Lords Sitting of 29 June 1967

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Coventry):
The LORD CHANCELLOR on the Woolsack.

BREATHALYSERS: ACCURACY OF TESTS
3.0 p.m.
LORD NUGENT OF GUILDFORD: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what steps they propose to take to achieve a higher standard of accuracy in breath-testing devices, in view of the false positive indications recorded in 8 out of 33 cases during the recent tests at the Home Office Central Research Establishment, Aldermaston.]
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE, HOME OFFICE (LORD STONHAM): My Lords, breath-testing devices are not precisely accurate analytical instruments, and will be used only for preliminary checks. There is also the safeguard that an arrested driver must be offered a breath test at the police station in addition to the roadside test. The 8 false positive results obtained during testing of the device which has been approved comprised one in the range 50–60 milligrams per 100 millilitres, one in the range 60–70, and six in the range 70–80. My right honourable friend considers that these are tolerable results for the purposes to be served by the devices.
LORD NUGENT OF GUILDFORD: My Lords, I thank the noble Lord for his Answer to my Question. May I ask him whether he realises that this will not give much comfort, as the consequences of a positive test are that the driver concerned is arrested and taken to the police
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station for a further breath test? Is the noble Lord aware that such a high percentage of failure as this, resulting in innocent men being treated in this way, would, as he himself said on Second Reading, be intolerable?
LORD STONHAM: My Lords, my right honourable friend fully appreciates the points which the noble Lord has made, but the figures I quoted did not tell the whole story. At the time the 33 results were taken from people with a breath alcohol content of less than 80 mg per 100 ml, tests were taken of 44 other persons with a breath alcohol count of over 80, and in each of those 44 cases the test proved accurate. So, taken as a whole, eight false positive results out of 77 cases shows an error of about 10 per cent., which was the error I mentioned during the passage of the Bill. Precisely the same results were obtained in Austria and Germany.
LORD NUGENT OF GUILDFORD: My Lords, does the noble Lord think it is possible that the reading of these devices in the lower ranges may be less accurate than in the higher ranges? Would he ask his right honourable friend to have further investigations done on this particular point, to ensure that a higher degree of accuracy is obtained in the lower ranges? This is a most important point from the point of view of innocent drivers.
LORD STONHAM: I agree with the noble Lord that this is an important point, but I have no reason to believe that the breathalyser is less accurate in the lower ranges than in the higher ranges, although the consequences are more severe. Of the 1,000 cases tested in Austria where false negative results were given, I understand that 8 per cent. were in cases where the blood alcohol level was above 80 mg per 100 ml and only 2 per cent. where it was below the 80 mg mark.
With regard to further investigations of this matter, the approved device, as the noble Lord is aware, is the "Alcotest". Four other devices have been submitted, not one of which has been found to satisfy the conditions so far of the 1967 Act. Certainly, if better devices are submitted and found on test to be more accurate, then they will be approved and undoubtedly adopted.
LORD NUGENT OF GUILDFORD: My Lords, may I thank the noble Lord for his evident care in this important matter? Is he aware that this is something we shall necessarily watch very closely, because it would be intolerable if many innocent people were arrested and taken to a police station?
LORD STONHAM: Yes, my Lords; but I would make two points. One is that obviously if a breath test is taken at a police station, as it must be after the breath test on the spot, and it shows a slight degree less than 80 mg., that does not mean that the breathalyser has been wrong. The second and more important point is that while it is right that people with a breath alcohol content of less than 80 mg. should not have to suffer this inconvenience, it is infinitely more serious if millions of people on the roads are subjected to injury to their lives or bodies.

CHURCHES AND UNIVERSITIES (SCOTLAND) WIDOWS' AND ORPHANS' FUND (AMENDMENT) ORDER CONFIRMATION BILL
Read 3a (according to Order), and passed.
PITTENWEEM HARBOUR ORDER CONFIRMATION BILL
Read 3a (according to Order), and passed.
ROYAL BANK OF SCOTLAND ORDER CONFIRMATION BILL
Read 3a (according to Order), and passed.
CIVIC AMENITIES BILL
Report of Amendments received (according to Order).
WATER (SCOTLAND) BILL
Report of Amendments received (according to Order).

DECIMAL CURRENCY BILL
3.9 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(Lord Shepherd.)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL OF LISTOWEL in the Chair.]
Clause 1:
The new decimal currency
1.—(1) On and after the appointed day the denominations of money in the currency of the United Kingdom shall be the pound sterling and the new penny, the new penny being one-hundredth part of a pound sterling.
THE EARL OF LISTOWEL: I must point out to the Committee that if, having called Amendment No. 1, this Amendment is agreed to, I shall not be able to call Amendment No. 2.
LORD AIREDALE LORD AIREDALE moved, in subsection (1), to leave out all words from "be" to the end of the subsection, and to insert:
"a unit of sterling, of the value of ten shillings, and a cent, the cent being one-hundredth part of the unit."
The noble Lord said: I hope that it will be for the convenience of the Committee if, in moving this Amendment, I speak also to Amendments Nos. 3, 4 and 6, these Amendments being in my name and in the names of the noble Baroness, Lady Elliot of Harwood, the noble Earl, Lord Dundee, and the noble Lord, Lord Redmayne. I hope to be brief in moving this Amendment, because I appreciate that this ground has been gone over a number of times before.
I will begin by putting forward this proposition: that we owe two duties to the world in respect of reforming our currency. First, we owe them a duty to decimalise our currency to bring it into line with most of the other important currencies in the world; secondly, we owe a duty to take the opportunity to bring our currency into line with one or the other of the main groups of currencies, and not to leave our currency with a major unit which is way out of line with all the main currencies of the world.
There are two groups of currencies, with either of which we might, I would submit, feel able to come into line. The first is the group of currencies of the countries of Western Europe—the French franc, the Swiss franc, the Dutch guilder and the West German mark. All these currencies are of a value in our currency of between 1s. 6d. and 2s. If we looked nearer than we do over entry into the Common Market, there would, I suppose, be a great deal to be said for adopting the florin as our main unit of currency instead of the pound sterling, and thus bring ourselves, currency-wise, into line with the rest of Western Europe. But a change from the pound to the florin would be a very big step.
There is, of course, one other important group of currencies enjoyed by all the great countries overseas with whom we have the closest ties—the United States dollar, the Canadian dollar, the Australian dollar, the New Zealand dollar and the South African rand. These currencies form a group whose value in terms of our money is between 7s. and 10s. I should have thought that these great overseas countries have a bond between them in having a closely knit group, with currencies which are very much in line with each other. We, if Her Majesty's Government's policy with regard to retaining the pound sterling is approved, shall remain out of line. Can we afford to remain out of line, in this matter of currency, with those countries overseas with whom we have such close ties?
The British people do not want the Government's proposed currency system. This has been made abundantly clear. I do not propose to go into detail, because I am sure your Lordships are aware that the British people do not want the Government's proposed system. The British people want the 10s./cent. system. They want it, not because Australia has it, or because New Zealand is to have it on the 10th of next month, but because they want to keep the half-crown and the sixpence. The British people are quite resigned to grappling with such coins as will be necessary when we "go decimal", but they want to retain as many of the old familiar coins as they can, and they want to keep the half-crown and the sixpence. Under the Government's proposed system they cannot do this.
The British public agree with the Minority Report of the two dissenting members of the Halsbury Committee. They have had four years in which to consider the Report of this Committee, and they have sided on the side of the two dissenting members. Her Majesty's Government have sided on the side of the Majority Report of the Halsbury Committee. I am not at all surprised at that. One would rather expect that the Government would put forward the majority view of the Halsbury Committee as the system to be adopted.
But Her Majesty's Government have not been content with putting the system forward. On this matter, which has nothing to do with the Party politics, so far as I am aware, they are intent upon forcing upon the British public a system which they plainly do not want, and a system which is going to keep them out of line with the whole of the rest of the civilised world, with a unit of currency which fits in with nobody else. It is a system which is marred by the wretched "½", which destroys the purity of the decimal element; and this is justified by Her Majesty's Government by one of the most distressing arguments that I have ever heard. It is that nothing is going to halt the fall in the value of money; that Her Majesty's Government can do nothing to arrest it. Therefore, at some quite uncertain future time, the halfpenny in the new proposed system is going to be virtually worthless, and no coin will be worth having smaller than the new penny, which to-day is to be worth very nearly 2½d.
That is the most depressing argument that I have heard for a long time. I am sure that we shall hear it again this afternoon from the noble Lord, Lord Shepherd; I do not see how he can avoid putting it forward. But I hope that he will put it forward very shortly indeed, because it is so depressing. All that this Amendment seeks to do is to give the British people the currency system which they manifestly want, and one which will bring them into line with one of the most important groups of currency in this world, enjoyed by those great nations overseas with whom we have our closest ties. I beg to move.
Amendment moved—
Page 1, line 7, leave out from ("be") to end of line 9 and insert the said new words.—(Lord Airedale.)
3.19 p.m.
THE EARL OF DUNDEE: I should like to compliment the noble Lord, Lord Airedale, on the clear and concise way he has moved this Amendment. It is an Amendment of great importance to the country, because upon it will depend the kind of money we use for perhaps the next 200 years. When the Second Reading was moved by the noble Lord, Lord Shepherd, and the agreements which were arrived at were explained, there was a report of the debate in the Daily Telegraph. It was a very good report, except that it was headed with something which implied that the Tories were no longer pressing this Amendment for the 10s. pound, because they were not putting on the Whips in the Division which was expected. Of course, this is not a Party question, and that is the reason why the Whips were not put on by the Conservative Opposition
in the Commons, and why they cannot be put on on our side of the Committee to-day. It is, as I say, a question which completely cuts across Parties. I hope that none of your Lordships will infer that anybody is losing, or has lost, interest in this question, which is of such keen moment to our trade, shopkeepers and business, to accountants, and to the country as a whole.
In another place there was a Division on Second Reading. Members there thought it important enough to move a Reasoned Amendment to the Second Reading on the ground that the 10s. pound was not proposed, and there was a keen debate again on Report. On the Opposition side the Whips were not put on. There is no doubt that Mr. Iain Macleod is right in his estimate, for which he gave very good reasons, that had there been a free vote in another place, an Amendment for the 10s. pound would certainly have been carried; and if your Lordships will read the OFFICIAL REPORT of the proceedings—I will not quote anything—you will see that there were several Labour Back-Benchers who made strong speeches in favour of the 10s. pound and, before they sat down, concluded by saying that of course they could not vote against "our dear Jim"; and so the Amendment was defeated.
There was also some dispute as to what kind of Whip they would put on in another place. It was only a two-line
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Whip. I am told—I do not know whether it is true—that in your Lordships' House an even more urgent summons has been issued to the supporters of the Government, which seems to show that the Government in your Lordships' House are a little apprehensive about what may happen. But I would say only this. I think it is a very great pity that a free vote on this was not allowed and cannot be had in both Houses. This is exactly the kind of question on which there ought to be a free Parliamentary vote. I will not say what would happen here if there were a free vote.
I would only remind your Lordships that, whereas in another place an adverse vote against the Government on a three-line Whip may be taken as a sign that the Government are expected to resign, nobody has ever dreamt of any such thing happening in your Lordships' House. In my five or six years as a Minister I think we were defeated almost as many times as we were successful in the Division Lobby, and everybody knows perfectly well that the only result of carrying an Amendment against the Government in your Lordships' House is that it gives the Government and the other place time to think again. They ought to have time to think again about this proposal, because I really do not think they have thought about it very much. The announcement of the decimal currency was made in the middle of the Chancellor's Budget speech—it took only a very few minutes in the middle of the speech—just before the Election; and I do not think a great many people in the country were really aware of what was happening, until last autumn when the Government's Paper was issued.
The noble Lord, Lord Airedale, has said that the arguments of the Minority Report of the Halsbury Commission, of the two dissenting members, appeared to him more cogent than those of the Majority Report which recommended the 20s./pound. As was said in our debate last January, the main weight of the argument of the Majority Report conceded a great many of the advantages of the 10s. system. And then they said those were outweighed by the international importance of having a 20s. pound sterling; that if we did not, there might be a danger of foreign bankers,

