How the euro crept into Britain

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.
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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
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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.
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“ We're hoping it will drag a lot more French across the channel - it's cheap shopping for them ”
Derick Holman, Rye businessman
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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.
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/uk_news/8060020.stm

Published: 2009/08/05 06:01:55 GMT

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