Letwin: Attack on Labour's spending plans

The government has "run out of money" and will raise taxes if re-elected, Oliver Letwin has said.

Speaking at a Conservative press briefing in London, the shadow chancellor sought to associate the present administration with the economic record of previous Labour governments.

And he said Labour has squandered a "golden legacy" left by the Tories.

"Labour has moved from a healthy bank balance to a substantial overdraft. Like previous Labour governments, Mr Blair's government has run out of money, the result is that the next government, of either party, would have to deal with it," Letwin said.

Tory leader Michael Howard joined in the attack, telling journalists: "If Mr Blair is re-elected one thing is certain; taxes will go up.

"We have to take a stand on government waste so that we can lower taxes."

The Tory leader said money saved by cutting swathes of government bureaucracy would be used to cut taxes for hard working families.

"On May 5 you have a choice. You can vote Conservative for lower taxes or you can reward Mr Blair for eight years of broken promises and vote for four more years of higher taxes. It will be your last chance to send a message to Mr Blair," he said.

Having accused the prime minister of lying over the Iraq war, Howard sought to highlight Labour waste.

"If I came up to you in the street took money out of your pocket and threw it down the drain that would be a crime," said the Tory leader.

"Well that's what Mr Blair's government does everyday. But you don't have to settle for this. I think it's time to take a stand on government waste."

Business

Speaking later to the British Chamber of Commerce Howard promised to take action on business leaders' concerns over red tape.

He said that a Conservative Cabinet would contain a secretary of state for deregulation, along with a range of regulation cutting measures including sunset reviews, small business exemptions and withdrawal from the EU social chapter.

"Mr Blair has introduced more regulations than any of his predecessors," he said.

"In his first seven full years, he introduced over 27,000 regulations. That's 15 new regulations every working day.

"The biggest complaint I get from business right across the country is that regulation and red tape are damaging business, damaging competitiveness and damaging jobs.

"The desire to over-regulate seems to be embedded in the bricks and mortar of Whitehall. Only a serious and systematic approach will keep it at bay. Fewer regulators and fewer bureaucrats will mean fewer regulations.

"And we have to curb the enthusiasm of the lawyers in gold-plating EU regulations."

Howard argued that "business needs a government that is on its side - not in its way".

"Business needs government to ensure the basics," the Tory chief said.

"A government that spends within its means. A government that doesn't take risks by over-spending and over-borrowing.

"A government that won't hand over control of our interest rates to the European Central Bank. We are the only major party pledged to maintain the independence of the Bank of England.

"Not just 10 days before a general election. But because for years we have seen the importance of interest rates being set in Britain for the benefit of the people of Britain.

"And let me tell you what else a Conservative government is going to do. We're going to do what every decent manager in every business does – cut out waste.

"There are two Britains today. Private sector Britain, where people are working harder just to stand still, struggling just to make ends meet. And bureaucratic Britain, where money is no object, you spend what you like and employ who you like."