Pressure mounts on CBI as organisation’s reputation lies in tatters


  By Martin Kelly
The reputation of the CBI is today lying in tatters after the organisation’s Director-General claimed a decision to register with the Electoral Commission as a formal supporter of the No campaign, had been made in error.
In a statement issued yesterday, John Cridland claimed the decision to register with the election watchdog had been made without his knowledge and that the CBI was “politically independent and impartial”.

Mr Cridland added: “Although the decision to register with the Electoral Commission was taken in good faith, in order to carry out normal activities during the referendum period, it has inadvertently given the impression that the CBI is a political entity – we are not and never will be.”

Last week a spokesman for the CBI insisted the decision to become an official campaign group on behalf of a No vote, had been taken by the organisation’s Scottish Council.  However, speaking on Radio Scotland this morning Mr Cridland gave another version of events and said the decision to register with the Electoral Commission had in fact been taken by a junior official in London.

Denying he had any knowledge of the decision, the CBI Chief said: “We should not have registered in the first place, it was not an authorised decision, it was a mistake.”

Mr Cridland claimed not to have known about the registration, and added: “Once the CBI Board and I knew on Good Friday that registration had actually happened, which we didn’t know, we took urgent legal advice and that legal advice showed that the CBI needed to be deregistered, the decision wasn’t the right decision and wasn’t an authorised decision to take.”

According to the CBI chief, the registration documentation was signed by “an official in our London office” which subsequently “opened a Pandora’s box of unexpected consequences”.

However Mr Cridland’s claim the he did not know about the decision to register and that it was taken by a lone junior official contradicts a statement he made on the BBC earlier this week, when he defended the decision to register with the Electoral Commission.

Interviewed on Radio 4 on Monday, he said: “This is a really key point.  We took the a decision that we needed to comply with the Electoral Commission’s regulations.

“Clearly like any other organisation, we are an independent organisation, but like any other organisation, we have to operate within the law, and the decision we took is that simply to do our normal activities … between now and the referendum, we were advised we needed to comply with the Electoral Commission’s rules because we have a position on the issues.”

The attempt by the CBI to reverse its stance has been ridiculed by pro-Yes group Business for Scotland, whose own chairman Tony Banks claimed the CBI had breached its Royal Charter by giving support to the No campaign.

Mr Banks, whose own company was one of eighteen to quit the CBI last week, said the situation had “descended from farce into shambles.”

He added: “That the organisation itself was unaware of its own governance procedures, has now ground its already diminished credibility into sand. This is the organisation set up in 1926 under Royal Charter to represent business interests across the UK and including Scotland.

“That it has failed to represent the interests of its own members under that Royal Charter will not inspire confidence.”

The Yes campaigner called the debacle the “biggest crisis in the CBI organisation’s history” and said it had “turned it into a public laughing stock,”

He said: “…this means that on both sides of the border, no private or public member of the CBI can now credibly remain within the organisation if they wish to be deemed as neutral in the Scottish referendum.

“Our understanding is that the CBI cannot nullify its Electoral Commission registration and must, having been identified as a campaigning organisation, be policed by the Commission during the referendum campaign period, just as we are ourselves will be.”

Speaking to the Herald newspaper, Green MSP Patrick Harvie said: “It’s good to see the CBI asking for its application to be stopped – however, the shambles over recent days begs a wider question.

“The CBI is clearly not just a business network – it’s a free-market, right-wing lobbying group.

“Given the recent exodus of members, the question must now be why public bodies and neutral broadcasters ever joined such a lobby group in the first place.”

The situation has now saw the BBC drawn into the controversy after it emerged the broadcaster itself was a member of the CBI. 

On Thursday, following growing pressure, the BBC announced its intention to suspend its own membership of the CBI.  However, in a move which some viewed as controversial, the corporation refused to follow the decision of STV and resign immediately, and instead declared its intention to remain a full member until May 30th, which is the date of the official referendum campaigning period.

The belated decision by the BBC means it remains a member of an organisation which has taken a stance on the independence referendum.  It also leaves the BBC open to accusations that the licence fee is being used in order to subsidise anti-independence campaign material.  At the time of writing this article, the CBI website contains several pages of pro-Union literature.

Earlier today, Newsnet Scotland contacted BBC Scotland to ask whether management in Glasgow had been consulted prior to the decision being taken that will see the BBC’s CBI membership suspended on May 30th.  We have also asked if BBC Scotland management agree with its London based management’s decision to remain a member of CBI until May 30th?

We await a response to our questions.