Chancellor Philip Hammond says UK will not undercut EU nations in tax after Brexit

Chancellor Philip Hammond has suggested that the UK government has no plans to slash regulations or tax so that Britain undercuts the rest of the EU after it splits from the bloc in 2019.

Hammond, who campaigned for Remain at the 2016 EU referendum in the UK, made the comments to French daily Le Monde in an interview published on Monday 31 July.

"I often hear it said that the UK is considering participating in unfair competition in regulation and tax," he said.

"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."

The UK already has some of the most competitive tax levels in the EU, with corporation tax currently at 19%. Germany, in comparison, has the levy at 29.79%, France has a corporation tax rate of 33.33%, and Italy has a rate of 24%.

Hammond's remarks come as the debate continues in the UK over a potential post-Brexit free trade agreement with the US. Fears have been raised over chlorinated chicken and cheap whisky being imported from America into Britain.

Parliament, meanwhile, is on its summer recess until 5 September and Prime Minister Theresa May is currently holidaying with her husband Philip in Italy.

Brexit Secretary David Davis and the EU's chief negotiator Michel Barnier have prioritised the issue of the more than three million EU nationals in the UK and the more than one million Britons on the continent in the talks.

But the UK government has rejected Brussels' demand that the European Court of Justice (ECJ) should still have jurisdiction in Britain after the split.

"All in all, the second round of negotiations have given us a lot to be positive about. And they have also highlighted the need for both sides to demonstrate a dynamic and flexible approach in the way we approach these challenges," Davis said on Thursday 20 July.

"We have conducted this round constructively and at pace, and I hope this is a model we can continue going forward. To coin a phrase Michel, the clock is ticking.

"I came here saying that it was important that we now made progress, identifying the differences so we could deal with them, and finding the similarities so we could reinforce them. And this week, I think we have done just that."