CBI scandal: NatWest, Meta and BP amid big names to quit or suspend collaboration
NatWest, Meta, BT, BMW, ITV and Unilever have joined a growing list of big corporate names in terminating their membership of the CBI or suspending collaboration due to the scandal engulfing the business lobby group.
The rush for the exit door came after the Guardian newspaper reported that a second woman had made a rape allegation – against two male CBI co-workers – building on the series of historic serious misconduct claims to have engulfed the body in recent weeks.
A NatWest Group spokesperson said: “Following careful consideration, and having previously paused all activity, NatWest Group has today withdrawn its membership of the CBI with immediate effect.
“British business needs a strong representative voice. Given the extremely serious allegations made against the CBI, we no longer have confidence that it can fulfil this role at the present time.”
A spokesperson for Facebook owner Meta also confirmed that they had paused engagement with the CBI while the investigation is ongoing.
BT Group said: “In light of the appalling allegations made, BT Group has decided to suspend its membership of the CBI with immediate effect.”
Facebook owner Meta has paused engagement with the CBI while the investigation is ongoing
Carmaker BMW joined the exodus late on Friday, saying they were “concerned by the allegations relating to the CBI. The Group has therefore decided to terminate its membership with immediate effect.”
They were joined by Rolls-Royce, who said: “In light of the recent allegations, which are deeply concerning, we are suspending all interaction with the CBI with immediate effect.
“We will await the completion of its ongoing investigations before making a final decision on our membership.”
A spokesperson for ITV told Sky News that the broadcaster “will pause engagement with the CBI with immediate effect and will not renew our contract with them.”
Unilever also confirmed that they were severing ties, saying: “Due to the very serious and ongoing allegations, we can confirm that we have suspended our membership of the CBI.”
The John Lewis Partnership had earlier cited “further very serious and ongoing allegations” as the reason for quitting the organisation.
It’s not exaggerating to call this an existential crisis for the CBI
If one were to compile a list of some of the most prestigious blue-chip UK employers, it would probably include NatWest, BP, Shell, Aviva, the John Lewis Partnership, Virgin Media O2, WPP, Phoenix Group, BT, PwC, EY, Schroders and AstraZeneca.
Were that list to be enhanced with prestigious foreign-owned businesses that are major employers in the UK, and which enjoy a meaningful UK presence, it would probably extend to take in names such as BMW, Mastercard, Ford, Fidelity, Jaguar Land Rover and JP Morgan.
That underlines the crisis now engulfing the CBI. All of those companies have either paused their engagement with the employers organisation or cancelled their membership altogether in the wake of the latest allegations consuming the CBI.
It was bad enough that the CBI felt obliged to dismiss its former director-general, Tony Danker, amid allegations of workplace misconduct.
What made it worse was a report in The Guardian, the newspaper that first published details of the allegations against Mr Danker, that a former CBI employee had filed a complaint that she was raped at a party hosted by the organisation back in 2019.
That has now been made worse still by a second woman coming forward to say she had been raped by colleagues while working for the CBI.
It is not now over-exaggerating to say that this has become an existential crisis for the CBI.
Insurer Aviva was first to reveal its hand on Friday, just moments after Sky News reported that abrdn, the FTSE 100 fund manager, was also considering its position with the organisation.
Fellow insurers Phoenix Group and Zurich swelled the exodus alongside the industry body the ABI while Virgin Media O2 also confirmed it had terminated its membership.
Asda, accountancy giant PwC and National Grid later confirmed they had suspended all activity with the business lobby group while Lloyds Banking Group was also understood to have done the same.
An AstraZeneca spokesperson said: “Following these grave allegations, we have decided to pause our engagements with the CBI while these are investigated.”
“In light of the very serious allegations made, and the CBI‘s handling of the process and response, we believe the CBI is no longer able to fulfil its core function – to be a representative voice of business in the UK,”, Aviva said.
“We have therefore regrettably terminated our membership with immediate effect.”
CBI president Brian McBride had previously admitted that a “handful” of its 190,000 members had departed since the crisis began.
Brian McBride was elected president of the CBI in June last year
They are known to have included, before Friday, the British Insurance Brokers’ Association.
Shell is understood to have suspended dealings with the CBI last week.
The potential departure of abrdn would be acutely embarrassing for Mr McBride personally as he currently serves as a non-executive director at the firm.
Sky’s City editor Mark Kleinman reported that the board had been debating whether to terminate its status as a CBI member once a CBI-commissioned review of sexual abuse allegations against staff members had been completed.
A source said that alternatively it could decide not to renew its membership when it expires at the end of this year.
A string of blue-chip companies, including Rolls-Royce and Marks & Spencer, have raised public concerns about the crisis.
Last week, the CBI sacked Tony Danker, its director general, after saying it had lost confidence in his ability to lead the organisation amid claims about his personal conduct.
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Tony Danker was sacked on 11 April
Mr Danker told the BBC this week he had been “thrown under the bus” and said the allegations against him did not merit his dismissal.
He also apologised for making a number of CBI employees “uncomfortable”.
