Chancellor Jeremy Hunt today cautioned against what he terms “declinism” about Britain and argued that Brexit can help tackle the country’s poor productivity record.

He set out the case for optimism and said the new freedoms won by Brexit can be a catalyst for growth.

However, he said it is “unlikely” that there will be room for any “significant” tax cuts in the Budget and any cuts he did introduce at a later date would focus on business taxes.

In particular he will focus on those paid before any earnings are made, such as business rates and employers’ national insurance.

In a speech at Bloomberg’s European headquarters in London, the Chancellor said he intends to meet targets in the Prime Minister’s New Year address which outlined five priorities, including halving inflation and cutting debt.

Mr Hunt said the UK aims to play a leading role in Europe and across the world in the industries of tomorrow.

He also confirmed that post-Brexit reforms to Solvency II will be implemented in the coming months, which could unlock £100 billion of additional investment into the UK’s most productive assets this decade – such as clean energy and UK infrastructure.

“Our plan for the years that follow is long term prosperity based on British genius and British hard work and world-beating enterprises to make Britain the world’s next Silicon Valley.” he said.

“Declinism about Britain was wrong in the past – and it is wrong today. Some of the gloom is based on statistics that do not reflect the whole picture.

“Like every G7 country, our growth was slower in the years after the financial crisis than the years before it. But since 2010, the UK has grown faster than France, Japan and Italy. Since the Brexit referendum, we have grown at about the same rate as Germany.

“If we look further ahead, the case for declinism becomes weaker still. The UK is poised to play a leading role in Europe and across the world in the growth sectors which will define this century.”

The Chancellor said he will focus on key growth industries, including digital technology, green industries, life sciences, advanced manufacturing and creative Industries in which Britain is said to have a competitive advantage.

Mr Hunt also set out some of the challenges the UK faces, including poor productivity, and set out a plan to long-term prosperity, using the UK’s new-found Brexit freedoms to support growth and entrepreneurship.

In the Autumn Statement, the Chancellor set out the government’s strategy for boosting growth by investing in people, in the infrastructure that connects the country, by creating the right environment for business investment, and by supporting financial services companies and innovators.

To further support investment across the economy, the Chancellor has announced a decision to proceed with reforms to Solvency II – an EU Directive that governs the amount of funds British insurers are required to hold in reserve.

The Association of British Insurers suggests the Chancellor’s reforms are expected to unlock up to £100 billion of private investment this decade into UK infrastructure and clean energy, such as nuclear power.

In December, the Chancellor announced the Edinburgh Reforms to drive growth and competitiveness in the UK’s financial services sector, while retaining Britain’s commitment to high international standards. This included the publication of an ambitious plan for repealing and reforming EU law for financial services.

Today the Chancellor added: “Confidence in the future starts with honesty about the present, and we should not shy away from the biggest challenge we face which is our poor productivity. Our plan for long term prosperity tackles that challenge head on.

“It is a plan necessitated, energised and made possible by Brexit which will succeed if it becomes a catalyst for the bold choices we need to take.

“Our plan for growth is a plan built on the freedoms which Brexit provides. It is a plan to raise productivity. It is a plan to use the proceeds of growth to support our public services at home, to support businesses in the new low carbon economy and to support democracy abroad. It is the right course for our country and the role in the world to which we aspire.”

With a UK tech sector worth one trillion dollars the Chancellor will call on other businesses to consider the UK as a place for investment by tech entrepreneurs, life science innovators and energy companies.

The recently-announced digital markets regime aims to open the UK’s digital markets up to greater competition and spur increased innovation across the sector.  The regime is an alternative to the EU’s Digital Markets Act and the government argues that the UK’s proposals are regarded as more proportionate, targeted and flexible than the EU’s.

This month PwC surveyed more than 4,400 top chief executives in 35 countries and found that the UK has risen to the joint third most important country in which to invest, behind only the US and China and equal with Germany.