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George Osborne was on Monday accused of trying to turn Britain into a “giant tax haven” after he sets out plans to slash corporation tax even further.

Labour shadow chancellor John McDonnell said Mr Osborne’s proposal to cut corporation tax to below 15% would upset European neighbours and undermine looming EU negotiations.

And it will cost the Government much-needed cash at a time when people’s personal tax rates may have to rise to cope with the economic fall-out of Brexit .

“This is a futile and costly gesture from a lame-duck Chancellor who is clean out of ideas,” Mr McDonnell said.

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“Instead of turning the whole country into a giant tax haven and playground for the ultra-rich, the Chancellor needs to get a grip on the real problems - by reversing planned cuts to Government investment and bringing forward shovel-ready projects for those areas worst affected by the shock of Brexit .”

The move by Mr Osborne follows repeated warnings from Labour ‘Remain’ campaigners that Tories would use Brexit to further their right-wing agenda.

He has already cut corporation tax from 28% to 20% since becoming Chancellor six years ago and last year set out plans to bring it down to 17% by 2020.

(Image: Daniel Leal-Olivas/PA)

A further cut to below 15% would see Britain closing in on Ireland’s 12.5% levy for big firms - among the lowest in the entire Western world.

Mr Osborne insisted cutting the tax yet again would be a sign Britain is “still open for business” despite voting to leave the European Union.

But experts warned it may fail to attract fresh foreign investment because companies prefer “certainty” and “stability” over lower levies.

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Robin Walduck, tax partner at KPMG UK, said: “Will this latest cut really make a difference? A reduction in rates will likely not be enough on its own to drive foreign direct investment. KPMG surveys of clients have consistently concluded that companies want stability, predictability and certainty.

“Whilst the current political and economic volatility prevails and uncertainty over a post- Brexit UK remains, companies may well be reluctant to invest in the UK.”

Helen Miller, associate director at the Institute for Fiscal Studies (IFS), added: “I expect it will have a minimal impact on the UK economy because it is not a firm policy measure with a firm date. It is an ambition, which may or may not come to pass.”