Undemocratic, anachronistic, fantastic. How the City survives

I’ve been standing shivering outside the birthplace of the modern City of London, when out of nowhere pops Peter Rees. We’d arranged to meet beneath the Gherkin in the heart of the Square Mile, the financial district that is the powerhouse of the UK economy. He’s like a tall Rob Brydon, all irrepressible Welsh charm and gushing enthusiasm for his specialist subject, the skyscrapers of the City.

For nearly 30 years, Rees was the man who ran planning here, overseeing the transformation of the area from a patchwork of fusty low-rise historical buildings into what is now a thrusting cluster of memorable high-rises: the Cheesegrater, the Walkie Talkie, the Can of Ham, 22 Bishopsgate (the tallest at 278m) and, of course, the mould-breaking Gherkin (the shortest, at 180m).

We have been taking a windswept walking tour of all the EC3 district’s notable high-rises, but now we retreat to the New Moon pub in nearby Leadenhall Market. Over pints of bitter, Rees regales me with tale after tale of his passion for the architecture of the City, how he loves the old as much as the new, how his favourite architect is not Richard Rogers or Norman Foster, but Nicholas Hawksmoor, whose apotheosis is the stout St Mary Woolnoth church overlooking Bank tube station, and how really good architecture is not just about creating something beautiful but a timeless mechanism to ensure a place serves its purpose well.

Cue another anecdote, this time about welcoming a school trip of nine-year-olds to the Guildhall, the seat of the City of London Corporation, the governing body for the area. Rees recalls showing the children a scale model and asking, “Can one of you tell me how the City works?”

Peter Rees © Wendy Huynh/Companion
© Wendy Huynh/Companion

The kids looked at him as if he was mad, so he proffered another question, “Can you tell me how a beehive works?” All the hands went up.

“We’ve got one in our school,” one of the children explained. “It’s got a glass side, and we can see the bees making honey.”

“Right, now we’re in business. Look at the Gherkin. That’s a beehive inside. You’ve got bankers, not bees. They make money, not honey.” He looked over his audience. “What are the bees doing to make honey?”

“They fly out and they find the juiciest flowers and they collect nectar.”

“Exactly! At lunchtime, that’s what bankers do. They go down into the alleyways. They find the pubs and the restaurants. Their nectar is [information and] gossip. They take it back to their building and they make money.”

A few days later, Rees got a drawing in the post. It depicted the Gherkin with bankers in pinstripe suits, wings on their backs, flying out of the building. “They’d got it,” he tells me, as the New Moon fills with insurance brokers and underwriters.

Rees says he and his City planning team insisted that the buildings put up in the 2000s and 2010s should do all they could to promote social interaction. The Cheesegrater is elevated on steel stilts to create space for a piazza. The bottom floors of the Walkie Talkie are cinched to make more room for commuters at street level, while the top floors are given over to its Sky Garden, which is accessible to the public. Earlier, as we’d huddled in a side street to avoid the wind tunnels created by the skyscrapers, I’d told Rees that while I love many of these buildings I just can’t overcome my gut dislike of the cartoonish Walkie Talkie. He flinched but didn’t falter. Whether you like the look of it or not, the mix of capacious office space with public areas fulfilled an all-important mission, he said. “I knew we had to protect gossip, because that was the one key ingredient. That’s why you can’t just create a new financial centre miles away.”

The less-than-subtle swipe at Canary Wharf, which Rees thinks was “fine for a temporary period” before the City got its chutzpah back in the 2000s, is timely. HSBC last year gave notice on its long-standing headquarters there and is building a new base to the north of St Paul’s Cathedral. Law firm Clifford Chance has taken a similar decision, and so has Moody’s, the credit rating agency. Later, the City of London Corporation’s planning committee chair tells me that planning applications in the Square Mile are up 25 per cent year on year. He reckons the City will need to boost its 10mn square metres of office space by up to 15 per cent by 2040 to accommodate demand, even if current patterns of hybrid working persist.

All this bullish talk feels at odds with the hand-wringing of many policymakers and investors, who bemoan the City’s decline compared with its old rival, New York. They’re more likely to point to the relatively shrinking scale of the companies traded on the London Stock Exchange, an icon of the Square Mile. But, in truth, the listed equity market is only a tiny part of what constitutes the modern City of London. Banking has largely withstood the challenges of Brexit and the 2008 financial crisis a decade earlier. Private equity has boomed. And insurance, the particular specialism of the EC3 area, remains world-leading after a record year.

