HC Deb 20 April 1970 vol 800 cc31-5
The Chancellor of the Exchequer (Mr. Roy Jenkins)

With permission, Mr. Speaker, I would like to make a statement on the future of the sixpence.

On 19th February, my hon. Friend the Minister of State announced that the Decimal Currency Board was being asked to advise whether the decision that the sixpence should be abolished at the end of the changeover period should stand, or whether there would be advantage in deciding now that it should continue as legal tender for 2½ new pence for a time after the end of the changeover.

The board's report to me on this matter is being published this afternoon. I am grateful to it for the speed and thoroughness with which it has carried out its task in the short time available to it.

The board's report contains a full assessment of the likelihood of the sixpence continuing to circulate freely within the decimal currency system. Its firm conclusion is that this is, in practice, unlikely to happen, whatever decision the Government take about the length of time for which it should remain legal tender.

The board has examined all the evidence on this question with great thoroughness and I accept that this is the best judgment that can be made about the likely course of events.

But the question whether a decision should be made now to end the life of the sixpence at the end of the changeover period is a different one. For one thing, impressive and authoritative though the board's report is, the durability of the sixpence after the change to decimal currency remains a matter of opinion and one cannot exclude the possibility that it may be mistaken.

Moreover, I recognise that there is a substantial body of opinion which does not share the board's view and that there is some risk that, if the Government's decision in this matter appears to be arbitrary, the acceptability of the changeover to decimal currency as a whole to the public may be impaired.

The board's recommendation is that the decision to abolish the sixpence at the end of the changeover period should not be altered. The duration of the changeover period is a point on which a decision must be made later. It cannot be finally settled until we see how adaptation to the new system is proceeding. It may be possible to bring it to an end before February, 1972, but a longer changeover period is by no means excluded.

But I see no compelling reason why the question of the future of the sixpence should be irrevocably linked to the changeover period. The Government's view is that it is right that the future of the sixpence should be finally settled on the basis of a reasonable period of experience of the working of the full decimal currency system.

I have accordingly decided that the sixpence will remain legal tender for a period of at least two years following Decimalisation Day. Throughout this period adequate supplies of sixpences will be maintained by the Royal Mint, so that those who wish to use them can draw them from the bank in the usual way.

Before the end of the period, in the light of experience, the Government will announce a decision as to whether it should cease to be legal tender at the end of the two years or continue as legal tender for 2½ new pence for a further period.

Mr. Iain Macleod

The Chancellor will be aware that few people think that the half units—the half-crown, the sixpence or the halfpenny—have a long-term place in the £-penny system, although we regard that as a criticism of the unit on which the Government are basing their change-over. I make two points on what I regard basically as a cost-of-living decision.

We have always said, and I think that what has happened underlines it, that the Decimal Currency Board is quite unsuitable as a body to decide this matter. Will the right hon. Gentleman include in HANSARD the questionnaire which the board sent to industry, which I do not think is in its report, so that we can see how biased it is against the retention of the sixpence?

Is the right hon. Gentleman aware, however, that in my view—and we have never sought to make this a matter of party division—[HON. MEMBERS: "Oh."] No. We have not. We did not have the Whips on when this matter was originally decided. In my view, the right hon. Gentleman is right to ignore a report which he calls "impressive and authoritative", but which I, on an admittedly superficial reading, find tendentious in the extreme.

Is he aware that he should and could have made this decision months ago? Is he further aware that, to say that the sixpence will be retained for at least two years, means that the final decision will be taken in the next Parliament, and that that suits us very well indeed?

Mr. Jenkins

I noted that the right hon. Gentleman was very anxious to avoid any party political points from the beginning to the end of his statement.

I do not share his view about the Decimal Currency Board. I think that it has given an authoritative report and I share its view as to the most likely course of events. But I do not think that there can be certainty and I think that public opinion is of great importance in the matter.

I share the board's view as to the most likely course of events, but by all means let it be tested. I do not think that the board's report is biased or tendentious. I will consider whether the questionnaire should be published. I think that, on closer examination, the right hon. Gentleman will find that the report as published, even if he does not agree with it in all respects—I do not agree with it myself in one respect—goes very thoroughly into the whole question.

Mr. Macdonald

Is my right hon. Friend aware that his decision is the worst of all possible decisions? Is he aware that it will lead to uncertainty for an indefinite period? What possible reason can there be for not adopting either of the other decisions open to him —to abolish the sixpence immediately at the end of the transitional period, as I think he should have done, or to allow it to continue indefinitely? His ambiguous decision will involve manufacturers in difficulty, will put up costs, and will create uncertainty all round. What reason can there be for steering this ambiguous middle course?

Mr. Jenkins

It cannot be the worst of all possible decisions since there are, in my view, only two possible decisions. One of these is to abolish the sixpence now—which my hon. Friend the Member for Chislehurst (Mr. Macdonald) wants, but which not many other people want. The other is to do what I have done.

It is not within the bounds of possibility for any Government to guarantee the continuance of a coin in a new system indefinitely. It depends on whether or not the public choose to use it. I have made it possible for the public to make their choice felt.

Mr. Lubbock

Does not the right hon. Gentleman agree that the report was a complete waste of time and energy? How much did it cost? Every argument that he has put forward in his statement today would have been equally valid without the report. Why did the Government not take the advice given by hon. Members at the time of the passage of the Decimal Currency Act and thus save a great deal of anxiety?

Mr. Jenkins

I do not agree with the hon. Gentleman. If he puts down a Question, I will tell him the cost, but I can say now that it was not very large.

The report was essential in order to take account of the movement of public opinion, which appeared to be strong and sustained, and also to know whether there were overwhelming technical objections to the continuance of the coin. The report shows me that the board itself would prefer immediate abolition, but, also, that there are no overwhelming technical objections to the sixpence's continuance.

Mr. Dickens

In view of the need to ensure that the transfer to decimalisation in February, 1971, is not accompanied by unjustified price increases, will my right hon. Friend ensure that his welcome statement is made available to the chairman of London Transport, and, in particular, to the Greater London Council, to ensure that the sixpenny minimum fare on the London Underground is maintained, at least for the foreseeable future?

Mr. Jenkins

I trust that my statement will be available. If necessary, I shall take steps to make it available to those two bodies. The sixpence will remain in existence until February, 1973.

Mr. Montgomery

As the Chancellor professes to be concerned about public opinion, will he explain why the Government did not heed public opinion a few years ago and have the 10s. unit, which would have saved all this rumpus?

Mr. Jenkins

That question goes back a long time. I think that public opinion, and opinion in the party opposite, was less clear on this issue then.

Mr. Gwilym Roberts

Will my right hon. Friend accept that many of us on this side of the House will welcome at least this partial reprieve for the sixpence? My right hon. Friend said that adequate supplies of the sixpence would be available during this period. I understand that none has been coined since the early half of 1969. Can my right hon. Friend assure the House that, if necessary, steps will be taken to coin further sixpences?

Mr. Jenkins

I stand by my statement that adequate supplies will be maintained throughout the period. I do not think that this will require further minting, but, should this become necessary, it will be done.