The City of London covers 1.12 square miles, houses fewer than 9,000 residents, and still sits at the centre of a network that Tax Justice Network ranks as the world’s largest enabler of corporate tax abuse.
A few days ago we asked whether London remains a top global financial centre. This piece goes behind that question: what kind of place is the City of London, actually?
Why Is the City Not the Same as London?
Official City of London Corporation figures put the resident population at roughly 8,600. More than 676,000 people work there on a normal day. The governing body is the City of London Corporation. It is older than Parliament. Its privileges show up in Magna Carta. Greater London has an elected Mayor. The City has its own.
You end up with a place that looks like a local council but acts like a centuries-old corporate body. A tiny number of residents sit alongside livery companies, ceremony and serious money. That mismatch drives almost everything else.
How Does the Strangest Local Government in Britain Actually Work?
Nowhere else in the UK do businesses get a vote in local elections. In the City they do. Companies that occupy premises can nominate voters based on how many staff they have. Small firms get one vote. Bigger ones get more. Because so few people actually live there, the business franchise dominates.
The City of London Police answers to the Corporation, not the Met. And then there is the Remembrancer. The job dates from 1571. He is one of the Corporation’s chief officers, its parliamentary agent and its chief of protocol. He sits in the House of Commons under-gallery, opposite the Speaker, and keeps an eye on any legislation that might touch the City’s interests. No other financial district keeps a permanent official inside the legislature like that. The Corporation’s own pages describe the Remembrancer’s role in those exact terms.
We checked the public records and the current Remembrancer is Paul Wright. The post has run continuously for more than 450 years. That is not just tradition. It is operational.
The Lord Mayor does a one-year term as the City’s global ambassador for UK financial services and travels with quasi-Cabinet status. A lot of the funding sits in City’s Estate (formerly City’s Cash), a private endowment built up over centuries from property, bequests and investments. The Corporation publishes accounts, but the fund has long sat outside the full transparency rules that apply to ordinary council money. Critics keep asking how big the total asset base really is. The published numbers give income and some holdings. The complete picture is harder to put together than a normal local-authority budget.
Where Does The Spider’s Web Begin?
Nicholas Shaxson in Treasure Islands and tax campaigner Richard Murphy call the City the centre of a British-linked offshore network. Jersey, Guernsey, the Isle of Man, Cayman, Bermuda, Gibraltar and the British Virgin Islands all feed capital and business back toward London. Shaxson describes it as a filter that lets the City touch the dirtier end of the market while keeping a bit of distance.
The Tax Justice Network’s Corporate Tax Haven Index ranks the British Virgin Islands first. Cayman and Bermuda sit right behind it. The UK and its territories together account for roughly one-third of the global corporate-tax-abuse risk the index measures. Tax Justice UK puts the annual revenue loss to other countries at about $84 billion.
We looked at the latest company numbers. The British Virgin Islands has a population of around 32,000 and more than 360,000 active companies. That is roughly eleven companies for every resident. Britain appoints the governor and keeps responsibility for defence and foreign affairs. The territory sets its own (effectively zero) tax regime for international business companies. The Panama Papers made the scale hard to ignore: the BVI was the single largest jurisdiction in the leak, with more than 110,000 companies, and UK-based advisers were among the most numerous.
Defenders say these structures give legitimate tax neutrality and legal certainty. Critics say they enable large-scale profit shifting and secrecy while the City takes the fees and the professional-services work. Both sides can point to evidence. The question is which evidence matters more to the people who write the rules.
Can Both Things Stay True at Once?
The City still handles nearly 38% of global foreign-exchange trading and almost half of over-the-counter interest-rate derivatives. Its legal system, professional services cluster and time-zone position still pull in serious capital. That part of the story has not gone away.
At the same time the constitutional oddities are still there: the business vote, the Remembrancer, City’s Estate, and the position at the centre of a British offshore network. The Square Mile is not just a district inside London. It is a jurisdiction with its own government, its own police and a long-running relationship with a web of low-tax territories.
Whether those two realities can keep coexisting without more political pressure is the question the next few years will have to answer.
Author: Vagner Dos Santos Trindade
The editorial team at #DisruptionBanking has taken all precautions to ensure that no persons or organisations have been adversely affected or offered any sort of financial advice in this article. This article is most definitely not financial advice.
See Also:
Is the City of London Still a Global Financial Centre?
