The City of London’s centuries-old independence from party politics has been brought into question after Labour won its first seat on the Square Mile’s local authority.

William Campbell-Taylor, an Anglican priest who has campaigned for higher ethical standards in the City, became the first political party candidate to be elected to the common council after winning the by-election for Portsoken, a ward near Aldgate, on Thursday night.

The City authority fiercely guards its tradition of independent councillors, arguing that its freedom from the hurly-burly of party politics allows it the latitude to make decisions in the long-term interests of the financial services hub.

But the Labour win raises the question of whether it can preserve its apolitical culture, particularly if Conservatives and Liberal Democrats follow suit and put up candidates in the next City elections in 2017.

Tony Travers, a professor at the London School of Economics, said the result was “a minor revolution” in London politics. “The City will be pretty uncomfortable with even one non-independent councillor. At the margin it will no doubt buoy Labour in the run-up to the London local elections in May. And if there’s any sense that Labour will make further inroads in City politics, even if only in the residential fringe, I think the Tories will have to take part.”

Abutting Tower Hamlets, Portsoken is the poorest of the City’s wards, contains its largest council estate and has a high residential population compared with other areas. Many believe it is likely to remain an outlier in local City politics. “It’s the only ward where Labour would stand a chance of winning – they’d never get traction elsewhere,” said one person at the City of London Corporation.

Labour first fielded candidates in City elections in 2009. Mary Durcan, secretary of the City of London Labour party, said: “We think people should be honest about their political affiliations.”

She added Mr Campbell-Taylor’s victory would “come as a shock” to existing councillors. “The idea you could win standing as a party candidate has always been dismissed.”

Mr Campbell-Taylor said: “We want to use the ancient institutions of the City for the common good.”

Mark Boleat, policy chairman of the corporation, downplayed the historic significance of the poll. “One member out of 125 does not mean the City now has party politics,” he said.

With just over 8,000 permanent residents in the City, elections can sometimes be decided by a handful of votes. In a field of seven candidates, Mr Campbell-Taylor won 137 votes – 37 per cent of the total – with the next candidate, Marie Brockington, getting 98.

Tom Sleigh, a councilman for the neighbouring ward of Bishopsgate and a member of the Labour party, said the City’s political independence remained a valuable asset to the capital. “Like many councilmen I am a proud supporter of a party nationally, but in the interests of Square Mile being seen as a neutral voice for the City we put our national politics to one side. It’s worked well for hundreds of years.”

The Square Mile’s non-political culture is unusual among global financial centres such as New York, Hong Kong and Singapore, a fact Mr Boleat said provided greater stability and better governance. “It’s not vital but we think it helps.”

But London’s credentials as a finance hub came under scrutiny last week as lost its top slot for the first time in a global survey of finance professionals. Respondents to the Global Financial Centres Index cited uncertainty over Europe, financial scandals and regulatory creep as factors behind London’s fall, which saw it overtaken by New York.

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