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holders of British currency, thinking, however wrongly, that the pound was being depreciated, or that it was not so strong as it was; and in order to evade this serious risk we must assume that the "Gnomes of Zurich" were not able to understand that twice one equals two, or something of that kind, and we must rigidly adhere to our 20s. pound. Then we were all surprised to see, when the Government's Paper came out on the official policy on decimal currency, that they blandly said they did not think the international argument was of any importance at all.
LORD SHEPHERD: No, my Lords. If the noble Earl, who is always accurate, will refresh his memory, he will see that what he has said is quite wrong. We said that we thought the Committee had given too much emphasis. Those are quite different words from those that the noble Earl has just delivered.
THE EARL OF DUNDEE: I should like to read it out, because I do not want to give a false impression. Does the noble Lord happen to remember the paragraph?
LORD SHEPHERD: I am only depending on my own memory.
THE EARL OF DUNDEE: I accept what the noble Lord says. They did not think very much emphasis ought to be given. I withdraw my remarks that they said it was of no importance at all; they said they did not think very much importance should be attached to this international argument. Well, my Lords, that being so, many of us have since found it difficult to see what argument there is at all for the 20s. pound, because it is generally agreed that 20s. is really too heavy a unit for a decimal currency. It is more than twice as heavy as the chief unit of any other great commercial country. The United States have the next heaviest, with the dollar worth about 7s. 2d. One penalty which has to be paid for it is that you have what is called the "beastly half-cent", which upsets the whole decimal character of the new currency structure. It will make it more difficult for every kind of calculation to be made, both mechanical and by hand, if the half-cent is kept in.
The ironical thing about it is this. I think the Government's real reason for insisting on the 20s. pound is the strong
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feeling of the Bank of England, which is really based on a kind of monetary pride; and what the Government have done is to surrender to this monetary vanity—I do not think it is too much to call it that—on the part of the banks, without considering the practical convenience of the shopkeeping and trading public. The ironical thing is that the banks, having prevailed upon the Government to keep the 20s. pound with the half-cent, are not going to use the half-cent themselves. They are too proud to use it; it is too much of a nuisance in their accounts. Therefore, the public has to put up with the inconvenience of it, but if they have a few half-cents in the bank they will not appear on their account: they will be ruled out altogether.
In the Majority Report it is argued that the half-cent, the "beastly half-cent", will be an inconvenience only for the next twenty years, until the 1980s, because by that time the value of our currency will have depreciated so much that we shall not need the half-cent any more, and we can then have, it is hoped for another 200 years, a truly decimal currency based on the pound, the florin being the next unit of 10 cents; and the unit of 2·4 pence—1 cent—will then be the lowest denomination of any coin which will be required. But do the Government not see how very strongly this argument can be turned against them?
For the last 25 years we have been trying to prevent, control and restrain inflation, trying to keep up the value of our currency. We discussed last January the graph in the Report which showed how our prices had gone up and down. But mainly the prices have gone up over the last thousand years or so, although it has not been an even process at all. They went up in the Napoleonic Wars, and we had some inflation. After that we had deflation and stable prices for about 90 years until 1914. Then we had a considerable inflation in the First World War, followed by deflation. Prices were lower in the 1930s than they were in the 1920s. We had another period of inflation in the Second World War, and it has only been since then that in time of peace we have been unable—or at least not very successful—in keeping stable prices. The only three years when they were kept stable during that period were from 1957 to 1960. Apart from that

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period every Government have always been fighting a losing battle against rising prices.
This is something which affects all Parties and all Governments. We are all trying our best to keep prices stable. The Government's prices and incomes policy has been brought forward in the hope of keeping prices more steady than they have been during the last 25 years. And is it not an awful confession of lack of confidence in the future if we deliberately say that in 25 years' time prices will have risen to much that we shall then be able to abolish this lowest half-cent denomination of 1·2d. and that the cent, or 2·4d., will then be the lowest coin that we shall require? That would seem to imply that in the next 25 years the value of our money will have been halved.
We believe that 1·2d.—the Government's half-cent and what we want to be the cent—is the lowest convenient denomination that we shall require in the future, and which we hope will remain the same for a very long time. There are some people who want it lower than that. It is arguable that even 1·2d. is too high. Those who want the halfpenny equivalent are going to bring forward a later Amendment about that. My reason for thinking that 1·2d., that is, one-tenth of a shilling, is in fact not really too high is that in fact it is worth actually less than the farthing was worth in 1914. In 1914 the lowest income groups were, on the whole, not so well off as they are now (they had to be equally economical, anyhow), and I think it is reasonable to say that if a farthing was the lowest denomination required then, one-tenth of a shilling is not too high now. But I recognise that there are arguments for having an even lower denomination than that, because we want to think of the budget of the smallest shopkeepers all the time, and I do not think the Government's proposal of the 20s. pound is one which will create the best conditions for the small shopkeeper.
As the noble Lord, Lord Airedale, has said, this Amendment will enable everybody to go on with nearly all the familiar coins to which they are accustomed. Though there is no longer any gold coinage in use now—no sovereigns—just a piece of paper (presumably the pound,
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whether it is 10s. or 20s. would be a piece of paper), the coins which we would be keeping under this Amendment would be the half-crown or 25 cents, the florin or 20 cents, the shilling or 10 cents, and the 6d. which would be 5 cents. As for the penny, the value of that would be raised from one-twelfth to one-tenth of a shilling, but that is no reason why the penny coin should not go on being minted exactly the same as it is now, because our copper coinage, anyhow, is a token coinage and is not supposed to have any relation to the intrinsic value of the metal from which it is made. That would be a great help and saving to all calculators, and all machines which have to be made to take pennies, sixpences and shillings would still go on being in use without the enormous expense of having to change them all.
Every other country, with the exception of Cyprus, which began with our currency and subsequently decimalised it has adopted the 10s. pound. In Australia it is now in use and is a great success. After careful consideration of all the various alternatives, Australian opinion came down almost entirely in favour of the 10s. pound. In South Africa, where the 10s. rand is now established, the same careful thought was given to the problem. In New Zealand also, where the new decimal currency will soon come into being, the 10s. pound has been adopted; and the same is going to happen in Ireland. We are the only big trading nation that is out of step; and even the 10s. unit which we are recommending would be a heavier unit than that of any of our big trading partners or competitors. In France the unit is 1s. 6d.; in Germany it is a little more, in Italy a little less; and even in the United States of America it is only 7s. 2d. The truth is that the pound is too heavy for a proper decimal system, and it is not made any better by the rather pessimistic assumption that in 25 years' time it will have lost so much of its value that we shall then be able to do without the half-cent. I should have thought that that was a prospect which would cause far more lack of confidence abroad in our currency than the changing of £1 into £2—a perfectly simple thing to do, which would be convenient, business-like and economical.

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I hope that the Government will reconsider this matter, because in my view neither here nor in another place have any convincing arguments yet been adduced in regard to the course which they have adopted. It is a second-best course, and I think it will be a great pity if the opportunity is not now taken to reconsider it.
LORD SHEPHERD: May I refresh the noble Earl's memory in regard to the Government's attitude to the international case? In view of the comments he made I think the Committee would appreciate hearing it—and I quote from Cmnd. 3164, paragraph 12, on page 5:
"The Government's view is that the 'international case' is important, though not in itself decisive. There are other important arguments for retaining the £, arguments which are more obvious and concerned with sterling as the domestic currency of the United Kingdom rather than as an international currency."
THE EARL OF DUNDEE: I am most grateful to the noble Lord. I tried to find that passage in the middle of my speech, and I am glad that he has helped me to do so. That is what I should have said: that the Government think that the international case is not decisive. The Halsbury Committee implied that it was decisive, and I entirely agree. They have said that they think it is important, although I do not think they have given any reasons why it is important unless we are to believe that foreign bankers and traders are incapable of comprehending the fact that twice 10s. is just as good as one 20s. pound.
3.40 p.m.
BARONESS ELLIOT OF HARWOOD: I rise to support the Amendment which has been so ably moved by the noble Lord, Lord Airedale, and supported by the noble Earl, Lord Dundee. I do so because I speak now for some thousands, hundreds of thousands, perhaps millions—I should not like to say what the numbers are—of people with whom my organisation, the Consumer Council, has been in touch on the question of decimal currency. The noble Lord, Lord Shepherd, said at the end of his remarks on Tuesday, in the short debate we had, that he had heard nothing new in the discussion we had on Second Reading. That
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may well be true; but the truth can be said over and over again, and it remains the truth, whether it is new or not new. I would assure the noble Lord, Lord Shepherd, that what has been said up to date by the noble Lord, Lord Airedale, and the noble Earl, Lord Dundee, is in fact the truth.
I should like to pick up one or two phrases which the noble Lord, Lord Airedale, used: one in particular in which he said that the majority of the country is against the Government. It is perfectly true we have never had a General Election in which people have been asked to make a decision on the subject of decimalisation or not. This question has never been put to the public. But if the organisation of industry and of retailing is representative of the public and of business, which I personally think it is, then it is a fact that the vast majority of people are opposed to the Government's proposals.
I can give your Lordships, if I may, a list of organisations who are backing the 10s. unit and the system which has been described by the noble Lord, Lord Airedale, and the noble Earl, Lord Dundee: the Association of British Chambers of Commerce—that is a very large organisation which is all over the United Kingdom, and they are solidly behind us; the Automatic Vending Machine Association; the Consumers' Association; the Co-operative Union—a very large organisation indeed; the Drapers' Chamber of Trade; the Economic Development Committee for the Distributive Trades; the Multiple Shops' Federation; the National Association of Master Bakers, Confectioners and Caterers; the National Chamber of Trade; the National Federation of Consumer Groups; the National Grocers' Federation; the Passenger Vehicle Operators' Association; the Retail Decimal Committee—that is a Committee of retailers; the Retail Distributors' Association and the Supermarkets Association. And in spite of what the noble Lord, Lord Sinclair of Cleeve, said on Tuesday about the Confederation of British Industry, we have some considerable support from some of the members of that Confederation. I know they are also backing the pound/mil system, but the 10s. decimal system has the support of a great many members of the Confederation of British Industry.

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If we are a democracy, if we believe in trying to get the views of the people who are operating in this enormous field of retailing, of buying or selling, of manufacturing and so on, if we have the whole thing represented in this Committee and in favour of the 10s. unit, surely the Government, who pride themselves—I say it without any criticism, because I do not want to make any Party political point on it—on being a strongly democratic Party, must be impressed by the fact that the people who are against them on this issue are the overwhelming number of those who are engaged in work in which currency is a vital integral part. Apart from that, the ordinary little shopper who goes every day to the supermarket or retail stores, the pensioner who goes into the post office and gets his pension, people doing all those things which everybody does every single day of the week, are deeply concerned about this matter. They will understand and realise what the 10s./cent system will mean. I will not repeat what the noble Earl, Lord Dundee, has said about the use of coins the coins which they are familiar with and understand and which can be explained to them. To scrap all that in order to have a system which is going to put us out of step with every single country in the world seems to me the most extraordinary way for any Government, whether Right, Left or Liberal, to behave. In fact we have, on this subject, information covering the whole range of trading and manufacturing work, and all behind the 10s. unit.
I hope that even at this late hour—after all is said and done, nothing vital has been done—we can look at this question again. I had the opportunity this week to attend the annual luncheon of the Confederation of British Industry and I sat next to a number of very distinguished economists; some were Treasury economists and some not Treasury economists. I asked them all what they thought about this particular plan which the Treasury is putting forward. I could not find one single person who agreed with it; they were all against. I beg the noble Lord, Lord Shepherd, and noble Lords in this House to think again. This proposal is going to affect every single person in the country. Surely we can do something which is going to be simple, which is
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going to be effective, which is going to bring us in line with all the rest of the nations in the world, and which will achieve what the Government want—that is, a decimal currency. I beg noble Lords to think again and to support this Amendment, which will give the Government a chance to think again if we win in the Division Lobby.
3.47 p.m.
LORD FRASER OF LONSDALE: I will be exceedingly brief. I find myself against my three friends on this side of the House. I think there is much to be said for the pound sterling. It has a great reputation throughout the world. The arguments used against it are that if we retain the pound we are going to be out of line with Europe. I venture to submit that that is really nonsense. Europe has half a dozen currencies: the French franc, the German mark, the Swiss franc, the Belgian franc—they are none of them the same. There are four or five different values attached to them. The South African rand (and, by the way, it is pronounced "ront") the Australian dollar, the New Zealand proposed dollar, the American dollar, the Canadian dollar, are not all the same; they are all different. Therefore it is quite wrong to suppose that by going in for a very lightweight unit or a medium weight unit we are going to assimilate ourselves to anybody. We are all going to be different anyway, so I do not think very much of that argument.
It is said we must have the half-crown. Why? It is not a decimal coin at all. It is a quarter of 10s. and an eighth of a pound. It can be expressed in two decimal points—·25 or whatever it may be—but it is not a decimal coin at all. It is a traditional coin—a very nice one. No doubt anyone who gets a half-crown tip and has to have a florin in the future will be sorry; but he will get over that. It is just as irrelevant to argue for the half-crown as to argue against the half-cent; they are both anomalies, nothing to do with decimals. I personally prefer the pound/mil system because it would avoid the one disadvantage of the Government's proposals, and that is that the machines for the time being will either have to ignore the half-cent, the ·66 or whatever it is, or will need to have three places of decimals. That is the only disadvantage. As regards inflation I am

