A Conservative government will keep Britain out of the euro and deliver better value for money in public services, Michael Howard has said.

In a press conference at Conservative headquarters in London, the Tory chief pledged to deliver a "strong and stable" economy.

Setting out the economic chapter of his party's manifesto, Howard added that he was committed to "rewarding people who do the right thing".

Policies set out by the party include keeping the Bank of England's control of interest rates by remaining outside the eurozone.

A Conservative administration would also implement a "value for money action plan" aimed at saving £12 billion by 2007/08.

Some £8 billion of these savings would be used to cut government borrowing, while £4 billion will be used to cut taxes.

"A strong economy is the foundation for everything we do in Britain," said Howard.

"It provides higher living standards so that people can look to the future with optimism.

"A strong and competitive economy is not built by government; it's built by people - the British people.

Taking risks

"We need a government that rewards people who do the right thing - who work hard, take risks, create jobs, save to buy a home, put money aside for their retirement or invest in the future.

"By rewarding people who do the right thing we can build a better Britain."

The Conservative leader called for a "change of direction" on economic policy.

"Britain cannot continue indefinitely to spend more than it is earning without higher taxes or higher interest rates or both - which will harm our economic prospects," he warned.