HC Deb 27 March 1969 vol 780 cc1909-12
Mr. Lubbock

I beg to move Amendment No. 2, in page 2, line 22, after ' bank', insert ' or a building society'.

This Amendment arises out of a point made by the hon. Member for Worthing (Mr. Higgins) in Committee when he referred to the position of the building societies, and asked the Minister of State whether they were included in the definition. The Minister made it quite clear that they were not. He outlined the reasons for the Clause as it then stood in relation to the banks. He said: The Clause does not specifically state who will make the conversion, but this is not necessary. The banks will do so, and they are entitled to do so, and that is the end of the matter. It is true the awkward customer may then say to the banks, ' I did not like what you did,' but the bank will say, ' We were entitled to do so end we have done so '."—[OFFICIAL REPORT, Standing Committee A, 4th March, 1969; c. 150.] This Clause is to take account of the awkward customer, as the Minister puts it, who objects to the conversion of the balance which was expressed in terms of the existing denomination, into decimal coinage immediately after D-day.

As the Minister has made clear, the banks are the ony organisations actually empowered to convert on D-day. The rest of the organisations which have balances would be covered under Clause 8, which does not take effect until the end of the transitional period. I put it to the House that the building societies should be given the same power as is conferred on the banks, because of the very large number of deposits which they have to operate. I am informed by the building societies that on the date of conversion there will be something like 14 million accounts of investors and borrowers, which might be affected by this Amendment. Although there may be other organisations which might have wished to have the same power, the building societies are the biggest single group affected in this way.

I understand that the Building Societies Association has recommended to members that they should take advantage of the closure period allowed in the Bill which would be on Thursday and Friday, 11th and 12th February, 1971, so that they can make their own arrangements. This would be very convenient, because there will not only be two days during the working week when the banks will be closed but, if the transition could not be completed then, if necessary, additional overtime could be worked on the Saturday and Sunday. There would then be four days within which clerical and administrative operations connected with the change-over could be completed. In the case of the largest building society, there would be as many as 1,750,000 accounts. There are many smaller societies who will need this period. There will not be another opportunity because on no occasion will the banks actually be shut for two days.

They will be as equally likely to have awkward customers as will the banks and they want to co-operate with the Government and effect the change-over as quickly as possible. If the Minister thinks that this conflicts with the argument we had on the previous Amendment, it could be qualified by adding the proviso that it should be for the convenience of the public. What I am suggesting is very much in the interest of the public. Indeed, the Government White Paper itself (Cmnd. 3889) says in paragraph 19:

It is desirable to keep the changeover period as short as possible". Surely, therefore, the Government ought to encourage organisations like building societies that are prepared to do this to put the changes into action immediately following Decimal day, 1971.

The building societies wrote to the Treasury on this point and received a reply yesterday, so that I am afraid very little time has been available in which to study it. It would have been helpful if there could have been a rather more prompt reply. The building societies wrote to the Treasury on 18th February and the reply has only just been received. I am not complaining so much of that, but the Treasury letter explains why the banks are given this special provision and no other organisations are brought into the Clause. Frankly, after reading it, I cannot say that the argument stands up.

Where the Treasury says that under Clause 12 bills of exchange, which include cheques and promissory notes, will be invalid if they are drawn in shillings and pence from D-day onwards it is helping the case I am putting; because, as all cheques going into the building societies are to be drawn in the new amounts, would it not be convenient if, at the same time, the balances are converted? I hope the hon. Gentleman will be able to accept this Amendment which, although it is not of very fundamental importance, would put the building societies in a position to make the change after D-day with peace of mind knowing, like the banks, that they will not have to suffer the possibility of receiving a comeback from awkward customers.

Mr. Taverne

The Amendment has to be judged against the background of what is happening; and what will be happening is that during the transitional period both the old and new currencies will be legal tender. If this is so it is very difficult for the Government to say unilaterally that, in general, people may decide they will accept payment in only one particular form. If both forms of payment are legal tender then it seems reasonable to say that people should be entitled to pay in old currency if they wish to do so.

This is the general question which first has to be considered by the Government. Certainly, there will be nothing to stop people converting accounts into decimal form during the period; and in general the Government expect that those who pay amounts to organisations that have converted, or receive amounts from such organisations, will be prepared to do so in decimal currency in accordance with the table. But as a matter of law we feel that people should be allowed, if they wish, still to pay in the old currency.

The one exception to this is the exception in the case of banks provided under the Bill. The reason for that is that there will be no change-over period at all for the banks, because after decimal day bills of exchange and promissory notes will be invalid if they are drawn in shillings and pence after that day. In the case of the banks, therefore, an exception had to be made. The hon. Gentleman has tried to argue the case for building societies and I would not argue that there is no case. But in practice 80 per cent. of payments to building societies are made by cheques on banks, so that there is no doubt they will be made in decimal currency form. But the difficulty of the Amendment is that it is very difficult to reconcile it with the first principle I announced, that people should still be free, in general, to pay in old coins if they wish to do so during the transitional period. If we drew the line at the building societies, it would be difficult to stop there. Why should we do it with the building societies and not with insurance companies? Why not do it with hire-purchase companies? Exactly the same considerations arise with them.

Mr. Lubbock

Not quite. I said that the building societies had 14 million accounts. The insurance companies do not have deposits and loans on this scale.

8.45 p.m.

Mr. Taverne

Some payments may be made through building societies, but a tremendous number of payments are through insurance companies. It would be very hard not to give this right to the insurance companies if it were given to the building societies. I should not like to say how many payments are made through hire-purchase companies, but they must run into millions. It would be hard to deny this right to them. If we did not draw the line at the banks, we would be abandoning the general principle.

Therefore, with some regret, I must ask the House not to accept the Amendment.

Amendment negatived.

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