I don't know about you, but usually when I get petrol for my car I would normally fill the tank up. Recently, though, I haven't been doing this. One reason is that I don't pay with my debit card any more but use cash - this is due to the number of people I know who have had their cards skimmed at petrol stations - so to avoid getting skimmed myself I just put £30 worth in and pay with real money.
It's actually a great way of doing things. It takes half the time that it does to use a debit card and I also tend not to buy numerous other things which I don't really need - mints, sweets, chocolates, drinks and so on. I just hand over my £30 and off I go.
Or rather, I hand over my £30 and one penny. Have you noticed how hard it is to stop a petrol pump on an exact price? The numbers click over so quickly that the gentlest squeeze on the trigger sends 3 or 4 pence worth of petrol into the tank. It's infuriating to say the least, but it also made me think about money and it's value. So I've decided to put together a post on it - it's the first post in a series of posts on what I call "The Stan Plan". Think of it as a personal manifesto.
Mostly this is just a bit of fun for me - a chance to exercise my megalomania and delusions of grandeur - but it's no laughing matter that it now costs around £70 to fill my car with petrol. It's not a big car either - just a bog standard family saloon. It's not that I can't afford it either. I don't actually do a lot of driving so a full tank will last a month or more, but for someone like me who was brought up in a very working class family where every penny was crucial the blase way we approach money these days is still somewhat shocking.
I'm sure there are many reasons for that - the easy access to credit being one of them - but I believe the main reason today is that we have lost all notion of the value of our money and that this is due mainly to the fact that inflation over the years has meant that the sums of money we deal with on a daily basis are so large that the real value has been lost.
Think of it like this. If your monthly income is £2000 then what does £70 to fill your tank matter? In real terms it probably isn't that different from 30 years ago when your monthly income may have been £200, but it still cost £7 to fill your car up. The difference is that it feels very different to have £1930 left over than it does to have £193 to see you through the month.
So my idea is to revalue the pound by a factor of 10 - so that £10 becomes £1.
Nothing really changes - your money post revaluation would go as far as it did pre-revaluation (though there may be some small adjustments up and down on certain things), but what it will do is give most people (apart from the very rich) a better appreciation of the value of things.
Let's look at some examples.
Someone earning £30,000 a year would earn £3,000 a year post-revaluation
A house costing £250,000 would cost £25,000.
A car costing £15,000 would cost £1,500.
A council tax bill of £1300 would be reduced to £130.
A mortgage payment of £800 a month would be £80 a month.
A washing machine costing £250 would cost £25.
A bicycle costing £100 would cost £10.
A DVD costing £15 would cost £1.50.
A packet of 20 cigarettes costing £5.50 would cost 55p.
A gallon of petrol costing £4.40 would cost 44p.
A pint of beer costing £2.75 would cost 27.5p.
Instead of your pound buying $1.97 it would buy $19.70.
With me so far?
There will be somethings that might go up in price. For example if something currently costs 28p to buy then it can not cost 2.8p post-revaluation - so it will become 3p. However, this will be balanced by adjusting to the nearest half penny. So if something costs 27p now it will go down to 2.5p post-revaluation.
What is the point of all this?
The first point is that it gives people a much better understanding of the value of the pound in their pocket. As I said earlier, when you have £2000 a month it seems like £70 is a relatively minor amount, but when that becomes £7 out of £200 it suddenly seems a lot more significant.
There are also environmental benefits. Our modern society likes to think we are more environmentally enlightened than previous generations - and in some respects we are - but the reality is that we've become a nation of throwaway junkies. Tumble dryer not working? No worries - a new one only costs £150 and that's not a lot in this day and age. But hang on - if that tumble dryer is now £15 and you only have a monthly income of £200 it suddenly seems like an awful lot of money. Better to spend a fiver getting it fixed.
So it would mean less propensity to just throw things away - and that is better for the environment.
It would also bring back the culture of saving. Back in the seventies, if you wanted something you saved up for it. It didn't matter if you were a kid saving up for a new Airfix kit or a dad saving up for a new car, you saved your money till you could afford to buy it outright or put a significant deposit on it.
But with things costing what they do now it is a lot harder to visualise that. That is especially true with big purchases and houses in particular. If you are a young couple looking to buy your first home then the prospect of saving up £12,000 for a 10% deposit on a £120,000 flat seems impossible - but if that became a deposit of £1,200 then that seems a lot more achievable through saving even though, in reality, there is no difference.
It would also loosen our dependency on credit. Saving up £80 to buy a top of the range television sounds relatively easy, but at £800 there is much more likelihood to resort to credit to buy it.
It would mean some other changes to. It would certainly make sense to reintroduce the pound note again. It would also mean a return of the hapenny (that's a half penny coin to anyone under 40 years of age).
Personally, I'd go further and bring back the shilling. Not the point of having 20 shillings to the pound, but why not 10 shillings to the pound and 10 pence to the shilling? You'd still have 100 pence equalling one pound, but it would give us back a piece of British culture which we are poorer as a nation for having given up.
As far as I can see there are a lot of benefits to revaluing our currency. It would be better for the environment by reducing the disposable society, encourage saving and discourage the tendency to resort to credit. In real terms, nothing would actually change value wise, but there would be a far better understanding of what value is and, particularly, what the value of the pound in your pocket is.
And I'd be able to put a few quids worth of petrol in my tank without having to fish for a penny or split a fiver.
Think about it. A Britain where you'll still get change from a pound when you buy a pint and a packet of crisps. A Britain where you can fill your car up for under a tenner. A Britain where the average cost of a house no longer sounds like the national debt of a small nation.
Downsides? I can't think of any - how about you?
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