Blair: Spend to save economy

The war against terrorism must be won to help protect British jobs, businesses and our way of life, Tony Blair declared today.

The Prime Minister used a speech to the CBI conference to claim that a victory against Osama bin Laden and the Taliban was also a victory for economic prosperity.

He told his business audience that there was a huge need to "restore stability" in international relations and that diplomacy and national security had a vital role to play in ensuring future growth.

He said: "Winning the battle against international terrorism is to win for the economy too. Jobs, living standards, businesses and trade need us to beat this terrorist menace. Each step towards our goal is a step towards reassurance for our own way of life and our ability to protect it."

His comments serve to underline his stance that the best way to combat terrorism domestically is for people to get on with their lives as normally as possible, particularly by continuing to spend in the High Street.

However, his words also suggested he and his senior ministers were only too aware of the threat to the economy - already facing a downturn - that the continuing battle against terrorism poses. However, he went out of his way to hammer home the message already put forward strongly by Chancellor Gordon Brown that the "fundamentals" of the British economy are stronger than they have been for a generation.

In a wide-ranging speech he also tackled the euro, claiming government policy on whether to join the single currency had not changed "one iota".

His neutral-sounding comments followed last night's speech by the Chancellor in which he stressed that a "considered and cautious" approach would be taken in the run-up to a decision on holding a referendum.

That was taken as an effort to apply the brake after Mr Blair's party conference address in September in which he appeared keen to act as a cheerleader for the currency, claiming that ministers would show the "courage" to take the argument in favour of joining to the public.

Today the Prime Minister claimed: "Despite whatever you read - warming up or cooling down - the policy has not altered an iota. In principle we are in favour. In practice the economic tests have to be met." If the five key tests were passed, Mr Blair added: "We will make the case to the British people."

Mr Blair also used today's speech to repeat his support for increased involvement by private companies in the provision of public services, despite strong opposition from the trade unions. He said public-private partnerships such as the one on the London Underground are crucial to secure the investment needed to improve services. He defended the actions of Trade Secretary Stephen Byers in cutting the funding to Railtrack, saying that it was essential to create a new structure.

The CBI has set an example to the business community by bringing 800 delegates to its annual conference, the same number as last year despite the gloomier economic climate.