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afraid I do not agree with the noble Earl, Lord Dundee, or with my friends on this side, that we had better try to bolster up our currency for the next 25 years by pretending that money is going to retain its value. It never has done, and certainly will not do so. If I remember rightly, the pound of 1938 is now worth only 4s. 9d.; and by the end of the century it will be worth 1s. 6d. I therefore think that the 2·4 pence copper unit will probably soon be the lowest unit we shall want. Therefore, I think that none of my noble friends, on either side of the House, is right. I think the Government would do far better to go to the mil, which is a real decimal system, and that my noble friends are not right to talk about the 10s. as if it were the only decimal system. It is not. A system based on one pound, one florin, and one-tenth of a florin—ten-hundredths of a florin—is a decimal system. I personally hope that the Government will think again, and will think about the pound/mil system which I regard as the best.
3.52 p.m.
THE EARL OF HALSBURY: I rise to oppose this Amendment, for reasons which I think will be fairly apparent to your Lordships. I listened to the remarks of the noble Lord, Lord Airedale, putting forward an argument which I have heard before, but which I have never found convincing; namely, that we ought to belong to some sort of a "club" represented by currencies that are grouped about an approximate value. I have never understood this concept. The currencies of the world occupy a range of basic values of which ours just happens to be the biggest. But I cannot see that the fact that the rupee and the franc are both worth about 1s. 6d. has a promotional effect on Anglo-French trade. Having gone into the foreign departments of the banks where they work with foreign currencies I find that either they work off tables or they know all the answers in their heads or can perform calculations at lightning speeds.
If we could have a world currency and if the regional sections of this world currency were always at par, there might be some convenience to tourists or to foreign exchange dealers. But I cannot see that the concept of bringing the pound into line with a purely abstract rupee has any relevance whatever on the
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decisions we have to take. This bears upon the point raised by the noble Baroness when she asked: why must we be out of line? I would ask everybody to consider what is this line that we are supposed to toe. I find this argument almost entirely unconvincing.
The noble Lord, Lord Airedale, also referred to what the British public think about this matter. Since the publication of the White Paper I have had a large number of invitations to go and talk on this subject to learned societies, to chambers of commerce, to Parliamentary Committees and so on, and I have had some experience of what the British public do think on this, which in the first instance seems to represent the latest pressure that they have come under from activists. As your Lordships know, modivists or supporters of the status quo, are never activists.
It is up to short-term interests who may feel themselves adversely affected by the Government's proposal to lobby to the contrary to their heart's content. That is perfectly fair. This is a democracy; and they lobby actively, and there is no reason why they should not. But my experience of talking to people on this subject is that I find them anxious when I start, and that I leave them relaxed when I have finished. One of the reasons is that I always take around with me a set of coins representing the future decimal currency, and I do some decimal currency shopping for them in front of them, and so give them experience of what it is like.
Although the list of organisations supporting the 10s./cent system quoted by the noble Baroness is most impressive, there is one big difference between this list and the Report of the Halsbury Committee. We published our disagreements. The world knows that we were divided, with a majority of four to two. Corporate bodies express opinions on behalf of their members, but they do not normally publish their disagreements. They do not vote by majorities; they do not publish what these majorities are, and a rather false impression can be created by
Supposing that all the bodies quoted by the noble Baroness in her list were necessarily unanimous. I know, because I have talked to them, that there were shades of minority opinion in many; and although it is quite true that the majority vote in many cases

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was for the pound, I greatly doubt whether that vote was ever taken—
BARONESS ELLIOT OF HARWOOD: May I intervene? I am talking about those organisations backing the 10s. unit. These organisations are part of the Committee who have been discussing this, and I can assure the noble Earl that they have an enormous majority of the traders, the shoppers, and so on, of this country, in backing the 10s. unit.
THE EARL OF HALSBURY: I thank the noble Baroness for correcting my slip of the tongue. When I said "pound" I meant the 10s. unit. But still, we do not know by what majorities they decided this; nor is it clear to me that these votes on behalf of these various corporate bodies were taken by people who had themselves practised decimal shopping in the pound/cent system and were aware that it is really not at all difficult.
Perhaps I may refer once more to a point made by the noble Lord, Lord Airedale. He talked about the impurity of introducing the half into the decimal system. I dealt with this on an earlier occasion on a Motion by the noble Lord, Lord Redmayne, and I have spoken on it on many occasions. The critics of the Government's proposals contradict themselves. Why is the half impure if you call it a half, but pure if you call it 5 mils? If only the opponents of what we proposed in the Committee of Inquiry could agree among themselves as to what purity or impurity is, it would be possible to treat them as a united opposition. But in fact they contradict one another in the course of trying to contradict the majority finding of the Committee.
LORD AIREDALE: My Amendment was nothing to do with mils. I called a half "1 cent".
THE EARL OF HALSBURY: I am talking about the general attitude to purity or impurity. I am simply saying that the noble Lord referred to the impurity of introducing a half-cent into the system, yet I am sure that there are other noble Lords present who would regard it as pure if the same unit were called 5 mils.
On the international case, I do not want to confuse your Lordships with more of this matter than is necessary, because it seems to have dropped out of public
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controversy to some extent. I had a long talk with the International Monetary Fund's managing director, the late Mr. Per Jacobsson. Looking back on that, I think that what he was warning me against was the irrational components in human behaviour. A rational warning against the irrational never sounds very convincing, and I suppose that is why the international case has convinced only those who studied it rather carefully.
I turn now to the speech of the noble Earl, Lord Dundee, who talked once more of the "beastly half-cent". The noble Earl has lived all his life with the "beastly halfpenny", and for a considerable part of it with the presumably doubly "beastly farthing". I should be most interested if on some subsequent occasion somebody could tell me what it is that is beastly about it. I think people are getting a little bored with halfpennies, because they are losing their purchasing power. But this is the inevitable consequence of a decline.
That brings me to the question of the secular trend to inflation on which the noble Earl took me to task after our last debate on this subject on the Motion of the noble Lord, Lord Redmayne, by pointing out that the different secular jerks of an inflationary character during the course of the last thousand years occurred in regular intervals and for different reasons. The noble Earl was quite right in what he said. I believe that if an economy were hit at random by inflationary and deflationary factors of quite different character and quite different origin, the inflationary ones would tend to survive and the deflationary ones would tend to be wiped out. The reason for this is simply that the social consequences of inflation are so very much less unpleasant than the social consequences of deflation. In terms to which we are all accustomed, it is much easier to get a pay rise under inflationary conditions than it is to find a job under deflationary conditions.
We have to accept that there is this secular trend. It is like the pile on a carpet: you rub it at random and it will always work one way. Some explanation for a thousand years' inflation certainly has to be found. Nobody has ever contemplated that inflation by a factor of two, wiping out the new halfpenny, would

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occur in a period of 25 years, but when one is designing something one tries to build in a natural point of weakness, so that if it encounters a stress which has not been foreseen it will break at one convenient point. The half at the bottom end of the decimal currency is a convenient point of weakness which can be dropped readily under inflationary conditions, thus securing a decimal currency without unnecessary coins in it for rather longer than if one did not.
I will not talk at great length about the associability difficulties of the pound. I know that it is in many people's minds. I have always felt that these difficulties have been over-estimated. In fact the whole of these controversies on which we are engaged are largely a question of short term versus long term factors in the decision we have to make. I believe that if we are building something to last a hundred years or so—and our Victorian forebears gave us a coinage which has lasted a hundred years—we ought to disregard the short term factors in the considerations and allow the long term factors to prevail. The long term factors are the precious ones that need defence. No defence is necessary for short term factors. They are nearly always involved in short term interests who will be zealous in defending them. In the course of my work on the Departmental Committee and in debates in your Lordships' House, it has always been the long term interests of the coinage, the currency, the nation and our descendants that have had the highest priority in my mind.
4.3 p.m.
LORD SAINSBURY: My Lords, I have from the beginning been a strong supporter of what has become known as the 10s./cent system, and was a signatory along with two other Members of your Lordships' House, the noble Baroness, Lady Elliot of Harwood, and the noble Lord, Lord Sieff, to a letter in The Times on December 12, 1966, to that effect. Nothing I have heard since alters my belief in the validity of the arguments used in that letter; the only difference is that there has grown up a body of opinion supporting a pound/cent/mil system or a pound/florin/mil system. I accept that these two systems are the least inflationary because they make provision for a unit roughly equivalent to
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our present halfpenny. However, this is their only advantage, and I do not believe that to be an adequate reason for adopting what would be a fairly complicated system. I believe, therefore, that the 10s./cent system is still by far the best alternative to the system proposed by the Government.
I do not propose to repeat all the arguments for the 10s./cent system. They have
been ably stated in previous debates, and this afternoon by the noble Lord, Lord Airedale, and other speakers. To my mind, the most important arguments are, first, that the 10s./cent system would be easier to associate with our existing currency for most transactions—and I am naturally concerned about this because I am associated with many of the organisations mentioned by the noble Baroness which have contact with the millions of people who will be most affected in the early period of this great transition to decimalisation. Secondly, there would be no fractions as there are under the pound/penny/halfpenny system which would make calculations very much easier. Also, it is doubtful to what extent the new halfpenny will be used by many traders. If, as seems likely, it is not extensively used, the smallest price increase will be the new penny, or nearly 2½d., contrasted with a cent, or just over a penny, under the 10s./cent system. Last but not least, the whole operation would be cheaper because it uses only two new coins, the one cent and two cent, as opposed to the five new coins required under the Government system. It is with great regret that I disagree with the Government's choice of the unit. I realise that it is a question of judgment, but I believe that on this occasion their judgment is wrong.
LORD MCCORQUODALE OF NEWTON: Having listened to what has been said, having studied this problem to the best of my ability, and not having declared myself on this matter before, may I say that I am absolutely in agreement with the noble Lord, Lord Sainsbury, and the noble Baroness, Lady Elliot of Harwood, and that I support this Amendment. I hope the noble Earl, Lord Halsbury, will not mind my saying that I am still of that opinion after listening to him this afternoon. I fail to see that his argument supported one side against the other. At one time I could not make out which

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side he was supporting, but presumably he was backing up his Majority Report.
I would make one point which I do not think has been seriously expressed this afternoon, but which is a matter which I regard as of great importance. I feel that this will be a difficult operation to put into action. It will mean an enormous amount of dislocation, and the more smoothly we can conduct the operation the better it will be for our trade, our industry and all concerned. If we accept this Amendment, I believe that we can get the smoothest operation possible, because we will leave in the hands of the public the penny, the sixpence and the shilling, which they understand, while I do not believe it will be easy to impress the general public with coins which are specifically stated in the Bill to be coins called "ten new pence", "five new pence", "two new pence", and a new halfpenny. I believe the penny, the sixpence and the shilling would smooth the way. If, even at this late hour, we could ask the Government to think again, I believe that it would be of immense advantage to trade, industry and commerce in this country.
4.10 p.m.
LORD SINCLAIR OF CLEEVE: I had not intended to speak to this Amendment, but the very clear statement by the Lord Chairman at the beginning of the Committee stage makes it necessary for me to say a few words. He said then, if I understood him aright, that if this Amendment is carried it will not then be possible to call the Amendment which stands in the name of my noble friends Lord Clitheroe and Lord Somers and myself. That being so, I think that I owe it to those of your Lordships who feel as we do to say that there is merit—and I was delighted to find that my noble friend Lord Fraser of Lonsdale saw great merit—in the pound/mil system or some variant of it, and to say quite explicitly what I tried to say on Second Reading a few days ago with regard to the 10s./cent system.
We feel that that system is open to serious objection on the grounds, first, that it does not provide for the halfpenny equivalent and is therefore inflationary—I hope I may develop that point in a moment when I come to speak on the
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pound/mil system—and secondly, it does not have the merit of flexibility. I am sure the noble Baroness, Lady Elliot of Harwood, was perfectly correct in saying that there are some members of the Confederation of British Industry—and she has had very convincing proof of that statement in the remarks of my noble friend Lord McCorquodale of Newton, who has just sat down—who believe that the 10s. system is the right one. I think I made that clear in the Second Reading debate, and I repeat it now. But the fact is that the C.B.I., by a majority of the Council, has come down quite firmly, and has said so repeatedly to the Government, in favour of the pound/florin/mil system or some variant of it.
LORD CHORLEY: I should like to make two remarks. First of all, the list of organisations in favour of this Amendment
which the noble Baroness has read out is at first sight rather formidable. It is a formidable army coming on with measured tread, until you realise that it is really a stage army. Pretty well all the organisations that she mentioned are in on the same racket, as it were; they march round behind and come back on to the stage from the other side. They are all organisations which have what one might call a short-term axe to grind in this business, and I hope to goodness that the Government will not allow themselves to be frightened by the heavy, thunderous tread of all the organisations which have been paraded on the stage. I think the noble Earl, Lord Halsbury, is absolutely right when he says that we must keep our eyes very steadily on the long-term interests of the country, and not allow ourselves to be frightened by the people who parade this bogey around.
My second point is that this fear about the difficulty of getting into this system is also a complete bogey. I had the great pleasure a few weeks ago of spending a fortnight in Cyprus. I had no idea until I landed on the island of Cyprus that they have already introduced a decimal coinage system there, with pound notes almost exactly the same as our own pound notes, and florins which are almost the same as our florins. For about 24 hours I thought I was still handling the ordinary British currency. Then it was borne in upon me that, in fact, it was decimalised, and it took me another 24 hours to get completely accustomed to it.

