It’s not only the Bank of England who will be printing money; the city of Bristol will be joining them. The Bristol pound comes into effect in May this year and pound notes will come in denominations of £1, £5, £10 and £20 notes. The council is currently holding a competition to design the new currency.
Bristol isn’t the only one to decide to go it alone when it comes to currency. Lewes did it years ago and Brixton quickly followed suit. So it seems that it’s easier to break out of the pound than it is from the eurozone…
Why Bristol and others are going it alone
The whole idea of having your own currency isn’t about the economics of foreign exchange: It’s not to control money supply or the value of the currency per se; instead it’s designed to keep money (and thus spending) local. Perhaps it’s a damnation of the Bank of England, something like if they can’t sort out the economic malaise that is gripping the UK we’ll do it for ourselves.
The logic is that you go to your local shop – say butcher – and spend your Bristol pound, then the butcher uses the money he gets to buy his meat locally rather than say from Cumbria or Scotland. It’s designed to help out local shopkeepers and help keep high streets alive, hence Sainsbury’s Tesco and the like are excluded from these schemes.
But Bristol is taking this a step further. It is being backed by the Bristol Credit Union who will also pay out in the currency, but because of the backing of the Credit Union shopkeepers can also pay their business rates with their Bristol currency rather than have to change back them back into the more typical pound.
Vouchers not currencies
However, it is some way before these “local” currencies have their very own value and one Bristol pound will be worth the same as a “normal” pound from May. So what if a shopkeeper in Bristol wants to buy something from a shopkeeper in Brixton – surely this will happen at some stage – what then? Can you buy goods in Brixton with Bristol pounds – would this encourage intra- Bristol/ Brixton trade?
For years now we have been told that the UK needs to rely less on financial services and boost its exports sector. However, the UK is still importing way more than it exports and our trade deficit with the rest of the world stands at a whopping £7.11 billion – a month – still some of the worst levels over the past 60 years.
If we can’t produce the stuff that the rest of the world wants because we let our industry go to the wall in the pursuit of financial service dominance, then why not try to promote grass-roots recovery and let intra-county, city or borough trade try to fill the gap?
It may all sound a bit feudal, but with so many external risks that could de-rail our economic recovery then why not try and protect ourselves by promoting internal trade?
If it picked up then it could also help the global re-balancing effort by reducing the need for imports from foreign surplus nations.
Of course this is all a bit pie-in-the-sky, but as the Bank of England tries yet another round of quantitative easing to try and boost our economy maybe some economic thinking outside of the box is called for…