Comment: Sam Stopp on why a Labour government shouldn’t move the Bank of England to Birmingham

by Sam Stopp

London-bashing is one of the most fashionable things a politician can do. There are ostensibly good reasons for this. Despite the longest squeeze in UK living standards since records began, London remains a filthy rich city, the capital of international finance and a cosmopolitan melting pot a world away from the Anglo-Saxon inclinations of those who dwell beyond the M25.

Brexit? Blame London’s sneering metropolitan elitism. Too much immigration? Blame Londoners’ sickening addiction to frothy coffees. The global financial crisis and all the ill that has come of it? Blame London, its greedy bankers and its unending contempt for real people with real needs. “London”, as a few people pointed out after the EU referendum, is now a dirty word.

It’s true that bankers have a lot to answer for, and most British bankers – as well as a fair few foreign ones too – live and work in London. So, we’ll leave aside the fact that an estimated two million Londoners are currently living in poverty, scarcely able to afford hot water, let alone caramel lattes. What matters most of all in politics is perception, and there is much to be gained out in the country right now from seeming to be anti-London.

So, it came as little surprise over the weekend when it was revealed that Labour is considering relocating much of the Bank of England to Birmingham in the event of its coming to power. Consultants commissioned by John McDonnell, the shadow chancellor, have concluded that the central bank’s base in Threadneedle Street is “unsatisfactory and leads to the regions being underweighted in policy decisions.”

Of course, McDonnell is not talking about moving the entire financial sector to Birmingham. He is talking about moving the institution that supposedly governs and leads it. An important distinction. Important because, if the big banks are the villains of the last decade, the Bank of England is supposedly their policeman, and physically separating them so soon after the financial crisis would be a bold and curious move.

If McDonnell’s intention is a serious stab at devolution of power and resources, then his basic desire is to be commended. Except that moving the Bank of England to Birmingham wouldn’t do this. The Labour report says the Bank’s relocation would “provide a clear, visible example of a new government’s determination to promote growth and a rebalancing of the economy”. If only it were it were so. Sadly, this looks more like the kind of gesture politics and spin for which New Labour was so often derided.

I alight at Bank station every day and stroll for 15 minutes into my place of work in Hackney, acutely aware that I am walking away from bankers whose club I will never join. Nor would I wish to. Their suits fit too well and their shoes are too shiny. Today, I toyed with wearing my reindeer jumper to work, but my fear of being singled out for unwelcome attention overwhelmed me.

Even so, setting aside my personal feelings about them, it makes sense for the bankers to be together, watched closely by their overseers in the Bank of England. When Gordon Brown rightly made the Bank independent in 1997, it was with the aim of freeing the institution from the chicanery of political machinations. Labour had at last taken a crucial component of the British economy out of the hands of self-interested politicians.

For the theoretical next Labour chancellor to impose on the Bank a needless relocation to the West Midlands would be a betrayal of the last Labour government’s noble surrender of power. The Bank of England must never again be allowed to be treated as a political plaything.

Perhaps it is a fusty relic of the Establishment. And perhaps the politics of populism will soon overcome our tired, old status quo. But it seems there is little evidence that simply moving grand and ancient institutions to places starved of power and resources will do much for the millions outside London who need a new deal. Rather, it is the conservative, out-of-touch, unambitious mandarins who dwell within these moneyed cloisters who need to be moved on – not to the great city of Birmingham but into obscurity and irrelevance.

Sam Stopp is a Labour councillor in Brent and chairs the Labour Campaign To End Homelessness. More from him for On London here and here. And you can follow him on Twitter.

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