What’s worse–the heavy-handed regimes like Russia, where the president rules like the former head of the KGB that he is, or the apparently democratic regimes where real power stands behind a curtain and whispers its dictates into the ears of the elected government? In an article in the Guardian, George Monbot reports on the Corporation of the City of London, the powerful and unaccountable body over which Parliament has no control. Monbot calls it the “dark heart of Britain, the place where democracy goes to die.”
Monbot tells us that the Corporation is the equivalent of a local council, one of the small units through which local government is administered in the UK. The Corporation is responsible for the area of London known as the Square Mile in which the large banks and financial services companies are based. There are 25 electoral wards in this tiny area, but only in four of them are the 9000 residents of the area allowed to vote; in all the rest, the officials who are elected are chosen by the corporations located there. The Top Man of this Old Boys’ network is the Lord Mayor, invariably a well-heeled insider, who oversees “a vast pool of cash, which it can spend as it wishes.”
As it happens, the Corporation usually wishes to spend that money to lobby on behalf of banks. According to its website, the Corporation “handle[s] issues in Parliament of specific interest to the City”; the job of the Lord Mayor is to “open doors at the highest levels” for business and to “expound the values of liberalisation”–that is, deregulation.
If all this smells fishy, here comes the whale: “The City of London is the only part of Britain over which parliament has no authority,” writes Monbot. “In one respect at least the Corporation acts as the superior body: it imposes on the House of Commons a figure called the remembrancer: an official lobbyist who sits behind the Speaker’s chair and ensures that, whatever our elected representatives might think, the City’s rights and privileges are protected” The result is “a kind of offshore state, a secrecy jurisdiction which controls the network of tax havens housed in the UK’s crown dependencies and overseas territories.” Those within this district then use their position “to launder the ill-gotten cash of oligarchs, kleptocrats, gangsters and drug barons,” depriving “the United Kingdom and other nations of their rightful tax receipts.” This Corporation also allows American banks a way to avoid regulation. “AIG’s wild trading might have taken place in the US, but the unit responsible was regulated in the City. Lehman Brothers couldn’t get legal approval for its off-balance sheet transactions in Wall Street, so it used a London law firm instead.”
Over the years, several governments have tried to reign in the City of London, but none
succeeded. As former Labor Prime Minister Clement Attlee said, “Over and over again we have seen that there is in this country another power than that which has its seat at Westminster.”
Right now, Occupy Wall Street-like protestors are camping outside St. Paul’s Cathedral.The Corporation, working with the Church of England, is trying to evict them. The protesters, in turn, have demanded that the Corporation submit to national oversight and control. Look for a showdown on or before November 12th, the date of the Lord Mayor’s Show, which, as the website says, “brings together all the pomp and pageantry the City can muster.” The Show dates to 1215, when King John gave the City a charter which stipulated that the Lord Mayor must swear allegiance to the Sovereign and ‘show’ himself to the people. “If ever there were a pageant that cries out for peaceful protest and dissent,” writes Monbot, “here it is. Expect fireworks.”