Local pound is worth a look for city economists

A motion to explore the merits of an alternative local currency to boost business and reduce poverty was backed by the Capital's economic development committee yesterday.

Under the scheme, first mooted by community group Transition Edinburgh, locally-owned businesses would be encouraged to offer discounts to customers who pay by "Edi" rather than Sterling.

Supporters say wealth can be retained within a community rather than being channelled elsewhere or siphoned into big business.

It is the latest attempt to boost the flagging fortunes of the city's independent retailers, which have been hit hard by the credit crunch, tram-related disruption and competition from out-of-town shopping centres, supermarkets and chains.

If introduced in Edinburgh, it would be the first city-wide Scottish local currency.

Speaking about the decision to debate the Edinburgh Pound, Councillor Steve Burgess, who proposed the motion, said: "It's encouraging that the economic development committee wants to explore this idea.

"Many local businesses are facing a battle with national chains in large suburban shopping centres.

"If we want thriving local shopping streets rather than rows of boarded-up shop fronts, we need to look at innovative ways to support them and the Edinburgh Pound is one of those.

"The economic development leader has voiced his interest in supporting local trade and I look forward to a positive report showing how the council can lend its support."

The innovative project is based on a three-month pilot exercise carried out last year in the Borders town of Hawick.

It saw 5000 Hawick pound notes being printed, with consumers sold batches of 21 of the notes for 20 - effectively giving them a five per cent discount on goods bought in the independent shops.

Only 3000 of the notes were bought, although organisers insist it was still a success in raising awareness of the value of spending money locally.

Councillor Jason Rust said: "In principle, I am quite happy with there being a report and finding out more about the pros and cons."Edinburgh, however, is much larger than many other areas in which it has been piloted and I do have some concerns about its impact in the current climate and the cost of its administration.

"In some of the other areas where it was tried, there had also been issues with counterfeit notes."

An Edinburgh Local Economy Day was held last month, which saw 40 people come together to discuss how community groups can strengthen local economies.

Among the proposals being considered may be an option to create localised versions of the currency, such as a Leith pound.