Business View: Rotten boroughs, feudal lords and the modern-day City of London

Number 6 Dowgate Hill, London EC4, is a very special property. Although the 15,000 sq ft building has stood empty for some months, and no rates are payable on it because it is empty, it seems to be occupied by 257 partners of DLA, the law firm. At least it is for the purposes of local government elections.

You see, in April a partner of DLA, Alison Gowman, was elected unopposed as one of 25 Aldermen in the City of London. She is representing the ward of Dowgate, where a key block of votes was awarded to the 257 "residents" of 6 Dowgate Hill.

Never mind that DLA's offices are now in Noble Street, EC2, which is in the Cripplegate ward. Or that almost all of the DLA partners voting in Dowgate (including Ms Gowman) are also entitled to vote in Cripplegate as well (despite some being based in places as far-flung as Leeds, Liverpool, Edinburgh and Brussels). Or that Ms Gowman actually has a third vote in City elections, in the ward of Aldersgate, thanks to her having a flat in the Barbican. This is the weird world of City elections – with rotten boroughs, business bias and one woman, three votes, rather than one man, one vote.

Ms Gowman declined to speak to me about her – entirely legal – manipulation of the electoral rules to become an Alderman. But an official of the Corporation of London called to admit that the system was crazy and archaic, and that's why a bill is passing through Parliament to reform elections in Britain's financial centre.

Indeed if a House of Lords committee headed by Lord Jauncey does not significantly amend the bill, it will almost certainly become law and the Corporation will be reformed. Lord Jauncey is expected to decide by Tuesday.

But the eminent Scottish law lord must be able to see what is staring anyone who cares about democracy in the face. The new voting system for the City is fundamentally flawed.

What the City aims to do – with the backing of Nick Raynsford, the local government minister – is maintain the only business vote in local elections in the UK. There are two issues here. Whether the business vote should remain, and if so, how it should be structured.

I'll put my cards on the table here. I genuinely think a business vote is something that should have been consigned to history along with the property qualification, serfdom and droit du seigneur. The idea that you can buy a right to vote should not be entertained in the 21st century (though it may be entertained in the proposed creation of Business Improvement Zones which John Prescott is toying with, but that's another matter).

However, even if you agree with a business vote, the City's plans have some obvious flaws. Roughly, that scheme allows for businesses to vote in proportion to the number of employees they have. This number is counted on a designated day. But what would stop an employer taking on temporary staff simply to get extra votes? Indeed what would stop someone renting out an empty office – 6 Dowgate Hill is available – on a short-term lease, employing hundreds of people and getting a slew of votes accordingly?

Malcolm Matson, a former City Alderman and campaigner for reform, is planning just such a ruse. He will offer readers of this paper the opportunity to buy a vote in the City elections by buying shares in a special company – Shrewd Persons Against Non Democratic Authorities Limited – and becoming employees for the purpose of an election. Anyone who wants to join should email him at scandal@city.co.uk.

The City Corporation argues that no one would want to exploit these rules and that it would be prohibitively expensive to do so. But the City is one of the richest and most powerful authorities in the world. It admits to assets of £1bn and many think its real assets are worth 10 or 20 times as much. It also decides on planning issues which can win or lose developers hundred of millions. So why should they not try to buy votes to get rulings their way?

The Corporation can trace its history back to William the Conqueror and its existing structure to Edward III. However, if it does not reform itself in a way that recognises a modern concept of democracy, it might as well be a historical relic. It is an institution with a great history. But without democracy it faces a weak future.

j.nisse@independent.co.uk