§ 8.24 p.m.
§ Order of the Day for the Third Reading read.
§ LORD SHEPHERDMy Lords, I beg to move that this Bill be now read a third time.
§ Moved, That the Bill be now read 3a.—(Lord Shepherd.)
§ On Question, Bill read 3a.
§ LORD SHEPHERDMy Lords, I beg to move that this Bill do now pass. I understand that the noble Lord, Lord Sinclair of Cleeve, has a few last words to say on this Bill, and perhaps it would be convenient if I were to leave my remarks until he has spoken.
§ Moved, That the Bill do now pass.—(Lord Shepherd.)
§ LORD SINCLAIR OF CLEEVEMy Lords, I recognise that at this late hour it would be intolerable if I were to attempt to repeat arguments fully deployed in Second Reading and in Committee. I also recognise that the Government have set their face against the pound/mil system, even although I believe there was evidence in Committee that the system had substantial support. To-night, I should like to make a suggestion which I believe to be constructive, and I hope that it may be so deemed by your Lordships. I do so from a deep personal conviction that the system proposed in this Bill is in one respect, at least, inflationary and inflexible, and I hope that the suggestion which I shall later make may remove, or at least mitigate, those disadvantages.
May I say, quite briefly, two things which were not said before on the subject of inflation and inflexibility. I think I am right in saying that on the subject of inflation and the subject of retention of the halfpenny equivalent, the noble Lord, Lord Shepherd, was moved to say that at this time he could not think of any single article that could be purchased for a halfpenny. That, I submit, with due respect to the noble Lord, is not really the point of this criticism. What is felt by a number of industries which I instanced is that the absence of the halfpenny equivalent will mean that prices will be forced to move upwards 871 or downwards in steps which are more than twice as big as the present halfpenny. Under the present and foreseeable conditions they are more likely to move upwards than downwards, hence the inflationary aspect of the absence of the halfpenny equivalent.
Since the Report stage I have tried to get some figures to illustrate the economic significance of this, and taking figures from the national Blue Book for 1966 I found that the value of the goods produced by the industries which I have instanced (and all of which were anxious to see the halfpenny equivalent retained), the value of those goods, as sold to the public in this country, represented 20.5 per cent. of the total consumer expenditure in that year. If one were to exclude from the figure of total consumer expenditure, as it would be right to do in this comparison, expenditure on services such as housing, transport, gas, electricity, water, entertainment and insurance, the percentage would rise from 20.5 to 28.5 per cent. That, I submit, is a substantial increase.
The second point on inflexibility, which I did not adequately explain in Committee, concerned an example to which I referred on the subject of confectionery, which was merely typical, I think, of a number of highly mechanised industries which sell their products in small packets and have an export trade. In those cases I think it is very important that the industries should be able to a large extent to maintain uniformity of the size and weight of their packets as manufactured for sale in this country and for export. Quite apart from the contingency of sales tax, added-value tax; irrespective of the possibility that the Common Market will ultimately move towards a common currency, in form at least; irrespective of those things, I think it must stand to reason that a country with a flexible currency is better placed in the matter of international trade than a country with an inflexible currency.
The suggestion I want to put forward to-night arises from the fact that, as the noble Lord, Lord Shepherd, said in Committee, we have to take a long view of this problem—I am sure of that; and, secondly, that the seeds of inflation and inflexibility, as I see it, lie in the half-cent coin in this proposal. My suggestion is 872 really a plea that the Government should undertake to consider, without delaying passage of the Bill, a reference to the Decimal Board, or some appropriate committee, of the practicability and desirability of having, in place of the half-cent coin, two coins, the first of which would be, in value and weight, four-tenths of the cent, almost exactly equivalent to the present penny—namely 0.96 of a penny; and it could be called a penny. The second coin would be, in value and weight, two-tenths of the cent, almost exactly equivalent to the present halfpenny, 0.48 of a penny.
Such a scheme would preserve the essentials of the system in this Bill, the pound/cent system. Nothing is altered under this suggestion except the half-cent. There is no necessity to mint a mil coin, which would be one-tenth of a cent, though, of course, that could be done later if it were required. Decimal-wise there is nothing wrong, I believe, with a progression of 2: 4: 10: 20: 50: 100, which would be the progression under my proposal. But I must in fairness say that the noble Earl, Lord Halsbury, to whom I have mentioned this suggestion, and who regretted that he would not be able to be in your Lordships' House to-night, sees some technical difficulties in it. But the result of adopting this suggestion would be to replace three coins which are unfamiliar to the British public with two that are unfamiliar and two that are completely familiar, the penny and halfpenny.
