NEW TORY WAR OVER 'FAIRYTALE' TAX CUTS

BIG BEASTS DO BATTLE OVER THATCHER LEGACY AS REES-MOGG AND DORRIES BACK TRUSS

- Nicholas Cecil, David Bond and Rachael Burford

A WAR of words erupted over "fairytale" tax cuts as Tory leadership contenders scrambled to get at least 20 votes from MPs today to enter the contest to succeed Boris Johnson.

Shortly before Rishi Sunak launched his official leadership bid, his successor as Chancellor Nadhim Zahawi took a swipe at him over their conflicting timetables for slashing taxes.

In the battle for the Tory Right, Foreign Secretary Liz Truss got a triple boost with the support of Culture Secretary Nadine Dorries, Brexit minister Jacob Rees-Mogg and Education Secretary James Cleverly.

In a new video early this morning, Mr Zahawi pledged he would deliver a "strong vision backed with solid philosophy", including delivering benefits of Brexit - which many economists say has in fact hit Britain's trade, reforming education and boosting defence spending in the face of threats from China and Russia.

"Of course, we need to reduce the burden of tax," he said, having promised to lop 1p off the basic rate of income tax next year, and another in 2024 to get it down to 18p in the pound. "I believe cutting tax isn't a fairytale but rather a critical step to tackle the cost-of-living crisis."

His words were hitting back at Mr Sunak, who officially launched his leadership bid vowing: "We need a return to traditional Conservative economic values and that means honesty and responsibility, not fairytales." He added: "Once we have gripped inflation, I will get the tax burden down.

It is a question of 'when', not 'if Mr Zahawi, Ms Truss and other candidates are pledging swifter tax reductions as millions of families and businesses across Britain struggle with the cost-of-living crisis.

Mr Sunak's supporters, though, are likely to seize on comments from the Government's fiscal watchdog, the Office for Budget Responsibility (OBR), that countries should not rely on tax cuts to try to grow themselves out of economic woes.