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As I See It

CBI out of tune and out of ideas

Terry portrait with tieThe CBI and the Scottish Government have not exactly been the best of bedfellows. Indeed, they fell out spectacularly during the independence referendum campaign after the CBI registered as a supporter of the No campaign.

It caused a huge political row and a number of CBI members resigned, including most of Scotland’s universities, several quangos, the Law Society of Scotland and STV, mainly on grounds of requiring the CBI to take a neutral position.

The CBI was forced into an embarrassing u-turn, claiming an ‘administrative error’, and the director general at the time, John Cridland, was forced to admit that it “wasn’t the CBI’s finest moment.”

Since then the CBI Scotland has been much less visible. Iain McMillan, its anti-independence former director who was rarely out of the headlines, was replaced by former Sun Microsystems boss Hugh Aitken who, in spite of his own previous reputation for spikiness, has maintained a low profile.

At CBI Scotland’s annual black tie dinner Mr Cridland’s successor Carolyn Fairbairn will attempt to raise the temperature once more with the Scottish government. Except the briefing notes on her speech suggest she is struggling to pick any sort of a fight.

The most notable feature of her address – or at least the preview of it –  is that there is no reference to independence. Perhaps this is now seen as too much of a hot potato for the CBI which will not wish to re-open old wounds.

Instead she is focusing on government-business relations and, it has to be said, it looks as if Nicola Sturgeon has stolen her thunder.

A call for implementation of the Barclay review of business rates comes a little after the event. Ms Sturgeon pledged to do that in her statement in Holyrood on Tuesday.

Ms Fairbairn will call for a business-led productivity task force. Ms Sturgeon might reply, as she did in an interview with Andrew Neil in May, that Scotland’s productivity has increased at a faster rate than the rest of the UK.

The CBI boss will challenge the Scottish Government to set a “concrete target for public and private R&D spending so progress can be tracked”.

On Tuesday Ms Sturgeon unveiled plans to increase R&D spending by 70% with the aim of leveraging a further £300m from private sources. It’s not clear how much more of a target can be presented, given that this sort of funding is dependent on so many variable factors.

Ms Fairbairn clearly has a job to do to ensure governments north and south are kept on their toes and deliver benefits for business. The pre-speech notes suggest that she is having trouble finding serious fault lines with the programme that the Scottish government has presented.

It’s not clear why Ms Fairbairn believes Scotland champions small business and denigrates big business. Apart from the large business business rates levy, I’m struggling to think of an example of the Scottish government being negative towards big business. It’s not exactly gone out of its way to welcome the emergence of Standard Life Aberdeen, but nor has it opposed it. The government is fully in tune with supporting oil giants; it put the steelworks back into operation and is backing big pharma and renewables investment.

On Brexit, Ms Fairbairn will call for “frictionless trade, no tariffs, mutual recognition of standards and regulations as well as reciprocal access to people and skills across the EU. A smooth transition – no cliff edges. And answers and clarity as soon as possible.”

That could have come straight out of a Nicola Sturgeon speech to the SNP conference.

So why is Ms Fairbairn tonight urging the Scottish government to “work more effectively with the UK Government during EU negotiations” when the First Minister argues that it is Westminster which is stubbornly refusing to work with the devolved nations.

This is pretty thin gruel for the CBI’s dinner guests and it will be interesting to see what sort of response the director-general receives.

When she resorts to bland statements such as “there’s more that can be done” and that this will require “brilliant partnership between government and business” it smacks of a business organisation which is short of big ideas.

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