Surely this suggestion is simple and non-inflationary and flexible. Those industries who do not use the halfpenny in their pricing are not affected; those that need it could have it. I could wish that there was someone abler and more experienced in Parliamentary procedure than I to put this case, but I cannot conceive it to be beyond the resource and ingenuity of Her Majesty's Government and advisers to find a way of providing for consideration of this small but highly important refinement, and to do so without delaying passage of the Bill. I am totally unskilled in the art of Parliamentary draftsmanship, but I should have thought the wording used in the Amendment to Clause 5 which was tabled for Committee, but not moved because Amendment No. 1 was defeated, expresses the point I have in mind. If, 873 as a result of this consideration, it were decided that this sort of thing should be done, it would no doubt require an Affirmative Resolution of both Houses of Parliament; but if it were right that would not be impossible.
Three or four years before this new system comes into effect, three or four weeks—or even three or four months—spent in examining this suggestion would not, I believe, be wasted time. While this is being considered, as we all know, there is plenty of work for the Decimal Board and those concerned to get on with by way of preparation for the change. If this thing could be done, it would, I believe, give great reassurance to many industries, and, so far as I can see, would hurt none; and in my own judgment it would help public acceptance of the change. I plead with the Government that they might give this suggestion further consideration.
§ 8.37 p.m.
§ LORD SOMERSMy Lords, I should like to support very much my noble friend's plea that the Government may give second thoughts to this. I will not go over all the technical details, which my noble friend has dealt with thoroughly, nor am I going to repeat what I said at Committee stage. But I should like to say this. I have spoken to a good many people who are interested in the decimalisation of our coinage, and very few indeed have heard of the pound/mil system. I feel that the public should know more about this system and be given a chance to make a choice before any definite decision is made. I think that the illusion is pretty widespread among those who are in favour of the 10s./penny system that one will get a smaller unit, but of course one gets precisely the same unit, 1.2 of a penny. That unit is not small enough. Therefore, I ask the Government to give this a second thought.
I realise that it is a point of honour that no Government—and I say definitely "no Government", not merely the present one—admits that it has made a mistake. My noble Leader referred to individuals who admit that they have made a mistake and the fact that it has the curious quality of endearing them to people. I think the same applies to Governments, because one realises that 874 they are trying to do the best they can. I therefore ask the Government to give this system a second thought, and to let the public know more about it.
§ 8.39 p.m.
§ LORD SHEPHERDMy Lords, to-day marks the end of a very long road, a road of some 150 years, when in Royal Commissions and Select Committees, in the Press, in trade and in industry we have discussed whether we should decimalise our currency. Throughout this period there has been disquiet and indecision. The noble Lord, Lord Somers, still reflects the feelings that have existed all this time. I well recognise the disquiet felt when we change a currency that has stood us in good stead, going back perhaps to the beginning of our own history.
When we change our currency there must be this feeling of disquiet. But Parliament has now decided that we should decimalise, and in some respects I suppose you could say that it is appropriate that this last act, the passing of the Bill, should take place in your Lordships' House. We move to a decimal currency for increased efficiency but, I am bound to admit, with a sense of regret. Certainly I shall keep my half-a-crown for sentimental reasons. No doubt the noble Lord, Lord Fraser of Lonsdale, will have great pleasure, because he has been a persistent critic of many Administrations, and now he is seeing an achievement. One might say, perhaps, that he is one of the real Conservative gentlemen, and it is rather strange to see coming from such as he agreement to a revolutionary change in our currency.
The noble Lord, Lord Sinclair of Cleeve, has been persistent in his own way. I think I should place this on record. On the fourth the noble Lord wrote me a long letter in his own handwriting, rather unusual in these days, from Bristol. The noble Lord has come to your Lordships' House, travelling that distance, again to make his own special plea in this matter. Although the hour is rather late, and I know that some of my noble friends are anxious to proceed, I think I should deal as fully as I can with the case that the noble Lord has made, and if I may I will use the information that I have gained having sent his letter to the Treasury.
875 The noble Lord, Lord Sinclair of Cleeve, made a plea that, after the passage of this Bill, the Government should refer to the Decimal Currency Board, or some other appropriate committee, a proposal to substitute two coins, a penny and a halfpenny, equal in value to 0.96d. and 0.48d. respectively in our present currency, for the half-cent. The penny would be two-fifths, and the halfpenny one-fifth of a cent, which would be worth 2.4d. in our present currency. As he has said, his reasons are two-fold. First, he considers that the familiar penny and half-penny would ease the changeover, and that there would be less possibility of marked price increases. I greatly appreciate the motives of the noble Lord, but I hope that he will bear in mind that what he is proposing really is a variation of the mil system which your Lordships rejected the other day.
