Brown exploits disagreement between Tories and CBI over single currency

Gordon Brown, the Chancellor, will today seek to capitalise on the rift between the Confederation of British Industry and the Tories over Europe by portraying Labour as the party of big business. Meanwhile the CBI's top brass last night attempted to diffuse the row over the European single currency which threats to overshadow its annual conference, which starts in Birmingham today. Michael Harrison and Colin Brown report.

The peace moves by the CBI today came as the Government prepared to portray Labour as the natural party of business and exploit its disagreements with the Tory leader, William Hague, who will speak at the conference today following an address by the Chancellor.

Mr Brown will highlight the growing gulf between the Tory Party leadership and business by announcing that work is to begin immediately on preparations for business to use the euro if Britain joins the single currency after the next election.

The Chancellor will tell the CBI that preparations for entry to the euro are "too important to leave to dogma and party politics". He will say: "I believe there is an increasing consensus about the principles of the single currency. These preparations are not cosmetic but real."

For his part, Mr Hague will tell the conference that those arguing in favour of entry because they are afraid of being left behind are acting like "lemmings".

Sir Colin Marshall, the CBI president, stressed it was "not at war with any political party", while Adair Turner, director general, insisted he agreed with many of Mr Hague's views. Disagreement over one subject did not amount to a fundamental rift, he added. Mr Hague tried to play down the differences between the Tory Party and the CBI as a disagreement between friends. "Sometimes you have to give your best friend candid advice," he said on GMTV yesterday.

Mr Turner and Sir Colin insisted they wanted an "intelligent debate". But sources close to the Tory leader confirmed last night that Mr Hague would stick to his text and refer to "lemmings". He will say: "The danger for Britain is not that we will somehow be left behind in Europe. The real danger for us is that Europe could be left behind by the rest of the world."

However a CBI survey of 734 firms published last night showed that 72 per cent backed UK membership of a single currency once economic convergence was in place, while 16 per cent disagreed. However, less than one-third of those polled replied and the chairman of Dixons, Sir Stanley Kalms, aConservative supporter and Eurosceptic, dismissed its findings: "There is a real danger that the CBI is neither representing the views of the vast majority of its members nor is it helping to create a healthy background for conducting business."

He added that there was a tendency in collective organisations for the loudest voice to be heard most: "The CBI has been hijacked by the loudest voices - the large organisations that have a determined self-interest in joining EMU."

Sir Colin said Sir Stanley represented "a minor minority viewpoint" and pointed out that large numbers of small and medium-sized companies had been polled in its surveys on EMU. "We are not at war with any political party, but where political parties raise issues and take positions ... which we do not think are in the best interests of business, we will take issue with them."

The CBI leadership denied it was aligned more closely to the Prime Minister, Tony Blair, or that Labour had become the natural party of business.

Nevertheless, the Government will seek to exploit the CBI's disappointment with Mr Hague to project itself as the party more now in tune with business. The Chancellor will announce that Britain will seek millions of pounds in EU funds to publicise the euro. A standing committee including the Governor of the Bank of England, the CBI, TUC, the Chancellor and Margaret Beckett, the President of the Board of Trade, will begin work this week on making preparations for the euro. A business advisory group is also due to report on the euro.

Mr Blair will address the conference via a live video link on Tuesday and before that delegates will be addressed by three other Cabinet members - Mr Brown, Mrs Beckett and David Blunkett, the Education Secretary. Mr Blunkett will announce the launch of a task force involving senior business figures to tackle skills shortages while Mrs Beckett will formally launch her campaign to get industry to benchmark its performance against world best practice.

The last time the CBI surveyed its members on EMU in July it found that 94 per cent favoured membership as soon as possible or backed EMU in principle but with delayed entry. Mr Turner said the lower vote in favour this time did not necessarily suggest a move away from support for a single currency since the two surveys had asked different questions.

Despite criticisms that the surveys were not representative, Mr Turner said there was no intention of the CBI polling every member. However, he backed the three major political parties' commitment to hold a referendum on EMU.

The CBI survey of members' views also found them heavily critical of the educational standards of school leavers and increasingly in support of special levies other than direct taxes to finance public services. Four in 10 firms said numeracy standards and communications skills among school leavers were poor. Eight in 10 said they would be prepared to see specific services paid for out of levies such as road tolls.