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The UK’s largest business lobby has performed a U-turn by asking the Electoral Commission to cancel its registration as a “No” campaign group in the Scottish independence referendum, saying the move was a “mistake” by a junior official in London.

The climbdown is an embarrassing reversal for the CBI, which had defended its position all week in the face of criticism from pro-independence campaigners. Nineteen organisations quit the group or suspended their membership.

John Cridland, the CBI’s director-general, said the decision to register had damaged the organisation by creating the impression that it was a political body, which “we are not and never will be”.

He said the CBI had taken legal advice from a QC that its application was “null and void” because it had not been signed by someone authorised to do so by its board.

In one of the most difficult weeks in the CBI’s recent history, its decision to register prompted the resignation of two companies, along with broadcaster STV and a number of Scottish universities, public agencies and industry associations. The BBC also suspended its membership.

The CBI has long supported Scotland’s continued presence in the UK, and has said it was confident it had a mandate from the vast majority of its membership for this stance.

But Mr Cridland said: “We have always said that the referendum is a decision for the Scottish people and we’re not telling people how to vote.”

He said the CBI registration had taken place after discussions with the electoral commission, in the belief that this would ensure the organisation’s regular Scottish events, including an annual dinner and lunch, complied with referendum rules that apply between May 30 and September 18.

During that period, organisations that are not registered are barred from activities that could be seen as part of a campaign to influence voters in the referendum.

Mr Cridland told the Financial Times that, although he had been aware of “conversations” with the commission about ensuring the CBI was compliant, neither he nor its Scottish officials knew it had registered until the row broke out.

He did not name the “relatively junior” official involved but said they had “acted in good faith” to enable the CBI to carry out its normal activities.

The Electoral Commission said: “We have received representations from the CBI to de-register. We are currently considering whether this is possible under the relevant legislation and will make our reasoning public when we have reached a conclusion and informed the CBI.”

Mr Cridland said that if the registration were nullified, he hoped those members who had quit would rejoin. He said it had been a “frustrating week” that had been “damaging to the CBI’s purpose and name . . . The impartiality of the CBI is paramount to me”.

He said the CBI had a “legitimate role in raising important questions on the big issues affecting business, jobs and growth, which we will continue to do”.

But the organisation has given an assurance to the commission that during the regulated period it will not carry out activities that break the rules. These include campaign broadcasts, sending unsolicited material to voters or holding any referendum-specific press conferences.

Mr Cridland said the CBI had opened a “Pandora’s box” by being the first trade body, charity, non-governmental organisation or trade union to test what may be permissible in the campaign.

Tony Banks. chairman for Business of Scotland, a pro-independence group, said the CBI’s role had “descended from farce into shambles . . . Our understanding is that the CBI cannot nullify its Electoral Commission registration and must, having been identified as a campaigning organisation, be policed by the commission during the referendum campaign period.”

The CBI published figures showing it had 1,200 businesses that were registered and operating in Scotland that were direct members. Together these employ 500,000 people, about a quarter of the private sector.

The overall figure may be higher because the CBI is a confederation of 140 trade associations, many of which will have Scottish members. Across the UK, the CBI says it speaks on behalf of 190,000 businesses employing 7m people.

Those who have quit
the CBI:
Heriot-Watt University
Highland and Islands university
Aberdeen university
Glasgow Caledonian University
Glasgow university
Edinburgh university
Strathclyde university
The Law Society of Scotland
Visit Scotland
Skills Development Scotland
Scottish Qualifications Authority
Highlands and Islands Enterprise
STV
Scottish Enterprise
Aquamarine Power
Balhousie Care Group

Those who have suspended membership:

BBC
Dundee university
Robert Gordon University


Letter in response to this article:

Nation state that ‘held the pass’ is now in danger / From Mr Robert Page

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