In an interview with the French newspaper Le Monde, 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.

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

Hammond said that tax raised as a percentage of the British economy ‘puts us right in the middle’ of European countries, and said ‘we don't want that to change, even after we've left the EU.’

The chancellor’s latest comments are viewed as a change from those reported earlier in the year, when he told a German newspaper that the UK tax regime might have to be change if the UK failed to get the deal it was seeking post Brexit.

In February Hammond said: ‘If we have no access to the European market, if we are closed off, if Britain were to leave the EU without an agreement on market access, then we could suffer from economic damage at least in the short-term.

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

However, since the general election has reduced the Conservative majority in the House of Commons, commentators have suggested it would be harder for Hammond to win support for slashing taxes and regulation.