A BUSINESS leader has called for greater tax incentives to help firms invest in skills and new equipment in the coming year.

Confederation of British Industry director general Digby Jones, said in his New Year message that tax credits for companies investing in research and development should be extended.

He said he hoped that decades of under-investment in transport, education and training would be redressed.

Economists were predicting that world economic growth would slow from 4.5 per cent this year to 3.5 per cent in 2001, but there was every reason to believe a 'hard landing' would be avoided, said Mr Jones.

"But slower economic growth leads to lower profits and less investment," he said, "So we could be storing up problems for the long-term, particularly in the hard-pressed manufacturing sector.

"That makes it vital for 2001 to be a year of investment. The Government must offer more incentives to invest in new equipment and innovative business opportunities."