The Last Rotten Borough Revisited

On 23 October 1997 Malcolm J. Matson completed the final draft of his paper The Last Rotten Borough outlining how local government in the City of London worked at the time and calling for the abolition of this thoroughly undemocratic council. Twenty-one years later many of Matson’s observations remain pertinent despite some minor tinkering with how this local authority operates. The most significant change since 1997 being an expansion of the number of business voters to ensure the council remains resolutely undemocratic and serves the interests of finance at the expense of those of local residents and London (or indeed the world) as a whole. Here are extracts from Matson’s paper:

The Corporation has an impressive record in persuading Governments of all political hues that its “special” procedures and rituals, despite appearances, produce an effective form of administration that is best left well alone. It has thus emerged unscathed from virtually all the parliamentary and local government reforms of the last 160 years…

The Corporation of London has rarely come under serious scrutiny since 1960 when a royal commission on local government in Greater London considered in great detail whether the ancient body could and should continue as a separate local authority. Sadly, its conclusion was feeble: “If we were to be strictly logical we should recommend the amalgamation of the City and Westminster. But logic has its limits and the position of the City lies outside them.”…

The City of London was the birthplace of British civic government. Ironic as it seems today, it was in the City that local democracy, through ward elections, was first developed. Having been given royal sanction in 1191 to unify into a commune, the following year the citizens of London decided to appoint their first Mayor. This was confirmed as a right by Magna Carta in 1215.

The Corporation of London is the local authority for the small area of 290 hectares (the “Square Mile”), which is situated at the geographic centre of London. It is home to 5,000 (closer to 9,400 today) residents and workplace to 50 times that number each weekday. For these people, the Corporation’s obligations are the same as that of the other 32 London boroughs. However, there the similarity ends. The structure and influence of the Corporation are utterly unique…

The qualification for the Local Government franchise in the City is unique. For elections of Aldermen and Common Councilmen, a voter must be either a resident, or a non-resident occupier of premises, as owner or tenant, with a gross rateable value of not less than £10. The property qualification has not fundamentally changed since the Great Reform Act of 1832…

The tenuous nature of Corporation-style democracy is underlined by analysis of where the elected representatives themselves reside. It goes without saying that in every other London Local Authority, all elected members have to live within the Borough. With the property qualification remaining in the City, that is not the case for the Corporation. Although every member of Common Council must have an “address” in the City by which they qualify to be on the electoral register, it is intriguing that fewer than 50% choose to use it even for business purposes…

Another distinctive feature of City democracy is the degree to which actual electoral contests are superfluous. Throughout the other Greater London Boroughs, uncontested elections are rarer than English victories over the Australians at cricket. In recent years, the only case of an uncontested seat in a local election that returning officers can recall was in Hackney when a Conservative candidate was disqualified because of an invalid nomination form.

In the City the remarkable fact is that the vast majority of seats at every round of elections are uncontested, and most members of Common Council have never had to defeat an opponent to gain or retain their seat. For the alleged godfathers of capitalism, it is a stunningly Stalinist process…

Uncontested seats at local election in the City (Dec 1996) 74%. The figure for the City in 1996 is not abnormally high – in 1995 was 73% of seats were uncontested. This is not because of some fundamentally lower appetite for democratic involvement in the City. When the electorate is given real and fair access to the ballot box, as at a general election, the turn-out is in line with inner London norms. At the 1997 election, the City wards of the City & Westminster constituency recorded a 58 per cent poll – the same as in the rest of the constituency, and only fractionally less than in neighbouring seats in Islington and Hackney.

The result of this ramshackle but little understood system is that many of the members of Common Council live in the leafy suburbs of Surrey or Sussex and have no real involvement with the City – past or present – other than that they are members of Common Council. Many have been simply encouraged by other councilmen or aldermen to exploit the property qualification to make themselves candidates – emphasising the self-perpetuating, sub-masonic character of the Corporation’s constitution.

It is disturbing to reflect that any well-organised extremist or terrorist group could stage a spectacular publicity coup and go on to inflict untold harm by the not particularly difficult route of winning control of the Corporation via the City’s mis-shapen ballot box. In the 1996 elections for Common Council, for example, it would only have taken 3,111 electors, spread across sixteen specific wards to have been absolutely certain of returning 80 members to Common Council and thereby gaining a comfortable majority.

Any body that can muster that sort of number could form a partnership in Spring, get it to take out a tenancy at will on a broom cupboard in the Square Mile for about £60 a year and by Christmas, quite legitimately under the current constitution, gain control of the Corporation and all its assets. Indeed, that is more or less what happens each year – the group is the preceding year’s Court of Common Council.

The democratic deficit in the Court of Aldermen is at least as great, though differently formed, as that in the Common Council…

The aldermen nominate governors or trustees of many charitable and educational institutions including two Commissioners of the Church of England. They appoint the Recorder of London and many senior City officers, and exercise powers in relation to the regulation and establishment of the City Police Force. They make orders, on the advice of the Police Commissioner, in respect of street traffic.

