Seanad Éireann debate -
Thursday, 24 Jul 1969

Vol. 66 No. 17

Decimal Currency (No. 2) Bill, 1969: Second Stage.

Question proposed: "That the Bill be now read a Second Time".

Minister for Finance (Mr. Haughey)

The main purpose of this Bill is to give statutory authority for the change to decimal currency. This is the first piece of decimal currency legislation. It was originally introduced in the Dáil on 16th April as the Decimal Currency Bill but the Dáil was dissolved before the text was circulated. It is therefore necessary now to call it the No. 2 Bill.

In 1962, following consideration of the report of a committee, the Government decided in principle in favour of a change to a decimal system of currency. Subsequently, consideration was given to the manner in which the Government's decision could best be implemented. The opinions of business, industrial and other organisations—and of the general public—on the question of the choice of system were sought in 1967. In my Budget speech on 23rd April, 1968, I announced the Government's decision to introduce the £-new penny system on 15th February, 1971. Preparations for the change are proceeding satisfactorily under the general guidance of the Irish Decimal Currency Board which has been operating since June, 1968.

The basic objective in adopting decimal currency is to simplify money calculations. Under the present £sd system of currency the reckoning is in twelves, twenties and tens. Ordinary arithmetic involves enumeration in tens only. The benefits to be gained from bringing our money reckoning into line with ordinary arithmetic are real and substantial. They will be felt quickly in shops, in offices and in schools—to mention but a few of the sectors that will benefit. The advantages of the new system will greatly outweigh any temporary inconvenience or expense involved in making the change.

Senators will see from the Explanatory Memorandum which I have circulated with the Bill that most of the sections contain technical provisions relating to coinage. These follow the lines of provisions in the Coinage Act, 1950, which is to be repealed. The main new provisions in the Bill are in sections 2, 3, 9, 10 and 16.

Section 2 establishes the £-new penny system. The new penny will be equal in value to one-hundredth part of a £, that is, 2.4 of our present pennies. Instead of pounds, shillings and pence we shall have pounds and new pence. As I mentioned already, careful consideration was given by the Government over a number of years to the choice of decimal currency system. A special booklet which I issued in 1967 compared different systems and invited views. The weight of opinion favoured the £-new penny system. Britain will introduce the same system on the same date.

Section 3 and the First Schedule deal with the provision of the new coins. The denominations and technical specifications of the 6 decimal coins are listed in the First Schedule. The values of the new coins are as follows:—

50 new pence value 10/-

10 new pence value 2/-

5 new pence value 1/-

2 new pence value 4.8d

1 new penny value 2.4d and

½ new penny value 1.2d.

The three bronze coins for ½, 1 and 2-new pence will be lighter and easier to carry and to handle than present bronze coins. They will also have a weight/value relationship with each other—the 2-new penny coin will be twice as heavy as the new penny one and this in turn will be twice as heavy as the ½-new penny. This relationship will be an added convenience for all those businesses which handle coin in bulk. The total value of a bag of mixed bronze coins can be found simply by weighing.

The cupro-nickel 10-new penny and 5-new penny coins will have the same specifications and values as the present florin and shilling coins respectively. The highest value decimal coin will be the 50-new penny coin with value ten shillings. The issue of a coin, rather than a note, for the 50-new pence denomination was recommended by the Decimal Currency Board. Before making its recommendation the board had considered carefully the relative merits of the note and the coin and consulted interested trade, commercial and other bodies. The weight of opinion was in favour of a coin.

The arguments for a 50-new penny coin are convincing. It will be of considerable convenience to the general public for shopping. On economic grounds also there is a strong case for the coin. It has a life of at least 50 years—after which the metal is recoverable—whereas the ten shilling note has a life of only about five months and the costs of distributing new notes and withdrawing worn ones are considerable. The cost of issuing the 50p coinage—a once-for-all cost, virtually—will be only about twice the annually recurring replacement cost of ten shilling notes.

It has been suggested that we might have both coin and note but it is obvious that this would create public confusion and impede the changeover. No representative body has argued in favour of such a course.

