Tell me, how did you get so rich?

As chancellor, Gordon Brown put his trust in tycoons and city chiefs. But as wealth disparities grow

The austere Calvinism of the manse and the multi millionaire lifestyle of the nation's corporate princelings are not obvious bedfellows. Yet among Gordon Brown's first actions on taking over as Prime Minister was to anoint, for the first time, a grand-sounding Business Council for Britain.

This was not all. The old Department of Trade and Industry, with its smokestack heritage, was swept into the sea to be replaced by the freshly minted Department for Business, Enterprise and Regulatory Reform and the former boss of the CBI, the effervescent Sir Digby Jones, was elevated to the Lords as trade minister (despite his flirtations with the Tories and venomous criticism of Brown's pensions and tax policies).

Brown's critics would argue that all of this cosying up to the business and City elites is no more than window dressing as he seeks to shake the socialist tag and demonstrate a willingness to listen to all, even the private equity bigwigs so despised by the unions and the political classes.

The new Prime Minister is more complex than that. As chancellor, Brown made a fetish of abandoning the traditions of white and black tie for the Mansion House dinner, one of the great set pieces of the financial calendar. Yet he assiduously courted many of the same people, passing the "Loving Cup" up and down the lengthy silver-laden tables, for advice on economic and business problems.

Many of Brown's modern Labour predecessors as prime minister, including Tony Blair, had a penchant for self-made businessmen with less than distinguished reputations and a weakness for cutting corners. Harold Wilson formed a close relationship with the flawed raincoat tycoon Joseph Kagan, James Callaghan with the fringe Welsh banker Sir Julian Hodge and Blair with any number of troublesome money men, from Grand Prix magnate Bernie Ecclestone to the governance-lite steel billionaire Lakshmi Mittal. Blair's relationships were too often built around the need for large tranches of cash to fund his election coffers and an unhealthy fascination with great wealth and celebrity.

The current PM's business associates are largely drawn from the elite of thinking financiers and industrialists on both sides of the Atlantic. He sees businessmen as leaders who know how to get things done, not just as cash points, although on occasion that helps. It is no accident he counts among his gurus the most respected banker in the world, former Federal Reserve chairman Alan Greenspan, Bill Gates of Microsoft and, at home, Sir John Rose of Rolls- Royce, whose outspoken views on the nation's lagging engineering skills proved a wake-up call for Brown. The new PM views these bigwigs both as inspirations and a source of great ideas.

It is no secret that in 2001, when Brown sharply lifted resources for the NHS, he searched desperately for a chief executive able to run a vast organisation and transform the culture.

He turned to Sir Terry Leahy, chief executive of Tesco, a lad from the modest council estates of Liverpool who had turned Tesco into Britain's most successful retailer and took a special interest in health because his wife was a medic. Leahy still had much to do on the international front for his employer at that time. But Brown never lost faith in his ability to co-opt Leahy and has added him to his new Business Council.

If the former chancellor wants a job done he automatically turns to the commercial world. His Budget speeches were laced with references to people such as Paul Myners, the former chairman of Marks & Spencer, Sandy Leitch, formerly of Zurich, and his close pal Sir Ronald Cohen, the godfather of private equity in Britain - all of whom have carried out projects on his behalf. Businessmen, with few exceptions such as Lord Young under Margaret Thatcher, rarely make the transition from the boardroom to the cabinet room, with aplomb. So Brown has come up with alternate ways of harnessing their enthusiasm and tapping into their talent pool.

His Business Council for Britain may be something new for a prime minister, but at the Treasury it was part of the furniture. Brown regularly played host to a high-level business advisory group and latterly, as Britain's financial sector picked up momentum - accounting for up to one third of the nation's output - he and his closest associate Ed Balls (now in the cabinet) did the same thing for the City. Balls was so impressed by what he heard that he became almost hyper-active bringing forward new legislation, for instance, to strengthen and protect the UK's City regulator, the Financial Services Authority, in case of an overseas takeover of the London Stock Exchange.

I found myself among those invited along to Brown's high-level business sessions held under strict Chatham House rules. Somehow the chieftains from almost every FTSE-100 company, from bankers to industrialists, found time to respond to the chancellor's embossed invitations and to take part. Brown would lay on all the trappings: a rehearsed order of debate led by himself and fellow cabinet minister Alistair Darling, a cameo appearance from the American treasury secretary Hank Paulson and suffice it to say handsome outside catering with fine wines. Curiously, some of the most powerful figures in business, controlling payrolls encompassing hundreds of thousands of people and corporations that stretched to the far corners of the globe, appeared at times to be reduced to stuttering schoolchildren in the hallowed halls of the Treasury.

