We have the governments of two historically important countries – Greece and Italy – in the hands of technocrats rather elected politicians, and many, including Aditya Chakrabortty in the Guardian, are asking: is this right?

In many senses, it isn’t. No public mandate exists for technocrats to lead a democratic, nation state.

But at this moment of crisis, the operating principle is ‘needs must’, and the real question is whether or not sufficient expertise can be brought together to allow the European project to do its job in investing in, and providing for, its citizens.

Technocratic skills are vital if Europe is to be able to effectively target and move money to address social and economic needs. But the problems that Europe is currently facing are not technocratic problems. Rather, the root problem we all face is the need to solve the European debt problem and create a long-term environment in which investment in infrastructure (in all its senses) can be created to solve the intractable disparities of wealth, health and opportunity that pervade the continent. In other words, Europe currently needs a different identity, not just different financial structure.

This problem can’t be solved by the institutions and instruments that Europe currently has to hand. We need politicians who can unite nations, and it might just be that a Greek banker might be more capable in providing unity than a politician such as Berlusconi.

So, it is no wonder that Merkel and a number of other politicians are beginning to think about how to build a more coherent and resilient European ‘body politic’ for the future – not just to prevent future, similar crises but to deal with the fundamental issues of global competitiveness.

There are echoes of the American War of Independence when ‘revolutionaries’ struggled with the lack of political instruments and precedence to deal with the growing discord between ‘mother country’ and local rights. The Founding Fathers had no choice but to ‘feel their way forward’. The same is true now for potential ‘unifiers’ – they feel that they have no choice if they are to avoid disaster.

Equally, the ultimate lesson from geopolitics is clear: a Europe of nations states can’t compete with the big regional blocs – China, USA, India – that are capable of delivering both wealth and innovation.

In my view, this recognition is why we are seeing signs that Germany under Merkel is beginning to build a consensus and a coalition behind the creation of a new European infrastructure and idea of a closer, united European union – if, perhaps, only for a smaller European grouping.

We need a more unified European Union, and a more unified financial structure to go with it, yet this is the one possibility that isn’t really being addressed. In my opinion, unification is the only way forward for Europe.

Will this ever happen? Probably not in the short to medium term. Politics will get in the way, although the chance of a Europe built around Germany, with the Scandinavian countries forming their own entity, is more likely now than ever. And that may be no bad thing, even if we need the help of unelected technocrats to get there.

What the country really needs is to unlock this capital against long-term strategic investments. In order to make this happen, there is a need for an independent report on what the infrastructure concerns within the UK are, which would have to be a broad, systematic review of where we have deficiencies in our society. This would have to call upon the Office of National Statistics (ONS) to bring to the surface the levels of poverty, vulnerability and deprivation that we have in our society – particularly for the elderly and children.

The efforts of chancellor Osborne to persuade the private sector to invest is ‘too little, over too short a term’. But this reflects the fundamental problem that there is no political mandate to back an ‘infrastructure’, or social model of capital (as currently exemplified by Germany and China, who are far more innovative than the UK) rather than the alternative model which we currently use of shareholder capital.

We need a major capital investment that would not just put money into schools or try to create employment, but rather a systematic approach to family welfare, educational improvement and employment improvement to tackle pockets of deprivation.

I do not think we will see this happening – rather, we will have little incremental changes (attracting perhaps £60-80 billion) which, whilst positive, are not enough to get the UK back on track, seeing as there is nearly £700 billion worth of private capital that is essentially sitting there not being used.

The UK is actually very cash rich; it’s just that the richness is unequally divided. We face a political issue where the UK is missing a coherent financial philosophy, and this is the fundamental shift that is gong to have to take place if things are going to change.

We are in a situation of assets being slowly controlled by fewer and fewer hands. More and more companies are interlinked through shared ownership structures, and are plagued with the bureaucracy of governance which is emerging more as protecting directors from prosecutions than actually following through on whether governance is really adding value.

