HL Deb 15 April 1969 vol 301 cc34-53

4.4 p.m.


My Lords, decisions to establish the foundations of our new decimal system were embodied in the Decimal Currency Act 1967, a Id the second Decimal Currency Bill now before the House deals with those matters which the law must cover in order to effect the change-over from the old currency to the new. We have attempted to make this Bill as straightforward as possible. The White Paper (Cmnd. 3889) endeavours to explain in simple terms how the main provisions of the Bill relate to the decisions that have already been taken and the Explanatory Memorandum sets out clearly the fields where legal provisions are required. I do not intend to take the House through the various steps already outlined in the White Paper or to explore in depth each of the more technical points which the Bill has to cover. My aim to-day is to outline the general principles underlying the Bill and to draw attention to the practical results that the Bill aims to achieve.

Moving from the present currency to the new involves no more than a change in the coinage for cash transactions and a change in the units for accounting. There is, for example, no need for the law to dictate how contracts should be amended where this can be achieved through mutual consent of the parties; or how future contracts should be written. The change-over cannot take place overnight because of the physical impossibility of instantly adapting or replacing all those machines which now accept £. s. d. coins or record transactions in £. s. d. But it is not desirable that the two currencies should remain side by side for any length of time. Experience with similar changes elsewhere shows that once the new coinage becomes legal tender, nearly everybody is anxious to use it exclusively and get the period of dual-currency working over as quickly as possible. The Decimal Currency Board's view is that a maximum of 18 months is a reasonable estimate, but in the event it may prove shorter. The Board will advise the Government on this matter and there are powers in the Bill to bring the dual currency period to an end in law.

During the change-over, it must be possible to effect the exact settlement of a debt in either the old or the new currency. This will be possible by using coins, since the coins of the old currency will be legal tender until the end of the change-over period. An important characteristic of the period of dual-currency working is that as long as it lasts it will be possible to settle both £.s.d. debts and decimal currency debts exactly. At the end of the change-over, the old penny, threepenny bit and sixpence will have disappeared from our purses and many prices will have been expressed in £.p. for some time. It is likely that debts then outstanding will be for amounts where the maximum difference, of one and one-fifth of an old penny between old and new currency equivalents, will be negligible in relation to the total due. It is proposed in the Bill that the whole new penny conversion table in Schedule 1 of the Bill should apply to £.s.d. amounts payable after the end of the change-over.

There is no need, nor would it be practicable, for the law to control the conversion of retail prices of goods and services to the new currency. We believe that official guidance is good enough. This has been done through the publication of a new halfpenny conversion table in the White Paper. The Decimal Currency Board has already disseminated this table and so have many private organisations. The public will see it everywhere on Decimal Day. The Government, however, do not expect there to be any general abuse of the decimal conversion of prices. Experience elsewhere and competition here support this view. In the final analysis, apart from ordinary shopping situations, the majority of contracts and agreements which require payments to be effected fall into two categories: those which require periodical payments to be made—insurance, and hire-purchase, for example—and those which specify a price per unit in cases where a single unit is never charged—for example, electricity, gas and rates.

For periodical payments of £.s.d. amounts, the Bill allows the debtor to pay the exact £.s.d. amount in cash during the change-over, or at his own choice an amount in the new currency according to the table in Schedule 1. There is no doubt that the vast majority of the public will wish to forget about the old currency as soon as possible and choose the second option. In neither case will the creditor gain or lose, as the differences in the table in Schedule 1 balance out over large numbers of payments.

For contracts which already use the price of a unit, such as electricity, the amount to be paid by the customer is already the result of a calculation and finally rounded up or down to suit the existing coinage. There is no need to change this method after decimalisation, whether one uses the existing £. s. d. amount per unit in calculations, together with a conversion of the final amount, or whether one initially converts the £. s. d. amount per unit to decimals on the exact equivalent basis that one old penny equals five-twelfths of one new penny. These simple principles are already well understood by industry, and it is an important part of the role of the Decimal Currency Board to disseminate them at all levels.

