'Bristol Pound' currency to boost independent traders

[Derbiean]

By Dave Harvey Business Correspondent, BBC West

The Euro is in trouble, the world's financial system is in turmoil. Is this the perfect time for cities to go it alone, and print their own money?
A group of independent traders in Bristol are launching their own currency, with the backing of the council and a credit union.
The "Bristol Pound" will be printed in notes, and also traded electronically.
There are other local currencies in the UK, but this is the first which can be used to pay local business taxes.
Ciaran Mundy, the director of the Bristol Pound, explained the concept behind the currency.
"Big companies just hoover up money from a local area," he told me.
"Money goes into their financial system and typically out into London and into the offshore sector."
Corporate challenge But by definition, Bristol pounds must stay in the city. Spend a tenner in a Bristol bakery, and they must use it to pay their suppliers or staff. In turn, those companies will have to use the money within the local economy.
"We'll be driving more business to independent traders, and ensuring the diversity of our city, which is one of the things people love about Bristol," Mr Mundy said.
Already more than 100 firms are signed up. A family bakery, the Tobacco Factory Theatre, the Ferry company, dozens of small cafes - even Thatcher's Cider will accept Bristol pounds.


So how will it work?
They will print notes in £1, £5, £10 and £20 denominations. A Bristol pound will be worth exactly £1 sterling.
People will open an account with the Bristol Credit Union, which is administering the scheme, and for every pound sterling they deposit, they will be credited one Bristol pound.
This money can then either be cashed, or used electronically to pay bills online or even with a mobile phone.
Since the money is held by the credit union, which has FSA backing, it will have the same protection as any other deposit account. The standard government scheme guarantees up to £85,000 per person.
Bristolians are being challenged to help design the new notes. The organisers have already created a logo, and produced security features to counter forgery.
There is a silver hologram design, a gold foil strip with serial numbers embedded, and other features which are impossible to reproduce.
But whose face should be on the notes? That is down to Bristolians.
Small change? "Bristol's own currency should reflect the values and the lives of people who live here," explained the designer, Adele Graham.
"We're open to any suggestions. It could be famous people, but it can be any design at all which Bristolians feel represents their city."
Local people can submit their ideas on the Bristol Pound's website. The competition will run until the end of February, and the notes will be launched in May.


But will the Bristol Pound really take off?
Most local currencies have remained small. The Totnes Pound was the first to launch, in Devon in 2006, and has 70 traders involved.
Eighteen months ago Stroud, in Gloucestershire, starting printing its own currency, but to date no more than 30 firms are taking the money.
Bristol's organisers point to two key differences: online banking, and council support.
Since the scheme is run by a bona fide financial institution, the Bristol Credit Union, traders can pay each other large amounts of money at the click of a button.
Also unique is the ability to pay local business rates in local currency. The council leader, Councillor Barbara Janke, is fully behind the scheme.
She told me: "This is a chance to demonstrate the economic resilience of the city.
"We want to make it as easy as possible for people to use the Bristol Pound."
'No real boost' Paying business rates in Bristol pounds means firms need not worry about being stuck with thousands of pounds they can't spend, if their own suppliers refuse them.
Naturally, there are sceptics. Will people find it inconvenient to carry two kinds of notes in their pockets? Will it be more than a gimmick?
Interestingly, it is the prospect of success that worries some the most.
Ben Yearsley understands money. Big money. He is an investment strategist at Hargreaves Lansdown, the Bristol finance house which looks after £22bn of people's savings.


He points out that the scheme will do nothing to help Britain's economic recovery.
"This won't boost spending," he explained. "It will merely move money from one sector to another, from national firms to local ones."
And if the Bristol Pound really works, Mr Yearsley worries that big national firms may be put off.
"A lot of people work for the national companies, and you may actually cause an increase in unemployment. Worse, there may be a brake on investment in the city."
But the organisers think he worries too much.
Stephen Clarke, a local lawyer who is working for the new currency for nothing, said: "This is not an attack on national chains.
"We just want to preserve our local independents, and you can see how hard it is for them at the moment."
Whenever local shops close down, and supermarkets or chain stores open, there are complaints about "cloned high streets" and "chain store Britain".
Well, now if people really want to support independents, they can quite literally put their money where their mouth is.
I've been investigating local currencies for Inside Out West, and you can see my film on BBC One on Monday Feb 6th, at 7:30pm or on the iPlayer after that.

