business politics

Why the City of London needs to be occupied

There’s been a lot in the news this week about the Occupy London protest around St Paul’s. The Cathedral has closed for the first time since the Second World War, and there is talk of legal action to move the protestors on. There is talk of health and safety, highway regulations, and the definitions of protest, but fundamentally  the protest needs to be moved is that it is ‘disruptive to the City’ as a spokesman said on the radio this morning. I should hope so. The City is in desperate need of disruption.

In fact, I doubt that even the Occupy London protestors are aware of all the reasons why. The protest focuses on the banks and the stock exchange, on the economy and inequality. There is little about the City itself, but the protest is an opportune moment to investigate a strange anachronism that almost nobody is aware of. I only became aware of it myself through reading Nicholas Shaxson’s book Treasure Islands, from which most of the following is drawn.

Also known as the Square Mile (it’s actually 1.22 miles square), The City of London is mysteriously exempt from the rest of Britain’s democracy. It operates as a small independent unit within the rest of the capital, a bit like the Vatican in Rome, albeit without the statehood. It doesn’t have a local council – it’s run by the City of London Corporation. Boris Johnson is the elected Mayor of London, but he has no jurisdiction over the City – it has it’s own Lord Mayor, based out of Mansion House.

The Corporation pre-dates Parliament, and so doesn’t really see itself as answerable to the British government. Technically, it has a similar status to Britain’s offshore territories like Jersey or Guernsey, and it has a long history of exempting itself from UK law. As long ago as 1086 it could be found declining to take part in the Domesday Book survey, and every attempt to integrate it or reform it, over centuries, has been thwarted.

The City operates according to its own political code. It has a full-time representative in the House of Commons, and has done since 1571.  He’s called ‘the remembrancer‘, who is tasked with “maintaining and enhancing the City’s status and ensuring that its established rights are safeguarded.” The remembrancer, currently Paul Double, is the only non-MP who gets to sit in Parliament.

A full time seat in parliament isn’t the City’s only privilege. It retains the right to meetings on demand with the Queen. The Prime Minister must meet with the corporation within ten days if they request a meeting. It is extremely wealthy, and does not declare its earnings. And it has the right to entertain foreign dignitaries and run international trade delegations.

Perhaps most bizarrely of all, it’s the only place in Britain where corporations get to vote. Most of the area is commercial, so the local authority has extended votes to those that work in the area as well as those that live there. Only 9,000 people actually live within the district, but there are 23,000 corporate votes. When it comes to local elections, corporations outnumber citizens. As Nicholas Shaxson points out, “Goldman Sachs, the Bank of China, Moscow Narodny Bank and KPMG have been voting in British elections.”

This arcane little mini-empire is the world’s biggest financial hub, with half of the world’s trade in equities, 45% of derivatives trading and 35% of global currency trading. The fact that it is essentially independent from the rest of the economy is key to its success, as it operates as a quasi-tax haven at the heart of the economy.

So yes, occupy the City, not just the Stock Exchange. Call out the Corporation, and run the Lord Mayor out of town in his golden carriage. This old seat of wealth and privilege has no place in a 21st century democracy.

UPDATE:

Looks like this is beginning to get the attention it needs. George Monbiot writes about it here, and there’s an alternative Lord Mayor’s Parade being planned on the 12th of November – just the campaign piece that was missing.

10 comments

  1. Occupy St Pauls! There are 12 unelected bishops who sit in the house of Lords able to yield influence on the government on behalf of a cult which believes several very strange things!

    Seriously we live in a democracy, a democracy in which we have even had a choice in how we elect our representatives. There is a well established way of effecting change in this country via elections. We have an old established system of governance which there are bound to be some anacronyms, the biggest of which is probably the Queen, the position of bishops in the house of Lords is another. Are you really saying that large corporations should have no influence of government? You may not like the result of the elections, you may even like the result of an election and dislike the way they govern. Unfortunately governments have implement the possible while their supporters are generally asking for the impossible.

    Is a never ending protest really the best way of changing things?

    1. I disagree. Corporations are not people and do not get to vote. I agree that they should have a right to influence government, but not by voting in local elections. And of course there are anachronisms, but the fewer of them the better. (I’m for reforming the Lords too, by the way!)

      The Corporation of London is a particularly serious anachronism. It is a centuries old alternative government for the City of London. It has enormous wealth, huge privileges, and it does not appear to be accountable to our elected government. Considering it hosts the world’s most important financial centre, that’s a huge problem, surely?

      What’s the point of having an elected government if there are pockets of the country where the law doesn’t apply?

  2. Thank you for writing this article. #OccupyLondon or #OccupyLSX composes many different people. Some more informed than others, but all know that there is something wrong with our country and the world.
    How many would be shocked by this article?

  3. Thanks for bringing your attention to this institution, Jeremy. I would like to hear your views on what the role of the church should be in this situation (aside of course from the constraints on the bureaucracy of St Pauls).

    1. I’d like to see the church taking a more vocal role in talking about social justice, corporate responsibility, and in particular about how wealth is used. There’s nothing wrong with making lots of money if you put it to productive use.
      What’s interesting is that St Paul’s had been engaging with the City through the St Paul’s Institute. They were due to publish a report on the ethics of the city last week, and postponed it because it might look like they were supporting the protestors. It’s a shame that the good work they were doing has been overlooked because they’ve been so cautious about taking sides.
      It doesn’t help that the church is so politicised, and its ‘official’ capacity makes it a little compromised. Ideally, it should be well placed to present a constructive critique of the city, that walks a line between ‘bash the bankers’ nonsense and the laissez faire nonchalance of most of our politicians.
      The Christian view has a lot to bring to the City, in particular to talk about wealth positively. Lots of people talk about what businesses shouldn’t do, and there’s a place for talking about what they could do if they chose to. Wealth is a good thing when it is acquired without oppression and used generously. It can be a way of doing immense good in the world. Too much of the City’s money is just used to make more money, and I think the church could encourage it to think more broadly about their place in the world and what they could do if they broadened their ‘mission’, for lack of a better word.
      The Goldman Sachs bonus pool was $10 billion this year, for example. That’s how much the World Bank estimates it would cost to provide primary education to every child in the world not currently enrolled in school. Can you imagine if Goldman decided to give away their bonus pool one year? Or to give away ten percent of it every year? Or a real life example – Bear Stearns employees were contractually obliged to give away 4% of their salaries, and many of them took a real interest in how they were going to do that.

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