Wednesday, October 21, 1998 Published at 11:59 GMT 12:59 UK
PM predicts better economic times
Tony Blair said there were "tough times ahead"
By BBC News Online's Nick Assinder.
Tony Blair has told Labour MPs the British economy will have turned around within two to three years.
In a speech to a packed meeting of the Parliamentary Labour Party, the Prime Minister attempted to calm fears that the country is heading into a full-scale recession.
His upbeat message came against a background of growing job losses, fears over the future of Rover's Longbridge plant in Birmingham and as former Chancellor's Kenneth Clarke and Norman Lamont piled on the pressure for an emergency Commons statement on the economy.
Mr Blair told his MPs that there were tough times ahead but that the government would come through them so long as they stuck to their core principles.
'Keep your nerve'
And for the first time, he tried to put a time scale on the economic slowdown.
"In two to three years' time when the economy has turned around, we will have seen the additional £40bn of investment in schools and hospitals which will come on tap in April which will have benefited people and produced stronger public services," he said.
But he insisted the party had to "keep its nerve", declaring that it should stick to its three key economic principles which would "carry us through."
"There will be more difficulties facing us with the economic slowdown but, on the other hand, that is also an opportunity to put a clear case to win the economic argument," he said.
The three principles were tough monetary and fiscal rules, long term strength through improved productivity and investment, and tackling jobs through the Welfare To Work programme.
"We must hold our nerve and stick together," he said. "There are difficult times ahead but we will come through them stronger if we hold together on the principles on which we have governed the country."
He expressed concern about the crisis facing the Longbridge plant and other recent job losses, but he also insisted that other jobs were being created elsewhere.
He won a rousing reception from his MPs as he said it was also essential that the party turned its fire on the Tories.
"We must turn the heat on the Tories' turn to the right and expose them as either cutters of public spending or opportunists, and probably both," he said.
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