Michael Howard has taken the election battle to Tony Blair's constituency with a warning that Labour is hitting business with 15 new regulations every day.

Addressing an audience in Sedgefield, the Tory leader praised the government's 1997 decision to give the Bank of England independence - but warned that red tape and tax were hitting business hard.

"Tony Blair praised the achievements of the last Conservative government here in the North East. So let me return the compliment to him - and his chancellor Gordon Brown - for the decision to give the Bank of England independence," he said.

"It was a necessary further step to provide macro-economic stability for the British economy and it has certainly proved its worth."

But he warned that independence "has concealed the damage that is being done by over-taxing and over-regulating the British economy".

"The job of running a business in Britain is getting tougher - much, much tougher," he added.
 
"The burden of regulation on business is, in my view, approaching crisis point. It is eroding the ability of business in the North East to compete.

"The costs involved can mean the difference between winning an order and losing it.

"Labour are now bringing in 15 new regulations every single working day - 50 per cent more than when we were in office."

Tax warning

Howard warned that Labour is implementing an unsustainable spending programme which will inevitably lead to higher taxes.

"To cover the black hole in the government’s borrowing they will have to bring in tax rises equivalent to £900 a year for somebody on average earnings," he said.

"That will make our economy even less competitive. We have already slipped eleven places in the world competitiveness league, from fourth to 15th, since Labour came to office. We cannot afford to fall further."

The opposition chief went on to detail the measures a future Tory administration would implement.

"We will ensure that the total regulatory burden imposed by government falls each year. We will introduce sunset clauses in new regulation. And like America, we will exempt small firms from a whole raft of regulation," he said.

"A Conservative government will ensure that, over the medium term, while public spending will continue to grow, it will grow less quickly than the economy as a whole."