Michael Gove has pledged to replace VAT with a “lower, simpler” alternative and cut business rates if he is elected Conservative leader.

Unveiling a radical economic manifesto in The Telegraph, the Environment Secretary pledges to take advantage of Brexit to scrap the 20 per cent tax currently levied on goods and services as a result of EU rules, in a move that could cut the cost of living.

Sources also indicated that he would halt construction of the £56 billion High Speed 2 rail line in order to review whether it represented “proper value for money”, amid concerns about its spiralling costs.

His intervention, which comes ahead of Monday's formal deadline for the nomination of candidates to succeed Theresa May, is likely to be seen as a dramatic attempt by Mr Gove to shift focus back to his policy plans after a new book revealed that he had taken cocaine in his 30s.

Confirming the claim on Saturday, Mr Gove said: “I did take drugs. It is something I deeply regret.”