10Apr

The Corporation

That is, the City of London Corporation, which currently is attempting to take licenses away from porters in the nearly 400 year old Billingsgate fish market.

I’ve seen much about the City of London Corporation recently. It’s a fascinating little quirk of law:

The City of London Corporation, the political authority in the Square Mile, is an ancient institution… The corporation rules through tradition – its status is recognised from “time immemorial”, reflecting its place in the ancient constitution of London. Their customs have the force of law in the City and no government can overrule its bylaws contained in a charter of 1342…

The franchise of the City of London is unique. Companies are given votes based on the size of their workforce. A company with five workers has one vote, 10 workers two, and so on. While the franchise is calculated on the size of the workforce, the workforce itself has no civic personality or representation. The only historic parallel is the voting system which applied in the US at the time of the American revolution, based on the number of chattel and slaves.

The workforce has no representation in the corporation, the sovereign body that will decide the porters’ fate. There is no balance of interests, just the will of capital maintained exclusively for itself.

The Corporation is “like the Soviet Union, [in which] your economic bosses are also your political bosses.” A Soviet Union that is the heart of London.

It is also a Tax Haven and has a long history of withstanding challenges to remove certain powers:

Over the centuries, reformers in Britain have tried, and failed, to have the corporation merged into a unified London authority. The political landscape heaved and shifted around it, but the City stood immune. As the Times noted in 1881, “The City Corporation is sacred although nothing else is…

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 proposed to expand the business vote to about 32,000 and to give a say, based on the size of their workforce in the Square Mile, to international banks and other big players. Voting would reflect the wishes not of the City’s 300,000 workers, but of corporate managements. So Goldman Sachs and the People’s Bank of China would get to vote in what is arguably Britain’s most important local election.

There’s more in that New Statesman article about tax havens:

…the Bank of England, lodged in the heart of the City (but not, it has to be said, regulated by it), in effect encouraged tax havenry in British outposts of the Caribbean and elsewhere. By the 1980s, the City was at the centre of a great, secretive financial web cast across the globe, each of whose sections – the individual havens – trapped passing money and business from nearby jurisdictions and fed them up to the City: just as a spider catches insects… So, the 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. These are possibly the biggest reasons for the City’s wealth and power – yet how many Britons understand this?

It props up murky tax havens across the world so that dirty money (from drug barons or corrupt dictators for example) may be laundered into clean money. Or with which huge corporations go without paying the right tax (I don’t buy any argument that firms should avoid large tax bills – after all, their staff use our resources, roads, transport, energy, so they would otherwise be like leeches).

And all of this goes on within a tiny part of the capital city, while most of us are unaware of how it operates. I’m actually staggered this kind of operation can go on to such extents in modern Britain.

Perhaps we seriously need to look beyond GDP as a measure of progress.

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About Mark Newton

Born in 1981, live in the UK. I write about strange things.

2 comments

  1. Wow, whenever I read stuff like this I feel both stunned and defeated. It seems like no matter how much progress we make, new old stuff surfaces to remind us of how deceived we are in that notion.