27/03/2017 09:54 BST | Updated 28/03/2018 06:12 BST

Have The Conservatives Lost The City Of London?

Tim E White via Getty Images

The City of London Corporation - one of the world's oldest local government bodies - which oversees the historic heart of London held elections to its Common Council last week. The Square Mile financial district delivered a surprise upset to the traditions and the politics of that ancient house.

Traditionally, candidates for the Council do not stand on party political platforms. They stand rather as independents. The old joke was that party affiliation is not necessary because they are all supporters of one party anyway - the Conservatives.

Last week, that changed.

No less than five Councillors were elected as Labour Party candidates. It an ironic twist, this means the first-ever political grouping on the Council is a Labour group. The City's electors include 7,000 adult residents as well as the businesses based in the City - banks, accounting firms and global corporations who traditionally have supported a conservative free-market business agenda.

The five official Labour members are the vanguard of a broader change on the 100-member Council. Right wing members lost several seats, and several liberal and pro-EU candidates were unexpectedly elected. The next Chair of the all-powerful Policy and Resources Committee (in effect, the Corporation's CEO) is tipped to be the liberal, pro-EU Catherine McGuinnes, who is rumoured to be replacing Theresa May's personal friend, Mark Boleat, in this role.

Many corporations and City media outlets strongly supported the Remain camp in last year's referendum. Since then, there are reports that companies have been alarmed that Brexit will encompass leaving the European Single Market (which the Leave campaign had insisted would not happen). In private, businesses have also expressed concern at Prime Minister May's surprisingly interventionist economic policies. She has spoken of mandating employee representation on company boards, and of capping executive pay and "the excesses" of corporate cultures. The apprenticeships levy and higher minimum wages have added to the sense that this is the most economically-interventionist government the UK has had for over 38 years.

City folk may have leaned towards the Conservatives in the past, but the hard Brexit policies currently en vogue in Westminster are alarming many in the Square Mile. In last year's by-election in the London borough of Richmond, voters chose to punish the previously-popular Conservative MP Zac Goldsmith for his pro-Brexit views, by handing victory to his Liberal Democrat opponent who campaigned explicitly on a pro-EU platform. It seems similar punishments for Brexiteers are now also being handed out in the City elections.

Of course, Theresa May and her followers might argue that the more important mandate is that of the wider British public, who on balance voted to leave the EU. Keeping the corporate leaders of London satisfied is of less interest to the government. And while that is true, losing City support for government policies is nonetheless a significant shift. While the government seeks to capture the "centre ground" of politics, it seems corporate opinion has been left unimpressed. Whether this is a temporary swing, or a harbinger of a larger clash between business and the government in future, remains to be seen.