Sir John picks a fight with New Labour

Sir John Egan is not worried about the "curse of the CBI", the mystery illness, which appears to strike down any company whose chairman, agrees to serve as president of the CBI.

His three predecessors in the job – BT's Sir Iain Vallance, Sir Clive Thompson at Rentokil and Lord Marshall of British Airways – all developed acute strains of the disease, as did the share prices of their respective companies. But Sir John says Inchcape, the car distributor where he is chairman, has nothing to fear.

"Before I accepted this job, I made sure I had the time to do it," he says.

He remains chairman of two other public companies, Harrison Lovegrove and Asite. But he resigned as chairman of the Ministry of Defence's commercial research arm Qinetiq. "The gap between me and the MoD was huge ... I just didn't understand the culture of the business, I didn't add a lot of value and I didn't enjoy the role," he says.

Sir John, who made his name running first the car company Jaguar and then the airports operator BAA, also points out that, unlike his predecessors, he is very much a non-executive chairman. "If I had tried to do the CBI job when I was chief executive of BAA I could not have done it," he says, adding that company directors, whether executive or non-executive, should not to spread themselves too thinly.

So what does he think of the Higgs review into the role of non-executive directors launched by the Government in the wake of the Enron and Marconi scandals? "What review?" he asks, before being reminded of the inquiry being led by Derek Higgs, the former Warburg corporate financier and now chairman of Partnerships UK, the organisation co-ordinating the Government's PFI strategy.

Sir John's view is not quite "if it ain't broke don't fix it" but he clearly feels content with the UK's standards of corporate governance. "When you look at the other systems on offer – the supervisory system in Europe or the board system in the US where the chairman and chief executive is a total dictator I don't think they are good systems of governance," he says. "I believe we have come up with a pragmatic, quality solution. OK, you could improve it to some extent and maybe some people do take on too many roles. But of the systems on offer, the one we have seems to be the best."

The one practice he does disapprove of – Sir Iain and Lord Marshall please take note – is that of the company chief executive becoming chairman. Sir John says the two roles need to kept clear and distinct.

Since retiring from full-time executive responsibilities at BAA in 1999, Sir John has taken to working four days a week, eight months a year. His new role at the CBI will occupy perhaps one of those days. Now aged 62, he cuts a slightly more hunched and thoughtful figure than the dashing executive who restored the fortunes of Jaguar in the 1980s and then persuaded Ford to pay the crazy sum of £1.6bn to take over the business.

Sir John still finds time to indulge his love of skiing. He and his wife spend the first three months of the year at their chalet in the Swiss Alps.

Back in London at the Centre Point headquarters of the CBI, the more serious project is to make sure the voice of business is heard loud and clear in Government circles. Here, the alarm bells have begun to ring.

"Tony Blair and Gordon Brown are approachable people and I hope there will be dialogue," says Sir John. "But I now think we are running risks with this economy. They had an impeccable experience with running the macro economy until the last Budget. They have really strayed into difficult territory. I think they are planning to spend too much of the GDP of this country. As soon as Governments start to spend too much they all seem to end up getting into trouble. I think the outputs the Government is seeking from the National Health Service are dubious and it will almost certainly be inflationary."

He contrasts the Government's tax and spend approach to the NHS with France where the key to delivering a "world class" health service has been the much bigger contribution of the private sector. Even Italy has a better record in combating illnesses such as cancer, he says. "They send them to places where they cure them, not where they kill them."

Sir John believes that Labour has "disrupted" the relationship it has cultivated with business over the last five years. He cites, for instance, the decision to raise employers' national insurance contributions, the increase in North Sea taxes and Stephen Byers' maladroit handling of the railways. "I don't think it helped to go and savage the shareholders. Everyone thought governments were predictable people to deal with. Railtrack demonstrated that needn't be so. It will just cost money.

Sir John's priority during his two-year stint is, he says, to persuade the CBI's members to take their social and environmental responsibilities more seriously. A worthy goal but one which is likely to be overshadowed by the organisation's stance on the biggest issue of the day – whether Britain will join the euro. Here Sir John strikes a much more sceptical note than either his immediate predecessor, Sir Iain, or the majority of big companies among the CBI's membership.

Sir John says the euro has been bad for Europe's biggest economy, Germany, inferring that Britain too could suffer in a similar way. "They [the Germans] weren't in the doldrums for as long as this when they were running the economy themselves so we must assume the euro is not acting in their best interests," he says.

He also recites a long list of issues that must be addressed before Britain can think about embracing the single currency, ranging from the exchange rate, at which the pound might enter to the impact on the City and inward investment. "Are we all going to go into this blindfold with paper bags over our heads or are we actually going to know something about how predictable the results are going to be," he asks.

Hardly the kind of europhoric stuff we have been used to hearing from the CBI. Then again, you sense that the CBI will be different in quite a few ways during Sir John's reign.

SIR JOHN THE NEW VOICE OF BUSINESS

Career History

Chief executive, Jaguar 1980-1989, CEO BAA 1990-1999, presently president of CBI and chairman of Inchcape.

Interests

Includes sport, theatre and music

Salary

£128,000 at Inchcape.

Business influence

"Being involved in the collapse of British Leyland and its sale to the Government. It taught me never to run out of cash and it made a very cautious businessman out of me."