According to Peston, currently the BBC’s business editor, it’s the new super-rich of private-equity and hedge-fund capitalists. They run the country in the sense that the present Labour government feels the need to kow-tow to them for fear of them taking their businesses elsewhere:

“Much of this book is about how New Labour in Government has never flinched from the view that economic disaster for the UK and electoral disaster for Labour would be inevitable if the super-wealthy ever felt their interests were under attack in the UK. Blair and Brown are true believers in one of the main commandments of the Book of Globalization: ‘Thou shalt not be seen to use the tax system to take from the well-heeled, for fear of driving them and all their valuable capital into exile’”.

A number of these capitalists have been given knighthoods and peerages and – this came first of course – have made very generous contributions to the Labour Party amounting in total to millions of pounds. In fact, they – rather than the trade unions – funded Labour’s last three successful election campaigns. Peston’s chapter on the dealings between Blair, Brown, Lord Levy and those he call’s Labour’s “plutocratic benefactors” can only confirm disgust and contempt for the leaders of the Labour Party for the lengths they are prepared to go just to stay in power.

The new super-rich come across as a bunch of loud-mouthed upstarts who buy companies, “rationalise” them at the expense of the workforce, and then sell them, pocketing a huge personal profit for themselves. Their profit is personal because they own their own companies outright and so have a much freer hand to do what they want, not having to comply with the normal company law that applies to “public”, shareholder-owned companies.

Although he criticises them for not paying their fair share of taxes and as a potential threat to political democracy, Peston cannot disguise his admiration for them, seeing them as fulfilling an essential role within capitalism of channelling capital into the most profitable lines of activity (instead of it stagnating in long-established businesses run by stuffy ex-Etonians). He wants the managers of pension funds to behave in the same ruthless way towards the companies they’ve invested the funds in, so as to bring in more money for present and future pensioners.

His chapter on pensions – and the run-down of final-salary company pension schemes – is instructive. Employers originally set these up to retain the loyalty of their salaried employees, but over the years governments have imposed so many obligations on them (frozen pensions, pension transfers, taxes, etc) that it has become no longer worth their while keeping them going. So they have been disposing of them to, among others, private-equity capitalists who hope to make a profit out of investing their funds.

In other words, reforms aimed at protecting people’s pension rights have had the opposite effect. Employers have walked away, leaving workers without the desired protection. Another lesson in the futility of reformism.

ALB