An adviser to the Government on business strategy has delivered this stinging criticism of the Bristol Pound. Ross Parker, who worked with Sir John Vickers on the Independent Commission on Banking and supported Professor John Kay on the Kay Review into equity markets, called the Bristol Pound a “bad idea (that) will cost small business money (and) hinder local shoppers”.
Prior to its planned launch in May and a week before the end of a competition to deign the Bristol Pound banknotes (right), Parker writes that the alternative currency will “harm, rather than help (the) local area”.
He also predicts that the project, which has the full backing of Bristol City Council, will be one that, like the ill-fated HourBike hire scheme, “inevitably collapses”.
“I say this as an enthusiastic supporter of local businesspeople, who really do not need the hassle of cashing up and accounting in two currencies, who need to put their cash in a bank, who need to pay providers of goods and services from outside the area, and who don’t need to train their staff to detect a range of new possible forgeries, nor to end up with a pile of worthless paper when the scheme inevitably collapses.”
The business consultant, who is moving to Bristol next month, says that “nobody in their right mind” would prefer to own Bristol Pounds when they could own the equivalent in Sterling. “Have you ever asked your employer if they would pay you in book vouchers because you really like reading?” he asks.
“Local currencies are a step backwards for local areas,” Parker concludes. “They take local businesses into a parochial realm of rusticity, with all of its inefficiencies and inconveniences. They encourage customers to spend on the basis of local affiliation rather than the quality of the goods or services. They benefit only those who draw a salary from the scheme, at a cost to all those who naïvely participate. The Bristol Pound is a very bad idea indeed.”
For an alternative view, I asked Laura Hart (below) from Hart’s Bakery, formally of Cotham, currently looking for new premises, purveyors of Bristol’s best custard tarts and Eccles cakes, and a businesswoman broadly supportive of the Bristol Pound
“I think the Bristol Pound is a really interesting idea although I appreciate the criticisms raised (by Parker),” she told me. “Starting my own business last year was a steep learning curve and really opened my eyes to the challenges faced by small independent businesses.
“I started to really appreciate how important it was to the bakery when people made the conscious decision to come and spend £2 or £3 with us rather than picking up a loaf when in the supermarket. I have since been much more conscious about my spending and try to think twice before getting everything from the easy option and take the extra effort to go to butchers, veg shop etc.
“I therefore think anything that promotes more considered spending is a very good idea. The Bristol Pound seems to be well thought out and they have addressed many of my initial queries like what would I do as a business with the money customers spent in the bakery and they are looking at ways to pay business rates, suppliers and more.
“From a business point of view, especially one like the bakery that relies on frequent small purchases, anything that encourages customer loyalty and promotes your loyalty to the local community can only be a positive thing.
“I am therefore keen to support the initiative as a business and a consumer. However, the success of the scheme relies on lots of people and businesses being involved so I hope by pledging my support it will encourage others to get in too We can’t all stand back and wait to see how it unfolds.”
In this detailed response by Michael Lloyd-Jones from the trader engagement team at the Bristol Pound, Parker’s criticisms are welcomed as positive debate, but then roundly debunked.
“The core aim of the scheme is to encourage people to spend more of their money within the independent sector, and then retain a greater proportion of this money in the local economy which will boost Bristol through a Local Multiplier Effect, an economic effect that is well-founded in research by the New Economics Foundation,” Lloyd-Jones writes.
“Financial incentives will help encourage individuals to join the scheme. For example, the first £100,000 banked as Bristol Pounds will be given a 5% bonus (backed by £5,000 sterling funded directly by the Bristol Pound CIC). In addition, participating businesses will be encouraged to offer special promotions for Bristol Pounds users – e.g. 10% off – to provide further incentive for individuals.”
He adds: “The Bristol Pound is a complimentary currency, designed to work alongside sterling, not replace it. We have never advocated individuals or businesses using the Bristol Pound exclusively, but to use both Sterling and £B as necessary. Yes, Bristol Pounds don’t work anywhere else, but if you live and work in Bristol it makes sense to invest in your local economy and community.”
The Bristol Pound team will be at the Tobacco Factory this evening, Tuesday, March 6, at 7.30pm, talking about the project. For more information, visit www.bristolpound.org.