HL Deb 01 May 1969 vol 301 cc947-59

3.24 p.m.


My Lords, on behalf of my noble friend Lord Beswick, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(Baroness Phillips.)

On Question, Motion agreed to.

House in Committee accordingly.

[The EARL OF LISTOWEL in the Chair.]

Clause 1 [Legal Tender]:

LORD SINCLAIR OF CLEEVE moved Amendment No. 1: Page 1, line 21, after ("Act, ") insert ("with the exception of 6d. pieces").

The noble Lord said: May I say at the outset that the first two Amendments on the Marshalled List hang together, inasmuch as the second is entirely dependent on the first and indeed is a necessary corollary to it if it is passed. Therefore, with your Lordships' permission, I should like to relate my remarks at this stage solely to the first Amendment. The objective is of course to secure the retention of the 6d. piece or its equivalent beyond the transitional period. Industry, as represented by the Confederation of British Industry; the Consumer Council; the distributive trades, represented by the Multiple Shops Federation; and both manufacturing and distributive trades, represented by the Co-operative Movement—all these have indicated that they feel strongly that the 6d. should be retained or at least given extended life. To judge from Press reports and correspondence over recent weeks, there would appear to be considerable public support for its retention.

Against this are the Retail Distributors' Association, who feel particularly that its retention presents difficulties in change-giving, and for that reason, in the main, they are opposed to it. And there is of course the view of the Government and the Halsbury Committee that it is a mistake to retain the 6d. The banks, I understand, are completely neutral. As the noble Lord, Lord Clitheroe, explained on Second Reading, they had made it quite clear that there is no practical difficulty for them in handling the 6d. piece either in addition to the two new penny (shown in the Schedule as 2p) piece or, for the time being, if that be the decision, in place of it.

The Halsbury Committee and the Government may say that the ordinary man does not understand all the implications of the new decimal system; that if we are "going decimal" we ought to be purely decimal; and though there will be a half new penny—0.5 of 1p—that is only a temporary excrescence on the smooth pattern of the new system, since inflation will soon see to it that the half new penny ceases to have appreciable value. I would regard that as a counsel of despair rather than a recognition of a fact of life. They may also say that a 6d. piece is undesirable because it is too close in value to the new 2p—a coin which is, of course, 4.8 pence in our present currency. That may well be, but I would prefer to put it that since the 2p is so close in value to the 6d., and since the 6d. has such great convenience, it would be preferable to keep the one and a quarter million pounds' worth of 2p pieces that we understand have already been minted in reserve, with a view to bringing them into circulation if and when the 6d. piece has been found to have outlived its convenience and its usefulness. But the Amendment before your Lordships does not seek to prejudge this issue. It leaves it entirely open. If it is accepted, the Decimal Board would decide whether or not to put the 2p into circulation initially as well as the present 6d. piece, which of course eventually becomes the new 2½p piece.

That is a brief statement of the effect of this proposal. The matter was argued extensively in Commitee and in Report stage in another place. It was argued there to some extent on Party lines. In your Lordships' House this Amendment is supported by some Members of all Parties and by some, at least, of those who sit on the Cross-Benches. It is not, nor as I see it should it be, in any sense a Party issue. I have studied the debate in Committee and at Report stage in another place, and certainly all the relevant points for and against seem to have been adequately covered. Therefore, I will not presume to argue them in detail this afternoon; others who support this Amendment will do that much better than I could.

If I may summarise the position as I see it in favour of the Amendment, I would say this. First, what the Amendment proposes is practicable as well as convenient. Secondly, the 6d. is undeniably the most popular coin. There are some 2,000 million in circulation and it is widely used in many types of business machines and other coin-operated machines. Thirdly, the extension of the life of the 6d. gives more time for the conversion of such machines and thereby can reduce costs. I have reason to believe that London Transport, for example, whose report was presented to Parliament on April 22, would from that point of view particularly welcome this Amendment. Fourthly, the 6d. is, of value from the point of view of associability, in at least the earlier years of the new system. Fifthly, from the point of view of industry a single coin is important for many packings. Without the 6d. or its equivalent we should have the is., of course, but no single coin to represent half a shilling, and there are often practical advantages in being able to break the 1s. into half units. Lastly, the speedy abandonment of the 6d. gives additional impetus to inflation because in many cases without the 6d. the rounding up may well be to the next single coin of value above the 6d., namely, the 1s. That may not apply to telephone charges if the proposals of the Postmaster General are adopted, but it is likely to apply in other cases, for example parking meters. The motoring organisations are strongly in favour of the retention of the 6d. which, in their words, "enables people to make brief stops at low cost without breaking the law".

