Wednesday 01 March 2017 9:38 am

Lord Lawson says the UK should ditch corporation tax and replace it with a Trump-style border tax

Former chancellor Lord Lawson has suggested the UK ditch corporation tax altogether, replacing it instead with a Donald Trump-style border tax.

In an interview with Sky News today Lawson, a prominent Brexit campaigner who earned a reputation as an enthusiastic abolisher of taxes during his time as chancellor, said corporation tax should be replaced with one that taxes companies on imports.

His comments come as similar proposals to stop taxing companies based on where their goods are produced, rather than where they are made, are being proposed by the Republicans in the US.

"The scale of avoidance is massive," said Lawson.

"There's no reason why we shouldn't do it ourselves and be a pioneer. There's no reason for the US to lead."

Manufacturing moves back home

Trump's focus on a 20 per cent border tax has led to dozens of companies moving their manufacturing bases into the US.

Although car companies took the lead, last night Apple chief executive Tim Cook hinted it may move more of its manufacturing to the US.

At its annual meeting in Cupertino yesterday, Cook said it was "always looking for more ways that we can help our country".

"We know that Apple could only exist in the US."

Trump speech

In an eerily calm speech to Congress last night, Trump promised a "new chapter of American greatness".

"A new national pride is sweeping across our nation. And a new surge of optimism is placing impossible dreams firmly within our grasp," he said.

In a wide-ranging speech covering job creation, immigration, national security and international trade, Trump added that he wanted to provide "massive tax relief" to the middle class and cut corporate tax rates, but did not provide any specifics.

"The US border tax plan… failed to gather an unanimous consent, given that the import-driven businesses as retailers, carmakers and refineries opposed to the plan, while export-driven businesses were delighted to be exempt of taxes," said Ipek Ozkardeskaya, from London Capital Group.