Leading Article: The other grocers mark down Major's credit

THE WORST piece of news for the Tories at the weekend was that Marks & Spencer is thinking of donating money to the Labour Party. It has never done so before. If it changes the habit of a lifetime, it will signal to other powerful companies that a Labour government would be good for business. More funds and testimonials would follow. Few trends could more dishearten the nervous Tories. Their funding would suffer and so would their claim to be the best friends of business.

There are also reports that Sainsbury money, which funded David Owen's Social Democrats, may be heading in Mr Blair's direction. They carry an additional message. If social democrats feel they can safely return to the Labour Party, they will drain votes from Paddy Ashdown, ending the era of split opposition that has been so helpful to the Tories.

For the Labour Party, the embrace of business would be a mixed blessing. Marks & Spencer is managed in a manner compatible with Mr Blair's approach to social affairs and labour relations, but many companies are not. The left wing will be suspicious, and there will be fears that businessmen are not so much offering support as trying to position themselves to buy policy favours and peerages from the next government.

This is, however, no reason for the party to reject business money altogether. If companies start queuing up with cheque books, it will be in a position to pick and choose. Although it needs funds to make up for declining union contributions, it could still afford to reject companies that do not meet whatever standards it sets. Unlike the Tory party, it will be partly protected by its commitment to make public all larger contributions.

The Labour Party tried hard to win the confidence of the business community before the last election, less to solicit contributions than to prevent a run on the pound and fall in share prices if it won. John Smith's 'prawn cocktail offensive' won him personal credit but did not entirely persuade the City to trust his party.

If Mr Blair can do better, he will gain badly needed funds for his party, demonstrate independence of the unions and undermine Tory claims that a Labour victory would be bad for the economy. It is worth eating a few prawn cocktails for that.