Issues such as risk, vulnerability, bribery and corruption that occur outside the usual Anglo-American governance regimes is a major problem. All our studies indicate that 80 percent of business transactions outside European or American boundaries involve more than one bribe, or a substantial amount of bribery, either to penetrate the market or to maintain presence in that market.

What is happening is that ever-increasing volume of procedures in organisations are inhibiting the organisation from being innovative, but are protecting it from prosecution, risk and loss of reputation. There does seem to be an unhealthy relationship between government and big business – in fact, some organisations are so expert at handling government that they have lobbying and public affairs departments that can be 100-strong plus. There companies are often those called on to advise government because of the quality and strength of relationship, and inevitably the advice given – and the way legislation is then shaped – favours the larger corporations at the expense of the small to medium size businesses (which tend to be far more entrepreneurial).

The question is, why do we have this situation, especially in a financial regime where fewer people are controlling assets, and the corporation is the vehicle for wealth creation? This is a question we are now beginning to see being played out in the streets of America, Britain and Europe with ever-increasing protests against capitalism.  What the protestors may not quite realise is that they are not protesting against capitalism, but against oligopolies and an ever greater restriction of markets.

Placing controls around lobbying is not necessarily the answer, though. If regulations around lobbying are increased, the corporations simply adapt. Regulation could inhibit the spread of interests trying to influence governments, but it doesn’t take much for a major corporation to then start forming links with NGOs and other organisations and contribute to their budgets in a way that turns these organisations into vehicles for big businesses.

Instead, we should be moving towards greater transparency as to who really advises government, how government approaches corporations for specialist input and how the businesses affect the drafting of legislation.

The first point which springs to mind reading this is the ‘anti-capitalist’ nature of the protest. Is it really anti-capitalist, or is it the restricted and centralised control of resources, that is the problem? If we really had capitalism in the sense of free and open markets, I doubt we would have such drastic downtimes, deep unemployment and a demotivated community as more capital would flow freely in the market.

It is unfortunate that the previous estimate I made regarding how much money is available in the city in close-to-liquid form of £450bn seems to be inaccurate, as the estimate currently is about £500bn and in Wall Street it is around $3.7trn of capital that is essentially not circulating. However, it could so easily do so – it is not tied up in buildings, long-term projects or infrastructure investments. It is money just waiting to be invested, but there are few investments taking place as there are not enough short-term transactional deals that will provide a return on capital quickly.

With this going on, I believe that these sorts of protests are going to continue. It is not so much London that is interesting, where discontent has been fairly muted, but New York. The home of capitalism as we know it today, Wall Street, seems to have been occupied by up to 70,000 walking in the streets and reacting against what is going on. It is interesting that this critique of modern capitalism is taking place in America, the place most would think to be the least likely to protest.

Previously, anti-capitalist movements were fringe and were part of the activities of focussed and specialist political movements that have influenced both America and Europe, with the mass of people in between. The situation now, however, has deteriorated to a point where the ordinary citizens that would not usually go on the streets are now the ones who are taking part in protests. This is indicative of the levels of pain people are feeling and the injustice that they are experiencing.

When essentially businessmen are joining protests it means that their business is drying up, and the reason for this is that money isn’t circulating, because the funds and banks don’t fundamentally trust that they can have the rapid returns on investment that they want.  Today’s situation is a need for investment on the very infrastructure and long-term projects that are being neglected.

The electoral process – simply voting at elections for increasingly similar political parties- no longer captures the level of democracy people need, so they take to the streets.

Andrew Marr of the BBC recently interviewed British Foreign Secretary William Hague, and asked his opinion on the protests. Hague’s response? – protest is unhelpful; government controlling debt and deficit is the solution.  If one of our key leaders holds such a perspective, then the situation will only worsen.

The issue is that the debt and deficit referred to is fundamentally placed on the shoulders of the ordinary citizen. Those who have substantial capital are not really subjected to proper scrutiny, otherwise the capital locked up in London and Wall Street would be circulating far more freely.

