Britain could slash corporation tax to 10 per cent in the event of a No Deal Brexit, Dominic Raab suggested last night.
In a tough warning to the EU, the Brexit Secretary indicated that a dramatic tax cut could be within the Chancellor’s ‘fiscal capacity’ to keep the economy afloat.
Corporation tax, a tax on company profits, currently stands at 19 per cent, with a pledge to reduce it 17 per cent by 2020.
But Mr Raab said the Treasury would use every possible measure to give the UK an edge on the EU if talks collapse without a new trade deal in place.
Dominic Raab (pictured) said the Treasury would use every possible measure to give the UK an edge on the EU
Philip Hammond yesterday used his speech to the Conservative Party conference to declare Britain could weather a No Deal storm, insisting he would ‘maintain enough fiscal firepower to support our economy if that happens’.
At a fringe event at the Conservative Party conference last night, Mr Raab was asked whether this could include cutting corporation tax to 10 per cent.
He replied: ‘The Chancellor has talked about reserving fiscal fire power – what more do you want? Of course he is talking about recognition that in the No Deal scenario we want to pull every lever we have got to see us through the short-term buffeting or disruption we have.’
The threat to cut taxes to lure businesses to Britain is likely to anger Brussels, which would see it as an attempt to undercut the EU’s competitiveness.
Philip Hammond (pictured) yesterday used his speech to the Conservative Party conference to declare Britain could weather a No Deal storm
It came after Mr Raab’s main speech to the conference hall yesterday, in which he rounded on Establishment figures trying to block Brexit, accusing them of ‘disdain for democracy’.
In a furious tirade at ‘senior politicians and Establishment figures’ behind the campaign for a second referendum and warned that if they succeeded, they would open the door to extremism and populists in British politics.
He also hailed the Prime Minister’s ‘pragmatic, not dogmatic’ approach to Brexit.
And he told Eurosceptics they would have ‘bitten his arm off’ for Chequers if offered it three years ago.
Addressing EU leaders, he warned they ‘need to get serious’ and abandon their ‘theological approach’ to the negotiation which sought to break up the United Kingdom.
The speech – and its reception – will bolster Mr Raab’s credentials as a potential future Tory leader, barely two months after he joined the Cabinet.
He said respecting the result of the referendum was the ‘essence of our democracy’ and condemned the ‘efforts of a small but influential group of senior politicians and establishment figures to overturn the result’.
He said they had bankrolled a ‘dangerous’ campaign to ‘scare the wits’ out of people about leaving the EU. If they succeeded, he said, trust in democracy would ‘all but vanish’.
‘Most people, whether they voted Remain or Leave, would see it for what it is. A shameless ruse by an Establishment that thinks that it has the right to keep asking the same question until it gets the answer it wants.’
He added: ‘If there is mass disillusionment with the system, then it’s the populists, the far-Left and the alt-Right who will reap the reward, as they have in other countries where the Establishment has ignored people’s concerns.’
Last night, Jean-Claude Juncker suggested that British planes may not be able to land in the EU if Brexit goes wrong.
Jean-Claude Juncker (pictured) suggested that British planes may not be able to land in the EU if Brexit goes wrong
The European Commission president also said a four-day quarantine may be imposed on pet dogs and cats passing from the UK to continental Europe and again on their return journey.
At a public meeting in Freiburg, Germany, Mr Juncker asked: ‘What’s going to happen to air traffic in Europe if everything goes wrong? British planes will not be able to land on the European continent. People didn’t know that.’
Mr Juncker added: ‘The people are finding out now – including British ministers and ministers on the continent – how many questions [Brexit] poses, all the things we need to resolve.
‘What is going to happen to the 250,000 dogs and cats who leave the European continent each year?’