Gilded cages of The City: These days the ancient livery companies seem to exist for wining and dining and dressing up. So why the secrecy? Matthew Gwyther finds a lot more going on than meets the eye

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MARGARET THATCHER is a Poulter (and Denis is a Painter Stainer), Harold Wilson is a Clockmaker, Robin Leigh-Pemberton is a Mercer, David Steel is a Tallow Chandler, the Princess of Wales is a Grocer. The Duke of Westminster, however, is a Weaver, a Fishmonger, a Gunmaker, a Marketor, an Armourer and Brasier, a Goldsmith and an Air Pilot and Air Navigator. The Duke holds the record for belonging to the largest number of City Livery Companies. He was, no doubt, able to pay the substantial Redemption Fines, as entry fees are known, without too much discomfort.

Despite origins dating back 800 years, and although these days you would be hard-pressed to find any armourers driving in rivets within the Square Mile, the liveries show no sign of even approaching their sell-by date. With the addition of the Worshipful Company of Information Technologists earlier this year - ceremonial robes of green for the globe and gold for conductivity - there are now 100 livery companies. Waiting patiently in the queue to join their ranks (it takes 14 years with pounds 100,000 in the bank to get to the front) are the Water Conservators, the Fire Fighters, the World Traders and the Licensed Taxi Drivers. The membership of all livery companies now totals 23,608, largely drawn from the ranks of City workers. That attests to the continuing popularity of these strange institutions.

But quite what function the liveries serve remains a mystery to many people. They began as a sort of early trade union for artisans who wanted to protect their interests. The guilds were originally known as the Mysteries, a corruption of the French metier, for trade. They maintain a strict hierarchy: top of the order come the Mercers, followed by the Grocers, Drapers, Fishmongers, and so on down the line. The order was set in stone by an act of the City's Court of Aldermen in 1514. The 'Great Twelve' companies dominate, with the other 88 or so 'minor' companies filling the lower ranks. But despite all this tradition, present-day livery companies have retained little or no connection with their ancient trade or craft.

Modern liverymen derive precious few obvious benefits from belonging to a company, despite the high entry fees. Most nights of the year there are likely to be several hundred men sitting down in the City's livery halls to a lavish and expensive meal (for which they, not the company, pay) by candlelight, accompanied by excellent wine, tedious speeches and interminable toasting. By 11pm they will be spilling on to the deserted streets, slightly the worse for drink and looking for taxis to take them home to Sevenoaks or Pinner. And that, on the face of it, is about all that membership of a livery company has to offer.

There appears, however, to be an element of snobbery, a feeling among many members that they have 'arrived', once they have joined a livery company. Membership panders to the desire for exclusivity among the kind of people who like to join clubs. And livery dinners may serve as good occasions for business contacts.

Yet many members maintain a curious and apparently pointless secrecy about their reasons for joining livery companies. For example, we asked Sir Paul Girolami, chairman of Glaxo, the pharmaceuticals group, what being a Goldsmith had done for him, and what he could do for the Goldsmiths. We received no reply.

The mystery of what function livery companies fulfil these days is no doubt what mainly lies behind the suspicion that they are another 'funny handshake' brigade in league with the Freemasons. There is no evidence that they are a kind of alternative Freemasonry. It is clear, however, that members of the same livery company sometimes help each other professionally or personally.

Archie Galloway, a director of John D Wood, the estate agency, is more open than most about the liveries. He has been a Grocer for 25 years, following where his father had gone before him. Had he ever made any personal gain from his membership?

'I may have done one or two business deals over the years as a result of being a liveryman,' he concedes. 'But I don't think of that as a paramount reason for being a member. I'm proud of the fact that I'm a Grocer and I'd be happier for all the liveries to be more open about what they do. They have nothing to be defensive about.' Galloway recognises that kudos still plays an important part in people's willingness to join up.

'A lot of people play up being a freeman, when in fact they have purchased it in one way or another - with some companies it is just a question of the size of the cheque.'

He firmly rejects any comparison with the Masons, although there are without doubt a good number also in the liveries. 'My father was a Mason, but I chose never to join. I felt I didn't want anything to do with them.'

Charity has become the main raison d'etre for many companies these days. Thanks to their ownership of large chunks of City property, some liveries are very rich indeed, but as they have no owners there is little they can do with their money besides give it away. Roughly pounds 12m a year goes to charity.

Nevertheless, meritocratic purists remain unhappy about the nepotistic nature of the liveries: there are, for example, no fewer than 23 members of the Watney clan and 18 Palmers in the Mercers.

These are problems of which the liveries are aware. A few years ago, the Livery Consultative Committee released a pamphlet suggesting how

the 'wrong image' of the livery companies might be changed. 'It profits a Master little to stand up in front of his Company after a slap-up dinner and tell them that they are not members of an eating and drinking club unless he can report some recent or projected initiative,' noted the pamphlet. The announcements of dinners on the Court pages of newspapers have been scaled down over recent years.

