Industry says no to Labour partnership

CBI conference: Politicians fight it out for the hearts and minds of business leaders in Birmingham

PETER RODGERS

MARY FAGAN

and JOHN RENTOUL

Business leaders yesterday rejected Tony Blair's overtures for a partnership between industry and the Labour Party and said contacts between the two were merely a dialogue.

Mr Blair is this morning to step up his drive to win over industry to Labour's new policies in a keynote speech at the Confederation of British Industry conference in Birmingham, where he will praise the benefits of an enterprise economy.

But against a background of growing concern among senior industrialists and Tory cabinet ministers that the CBI has been aligning itself too closely with Labour, Sir Bryan Nicholson, president of the employers' organisation, said: "It is equally important that we listen to the Government in power as to precisely which lines of policy they are going to continue to propagate, because after all they hold the levers of power."

Separately it emerged that Howard Davies, former director general of the CBI, had drawn up a critique of Labour policies, outlining areas that Mr Blair should change in order to meet the needs of British industry.

The document is bound to be greeted with glee by Conservative ministers, but Sir Bryan said yesterday that it had constituted only a "checklist".

The central thrust of MrBlair's address is expected to be that Britain should become a "nation of entrepreneurs". He will take issue with John Major's Blackpool conference ambition for Britain to become the "enterprise centre of Europe", describing this as "a fantasy unless and until we become the knowledge capital of Europe".

Mr Blair will emphasise the change in the Labour Party since John Smith addressed the CBI in 1993, and stress its conversion to "the enterprise of the market and the rigour of competition", enshrined in the party's new constitution.

Mr Blair's speech will set out Labour's economic policy across a broad front, with education and skills at the core. Labour's stance on training became clearer last week as the 1992 policy of a levy on companies that did not spend enough on training was finally dropped, to be replaced with a plan for individual "learning accounts", to which employees, companies and the taxpayer would contribute.

Sir Bryan said that with the Labour Party "you are not talking about a partnership, you are talking about a dialogue". The question CBI members most frequently asked him was: "Are you making certain that in the event there is going to be a Labour administration you have been talking to them properly and putting our views across?" Distancing himself from the view among some that Labour is the government in waiting, he added: "With 18 months to go, I think members reckon that anything could happen.

Adair Turner, CBI director general, welcomed the "apparent shift in the overall tone of Labour's approach to business" but he called on Labour to clarify its policy in a number of areas, including personal taxation, and in particular to confirm the party has "truly rejected the politics of envy" on top marginal rates of taxation.

He also resurrected the deep-seated disagreement between business and Labour on the minimum wage and on the party's policy of dropping the opt- out on the European social chapter.

With reports last week that the Government had pounds 5bn of tax cuts in its sights, the CBI warned that its members were vociferously opposed to tax cuts above pounds 3bn. A survey of members on Budget priorities said only 5 per cent favoured tax cuts above pounds 3bn. Education was first or second priority for 79 per cent.