Big companies will get huge tax cuts if there is no-deal Brexit, Dominic Raab suggests

Corporation tax would be slashed to as low as 10 per cent - as ministers 'pull every lever we’ve got to see us through'

Dominic Raab was explaining what Philip Hammond meant by a vow to 'maintain enough fiscal firepower to support our economy' (AFP/Getty)

Big companies will be handed huge tax cuts to woo them to Britain if there is a no-deal Brexit, Dominic Raab has suggested.

Corporation tax would be slashed to as low as 10 per cent, the Brexit secretary said, as part of efforts to “pull every lever we’ve got to see us through”.

Labour pounced on Mr Raab’s comments to declare the Tories “want to turn our country into a tax haven for the super-rich”.

They came when he was asked to explain what Philip Hammond, the Chancellor, meant when he vowed to “maintain enough fiscal firepower to support our economy” if the UK crashes out of the EU.

At a conference fringe meeting, Mr Raab responded to a suggestion, by TaxPayers’ Alliance campaigner Chloe Westley, that Britain would need to slash taxes.

He said: “You just said that Chloe wants to lower corporation tax to 10 per cent and the Chancellor has talked about reserving fiscal firepower in case of no deal.

“Of course, he’s talking about a recognition that actually, in a no deal scenario, we want to pull every lever we’ve got to see us through what the short-term buffeting, as I’d describe it, or disruption we’d have.

“The chancellor gave a brilliant speech. It shows you that we are all rowing in the same boat.”

The UK’s current corporation tax is 19 per cent and is set to fall to 17 per cent by 2020, under existing government plans.

Setting a rate of 10 per cent would cost the Treasury tens of billions, but ministers would gamble on recouping that over time, by having one of the lowest tax rates for business in the world.

Before the Tories lost the 2017 general election, Mr Hammond himself talked of lowering taxes as a way to cope without a Brexit deal.

He said: “If Britain were to leave the European Union without an agreement on market access, we could be forced to change our economic model....to regain competitiveness.”

The threat sparked Labour claims that the Conservatives planned to turn the UK into a low-tax, low-regulation ‘Singapore-on-Thames’, in a desperate bid to undercut the EU.

However, Mr Hammond has since backed off such suggestions, as he instead issued increasingly stark warnings about the cost of crashing out of the EU.

Meanwhile, speaking at a separate event, home secretary Sajid Javid called for tax cuts if the UK left the EU with no deal and did not have to pay the so-called Brexit “divorce bill” of at least £40bn.

“In terms of the £40bn, there is tendency in government if you get some sort of windfall back in cash to your department or elsewhere to start wondering ‘how do I spend it’.

“The default position should be ‘I should give this back to the people’, because it’s their cash in the first place. That’s exactly what I would do. We are taxed enough as it is - give it back to the people.”

However, half of the £40bn consists of legal commitments Britain would be expected to pay even without a Brexit deal – while economists agree the cost of crashing out would far outweigh the remaining savings.