What is the point of the CBI?
Welcome to this Bank Holiday special, I hope you have enjoyed a Cadbury creme egg or two. Apparently British people have one of the highest consumption rates of chocolate in Europe, coming in at 11kg per year.
Today we look into the challenges facing the CBI, not so much the immediate allegations, although I map out why it could be a perfect storm. We assess the modern history of the CBI, the broader challenges of a business voice in the 21st Century. And look at what the future might hold.
Before my three years in No.10 as business relations SpAd, I was head of external affairs and ‘new economy’ policy at the Institute of Directors, a ‘rival’ group to the CBI (The Times).
Oliver Shah went a bit further in his piece in the Sunday Times this week, describing the IoD as ‘always the weirder, less effective cousin’ of the CBI.
We were definitely weirder, but as the policy team was about the tenth of the size of the CBI’s, I don’t agree with the effectiveness point (It’s easy to say the CBI should close, but who will speak for big business?)
It reminded me of what George Osborne when Chancellor used to say in our pre budget meetings with him, ‘I always get the most interesting ideas from IoD’, I was never sure if he meant innovative or bat-**** crazy.
We also look at the innovate Spectator internship programme and compare the difference between Oxford and Cambridge university spin outs.
I want to thank Ashore who are helping bring you today’s notebook. Ashore is the platform for booking stays in the UK's best and most beautiful remote-work homes.
When it comes to hybrid-working, you probably think of working from home, part-time at the office, or maybe a co-working space.
Ashore offers a new option: remote-work stays in homes located in some of the most beautiful towns and villages in the UK - from Margate, to Skye, to Hay-on-Wye.
Every home has at least one best in class workspace with 4k monitors, Herman Miller chairs, and verified internet. It is founded by my former colleague from when in Government, but still friend, Aled Maclean Jones.
It really is worth clicking on the link to have a marvel at some of the gorgeous properties.
What is the point of the CBI?
I am not sure the CBI will exist in 10 years any way
That was the stark assessment of one leading business commentator when the initial allegations broke about Tony Danker last month.
A more accurate question now seems to be, will the CBI exist in 10 weeks time? The allegations of a toxic culture are serious and grim, go back many years and are multiple in nature. Anna Issac in The Guardian has been at the forefront of the reporting.
There is speculation in the Mail on Sunday, that No.10 are considering scrapping the Royal Charter, this would be unprecedented and in my view it is highly unlikely.
But the timing could be a perfect storm.
The CBI has around 230 employees a £25 million turnover, of which most comes from recurring membership fees of the circa 200 biggest members
When every corporate budget in the country is under intense scrutiny and with many annual renewals coming up, a considerable number of corporations may see a rather useful six figure sum that they can claw back and it poses the question, what value does the CBI bring?
There is speculation that EY, Rolls Royce and Adnams Brewery are all reviewing membership, any business leader that is giving an interview in the next few weeks is likely to be asked their view, that is a dangerous place for the group. This is because there will be a continual drumbeat of ‘we are reviewing our membership’, it may also reveal some companies that are not members at all.
Further danger is that when one goes, the flood gates open, there was an intense worry back in 2016 when Sky and JCB revoked its membership (The Times) and JCB (Sky News). (As an aside, there is an irony that it was Andrew Griffith who was the CFO of Sky who became Boris Johnson's lead business adviser, and is now a Treasury Minister in Rishi Sunak’s Government).
And that leads us neatly to the CBI in the modern era.
It is fair to say that the CBI struggled to adapt in the wake of the 2016 referendum result; it had been used to the 30 years of a globalised consensus in the wake of the Berlin Wall coming down. All of its senior players had spent their entire careers in that era. Throughout that period Governments and businesses were in lockstep aiming to achieve 2.5% economic growth year on year. Overnight that was changed and the election of Trump and the pandemic solidified the movement back towards nation state.
To be fair Tony Danker had done a decent job of repairing relations with politicians of all sides. Brian McBride, the President who grew up in a Glasgow council estate who went on to lead ASOS, TrainLine and Amazon in the UK had given the group a more modern and gritty feel than it previously had.
So what is the point of the CBI in the 21st Century?
