At the party's Bournemouth conference, Mr Redwood said the Government seemed "paralysed by events" and unable to act while the list of companies forced to sack workers grew longer each day.
He warned: "There is a new cancer at the heart of British industry, nurtured by this Labour Government. One interest rate cut of 0.25 per cent is too little too late. It will not suddenly stop the closures or rescue manufacturing.
"The damage has been done by Labour's high interest rate and high sterling strategy."
Mr Redwood echoed Tory leader William Hague's call for a "jobs crisis package", which he said, should include: making it cheaper to employ people by delaying introduction of the minimum wage; avoiding "damaging" trade union reforms; cutting business taxes; and making further cuts in interest rates once the risk to inflation is reduced.
The Tories also produced an estimate that a 1 per cent reduction in the 1999 growth forecast would make a pounds 13bn "black hole" in the public finances. The Tory Treasury spokesman David Heathcoat-Amory wrote to the Chancellor, Gordon Brown, seeking details of his new forecast.
He wrote: "Your 1998 Budget was based on an assumed growth next year of between 1.75 to 2.25 per cent. You have now confirmed that growth next year 'will be more moderate' but you have so far failed to disclose your internal Treasury estimate of this reduction.
"However, your press spokesman has briefed journalists that it could be in the region of 1 per cent. A reduction on this scale would have a severe impact on your published expenditure and borrowing plans, on which many people are relying. We need to know whether you will raise taxes again, cut spending or let borrowing increase."Reuse content