Merger talks between CBI and Make UK reportedly hit hurdle on pensions
Merger talks between the scandal-hit Confederation of British Industry (CBI) and the manufacturers’ trade body Make UK have been delayed by concerns about the business lobby group’s pension scheme, according to reports.
The CBI, the UK’s largest corporate lobbying organisation, has been in discussions with Make UK about a tie-up, in an unexpected twist to its battle to recover from sexual misconduct allegations revealed by the Guardian.
On Friday it emerged that the CBI’s pension scheme may be an obstacle to the proposed combination, which could help the CBI repair finances damaged by the flood of businesses that cancelled their memberships after the claims surfaced.
The pension scheme is in surplus but will have to be hived off, probably to an insurance company, according to the Financial Times, which first reported on the stumbling block.
The CBI is understood to be yet to find an insurer willing to take on the scheme’s liabilities. “It’s not that there’s a problem with the regulator, it’s just that these things take time, and the CBI doesn’t have time,” someone close to the talks told the FT.
The CBI and Make UK said “positive and constructive” merger talks had taken place and were at an initial stage.
The CBI is understood to be under pressure to find a solution in short order, given the pressure on its finances caused by the membership exodus. It is unclear whether it would retain the CBI brand, described as “broken beyond repair” by one business leader earlier this year, after any tie-up with Make UK.
Rain Newton-Smith, who took over as director general in April and is overseeing an overhaul of the group’s governance, has said a rebranding would be a necessary part of attempts to rebuild trust.
The CBI was plunged into crisis by reports in the Guardian about alleged sexual misconduct, which led to a police investigation. Allegations included a claim of rape at a staff party.
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Dozens of companies paused or cancelled their CBI membership in light of the allegations, and the lobby group found itself frozen out of industry meetings with government, and had to quit a corporate diversity initiative earlier than planned.