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It is as easy as that. I think that this business about everybody being in chaos for weeks and weeks because the pound will be slightly different and the florin will be distinctly different, and the shilling, also, will be distinctly different, is a bogey which we ought not to allow ourselves to be frightened by. I hope the Government will stand firm.
LORD SOMERS: I should like to say one or two words. I shall not keep your Lordships long, because I am sure we want to get down to this matter and divide. I am glad the noble Earl, Lord Halsbury, made one remark about one aspect of this matter, and that is the passion for getting into line. I am sorry the noble Lord, Lord Airedale, feels so ashamed of being British, but I cannot see any reason why we should try to get into line with other nations. For one thing, there is nothing to be ashamed of in being different from the majority. In any case, the argument about producing a unit
which is something like the other units is not going to mean anything at all. Everybody who studies foreign exchange realises that the relative values of the currencies of two different nations vary from day to day. Therefore, we shall have got no nearer similarity than we are now. I cannot see any point in trying to be like everybody else.
4.16 p.m.
LORD REDMAYNE: I have some points to make which I shall try to make as briefly as I can, and I shall try not to repeat any part of the speech which I made on the previous occasion. Of course, it is true that these arguments are now terribly threadbare, but they are threadbare on all sides. They are threadbare, if I may say so with due respect to the noble Earl, in respect of the pound/cent/half-cent; they are certainly threadbare in respect of the 10s. system; and they are certainly threadbare in respect of the pound/mil.
Those who support the 10s. unit have been too frequently called intemperate, and I should like to congratulate the noble Lord, Lord Airedale, on running no risk of having that accusation made against him. The noble Earl, Lord Halsbury, is inclined on occasion to use terms which seem to have a slightly derogatory meaning. On his use of the word "activist", for example, if I may say so with respect to him, he is just as much an activist on
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behalf of the Majority Report of his Committee as some of us have been in support of the 10s. unit.
I thought he was inclined, also, to be rather unkindly critical of my noble friend Lady Elliot of Harwood, since he discounted the support which she detailed, in the sense that they were not necessarily majority opinions or universal opinions of those bodies. Of course they were not. None the less those which the noble Lady quoted were of themselves sufficiently impressive. However, she might also have drawn attention to some others and put more stress, for example, on the Vehicle Operators, on the London Transport Executive, on British Rail, and on two Government Departments—the Ministry of Social Security and the Post Office.
She mentioned the C.B.I. but I do not think she mentioned the T.U.C. Although a letter from the T.U.C. to the Chancellor was mentioned in the previous debate, it was not put on the record, and I think it ought to be put on the record. What they said to the Chancellor on January 11 was this:
"Taking into account the mounting evidence that the greater part of opinion in industry, trade and commerce now clearly favours the introduction of the 10s./cent system of decimal coinage, the General Council decided to draw your attention once again to their support for this system."
That is powerful advice from a powerful body. When the noble Lord, Lord Chorley, speaks of those with a short-term axe to grind, I hope he will also take into account that great body of opinion which cannot, by any possible argument, have a short-term axe to grind—the Trades Union Congress.
It is true that the C.B.I., for whom my noble friend Lord Sinclair of Cleeve has briefly spoken—and to whose view he will unfortunately have no opportunity to return, and I commiserate with him on that—has somewhat changed its mind in favour of the pound/mil. But it should be noted by the House, and I am sure my noble friend will bear me out in this, that that change of mind is not due to any conversion to the merit of the pound as the major unit, but rather to dissatisfaction with the minor unit on the ground of the need for a halfpenny equivalent.
I should like to speak briefly now, if I may—because this is relevant to my support for the 10s. unit—about the need

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for the halfpenny equivalent, or, rather, the lack of need for it. In the debate on January 30 the noble Earl, Lord Halsbury said, and I quote from columns 828 and 829 of the OFFICIAL REPORT:
"If the 10s./cent and pound/mil enthusiasts could agree with each other, I think I might bow before the combined weight of their authority".
With respect to the noble Earl, he should bow, because we are largely agreed in the matter of the decision made by the Government. Our only point of disagreement is on the need for the halfpenny equivalent. I think that in discussing this matter we have all tended to suffer from the disadvantage that we are constantly arguing to-morrow's case with yesterday's facts; and this is more true in respect of the halfpenny equivalent than in respect of anything else. My noble friend Lord Sinclair of Cleeve, I know, believes that in 1971 the need for the halfpenny will still be relevant. Frankly, I should like to believe that to be so, but it seems to me to be common sense that in the intervening years prices, and the pattern of price fixing, which is important in this matter, will have adjusted themselves to the pattern of decimalisation in advance of the changeover day.
There has been much talk of rounding up and rounding down of prices, and we are told that the Decimal Currency Board will in due course make recommendations. Much will depend on the date on which those recommendations are made, but I am perfectly certain in my own mind that it will be found that automatically in the intervening period prices will tend to adjust themselves to whatever level is most nearly equivalent to a converted price on decimalisation, when decimalisation becomes necessary. If, in the meantime, an increase is necessary in the price of, for example, a low-priced article, such as an egg, a pint of beer or a pair of bootlaces, then that price, as increased, will edge inevitably towards a price in the old currency most conveniently converted to the new, and, I may say, least likely to be subject to any arbitrary recommendation as to rounding down. Four years is a long time in which any such adjustments can be made—that is, up to the date of changeover—and I see no great problem in it.
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As to the need for the halfpenny equivalent after that date, all I will say is that, however much I may disagree with the Government's acceptance of the majority finding of the Halsbury Report, I certainly have never—indeed, none of us has—belittled the care with which their evidence was collected; and I accept their dismal message that the halfpenny will shortly be as dead as the farthing is to-day. And even if it is not quite dead in 1971,
what of it? Even the most optimistic of us can hardly believe that it will have any relevance then to the price of a packet of cigarettes. As for beer, milk or small groceries in broken bulk, I do not doubt that any temporary difficulty—and it will be only temporary; just for a year or two—in change-giving will be met by token coins, or by some such device; and some such device is by no means new.
It can of course be argued that such tokens are a nuisance, but if I may say so—and I say this particularly to my noble friend Lord Sinclair of Cleeve, and to those who are inclined to think the same way as he does—if such tokens are a necessary short-term nuisance, they are nothing compared to the burden of adopting a cumbrous and impractical currency, such as the pound/mil would be, in order to meet a short-term need. Indeed, if one had to provide a halfpenny equivalent, I would propose adding the half-cent to the 10s./cent system, which would in fact be the better solution. But, as I say, I have never believed that to be necessary, and I do not believe it now. I believe that insistence on the need for the halfpenny equivalent for price-sharing or wage-fixing is, in the words of my ex-master, "a train in last year's Bradshaw", and I do not think it will be running in the '70s—if, indeed, any trains are running in the '70s at all.
I said that I would not repeat the arguments. I must say only this about associability. I make no excuse for the term. The noble Earl used it in his Report; the Chancellor of the Exchequer derided it, because he had a weak case. But without any question at all, on associability the 10s. unit wins hands down. On that, I want to make one point, because it has been frequently said (indeed, the noble Lord, Lord Chorley, suggested something of the sort in his speech)

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by those who disparage the associability argument that Englishmen abroad use foreign currencies with such ease. The noble Earl has also used this argument on two occasions. In my view, however, it is a very false argument. I do not believe that anybody who is not literally at home with a foreign currency in its own country can use that currency without some mental check of the equivalent value. If we are in France, we know that a franc is 1s. 6d.; if we are in America, we know that the dollar is equivalent to about 7s. It is this same check on value—value of purchase and value of change—which will be required, not just for a short period, not just for a week or two, but all the time that these two currencies run side by side.
Double pricing (and I suspect that the Minister may use this argument) is not in itself the answer. Double pricing—that is, the marking of tickets with the two prices side by side—is perfectly all right in the shop window, but it has little relevance to word-of-mouth transactions involving small purchases and small change: and this is where the easy signposts of the 10s. system, to which my noble friend Lord McCorquodale of Newton referred, are most important. You cannot belittle this argument. The 6d., the 1s., the florin, the halfcrown—5 cents, 10 cents, 20 cents, 25 cents: each of these, during quite a long period, will afford a quick check of the competence or, I may say, of the honesty of the cash handler, whether he is the cash handler behind the counter, in the cashier's box, on the bus, in the Tube or wherever he may be. I believe that this is extremely important. I think that on all the other arguments (and I am not going to refer to them now) the 10s. system wins. In spite of the fact that the noble Lord opposite and my noble friend may quarrel over the exact wording with which the Government have described the international case in the White Paper, he knows very well, as we all know, that in point of fact this has faded far into the background.
I am sorry to have taken a little long at what, after all, is not a very late hour, but I think that we certainly should have had a free vote. I hope that if we win this vote the Government, at long last, will accept that they have been
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wrong, and that there is no disgrace in giving way about it. Quite frankly, if we lose this vote I shall be sorry for the politicians of all Parties who will have to face the puzzled wrath of the man in the street in 1971—because, regardless of what we have said to-day or during these weeks, we shall all be held to blame.
LORD CLITHEROE: I do not want to intervene for more than two minutes, but in case the Amendment in the name of the noble Lord, Lord Sinclair of Cleeve, and myself is not called, I should like to make my position clear. I agree with the noble Lord, Lord Kahn, who spoke the other day; and I am not in favour of the decimal system. Had we introduced a metric system, which I recognise would involve the agreement of the United States of America and the Commonwealth, there might have been something to be said for going the whole hog, but I think the cost of the decimal coinage system is quite out of relation to any advantage we shall get from it. Having said that, perhaps I may say that I prefer the system advocated by the noble Lord who has just spoken and by the noble Earl, Lord Dundee, the noble Baroness, Lady Elliot of Harwood, and others, to the system proposed by the Government. If, however, the Government insist on going on with their plan then I think the Amendment of the noble Lord, Lord Sinclair of Cleeve, is the only method by which we can get any sense at all from this arrangement.
4.30 p.m.
LORD SHEPHERD: I must admit that I have enjoyed this afternoon's debate. It has been a true debate; we have had short, good-humoured speeches both supporting and opposing the Government case. I find myself in the unique position of having opposition behind me, from my noble friend Lord Sainsbury, while enjoying the support of the noble Lord, Lord Fraser of Lonsdale: either he spoke for my case or I for his. The noble Lord, Lord Airedale, when he introduced this Amendment laid down the proposition that we should decimalise if we must and bring ourselves into line with some other decimalised currency. But I think the Committee will agree that we must have more important points in mind. I would refer your Lordships very briefly to the

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features that the Halsbury Committee considered desirable in a decimal currency system.
They said—and I quote from the Report:
"The system

(i) should be a consistent decimal system and should seek to maximise the benefits hoped for from decimalisation;

(ii) should be simple;

(iii) should be flexible, and convenient for money transactions of all values;

(iv) should be lasting. The introduction of the system

(v) should not affect the international standing of sterling;

(vi) should not present people with undue difficulties of adaptation in the changeover period;

(vii) should not result in avoidable price increases;

(viii) should not result in unduly high machine and non-machine costs."

These were the very important factors that the Halsbury Committee had in mind when they made their recommendation. But if noble Lords had the Halsbury Committee's Report in front of them they would recognise from paragraph 27 that the Halsbury Committee admitted that there was no perfect solution; that it was not possible to decimalise our pounds, shillings and pence in a pure form. If I may say so, my basic criticism of the speeches that have been made so far in
support of the 10s. system is that it was made out to be all virtue and no vice. In fact, I submit that the 10s. system has more disadvantages, particularly in the long term, than the pound. But I do not stand at this Dispatch Box this afternoon and say that the pound system the Government are putting before the Committee is a perfect one. What I am saying is that we believe it to be the best, not only in the interests internally of this country but in view of our world trade role.
It is not surprising that we should have this debate to-day; it has been going on now for some 150 years. If your Lordships are to make a judgment this evening, I think you must first ask yourselves whether the initial advantage of the 10s. system—and I grant the noble Baroness that it has an initial advantage—outweighs the long-term advantage of the pound system. Then I would ask the Committee to say whether the advantages
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of the 10s. system, which I have conceded, are as great and as significant as the proponents of the 10s. system believe them to be. I hope that the Committee will take the view that the advantages are not so great as to outweigh the disadvantages of the pound system; and that there will be recognition of the long-term advantages of the pound system, not only in terms of our internal economy but also in terms of our role as a great world trading nation.
One significant omission from the case for the noble Lord's Amendment is that while he recommends a 10s. system he is silent about the name. No doubt the noble Lord, Lord Airedale, will consider this a technicality. I would assure him that it is not; and that I believe there would be just as much controversy in this House about the name of the new unit, if we were to accept it, as there has been on the arguments presented to-day.
LORD AIREDALE: I will tell the noble straight away what I would call it. I would call it "the British dollar".
SEVERAL NOBLE LORDS: Oh!
LORD SHEPHERD: Well, well! I must say that it seemed to me, while the noble Lord was speaking, that he would go for the franc or the dollar. But I see great difficulties in persuading this House to accept the phrase, "the British dollar". I should not care to recommend it to your Lordships.
The main arguments for the 10s. system are so closely related to the arguments against the pound that I think it best that we should examine them together. They fall conveniently under three headings: First, associability, which the noble Lord, Lord Redmayne, stressed, and the fraction. There was also the problem of coinage and business accounting machines, but that aspect I will leave out this afternoon because I do not think it has been developed. It seems to me that there is general recognition now that there is very little in the case. The argument is that the 10s. system is more readily associable than the pound system, since the familiar shillings are repeated in the decimal equivalents; for example, the shilling being 10 per cent.; the 2s. 20 per cent., and the half-crown being 25 per cent.