The Government propose two exceptions to the broad principles which I have outlined. One is for the millions of small industrial assurance policies of the penny-a-week type. After a careful examination of the problems involved, the Registrar of Friendly Societies and Commissioner for Industrial Assurance have agreed with the societies and companies a scheme which preserves the interests of the small contributor. The legal basis for the scheme is in Clauses 6 and 7 of the Bill. The other exception is for those amounts which are specified in existing Acts of Parliament and their subordinate legislation. These are covered by Clauses 10 and 11 in the Bill together with Schedule 2.

I have dealt so far with those principles behind the Bill which affect coinage and cash transactions. As I have said, decimalisation will also change the unit of account. This involves mainly technical and specialised considerations, but one aspect is familiar to many, and that is payments which are made through the banking system. Much has been learnt in this field from the experience of Australia, New Zealand and South Africa. We know that although banks could not work in both currencies it is possible for them to effect a complete change-over, if not overnight at least in a flatter of days. This is why the Bill provides for an extended week-end during which the banks will supply a limited service while attending to the conversion of their accounts, procedures and machines. When the banks open on Monday morning, the 15th February, 1971, they will be fully equipped to work exclusively in the new currency for all the documents and cheques which they normally handle.

The Bill provides the legal background for the banks to follow this plan of instant change-over, but they will of course continue to receive and supply such old £.s.d. coinage as the public may wish to handle. I understand that a measure of commercial flexibility will be applied by the banks for those who might be forgetful of details, much as they now do when some of us persist in writing our January cheques with the previous year's date. This immediate and complete change-over by the banks will be the most powerful single incentive for the country to turn fully decimal as quickly as possible.

My Lords, let me now deal with the way the change-over will affect the individual citizen in the ordinary transactions of everyday life. The first point is that the individual citizen need not bother too much about the details of the law, or about conversion tables and so forth; common sense can be his main guide. As I have just said, we shall need to remember that cheques written after "D-Day" must be written in the new currency, and the banks will be at pains to remind their customers of this when the time comes.

But more important than cheques are cash transactions. Here the essential point to remember is that during the change-over period those who sell goods or services will sell them either at a decimal price or at an £.s.d. price, but not at both. Once a shop or a bus company has gone decimal, their prices or fares will be decimal prices only; those who have not yet gone decimal will be dealing in £.s.d. prices and fares only. It will not be open to a customer to walk into a decimal shop and decide that he prefers to pay an £.s.d. price. The shopkeeper may be prepared to deal with him on this basis to retain his goodwill; but this will be exceptional, not the rule. This does not mean that people will have to carry separate stocks of the coins of both currencies. All they need to remember is that sixpence in the old currency is exactly equivalent to 2½ new pence, and if they always tender high in sixpenny multiples they can always be given the exact change. If everybody remembers to tender high in sixpenny multiples most of the problems will disappear. The Decimal Currency Board will be at great pains to impress this point on retailers, and on the public in due course.

Finally, perhaps I should touch briefly on our position on compensation. The Government never contemplated a general scheme to cover decimalisation costs, and this was made clear when the decision to introduce a decimal currency system was first announced. It was, mentioned again in the White Paper of 1966, and also when the first Decimal Currency Bill was considered by Parliament. On the question of compensation in special circumstances, the Government made it clear that they had a completely open mind and would leave the whole issue for examination by a completely independent and impartial body. The Decimal Currency Board, whose members have been drawn from the main fields affected by decimalisation, were given the task under the Decimal Currency Act 1967, but were deliberately given no directive from the Government on how to approach this problem. They have carried out their work quite independently.

The Board finally satisfied themselves that no scheme for special compensation could be devised which could he based on clear defensible principles. Furthermore, such a scheme could not be administered fairly and soundly. Equity is the keystone of any compensation scheme, and the Board were finally convinced that there were no principles which could justify meeting all or some of the decimalisation costs of one particular group or groups and not those of other groups. They recommended, after long study of the general problem of the change-over and the detailed representations submitted to them, that there should be no compensation in any circumstances, and the Government consider that the Board's view on this matter ought to be accepted.

