DECIMAL CURRENCY (Hansard, 5 May 1966)

§ THE EARL OF DUNDEE
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

§ LORD BOWLES
My Lords, I can assure your Lordships that the fullest consideration was given to the Minority Report of the Halsbury Committee before the Government chose the pound as the major unit for the decimal currency system.

§ THE EARL OF DUNDEE
My Lords, before the Government make an irrevocable decision on this, will they not consult representatives of the shopkeepers and chartered accountants, the Consumer Council and manufacturers of electronic equipment and cash machines, as well as the bankers? I do not want to be dogmatic about this, but are the Government not aware that every other sterling country which has gone decimal—South Africa, New Zealand and Australia—has adopted the ten shilling pound, and that all the non-sterling decimal countries have a small enough unit to fit into two decimal places and do not need this troublesome half cent, which will add so much to the costs of transition? Also is the noble Lord aware that the main argument given in the Majority Report here is that the twenty shilling pound before the end of the century will have 442 depreciated to half its value, so that we shall then be able to abolish the half cent without difficulty. Is that likely to increase the strength of sterling? Is it not a counsel of despair?

§ LORD BOWLES
My Lords, I am quite certain the Government have consulted a large number of the bodies referred to by the noble Earl, and I am sure they will be open-minded enough to seek any further advice they want. It is a pity that the noble Earl seems to think in terms of the small transactions. I have the feeling, and I think the Treasury have, that it would be unfortunate it' the great pound were reduced to ten shillings. We have the most heavy currency in the world and if we reduced it to the rand or to ten shillings or even, to use the noble Earl's invented term, the "ten shilling pound", that surely would be a great pity, and there are other pounds, like the Libyan pound, which might seem superior to our then ten shilling pound.
As regards electronic machines, it seems to me there are not very many of them yet and they will still be in the process of being manufactured and allowances can be made for the half cent to which the noble Earl referred. Ever since I have had a cheque book of my own, I do not remember ever signing a cheque for a halfpenny, or even for £1 5s. 4½d., and neither has the noble Earl. I telephoned to my bank manager this morning and he could not, after forty years, remember seeing a cheque for a halfpenny, so that unit has already disappeared where a great deal of transactions take place, namely, in banking. If, on the other hand, a machine has a unit of 0.005, which is half a cent, and it works to three decimal places, such transactions can be dealt with. On the question of exporting machines, it seems to me fairly clear that if, for instance, we made it easier for our manufacturers of these machines to export them it would be easier for foreigners to export their machines to this country, and that is a fact that I am sure the noble Earl will bear in mind. The noble Earl asked a lot of other questions but I hope I have answered at least some of his points.

§ THE EARL OF DUNDEE
My Lords, I am most grateful to the noble Lord for 443 giving such a very full and courteous reply to my supplementary question. On the subject of confidence, does he really think that foreign bankers, whose opinion may be important to sterling, are incapable of calculating that twice ten equals twenty?

§ LORD BOWLES
My Lords, I am certain they are quite capable of doing it, but I can assure the noble Earl that on the balance of arguments—I emphasise, on balance—having regard also to the international position of the pound, and taking into consideration the views of the City, it was decided that it was better to have the pound as the unit for decimal currency.