Against this proposal the main arguments seem to be that experience elsewhere has shown that a coin such as this will not retain its popularity in the new conditions. There are some exceptions to that—for example, the 2½ escudos in Portugal—but I will not try to argue this point in detail now. It is wiser, it is said, to avoid uncertainty in the minds of industry and trade by adhering firmly to the proposal to demonetise the 6d. piece after the transitional period. The second argument against this proposal is that the continued existence of the 6d. would be out of line with the planned progression in terms of values of the new coinage. Thirdly, it would complicate the giving of change. Indeed, I believe it has been suggested in some quarters that the coin would in fact prove a positive inconvenience to the public.

The issue here is not, as I see it, a question of principle but rather a matter of judgment. As the noble Lord, Lord Jacques, said in the debate on Second Reading it is an issue of practical convenience, not an issue of policy. I think there are those among your Lordships who support this Amendment who would find themselves in one or other of three categories. First, those who believe that there will always be a place for the 6d.piece or its equivalent in our coinage; secondly, those who believe that it would be a really valuable addition to the range of coins so long as the new ½p exists; and thirdly, those who would not go further at this stage than to say that it would be a mistake to decide now to demonetise the 6d. coin after the transitional period. These categories are not mutually exclusive—and I confess that I would place myself in the middle category —yet they all require the Amendment. I believe I understand and appreciate the arguments which have been advanced both in Second Reading in this House and in another place against what the Amendment proposes, but the weight of practical and informed opinion which I believe exists is such that I hope very much that the Government will recognise the strength of the case and accept this Amendment. If they do, it will ensure that after the transitional period the 6d. piece, in its existing shape but under a new designation of 2½p—though it may well continue to be familiarly and affectionately known as the "tanner"—if it is given a chance will prove its worth and its continued usefulness which so many believe it will have. I beg to move.


I rise to support the Amendment so persuasively and moderately moved by my noble friend. I have been interested in this question of decimal coinage from being an advocate of decimalising our currency on the basis of the pound sterling for as long as I can remember. I was certainly writing articles in that sense 25 years ago, and it may be longer than that. I gave evidence to the Committee presided over by the noble Earl, Lord Halsbury, in that sense—in fact I believe I was the only private person to do so. Therefore I heartily welcomed the Report the Committee made and, in principle, the action that the Government have taken upon it.

I mention these facts in order to establish that if I now support the retention of the 6d. it is from the point of view of a convinced believer in principle of the great reform that is now being put through, and not, as appeared to be the case with some of those who took the same view when it was debated in the other place—not, so to speak, as a "ten-bobber"—hoping for a last ditch concession before the Bill goes through. I have always thought that in a decimal coinage based on the pound sterling a coin representing 2½p—as they are now to be called—formed an essential part.

Since time is short I will confine myself to what seemed to me to be the two main grounds for this Amendment, both of which were mentioned briefly by the noble Lord, Lord Sinclair of Cleeve. The first is a matter of pricing, and I ask noble Lords to remember that this refers not only to articles that are priced at 6d., but at 1s. 6d., 2s. 6d., 3s. 6d., 4s. 6d., 7s. 6d.—and every other multiple of the present 6d. coin. The new ha'penny table—or perhaps I should say the new half penny—which is printed in the White Paper accompanying the Bill and which is supposed to act as the guide to a conversion of prices says, quite correctly, that the old 6d. equals the new 2½p.That is of course an absolutely exact conversion, but if after the transitional period there is not going to be a 2½p coin, how do we manage to buy some thing that is priced at 2½p? It will be possible if they are goods which one normally buys in dozens, but not for those which are bought singly. There will not be a coin to pay for them.