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The argument continues that this is important, since a high percentage of daily transactions are based on shillings and pence. This argument is valid if it does not include the odd pence. But it is essentially a transient advantage which will have no relevance once the transitional period is over. This may well be a question of weeks, and I should like noble Lords to keep that time scale very much in mind.
LORD REDMAYNE: My Lords, I am sorry to interrupt the noble Lord, but I think this point is of great importance. Is he saying that the time during which the two currencies may both be legal tender will be a matter only of two or three weeks?
LORD SHEPHERD: No.
LORD REDMAYNE: In that case his argument is false.
LORD SHEPHERD: I did not say that. The period for legal tender of the two currencies may be 18 months, or it may be two years. It depends on how quickly we can get the new currency into use. But the acceptance of the new currency by the public, I think, will lie in a matter of weeks.
The principal advantage in retaining the pound as a major unit is that it avoids any break in our sense of values on all money transactions larger than the small transactions which are the every-day, though important, transactions, such as those in shops, on food, or in buses. But whatever system is chosen, these difficulties will arise. This was the experience in South Africa, India and Australia. We believe that these difficulties can be overstated; and that, with proper preparation, much can be done to ease these problems. As I said during the debate initiated by the noble Lord, Lord Redmayne, the Government, on the advice of the Decimal Currency Board will undertake a massive educational programme, using the Press, television and all forms of communication, so that the public will be able quickly to understand the new currency. But I believe that people will soon become accustomed to thinking—and this is the important thing—in terms of the new currency.
The noble Lord, Lord Redmayne, poured scorn on the use I have made of the fact that many of our people from
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all walks of life now proceed overseas for their holidays. But they do go overseas; they go to unfamiliar countries, speak unfamiliar languages, and use unfamiliar currencies. They rapidly learn to think in terms of the foreign currency, particularly in relation to small values. In fact, the less associability there is between the foreign currency and their own, the more quickly they become used to it. I can speak from experience. Many of my Malayan
friends who have lived with the dollar at 2s. 4d. and have come to this country, find that once they have grasped the difference between a half-crown and a two-shilling piece they have not the slightest difficulty with our money. It is quite a different thing when they go to Hong Kong, where they are still dealing with the dollar, but where it is worth only 1s. 3d. Our object is to get people to think in terms of the new decimal currency as quickly as possible. We believe that it is only when buying the more expensive goods with foreign currency that travellers make a mental conversion into the more familiar pound. But no such conversion would be necessary with the pound system which would retain the familiar major unit.
I do not believe that there is a great deal in this question of associability. I believe that the Halsbury Committee carried out an investigation into how long it would take an ordinary person to become used to the new currency. It was said that under the 10s. system it would take about a month, and that under the pound/cent/half-cent system it would take two to three months. I think it is true to say that those who participated in the investigation came to the whole thing "raw", but our people would come to it after a good deal of educational propaganda through television and the Press. They will, in fact, assimilate these new currencies a great deal more quickly than the subjects used in the investigation.
We must also take into account that customers in shops will have advice from shopkeepers and shop assistants who have been trained. May I give one illustration which I think is of some significance. I understand that in Australia there has been sales resistance on the part of customers because of the use of the new 10s. dollar. Ladies have resisted buying attractive dresses because the price was marked at 26 dollars instead of at £13.

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I understand that in some shops in Australia, in order to attract lady customers and not frighten them off, prices are quoted in pounds. That has overcome the difficulties.
The noble Earl, Lord Dundee, spoke about the "beastly halfpenny". The Government have not said that the halfpenny will be dropped in a short time. We shall retain it as long as it is necessary to do so, but the noble Earl will bear in mind that in 1966 the pound, in terms of the 1946 value, was worth about 9s. 2d. This fall in value occurred under Governments of both political Parties. It may be a consequence not just of pure and simple inflation, but of our growing money incomes. We know that the farthing has gone and that in due course the halfpenny will go; and when that occurs the noble Earl will have lost his "beastly halfpenny" and we shall have moved to a pure decimal currency.
I do not think there is a great deal more that can be said regarding the effect that this change will have on consumers. The Halsbury Report suggested that decimalisation would create an increase in the cost of living index of some 9d. in £5 purchases. I understand that the Ministries involved in this have no reason to differ from that view. It has been said that the inflexibility of the pound/cent system will result in manufacturers and wholesalers having difficulty in phasing their prices, which will cause inflation particularly in the retail shops. Those who are in trade—the noble Lord, Lord McCorquodale of Newton, is one and my noble friend Lord Sainsbury is another—will recognise that it is in the retail shops that the physical passing of currency takes place.
Transactions between retailers, wholesalers and manufacturers are paper transactions. I believe that to-day manufacturers decimalise when quoting, and there is no reason to quote single articles on an invoice or refer to a halfpenny. You can get down to a much finer figure through decimalising what is already a decimalised currency. I do not believe there is anything in the argument that because the halfpenny is the smallest unit it will create price increases. Certainly, it would be the duty of the Government to see that this does not take place, and
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they have the machinery to do so. The Government will be able to give information and advice to manufacturers as they are already doing for some of the companies mentioned by the noble Baroness, Lady Elliot of Harwood. We advise them how they can quote their goods in a decimalised form and still permit the retailer to secure his present profit margin.
I have dealt with the case for the 10s. unit, and I have not denied that there is something in it. I will now put to your Lordships the reasons why the Government take the view that the pound should be our currency in the future. One long-term advantage of retaining the pound as the major unit is that it avoids the necessity of changing past accounts and records. Any such break in continuity in Government and company accounts would continue well beyond the transitional period, that is, the first 18 months. Secondly, the United Kingdom has become accustomed to an unusually high value major unit. This heavy unit has advantages in a highly-developed industrial trading country. We need this major unit. Australia and New Zealand are not in the same class as ourselves as a world trading organisation, but I will come to that in a moment.
Thirdly, the adoption of the pound system makes it possible to use quicker and cheaper conversion methods for some of our main business machines which would be affected by the changeover, machines which account for a large proportion of the total changeover cost. Fourthly, the importance of the currency unit inevitably lessens with time which is what I have been dealing with. Fifthly, the pound has the associability advantage of retaining the familiar major unit. As I have said, there is evidence that both South Africa and Australia are eradicating the idea of the pound from people's minds.
The international case is strong. We use the phrase, "it is important, though not in itself decisive". But it is very important. As one who has traded overseas and who recognises the importance of the pound sterling I would put this view to your Lordships with great stress. The international case for the pound is based on the fact that the pound sterling, as well as being domestic money in the United Kingdom, is one of the two great international trading currencies. It is

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used for the settlement of trade debts and as a reserve currency. About one-third of the world's international trade is settled in sterling, and rather more than half covers trade between two third parties. The witnesses include the Bank of England, the British Bankers' Association and many other organisations involved in international trade. They have all taken the very strong view that we should retain the pound and that that is essential in the interests of our international trading position.
I repeat, there is no perfect solution when we decimalise. These are advantages to the 10s./cent system, but they are relatively short-term. The overriding strength of the pound case is its long-term advantages, not only internally but also as an international trading currency. The noble Baroness, Lady Elliot of Harwood, herself used the phrase, "in the short term". We are legislating to-day to establish a currency not simply for our generation and the generation yet to come, but one that will stand the test of time as well as pounds, shillings and pence have done. All the evidence is there that the pound system will give us the currency that will last right through this century and perhaps through the next. I hope that the noble Lord, Lord Airedale, will withdraw his Amendment.
4.52 p.m.
THE EARL OF DUNDEE: I think that the Committee is almost ready to come to a decision. I want only to thank the noble Lord, Lord Shepherd, most sincerely for the reasonable and moderate way he has advanced his arguments. I have tried my best to understand and appreciate the Government's case, but I honestly think that the only good reason for their decision is that they have respectfully followed the monetary conservatism of the bankers. But even bankers may be capable sometimes of monetary pride and prejudice, and I hope that noble Lords will prefer their own reasons and convictions.
LORD AIREDALE: Nobody wants to hear another speech from me—that is
quite certain. I will briefly take up two points which have arisen out of the
debate and then we must divide. I am very sorry to inform the Government Chief Whip that I cannot accept his kind invitation to withdraw my Amendment. The noble Lord, Lord Somers, said he was sorry that I was ashamed of being British. I do not like to think of the noble Lord being immersed in sorrow and I hasten to reassure him. I am not ashamed of being British. I hope that his sorrow will be transformed into joy.
The noble Lord, Lord Chorley, took to task the noble Baroness, Lady Elliot of Harwood, and called the many organisations for whom she spoke "a stage army who walked round the back and came back on to the sage." I cannot help thinking that on an afternoon when the Government Whips are on and there is a free vote on this side of the House it is rather extraordinary that a member of the Government's side should talk to a member of this side about a "stage army who walked round the back and came back on to the stage".
The shortest possible summary of the points in favour of the 10s./cent system are set out in a few lines in the Minority Report of the Halsbury Committee, on page 163, in which they say:
"The 10s./cent would be the more consistent decimal system, and would give much more benefit from decimalisation. It would be much more simple. It would be more flexible and convenient for money transaction of most values. It would present people with much less difficulty of adaptation in the changeover period. It would be less likely to cause price increases. It would cost substantially less—"
A Government who, on a matter which has nothing to do with Party politics, attempt to force upon the British people a system which apparently the British people do not want undoubtedly invite a Division in this House. They are going to get a Division in this House and I earnestly hope they are going to lose it.
4.57 p.m.
On Question: Whether the said Amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents 70, Not-Contents 86.

CONTENTS

Ailwyn, L.

Allerton, L.

Amulree, L.

Airedale, L. [Teller.]

Amherst of Hackney, L.

Berkeley, Bs.

Albemarle, E.

Ampthill, L.

Bessborough, E

Bradford, E.

Henley, L.

Rea, L.

Brooke of Ystradfellte, Bs.

Hereford, V.

Redmayne, L.

Byers, L.

Howard of Glossop, L.

Rockley, L.

Carrington, L.

Hylton-Foster, Bs.

Sainsbury, L.

Clwyd, L.

Jackson of Burnley, L.

St. Aldwyn, E.

Craigavon, V.

Jellicoe, E.

St. Helens, L.

Craigmyle, L.

Kemsley, V.

St. Just, L.

Darwen, L.

Kinloss, Ly.

Salisbury, M.

Daventry, V.

Kirkwood, L.

Sandys, L.

Denham, L.

Lambert, V.

Savile, L.

Derwent, L.

Listowel, E.

Sempill, Ly.

Dudley, L.

Lothian, M.

Sherfield, L.

Dundee, E. [Teller.]

Loudoun, C.

Strange, L.

Ebbisham, L.

Lucas of Chilworth, L.

Strange of Knokin, Bs.

Effingham, E.

MacAndrew, L.

Stuart of Findhorn, V.

Elliot of Harwood, Bs.

McCorquodale of Newton, L.

Iweedsmuir, L.

Ferrers, E.

Merrivale, L.

Vivian, L.

Fleck, L.

Monson, L.

Wakefield of Kendal, L.

Fraser of North Cape, L.

Mowbray & Stourton, L.

Wedgwood, L.

Grenfell, L.

Netherthorpe, L.

Wynford, L.

Headfort, M.

NOT-CONTENTS

Addison, V.

Hall, V.

Moyne, L.

Archibald, L.

Halsbury, E.

Pargiter, L.

Atholl, D.

Harvey of Tasburgh, L.

Phillips, Bs. [Teller.]

Auckland, L.

Hawke, L.

Plummer, Bs.

Balfour of Inchrye, L.

Hilton of Upton, L.

Ritchie-Calder, L.

Beauchamp, E.

Holford, L.

Rowley, L.

Beswick, L.

Horsbrugh, Bs.

Royle, L.

Blackford, L.

Hughes, L.

St. Davids, V.

Boston, L.

Hunt, L.

Samuel, V.

Bowles, L. [Teller.]

Ilford, L.

Sanderson of Ayot, L.

Brockway, L.

Inchyra, L.

Segal, L.

Burden, L.

Inglewood, L.

Serota, Bs.

Champion, L.

Kennet, L.

Shackleton, L.

Chorley, L.

Killearn, L.

Shepherd, L.

Citrine, L.

Latham, L.

Sinclair of Cleeve, L.

Cooper of Stockton Heath, L.

Latymer, L.

Somers, L.

Cork and Orrery, E.

Leatherland, L.

Sorensen, L.

Croft, L.

Lindgren, L.

Stonham, L.

Crook, L.

Lindsey and Abingdon, E.

Strang, L.

Dulverton, L.

Longford, E. (L. Privy Seal.)

Summerskill, Bs.

Dundonald, E.

Massereene and Ferrard, V.

Swansea, L.

Faringdon, L.

Milford Haven, M.

Taylor of Mansfield, L.

Fortescue, E.

Milverton, L.

Teynham, L.

Francis-Williams, L.

Mitchison, L.

Thurlow, L.

Fraser of Lonsdale, L.

Molson, L.

Walston, L.

Gaitskell, Bs.

Morris of Kenwood, L.

Wells-Pestell, L.

Gardiner, L. (L. Chancellor.)

Morrison, L.

Winterbottom, L.

Goschen, V.

Mountgarret, V.

Wolverton, L.

Granville-West, L.

Moyle, L.

Resolved in the negative, and Amendment disagreed to accordingly.

