Smithfield meat traders aim to oust Michael Cassidy, the City Corporation's most prominent councillor, at the next election. They are exploiting its archaic electoral system which Mr Cassidy admits is a 'real threat' to his position and ultimately to the City Corporation.

Mr Cassidy recently approached the Prime Minister to get the system changed to counter the threat, but was told the Government was reluctant to intervene.

The traders are angry about what they claim is a planned five-fold increase in rent for new premises built by the Corporation to meet European Union regulations. They estimate this will cost each trader an extra pounds 100,000-pounds 170,000 per year.

The challenge, from what traders describe as a new political party, is the biggest threat to the City's status quo in modern times. The Corporation administers the largest financial centre in Europe and last year collected pounds 677m in business rates, of which it retains 5 per cent for local expenditure. The City also has its own property and investment portfolio. Last year they spent pounds 64.8m.

Peter Martinelli, a former trader and an elected member of the Court of Common Council, the City's ruling body, said: 'We trusted the City to look after us and they abused that trust. Now they will see what we are capable of.'

Mr Cassidy, chairman of the powerful policy committee, and the nearest thing to a council leader, disputes the traders' claims about rent rises - but admits they will double. 'They're using the electoral system to favour a vested interest, namely to get their rents down, which is contrary to the whole spirit of local government in this country.'

He said that it was unlikely that the traders would be able to elect a majority on to the Court of Common Council this year but could be in a strong position within the next few years.

The traders got two supporters elected to the council, having contested 12 of the 25 wards in last December's annual election. They are now registering hundreds of voters across the City to take part in next December's election, in advance of a 15 June registration deadline.

Mr Cassidy's ward, in particular, has been targeted. Last week the traders registered 200 voters to add to their 60 supporters in the ward. In the last election Mr Cassidy was elected with 118 votes.

Mr Martinelli is also standing for Sheriff, a post elected by members of the City's livery companies or trade associations. He has the backing of the Worshipful Company of Butchers and believes that the poulterers will also back him. If he is elected, Mr Martinelli would be entitled to appear next to the Lord Mayor at ceremonial events and sit in the Old Bailey law courts.

John Major has rejected heavy lobbying from Mr Cassidy and his colleagues to extend the City franchise to large employers. The present system means that while residents, traders and the partners of large accountancy firms and legal practices can vote in several wards, companies like BP, the City's largest employer, does not have a single vote.

Graham Bright, Mr Major's Parliamentary Private Secretary, has privately told corporation leaders that the Government could not countenance such controversial legislation with its present small majority. The implication is that with fierce lobbying by the Smithfield traders, ministers could well be faced with an embarrassing and potentially successful backbench revolt if they embarked on such a measure. Mr Martinelli said: 'The City have brought this on themselves by betraying families whose families have worked in the market for 125 years. We're now a political force to be reckoned with.'

Tony Travers, Director of the Greater London Group at the London School of Economics, said: 'It is somewhat paradoxical that the very electoral system which has preserved the City in its ancient form for so very long, should also allow the traders to mount such a strong challenge.'

Smithfield is Britain's premier meat market with a turnover of more than pounds 250m a year. The decade-long dispute between the traders and the City centres on the newly refurbished market buildings. New facilities were required to meet strict new European Union regulations on design, temperature control, storage, delivery and the movement of goods around the market. The first phase of the refurbishment, costing pounds 24m, was recently completed. The total cost will be pounds 60m.

Last year the Smithfield Market Tenants Association sought a judicial review of the Corporation's offer to tenants. They claimed that the corporation had acted 'irrationally, illegally and unreasonably' in refusing to improve tenancy contracts.

Mr Justice Hidden, however, said that while the Corporation was under a duty to provide a market on the site, there was no duty on it to run the market as a loss-making enterprise.

Following deadlocked negotiations with the SMTA, the Corporation recently decided that it would talk to tenants individually rather than go through their representative body.

Having failed in the courts, the traders are now determined to use the electoral system to get their way.

SUB-LETTING LOOPHOLE CREATES NEW VOTERS

The traders' challenge relies on exploiting loopholes in the Corporation's centuries-old constitution.

Last December, elections in 13 of the City's 25 wards were uncontested. Seven wards had fewer than 100 potential voters. One ward, Candlewick, near the southern border of the square mile, had just 33. It is the last local authority in the country to retain a business vote.

Councillors are 'independent' and do not follow mainstream political affiliations. Councillors are largely drawn from 'the professions' - lawyers, accountants and surveyors, with some residents and businessmen. The right to vote in the annual elections is afforded to City residents - nearly 4,000 - and individuals or partners in companies that hold a freehold or lease in the City. This excludes directors and employees of limited companies.

The traders discovered that it was within the law to lease a building, divide it into hundreds of small areas of floorspace - areas of under one square foot are theoretically possible - and sub-let each section to family and friends. Each is then entitled to vote.

The only limitation is that the area of floor space must have a rateable value of more than pounds 10.

The traders say they are in a position to carry out the same ploy in many of the 25 wards because they have friends and supporters prepared to lease them property at a peppercorn rent. Their strategy is helped by rules which allow the same individual to vote in any ward where he or she has a leasehold or freehold.

Individuals wanting to stand for election must be Freemen of the City of London. This poses no problem for meat traders who automatically become freemen on joining the Worshipful Company of Butchers, their trade association, which has rights under the City constitution dating back to medieval times.

In response, Michael Cassidy is encouraging limited companies to sub-let parts of their premises to employees to widen the franchise. They have to register by 15 June to qualify for the December vote.

An ancient legal document, a Tenancy at Will, has been recommended by the City. It permits a landlord to let to a tenant without giving security of tenure.

Companies, however, have been slow to take up the offer. 'I've seen about half a dozen firms in my ward and they're all thinking about it,' Mr Cassidy said.

(Photograph omitted)

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