Perhaps most important of all, the Court of Aldermen each year decides which of their number should become Lord Mayor. (Common Hall plays a somewhat empty role in this in formally submitting a short-list of two candidates. Both must be aldermen and already have served as Sheriff)…

As the front page of The Wall Street Journal reported on March 13th 1996, quoting a London based Vice- President of the consulting firm Booze-Allen & Hamilton, “the whole system is like a Monty Python sketch”. It is par for the course that the Alderman who took office as Lord Mayor on 8th November 1997 neither works nor lives in the City nor even in the proposed area covered by the GLA (Greater London Authority) and has only had to survive the ballot box once. In this instance, the Alderman in question, Richard Nichols, who lives in Hertfordshire and works in Watford, topped the poll on May 3rd 1984 with seven (7) votes in a ward that had a total electorate of 18…

We might take note that New York, one of London’s few effective competitors as a financial market, feels no compulsion to burden itself with a Mayor of Wall Street, or a separate local authority of any kind. So it is highly presumptuous for the Lord Mayor to travel to Australia and New Zealand, as he did in August 1997, “to promote the City of London as the international financial capital of Europe”. By what authority has he assumed for himself, as leader of the Capital’s smallest local authority, the mantle which the Government says it has reserved for the new democratically elected Mayor of London? Or when was it decided to re-define the use of the name “City of London” to mean the “virtual City” which comprises the financial markets rather than the Square Mile?

In recent years, this “virtual City” of global financial markets, with a nucleus in the Square Mile but sustained by modern information technology, has incubated many serious financial scandals. Episodes such as those at Barings, Lloyds, BCCI, Morgan Grenfell and NatWest have damaged London’s reputation around the world as being a trustworthy and reliable market….

But in many places in the City, “what is right” has come to mean no more than “what works”.   “If it ain’t broke – don’t fix it” is the modern euphemism in the City for saying that the ends justify the means.   When such an ethic is revered and promoted at the highest levels of the Corporation, it is little wonder that it also becomes an acceptable modus operandi on the trading floors in the marketplace.

But without a compass of open, democratic accountability, it is impossible to steer a straight course “with good faith and reason” which never swerves from the destination of being “profitable to the people”, as Edward III charged it to be when granting a renewed Charter to the Corporation in 1341.

But even if, seated at top table in the Mansion House, you were for one moment to believe the Corporation’s claim that “it does work”, the question must surely be, “for whom?” For the élite maybe, but certainly not for the citizens…

The simplest and most rational mechanism for modernising the government of the City is to abolish the Corporation of London altogether and to transfer the normal local authority functions currently carried out by the Corporation of London for the residents and businesses within the Square Mile to the City of Westminster. This would bring the constituency for local elections into line with that for Parliamentary elections. The business property vote would thus be abolished – thereby ensuring that straightforward universal suffrage comes into its own in the City of London as it has everywhere else in the United Kingdom. .

The financial implications of abolishing the Corporation are remarkable. Assets worth hundreds of millions of pounds (valued now in billions) and known as “City’s Cash”, would be placed under the control of the new GLA, the income on which would be available for expenditure according to its priorities for the benefit of the many rather than remaining under the secret and unaccountable management of the Corporation for the benefit of the few.

Built up over the centuries the Corporation now owns massive capital assets which are invested in property and marketable securities and yield substantial annual income.   Much of this real estate is physically located in other London Boroughs.   Currently, this is further supplemented by income from Smithfield, Billingsgate and Leadenhall Markets and other fees and charges…

The Corporation seems to regard these public funds as its own.   Yet “City’s Cash” is really “Citizen’s Cash”, for it is from the citizens of London that the money was originally taken and its continued stewardship and use should remain under the democratic control of the people rather than an undemocratic self-perpetuating body.

Transfer of the assets that comprise City’s Cash from the Corporation to the GLA would provide the new authority with an independent financial basis and substantially ease its burden on the Treasury. It would also restore democratic accountability to the management and use of these resources, enabling the GLA to spend them according to public priorities instead of for covert purposes as at present, however beneficial these may or may not be…

This paper has sought to argue that the Government will not be able to adhere to these criteria for the Greater London Authority unless bold and radical steps are taken to pursue sweeping reform of the Corporation of London rather than attempt to tinker with the franchise of what is surely the last rotten borough. Otherwise there will exist at the heart of the new structure , like a mini-West Berlin, an influential and well resourced authority singing to a totally different tune. This will cause untold damage to the governance of London and a dereliction of duty to its citizens.

The Government must act decisively. It is the last chance we have to make the institutions of the capital city fit for the 21st century, rather than the 12th.

While we agree with Matson’s conclusion that the City of London should be abolished, we feel there is room for discussion over whether the area this local authority covers should be absorbed into Westminster as he suggests, or a different neighbouring authority. Even if the bulk of the City were to be absorbed into Westminster, it would make more sense to us place the residential wards of Cripplegate and Aldersgate in Islington, and that of Portsoken in Tower Hamlets. However given the wealth and power found in Westminster we feel it would be better for the bulk of the City of London to be absorbed by a different neighbour or neighbours.

The whole of Matson’s The Last Rotten Borough can be seen and downloaded here:

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