Our present inequalities and the attempt to have the ordinary citizen pay off the country’s debts will lead to more protests from ordinary men and women and that may lead to increasingly severe police tactics, surveillance and human rights infringements – all rather than dealing with the problem we have, which is ever-increasing vulnerability and poverty.

It became clear to me whilst working with the PASC that up to the present Conservative Government, civil servants have had to display three core competencies. Two of these had been around for a long time. The first of these skills – policy design and policy advice to ministers – has been the big ‘status’ skill that has shaped the current Permanent Secretary role.  The second of these skills has centred on the specialist knowledge for each department, be it education, health, defence or otherwise. But these skills have not been sufficient.

The last ten years have witnessed continuous cutbacks and the belief that the corporate sector private market forces philosophy will work in government, which has led to the third core competence which is managing costs. Key to this is outsourcing – namely, the repositioning of resources to specialist suppliers.  The civil servants over the last 10-15 years have been exposed to developing contractual skills. The major question is has this contracting process helped or hindered? Has public-private finance built better schools, or has it just built some schools that are equipped to deal with some of the problems and then bound the community to unwelcome long-term interest repayments? Unfortunately, evidence indicates that it is the latter, and this is the position we are in. Public service activity is too much driven by contract, and the rigidities underlying contracts.

However, since David Cameron came to power, a fourth key competency has emerged and that has not been entirely obvious what it is. Under the heading of ‘Big Society’, namely the transfer of resources from the pubic arena to the citizen, the ability to relate to communities – the ability to facilitate community needs – has emerged as a fourth competence.

These four skills do not sit well together. Giving policy advice means needing to think big. Outsourcing mean dealing with detail all of the time. I wonder how many organisations can pursue these two skills at exactly the same time. Not even oil companies do this. Further, facilitating relationships with communities is akin to being the social worker to society. How can an organisation or civil servant be both social worker and policeman who rigidly enforces a contract at the expense of the citizen at the same time?

One skill that is steadily being lost is the specialist expertise within departments. For example, within children’s services, particularly at local authority level, in order to cope with these new demands officers are being trained in leadership. Although most appreciate the programmes, the overall comment is that they are irrelevant. Children’s Services Officers have gradually become less about protecting child welfare, and more about contracting skills and outsourcing.

What many Children’s Service Officers highlight is that when they go and inspect premises to see if they meet fundamental standards these are not as stringent as vulnerable children need. Certain leave premises (many of which that have seen better days) to the local authorities for childcare and welfare, and make money by essentially cramming children into these homes. This did not happen on a large-scale when government ran children’s services, but is increasing under the private sector.

What PASC is examining is; is Government appropriately structured to deliver on those four competences? The analysis that I provided for the Committee concluded that this is not the case. The alignment across departments is improving, so there may be some sharing of ICT services, human resources, expertise and some cross-departmental work, but the real problem is the relationship between the delivery departments and the heart of Government, i.e. the Cabinet Office and The Treasury.

The question that was being asked in Parliament was; ‘Is it unique that the centre of government is not well aligned with the delivery departments responsible for services?”. My answer was no. A similar situation exists with the large multi-nationals in the private sector.  The relationship between the corporate centre and the delivery departments is not one of simply delivering what the Centre dictates irrespective of the needs of communities or markets. A well-organised centre examines the value proposition, namely, what does it take to make most effective use of an array of resources scattered across departments. At times this may well be being disciplined on costs, but at times this may also mean being consultative and facilitative trying to pull the various departments together so that limited resources can be more aligned.  To be more aligned requires feedback from the delivery departments to the centre so that the centre adjusts its style and approach. Often feedback is not entirely positive and the response to such comment is indicative of the quality of leaders in the centre.

I have seen no indication from the heart of Government that they really want to change. What is evident to me is that we have 19^th century government at the centre of government, and the delivery departments are trying to crawl into the 21^st century, and this is where the tension lies. It will be interesting to see what this Committee will do.  This Committee has exposed how poorly aligned government is and in parliamentary terms, this is a revolution.

