Labour Considers Transferring the Bank of England to Birmingham

CC BY-SA – credit: Photo by George Rex.

Labour would consider relocating the Bank of England to Birmingham if it took power at the next general election, in a move which could end the more than 300-years of stay of the Bank in London.

A study that was commissioned by John McDonnell, a shadow chancellor, concluded that the base of the central bank in Threadneedle Street, where it has been located since 1734, is “unsatisfactory and leads to the regions being underweighted in policy decisions.”

Clearpoint Corporation Management and GFC Economics, the consultants who worked on the report, suggested that “some functions” of the bank be relocated to Birmingham near the National Investment Bank and Strategic Investment Board, the two bodies which Labour plans to create on entering government.

It also recommended establishing offices in Cardiff, Belfast, and Glasgow and smaller outposts in Plymouth and Newcastle.

McDonnell stated that the “important report drums home the message that our financial system isn’t delivering enough investment across the whole country.”

Birmingham has already been attracting the attention of growing numbers of businesses in the past months. HSBC has selected the city for its new retail bank, relocating 1,000 staff there from London, while a fresh study ranked Birmingham as the fastest-improving city to live in the United Kingdom.

The report from Clearpoint and GFC stated that establishing the Bank in Birmingham along with the two investment bodies “would constitute a new ‘economic policy’ hub.”

Location was not the only thing that the consultants wished to review. Clearpoint and GFC added that the mandate of the Bank of England should be reviewed since the Financial Policy Committee – which is intended to help decrease systemic risk in the financial system – is “ignoring investment” and that it “makes no distinction between unproductive and productive lending.”

The said report will currently be considered by the Labour party.