The chair of the influential Foreign Affairs Select Committee has accused the City of London Corporation of allowing itself to be pushed around by China after the body banned Taiwan from participating in the Lord Mayor's show.
In an unusual move, the City of London Corporation, which governs the Square Mile, went against the advice of the foreign office in its decision to block Taiwan from parading a float in the miles-long procession through central London, in which hundreds of countries from around the world are represented.
The Corporation's decision has raised concerns among MPs and members of the House of Lords who say the City is bowing to pressure from China.
Tom Tugendhat, chair of the Foreign Affairs Select Committee told City A.M: “Free markets and free societies are based on the rule of law and individual rights. If we're going to defend our liberal society and resist those who would push us around, those guarding our markets shouldn't be bowing to foreign pressure. Nobody respects weakness.”
The issue was first raised during a Lords debate earlier this month, in which Baroness Barker, a Liberal Democrat peer, branded the intervention as a “petty” example of China’s “relentless campaign to deny Taiwan international recognition”.
While the UK does not recognise Taiwan as an independent state, the government is keen to support its membership of key organisations on the world stage, including the UN's World Health Organisation and the World Trade Organisation.
During the debate, Conservative peer Lord Ahmad said that while the Lord Mayor's office was independent of central government, the foreign office “continue[s] to support Taiwan’s inclusion in matters which do not confer statehood upon Taiwan and to which it brings cultural, economic and educational value.
“The Lord Mayor’s show falls within this category.”
The news of the ban comes just weeks after the government came under fire for its decision to allow Chinese telecoms giant Huawei to build part of the UK's 5G network, despite concerns from the US and other allies that the company could be used as a proxy by the Chinese government to carry out spying.
Last month, a report produced by the City of London Corporation laid bare the volume of trading in Chinese currency that takes place in the capital. The average daily trading volume of the Renminbi in London in the fourth quarter of 2018 was £76.6bn, up 45 per cent on the previous year.
The Lord Mayor, Peter Estlin, expressed his support for China's Belt and Road initiative, a campaign promoting Chinese investment around the world, on a fintech delegation to China in March. His enthusiasm has been shared by the Corporation's policy chair, Catherine McGuinness, who said last month that there were “billions of pounds in trade opportunities” associated with the initiative.
One Corporation councillor told City A.M. that the decision to ban Taiwan was a “simple matter of money”.
“Taipei doesn't have anywhere near the investment power that Beijing does,” they said. “The Corporation knows which side of its bread is buttered. The Corporation isn't famed for its backbone when it comes to difficult political choices, but it's particularly feeble to hang Taiwan out to dry quite so obviously.”
A spokesperson from the Lord Mayor’s Show Ltd said: “The Lord Mayor’s show is the biggest and most colourful event in the City’s calendar.
It is not a political event. It is a family-orientated day out, aimed at welcoming the new Lord Mayor into office.”