If we as a country are going to continue to invest in the short-term transaction instruments, then I think we will see another financial collapse within four to five years. However, if we changed our philosophy and started investing in long term infrastructure projects, socialising the capital that we have, then we would have a situation of full employment, far less poverty and an overall wealthy society. But is there any sign of that happening? I can see none.

The capital we have available is waiting to fall back into its old pattern of behaviour, pursuing transactional gain. I don’t see how we can have improvement. What is unfortunate is that life is are getting worse. And it again has to do with capital. In New York this year, 66 per cent of trades on the stock exchange were based on algorithms, and in the Australian stock exchange, 30-35 per cent were. All an algorithm does is give the likely pattern of behaviour of any share based on the last few trades. So in a sense, the algorithms tell the investor whether to buy or sell without taking any notice of the quality of management in the company, the investment in the company, and so on. In fact in Australia the algorithms are now starting to include ‘soft data’, which takes into account certain words used in the financial reporting of a company and enters this data into the algorithm. When I was in Australia earlier this year, I was speaking to one of the board members of the Australian stock exchange, who told me that the reason the Australians are doing this is to buy and sell quicker than any other algorithm – without even knowing what is going on in the company.

So how do you escape a depression when the very owner of the firm that generates the wealth becomes owner for a nano-second? A whole number of trades may be taking place on supposed improvements all in the space of five minutes.

Under our current circumstances of prolonged depression, it is understandable that there is a lack in consumer confidence. We are unlikely to create the wealth for debts to be repaid.  Yet people have high living standards and commitments that they have to fulfil. We are in a situation that indicates further and further deprivation. It is unlikely that we will improve out circumstances unless we change the way that we position our finances. But instead of addressing this issue, we are going further into even shorter-term transactions that now have almost nothing to do with real life. It is like betting on horses when you don’t know what the horse looks like or how old it is – all you know is how it performed in the last few races.

Perhaps the most concerning thing is that the political institutions are doing absolutely nothing to remedy this. I was told that the Australian government had been warned of the danger of algorithmic trading but that to this day they have not responded or replied in any way. So even in Australia, which has much more of a boom economy than the other Anglo-American economies, there is no attempt by government to try and divert resources from short-term transactions to longer term infrastructure investment that would provide a good living for all.

The City drives Parliament and thus we have a vicious cycle. We need leadership from Parliament, to stand up and say ‘no more’. Such an act would probably see an individual politician’s career over, but at least the debate would be started on how we could use our capital for the greater good.

Reading these articles, for me the greatest concern is that of restricting information, and entering into a world where for political reasons information is prevented from going to individuals who are seen to take politically unacceptable action. Under the Labour administration, which was a period of high employment and income in the city, a lot of money was put into health and education, but it seems that things have not really improved.

I have seen very few studies that examine the experience of people living in deprived areas where schools and services have been improved, but the overall environment has not. If one spends seven and a half hours in school and there is an improvement in tuition, culture and in the way students and staff are treated, then one would expect to see positive changes. But if that same pupil goes back to a home where three generations have not worked, or to a community that is highly alienated and where drugs and crime have become normal, then this becomes less straightforward.

So far, the way the Government has been handling problems has been to address parts of problems, but not the whole. When the financial support that kept education and health and benefits were reduced, this lit the spark needed to create the riots within communities that, because of the high levels of deprivation, a high level of criminality has been incurred.

But does it help matters to deprive people of Twitter and Facebook? I believe that it would only make them angrier, more determined to be organised, and even more alienated than before. The Google chief Eric Schmidt was absolutely right when he criticised David Cameron’s proposal to bar people from these sites.

We have to examine how powerful Twitter and Facebook, or any other form of electronic communication, actually are. Can that form of electronic communication really explain the level of organisation that was behind the riots in August? Twitter, Facebook and electronic mediums help people to communicate, but they do not help to organise masses of milk bottles full of petrol waiting to be thrown as petrol bombs, or for groups of youths quickly running from one street into another who seemed to be organised by a trail of 25-27 year olds.

