Bank station on the London Underground is a relic of a simpler time, when the builders of the Central London Railway could get away with naming their stations after the first thing they happened to see when they stepped outside, like they were labelling the elements of a toy town. The next stop up the line was once called Post Office.
If the Labour party gets its way, though, Bank could one day be as inaccurately named as Elephant and Castle, a place disappointingly lacking in both. That’s because a report on the UK financial system that the party commissioned from a couple of consultancies has just proposed moving some of the Bank of England’s activities from the site they’ve occupied on Threadneedle Street since 1734.
Creating some distance between Bank staff and ministers may be no bad thing
Were Labour to win power and implement the recommendations of GFC Economics and Clearpoint, a huge swathe of bank of activities would instead take place in Birmingham. The city, like Wall Street, already has an enormous statue of a bull. Why shouldn’t it have the financial industry to match?
Moving public sector jobs out of London is an idea successive governments have toyed with. A few years ago, the BBC shifted chunks of its operations from London to Salford, a move widely seen as a success. Around the same time, the Office for National Statistics went to Newport, a move that sadly wasn’t. That hasn’t discouraged the politicians, though, and the Tories are talking about moving civil service jobs out of the capital, too.
What’s different this time is that the institution that could find itself moving up the M1 is at the heart of economic policy. Monday’s report suggests basing Labour’s proposed new National Investment Bank in Birmingham, alongside a Strategic Investment Board and “some Bank of England functions”. Other jobs would move to smaller branch offices in Glasgow, Cardiff, Belfast, Newcastle and Plymouth. Bank station could soon serve only half a bank.
There are some obvious advantages to such a plan. It would spread the wealth created by government activity around the country. Birmingham has lower living costs than London, so moving jobs there should cut the wage bill, too. Best of all, it might break the stranglehold that London has on policy. There is a sneaking sense that, whatever its architects claim, economic policy has tended to prioritise the needs of the capital. Moving the people who make that policy out of the capital might provide a helpful shift in their perspective.
But inevitably the plan comes with downsides. One is that, when you move jobs, you often lose people in transit. In some ways this isn’t the worst idea, as it would mean opening up opportunities to Brummies rather than simply transplanting Londoners – but it would come at the cost of institutional memory and expertise.
Another problem is that Labour isn’t proposing to move the entire Bank: many staff would remain in London. Creating some distance between Bank staff and ministers may be no bad thing; creating distance between them and their colleagues, though, will be a pain in the bum for everyone except the companies that operate the trains on the West Coast Main Line.
My biggest concern, though, is that this plan is not radical enough. England is hugely overcentralised, more so than any comparable nation, and the vast majority of major spending or investment decisions are taken in London. It seems baffling to me that a great city like Leeds has for decades been prevented from building its own public transport network by civil servants in London – yet this is the situation we’ve all come to accept as the natural state of affairs.
Rather than moving the odd job here and there, a party that really wanted to rebalance the economy would do one of two things. The less radical option would be genuine devolution: allowing cities the power to set their own local taxes or build their own local infrastructure. This would set the likes of Birmingham and Leeds free to create their own jobs, rather than simply hoping for a few crumbs cast off from London’s table.
A truly radical chancellor would go even further. The Palace of Westminster is crumbling: this is as good a moment as we’re ever likely to have to move the capital altogether. London could be our New York, another city our Washington. As it happens, my first choice would be Manchester, but I’m open to pitches from the other great cities of the Midlands and the north.
It would be disruptive, of course – far more so than just moving a few Bank of England jobs up the M1. But the benefits would be far greater, too, cooling London’s over-heated housing and transport systems, creating jobs and encouraging investment elsewhere. The best part is it would break our London-centric political culture once and for all. How about it, shadow chancellor?
• Jonn Elledge is editor of the New Statesman’s cities site