Economists oppose George Osborne's corporation tax cuts crusade

But Christian Odendahl and John Springford of the Centre for European Reform said this was likely to "backfire". "The stimulative effect of such tax cuts in the short run is weak, as with monetary policy. Companies will be unlikely to invest their extra earnings while they face uncertainty" they said.

"And the more the UK plans to become a tax haven the tougher the EU will be as a negotiating partner. The remaining states have no interest in rewarding the UK for attracting investors by undercutting tax rates elsewhere in Europe."