LEADING ARTICLE : The CBI's place in the middle

The Confederation of British Industry is wobbling precariously along a political fence, between the Tory government and what many businessmen privately acknowledge looks increasingly like a Labour administration in waiting. So far it has done well to prevent Tory businessmen, as well as politicians from either side, pushing it off, either to left or to right.

The CBI cannot afford to offend the government in power, not only because ministers still have their hands on the levers that matter but also because an influential body of members quite clearly wants its organisation to take sides, by acknowledging that business's real friends are the Tories. Politically committed members will regard neutrality as next to treachery. As the election approaches, the pressure on the CBI to come out more clearly in favour of the Government will be enormous. Probably as a response to too many headlines last week about the CBI cosying up to the Opposition, Sir Bryan Nicholson, president of the CBI, went out of his way on Sunday to dismiss the idea of partnership with Labour, describing what is going on as just a dialogue.

But then dialogue is what this has been about all along, not phoney partnerships of the type Labour has claimed with BT. No sensible lobbying body with the interests of its members at heart can contemplate any other course than finding out what Labour policies are, and then do its best to influence them.

In speeches in Birmingham this week, the CBI has been throwing bricks at both sides. It is bitterly critical of the damage likely to be done to business by the Government's squabbling over Europe, wary of the Chancellor in case he gives away too much in the Budget, and particularly concerned that he is relying on the Private Finance Initiative as a fig-leaf to cover cuts in public spending on infrastructure, which directly affects members' order books. Equally, the employers intensely dislike Labour's minimum wage and its intention to sign up to the European Social Chapter; they are reassured by Tony Blair's comforting words on inflation and taxation policy and his backing for high rewards for success in business, which he took a step further yesterday, to resounding applause from the conference. But they wonder whether good intentions will survive the stresses and strains of government, and whether the small print of the policies, which Mr Blair skirts round, will reveal something scarier.

Throughout the Eighties the CBI was in the wilderness, partly because of the bare-knuckle fights promised at its 1981 conference, when recession was battering its members; equally, the Government's policy for industry was long centred on shifting the balance of power away from the unions. There was not much left for the CBI to lobby about. That has changed, both at the level of detailed policies for industry - Michael Heseltine reinvented the Department of Trade and Industry when he was there - and in the debates about government spending, taxation and Europe.

By occupying the middle ground - what is left of it now that Labour has moved closer to the centre - the CBI is in a position to influence events in a way it has not experienced since the days of beer, sandwiches and corporatism in the Seventies. It would be foolish indeed of the employers to come off the political fence and destroy that influence.