4 ms·

Seems to be a lot of complaining about the City of London's semi-autonomous status, without actually explaining why this is a bad thing. I've always thought it

by adwf 12y ago

Seems to be a lot of complaining about the City of London's semi-autonomous status, without actually explaining why this is a bad thing. I've always thought it was just an odd historical quirk. They're still subject to the general laws of the country, still subject to the same taxes and regulations. The articles main complaint seems to be about banks and other financial bodies using offshore tax havens, but that has nothing to do with the City's odd status. That could happen - and does happen - anywhere in the world...

toyg 12y ago
> They're still subject to the general laws of the country, still subject to the same taxes and regulations. The point of the article is that this is actually not true; the City is not subject to Parliament and Monarch, but rather a peer with substantial autonomy on various matters, enjoying special representation at Westminster and in other bodies. The author mentions a private development where the City was at the same time investor and institutional overseer, in a clear conflict of interest that would be illegal elsewhere in the UK. Because the City body politic is composed by businesses rather than individuals, most matters where special status is invoked or leveraged are financial privileges and lobbying powers of one sort or another; this enabled City companies to build the network of tax havens we all know and love, where money flows to semi-autonomous City of London, which redirects it to progressively-more-autonomous dominions oversea, disappearing like a ship on the horizon. Removing all privileges the City enjoys would be a necessary first step to crack down on global tax avoidance in the financial sector, but this is extremely unlikely: Blair's (New) Labour held an overwhelming parliamentary majority for a decade and still conceded to the City's wishes, while Tories are wholly dependent on City money to even exist in the first place. The author believes international pressure will eventually force the government's hand at some point; personally, I am quite skeptical -- but then again, I work with/for a lot of City companies, so I might not be entirely unbiased.
- adwf 12y ago
  The only taxes I can see them being exempt from are local council taxes, not income/VAT/corporation tax. And whilst they are nominally not subject to the Monarchy, nor is the rest of the country really. Much like the Monarchy, the City's regulatory power is largely paper thin and only exists within the square mile. The moment they tried to exercise any kind of open egregious use of power (like evading, rather than avoiding corporation tax), they'd find their priviledges revoked near-instantly. However that doesn't prevent them from using the usual methods of bribery and corruption from influencing the government. But then how is that any different from any country in the world?
  - toyg 12y ago
    > how is that any different from any country in the world? Well, other countries at least try to maintain the idea that democratic power comes from the electorate, rather than special interests. So corruption, where it is, has to pass through the electorate (which it often does, but that's another matter). Whereas in Britain, the City is an institutional body openly and directly representing business and "free trade" in Parliament and elsewhere. This arrangement is closer to what Mussolini implemented in Italy, based on the idea that Parliament should be a zone of mediation between competing private interests, rather than a body dedicated to represent and discover the Will of the People as a whole (which is the traditional French model).
    - gadders 12y ago
      But in a similar way, you get Unions fund housing in London for Labour MPs, and Labour as a party is totally beholden to Unions for its funding.
      - phaemon 12y ago
