Tony Blair has rejected Liberal Democrat claims the Queen's Speech is aimed at creating a "climate of fear" ahead of the next general election.
The prime minister went on the offensive against his opponents
The prime minister told MPs: "The threats faced by this country and every other major country are real."
Earlier Tory leader Michael Howard launched an all-out attack on the government, saying tax payers were not getting value for money.
Mr Blair responded Mr Howard was the reincarnation of a failed Tory past.
After a Queen's Speech that put crime and terror at its heart, the premier said the plans should be taken alongside government investment in public services and next week's pre-Budget report, which would focus on stability and opportunity.
Mr Blair said New Labour recognised the kind of challenges faced by the UK.
"If we want to help the British people cope with economic globalisation, terrorism, organised crime, the pressures of modern work and family life we have to change radically the way public services, the welfare state and the criminal justice system work."
He said his government's plans were simultaneously "radical but realistic and costed".
'Source of pride'
The prime minister conceded there were "still far too many victims of crime" but added he was determined to bring back "respect and responsibility" to Britain's streets.
And he acknowledged it was a "big change" to bring in compulsory ID cards but claimed the move was "long overdue" in the face of terrorism, organised crime and illegal immigration.
The prime minister used his speech to MPs to pay tribute to British forces currently serving in Iraq.
"They are a huge source of pride for the country," he said.
Fantasy tax cuts?
Mr Blair then turned to the Conservative's alternative Queen's Speech which he said had "tantalised" voters with the prospect tax cuts worth billions could be introduced.
"Then you read the small print of the document. Tucked away at the end is this sentence: 'The presence of a particular option in this paper does not constitute any guarantee or promise that the particular option in question will form any part of any Conservative budget'," he said.
"We are introducing a consumer credit bill to protect people from sharp practice. We'll have to amend it to cover Tory policy."
Mr Blair added: "It's not a real tax cut, it's a fantasy tax cut and a fraud because it's sold as a reality."