From tiny Acorns - a way out of recession: Now thousands of people in Britain are turning to barter, reports Nick Holdsworth

THE VALUE of the pound is sliding against a basket of currencies, here in Britain. In Totnes, people prefer payment in Acorns; in West Wiltshire things can be bought for Links. The New Agers of the Findhorn Foundation on the Forres estuary in Scotland like a Buzz or two, and the currency in Bath is the Oliver.

None of these currencies exists, but all are used. They are the names given to units of exchange used by members of a growing network of barter schemes or LETS - local employment and trading schemes. There are more than 30 around Britain, and as many as 4,000 people regularly exchange goods and services in return for credits without money changing hands. The national turnover is reckoned to be as high as 100,000 'green pounds' a year.

The Inland Revenue admits it has never heard of the schemes, but a spokesman said that tax - in hard cash - would be payable on any credits earned.

'The general position concerning bartering arrangements . . . is that a tax inspector will come to an agreement that gives a value. If you are involved in a regular business then you have to declare that and the income derived from it.'

But unwelcome attention from the taxman is low on the list of priorities for people involved in barter schemes. Liz Shephard, of the West Wiltshire LETS, based in Warminster, and co-ordinator for Letslink UK, said that all members are advised of the need to declare their earnings - and are encouraged to do some trade in sterling for tax payments.

'Eventually we would like to see tax collected in LETS units - perhaps we could set something up with local authorities, where an account could be paid off by doing jobs or supplying goods,' she said.

There are fears that people on benefits could lose them if they joined a barter scheme - but the Department of Social Security said income support is not affected as long as a person is 'actively seeking work' and not working more than 16 hours a week.

In West Wiltshire, trade among the 100 members ranges from domestic services, such as baby sitting, transport and household jobs, to more luxurious items. A Welsh holiday cottage in the Brecon Hills is available for 100 Links a week.

Cheque books are used to record exchanges, credits and debits. No interest is charged on overdrawn accounts. 'Wealthy' members have to spend their credits, because the units have no value until used.

Those involved in any transaction set its value themselves, and they all see each other's accounts each month - increasing trust and reducing the risk of someone defaulting with a large debt.

Daniel Johnson, a decorator from Bradford-on-Avon earned 1,300 Links last year - a fifth of his turnover. He said that the system also attracts work paid for in hard cash.

'Money was very tight last year, so the Links I made were invaluable for a lot of things. We were selling our house so we had people in to do woodwork, plumbing and things like that. But I find other work comes through jobs done for Links.'

The first barter schemes were set up in British Columbia 10 years ago in response to high unemployment, and successful ones have also been run in Australia and New Zealand - where some dole offices recommend unemployed people to join.

Barter may have roots in the Green movement and rural communities, but its greatest value may lie in depressed inner cities. Harry Turner, an artist and teacher from Warminster, has held workshops with unemployed people and community agencies in Paisley, near Glasgow.

'Local government, enterprise agencies and others are all people who are looking at LETS as a way of dealing with serious problems,' he said. LETS schemes offer a way back to self-esteem and the knowledge that all people have useful skills, he added.

Roger Opie, economics fellow at New College, Oxford, agreed: 'One of its attractions is that it enables people to do things for themselves. People can get things they cannot afford except on this basis.'

David Boyle, editor of New Economics magazine, added: 'Every community has skills. The tragedy of the recession in inner cities is that our economic system is unable to use them.'

(Graphic omitted)