Inevitably, therefore, those who are trying to fix the prices of their goods will turn to the whole new 1p table which is printed as a Schedule to the Bill now before the Committee. I know that that Schedule, formally speaking, is not a price conversion table; it is a guide to the conversion of specific sums of debt as referred to in earlier clauses of the Bill. But inevitably, when faced with the situation of what to do with a price for which there is no coin, this whole new 1p table will be taken as a guide to conversion; and that table says that 6d. equals 3p, which is the equivalent of 7.2d. and therefore would incorporate a 20 per cent. inflation.

Moreover, even this is not the end of the matter, because those who can see the change coming and who are now selling articles priced at 5d. will take very good care that before "D-Day"—or at any rate before the end of the transitional period—they move their prices up to 6d. so that by the end of the transitional period they can have authority to convert them into 3p.


I am very anxious to follow the noble Lord's argument. I cannot follow him at all on this point. Will he explain a little more carefully why it is impossible to buy something priced 6d.? With the new currency one hands over two new 1p coins and a ½p coin, which is precisely what is required.


I am speaking of the end of the transitional period, when it is said the ½p coin will disappear. Then there will be no difficulty. May I continue the argument and come back to that, because it is relevant to the change-making argument? The particular argument in which I was engaged was relating to articles now priced at 5d., and it is not a minor matter. There happen to be quite a large number of important articles, sold in ones, priced at 5d. Many newspapers are in that category. There is also the first-class post which is priced at 5d. I hope that no noble Lords think this is an unduly cynical argument, and that before the time comes we shall find these articles have moved into a higher range. Mark my words and see what happens!

The second argument, and perhaps the more important one, relates to the difficulties of transition. As I say, I am a most convinced believer in the principle of this reform, but it undoubtedly has one disadvantage. To decimalise on the pound sterling makes the transition more difficult. It is the one clear argument for decimalising en the 10s. base. Then, for example, a price of Is. 6d. would automatically become 15 cent, or whatever it is called; whereas under this system you have to perform mental arithmetic and first of all put it into decimals and then divide by two. This is a disadvantage and the public will find it difficult. Why, therefore, should this transition be made more difficult by failing to provide a direct, exact and permanent equivalent for the most frequently used coin of all? It is not only a psychological difficulty we have to consider but a physical one. There are tens of thousands of vending machines up and down the country designed to take the 6d. Perhaps I should, in passing, declare an interest, since I am chairman of a company which owns a number of these vending machines; but that is not the reason I am supporting the Amendment. The very heavy cost of adjustment falls entirely on the proprietors of these machines. All the Id. ones are inevitably going to have to be converted. Why must the extra unnecessary cost of converting the 6d. ones also be forced upon them?

If one seeks reasons for the failure, in spite of continued argument, to do what seems to me an extremely sensible and easy thing to do, to retain this useful coin, one is met with two principal arguments. One is that it is hoped the ½p will disappear. Possibly this may happen. In my opinion, even with the progress of inflation, it will be a very long time before the new ½p as a unit of calculation disappears. When that time comes, let due notice be given, in the fullness of time, that the 2½p coin would then be withdrawn. But let us not commit ourselves to it in advance.

The second argument, also touched upon by the noble Lord, Lord Sinclair of Cleeve, is the difficulty of making change. If it is urged that one of the reasons against this Amendment is that there is to be for a long time a ½p coin, then the difficulty of making change disappears and there is nothing in it. However, it is said that the time will come when that will disappear. When that time comes, how many transactions will there be which are likely to be for exactly 2½p? And if it be true that in the course of giving change somebody or otter is going to find himself ½p short, does that matter very much? Will not nine hundred and ninety-nine people out of a thousand say, "Forget it", and should we not also forget this change-making difficulty? The minor inconvenience it will cause seems to me infinitely less than the major inconvenience of not having a permanent and exact equivalent of 6d. Many years ago Ernest Bevin founded his reputation on the stirring defence f the "decker's tanner". May we this afternoon strike a blow for the "Peer's tanner".


