How about a Pembrokeshire Pound

Here’s a thought: why don’t we launch a Pembrokeshire Pound? The idea would be to have a community-based currency to keep more money circulating in the county for the benefit of local businesses.

If we had a Pembrokeshire pound that could be only used within the county we’d generate more locally-based economic activity. So, for example, a restaurant would be encouraged to buy more homegrown produce. In turn farmers, paid in Pembrokeshire Pounds, would be encouraged to use the currency to pay a local architect, who also dealt in Pembrokeshire Pounds, to design a property renovation. In this way money would keep on circulating locally to the benefit of local independent businesses, producing a multiplier effect. In contrast, economists calculate that for every pound sterling you spend in a M0rrisons or Tesco, more than 80p immediately leaves the county.

The idea is not so far fetched as you might imagine. Local pounds are already operating successfully in a number of English towns, including Totnes, Lewes, Brixton and Stroud, with Exeter coming on stream next month. The most successful local pound was launched in Bristol three years ago. The system works by people exchanging their sterling for paper Bristol Pounds – in single, five, ten and twenty denominations – or by opening an account at the Bristol Credit Union. The currency can then be spent in participating businesses, or between businesses, in return for goods or services.

So far about £1m Bristol Pounds have been issued with £B700,000 still in circulation. More than 800 businesses accept the alternative currency and more than a thousand users have a Bristol Pound account. The rules are straightforward. Businesses have to be locally owned and cannot be listed on the stock exchange. Individuals who participate have to live inside the boundaries of the city defined by the postcode map.

Bristol City Council and other organisations offer their employees part of their salaries in Bristol Pounds. George Ferguson, the city’s mayor, accepts his entire salary (£51.000) in Bristol Pounds. Since June energy bills can be paid in £Bs to the renewable energy provider Good Energy. It claims to be a world first for enabling the paying of energy bills using a local currency.

The Bristol Pound is managed by the non-profit Bristol Pound Community Interest Company in collaboration with the Bristol Credit Union and the city council. Every physical £1 converted to a printed £B1 is backed in a secure trust fund.

The scheme operates through paper notes, which act as local flyers advertising the local economy, and digitally as well. The amount of money circulating in Bristol is still at a fairly low level, though earlier this year a local architecture firm billed the council for £B900,000. As Ciaran Mundy, co-founder of the Bristol Pound, said, “If we can get that kind of procurement going using the currency then we will begin to have a serious impact on the local economy.” If they can do it in Bristol, why not in Pembrokeshire?