Until we have a full and independent investigation into the riots and begin to recognise the level of organisation that was behind them, there is absolutely no point in targeting Twitter and Facebook. If people are deprived of these forms, what is to stop them simply using the phone, or another site?

We need to get the riots in perspective – they are symptoms of serious social deprivation in the UK, where 30 per cent of children live in poverty, in conditions which are comparable to Madagascar, and in communities where three or four generations have not worked at all. We are seeing greater isolation ofcommunities, and are seeing greater criminality within these areas, with members of those communities who wish to be honest and straightforward afraid to even go shopping, let alone go out at night. As a country, we are doing nothing about this, so it is a recipe for social disaster.

We need to examine how effective was the organisation of riots from city to city.  We also need to consider the level of social investment which now needs to take place within communities to bring people into employment, to train and develop people, to provide social services, and to provide good education. Crucially, these issues need to be addressed as a package rather than as individual policies.

Is the issue of communities not trusting the police critical?  Yes. If we continue to penalise individuals in term of the debts that have been incurred by investment patterns that went wrong. Allowing the rich to get away with the debts that they created and everyone else having to pay for them raises extreme resentment. I doubt that this can continue for much longer.

A small example of alienating the ordinary citizen is tax disks on cars. Until recently, when a disk ran out, the individual was given a week’s grace to get another disk. Examination of the new statement states that when road tax is due, the document now says the individual has 14 days to renew their disk, but that during this time it is illegal to drive your car, and that if the person does not submit their form within 14 days, then this is noted by the system and the police could legally take the car and crush it. I do not think that middle England will be happy with these circumstances for much longer. Unless the Government is seen to start listening to people’s concerns, the next riots we see might not be so far away.

Murdoch was one of the few press barons who actually reorganised the newspapers to become more functionally viable business entities. He repositioned the press on a new technological basis to become businesses concerned with the capture, packaging and distribution of information. All of the newspapers benefited from his revolutionary action.  Rather, all of the press should also be receiving the same level of scrutiny.  In addition the Metropolitan police should be investigated to a much greater depth than Murdoch.  The notion that by chastising Murdoch we are somehow ‘wiping the slate clean’ is just not true.

It is clearly emerging that confidential information was passed on and so we need to examine the failure of the legal and regulatory mechanisms that allowed this to happen. We are likely to learn that corruption is broad, and rife across the press.  It just so happens that Murdoch is in the firing line. But I agree with the recent Guardian article by Cory Doctorow that journalists should not necessarily be reined in, in the way that has been so fervently discussed.

There are currently four large media organisations, according to the Fortune 500: Walt Disney, News Corporation, Time Warner and Viacom. When one of these – in this case News Corp – is noticeably weakened, all that happens is that the other three become even more powerful, after possibly buying up cheapened assets. Should News Corp be damaged, rather than having four media conglomerates, we shall be left with three and these three will exercise even less accountability. The scape-goating of News Corp could mean more control of the information fed to the general public by the other three corporations.

What we should be looking at is firstly, who owns the media, and secondly, who controls it – the ownership of information should be our biggest concern.  I suspect that if we were to instigate a serious investigation, we would find that half of the neurosis around hacking at the moment is being whipped up by the other media conglomerates in an attempt to reduce the value of the News Corp assets, so they become a prime target for takeover and dissection. This would have information further commoditised. What worries me is that the public sees Murdoch in the dock, but not the fact that the free flow of information is under threat.

There is no one simple safeguard to prevent the intrusion of privacy, particularly for those who are already vulnerable.  There has to be a serious debate about the relationship that the media/press have with the police and politicians. The debate on how to handle information is a political issue. We really need to dismantle the big corporations to ensure a plurality of ownership – we would need twenty plus separately owned media and press entities, each taking a different stand, in the marketplace. This would ensure that we really have the competition and the information flow that is so sorely needed.

