Javid seeks to calm business over EU rulebook after Brexit

Sajid Javid has sought to reassure business that there will be no wholesale dumping of EU regulations as he pledged there would be no divergence after Brexit for the sake of it.

Speaking at the CBI lunch in Davos, the chancellor addressed the question of whether the UK would stay aligned with the EU rulebook – seen as a crucial issue by aerospace and automotive companies in the UK.

“We are leaving the EU, the single market and the customs union,” Javid said. “And we are doing that so that we can have control of our rules and laws.”

But pressed in a question and answer session as to how ministers would act in practice, Javid said: “We won’t diverge just for the sake of it”.

Earlier in the speech, he said the government would “always protect the interests of British businesses” as the country left the EU. “And we’ll maintain high standards – not because we are told to, but because we want to. It’s what the British people want.”

Businesses in some key sectors of the economy were alarmed by an interview given by the chancellor to the Financial Times at the weekend in which he said companies had to adjust to the new reality of life outside the single market and the customs union.

But over the past few days, Javid has refined his line and has been making clear that the government will only use the freedom to diverge if it thinks the change is worthwhile, and after the pros and cons have weighed up.

Javid also made clear in his speech to UK business leaders at the World Economic Forum that the government had an eye on markets in the rest of the world.

He said 90% of global growth in the next decade was going to come from outside Europe.

“That creates huge opportunities. The UK has deep ties of history, language and culture with many of the countries driving this new growth.

“And our businesses already have fantastic trading relationships abroad. So we will reach out to the rest of the world at the same time as staying close to Europe.”

Steve Mnuchin, the US treasury secretary, said the White House expected to conclude a US-UK trade deal this year, while Wilbur Ross, Donald Trump’s commerce secretary, said there were “far fewer issues between the UK and the US than there are between either of us and the EU”.

Javid said the decisive general election result provided a clean break that would allow the government to start tackling some of Britain’s deep-seated economic problems.

The UK was deficient in skills and infrastructure and had a growing productivity gap with the rest of the world. These were the same problems as when he first became an MP in 2010, he told the CBI lunch, adding that the country needed a “course correction”.

“In Britain, there are too many people who feel hopeless and let down by the way politics and economics has worked. There is a sense of anger and betrayal in some communities.

“We need to be honest with ourselves about why that’s happened. I think there’s been a failure of economic policy in recent decades that started even before the financial crisis. We’ve been too focused simply on growing the pie without making sure that everyone got their fair share.”