Magazine Issue 3 - Spring 1997

European Round Table of Industrialists (ERT)

The ERT is the most powerful lobby group in Europe. It represents the interests not of businesses, but of businessMEN (not women!), 45 of the wealthiest businessmen in Europe - the chairs and chief execs of Europe's largest corporations, including ICI, Hoechst, BP, Shell, Volvo, Fiat, Unilever, Nestle, Carlsberg, BAT, Pilkington, Olivetti, Philips, Siemens, Trafalgar House etc. Greg Muttitt reports.

According to ERT Secretary-General Keith Richardson, the key is "access", or "being able to 'phone Helmut Kohl and recommend that he read a report...[or] John Major 'phoning...to thank the ERT for its viewpoints."(1) The ERT also has regular meetings with the President of the European Parliament and other top officials.

Driving force behind the single market
The ERT was set up in 1983 to push for a European internal market. Its 1984 report Europe 1990: an Agenda for Action was copied almost word-for-word into the EC's Completion of the Internal Market (1985), and led to the 1986 Single Europe Act, which committed member states to embracing unrestricted free trade. EC President Jacques Delors admitted that the ERT was "one of the main driving forces behind the single market."(2) Conveniently, the EC's 1989 Task Force Report on the environmental impact of the single market - predicting vast increases in road traffic and emissions, traffic in toxic waste and erosion of national environmental legislation - received almost no discussion(3).

Infrastructure expansion
The ERT's Missing Links (1984) identified key gaps in European infrastructure, in particular the Channel Tunnel, the Scan Link bridge (Sweden - Denmark - Germany) and high-speed trains. All began construction within a few years. 3 further reports in the next 5 years set out the vision for Trans-European infrastructure Networks (TEN).

Before long, TEN reached the top of the EC policy agenda, and the White Paper came out in 1992 after consultation almost exclusively with the Motorway Working Group. This was an ad hoc group consisting of Commissioners plus the ERT, the International Tourism Alliance,the European Investment Bank and umbrella groups of national road federations (like the BRF), of motor traders' associations, of highways authorities and of toll concessionaires(4). TEN involves building 12,000 km of new motorway in the next 20 years, at a cost of £800 bn (60 times the proposed spending on rail). Somehow the link between road building and traffic growth was lost between the original Green Paper and the White Paper5. No conflict was seen with the Rio Treaty which committed EC member states to maintaining CO2 emissions at 1990 levels by 2000.

In 1991 the ERT brought out Missing Networks. This was a more sophisticated document, and carried a vision of "a single interacting system or meganetwork with a single output: mobility."(6) It demanded more and better national roads, especially to overcome the Alpine and Pyreneean "barriers", more high-speed trains, more air terminals and more high-capacity cables and exchanges, plus links between these modes, and a balance between the uses of each. Much of this vision guided the TEN programme. The report called for a European infrastructure think-tank (which now exists) and for road tolls - an excuse for private companies to encourage traffic growth in order to boost their profits. The following year Britain and Germany announced plans to introduce motorway tolls.

Education - supplying the labour market
In 1989 the ERT published Education and European Competence, which bemoaned students "pursuing 'interesting', not directly job-related studies."(7) It wanted industrialists to be more involved in administration, governing and curriculum drafting, and teachers to have experience in industry. It also called for lifelong learning, ie regular training and updating knowledge of employees. The EC's Memorandum on Higher Education in 1991 arrived at a similar analysis (surprise surprise!), and defined education as a function of the labour market. Institutions should, it says, support cooperation with industry; it also expressed interest in lifelong learning, to recycle obsolete workers back into the market.

Worker "flexibility"
In Reshaping Europe (1991), the ERT called for employee flexibility, arguing that legislation to protect workers obstructs economic growth. And it would be disastrous, claims the report, were employees to be involved at all in corporate decision making. Following the now familiar pattern, the EC's 1993 White Paper Growth, Competitiveness and Employment repeated most of the points. The White Paper was criticised by the European Trade Union Confederation for the "short-sighted and counter-productive measures ... which sometimes go as far as cutting wages, making it easier to sack people, reducing unemployment benefits, and even attacking basic trade union rights."(8) Launching another offensive, Beating the Crisis in 1993 claimed that "labour costs are the single major cause of falling competitiveness"(9); wages must be cut and productivity raised, helped by tax cuts.

Environmental deregulation
The ERT's environmental policy demands deregulation and other growth-encouraging measures, to help companies invest in techno-fixes.(10)


Beyond Europe: .... the world!
"The Community has a responsibility to open its own markets as quickly as possible to its neighbours in Central and Eastern Europe and to help their transition to a true market economy."(11) Conveniently, these philanthropic efforts will bring 200m consumers into the market, along with "access to natural resources, including fuels, minerals and land, which are generally in short supply in Western Europe."(12)

The ERT's North-South working group is chaired by Nestle boss Helmut Maucher. The deeply humanitarian Herr Maucher sees no problem in the net flow of money (through debt repayments) from poor to rich countries: "a flow of finance from slow-growth areas to higher growth areas is a normal phenomenon of credit allocation through market forces."(13) He also redefines people as "a vast potential in non-saturated markets." These markets are available for "brand-orientated marketing" by multinational companies, ie seizing control of (and hence all the profits from) local commodities that have been used unbranded for centuries. And of course the ERT just loves GATT.

