Tories are more electable under Howard - CBI chief

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The Tories have become more electable under their new leader, Michael Howard, the head of Britain's biggest business organisation, the CBI, said yesterday.

Digby Jones, the director general of the CBI, said Mr Howard's challenge would be to appeal first to the centre ground of the Tory party and then to the 40 per cent of the electorate who voted neither Conservative nor Labour. "I think they are better equipped to do that this week than they were two weeks ago," he said.

Speaking on the eve of the CBI's annual conference in Birmingham, Mr Jones also criticised Mr Howard for excluding a spokesman for trade and industry from his streamlined Shadow Cabinet.

"I am disappointed that there is not a minister in the Shadow Cabinet with specific responsibility for enterprise and wealth creation. It is a junior minister post. I would like to see far more importance given too it on the political radar screen," he said.

Mr Howard will speak at the CBI conference as will the Prime Minister, Tony Blair, and the Chancellor, Gordon Brown. Mr Jones said he made no apologies for attacking the £54bn of tax rises under Labour and the poor returns from the spending of that money in the public sector - criticisms which have provoked a furious response from the Treasury.

"Business in Britain pays my wages, and not the Treasury, or the opposition or Brussels, and so my job is to put forward constructively, politely but nevertheless forcefully, the views of business," said Mr Jones.

"If the Treasury don't like that they can react as they wish. I take a bit of heart from the fact that I might have just hit a raw nerve. It also demonstrates the CBI is being listened to."

Mr Jones also took the Bush administration to task for what he claimed was America's increasing protectionism. The issue is likely to be the subject of fierce debate in Birmingham in light of the looming trade war over US steel tariffs and the failure of the World Trade Organisation talks in Cancun.

In a direct message to the US Treasury Secretary, John Snow, who is also addressing the conference, Mr Jones said: "Americans are becoming more protectionist by the day. It is a time for America to show some political courage, firstly on the specifics of steel tariffs, in order not to plunge the world into a trade war.

"America has to understand that if it subscribes to a rules-based multilateral trade system, then unless they obey the rules there will be sanctions against them."

The CBI is to publish the results of a major survey into the attractions of Britain as a business location to coincide with the start of the conference on Sunday. The survey of CBI members is certain to highlight growing concerns about red tape and rising business costs.

Mr Jones said that on the macro-economic level, Britain had done well and was the only developed nation to have avoided recession. "That is something the Government should be applauded for," he said. "But at the micro-level, if you go around and talk to businessmen of Britain, the biggest concerns they have, whether it be labour market flexibility, tax, transport or investment in kit and people, is that it is becoming far more difficult to do it."

Mr Jones will go into the conference slimmer and fitter, having shed 18 pounds since September. But he admitted his own "Battle of the Bulge" was a constant struggle, when he spent so much time on the road and attending dinners. He has recently agreed to remain in the £280,000-a-year post for a further three years through to the end of 2006.