We should be upset that the most extravagant social event of the year has been cancelled

ARK galas can raise as much as £26m in one night. Why are we storming the Bastille?

“It was all getting to feel a little bit 1788 and all that”. So said somebody connected with the opulent ARK gala in this week’s Financial Times. In one fell swoop, a symbolic link was drawn between Louis XVI’s pre-revolution balls at the Palace of Versailles and the annual ARK charity gala – thought of as the most extravagant social event of the year – that has this year been cancelled.

Just to give you a taste of this extravagance, previous ARK galas have been hosted in Kensington Palace Gardens and London Waterloo’s former Eurostar terminal, which was decked out with mature trees to resemble a woodland grove. Guests – mostly made up of "A-Listers" and financiers – have been entertained by Madonna, Bill Clinton and Prince, while served Krug and lobster. And the auction is another thing entirely – no homemade hampers here – prizes have ranged from a private dinner with Mikhail Gorbachev and yoga with Sting to a week on a private superyacht.

All the money from the gala – which has topped £100 m over the years – is donated to ARK (Absolute Return for Kids), a charity founded by Arpad “Arki” Busson, one of the country’s most successful hedge fund managers.

So it is little wonder that such an annual ostentatious gaiety has been cancelled. Such irresponsible illustrious in an age of austerity. Displays of excess while the remainder of the country is bordering on recession, claim most of the news stories, is not a good image.

But this is ignoring the wider point, which is raising money for charity is hard enough in these times. There is a simple rule: the more extravagant the party, the more money is raised. Besides, persuading wealthy individuals to part with their cash is no easy feat, so what if it takes Krug, Clinton and Madonna to entice wallets and purses to open.

In this, the hedge funds are leading the way. Chris Hohn is one of the UK’s most generous philanthropists having donated over £800m; his Children's Investment Fund Foundation receives direct grants from his hedge fund of the same name. Two other philanthropic arms of hedge funds – Tudor Investment Corporation and Tiger Management – accounted for about £110m in 2010 according to research by the Alternative Investment Management Association.

Then there are the parties, which – as the ARK gala has shown – can raise as much as £26m in one night. So, regardless of the 1 per cent vs. austerity, these types of events are crucial for charities and, unlike 1788, there will be no storming of the Bastille.

Kate Middleton at last year's ARK gala. Photograph: Getty Images

Oliver Williams is an analyst at WealthInsight and writes for VRL Financial News

Photo: Getty Images
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How can Britain become a nation of homeowners?

David Cameron must unlock the spirit of his postwar predecessors to get the housing market back on track. 

In the 1955 election, Anthony Eden described turning Britain into a “property-owning democracy” as his – and by extension, the Conservative Party’s – overarching mission.

60 years later, what’s changed? Then, as now, an Old Etonian sits in Downing Street. Then, as now, Labour are badly riven between left and right, with their last stay in government widely believed – by their activists at least – to have been a disappointment. Then as now, few commentators seriously believe the Tories will be out of power any time soon.

But as for a property-owning democracy? That’s going less well.

When Eden won in 1955, around a third of people owned their own homes. By the time the Conservative government gave way to Harold Wilson in 1964, 42 per cent of households were owner-occupiers.

That kicked off a long period – from the mid-50s right until the fall of the Berlin Wall – in which home ownership increased, before staying roughly flat at 70 per cent of the population from 1991 to 2001.

But over the course of the next decade, for the first time in over a hundred years, the proportion of owner-occupiers went to into reverse. Just 64 percent of households were owner-occupier in 2011. No-one seriously believes that number will have gone anywhere other than down by the time of the next census in 2021. Most troublingly, in London – which, for the most part, gives us a fairly accurate idea of what the demographics of Britain as a whole will be in 30 years’ time – more than half of households are now renters.

What’s gone wrong?

In short, property prices have shot out of reach of increasing numbers of people. The British housing market increasingly gets a failing grade at “Social Contract 101”: could someone, without a backstop of parental or family capital, entering the workforce today, working full-time, seriously hope to retire in 50 years in their own home with their mortgage paid off?

It’s useful to compare and contrast the policy levers of those two Old Etonians, Eden and Cameron. Cameron, so far, has favoured demand-side solutions: Help to Buy and the new Help to Buy ISA.

To take the second, newer of those two policy innovations first: the Help to Buy ISA. Does it work?

Well, if you are a pre-existing saver – you can’t use the Help to Buy ISA for another tax year. And you have to stop putting money into any existing ISAs. So anyone putting a little aside at the moment – not going to feel the benefit of a Help to Buy ISA.

And anyone solely reliant on a Help to Buy ISA – the most you can benefit from, if you are single, it is an extra three grand from the government. This is not going to shift any houses any time soon.

What it is is a bung for the only working-age demographic to have done well out of the Coalition: dual-earner couples with no children earning above average income.

What about Help to Buy itself? At the margins, Help to Buy is helping some people achieve completions – while driving up the big disincentive to home ownership in the shape of prices – and creating sub-prime style risks for the taxpayer in future.

Eden, in contrast, preferred supply-side policies: his government, like every peacetime government from Baldwin until Thatcher’s it was a housebuilding government.

Why are house prices so high? Because there aren’t enough of them. The sector is over-regulated, underprovided, there isn’t enough housing either for social lets or for buyers. And until today’s Conservatives rediscover the spirit of Eden, that is unlikely to change.

I was at a Conservative party fringe (I was on the far left, both in terms of seating and politics).This is what I said, minus the ums, the ahs, and the moment my screensaver kicked in.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.