Labour lifts its boycott of crisis-hit CBI

The Labour party has lifted its boycott of the crisis-hit CBI, with shadow business secretary Jonathan Reynolds meeting the UK lobby group’s new director-general Rain Newton-Smith this week. 

Both Britain’s main opposition party and the governing Conservatives ceased engagement with the CBI earlier this year in the wake of a misconduct scandal which has brought the country’s leading business lobbying organisation to the brink of collapse.

So far prime minister Rishi Sunak has not signalled any imminent government rapprochement with the group, although civil servants at a junior level have continued to engage with the CBI since the crisis broke.

But Reynolds held an online meeting with Newton-Smith earlier this week. One party official described it as a “positive” and “warm” engagement. The Labour leadership has also authorised contact to resume among aides in the shadow business team and in leader Sir Keir Starmer’s office.

However, Labour has not yet given the CBI a total carte blanche. Other shadow ministers have not yet been given permission to have meetings with the organisation, given the serious allegations that have been levelled against it.

Earlier this month, Gareth Davies, permanent secretary at the Department for Business and Trade, wrote to all his civil servants to tell them that the government was “avoiding senior-level contact and ministerial contact”. 

The CBI declined to comment. 

Newton-Smith is trying to save the CBI, which has been frozen out by politicians over claims reported in The Guardian of serious misconduct at the group, including two allegations of rape. 

She appeared this week in front of the House of Commons business and trade select committee in an effort to convince MPs that the organisation was addressing problems with its governance and culture, and that it could still serve as a representative voice for businesses of all sizes and sectors. 

The group’s viability was cast into doubt in April when dozens of large companies cancelled or suspended their membership, dealing a blow to its finances and prompting it to begin planning redundancies. 

Newton-Smith revealed on Tuesday that the group now had 1,200 members following the exits of companies such as Aviva, NatWest, KPMG and John Lewis. A thawing of relations with politicians would be a boost for the CBI and could help to persuade some businesses that their membership is worth renewing. 

The CBI won a vote of confidence among its members by a margin of 93 per cent to 7 per cent, but only 371 members cast a ballot meaning that less than one-third of the membership backed management’s turnround plan.