Monday, May 20, 2024



Getachew Beshahwred

The United Kingdom, which is officially known as the United Kingdom of Great Britain and Northern Ireland, is made up of England, Scotland, Wales and Northern Ireland, with their own capitals: London, Edinburgh, Cardiff and Belfast respectively. It is commonly known as the United Kingdom or Great Britain or simply the UK, and is a Parliamentary Democracy and Constitutional Monarchy.
Since 1998, the UK parliament has devolved power to the devolved governments of Scotland, Wales and Northern Ireland which are still part of the United Kingdom. The UK parliament has ultimate power to make laws, though it has devolved some powers to the Scottish Parliament, the Welsh Assembly and the Northern Ireland Assembly. These are known as Devolved Matters. Some issues or matters which are known as Reserved Matters remain the sole responsibility of the UK Parliament at Westminster, London. England does not have its own devolved parliament or assembly.
According to the Office for National Statistics (ONS), in mid-2018, the population of the United Kingdom reached an estimated 66.4 million. The contributions from each region, according to the ONS, are as follows:
England:………………………… 56 million
Scotland:……………………….. 5.4 million
Wales:……………………………. 3.1 million
Northern Ireland:……………. 1.9 million
The UK parliament has also devolved power to the Greater London Authority (GLA) which consists of the Mayor of London and the London Assembly. The GLA together with the 32 London Borough Councils and the City of London are responsible for the governance of London.
The Mayor of London and members of the London Assembly are elected by those registered to vote, are 18 years or over on the day of the election, are British, Irish, Commonwealth or EU citizens and are resident at an address in Greater London.
The Mayor has an executive power and makes decisions on behalf of the people of London in accordance with the powers vested in him/her by the UK Parliament. The Assembly members are responsible for scrutinising the decisions of the Mayor to ensure that they are in the best interest of the people.
London has been the Capital City of England for centuries. Currently this is nominal since England does not have a devolved government, and some argue that the capital city of any future English Government/ Parliament should be in the North; like Manchester or Birmingham. It is estimated that Greater London generates a third of the UK’s Gross Domestic Product (GDP).
Greater London is governed by a Mayor and the London Assembly, the 32 borough councils and the city of London. Each of the 32 borough councils are managed by councillors elected by registered and eligible residents in each borough and by the Leader of the council who is elected by the councillors. However, the day to day activity of each council is carried out by a Chief Executive who is appointed by council members. Each council has also a Mayor who has only ceremonial duties and is appointed by council members for a term of one year. Since 2000, councils have been allowed to have a directly elected-mayor, chosen by local voters, to replace the job of council leader who would be charged with leading the council and the councillors. So far only a handful of councils have chosen to have an elected mayor.
The City of London, which consists of the central financial district of London is officially known as the Mayor and Commonalty and Citizens of the City of London, or simply The City of London Corporation, which has been in existence since around 1067. The leadership of the City of London consists of the Lord Mayor (elected for a year), the Council and the Chief Executive. The First Lord Mayor of the City of London, appointed by King Richard I in 1189, was Henry Fitz Ailwyn, a Draper (who sells textile) and the Current elected Lord Mayor is Peter Estlin, a Chartered Accountant. This differs from the Mayor of London who is mayor for whole the Greater London area. The current Mayor is Sadiq Khan.
The thirty-two boroughs and the City of London are responsible for ‘the provision of day-to-day services for their local residents including education, housing, social services, local planning and many arts and leisure services.’ The Mayor of London has also some responsibilities over policing through the Mayor’s Office for Policing and Crime. It is also responsible for transport in London. Not devolved matters are the sole responsibility of the UK parliament.
The Greater London Authority is largely funded by a direct grant from central government. It also gets some money from local councils collected through council tax. Local authorities also get direct grant from the government. However, the largest source of income for local borough councils is council tax paid by residents based on the value-band of their house, and business rates paid by businesses based or trading in their districts again based on what is known as rateable value of the property. The UK central government has a significant degree of control on both council tax and business rates and sets, ‘the policy framework in which both operate.’
Although London generates about a third of UK’s GDP, neither London nor England do have any other tax raising powers. All other forms of taxation; Income Tax, Corporation Tax, Value Added Tax (VAT), Excise Duties, Stamp Duty, National Insurance Contributions (NIC), Capital Gain Tax and Inheritance tax are levied and collected by the central government , and the money so collected is available for the whole of the United Kingdom through the national Budget administered by the Treasury Department.
This system of government has worked very well for London, England and the United Kingdom. There are many issues that threaten the unity and integrity of the United Kingdom, but London is not one of them. London has never been an issue since it has been accepted by all including England, that it is the Capital City for the whole of the United Kingdom. England does not have a special claim or right over London, nor does it demand or obtain any special benefit.
London is considered to be one of the most cosmopolitan and diverse cities in the world. According to the Office for National Statistics, as at 30/06/2015 (the most recent available data), London had a population of 8,674,000. It is estimated that over 300 languages are spoken in London, and London is home to over 270 nationalities. Like many other cosmopolitan cities, London has its own problems: economic, racial and crime. However, London itself has never been an issue. Even when Mrs Thatcher, in 1985, abolished the Greater London Council (GLC), the predecessor to the GLA, there was no question on the overall status of London. It remains to be the Capital City of the United Kingdom. That is why it attracts so many from all-over the world; both people and businesses. It has been a magnet for foreign investment to the United Kingdom. It is considered to be one of the most attractive and stable places to work and live in.
Unlike London, the governance of Addis Ababa, which has been the Capital City of Ethiopia since its foundation in 1886, has become a contentious and dangerous issue resulting from the latest constitution of Ethiopia which reserved some unspecified ‘benefits’ to one of the devolved nations, which has proved to be controversial and unworkable.
Hello Addis! Any lessons from London?

Getachew Beshahwred BA (Dist.), MBA, BFP, FCA, Cert CII, PMP is the Managing Director of GB & Co Ltd, Chartered Accountants and Management Consultants, London. Getachew can be contacted at

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