Gerry Hassan: CBI, SCDI, FSB, SFE…what do they really stand for?

Published on Friday 18 December 2009 21:06

ONE of the paradoxes of devolution is that, for all the talk of greater openness and wider engagement, those who have gained most from the whole experience have been the voices of institutional Scotland; those who already had access and power pre-devolution.

A further paradox is that one of the specific interest groups which has gained most has been those who campaigned against devolution and whose attitude to the entire exercise ranged from dismissive to hostile – the business membership bodies.

It should not be too much of a surprise that institutional Scotland has gained so much from devolution. These groups, whether public, private or voluntary sector, knew the networks, contacts and channels and the way to work and maintain relationships.

Devolution, in the eyes of these groups, was not a major event and, in many ways, was an opportunity for more access, lobbying and ministerial hobnobbing; for being told how important they were by politicians, whilst trying to ingratiate themselves.

Groups such as CBI Scotland were damning of devolution for years, and poured scorn on the whole thing at every opportunity. Yet, with the establishment of the Scottish Parliament, they quickly became the new institution's best friends, while no-one has dared remind them of their historic opposition to devolution.

For all the supposed anti-business culture in Scotland, there is a plethora of business organisations, including CBI Scotland, the Scottish Council for Development and Industry (SCDI), Scottish Financial Enterprise (SFE), Scottish Chambers of Commerce, the Federation of Small Businesses (FSB) and Institute of Directors. As well as these national players, more recent bodies have emerged in the Entrepreneurial Exchange and Scottish Family Business Association.

These burgeoning groups are not the voices of business: they are the voices of their members and representative of their own "producer capture" – their staff, boards and their most vocal stakeholders.

Their main priority is justifying their existence, keeping up membership subscriptions and not losing revenue, like any other organisation.

They talk a language of business that is not informed by the real hands-on experience of running a business. The business lobbies are actually bureaucrats, who talk the language of business one or two steps removed from reality.

One of the main activities of the business lobby is engaging in policy, networking and influencing, which entails writing papers, responding to government consultations, lobbying and holding events and dinners.

The policy capacity of these organisations is threadbare. None of them engages in any real, substantial policy research, passing off as research short papers and membership surveys.

If you look across the business lobby, with one or two exceptions, few of them have ever substantially addressed such issues as health, education or social justice, all of which have consequences for business.

Years ago, I worked for one of the main business bodies, and it was a pleasant experience. But at the time it was – like all the others – obsessed with the subject of business rates, and I suggested we change the record.

I suggested we speak to government about other issues, such as public health, and how it affected the lives of so many of our citizens, and how to get business engaged in how to tackle it.

This would reflect well on us, make us distinctive and be welcomed by politicians. There was no interest or comprehension that this might be a positive and effective approach for everyone.

There are exceptions. The FSB's "Index of Success" benchmarked Scotland on an array of indicators internationally, covering wealth, equality, health and more, and was a refreshing contribution. The SCDI for ten years backed the Scottish Council Foundation to engage in independent think-tank work and aid policy capacity, though sadly that work has now ended.

More commonplace is the thinking behind the CBI's UK Public Services Strategy Board, which talks about the need for "efficiency" and "quality" but is focused on continuing much of what we have seen south of the Border in recent years: encouraging contracting out and the corporatisation of the public sector.

CBI Scotland's Iain McMillan wants a UK "austerity budget", but with no tax hikes, and the pain born through public sector and local authority cuts. One of the recurring themes of the business groups is their constant demand for public spending cuts while calling for increased spending on their favourite programmes, usually infrastructure and more business subsidies.

Another area on which the business lobby is completely silent is unrestrained corporate power and misuse, which has exploded in recent times.

Given that the UK is the tax-haven capital of the world, why are the CBI, the SCDI and the whole industry not commenting on the wholesale avoidance of corporation tax which costs, at a conservative estimate, 12 billion a year?

Are they in favour of this tax being collected and pursued, or do they favour corporate avoidance? Their silence suggests an embarrassment about the issue. Why bother addressing such a difficult subject, when instead you can bore on about public-sector pensions again?

Then there is the never-ending activity of dinner-table conversation, where each week, politicians and various opinion-formers go and talk at a CBI, SCDI, FSB or some other event. It is a polite dance, where the only choice and element of change seems to be of the respective business lobby's banner.

Much of what passes for even the intimate private dinner with key influencers is the same small group of people recycling themselves from one forum to the next as speakers and audience. The conversation is often not a dialogue, but characterised by platitude and clich, and several steps removed from the business language loved of the business lobby.

Scotland needs a thriving, dynamic business culture, but it does need to scrutinise the self-interest of the gatekeepers of the business lobby. Perhaps we could do with a bit of a cull, or even a few mergers, getting them to practice what they preach, while encouraging the genuine, real voices of hands-on business to speak.