The aches and pains of business were laid bare by his guests, from the lack of skills to fears of an implosion at the Doha round of trade talks. Among the serious and enduring issues raised was how the riches of the City were creating a divided nation where the best mathematical brains were drained off to the towers of the Square Mile and Canary Wharf direct from university and how the sheer quantity of wealth created in the City - 4,200 sterling-bonus millionaires in 2006 alone - contributed to a housing market which froze out those working in vital public services.

There is a bravery if not foolhardiness about Brown's adoption of certain business associates. Sir Ronald Cohen may not be in any official post, but he has been the PM's man for all seasons. Founder of Apax - the British private equity powerhouse - he has helped fund Brown's favoured think tank, the Smith Institute, as well as the Portland Trust, the group which paid for much of the work down by Brown advisers Ed Balls and Jon Cunliffe, now at No 10, on using economic muscle to lift the West Bank and Gaza out of poverty.

At home, Brown has asked Cohen to find ways of repatriating the "orphan assets" held by many banks and insurers, money left behind over the generations, and putting them to work on social projects in the inner-city.

The new PM has never wanted to acknowledge that using a tycoon who has accumulated at least £250m of personal wealth and is reported to be non-domiciled for tax purposes, may not play well on the council estates or in the Plc boardroom, where there is huge jealously of such tax privileges.

Perhaps most strange of all was his decision to include Damon Buffini, managing partner of Permira, among his new business advisers. Admittedly, Buffini's personal story is inspirational. A mixed-race child from a single-parent family, he rose to one of the most powerful jobs in the City as head of the private equity arm of the blue-blooded investment bank Schroders.

Pass the parcel

Buffini and Permira have been demonised for their management of the AA, where staff and membership services, including night patrols, were slashed in the name of efficiency.

In the past fortnight, the pass-the-parcel with the AA's assets continued after a merger with Saga in which Buffini and his pals extracted up to £2bn of cash on which they will pay a lower tax rate than the cleaners and gardeners at No 10. He is a choice that looks like political madness.

Certainly, it cocks a snook at the GMB and others who have declared Buffini and his private equity chums public enemy number one, not just for their greed, but for defenestration of pension systems and ruthless job-cutting. Brown's motivations and his slowness in closing down the tax loopholes that have made Mayfair the get-rich capital of the world are hard to fathom. It would be too cynical to think he refuses to confront the tax lacuna for fear of losing party donations.

His reasons are very different. Brown recognises that the greatest force behind Britain's long ten-year run without recession has been the sheer excellence, innovation and openness of British finance. Having created a more liberal tax regime for the super-rich he is unwilling to change it under political pressure and destroy wealth creation. He genuinely believes that there is something to be learned not just from the science of J P Garnier at GlaxoSmithKline but also from the genius of financial innovation. If he can put this to good use in government then so be it.

Brown's value system is so deeply lodged that, unlike some of his Labour predecessors, he has not personally been seduced into thinking he deserves what the captains of industry have, from the private jets to the villas in the Caribbean. But in his embrace of the greed of private equity and mercurial tycoons such as Apprentice star Sir Alan Sugar, he risks undermining his reputation for rectitude.

Alex Brummer is City editor of the Daily Mail. Read his new weekly column on business and economics, entitled "Money", starting next week

This article first appeared in the 09 July 2007 issue of the New Statesman, The new terror

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When heritage becomes hate: why my home town of Charlottesville needs to address its complex past

After an invasion of white supremacists, we need to see what our history means today.

Watching a tragedy happening in slow motion, without any way to stop it - that’s how it has felt to be from Charlottesville, Virginia in the summer of 2017. A city that used to always get voted “happiest town in the USA” when I was growing up was the target this weekend of an ugly white supremacist movement whose roots spread far from the city.

It was a huge surprise when we won the lottery of Nazi flags, with our stupid old statues that have become icons of international fascism, with a park named after a distantly forgotten old man becoming a site of struggle for an attempted racist coup of the United States. Our first reaction is: they aren´t from here. Our second: make them go away. Our third: a realisation we need to examine the way that our own ways of life, which we thought so harmless, have inspired such horrible feelings in strangers.

