Below is the text of the speech made by Greville Janner, the Labour MP for Leicester West, in the House of Commons on 7 April 1978.
As the value of our currency declines, so inevitably does the value of the pound note and of each of the coins that represent that value in the hands, in the pockets and in the wallets of the ordinary user. I am happy to have this opportunity to ask the House to consider whether the time has now come for a complete review of our coins and our notes in the light of the decline in the value of money, in the light of inflation, and in the light of the weight of the coins that exist. In particular, I shall suggest that the time has arrived for the introduction of a £1 coin, for the introduction of a crown—that is, a 25p coin—and for a change in the type, size and, in particular, in the weight of the coins that are used at present.
The value of currency has dropped in the last 20 years by four times. That is to say, £1 in 1957 would have bought as much as £4 today, 20 years later. Yet we still do not have a coin to represent the 1978 value of a 1957 pound. Indeed, the speed at which the value of the pound has dropped has increased, as we all know. Since decimalisation, when the last major changes in our currency took place, on 15th February 1971, there has been a drop in value of just under 60 per cent. Yet this drop is in no way reflected in the coins and in the notes that are in current use.
It is clear, therefore, that a review is necessary and that steps ought reasonably to be taken so that people can have coins and notes that are convenient to handle, light in weight, last a reasonable time in the wallet or in the pocket, do not deteriorate so fast, and are easily recognisable by those who use them.
I deal first with the question of the £1 coin. The Financial Times today carries a splendid cartoon suggesting that I should let nature take its course and the pound note will disappear anyway. If we allow it to go on long enough, I dare say that that will be so. In spite of the tremendous reduction in the inflation rate from nearly 30 per cent. about three or four years ago to under 10 per cent. today, the pound still faces a change which is inevitable and which is continuing along with the world financial situation.
What we now need is a coin which is convenient in use and which will last indefinitely. I am informed in answer to a Question that the average life of a £1 note today is 10 months, the life of a £5 note, which is used less, is 18 months, the life of a £10 note is two years and the life of a £20 note—which I do not think that some of us have ever seen—is two and a half years. A coin would be expected to have a life of at least 25 years. Therefore, even if the introduction of a coin were expensive at first, it would certainly be justified and much cheaper in the long run.
Given that it would be possible to produce coins, the question then would be whether this introduction would mean the end of the pound note. Here I draw the attention of the House to the fact that in many other countries both coins and notes exist in the same denominations without causing any difficulty, so that those who prefer to use coins can handle coins and those who prefer to handle notes can handle notes. In France, for example, there are 50 franc and 10 franc notes and coins. As the value of the pound in France is about 9 francs, this means that the French have the equivalent of a £1 and a £5 coin, although the latter is not in common use.
In West Germany they have 10 deutschemark and 5 deutschemark notes and coins. As the pound is equivalent to approximately 3·7 deutschemark, that means that Germany has coins worth about £1·30—an overlap in both places.
In the United States there is a silver dollar and there is a dollar note. Those of us who have had the occasion to visit such centres of civilisation as Las Vegas have seen that the coins have a use in machinery which is never approached by notes. In this country there were some complaints, which perhaps my right hon. Friend will deal with in his reply, when the size of the pound note went down about whether the new pound note would be usable in, for example, the machinery at service stations.
In Australia there is an almost complete coverage of notes and coins from 50 Australian dollars down to one Australian dollar, in both cases with notes and coins.
When the 50p piece was introduced at the time of decimalisation, Lord Fisk said that he recognised that introducing a coin of even 50p—or 10s. as it had been in value—would seem rather strange at first. He pointed out that many countries have coins to the value of the same amount as 50p or more.
There would appear to be no good reason in common sense or in finance or in economics why there should not be a £1 coin. I noted that in the other place earlier this week Baroness Birk indicated that the matter was under review.
