CBI backs Blair in Labour race

A CLEAR endorsement of a Labour Party led by Tony Blair came yesterday from Howard Davies, the Director-General of the Confederation of British Industry.

In the first sign that industrial leaders were ready to do business with a party under the control of its 'modernising' wing, Mr Davies said it would be 'churlish' not to recognise that Labour had changed in important ways.

As Mr Davies promised to pay serious attention to Labour's new economic policies, Mr Blair called in a speech last night for an end to the traditional left-right divide over law and order.

Mr Davies told a British Printing Industries Federation lunch in London: 'It seems likely that we shall be facing a Labour leadership without any baggage from previous episodes in power and with a set of economic policies rather different from those which held sway in the people's party for most of the 1980s.

'Gordon Brown (the shadow Chancellor) has told us in no uncertain terms that there would be no manifesto commitments to large scale re-nationalisation. There will be no grand industrial strategies, National Enterprise Boards or what- have-you.'

Parts of Mr Blair's annual Police Foundation lecture could almost be viewed as his own version of Back to Basics.

'We are not going to recreate the world of 50 or 60 years ago,' said the shadow Home Secretary. 'But we do need to rediscover a strong sense of civic and community values, the belief that we must combine opportunities and responsibilities and the realisation that true self-respect can only come through respect for others.'

However, he emphasised that: 'For that respect to function we need to create a nation in which each individual has a chance to succeed, to have a stake in society, but where with that chance and stake come the duties of citizenship in return.'

Mr Blair said that his 'tough on crime, tough on the causes of crime' nostrum was an attempt to break through the traditional left-right divide, acknowledging that the left had undervalued duty while the right had disregarded the need for a society of opportunity.

'We can now make a fresh start, combining a criminal justice system that works with a society prepared to act to tackle crime's causes, a new national programme around which the public and policymakers can unite in the interests of the country and act in full and proper partnership with the police to combat crime and the fear of crime.'

Leaders of the main steel union, the Iron and Steel Trades Confederation, meanwhile publicly recommended its members to back Mr Blair for the leadership and John Prescott, the employment spokesman, as his deputy.

Some prominent backbench Blair supporters have also thrown their support behind Mr Prescott for the number two job.

Denzil Davies and Ken Livingstone, would-be 'fringe' contenders from the left, yesterday called for higher taxes for the better off. Mr Blair insisted that he favoured 'progressive' tax rather than VAT, but that it would not be right for Labour to write its tax plans now.