LEEDS could host the London Stock Exchange from its own miniature version of Canary Wharf in times of crisis, according to the man behind much of the city’s digital infrastructure.
Speaking to The Yorkshire Post, Dr Adam Beaumont, chief executive of aql, which has three large data centres in Leeds and hosts Yorkshire’s internet exchange, said it was feasible that a major incident could bring down data systems in London and that a back-up plan was needed.
Leeds, whose digital connections with the rest of the world are independent of London, would be ideal to plug the gap.
“The main benefit of having a city with a well-developed internet ecosystem is that we can route all our data to the United States, to mainland Europe, to Russia, without going via London,” he said.
“That’s important because most financial businesses are dependent on online trade, so it’s very much in their interest to look after their cyber-security. They have to be looking at their digital resilience.”
The answer, he said, is to have an “instance” of the Stock Exchange in Leeds which would duplicate London’s infrastructure and would copy data in real time, but would only be traded from in the event of systems failure in the capital. If that happened, it would be switched from “passive” to “active” use immediately.
But in order to make use of the facility, financial companies would have to already have a presence in Leeds so that they would have the physical hardware already in place.
“If one company was connected to Leeds, all its competitors would have to be as well, so that they didn’t give away any competitive advantage,” said Dr Beaumont.
“It would generate so many jobs, with all the large financial investment companies having a presence here. The old Carlsberg site on the South Bank [of the River Aire] is ripe for development – it could create a miniature Canary Wharf in Leeds,” he said.
His business is among those thought to have expressed an interest in the 22-acre site, which Carlsberg has put up for sale with a £35m price tag.
The other potential bidders are said to include Asda, Ikea, St Modwen and Leeds City Council.
Dr Beaumont was expanding on ideas he first mooted last October at a panel discussion event on financial technology – or “fintech” – hosted by inward investment agency Leeds and Partners.
At that event, the keynote speaker was Baroness Pauline Neville-Jones, the former minister of state for security and counter-terrorism. She is also a member of the National Security Council and the Government’s Special Representative to Business on Cyber Security.
Referring to the city’s digital infrastructure, she said Leeds was already showing how it could be “bigger, better and stronger than other UK cities”, and made special reference to the work of companies like aql, emphasising the importance of cyber-security.
In response, Dr Beaumont said: “We’re dedicated to building the capability to support world-class hosting within the city and to promote the city as the main out-of-London disaster recovery site for the UK.
“Most of the UK’s financial institutions keep their core infrastructure within the M25 corridor. This is a significant exposure. By encouraging financial institutions to adopt a North and South approach to their infrastructure, this increases the resilience of the UK on a global perspective and also encourages duplicate investment by the financial industry in Leeds and the City Region.”
Speaking to The Yorkshire Post, Dr Beaumont said that although he was lobbying the Government to make sure the plan came to fruition, he couldn’t say how soon it might happen, nor how close he might be to achieving his goal, other than to say it was “something that will have to be looked at within the next year”.
Nevertheless, he says he has bought “a couple of acres” on the South Bank and is looking for more.
The former industrial heartland is being marketed as one of the best regeneration opportunities in Europe. Carlsberg closed the brewery in 2011.
Scale and severity
Exactly what kind of crisis could lead the Stock Exchange to move out of London can only be guessed at, but it would have to have the potential to be catastrophic.
Even the two World Wars didn’t manage to budge the traders. In 1939 a move to Denham in Buckinghamshire was considered but rejected, and throughout both wars, the Stock Exchange closed only three times: for six months in 1914 for the sake of financial stability, for six days at the outbreak of war in 1939, and for just a single day later in that war due to V2 rocket damage.
Nowadays, however, there are other threats. The Stock Exchange was attacked by hackers in 2011, and the scale and severity of any future threat may depend on the state of our cyber-security measures as well as our relations with potentially aggressive foreign states.