Anthony Sampson on the Meanness of the Rich

Anthony Sampson in his book Who Runs this Place? The Anatomy of Britain in the 21st Century has a passage discussing the way 21st century Britain is now far meaner and much less generous than in the 19th century, and America today. The people most willing to give money to charity, however, are the poor. The rich are the least likely and willing to give to charity. He states:

While the rich in Britain have become much richer, they have not given more away. Their incomes relative to the poor have increased, but they feel much less pressed than their predecessors to share their wealth, whether prompted by social obligations or by a religious conscience. The connections between business and philanthropy which were so marked among Quakers and other practising Christians have largely disappeared. ‘As inequality of wealth balloons back to nineteenth-century levels,’ wrote Will Hutton in 2003, ‘there is no sign of nineteenth-century levels of civil of engagement and philanthropy by the rich.’

It is a striking fact that 6 per cent of the British population provide 60 per cent of the money given to charity, but it is more striking that the poor give away proportionately more of their money than the rich. ‘It’s more surprising because the rich can give away without noticing it, while the poor make a sacrifice,’ said one charity chief. ‘But the poor have more empathy with less fortunate people.’

The big corporations have been equally reluctant, and most boardrooms have shown little interest in charities. In 1986 two leading businessmen, Sir Hector Laing, a committed Christian, and Sir Mark Weinberg, and ex-South African, set up the Percent Club to urge companies to devote 1 per cent of their pre-tax profits to charity, but they soon had to reduce the target to 0.5 per cent, and their results were still disappointing: by 2001 the top 400 companies were giving exactly the same percentage, 0.42, as ten years before. A few big corporations stood out above the average. Reuters gave £20 million in 2001, amounting to 13 per cent of its pre-tax profits, which were sharply down. Northern Rock, the mortgage company based in Newcastle, gave away £15 million, or 5 per cent of pre-tax profits. Other big companies provided gifts in kind, rather than money, though they were not always as generous as they looked. (Sainsburys gave away food that was past its sell-by date, which avoided the cost of dumping it in land-fill sites.) Most companies have shown little interest in more giving.

‘Corporate donations … are worth less now than they were in 1991,’ said Stuart Etherington, the chief executive of the National Council for Voluntary Organisations. ‘Clearly it is time for the government to get tough with the business sector.’ But the New Labour government showed little desire to get tough.

By 2000 the two chief overarching bodies for charities – the NCVO and the Charities AID Foundation – were so concerned about the lack of funds that they approached Gordon Brown at the Treasury. His budget provided major tax concessions to donors – which are now as generous as the Americans’ – and he also helped to finance a Giving Campaign, chaired by the former head of Oxfam Lord (Joel) Joffe, an unassuming but persistent South Africdan who worked closely with Weinberg. The campaigners have had some success in giving more prominence to charity, but donors have been slow to exploit the over-complicated system of tax relief; and the charities are still very disappointed by the response, both from corporations and from individuals – whether entrepreneurs, corporate directors or the million-a-year men in the City.

Joffe, like other heads of charities, is struck by the contrast between attitudes in Britain and America where giving is part of the culture. ‘If you’re rich in America and don’t give,’ he said, ‘you’re regarded as an outcast.’ Americans give on average 2 per cent of their income to charity, compared to the British figure of 0.6 per cent. The British have often argued that their governments have take over the roles of philanthropists in health, education and social services, to which Americans devote much of their giving. ‘People still expect the government to pay for the basic social and artistic causes,’ says Hilary Browne-Wilkinson, who runs the Institute for Philanthropy in London. But the expectation is much less realistic since the retreat of the welfare state and the lowering of taxes, while the rich in the United States remain more generous than the British, and more systematic and effective in attaining their objectives. ‘British charity is more reactive, sometimes responding quite generously to television coverage of famines and disasters,’ says Joffe. ‘The Americans have a more strategic sense of what they want to achieve and plan their giving accordingly.

