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George Osborne planning corporation tax cuts to provide post-Brexit vote boost

Published 03/07/2016

George Osborne is planning to cut corporation tax to less than 15% as part of a plan to give Britain a post-Brexit vote boost.

The Chancellor said the UK must show it is "still open for business" following the decision to leave the EU as he set out plans to create a "super competitive economy".

Slicing more than 5% off the current rate would see Britain close in on the Republic of Ireland's 12.5% levy and make the country one of the most competitive global economies.

Mr Osborne told the Financial Times: "We must focus on the horizon and the journey ahead and make the most of the hand we've been dealt."

The Chancellor wants to focus on generating investment from China as well as ensuring support for bank lending, bolstering the Northern powerhouse and maintaining the UK's fiscal credibility to shore up the economy following the shock referendum vote .

Mr Osborne, who had threatened tax and spending cuts through an emergency budget if Britain voted to leave, said he will wait for official forecasts before announcing any new measures.

He said Britain faced a "very challenging time" and urged the Bank of England to use its powers to avoid "a contraction of credit in the economy".

Jonathan Isaby, chief executive of the TaxPayers' Alliance, said: "The Chancellor is absolutely right to be considering a big cut to corporation tax, as it would show that the UK is ready to seize new opportunities in the global economy.

"But Mr Osborne must be bold and cut the rate to 10% as soon as possible to really demonstrate that we are open for business, with competitive conditions to match our talented workforce. It's crucial that our politicians have a positive vision for British taxpayers outside the EU, and meaningful tax cuts to boost growth and prosperity are an excellent first step."

It comes after Tony Blair said Britain should keep its "options open" over leaving the EU because the "will of the people" could change.

The Government should delay triggering Article 50, the two-year process for formally quitting the bloc, "for as long as it takes to get an idea of how the other side looks", according to the former prime minister.

A downturn in economic fortunes could lead to a change in attitudes about the country's future outside the EU, he suggested.

Mr Blair told Murnaghan on Sky News: "One of the reasons why we should keep our options open is that yes, the referendum expressed the will of the people, but the will of the people is entitled to change.

"Right now, over the next two months, even while this psycho drama within the Conservative party is going on, we've got to have the national interest protected by trying to set the scene for any negotiation."

He added: "I don't think you can override the settled will of the people but it's 52 to 48. Supposing some weeks or months down the line, as it becomes clear what we are moving to, as that becomes clear, if it becomes clear these terms are bad for us, if people start to worry about their jobs, we should just keep our options open.

"I'm not saying we should have another referendum, I'm not saying you can revisit this. I'm simply saying there's no rule about this - we're a sovereign people we can do what we want to do."

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