Is this a labour party, brother? ...or is it for business?

Tony Blair's redefinition of socialism swept on yesterday as he went to the heart of speculative capitalism in the City of London to embrace the profit motive.

He told his audience at the Guildhall that New Labour wanted to deliver "the good times", and make Britain better off, but in a sustainable way. "Sometimes our political opponents portray the Labour Party as a bunch of killjoys, always opposing tax cuts and increases in living standards. Nothing could be further from the truth. We want people to consume more. We want high quality public services. We want people to pay lower taxes," he said.

"But we want this for all our people - not simply a few at the top - and we want it on a sustainable basis."

In an address to the Liffe market, once regarded with intense suspicion on the left because its trading is essentially betting against future price changes, he continued his controversial drive to re-position Labour as equidistant between business and trade unions.

In the past, he said, "the Labour Party was portrayed as representing one sectional interest and the Tory party another, while we appeared insufficiently aware of the importance of profit". But now, while denying a "secret plan to dump unions", he said that "business people as well as employees are joining us".

His address set out the four "millennium challenges" he saw facing Britain, and trailed a series of further speeches by leading shadow ministers on how a Labour government would attempt to meet them. In short, the challenges were: how to make Britain better off; how to make Britain safe; how to make Britain accountable; and how to make Britain strong.

In meeting the first, Mr Blair said, Labour had moved on from the solutions of the past. "Even if we wanted to do so, we could not today find a commanding height of the economy to take into public ownership. Even if we wanted to do so, we could not find union and management groups able to implement a national pay policy," he said.

But he said that the Conservatives had neglected important economic truths over the past 17 years. One was the need for long-term investment, which was "crucial to the sustained growth of living standards and lasting reductions in taxation". Another was that "monopoly profits distort economic efficiency".

Mr Blair continued to play down expectations of a dramatic change of economic policy under Labour. "There is no 'big bang' way of transforming an economy for the better, but the cumulative effect of consistently good policy measures can be large," he said.

Earlier, Mr Blair had backed Kim Howells, Labour's junior trade spokesman, who caused a furore at the weekend by calling for the word "socialism" to be phased out. "I agree absolutely that what we have got to be about is the best practical means to deliver a different type of society in Britain today that faces that modern world, that is based absolutely on our values but isn't tied to some outdated form of ideology," Mr Blair said on the BBC's Today programme. "Kim expressed this in his own inimitable style, but I think the kernel of his argument was entirely correct."