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Decimalisation 1

Context

1971. Decimalisation - prices are up?

The UK introduced decimal coins on 15 February 1971. The old coinage was based on a pound that was worth 20 shillings and shillings worth 12 pence (thus £1 = 240p).

The new pound was worth 100 pence.

Work towards D Day (Decimalisation day) began in 1966. After the new coins were introduced there was a period of several months when both forms of currency were legal tender.

This was necessary to allow everyone time to get used to the new coins and it also gave longer to convert the 5 million or so machines that had to be adapted for the new coins.

The decimal coinage system may seem simple today, but at the time it caused considerable confusion and consumers had to be constantly reminded of the value of the new coins (see the pictures in this clip).

The other major concern was that shops were using decimalisation to put prices up. However, as John Hosker of the Consumers' Association makes clear in this clip, the rise in prices was quite possibly due to inflation, which was comparatively high at the time.

Transcript

PRESENTER:

Ask any housewife what's been the main cause of food going up in price, and she and her husband will probably react like Mr and Mrs Average in the market yesterday.

WOMAN:

All the supermarkets have upped their prices. You can tell that by the money you spend each week - it's just not going as far as it was.

MAN:

I think that traders treat new pence like old pence now. And grapefruits, some time ago they used to be ninepence each, old pence, they're now eightpence and ninepence each, new pence.

PRESENTER:

It's no good trying to explain, for example, that those grapefruit, plentiful back in February, are relatively scarce now, or that Britain hasn't been isolated from a worldwide escalation of prices. Decimalisation rears its ugly head. In fact, prices were monitored during the changeover period, and one of the most detailed surveys was analysed by John Hosker of the Consumers' Association.

JOHN HOSKER:

The fact that retailers and others had to bear the cost of conversion of machinery, training of staff and other things unquestionably means, I think, that some element of this increase in cost has been passed on to consumers. But the problem is, peering through the general steam of inflation, it's very difficult to decide just how much of the current increases in prices is as a consequence of decimalisation

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