CBI says Labour's red tape will strangle `golden goose'

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THE CONFEDERATION of British Industry last night threw down the gauntlet to the Government, warning Tony Blair that Labour is throttling business with excessive regulation. Sir Clive Thompson, president of the CBI, accused the Government of placing a stranglehold on business with its social legislation and trade union reforms and said Labour was "in danger of suffocating the golden goose".

His message could put business on a collision course with the Government, which is fielding five Cabinet ministers, including the Chancellor Gordon Brown, at the CBI's annual conference, which starts today in Birmingham.

In his opening speech to the conference, Sir Clive will attack the "creeping paralysis" of red tape under Labour, warning delegates: "In the last eighteen months the business horizon has darkened. The CBI has fought very hard to lessen the impact of excessive regulation but we are still faced with trade union recognition, the national minimum wage and the Working Time Directive.

"Enough is enough. My message to the Government is straightforward. Do not suffocate the golden goose - you cannot simply regulate your way to prosperity and jobs. Unless this creeping paralysis stops, the only growth market in 1999 will be regulation."

Sir Clive will also callthe Government to be more supportive of entrepreneurs saying the "Fat Cat" label was indiscriminately applied.

"Would a latter-day Dick Whittington `turn again' to discover the streets of London were paved with gold if faced with a headline `Dick, go home you greedy bastard, be satisfied with what you've got'?"

However, a CBI survey issued on the eve of the conference suggested its members were more sanguine than Sir Clive about the Government's workplace legislation.

Sixty per cent of firms said they had "no concern" about statutory trade union recognition, while eight in ten said they were not concerned about the minimum wage.

Just over half said the new working time regulations would have no effect on them.

Sir Clive's message to Government not to intervene in industry, was backed by the CBI's director general, Adair Turner. Commenting on the possibility of state aid to keep open Rover's Longbridge car plant, Mr Turner said: "We are very wary of governments leaping in to intervene in specific industrial situations."

Also at today's conference, business is expected to receive its strongest warning yetagainst watering down proposals on employees' rights.

Ken Jackson, General Secretary of the Amalgamated Engineering and Electrical Union, said his organisation would feel "duped" if the Government bowed to CBI pressure

Mr Jackson, who represents 780,000 skilled workers is expected to say that the labour movement thought it had reached an agreement over the "fairness at work" White Paper. Referring to the document, he will tell the CBI:

"It was a White Paper we hoped to make work, so now is not the time to inject a dose of bad faith."