During the EU referendum campaign the Confederation of British Industry was a fully fledged practitioner of Project Fear.
That was no surprise. This outfit has got form. Earlier we had its support for the UK joining the Euro and in the 1990s the CBI was chief cheerleader for the disastrous Exchange Rate Mechanism.
Thus, along with the rest of the carefully choreographed alphabet soup of “experts” in June, the CBI did not merely claim that we faced devastation once we actually left the EU.
— Nick Sutton (@suttonnick) October 10, 2016
It also asserted that a vote to Leave would cause an immediate “shock”, with an economic downturn and higher unemployment even before Brexit took place.
What makes it worse is that – despite having already been proved wrong – the CBI has made no apology. Indeed it continues to spread doom and defeatism about Brexit. While paying lip service to the value of business confidence it does all it can to undermine it.
In doing all this CBI claims to be “a voice for business”. It says that it “speaks on behalf of 190,000 members” in opposing Brexit and claimed 80% support.
But the British Polling Council described its basis for this claim as “dodgy”.
A large poll by Lord Ashcroft asking people how they voted did suggest that the socio-economic groups A and B – so broadly including “the bosses” – were more likely to Vote Remain then the rest – that is “the workers”.
On the other hand those in the private sector – all those companies the CBI boast of – were more likely to Vote Leave than those employed in the public sector.
The truth is that business opinion was split. That is why it was sensible of other business organisations – such as the Institute of Directors – to remain neutral during the referendum campaign.
The British Chambers of Commerce was also neutral. When its Director General, John Longworth, expressed his personal support for Brexit he was forced out after Downing Street complained.
— Louise Mensch (@LouiseMensch) August 10, 2016
It is generally understood that big business was more likely than small firms to back Remain. Although since the referendum some of the CBI larger members must have been pleasantly surprised to find their share price rising and their order books bulging – despite the dire warnings from the CBI “experts”.
Yet the CBI arrogantly ignored the section of its membership that backed Brexit.
Now finally the construction firm JCB has had enough. It has left the CBI. The firm employs 6,500 people and is one of our biggest exporters.
Peter Hargreaves, of the financial services firm Hargreaves Lansdown, backed the decision saying: “Any employer that joins the CBI has gone soft. Businesses squander their money on it but it has no relevance in today’s world.
“I’d like to see other companies joining JCB in leaving this organisation, which told lies about Brexit.”
The CBI has always favoured a corporatist rather than free enterprise approach. In the 1980s Margaret Thatcher introduced a series of crucial reforms which transformed the economy.
It is well-known that she faced the opposition of militant trade union leaders. But there was also the CBI seeking to thwart her. The then-head of the CBI Sir Terence Beckett promised a “bare-knuckle fight” to defeat Thatcherism.
Several members resigned in protest at what was later proved to be a deeply misguided stance by the CBI.
What is the reason any firm would join the CBI? It claims to represent their views and to “lobby” for them.
That seems to be pretty much it, though it also boasts: “Our Member Lounge is your space in our London HQ, for you to host your meetings or meet with CBI policy experts.”
One of its members certainly has its views faithfully represented. The BBC pays a sub of £21,756.80 a year. But I suspect some others may agree with JCB that their money could be better spent elsewhere.
Perhaps it could go instead to fund an organisation pushing to get rid of as much as possible of the red tape currently imposed by the EU.
While the CBI’s doom about Brexit is not likely to to prove accurate for the economy as a whole, they might well have to face up to a downturn in their own finances.
Apart from patriotic and independently-minded businessmen cancelling their subs, the CBI also faces the prospect of missing out on the £148,000 they are currently paid by the EU each year.
The departure of JCB leaves the CBI stuck in a hole. If they have any sense they will stop digging.