What I have said so far still leaves questions unanswered. Many of them will be dealt with in the course of our later consideration of the Bill. But there are also others with which the Bill does not deal, and does not need to deal; and on those the Decimal Currency Board has given, or will be giving, detailed guidance. Let me emphasise again, my Lords, that the Government's aim in this Bill is to provide a sensible framework for the change-over. Much depends on getting this framework right, but much more depends on careful and thorough planning by all concerned in the time that remains before "D-Day". I should like to think that we in this House can send out a message of encouragement to those upon whom the burden of the day-to-day work of conversion will fall. I beg to move.

Moved, That the Bill be now read 2a.—(Lord Beswick.)

4.18 p.m.


My Lords, this Bill gives effect to the machinery of decisions which have for the most part already been taken and carried out by Parliament. I think that most people in this country, or at least most people in Parliament and in business, are in favour of having a decimal currency. There are a great many different points of view as to exactly how it should be carried out, and I have regretted from the beginning that the Government should have taken so rigid and authoritarian a view about this as they have always done. I am not going to reopen at any length the questions that we have already debated, but I think it was a great pity that the question of whether to have a 20s. or a 10s. pound was forced through with the Government Whips, and that neither House of Parliament was allowed to have a free vote upon it. This is a question which I should have thought was eminently suitable for a free vote, particularly since opinion, as expressed even in the Halsbury Report, was so evenly balanced.

Some of us thought that the Minority Report by two of the members was right, and even the Majority Report said that in their view the 10s. pound would be more convenient, but they came down in favour of the 20s. pound on grounds of the international prestige held by the pound. Some of us did not agree with that. It was rather a surprise when the matter came to be debated in Parliament that the Government announced that they were not recommending this because of the international prestige of the pound at all and that they did not accept this argument of the Majority Report of the Halsbury Commission. What argument they did accept or based their decision upon was not quite clear.

One irritating disadvantage of this 20s. pound is that one has to have an extra place of decimals, because the new penny of 2.4 pence is too large for the convenience of small shoppers. So we had to have what is now going to be called the "new halfpenny", which is the equivalent of 1.2 pence in our present currency. That is now going to be the smallest unit. Of course, we should all agree that that was necessary. Under the 10s. system it would have been also the smallest unit of denomination and it would have been the penny, and we should not have had this extra place of decimals.

The excuse which the Halsbury Commission gave on that point was that very soon this coin would not be needed in any event. They seemed in two minds as to whether this was because inflation was bound to go on or because everybody would get so rich that people would not bother about so small a sum as 1.2 pence, and that in about thirty years' time we could therefore take this new penny of 2.4 pence as the smallest coin which we would condescend to bother about; anything less being beneath the notice of our affluent society. That was the optimistic view. The pessimistic view was that inflation would go on. In the last four and a half years I think I am right in saying that prices have risen by 20 per cent. already, and of course if the process continues like this for another twenty years at the same rate, then it is true that this new halfpenny will be worth so little that it will probably be discarded. But I do not think that that is a very good reason. It is a counsel of despair; that we are going to have so much inflation in any event that we may as well have a top-heavy currency, because in another 25 years it will be worth only half as much anyhow. I have always been rather antagonised by that argument. We should have had also the advantage of being in line with everybody else who has adopted a decimal pound, in South Africa, Australia and in New Zealand. They have all had this 1.2 penny as the lowest denominational coin.

The noble Lord, Lord Beswick, also mentioned the question of compensation. I think the question of compensation would have been very much less troublesome and in fact very much less necessary if we had had enough sense to adopt the 10s. pound; there would not have been nearly so much loss in expense of conversion, particularly in regard to automatic machines. The only coin that would have been different from the present coinage would have been the new halfpenny, 1.2 pence, the penny as it would have been called under a 10s. system, and then we should have had the sixpence which would have been 5 cents; the shilling would have been 10 cents; if we had wanted 20 cents we should have had the florin, and 25 cents or the "quarter" would have been the half-crown, and so on. But now the situation is much more complicated and the associability is much less, and all the expense of changing over is going to be much greater, so the need for compensation is very much more. I am sorry to see that the Decimal Currency Board have announced, after very careful consideration, that the task is beyond them and that they cannot recommend that any compensation be given. I think that that is very hard on a great many small shopkeepers who have fairly expensive machines, cash registers and sometimes even small computers and calculating machines, which last for twenty years—and those of them who have renewed their capital outlay on this lately will suffer a very great hardship if they should have to do it all over again.

