Blair promises stable economy, sidelines Iraq

Tony Blair

LONDON - British Prime Minister Tony Blair unveiled the policies that will underpin his bid to make British political history by winning a third straight term for his Labour Party.

At the heart of Labour's campaign for next month's election is a pledge to preserve economic stability - the factor Blair hopes will offset widespread discontent over the Iraq war.

In a bulky manifesto, Labour also promised to lead economic reform in Europe, keep up pressure on Iran and North Korea over their nuclear programmes, and lamented violence in Iraq.

"We mourn the loss of life of innocent civilians and coalition forces in the war in Iraq and the subsequent terrorism. But the butchery of Saddam is over," it said.

"Many people disagreed with the action we took ... We respect and understand their views. But we should all now unite to support the fledgling democracy in Iraq."

Polls show Labour on course to win the May 5 poll. A new survey by Mori yesterday gave Blair a four-point lead.

He and Chancellor of the Exchequer Gordon Brown, his most likely successor, have put aside years of on-off feuding to campaign together. Blair has promised Brown will keep his job if Labour wins, in a bid to entrench economic stability.

"We will never return to the stop-go of the past," Blair, who has pledged to serve a third term but not seek a fourth, told a news conference.

But Labour's emphasis on the economy was undermined by figures showing the largest rise in unemployment claimants in two years and a protest outside Blair's office by the families of workers at collapsed car firm MG Rover.

Labour's manifesto reset an inflation target of 2 per cent, which the Bank of England must tailor interest rates to meet. A commitment not to raise rates of income tax - key to Blair's 1997 and 2001 election wins - was repeated but without a broader promise not to hike any taxes at all.

Economists say the Government's spending plans mean higher taxes at some point after the vote, an analysis Brown denies.

"There's one thing you can be certain of. If Mr Blair gets in again, taxes will go up again," Opposition Conservative leader Michael Howard told reporters.

By promising a referendum on the European Union constitution next year, Blair has neutered Europe as an election issue.

Polls suggest he faces an uphill struggle to convince sceptical Britons although the manifesto said Blair would campaign "wholeheartedly" for a 'Yes' vote.

The manifesto also spelled out Labour's priorities when Britain presides over the EU in the second half of 2005: promote economic reform and cut regulation, make progress on world trade talks and bring Turkey, the Balkans and Eastern Europe closer to EU membership.

- REUTERS