Britain will not cut taxes and red tape to become a Singapore-style tax haven after leaving the European Union, Philip Hammond has said.
In something of a u-turn from previous comments, the chancellor told French newspaper Le Monde Britain would remain "recognisably European" after Brexit and would not undermine competing continental economies to attract global business.
“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," Hammond told the paper this weekend.
“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, even after we’ve left the EU."
When Hammond says he "often hears it said", perhaps he is referring to his own previous interview with Welt am Sonntag, in which he was pretty unequivocal what Britain would do if left with a less-than-rosy deal on the table.
Back in January, the chancellor told the German paper "you can be sure we will do whatever we have to do" to ensure the country's economic prosperity, adding:
"We could be forced to change our economic model and we will have to change our model to regain competitiveness."
His position has changed since the June election result left the Conservatives without a majority, meaning it would be almost impossible to pass major tax and regulatory changes.
Although some within Hammond's own party may not welcome the move, it will probably have gone down well in Brussels.
Earlier this year Michel Barnier, the European Commission’s chief negotiator, said he would be "vigilant that this regulatory divergence does not turn into regulatory dumping".
Hammond's u-turn was published as it was revealed that London is still edging ahead of its European rivals Frankfurt and Paris, despite the battle heating up for financial services dominance.