However, now that we have taken these decisions we must make the best of them; and I am not sure that the Government are making the best of them in this Bill. I have looked very carefully at their arguments about the sixpence, which is going to be prolonged only during the period of transition or possibly for a year or so beyond that. After that it will be phased out. I think there an: many reasons against doing that. I quite agree that the sixpence under the pound/cent decimal system will not neatly fit in with even decimalisation because, instead of being 5 cents, as it would have been on the 10s. pound, it would now with the 20s. pound be 2½ cents, so we have the half-cent again. But we have it anyhow as the halfpenny. I do not think it would add any greater complication—if we are going to have the halfpenny anyhow—to allow the 2½ cent coin to continue, which will in fact be the old sixpence. The advantages of this would be many. An enormous number of sixpences are in circulation. We should save a great deal of expense in minting new coinage if we let them go on; and there would be much less loss in changing the automatic coin machines, so many of which are now adapted to the use of sixpences. And I think it would tend to prevent certain rises in prices which might otherwise be inevitable as a result of this change. To take telephone calls, it is very difficult to see how they are going to be adapted to the new system without charging more than sixpence as the basic amount after the sixpence has been abolished.

Finally, the Bank of England itself is quoted by the Halsbury Report, which I was looking at just before I came into the Chamber. This Report by the Bank of England is quoted on page 234, which points out that one great advantage of the pound/cent system is that the sixpence can be continued if it is wanted. We could continue the sixpence or the florin or the shilling or all of the denominations, as well as the new halfpenny and the new penny. But this fact, which I think weighed with some people in supporting the pound/cent system, has now been discarded, and we are told that the sixpence is ultimately to abolished. I should like in conclusion to appeal again to the Government, if it not too late, to reconsider this matter and to reflect upon the inconvenience to the public which may be caused by the abolition of this coin—I will not say particularly in Scotland, but it is supposed to be used to an even greater extent there than it is here It would be a great convenience, both to the small shopper and to the small shopkeeper. If the sixpence were to be continued I think it would tend to prevent a rounding up in prices of all kinds of small commodities, and I hope that the Government will not continue to think in terms of very grand and high finance, as they so often do, but that they will not be too proud to "sing a song of sixpence."

4.30 p.m.


My Lords, in the course of his speech the Minister referred at one point to certain things which we had learned from Australia and New Zealand. What we ought to have learned from Australia and New Zealand and the other great countries of the English-speaking world are the enormous advantages of the 10s. system over the £ system.

I could well have understood its being said that we in this country understand the advantages of a decimal currency but we think that it is not worth while for this country to take the plunge, having regard to the fact that we have what has been for a very long time a reserve currency, well understood throughout the world. This factor might have been one which could have led us to say that in our particular case decimalisation is not vitally necessary. But, we having decided to take the plunge, I think it is a matter of the utmost regret that we did not plump for the 10s. system. I do not believe that the ties that bind together the great English-speaking peoples of the world are so strong that we can really afford to throw away this wonderful opportunity of coming into line with them in the matter of currency. However, it is not much good going on like this, because I know that this battle has been fought and has been lost. I was, however, very surprised when the noble Lord, Lord Stonham, in a discussion on the last business, referred to the Decimal Currency debate that we had in this House as a "not very controversial matter". My recollection is that this was one of the most controversial matters that we have discussed in this House for a long time.

