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How a Payments Project brought down a Government

The commercial horrors of Halloween seem to have gained popularity over the UK’s indigenous “Bonfire Night” on the 5th of November. So I thought I’d do my bit to push back for a less US-centric way of getting kids out begging in the streets at night-time.

So here are the opening questions in my new cultural quiz:

Q1. When the Houses of Parliament in London last burned down, who was held responsible? Was it:

(a)          Robert Catesby

(b)          Guy Fawkes

(c)          John Spencer

(d)          Richard Whibley

Q2. After allowing for inflation (and a reasonable service charge), how much is a "Penny for the Guy" in Euros to the nearest cent?

 

If you answered (b) for the first question, you should now be deafened by the klaxon that normally accompanies a wrong answer on TV quiz shows. Guy Fawkes? What were you thinking? He was a mere amateur and his only job was to light a gunpowder fuse.  Robert Catesby? Now he was the brains behind the so-called Gunpowder plot in 1605 - the religiously motivated plan to kill King James. But that would be the wrong answer too! 

The 180th anniversary of the day that the UK parliament was actually destroyed was the 16th October 2014. It was brought down by a disruptive payments revolution, combined with a bit a regulatory dithering.

The dynamic British Government of the late 18th century had been very keen to abolish an ancient form of payments and accounting known as Tally Sticks that had been used as far back as the 13th century. These were pieces of wood (often hazel or willow) that were inscribed with credit/debit details then split down the middle to be given to the two participants in a trade arrangement. For auditing purposes and for finalising payment, if fitted together, the notches on the two parts of the stick should form a perfect match - i.e. a tally. The unique patterns and grain on the wood would be difficult to counterfeit. 

But UK government and banks alike were concerned about falling behind the competition (powerful European trading competitors) and recognised the need to migrate to new emerging standards for payments and to embrace the new technology of the time - known as “paper”. 

Once the administration's central bankers had completed a fifty-year migration (!) to this new payments platform, they wandered what to do with the old payment instruments. After 10 years or more of indecision on how to dispose of the sticks - in part based on the worry that they contained sensitive, confidential information - a decision was taken to burn the old tally sticks enthusiastically in the basement ovens in Westminster. A bit too enthusiastically it seems - the workmen allowed the fire to get out of control and they burned the Houses of Parliament to the ground. So the beautiful buildings that stand by the River Thames today needed to be completely rebuilt after this somewhat over-exuberant end-of-project party.   

For the record - the two labourers responsible for the fire were Joshua Cross and Patrick Furlong. But the Director of Works was Richard Whibley. So well done if you answered (d) for Question 1. But I would also have accepted (c) - John Spencer (the Viscount Althorp) was the Chancellor of the Exchequer at the time.  

I’m open to suggestions on the subtexts of this tale. But perhaps you'll not need to dig too deep to find some parallels with today’s payments challenges. 
To be filed under “Payments system migration case studies”. 

“Bitcoin for the Guy” anyone?

 

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Comments: (1)

Neil Clarke
Neil Clarke - Volante Technologies - London 05 November, 2014, 09:50Be the first to give this comment the thumbs up 0 likes

Very nice bit of topical history Lu.