The New Few, Or a Very British Oligarchy Ferdinand Mount

Simon & Schuster, pp.320, 18.99

However often rehearsed, the facts remain eye-popping. Inequality has bolted out of control over the last three decades.

Democracy has proved increasingly powerless to check the unaccountable runaway oligarchy that fails even to pay its taxes. Ferdinand Mount gives a lucid account of political decay alongside all this looting, a disengaged electorate and a cult of leadership in hock to overmighty media oligarchs, all ominously suggestive of the decline and fall of the Roman empire.

When a Tory tells the story, it’s far more compelling than any left-winger. Mount was head of Margaret Thatcher’s Policy Unit from 1982 to 1984 and a director of the then most influential Tory think-tank, the Centre for Policy Studies. He was in the thick of it when Thatcher’s Big Bang deregulation of finance blew the lid off any gentlemanly restraint in the City. The government he served let off a simultaneous cannonade of jereboam corks at the unions, which had until then kept manual wages up with the rest.

The combination of these two policies in the 1980s helped send into reverse what had seemed a steady postwar progression towards greater equality. Mount, who documented those years in his charming and slightly faux-naive recent memoir Cold Cream, seems to have been an innocent abroad in the corridors of Thatcherism.

Now he stands wide-eyed with shock at the consequences, with eloquent pen to capture what he sees. The facts are neatly arrayed: chief executives’ pay in FTSE 100 companies rose from 45 times to 120 times more than the pay of average employees. Money didn’t trickle down, it was sucked upwards; the share of national pay going to the lowest earners fell steeply over the last three decades, half the population getting just eight per cent of a doubling in national income. Even after the crash, the pay packages of FTSE 100 directors soared up unabashed, rising 49 per cent in 2011 alone.

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‘We did not expect this and most of us are at a loss to understand exactly what has happened,’ Mount writes. If globalisation destroyed the jobs and pay of erstwhile well-paid industrial workers, why is that same globalisation used to explain the inflation of top executives’ pay, instead of levelling them down too?, he asks. He debunks old Tory nostrums: the rising tide doesn’t raise all boats; instead ‘the rowing boats are stuck in the mud’. The super-class of oligarchs ‘hardly belong to the society they flit through’ and ‘the gap appears to be widening all the time’, regardless of boom or a slump. He pulls few punches: ‘When George Osborne says, “We are all in this together” it sounds grotesquely implausible’ — though ‘implausible’ is perhaps too polite a word.

What is an honest Tory to think and do? In the past, arguments with the left could be countered with warnings about the horrors of communism or angels-on-pins debates about exactly what level of inequality is tolerable or desirable. Bogus pieties on the importance of equality of opportunity — on which all politicians solemnly agree — avoid the glaring fact that extreme inequality in countries such as the UK or the US ensures that opportunity stays mainly with those children born to it.

What’s to be done? That’s where books like this usually wobble. Grim observation of social dislocation, boardroom kleptocracy and perilous political decay require radical remedies. Can such heavy lifting be done by relatively modest improvement to codes of corporate governance and expectation that fund managers will take more interest in the shares they control? Mount rests his faith in shareholder activists forcing companies to cut excessive pay, just as they are forcing greater use of fair trade products. But attend any company AGM and you would have to say he was optimistic.

On the falling pay of the bottom half of earners, he relies on the splendid living wage campaign of Citizens UK, which galvanises churches and activists to shame companies into paying their cleaners and security guards better. Alas, after a decade, this worthy group have achieved a living wage for only 10,000 people, mostly cleaners in banks that can afford it. It has yet to succeed with most supermarkets or care homes that employ the low-paid. Trade unionism is more bruising, but the Bob Crows do keep up their members’ wages: if unions had not virtually vanished from the private sector, this book might never need to have been written.

On political oligarchy, our old friend localism is the answer: both right and left, stumped for what to do about widespread voter cynicism, advocate pushing responsibility back down, giving town halls the taxing powers they lost. Localism and postcode lotteries may or may not be a good idea, but expecting a sudden rekindled enthusiasm for attending local meetings also looks optimistic.

Oddly for a Tory, Mount embraces last summer’s riots to promote his case: if you don’t pity the have-nots, then fear them. For those who dismiss the rioting as mere moral mayhem, he offers these facts: of more than 1,000 found guilty, over 90 per cent were unemployed, only eight per cent students or in work. In Tottenham, where they began, as in other riot boroughs, there are 30 claimants for every job vacancy. ‘We have got into the habit of of regarding the footloose oligarchs as uncontrollable and the underclass as irredeemable’, but, he says, something must and can be done.

His remedies are decent and wise — but more milk of magnesia and cough medicine than chemotherapy, tending toward citizen action, not the brute force of central government edict. What would he say, for example, to research showing that a one-off windfall tax of 20 per cent on the accretion of hyper-wealth in the top few per cent would be enough to wipe out the debt problem?

Like David Willetts’s excellent analysis of inequality between generations in The Pinch, this book should be compulsory reading for the cabinet. Both authors amass devastating evidence — but that in the end leaves both of them floundering in their final chapters. How do you solve such epic structural dysfunction without radical intervention by the state? A Tory seriously worried about inequality is like someone living in the wrong body, a category error; for a Conservative government will always dismantle the few redistributive mechanisms that could act as some brake on the galloping inequalities.

This article first appeared in the print edition of The Spectator magazine, dated

Tags: Book review, Non-fiction, Oligarchy, Politics (UK), Society