The only matter of detail in this Bill that I wish to speak about at any length is Schedule 1, which is the Table for converting existing shillings and pence into the new pence. I should have thought that it stuck out a mile that if you had shillings and pence to convert into a new currency you would convert the shillings and then you would convert the pence, particularly having regard to the fact that the shilling is an exact figure in the new currency, the shilling being five new pence. I should have thought that there could be no question that this was the way to do it. But no; Schedule 1 is not based on the shilling; it is based on the 2s. and everybody has to learn a conversion table, not of pence up to a shilling but of old pence up to 1s. 11d.

So the situation is this: that supposing you have an awkward sum like 13s 7d., instead of saying "13 x 5", which gives you the new pence for the shillings, and then dealing with the 7d.—well, most people would be able to remember the 7d. in the new pence—according to Schedule 1 it is to be put on a 2s. base, so you have to multiply 12s.—but I am getting rather muddled, which just shows how difficult it is going to be. You have to take six times 2s. and then you have converted 12s. of the amount. Then you have 1s. 7d. left, and you have to look up 1s. 7d. in the Table—because it is pretty sure that unless you are a bank clerk or something like that you are not going to be able to memorise 1s. 7d. in the new pence—and you find out that it is 8 new pence.

My Lords, what is the purpose of all this? So far as I can understand it, it simply arises out of the fact that to convert 6d. into the new currency it is rounded up from two-and-a-half new pence to three new pence, and correspondingly when you get to 1s. 6d., that is rounded down from 7½new pence to 7 new pence. As I understand the argument, this evens things out. You have a rounding up of the 6d. and a rounding down of the 1s. 6d. That might be all very well if we were all born either creditors or debtors, like men and women, and we remained creditors or debtors for the whole of our lives. But in fact of course what happens is that we are all creditors at one moment and debtors the next, so that any rounding up of a 6d. or rounding down of 1s. 6d. will be evened out not by meticulous accuracy in a 2s, table but because we shall all gain and lose on the swings and roundabouts anyway. I should have thought it was quite unanswerable that this Schedule, based on the 2s. unit, will not do, and that the only sane and sensible way to do it is to convert the shillings and then to convert the pence. Then you have only to remember up to 11d. on the conversion tables and you have not got the appalling business of trying to remember what 1s. 7d. converts into in terms of new pence, without having to look it up.

My Lords, I am sorry to go into such detail on Second Reading, but I think this Table will be a headache for people in the early stages of the transitional period, and I hope that as this Bill goes through we shall get a change from the 2s. base to the shilling base for conversion.

4.37 p.m.


My Lords, with the permission of the House, the noble Lord, Lord Donaldson of Kingsbridge, has changed places with me on the List. I would compliment the Government, first, on facing this problem of the decimalisation of the currency, and then on the preparatory work which is being done. At the present time we have seven coins and a 10s. note which gives us eight units of currency below one pound. In the future it is proposed that we should manage with only six—we are discarding the half-crown and the sixpence. I want to state in some detail the case for retaining the sixpence.

The shilling is a key coin in our present currency. It is a key unit of currency because there are 20 to the pound and it is equal to five per cent. of the pound. We found it convenient to have a unit of currency, namely the sixpence, equal to half the value of the shilling. Now all we are doing with the shilling is changing its name. We are changing its name to "five new pence". It will still be worth one-twentieth of a pound; it will still be a key unit of currency, and I suggest that as in the past it has been very convenient to have a coin equal to one-half of the value of the shilling, it will continue to be convenient to have a coin equal to one-half of the value of the five new penny coins. If we do not have such a coin it means that if we are asked to tender a 5-cent coin for a purchase and we have not got one, we shall have to find three coins, instead of two, to replace it. At the present time we can tender two sixpences, but with the new coinage we should have to tender two units of new pennies plus one unit of the new penny. In the retail trade many of our goods and services are sold in quantities which are related to the value of sixpence. If we do not have a coin equal to the value of sixpence we shall have a choice of doing one of two things: either to change all the quantities, or, secondly, to use more coins when the quantities are bought. That seems to us to be change for the sake of change.

