Scrap degree classifications in favour of rankings.

I am suggesting that yes, that each year group for each subject it's ranked. I'll add it to the OP.

The purpose is for employers, yes, as well as academic interviewers.

I highly doubt that LSE teaching is better than Cambridge's! The attention which Oxbridge students receive from their teachers is enormous, whereas LSE students frequently complain about a lack of contact with their lecturers, and a complete lack of care from them about their undergraduates.

Perhaps LMU is an extreme example, but only last year I spoke to an employer at a Magic Circle law firm (if you don't know the Magic Circle, they are the most prestigious firms in the UK, with an incredibly competitive hiring process) about the issue of the 2.1, and he bluntly replied that a 2.1 from Liverpool would be superior to a 2.2 from Cambridge, that the Cambridge 2.2 would be ruled out.

Now, I think it's ridiculous that 1% in exams at completely different universities (the Liverpool grad could have just scraped the 2.1, and the Cambridge grad just missed it) can lead to such an enormous influence on job prospects.

There are a few problems with OP's idea. Take two similar universities, who would be the better candidate:

1st out of 10
15th out of 120

Difficult to compare. All the people in the first case could be poor students, so being first doesn't mean anything.

Why not just use percentage points, like many people suggested?

I don't know how this would work for my degree...there are about 20 people doing it, and my "branch" there are only 5!

However, surely the best thing to do is to give a ranking AND the classification and combine these 2 into one number. That way Universities that award lots of 1sts and 2:1s would overall have a similar number of people with a certain rank.
For example: 1st = 20, 2:1 = 15, 2:2 = 10, 3rd = 5. Then top 10% = 20, 11-30%= 15, 31-60/70%=10 61/71%-100%=5.
So A who graduates from Oxford with a 2:1 and 32nd out of 200 students gets 30"points".
B who graduates from LSE with a 1st and 41st out of 200 students gets 35"points"
C, Oxford, 1st and 3rd out of 200 gets 40"points"
D, LSE, 2:1 and 70th out of 200 gets 30"points".

It would work for the majority of courses, and it would remove some of the difficulty with relating grades across different years, as the classification would stay the same, even if the rank moved. You could always add more rank brackets to make more distinction between students as well.

I don't know how this would work for my degree...there are about 20 people doing it, and my "branch" there are only 5!

However, surely the best thing to do is to give a ranking AND the classification and combine these 2 into one number. That way Universities that award lots of 1sts and 2:1s would overall have a similar number of people with a certain rank.
For example: 1st = 20, 2:1 = 15, 2:2 = 10, 3rd = 5. Then top 10% = 20, 11-30%= 15, 31-60/70%=10 61/71%-100%=5.
So A who graduates from Oxford with a 2:1 and 32nd out of 200 students gets 30"points".
B who graduates from LSE with a 1st and 41st out of 200 students gets 35"points"
C, Oxford, 1st and 3rd out of 200 gets 40"points"
D, LSE, 2:1 and 70th out of 200 gets 30"points".

It would work for the majority of courses, and it would remove some of the difficulty with relating grades across different years, as the classification would stay the same, even if the rank moved. You could always add more rank brackets to make more distinction between students as well.