A view of the City of London, from the far side of the River Thames. Photograph: Getty Images.
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A lack of trust: addressing the "trust deficit" facing UK businesses

Trust in banks and businesses has was severely hampered by the financial crisis - and has yet to recover. The mistrust cuts both ways. How can we expect a recovery without support for business from politicians and the public?

The financial crisis that seized the developed world in 2008, sending shock waves through markets and plunging the world into a prolonged recession, did more than wreak socio-economic havoc: it significantly eroded trust between politics, business and the media. By inference, the public’s trust of politics, business and the media has been negatively impacted and a series of scandals involving each of these key pillars of society has enforced this sense of mistrust and created schisms between these institutions, driving a rift between them and the public. The importance of trust cannot be underestimated: it is an essential component of a flourishing democracy and economy. Without trust, investment is severely hampered and growth is strangled before even the "green shoots" appear. The dearth of trust is one of the major issues facing society today.

A recent research report conducted by Populus, commissioned by DLA Piper, has found that multiple trust "deficits" exist in our society. Moreover, the lack of trust between the three aforementioned "estates" is not only deeper now than back in 2011, when the inaugural Trust report was published, but it is wider too, with diverging ideologies splitting political parties, the phone hacking scandal afflicting the fourth estate, and the manifold recent negative stories stemming from the business community, particular from the financial services and energy sectors, appear to have tainted the reputation of all private enterprise. It is clear that trust between business, politics and the media has now broken down completely.

"Trust in business" remains at the forefront of the political agenda. Westminster remains committed to addressing what is perceived to be widespread malpractice among businesses - from energy firms hiking prices to PPI mis-selling – all to the detriment of the consumer. There is a view that non-financial services businesses are increasingly resenting being tarnished by the same brush the media and politicians have used to smear the reputation of banks over the past few years. Businesses have not necessarily addressed this negative perception in a particularly proactive manner. While there is acknowledgement that the financial crisis has been a torrid time for businesses, there is little sign that corporate behaviour is changing in any meaningful way. In other words, it’s business as usual for most businesses, who do not see themselves as the source of the "trust deficit" problem. With one influential media commentator opining that there should be a "bankers wing" at Ford Open Prison, the lack of awareness shown by some businesses is pretty surprising.

While public outrage, manifested through politicians, media and populist movements, being directed at certain business malpractices is understandable, it has led to an unhealthy overarching anti-business mood, which is hampering a sustainable recovery in the UK. This lack of trust cuts both ways. If businesses are viewed by the majority of politicians with deep scepticism then the feeling is mutual, with a growing sense in the business community that politicians and the media simply do not understand capitalism. This is particularly the case with politicians, who can be viewed as being devoid of business experience and accused of drawing ill-informed and uphelpful conclusions, which has hampered UK growth and the international reputation of UK plc. As a corollary to this, political messages are seen by business and the media as being opaque and often contradictory.

What can businesses do to address this trust deficit? A good start would be to make more noise about the myriad ways in which British businesses should speak out more and deliver positive messages which show that they are a force for good. It is clear that businesses expect industry organisations such as the IoD and the CBI to do more in this regard, but businesses themselves should also be promoting the virtue of capitalism and the benefits it brings. Schools have a role to play in explaining the value of commercial activity and countering any cultural problem with success. Business needs to re-evaluate its social responsibility and pro bono activity accordingly. Only through a concerted effort involving all stakeholders can this critical issue be addressed and, through exploring the areas where trust has broken down, solutions for the long term formulated.

Co-CEO of DLA Piper

Getty
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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.