5.8 p.m.
LORD SINCLAIR OF CLEEVE LORD SINCLAIR OF CLEEVE moved, in subsection (1), to leave out all words from "the pound sterling and" to the end of the subsection, and to insert:
"the florin, the florin being one-tenth part of a pound sterling, and the mil, the mil being one-hundredth part of the florin."
The noble Lord said: I beg to move the Amendment standing in my name and that of my noble friends Lord Clitheroe and Lord Somers, and I would add that my noble friend Lord Aldington has
asked me to say that he has seen these Amendments, agrees with them, and had he not been compelled at short notice to go abroad yesterday on urgent business his name would have been included among those now down to this Amendment. I should explain at the outset that these three Amendments, Nos. 2, 5 and 7, stand together. Since the "10s. Amendment", No. 1, no longer stands, the Committee is left with the straight choice between the pound/half-cent and the pound/mil or some variant of it. I will explain later what I mean by the phrase "some variant".
Those of us who prefer the pound/mil see three objections to the pound/half-cent. The first is that it is inflationary, in the sense that under it the minimum practicable price variation upwards or downwards is 1·2d., whereas at present, or under the pound/mil system, prices can move in steps of one halfpenny. The increase proposed, therefore, under the Government scheme over the present one is 140 per cent. Although the halfpenny is no longer used on buses in England—it is, I am glad to say, still used on some buses in Scotland—and no longer features in the price of newspapers, it is a coin in common use. There are considerably over 800 million halfpennies in circulation, and the number of halfpennies in circulation has varied very little over the last 10 years. It is important in our lives. Bread, beer, confectionery, eggs, milk, petrol, sugar and tobacco—in all these the halfpenny is a constituent of the retail price. Moreover, and incidentally, there are quite a number of people in the lower income brackets who like to make their purchases when they can in small numbers—for example, two eggs, or three apples—at a time, and to them the halfpenny is convenient.
Narrow price phasing is essential for all the products I have mentioned, and likely to continue to be essential for many years to come. I cannot agree with the conclusion of the Halsbury Committee that the halfpenny will have outlived its usefulness in another five years. Many trade organisations are recognising that their businesses and their customers will be badly hit if the halfpenny is demonetised. As I understand it from what the Financial Secretary to the Treasury said in another place on this issue, the Government feel that, with the inevitable progress of inflation, the value of the halfpenny will soon be quite insignificant. That is surely a somewhat pessimistic and almost defeatist point of view. The value of the single halfpenny may be considerably less than it is to-day, but the value of a thousand halfpennies will still be significant.
The argument has been advanced that to raise the minimum variation from ½d. to 1·2d. is not inflationary because manufacturers would be slower to raise their prices. The latter part of that statement is true, with or without the necessity to justify an increase to the Prices and
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Incomes Board, but the first part is not true. I contend that to make the smallest coin equivalent to 1·2d. would still be inflationary, in that when the price increase came it would be greater than it need be at that time, and the delay beyond the point where the increase of the halfpenny was necessary and completely justifiable would mean that the industry concerned would in the meantime be restricted in funds available for necessary capital investment; in other words, it is forcing that industry to work inefficiently until its prices can be put on a sound basis, and when that time comes to take out of the consumer more than competition and good business sense would dictate. There can be no doubt that the substitution of a coin worth 1·2d. in place of the halfpenny as the minimum value coin is inflationary, and we cannot afford any artificial stimulus to the rate of inflation from which we at present suffer. Yet, as I said on Second Reading, it is perfectly possible to provide the halfpenny equivalent under the pound/half-cent proposal by minting a coin 0·2 (or one-fifth) of a cent. If the Government were prepared on further consideration to do this, it would meet the particular criticism to which I have referred.
The second objection to the pound/hall-cent system is its inflexibility. Here, we have to do a bit of crystal gazing. We are not yet members of the Common Market, but our policy is to join just as soon as conditions make our membership possible. In this matter of decimalisation we are, as has already been said this afternoon, legislating for generations to come. We certainly do not want to contemplate the radical alteration involved in the change from the existing to a decimal currency to be followed within a decade, or a comparatively short time, by a radical alteration of the particular decimal system we adopt. And, if the system proposed in this Bill is adopted, and we join the Common Market, British industry will be handicapped in being unable to have price phasing similar to that practised by its European partners or competitors.
The validity of this point does not, I admit, leap to the eye when one remembers that the prices to be charged are of course the prices operative in the country in question. The fact, however,

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is that if our price phasing is wider and less flexible than that of our partners and competitors, our manufacturers and traders are handicapped. The point was well illustrated by an example given by Mr. Patrick Jenkin in the debate on Report stage in another place, when he instanced in some detail the case of confectionery.
Then, again, we may at some future date want to have sales taxes, which, because they cover purchases of small denominations, can be expressed only in coins of very small value. This is the main reason for the enormous number of small coins in circulation in Continental countries and North America. I am not advocating a sales tax, but we ought to be able to cope with one if it were deemed necessary, and be able to do so without a radical alteration of the whole currency system. As regard an added value tax, although at the point at which such a tax is paid it is in fact a paper transaction, it still requires, or may require, narrow and flexible price phasing to take account of that tax at the retail level.
Our third point of objection is "comparative inconvenience of the coinage". It is difficult to deal with this adequately within the compass of a speech of reasonable length, but I will do my best. Let me first deal with the problem of machines—the coin-operated machines and the business machines. As regards coin-operated machines, all machines operated by the existing 1d. coin will under any new system require conversion. Under the pound/mil system, if the 6d.
is retained those operating on 6d. and 1s. coins will require no alteration on the coinage proposed in the Amendment to Schedule I. Under the pound/half-cent system no 6d. coin is practicable. Therefore, machines such as parking meters, telephone boxes and other machines operated by the 6d. will require alteration.
As regards business machines, my information is that the addition of an extra column to an existing machine is expensive, but the extra cost of providing an additional column on a new machine is marginal, and as the life of these machines is not great and three or four years' notice of a new system is contemplated, the cost involved, although considerable, is not
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of such an order as of itself to influence the choice of systems. There are many technical questions involved, and I confess that I do not feel competent to deal with all the refinements of this aspect of he problem, but in terms of numbers of columns required the pound/mil and the pound/half-cent systems are on a par, each requiring columns to cover three places of decimals.
As regards cash registers operated by press-down or push-in keys, I believe it is the case that under the pound/florin/mil system the capacity of the normal 25-key machine would be reduced from £3 19s. 11½d. to the equivalent of 16s., and therefore such machines would require replacement. Such machines are not used in supermarkets but in the smaller retail shops. There are estimated to be between 250,000 and 300,000 such machines in existence, and the cost of replacement at between £25 million and £30 million. In looking at this figure, however, one has to have regard to the cost of conversion on other machines if the 6d. coin is abandoned. On vending machines alone that is put at £10 million, and on top of that is the cost of conversion of the many thousands of parking meters, telephone boxes, et cetera.
It is, I am afraid, impossible to go into this matter in greater detail without wearying the Committee. The pound/half-cent system itself necessitates considerable expenditure on machine conversion replacement. The Halsbury Committee summed this up on page 148 of their Report as £109 million in the first year, £114 million in the second, and £138 million in the third. That is putting all the costs together. I must admit that I have no reliable estimates of comparable figures under the pound/mil system, but I see no obvious reason why they should be substantially different from this, even if the 6d. coin is abandoned.
That brings me to my last point; namely, the denomination of the smallest coin to be minted tinder the pound/mil system. If the mil itself (the farthing equivalent) is minted, then we are faced with the inconvenience of a large number of these so-called vestigial coins in circulation, but no other inconvenience in terms of coinage, because under this system the 2-mil is the halfpenny equivalent (0·48d.); the 5-mil is the same as the proposed new half-cent (1·2d.) under

329
the Government scheme; the 10-mil coin is the 2·4d. equivalent; the 25-mil coin is the 6d.; the 50-mil coin is the shilling, and the 100-mil is the florin.
If, on the other hand, the smallest coin to be minted is the 2-mil coin, and the 5-mil and 25-mil coins are retained, there are two disadvantages. The first—which is more theoretical than real—is that it is not possible to have any single article priced at 1-mil or 3-mil. The second is that there are inconveniences in the giving of change; for example, change for certain values cannot be given from the next highest coin, or can be made up only in one way. If, as may well be the case, these inconveniences are deemed intolerable, then the 6d.—the 25-mil—coin has to be abandoned and the progression becomes 2-mil (0·48d.), 4-mil (0·96d.), 10-mil (2·4d.), 20-mil (4·8d.), and 50-mil (1s.), the last three coins being precisely as proposed in the Government's pound/half-cent system.
At first sight it may be asked: why go to all this trouble for the halfpenny equivalent when the pound/half-cent system could give the halfpenny equivalent if a coin of the value of one-fifth of a cent were minted? I think the answer to that (apart from the fact that the Government have given no indication of having a fifth of a cent coin) is that under the pound/mil system it is perfectly easy, even if one starts with the smallest coin as 2-mil, subsequently to have the 1-mil coin without any radical alteration in the system, if, for reasons such as sales tax, this is required. But to divide the cent into fifths and tenths would be cumbersome and still would not make possible the restoration of the 6d. if that were later required.
I feel that the relative advantages and disadvantages of, on the one hand, the minting of the 1-mil coin and retaining the 6d., and, on the other, of minting the 2-mil as initially the smallest coin and abandoning the 6d. should be weighed up by experts before the die is finally cast. That is what I meant by the phrase which I used initially, "or some variant".
On Second Reading I referred to the considerable support that exists to-day in industry and trade for the pound/mil system or some variant of it. I will therefore
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not repeat that to-day. Although from time to time there have been a good many references in the Press to a pound/mil system it would, I think, hardly be true to say that it is a system with which the general public are familiar; and, for reasons which were perhaps understandable at that time, it was not dealt with at length in the Halsbury Report. By itself the system is simple and straightforward. When considering transitional problems it becomes clear that the difficulties are less if we have the single-mil coin, because then more of the coins with which people are familiar—particularly the 6d.—can be retained.
I do not seek to minimise such difficulties as there are in the change-over from the existing system to the pound/mil system. There are, of course, difficulties, as the Government have recognised, in the change-over to the pound/half-cent system, but given time for adequate preparation, such difficulties can be greatly reduced and, in any event, in my view should not be the deciding factor in the choice of system to be adopted. I was most interested to hear the noble Lord, Lord Chorley, speaking of his experience in Cyprus, which confirms what I have heard from a great many other people: that the change there to the pound/mil system was effected with great smoothness and is working extremely well.
To accept this Amendment would not delay the passing of the Bill but it would give a maximum of six months for expert consideration of what appears to be a very important part of the system. If, as a result of the examination suggested, the Treasury approve specific recommendations from the Board or the Committee, as the case may be, that approval is subject to Affirmative Resolution by both Houses of Parliament. Having regard to the importance of the issues at stake, and the very long time for which we are legislating, I hope the Committee will feel that this is a common-sense and practical way of ensuring—so far as it is humanly possible to ensure—that the system finally adopted is in its essentials and its details the best available to us. I beg to move.
Amendment moved—
Page 1, line 8, leave out from ("and") to end of line 9, and insert the said new words.—(Lord Sinclair of Cleeve.)
5.26 p.m.
LORD SOMERS: I rise to support this Amendment very strongly; and I do so for two main reasons. I am not qualified to speak on the inflationary side, but that has already been dealt with very well
by my noble friend. One point which I think is most important, and which neither of the other two systems would achieve, is that, as has already been explained by my noble friend, practically nothing in the way of our present coinage would have to be altered. We could retain the 1s. and the 6d., and it is only the coins of very low value that would need be altered. Under the system proposed by the Government innumerable coin-operated machines throughout the country would have to be altered (which would be a vast expense—just think of the number of parking meters there are in London), but that could be avoided under this system, and this, I think, is a tremendous advantage.
The other reason I support the system proposed in the Amendment is that it retains the pound, which I feel, in common with so many of your Lordships, has an international significance and is well worth retaining. What is more, of course, the pound note would not have to be altered. The 10s. note could be accepted, if necessary, until such time as new ones were printed, as 5 florins instead of 10s.; and altogether the changes in notes and coinage would be minimal.
I agree with my noble friend that it would be a good thing if the public could know more about this subject. I have been astounded and rather saddened by the fact that each time this point has been mentioned in your Lordships' House it has received practically not a word of comment from the spokesman for the Government who wound up the debate. I do not remember any comment being made on it when my noble friend first introduced it, and there was certainly none when I subsequently spoke upon it. I am not surprised at that, but it is a great pity, and I think that the public as a whole should be made more aware of this system and of the entire logic of it. It is the logical compromise between those who wish to retain the pound and those who wish to have the 10s. system. It is the one which bridges the gap between the two.
LORD CLITHEROE: I will not add more than a word. The noble Lord, Lord Sinclair of Cleeve, has already put the case, admirably supported by the noble Lord, Lord Somers. I am convinced that if we do not have a smaller coin than that proposed by the Government, there will be an inflationary tendency. The noble Earl, Lord Halsbury, does not mind about inflation, but I can never refrain from reminding people that inflation is a tax on savings not authorised by Parliament. The fact that we might one day find it necessary to have something like a sales tax, as the noble Lord, Lord Sinclair of Cleeve, mentioned, is another additional important point which should not be overlooked. I have nothing further to say, except that I strongly support this series of Amendments.
THE EARL OF HALSBURY: Although I oppose this Amendment, I should like to start by expressing agreement with all that has been said by the noble Lord, Lord Sinclair of Cleeve, on the subject of inflation. The transition from a finer grained to a coarser grained coinage must incorporate an inflationary element in the price structure. The important thing is to decide how big this element is going to be. One can tackle this in two ways. One is to calculate the actual magnitude of the effect. This involves two different calculations, according to whether you demonetise the halfpenny first and then decimalise the currency second, taking two bites of the cherry, or whether you do the whole operation in one, in which case you get an effect a little different from doing the two operations in succession. Just to measure the inflationary effect of removing the halfpenny without decimalising, our best calculation was that the most probable maximum inflation effect was 3d. in £5. One could say that that might be retarded as a very small fluctuation imposed on the much larger inflationary effects that afflict us, because whatever the noble Lord, Lord Clitheroe, may say, I am not in favour of inflation, though it is less painful than deflation from the social point of view.
The other way you can approach it is to look at the decline in purchasing power of our small coins over the century, and then see what the farthing of 1900 represents to-day. One finds that a smallest coin of value, 1·2 of our

