Tory leadership candidates have been urged to explain how they would fund billions of pounds worth of tax cuts.
Grant Shapps, Jeremy Hunt and Sajid Javid have all pledged to reduce the tax burden if they win the race to succeed Boris Johnson.
Others, including Suella Braverman and Liz Truss, have also said they want to cut taxes as a way of helping people cope with the cost of living crisis.
By contrast, former chancellor Rishi Sunak has warned Tory members not to vote for candidates making “fairytale” promises.
On Sky News’s Sophy Ridge On Sunday this morning, Shapps vowed to bring in an emergency budget to immediately cut 1p off the basic rate of income tax if he becomes prime minister.
In addition, he said he wanted to scrap Sunak’s planned rise in corporation tax, which is due to come in next year.
Asked how he planned to pay for the tax cuts, as well as his plan to hike defence spending to three per cent of GDP, he said he would cut public spending, without giving any more detail.
Javid went even further, outlining tax cuts which would cost £39bn a year to fund.
He said he would cut a penny off income tax next year, reduce corporation tax to 15 per cent and scrap the rise in national insurance payments which he championed when he was health secretary.
The former cabinet minister, whose resignation last week ultimately led to Johnson’s downfall, also said he wanted to slash fuel duty.
Hunt, meanwhile, said he would also reduce corporation tax from its current rate of 19 per cent to 15 per cent, instead of increasing it to 25 per cent, as Sunak intended.
Pat McFadden, Labour’s shadow chief secretary to the Treasury, tweeted: “It’s only day 4 and Tory leadership candidates have so far pledged £235bn in tax cuts - roughly 1.5 times the annual NHS budget - with no word on how to fund it. If Labour did this we’d be getting slaughtered. “How will you pay for it?” Should be a question for the Tories too.”
In a Twitter thread, Paul Johnson of the independent Institute for Fiscal Studies think tank said tax cuts on the scale being proposed would inevitably lead to dramatic reductions in public spending.
He said: “Everyone would like lower taxes. But need to be clear about consequences. Short run and long run issues.
“In short run OBR [Office of Budget Responsibility] did say £30bn headroom against fiscal target. But that assumes spending rises only at rate set out in September when inflation expected to hit just 4%
“Using that headroom on tax cuts almost certainly means big real terms cuts in public pay, for example. (And the headroom is actually tiny in any case). An alternative of course is to borrow more (contrary to Conservative manifesto). May be risky in highly inflationary environment
“Bigger issue is long term. As OBR set out last week (we’ve known for years) we’ll need to spend much more on NHS, social care, pensions. That must mean tax rises OR a real plan for major surgery to parts of welfare state. Latter may be possible but nobody is talking about it