Brokers question Labour’s Bank of England plan

Michael Lloyd

December 12, 2017

Brokers have questioned Labour’s plan to move large parts of the Bank of England to Birmingham, with one blasting it as a “complete waste of space”.

A report commissioned by Labour suggested moving the Bank away from Threadneedle Street in the City of London, where it’s been based since 1734.

John McDonnell, the shadow chancellor, argued that the current financial system was not delivering investment across the UK.

But Rob Ashley-Roche, principal at Rest Assured Mortgages, said: “It’s a waste of time and will never happen. Anything to do with Labour and their wonderful plans are just a waste of space. They’re not going to get in.

“Last week there was talk about moving offices to Europe. It doesn’t matter where we move the head offices to. We’re all moving to Amsterdam if you believe the papers.”

The report said that moving areas of the Bank to the Midlands would help create a “new economic policy hub”.

McDonnell said: “Under the Tories, we’ve seen more and more investment flowing into property speculation whilst high-tech firms have been starved of the money they need, and research spending has lagged far behind.”

The report stated: “As a central bank sitting at the heart of the UK financial system, the Bank of England needs to be playing an active, leading role, ensuring banks are helping UK companies to innovate.”

However Ray Boulger, senior technical manager of John Charcol, thought there are some functions that don’t need to be done in London.

For example administrative departments could move city, but he felt it would be a bad idea to move senior departments.

He said: “Trying to decentralize some jobs from London when they don’t have to be in London does make sense because you can reduce costs.

“But moving large parts would not be sensible because it would create inefficiencies because the senior people they need to meet would be in London.

“There would need to be careful consideration of what departments to move but they could move some departments, whether to Birmingham or somewhere else. I’m sure there would be some administrative parts they could move.”

But Boulger added: “What’s surprising is saying Birmingham at this stage. The sensible thing would be to say they are thinking of moving certain parts.

“I think the likelihood of some admin staff being relocated outside London is quite high, I think the likelihood of any of the senior people moving outside London is quite low.”

The report by GFC Economics and Clearpoint Corporation Management warned of a risk of regional inequality, with more technology companies in London and the South East.

The report suggested moving the National Investment Bank and the Strategic Investment Board secretariat and research department to Birmingham.

Labour pledged to set up both organisations if it wins the next election.

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