Business leaders have lined up in recent weeks to denounce its handling of the crisis, saying it had been too slow to apologise and had erred by appointing an insider, Rain Newton-Smith, as Mr Danker’s successor.
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Three employees have been suspended, while a police investigation is under way.
The CBI said this week that the second phase of an inquiry by the law firm Fox Williams would conclude imminently.
“The board will be communicating its response to this and other steps we are taking to bring about the wider change that is needed early next week,” the group said on Thursday.
Business
Chancellor Rachel Reeves accused of refusing to ‘face up to her own failures’ amid market turmoil
Chancellor Rachel Reeves has been accused of refusing to “face up to her own failures” by “jetting off to Beijing” during a week of market turmoil.
Shadow chancellor Mel Stride accused the chancellor of ducking difficult questions as the “government was losing control of the economy” while Ms Reeves visited China over the past week with a delegation including the governor of the Bank of England and the heads of HSBC, Standard Chartered and Schroders.
On Monday, both long-term 30-year and 10-year government borrowing costs rose, with the 30-year effective interest rate (the gilt yield) reaching a new high of 5.47% – a rate not seen since mid-1998.
The pound also hit a 14-month low, prompting questions over the chancellor’s future.
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She received a slight reprieve on Tuesday morning as the pound recovered some loss and ticked up slightly to $1.22, while government borrowing costs dipped slightly.
But the Conservatives used Ms Reeves’s absence over the past week to attack her, with Mr Stride telling the Commons: “While the government was losing control of the economy, where was the chancellor?
“Her trip to China had not even begun when my urgent question was taken in the House last week, she was still in the country, but she sent the chief secretary rather than face up to her own failures.
“So can I ask (Rachel Reeves) why she chose not to respond herself? The chancellor, of course, ducked the difficult questions by jetting off to Beijing.
“I believe that in Labour circles, they are calling it the Peking duck.”
Chinese Vice President Han Zheng with Rachel Reeves in Beijing during her visit. Pic: AP
But Ms Reeves dismissed the criticism and vowed to stick to the fiscal rules she set out in the October budget – to get day-to-day spending through tax receipts and get debt down as a share of the economy.
“We remain committed to those fiscal rules and we will meet them at all times,” she said.
She also defended her trip to China, saying engaging with countries around the world will “deliver growth”, and said she brought up human rights issues with China.
“Leadership is not about ducking these challenges, it is about rising to them,” she told the Commons.
“And the economic headwinds that we face are a reminder that we should, indeed we must go further and faster in our plan to kickstart economic growth that plunged under the last government.”
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Why is the UK economy in big trouble?
The chancellor said her trip to China has meant greater access to the Chinese market for British firms and helped safeguard the UK’s national security.
New agreements were made on vaccine approvals, fertiliser, whisky labelling, legal services, automotives and accountancy to “unlock £1bn of value for the UK economy”, she said.
Ms Reeves said she raised the case of imprisoned British citizen and media tycoon Jimmy Lai with every minister she met in China.
She said she also raised concerns about Russia’s war in Ukraine, human rights, restrictions on rights and freedoms in Hong Kong and the “completely unjustified sanctions against British parliamentarians”.
“A key outcome of this dialogue is that we have secured China’s commitment to improve existing channels so that we can openly discuss sensitive issues and the ways in which they impact our economy because if we do not engage with China, we cannot raise our real concerns,” she said.
“This dialogue is just one part of our engagement with trading partners right across the world.”
Google could be required to hand over data it collects to businesses as the UK competition regulator launched an investigation into the tech giant.
The Competition and Markets Agency (CMA) said it launched the inquiry to assess how Google‘s search and advertising services impact users and businesses such as advertisers, news websites, and rival search engines.
It will be looking to see if Google used its dominant market position to stop others from competing and if barriers are preventing potential rivals from entering the market.
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Of particular interest to the CMA is whether Google can “shape the development” of new AI services.
Also being assessed is whether Google is using its prime position to preference its own services, such as Google Shopping and Google Flights.
“Potential exploitative conduct” through Google’s collection and use of “large quantities of consumer data” without informed consent will be examined, as will the use of things like news articles without paying the publishers, the CMA said.
The CMA could compel Google to make collected data available to other businesses or order them to give publishers more control over how their data is used.
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Google is by far the most popular search engine in the UK, answering more than 90% of all general search queries, and hosting more than 200,000 UK advertisers.
The investigation announced on Tuesday is the first launched under the digital markets competition regime which took effect on 1 January.
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The new regime enables the CMA to designate companies with a so-called strategic market status and impose new rules on them as a result.
Effective competition among search engines could keep down the cost of search results advertising, equivalent to nearly £500 per household per year, the CMA said.
Investigations in EU and US
The UK is just the latest country to look at Google’s search engine primacy.
A federal US court ruled in August Google illegally maintained an online search monopoly.
Meanwhile, an EU investigation into Google’s parent company Alphabet is examining whether it imposed restrictions that made it difficult for developers to promote services by other companies, looking at search results for services such as Google Shopping and Google Flights.
The UK government had ordered regulators such as the CMA to come up with ideas for growth and investment amid sluggish economic growth.
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