The Ironmongers, orignally known as Ferroners, were established in the 13th century. They now reside in a fairly unattractive pile with a mock-Elizabethan interior constructed in 1925, and dwarfed by the apartment blocks of the Barbican. Their Clerk is James Oliver, formerly a commander in the Royal Navy. Many Clerks are ex-military men and the posts are highly sought-after. It is said that the Carpenters had 1,200 applications when they advertised their post.

In common with other liveries, the Ironmongers are careful to differentiate between the charitable trusts which they administer and their own institutional wealth. They administer several charitable bequests, one of the strangest of which is the Thomas Betton Trust, established in the 18th century to redeem British slaves from the Turks. About 200 years ago, 135 Britons, including nine commanders of vessels, were rescued from slavery 'in Barbary' with the bequest's funds.

When the supply of British slaves ran out, the funds were directed towards education. These days the Ironmongers' money goes to lower- profile but no less admirable causes, such as helping to build a day-care centre in Hackney ( pounds 500,000) and rebuilding a voluntary-aided primary school in Cornwall ( pounds 300,000).

These large capital projects were made possible after an unexpected windfall three years ago, from a site in Bouverie Street which the Ironmongers had held since 1726. The esteemed institution had been the Sun's landlord, and the sale to the Japanese netted about pounds 1.25m after tax. This made up for a poorly judged decision to divest themselves of a lot of property after the war. The Ironmongers also have a sizeable equity portfolio managed by Robert Fleming.

How, I asked Oliver, might one go about becoming an Ironmonger? The question was greeted with a look of alarm. One does not ask to become an Ironmonger, one is invited. (To join a livery an individual has first to be a freeman of the City of London.) 'We have one or two people joining every year at the moment,' says Oliver, 'and they are likely to be patrimonial people (those who gain the right to entry by virtue of their fathers' membership).'

There is little opportunity for anyone else. Entry is jealously guarded; it's quite important to maintain an element of mystique. 'I know that in this modern day and age,' Oliver says, 'the word 'standards' is a dangerous one, but they are what we seek. We call on expertise. New members would have to be people who can give of their time and expertise.'

The Ironmongers are among the 50 per cent of livery companies which refuse to accept women, even though they were admitted until the 19th century. 'It's something which has not been asked for and has not been considered,' says Oliver. 'Lady members are not a live issue for the Ironmongers. I'd like to emphasise the impression that it is a conservative company.' Another said: 'Women don't seem to fit the ethos. It is a rather masculine style of life.'

From Ironmongers' Hall it is a short walk to Goldsmiths' Hall in Foster Lane. Not only does the journey take you up the livery pecking order - from ten up to five in the order of precedence - but into a fundamentally different culture. The Goldsmiths are an 'active' company, in that they are still closely involved in the trade from which they derive their origins. They have run the hallmarking Assay Office - at a loss, 40 redundancies this year - since the 10th century. They run master-classes, give advice, bursaries and indentures for goldsmiths and silversmiths; and they host exhibitions at which worked gold and silver are sold. The Goldsmiths are currently being taken to the High Court by the EC over their refusal to give up hallmarking - only six of the 12 EC states have hallmarking.

'The EC negotiations have been quite a dogfight, but we are very proud of our associations with the trade,' says Robin Buchanan-Dunlop, Clerk of the Goldsmiths, ex-Scots Guards, a little fierce but likeable. 'It gives us impetus and a raison d'etre without which we'd lack a certain sharpness.' Without putting too fine a point on it, Buchanan-Dunlop has little time for those who use the liveries merely to dine and absorb the faded glory that lingers from a bygone age. 'If you are going to be a livery, you must have a proper role. If your ancient role has gone, then you must find a new one such as education or charitable activity.'

The Goldsmiths are not shy of recruiting people they like the look of - and they admit women. 'We'd say, 'You're a good guy / good girl. Come and join us,' ' says Buchanan-Dunlop. The Redemption Fine for those not in the craft is a hefty pounds 475.

The Goldsmiths have acquired some useful good guys and girls, including Sir Paul Girolami; the Prince of Wales; Sir Simon Hornby, the chairman of W H Smith; Sir Edward Ford, retired personal secretary to the Queen; the Duke of Westminster, Lord Jenkins of Hillhead and Edward Heath MP.

When the need arises, they know how to put a word in the right ear and Buchanan-Dunlop makes no excuses about it. 'We can make a statement. We have within our membership people who are consulted and listened to by government. We're not political as such, but we can still work quietly to achieve a better lot for our people.'

One of the areas in which the liveries have a strong interest is education. The Goldsmiths, Mercers, Skinners, Haberdashers and Merchant Taylors all run schools and will have made sure their voices were heard during the recent education reforms. The Goldsmiths have three university vice-chancellors among their liverymen and two members of their Court of Assistants closely involved with the House of Lords Select Committee on Education.

