Basic statutory authority for the decimalisation of currency was given by the Decimal Currency Act, 1969. When the 1969 legislation was before the House it was intimated that this second Bill would be needed to deal with matters of detail. The Bill now before the House is based on recommendations made by the Decimal Currency Board. The Explanatory Memorandum describes the provisions in detail.
The board's publications have been supplied to Senators as they were issued and copies are in the Library. Senators will therefore be already generally aware of what is involved in the changeover to the £-new penny system of decimal currency beginning on Decimal Day, 15th February, 1971.
On that day the banks, Government Departments, and a large proportion of companies, shops and business firms generally will switch over to working in decimal currency. An overnight switch by all shops and business is not possible chiefly because some time will be needed by machine supply companies to complete the task of conversion or replacement of cash registers and other machines. There must therefore be a changeover period. During that period both the £sd system and the £-new penny system of currency will be legal — except that cheques and other bank documents must be written in decimal currency. While the changeover period may last up to a year, in practice the switch to decimal working will probably be nearly complete in most business sectors within some months after Decimal Day.
The purpose of this Bill is to provide the legislative framework for the changeover. It does not attempt to legislate for every decimalisation problem. Statutory provisions are required only for cases where serious inequity or administrative difficulty would otherwise arise.
Section 1 deals with definitions and interpretation. The effect of section 2 is that cheques must be written in the new currency on and from Decimal Day. The complete switch of banking transactions into decimal currency on that day is important for the successful launching of decimal currency. Their large volume of transactions would, in any event, make it impracticable for banks to work in both decimal currency and £sd during the change-over period. In order to ensure an overnight switch in banking transactions section 2 makes invalid any cheques with shillings or pence in them, if they are written on or after Decimal Day. In the course of the Committee Stage debate in Dáil Éireann on 10th December, 1970, the question was raised whether a bank could deal at all with a cheque which is invalid under section 2. The Minister promised that this point would be examined. This has been done and confirmation has been obtained that banks can deal with such documents. For their part the banks are willing and anxious to facilitate a customer who has inadvertently lapsed into £sd when writing a cheque on Decimal Day or after it. After the first few days of the use of decimal currency such cases are not likely to occur frequently. The publicity of the Decimal Currency Board and of the banks will prepare the public to write cheques in decimal currency only as from Decimal Day.
Section 3 is intended to facilitate the banks in the days, immediately preceding Decimal Day, during which they will have the heavy task of converting their accounts to decimal terms and completing various internal preparations such as conversion or replacement of machines.
Section 4 provides for the method of conversion to decimal terms of £sd amounts written on any cheques and similar instruments which though drawn before Decimal Day are not paid in until on or after that date.
Section 5 prescribes the method of conversion of references to shillings or pence in bank balances. These conversions will be done by the whole new penny conversion table given in the Schedule to the Bill. The banks will account only in whole new pence and this table gives the amounts in whole new pence which are nearest in value to old penny amounts up to 2s. In the overall the table will give equitable results because it is designed so that increases and decreases due to rounding balance out. Some individual debtors or creditors may gain or lose marginally. The maximum loss or gain on a cheque amount will be one and one-fifth pence.
I now turn to some other transactions for which conversions by the whole new penny table will be done. During the changeover period it will be possible to settle £sd debts in cash because the £sd system will still be legal. If an £sd amount to be paid includes some old pence, however, it will not have an exact decimal currency equivalent in whole new pence. In order to allow such amounts to be settled by cheque, section 6 of the Bill provides for conversion by the whole new penny table during the changeover period. Under section 13 of the Bill the whole new penny table is also prescribed as a basis for settling in the new currency—whether in cash or by cheque—any £sd amounts that have to be paid after the changeover period. At that stage the decimal system will be the only legal currency system and the £sd coins will no longer be in circulation.
The position of regular weekly or monthly payments such as mortgage repayments, ordinary life assurance premiums and hire purchase instalments is dealt with by section 7 of the Bill. As in the case of any other £sd debt, a person making such a payment will retain the right to pay the existing £sd amount in cash during the changeover period. If he prefers to pay in decimal currency during the changeover period he will be free to convert the shillings and pence on the basis of the whole new penny conversion table and to pay that amount. After the end of the changeover period the payment must be made according to the whole new penny table.
A special arrangement is however necessary in regard to premiums payable under industrial life assurance policies or friendly society contracts. A large number of such contracts involve very small weekly cash payments and many of these do not convert exactly into decimal currency terms. Application of a conversion table individually to such small payments would in some cases cause a relatively appreciable change in the amount of the payment. Section 8 of the Bill will enable the Minister for Industry and Commerce to make regulations prescribing an equitable solution to come into effect as from Decimal Day. It is intended that these regulations will prescribe that the total £sd amount payable over a period of four weeks will be converted into the nearest equivalent in decimal coins, that is, to the nearest half new penny. Benefits payable under policies will not change.
Section 9 and 10 contain an important group of provisions concerned with statutory references to amounts of money which include shillings or pence. The bulk of statutory references to £sd will not give rise to any difficulty as they will convert exactly to decimal currency terms. In some cases, however, it may be necessary to make some slight adjustment if the amount does not convert exactly. Section 10 of the Bill gives the necessary powers to enable this to be done in cases where existing powers are not adequate for the purpose.
The provisions of section 14 of the Bill will ensure that the changeover to decimal currency does not invalidate any contracts or other formal documents which contain references to amounts of money in £sd. For example, if after the changeover a person makes a will which mentions an amount in £sd, it will not be invalid. However, all payments under £sd contracts and other legal documents will fall to be made in decimal currency under section 13 of the Bill after the changeover period.
During the changeover period those who sell goods or services will offer them at a decimal price or at an £sd price. There will not be two prices for one article. Once a shop has gone decimal, the prices will be decimal prices only and it will not normally be open to the customer to decide that he prefers to pay an £sd price. People can, however, use both old and new coins when paying for their purchases. Since sixpence in the old currency is exactly equivalent to 2½ new pence, exact change can always be given if customers tender in multiples of 6d or 2½ new pence. The decimal currency board will impress this point on retailers and the public.
Up to the present a great deal of the Decimal Currency Board's activities have been directed towards getting businesses — large and small — to identify everything that needs to be done and to set about preparations in good time. From the board's contacts with business firms and organisations throughout the country they are satisfied that the business community generally is responding well to the call for efficient preparation. No intractable problems have been encountered but there is still a proportion of traders who have been dilatory in setting about the task of preparations. These should take action without further delay.
An important part of the board's future work will be to prepare the general public for the use of decimal currency so that they will understand it thoroughly. A special publicity campaign will be conducted for this purpose. In the six weeks before Decimal Day the board will switch the weight of publicity over to the general public. A special explanatory booklet will be sent to each household in the country. This booklet will include a copy of the shopping conversion table — sometimes known as the new halfpenny conversion table — which the board have recommended for equitable conversion of retail prices generally. Other publicity measures will include advertising of basic facts about decimal currency in the press and on radio and television. I feel confident that the public will come up to 15th February, 1971, with the knowledge of decimal currency fresh in their minds.
