Scandal-hit CBI ‘is finished’, says City guru Helena Morrissey

The CBI’s future looked bleak last night after a leading City figure warned that its days were numbered.

Baroness Morrissey, a long-serving financier, believes the business lobby group’s apologies following a string of sexual harassment and rape allegations have been ‘too little, too late’.

The organisation had already lost credibility in the business community, said the peer.

‘Losing trust is so quick and easy to do, and regaining it is so difficult,’ she said. ‘Their [the CBI’s] job is to represent business but they don’t have the ear of government and they don’t have the confidence of business.’

Asked if she thought the CBI was finished, she said: ‘I do I’m afraid.’

The scandals engulfing the lobbying outfit include the abrupt firing of its director-general Tony Danker after allegations of inappropriate behaviour while allegations of rape and sexual assault have been made against other members of the organisation. Danker, 51, has claimed he has been made a ‘fall guy’ for the wider crisis.

The emergence of a second rape allegation from a female employee last week sparked a mass exodus of large firms, including insurance giant Aviva, retailer John Lewis and telecoms group BT. The Government and the Labour Party have also cut ties.

And yesterday, the City of London Corporation, the body that governs the Square Mile, said it was suspending its CBI membership. A spokesman said it condemned the ‘culture of abuse at the CBI’.

But Morrissey, 57, criticised Danker’s replacement Rain Newton-Smith, a former CBI chief economist who took over earlier this month.

‘I’m sure she’s wonderful in lots of respects but it doesn’t quite cut the mustard if you’re trying to show that you are embracing a new approach to all of this,’ Morrissey told the BBC. 

Martha Lane Fox, a businesswoman and president of the British Chambers of Commerce, a business network with around 53 branches across the UK, said the group could step in to fill the gap left by the CBI’s implosion.

‘The BCC is an extremely vibrant and very long-term network,’ she said. ‘We have 100,000 businesses internationally and 53 chambers. A different structure built up locally with national representation.’

The comments followed reports that the BCC had experienced a jump in inquiries, particularly from large businesses amid the scandal engulfing the CBI as firms searched for new representation ahead of next year’s general election.

But Paul Drechsler, who served as president of the CBI from 2015 to 2018, hit back against claims the organisation was defunct, saying its status was unique in Britain’s business community.

He said: ‘In a crisis like this, the board and the management need to declare whether they want to fight or flight.’

Drechsler told Times Radio that the group had ‘without question the best economic team in terms of industrial economics in the UK.’ 

He added: ‘It is the organisation that represents the UK, in the international settings for the G7 and G20. Whatever happens, the UK needs all of that.’

The CBI, founded in 1965, effectively mothballed itself last week after dozens of major firms ended or suspended their ties with the group. The flood has since slowed to a trickle as more businesses and groups sever their links.

Sensodyne maker Haleon suspended its ties with the CBI despite only being a member for six months, while the Society of Motor Manufacturers and Traders, the trade body for the UK’s car industry, has suspended its engagement with the CBI following the ‘serious and disturbing allegations.