee from expressing any views it may have on the number, size, and composition of the coins in whatever system it recommends. The design of any new coins, however, will not be a matter for the Committee, but one for the Royal Mint Advisory Committee which, as the House knows, is presided over by the Duke of Edinburgh.

I do not think that it would be appropriate on this occasion for me to get drawn into any detailed discussion on the best system of decimalisation because this is one of the principal matters which the Committee of Inquiry is considering. Nevertheless, this aspect has been touched on by a number of hon. Members, and my hon. Friend the Member for Abingdon (Mr. Neave) and other hon. Members have pointed out that it is not at all easy to decide what would be the best decimal currency system for the United Kingdom to adopt because the £ does not lend itself very readily to decimalisation.

If it is divided into 100 sub-units, they will be worth 2.4d. each, which is probably too large to serve conveniently as the smallest unit of a currency system. To divide these smaller units into halves or quarters would seem to rob the system of its truly decimal character. On the other hand, to divide the £ into 1,000 units would involve all the inconvenience of three places of decimals, and would mean that the smallest unit would be extremely small in value.

In view of the rôle that the £ has played in international trade and as a reserve currency, any decision to replace it by, say, a unit of 10s which was suggested by one of my hon. Friends, would, I think, require very careful consideration. But here again I want to be as forthcoming as I can. I agree with the hon. Member for Glasgow, Craigton and my hon. Friend the Member for Cleveland that this again should not be an overriding consideration, although I do not think that we should minimise the importance of the rôle which the £ sterling has played, and of the name itself.

The advantage of a 10s. unit is that if split into one-hundredths it would provide a small unit of a convenient size. We should have to find a new name for the 10s. unit. I do not want to intervene in the private dispute between my hon. Friend the Member for Cleveland and my hon. Friend the Member for Reading. Some names have already been suggested. My hon. Friend the Member for Cleveland suggested that it should be called a "new pound", and other suggestions have been a "royal", a "Britannia", a "sterling", and even a "noble".

The other possibility is a system based on the penny, which has recently been canvassed in some quarters. The suggested advantage of this system is that amounts of 1d and multiples would not need to be changed. Against this, it must be recognised that the new major unit would stand in an extremely awkward relationship to the pound. At the outset, therefore, all statistics, contracts and records expressed in pounds would have to be multiplied by 2.4. Further, apart from the halfpenny and penny, no existing coin could satisfactorily continue to circulate for any length of time.

One of my hon. Friends referred to the Commonwealth. I want to assure the House that we are in close touch with our friends in the Commonwealth on this matter. In December last we kept them fully informed of our proposals for setting up the Committee of Inquiry. In addition, my right hon. Friend discussed this question with his colleagues the Finance Ministers of New Zealand and Australia when they met in Ghana during the meeting of the Commonwealth Economic Consultative Council last September. The Governments of New Zealand and Australia are committed in principle to the change, and the timing of the changeover in the three countries will almost inevitably necessitate some co-ordination because of the difficulties for machine manufacturers.

The position of other Commonwealth countries in the question of decimalisation varies. Some countries, such as Canada, East Africa, Ceylon and Malaya, have always had a decimal system. Others, such as India and Pakistan, have changed to a decimal currency, as have Burma and South Africa—countries which are not in the Commonwealth but with which we have close associations. Cyprus and the British Caribbean have also recently changed to the decimal system. Nigeria has announced her intention of changing over to a decimal system in due course. The Government of Eire have also accepted in principle the desirability of changing over, and a Government Committee has recently been set up in that country to consider the best means of making the changeover. It will therefore be clear that if the Australians, New Zealanders and Nigerians decimalise, almost all the Commonwealth will have changed to a decimal system.

In conclusion, may I again congratulate my hon. Friend and thank him for giving the House the opportunity of discussing what is undoubtedly a very important question? I hope that he will realise that with the consideration now being given to the matter by the Committee of Inquiry I could not sensibly advise the House to give the Bill a Second Reading. If it is decided to change over to a decimal currency it will almost certainly be necessary to introduce quite complicated legislation. I should also mention that it might be that we should want to use the opportunity for a more general review of our legislation on currency, in order perhaps to bring it a little more up to date.

I have been asked to express my views as clearly as I can on the matter, but I do not want to go too far. There can be no doubt that real advantage would follow from adopting a decimal currency, but, as my hon. Friend the Member for Cleveland said, this is a business question, and I am sure that the House will agree that no responsible Government could ignore the question of cost, not only in terms of £ s. d. to the Exchequer but also in terms of the burden on the whole economy.

The Committee of Inquiry is pressing on with its work as quickly as possible. As soon as it reports we shall do likewise. As I said at the outset, it is in the interests of the whole country that a decision should be reached and announced as soon as possible.

3.50 p.m.

