Lord Bilimoria: Scandal was a bolt from the blue – but we STILL need the CBI

The CBI is facing widespread calls to be dismantled after a sex and drugs scandal but, says one of its former presidents, those clamouring for its demise should not forget what he describes as its ‘amazing achievements.’ What might those be?

Lord (Karan) Bilimoria – the founder of Cobra beer, who was at the top of the UK’s premier business organisation during Covid – points to the role it played in saving firms across the country.

It was, he says, partly thanks to the advocacy of the CBI, which pushed for so-called bounceback loans guaranteed by the Government, that many companies were able to keep going during the pandemic.

‘It literally saved thousands and thousands of businesses,’ the crossbench peer declares. This was, he says, ‘another example of government listening to and working with business’.

‘When it works it’s pretty effective, if government listens,’ he says. ‘I’ve always disliked this whole concept of the CBI being a lobbying organisation. We’re here to represent business, stand up for business, work with government and challenge government.’

Bilimoria, an urbane Indian-born entrepreneur, is a stout defender of the CBI’s role in bringing the corporate world together as a force for good. He cites last year’s Mail Force campaign, funded by generous readers of this newspaper, to ship hundreds of thousands of food parcels to Ukraine.

The CBI used its convening power to ensure the parcels reached Ukrainian families.

It also helped companies get to grips with the effect of sanctions against Russia and tried to make sure government understood the issues facing businesses.

All that excellent work, however, was overshadowed by the scandal that led to former director- general Tony Danker being sacked last week after his conduct – alleged to include bombarding a female member of staff with unwanted messages – was deemed to have fallen short of expectations.

‘It came completely about of the blue,’ Bilimoria says about the Danker accusations, stressing that the CBI had vigorously ‘championed best practice’ on diversity.

A further series of even more troubling allegations, including rape, subsequently emerged about staff at the CBI.

These do not involve Danker and date back to before his time at the organisation. They prompted the suspension of three members of staff and a police investigation.

Now the very existence of the CBI – founded in 1965 – is under scrutiny as never before.

Critics who argue it is an obsolete talking shop have been emboldened by the claims, which also include allegations of staff snorting cocaine at official events.

The Mail on Sunday spoke to Lord Bilimoria, 61, after the first claims about Danker emerged, but before the wider allegations spilled out.

The latter prompted many CBI members – including a number of FTSE 100 giants – to consider quitting. Contacted about the more recent accusations, Bilimoria, who was on a parliamentary delegation to India, declined to comment further.

For his part, the peer is an exemplar of the well-connected person smoothly using personal contacts in the corridors of power to get things done.

He was ennobled in 2006, when he was created Baron Bilimoria of Chelsea and became the first Zoroastrian Parsi to sit in the House of Lords, an institution he clearly loves. ‘It’s a wonderful place and I think people underestimate how effective… and how special it is,’ he says of the second chamber. ‘Nothing comes close to it.’

Despite the trappings of privilege, it has been an unorthodox path to prominence for the Cambridge law graduate and son of an Indian Army general.

His education, he says, was ‘tailor-made to go into something like investment banking’, so when he decided to start a business – initially importing polo sticks from India before starting Cobra beer – it surprised his family.

Bilimoria’s late father, he said, reacted by saying: ‘What are you doing with all this education? You’re becoming an import-export wallah. Get a proper job.’ But he ‘became my greatest fan once it succeeded’, he added.

The road to success began with thousands of mailshots to the restaurants that were his target customers but he suffered a major hiccup in 2009 when the financial crisis saw Cobra collapse owing £72 million to hundreds of creditors.

They were left out of pocket when the brand was rescued by US/Canadian brewery giant Molson Coors. Bilimoria has vowed to pay it back and now says the ‘vast majority’ of 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, bright person’, as well as a ‘lucky general’.

That, he says, ‘doesn’t stop me challenging him and saying ‘I disagree with you’ on certain matters’.

Bilimoria makes sure to point out he also gets on well with Labour’s front bench, though he is concerned about suggestions that if elected to power it could hike capital gains tax and may try to abolish his beloved House of Lords.

He cites with pride the role the CBI played during the pandemic, including on the furlough scheme – when the Government prevented mass job losses by subsidising wages for workers who had no work to go to.

He did not always manage to gain the ear of Ministers, however. He says he pushed for the widespread use of lateral flow tests – quicker and cheaper than the standard PCR tests – at an early stage, but says Ministers and officials batted him off. ‘They wouldn’t listen – they were rude to me.’

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The Government announced the roll-out of free tests in April 2021, paving the way for businesses and wider society to reopen. But the delay still rankles with Bilimoria.

‘I was right all along,’ he says. ‘If they’d listened to me earlier they could have avoided lockdowns two and three – just imagine the effect that would have had.’ His term as president of the CBI ended last year but he remains on its board as vice-president.

And he is still an outspoken advocate for business, using an appearance at the British Kebab Awards earlier this year to rail against the corporation tax hike from 19 per cent to 25 per cent.

He says it threatens to diminish the attractiveness of Britain for investors – already apparent as AstraZeneca builds a £320 million factory in Ireland instead of here, and chip designer Arm’s ‘painful’ decision to list in New York rather than London.

‘Businesses have suffered so much. The worst thing is to have a high tax burden because it hampers growth and it hampers the recovery,’ he says. ‘It’s the wrong thing to do, particularly now.’

The shame of it, Bilimoria argues, is that Britain’s flourishing entrepreneurial culture could do even better ‘if we had a more attractive tax regime’.

Wherever its members stand on the CBI’s current troubles, lower taxes is one thing on which they probably could all agree.