Decimalisation in the UK
by Jackie Speel, 29 March 2009. Updated 11
The UK was one of the last countries to adopt a
decimal monetary system, although there had been discussion on and
investigations into the subject since the early nineteenth century.
The topic was pursued intermittently for a century
and a half, sometimes in conjunction with the adoption of the metric
system of weights and measures. It was generally agreed that the
changeover was necessary - it would simplify accounting, business
and trade by a considerable degree, and would save a great deal of
schooling in arithmetic.
Various official investigations, a number of books
and many other publications, and much discussion in various quarters,
as well as the formation of the 'Decimal Society', were involved in
the process. There were a variety of decimal coinage systems proposed -
some of them as complicated (to modern eyes) as the system they were
intended to replace, and several bordered on the incomprehensible or
impractical. The use of gold and silver as coinage metals - rather
than the present system of coins having a purely nominal value -
influenced nineteenth century discussions, as did the relative low
value of inflation for much of the period.
In the nineteenth century and early twentieth century
a system based on £1 (one pound sterling) being equal to 1000 minor
units (with several intermediary coins) was the most popular option
and later on, with the effects of inflation, the lesser unit was
fixed at a hundred minor units to the pound.
Other options suggested at various points included 10s
(ten shillings), the crown (five shillings, a quarter of a pound), the
florin (two shillings, introduced as a tenth of a pound), and units
based variously on a thousand farthings or a hundred pennies.
The effectively stable relationship between various
different currencies led to suggestions for an international fusion
of coins (one proposal from 1838 bears more than a passing resemblance
to the euro). In many cases there was a preference to retain as many
of the existing coins as possible, even when this meant redenominating
them, with the potential for confusion that would arise. (Occasionally
the metal was worth more than the face value: there were also occasional
nineteenth century examples of forged coins using platinum, either as
a silver substitute or as a core with a gold 'coating'.)
The nineteenth century's choice of the pound being
equal to 1000 minor coins reflected contemporary prices, and the
seemingly easy conversion from the existing 960 farthings to the
pound - and the perceived benefits to the poor of fractional prices,
who would, it was claimed, be happy to receive more coins for their
pennies and sixpences, and the greater flexibility afforded.
Creating London's GLA
RULERS OF EUROPE:
House of Windsor
BBC: D-Day Delivers New Currency
Decimal Coins of the UK
History of Decimalisation at
currencyconverter.co.uk (dead link)
Decimal Coinage Weights &
Measures at www.jstor.org (dead link)
The National Archives
In English-language use, the pound sign (in
the lower lefthand corner of this 1928 one pound note) is placed
before the number (£15.00, and not 15.00£), and is separated
from the following number by no space or only a thin space
As part of the discussion in this period it was pointed
out that in several quarters it was the practice to convert all monies
into decimal equivalents, carry out transactions, and then convert the
figures back to 'real money'. It was recognised that there would be
'issues' in some areas - for example the penny post and other 'fixed
costs' - as there were no direct equivalents between existing coins and
the replacements. There was a greater emphasis on establishing the
values of the coins and how the two systems would tally than on
the longer term impacts. More important were areas of concern such
as the cost of conversion, the potential for inflation, and the
likelihood of confusion if coins were redenominated, although some of
this would have been resolved had there been a move towards implementing
a new system.
The move towards implementation
The debate, and official investigations continued
into the twentieth century, by which time virtually all major and many
minor economies outside the British empire had adopted decimal systems
(and had sometimes gone through a number of different systems of
monetary units). The real shift towards the adoption of decimal
currency occurred from the 1950s with the rise of international trade,
and various members of the British empire and Commonwealth adopting
The Halsbury Committee was established in 1961. This
reported on decimalisation in 1963, the majority report being in favour
of the pound as the basis. The chief alternative proposal was based on
a ten shilling unit (such as had been adopted in several Commonwealth
countries), and the proponents for this argued their case.
Other suggestions were made, with units from five
shillings via a hundred old pence to £5 (five pounds) - the latter
to take into account inflation by the time the system was actually
adopted, none of which received significant support. An octal system
was suggested, with Sir Fred Hoyle erroneously arguing that it would
be more computer friendly (some makes of computer actually 'preferred'
hexadecimal (base 16) to octal). Counter arguments included the point
that computers were made to make life easier for humans, not the
reverse. A duodecimal system was also suggested (a society promoting
a base-twelve was still active in 2009), but this was not taken up.
Base-ten was the normal usage for currency elsewhere.
In 1966 the pound was adopted as the main unit. In
support of this, chancellor of the Exchequer (and later prime
minister), James Callaghan argued that the claimed benefits of the
ten shilling unit were purely temporary and limited, whilst possibly
leading to inflation (as the minor unit would go from one old penny
to the equivalent of 1.2 old pennies).
Again there was much debate as to the coins to be
used and their names - 'cent' was favoured by some for the smaller
unit, but 'new penny' (eventually to be shortened to penny) was
adopted. The system was made technically non-decimal by the
introduction of a half-unit coin, to accommodate values covered by
the existing penny. It was suggested (as in previous discussions)
that the shilling be made equivalent to ten pennies (down from
twelve in Imperial currency), there being no indication on the units
of money as to their interrelationships, but this was rejected as
likely to lead to hoarding and similar complications.
