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| The CBI: David Cameron's unwavering ally in EU referendum | The CBI: David Cameron's unwavering ally in EU referendum |
| (35 minutes later) | |
| There was never the slightest doubt that the CBI would back Britain remaining a part of the European Union. For all the talk while David Cameron was conducting his negotiations that the employers’ organisation was in favour of remaining in a reformed union, it would not really have mattered had the prime minister come back from Brussels with a blank sheet of paper: he was always going to have the CBI onside. | There was never the slightest doubt that the CBI would back Britain remaining a part of the European Union. For all the talk while David Cameron was conducting his negotiations that the employers’ organisation was in favour of remaining in a reformed union, it would not really have mattered had the prime minister come back from Brussels with a blank sheet of paper: he was always going to have the CBI onside. |
| Related: CBI member survey reveals huge support for remaining in EU | Related: CBI member survey reveals huge support for remaining in EU |
| That’s hardly surprising, given that the CBI membership includes some of the UK’s biggest exporters, who have concerns about whether they would enjoy the same sort of access to the world’s biggest market in the event of Brexit. | That’s hardly surprising, given that the CBI membership includes some of the UK’s biggest exporters, who have concerns about whether they would enjoy the same sort of access to the world’s biggest market in the event of Brexit. |
| CBI members do not speak with one voice, but 80% of those polled by Comres were in the remain camp and just 5% in the leave camp. Among small- and medium-sized companies, the majority was smaller but – at 71% – still sizeable. | CBI members do not speak with one voice, but 80% of those polled by Comres were in the remain camp and just 5% in the leave camp. Among small- and medium-sized companies, the majority was smaller but – at 71% – still sizeable. |
| Four questions arise from the poll. The first, given the controversy about previous CBI membership surveys on Europe, is whether it was fair. | Four questions arise from the poll. The first, given the controversy about previous CBI membership surveys on Europe, is whether it was fair. |
| Comres is a reputable company and sampled almost 800 companies using established methodology. There is no reason to doubt Carolyn Fairbairn, the CBI’s director general, when she says the survey is “rock solid”. | Comres is a reputable company and sampled almost 800 companies using established methodology. There is no reason to doubt Carolyn Fairbairn, the CBI’s director general, when she says the survey is “rock solid”. |
| The second question is whether businesses have a right to air their views about such a sensitive issue. | The second question is whether businesses have a right to air their views about such a sensitive issue. |
| Clearly, it is legitimate for companies to speak up if they feel that they will be affected by the outcome of the referendum. But it is worth noting that the CBI poll reflects the views of the people running member companies and not those of the 7 million people who work for them. | Clearly, it is legitimate for companies to speak up if they feel that they will be affected by the outcome of the referendum. But it is worth noting that the CBI poll reflects the views of the people running member companies and not those of the 7 million people who work for them. |
| Question number three is whether the CBI members are right. There would certainly be short-term costs from Brexit in the form of weaker consumer confidence, deferred investment decisions and financial instability. | Question number three is whether the CBI members are right. There would certainly be short-term costs from Brexit in the form of weaker consumer confidence, deferred investment decisions and financial instability. |
| Would the long term benefits outweigh the short-term costs as the outers say it would? That depends on a number of unknowns: the shape of any deal with the UK’s former EU partners; the length of time it takes to negotiate that new arrangement; the ability of the UK to plug into markets in other parts of the world; and, crucially, whether the opportunity is taken to solve the UK’s long-standing economic problems. | Would the long term benefits outweigh the short-term costs as the outers say it would? That depends on a number of unknowns: the shape of any deal with the UK’s former EU partners; the length of time it takes to negotiate that new arrangement; the ability of the UK to plug into markets in other parts of the world; and, crucially, whether the opportunity is taken to solve the UK’s long-standing economic problems. |
| Finally, there’s the question of whether voters take any notice of what the CBI or any other lobby group says. It is hard to say, but the evidence of general elections is that what business says does matter. It might not matter as much as it did before the era of corporate scandals, rows over “fat cat pay” and the financial crisis, but it is a reasonable assumption that some of the undecideds will still be swayed. | Finally, there’s the question of whether voters take any notice of what the CBI or any other lobby group says. It is hard to say, but the evidence of general elections is that what business says does matter. It might not matter as much as it did before the era of corporate scandals, rows over “fat cat pay” and the financial crisis, but it is a reasonable assumption that some of the undecideds will still be swayed. |
| Is Sir Martin Sorrell worth it? | Is Sir Martin Sorrell worth it? |
| When questioned about the size of his pay packet in the past, Sir Martin Sorrell runs the L’Oreal defence: because I’m worth it. The man who has built up WPP from scratch into the biggest marketing and advertising company in the world says he only does well if his shareholders are doing well. Sorrell’s basic salary is £1.1m, but once annual bonuses are added to his long-term bonus scheme he pocketed close to £70m in 2015. What’s wrong with that? | |
| Let’s start with the obvious: there’s something unhealthy and not a little repugnant about a chief executive earning 2,800 times as much as the average UK salary, and Sorrell ought to be able to appreciate that. | Let’s start with the obvious: there’s something unhealthy and not a little repugnant about a chief executive earning 2,800 times as much as the average UK salary, and Sorrell ought to be able to appreciate that. |
| What’s more, high performance-related salaries are justified by the need to recruit and retain top people. Neither applies in Sorrell’s case, since he started the company himself and at 71 is at the stage when he should be thinking hard about a succession strategy. The fact that there is nobody lined up to take his place at WPP should be a concern to the company’s shareholders. | What’s more, high performance-related salaries are justified by the need to recruit and retain top people. Neither applies in Sorrell’s case, since he started the company himself and at 71 is at the stage when he should be thinking hard about a succession strategy. The fact that there is nobody lined up to take his place at WPP should be a concern to the company’s shareholders. |
| The test of whether Sorrell needs £70m to do a job he is good at and clearly enjoys will come next year when, as a result of a rebellion by shareholders in 2012, the long-term bonus scheme is phased out. At that point, he might walk away from WPP insisting that he is not getting what he is worth. Don’t bank on it, though. | The test of whether Sorrell needs £70m to do a job he is good at and clearly enjoys will come next year when, as a result of a rebellion by shareholders in 2012, the long-term bonus scheme is phased out. At that point, he might walk away from WPP insisting that he is not getting what he is worth. Don’t bank on it, though. |