CBI chief sidelined in merger talks with manufacturing body Make UK

The CBI’s boss has been sidelined as the beleaguered business organisation explores a merger with manufacturing body Make UK, the Mail understands.

A source close to the discussions said Rain Newton-Smith has ‘had very little involvement in the talks’, which come as the CBI faces a cash crisis.

Talks have included plans to merge the two organisations’ backroom operations with significant redundancies likely in finance and HR departments, the Mail has been told.

The CBI and Make UK both declined to comment.

Newton-Smith was parachuted in as CBI director-general in April after it became engulfed in a series of sexual misconduct allegations.

This resulted in a wave of businesses – including John Lewis, Aviva and NatWest – quitting as members. and prompting Chancellor Jeremy Hunt to declare there was ‘no point’ in talking to it as the firms left in droves.

Now it faces a financial crunch, with the Sunday Times reporting that the CBI was racing to raise £3million from its remaining members within days. And it emerged earlier this month that it was in talks with Make UK over a tie-up.

The Mail understands that, under the plans, Make UK would effectively take over the CBI – and that the CBI only has six weeks of cash left. 

The merger would take place next spring with Stephen Phipson, Make UK’s chief executive, running the overall group.

The CBI would continue to exist within this structure, led by Newton-Smith, with Ben Fletcher, chief operating officer at Make UK, replacing Phipson at that organisation.

It was not clear why Newton-Smith has been sidelined in the talks or who is representing the CBI at the discussions.

CBI members will be given an update this week. Its annual general meeting is due to be held tomorrow.

On reports about it seeking to raise new funds from members, a CBI spokesman said: ‘As has been widely reported, the CBI has experienced some short-term cash flow challenges following an incredibly difficult year for the organisation.

‘A number of options are being explored to resolve this issue and secure the footing of an organisation that remains in a strong medium-to-long- term position.’