CBI in talks about tie-up with manufacturers’ body Make UK
The CBI, the embattled employers’ lobbying group, is in talks with Make UK, the manufacturers’ body, about areas of potential collaboration in what some observers believe may be the prelude to a full-blown merger.
Sky News has learnt that two of Britain’s most influential business organisations have been holding preliminary talks about forging a closer alliance in areas such as industrial strategy policy.
A source close to one of the organisations said it was “premature” to predict that a full-blown merger was on the cards, although they acknowledged that it was a possibility.
In a statement issued to Sky News, Make UK said: “Make UK and the CBI are in early-stage discussions to explore how the two parties might work closer together.
“These discussions are positive and constructive but remain at an early stage.”
The CBI issued a virtually identical statement.
It was unclear on Thursday how a formal merger would work, whether the CBI’s name would disappear in favour of Make UK’s or how a combined organisation would represent non-manufacturing businesses.
The possibility of a formal combination of two of what were informally named the B5 business groups underlines the parlous nature of the CBI’s standalone existence, even after its members voted in June to support its revised strategy in the wake of a sexual misconduct scandal.
It emerged recently that the CBI is closing most of its overseas offices as part of a cost-cutting drive, with an outpost in Brussels its only remaining international presence.
Read more from business:
Ryanair boss pied in the face by protesters
Offshore wind warning as government auction flops
Competition watchdog probes £2bn vet industry
The closure of offices in Beijing, Delhi and Washington, DC were seen as symbolic of the retrenchment of what was for decades Britain’s dominant business representative organisation.
The CBI was plunged into crisis in April when a swathe of sexual harassment and misconduct allegations was exposed in the media.
Its board then decided to sack Tony Danker, its director-general, over allegations that he had made a number of staff feel uncomfortable.
The group, which is seeking a new president to replace Brian McBride, is cutting jobs across its operations amid growing financial pressures.
It has already embarked on a compulsory redundancy programme, sources told Sky News, with roughly a third of the workforce said to be vulnerable.
The CBI was hit by a wave of membership resignations – including Aviva, John Lewis Partnership and NatWest Group – earlier this year when it emerged that it was facing multiple allegations by women who were previously employed there.
Please use Chrome browser for a more accessible video player
CBI: Members approve reform package
Jeremy Hunt, the chancellor, said there was “no point” interacting with it after it was deserted in droves by leading corporate members.
The claims included a rape allegation unrelated to Mr Danker.
The other members of the B5 quintet are the British Chambers of Commerce, the Federation of Small Businesses and the Institute of Directors.
In the last six weeks, the CBI has made efforts to begin restoring relations with the government and Labour after both said they would suspend senior-level contact with the group.
The CBI has claimed in the past to represent 190,000 businesses – although most of these are not direct members.
It was incorporated by royal charter in 1965.
Many of the large companies which suspended their membership pending the conclusion of a police investigation will face a decision in the coming months about whether to renew their memberships.
Had the CBI board lost the vote in June, it would have filed for insolvency.
Rain Newton-Smith, the new director-general, hinted after she took over that the group would change its name.
The UK’s jobless rate ticked up to 4.6% in April while payrolled employment has fallen sharply since, according to official figures covering the period when budget tax hikes on businesses came into effect.
The Office for National Statistics (ONS) said the new unemployment rate covering the three months to April was the highest since July 2021.
It had previously stood at 4.5% – a total of more than 1.6 million people.
At 4.6%, it is above the peak level predicted for this year, just in March, by the Office for Budget Responsibility.
Money latest: My insurance firm charged me £700 after my dog died – is this right?
Figures from the taxman also highlighted by the ONS showed the number of people in payrolled employment during May fell by 109,000 – double April’s revised figure of 55,000 and the biggest monthly drop in five years.
The ONS Labour Force Survey data was the first to cover April’s rises in employer national insurance contributions and the national living wage – hikes to costs for businesses which lobby groups had warned would result in job losses, price rises and lower wage settlements.
The ONS figures showed average weekly earnings, excluding the effects of bonuses, over the three months to April were weaker, from a downwardly revised 5.5% to 5.2% year on year.
Please use Chrome browser for a more accessible video player
Cost of living impacts families
Liz McKeown, ONS director of economic statistics, said: “There continues to be weakening in the labour market, with the number of people on payroll falling notably.
“Feedback from our vacancies survey suggests some firms may be holding back from recruiting new workers or replacing people when they move on.”
The ONS data piles more pressure on Chancellor Rachel Reeves, just a day after she confirmed her winter fuel U-turn would cost £1.25bn.
She has consistently defenced her budget, arguing the taxes on business were a one-off necessary evil to account for a £22bn “black hole” in the public finances inherited from the last government.
Please use Chrome browser for a more accessible video player
How big is winter fuel payments U-turn?
Employment minister Alison McGovern said in response to the data: “Six months after we launched Get Britain Working, we are already seeing the benefits with economic activity at a record high, with 500,000 more people in employment since we entered office and real wages growing more since July than in the decade after 2010.
“People all over the country are benefiting from increased training opportunities and the newly launched Jobs and Careers Service will allow us to test new and innovative approaches to personalise employment support.”
Despite the wage figure easing, that 5.2% level remains comfortably ahead of the 3.5% rate of the pace of price growth – inflation.
Read more from Sky News:
Paternity pay in UK ‘among lowest in developed world’
Government commits £14.2bn to new nuclear power station
The curb to consumer spending power will be welcomed by the Bank of England as its rate-setters continue to fret that strong wage growth represents an inflation risk ahead.
The ONS figures did little to boost financial market expectations of a further rate cut next month.
LSEG data showed 90% of market participants believed there would be no no change – with just one further cut this year being fully priced in.
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports1 year agoStory injured on diving stop, exits Red Sox game
-
Sports2 years agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike
-
Business3 years agoBank of England’s extraordinary response to government policy is almost unthinkable | Ed Conway