© Wendy Huynh/Companion
© Wendy Huynh/Companion

Rees, who is now a professor at UCL’s Bartlett School of Planning, is dismissive of doom mongers suggesting that the office-based ecology of the financial district has been fundamentally destroyed by Covid-19 and the home working it ushered in. “If people say to me, ‘Oh, you know, Covid’s finished the City’, I say, ‘This is a City that survived the Romans, the Plague, the Great Fire, the Blitz, Big Bang and the banking crash.’”

Over the course of my career as a financial journalist, most of it at the Financial Times, much of it covering the City of London in one way or another, I’ve met hundreds, possibly thousands of senior figures in banking, insurance, asset management and other areas of the financial and professional services industry that sits at the heart of the Square Mile (technically 1.12 sq miles). Their businesses, from Goldman Sachs to the Lloyd’s of London insurance market, BlackRock asset management to the stock exchange, are the engines that power the City.

What only recently dawned on me, though, is how this City community is bizarrely divorced from the parallel City that runs the place and advocates for it domestically and internationally. Only a handful of those who have senior roles in the corporation, or are on track to be its titular head or Lord Mayor, have ever held roles among the upper echelons of the financial services giants. If people are the fuel of prosperity, then surely having two parallel Cities makes no sense.

Sue Langley is arguably one of the exceptions. One of two “sheriffs” of the City of London, and thus Lady Mayor in waiting (her preferred nomenclature), Langley has been a career insurance executive. After senior roles at Hiscox and Lloyd’s of London, she now chairs the medium-sized insurer Gallagher. But her part-time job as sheriff also makes her the titular joint-head of the Central Criminal Court. She has one foot in her modern-day insurance career and the other in the ancient governing traditions of the Square Mile.

The Old Bailey building, with its elegant dome topped by a gilt bronze figure of Lady Justice brandishing sword and scales, is a fitting icon for the top criminal court in the land. Down a dark alleyway, thronging with people queueing to get into the public galleries, is the court’s back entrance. Staff and visitors file through some utilitarian electric gates, a guarded doorway and an airport-style security scanner, before being pitched into a busy waiting area at the foot of a grand staircase. I was half-expecting Langley to appear in the full-length fur-trimmed velvet gown that is the official garb of a sheriff, the oldest role in the City of London, which has remained largely unchanged since the seventh century.

Instead, she pops up from behind a gaggle of guests, low-key in modern business garb, and whisks me upstairs to a meeting room. En route, we pass the pokey flat where sheriffs must live for their year in the role to fulfil their core duties of presiding over the Old Bailey’s 15 judges, hosting four refectory lunches a week for the judges with an eclectic array of outside guests as entertainment, deputising for the Lord Mayor and officiating at a brutal schedule of dinners for livery companies, the professional guilds that also serve as charities and social clubs.

How, I ask, does she feel about becoming only the third woman to become Lord Mayor in more than 800 years? “Lady Mayor,” she corrects me with a smile.

When she was first approached more than a decade ago to consider the role, she demurred. “I saw it as too traditional,” she explained, remembering how gauche and perplexed she felt to find herself unwittingly sitting next to the then-Lord Mayor at a Lloyd’s of London dinner. “I said, ‘And you are?’ And then I said, ‘And why are you dressed like that?’” We followed up and had coffee, and it went from there. “But it took 10 years to change my mind.”

Lady Mayor in waiting, Sue Langley © Wendy Huynh/Companion
© Wendy Huynh/Companion

So now that she’s embedded in the tradition, does she think all the pomp and paraphernalia that go with the role need to be ditched? Is it time to have a 21st-century mayoralty and shrievalty (the wonderful term for being sheriff)? Her reply is heavy with the weight of history. “I am not Sue Langley. I am not a person. I am a role,” she says. “They want you to look different,” she adds, referring to the value that the heritage of such offices holds, especially when travelling abroad. “As Lady Mayor, I’ll be the chief business development officer for the City of London,” she says.

