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

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As we reach the 50th anniversary of China's Cultural Revolution, are we seeing echoes of Mao?

With the official verdict being that Mao was “70 per cent good, 30 per cent bad”, his legacy is never far from the mind of today's politicians.

The Great Hall of the People on the western side of Tiananmen Square in Beijing is normally the scene for formal occasions, such as the annual meeting of the National People’s Congress. In early May, however, it resonated with singing by a group of young women, 56 Flowers, at a concert staged by an organisation calling itself the “Propaganda Department Office of Socialist Core-Value Propaganda and Education”. Tickets sold for up to £200.

The repertoire of the singing group was of a kind heard only rarely in China today. It consisted mainly of anthems from the Mao Zedong era, among them “Sailing the Seas Depends on the Helmsman”, which compares the chairman’s thinking to “the sun that never sets”. The maverick politician Bo Xilai used such songs in his campaign to challenge the central leadership earlier this decade but he is now in prison, serving a life sentence for corruption.

The singers, who describe themselves as “the socialist band fallen from heaven”, wear the sort of scarves worn by Young Pioneers in the Cultural Revolution that Mao launched, 50 years ago this month, to shake up China and assert his leadership.

Some other songs praised the current leader, Xi Jinping, but the event was determinedly retro, demonstrating nostalgia for the era before China embarked on its race for economic growth and before society modernised. In a country where the leaders shape history to their purpose, this was a distinct political statement, and that the performance was permitted at all raised eyebrows among China-watchers. There was even more puzzlement when the organisation that put its name to the show turned out not to exist. Speculation spread that the whole thing had been staged by opponents of the current leadership in an attempt to embarrass it.

While Mao remains the biggest figure in the narrative of the People’s Republic, his three decades in power were marked by killings on a huge scale and the repeated use of terror, ending with the ten-year disaster of the Cultural Revolution. His heritage poses a problem in a country with a vastly changed society that has little affinity with the rampaging Red Guards. The Communist Party-run state needs the Great Helmsman at the centre of its history and its conquest of power. But the kind of nostalgia peddled by 56 Flowers has little relevance in China today, where materialism is more important than Maoist Marxism and where the pressing issues are how to deal with a mountain of debt and reduce excess industrial capacity.

In an unprecedented move in mid-May, the party newspaper People’s Daily ran a severe condemnation of the Cultural Revolution as a grave mistake. However, Mao’s body still lies embalmed in Tiananmen Square, his head is on the banknotes and the official verdict is that he was “70 per cent good, 30 per cent bad”.

Mao launched the movement that convulsed his country after a politburo meeting on 16 May 1966, which identified “representatives of the bourgeoisie who have sneaked into the party, the government, the army and various spheres of culture” but were merely “a bunch of counter-revolutionary revisionists”, aiming to instal “a dictatorship of the bourgeoisie”.

The man who had led the Chinese communists to power in 1949 had been feeling disgruntled. He had been marginalised by his lieutenants Liu Shaoqi and Deng Xiaoping following the collapse of his attempt to industrialise the country in the Great Leap Forward at the end of the 1950s and the ensuing famine, which some estimate to have killed more than 40 million people. Mao was nearly 73 but he was not yet ready to be kicked upstairs into a ceremonial post.

Rousing himself for a final power play, Mao launched the Great Proletarian Cultural Revolution to assert himself, to destroy the Communist Party’s “bourgeois” bureaucracy and to give China a shake-up as he led the nation’s young people on a crusade to “destroy the old”. Once more, he ruthlessly turned Chinese against Chinese to consolidate his power and to pursue a supposedly revolutionary adventure.

The effects were, as with earlier initiatives, catastrophic – politically, economically and socially – above all, for the many millions who suffered death, injury, torture and deprivations. The party, the army, schools, universities and practically all other institutions were caught up in the maelstrom.

The wrecking of the regime’s control mechanisms cleared the way to the economic reform that was officially approved by Deng after Mao’s death in 1976, as Frank Dikötter shows in his magisterial new book, The Cultural Revolution: a People’s History, 1962-76. But loosening control is the last thing that Xi Jinping has in mind. Since taking power in November 2012, he has pursued a crackdown on dissent and is centralising authority in a way not seen since Mao. At the same time, and in the lead-up to a crucial party congress at the end of 2017, he is trying to use his campaign against corruption to root out opponents and change the way that China works.

Some commentators have described it as a new Cultural Revolution, even though the attempt to impose draconian control from the centre under Xi hardly chimes with the Red Guards’ invocation to “storm the fortress” and destroy the centres of authority. Still, there are echoes of 50 years ago. In a speech published this month, the president denounced “careerists and conspirators” who were undermining party governance.

“We . . . must make a resolute response to eliminate the problem and deter further violations,” Xi added, in a tone that Chairman Mao might have used. The context changes but China’s leaders have always been adept at finding adversaries to be used to advance their own ends – though what happened under Mao should stand as a warning of where witch-hunting can lead.

Jonathan Fenby is the author of “Will China Dominate the 21st Century?” and “The Penguin History of Modern China”

This article first appeared in the 26 May 2016 issue of the New Statesman, The Brexit odd squad