CBI: Lobbying to Retain the Cut-Throat Model of Capitalism

For my sins, I have read the CBI report which you can find here in our Information Without Cherry Picking section.

While I believe it raises a few serious questions which the Yes Campaign need to deal with. A few pages into the report you realise that the conclusions  were drawn long before it was produced.

It reads like it was designed to be a weighty companion piece to the now crumbling Project Fear. How else could a document of this size barely think of one advantage to independence?

Genuine issues that we need to deal with that are highlighted in the report include:

– Would a Currency Union work as the structure of the two economies starts to diverge?

– What would be our negotiation terms to rejoin the EU? For instance, would we have to join the Schengen Area and would that mean that we would need passport control at Hadrian’s Wall?

– As the bulk of our trade is with the rest of the UK would independence mean barriers would be erected making doing business more expensive?

These are all valid questions and Business For Scotland goes some way to answering them here. The problem with the report is that it mixes these genuine questions with pure speculation. It mixes uncertainties about the future with a lot of Barroso and Osborne style scaremongering.

It also displays a lack of vision when it comes to answering every question it poses.

Sometimes the report is either incompetent or just sheer duplicitous. In a section where it tries to show Scotland will have a higher budget deficit than the UK, due to unfunded commitments in the White Paper, it takes into no account how these initiatives could actually generate revenue and merely lists them as costs.

For instance, it lists the proposal to have state funded childcare for 3-4 year-olds as costing £600 million a year. However, as explained here a 6 percent increase in female participation at work would increase tax revenue by £700 million a year.

There are many instances in the  report where a truly forward thinking and unbiased approach would have produced a more nuanced overview of the situation.

To understand why the document seems so one sided we have to look at the CBI themselves.

Unfortunately we don’t have a full picture of them as they don’t publish a full list of their members.  We do know  that although they are a powerful lobby group they don’t have as many members as they claim, this is because they include in their ranks businesses which are members of affiliated trade associations. So while they claim to represent one third of the people employed by the private sector, they only have around 2000 paying members.

Like any Lobby Group, you could argue that they have an agenda. This report by Friends Of The Earth shows how the CBI have consistently lobbied against regulation with regards to issues such as the Minimum Wage and Environmental Regulation.

I was struck by the threat in the CBI report that Scotland would be left with the same influence as Finland should they leave the UK.

A quick comparison between the UK and Finland shows Finland would not be the worst country for Scotland to emulate. In terms of education, social mobility, income disparity, gender wage gap and life satisfaction, Finland outperforms the UK.

To quote the OECD:

“Finland performs very well in many measures of well-being, as shown by the fact that it ranks among the top countries in a large number of topics in the Better Life Index.”

Finland achieves this by following the Nordic model, a system that employs a free market economy along with a strong welfare state.

The ‘Cuddly Capitalism’ of the Nordic model is what most Yes Voters seek. Contrasting that with the ‘Cut-Throat’ Capitalism of the United States which the UK is moving closer to .

This London School Of Economics report shows that Nordic

countries that invest in research, have good universities and quality regulation can also innovate, without having to offer successful entrepreneurs outsized rewards.

The  CBI seem to favour the Cut-Throat model with as little government interference in environmental and social issues as possible.

One wonders how many people that have influence in the organisation are receiving outsized rewards?

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