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Top Tory Michael Gove declared today that capitalism in its current form has failed and needs to be reformed to save it.

The Cabinet minister said "crony capitalists" must be stopped from "rigging the system" - despite his own party offering donors lavish secretive dinners with the Prime Minister.

And he moaned "deliberate policies" have rewarded the already rich - after his party slashed taxes on inheritance,banks,hedge funds and £150,000 salaries.

More than a third of donations to the Conservatives last year came from the tiny 'Leaders' Group' of 64 rich donors, 62 of them men.

The list of diners with the Cabinet was dominated by hedge funders and financiers, all of whom donated more than £50,000 each. Some are billionaires.

Mr Gove made his provocative comments in a speech this morning to the Policy Exchange thinktank that well beyond his brief as Environment Secretary.

The reforming Tory - tipped as a future leadership contender - spoke of the “failure of our current model of capitalism to deliver the progress we all aspire to”.

(Image: i-Images Picture Agency)

(Image: London News Pictures Ltd)

He argued that rather than exploiting the environment and working people, there should be “investment in our natural capital and human capital”.

He said people need to call out and hold to account those bosses – the "unacceptable faces of capitalism" – who award themselves excessive pay rises.

And he said reform is essential to take power away from a small group of "crony capitalists" who have "rigged the system", and to encourage innovation and investment.

(Image: REUTERS)

Mr Gove said that, since the global crash of 2008, the outlook had grown "darker" for the majority of people - particularly the young and those with low skills.

"It is imperative we address that failure honestly and unsparingly, determined to identify where, and how, we have gone wrong, because, unless we rescue and re-invigorate capitalism, then we will find the engine which has generated so much of mankind's progress either stalls or moves into reverse," he said.

(Image: Wiktor Szymanowicz / Barcroft Media)

"Economic power has been concentrated in the hands of a few and crony capitalists have rigged the system in their favour and against the rest of us.

He added: "Our politics, culture and regulatory models have worked against innovation, indeed have been pushed in that direction by powerful incumbents.

"Many of our fellow citizens, especially those without the qualifications and connections to work the existing system, have seen less and less value placed on their work and themselves."

Mr Gove said that such economic trends had fuelled the rise of populist, left-wing movements across Europe - including Labour in Britain which was now more in tune with radical parties like Syriza in Greece and Podemos in Spain than "the movement of Attlee, Wilson, Callaghan and Brown".

"Since 2008, the outlook has grown darker for most. With productivity stalling, so unemployment has increased in many advanced economies, particularly among the young and those with fewer skills.

(Image: AFP)

"Wage growth has stagnated and expectations of future security have eroded as occupational pension schemes have been plundered or dissipated in value.

"These unfortunate trends have gone hand in hand with an increased concentration of wealth, and power, in the hands of the already wealthy and powerful.

"It's not just that members of the cognitive elite, the well-educated and well-connected, have the networks and mobility to insulate themselves from economic shocks

"These political currents pose a particular danger for the free market system which has generated so much wealth and opportunity in the past, and which I believe has the potential to do so again.

"The current failure of capitalism to deliver prosperity and opportunity - as it has, can and should - has fed the revival of ideological movements which threatened, indeed harmed, free markets and human flourishing in the past."