Perhaps my right hon. Friend will be able to give an answer to a question which people are reasonably asking, which is why there is not to be a £1 coin very swiftly. Perhaps he will explain at the same time who makes the decision about whether there shall be. Is it him? Is it the Government? Is it the Bank of England? Who is it? Who decided that the £1 note should be reduced in size? Did he know about it before that decision was taken? If not, why not? Who is consulted? Was the House consulted? If not, why not? Decisions regarding our currency are of importance to our constituents and we are entitled to know what is to happen, what has happened, and why.
I turn next to the crown coin. There is no coin available and in use between the 10p coin and the 50p coin. This is a gap about which shopkeepers complain. There would appear to be no good reason why this gap should not be plugged so that there can be an easier denomination in the giving of change. There is no need for the size to be too large.
The White Paper issued at the time of decimalisation, specifically stated that the 50p coin
“should be of such a shape and size that a 20p or 25p could be provided in the same tier later if the need should arise….
The Board and the Royal Mint soon concluded that the 50p would have to be a fairly large coin so that it would be possible later to fit into the same tier a 20p or 25p in weight-value relationship”.
Clearly, although the Jubilee crown was a splendid souvenir which is treasured by many of us and many of our constituents, it is too bulky for everyday use. It is a souvenir and not a coin for use in the market place and there would appear to be no reason why we should not have a coin which is half the size or half the weight for a crown or, if the Government saw fit and the Bank of England thought it preferable to have a 20p piece, it would be one in the same relationship and one, I hope, which would be hexagonal—it should have many sides—unlike the ordinary round coins to which the 50p piece is the only exception.
I suggest to my right hon. Friend that there is no good reason in logic, economics or finance why there should not be a crown coin and why there should be this continued gap between the 10p and the 50p piece. Certainly the only answer that I have received has been that we do not want more coins because they are heavier. I repeat that if we were to have more coins, the notes could be continued, in so far as they exist, and that if there were coins of a higher denomination, fewer coins of the smaller denominations would need to be used.
I turn to my next suggestion, which I hope has already been considered. It certainly should be if it has not. It is that our coins should be looked at in the light of the coinage of other countries to see whether there is any need for them to remain as bulky, and whether there really is any sensible reason why our coins should continue to drive holes through our pockets when they could be made from lighter and more convenient material, as they are in so many other countries.
I suggest that there is very good reason for changing the shape of the coin. It is not only blind people who are concerned with the shape of the coinage. People who have to handle coins in conditions of poor light are also concerned, and we all like to know, from the feel of a coin in the pocket, what it is.
There is no reason why we should remain, as we have done, so stagnant in our approach to coinage, and so old, fashioned. There is no reason why we should not have a radical change, even if, as was pointed out by Lord Fisk at the time of decimalisation, such a change is unpopular at first. It takes a while for people to get used to changes. I do not believe that this change would be unpopular. I believe that it would be a very popular change to have lighter weight coinage of different shapes, which people could recognise readily and use readily. It would enable them, despite the lowering of the value of money, to have coins which are readily usable and changeable.
It is quite plain that, even if these mild and, I suggest, modest and reasonable suggestions are to be taken into account, someone has to perform a general review. I presume that it would be my right hon. Friend and his colleagues at the Treasury. It may be that this would be together with the Bank of England but, whoever is involved, the review is now needed.
From a reply given to me by my right hon. Friend earlier this year, I understand that there are periodical reviews and a balance between notes and coins, for example, but that no date has been fixed for the next periodic review. Surely it is reasonable to suggest that the time has come when the date ought to be fixed.
Fortunately, the value of the coinage and the value of our notes is going down by “only” something under 10 per cent. per year, but the decrease in the value of the coinage means that there is an increase in their number. There is also an increase in the need for coins of convenient shape and size, an increase in the need for coins which cover the denominations in most common use—that certainly includes 25p—and an increase in the need for a coin which would reach the mighty level of the pound.
I suggest that the time has come for us to have a silver pound, just as there is a silver American dollar. I hope that as the rate of inflation continues to decline the silver pound, which I would be very happy to hear the Minister announce, would retain its value for a very long time to come.