Government admits businesses will be hit by Brexit

The Chancellor Sajid Javid

The Chancellor Sajid Javid has warned businesses that “there will not be alignment” with the EU on regulations following Brexit.

The Treasury would not lend support to manufacturers that favour EU rules as the sector has had three years to prepare for Britain’s transition, Mr Javid said in an interview with the Financial Times.

Mr Javid urged businesses to “adjust” and said that while some will benefit others will not.

He added: “There will not be alignment, we will not be a ruletaker, we will not be in the single market and we will not be in the customs union – and we will do this by the end of the year.

“We’re… talking about companies that have known since 2016 that we are leaving the EU. Admittedly they didn’t know the exact terms.   ”

Javid also said outlined plans to increase the UK’s annual economic growth to between 2.7 and 2.8 per cent.

He said the additional growth would come from the Midlands and north of England where there would be investment on skills and infrastructure despite being able to get more “bang for buck” in other regions.

It is double what Bank of England governor Mark Carney had predicted last week, in which he said the UK’s trend growth rate would be much lower at between 1 and 1.5 per cent.

Javid said the historically low interest rates were “almost a signal to me from the market – from investors – that here’s the cash, use it to do something productive”.

The chancellor also vowed to rewrite Treasury investment rules, which have helped to “entrench” inequality by favouring spending in places with high economic growth. He said he will promote spending in weaker parts of the country.

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