Five key points from the Institute of Government: What to look for
Tuesday, 24 November 2015
Friday, 13 November 2015
An academic friend asked me recently why I had not returned to my early work on the CBI. (Grant and Marsh, 1977). My answer was that the organisation was a shadow of its former self. Its heyday was in the days of tripartite economic policy in the late 1960s and 1970s. It suffered a body blow under the Thatcher Government when it was seen as a throwback to failed corporatism and more ideologically attuned organisations such as the Institute of Directors found favour. Influence was regained under the Major Government and New Labour, but in some respects the organisation had been ‘hollowed out’ like other British institutions. Now it finds itself in a dilemma over the referendum of British membership of the European Union.
Opponents of membership, two of whom turned up with a banner ‘Voice of Brussels’ when David Cameron addressed the CBI , argue that its pro-EU stance misrepresents the views of British business. Scepticism was expressed about a survey which favoured continued membership. It was only a survey of CBI members and Eurosceptics argue that many of its claimed members are not direct members but only indirect ones by virtue of their membership of trade associations affiliated to the CBI. Nevertheless, the CBI is reasonably representative of big business (even if it has failed to publish a list of members) and, leaving aside some hedge funds and private equity businesses, most big businesses think that Britain would be better off inside the EU than outside it.
Chief executives of some of the Britain’s biggest companies linked to the CBI have been targeted in letters by Eurosceptic campaigners urging them to remain apolitical ahead of the EU referendum. The Scottish referendum has encouraged some business leaders to speak out on the issue. However, other chief executives are remaining neutral in order to avoid getting drawn into a partisan debate. Dave Lewis, the chief executive of Tesco, has said that the retailer would maintain an entirely neutral position in the referendum out of respect for the diverse views of its stakeholders. However, Tesco does not really need access to the internal market and would be less impacted by a Brexit than a manufacturer.
Paul Dreschler, president of the CBI, has said that it has been subjected to a ‘series of systematic and sustained attacks’ by Eurosceptics designed to undermine its credibility. Vote Leave issued an ad campaign to coincide with the CBI conference with the words ‘Wrong on ERM, wrong on euro, and wrong on EU.’ Addressing claims that the CBI was EU funded, Mr Drescher said that only 0.6 per cent of its income came from the European Commission. These were contracts won in competitive tenders.
John Cridland is about to step down as director-general. An insider with 33 years service, he was promoted from deputy director-general in 2010, the first time this had happened in the organisation’s history. In manner and appearance, he reminds me of an old style civil service permanent secretary, perhaps recalling the days when Sir Norman Kipping was the long-serving head of the predecessor organisation, the Federation of British Industries and was a familiar face in the corridors of Whitehall. Indeed, the CBI’s old offices in Tothill Street reminded me of a rather run down out station of a government department Cridland appeared to be in the same wavelength as the coalition Liberal Democrat business secretary Vince Cable who favoured an industrial strategy. His Conservative replacement, Sajid Javid, has a more free market orientation and rebuked the CBI for coming out in favour of the EU before the renegotiation process had even started.
The new director-general, Carolyn Fairbairn, is formerly of the BBC. A consultant and journalist, she is untried in such a high profile post. Katja Hall, Mr Cridland’s deputy and policy chief, is leaving after she failed to get the top job.
Paul Dreschler has just taken over as president, replacing Sir Mike Rake, chairman of BT. Mr Dreschler chairs Bibby Line, a family-owned shipping group. He only got the job when the president-in-waiting. Paul Walsh, the former chairman of Diageo was judged to be too openly Conservative.
A cloud on the horizon is that new Labour leader Jeremy Corbyn refused an invitation to speak at the CBI’s annual conference. There has been no contact between the CBI and Mr Corbyn or the new shadow chancellor, John McDonnell, since they took on their roles in September. Any contact has been through Angela Eagle, the shadow business secretary.
Things aren’t what they used to be!
Reference: Grant, W. and Marsh, D. (1977) The CBI (London: Hodder and Stoughton).
Monday, 9 November 2015
The head of the Association of British Chambers of Commerce, John Longworth, has said that politicians should stop demonising debt. He has called for infrastructure spending to be excluded from national debt targets.
He argued that infrastructure spending was an investment rather than a cost. He commented, 'Politicians are well versed in telling the electorate that we shouldn't leave today's debt for tomorrow's generation. It would be equally calamitous to leave the next generation with an economy ill-equipped to compete on the global stage.'
A BCC report called 'Bursting the Bubble' stated that current levels of investment were inadequate to deliver transport capacity, energy security and digital connectivity: Bursting the Bubble
George Osborne argues that either the deficit goes down or the country goes down. However, the current low interest rate environment offers an opportunity to improve infrastructure. If the Northern Powerhouse is to be more than just rhetoric, urgent investment is needed in transport infrastructure to replace 40-year trains made up of bus bodies welded on to bogies.