Liz Truss is now a huge favourite with bookies to beat Rishi Sunak in the Tory leadership contest and become the next prime minister.
The foreign secretary has always been the frontrunner but she has pulled even further ahead, with odds of around 1/9 compared to Sunak’s 8/1.
It comes after former Conservative leadership contender Tom Tugendhat put his support behind Truss, dealing a blow to the ex-chancellor.
Truss’s pledge of more than £30 billion of unfunded tax cuts won over Tugendhat, who described them as being “founded on true Conservative principles”.
Watch: Huge blow to Rishi Sunak as former rival throws his support behind Liz Truss
Sunak had been on the defensive over tax again in a crunch interview with Andrew Neil on Friday, rejecting accusations that his policies would result in recession and warning that Truss’s plans for vast tax cuts would pour “fuel on the fire” of inflation.
He was grilled by the veteran political journalist on the economy, immigration and his wife’s tax status for nearly half an hour in his Channel 4 interview, in which Truss has so far declined to take part.
Truss is strong favourite with all the major bookies, including William Hill (1/9), Paddy Power (1/14) and Betfair (1/14).
Sunak is lagging behind at 6/1 with the same three odds makers.
With Truss’s tax plans seeing her consistently leading in polls, Sunak performed a U-turn this week by promising to slash VAT on energy bills temporarily.
Sunak pledged to temporarily scrap VAT on energy bills from October if the price cap rises above £3,000 as expected, saving households around £160 at a cost to the exchequer of around £4.3 billion.
However, the policy appears to have failed to shore up support among Tory voters – who include the party members electing the next prime minister – of whom 43% believe Truss would do a better job, compared with 32% for Sunak, according to a BMG Research poll for the i newspaper.
The foreign secretary has pledged to “start cutting taxes from day one” with a new Budget and Spending Review that would reverse April’s rise in national insurance and next year’s corporation tax hike from 19% to 25%.
She has also vowed to “simplify” taxes and ensure people are not penalised for caring for children or relatives.
Truss has not explained how she would pay for the £30 billion in tax cuts she has promised, but insists they “can be paid for within the existing fiscal envelope”.
In a bid to regain his footing in the contest before ballot papers begin dropping through letterboxes of the party faithful next week, Sunak will on Saturday give a speech attacking “woke nonsense”.
It is seen as a make-or-break weekend for the former chancellor.