A six pence cut in the price of a litre of petrol has formed the centrepiece of the Tories' election manifesto. The manifesto quickly ignited a full scale election war with the news that Labour ministers are to write to millions of pensioners accusing the Tories of seeking to cut their pensions

Launching the "time for common sense" manifesto, William Hague said it represented "common-sense wisdom".

"Today our spirit of enterprise is being extinguished by higher and higher taxes, regulations and conformity. Out streets are becoming more threatening. The standards of our public services are lower. We are surrendering to the European Union our ability to run our own affairs," he said.

The flagship fuel proposal will be implemented in March 2002 - if the Tories are elected - as the Conservative manifesto set an £8 billion tax-cutting agenda rapidly dominating the election campaign.

Labour attacked the Conservative manifesto claiming that the commitments did not add up and would cost £16.7 billion.

Conservative pension plans - allowing young people to opt out of the state pension - would create a £6 billion shortfall in the National Insurance Fund claimed, the chancellor, Gordon Brown. Labour released the "Portillo tapes", a recording of two public speeches where the shadow chancellor admitted the policy would lead to a funding gap.

Millions of pensioners will receive a letter from social security secretary, Alastair Darling, saying that Tory plans "would mean cuts in your pension". Millbank sources say that Labour's direct mail department will contact as many old people as possible and that party activists will be armed with the "Portillo tapes".

William Hague will today pledge that Scottish university students studying in England will not have to pay tuition fees under a Conservative government. He is launching the Conservatives' Scottish manifesto in Edinburgh.