Tory leadership hopeful Rishi Sunak has unveiled plans to scrap VAT on domestic energy bills in a massive U-turn.
The former Chancellor said the measure would save the average household around £160 in the next year, in a major climbdown from his opposition to tax cuts.
Mr Sunak, who polls suggest is trailing rival Liz Truss among Tory members, described it as a "targeted, temporary and timely tax cut".
It would be brought in for 12 months from October if, the energy price cap for a typical consumer rises above £3,000.
But critics immediately accused him of making a screeching U-turn after he repeatedly opposed tax cuts.
Labour have been pushing for a cut to VAT on energy bills for months - but Mr Sunak told the Commons earlier this year that the "policy would disproportionately benefit wealthier households."
He also said he plans to double the number of hours those on welfare have to work each week in order to avoid having to look for a full time job.
The ex-cabinet member also announced he would "look at new incentives" to support older people returning to work - but has again been accused of flip-flopping by Ms Truss's supporters.
In January a Labour motion to force a cut in VAT on energy bills was voted down by Tories, with Boris Johnson previously branding the move a "blunt instrument".
Mr Sunak said: "Tackling inflation and getting people the support they need to help with the cost of living is critical.
"That’s why, with the price cap expected to rise above £3,000 in October, I will move immediately to scrap VAT on everyone’s domestic energy bills for the next year, saving the average household £160.
"This temporary and targeted tax cut will get people the support they need whilst also – critically – bearing down on price pressures."
And he continued: "As Chancellor I knocked £400 off everyone’s energy bill and provided support of £1,200 for the most vulnerable households. This additional VAT cut will help deal with the current emergency."
Shadow Treasury Minister Pat McFadden accused him of "acting as his own personal rebuttal unit", while Liberal Democrat Treasury spokesperson Sarah Olney said "this sounds like another Sunak Swindle".
Just one Tory MP - Anne-Marie Morris - backed the non-binding motion for a debate on cutting VAT on energy bills in January - meaning it was defeated by 319 votes to 229.
Truss backer Kwasi Kwarteng said Mr Sunak had pivoted as he was under pressure in the contest.
Asked whether Mr Sunak could win a general election, Mr Kwarteng told LBC radio: "He has flip-flopped and U-turned on this tax issue, which I find somewhat concerning, but he is a capable politician and a very likeable chap."
Work and Pensions Secretary Therese Coffey, another Truss ally, said: "Helping people progress in work by getting better jobs and more hours is a key role of jobcentres.
"DWP will shortly change the rules to ensure people keep looking for extra work until they have at least 12 hours a week with an ambition to increase that in the future.
"DWP had hoped to get this underway earlier this year but unfortunately was blocked by the former Chancellor.
"I share the ambition to go further but these new proposals require extra £210m funding. In the meantime, we need to get on so we can help people be more prosperous and help grow the economy.”
Sources within Ms Truss's camp claim that by delaying extra career support, Mr Sunak denied it to potentially hundreds of thousands of people.
But Transport Secretary Grant Shapps, a Sunak ally, defended the shift by the former Chancellor.
"The thing is, with this particular cut, what it does not do is add to inflation - in fact in the short term it would be deflationary because people's costs would reduce, in the medium term it would not have an impact on the consumer prices index," he told ITV's Good Morning Britain.
Told it was a "flip-flop", Mr Shapps said: "If he hadn't produced £37 billion of support, about £1,200 to the hardest-up households already - if he hadn't done any of that and then suddenly did it then you would have a point.
"But he has, he has been providing all this support, now he is saying 'Here's something that won't add to inflation that would save every person watching your programme £160 off their energy bills' - I think that's worthwhile."
It comes as the two remaining candidates continue to clash over their economic policies.
Earlier today Ms Truss suggested a Sunak government would be a "disaster" for homeowners, workers and businesses.
Speaking to Sky News, the Foreign Secretary was asked about the IMF world economic update, which implied that not cutting taxes and keeping spending down is the way forward.
She said: "Let's be clear, his (Rishi Sunak's) plan is to raise taxes. He is planning to raise taxes on corporations, putting our taxes up to the same level as France. That is going to put off people who want to invest in Britain. And I know there are masses of opportunities right across the country.
"Less investment will mean fewer jobs, fewer opportunities, lower wages and lower productivity in the future. So it's cutting off our nose to spite our face. The fact is that we promised in our manifesto not to raise national insurance. I thought it was wrong at the time to do so, and that is why I would reverse that.
"I also want to put money into people's pockets. I could quote the OECD who said that our current policy is contractionary. And what that means is it will lead to a recession. A recession would be a disaster, it would be a disaster for people who are homeowners. It would be a disaster for people who go out to work. It would be a disaster for people who run businesses.
"That is why I want to keep taxes low, attract the investment, get the growth. That's the best way to pay down our debt."
