CBI under fire from Business for Britain as competition comes to lobby groups

Tim Wallace
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The CBI’s 180,000 members carry huge clout, and command the attention of the Prime Minister
The Confederation of British Industry is a champion of competition. It wants more competition in banking, for instance and pushed for robust powers for the new Competition and Markets Authority.

But suddenly competition in the CBI’s own sector – business lobbying – has got tough.

In a scene reminiscent of that seen in sectors like banking and technology, a newer rival with a much narrower remit has hit the established giant of corporate membership groups hard.

The battleground prompts a major question: who really speaks for British businesses?

On the subject of the EU, the CBI wants Britain to stay in, and work to become a central player in Brussels.

Newcomer Business for Britain (BfB) wants changes to the status quo, backing a substantial renegotiation of the UK’s place in Europe, followed by an in-out referendum.

Last year BfB took aim at the CBI, revealing that the business group was receiving funds from the EU.

And yesterday it published freedom of information requests showing the CBI received more than £5m from public sector bodies over five years.

As a result, its critics argue the CBI is not fully focused on businesses’ interests, and should not be presented purely as “the voice of UK business.”

This row reflects wider trends in the industrial and political arenas in which the CBI operates.

Big banks dominated their sector for years, growing bigger and bigger with few new competitors.

Suddenly Metro Bank was given the first new licence in a century, and a wave of new small or specialised entrants followed, aiming to hurt the big players.

And in politics, two parties passed control between each other for most of the past century. Now we have one coalition and are likely to see another after this election, as smaller parties like Ukip and the Greens command sizeable chunks of the vote. Plurality is in vogue.

In the CBI’s case, its traditional stance as the voice of British business is under fire.

Its boss John Cridland stuck to his guns yesterday, arguing the funding from bodies like universities, the BBC and the NHS does not run counter to its mission. “While public sector members are a tiny proportion of our overall membership and represent less than five per cent of our income, the CBI is proud to represent these organisations as part of its diverse membership,” Cridland said.

“They join because they operate in a commercial environment, value business links and are major employers.”

But, just as with some of the corporate titans it represents, the CBI has so far appeared less nimble than its plucky rival. BfB immediately hit back, arguing the CBI should call itself an employers’ federation rather than a business group, to more accurately reflect this position.

As more groups spring up to campaign on specific issues, and rival bodies with alternative views expand, it may be difficult for this industrial titan to keep its dominant position.

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