In accordance with usual practice the designs of the new coins will be prescribed by regulations. Senators will, I hope, have seen the leaflet which I published some months ago giving details of the designs. Copies of the leaflet are available in the Library. Sections 9 and 10 of the Bill authorise the Central Bank to issue the 5, 10 and 50-new penny coins in advance of 15th February, 1971. These three coins have exact equivalent values in £sd and can be used in these values until the changeover date. It is proposed to start the issue of the 5 and 10-new penny coins this autumn and to bring out the 50-new penny coin early next year. Thus the public will be familiar with the three cupro-nickel decimal coins well before the changeover to the new system begins.

Section 16 of the Bill empowers the Minister for Industry and Commerce to prescribe how certain payments involving a halfpenny are to be varied when the ½d coin is demonetised on and from 1 August, 1969. The payments involved are small premiums under industrial life assurance policies and payments under friendly society contracts. A large number of these contractual payments involve an odd ½d and it is necessary to have a statutory provision to prescribe how they are to be adapted to the new situation. Section 16 will enable the Minister for Industry and Commerce to ensure that the total amount payable over a period will be maintained constant in each case.

A second Decimal Currency Bill will be needed later this year to settle other matters of detail. These are matters such as the conversion of bank balances, the effect of the change on hire purchase and other contracts, and the legal tender arrangements during the changeover period beginning on 15 February, 1971. The Decimal Currency Board is at present studying the matters that need to be dealt with in the second Bill, in consultation with the interests concerned.

Mr. Rooney

The trend for some considerable period has been towards the adoption of the decimal system. With the prospects of entering the Common Market, apart from our close association now with European countries, it seems we have very little choice but to join with the remaining countries in adopting the decimal system. A very good start has been made by setting up the Decimal Currency Board which very carefully went into the various problems which would arise from the adoption of this system. There are, of course, slight differences between the present system and the decimal system which is related only to one-tenths or tens. I should imagine that in the early stages there will be some confusion in regard to the conversion of prices of goods from the present system to the decimal system. It will probably involve a very small margin but in fairness we should try to ensure that the benefit of the doubt will be available to the purchaser rather than the person selling the goods.

I notice that the ten shilling note is to be abandoned and that instead a coin to the value of ten shillings is to be used. It strikes me that this is a very high unit for a coin to be carried around by people, particularly in relation to the average weekly wage. It is easier for a housewife or anybody else to lose a ten shilling coin than a ten shilling note, which is much lighter and will more easily remain in a pocket or a purse than the ten shilling coin. There is going to be a problem there. I do not think any country in Europe has a coin valued at ten shillings. In most European countries the coins have a value of less than ten shillings and indeed much less than ten shillings. This new ten shilling coin will apparently have the greatest value now of Common Market country coins.

I was not in favour of having the ten shilling unit adopted rather than the £-new penny unit which has been adopted in Britain. If we did this it would be better related to the average weekly earnings of our people, compared with the average weekly earnings of people in Great Britain, for the purpose of sharing out the expenditure of any particular week in relation to domestic needs.

We could have adopted this 10s unit instead of the £-new penny unit without creating any inconvenience as between this country and Great Britain or for visitors from Great Britain to Ireland or visitors from Ireland to Great Britain. I do not think it was necessary for us to adopt the £-new penny system because Britain had adopted it or because we decided to have it instead of the 10s unit.

In Europe, paper currency is still used to a very great extent. From my experience of coins in Europe, I could say that coins were the rubbish and paper was the usable money but a 10s coin is no rubbish and we are going to use a 10s coin here. I see the argument which the Minister has offered, that is, that paper currency has to be replaced more frequently, almost twice the number of times, as compared with a copper or nickel coin, which might last for 50 years.

It is possible that people will be obliged to use a purse more than they have been doing in recent times. Generally speaking, the housewife uses a purse more than the man-in-the-street who does not have to carry so many coins at present but if he is going to have units up to 10s in coins he will have to return to the old system of carrying a coin purse in addition to his wallet.

