CBI members warn of new exodus amid manufacturing tie-up talks

Some of the CBI’s remaining members are warning that they will terminate their association with the crisis-hit lobbying group if it cements a full merger with Make UK, the manufacturers’ trade body.

Sky News has learnt that a number of individual company members and trade associations are discussing ending their memberships if the tie-up goes ahead.

Several from outside the manufacturing sector said privately on Thursday that they had no interest in participating in an organisation dominated by Make UK’s leadership.

The financially troubled CBI is in discussions about collaborating with Make UK in a move largely designed to avert a growing cash crisis at what was once Britain’s most influential business group, as Sky News revealed last week.

Sources said the CBI could be as little as four weeks from running out of money, with insolvency experts on hand to provide advice to its board.

One person said on Thursday that the talks with Make UK could involve the creation of a new umbrella body under which both groups would sit.

Stephen Phipson, the Make UK chief executive, would be likely to lead the merged or umbrella organisation, according to insiders.

Make UK is in rude financial health, meaning its balance sheet would offer the CBI a safe haven.

However, any further exodus of CBI members would risk reducing its influence and recovery prospects in the aftermath of the sexual misconduct scandal that engulfed it earlier this year.

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

“We have had no outreach from them whatsoever,” said a senior executive at one member deliberating about whether to renew its subscription.

Neither the CBI nor Make UK responded beyond a brief statement issued last week that they were in initial discussions with each other.

Last Friday, a CBI spokeswoman said: “As we previously stated, the board has sought advice on matters of restructuring and rightsizing as may be appropriate, as any responsible board would.”

One insider has told Sky News that insolvency “is definitely a risk”.

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The CBI has been searching for a new president to replace Brian McBride, while new director general Rain 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 closing overseas offices.

Jeremy Hunt, the chancellor, said earlier this year that there was “no point” interacting with the CBI as its influence diminished.