Maybe for my African-American classmates at high school the statue of Confederate general Robert E Lee, and the park when it was still named after him rather than Emancipation Park, always meant violence. Pulling the statue down says no more about the historical Lee than tearing down Lenin in '89 says about socialism. We've been invaded by people pretending to protect us from invasion, and the symbols of our past will never matter as much as living people do.

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The invaders picked our town, probably, because Virginia was a confederate state, and was in fact where the southern gentry used to live. Lee exemplified this tradition. He was son of Lighthorse Harry Lee, a hero of the revolutionary war and governor of Virginia, and is a descendant of one of “Virginia’s first families,” the aristocratic Englishmen who emigrated to Virginia when it was a British colony. He is part of Charlottesville's heritage, and perhaps not even all that shameful a part. He opposed the secession of the confederacy, supported the reconstruction after the war, including giving rights to recently freed slaves. Not exactly woke, but for a confederate general, not as bad as some.

We were taught at Venable Elementary School that he fought only reluctantly, to defend his land, not slavery. In the version we learned, one would imagine Lee being very opposed to people from the Midwest coming to Virginia in cars with Ohio license plates to murder Virginians. Many non-racist Virginians, including quite a few friends, respect Lee deeply - the same is true in towns like New Orleans where other Lee statues are being taken down. Yet if once we could fool ourselves into thinking that the statue didn't represent hatred and racial hierarchies, we can't anymore. The discussion of local history has turned into one of national identity. The statue should be gone by Christmas. 

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The real hero of Charlottesville is the town’s founder, Thomas Jefferson, who was among the most enigmatic of the founding fathers, idealistic and hypocritical - a real American, in other words. His idea of the gentleman farmer is also part of our heritage. It was an alternative to Hamiltonian industrial capitalism, but lost out in the tustle to shape American history. Much like English contemporaries such as William Cobbett, Jefferson believed in a rural ideal, reading poetry by morning, farming by afternoon, playing the harpsichord by night. His thought is also present in our beautiful "academical village" of the University of Virginia which he also founded. It is one of UNESCO’s few world heritage sites in the United States, so I guess it is part fo the globe's heritage as well, and it is also where the white supremacists stomped around with their tiki torches.

It’s time for us to stop being romantic about Jefferson, too. The statue in our minds needs to come down. We can recognize the great parts of his work, of his thought, in Charlottesville today, but we can also recognise that he allowed himself to use violence to dominate others, that he owned slaves and raped them. And we can recognise that equivalent scenarios continue to play out today, and will continue to play out until we are willing to face the truth.

There can be no more excuses. It’s not about Jefferson, or Lee, after all. We use monuments, statues, heroes, to inspire ourselves. In the end, the “truth” about Jefferson or Lee is a matter of trivia and history. Today, for every white male in America, we need to deconstruct the parts of our identity built on the graves of others. It’s not easy.

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Jefferson's gentleman farmer was the forerunner of the people who populate the gentrified Charlottesville that exists today of expensive coffee-shops and celebrity-filled suburbs. This romantic idea, much like the lifestyles of the American and English elite today, seems to engender a lot of resentment from those who can only watch helplessly, and are often gentrified out. It’s not only immigrants or, in the United States, African-Americans, who are denied access to America's Williamsburgs and Charlottesvilles, London's Shoreditches and Oxfords. In Charlottesville, descendants of white sharecroppers and black slaves alike are unable to afford $15 glasses of local Virginia wine.

The paradox implicit in Jefferson’s beautiful idea is that in the end, it’s impossible to sustain this chilled-out and happy lifestyle without the labor being done by others, be they slaves, sharecroppers, or factory workers in China. If America is in trouble now, the conflict comes precisely from the fact that our universalist ideas of freedom, equality, and liberty correspond to an economy that is anything but universal. We actually did it, keep doing it, and unless we can use these ridiculous men dancing through our streets iin Halloween costumes as a funhouse mirror to make us see ourselves as we are, we’ll probably keep doing it.

I resent Jefferson for his hypocrisy, because in truth, I would love it if America looked more like Charlottesville than the industrialized and nasty-looking Interstate 95 highway that leads up the East Coast, the aftermath of Hamiltonian industrial-revolution factory America. The New Jersey towns, the gas stations, what we contemptuously call “McMansions,” suburban Northern Virginia... none of it is really authentic enough. Parallel to the rich and ugly suburbs, are poor and ugly towns, the sort of places with unemployment and discounts on cereal that tastes like sugary trash in the supermarket.