A very valuable contribution has been made by the Irish Decimal Currency Board and all those other organisations which are educating the public in relation to the decimal system and, in particular, decimal currency.

The decimal system is a simpler method of calculation than the system we have been using. In business, engineering and the various professions the use of the decimal system will make for greater efficiency and simplification of calculations. Of course there will be considerable expense involved for those who find it necessary to adapt various types of calculating machines, computers, adding machines, cash registers and so on but, in the long run, the expense will be justified because of the simplicity of the decimal system. The use of the decimal system is a positive move towards greater efficiency and speedier calculation and will bring great benefits to the community in general. All classes in the community will be involved in the benefits arising from the changeover to the decimal system because of its greater simplicity than the system we use at present. There are certain types of offices which are involved in continual calculations and, of course, from morning to evening shop assistants and office clerks are involved in calculations.

I notice that the Minister intends almost immediately to bring into use some of the coins of lower value such as the 5 penny, 10 penny and 50 new penny coins. It would seem that D-day is to be 15th February, 1971. That leaves exactly 18 months to educate the organisations that will be involved in the application of this new system, who will have to study the implications of the change and prepare for the change. Eighteen months will probably be found to be a short time, but I think it is a good idea to make a start with the smaller units even at this stage so that people will become accustomed to exchanging the decimal coins and making the appropriate calculations, which will simplify the process for the day when the £-new penny currency becomes available in addition to the 50 new pence denomination which is expected to come at an earlier stage. I am in favour of this new system. Most of us are looking forward to it because we realise that it will simplify daily problems of calculation, particularly where currency is concerned.

Professor Quinlan

We can all welcome this Bill initiating the changeover to the decimal system, beginning with currency. This system is the basis of calculation used in Europe and America and, with England moving on, we have no option but to make the change. In any case, it is a worthwhile change, which I welcome.

There are some points of detail that we might consider. First, there is the question of the 10s unit being a coin or a note. It does seem rather large as a coin. On the other hand, we can look back to the 1930s when the half-crown was in use and even the 5s piece. Obviously, the half-crown of the 1930s is the equivalent of the 10s note today. So, I do not think that should create any real difficulty.

What I do feel, looking at the system proposed, is that there are perhaps a bit too many breakdowns in it. For instance, the 2 new penny piece seems to be a rather unnecessary coin. It is also out of line with the general decimal approach. In the United States, they have the cent, five cents, ten cents, and so on, going up in multiples of five. If inflation continues, as it probably will, then the halfpenny, which corresponds to the present penny, will probably be withdrawn from circulation some time in the not too distant future and that would tidy up the system as it is.

As regards the question of some inflation arising on the introduction of the new system, I feel that, by and large, a blanket order simply knocking off whatever fractions could not be provided in the new money would work all right and that it would certainly be going downwards rather than upwards and should not affect commodities. In most cases where commodities would be likely to be affected, occasionally you have number changes and slight weight changes. I doubt if it would be desirable to encourage this on a wide scale. Therefore, I think that the industries concerned should be able to absorb a rubbing-out of all parts that cannot be paid rather than rounding them up to the next available quantity.

The Bill makes no mention of the paper notes for the future. I take it that the present idea is that the £5 and £10 notes would continue. I would draw the Minister's attention to the fact that they are both very unwieldy notes and are considerably out of line with the type of smaller and more easily handled paper note in other countries. The £10 note, especially, is a grotesque effort. It should be possible to standardise it thus using far less paper which, in turn, would take up less space.

As far as the education of the public in the use of the new system is concerned, I do not think that that will present any great problem. If we could get television away from some of its performances sufficiently to give it a little coverage, I am sure a few weeks intensive coverage, especially when some of the new coins are in circulation, would get our people used to it. It would probably be much better for the "Late Late Show" than some of the stuff it has considered worth while putting on in recent times.

I welcome this measure and, in general, I welcome the whole conversion to the decimal system. It will get rid of many of the absurdities which plague school children as well as much of the bewilderment we now cause to tourists by our systems of weights and measures, currency, and so on.