It is perfectly true that the penny and the halfpenny are familiar coins in our present currency, but in the coinage suggested by the noble Lord their size weight and value would be different. Furthermore, their relationship to the cent would be expressed in an unfamiliar and an awkward fraction. Because of this the expression of amounts causes difficulty. How, for example, would you express the decimal equivalent of the present 6d.? Would we say 2⅖ cents, 2.5 cents, or 2 cents ld. Or as the noble Lord suggested in his letter, a new phrase "2 cents 2 megs" or "12 melts"? A special name such as "meg" or "mite", as the noble Lord suggested in his letter, would be confusing.
I suggest to the House that the introduction of a penny or halfpenny would not facilitate the changeover, but would in fact make it much more difficult. Most of the important objections to the pound/mil system apply to the pound/cent system with a one-fifth coin. It is a third place system. In the changeover, people would find the translation of pounds, shillings and pence into decimals and vice versa most difficult. To the extent that the halfpenny needed to be recorded on business machines, the work and cost of conversion would be increased. There would also be minting problems in devising a suitable coinage in weight-value relationship. The system does not include one of the advantages 876 of the pound/mil system, the provision of a coin equivalent in size, shape, weight and value to the present sixpence. The question may well be asked: If not one-fifth, what about the pound/cent system with a quarter cent coin equivalent in value to 0.6d. in our present currency? I think this was suggested by the noble Lord. This can be quickly dismissed, although, I hope, courteously dismissed. One quarter is not a decimal fraction, and its decimal expression involves the use of two additional places. Psychological tests commissioned by the Committee of Inquiry on Decimal Currency, chaired by the noble Earl, Lord Halsbury, showed conclusively that in the pound/cent/quarter system, the associability problems would be great and the mistakes in mental calculations frequent.
The case for the pound/mil, pound/cent/one-fifth or the pound/cent/one-quarter system stands and falls on the need of the halfpenny equivalent. The Government have given most careful consideration to the arguments that there will be a continuing need for the halfpenny after decimalisation. They have recently reviewed the whole question in the light of representations made to my right honourable friend the Chancellor of the Exchequer by the Federation of British Industry and others. The Government do not suggest that there are no disadvantages in losing the halfpenny, and they recognise that in certain areas it will be missed. But these difficulties are not so great as to dictate the sort of currency system we ought to have. The Government are satisfied that it will not be necessary to retain a halfpenny equivalent when we change to the decimal currency in 1971.
There is one other point that I should make to the noble Lord. He spoke of our having time. When my right honourable friend the Chancellor of the Exchequer announced the decision to decimalise—which was on March 1, 1966—there was some five years ahead. To-day, the change is three-and-a-half years away. To many, this seems quite a period of time for reflection and for change. But the noble Lord, Lord Sinclair of Cleeve, with all his own experience of industry, well knows that in terms of preparation, the setting up of machinery, and in this case the production of coins, the education of the public and 877 many other factors, three-and-a-half years will perhaps be too short. We really cannot afford further delay. I do not think it would be right to cast any more doubt in the minds of those who must now make their preparations. Therefore, it is with the greatest reluctance that I have to say to the noble Lord that we cannot accept his suggestion, although we have given it careful consideration.
May I now turn from the dust of conflict of so many years? This Bill may mark the end of indecision, but it is only the beginning of the labours before us as there is a great deal of work to do. The immediate brunt will be borne by the Decimal Currency Board, and then by industry and trade. Later the way will be clear for those who will have to educate us in the use of this new currency. I am sure that we all wish them well, and we are confident that they will serve us well.
My Lords, I feel that in some ways this is an historic moment. With the passing of this Bill an old familiar servant will have had its day to make way for a new system of currency which may be more efficient. But I cannot help reflecting that our grandchildren and our great grandchildren will not share the joy we have all had on receiving a half-crown, a florin or a sixpence. I really cannot believe that a decimalised coin will have quite the same ring. But I hope that it will lead to greater efficiency.
§ LORD SINCLAIR OF CLEEVEMy Lords, perhaps I may impose upon your patience for a minute or so in order to deal with two points made by the noble Lord, Lord Shepherd. I am obliged to him for the courtesy of his reply; I am deeply disappointed with its tenor. He referred to the noble Lord, Lord Fraser of Lonsdale. I think that it ought to be on record that in his remarks during our debate on this matter the noble Lord made it quite clear that he was in favour of the pound/mil system. Secondly, under either system, whether it be my suggestion or the Government's proposal, the sixpence will disappear. I accept that the essence of the Government's scheme is the pound/cent. My suggestion is not a variation from the pound/cent, any more than the half-cent is a variation. The half-cent is to the third place of decimals, just as in my 878 suggestion; so there is not any difference in that respect. I feel that I ought to make this clear.
§ On Question, Bill passed.