Many of the American mega-rich a century ago, like Carnegie, Rockefeller and Ford, converted part of their fortunes into foundations which today provide a powerful counterweight to the prevailing profit motive. ‘He who dies rich, dies disgraced, ‘said Andrew Carnegie, who gave away his fortune to finance free libraries and a peace foundation. More recent billionaires like George Soros and Bill Gates, have continued this tradition. When Ted Turner, the founder of CNN television, gave a billion dollars to the UN 1997 he quoted Carnegie and mocked his fellow billionaires: ‘What good is wealth sitting in the bank?’ The rich lists, he said, were really lists of shame.

But there are only a few comparable British bequests, like the Wellcome, Sainsbury or Hamlyn foundations, and most of the old rich feel much less need to commemorate their wealth through charity. The British aristocracy have traditionally seen their main responsibility as ensuring the continuity of their estates and families, in which they have succeeded over the centuries, helped by the principle of primogeniture which allows the eldest son to inherit the whole estate. Their argument can appeal to anyone who values the timeless splendours of the countryside, with its landscapes of parkland, forest and downland which owes much to the protection afforded to large landowners. Old money in Britain has been interlocked with the environment as it has never been in most parts of America, where land is less valued, and where the rich have more urban and nomadic habits.

But the argument is less valid today, when much of the responsibility for the environment has been taken over by English Heritage or the National Trust. Many old families with large estates still have incomes which greatly exceed the cost of their upkeep, and they still have responsibilities to contemporary society. Many of the new rich are happy to follow the earlier tradition, but they are still less encumbered. Most people of great wealth in Britain today show a remarkable lack of interest in using their money to improve the lives of others.

Above all they feel much less need than their predecessors to account for their wealth, whether to society, to governments or to God. Their attitudes and values are not seriously challenged by politicians, by academia, or by the media, who have become more dependent on them. The respect now shown for wealth and money-making, rather than for professional conduct and moral values, has been the most fundamental change in Britain over four decades.
(pp. 346-8).

So the rich have become much meaner, while the poor are the most generous section of the population. Charitable giving has declined along with notions of Christian morality and an awareness of need. People still expect the government to provide, despite the attack on the welfare state. The aristocracy don’t give, because they’re still concerned with preserving their lands and titles. While the new rich are feted by the media and society, simply for being rich, without any concern for morals or charity. And because universities and the media are dependent on them, they are reluctant to criticise them for their lack of charitable giving.

This was inevitable. Modern Conservative ideology was all about greed, shown most acutely in the Yuppies of the late 1980s and 1990s. And because the Tory attacks on the welfare state concentrate on attacking the poor as scroungers, there’s no incentives for people to give to them either. If someone’s labelled a scrounger or malingerer, giving to charities to support them is just as bad as government tax money.

This marks another, massive failure of Thatcherism. She thought that if the welfare state was rolled back, charitable giving would increase. It hasn’t.

Thatcherism has made the rich meaner, and the Tories continue with the same attitudes and visceral hatred of the poor.

Anthony Sampson: Leaders’ Personalities Does Not Affect Election Results

Over the past year or so there’s been considerable debate about Ed Miliband’s character, and whether he has the personality to engage the public and win a victory for Labour at the coming elections. Miliband has been criticised for being ‘geeky’, ‘nerdy’, and appearing far more confident in the lecture room than on the hustings in front of a crowd. You remember all the jokes made a few months ago about him eating a bacon sandwich ‘weirdly’.

His awkward demeanour in front of the camera and the crowd is contrasted with Cameron’s, who appears far more confident. As well he might, given that at his level of society and in the public schools they have a sense of arrogance and entitlement drummed into them. They are literally the lords and ladies of all they survey, and take it as their natural right that they should lead the country and command the respect, fortunes and lives of lesser mortals. Such arrogance and condescension oozes from Cameron, just as it oozes from Gideon/ George Osborne, Clegg and Iain Duncan Smith.

