The Chancellor of the Exchequer, James Callaghan, has confirmed the “historic and momentous” decision to change over to decimal coinage.
It was just one of a number of proposals announced in his “little Budget” statement in the Commons. Other proposals included a new gambling tax – the proceeds from which will be used to fund cheaper mortgages for the less well off.
Loud cheers greeted Mr Callaghan’s announcement of the switch to decimal currency.
He said: “It is the government’s conclusion, shared I know by large sections of industry, commerce, science and banking, that the change to a decimal coinage will bring considerable benefit to the economy at large.”
Preparations for the change-over will begin at once, with the introduction of a Decimal Currency Bill. One of its functions will be to establish a new Decimal Currency Board to oversee the switch which will take place in February 1971.
There were more cheers as Mr Callaghan confirmed the pound would remain the major unit of currency. It will be divided into 100 units, to be called either cents or new pennies.
Preliminary estimates suggest the cost of switching to decimal coinage may be as much as £120m. However, Mr Callaghan said he hoped the long change-over period may mean the total cost was lower than this.
Companies obliged to invest in new equipment will not be compensated, but they will be entitled to tax relief.
Courtesy BBC News
In context
The United States pioneered decimal coinage in 1786 with one dollar worth 100 cents. At one time, the British system of pounds, shillings and pence was a major currency in the world. Many former Commonwealth countries switched to decimal once they gained independence.
On 15 February 1971, otherwise known as “D Day” for Decimal Day, the United Kingdom adopted a decimal currency.
This replaced the £.s.d. – pound shilling and pence system – in which there were 20 shillings in each pound and 12 pence in each shilling. The existence of 240 pence in each pound was a legacy from Anglo-Saxon times when a Roman pound in weight of silver was divided into 240 silver pennies.
Plans to introduce a decimal currency in the UK had been over delayed over disagreement about whether to retain the pound or replace it with a smaller unit as South Africa, Australia and New Zealand had done.
