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Tuesday, November 2, 1999 Published at 06:45 GMT

Business: The Economy

Blair woos business leaders

Tony Blair presents his vision of the future UK economy

Tony Blair has said there will be no loosening of the Treasury purse-strings in an attempt to win votes in the run-up to the next general election.

BBC News' Robin Oakley: "These have been ritual exchanges - not the real meat of politics"
Addressing the Confederation of British Industry conference, he said there would be no "irresponsible pre-election spending spree".

Referring to the recent upturn in the fortunes of the UK economy, he said: "There will be no risks taken by this government with this new stability.

"Gordon Brown is the Iron Chancellor and his iron grip is here to stay."

Tony Blair addresses the conference
The Labour government has built a reputation for prudence, but there are concerns in the business community that the tough stance on the economy could relax as political pressures begin to mount.

With inflationary pressures coming back into the economy - particularly through big increases in the cost of oil and rapidly rising house prices - it is essential that a tight grip is maintained.

Seeking to reassure his audience, Mr Blair said: "We have managed to live through this part of the economic cycle without recession, with the lowest inflation and borrowing for many years, with the lowest unemployment for 20 years and we are not going to throw it away."


He had a particular message for the business world on electronic commerce: "To succeed in this new competitive global economy, Britain's businesses need to be knowledge-driven.

George Jones, political editor of the Daily Telegraph: "Blair has shifted the balance toward big business"
"That applies not just to high-tech businesses but to all businesses in all sectors."

"In the new knowledge economy, companies and individuals will thrive on the knowledge they hold; the skills they update to meet technological change; the flexibility they can deploy to meet changing circumstances; the creativity they can apply to tap new markets."

He also announced that the government was spending £500m on creating a network of 1,000 information technology learning centres. He said Microsoft's Bill Gates had said he saw the UK's proposed policies on e-commerce as a model for others.

In Europe

He also reasserted his belief that the UK belonged at the heart of Europe. He attacked the "virulent anti-Europeanism" of the Tory right and said Conservative proposals for a new opt-out would lead to Britain pulling out of the EU altogether.

"They are unable to name a single country that would support this proposal and it would require unanimous support by all 15 members," he said.

"If they failed to get that support, we would have to leave the EU, as of course many of the supporters of this proposal would like us to do. That would be a disaster for Britain."

On the single European currency, Mr Blair restated chancellor Gordon Brown's comments to the CBI yesterday that adopting the euro would depend upon meeting the government's five economic tests.

"It is the right position for Britain. It keeps our options open. It resolves all the issues of principle. It correctly identifies the crucial test as the national economic interest," he said.

"In principle, a successful single currency within a single European market would be of benefit to Britain - in terms of trade, transparency of costs and current stability.

"But in practice, we can only sensibly join a successful single currency if it is in the best economic interests of Britain to do so.

"We will judge that on the basis of the five tests we have set out and if they are met, we will put that judgment to the people in a referendum. The position of principle is clear. And so are the economic conditions."

Working time regulations

The CBI president, Sir Clive Thompson, challenged Mr Blair about regulations which he said had cut labour market flexibility.

Mr Blair responded that he was prepared to look again at the Working Time Directive, introduced across the EU to limit working hours.

He said some of the measures in the directive were "over the top", a comment which is sure to raise concerns among union leaders, already complaining that the directive was being watered down.

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