Yet the anxieties about Miliband’s personality may be mistaken. Mike has recently pointed out over at Vox Political that the perception of Miliband as awkward, hesitant and geeky are in fact mistaken. Conservative critics have spoken about his superb debating skills and that he is actually a determined, decisive leader. Nevertheless, the image has stuck.

It may not lead to Labour losing the election, however. Anthony Sampson discusses the way the personality of a party’s leader doesn’t necessary affect the fortunes of their party at the polls in his book, Who Runs This Place? The Anatomy of Britain in the 21st. He describes Blair’s 1997 election victory, and his personality that seemed more positive and attractive than that of his opponents.

He appeared as his party’s saviour. With his welcoming smile, fresh unlined face and bright eye, he was the most obviously likeable and presentable prime minister in the twentieth century. And at the age of forty-three, he was the youngest since Lord Liverpool in 1812 – younger than Harold Wilson at forty-eight.

He goes on, however, to argue that Blair’s personality didn’t necessarily have much to do with Labour’s victory.

In fact New Labour’s victory had not depended on Blair’s popularity. Labour had been leading in the polls under JOhn Smith, and the popularity of leaders was always less important in winning elections than the public assumed, as Professor Anthony King has pointed out. When the Conservatives won the 1970 election Harold Wilson was rated higher in the polls than Edward Heath; when they won again in 1979 James Callaghan was more popular than Margaret Thatcher. And Labour would almost certainly have won without Blair in 1997 and 2001. (p. 80).

This isn’t to say that we should be complacent about Miliband’s personality and Labour winning the election. But it does mean that the Tories have far less chance of winning than all their talk about Cameron’s supposed confidence and assured leadership suggests.

Privatised Railways and the Failure of Popular Capitalism

One of the Ed Miliband’s election promises has been to renationalise parts of the rail network. As recent polls found, most of the population of this country would like to see the utilities returned to public ownership, including the railways. They’ve been marred with poor service and overcharging since they were first privatised by John Major back in the early 1990s. To make matters worse, the railways are receiving far more in government subsidies than they were when they were nationalised. The British public are paying through the nose for a worse service.

Anthony Sampson discusses the massive failure of the privatised railways in his book, Who Runs This Place: The Anatomy of Britain in the 21st Century. The book examines and describes how Britain has become less democratic, with politicians, government officials and industrialists more remote and unaccountable. He devotes nearly two pages to the privatisation of the railways, pp. 289-90, in which he states

The most disastrous of the privatisations was the last, British Rail, which was also the most visible to the public. Margaret Thatcher had shrewdly resisted selling it off, but John Major weakly gave in to pressure from bankers, and went ahead in 1996. The selling off of the vast railway network was devised by the Treasury to maximise the short-term gains, and was masterminded by Sir Steven Robson. The stations and the 23,000 miles of track would be run by a national company, Railtrack, while separate operating companies would buy and run the trains in different regions. The old railway managers were soon demoted: the chairman of Railtrack was Sir Robert Horton, who had just ben fired as chief executive of the oil company BP; and he chose as chief executive a finance director, Gerald Corbett, who had risen through Dixons shops, Redland cement, and Grand Metropolitan drinks. the track maintenance was delegated to private contractors.

By 2001 the whole railway system was in serious danger. Corbett was out of his field and Horton was in ill-health; he was succeeded by Sir Philip Beck, chairman (like his father) of the Mowlem construction company, whose experience came from the controversial Docklands Light Railway. The lack of effective accountability became tragically clear after a succession of train crashes, which revealed scandalous lack of supervision. The crash at Potters Bar was blamed on careless maintenance by the subcontractors Jarvis, whose chief operating officer blamed sabotage, of which no evidence emerged; he was then promoted to chief executive. The trail of accountability ended up in the sidings of a secretive private company.

