Tony Drury: Be sure to wear some flowers in your hair.

The sad death last Saturday in America of Scott McKenzie (73) has evoked memories of a song he sang (with the Mamas and Papas) and which all supporters of George Osborne should now be singing.

All across the nation such a strange vibration

People in Motion

There’s a whole generation with a new explanation

People in motion people in motion

The song San Francisco was written in 1967 and became the theme of a summer of love when 100,000 hippies decided to reside in the City. It became associated with free love, free expression, peaceful protest and a licence to try psychedelic drugs. It became the anthem for peace during the anti-Vietnam War protests.

As the Chancellor proves incapable of turning around the recessional trends of the UK economy a new phenomena is emerging. This time it is not anti-war protests (there aren’t any apart from Syria) but anti-capitalism. The canvas structures outside St. Paul’s Cathedral and the large Buddha in the meditation tent have been removed. Their representative said:

What matters is we’ve been able to come together and meet a lot of people who have all formed networks…to make our voices heard against the crisis which the banks have created and the corporate greed.

A whole new movement has been stimulated by the Coalition government who have sponsored a growing accusatory atmosphere in society. The Inland Revenue now pursue anyone where they think they might win money. VAT inspectors strike fear into SMEs. Councils try to fine anybody for a minor infringement and of course traffic wardens prowl our streets trying to catch the harassed housewife who desperately needs supplies for her family and left her vehicle a few minutes too long. Tolerance has gone out of society.

But beneath the surface is a much greater threat. The simple solution to the recession is to encourage wealth creation. That means lower taxes (although ‘Entrepreneur’s Relief’ remains one of the best give-aways of this Government), improved Enterprise Investment Schemes (and perhaps SEED/EIS innovations) more risk capital and an applause for those who prosper and build businesses and create jobs.

To underpin this whole approach requires equity financing. This anticipates future profits (because the return to investors is the payment of dividends) and allows the business owner to take a longer-term approach to the strategic direction of their planning. If the supply side is based on debt (aka banks) the whole system comes to a halt.

There are two other problems. Firstly, the Treasury believes early stage financing should be provided through funds and, secondly, the Financial Services Authority is hell-bent on de-risking equity investment with the result that it is being eradicated. The small-cap brokerage community in the UK is being wiped out as a result.

So where does change come from? Perhaps it is cyclical, maybe a change of Government or perhaps a new Governor of the Bank of England who will be incredibly powerful once the new regulatory system is in place.

Or perhaps the people rise in unison and sing out:

Be sure to wear some flowers in your hair

Summertime will be a love-in there

Scott McKenzie: folk singer: 10 January 1939 – 18 August 2012

The author of this article is Tony Drury. He tweets @mrtonydrury