This Amendment is one of the most mild and innocuous which has ever been put before your Lordships. It does not pursue the future of the 6d. in any way whatever. It simply says that nobody living can tell what is going to happen, so do not let us close the options. The Government view that the 6d. will die a natural death is quite sensible and may even be right, but it is essential not to prejudge the issue. For that reason I, for one, will not support the second Amendment, because there is a sense in which it does prejudge the issue, in making preparation for the continuation of the 6d. I want to be certain that we do not on insufficient evidence make a rash decision.

Support for the 6d. is impressive, and I will not go through it again. The noble Lord, Lord Sinclair, listed the bodies in favour of retaining it, including two "Little Neddies", which is quite a lot of "Little Neddies". He left out one group, the Retail Alliance, which consists of the Drapers' Chamber of Trade, the Menswear Association of Britain, the National Association of Retail Furnishers, the National Federation of Ironmongers, the the National Grocers' Federation, the National Pharmaceutical Union, the Radio and Television Retailers Association, the Scottish Retail Drapers' Asocia-tion—quite an impressive list. I should like to add one further comment in its favour. My right honourable friend, Mr. George Darling, who is probably better versed in these matters than anybody else on either side of the House, in an earlier debate in another place said tie t he thoroughly agreed that the 6d. should be be which are likely to be for exactly retained for longer than the transitional period until the question of inflation arising through changed currency was completely out of the way. This is all worth saying.

The evidence on the other side is strong, as the noble Lord, Lord Sinclair, openly acknowledged. But it is not the first time experts have differed. It is not a very dreadful thing when they do, particularly when, if you leave it a little time, sufficient evidence will appear on which a sensible decision can be made. Sometimes that is not the case. In the case of deciding between the pound and ten shillings the Government had to make a decision, and though some of us think it was wrong, that is nothing to do with this question. In this case, however, the evidence will reveal itself within 18 months of transition and it is absurd to prejudge the issue.

In last month's debate in another place the Minister of State said a new 2½p piece will not be a convenient niece to use and will not be used—a firm statement. He reasoned from this that to encourage the hope that the 6d. will remain will be to make planning more difficult and may lead to frustration of the public. I am not quite sure what that phrase means; I think it is elliptical. However, one can certainly accent his conclusions if one can accept his premises; but the argument is based on a series of assumptions which may or may not be true. Under the £.s.d. system the 6d. is a convenient coin. so the detailers demand a large number from the banks, give them as change to their customers, who nut them in their Dockets and thence into slot machines. and then these coins go back to the banks.

I do not wish to question this analysis of the cash flow, it is probably perfectly correct. Under the decimal system, he said, a 2½P piece will not he a convenient coin, so the retailers will not demand them from the banks and the customers will not have them in their pockets to put into slot machines. So any slot machines that still have 6d. slots will stand empty. That is absolutely "all right with me". It may be true, but I see nothing to worry about. Surely then is the moment for the machine owners to begin changing machines and for the Government to think about demonetising the 6d. The experts are divided on this. If the Minister is wrong, and I think we can categorise his view as a minority one, then the forced changeover of machines, which he admitted will be expensive, will be made unjustifiably more so by this inconsidered haste. The machines I have mentioned, in good working order, will have to be scrapped before the end of their natural life.

The noble Lord, Lord Crowther, has pointed out the danger of rounding up. My noble friend Lady Phillips, in answer to my suggestion on this point on Second Reading, said that one must not necessarily assume that prices will always rise. I agree that one should make as few assumptions as possible, but one of the assumptions the Government seem to be making is that the ½p will in due course disappear. This suggests that prices will in fact be more likely to rise than to fall, which we all knew anyway. It is no pleasure to me to oppose the Government on this or any other issue: it is a matter of some embarrassment. But the Government's action is so arbitrary and so contrary to much of the best opinion that it would be irresponsible of me, in my position as Chairman of the Consumer Council, to allow what seems to me clearly to be a mistake to go forward without protest.

I feel that my noble friend may have some difficulty in raising enough "captive balloons" to defeat this mild and sensible Amendment. It is ironical that while honourable Members in another place were rolling in the aisles with laughter at the witty and inelegant reference to your Lordships as "captive balloons" and "worms in ermine", they missed the point that some balloons are more captive than others; and I think it is likely that my noble friend may have to rely on balloons elsewhere rather than here.