The government at last intervened, withdrew support from Railtrack, thereby bankrupting it, and created a new non-profit company, Network Rail, chaired by Ian McAllister, the former chairman of Ford in Britain, with an engineer John Armitt as chief executive. The environment secretary Stephen Byers, who had responsibility for transport, resigned, and was succeeded by the Scot Alistair Darling, and Darling extended the government’s role in July 2004 when he abolished the independent Strategic Rail Authority – which had been created only four years earlier – and took over most of its functions.

The operating companies, which had been only granted short franchises, were more interested in quick profits than long-term planning, and most boards had little experience of railways. South West Trains was acquired by the bus company Stagecoach, built up by the combative Scots entrepreneur Brian Souter and his sister Ann Gloag, which the Monopolies Commission had earlier accused of behaviour that was ‘predatory, deplorable and against the public interest’. They made a new fortune by selling rolling-stock, and bought the magnificent Beaufort Castle in Scotland; but they soon made rash investments in America which brought down their shares and limited their investment in British trains. West Coast Trains was bought by Virgin, run by Sir Richard Branson whose background was in airlines and pop music. South Eastern and South Central trains were run by Vivendi, the French conglomerate which soon hopelessly overextended its empire, from water to Hollywood. The Great North-Eastern (GNER) was owned by the Bermuda-based company Sea Containers, controlled by its American founder-president Jim Sherwood.

The privatising of the network had undermined much of the traditional British pride in railways. The separate regional traditions and hierarchies of engine-drivers, signalmen and stationmasters were swept aside by the cuts and constraints imposed by accountants and financial directors at headquarters. Many of the cutbacks were necessary if the companies were to be made viable; but the upheavals in the operating companies and the collapse of Railtrack had left few people who understood how railways really worked.

The privatisation of the railways failed because the franchises were short-term, and the firms that bought them thus only interested in making a quick buck. They had no knowledge or experience of running railways, and refused to accept responsibility for the disasters and horrendous crashes that occurred. Margaret Thatcher herself recognised that privatising them would be a bad idea, but it clearly wasn’t bad enough to dissuade Britain’s bankers.

As a result, Blair’s government had to extend government power over the privatised railways, even though New Labour was enthusiastically pro-privatisation. Ed Miliband’s planned re-nationalisation of parts of the rail network will thus undoubtedly be an improvement.

Northcliffe on the Threat of Coercion by Advertisers

I also picked up yesterday a copy of Anthony Sampson’s Who Runs This Place? The Anatomy of Britain in the 21st Century (London: John Murry 2004). This attempts to describe how the country has become less democratic, and government and big business more unaccountable. It’s a very good book, and accurately describes how we have lost power to the governing elites. One of the most immediately significant passages deals with the way newspapers have increasingly come to reflect the interests of their advertisers.

This was brought home most powerfully this last week with the scandal over the suppression of adverse news about HSBC by the Telegraph. HSBC is heavily involved in tax avoidance, and is being investigated by the Swiss, Americans and other nations for money laundering. Yet this was largely kept out of the pages of the Torygraph on the express orders of its chief executive, Murdoch MacLennan. HSBC was the advertiser the newspaper believed it could not afford to lose, and so instructed its journalists to do everything not to offend it. The resulting scandalous lack of coverage, and the suppression of other news stories and their substitution by puff pieces to satisfied other advertisers, so outraged the columnist Peter Oborne that he resigned. Oborne has written a piece on the Net describing his decision and the circumstances that led up to it. Mike has covered this extensively, including linking to Oborne’s piece, on his own blog over at Vox Political.

Sampson notes in his section on the growing power of advertisers that Lord Northcliffe, the press tycoon, was well aware of their power and did everything he could to keep it in check. Northcliffe said in 1922 ‘Do not let the advertisements rule the paper’. Apparently for a brief period he had the hall porter at the Daily Mail censor them. Northcliffe himself was a major pillar of the establishment, but he was absolutely right in this instance. Unfortunately, Murdoch MacLennan and the others weren’t listening.