FILE PHOTO: Philip Hammond MP, Chancellor of the Exchequer appears on BBC TV's The Andrew Marr Show in London, Britain, May 26, 2019. Jeff Overs/BBC/Handout via REUTERS/File Photo

LONDON (Reuters) - British finance minister Philip Hammond will on Thursday warn those hoping to replace Prime Minister Theresa May against basing their leadership pitches on tax cuts and deregulation, a source at the finance ministry said.

May is due to stand down on June 7, having failed to deliver Brexit, handing over the reins of the world’s fifth largest economy at a critical juncture that could define the nation’s prosperity for generation.

A large field of candidates from the right-leaning Conservative Party are vying to replace her, and have already begun setting out the policies they will use to woo fellow lawmakers and party members.

Hammond, May’s chancellor throughout her almost three-year premiership, will use a speech at the launch of a report on low pay to warn against adopting a “populist” approach to appeal to a Conservative Party membership typically in favour of low tax and regulation, the source said.

“The truth is, we have seen a gap open up – in Britain and in other developed countries – between the theory of how a market economy and free trade creates and distributes wealth, and the reality experienced by many ordinary people,” Hammond will say, according to advance extracts of his speech.

“That doesn’t mean we should abandon our economic model. Of course, we can’t ignore people’s concerns either – otherwise the reckless solutions of the populists will flood in to fill the vacuum.”

Hammond’s remarks will serve as a rebuke to candidates, including former Brexit minister Dominic Raab, who have already promised tax cuts if they win the top job, and others who are seeking to revive the deregulation drive championed by former Conservative Prime Minister Margaret Thatcher.

The finance minister, who has yet to endorse a candidate to succeed May, will seek to persuade the next Conservative leader to recognise that public appetite for public spending and protection from market forces should not be ignored.

“It is imperative that we take decisive action to show that the regulated market model can deliver higher wages and higher living standards,” he will say.