        There's a big difference between being supported by corporate interests and being supported by union interests. Am I actually defending Labour? After their appalling behaviour? Umm...take it as a defense of the principle rather than the party, please!
        gadders 12y ago
        I would say both are morally equivalent.
      - toyg 12y ago
        From an ideological standpoint, Labour policy has been very far from unionism for almost 20 years now, and there is an ongoing attempt to cut all remaining ties.
mmaunder 12y ago
I was on the edge of my seat waiting for them to get to the point and I still am. Sounds like a handful of socialists belly aching about something they don't understand but feel is unfair.
Lazare 12y ago
Yep. The City is in every way entirely subject to parliament, and the laws of the country apply within the square mile in every particular the way they do outside it. The biggest oddity is that since so many people commute into the City, they don't just let residents vote in council elections, but also businesses in proportion to the number of workers they have; an odd but not altogether crazy way of making sure that all stakeholders are represented. ...what any of this has to do with offshore tax havens is a mystery to me. There's only one FSA in Britain, and they don't care where you're headquartered. Edit: From the article: "the corporation is an offshore island inside Britain, a tax haven in its own right. The term "tax haven" is a bit of a misnomer, because such places aren't just about tax." Actually, it's not that it's not just about tax; it's that it's not about tax at all. Tax rates are the same in and outside the City. A "tax haven" that's not a haven and doesn't have different tax rates? This is Orwellian stuff.
- Retric 12y ago
  Local governments normally collect more taxes so there are tax advantages. Just not the same scale as offshore tax havens.
- jackgavigan 12y ago
  FYI, a recent "shake-up" of financial regulation saw the FSA (Financial Services Authority) change its name to the FCA (Financial Conduct Authority), and certain parts/responsibilities of the old FSA were (nominally) hived off to a new Prudential Regulatory Authority (PRA), which falls under the remit of the Bank of England. Otherwise, I agree 100% with what you wrote.
- UweSchmidt 12y ago
  Sorry but businesses getting to vote based on the number of workers they have sounds insane and totally undemocratic. There is a tendency on the internet to downplay the significance of democratic principles and to consider them as quaint, liberal or at odds with libertarianism. Worrying imo.
  - colechristensen 12y ago
gutnor 12y ago
Actually, there are 2 financial center in London. Canary Wharf and the City. Canary Wharf does not enjoy the same weirdo status as the City and that does not seem to prevent bank like HSBC to be headquartered there. Also quite a lot of financial institutions bleed outside of the City, like in SouthBank. The whole financial sector in the UK has a murky reputation, and there have been regular show on TV about how "the City" is a big money laundering machine. The City in this cased was used as a synonym for the whole sector in the UK rather than the physical location.
- greenpinguin 12y ago
  True, but if Barclays has 500 subsidiaries, how many will hsbc have? It was probably just cheaper to have the big office in canary wharf and keep the city office with less staff. I work close to bank station and I have never in my life seen so many banks, in the smallest spaces you get the most exotic bank branch from a bank operating in some other part of the world. And that's just on the street level - if it's not a pret it's a bank- and who knows what's in those generic skyscrapers housing 20 different companies...
phaemon 12y ago
I believe they're not quite subject to the same laws. See: https://www.therules.org/en/actions/stop-stealing-our-wealth https://www.therules.org/en/actions/stop-stealing-our-wealth for example. That's a specific campaign to stop them being exempt from certain laws.

