Chancellor offers olive branch to ailing CBI business group 

Business

The chancellor has offered an olive branch to the CBI, the stricken business lobbying group, by agreeing to meet its boss for the first time since a sexual misconduct scandal erupted in the spring.

Sky News has learnt that Jeremy Hunt has agreed to hold in-person talks with Rain Newton-Smith, the CBI director-general, in the run-up to November’s autumn statement.

Treasury sources confirmed on Monday that Mr Hunt was open to the meeting five months after declaring that there was “no point” engaging with the CBI.

His offer may serve as a tentative lifeline to what was until recently Britain’s most influential business group, which faces running out of money within weeks.

Nevertheless, depending upon the timing of the meeting and the extent of the CBI’s remaining cash reserves, it is possible that the chancellor’s olive branch may come too late.

Sky News revealed earlier this month that the CBI was in talks about a tie-up with Make UK, the cash-rich manufacturers’ body, that could entail a full merger of the organisations.

Speaking in April, when the CBI sacked Tony Danker, its director-general, over suggestions that he had behaved inappropriately towards colleagues, the chancellor said: “There’s no point in engaging with the CBI when their own members have deserted them in droves, so we want to engage with a body that speaks for business.

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“It’s incredibly important for me when I am constructing budgets to have someone I can turn to that speaks for British business because we are a very, very pro-business government.

“We are obviously very concerned about the allegations of what’s happened at the CBI – they are very, very serious.”

Ministers have refused to interact formally with the CBI since then, but on Monday a government spokesman said: “We continue to engage with businesses on a case-by-case basis and business groups where appropriate”.

One official said the chancellor would meet the CBI and other leading business groups “as usual” in the weeks before a major fiscal event.

It was unclear what had prompted the Treasury’s change of stance.

Last week, it emerged that some of the CBI’s remaining members intend to terminate their association with the crisis-hit lobbying group if it cements a full merger with Make UK.

The Sunday Times reported that the CBI was trying to raise £3m from members, and it is conceivable that a perception that it is regaining political influence could persuade some lapsed members to rejoin.

Sky News revealed this month that the CBI could be as little as four weeks from running out of money, and that insolvency experts have been on hand to provide advice to its board.

Some CBI members complain that they have been left in the dark about the agenda for its annual meeting on Wednesday.

The CBI has been searching for a new president to replace Brian McBride, while Ms Newton-Smith vowed to reinvent the group when she took over several months ago.

Established by royal charter in 1965, the CBI was rocked in the spring by the resignation of corporate members including Aviva, John Lewis Partnership and NatWest Group.

The crisis has drained the CBI’s cash reserves, forcing it to slash jobs and close overseas offices.

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