The Bank of England has ignited a political controversy after being accused of pursuing "woke" policies in its procurement process for a new banknote printer. Threadneedle Street is facing significant criticism from Conservative figures over plans to make applicants for the lucrative UK money printing contract adhere to stringent environmental, social and governance (ESG) criteria alongside diversity and equality standards.
Political Backlash Over Procurement Conditions
Shadow business secretary Andrew Griffith launched a pointed attack on the central bank during Prime Minister's Questions on Wednesday, standing in for Tory leader Kemi Badenoch. Griffith argued that with the UK economy projected to grow slower than Greece, Albania and Mexico this year, the Bank's priorities were misplaced.
"When the UK economy is expected to grow slower than Greece, Albania or Mexico this year, the Bank of England shouldn't be worrying about finding a 'woke' banknote printer but instead helping grow our financial sector," Griffith told City AM, highlighting what he sees as misguided focus on sustainability issues during bidding rounds.
The £900 Million Contract Specifications
The Bank has issued a tender for supplying banknotes from 2028 over a ten-year period, as the current arrangement with paper manufacturer De La Rue approaches expiration. Under the terms of the substantial £900 million contract, prospective suppliers must demonstrate compliance with key conditions covering ESG principles, equality and diversity measures, and carbon reduction targets.
Applicants will face assessment on a pass-or-fail basis, with bidding deadlines set for late next month. A Bank of England spokesperson defended the approach, stating that procurement legislation permits "set conditions of participation" for suppliers hoping to secure the valuable contract. "Details of these conditions and how they are to be assessed will be shared with applicants in due course," the spokesperson added.
Broader Context of ESG Scrutiny
The controversy emerges against a backdrop of increasing examination of ESG and diversity standards across the City of London. Concerns have mounted regarding the UK economy's sluggish growth, alongside notable financial services firms withdrawing from net zero commitments and former President Donald Trump's vocal opposition to climate frameworks and diversity initiatives.
Last year witnessed major institutions including Barclays and HSBC departing from net zero-focused banking groups, while surveys indicate declining interest among finance professionals in championing diversity, equality and inclusion commitments.
Think Tank Analysis and Criticism
Research from influential think tanks has added weight to the criticism. A Policy Exchange report last year revealed that listed companies receiving approval from ESG ratings providers saw their value decline by twice as much as the FTSE 100 average during 2024.
Separately, the Institute of Economic Affairs published findings suggesting diversity initiatives led by the Financial Conduct Authority and other public bodies had extended "far beyond" legal requirements. Callum Price, communications director at the Institute of Economic Affairs, offered sharp commentary on the procurement approach.
"All government bodies, the Bank of England included, should only be concerned with doing the job that they have been created to do to the best of their ability," Price stated. "This means keeping costs down as much as possible and resisting mission creep. Tying unnecessary baubles onto the requirements for procured contracts that do not affect the primary role of the contract will only drive up costs, increase inefficiency, and reduce competition."
The developing situation places the Bank of England at the centre of an ongoing national debate about the appropriate role of sustainability and diversity considerations in major public procurement decisions, particularly within crucial financial infrastructure projects.