Competition policy: deregulate!
The ERT perhaps sometimes overestimates what it can get people to believe: "deregulation reduces monopoly or closed shop practices"(14); "the working of a free market requires that competition rules should be applied in a way that least hinders the natural progress and development of individual companies"(15). Then again, don't underestimate the EC's gullibility.

References:
The Ecologist (1994) (below); ref, to Hallen, J. & Thoren, R., "Det hanger pa kontakterna", Metallarbetaren, 4/93, p.3
The Ecologist (1994) (below); ref, to ERT Brochure, 9/93
Mis-shaping Europe (below), p.12
MWG Report: "Trans-European Networks: Towards a master plan for the road network and road traffic", 5/92
"Infrastructure planning should not necessarily seek to promote an increase in capacity, since in certain instances the might boost transport demand" - Commission of the EC, COM (92), 48 final, para. 79
ERT, Missing Networks, 1991, p. 17
ERT, Education and European Competence, 1989, p. 4
ETUC, preliminary contribution to EC Commission White Paper, Brussels, 1993, p.4
ERT, Beating the Crisis, 1993, p. 5
ibid., p.23. For some really appalling stuff, see ERT's The Climate Change Debate, 1994.
op. cit. 9, p.26
ERT, Reshaping Europe, 1991, p. 48
ERT, European Industry, a Partner of the Developing World, 1993, p.18
op. cit. 6, p.13
op. cit. 9, p.25.


Recommended reading:
Ann Doherty & Olivier Hoedeman, "Mis-shaping Europe", The Ecologist, v.24, no.4, 7-8/94, p.135.
ASEED Europe, Mis-shaping Europe - £5 from Postbus 92066, 1090 AB Amsterdam; tel 0031 20 668 2236; fax 0031 20 665 0166. Contact ASEED for more info on ERT campaigns.
ERT has over 30 entertaining documents, (incl those mentioned above) available free from ERT, Avenue Henri Jaspar 113, B-1060 BRUSSELS; tel 0032 2 534 31 00; fax 0032 2 534 73 48.

Confederation of British Industry (CBI)
Centre Point, 103 New Oxford Street, London WC1A 1DUtel. 0171 379 7400 CBI Web site

The CBI is the representative body for British business as a whole. Its membership of 250,000 firms employs about half the UK's workforce.The stated objectives of the CBI are "to uphold the market system and the profit motive that sustains it." (1)

It works both proactively, in forming and pushing policies, and reactively, in trying to deflect government proposals. In fact few policies or bills are written without extensive consultation with the CBI. It has daily contact with every level of government, with civil servants, with Ministers (including the PM), and once a bill reaches Westminster with MPs1. The CBI's chief economist is a member of the independent panel of Six Wise Persons which advises the Chancellor on the Budget (2).

The internal structure of the CBI is fairly elaborate, with 21 policy committees (each having several sub-committees), from Europe to energy to education, plus 13 regional committees. It has about 300 staff (1).

The general election is obviously an important event for the CBI, and it has produced its own manifesto, Prospering in the Global Economy (3).

The CBI consistently argues for a flexible workforce, including part-time and temporary workers (4); it unsuccessfully fought the EC's Working Time Directive (alongside the government) (5); and has opposed the DTI's consultative document proposing greater employee consultation and involvement in company decisions (6). In the 5-yearly Health & Safety (H?) review by the DoE, it has attacked proposals to charge high-risk companies (such as oil extraction, chemicals) for their H? inspections (5).

In response to the EC's proposed widening of the Integrated Pollution Prevention and Control Directive, the CBI demanded "a clear justification in terms of environmental need and sound cost / benefit analysis" (the usual industry need for an excessively high level of certainty) (5). It has challenged the international bio-safety (biotechnology safety) protocol to the biodiversity convention, on the grounds that it could discourage R?, commit countries to over-regulation, and deprive them of discretion (6) (discretion which would allow companies to play countries off against each other and invest in whichever has the lowest standards.) It has opposed the carbon tax and emissions restrictions, preferring voluntary self-regulation by companies (I wonder why?); and supported privatisation of the nuclear industry (7).

In 1994 the CBI argued that legislation should require contaminated land to be cleaned up only enough for the planned future use; its points were included in the Framework for Contaminated Land and the Environment Bill (7).

It is currently fighting EC legislation which would empower consumer organisations to file injunctions or seek damages against dangerous companies4. It opposes Labour's proposed windfall tax on the privatised utilities (4).