It is apt enough. Lord Mayors are routinely deployed in co-ordination with the Foreign Office and other government departments to host foreign dignitaries. Past Lord Mayors have told me of the fanfare they receive on trips abroad, playing a similar role to a royal when touting for business. “It’s incredible,” confided one. “You are wined and dined and generally treated like a head of state. And then you get home and no one knows who you are.”

Unlike modern city mayors, including Sadiq Khan, who oversees the whole of London and with whom the Square Mile authorities must liaise closely, Lord Mayors of the City of London are not directly elected. They are instead anointed by a years-long process involving the nominations committee of the Court of Aldermen, with an initial selection of sheriffs and thus prospective Lord Mayors by the Livery Committee of livery company representatives. If that wasn’t elaborate enough, an advisory view is given by a semi-secret Appraisal Committee, sometimes known as the Shrieval and Mayoral Interview Panel, one of the few bodies in the civic City that includes well-known financiers, such as Abrdn chair Douglas Flint, Schroders chair Elizabeth Corley and former Virgin Money boss Jayne-Anne Gadhia.

Becoming Lord Mayor used to be an expensive business. It is an unpaid role, so there is a year of lost earnings. There also used to be a tradition of the Lord Mayor personally paying the annual bills for wine at official dinners and petrol for official cars, though that has apparently fizzled out.

There are compensations too, most obviously including a year of living like a royal. A Lord Mayor gets an army of staff and a plush apartment occupying an upper floor of Mansion House, the Lord Mayor’s administrative headquarters. The building regularly hosts fancy events, including the famous annual dinner, where the UK chancellor and Bank of England governor deliver closely watched speeches about the state of the nation. The Lord Mayor continues to play a high-profile role in the top echelons of British public life. Former Lord Mayor Nicholas Lyons was a core cast member at King Charles’s coronation last year, carrying a 15th-century crystal sceptre that Henry V gave the City as thanks for helping to fund the Battle of Agincourt.

Lyons is another kind of exception to the rule that only mid-calibre financiers and lawyers end up in high office in the City’s civic administration. (He took a year’s sabbatical to be Lord Mayor and has now returned to his day job as chair of insurance group Phoenix.) His priority during his time in office, from 2022 to 2023, was to rebuild the City’s links to the world after the pandemic. Having someone with a financial services background proved crucial. “As Lord Mayor, you’re the ambassador for the City of London,” he says. “I was able to go to New York and meet one-on-one with [JPMorgan CEO] Jamie Dimon and [BlackRock CEO] Larry Fink because I knew them.”

A common complaint of Lord Mayors is that the centuries-old tradition of one-year terms is fundamentally self-defeating. It hampers their ability to achieve much as an influencer of domestic policy. That applies even more to a Lord Mayor’s international role, which demands building relationships with officials around the world, all of whom are in power for years at a stretch. “It’s insane,” admits one longtime alderman, a high-ranking official. “Comparable champions for the financial centres of Singapore or Paris or Miami would be in their roles for years at a time.”

In the shadow of EC3’s tallest towers sits the quietly distinguished Merchant Taylors’ Hall. The headquarters of the eponymous livery company has stood on this site since the 1300s. We are close to the old City walls, which William the Conqueror chose to fortify rather than raze, recognising the area’s wealth-generating right to an autonomous governance that persists today. Threadneedle Street, made famous by the nearby Bank of England, was given its name by the presence of the Merchant Taylors, originally a society of needleworkers. The great hall is allegedly the site where the modern national anthem was first performed in 1607, for a visiting James I. Like most of the above-ground structure, the hall was devastated first by the Great Fire of 1666 and then by the Luftwaffe in the second world war.

© Wendy Huynh/Companion
© Wendy Huynh/Companion

“It’s a lovely room,” says Michael Cole-Fontayn, as we climb the stairs inside and enter the Chinese-wallpapered drawing room. “It’s blessed with natural light.” The Master of the Merchant Taylors is the epitome of City charm and reassurance. But, standing at the window looking across the courtyard, his comment feels loaded with foreboding. Stretching my neck up and up, I behold the 62-floor skyscraper at 22 Bishopsgate and a scattering of cranes that announce more to follow.