Interesting, maybe more places would benefit from doing something like this?

[Exarch]

reminds me of how some towns during the Great Depression printed their own money and currency and did quite well, avoiding unemployment etc but then the State got pissed about the whole thing, and shut everything down and the towns went back to dustbowl Great Depression

[Town Watch]

reminds me of how some towns during the Great Depression printed their own money and currency and did quite well, avoiding unemployment etc but then the State got pissed about the whole thing, and shut everything down and the towns went back to dustbowl Great Depression

dustbowl was an actual weather phenomenon though, which destroyed farms, and the health and lives of many affected people. Dust went into the lungs kinda like 911-first-responders, and adversely affected the health of affected folks, and hiding inside houses didn't usually help either because farm buildings had bad insulation.

[Sphere]

As the article mentions, the problems arise when you start trying to get investment or supplies.

If for example a Bristol Baker is doing well and looking to buy flour or vanilla or someother non-local good, having a bunch of Bristol pounds isn't worth anything and means they can't expand production.

Or if this same baker does well using this currency and wants to expand through a buisness loan, a London bank isn't going to accept Bristol pounds as repayment, so the Baker is SOL.

Likewise with people looking to get house loans, or any sort of insurance; having a bunch of a local currency gets in the way of getting either.

Thinking in the long term not a great idea.

[King Gambrinus]

No chance. Thé gouvernement sont let them have that kind of power.

[justicar5]

No chance. Thé gouvernement sont let them have that kind of power.

There are more than a few local currencies in the UK already.

[Thorn777]

^They are allowed to, but the problem is that their pegged to the every day currencies, hence when they go do down, so will they.

[Derbiean]

In such cases i think it would be prudent to keep the pound sterling as a means to pay for goods/services outside of the local area, an exchange of the currencies shouldn't be difficult as this is done already.

[Sphere]

In such cases i think it would be prudent to keep the pound sterling as a means to pay for goods/services outside of the local area, an exchange of the currencies shouldn't be difficult as this is done already.

Well, then it just is a pound-sterling and would have no effect. If there is no barrier to exchange or use it shouldn't affect purchasing habits. The point of this system is to make exchange inconvient such that the "cost" (in terms of effort) of buying non-local goods and services is increased.

But in the end, this is just a way of trying to circumvent the preferences of consumers. The only real solution is to make local products which consumers prefer, instead of creating monetary schemes which force them to do things they wouldn't normally do if using the more universal monetary system.

It can be done, I live in a community were locally owned co-op grocery stores dominate the grocery market, local breweries are thriving, local meat and produce sources are doing so well the country is looking to create a regional packing center for organic foods. And ...shock ... all this using the evil USD.

[Condottiere 40K]

It's a mild form of currency control, and since there should be no restrictions nor penalties for converting to sterling, it seems more like gift certificates.

[CtrlAltDe1337]

Kind of pointless since they tie the value directly to the British Pound. You can substitute money easily, so I fail to see how this will help keep money in the local economy. Not a bad idea...but not really a good one either.

[The excited one]

thats nice then there will be london pound, Portsmouth pound, Belfast pound and even Manchester pound! AWESOME and yeah each currency had different rates as well so our kids in the future can learn better at math especially in multiplication and division since they had to calculate the exchange rate in their heads if they want to buy some sweets to the next suburb (or even next door if they live next to the boundary for customs check like scanning for weaponry like pen or pencils) since they are using the Different currency!

what sensible policy for a happier Britain next to making everyone a slave if they are lower than knighthood.