It is rarely clear, at the time, that an historical era is coming to an end and a new one beginning, but six years ago this week, Britain was in exactly such a period of transition. On August 30 2008, Chancellor Alistair Darling warned of an recession more “profound and long-lasting” than had previously been imagined. The sub-prime crisis had, for most of 2008, seemed like distant rumblings of thunder. In this different country — a Britain in which just 26,000 people, rather than a million today, depended on food banks — there was little appreciation that a precipice beckoned.

We know now how far we had to fall when Lehman Brothers failed for bankruptcy on September 15 2008. Not since the 1870s have wages dropped for so long. Benefits for low-paid workers, disabled people and unemployed people have been frozen, cut, sanctioned or simply stripped away. And yet — as the City’s bankers and stockbrokers return to work this week — the financial elite responsible for so much of Britain’s recent travails has never had it so good.

Earlier this year, personalised number plates celebrating the City’s return to boom time were being advertised on financial news service Bloomberg. BU11 MKT could have been yours for £25,000, while BU11 ESH was on sale for £15,000. Of the 3,529 European bankers paid more than €1 million in 2012, 2,714 were British, and their pay leapt 35 per cent compared with the previous year.

Fertile ground, you might think, for savvy populists to launch a campaign directed at the Two Britains: a banking elite booming away despite being responsible for so many of our problems, while millions suffer a crisis not of their making. It has not happened.

Why not? Some would call it counterproductive: that our financial elite remains a desperately needed cash cow. But as research by the Centre for Socio-Cultural Change in 2011 uncovered, this is a mirage. Because of rampant tax avoidance in the financial sector, the City provided “remarkably little revenue in the boom years” before the state had to bail it out with more than a trillion pounds of public money. Tax revenues from finance were worth £193 billion between 2002 and 2008, or just 6.8 per cent of total tax receipts. Britain’s benighted manufacturing industry actually provided double the tax revenues, because it engaged in less tax-dodging and employed more tax-paying workers.

Instead, the City’s deflection of blame has much to do with its grip over political and media elites. In the initial post-war decades, the City’s power was curtailed. This was a time of “broad and systemic regulation of finance”, as economics professor Costas Lapavitsas puts it. “The City in the middle of a socialist state is as anomalous as would be the Pope in Moscow,” declared Prime Minister Clement Attlee before he nationalised the Bank of England. Even many 20th-century Conservative politicians favoured state regulation of the flow of capital.

That all changed when the Bretton Woods global system of fixed exchange rates came crashing down in 1971. The same year, Ted Heath’s Conservative government lifted the borrowing restrictions on banks.On the eve of her election triumph, Margaret Thatcher applauded the City for attracting “no subsidies, no hidden subventions” — which, in hindsight, seems darkly ironic. Before she waltzed into No 10, the London Stock Exchange surged to record heights, leading this newspaper to declare “Shares Vote for Maggie!” She swiftly abolished capital controls, and promoted slash-and-burn economic policies that hammered manufacturing industry but which Tory minister Ian Glimour declared were designed to “satisfy the City that the Thatcherites were still being tough”. She later promoted privatisations that lined City coffers and further boosted the Square Mile with her famous Big Bang package in 1986.

But the City’s political coup depended on the Labour leadership, too. In the early 1990s, John Smith and Mo Mowlam famously courted key City players in a so-called “Prawn Cocktail Offensive”. When New Labour assumed power, manufacturing was allowed to continue to wilt while the City flourished. As former Labour spin-doctor Damian McBride put it to me, “high finance” players and media barons were the only business figures Gordon Brown would ever actively go and meet.

Today’s list of Tory donors is dominated by City types like hedge-fund supremo and Conservative treasurer Michael Farmer, hedge-fund boss Stanley Fink, and Richard Sharp, a former senior Goldman Sachs employee appointed by George Osborne to the Bank of England’s Financial Policy Committee. One hundred and thirty-four Tory MPs and peers are or were once employed in the financial sector, helping to ensure that the City’s interests are well-articulated in Westminster. Big Finance spends around £93 million on lobbying each year. Leading lights from all parties — including Labour’s Chuka Umunna and Ed Balls — are frequently treated to City of London dinners with leading financiers that operate Chatham House Rules, ensuring conversations are off-the-record.

Using powerful financial PR firms, the City has successfully deflected media coverage, too. Between them, Brunswick and RLM Finsbury represent around half of the FTSE 100 and FTSE 200 companies. As one senior financial journalist put it to me, that affords them “collective protection”. With a PR agency acting as the sole conduit for stories, journalists risk being frozen out if they write stories that offend senior City figures. As a former Daily Mail City editor has it, during the financial crash such agencies “acted as a barrier to journalists, investors and perhaps even regulators who were trying to discover which banks were broken beyond repair”.

So instead, our Establishment focuses its ire on the behaviour of groups other than the City: the unemployed, benefit claimants and immigrants. They have little political representation and weak lobby groups. The City elite plunged Britain into one of the worst economic disasters in modern history but its political power shields it from scrutiny or radical reform. And until this stranglehold is broken, little will change.

Owen Jones’ new book, The Establishment: And How they Get Away with it, is published this week by Allen Lane.