One FTSE CEO said to me whilst in Downing Street
I feel the CBI is like a charity that has forgotten its initial purpose which is to champion business not just to politicians but to the country as a whole.
It does seem to have become a quasi lobbying agency which determines success via the number of political meetings and media coverage (both feature top of the infographic in the annual report).
Trust in business leaders continues to fall across the country despite private enterprise being responsible for 7 out of every 8 jobs in the UK.
But there is even something more fundamental to the challenge, what is ‘business’ in the 21st Century?
Business, how we make money and profit is dramatically changing, it is becoming harder and harder for the CBI to say that it speaks on behalf of 190k businesses, where interests are becoming so diverged.
A rather stark example of this is the CBI over the last few years hasn’t been able to make up its mind on corporation tax. Even with the political chaos of the last 18 months, you would think Britain's biggest business group would have a settled position on the primary business tax in the country.
Another challenge in the 21st Century has been the dissemination of information too, if you wanted to start a business 20 years ago, your first port of call would have been your local IoD, CBI branch, but now it's Google or even people on social media.
Who has done more to promote the modern economy to school children and those under 25 in the last five years, the CBI or Speakers for Schools or Steven Bartlett / Ben Francis?
Of course, this is not just a problem for the CBI, but for all business groups, the ‘B5’ as they term themselves are facing challenges, the Institute of Directors membership has fallen a third since the pandemic.
There are some business leaders who are now privately speculating about whether the CBI and the IoD should be merged, of course the CBI was initially founded in 1965 with the merger of Federation of British Industries (an interesting acronym!), the British Employers' Confederation and the National Association of British Manufacturers.
What I would plea for if this were the case, is that the name should be modernised to reflect 21st Century British business, all the terms like federations, institutes, confederations and chambers feel as though they are from a bygone age of British business, which conjures up smoking jackets and wood paneled doors. Feel free to suggest some names by hitting reply.
Groups such as COADEC and Enterprise Nation are certainly having impressive moments and campaigns at the moment. So is the answer further dissemination or a merger?
Either way to return to the initial question, it is difficult to see the status quo remaining until the end of the decade.
The CBI, when at its best, is a treasure trove of information for the government and public to draw on, to convene brilliant and thought provoking sessions on the future of our economy and how examine how Britain can increase trade across the globe.
Britain is at a major juncture in its economic and enterprise history, and it's going to need innovative and dynamic businesses more than ever. It not only needs a seat at the top table, but it requires going out around the country and to go across the world and bang the drum for British business.
🗞️ Spectator opens internship programme
The Spectator’s internship programme is one of the most innovative in Westminster and probably the country.
I always enjoy reading the challenges they pose.
Age does not matter, nor do CVs, nor do names. Apply by May 1st.
Fraser Nelson writes about it here.
If you have seen any innovative recruiting methods for interns or otherwise, hit reply and we may feature them in the future.
🎓 University spin outs
I often lose my temper at Dragon’s Den when one of them insists on having over 30% of the company, I just think it is crazily high and means naive founders don’t have enough skin in the game. It is also why we hardly ever get any follow up episodes on the show.
So I was pretty alarmed to read in Sifted this week, that Oxford University is still taking almost 25% of spin out companies, compared to Cambridge’s 12.6%. No surprise it is Cambridge which is generating more high growth companies than Oxford.
This is a massive problem for the development of UK entrepreneur system and something that needs to get sorted.
Long term reader, Jamie Macfarlane, founder of the Creator Fund has been speaking to Sifted on the challenge, full piece here.
✍️ This notebook is not possible without …
It is the most common question I get asked on when I tell people that I am a podcaster is, ‘how do you make money?’.
Well it is possible thanks to our various partners.
If you want to reach some of the UK’s most influential people, whether they be FTSE CEOs, the UK’s fastest growing entrepreneurs, editors of national newspapers and or Cabinet Ministers… including now several former Chancellors.
We are exploring future mini series on AI impact on jobs, future of the office, the creator economy.
Then check out some of the different innovative models we have at https://www.jobsofthefuture.co/partnerships
And check out the website, the hub for everything Jimmy’s Jobs
jobsofthefuture.co
Follow our socials below: