Is the CBI Being Honest? New revelations in CBI crisis

The CBI led the anti-devolution business campaign. History shows they were wrong then, and it will show they are wrong now.

>Breaking news - 22/04/14 Highlands and Islands Enterprise, The Law Society of Scotland and The University of Strathclyde have joined yesterdays leavers Glasgow, Aberdeen & Edinburgh Universities in resigning from the CBI over #indyref stance.<

When the Electoral Commission contacted Business for Scotland in 2013 to say that they had identified Business for Scotland as a possible campaigning body that may need to be registered, we agreed that we would register. However, we added the instant caveat that we would only register if the CBI also did so, and asked the Electoral Commission to look into CBI activity. The Electoral Commission is a professional and ethical organisation which listened to our case. They explained they could not comment further but had listened to our concerns. As the CBI stepped up its campaign and clearly identified itself as a No campaigning organisation we contacted the Electoral Commission several more times to make the case for the CBI being monitored.

On Friday April 18th the CBI UK (not CBI Scotland) registered with the Electoral Commission as a formal participant, with the ability to spend up to £150,000 campaigning against Scottish self-determination. We were notified of the CBI registration very shortly after it was approved by the Electoral Commission and posted an article on our site, as well as making relevant journalists aware of the development.

The CBI has not simply taken a view on the issues; it has taken a policy decision against independence and actively campaigned for months now. It has spent money doing so. Likewise, it will spend money doing so during the regulated period. CBI officials obviously decided on this course without thinking through the legal dimension. The CBI then found itself in a position where it had to register with the Electoral Commission as a No Campaign participant. It now faces substantial problems related not least to the difficult position it has placed its membership in, more of which will become clearer in the days and weeks ahead.

The CBI did NOT have to take a view against independence. It could have raised concerns about particular policy issues or perhaps, more constructively, have given a view on how the powers of independence could be used to grow the private sector, without expressing a definitive view on Yes or No. It could have also questioned the No campaign's ridiculous scare stories in order to represent a balanced view. But instead, officials couldn't help themselves. They decided to go one step further by making clear they were against independence. However, it seems clear that they had NO mandate from the membership to do so.

CBI Director General John Cridland's narrative, obviously cobbled together as the CBI tries to stem the flow of exits and finally considers the legal difficulties in which it finds itself, is completely inconsistent. He is digging himself into a deeper hole.

There is no evidence that there has EVER been an anti-independence resolution passed at the CBI through proper procedures of governance. The CBI's own members say talk of "wide consultation" is a nonsense and the CBI should be very careful about what it tries to suggest in this regard. Officials decided on a course of action, and it now seems clear they did so with no proper mandate.

The fallout from the CBI registering

Firstly, two commercial companies Balhousie Care Group and Aquamarine Power resigned from the CBI stating that their companies were neutral in the debate and could not be members of an official No campaigning body. This was quickly followed by STV, Scottish Enterprise and Visit Scotland, all of whom have legal requirements not to be members of political campaigning groups and all of which want to be neutral in the debate. The Scottish Government has confirmed that it is inappropriate for public sector bodies to maintain membership of political campaigning bodies – although that frankly that goes without saying.

It is not simply public sector organisations which have a problem now. So do any private sector members whose stated position on the referendum is to be neutral. Expect more developments in this regard. Make no mistake, the CBI is in crisis and more twists are to come in this tale.

The CBI must be honest and open with the Scottish Business community

Business for Scotland does not have a problem with business people supporting a No vote. The more there are, the more we can debate with them and win the arguments. On many occasions we have had debates and TV interviews canceled because the No Campaign cannot supply business people to make their side of the argument. We eventually changed our stance of only debating with business people and now most of our debates are against politicians from unionist parties.

However, we oppose the CBI's behaviour because we believe there is an inherent dishonesty in their position. We also believe this story is only beginning to be understood by the press, and those who believe the weekend's headlines were overblown will be proven wrong in the days ahead.

Are the CBI being honest?

Four areas where the CBI need to be questioned further:

False Neutrality and Misrepresentation

The CBI has throughout the last year gained press and media coverage via a series of statements questioning independence. This coverage was largely gained because the CBI put itself forward as a politically neutral organisation simply representing the views of its members. Then two things happened over the last few months. First, the CBI came under pressure from Business for Scotland in a head to head debate between myself and the CBI Director General in the media. He then withdrew from a planned televised debate with me later that day.

Secondly, the CBI decided to be more forthright in public against independence. In that period members of the CBI have been contacting Business for Scotland to raise concerns, including the fact that all of the CBI papers on Scotland's political future are one sided and effectively amount to No campaign briefings. The CBI has also put itself forward to third party organisations as the neutral chair of debates involving representatives from Business for Scotland and the No Campaign.