333
present penny to-day, would have about the purchasing power of a 1900 farthing, although the national income per head is about double what it was in those days. In relation to the income of 1900, our proposed new coinage will be twice as fine grained as the coinage of those days.
LORD SINCLAIR OF CLEEVE: Would the noble Lord allow me to make one brief observation on the subject of inflation? I have no doubt that he followed pretty carefully, as I did, the proceedings in Standing Committee A in another place. There was a considerable amount of evidence produced, bringing up to date the budgets on which that 3d. was calculated, which did show a considerable percentage-wise increased figure.
THE EARL OF HALSBURY: I will accept what the noble Lord tells me, though I have not studied this in detail, as he evidently has. The Achilles heel of the argument that I have put before your Lordships is whether the coinage of 1900 had a smallest coin that was in fact small enough. Quite recently I have come across a piece of evidence that bears on this point, through the good offices of an amateur numismatist, who showed me what I had not seen before, a half-farthing of the mid-19th century. The history of this aberration in our coinage was that a half-farthing was minted for use in Ceylon. For legal and constitutional reasons it was made legal tender in this country and put into circulation. It was greeted with derision by the Press and public and was withdrawn about ten years later, there being no use for it, which would suggest that in the last century the farthing was about the smallest coin we needed.
I think it follows naturally, and no one would disagree, that if you give people a facility they will use it, and if you take it away after they have got used to it they find it an inconvenience. But proportionally as the use of the farthing in this country declined after the Second World War, so the Mint was increasingly reluctant to mint it, but came under pressure from various interests to do so. One of those was the Scottish bakeries. They felt the farthing to be an essential component of their price structure. When it was finally demone-
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tised they found that they could get along without it all right.
I can quite realise that the great industry with which the noble Lord, Lord Sinclair of Cleeve, is connected moves its price of cigarettes by a halfpenny at a time. That is because there is a halfpenny with which to do it. But when we talk of moving by a halfpenny, do we mean the 1967 halfpenny or the 1945 halfpenny, which would have been a penny in our present price structure, or do we mean the 1939 halfpenny, which would be three halfpence in present terms? You cannot introduce a 2-mil coin in parallel with the 5-mil coin unless you have a 1-mil coin as well for the purposes of change. You can have a fifth or a half, but if you mix a fifth and a half you must have a "one" also. It means going back to the farthing.
The only real issue on which I disagree with the noble Lord, Lord Sinclair of Cleeve, is that I think it is wrong at this stage to make a retrograde step by going back to the farthing. Sooner or later we shall demonetise the halfpenny in any case. I sympathise with the view he is putting, because in choosing a compromise solution I regard the abolition of the halfpenny as the biggest single sacrifice that has to be made for the sake of adopting the pound system; but I believe it to be an acceptable one.
LORD SOMERS: May I say a word about what the noble Earl has said about the halfpenny? I rather sympathise with him, in that I always dislike it when I have an odd halfpenny in my pocket. But although it does not mean very much to me whether I pay 9d. or 9½d. for a pint of milk, it means a very great deal to the dairy firm. They are the people who are going to suffer; or, if they decide to put it up to 10d., naturally we have to suffer.
LORD MERRIVALE: I should like to support this Amendment. One of my reasons for doing so was mentioned by the noble Lord, Lord Sinclair of Cleeve. We propose to apply for membership of the E.E.C., and France is one of the leading members. As the noble Lord, Lord Shepherd, will be aware, only a few years ago the franc was re-valued to a value which was 100 times more than in the past. It then became known as the new franc for a certain period of

335
time, and then on a certain day it became known as the franc. If France can now
have a centime which is the equivalent of one-hundredth part of 1s. 6d., I should have thought it would have been reasonable to assume that Her Majesty's Government could consider adopting the system proposed by the noble Lord, Lord Sinclair of Cleeve; in other words a pound/mil system with a mil which would be one-hundredth part of 2s. If in France they have a coin which is one-hundredth part of 1s. 6d., and is used quite extensively, I should have thought that that is one aspect which could be considered by Her Majesty's Government.
LORD BOOTHBY: I should like to put on record in one sentence a view I have held for forty years: that is, that a moderate, controlled but continuous inflation is an essential condition of economic growth of any kind at all. We have had exactly that for the last forty years, and that is why, by and large, the people of this country are more prosperous than they have ever been.
5.40 p.m.
LORD SHEPHERD: I hope the Committee will understand when I repeat the expression of appreciation that I made to the noble Earl, Lord Halsbury, at the time that we had our debate on the Motion of the noble Lord, Lord Redmayne. I think that the noble Earl has played a signal part in this afternoon's discussion. I would give him the full benefit of a notable victory—though perhaps it was aided slightly by the Whips that we felt it wise to put on. But he has played a most notable part, and certainly has added to the case that this House benefits through those who sit on the Cross-Benches, particularly those who do not come frequently but who, when they do come, make such notable contributions.
The basis of the Amendment of the noble Lord, Lord Sinclair of Cleeve, is to ensure that we have the halfpenny in our currency. The Amendments are designed to provide for a decimal currency in which the denominations of money are the pound sterling, the florin of one-tenth part of the pound sterling, and the mil, one-hundredth part of a florin. The pound/florin/mil is one of the two possible
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systems of decimal currency based on subdividing the pound.
If one reads the Reports of the Halsbury Committee one sees that careful consideration was given to this scheme, although we may not have taken quite so much note of it as we should have done. But at least the Halsbury Committee gave it careful consideration and came to the conclusion that it was greatly inferior to either the pound/cent/half-cent or the 10s. system. But under the pound/florin/mil system the major unit, the pound, is subdivided into 10 florins, which in turn are subdivided into 100 mils. The monetary sums, when written in, express pounds, florins and mils. Thus, the florin becomes a separate unit of account, and therefore 3s. 9d. would be expressed as I florin 87 mils, and 18s. 11d. would then be 9 florins 46 mils. Those of us who were
concerned about associability between the pound and the 10s. would, I fear, boggle at the problems that would arise if this scheme were to be adopted.
LORD HAWKE: May I ask the noble Lord to explain that a little more clearly? It is not clear to me why it is necessary that the amount should be expressed in terms of florins. Why should not the amount which he stated be 175 mils, or whatever it was?
LORD SHEPHERD: I really do not know. That is the basis of the noble Lord's Amendment, as I understand it. If I am wrong, perhaps the noble Lord will correct me.
LORD SINCLAIR OF CLEEVE: I do not think it follows automatically.
LORD SHEPHERD: That is what I am advised. But if I should be wrong, I will certainly speak to the noble Lord. This is the advice that I have as to what is meant by the noble Lord's Amendment.
LORD SINCLAIR OF CLEEVE: May I just say that that is a common interpretation and a common way of using a coinage expressed in such terms as the pound/florin/mil, the florin being regarded in those circumstances as an intermediate coin. I have never suggested in anything I have said that I insisted on the florin being regarded as an intermediate coin. It is a convenient way of

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describing it, and it may subsequently be found to be an accurate and convenient practice to use the florin in that way; but it is not a necessary condition of the system, as my noble friend Lord Hawke has said.
LORD SHEPHERD: I see. Therefore, my advisors may be right when we are thinking in terms of small transactions. Clearly, the pound and the mil system would apply particularly when you are dealing with large purchases, but where you are dealing with, as I was quoting just now, 3s. 9d., you would use the florin as the major unit.
At least we are agreed that the purpose of the noble Lord's Amendment is the retention of the halfpenny. I agree with the noble Earl, Lord Halsbury, and to a certain extent with the noble Lord, Lord Boothby, that we shall see inflation. We have had it as long as history is recorded, and there is no reason to believe that history will be held back. Undoubtedly, in the view of the Halsbury Committee and that of the Government there will be a time, not necessarily in the next 10 or 15 years but perhaps in 25 years, when the halfpenny will disappear. In fact, I cannot recall at the present moment any article which can be purchased for a halfpenny.
I think the noble Lord, Lord Sinclair of Cleeve, would concede that when one considers the countries which use a mil system, one finds they are all countries with a relatively low gross national product in terms of the individual. Therefore they need a currency containing a small unit to facilitate the purchase of the necessaries of life. I should like to give to the Committee this example. In Cyprus, the gross national product in 1964, in United Kingdom currency, was some £180 per year: in the Sudan, £32·7; in Libya, £76·3; in Tunisia, £66·2; in Egypt, £39; in Iraq, £90; and in Jordan, £78. Those are the gross national products per head in those countries. It really does require a small currency unit for the purchase of articles of everyday life. But let us then look at what the figure was in this country. Remembering those small figures, we find that our gross national product at the same period was some £529 per annum. I think the noble Lord, Lord Boothby, will agree that this will be subject to a continuing
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increase. One of the consequences of this fact is that the halfpenny will need to disappear from our currency.
The noble Lord, Lord Somers, I think referred to the problem of milk. We know that milk varies in price throughout the year. It is adjusted according to demand and supply. In the case of pasteurised milk, which I believe represents some 80 per cent. of the milk that is sold in this country, it would be easy to deal with the problem of the slight inflexibility of the 1·2d. minor unit in the sense that one would be able to adjust the uplift or the reduction in the price of milk. This problem, I think, can be overcome.
The noble Lord, Lord Somers, and I think the noble Lord, Lord Sinclair of Cleeve, also spoke about finer pricing—that is, getting a grade in prices. One has to recognise that it is in the retail shops that the basic difficulty of the halfpenny arises. If manufacturers had to take into account the halfpenny in making out their invoices, of course the problems would be great. But, as I said on the first Amendment, companies will in a greater measure be able to offer goods in a decimalised price. For example, an article priced at, say, £8 20½ new pence, could be shown as £8 20·5 new pence, or £8·205. Or if you were talking in terms of goods that are sold even more quickly and in larger quantities, you could quote in your invoices down to three places of decimals in pence. One of the great gains of decimalisation is that if one is offering large quantites of goods, one will be able to offer fine decimalised figures.
LORD SOMERS: Under the Government's present system, even the halfpenny will be worth 1·2 pence.
LORD SHEPHERD: Yes, but I am now talking in terms of the manufacturer. May I give the Committee an example? I did not want to bore your Lordships with a lot of detailed figures, but perhaps this would give the Committee an idea of what can be done. A very well known manufacturing company came to the Treasury and pointed out their difficulties in making quotations in relation to their retail outlets, when decimalisation comes about, if there is no halfpenny equivalent. They put this problem to the Treasury: "How are we to sell

