Chancellor insists: UK no tax haven after Brexit

MINISTERS will not use Brexit to undercut the EU on taxes and regulation, Philip Hammond has said.

The Chancellor used an interview with French newspaper Le Monde to play down suggestions Britain could turn itself into a Singapore- style corporate tax haven if Brussels tries to punish the country in Brexit talks.

His comments suggest ministers have all but ruled out the idea of walking away from the negotiating table with no deal.

Mr Hammond said: ‘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.

‘The amount of tax we raise as a percentage of our GDP puts us right in the middle of the pack. We don’t want that to change … I would expect us to remain a country with a social, economic and cultural model that is recognisably European.’

His commitment to retaining a European model is likely to irritate some Tories who want Brexit to be a clean break.

The remarks threaten to rob UK negotiators of the potentially potent threat to walk away if the EU tries to impose a punitive deal. Theresa May has said ‘no deal is better than a bad deal’.

The prospect of a major lowtax economy on Europe’s doorstep has alarmed some EU leaders, who fear their countries could lose out.