As reported in the Scotsman on December 5th 2013, CBI Director for Scotland Iain McMillan “spoke with pride of the CBI’s outspoken view that “Scotland, England, Wales and Northern Ireland are better together”. He pointedly added:“Even if some others don’t or won’t come out and say it, we will not tire of stating our position and go on saying it”.

Also reported in the Scotsman in February 2014 Mr McMillan said: “The members of CBI Scotland have looked at the independence issue very carefully, and our Council’s position on behalf of members, is that Scotland’s economy and its businesses will fare better with Scotland being part of the United Kingdom than Scotland leaving the United Kingdom, with all that entails.”

The CBI has been criticised by its own members in the past for misrepresenting their views on independence. Several CBI members who have all made statements neutral on the referendum have complained publicly that Iain McMillan and the CBI have misrepresented their views on independence. These include “Barclays Wealth, Edrington Group, Aquamarine Power and even the Law Society of Scotland, who all publicly denied Mr McMillan’ claims about independence.”

Specifically, Mr McMillan stated that at a meeting of the CBI, its members were ''very much at one'' with his organisation's calls for an early ballot on the referendum.

A Barclays spokesperson stated that “Barclays is agnostic on the timing of a referendum on Scottish independence and has never expressed a view on this subject."

A spokesman for Edrington, said: "Edrington didn't express any views at the meeting. We were there to listen to the Secretary of State outline his thinking on the consultation."

Martin McAdam, Chief Executive of wave energy company Aquamarine Power, whose company has now resigned its CBI membership and who personally appears to have been a CBI council member at the time said: “it was "absolutely not the case, that there had been agreement on timing, and he had told the meeting he felt strongly it was for Scottish Government to decide.”

He said: "I have no idea how he [Ian McMillan] came to arrive at that. There's no way that I could say that all the members who were present at the meeting had a single view in relation to the timing of the referendum. That was not the case”.

In yesterday's Sunday Herald, Paul Foley, a director of Kynesis Consulting, which is a CBI member, and who chairs the CBI Scotland Public Services committee, said his firm was "unaware of any formal consultation process to assess the views of CBI's Scottish members". He added: "I find it very disappointing and quite irritating".

Inflated Membership Numbers

It is often said that the CBI have 24,000 Scottish members. This is not the case.

In January this year The Telegraph reported

... “the CBI did not represent the views of companies north of the Border, pointing to Business for Scotland signing up 1,100 (now 1,800) members. However, this is dwarfed by the CBI, which has around 24,000 members in Scotland that employ 630,000 people”.

“The same article then goes on to say: “The CBI has around 240,000 members across the UK”.

The 24,000 figure is used over and over again on websites and in the media and we believe it is not possible for the CBI to have either 24,000 Scottish members or 240,000 UK members.

CBI Scotland Council member Anthony Rush has admitted, that the CBI may only have around 100 members and "he does not know where the true number of Scottish companies lies.” The CBI is so secretive about its membership numbers that even some of its Council Members do not know how many they have. Business for Scotland highlights that there is no evidence that the CBI have more than 70 companies - the vast majority of which take a neutral stance on Independence and were not consulted on the CBI's support for and involvement in the No Campaign.

To put it another way, since this story broke on Friday, 73 Scottish business people have joined Business for Scotland - that may be more new individual members for Business for Scotland over this weekend than the CBI has organisational members from Scotland.

Stated reasons for joining the No Campaign

The CBI issued a statement to the Sunday Herald explaining their reasons for officially joining the No Campaign:

"Given that we regularly hold a number of events in Scotland, including our annual dinner and lunch, and since these will fall within the campaign period, registering with the Commission is a question of good governance and ensures we comply with the law during the referendum period."

Let us be perfectly clear - if you do not intend to spend more than £10,000 campaigning between May 31st and September 18th 2014 you do not need to register with the Electoral Commission. By registering the CBI now has the legal right to spend £150,000 in campaigning.

Holding an annual dinner or lunch that you would have held if there was no referendum would not all count as campaign spend even if you have a speaker from one side or the other in attendance. Issuing press releases or documents does count. Paying the salaries of staff who speak against independence in the press does count and writing reports / lobbying for a No vote does.

Business for Scotland believes that the Electoral Commission may have identified the CBI as campaigning for a No vote and requested their registration.

No Mandate to campaign officially

The CBI also told the Sunday Herald that the decision to campaign against independence “reflects the views of the vast majority of our members”.

