Fickle friends at Labour's cocktail party: Leading article

Look at the company Labour is keeping these days. Or rather, look at the companies. Hundreds of them sent representatives to Labour's love- in with business yesterday. Furthermore, we hear rumours that several high-profile companies are planning to abandon their traditional allegiance to the Conservatives to woo Mr Blair instead.

It has been a long march from the banner-led rallies to the boardroom. Gallons of gastric juices have been spilt on white wine and prawn cocktails along the way. At last business is willing, if not yet entirely convinced.

But Mr Blair should beware the temptation to trim his policies any further to suit some notional business palate. Labour's economic and industrial policies are broadly sensible and good for business. If industrial and financial leaders are still hostile to new Labour, it is because they are too cautious, or too prejudiced, or because they fear that old Labour is waiting in the wings. It would be a mistake for Labour to compromise on the few remaining policies that the business community actively dislikes (such as the minimum wage) just to try and boost business support further.

Official party policy, and the warm words emanating from Tony Blair and Gordon Brown, should be encouraging for business. Governments serve the private sector best if they promote steady growth and avoid the chaotic boom-bust cycles that destroy so many good companies. Gordon Brown's statements about inflation targets, and the borrowing rules he would follow, are as promising as anyone could expect from an opposition party, and are close to the Government's official position too.

Where Labour has attempted to differentiate itself - on education and skills - business should have even more to hope for. As more and more economic activity depends on human capital rather than physical capital, businesses will benefit from any improvements in the skill base of the nation.

In Europe too, the absence of a belligerent Euro-sceptic tone (so far) within the Labour Party should be reassuring for exporters. In contrast, the Conservative right's antagonism to Europe could jeopardise British companies' ability to compete in a single European market. Even on red tape, that obsession of small businesses, Labour is making the right noises about avoiding new regulations, and refusing to turn back the clock on trade union legislation.

In spite of all this sensible stuff, many senior industrialists and financiers remain unconvinced. They may be less willing to criticise Labour openly these days, they may even want to shake hands with Mr Blair, or go to lunch with Mr Brown, to press their particular cause. Tony Blair is attracting the pals of power. But these are fickle friends. Behind the lunches and the lobbying often lies a resolute Conservative supporter. Few senior business leaders are yet prepared to mark their cross beside the Labour candidate next year. Even at yesterday's much-heralded conference, big business leaders were not much in evidence; they had sent along their public relations people instead.

Faced with such persistent scepticism, new Labour may feel tempted to adapt a few other policies too, just to win a bit more private-sector support. That troublesome minimum wage, for example: just think what a fuss small firms and retailers make about it - it could be toned down a little further, or delayed a little longer. Mr Blair should resist such pressures. A minimum wage, set at a sensible level, is essential protection for the poorest of workers and for the taxpayer's pocket. Moreover, many companies are gradually coming round both to the minimum wage and to the supposedly reviled Social Chapter.

Many of the business leaders who still resist Mr Blair's charming smile will never be persuaded by an opposition Labour Party. Perhaps they are too deeply prejudiced to associate red roses with anything other than thorns. Or perhaps they are just cautious and will wait to be convinced by Labour in government. Many of our most senior industrialists are driven by self-interest, too; they include the so-called "fat cats", whom Labour plans to deprive of their executive share options. Personal financial circumstances, and the natural distaste that highly paid people have for the risk of higher taxes, may have more to do with their attitude to Labour than any of the party's broad economic policy.

But Mr Blair has one weak point that business leaders are right to worry about: the rest of his party. Most Labour MPs are a lot less anti-business than they were a decade ago - but they cannot yet be described as pro- business. Emerging from a tradition that viewed profit as the proceeds of exploitation, and competition as something nasty and distasteful, many still instinctively shy away from business and the market.

Even the business men and women who do not fear a Labour government say they worry about a Labour landslide in case it encourages Mr Blair to accommodate his more left-wing colleagues. They are wrong: actually a landslide would give Blair the power to pursue his own agenda. But their anxiety is powerfully felt.

The Labour leader has a real and important task to persuade the rest of his party to embrace the pro-business attitude that he has genuinely adopted. Beyond that, he should be confident in his position, not daunted by the conservatism of the financial and industrial establishment. In fact, he should even be prepared to take them on, in the name of good business and a prosperous economy, by developing the stakeholding ideas he raised last January. If new Labour can build a corporate strategy that discourages short-termism, while avoiding red tape and corporatism, it will have found a programme that is good for business and good for Britain, whether or not it receives the assent of a few thousand bosses.