Time to abolish the UK's last "rotten borough" - the City of London Corporation

One year on from the Occupy protest at St Paul's, we're no closer to reforming the dark heart of predatory capitalism.

On the night Occupy LSX marched into the City tweets came into me asking for help as the police kettled activists on the steps of St Paul's. I went down there and did what little I could to prevent people being roughed up. Over the next few days the tents soon appeared and the occupation became a debating forum on the causes and creators of the economic crisis.

As days turned into weeks and the cathedral hierarchy split over whether to evict the camp, the occupiers soon discovered the existence of an organisation the vast majority of the population barely knows exists. The City of London Corporation was flushed out of the shadows in which it normally lurks to show that it was something more than the organiser of a good pageant in the Lord Mayor’s Show.

Naturally members of Occupy turned their inquisitive attention to this seemingly quaint body that was threatening to send in the bailiffs. Just as the direct action by UK Uncut transformed the issue of tax evasion from a dry debate for accountants into a popular cause, Occupy has helped turn the spotlight on the abuse of power that is the City Corporation.

In Michael Chanan’s and Lee Salter’s new film, “Secret City”, Maurice Glasman explains ironically that St Paul’s was the site of our earliest democracy, where the citizens of London in medieval times would hold hustings. In the sixteenth century the city took over from Amsterdam as the centre of international credit and maritime trade. Its coffee houses became banks and governments became dependent upon them for loans, largely to finance wars.

Government's reliance on the city to finance the national debt gave the city such influence that the Corporation was able to avoid the successive reforms that established democratic local government in the rest of the country.

Instead the City Corporation to this day retains the business vote, which overwhelms the votes of residents in the elections for its Common Council. The vast proportion of elections in the City have not been contested. Instead an old boys’ network amongst the companies sorts out which favoured son is to be bestowed the seat.

This usually prevents anyone slipping through the net who shows any spark of independence, although not always. Around a decade ago, Malcolm Matson was elected with 80 per cent of the vote but was known to favour reform. He was hauled before the City’s Court of Aldermen and was blackballed. Local vicar, the William Taylor, was also successful in being elected but as soon as he started asking questions about the Corporation’s unpublished accounts, his bishop received letters with more than a hint of a threat.

Matson and Taylor could not be tolerated because they were asking questions about the massive resources being spent on the secretive role the City Corporation plays as the lobbyist for finance capital. The Corporation has used its influence to dictate successive government’s policies on the regulation of finance and taxation.

This secured the deregulation of the “Big Bang” era of Thatcher and the hands off approach under Blair and Brown. City speculators were allowed to create the bubble that eventually burst to create the current economic crisis. London became a funnel through which trillions poured into tax havens and the concentration on financial speculation rather than investment in our manufacturing base unbalanced our whole economy. Obscene levels of incomes and conspicuous spending in the City have also created a society grotesquely scarred by inequality and a capital city in which immense wealth is located cheek by jowl with stark levels of poverty.

It was Labour Party policy since its foundation to abolish the City Corporation, until Blair arrived and the policy changed to reform. The City cynically interpreted reform as simply giving more businesses the vote.

The abolition of this last “rotten borough” would show that Ed Miliband is serious about tackling predatory capitalism.

John McDonnell is the Labour MP for Hayes and Harlington

"Secret City" previews at the House of Commons on Tuesday 16 October. For details of screenings and to watch a trailer for the film, visit: secretcity-thefilm.com

A statue of a dragon that marks the boundary of the City of London. Photograph: Getty Images


John McDonnell is Labour MP for Hayes and Harlington and has been shadow chancellor since September 2015. 

Photo: Getty
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Who will win the Copeland by-election?

Labour face a tricky task in holding onto the seat. 

What’s the Copeland by-election about? That’s the question that will decide who wins it.

The Conservatives want it to be about the nuclear industry, which is the seat’s biggest employer, and Jeremy Corbyn’s long history of opposition to nuclear power.

Labour want it to be about the difficulties of the NHS in Cumbria in general and the future of West Cumberland Hospital in particular.

Who’s winning? Neither party is confident of victory but both sides think it will be close. That Theresa May has visited is a sign of the confidence in Conservative headquarters that, win or lose, Labour will not increase its majority from the six-point lead it held over the Conservatives in May 2015. (It’s always more instructive to talk about vote share rather than raw numbers, in by-elections in particular.)

But her visit may have been counterproductive. Yes, she is the most popular politician in Britain according to all the polls, but in visiting she has added fuel to the fire of Labour’s message that the Conservatives are keeping an anxious eye on the outcome.

Labour strategists feared that “the oxygen” would come out of the campaign if May used her visit to offer a guarantee about West Cumberland Hospital. Instead, she refused to answer, merely hyping up the issue further.

The party is nervous that opposition to Corbyn is going to supress turnout among their voters, but on the Conservative side, there is considerable irritation that May’s visit has made their task harder, too.

Voters know the difference between a by-election and a general election and my hunch is that people will get they can have a free hit on the health question without risking the future of the nuclear factory. That Corbyn has U-Turned on nuclear power only helps.

I said last week that if I knew what the local paper would look like between now and then I would be able to call the outcome. Today the West Cumbria News & Star leads with Downing Street’s refusal to answer questions about West Cumberland Hospital. All the signs favour Labour. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.