Over the coming months and years, the Merchant Taylors’ prized light will steadily be stolen by the mushrooming towers a hundred metres away. When I ask if that’s a sad prospect for such a distinguished building, Cole-Fontayn pauses, seemingly torn. “I suppose it’s been controversial over the years,” he says, referring to the modernisation of the City. “But this”, he gestures at the skyline, “is enabling the future.”

Cole-Fontayn is surprisingly pragmatic about the likely inability of organisations like his to preserve their historic buildings for ever. “If you’re sitting on a piece of prime London real estate, and you’ve got all these towers going up around you, and your purpose is philanthropic, then at some stage you’ll have to review and evaluate and say, ‘Do I hang on to this ancient monument for all the heritage and history? Or should it be redeveloped to release capital and ensure that I’m able to do good works in the future?’”

Reformers might argue that the buildings are just one aspect of the City’s ancient establishment that is overdue for modernisation. The most obvious anachronism is evident in the names of many of the livery companies, which read like an economic sketch of the British Middle Ages, a period when merchants (or Mercers) were dominant, Skinners clothed the wealthy in furs, Salters dealt in crucial preservatives, Bowyers made archers’ bows, Fletchers made arrows and Girdlers made belts without buckles.

Fiona Woolf belongs to 11 livery companies. As a former Lord Mayor, she is much in demand for the prestige her membership brings with it. “At the moment, I’m master of the Wax Chandlers,” she says. In the Middle Ages, blocks of beeswax were like Hanseatic gold, she says. But “there aren’t many people making beeswax candles any more, so we focus on recycling and bee-keeping.”

And yet, new livery companies are being set up all the time. The most recent debutant, last year, was the Worshipful Company of Nurses, founded by a group of former nurses who trained at St Bartholomew’s Hospital near the northern perimeter of the Square Mile. This brand-new livery company has adopted the trappings of its ancient antecedents, including the full-length gown for the master and chains of office. A fundraising drive is under way for a coat of arms application.

Michael Cole-Fontayn © Wendy Huynh/Companion
© Wendy Huynh/Companion

For all the quaintness and oddity, all the dressing up and nostalgia, many of the livery companies claim modern-day relevance. For those that represent the City’s core industries, insurance, banking and so on, some of the original livery essence remains. “When they were created, they were like a combination of modern-day trade associations, combined with trading standards and regulators,” explains Cole-Fontayn.

The others are mostly a meld of social clubs, charitable organisations and, in a number of cases, managers of vast property and wealth. There is reticence among most livery companies about how wealthy they are and quite how that wealth was accumulated. A glossy Pan-Livery Report is published every other year. It is packaged like a corporate annual report but is more of a promotional pamphlet, trumpeting, for example, £75mn of charitable giving in 2021.

The Mercers is the richest livery company and owns large swaths of Covent Garden, including the new Yards development, as well as a chunk of the City to the north of Cheapside. It does not disclose its total assets, though the charities it runs have aggregate funds of more than £200mn.

Its most famous son is also the most famous Lord Mayor, immortalised in pantomimes across the country every Christmas. Dick Whittington’s rise to fame and fortune in the late 1300s was not that of the fabled poor boy made good, but actually of a wealthy aristocrat made even wealthier. On his death, he bequeathed the equivalent of £5mn in today’s money to good causes, most of it via the Mercers. William Caxton, famed as the first English printer, was also a Mercer.

There have been more controversial old boys. Edward Colston became famous again in 2020, when a Bristol statue of him was toppled amid the global protest that followed the police murder of George Floyd in Minneapolis. Among other things, Colston was a slave trader and a Mercer, though there is no mention of him on the Mercers’ website. (The livery company said he left no charitable bequests to the Mercers and “did not play a significant nor notable part in the Mercers’ Company history”.) William Beckford, another former Lord Mayor, whose sculpture has presided over the great hall at the Square Mile’s historic Guildhall headquarters since 1772, made his money as a Jamaican sugar plantation owner with 3,000 slaves to his name.