Dr. Alan Glyn (Clapham)

I am glad that my hon. Friend the Economic Secretary to the Treasury has given an assurance that he will not delay unduly as soon as the report is received. It is so often the case that long and complicated reports are produced and it takes an even longer time for Governments to decide on the action that they wish to take, but I welcome this change of heart and the acceptance of the principle that we have to go over to the decimal system of coinage. I am glad that my hon. Friend should take such a forward-looking approach to the whole matter.

The whole House could not but be grateful to my hon. Friend the Member for Cleveland (Mr. Proudfoot). We know that the possibilities of the Bill receiving a Second Reading may be small but, as he has said, it has given us the first opportunity in a century to discuss in the House this matter of considerable importance. It may well be from the historical point of view, as the Economic Secretary has said, that in 1838 and 1843 the Royal Commissions came out in favour of a change and that in 1856 and 1858 and up to 1918 the various Commissions were not in favour of it, but conditions have changed.

I do not think that anybody fail to be impressed by the report by the British Association for the Advancement of Science and the Association of British Chambers of Commerce. It is a comprehensive document which has gone into almost every aspect of the subject. I agree that it is devoted partly to the metric system but that does not in any way detract from its value in dealing with the other side of the picture.

If the Bill does not receive a Second Reading today, this will not prevent my hon. Friend from bringing forward a Bill in the next Session, but after hearing the Economic Secretary I am convinced that that will not be necessary and that the Government will act as quickly as possible in the matter. The country is interested in it. We have to weigh the advantages against the disadvantages, but it is important to realise that we have arrived at a situation where we have all decided what we want to do and it is a question now of how we can do it and how long a period of transition is to be given to the changeover. There will be, of course, opposition, as always when it comes to changes, but I do not think that anyone in his senses could possibly imagine that the advantages do not outweigh the disadvantages.

One of the real problems touched upon by my hon. Friend the Member for Cleveland is the difficulty and cost of converting calculating, adding and slot machines. This is something on which I do not think the Economic Secretary could put a price, but if we put a price on the cost of doing it today the price in future may well be three or four times as much. In every industry which is attempting to become more efficient there is more and more mechanisation. Calculating and adding machines are being incorporated into business methods. Therefore, if we leave this change-over for another ten years the cost of altering these machines will be astronomical.

Firms which produce these machines now should have in their minds the inevitable changes which will take place later. They should make a point of devising machines which can be easily converted. This makes it all the more important that a decision should be taken on the actual system, because it must be on the basis of that change that manufacturers must design their machines for the inevitable switch-over to the new system of coinage. I consider that this may cost the country a very large sum of money. In some of the more advanced shops where there is self-service the customer's bill is not added up on paper but machines are used which may cost £60, £70 or £80 or even £100.

Mr. Proudfoot

My hon. Friend is not quite correct. These machines cost up to £600.

Dr. Glyn

I accept my hon. Friend's correction, but I think he will agree that it depends on the type of machine. There are now produced some very small machines in the form of fairly simple ready reckoners which shop assistants are using. I was not referring to the more complicated machines used by the larger groups of firms.

My hon. Friend referred to education. I am not worried about that aspect. I do not think it does the children any harm to have to work a little harder under the present system and it may even improve their mental capacity. I do not think that that is a factor which need enter into the argument.

It is an inconvenience when trading with other nations that we should have a different system of currency and that would warrant a change being made. The report to which I have referred comments on the difficulties experienced by foreign buyers. I think I am right in saying that many firms express their costs in decimals of the £ so it would seem that there is a definite awareness—

Mr. Millan

Such firms should not only express their costs in decimals of £s, shillings and pence. The cost should be expressed in the currency of the country to which the goods are to be sent.

Dr. Glyn

I appreciate the point. Of course, firms must take into consideration the difficulties of a currency system in which there is the pound versus the metric system in the country to which goods are to be exported.

Whatever conclusion we arrive at, I am convinced that it must be done rapidly. Although it would be wrong to exaggerate it, there would be one difficulty arising from the fact that throughout the trading nations of the world the £ is regarded as something which is stable. I fear that any attempt to alter the value of £1 would be interpreted by other countries as a change in the value of the £ sterling. I think that my hon. Friend the Member for Bristol, West (Mr. Robert Cooke) feels strongly on this matter. I appreciate that there is a danger, but I do not consider that it is insuperable.

I wish to draw attention to the Schedule to the Bill which I think represents the nearest we can get to the transformation of our currency to a decimal system. There may well be other matters which merit attention but in this way the currency is not dislocated to any great extent. The hon. Member for Cleveland suggested the possibility of doing away with the half-penny and there is perhaps a possibility of doing away with the half-crown and the crown. But it is absolutely essential that we come to a conclusion as rapidly as possible. We can leave it in the hands of my hon. Friend who has given the House every assurance that the Government will not wait for an—

It being Four o'clock, the debate stood adjourned.