A lesson in lobbying by the pirates of the City of London Corporation of New Jerusalem
City of London Corporation: a lesson in lobbying
The years go by but for the corporation retaining London’s status as a premier-league financial centre remains key
Nick Mathiason and Melanie Newman
guardian.co.uk, Monday 9 July 2012 22.00 BST
For almost 1,000 years, the City of London Corporation has resisted virtually every attempt by monarchs, governments or the people to rein in its vast wealth and influence. From the murder of peasant revolt leader Wat Tyler by the lord mayor of London and his men in 1381, to the dispatching from the City to Northern Ireland of rural refugees forced off their land in 17th-century land reforms, the corporation has long been a guiding hand in British history.
Today, the corporation’s main weapon is sophisticated, well-resourced and hospitable diplomacy. But its main aim, charitable endeavours and duties such as the Square Mile’s local authority notwithstanding, is the same as it ever was: retaining London’s status as a premier-league financial centre.
The human bridgehead in this task is its new “lobbyist-in-chief”, Mark Boleat, appointed in May as chairman of the pivotal corporation policy and resources committee. Behind Boleat sit parliamentary lawyers, public affairs staff, 43 media staff, a 50-strong economic development unit sifting through international regulations, researchers and legions of hospitality workers. This public affairs machine costs over £10m, according to the Bureau of Investigative Journalism’s calculations, although the corporation disputes this figure.
Boleat is the corporation’s de facto prime minister, and will, if he is anything like Stuart Fraser – his recent predecessor – be like a moth to the flame of power.
Until his departure, Fraser was probably the City’s most energetic lobbyist. Freedom of information documents show Fraser had contact with George Osborne, Treasury ministers and senior Treasury officials 22 times in the 14 months up to March, augmented by regular letters.
Updating Osborne by letter about a recent trip to China, Fraser complained to the chancellor that the City watchdog, the Financial Services Authority (FSA), was taking too long authorising Chinese and Indian banks to operate in the UK. “The FSA’s rules are perceived to run counter to the message that the UK welcomes FDI [foreign direct investment].”
Feeding back his meetings with senior US politicians, regulators and financiers, Fraser said: “One leading global insurance brokerage … explained that their current cost of compliance in the UK is higher than the combined cost of compliance in the other 99 countries in which they operate.”
Last November Fraser wrote to Mark Hoban, the Treasury minister responsible for the City, suggesting a migration clampdown “has had a negative impact on the UK’s attractiveness for international firms”, leading to businesses postponing expansion plans. Fraser suggested to Hoban, whose wife, Fiona, works for the corporation’s legislative scrutiny department, that “intra-company transfers” should remain outside government migration rules.
The influence of the corporation is underlined by speeches by the prime minister, the chancellor, and the mayor of London who outline their plans at sumptuous banquets in the Guildhall or Mansion House. These events’ importance is confirmed in a leaked document from the Corporation’s so-called City’s Cash fund, one of a number of corporation accounts.
The fund’s annual report is restricted to City councillors, aldermen and officials. In the notes section, the report says the aim of major national set-piece occasions and small receptions – where politicians and City figures meet in private – is “to increase the emphasis on complementing hospitality with business meetings consistent with the City corporation’s role in supporting the City as a financial centre”.
For this, City’s Cash spent £4.66m in 2007 on “ceremony”, according to the accounts, and another £7.16m servicing the lord mayor’s banqueting and “shrievalty” duties.
Not all the ceremony and lord mayor’s £11.82m budget is spent on “banquet lobbying”, but a large slice is. The effect these events have on those who run the UK is mesmerising, according to Father William Taylor, who between 2001 and 2008 was a City of London corporation common councillor.
“You are getting in a room all the powerful people you want to influence,” he said. “You are getting them handsomely drunk. You are applauding them. It’s literally intoxicating. It’s how power operates. It’s probably underestimated as a tool for cementing consensus and support for the corporation.”
What may also be underestimated is the influence wielded by the City in parliament. Sitting facing the speaker’s chair is Paul Double, a City of London official known as the remembrancer. The remembrancer scours every piece of parliamentary legislation to ensure the corporation’s interests remain unaffected.
The department enjoys a budget of £6m. Most is spent on “ceremony”. But the remembrancer also employs six in-house lawyers and has submitted evidence to 16 separate select committees in the past 18 months, including the Treasury’s Tax Principles report published last year. Subsequent events indicate it was well received.
The corporation’s evidence to the Treasury’s Tax Principles agenda stated: “Several insurance companies … have already changed their domicile and there is speculation that some major UK-based banks are assessing the benefits or otherwise of being domiciled in the UK. Furthermore, some other institutions, including US investment banks, have already moved away from their previous settled view that London is the best placed centre for their operations in Europe, the Middle East, Africa and in some cases Asia as well.”
The City suggested the government communicate the UK is “open for business” with “a phased reduction in rates of taxation”. George Osborne in his March budget made sharp cuts in corporation tax as well as introducing a £500m tax break for insurance firms.
The City of London makes no apology for “promoting the competitiveness of [finance] as a whole so that this industry will thrive globally – and underpin jobs, prosperity and tax revenue”.
“Crucially,” it adds, “we do not ‘lobby’ for individual firms, deals or people. We are in contact with all political parties – both in and out of office and act rather like a trade body but across a broader range.”
• The Bureau of Investigative Journalism
• This article was amended on Tuesday 10 July 2012 to make clear Paul Double sits facing the speaker’s chair, not behind it.