The ferocious spat between the Chancellor and the CBI carries damaging echoes of the stand-offs between the Labour Party and business that both sides thought had been consigned to history.

Labour’s new-found role as the ally of big business, symbolised by a long and warm rapprochement with the CBI, was among the most important elements of repositioning by Tony Blair and Gordon Brown.

The relationship, in stark contrast to the industrial battles of the 1970s and 1980s, appeared to have scaled new heights even a few months ago as David Cameron fell out with the CBI.

Labour strategists rubbed their hands with glee as the Conservative leader turned down at short notice an invitation to address the CBI’s annual conference, preferring to fly to Iraq to meet British troops in Basra.

Mr Cameron sent George Osborne, his Shadow Chancellor, instead but this was not enough to prevent headlines suggesting a snub to the CBI. Some business leaders suspected a contrived row in line with a pledge by the Tory leader to “stand up to big business”.

Wooing the voice of corporate Britain has long been a central aim of Mr Blair and Mr Brown as they strove to demonstrate to voters that new Labour would not resort to the old-style corporatism, industrial confrontation or economic mismanagement of the past.

It was under Neil Kinnock that Labour first began attempts to mend fences with the business community as John Smith, then his Shadow Chancellor, launched a much-mocked “prawn cocktail offensive” to charm sceptical business figures in the City.

But Labour’s relationship with business, and in particular with the CBI, moved on to a new plane under Tony Blair. He appeared to delight in facing down demands from the trade union movement to unpick trade union laws and was fond of declaring Labour the “party of business”. No less enthusiastic was Gordon Brown, who set out to transform City expectations of a Labour government with his zeal for a stable economic framework for the economy.

After winning power in 1997, relations with the CBI became more ardent still as a host of business leaders were picked to lead Government task forces or reviews of economic or welfare policy — a tactic much loved by the Chancellor.

Mr Blair, too, saw the CBI as a natural ally as he became increasingly focused on his ultimately unfulfilled ambition to take Britain into Europe’s single currency. Support from chief executives and chairmen of some of Britain’s biggest employers and investors, many of whom were at the time keen on joining the euro, was one of his main weapons in keeping euro-sceptic arguments at bay.

At the time, the CBI had a pro-euro leadership and it was left to other business voices, such as the traditionally more right-wing Institute of Directors, to put the case against.

Gradually, the Government’s failure to deliver on the euro and the everyday tussles over policy led to a distancing of relationships, but the Prime Minister and Chancellor continued to set high store on keeping good links with the CBI.

This is why the ferocity of the current dispute over pension tax changes is so striking: never before under new Labour has a public falling out been so bruising, and potentially damaging.

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