Recession has hurt the Goldsmiths but has, as yet, not affected the charitable donations. Buchanan-Dunlop says: 'We're not here to make a quick buck in the Nineties, we're here for the next century and beyond.'

Although no longer linked with fabrics - their master, the Hon Harry Palmer, is a management consultant - the Mercers, numero uno of livery companies, are a big outfit. They employ around 80 people and own, by some margin, the largest property portfolio of all. The Mercers' Clerk is one of the few non-military men in the business - Michael Wakeford, an ex-barrister who has been in place since 1974. He is a tall, slightly lugubrious man who sits, pin-striped, in an office with an ancient IBM and a stuffed bird of prey.

If Wakeford is a worried man he conceals it with some skill. The Mercers were one of the first livery companies to realise that long leases and shared equity with developers might not be in their best interest. Increasingly, they have sought to cut out the middle man and go it alone with direct development.

Does the current state of the market alarm Wakeford? 'I don't think one's alarmed by it. We live with it day by day.' The Mercers have four new developments totalling 200,000 square feet. The largest of them, Barnard's Inn on Fetter Lane, cost pounds 20m to redevelop. 'It's an all-singing, all-dancing building,' says Ian Kennard of Ian Kennard and Co, who is the official surveyor to the Mercers. Kennard would begin negotiating on Barnard's Inn at pounds 30 per square foot. When the project was conceived you could have doubled that figure.

Michael Wakeford may not be alarmed, but he has been sufficiently moved to organise an event that would previously have been unthinkable in the hallowed halls of livery. As a marketing exercise, 100 City agents are to be invited to dinner at the Mercers' Hall on 28 October where they will be treated to an audiovisual presentation on the properties to let, addressed by the Master and then by Will Carling, England's rugby captain. The latter will give 'a general line on rugger, leadership and management', according to Michael Wakeford. 'There'll be four courses and some of the nicest wines you could hope to drink,' adds Kennard.

This sort of exercise would turn any self-respecting Ironmonger pale: the loving cup passing - no doubt the wrong way - through the hands of estate agents on a jolly. But in the current climate, if Will Carling is what it takes to shift their empty space the Mercers are realistic enough to forget about mystery and get their hands dirty. 'The livery companies have always been surrounded by secrecy - they have no annual accounts,' says Ian Kennard. 'But you can't live on an island these days. You need to be seen in the market and recognised as such. We could have miscalculated. If City offices become still more unpopular then the consequences could be dire for the livery companies.'

If the City property market fails, the Mercers will still have their vast swathe of Covent Garden to fall back on. They have just announced a large redevelopment of their buildings to the north of Longacre. They have waited 15 years for a difficult planning permission. Elsewhere in the property world, the site would have changed hands several times. 'Who besides us can afford to wait 15 years?' asks Michael Wakeford. The Mercers will have to wait still longer to cash in on Covent Garden. In the meantime they shell out around pounds 2.2m per year on medical, arts, welfare and educational projects, plus housing for the elderly. They also run St Paul's and St Paul's Girls' School. Women can still not become Mercers, however.

Neither are women welcome at the Makers of Playing Cards, No 75 in precedence, which dates back to 1642, when every playing card was hand-made and painted. There is one industrial manufacturer of playing cards left in the UK, Waddingtons. 'Some of the big liveries are a bit pompous. We're a friendly crowd,' says the Clerk, Michael Smyth. 'It's all first names.'

The Makers of Playing Cards number 140 or so largely late-middle-aged professionals from Purley, Beckenham and Rickmansworth, who enjoy dining at other liveries' halls, as the Makers have no hall themselves. They take part in the inter-livery bridge competition and have a modest investment fund from which they hand out a couple of thousand pounds a year to students in need under 25. Why did Smyth think people would want to join? 'Most just want to be a member of a livery. And then there's the friendship. It's not just to eat dinners - that would be jolly expensive at about pounds 60 a time, and the smallest halls cost pounds 600 to hire now . . . We haven't actually had any applications for six months, but we've never turned anybody down.'

It was not always genteelly thus. As befits organisations that started out life as trade unions there has been aggro along the way. In 1226 the Goldsmiths and Taylors fought a pitched battle which led to the execution of 13 ringleaders. The most famous riot, however, occurred in 1483, when an extended punch-up between the Skinners and the Merchant Taylors spilled over into the Thames. To keep the peace, ever since they have alternated between No 6 and No 7in the order of precedence.

Nor are liveries invincible. The ravages of time, impecuniosity and indifference have caused the death of several in the past 50 years: the Coatmakers, the Hat Band Makers, the Long Bow String Makers, the Soapmakers, the Fishermen, the Starchmakers.

All these are listed in the red book of Terry Morris, the Clerk to the Chamberlain's Court at the Guildhall, who oversees companies. Why does he think they remain? 'They like tradition. They like to be part of something. However, they may be as old as the hills, but they're affected by recession. There was never any shortage of dinners in the Eighties, but now they're having to be a bit more careful.'

(Photographs omitted)