The English feudal system -- 2010 version

Peter Wilby on banking tyranny, the importance of old media, Hugh Trevor-Roper v Rupert Murdoch, mid

British banks, which all seemed to be insolvent less than two years ago, are announcing fat profits. Admittedly, these are in mere millions for those that needed state bailouts, as opposed to billions for those that didn't. But they all benefit, in effect, from state guarantees that if they hit disaster again, they can fall back on taxpayers. That is why the public sector faces unprecedented cuts. Welfare is being slashed, services run down and taxpayers squeezed to ensure that in another crisis government funds will be sufficient to mount a second rescue operation. Meanwhile, financiers still award themselves enormous salaries and bonuses: the Financial Services Authority reckons some 3,000 City of London workers (10 per cent of the total) earn more than £1m a year.

Is there a word to describe the state we find ourselves in? It isn't exactly capitalism, as the government is now part-owner of Lloyds and RBS - which seems to give it no powers whatever - and underwriter to other banks, while small businesses are virtually at a standstill because they can't get bank credit. Nor do we have socialism or even social democracy, though many of us thought these would return after market liberalism was discredited.

Perhaps the word is feudalism. Medieval peasants received protection from their lords in return for a fixed proportion of their produce. That's roughly the relationship we now have with financial institutions. They provide pensions, insurance, mortgages and so on - providing protection against, for example, accidents or poverty in old age - and they cream off a "tax", estimated by some analysts at 25 per cent, from all transactions. Governments are largely powerless, as were medieval monarchs against feudal barons. A clever economist should write a General Theory or Kapital about this situation and tell us what to do. But most economists work for banks.

Back the hack

The WikiLeaks disclosures of Afghan war disasters, some say, show how the old media are losing control of news. In future, sages predict, figures such as WikiLeaks's Julian Assange - geeky, semi-anarchist "information entrepreneurs", operating on the fringes of society - will make the big disclosures, not salaried hacks in conventional offices.

I don't think so. To make any sense of his material, Assange turned to the Guardian, the New York Times and other mainstream newspapers. Nick Davies and David Leigh, the Guardian's distinguished investigative journalists, brought expertise to the job of sifting and interpreting. So what's new, except the internet allows us all to view the original documents?

Shown the ropes

The late historian Hugh Trevor-Roper (Lord Dacre), subject of a new and widely reviewed biography, was a high Tory snob, but he was once willing to conspire with the likes of me. Under the agreement that allowed Rupert Murdoch to take over the Times and Sunday Times in 1981, "independent directors" were appointed, supposedly to protect the papers from undue proprietorial interference and their editors from arbitrary firing. Trevor-Roper was one.

I was then an officer of the Sunday Times journalists' chapel (that is to say, union branch) and we wanted regular contact with at least one independent director, so we could alert him to Murdoch atrocities and he could leak details of board discussions to us. To our surprise, Trevor-Roper was the most amenable and, in secret corridors of the labyrinthine building the Sunday Times then occupied, we met regularly after board meetings. He behaved with schoolboyish excitement, as though we were 17th-century country-house conspirators planning rebellion against a despotic ruler.

When we discovered that Murdoch, whom Trevor-Roper thought a cad, had spirited away the titles of the Times and Sunday Times and put them in another company - thus giving him complete freedom to fire the staff and editors of both papers - Trevor-Roper was outraged by this abuse of power and helped our successful campaign to make him restore the titles to their proper place. Only later did Trevor-Roper blot his record by authenticating the fake Hitler diaries and becoming little more than a Murdoch lapdog.

The parent trap

Parents - usually middle class - who falsify their addresses and sometimes move temporarily into rented flats to get their children into a favoured school are committing a form of fraud. This is not a victimless misdemeanour, because other children, whose parents abide by the rules, are denied places and in some cases a council's attempt to achieve a better social mix in its schools (to everyone's benefit) are frustrated. So I have sympathy for Poole Council, which put suspect families under surveillance but has now been told by a tribunal that it misused its powers and breached privacy.

The council went too far, at least in the case of the middle-class couple who complained. But I wonder if the verdict would have been the same, and the media applause so warm, if the surveillance had been against suspected benefit fraudsters.

Milk made

I can see why milk from cloned cows, like GM food, may be of public policy concern, as such technologies could pose risks to genetic diversity and, therefore, to long-term disease resistance among the animals and plants that we rely on for food supplies. But why should the milk cause, as the Daily Mail puts it, "deep unease among consumers"? What do they fear, exactly? That it will tamper with their DNA and turn them into cloned cows? If so, why do "consumers" cheerfully gobble so much processed, junk supermarket food?

Peter Wilby was editor of the New Statesman from 1998-2005

Peter Wilby was editor of the Independent on Sunday from 1995 to 1996 and of the New Statesman from 1998 to 2005. He writes the weekly First Thoughts column for the NS.

This article first appeared in the 09 August 2010 issue of the New Statesman, The first 100 days