I wrote yesterday about the lack of accountability of the City of London - and reported the opinion, so eloquently related by Maurice (Lord) Glasman that the City of London Corporation is, in effect, a deparate state within the UK. It is a captive tax haven, quite beyond the control of the UK parliament.
I have looked a little further into this. It is not quite true that the Corporation of London does not put accounts on public record. It does.
It's also not completely true that it does not disclose its assets. To some degree it does. The last time it did so - in 2007 - it revealed it had £900 million in investment property assets not used for the purpose of fulfilling its duties as a local authority.
But that is not the whole story. The implication of the accounts is that they're the whole story of what the City does - as a local authority, albeit the weirdest one in the UK. But that is not true. Because as you note if you hunt a little further on their web site there's also this entry:
City's Cash
This is a private fund built up over the last eight centuries. Its incomes are derived mainly from property, supplemented by investment earnings and the fund is now used to finance activities mainly for the benefit of London as a whole but also of relevance nationwide. The management and conservation of over 10,000 acres of open space, all of the Lord Mayor's activities, Smithfield, Billingsgate, and Leadenhall markets, three of the highest achieving independent schools in the country and the Guildhall School of Music and Drama — all these are paid for by City’s Cash at no cost to the public.
This is the source of the City's power. And note - this is a 'private fund'. How come a local authority has a 'private fund'? Can anyone explain that? It does of course prove Maurice Glasman right
And yes, these funds might maintain Epping Forest. But let's not got too distracted by that.
And why is a local authority that has just one state primary school also funding three independent schools? And a drama college (and as a former director of one of its rivals I do not think this a burden on its books, by the way).
No, this fund does indeed finance the Lord Mayor's activities. Let's look at what the Corporation says its roil is, and then look at the Mayor's:
The City of London provides local government services for the financial and commercial heart of Britain, the 'Square Mile'.
It is committed to supporting and promoting 'The City' as the world leader in international finance and business services through the policies it pursues and the high standard of services it provides. Its responsibilities extend far beyond the City boundaries in that it also provides a host of additional facilities for the benefit of the nation. These range from open spaces such as Epping Forest andHampstead Heath to the famous Barbican Arts Centre.
The City of London combines its ancient traditions and ceremonial functions with the role of a modern and efficient local authority, looking after the needs of its residents, businesses and over 320,000 people who come to work in the 'Square Mile' every day. Among local authorities the City of London is unique; not only is it the oldest in the country but it operates on a non-party political basis through its Lord Mayor, Aldermenand members of the Court of Common Council. The Lord Mayor in particular plays an important diplomatic role with his overseas visits and functions at the historic Guildhall and Mansion House for visiting heads of State.
And the Mayor (edited highlights):
The City of London is one of the world’s leading international finance centres. As head of the City of London Corporation, which provides business and local government services to the City, the Lord Mayor of London's principal role today is ambassador for all UK-based financial and professional services. The Lord Mayor of London is not the Mayor of (Greater) London.
The Lord Mayor is elected for one year and the position is unpaid and apolitical. It is an exceptionally demanding role. The Lord Mayor spends some 90 days abroad and addresses some 10,000 people face-to-face each month (making around 700 speeches a year). Read more about theLord Mayor's international business role, and his overseas visit programme.
The Lord Mayor listens to City businesses and advises the Government of the day on what is needed to help the financial services sector to function well. The Lord Mayor frequently travels to represent the City and is treated overseas as a Cabinet level Minister.
The Lord Mayor supports the work of the City of London Corporation promoting the financial services industry in the UK. This is a reflection of the importance of this area of business activity for the UK economy.
Note that as Maurice Glasman says, the primary purpose of this council is to promote the UK finance industry.
To do that its Mayor is afforded the rank of a senior cabinet minister - an official of state - although he's not an official of the UK government. He is an official of another government - that of the City, a body dedicated purely to promoting finance.
And note that even the City of London says of its government on its web site:
The City of London is the oldest continuous municipal democracy in the world. It predates Parliament. Its constitution is rooted in the ancient rights and privileges enjoyed by citizens before the Norman Conquest in 1066. The City of London developed a unique form of government which led to the system of parliamentary government at local and national level.
The right of the City to run its own affairs was gradually won as concessions were gained from the Crown.
That's subtle, but very clear. The City runs its own affairs indpednetly of the Crown.
And let's not suffer the pretence that this is a democracy. As the City says of its supposedly apolitical system of government:
Today the Court of Common Council (100 Common Councilmen and 25 Aldermen) governs the City of London Corporation, the oldest continuous municipal democracy in the world. The range of services the City provides its workers, residents and visitors and the national and international work the City is called upon to perform is unique. Common Council accomplishes this work through a committee structure.
The Court of Aldermen consists of 25 Aldermen, one for each ward of the City, elected at least every six years (separately from the Common Councilmen elections, and not all at once). Since 1834 Common Council has been elected by the 25 wards of the City. Elections are held every four years in March when all the seats are up for re-election. Each ward returns between two and ten members depending on the size of the electorate. Candidates must be freemen of the City.
Note that little reference to the fact candidates must be Freemen of the City. This is what that means:
One of the oldest surviving traditional ceremonies still in existence today is the granting of the Freedom of the City of London. It is believed that the first Freedom was presented in 1237.The medieval term 'freeman' meant someone who was not the property of a feudal lord, but enjoyed privileges such as the right to earn money and own land. Town dwellers who were protected by the charter of their town or city were often free - hence the term 'freedom of the City'.