In conclusion, I wish to say something personal and embarrassing. It has been suggested to me that, as I am Chairman of a Council which takes a view in this matter, receiving a humble emolument from it, it would be improper for me to vote on this issue. I shall, therefore, abstain, with the greatest reluctance. I should like to feel that this matter, a sort of extension of the Addison Rules, were cleared up in this House. I do not want to vote if anybody might feel inclined to say at any time that I ought not to have voted. I sit down with great discomfort, forced to abstain on this, I think, important matter.

3.53 p.m.


Apparently I rise as a "captive balloon". Much has been said about the attitude of the retail trade in this current controversy concerning the 6d., and perhaps noble Lords will allow me, as a partially retired retailer, to put, quite briefly, my views. I am opposed to this Amendment. It is obvious from what has already been stated that there is no unanimity on this question in the retail trade; indeed, there are varying views even within my own firm. As noble Lords have heard, the Multiple Shops' Federation is strongly in favour of retaining the 6d. after the change over period. I would emphasise that there are other equally important trade associations who take the opposite view. The Retail Distributors' Association, which months ago set up a special committee to study this problem and which represents Britain's departmental stores, is against the retention of this coin. The Grocers' Institute, which has been looking at this question from the most important point of view of staff training, is of the same opinion. I understand that Marks and Spencer have also accepted that the 6d. will disappear after the change over period and are planning on this basis.

I accept that there are some arguments in favour of the Amendment. Undoubtedly it would be convenient for the confectionery, cigarette and vending-machine manufacturers to continue with the 6d. But in my view this is not a strong enough reason for saddling ourselves with a coin that, to my mind, has no logical place in our new decimal system. We hear a tremendous amount about the plight or difficulties of the vending-machine manufacturers, but I think we must keep this in proportion in relation to all the transactions that are going on all the time in retail shops. Judging by the last distribution census figures available, those for 1966, sales through vending machines accounted for slightly more than 0.1 per cent. of the total retail sales. I also appreciate that there are fears that the eventual abolition of the 6d. could lead to inflation, but I feel, in view of the Government's stated intention to see. that there is no profiteer- ing, and the strong competition that exists in most sectors of the retail trade, that such fears are grossly exaggerated.

There are many reasons for not retaining the 6d. after the changeover period, but I should like to concentrate on only one. This is the fact that, so far as most retailers and their customers are concerned, the continued existence of the 6d. would not be an advantage; on the contrary, it would be a serious disadvantage. And I am not talking of this from the basis of theory; I am talking of this after extensive experiment with the proposed new coinage. My firm's experiments indicate that the use pf this coin as part of our new decimal system would make change-giving and the associated mental arithmetic more difficult, since, it would require thinking and working in terms of a fraction to an even greater extent than would otherwise be the case.

The Retail Distributors' Association, to which I have already referred, as has Lord Sinclair of Cleeve, started off as being not in favour of the disappearance of the 6d. But after they had conducted tests in connection with the preparation of their training manual they fully. and firmly confirmed the conclusions reached in the experiments conducted by my own firm.

It has been suggested that the Government are unwise to commit themselves so far in advance to the abolition of the 6d., because they could always abolish it later if there was evidence that it was not needed. This is a plausible argument, but we should not ignore the fact that this course of action would create considerable uncertainty. In order to ensure that business is ready for a smooth changeover on D-Day it must prepare well in advance, and the less uncertainty there is, the better. Many stores and retail organisations have already begun their preparations, the preparation of training manuals, on the assumption that after the changeover period the 6d. will go, and to leave the question at this late stage unsettled would greatly increase their difficulties. It is for these reasons that, without hesitation, I shall vote against this Amendment if the House is divided.


Before my noble friend sits down, would he repeat to the Committee the figure he gave for the proportion of the retail trade which goes through vending machines. I think he said 0.1 per cent.; did he not actually mean .01 per cent.?


0.1 per cent.


One-tenth of 1 per cent.


Yes. I can quote the figures. The total retail trade was just under £11,000 million in 1966, and the sales from vending machines, according to the 1966 census, were slightly over £11 million.


Would the noble Lord agree that vending machines are used for many other uses as well as in the retail trade?


For the purpose of hearing the Statement I move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.