Philip Hammond has said the UK will not become a tax haven in a bid to compete with European rivals after Brexit, reports the Evening Standard.
The Chancellor made the comments in an interview with French newspaper Le Monde, revealing the UK will not reduce taxes or regulations after leaving the bloc.
"I would expect us to remain a country with a social, economic and cultural model that is recognisably European,” he told the newspaper.
He said the percentage of the British economy raised by tax “puts us right in the middle” of EU countries, adding “we don’t want that to change, even after we’ve left the EU”.
“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.”
But in January, in an interview with German newspaper Welt am Sonntag, Mr Hammond appeared to take a different stance when he said “you can be sure we will do whatever we have to do" if Britain was unable to agree a good trade deal with the bloc.
He said: "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.
"In this case, we could be forced to change our economic model and we will have to change our model to regain competitiveness."
The interview also covered the rights of EU workers after Brexit. Mr Hammond said he wants both EU workers and Brits living abroad to continue with family life in the country and be part of the economy.
It comes after international trade secretary Liam Fox said the Cabinet had agreed a deal to allow the free movement of labour for three years after Brexit.