Smith urges immediate rate cut

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JOHN SMITH, the Labour Party leader, called for an immediate cut in interest rates to salvage a recovery that, he said, has already run out of steam. He said the cut should not be delayed until it is convenient for the Government's news management but introduced now when industry and the wider economy 'so clearly require it'.

Mr Smith attacked successive Conservative governments for neglect of manufacturing throughout the 1980s. Although John Major had stressed the importance of manufacturing, Mr Smith said that there remained 'no strategy for industry at all'. He urged the Government to create a more stable environment to allow companies to invest in research and development with a view to the long term.

He said: 'Industry cannot prosper if companies continually have to look over their shoulder in fear of takeover because of a short-term dip in their share price.' He said that in the forthcoming Budget there was a strong case for extending the level of capital allowances beyond the current year and considering tax credits to encourage investment.