IN a feverish day of electioneering yesterday, the Tories turned the tax spotlight on Labour, claiming there was a £10bn hole in their finances.

Conservative Party leader William Hague challenged Chancellor Gordon Brown to rule out lifting the cap on National Insurance contributions, which limits the amount workers pay.

Social Security Secretary Alistair Darling refused to rise to the challenge and instead claimed that there was a £20bn hole in the Tories' finances which would mean spending cuts.

Prime Minister Tony Blair made the third of his six campaign keynote speeches - stressing the need for change and investment in public services.

The Liberal Democrats focused on their transport and environmental policies, while John Prescott was back on the campaign trail, his Prescott Express bus hitting Wales, although a good-humoured Mr Prescott avoided hitting any voters.

In the North-East, Labour edged towards creating a regional assembly by promising to hold a referendum if the public wants one.

Chief Secretary to the Treasury Andrew Smith visited Sunderland where a mini-manifesto entitled Ambitions for the North was launched.

He sought to play down the row over the Barnett formula, saying that because of new Labour initiatives, the North-East received 14 per cent more funding than any other English region.

The mini-manifesto prom-ises to increase the amount of money being spent on economic regeneration so that the North-East can move towards full employment.

It also talks about setting up a Regional Venture Capital Fund, which is expected to bring in £45m extra investment in three years, to help small businesses start up.

But the heat was on Labour after Mr Darling refused to commit the party to retaining the existing ceiling on NI contributions.

The Tories claimed removing that cap would be the equivalent of raising £3bn by effectively introducing a 50 per cent marginal top rate of tax by stealth on all those earning £34,000 and above - nearly four million people.

Shadow Chancellor Mic-hael Portillo said last night: "If they cannot give the assurance we have given on NI contributions, people will have to conclude that they are planning to abolish the National Insurance ceiling."

Election special - Page 2