Since then it has done more than any other new commercial station to convince British industry to use commercial radio

Since then it has done more than any other new commercial station to convince British industry to use commercial radio as an advertising medium."Sixty per cent of our advertisers had never used commercial radio before," said John Spearman, chief executive.Since Classic FM's birth, commercial radio's advertising revenues have grown from pounds 129m to pounds 220m. It has invested pounds 2.1m launching sister stations in Holland, Sweden and Finland.But the performance of the core UK radio station will be seen as a triumph for commercial radio, demonstrating that new stations in well defined niches can quickly go into profit.Classic FM started broadcasting in September 1992. CLASSIC FM, the commercial radio station that broadcasts classical music nationwide, has declared its first profit after three years on air. According to annual accounts filed last week at Companies House the group's profits in the UK were pounds 281,000. But expansion overseas sent the overall group deeper into losses - from pounds 1.2m last time to pounds 1.9m. Such a shortfall would put downward pressure on current pre-tax forecasts of pounds 100m.Books account for 27 per cent of WH Smith's retail sales in the UK and about one-third of gross profits.By contrast, any margin pressure at Dillons would have very little impact on its Thorn EMI parent.. However, they point out that there could be a short-term hit on profits of between pounds 5m and pounds 7m as margins on best-sellers and other titles are sacrificed in favour of increased sales.

Both offers will run for at least a month.On Monday, WH Smith begins discounting some 60 fiction and non-fiction titles in both hardback and paperback by up to 50 per cent.Analysts say that WH Smith, the established leader with a 25 per cent share of the UK book market, should emerge as a winner in any drawn-out price war as it can negotiate favour- able one-off deals with publishers. WH Smith was one of the NBA's staunch- est supporters.Waterstones, the high-street book chain owned by WH Smith, is offering discounts of up to a third on 19 titles, including the latest works from authors such as Salman Rush- die, Robert Harris and Martin Amis.Dillons, the Thorn EMI subsidiary, is cutting the price of the five titles short-listed for the prestigious Booker Prize by pounds 2 from today. The first salvoes in what promises to become a full blown and protracted price war will be fired today when WH Smith and its arch-rival Dillons, Britain's two biggest book chains, unveil big discounts on a range of current best-sellers. The launch of the price-cutting campaigns follows the collapse last week of the 95-year- old Net Book Agreement between publishers and retailers, which guaranteed minimum prices on titles. BETWEEN pounds 5m and pounds 7m could be wiped from the profits of WH Smith as a result of the book price war, but in the long term the beleaguered retailer will benefit from the demise of the Net Book Agreement, analysts estimate.

But he warned that Labour was naive in its attitude to business, and that while Blair was in danger of being too accommodating to business, the left wing of the party remained "excessively suspicious and hostile".Charles Skinner, editor of Management Today, commented: "Despite the radical turnaround, Blair still has much to do to convince British businessmen that a Labour government would be beneficial for British industry."Who would you have most confidence in as prime minister? (You may choose from any party.)John Major 36%Michael Heseltine 30%Tony Blair 9%Kenneth Clarke 3%Paddy Ashdown 2%Michael Portillo 2%Margaret Thatcher 2%Douglas Hurd 1%Bryan Gould 1%Chris Patten 1%John Redwood 1%None 7%Don't know 6%Source: Management Today. The 'Let's go back to the Empire' faction in the Conservative Party terrifies me."Chris Haskins, chairman of Northern Foods, said Britain was tending towards stagnation and corruption after 16 years of Conservative rule Labour would be good for the country. He was also concerned that Labour would penalise dividends in a bid to encourage firms to reinvest more profits. That would "heap untold damage on to growth prospects", he said.But Labour has some supporters in the boardroom. Sipko Huismans, chief executive of Courtaulds, the textiles firm, said he was "marginally more positive towards Labour than the Tories because of Labour's higher degree of commitment to Europe and the single currency. But the Conservatives can't resist stepping in occasionally, and the fear is that Labour will be worse." He was also worried about the UK joining the Social Chapter.Sir Colin Marshall, chairman of British Airways, voiced fears about the imposition of a minimum wage. Many will be demanding that Labour names a figure for its planned mimimum wage - a policy business largely opposes.But some parts of Labour policy are attractive to business leaders: 21 per cent applauded its commitment to education and training; 20 per cent its commitment to Europe; and 16 per cent its commitment to an industrial policy.Despite Mr Blair's claims that old-style Labour corporatism is dead, many directors continue to fear that a Labour government would interfere in the running of industry.According to John Gardiner, chairman of the engineers, Laird Group: "Both Labour under Blair and the Conservatives say they understand the need to let business and industry get on with their jobs.