The residents of these towns don’t hate the residents of more gentrified towns for our organic granola, they hate the world for the structures of oppression that they can’t escape, even as an international class, an educated class, a well-meaning class, escapes without even needing to. We coexisted in the same place but not the same set of opportunities, and we glided on to new and bigger worlds of possibility, ones denied to those of different class backgrounds, regardless of their ethnicity.

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Some of my African-American classmates at Charlottesville High School were likely descendants of Jefferson’s slaves, coming from poorer neighbourhoods and housing projects and taking "standard" level classes, with honors and AP classes for students whose parents worked in the University (very liberal, of course), a genteel place where every year, some kid wears blackface or a Nazi outfit to a party - as a joke, of course. While my classmates in AP and Honors classes got help from our teachers in applying to Ivy League schools, the general level classes saw black and white students who shared poorer backgrounds acting out to get attention from harried teachers. This was public school, but Charlottesville’s many excellent private schools, of course, didn’t even have the general level students at all.

Despite some southerners such as Lee supporting the post-war “reconstruction,” white resistance to racial equality led to a Jim Crow system that wasn’t much better than slavery, and an American South which dozed in sweaty decline while the rest of the country industrialised and modernized. From 1865 to 1965, not much happened in the South. True, there were intellectual movements like the Agrarians, whose 1920s manifesto “I’ll Take My Stand” I found one high school afternoon in the local bookstore, we had our Faulkners, our occasional geniuses. But as a society, it was stagnant. 

It was only when the civil rights movement began that the south began to actually rise again. UVa went from being a minor regional school to being a world-class one. Charlottesville went from being a mediocre gentleman’s club to a place that people of all backgrounds could make lives for themselves in the public service. And we, the public, gained so much - that’s why my family chose to live there.

I remember as a child strolling the beautiful downtown mall to go to dinner al fresco with my parents, my father pointed out a man in a turban; it was Satyendra Huja, a Sikh professor at the university who had planned the downtown mall, and made a useless street into one of the nicest places to congregate in town. In 2012, Huja became the mayor. I guess the former mayor of Charlottesville who single-handedly made Charlottesville one of the most charming towns in the country often gets told to “go home,” as if that's somewhere else.

Martin Luther King Jr.’s birthday is a national holiday in the United States, but in Virginia it used to be “Lee/King/Jackson” day, with two confederate officers added in just as a reminder. That’s not really our heritage, and as students, we were grateful for the day but always laughed at how immature it was that the powers that be needed to block out Dr. King’s achievements so much.

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Charlottesville is a southern town true to and even obsessed with our heritage - a place filled with museums, historians, bookstores - which wants to dissect that heritage to remove the parts of our forefathers (and mothers) lives that we can’t accept, like a sandwich that you open up, take the pickles out of, and then keep on eating. We love our heritage in Virginia. We read about it, celebrate it, live it every day. But heritage isn’t a static thing, fixed in time, and the walls between myth and history are thin. In fact, perhaps knowing about your heritage is the ultimate form of privilege. I doubt that either the descendants of slaves I went to high school  with, or the “redneck” (so-called because they got sunburned by working in the fields - “redneck” is a class slur) descendants of the illiterate sharecroppers of rural Maryland, do. 

What happened this weekend to Charlottesville could happen to any town as long as we those who are deprived of their history and who don’t feel at home in their hometown. But the Charlottesville I remember, and the one it is now, proves that you can go from war and conflict and institutionalised racism to one where people of all races and identities can coexist, for the most part, peacefully and happily. We can, if we try, honor Jefferson for his achievements without forgetting the slaves his beautiful buildings were built by. A “Memorial to Enslaved Laborers” is being built on the campus he founded.

For the first time, every one of my old friends is thinking about racism, white privilege, the origins of violence, and what we can do about it. We can honor Jefferson and General Lee’s memory best by trying to learn from their mistakes. Maybe, if it seems like we are able to solve these problems, I’ll have a child myself. I hope she goes to Venable Elementary School, and I’ll take her to Emancipation Park afterwards.

This article first appeared in the 09 July 2007 issue of the New Statesman, The new terror