Peter Estlin, Lord Mayor in 2018, says acknowledging the roots of the City’s wealth is crucial, if it is to remain credible in the modern world. But, at the corporation, efforts towards slave-trade transparency have been slow. In the wake of the Black Lives Matter movement, investment committee chair Andrien Meyers, who is Black, tells me he felt so strongly that the City should acknowledge its slaving history that he initiated a campaign. “It’s not often I send an all-member email at the corporation,” he says. “I said, ‘You know, there’s an injustice that’s being done. I acknowledge that the corporation as a body is hundreds of years old, but I think we can try and shape the future going forward.’” A Tackling Racism Taskforce was set up and concluded, after widespread consultation, that prominent statues should be removed, including Beckford’s in the Guildhall.

The decision was swiftly trumped by a directive from the government’s then culture secretary Oliver Dowden to “retain and explain” such statues. When I ask him about this, Meyers puts on a brave face, contrasting his “personal feeling” with the need “from a governance perspective . . . to manage this properly”. Four years later, there is still no explanatory plaque on the Beckford statue. Meyers is hopeful it will be in place by the end of the year. (A small temporary sign to the side of the statue says the plaque will be updated to reflect the “retain and explain” approach.)

Liz King, a slight, bespectacled retiree, does not look much like a crusader. She sits, nursing a whisky sour in the Barbican Centre’s magnificently retro Martini Bar. But this New Jersey native, who settled in the UK in her student days before building a career in the steel and energy sectors, is passionate about another of the City of London’s old ways of doing things, the nature of democracy here. She’s not shy about saying so.

“The way the City views us residents, it’s that we’re a nuisance,” says King, one of nine elected representatives of the City’s Cripplegate ward, which encompasses the lion’s share of the Barbican, a landmark of 1970s brutalist development comprising 2,000-plus apartments and an avant-garde arts centre.

Some 615,000 people work in the Square Mile, but fewer than 9,000 people live here. So the perennial question for the local council is how much weight should it give to residents versus the companies that bring jobs and money to the district. Uniquely in the democratic world, the City of London operates an elaborate kind of corporate voting mechanism. (Melbourne in Australia has a comparable system. It is far smaller, albeit similarly contentious.) According to data cited at a corporation committee meeting in March, there are now twice as many “corporate” voters as resident voters in the City, 13,748 versus 6,475.

Even though the City is the wealthiest local authority in the country, residents feel just as aggrieved by the quality of services they get from their council as those in far poorer areas. King, who has lived in the Barbican for decades, describes residential service charges as “crazy”. (They average £6,461, excluding penthouses, for which charges top £30,000.) The council has failed to make up for years of poor maintenance, resulting in leaking roofs and other avoidable wear and tear. The situation across the road on the Golden Lane Estate is worse still. King reckons that is partly because the flats there are still mostly social housing. “They’ve been talking about replacing the windows on that estate for over 20 years. It’s shocking.”

Chris Hayward, the man who runs the corporation day to day via his chairmanship of the Policy and Resources Committee, is a career-long councillor. But on the day I meet him, he looks every inch the City-wide boy. Outside his office in the corporation’s Guildhall headquarters, he strides towards me, arm outstretched in the kind of broad pinstriped suit that embodied the bravado of a 1990s banker. He insists he cares about all his constituents, pointing out that the local investment that he and his predecessors have overseen, including the Elizabeth Line tube stations, is “beneficial for the whole City”.

But when I describe the corporation as a local authority like any other, he bridles. “I would challenge that,” he says, insisting only 20-25 per cent of the organisation’s work comprises local authority functions. He reels off a list of extracurricular activities, including managing 11,000 acres of green spaces across Greater London, from Hampstead Heath to Epping Forest, operating 11 public-sector schools and three private ones and building a new Museum of London.

I ask him how he feels about managing the corporation’s conspicuous wealth and spending power at a time when other local authorities are struggling to stay afloat. Is he not likely to come under pressure to help poorer regions? Hayward looks cornered for a moment. “I mean, yes, there were always opportunities to invest in appropriate things,” he says, citing a recent trip to the north-west of England. “It gives us an even greater sense of responsibility as to how we discharge expenditure of those funds,” he says, referring to the assets, worth about £5bn in total, the corporation manages directly. (The City Bridge Trust, a charity, oversees a further £1.6bn, accumulated from centuries of tolls charged on the bridges crossing the Thames into the Square Mile.) “We do that in a number of different ways . . . First of all, we do it by a significant capital building programme . . . And the second, of course, is that we speak for the United Kingdom on financial and professional services.”