All freemen receive the book of 'Rules for the Conduct of Life' , written by the Lord Mayor, 1737-8. Click here to read the Declaration of a Freeman.
The freedom of the City is closely associated with membership of the City livery companies, successors to the ancient guilds. For an insight into the fascinating history and modern role of the Livery, visit the Livery pages.
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Dear Lord! This is disgraceful!
How do we get rid of this monstrosity
Wow, Richard, you’ve really started something now – I hope. Time for this to go viral.
@Carol Wilcox
I hope so
I haven’t seen anything by you on this, but quick question: do you advocate a system whereby salaries are paid to HMRC and then redistributed once income tax has been deducted?
@Tyisha
If Richard advocates this he is probably standing alone! If HMRC could be relied upon to have software which didn’t make a total bollox of it and wreck the lives of ordinary working families then yes, but in the real world, this is the stuff of nightmares only.
@James from Durham
I don’t advocate it
HMRC want to do something like it
I think there’s not a hope it would work
I think HMRC want to do this using outsourcing – even better, eh?
@Richard Murphy
Nobody, but nobody, advocates this. Even people who agree with you on nothing else agree on this.
I don’t think the dissolution of the monasteries is a particularly glorious episode in English history, so I hope you could go for a different historical analogy for intervention to take control of unaccountable power…
Also I’d like to propose an amendment to your proposed Bill to transfer the assets and powers of the City of London to the Greater London Authority (ie Mayor of London) rather than to a new London Borough of the City, which would have very few residents. The City’s riches should belong to all of London, not any small part of it. And such a concept works better for recreational assets such as Hampstead Heath or Epping Forest.
On the issues of the privileges of the City against the monarch, I was once told that the Queen very rarely ever took the train from Liverpool Street station (in the City), because of the need for the monarch to be escorted by officers of the Corporation at all times when within the City limits. It was less trouble for her to travel from Kings Cross (London Borough of Camden).
Such rights against absolute monarchy could come in useful should a Henry VIII figure ever reappear! Although I concede that this has no relevance whatsoever to your case to bring the City & its assets within democratic accountability.
I think this campaign should be a subset of a wider campaign to give this country a proper written constitution, as used to be campaigned for by Charter 88.
Could some of this be legally challenged? What if someone applied to be a council candidate, and if rejected take the case to the European Court of Human Rights?
“So this is the one local authority in the country where living in the area does not give you the right to stand for election. Far from it – that is secured by privilege.”
Not entirely true. A little further reading would show that a) anyone on the Electoral Roll for at least a year can acquire the Freedom without the need for any of the normal approvals or fees, and b) if someone wants to stand for election, their Freedom application can also be supported by any other two registered electors or passport application signatories.
“But that is not the whole story. The implication of the accounts is that they’re the whole story of what the City does – as a local authority, albeit the weirdest one in the UK. But that is not true.”
Again, I respectfully disagree. They DO give the whole story of what it does AS A LOCAL AUTHORITY. What they do not do is give the whole story of what it does as an organisation, but the remainder of its activities are either as a charity, or as a private entity.
Andrew Duncan’s Secret London has some information about the origins of the City’s Cash as a private fund. A large part appears to derive from land purchased by the fund from the crown.
@J Williams
I admire your tenacity as an apologist, but that is what you clearly are. First of all we have the extraordinary position, if you are right, that a person has to apply to be a freeman of the place for which they wish to be a councillor before they can be considered for election. That is quite absurd. That is not democracy as we know it.
Secondly, your claim as to the activities of the City is utterly inappropriate. If it is a charity its account should be on public record. But it is not a charity. It is a local authority. As a local authority it cannot be run for private benefit or else there is an abuse of the democratic process. Your argument is simply untenable, and contrary to all principles of democratic government
Which is my point, of course
But it is good of you to make it for me.
Herewith the public record of the charity accounts:
http://www.bridgehousegrants.org.uk/citybridgetrust/
My argument is not that a local authority is being run for private benefit. I agree that would be untenable. Rather I argue that there are three separate subsidiaries under a single ‘parent company’ – and that the local authority it merely one of these subsidiaries, as is the private entity.
@J Williams
There is no such an structure in UK democratic accountability. If that is what you are suggesting, show me the accounts of the parent company. Why should a local authority be able to undertake activity entirely beyond public scrutiny? And why should a local authority act for private benefit?
But if true, this idea that somehow a local authority has a higher authority to which is accountable is, of course, entirely consistent, again, with my hypothesis. There is, in this case, an undemocratic second tier of government, invisible to the public eye, which is running the city for its own benefit, and not but that of the electorate, and not for the Crown. In which case we have, as Maurice Glassman argues, a state within a state.
Yet again you make my case for me
@Richard Murphy
You’re right, I didn’t word that very well. What I was trying to describe as the parent company is merely the name City of London Corporation. No higher power, just three separate organisations working in tandem. Your concept is evidently that the whole is a local authority, but carrying out other activity at the same time. Mine is that the local authority stands in its own right as a component part of the whole, and that the other activity is not carried out by the local authority but by the other components.
I view it in some ways as the ultimate in shared services. Three wholly separate organisations, from public, private and charity sectors, each preparing their own set of accounts, but all using the same back-office support.
But even if I accept your arguement, I think the electorate do benefit at least to some extent from the private funds. Certainly, aside from the ceremonial aspects, a large part of the expenditure is on activities that benefit the public beyond the City boundaries, such as Hampstead Heath.