What we are seeing right now in the debates on regime change in the Middle East is the application of a well-worked, long-term strategy that has been on the cards for the last twenty-five years, having started under Reagan and Thatcher in the 1980s. The Anglo-Americans have invested multi-billions of dollars into regime change and political change to create their own markets first in Eastern Europe through the coloured revolutions and now with the Jasmine revolutions of the Middle East. If one accepts the assertions of empire advocates such as Niall Ferguson, as discussed in William Skidelsky recent Guardian article, “Westerners don’t understand how vulnerable freedom is”, then one might believe that the change of political flavour brought about by these investments represents a drive for freedom and democracy.

However, if one looks, first, at each of these Eastern European countries today, such as Georgia and Serbia, two things have happened: the standard of living has dropped to where it was under the previous regimes and the resentment towards the Anglo-Americans is much greater. I have just returned from Georgia.  It used to be the richest republic in the Soviet Union and the principle supplier for agriculture products.  Georgia could feed two thirds of Europe and probably half of Russia—and today the very same fields are now derelict. In every country where there has been this investment for so-called freedom, there has been no investment in infrastructure, with Ukraine and Serbia being the outstanding examples.

Second, if one looks at the Jasmine revolutions of the Middle East today—Tunisia, Egypt, Libya, Yemen, and Bahrain—there never has been a spontaneous taking to the streets. In Egypt alone there was well over $650 million spent over the last five years to create this supposed spontaneity. In Libya the so-called idea of protecting citizens by bombing Gaddafi is only going to create a civil war. In Bahrain there has not been regime change, but rather a regime change of tone. Now Bahrain is far more Anglo-American responsive.  So, what has happened? The very same people who were demonstrating in the streets are now seen as having gone too far and so are being shot by their own troops.

Why is all this happening? It is very simple. The drive for oil is stupendous. If you are going to have real freedom, you do not invest in particular cliques to attract resources out of those countries. However, the reason the whole of the Middle East is going through this regime change with no investment in infrastructure is that the bombing of Iran is also going to place towards the end of the year with Iran being split into three and the repercussion of that will be unbelievable.

Figures coming out of one of the most right wing think tanks in the UK, the Institute for Fiscal Studies and also from the National Statistical Office indicate that 33-34% of children in the UK are living on or below the poverty line. The statistics also indicate that in any month there are 3,000 children in prison. Around 40-45% of elderly people in the UK, (people who have retired, 65 or over), are living in conditions of poverty, many of them simply unable to heat themselves and are in danger of dying during the winter. Further, in certain parts of the UK there are also now three to four generations of families that have not worked. In parts of Liverpool, Manchester, Newcastle, Middlesbrough, among other areas, there are alien cultures on a community-wide basis where 60% of the population does not work and that is the norm.

An interesting phenomenon is that the predictions of think tanks, academics and the national statistical office, which are politically poles apart, about poverty, incarceration, poor education, and the long-term effects on mental and physical health, are virtually the same and that is a critical signal of the level of the deep seated social problems we have in the UK. When you start getting statistics like this, it indicates that the problem is real.

Our social concerns arise out of having privileged markets.  Today’s markets are not free and open markets, but are concerned with maintaining large corporations on a multinational basis, evolving a culture of philanthropy and charity on behalf of the corporation, not the citizen. Last year, the UK actually dropped wage standards when, in fact, the profits of corporations in the UK were up 30-35%. So the major question is: how long is this situation sustainable?

The reaction I expect to see in the near future is a much more politically active older generation. With more cuts and more people of the post-World War II generation retiring, poor living conditions and a lack of basic support will no longer be tolerated, especially when these populations have paid their taxes for four to five decades. Certain 65-70 year-olds in the UK have already been refusing to pay their local taxes and are going to prison. I believe these are just the forerunners of individuals who will not accept their inadequate circumstances. How will radical activity from the elderly arise? That is going to be unpredictable. I think one of the major concerns will be cuts in health services, and the growing awareness of an ageism policy.