CBI has proved an invaluable organisation despite being highly damaged by recent events

It has become fashionable in recent days, as the CBI reels under a barrage of accusations concerning its workplace culture, to suggest that the employers organisation has outlived its usefulness and no longer wields the clout it once did.

After all, the reasoning went, if government ministers are pulling out of your events – as some have been in the light of recent reports – how can you possibly claim to be a successful advocate for business in the corridors of power.

Such arguments are nothing new, however, as an episode from 1980 shows.

Then, just five weeks into the job, the CBI’s new director-general Sir Terence Beckett – a former chief executive of Ford of Britain – amended his first speech to the organisation’s annual conference to incorporate an attack on the aggressively monetarist policies being pursued at the time by Margaret Thatcher’s government.

Sir Terence’s call for a “bare knuckle confrontation” sparked outrage and a group of businesses, led by Sir James Goldsmith, cancelled their membership – potentially depriving the organisation of thousands of pounds.

What is less well-remembered, though, is that, shortly afterwards, Sir Terence made peace with Mrs Thatcher at a meeting at 10 Downing Street and went on to enjoy considerable influence with ministers over the subsequent five years.

Perhaps more damaging for the CBI now is the perception among some that, in an age in which advocates for single industries like UK Hospitality, Make UK, the Society for Motor Manufacturers & Traders and the British Retail Consortium are not only well-funded but more professional than ever, there is less of a role for an umbrella organisation like the CBI to play.

Yet that argument is not as strong as it looks at first.

Individual lobby organisations can be played off against each other by wily politicians and civil servants.

And, on occasions, the CBI has proved an invaluable organisation in providing cover for some big businesses, in particular consumer-facing organisations, to articulate opinions that they would not want to make public themselves for fear of alienating some of their stakeholders.

Copping the flak

A good example here is the highly polarising Brexit debate. The vast majority of business leaders, particularly the bigger their business, were pro-Remain.

Yet few wanted to say so publicly in case they attracted a boycott from half of their customers – so it was highly convenient for them to hide behind the CBI and for it to cop the flak.

The Brexit debate, though, also proved highly damaging for the CBI when, having backed the Remain cause so stridently, not only did the country vote to leave the EU but a strongly pro-Leave government came to power.

The infamous “f*** business” comments by Boris Johnson in 2018, when he was foreign secretary, can more accurately be seen as “f*** the CBI”.

For a while, the CBI’s credentials as being the voice of business in the corridors of power again looked under threat, but Mr Johnson, like Theresa May before him and Rishi Sunak after him, still ended up, as prime minister, addressing the CBI conference. Rather embarrassingly for Mr Johnson, as it turned out.

Nonetheless, recent events have been highly damaging to the CBI.

An invaluable bridgehead

The task of Rain Newton-Smith, its new director general, will in the first instance be to persuade those members thinking of cancelling their subscriptions to think again.

The organisation will be hoping that the decisive action it has taken today will help draw a line under recent matters – even if, to judge from his posts on social media, it has created the impression that Tony Danker, her predecessor, has been hung out to dry.

Central to that will be proving to members that the CBI remains an important advocate for business.

And, to that end, circumstances may prove supportive. All of the opinion polls suggest that, within the next two years, there will be a change of government.

On such occasions in the past, the CBI has proved an invaluable bridgehead between businesses and the incoming government, no more so than in 1997 when, despite his avowedly pro-business utterances, Tony Blair remained a figure of suspicion among some business leaders.

The willingness of Adair Turner, the CBI’s director-general at the time, to work so publicly with Mr Blair put many minds at ease – even if Lord Turner subsequently (to the delight of Mr Blair and the horror of some CBI members) made it official CBI policy, briefly, for the UK to join the Eurozone.

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While many businesses have been love-bombed by Sir Keir Starmer, the Labour leader, and Rachel Reeves, the shadow chancellor, there remains a residual unease towards Labour among some business leaders, particularly in view of indications that higher capital gains taxes may be in the offing.

The CBI is well-placed to open conversations between the two sides and ease tensions. That will also be the case if, against the bookies’ odds, the Conservatives are re-elected.

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One achievement of Mr Danker was to patch up relations with the government, following the turmoil of the referendum and its aftermath, while the CBI is clearly also trusted by the Labour hierarchy. The CBI’s credentials as a bipartisan organisation are not in doubt.

Those are not bad foundations for Ms Newton-Smith to build on.

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