Mr. Brosnahan

I also should like to welcome this Bill. The introduction of decimalisation was inevitable in view of our efforts to get into the Common Market. Apart from the fact that the introduction was inevitable, it is most welcome for many reasons. It makes the process of calculation simpler. It will remove much of the torture in the teaching of arithmetic in the schools. Children have gone through many painful years—I mean "painful" literally—in learning the tables which we all learned in the past. There will be a jolt, of course, in the introduction of decimalisation and also in the introduction of metrication later on.

I should like to make this offer to the Minister. I mentioned this also to the members of the Decimal Currency Board. The Irish National Teachers' Organisation are prepared voluntarily to throw their full weight into the conducting of familiarisation courses for adults who may feel that its introduction will upset them and cause them undue worry. The courses will be conducted in the various national schools throughout the country. There is a national school in every parish and the school building can be used for this purpose. The services of teachers can be availed of in order to ease the jolt which may be caused to the public who may be unprepared to accept the introduction of decimalisation and, later on, metrication. I offer that service to the Minister. We consider that teachers play and important role in the community and that their function should not cease at the end of the school day. We feel they should place their services at the disposal of the community, particularly at an important turning-point in the history of our country.

The introduction of decimalisation and metrication is a turning point in our history. Our national teachers are prepared to play their part in the introduction of these two systems. I intend to have further discussions with the officials of the Decimal Currency Board after the summer recess. I had preliminary talks with them but I was unable to follow them up due to a variety of matters which we had in hand at the time.

Mr. Haughey

I note that the Seanad generally has welcomed this measure and that a few queries have been raised by individual Senators. First of all, may I particularly welcome the contribution by Senator Brosnahan and the offer which he has made. It is indeed particularly welcome and it is a matter of very considerable importance. It is very encouraging for me and I know it will be equally encouraging for the board to know that they can count on the wholehearted and expert support of the national teachers in this fairly complicated task of preparing the public for the change-over. Senator Brosnahan's suggestion that the schools could be used for the education of the general public in this decimal currency matter is excellent. I am glad of it. I hope he will, as early as he can, take the matter further with the Decimal Currency Board because they, too, will be very pleased indeed with what assistance he can offer. No one group of people in the whole life of the country would be better equipped in this matter of training and teaching the public than a trained professional teacher.

Senator Rooney talked about the coins. He asked if I could give him some examples of other countries in which high value coins are in use. I shall mention just a few. Germany has a five Deutschemark coin which is equivalent to our 10s; Spain has a 100 peseta coin which is equivalent to about 12s; Belgium has a 100 franc coin which is about 16s 8d and Switzerland has a five Swiss franc coin which is about 10s, so that a coin of this value is very widely known and in use in a considerable number of countries.

Senator Quinlan asked about the notes. We have tried to make the change-over as simple and uncomplicated as possible so as not to burden the public with too many complications, not to put too great a strain on the ordinary member of the general public and to reduce the number of changes to which he will be subjected to the minimum. Following that policy we are retaining all the notes except the ten shilling note. The £1 and the £5 and so on will be the same and we will not consider changing those for some time after decimalisation. In other words, if we are changing the notes in either size or design we will wait until the whole process of decimalisation has got across and everybody is fully familiar with the new system before introducing changes which, while they might be an improvement, would not be regarded as urgent or immediately necessary. I think they are the main points which were raised but if there are any other matters we can deal with them on the Committee Stage.

Mr. Rooney

There is one point I should like to raise. The Minister has decided to have the £ note instead of the ten shilling note as the unit. I think there is an argument in favour of the 10s.

Mr. Haughey

Yes, a very strong argument in favour of the 10s. Indeed the 10s as a basic unit has been adopted by New Zealand, Australia and South Africa and if our circumstances had been different we would probably have opted for the 10s as the basic unit. However, we had to weigh all the advantages and disadvantages of any particular system and whereas the 10s unit as a basic denomination would have a considerable number of advantages we decided, on balance, to opt for the other system.

Mr. Rooney

Thank you.

Question put and agreed to.

Agreed to take remaining Stages today.