The Confederation of British Industry (CBI) has just gone through a disastrous episode over the Scottish referendum No campaign, for a reason which says much more about the CBI than it does about the Scottish independence campaign.

The CBI is, ostensibly, a worthy lobbying organisation representing industrial and wider private sector employers. Its name suggests that it’s the kind of outfit that does what it says on the tin. Its strapline, “the voice of British Business”, seems fairly unambiguous.

Yet somewhere along the line, the CBI has actually also become the voice of public sector managers who like to imagine they’re regular businesses but are actually about as far from that as they can be. So on the one hand, the CBI seeks to represent the views of businessmen and women whose imperatives are largely reflected on the front page of the CBI’s website – growth, markets, economic intelligence, trading conditions.

On the other hand, though, the CBI’s enthusiasm for recruiting ever-more members has led it to quietly seek to represent those whose imperatives are very far from what’s on its own front page – that is, government departments, civil servants and pubic bodies wholly reliant upon state funding. In many cases, these public bodies are actually directly under the control of ministers and so obviously shouldn’t be part of a lobbying organisation anyway.

My constituent Iain McMillan, who as Director of CBI Scotland is one of Scotland’s most effective business advocates and lobbyists, has been utterly stymied by public sector employees who ought to be nowhere near the CBI in the first place. Public sector managers, who have their own representative bodies too, this week pushed real business leaders out of the way and called the shots in the CBI on the independence issue, humiliating the business advocate who leads the organisation in Scotland into the bargain. How did this happen?

It’s very simple, really. Successive governments have, quite rightly, encouraged those parts of the public sector involved in service delivery rather than policy-making to import effective business practices, language and cultures. In the 1990s, I was sent on an MBA course and appointed to assist a General given the task of making the UK’s then largest ‘agency’ (responsible for Army Individual Training) more businesslike. We took expensive advice from big league consultants like KPMG, appointed businessfolk to an advisory board, created internal pseudo-demand and supply relationships and all the rest. But in the end, we (and most importantly, our very high-grade boss) never lost sight of the fact that we were a public sector delivery organisation reliant upon taxpayers’ money. We were quite different in nature from a real, private sector business.

Folk who lead universities, government agencies and the rest often like to see themselves as ‘chief executives’ and the like. But if these organisations truly were ‘businesses’  then they’d ben run by business people, not professors and civil servants. The CBI, though, has chosen to ignore that fundamental detail in its pursuit of more members – it’s lost sight of the wood for the trees. John Cridland, the CBI Director General has issued a statement saying the decision to lobby for a No vote (which he MUST have been part of) was wrong since it involved political lobbying. You what?  First, the front page of the CBI’s website includes a link to “the CBI’s comment on Labour immigration policy”. Second, what’s the point of the CBI if it isn’t to politically lobby for business?

Worst of all, though, Cridland has just shafted his Scottish director, on entirely ludicrous grounds, for lobbying for business — because he’s worried he’ll lose all that lovely public sector money. The CBI has become a subsidy junkie dominated by public service managers. It has badly lost its way. Perhaps it needs a businessperson in charge?

3 Responses to How the public sector took over the CBI
  1. ” pubic bodies wholly reliant upon state funding”
    Government brothels, whatever next!

  2. Eric, any chance you could use the facilities open to you as an MP and find out how much public money is spent on CBI memberships, attendance at conferences and other expenditure etc?
    It came as a bit of a shock to discover the Beeb were members, STV you could understand perhaps. Shocking that the beeb only suspended membership. They must really be sweating on a YES vote now.

    What other organisations does the beeb belong to?

    • We could ask the CBI, but at the moment I imagine they’d be all coy! It’s an interesting area,though. I imagine FOI requests to quangos might flag up some details. A parliamentary question might yield something – I’ll have to think about the formed; it’s a good idea…..


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