Revolt against City of London’s medieval elders
For almost a thousand years the City of London Corporation has run the British capital’s financial hub, winning hearts with opulent banquets and parades of red-robed dignitaries, pikemen and musketeers.
But campaigners want to open up the secrets of this arcane organisation, arguing that its medieval structures are helping one of the world’s top financial centres avoid reform after the global crisis.
Dating from when Londoners lived in huts of wattle and daub, the City of London survived the Black Death and the Great Fire of London to emerge as a powerful but opaque force in modern Britain.
Today the corporation manages the “Square Mile” as a separate enclave within London with its own police force, employing 3,500 people and commanding billions of pounds (dollars) in funds.
But critics say it has failed to respond to the problems in the financial industry laid bare following the global crisis, instead protecting its own.
“The machine of the City of London serves the dealmakers,” said William Campbell-Taylor, a Church of England vicar and longtime critic of the corporation.
“The myth of (finance as) the goose that lays the golden eggs is one that is nurtured in the Guildhall”, the 15th-century banqueting hall where the corporation was traditionally based, he said.
The corporation plays a key role as a forum for top-level financial and political networking, often carried out at lavish banquets or through visits abroad by the Lord Mayor, its ceremonial envoy.
But reformers criticise the secrecy of some of its operations, including parts of its accounts and the allocation of votes to City workers in elections — as well as its unorthodox blend of private and public functions.
Elections for the councillors and aldermen who run the corporation are held without political party affiliations.
The City Reform Group, which was formed last year in the wake of the financial crisis by a group including a Conservative lawmaker and a former fund manager, has seized on elections this month as an opportunity to push for change.
Many are standing for positions themselves so that they can agitate from the inside, while they are also asking other candidates to sign up to seven pledges that emphasise accountability.
The reform group’s top demand is the release of full accounts for the “City’s Cash”, an 800-year-old, £1.3 billion ($1.9 billion, 1.5-billion-euro) endowment fund which is cloaked in secrecy.
Today, the fund which includes income from the corporation’s 11,000 acres of British land, aims to promote Britain’s financial services, on which the corporation says it spent £12 million in 2012.
But critics say the City has succeeded in lobbying for the status quo despite widespread calls for changes to the way banks in particular are regulated.
“We think the corporation should be leading standards in the way that the guilds and the livery did,” says writer and reformist Jonathan Myerson, who will be standing in the elections.
London’s ancient guilds or livery companies — where the corporation has its roots — were set up to provide guarantees of quality for different professions from goldsmiths to fishmongers.
The corporation itself sees its role promoting the finance industry as a success story.
“Most of (the lobbying work) is about getting business into Britain,” Mark Boleat, the corporation’s policy chief, told a debate about the City’s future in February.
Financial services brought in more than 10 percent of Britain’s tax take in 2009-10, according to studies by accountants PwC.
The corporation is now wooing Chinese banks to set up London offices, and it has also been instrumental in the arrival of a clump of new skyscrapers on the skyline.
Tony Travers, professor at the London School of Economics, doesn’t believe the corporation was a factor in the financial crisis, telling AFP: “If that were true, that wouldn’t explain how it happened in New York or other cities in Europe.”
He said the “soft diplomacy” of banquets and parades was a way of “sustaining the mystique of the City. It’s hard to believe that doesn’t have beneficial impacts, but it’s hard to measure”.
Demands for change have emerged before, but a 2002 deal with the then-ruling Labour party — whose policy had once been to abolish the corporation altogether — entrenched many of its peculiarities in law.
For many locals, exactly how the corporation works is far from the forefront of their minds.
“People are more worried about whether their company is still going to be here tomorrow,” said Robert Bates, 42, an insolvency partner at an accountancy firm, drinking in a busy City pub.
But David Pitt-Watson, a reformer and ex-fund manager, believes change is inevitable.
“London’s economic future depends on the reform of financial services,” he said. “The alternative to reform (of the corporation) is not the status quo, it’s revolution.”