Are the Tories tipping into anti-business rhetoric?

The government announces more regulation business won't like.

This announcement was always going to be tricky for a Conservative prime minister to make. The relationship between the Conservatives and the business community is stronger and longer established and runs much deeper than the marriage of convenience between business (and the City especially) and New Labour, and stronger than that with the LibDems. While the Labour Party continues to try hard to re-engage and woo business leaders (its top team were out in force at a Labour Party business reception earlier this week, including the one-man charm machine that is shadow business secretary Chuka Umunna) it still has a long way to go.

The Conservatives on the other have been trying to juggle keeping business onside with not being seen to be too cosy with such natural allies as large corporate donors and wealthy business leaders. This balancing act partly explains both the prime minister and his chancellor making so much noise about anti-tax abuse regulations.

At an awards dinner recently one senior FTSE100 executive told me he was fearful that all the aggressive government rhetoric on tax was in danger of tipping into anti-business rhetoric. He was appalled by what he felt was precisely the opposite of the sort of language he expected from a Conservative prime minister, even one leading a coalition government.

The lobbying debate got even more heated when another announcement – that plans to force cigarette brands to adopt generic packaging were to be shelved – was linked to alleged lobbying activities of Conservative Party strategist Lynton Crosby (whose firm counts tobacco giant Philip Morris among its clients).

The rights and wrongs of who asked for what favours from which politicians (which is essentially what lobbying is) matters less than the message the whole affair sends out. While the boisterous, point-scoring politics of Prime Minister’s Questions is a bit of noise and we can enjoy the “banter” of David Cameron being called “the prime minister for Benson and hedge funds” Ed Miliband being accused (again) of sitting “in the pocket of the unions”, these stories continue to undermine public trust and confidence in both politicians and business.

Trust is already at a something of a premium, following the financial crisis. The recession may have been caused more by a reckless few financiers than the business community per se, but for much of the public there isn’t that much to distinguish bankers from big business. It’s a problem business secretary Vince Cable started the week trying to address. He launched a consultation paper at the London Stock Exchange called Trust and Transparency, which proposes a whole raft of measures on areas ranging from beneficial ownership (much of which was announced at the G8 Summit earlier in the summer) right through to a much-needed review of the system for pre-pack administrations.

Cable launched the paper in the City because many of the current problems with trust started in the Square Mile during the financial crisis. As Cable said, there has been “a seemingly endless succession of mis-selling and price-rigging scandals; and accusations of greed and unethical behaviour against leading figures in the industry.”

It’s no surprise that this year’s Edelman Trust Barometer found that UK banking scores some of the lowest trust scores for any sector in any country.

The problem with any trust is that it takes a long time to build, is shattered in an instant and takes even longer to rebuild. If the public mistrusted the relationship between business and politics in 2008 it is not surprising the only thing that has changed since then is that the sense of mistrust and the outrage have grown.

Politicians need to be seen to be tackling these problems and as much as businesses won’t like it, that always means more regulation. Cable is right to introduce measures to give investors more power to influence executive pay. While the details of plans to introduce a register of the beneficial owners and detailed issues such as bearer shares will not be raised by the public when politicians start pounding pavements at the next election, it is essential the public understands that politicians and the business community are taking steps to put their respective houses in order. Without that trust will never be restored.

This piece first appeared on economia.

Photograph: Getty Images

Richard Cree is the Editor of Economia.

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Labour's establishment suspects a Momentum conspiracy - they're right

Bernie Sanders-style organisers are determined to rewire the party's machine.  

If you wanted to understand the basic dynamics of this year’s Labour leadership contest, Brighton and Hove District Labour Party is a good microcosm. On Saturday 9 July, a day before Angela Eagle was to announce her leadership bid, hundreds of members flooded into its AGM. Despite the room having a capacity of over 250, the meeting had to be held in three batches, with members forming an orderly queue. The result of the massive turnout was clear in political terms – pro-Corbyn candidates won every position on the local executive committee. 

Many in the room hailed the turnout and the result. But others claimed that some in the crowd had engaged in abuse and harassment.The national party decided that, rather than first investigate individuals, it would suspend Brighton and Hove. Add this to the national ban on local meetings and events during the leadership election, and it is easy to see why Labour seems to have an uneasy relationship with mass politics. To put it a less neutral way, the party machine is in a state of open warfare against Corbyn and his supporters.

Brighton and Hove illustrates how local activists have continued to organise – in an even more innovative and effective way than before. On Thursday 21 July, the week following the CLP’s suspension, the local Momentum group organised a mass meeting. More than 200 people showed up, with the mood defiant and pumped up.  Rather than listen to speeches, the room then became a road test for a new "campaign meetup", a more modestly titled version of the "barnstorms" used by the Bernie Sanders campaign. Activists broke up into small groups to discuss the strategy of the campaign and then even smaller groups to organise action on a very local level. By the end of the night, 20 phonebanking sessions had been planned at a branch level over the following week. 

In the past, organising inside the Labour Party was seen as a slightly cloak and dagger affair. When the Labour Party bureaucracy expelled leftwing activists in past decades, many on went further underground, organising in semi-secrecy. Now, Momentum is doing the exact opposite. 

The emphasis of the Corbyn campaign is on making its strategy, volunteer hubs and events listings as open and accessible as possible. Interactive maps will allow local activists to advertise hundreds of events, and then contact people in their area. When they gather to phonebank in they will be using a custom-built web app which will enable tens of thousands of callers to ring hundreds of thousands of numbers, from wherever they are.

As Momentum has learned to its cost, there is a trade-off between a campaign’s openness and its ability to stage manage events. But in the new politics of the Labour party, in which both the numbers of interested people and the capacity to connect with them directly are increasing exponentially, there is simply no contest. In order to win the next general election, Labour will have to master these tactics on a much bigger scale. The leadership election is the road test. 

Even many moderates seem to accept that the days of simply triangulating towards the centre and getting cozy with the Murdoch press are over. Labour needs to reach people and communities directly with an ambitious digital strategy and an army of self-organising activists. It is this kind of mass politics that delivered a "no" vote in Greece’s referendum on the terms of the Eurozone bailout last summer – defying pretty much the whole of the media, business and political establishment. 

The problem for Corbyn's challenger, Owen Smith, is that many of his backers have an open problem with this type of mass politics. Rather than investigate allegations of abuse, they have supported the suspension of CLPs. Rather than seeing the heightened emotions that come with mass mobilisations as side-effects which needs to be controlled, they have sought to joins unconnected acts of harassment, in order to smear Jeremy Corbyn. The MP Ben Bradshaw has even seemed to accuse Momentum of organising a conspiracy to physically attack Labour MPs.

The real conspiracy is much bigger than that. Hundreds of thousands of people are arriving, enthusiastic and determined, into the Labour party. These people, and their ability to convince the communities of which they are a part, threaten Britain’s political equilibrium, both the Conservatives and the Labour establishment. When the greatest hope for Labour becomes your greatest nightmare, you have good call to feel alarmed.