The CBI is facing widespread calls to be dismantled after a sex and drug scandal, but, says one of its former presidents, those clamoring for its demise should not forget what he describes as his “amazing achievements.” What could that be?
Lord (Karan) Bilimoria – the founder of Cobra Beer, who was at the top of the UK’s main business organization during Covid – points to the role it played in saving businesses across the country.
It was, he says, thanks in part to the advocacy of the CBI, which pushed for so-called bounceback loans backed by the government, that many companies were able to survive during the pandemic.
“It literally saved thousands and thousands of companies,” explains the crossbench colleague. This was, he says, ‘another example of government listening to and cooperating with business’.
“If it works, it’s quite effective, if the government listens,” he says. “I’ve always hated the whole idea of the CBI being a lobbying organization. We are here to represent business, stand up for business, collaborate with government and challenge government.’
Defender: Lord Bilimoria says the CBI has bailed out thousands of businesses
An urbane Indian-born entrepreneur, Bilimoria is a staunch defender of the CBI’s role in bringing the business world together as a force for good. He cites last year’s Mail Force campaign, funded by generous readers of this newspaper, to send hundreds of thousands of food parcels to Ukraine.
The CBI used its summoning power to ensure that the packages reached the Ukrainian families.
It also helped companies get to grips with the effect of sanctions against Russia and tried to make sure the government understood the problems companies face.
All that excellent work, however, was overshadowed by the scandal that led to former director-general Tony Danker being fired last week after his behavior – including bombarding a female member of staff with unwanted messages – fell short of expectations. .
“It came completely out of nowhere,” Bilimoria says of Danker’s accusations, highlighting that the CBI had vigorously promoted “best practice” on diversity.
A new set of even more disturbing allegations, including rape, subsequently emerged against CBI personnel.
These do not relate to Danker and predate his time with the organization. They led to the suspension of three members of staff and a police investigation.
Now the very existence of the CBI – founded in 1965 – is being scrutinized like never before.
Critics who claim it is an outdated talk shop are encouraged by the allegations, which also include allegations of staff snorting cocaine at official events.
The Mail on Sunday spoke to Lord Bilimoria, 61, after the initial allegations about Danker emerged, but before the wider allegations surfaced.
The latter led many CBI members – including a number of FTSE 100 giants – to consider quitting. Contacted about the more recent allegations, Bilimoria, who was part of a parliamentary delegation to India, declined to comment further.
For its part, the peer is an example of the well-connected person who readily uses personal contacts in the corridors of power to get things done.
He was raised to the peerage in 2006 when he was created Baron Bilimoria of Chelsea, becoming the first Zoroastrian Parsi to sit in the House of Lords, an institution he clearly loves. “It’s a beautiful place and I think people underestimate how effective … and how special it is,” he says about the House of Representatives. “Nothing comes close.”
Despite the trappings of privilege, it has been an unorthodox path to prominence for the Cambridge law graduate and the son of an Indian Army general.
His education, he says, was “tailored to do something like investment banking,” so when he decided to start a business — first importing polo sticks from India before starting Cobra beer — his family was surprised.
Bilimoria’s late father, he said, responded by saying, “What are you doing with all this education?” You become an import-export wallah. Find a good job.’ But he “became my biggest fan when it worked out,” he added.
The road to success started with thousands of mailings to the restaurants he targeted, but he hit a major hiccup in 2009 when Cobra collapsed due to the financial crisis, owing £72 million to hundreds of creditors.
They stayed out of pocket when the brand was bailed out by US/Canadian brewing giant Molson Coors. Bilimoria has vowed to pay it back and now says the “vast majority” of the claims have been settled.
He has known Rishi Sunak’s father-in-law, NR Narayana Murthy, the billionaire founder of IT services company Infosys, for two decades.
Murthy, he says, asked him to meet Sunak and “keep an eye” on him when he was a new MP.
He describes the prime minister as a “very decent, intelligent person”, but also as a “happy general”.
That, he says, “doesn’t stop me from challenging him and saying ‘I disagree with you’ on certain things.”
Bilimoria points out that he also gets on well with Labour’s front bench, although he is concerned about suggestions that if it comes to power it could raise capital gains tax and try to abolish its beloved House of Lords.
He proudly cites the role the CBI played during the pandemic, including in the furlough scheme – when the government prevented massive job losses by subsidizing wages for workers who had no work to go to.
However, he did not always succeed in winning the ears of the ministers. He says he pushed for the widespread use of lateral flow tests – faster and cheaper than standard PCR tests – at an early stage, but says ministers and officials have turned him down. “They wouldn’t listen—they were rude to me.”
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The government announced the rollout of free tests in April 2021, paving the way for businesses and society at large to reopen. But the delay still gnaws at Bilimoria.
“I was right all along,” he says. “If they had listened to me sooner, they could have avoided lockdowns two and three – imagine the effect that would have had.” His term as president of the CBI ended last year, but he remains on the board as vice president.
And he is still an outspoken corporate advocate, using an appearance at the British Kebab Awards earlier this year to protest the corporate tax increase from 19 per cent to 25 per cent.
He says it risks reducing Britain’s attractiveness to investors – already evident with AstraZeneca building a £320m factory in Ireland instead of here, and chip designer Arm’s ‘painful’ decision to list in New York in place of London.
“Companies have suffered so much. The worst thing is that you have a high tax burden, because that hinders growth and recovery,’ he says. “It’s the wrong thing to do, especially now.”
The shame, Bilimoria argues, is that Britain’s thriving entrepreneurial culture would perform even better “if we had a more attractive tax regime.”
Wherever the members stand on the CBI’s current issues, lower taxes is something they can probably all agree on.
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