Labour debates moving Bank of England operations to Birmingham

Bloomberg

The Labour Party is debating moving some of the Bank of
England’s operations to Birmingham if it wins power in the next general election.
The plans, first reported by the Financial Times and confirmed by the UK’s main opposition, are aimed at spreading investment across the country. They’re based on an analysis by the economist Graham Turner of GFC Economics, who found that Britain’s financial system is failing to deliver the investment needed in its high-technology sector.
“This important report drums home the message that our financial system isn’t delivering enough investment across the whole country, and in the high-technology industries and fir-
ms of the future where it is needed most,” Labour’s finance spokesman, John McDonnell, said in an emailed statement.
“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,” he said.
Labour is increasingly trying to present itself as a government-in-waiting as it leads in the polls, while Prime Minister Theresa May struggles to hold together her squabbling Conservative Party. With the premier dependent on the votes of Northern Ireland’s Democratic Unionist Party to prop up her minority administration, she’s at risk of a revolt by backbench lawmakers that could spark a general election.
Under the proposals outlined in the report, Labour would move to Birmingham some of the functions of the Bank of England, currently located in London’s City financial district.
The city in central England would also play host to the National Investment Bank as well as the secretariat and research department of the Strategic Investment Board that the party plans to establish.
Turner’s study found that average output from UK high-tech companies has fallen during the past decade, under-performing all but one European Union member. Flow of funds analysis shows that banks are diverting resources away from industries vital to the future of this country.
“There is a risk that the disproportionate number of technology companies in London and the South East will increase, exacerbating regional inequality,” Turner said. “Governments have a critical role in addressing these weaknesses, but that will require determined, strategic action.”