It was my mugger's apology that rattled me

Expert view

I was mugged last week. It was early, 6.30pm, and I wasn't in a "bad" part of town. The wild-eyed youth had the white face of drug abuse and the black teeth of zero dental care. He twisted my hand until the fingers snapped and I gave him £40. As he was walking away, to my surprise, he turned round, held his arms out and shouted: "You've got to understand - I'm desperate."

I was mugged last week. It was early, 6.30pm, and I wasn't in a "bad" part of town. The wild-eyed youth had the white face of drug abuse and the black teeth of zero dental care. He twisted my hand until the fingers snapped and I gave him £40. As he was walking away, to my surprise, he turned round, held his arms out and shouted: "You've got to understand - I'm desperate."

We live in a rich country. The 1990s boom has now come to exceed the excesses of the 1980s. Even after eight years of economic expansion, city forecasters are predicting that 2000 will be even better with growth accelerating to 3 per cent. Inflation is squeezed ever lower, and, at just 2.2 per cent, is comfortably behind the growth in incomes. It is hardly surprising that the London market, the third largest in the world, is now at record levels, worth some £1,600bn. We have never had it so good. But the question for the guy on the street is where is the "trickle-down effect"?

The very construction of our cities, the existence of "bad areas", is evidence of a deep-rooted social divide. A friend from the Middle East (where they know a thing or two about wealth) observed: "You British are rich, and you know how to hide it - in bricks and mortar." Take a walk in a south-westerly direction from Oxford Circus and you will long tire before you reach the limit of desirable property. Pass through Mayfair, Belgravia, South Kensington, Chelsea (a good three miles of houses and apartments worth millions), before reaching the aptly named World's End.

Social divide may be nothing new, but I do believe recent economic change is exacerbating it. The rise of the internet is creating untold wealth and opportunity for a lucky few - such as the young men who shared £10m from their start- up. But it is also having a more general effect. At the peak a small number of highly paid jobs require ever greater skills, ability and education. What happens down below?

We must be alert to the failings of trickle-down. The argument supporting the global victory of the free market is that the new-found wealth reaches everyone. Here in the UK unemployment has been cut sharply (down to 4.1 per cent). This is the so-called Anglo-Saxon miracle. And yet commentators quite rightly challenge the meaning of this statistic. There has been the birth of the so-called "Mac-job" phenomenon where people are shoehorned into poorly paid unskilled jobs. Thus just as the internet creates millionaire entrepreneurs at the peak, it puts others out of work and create low-skilled jobs at the bottom.

Even these are the lucky ones. The new technology ensures there are others even more excluded. In New York, in London, in most cities in the northern hemisphere, the ghettos of the underprivileged are becoming more and more remote from the loft apartments of the net-skilled yuppies. You could take a very different walk from Oxford Circus if you chose another direction. Children are being born to parents who have never worked, often with grandparents who have never worked. What chance for them?

I had lunch recently with Stephen Timms, a Government minister charged with attacking social exclusion. What interested me most was that he saw the City as having a vital role. He is looking at what has been done on Wall Street. There, leading US financial firms took on "real workers" for "real jobs" as part of a government-sponsored project. The problem for many desperadoes is that in the ghettos, where work is rare, the young will never learn the basic skills associated with working that most of us take for granted. How to answer a phone, plan a diary, run a meeting or greet a customer. To those of us in work these have become second nature but to the excluded they are skills that have to be taught. We need a lot more projects like this in the UK, and the financial industry, as the core of our economy, has a role. We can help.

If, as a society, we do nothing, I fear we will eventually return to a medieval situation. The rich will seek refuge behind their fortified walls, with private security armies and protection for a chosen few. The rest of us will be left to the bandits. We can already see this in some areas of the States.

I have not slept much in the last week. The pain in my hand is excruciating. Worse is the memory of his face. Is it the future?

* Christopher Walker is a director of Hill Samuel: Christopher.Walker @hsam.co.uk