A few weeks ago, John Cridland was questioned on Scotland tonight about the lack of consultation with his members. In response, he stated quite clearly:

"I represent 200,000 businesses across the UK those employ 500,000 Scottish workers. Of course when I speak it is on the basis of a mandate from my members after careful consultation. The decisions on this policy are set by CBI Scotland Council that Council met in February and I attended that meeting and that was where this mandate was decided."

However, the Council of the CBI appears to have included at that time STV, Scottish Enterprise and Aquamarine Power, all of whom have resigned because they are neutral and cannot be members of a No campaigning body. Did they not state that this was the case if they were really consulted? In any case, none of them seem to accept that there was any resolution passed.

Had the CBI Council in Scotland been consulted, then surely the CBI would have known that the resignations would have to happen. Companies such as STV and public sector bodies such as Scottish Enterprise and Visit Scotland would presumably not have been surprised by the move.

CBI claims to have a mandate from members but unless there is a new definition of mandate in the dictionary we do not believe one exists.

CBI did NOT have to take a view against independence. It could have raised concerns about particular policy issues or perhaps even more constructively given a view on how the powers of independence should be used to grow the private sector without expressing a definitive view on Yes or No. But instead, officials couldn't help themselves, they decided to go one step further by making it clear they were against independence.

Mr Cridland's narrative, obviously cobbled together as CBI tries to stem the flow of exits and finally considers the legal difficulties in which it finds itself, is completely inconsistent. He is digging himself into a deeper hole.

Business for Scotland has contacted as many CBI members as we can identify and asked them for their organisations official stance of the independence referendum. Any journalist could have done this and still could.

Our work continues and we will update this list in the coming days but this is what we found so far:

25 formally taking a NEUTRAL stance

Robert Gordon University
Scottish Power
Glasgow Caledonian University
Scottish Television (has now resigned)
Alliance Trust
Clydesdale Bank
Scottish Enterprise (has now resigned)
Standard Life
Kynesis
SELECT (has now complained)
Liddell Thomson
ICAS
Visit Scotland (has now resigned)
Millsteam Associates
Balhousie House Care (has now resigned)
Ledingham Chalmers
Maclay, Murray and Spens
Morton Fraser
The Law Society of Scotland
Barclay's Wealth
Aquamarine Power (has now resigned)
John G Russell - No current position
Memex Technologies
Scottish Leather Group Undecided / Neutral
Edrington Group

2 No vote supporters

M Computer Technologies (owner sits on board of the No Campaign)
Balmoral Group (Chairman is a supporter of the No Campaign)

Despite there being two organisations that support a No vote we are aware of several leaders in the above mentioned organisations who are pro-independence but who quite rightly distinguish between a personal and corporate view.

Individuals, not companies join Business for Scotland. EVERY member signs a declaration saying they support independence and believe Scotland's economy will thrive with a Yes vote. As such we have a 100% mandate to campaign for independence on behalf of our members. In total, 26% of businesses we have previously identified as CBI members have directors or owners that are Business for Scotland members.

There is no evidence that there has EVER been an anti-independence resolution passed at the CBI through proper procedures of governance. Their own members says that talk of "consultation" is a nonsense and CBI should be very careful about what it tries to suggest in this regard. Officials decided on a course of action and it seems they did so with no proper mandate.

The vast majority of CBI members are neutral and desperately want to remain so. They do not want their brands at the centre of a democratic political debate and CBI is dragging them to that place. it cannot be said that the CBI membership in Scotland is against independence.

Finally, in relation to comments made by Brian Monteith in the Scotsman today, the weakest argument we've heard yet is that because CBI has the word "British" in its name, it should be against independence. But the referendum is not a question of Scottish versus British identity. The latter will remain after a Yes vote and there's no reason why the CBI could not have as well. However that now looks increasingly unlikely as its membership shrinks.

Conclusion

The CBI must come clean on what basis it has developed a campaigning position and activity against independence without the sign-off of members. Moreover, was it approached first by the Electoral Commission?

The CBI must explain why if it has a mandate to join the No Campaign from its Scottish Council why several Council members were clearly surprised by the decision to register with the Electoral Commission and then felt they had to resign.

The CBI must be honest about its membership. How can anyone take them seriously or believe anything they say when they say they have a membership of 24,000 members in Scotland but potentially have less than 70!

How do the CBI get away with claiming a mandate to join the No Campaign when 93% of members polled state their organisations are neutral on the issue?

The CBI is in serious trouble, and given their new found formal affiliation, so is the No Campaign. This story has some legs in it yet and we would not be surprised to see more resignations in the coming days.