Tuesday, July 10, 2012

The Corporation

"The Corporation, which runs the City like a one-party mini-state, is an unreconstructed old boys' network whose medievalist pageantry camouflages the very real power and wealth which it holds." - Rough Guide to England, 2006

To-days Guardian carries a story on the influence of the City of London Corporation or as it is  often referred to as "the City" or simply "the Square Mile". SOYMB adds to it in this blog.

The term "tax haven" is a bit of a misnomer, because such places aren't just about tax. What they sell is escape: from the laws, rules and taxes of jurisdictions elsewhere, usually with secrecy as their prime offering. The City of  London Corporation has two main claims to being a tax haven: first, as a semi-alien entity, floating partly free from Britain (just as the Cayman Islands are), and second, as the hub of a global network of tax havens sucking up offshore trillions from around the world and sending it, or the business of handling it, to London. Over 500 banks have offices in the City. The role of the Corporation as a municipal authority (and Lord Mayor) is it is a hugely resourced international offshore lobbying group pushing for international financial deregulation, tax-cutting and tax havenry around the world. In 2008, the City of London accounted for 2-4% of UK GDP

For almost 1,000 years, the City of London Corporation has resisted virtually every attempt by monarchs, governments or the people to rein in its vast wealth and influence. From the murder of peasant revolt leader Wat Tyler by the lord mayor of London and his men in 1381, to the dispatching from the City to Northern Ireland of rural refugees forced off their land in 17th-century land reforms, the corporation has long been the strong-man of British history. The 1.2-square-mile of prime real estate in central London that is the City of London is an offshore island inside Britain, a tax haven in its own right. A Teflon-like, medieval institution dedicated to keeping finance strong and free.The City's "elsewhere" status in Britain stems from a simple formula: over centuries, sovereigns and governments have sought City loans, and in exchange the City has extracted privileges and freedoms from rules and laws to which the rest of Britain must submit. A symbolic example is that whenever the Queen makes a state entry to the City, she meets a red cord raised by City police at Temple Bar. In this ceremony, the Lord Mayor recognises the Queen's authority, but the relationship is complex: as the corporation itself says: "The right of the City to run its own affairs was gradually won as concessions were gained from the Crown." the Lord Mayor of the City of London, an office separate from (and much older than) the Mayor of London. The Coroporation even has its own police force separate from the London Met with an independent police authority, the Court of Common Council of the Corporation. The City Police have three police stations and has 813 police officers, 85 Special Constables and 48 PCSOs. The Port of London's health authority is also the responsibility of the Corporation, which includes the handling of imported cargo at London Heathrow airport.

 Today, the Corporation's main weapons are more sophisticated, parliamentary lawyers, public affairs staff, 43 media staff, a 50-strong economic development unit sifting through international regulations, researchers and legions of hospitality workers. This public affairs machine costs over £10m, according to the Bureau of Investigative Journalism's calculations. Sitting literally behind the Speaker of the House of Commons chair is Paul Double, a City of London official known as the remembrancer,"charged with maintaining and enhancing the City's status and ensuring that its established rights are safeguarded". The remembrancer scours every piece of parliamentary legislation to ensure the corporation's interests remain unaffected. The remembrancer employs six in-house lawyers.

Mark Boleat, appointed in May as chairman of the pivotal corporation policy and resources committee, is the corporation's de facto prime minister, and will, if he is anything like Stuart Fraser – his recent predecessor – be the City's most energetic lobbyist. Freedom of information documents show Fraser had contact with George Osborne, Treasury ministers and senior Treasury officials 22 times in the 14 months up to March, augmented by regular letters. The influence of the corporation is underlined by speeches by the prime minister, the chancellor, and the mayor of London who outline their plans at sumptuous banquets in the Guildhall or Mansion House. These events' importance is confirmed in a leaked document explaining the aim of thee major national set-piece occasions and small receptions – where politicians and City figures meet in private –is "to increase the emphasis on complementing hospitality with business meetings consistent with the City Corporation's role in supporting the City as a financial centre". They are financed from the Corporation's so-called City's Cash fund, one of a number of corporation accounts "a private fund built up over the last eight centuries" its assets are beyond proper democratic scrutiny. The fund's annual report is restricted to City councillors, aldermen and officials. 

Within the City, the Corporation owns and runs both Smithfield Market and Leadenhall Market. The Corporation owns and is responsible for a number of locations beyond the boundaries of the City. These include various open spaces (parks, forests and commons) in and around greater London, including most of Epping Forest, Hampstead Heath and many public spaces in Northern Ireland through The Honourable The Irish Society. It also owns Old Spitalfields Market and Billingsgate Fish Market, both of which are within the neighbouring London Borough of Tower Hamlets. The Corporation also owns and helps fund the Old Bailey. The City is the third largest UK funding-patron of the arts. It oversees the Barbican Centre. The Corporation oversees the running of the Bridge House Trust, which maintains five key bridges in central London, London Bridge, Blackfriars Bridge, Southwark Bridge, Tower Bridge and the Millennium Bridge. The City's flag flies over Tower Bridge, although neither footing is in the City.

Over the centuries, reformers in Britain have tried, and failed, to have the corporation merged into a unified London authority.
In 1917, Peter Mandelson's grandfather Herbert Morrison, plainly declared "Is it not time London faced up to the pretentious buffoonery of the City of London Cor­poration and wipe it off the municipal map?" he asked. "The City is now a square mile of entrenched reaction, the home of the devilry of modern finance."
Clement Attlee in 1937. "Over and over again we have seen that there is in this country another power than that which has its seat at Westminster," he said. "Those who control money can pursue a policy at home and abroad contrary to that which has been decided by the people."
In 1996, Tony Blair got Labour to replace its pledge to abolish the corporation with a promise merely to "reform" it.

Like any other local authority, the City of London is divided into wards. The wards are not reviewed by the Electoral Commission under the Parliamentary Constituencies Act 1986 and (unlike with other local government electoral reviews in the country) the number and the names of the wards do not change. These elect candidates to serve on the Court of Common Council, the City's principal decision-making body. Unlike any other local authority, however, individual people are not the only voters: businesses can vote, too. Political parties are not involved - candidates stand alone as independents. Before 2002, the 17,000 business votes (only business partnerships and sole traders could take part) already swamped the 6,000-odd residents. Blair's reforms expanded the business vote to about 32,000 and gave a say, based on the size of their workforce in the Square Mile, to international banks and other big players. The business vote was abolished in all other UK local authority elections in 1969.  Voting reflect the wishes not of the City's 330,000 workers, (these workers did not have control of their own votes but comparable to the voting rights of chattel owners in the pre-war American South: the slavery franchise.) but of corporate managements. So Goldman Sachs and the People's Bank of China get to vote in what is arguably Britain's most important local election.

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