Blair tells CBI conference of Britain's 'huge strengths'

Prime Minister Tony Blair has said that the alliance with the US and Europe had provided Britain with "unprecedented purchase" in international affairs.

But he acknowledged that there "is still a vast amount to do to improve our country further".

Addressing delegates at the CBI conference in Birmingham, the Prime Minister said that Britain and the government must be ready to adapt to cope with the pace and scope of change. The government has to create the right environment for business through skills, education, transport and the system of healthcare, he said. "Its role for good or ill is vital."

He said that British business has always given strong support to the UK's membership of the EU for good reason: "You understand that being in the EU brings us massive benefits in trade, jobs and prosperity. You know that to be anti-Europe is to be anti-business. But you also know - and so do I - that a reform agenda for Europe is also vital. This is an area where we wholeheartedly welcome your engagement."

Ten new countries are set to join the EU, making Europe the world's biggest market, with over 400m consumers. Mr Blair said this meant that the way Europe's institutions work must be updated, but he said that the UK would not yield on any of the crucial issues in the forthcoming negotiations on the new European Constitution.

"Specifically, on the matters of tax, social security and the EU budget, we oppose any move away from unanimity. Within Europe Britain is a low-tax country and I am adamant that we will remain that way," said Mr Blair.

However, a CBI report published on the first day of the conference revealed that directors in the UK thought that business climate was worsening.

The survey revealed that seven out of ten directors said the business climate in the UK had become worse over the past five years and 60% expected it to get worse over the next five years. The report also revealed that two-thirds of respondents believed the government places a "low priority" on delivering a favourable business climate and expected the situation to deteriorate.

The Prime Minister announced a £10m of investment package and the setting up of a new working group to boost the competitiveness of UK biotechnology. The sector in the UK is worth over £3bn a year and employs over 25,000 people.

(SP)