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One of Wales’ best known economists fears challenging the UK Government to consider a radical plan to protect Wales after Brexit.

Eurfyl ap Gwilym fears our dependence on EU exports, our farmers' depending on EU funds and our deprived area's depending on EU support makes Wales vulnerable.

He fears that large employers will flee to countries that remain inside the Single Market.

The former deputy chairman of the Principality Building Society wants to see the amount of tax businesses here pay slashed dramatically to give us a fighting chance.

The economist was Plaid Cymru’s representative on the Silk Commission on the future of devolution and came to UK-wide attention with a 2010 clash with Jeremy Paxman on Newsnight in which he told the television to do his “homework”.

His vision is controversial as it would see businesses here and in poorer parts of England and Scotland fall to less than half of the rate in London.

Here's a clip of Eurfyl ap Gwilym putting Jeremy Paxman in his place:

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The main rate of corporation tax today is 19% and the Conservative manifesto stated it would fall to 17% by 2020.

The Tories argue an overall cut would help bring “huge investment and many thousands of jobs to the UK”.

But Dr ap Gwilym describes a different vision.

He thinks the headline rate should be 20% in most of the UK and be but to just 10% in the three worst-off nations and regions– North East England, Wales and Northern Ireland.

In London and the south-east of England, he thinks its should be raised to 22%.

He said: “The additional 2% levied in the two most prosperous regions should be politically palatable. In the case of Wales such an approach could provide a stimulus of between £600m and £700m a year.

His proposed corporation tax rates across the UK

In a analysis last month for the Institute of Welsh Affairs Mr Gwilym also made the case that the UK Government should consider lower rates of corporation tax for the poorest parts of the country.

He said: “One of the challenges facing the UK is the chronic inequality across the nations and regions of the UK. Could corporation tax policy be used to help redress some of this imbalance?

“A way of doing this would be to vary the rate of corporation tax across the UK with a reduced rate been levied in the poorest areas and a slightly higher rate being applied in the most prosperous.”

(Image: Collect unknown)

Warning of the scale of upheaval Wales could face as the country leaves the EU, he said: “Wales is in danger of being disproportionately impacted by Brexit due to two factors: our greater reliance on the EU as a destination for our exports; and our receipt of £680m a year from the EU in the form of CAP payments and European Structural Fund payments.

“The uncertainty will undermine confidence and thus investment in Wales. This will happen whatever the final shape of the Brexit deal.”

Making the case for Wales to gain powers over corporation tax, he said: “The considerations which will make many major employers, particularly those that are parts of large international groups, review future operations in Wales will also weigh heavily on foreign direct investment (FDI). Unless Wales has powers over such factors as corporation tax it will become increasingly difficult to attract FDI.”

An 'acid test for the Government's seriousness

Setting out the hurdles he expects Wales to face as the country leaves the EU, he said: “As well as ensuring that Wales continues to receive development funds to replace the loss of EU structural and social funds a measure to reduce the rate of corporation tax as described here could mitigate the damage wrought by Brexit as well as helping geographically to rebalance the UK economy. Willingness to adopt such a model would be an acid test for how serious [the] UK Government is about geographically rebalancing the UK economy post-Brexit.”

The economist argues Brexit will remove an obstacle to the devolution of corporation tax.

He said: “Plaid Cymru has long been an advocate of devolving corporation tax where it could then be used as part of the tool-box for revitalising the Welsh economy and attracting more foreign direct investment. Until now such devolution was thought to be contrary to EU rules but with the coming of Brexit this obstacle will disappear.”