Brexit: UK will not cut taxes, says Philip Hammond

Philip HammondImage copyright

The UK will not cut taxes and regulations after Brexit to try to undercut European rivals, Chancellor Philip Hammond has suggested.

He told French newspaper Le Monde that the tax raised as a percentage of the British economy “puts us right in the middle” of the European pack.

“We don’t want that to change, even after we’ve left the EU,” he said.

This is at odds with what Mr Hammond said in an interview with German newspaper Welt am Sonntag in January.

Mr Hammond told Le Monde: “I often hear it said that the UK is considering participating in unfair competition in regulation and tax.

“That is neither our plan nor our vision for the future.

“I would expect us to remain a country with a social, economic and cultural model that is recognisably European.”

Mr Hammond was asked earlier this year by Welt am Sonntag whether the UK could become a tax haven.

He said he was “optimistic” about securing a good trade deal with the EU but if this did not happen “you can be sure we will do whatever we have to do”.

“If we have no access to the European market, if we are closed off, if Britain were to leave the European Union without an agreement on market access, then we could suffer from economic damage at least in the short-term,” he said at the time.

“In this case, we could be forced to change our economic model and we will have to change our model to regain competitiveness.”

Not a question of money

BBC political correspondent Chris Mason says that having lost their majority at the election, the Conservatives would struggle to persuade the Commons to support slashing taxes and regulation.

In the French interview, Mr Hammond said the UK wanted EU workers be part of the British economy and carry on with their family life in the country, and the same for British expats working in Europe.

He said the bill for Brexit was not a question about money, but how the UK leaves the EU without causing problems for businesses and people.

Breaking up the City of London would benefit New York not Frankfurt or Paris, he added.


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