The last ‘rotten borough’: The City of London Corporation, is it time for reform?

**The City of London Corporation wields real influence over UK politics while standing outside much of the scrutiny and democratic controls that other public bodies are subject to. Green Party peer Natalie Bennett argues that the question of its future can no longer be left unexamined.**

When William the Conqueror marched into the City of London, he promised to respect “all the rights and privileges” citizens “had hitherto enjoyed”. King John, wrestling with his barons, created the mayoralty. King Edward III in 1327 restored the city fathers’ privileges. Not a lot has changed since then. When in 1832 political reform was supposed, with the abolition of “rotten boroughs” to establish the principle of “one man, one vote” (and later “one person”), the City retained, and retains, different rules.

Although that’s not for want of some apparently powerful people trying, from Charles II to the Royal Commission on the Amalgamation of the City and County of London of 1894. It was Labour Party policy to abolish today’s City of London Corporation, until Tony Blair took over the party. Instead, when he created the Greater London Authority and mayoralty, while leaving the black hole at the centre of the capital outside the control of the London mayor. Indeed, he even strengthened the power of business over the Corporation, with a greater weighting of the business votes against those of residents.

Through the All-Party Parliamentary Group on Investment Fraud and Fairer Financial Services, I have launched a project to ask a straightforward question: should the Corporation be left as it is, fundamentally reformed, or abolished?

The case for asking is neither arcane nor merely academic.

Starting with transparency. Every local authority in England and Wales is subject to Freedom of Information legislation. The City of London Corporation (COLC) is not, at least, not fully. A substantial part of its activity is designated “private” and shielded from public view. This includes the fund known as “City’s Cash”: a centuries-old endowment whose precise contents and purposes remain opaque and is used, in part, to support lobbying on behalf of the financial services industry. An institution that exercises public functions and spends what is, in any meaningful sense, public money should be accountable for how it does so. At present, much of it is not. Moreover, considering the COCL has the ability to influence public policy, all of its financial activities should be readily available for scrutiny.

Then there is the question of democracy. In every other local authority in the United Kingdom, the governing principle is one person, one vote. The COLC operated a model whereby businesses receive additional votes in proportion to the size of their workforce, cast by nominated representatives who are under no obligation to consult the employees they represent. Residents, the people who actually live within the Square Mile, are routinely outvoted by commercial interests. This is not a minor historical quirk. It is a significant departure from the standard of democratic representation we would expect anywhere else in British public life.

And there is the City Remembrancer itself: an advocate for the COLC within Parliament, supported by a legal team, whose role is to watch over the legislative process and protect the financial sector’s interests as laws are made. No equivalent role exists for housing, health, manufacturing, agriculture, or any other sector. The City of London alone has one. It is hard to imagine such an arrangement being established today.

Defenders of the COLC tend to reach for the language of heritage. The Corporation is ancient; it is part of the fabric of London’s history; reform would be complicated. These are understandable instincts, but they are not, on their own, an argument against examination. Age alone does not confer legitimacy. The Corporation’s constitutional arrangements were not designed to serve modern democracy; they predate it, and they have been carefully preserved by those who benefit from them.

This matters well beyond the Square Mile. The COLC influences the regulatory environment for financial services across the whole country. The regulations it helps to shape, the legislative interventions it supports, and the lobbying it funds all effect people far from the City: every worker whose pension depends on well-functioning markets, every small business relying on banking services, every household with a stake in how financial markets are regulated.

Our aim is to support considered, evidence-based reform. The work begins by gathering evidence from parliamentarians, from the public, and from anyone who has encountered the Corporation’s influence and wants their experience heard. We will hold evidence sessions and develop policy positions based on that evidence and shaped through consensus.

The Corporation is not the financial sector, but it is its lobbyist, its defender and a powerbase enjoyed by no other part of our society. An industry that has been given such a privileged position in our society, one that as we saw in 2007-8 can threaten the security of us all, should not have as its servant an institution that answers to giant businesses. They need no boost to their power.

The country must come first, not private interest. This is especially true today. The funds the City of London Corporation holds could be returned to public hands, and the power it has accumulated given back to the people to whom it rightly belongs. No other major financial centre has anything resembling the City of London Corporation. Not New York, not Tokyo, not Frankfurt, not Singapore.

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