In fact, printing cash locally can help revive a struggling local economy. That’s exactly what traders in Brixton were hoping as they began accepting a new local currency – the Brixton Pound.
Now Edinburgh City Council is looking into the possibility of supporting a community initiative to introduce an “Edinburgh Pound”. Last week councillors voted for a proposal that we investigate how best to support such a community initiative.
Local currencies aren’t new. The Swiss “WIR” currency, with an annual turnover in millions of Swiss Francs, dates back to the 1930s. In Germany there are now 28 local currencies.
Closer to home, the Hawick pound, piloted last year by local action group, A Greener Hawick was deemed a great success. Meanwhile in Findhorn, near Forres, the Eko currency has been in circulation since 2002, enabling grants of £400 to community projects.
Currencies of this kind are seen first and foremost as a way of supporting local businesses and building the local economy.
A worrying fact is that supermarkets and other large chains spend on average just 10 to 12 pence in every pound in the local community. The beauty of a local currency is that it can only be spent locally – in shops, or to pay tradesmen – so each pound circulates around the area many times.
Especially in hard times, when local shops and traders are struggling to stay afloat, it’s easy to see why this idea is gaining interest.
Brixton in London was the first urban area in the UK to set up a currency. Now, more than 70 local businesses have signed up to accept it. Stacey Raymond, general manager of Morleys in Brixton, said that as one of the few independently owned department stores left in the UK, Morleys was proud to support the scheme, adding that the Brixton Pound was a symbol of the area’s creativity and community spirit.
So, small businesses really value local currency schemes because they make shopping locally more attractive. Local shops also often offer a discount on all purchases as an incentive.
At the outset, a local currency can encourage people to buy from local shops, and over time it encourages those shops to buy locally, and so the network grows.
If communities in Edinburgh launch a currency, we’d be the first city in the UK to have a city-wide scheme, which is an exciting prospect.
So how would an Edinburgh local pound work? Well it might include a five per cent discount on purchases made with the local currency.
Notes could bear an Edinburgh Pound picture on one side, and a distinctive design celebrating a particular participating community – such as Portobello, Leith or Morningside – on the other. The notes are protected from forgery by similar means to those used on conventional bank notes. And notes can have interesting designs to reflect local interest – in Brixton, there was a vote on which faces should appear on their notes. The Edinburgh Pound wouldn’t necessarily have to portray our Lord Provost – although I’m sure he’d be delighted.
Plans for the Edinburgh Pound come from an alliance of community action groups including Transition Edinburgh, PEDAL – Portobello Transition Town, Transition Edinburgh South, Bridgend Inspiring Growth and the SEED network.
Support from the council is crucial – not funding, but in the form of research into its benefits, its feasibility and into how the council might best work with local traders to establish its use. Community currency groups in other cities such as Bristol are working with their local authorities. The hope is that eventually residents will even be able to pay their council tax in local money.
The local currency is not a gimmick – it’s a step towards building a much more resilient local economy.
This blog first appeared in the Edinburgh Evening News as an opinion piece on 7 June 2011