Thousands of firms have been left voiceless on Brexit
We are entering the trade association conference season. These are the same business groups who have, at best, poured cold water on our post-Brexit prospects and opportunities and, at worst, set out to sabotage Brexit and undermine democracy itself.
It is taken as read that they are “the voice of business”, they are relied upon by the media and often quoted. They set out to influence government and thus impact on the democratic process. But who are they and do they really speak for business?
During my career I have been the director general of the British Chambers of Commerce (BCC), claiming to have up to 100,000 business members; I was for five years chairman of the Confederation of British Industry (CBI) distributive trades panel and its economic spokesman, and I have been a member of the Institute of Directors (IoD) legal committee, as it was at the time.
The CBI claim 190,000 business members and the IoD honestly admit to around 35,000 individuals who are members.
The other two groups are the Federation of Small Businesses (FSB), with a claimed membership of over 200,000, and the much smaller Engineering Employers Federation (EEF).
It looks impressive, however, even if these claims to membership were correct, which they are not, the combined total would add up to less than one sixth of all the businesses in the UK. So even when these groups speak with one voice there is a deafening silence from millions of unrepresented businesses, who may have a very different view.
In the past this hasn’t mattered too much because business tends to agree on the big issues, with the technical matters covered by individual sector groups. But on Brexit it matters greatly because many see this very differently.
The greatest distortion of opinion has been perpetrated by the CBI. A well-funded think tank made up of a vast army of bureaucrats, they bounce policy proposals off panels made up almost exclusively of multinationals and off the president’s committee – the president, of course, being a card carrying Remainer. What of the membership? Well they have a relatively tiny number of direct members who have the power of policy, the tens of thousands of members claimed are actually members of federations, once removed from the power structure.
Of course we don’t know just how tiny this group is, as it is a secret. When the chairman of the House of Commons Brexit committee asked the head of the CBI to reveal how many full voting members there are, she refused to answer, saying that it was a secret. Rather more openly the BCC have started to talk about numbers around 70,000, who are themselves members of local chambers, not of the BCC.
What they share with the CBI, however, is that these members may also be members of one of the other groups, thus leading to double counting, and in large numbers may be organisations that the public wouldn’t recognise as businesses at all: schools, local authority organisations, stuffed with bureaucrats and sometimes funded by the EU (as indeed is the CBI and some chambers).
By contrast the IoD is made up, for the large part, of middle ranking directors of the very same companies who make up the CBI and BCC, thus triple counting, but it hardly matters since IoD policy appears “out of the ether” as members are not asked on individual policy issues, albeit surveys are occasionally conducted. Witness that both the IoD and CBI supported Jeremy Corbyn in respect of the customs union – you couldn’t make it up. The BCC was the only group to acknowledge that there were different opinions among its members on our membership of the customs union.
For its part, a senior official of the FSB told me that were they to repeat their pre-referendum survey it was expected a clear majority would now be in favour of Brexit. Naturally, and of course they haven’t asked.
Finally there is the rather small EEF, whose members are significantly foreign owned, German, French, Italian and others of EU origin, all no doubt awaiting instructions from Berlin. Is it any wonder that these organisations who were once chomping at the bit for better regulation, at a time when nothing could be done about EU rules, have suddenly been struck dumb now we can do something. A deafening silence during the debate on regulatory divergence. Deregulation was the number one request of businesses I visited and addressed at events – thousands of them – and still is.
Who speaks for business? This is the question Lord Heseltine addressed to me when he joined the Government a few years ago. He suggested that British business is not well represented, unlike their counterparts in Germany where there is compulsory membership of trade groups. Being a corporatist he thought compulsory membership was a good idea.
It has certainly struck me on my visits with German business how committed they are to the “EU (German) project”, considering any fall out from a clean Brexit as collateral damage. They back their chancellor in Brexit negotiations even if it hurts them (what a contrast to the UK).
Compulsion is not the answer, but Heseltine may be right for once. The British business voice is certainly not well represented on Brexit and the so called “voice of business” should be taken with a large pinch of salt.
John Longworth is an entrepreneur, co chairman of Leave means Leave, and advisory board member of Economists for Free Trade
March 6th, 2018: Telegraph