In addition, we have thousands of meters and machines which use the sixpence. We have them in connection with the telephone, in connection with the purchase of stamps, in connection with car parking, in connection with travel tickets, on the Underground, for example, and in connection with the purchase of food. If we are not going to have a 2½ new pennies coin, then these machines will all have to be either scrapped or completely rebuilt. That seems to us to be adding cost unnecessarily in the transition period. We are not asking for a new coin; we are asking for a coin that is already in circulation.

Then I would direct the attention of the House to the fact that before "D-Day" we shall require many more sixpences than we have to-day. With the present currency, using the minimum number of coins, and making up every amount from one penny to 19s. 11d. you use only 24 sixpences in total, for the simple reason that once you get to 2s. 5d. and 12s. 5d., respectively you can commence using the half-crown. But as from January next year there will be no half-crown. To do the same exercise—that is to say, to make up all amounts between one penny and 19s. 11d.—it will be necessary to use not 24 sixpences but 120 sixpences, because we shall have lost the use of the half-crown. It will be necessary to use five times as many sixpences. Therefore, after January next year either we shall have public inconvenience or there will be more sixpences in circulation because of the withdrawal of the half-crown. We suggest that there should be more sixpences in circulation, that they should be marked 2½ new pence and that they should remain in circulation.

This Government and their predecessor have gone to a great deal of trouble to create machinery for consultation with industry, and they have also encouraged industry to set up its house to be able to consult with Government. In distribution we have the National Economic Development Council for Distribution. Its advice on this subject is quite clear, quite concise and quite reasonable. It is as follows. The sixpence should not be de-monetised unless and until objective research in the transitional period has shown that it is redundant. This advice is confirmed by all the trade associations engaged in the retail trade, who are solidly behind the Development Council in this particular advice. It may be that this advice clashes with the advice of the bankers—I do not know. But if it does, I would remind the Government that the bankers handle coins in bulk and the retailer handles coins in small amounts. Thousands of coins such as sixpences circulate for years in the retail trade without ever seeing a bank. Therefore on this particular question the relevant industry for consultation is, I submit, the retail trade, and they have made their position perfectly clear.

This is not an issue of policy; this is an issue of practical convenience. I suggest that if ever there was an issue on which the Government should be prepared to listen to, and accept, the advice of the industry concerned, this is it. I hope that, in replying to the debate, my noble friend will be able to tell me that the advice of the industry will be looked at again, and that unless reasons much better than have so far been given can be found the advice of the industry will be accepted, and that we shall continue to have a coin equivalent to the sixpence.

Before closing I should like to comment on the question of compensation. I can see the Government's difficulty in regard to compensation, but I would plead for what is technically known as free depreciation. Many machines will have to be scrapped, because of decimalisation of the coinage, before finishing their expected life. That means that the owner of that machine will have to find new capital to purchase a replacement. In the ordinary course of business he would not be allowed for tax purposes the cost of that new machine immediately; he would get an allowance made to him over a number of years, five, ten or fifteen years, according to the nature of the machine. But he has to find the capital for that replacement because of decimalisation, and he has to find it there and then. I suggest that, as a matter of equity, he should be allowed the cost of the machine as a charge for income tax purposes in the year in question, so that he will pay less tax in that year, which will help him to meet the capital cost of the new machine. In the long run the Exchequer will not lose anything. It merely means that the man who has to replace his machine because of the act of the Government in decimalising will have the cost allowed wholly now, instead of being spread over a number of years. That, I think, is equitable, and I would plead with the Government to give it further consideration.


My Lords, before the noble Lord sits down may I make one comment on what he has said? He referred to the clearing banks, and I should like to say on behalf of the clearing banks that they have not made any representations to the Government against having a sixpenny or 2½ cent coin. They are quite willing to handle whatever coins the Government produce. They have no contrary view with regard to this. The noble Lord rather suggested that the banks were against having a sixpenny or 2½ cent coin. That is not so.


My Lords, I did say that I did not know. Might I suggest that, having heard such a good case made out for the sixpence, the clearing banks might consider it and support the retail trade?

4.48 p.m.


