Finance Minister Michael Noonan has played down the threat of the UK slashing its corporate tax rate.

The chancellor George Osborne has said he wants to cut the rate from 20% to under 15% to prove Britain is “open for business”.

The move could see increased competition with Ireland, where the corporate tax rate is 12.5%.

Economist with IBEC Fergal O’ Brien said this morning that the Government here must react.

However, Michael Noonan said the risks to Ireland are being overstated.

“It’s not as dramatic an announcement as it might appear,” he said.

“Two years ago (Mr Osborne) announced the principle of bringing UK corporation tax rates down to 17% by 2020. 15% or less is not a million miles away from what was announced already.”