At last the Confederation of British Industry has, to its credit, said that it wishes to move on from the politics which manifested during the referendum campaign and the run-up to Brexit. Tony Danker, the new head of the CBI, acknowledged that the body was at odds with government for years.
I would hope “put politics behind us” means a recognition that it put the narrow, vested interests of multinationals – which are often foreign-owned and drivers CBI policy-making – above the national interest.
And the CBI’s chumminess with the EU goes well beyond this. Its officials take a naturally pro-EU line because EU contracts part fund the organisation. This is no doubt helped by those all expenses paid, gourmet meetings in Brussels. There is nothing so base as human nature. If “too political” does not mean this, it should.
At the same time the CBI has asked the government not to stray from EU regulation, which raises the question as to what game they are really playing?
Big business loves regulation. They have the resources to manage it and it is a marvellous barrier to entry for up and coming competitors. It preserves monopoly positions. But the vast majority of businesses are not big corporates and the bulk of innovation and creative disruption comes from entrepreneurs and new business. Governments that are complicit in stifling enterprise are condemning their economies to second-rate performance.
Maintaining close alignment with the EU also allows for a future campaign by the CBI to re-enter the single market, something that the EU has been promoting consistently, and has tried to enforce on the UK through the poison pill of the Northern Ireland Protocol.
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I will never forget giving evidence to a Parliamentary Committee and finding myself promoting enterprise while the CBI sat beside and in concert with the TUC, promoting the status quo.
Leaving the EU is proving to be so far a relative success, at least politically, even without the government taking steps to crystallise the advantages that Brexit affords. This has been largely due to the vaccination debacle in the EU versus the exceptional performance of the UK. The opinion polls now show 62 per cent of people saying that it was a good idea to Brexit. Over time this will become even more stark provided the promise of strong economic performance is achieved. This can be partially delivered through superior trade deals around the world, but by far the greatest gift of Brexit lies in the domestic economy, which is 70 per cent of GDP. Super growth in the domestic economy will very much depend on tax and regulatory divergence from the EU.
This is where the rub lies since the government is showing no signs of pursuing the national interest. Mandarins, particularly Treasury ones, remain too much in awe of big business rather than enterprise, as we have seen through the lens of the lobbying scandal. Government must beware of siren calls for proto-single market membership, which is the EU and CBI game, and instead go “full tonto” for divergence and super growth.
John Longworth is an entrepreneur and businessman, former Conservative MEP and Chairman of the Independent Business Network. He was director-general of the British Chamber of Commerce from 2011 to 2016 and a Chair of the CBI Distributive Trades Panel and their economic spokesperson for several years.