Mr Redwood said that the root cause of Britain's economic ills lay with the policies pursued by the Government and the regulatory and tax burdens it was heaping on industry.
Addressing the CBI annual conference, he said: "The Government should realise that the main cause of lower profits and less competitiveness in recent months is the Government's own actions, not those of business.
The charge sheet included a 43 per cent increase in regulation, pounds 25bn of extra taxes over the next five years, the threat of new energy taxes and Fairness at Work legislation that would take Britain back to "the bad old ways".
Mr Redwood's attack echoed some of the crticism made by the CBI president, Sir Clive Thompson, in his opening speech to delegates.
Sir Clive said that since Labour came to power the business horizon had darkened and cited the wave of social legislation being imposed on firms.
Mr Redwood reiterated his call for a scaling back of welfare spending, postponement of the national minimum wage and scrapping the Working Families Tax Credit.
This would pave the way for cuts in interest rates "to levels that make sense for industry".
He also ridiculed the "third way" trumpeted by Tony Blair and "the current socialist leadership of the European Union".
He said: "There is no such third way. You have to choose between state planning and free enterprise.
"You have to choose between liberty and control. You have to choose between democracy and bureaucracy."Reuse content