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How the euro crept into Britain

2009-08-05 04:51:43

By Marie Jackson

BBC News

For anyone wondering what to do with a couple of 20 euro notes stuffed in their

sock drawer and no holiday in sight on the Continent, there may be a simple

answer - spend them in the UK.

From the south coast of England to a Birmingham nightclub and a major high

street retailer to Edinburgh's Royal Mile, substantial numbers are saying yes

to the euro.

Quite where this trend began is in dispute.

Dunster, a medieval village in Exmoor, lays claim to being the first place in

Britain to accept euros on a par with the pound - not a bad deal with the

exchange rate hovering around 85p to a euro.

"There are no banks in the village, no bureau de change - I think we're giving

them a service," says Antony Brunt, Dunster hotel owner and chairman of Exmoor

Tourism Association.

Some economists may call Dunster's retailers foolish but what villagers have

done is regarded by others as savvy marketing.

WHERE TO SPLASH YOUR EUROS

Dunster, Somerset: Made a name for itself with a 1 Euro= 1 rate

Bournemouth and Poole: 50 outlets signed up including taxi drivers, ice cream

vendors and restaurateurs to accept notes only

Swanage: Accepts any strong currency, including euros

Rye: Starred on French TV, looking to improve local euro banking system

All Marks and Spencer stores: Change given in sterling, conversion rate set

weekly

Gatecrasher nightclub, Birmingham: Euros accepted on the door and at the bar

The move has not gone unnoticed internationally, with Dunster (population: 860)

featuring on French TV, in a leading German magazine and being visited by a

Japanese news agency.

Mr Brunt thinks this interest has been piqued by people wanting to see evidence

of Britain looking to the future.

"There's got to come a time when Britain adopts the euro, whether in five or 50

years' time," he suggests.

Could the seeds have been sown for a much wider unofficial movement?

Professor Iain Begg of the European Institute at the London School of Economics

is doubtful.

"These are local gimmicks," he says. "If you are the tourist officer for

Bournemouth and you can say 'you can pay in euros', it gives you a bit of an

edge.

"But you are talking about an aggregate population of 250,000, which is less

than half a percentage of Britain's population.

"It is designed to cater to tourists - it won't engage with the rest of the

population," he added.

Only if the euro was adopted outside the tourism trade or by an entire city

could momentum gather, he said, but that would be a "logistical nightmare".

Every cash till would need reprogramming and cash handling charges would

double, he added.

The drawbacks, however, have not put off the town of Rye.

'Bank deals'

Euro notes have been appearing in cash tills in the East Sussex tourist spot

since they first came into circulation in 2002, and now nearly half of all

local outlets accept them.

Traders there believe it has been a boost to the economy, so much so that they

are looking to develop a banking system of their own.

We're hoping it will drag a lot more French across the channel - it's cheap

shopping for them

Derick Holman, Rye businessman

Rye shops currently rely on staff to top up euro coin reserves on their trips

across the English Channel and are avoiding commission charges by buying the

currency back from the business for personal use rather than converting it into

pounds.

To counter this, the local chamber of commerce is trying to strike deals with a

major bank and a ferry company that would enable them to accept coins more

easily and change euros for a lower commission rate.

Rye businessman Derick Holman trades in euros, working to a daily exchange rate

in his gift and reproduction antiques shop.

"We're hoping it will drag a lot more French across the Channel. It's cheap

shopping for them," he said.

The so-called euro tourist is no new concept. Northern Ireland's border towns

have seen increasing numbers of customers from the Irish Republic crossing over

to do their shopping.

Some shops have been offering a straight euro-for-pound exchange rate in towns

like Newry and Enniskillen.

Money-spinner

Such demand is what is exciting the new "euro-towns".

The seaside town of Bournemouth is hoping this summer will see the use of the

euro take off and become a real money-spinner.

Tourism bosses there have calculated that if half a million tourists each spend

20 euros as a part of their holiday budget, the region could be looking at

making close to 10m.

Others are less optimistic.

Julian Maughan, who runs the Castleton Hotel in Swanage, says despite having

guests from across the eurozone, not one has used his euro-paying service yet.

Back in Rye, Mr Holman has such confidence in the euro that he is looking to a

day when it will have the same relevance as the pound.

But this is no great Europhile talking, simply someone who can see the

advantages of dealing in other currencies.

"I think a lot of people who are enthusiastic about it are relatively lukewarm

about Europe. I was very pro-Europe. These days, I'm quite happy being Britain

and leaving Europeans to get on with it," he said.