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CBI shows backing for Labour strategy

The Confederation of British Industry will today come its closest yet to endorsing much of Labour's plans for the economy when it unveils its business manifesto for the next election.

The document, Prospering in the Global Economy, will back New Labour's strategy on inflation, control of public spending, independence for the Bank of England and rejection of penal rates of taxation.

It will also endorse Labour leader Tony Blair's pledges on Europe, education and training and investment. The two areas in which the CBI remains opposed to Labour policy are social legislation - in particular the imposition of a national minimum wage - and plans for a windfall tax on the utilities.

However, even on the Social Chapter there are signs that Labour is moving closer to the business community with Mr Blair's apparent offer to oppose the extension of qualified majority voting to proposals introduced by Brussels under the Social Protocol.

Speaking before publication of the business manifesto, the CBI's director- general, Adair Turner, said there had been a great deal of convergence on economic and industrial policy between Labour and the Conservatives.

He insisted the CBI would not take sides before the election and would maintain political impartiality; nor was the manifesto an attempt to second guess its outcome. But he conceded that a large number of companies were now working on the assumption that a Labour victory was a "significant possibility but not a certainty".

Mr Turner said it was impossible to ignore the shift in Labour policy which followed its renunciation of Clause Four on public ownership.

The manifesto will also call for Britain to retain its option on whether to join a single currency.