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120 dozen of our goods, at, say, 8s. 1½d. net?" At present, the total cost to the retailer for those goods would be £585. His profit margins,
on retail prices of 8s. 7d. or 8s. 7½d or 8s. 8d., would be 5·89, 6·16 or 6·66 per cent. Respectively. On decimalisation, without the halfpenny equivalent, the cost, net, would be 41 new pence. The total cost to the retailer would then be £590 40 new pence, and his profit margins, on retail prices, of 43½ new pence (or 8s. 7d. to-day), and 43½ new pence (or 8s. 8d. to-day) would then be only 4·88 per cent. and 6·1 per cent. This is getting rather involved, but your Lordships can read all about it tomorrow.
If, on decimalisation, the manufacturer uses two or three places of decimals in the price units, the unit price would be 40·625 new pence and the total cost to the retailer would be £585—in other words, the figure which is at present being quoted. The retailers profit margin on 43 or 43½ new pence would be increased to 5·85 per cent. and 7 per cent.
Respectively. If the retailer was aiming at a profit of 5 per cent. or 6 per cent. on the items, the effect on the consumer of the use of decimal parts of a new penny at the wholesale end would be a reduction in price from 43½, to 43 new pence—a reduction of 1·1 per cent. I doubt whether your Lordship's can follow these figures, given orally—I must say that I do not as I read them. But at least I am now on record; and the noble Lord, Lord Sinclair of Cleeve, can see that at least we have gone into this problem of what will arise through the loss of the halfpenny.
But there is a way in which that difficulty can be overcome, particularly with the manufacturer and the wholesaler. As I said on the first Amendment, clearly it will be the responsibility of the Government and of the Decimal Currency Board to give all advice as to what can be done not only to ease the problem of the manufacturer—particularly in relation to the industry with which Lord Sinclair of Cleeve is connected—but also in regard to a retailer.
In the end we come back to this problem: should we have a coin in our currency which, looking at the history of the matter and anticipating what is before us—and this is not to say that inflation
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is rampant—we shall not need many years hence? That is the view of the Government, as I think it was the view of the Halsbury Committee; and this is one of the reasons why in the end we agreed to the decision of the Halsbury Committee to take the pound/cent/half-cent system. I am very sorry that I have not been able to make myself all that clear to the noble Lord. But the Government have gone into this matter; they agree with the Halsbury Committee that this is not a good scheme, and I would ask the noble Lord to withdraw his Amendment.
The noble Lord has also an Amendment down which asks us to ensure that the Decimal Currency Board undertake yet another review of this matter, that they should report in some six months' time, and that any report that is made should be endorsed and approved by the two Houses of Parliament. I will be frank and say that I do not believe anything new will come out of any further examination. I really do not believe that there is now any information which could be brought forward. I have spoken to the Treasury officials, I have listened to all the debates, and I think noble Lords will agree that, apart from the fact that points have been nut in different ways with varying emphasis, there has been no new information at all which was not presented to the Halsbury Committee. In fact, one might say that there was very little new information available to the Halsbury Committee which was not available to some of the earlier Select Committee inquiries.
If I thought that there was a possibility of new information, I might go to my right honourable friend and say, "Let us have a chance to think again". But I do not believe that that is the case. If we were to meet the point put forward in the noble Lord's Amendment nothing would happen for some time, and one wonders what would be the position of manufacturers and traders who must now start making preparations. It would mean that for 12 months at least they could do nothing about their preparations. They would not know what to do, and I believe that this would be wrong. We have now waited 150 years to decimalise our currency. We have had this Report; we have made our decision, I hope, in Parliament; and now is the

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time to put all our energies into making the currency, geting it circulated and, above all, in educating everybody in its use.
5.57 p.m.
LORD SINCLAIR OF CLEEVE: I should like to thank the noble Lord for the courtesy of his reply. I feel that there has been some misunderstanding about the purpose of the Amendment in regard to the procedure suggested in Amendment No. 5. It was aimed at securing a judgment and assessment of the relative advantages and disadvantages on the one hand of the single mil, with the retention of the sixpence, and on the other of the 2-mil coin and the abandonment of the sixpence. I have already described the various systems and it is very difficult for any one individual to come down firmly on one side or the other. Therefore, I feel that it needs to be given a certain amount of examination. What is a period of six months when one bears in mind the period for which we are legislating? The Amendment was an attempt to find a common-sense and practical way of getting a good answer to this question, if, as I had hoped, Parliament would find that the virtues in the pound/mil system were so considerable as to justify that exercise. We were not suggesting that the Decimal Currency Board as constituted should make this examination, but that it should be given power to do so if the Treasury thought wise. That is why we said it should be the Board itself, or some other appropriate Committee.
There were two points in the speech of the noble Lord, Lord Shepherd, to which I must refer. First, in regard to inflation, I stand by what I said as to the opinion of industry in regard to the inflationary effect of the abolition of the halfpenny or the non-retention of the halfpenny equivalent. I accept the fact that a certain amount of inflation is one of those things with which we have to live, but I do not accept the necessity to give an artificial stimulus or spur to that process, which is going quite fast enough.
My last point is on the question of small coins. If I did not misunderstand him, I think the noble Lord said that the prevalence of these very small coins was most noticeable in those countries with a low gross national product. But in Germany—taking that as an example of a country where the gross national product is not so low—the number of pfennigs in circulation is about 3,400 million, if my memory serves me right. The pfenning is worth a farthing. Holland has the cent, which is of the same value, and has almost the same number of cents in circulation. That represents about 80 per head of the population in Holland, whereas in Germany it represents 50 per head, both enormously greater than the number of halfpennies in circulation in this country.
In the United States of America the value of the cent on a strict Exchange rate basis is above that of our halfpenny, but in purchasing power it is slightly below it. But the number of cents in circulation in the United States (and the same applies to Canada) is astronomical. In spite of the utmost diligence in our research, we have not been able to get a reasonable approximation of the number, but we know that the number of new cents minted every year for the last few years is between 3,300 million and 3,500 million. So the prevalence of the small coins is not so much related to the gross national product of the country as due to the practice in those countries of having sales taxes which require a very small coin. This is part of the argument for flexibility. Much as I appreciate the terms in which the noble Lord has replied, having regard to the importance of the two considerations of inflation and flexibility I find it impossible to withdraw this Amendment.
6.4 p.m.
On Question, Whether the said Amendment (No. 2) shall be agreed to?
Their Lordships divided:—Contents, 42; Not-Contents, 57.

CONTENTS

Albemarle, E.

Brooke of Cumnor, L.

Ebbisham, L.

Atholl, D.

Clitheroe, L.

Hacking, L.

Auckland, L.

Cullen of Ashbourne, L.

Hawke, L.

Audley, Bs.

Daventry, V.

Headfort, M.

Berkeley, Bs.

Drumalbyn, L.

Horsbrugh, Bs

Bridgeman, V.

Dulverton, L.

Ilford, L.

Killearn, L.

Monson, L.

Sinclair of Cleeve, L. [Teller.]

Lambert, V.

Mountgarret, V.

Somers, L. [Teller.]

Latymer, L.

Mowbray & Stourton, L.

Strange of Knokin, Bs.

Lindsey and Abingdon, E.

Moyne, L.

Stuart of Findhorn, V.

MacAndrew, L.

Napier and Ettrick, L.

Swansea, L.

McCorquodale of Newton, L.

St. Just, L.

Vivian, L.

Merrivale, L.

Salisbury, M.

Wolverton, L.

Milverton, L.

Sandys, L.

Wynford, L.

NOT-CONTENTS

Addison, V.

Francis-Williams, L.

Pargiter, L.

Amherst of Hackney, L.

Gaitskell, Bs.

Peddie, L.

Archibald, L.

Gardiner, L. (L. Chancellor.)

Plummer, Bs.

Beswick, L.

Halsbury, E.

Ritchie-Calder, L.

Blackford, L.

Henley, L.

Royle, L.

Boothby, L.

Hilton of Upton, L. [Teller.]

St. Aldwyn, E.

Bowles, L.

Hughes, L.

St. Davids, V.

Burden, L.

Kennet, L.

St. Oswald, L.

Carrington, L.

Kirkwood, L.

Segal, L.

Champion, L.

Leatherland, L.

Shackleton, L.

Chorley, L.

Lindgren, L.

Shannon, E.

Cooper of Stockton Heath, L.

Listowel, E.

Shepherd, L.

Cork and Orrery, E.

Longford, E. (L. Privy Seal.)

Sorensen, L. [Teller.]

Crook, L.

Massereene and Ferrard, V.

Stonham, L.

Darwen, L.

Mitchison, L.

Stow Hill, L.

Denham, L.

Molson, L.

Summerskill, Bs.

Derwent, L.

Morris of Kenwood, L.

Thurlow, L.

Faringdon, L.

Morrison, L.

Walston, L.

Ferrers, E.

Moyle, L.

Winterbottom, L.

Resolved in the negative, and Amendment disagreed to accordingly.

Clause 1 agreed to.
Remaining clauses and Schedules agreed to.
House resumed: Bill reported without amendment; Report received.

ADEN, PERIM AND KURIA MURIA ISLANDS BILL
Brought from the Commons; read 1a, and to be printed.

LICENSING (AMENDMENT) BILL
6.16 p.m.
Order of the Day for the Second Reading read.
LORD PEDDIE: My Lords, I beg to move that this Bill be now read a second time. I shall endeavour to be brief, but I am sure that my brevity will not be taken as any indication of the lack of importance of this Bill. The object of the Bill is to exclude off-licences from the scope of the licensing planning committees. These are committees set up under the provisions of Part VII of the
Licensing Act 1964, which consolidates earlier Acts. That Act has the purpose of establishing these committees in areas where there has been extensive war damage. The function of a licensing planning committee is to ensure that in their area the number, the nature, and the distribution of licensed premises, and the accommodation and facilities provided, are in accord with local requirements. There are 18 areas, including the area of Inner London and the City, in which these committees are still functioning to-day. Part VII of the 1964 Act is subject to annual renewal in the Expiring Laws Continuance Act. The amendment to the 1964 Act with which this Bill deals has been the subject of discussion on more than one occasion, it having been raised by Mr. W. T. Williams, Q.C., in another place; and out of his representations has come this Bill.
The whole future of licensing planning was examined by a Departmental Committee
under the chairmanship of Mr. J. Ramsay Willis, Q.C., and their Report was published in July, 1965. One of the Committee's recommendations was that there was no need for premises in respect of which only an off-licence is held, or is being sought, to be controlled by the licensing planning procedure. The Committee expressed the view that the powers

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held by licensing justices to hear applications for the renewal of existing off-licences and for the grant of new off-licences are sufficiently wide to deal with such problems as redundancy, changing public need and the development of new shopping centres.
This Bill seeks to implement this recommendation by excluding justices' off-licences and licensed premises for which a justices' off-licence only is in force from the provisions of Part VII of the Licensing Act 1964, to which I have made reference. The Bill, when under consideration in another place, underwent small drafting amendments which were suggested by the Home Office. As a result of one of these Amendments the Bill, if enacted, will not come into force until one month after it is passed; and the purpose of such an Amendment was to allow time for the justices, planning authorities and the trade to assess the new situation before being required to apply the provisions of the Bill. I want to make quite clear something which I am sure the House will realise: that the Bill does not deal with the wider question of licensing planning as a whole. That, obviously, must await Government consideration of the Departmental Committee reports. However, the Bill does give effect to one recommendation of the Committee about where there is general agreement, and, if accepted, it will remove what has been for some years a source of irritation and criticism. I beg to move.
Moved, That the Bill be now read 2a.—(Lord Peddie.)
6.22 p.m.
LORD DERWENT: My Lords, we are grateful to the noble Lord, Lord Peddie, for having explained not only briefly but clearly the purposes of this Bill. I need hardly say that I welcome it, for the
Departmental Committee under Mr. Ramsay Willis was set up by my noble friend
Lord Brooke of Cumnor when he was Home Secretary. Apart from that, I welcome it because it seems just plain common sense. As the noble Lord, Lord Stonham, is going to say a word for the Government I would ask: why has only this recommendation of the Committee come forward? Is it not about time that the other recommendations of the Committee were dealt with?
6.23 p.m.
LORD STONHAM: My Lords, I join with the noble Lord, Lord Derwent, in thanking my noble friend Lord Peddle for his very clear exposition of this small but useful Bill. As my noble friend said, it concerns a matter which for several years has been raised in the course of our annual debates on the Expiring Laws Continuance Bill. When that Bill was debated in another place last year my right honourable friend Miss Alice Bacon, Minister of State for my Department, indicated that the limited reform that has now been proposed in my noble friend's Bill might be achieved through the medium of a Private Member's Bill—that which we now have before the House. We therefore welcome the initiative of the sponsors of this Bill and hope that it will be approved by the House.
As my noble friend has kindly indicated, the Home Office has given some drafting assistance to make sure that the measure is technically viable. I, for one, shall not be sorry (having had to refer to this three times, I think) that, at least in part, it will dispose of a wartime relic that has been an annoyance to many people for a good many years, by putting into effect one of the recommendations of the Departmental Committee presided over by Mr. J. Ramsay Willis, Q.C. The noble Lord, Lord Derwent, underlined the fact that it was only one of the recommendations. Not unfairly, he asked me why we did not "go the whole hog" and implement all the recommendations. I give him one clear—and, I hope, satisfying, if not satisfactory—answer. The very good reason is that there was no uniformity of opinion on the matter and that the main Report itself was accompanied by a dissenting Minority Report.
Meanwhile, the licensing planning system, where it is still in force (in 18 out of the original 33 areas) seems to be working well and giving general satisfaction—with the one exception with which this Bill deals. As my noble friend Lord Peddie said, this Bill enables that smaller matter, on which there is widespread agreement, to be put right. We feel that it is sound common sense on which there is general agreement to put it right without waiting for a decision on the more controversial general issues

347
—although I am sure that the noble Lord, Lord Derwent, will join with me in hoping that there will not be much further delay on those matters.
LORD PEDDIE: My Lords, I thank my noble friend Lord Stonham and the noble Lord, Lord Derwent, for their indications of support for this Bill. My noble friend has given a clear indication as to why the Bill deals with only part of the general recommendations of the Committee—a Committee which, it is true, was established during the former régime. The reason is, of course, that the recommendation upon which this Bill is based, as has already been said, was unanimous. It is easy to deal with in isolation and it meets a well recognised
348
need. I would thank the House for the support it has given to the Bill.
On Question, Bill read 2a and committed to a Committee of the Whole House.

BRITISH TRANSPORT DOCKS (NO. 2) BILL
The Chairman of Committees informed the House that the opposition to the Bill was withdrawn: the Order made on the 6th June last discharged, and Bill committed to the Committee on Unopposed Bills.
House adjourned at twenty-six minutes past six o'clock.