My Lords, my noble friend Lord Jacques speaks with intimate knowledge and in an official position for a very large retailing movement which also represents consumers, as the Co-operative Movement has always done. I only want, from the point of view of the Consumer Council, of which I am Chairman, to say that we share his view completely over this particular question of the sixpence. I do not want to discuss anything else in this Bill, which otherwise we think a very good one. The arguments have already been put and are not improved by being put again.

There is very little I can add to what my noble friend has said, and what was said from the other side originally on this point, but I think it is worth noticing one's own experience. I looked into the window of a mens' outfitters yesterday afternoon, and 11 out of 13 items were priced at a price ending in sixpence. If the price is going to be 2½ pence it will not stay there. It may be rounded down a halfpenny or up a halfpenny, but our belief is that it is likely to be rounded up the full 2½ pence to the full shilling. I think that there is an inflationary cost-raising danger in doing away with the sixpence. Although one cannot prove that it will happen, I believe that it is extremely likely.

The only other point I would make is that the situation has arisen in South Africa, where the "tickey"—a coin not dissimilar from the sixpence—persisted for a very long time, and the public made it clear that they wanted to go on using it. All I need say is that although it is not the business of the Government to force any particular coin on to the people, neither is it their business to deprive people of the use of any particular coin until there is good evidence that it is not required. It is too soon to say whether the sixpence, two and a half pence, will be popular or not. Please, let us try to see, and not pre-empt the position as the Government's present proposal does, by announcing that we are going to abolish the sixpence 18 months after "D-Day."

4.50 p.m.


My Lords, I fear that in attempting to reply to the discussion that has taken place so far on the Second Reading of this Bill it is unlikely that I will satisfy noble Lords who have spoken. During the Easter Recess I re-read the debate which took place originally on this subject, when certainly two noble Lords who have taken part this afternoon, the noble Earl, Lord Dundee, and the noble Lord, Lord Airedale, quite forcefully expressed their views for a completely different system. The noble Earl, Lord Dundee, has reiterated his support for the ten-shilling system, so whatever I say he will perhaps be still heavily in favour of this system and will go down, as it were, to the end of the discussion on the Bill insisting that this would have been a better system.

Leaving that for the moment, I think we must agree that the Bill is presented to your Lordships as a framework for the change-over and that some of the points which we have been debating may in practice well not prove to be as complicated as they have been made to sound. I can assure the noble Lord, Lord Airedale, that the Schedule which appeared to cause him some concern is intended for accounting and not for shopping transactions. I have already discussed the system of the new currency with a number of housewives who are the people who will be dealing with the cash transactions, and inevitably they did exactly what the noble Lord suggested: when the figure was 13s. 7d. they multiplied 13 by 5 and then dealt with the pence separately. So whatever conversion table is offered I think people will naturally evolve their own system of dealing with it.

The practice of rounding-up is not uncommon. Rounding up has gone on for a long time. I would say at this point that it is important not to assume, as perhaps the noble Lord, Lord Donaldson, did, that prices necessarily go up. I have had a number of dealings with traders, both wholesalers and retailers. They are not rogues, and we should be doing them less than justice if it should go forth from this House that we felt that necessarily prices would be rounded up. I feel perhaps that London Transport might set the tone by rounding down, so that we get a 5d. fare on the Red Rovers, as some people are rather aggrieved that they have to pay 6d. for what in their view is a 5d. fare. There seems to be no reason, looking at Australia and New Zealand, why traders should not play fair on this. Indeed, I think this will cause the housewife to look more acutely and carefully at prices during the change-over period. I feel that we must not assume that rounding-up will necessarily cause inflation in prices. This would be a reflection on traders.

The noble Earl, Lord Dundee, made the point about the conversion of coin-operated machines, suggesting that the ten-shilling system would not have involved so much expense. I am advised that in some cases the cost of converting business machines, such as cash registers, would have been greater because more figures are involved. But this is something which we shall see as time goes on.