Questions about the City’s governance remain. Four years ago Lord Lisvane, the former clerk to the House of Commons, delivered a scathing report about overdue modernisation. He suggested it appeared “inefficient, lacking diversity, transparency and good modern governance”. Barely half of Lisvane’s 80-plus recommended reforms have been acted upon.

© Wendy Huynh/Companion
© Wendy Huynh/Companion

The most obvious oddity is the extreme size of the council. In any other square-mile district in the country, there would be only a handful of councillors. There are 93 committees of one kind or another, ranging from the supremely powerful to the abstruse (my favourite is the Efficiency and Performance (Finance) Working Party). Many of them have dozens of members.

A second quirk, call it quaint if you’re a historian or anachronistic if you’re a reformist, is the two ranks of elected officials, councillors and aldermen. Hayward defends the system with pride as “the oldest working democracy in the world”, pointing to 11th-century roots that predate the British parliament.

A third is the almost complete absence of political parties in the Square Mile. Refreshing perhaps, but critics say the system is an invitation to perpetuate an old-boys’ club. Candidates for both councillor and alderman roles are typically encouraged to stand for election by those they know through livery companies or other closed networks. Though some livery companies are relatively progressive, aiding female career development, for example, most remain overwhelmingly male and white.

Fourth, and probably most controversially, the City operates an idiosyncratic system of “corporate democracy”. At best it is flawed, at worst a recipe for abuse. The Square Mile is the last “rotten borough”, according to Reclaim EC1, a well-read blog by disaffected residents. Councillors and aldermen are elected by votes cast by corporate representatives, or “electors”, as well as residents. An estimated 90 per cent of the City’s adult resident population is registered to vote (in line with the national average), but the percentage of eligible electors who are registered is far smaller. The corporation will not say exactly how many more employees it believes are eligible to vote compared with the tally of 13,748 currently registered, though it is probably about double that number, according to some officials.

The rules state that at small companies, one elector is granted for every five members of staff. For bigger companies, a further elector is granted for every 50 members of staff. That would entitle one of the City’s biggest employers, Goldman Sachs, with about 5,500 staff at its Shoe Lane headquarters, to about 120 elector votes. The only snag is that Goldman has a policy of non-participation in political processes. The same goes for other big employers, particularly American companies. Despite the corporation’s efforts to boost participation, many companies do not bother.

A connected problem is the scant choice of candidates. For every councillor position, there are just 1.3 candidates on average, radically fewer than in London’s 32 local boroughs. The aldermanic voting system is particularly open to manipulation. While terms of office last up to six years, it is up to an alderman to trigger an election. “Some people abuse the system,” says Lyons, Lord Mayor until last November, without elaborating. Diversity is lacking. Only six of 25 aldermen are women. All, bar one, aldermen are white. The corporation said it was committed to promoting diversity.

An old acquaintance and former Lord Mayor once told me that one explanation for the City’s sometimes reactionary instincts is a “shadow hanging over the whole structure” of the corporation’s supposedly democratic governance, Freemasonry. Close to a third of councillors are declared masons, including the chairs of nearly all the major committees. Three-quarters of Lord Mayors over the past century have been masons. “If a Freemason has a choice between appointing a Freemason and a non-Freemason to a role,” my acquaintance pointed out, “they are very likely to go with the Freemason, regardless of other issues.” Women cannot be masons, a topic frequently raised by some of the more reform-minded councillors.

King is one. The evening we meet is shortly after the row over male-only membership of the famous Garrick Club has hit the news, finally leading to the admittance of women, and King sounds hopeful that the attention could spur closer scrutiny of the role played by Freemasonry in the City. “All the people who are in the [City] establishment, yes, they’re all masons. This whole place. It’s a throwback. But it will change.”

King’s comment made me think back to my encounter with Sue Langley and her poised informality, her gentle iconoclasm. As she prepares to become the Lady Mayor next year, Langley (herself an Essex girl, who went to a state school and Southampton university) judges that the pluses of historic tradition outweigh the anachronistic frustrations. “I think it’s fair to say,” she concludes, “that if you were designing a lot of the City today, you might take a different path. But that’s both the intrigue and challenge of a tangled history.”

Patrick Jenkins is the FT’s deputy editor

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