Anarchy in the UK

There is some very odd and outdated ideology at work behind the scenes in the management of Britain.

We may have thought that the ban on foxhunting was the last gasp of those still fighting a class war that has long since moved on to new territory. But no, the undercurrents of old-fashioned socialism are now coupled with the political spin machine. Facts are blatantly disregarded in order to construct a media perception of injustice, against which the government can be seen to act. This is no more apparent than in the two fields in which I am involved: education and finance.

A recent report by the Sutton Trust educational charity confirmed what many of us already knew -- that clever state school pupils are being held back from applying to top universities by their teachers' "inverse snobbery". Yet for years it has been the universities that took the brunt of the attack for not admitting more state school pupils. In effect the government has been endorsing the view that these institutions are elitist, and has consistently applied pressure on them to agree to taking quotas of students from the state system.

At the same time the government has forced universities to take a proportion of students from overseas, by dint of making it a necessary financial requirement -- overseas students pay at least 3 times more in tuition fees than UK/EU students. This has become so farcical that now UK students are being turned away from courses where places are still open for overseas students. Oh, and if that is not paradoxical enough...strict new visa guidelines brought in earlier in the year are now making it far more difficult for overseas students to come to Britain compared with other university destinations.

The confusion in government policy lies in not knowing the difference between elitism and meritocracy. The difference is about half a century. Access to the best education is now based on academic qualifications, not on birthright. You are privileged because you are intelligent and worked hard for the study place, and not because daddy gave the rector a funny handshake! Private schools and universities are often very selective...in choosing students that are not only clever, but willing and able to contribute something to the institution they are joining. These days Billy Elliot probably has far more chance of acceptance than Billy Bunter.

If the political left were ever suspicious of the workings of our top private schools and universities, then they have positively seethed at the abundance created in the City over the years.

London is one of the most important financial capitals in the world -- a position it has achieved through being the centre of Greenwich Mean Time and a hub of global trade for many centuries. But its maturation came in the final decades of the last century when benign taxation and a commonsense attitude to regulation attracted huge investment from first the United States and Japan, and then the newly emerging countries of Asia and Europe. A great success story for the UK economy, and a pillar of support in an environment of weakening manufacturing industry and North Sea oil revenues.

A well-fuelled train that is gathering momentum will run away if there is no-one in charge to apply the brakes. So it was with the financial industry in that rising property values and currencies should have alerted governments in the UK and US to the risk of "doing a Japan"-- of a bubble-burst causing great harm to the economy. But all chose to ride the train with the taps open. The Bank of England couldn't see any inflation so didn't raise interest rates early enough to quell the runaway growth (even though property price inflation was rampant). The government was happy to ride the crest of the wave, and Gordon Brown took the crown for his "prudent" management of the economy.

It therefore seems utterly ludicrous to blame the train for the crash when the drivers were happy to sip champagne as they raced towards the buffers!

While we can understand that in politics it is necessary to blame someone other than yourself in order to remain in power, it becomes extremely worrying when supposedly impartial civil servants espouse the same ideology.

Lord Turner has today done just that with his suggestion for special taxes on banks to discourage the awarding of large bonuses for "socially useless activities". Notwithstanding that his organisation -- the FSA -- was supposed to govern the banks in the first place, and found itself totally asleep at the switch when everything went pear-shaped. (I would like to know his definition of a "socially useless activity"!) The hand of Lord Mandelson never seems to be far from these outbursts but it should ring very loud alarm bells throughout London. At a time when the 2012 Olympic games require huge investment, and the banks are still getting back on their feet again, the last thing London's economic engine needs is for water to be poured in the fuel tank. The government coffers may be empty, but they will not fill them in the long term if they meddle in an industry that only thrives through being free to operate.

That does not mean stepping back and letting them get on with it. But like tackling global issues such as the effect of climatic change, or resource depletion, a new code of ethics is necessary worldwide to ensure that the more deplorable aspects of financial dealings never rise in prominence again. There are interesting dicsussions already on the status of tax havens, for instance. Tighten up the moral framework, put in effective regulation -- not underfunded or under-resourced as at the FSA -- and then let the City do what it does best, but within parameters that everyone can live with. More tax revenues will be generated by a hands-off approach than by "punishing" bankers with politically-expedient punitive taxes and regulations.

Long-term planning is now vital to pull the UK out of its near bankrupt state. It is essential that in rebuilding Britain, our centres of global excellence such as education and finance are nurtured.

Sadly this may now be too much to ask from a government still wedded to anachronistic views of social inequality and elitism, and to delivering bite-sized, short-term policy actions.