I should like to pay a tribute to the noble Lord, Lord Jacques, for what I know to be his really practical experience in retail trade. But I wonder whether I dare suggest to him that all traders were not so unanimous as he seemed to suggest in supporting the retention of the sixpence. Some quite large multiple traders have come down in favour of the present system of conversion. It is not entirely true to say that when the half-crown is demonetised we shall need more sixpences. I have been doing a little arithmetic during this time, and I have had to do it rather rapidly. But the noble Lord, Lord Jacques, will be reassured because there has been quite a lot of research on this, and it is a fact that two-thirds of the sixpences now used in transactions arc used in pairs: in other words, for shillings. So the Board are urging that there should be more shillings. I believe that if your Lordships were to look in your pockets at this precise point of time you would find that you have more large coins than small ones. Again, I have been doing a little research into this. The shop assistant counts up and not down (the noble Lord, Lord Jacques, will know what I mean by this), so that in fact we tend to use the large coins where possible rather than the small ones.

So far as the question of the sixpence is concerned I feel that I must spend a little time on this because at least four noble Lords who have spoken to-day have spoken firmly in favour of it. The sixpence will die a natural death. It will not disappear immediately at the point of the change-over. Great stress has been made of the point that the sixpence is a popular and useful coin, that it is of convenient size and so on, and that its withdrawal is going to have an adverse effect. The Government are convinced that by the end of the change-over period the sixpence will have ceased to be a useful coin.

We are by nature a conservative race, and therefore we tend to accept the sixpence as always having been part of our currency. But it seems that there is no reason why we should continue to assume that we must have a coin of this size. To include it in the new decimal currency would involve yet another half. I know that the noble Lord, Lord Airedale, did not particularly like the half in the first instance, and I am quite sure that he would not want to see another half included yet again in our new currency. When I taught mathematics I was always anxious to impress upon my pupils that one had as few fractions and decimals mixed as possible—in other words, you thought in decimals or you thought in fractions. I am sure that with his great interest in figures the noble Lord would be the first to agree that since we have already accepted a half in deference to some pleas, we do not want to compound this by adding also two and a half into this currency, which can be quite straightforward. We have to get over this idea that we must always think in terms of existing currency.


Would my noble friend object to 2.5?


The figure 2.5 is two and a half. But I think that the noble Lord will agree with me if I say that while I do not object to it the more you bring in 0.5 the more you are breaking down yet again. One of the great advantages of the decimal currency, as the noble Lord will appreciate, is that it will speed up cash handling and addition and subtraction. Therefore, if we complicate it by breaking down we shall destroy, as it were, the value of the system.

I think those of your Lordships who have been in other countries know how quickly one converts to the currency of the country. I remember the last time I was in France. It was said that you could always tell the British because they would stand in front of the shops with little bits of paper calculating in their own currency the price of the goods in the window. But after three or four clays one starts to think in the currency of the country. I believe this is exactly what will happen and that we shall not any longer think back to these halves.

So far as the question of the machines is concerned, I wonder whether sometimes we tend to over-emphasise that matter. The actual number of machines at the moment operated by sixpences is 1.7 million, which is not such a vast figure as might be supposed. We have already had the assurance that at any rate telephone calls can be adjusted to the new pence; we can have shorter calls for less money. I should not think that there is anything very wrong in having smaller chocolate bars in order to meet the value of the new pence we shall put into the machine. There is nothing wrong in this; this has been done before. I am quite sure that most caterers have got round the question of not raising prices; of giving you three sandwiches where they gave you four before. There is nothing wrong in this; this is a simple economic adjustment which I am sure the machine owners can handle.

The fact is that at this point of time we have to recognise that during the change-over there will be the question of handling the two different coinages. But knowing the British people as I do, I am confident that this is something they will cope with as they always have. There has never been any real objection to the idea of decimal currency. The previous debate seemed to me to range really on whether it was to be the ten-shilling unit or to be the pound unit. As the Bill progresses, I am quite sure that we shall again have some very useful comments from those noble Lords who have taken part in this debate, and I should like to suggest this Bill as a framework for change-over and commend it to your Lordships for Second Reading.

On Question. Bill read 2a, and committed to a Committee of the Whole House.