Why Britain doesn't trust business any more

The UK had ranked fifth from bottom in the annual Edelman Trust Barometer last year. Now it’s behind only Russia among 28 countries surveyed. James Moore reports

As the City of London prepares for annual report season, trust in British business is at an all time low (Getty)

If business leaders really want understand why a report by US PR firm Edelman found public trust in them is slumping, particularly in Britain which was at its lowest ebb in the survey’s 20-year history, perhaps they might like to consider a story involving a hitherto rather obscure mining company that came out on the same day.

Sirius Minerals tabled grandiose claims about becoming a world leading producer of polyhalite, a fertiliser, through the development of a huge mine in North Yorkshire.

As the working week got underway, it waved the white flag, surrendering to multinational giant Anglo American, which picked up a company once worth more than £1.5bn for just north of £400m courtesy of a 5.5p a share offer. Thousands of small investors who’d backed the business will see their losses crystallised through it, although while the bid might appear derisory it could have been worse.

Despite its well publicised problems – the company had struggled to secure financing and was running out of cash when Anglo American moved in – CEO Chris Fraser was on just under £1m a year per the most recent annual report.

As ever, it’s very much a case of heads you win, tails you win too at the top of business.

Nice work if you can get it, but most people can’t. Thanks to the decisions of some business leaders, their employment is insecure, and their future uncertain. Then there are wages, which lagged behind inflation for several years after the financial crisis.

The survey highlights a notable gap in the UK, and western democracies generally, between those it classes as “informed” and the “mass population”.

The former are people who have degrees, higher than average incomes and an interest in current affairs. That those who’ve done well are more trusting of the system they’ve done well out of shouldn’t come as a great surprise.

The perceptions of those not in this group should be a cause for concern. Not only are they pessimistic, they are losing faith in both capitalism and in democracy, which is grist to the mill for a certain kind of politician. I’m talking about those offering simple solutions to complex problems backed up by bellicose nationalistic rhetoric. The left sure isn’t benefiting from the dark cloud of mistrust and anxiety that hangs over the west. It might care to reflect upon that rather than indulging in a pointless process of lather, rinse, repeat.

One of the report’s conclusions is that business has the capacity to change the narrative independently of government if it is minded to do so.

It finds that there is broad support for businesses becoming more accountable to stakeholders, including employees and customers, rather than just shareholders, and for putting more stress on paying decent wages and treating employees fairly than it does at present.

That might sound like saying wouldn’t it be nice if people were nicer to each other but for the fact that on Sunday a very different vision for business could be seen at work.

Julian Richer, who founded Richer Sounds, a chain of stores selling hi-fi equipment, TVs, and suchlike, made headlines last year by handing control of the business to his staff.

While the business was in his hands he made a point of treating his employees fairly and paying them properly. He was handsomely rewarded for doing that. It played an important role in the business’s success.

Richer is not finished. He’s moved on to bankrolling efforts to torpedo zero-hours contracts (long banned at Richer), with free legal clinics and plans for “strategic litigation” to bring the companies that rely upon them to heel.

The problem is that for every Julian Richer there are 10 or 100 who don’t share his approach. It sometimes seems there’s one every week.

There was last week. Former Persimmon Homes boss Jeff Fairburn, who departed amid huge controversy over a £75m bonus, resurfaced as the CEO of Berkeley DeVeer after using some of the money to buy a 50 per cent stake in the firm.

There’ll be plenty more evidence that people like him are in the majority as Britain moves into annual report season and controversy erupts over the absurd pay packages handed out to the self-serving elite of British business.

When it comes to addressing the issues raised by this survey there’s been rather more talk than action to date. Business surely could do with a few more Julian Richers.