The CBI report Moving Forward demands an extra £2 bn pa investment in infrastructure, attracting inward investment and stimulating regeneration, to reduce congestion and to create jobs in the construction and IT industries. It echoes the ERT's Missing Networks in the call for better links between the modes. The report calls for government to "take full account of UK companies' need to compete abroad; not increase the overall tax burden on business; and guarantee greater, more consistent investment in transport".

On Europe, the CBI wants to strengthen the single market, reshape social policy and balance environmental objectives with competitiveness. Elsewhere it supports export credit guarantees and aid-trade provision (a la Pergau Dam) to help companies to exploit developing markets (7).

Business as usual!
It produces the monthly CBI News. The Annual Report costs £5
Institute of Directors (IoD)
116 Pall Mall, London SW1Y 5ED tel. 0171 839 1233

Like the ERT, the IoD is an association of businessmen rather than of businesses, but of rather different scale. With over 37,000 members, the lowest common denominator effect ensures that it's far less dangerous than the ERT.

In fact its views are more balanced than those of the CBI (for example), as the IoD is an association of people each with an equal say - the majority come from small businesses (whereas the CBI is an association of businesses, some of which are larger and more influential).

While the ERT is pro-single currency and the CBI is split, the IoD is opposed to it. IoD's biggest recent success has been the 1995 Budget cuts to both capital gains and inheritance tax.

It produces a monthly magazine, The Director. The Annual Report is free.

The Roads Lobby
The roads lobby has always conjured up images of dark, mysterious characters in suits who are unimaginably powerful. Certainly in the early 1990s the lobby looked undefeatable, with roads being built left, right and centre. However the last three years' cuts to the road programme make one wonder whether the lobby was ever powerful at all.

What remains of the trunk road programme is a few economically strategic infrastructure links, the lobbying for which largely occurred at the European level.

At the national level most road lobbyists go through is the British Roads Federation (BRF), the most powerful group. It doesn't retain any MPs, nor make any political donations; however it is politically well-connected. Chief exec Richard Diment formerly spent 8 years in Conservative Central Office, and press officer Andrew Pharoah several years at Labour Party HQ (Evening Standard, 3/10/94). The BRF meets with Ministers and their Shadows, participates in all-party groups and party conferences and briefs MPs, MEPs, councillors and committees. It claims responsibility for the motorway network developed in the '60s, '70s and '80s (AA Magazine, 11).

The BRF is rather unsophisticated in its aims, which are more to increase road building, maintenance and "improvement" as a whole (including bypasses and local roads) than to prioritise economically strategic infrastructure. Both the BRF itself and its executive committees are made up mainly of companies and trade associations with a fairly direct interest in roads: construction, engineering, materials, car manufacturing, transport, haulage and courier, 4 oil companies (BP, Mobil, Shell, Total), AA, RAC, National Car Parks, Forte etc. Freight users (such as Weetabix, Tate & Lyle, Bulmer, National Farmers Union) are less influential. The BRF has a powerful network of local groups, including Yorkshire Roads Group, Transport Action Scotland and East Anglia Roads to Prosperity.

However, the UK government in the 1990s has little interest in maintaining spending in order to support the construction industry.

What motivated the roads programme was not favour for the construction industries but economic theory; the government already believed in the importance of free trade, and recognised the consequent requirement for infrastructure; it also recognised the economic significance of cars and oil. Like most lobbies, the the roads lobby only guides rather than directs policy. But now the government even admits that road building is not a cost-effective means of dealing with traffic problems and with stronger public opposition to road building even the economic "benefits" of road building are often seen as less politically valuable than spending cuts.

The Freight Transport Association (FTA) is a general trade lobby rather than a construction / transport lobby: its members are mainly freight users, including retailers, wholesalers, and primary and secondary industries, from IBM to ICI, from ARC to Asda. Though a member of the BRF and a keen supporter of the roads programme, the FTA is less active in lobbying for roads than in trying to prevent, change or initiate haulage legislation. Its biggest success has been to raise the lorry weight limit from 40 to 44 tonnes. Interestingly, this coincides with a BRF campaign for a national bridge strengthening programme; it will also favour road freight over rail economically. FTA also lobbies to increase lorry access to city centres (including use of bus lanes!), to prevent tighter vehicle environmental standards, to reduce road tolls, vehicle excise duty and other taxes, to deregulate cargo handling practices and to cut "bureaucracy" (or accountability?). It has over 300 staff.

The Road Haulage Association, which recently signed Transport Minister Stephen Norris for £150,000 a year, is similar to the FTA, except that it represents the hauliers (over 10,000 members) rather than the freight users. It has 30 staff.

Addresses:
British Roads Federation, Pillar House, 194-202 Old Kent Road, London SE1 5TG tel. 0171 703 9769 fax 0171 701 0029
Freight Transport Association, Hermes House, St Johns Road, Tunbridge Wells, Kent TN4 9UZ tel. 01892 526 171 fax 01892 534 989
Road Haulage Association, Roadway House, 35 Monument Hill, Weybridge, KT13 8RN tel. 01932 841 515