Danny McCance 31 Jul 2017 12:14pm

Hammond will not make UK a tax haven

The chancellor, Philip Hammond, has signalled that he has no plan to lower taxes after Brexit, and is determined to remain “recognisably European”

In an interview with French newspaper Le Monde over the weekend, Hammond noted that the UK would remain within the EU average in terms of tax rates, denying that the UK will drop taxes to become more competitive.

"It is often said that London would consider launching into unfair competition in terms of fiscal regulation. That is not our project or our vision for the future,” Hammond claimed.

"The amount of tax that we raise, measured as a percentage of GDP, is within the European average and I think we will remain at that level.

“Even after we have left the EU, the UK will keep a social, economic and cultural model that will be recognisably European,” he added

The comments differ from those made by the chancellor in January, in which he told German newspaper Welt Am Sonntag that the UK may have to change its economic model if forced to leave the single market.

“We will change our model, and we will come back, and we will be competitively engaged,” Hammond told the paper.

“I personally hope we will be able to remain in the mainstream of European economic and social thinking.

“But if we are forced to be something different, then we will have to become something different.”

Last month, the chancellor used his Mansion House speech to warn of the perils of a “hard Brexit”.