Monday 4 July 2016 10:57 am

Labour hits back at Osborne's plans to cut corportation tax

The Labour party has hit back at reports that the chancellor is planning to cut corporation tax to 15 per cent.

Shadow chancellor John McDonnell said that the government needs to rethink cuts to government investment and bring forward "shovel-ready projects".

"This is a futile and costly gesture from a lame-duck chancellor who is clean out of ideas after being forced to abandon his failing flagship austerity programme. George Osborne is already set to slash corporation taxes to among the lowest rate in the G20," McDonnell said.

"But despite falling corporate tax rates UK investment has shrunk in both of the last two quarters even with record profits and UK companies sitting on a £700bn cash pile.

"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 investment slump and the shock of Brexit."

Read more: Osborne to slash corporation tax to below 15 per cent in bid to create a "super-competitive economy"

The cuts are part of the chancellor's plan to attract businesses discouraged from investing in Britain following Brexit.

In an interview with the Financial Times, Osborne said he wants Britain to boast the lowest corporation tax rate of any major economy, cutting the rate to 15 per cent down from 20 per cent now

Speaking to BBC Breakfast, McDonnell added that the cut is "not constructive".

Also speaking to BBC Breakfast, he said leader Jeremy Corbyn has an open door policy on meetings with MPs, amid speculation that Angela Eagle could today announce a bid to challenge the incumbent.