by adwf 12y ago

toyg 12y ago

> They're still subject to the general laws of the country, still subject to the same taxes and regulations. The point of the article is that this is actually not true; the City is not subject to Parliament and Monarch, but rather a peer with substantial autonomy on various matters, enjoying special representation at Westminster and in other bodies. The author mentions a private development where the City was at the same time investor and institutional overseer, in a clear conflict of interest that would be illegal elsewhere in the UK. Because the City body politic is composed by businesses rather than individuals, most matters where special status is invoked or leveraged are financial privileges and lobbying powers of one sort or another; this enabled City companies to build the network of tax havens we all know and love, where money flows to semi-autonomous City of London, which redirects it to progressively-more-autonomous dominions oversea, disappearing like a ship on the horizon. Removing all privileges the City enjoys would be a necessary first step to crack down on global tax avoidance in the financial sector, but this is extremely unlikely: Blair's (New) Labour held an overwhelming parliamentary majority for a decade and still conceded to the City's wishes, while Tories are wholly dependent on City money to even exist in the first place. The author believes international pressure will eventually force the government's hand at some point; personally, I am quite skeptical -- but then again, I work with/for a lot of City companies, so I might not be entirely unbiased.

adwf 12y ago
The only taxes I can see them being exempt from are local council taxes, not income/VAT/corporation tax. And whilst they are nominally not subject to the Monarchy, nor is the rest of the country really. Much like the Monarchy, the City's regulatory power is largely paper thin and only exists within the square mile. The moment they tried to exercise any kind of open egregious use of power (like evading, rather than avoiding corporation tax), they'd find their priviledges revoked near-instantly. However that doesn't prevent them from using the usual methods of bribery and corruption from influencing the government. But then how is that any different from any country in the world?
- toyg 12y ago
  > how is that any different from any country in the world? Well, other countries at least try to maintain the idea that democratic power comes from the electorate, rather than special interests. So corruption, where it is, has to pass through the electorate (which it often does, but that's another matter). Whereas in Britain, the City is an institutional body openly and directly representing business and "free trade" in Parliament and elsewhere. This arrangement is closer to what Mussolini implemented in Italy, based on the idea that Parliament should be a zone of mediation between competing private interests, rather than a body dedicated to represent and discover the Will of the People as a whole (which is the traditional French model).
  - gadders 12y ago
    But in a similar way, you get Unions fund housing in London for Labour MPs, and Labour as a party is totally beholden to Unions for its funding.
    - phaemon 12y ago
      There's a big difference between being supported by corporate interests and being supported by union interests. Am I actually defending Labour? After their appalling behaviour? Umm...take it as a defense of the principle rather than the party, please!
      - gadders 12y ago
        I would say both are morally equivalent.
    - toyg 12y ago
      From an ideological standpoint, Labour policy has been very far from unionism for almost 20 years now, and there is an ongoing attempt to cut all remaining ties.

mmaunder 12y ago

I was on the edge of my seat waiting for them to get to the point and I still am. Sounds like a handful of socialists belly aching about something they don't understand but feel is unfair.

Lazare 12y ago

Yep. The City is in every way entirely subject to parliament, and the laws of the country apply within the square mile in every particular the way they do outside it. The biggest oddity is that since so many people commute into the City, they don't just let residents vote in council elections, but also businesses in proportion to the number of workers they have; an odd but not altogether crazy way of making sure that all stakeholders are represented. ...what any of this has to do with offshore tax havens is a mystery to me. There's only one FSA in Britain, and they don't care where you're headquartered. Edit: From the article: "the corporation is an offshore island inside Britain, a tax haven in its own right. The term "tax haven" is a bit of a misnomer, because such places aren't just about tax." Actually, it's not that it's not just about tax; it's that it's not about tax at all. Tax rates are the same in and outside the City. A "tax haven" that's not a haven and doesn't have different tax rates? This is Orwellian stuff.

Retric 12y ago
Local governments normally collect more taxes so there are tax advantages. Just not the same scale as offshore tax havens.
jackgavigan 12y ago
FYI, a recent "shake-up" of financial regulation saw the FSA (Financial Services Authority) change its name to the FCA (Financial Conduct Authority), and certain parts/responsibilities of the old FSA were (nominally) hived off to a new Prudential Regulatory Authority (PRA), which falls under the remit of the Bank of England. Otherwise, I agree 100% with what you wrote.
UweSchmidt 12y ago
Sorry but businesses getting to vote based on the number of workers they have sounds insane and totally undemocratic. There is a tendency on the internet to downplay the significance of democratic principles and to consider them as quaint, liberal or at odds with libertarianism. Worrying imo.
- colechristensen 12y ago

gutnor 12y ago

Actually, there are 2 financial center in London. Canary Wharf and the City. Canary Wharf does not enjoy the same weirdo status as the City and that does not seem to prevent bank like HSBC to be headquartered there. Also quite a lot of financial institutions bleed outside of the City, like in SouthBank. The whole financial sector in the UK has a murky reputation, and there have been regular show on TV about how "the City" is a big money laundering machine. The City in this cased was used as a synonym for the whole sector in the UK rather than the physical location.

greenpinguin 12y ago
True, but if Barclays has 500 subsidiaries, how many will hsbc have? It was probably just cheaper to have the big office in canary wharf and keep the city office with less staff. I work close to bank station and I have never in my life seen so many banks, in the smallest spaces you get the most exotic bank branch from a bank operating in some other part of the world. And that's just on the street level - if it's not a pret it's a bank- and who knows what's in those generic skyscrapers housing 20 different companies...

phaemon 12y ago

I believe they're not quite subject to the same laws. See: https://www.therules.org/en/actions/stop-stealing-our-wealth https://www.therules.org/en/actions/stop-stealing-our-wealth for example. That's a specific campaign to stop them being exempt from certain laws.