A 'Decimal Currency Board' was set up (alongside
several other such bodies, covering inter alia East Africa,
West Africa, and the Pacific). Under the chairmanship of GLC Leader
William Fiske (afterwards Baron Fiske), it carried out a good deal
of work, including the provision of educational material and
publications. There were also two competitions, one secret and the
second open, to find a design for the new coins.
As with the 'millennium bug' of around thirty years
later, but in practice more practical, a minor industry arose to
cater for the conversion: dual use equipment (which could, of course,
be used with existing decimal currencies as well), training provision,
Robert Maxwell, then owner of Pergamon Press and
also an MP, saw the potential profit in issuing books and other
materials on the subject.
Shown here is the former Royal Mint building in London, with
this postcard photo being dated to 1906 - the building itself
was opened for business in 1808-1810
A two shilling coin, or florin, from 1964.
Florins were produced for Queen Elizabeth II each year between
1953 and 1967, with proof coins again produced in 1970. The
obverse shows the Mary Gillick head of Queen Elizabeth, inscribed
ELIZABETH II DEI GRATIA BRITT OMN REGINA (1953 only) or ELIZABETH
II DEI GRATIA REGINA (all other years), while the reverse shows a
Tudor rose in the centre surrounded by thistles, shamrocks, and
leeks, with the inscription FID DEF TWO SHILLINGS 1964. In
accordance with the plan for currency decimalisation, from 1968
the decimal ten pence coin was introduced at the same size, weight,
and metal composition as the florin. Accordingly the florin (usually
dated 1947 or later) remained in circulation until the size of the
decimal ten pence was itself reduced in 1992. Earlier florins had
been made of an alloy containing 50% or 92.5% silver, and had
mostly already been withdrawn to retrieve the valuable metal.
Remaining florins and the larger 10p coins were finally demonetised
The situation in countries which were decimalising at the time
was studied and learnt from. One of the marketing strategies was
to point out that those companies in Australia which had decided
to leave the acquisition of equipment and training until the last
moment had found it difficult to make arrangements - and lost
customers to those firms which had already done so and therefore
provided a quicker service.
As mentioned, publicity material and educational
material were provided for the general public and for educational
establishments - and it was argued that with increasing travel
abroad people were already familiar with decimal currency. There
was a certain amount of counter-argument - or baseless problems:
it was argued that claims by shopkeepers that people would be
wandering around with pocketfuls of the new currency but unable
to work out how to use it were fallacious.
As with the earlier period, differences in culture
and attitudes are regularly visible - most notably the situation and
attitudes towards women, with remarks made about 'the housewife'
that would now be seen as patronising. However, the situation was
that men were in positions of authority and the housewife was in
charge of the household - she did most of the shopping and would be
at the forefront of using the new coinage.
The Royal Mint was moved from its existing site at
Tower Hill, London, to a new site in Wales, partly because the existing
site was too small and also due to the then existing policy of moving
industry to the regions (there being relatively high unemployment in
the new catchment area).
Coins were struck over several years - although all
of them with the intended date of use - and consideration was given
to factors such as the premature death of the queen, popular rejection
of the new currency, or the Mint being damaged by Welsh nationalists
(some of whom at the time adopted less than peaceful methods). In the
event there were some delays - caused by a postal strike early in 1971.
The half-crown (2/6, or two shillings and sixpence)
and old half-penny were withdrawn ahead of the transition for the sake
of convenience. The first decimal coinage was issued in 1968 - the
equivalents of the shilling and florin - these being the 5p and 10p.
The ten shilling note was replaced by a new 50p
coin. This was announced (and introduced) later, in 1969, after a
specimen set or introductory pack in a vinyl wallet had been made
available, which consisted of 5p and 10p coins (both dated 1968) and
1/2p, 1p, and 2p coins (all dated 1971).
The three smaller coins, 2p, 1p and 1/2p, were
introduced into general circulation on 15 February 1971 (this being
one of the quieter times of year). The banks had been shut for
several working days to allow for essential activities.
The BBC reported the story:
'D-Day delivers new UK currency - The British
Government has launched a new decimal currency across the country.
The familiar pound (£), shilling (s) and pence (d) coins are to be
phased out over the next eighteen months in favour of a system
dividing the pound into units of ten, including half, one, two,
five, ten and 50 pence denominations.'
Shops were opened as 'old currency' and 'new
currency.' It had been expected that the transition would take some
two years, but in fact it took a matter of weeks - sufficient for the
Decimal Currency Board to be wound up in 1971.
A range of its documents were released by the Public
Records Office and the National Archives in 2001 to mark the thirtieth
anniversary of the event. In 2008, to mark the issue of a new design
for the existing coins (the 1/2p having been dropped, and three new
coins being added, with values of 20p, £1, and £2) a small exhibition
at the British Museum included a section on decimalisation.
The Times - London editions of the newspaper
FindTarget.com - British currency information
via their website
Text copyright © Jackie Speel with corrections and additions
provided by Ron Haller-Williams. An original feature for the History Files.