Britain’s Other D-Day: The Politics of Decimalisation

Some commentators have seen the introduction of decimal currency in the UK as part of a broader process of Europeanisation, driven by a zeal for modernisation, and leading to an abandonment of a traditional British exceptionalism. This thesis will argue that this view is false, and that the modernisation of the currency was an essentially conservative reform. In preserving the existing pound sterling, the Government was keen to maintain the supposed prestige of the currency, and the retention of the name ‘penny’ for the minor unit was based on an appeal to the public’s perceived adherence to tradition.

There is little evidence that either the fact of decimalisation per se, or the choice of a system based on the existing pound, was influenced by Britain's attempts to gain entry to the European Economic Community, or indeed any desire to emulate wider European practice. In fact, by far the more important external stimulus to action by the British authorities was the decimalisation of the currencies in the 1960s by successive Commonwealth countries, South Africa, Australia and New Zealand, which left the UK, in the mid-1960s with the prospect of being virtually the only country in the world operating a non-decimal currency.

However, I will argue that, although the influence of the decisions made in Australia and New Zealand was important, it was limited in scope. Whilst the UK was content to follow the lead of its Commonwealth partners in decimalising its currency, it did so on the basis of the existing £ unit, rather than the 10-shilling basis favoured in South Africa, Australia and New Zealand. It did so, despite significant internal opposition from retail and other interests, largely as a result of an unlikely alliance between the City of London, anxious to preserve the international status of the pound as a reserve currency, and a Labour government with decidedly conservative views on the traditional image of the pound.