Heseltine warns against rate cuts: Tories told not to lose their nerve
The intervention by the President of the Board of Trade will be seen as a shot across the bows of Tory colleagues who have been demanding a further cut in interest rates to offset the tax increases before they hit Tory support in April.
Warning colleagues 'don't lose our nerve', Mr Heseltine said on BBC Television: 'I think that the economic factors today facing the British economy are about as encouraging as I can ever remember, providing we don't do what has happened, time and again, since the war, when the currency has been devalued, which is to let inflation overrun our expectations.'
The pressure for interest rates cuts is likely to be heightened by the Bank of England inflation report tomorrow. Although inflation rose from 1.4 per cent to 1.9 per cent in December as a result of indirect tax increases, it will show the underlying rate of inflation is 'comfortably within the Government's target range', Eddie George, Governor of the Bank, said on LWT's Walden Programme.
Mr Heseltine was rallying round John Major's leadership, after further buffeting over weekend reports that Mr Major would not resign in spite of expected Tory defeats in the local elections in May and the European elections in June. Mr Heseltine said: 'I don't know of a political leader who has not gone through this sort of crisis in mid-term.'
John Smith, the Labour leader, launched his party's European and local government campaigns in Glasgow by emphasising Labour's economic competence. 'We have one simple message for the British people - Britain will be better off with Labour,' Mr Smith said.
According to a Gallup poll in today's Daily Telegraph, Mr Smith is rated higher than any Labour leader in opposition for decades. The proportion of voters considering him a good Labour leader has exceeded 50 per cent three times in the past four months. During Neil Kinnock's eight-year tenure his rating reached 50 per cent only once.
But Bryan Gould, a former Shadow Cabinet member, said Labour had abandoned socialism. 'We have given up supporting the interests of the workers and for peculiar reasons we have sided with the wealthy. I want to see us swap back,' he said.
Labour leaders were accused of 'shying away' from financial reforms to local government in a report by the Fabian Society.
It urges Labour to adopt local taxation, including a local sales tax, a tourist tax and a tax on dog ownership.
Beyond the Town Hall; Fabian Society, 11 Dartmouth Street, London SW1 9BN; pounds 3.50.
- 1 California man brutally beat 82-year-old Sikh grandfather he mistook for 'one of those people'
- 3 School kitchen manager 'fired from Colorado school for giving hungry students free lunches'
- 5 Charles Kennedy 'had better judgement drunk than many sober politicians' says Ian Hislop
California man brutally beat 82-year-old Sikh grandfather he mistook for 'one of those people'
Amber Peat: Body found in search for missing 13-year-old who left house after argument with her parents
School kitchen manager 'fired from Colorado school for giving hungry students free lunches'
Alton Towers closed after horror crash on The Smiler raises safety questions for theme park
Alton Towers crash: Four guests seriously injured as Smiler ride carriages collide
Thousands of teenage girls enduring debilitating illnesses after routine school cancer vaccination
Migrants in Kos: Photos show real tragedy after Brits abroad complain of 'awkward' holidays
British tourists complain that impoverished boat migrants are making holidays 'awkward' in Kos
Michael Gove determined to scrap the Human Rights Act – even if Scotland retains it
Threat to scrap Human Rights Act could see UK follow Nazi example, warns UN official
Church of England 'one generation away from extinction' after dramatic loss of followers
£40000 - £47000 per annum: Recruitment Genius: A 3rd Line Virtualisation / Sto...
£26000 - £35000 per annum: Recruitment Genius: A successful national service f...
£15000 - £25000 per annum: Recruitment Genius: This is an opportunity to join ...
£17500 - £20000 per annum: Recruitment Genius: We currently require an experie...