Philip Hammond hits back at Boris Johnson as Tory Brexit splits erupt once more
Philip Hammond has hit back at Cabinet rival Boris Johnson as the splits among Theresa May's frontbench on Brexit erupted once more.
The Chancellor's blast came after the Leave-backing Foreign Secretary told a private dinner that the Treasury was the "heart of Remain".
"The fight at the moment, I won’t hide it from you, the inner struggle, is very, very difficult," said Mr Johnson.
"The Treasury, which is basically the heart of Remain, has seized the risk - what they don’t want is friction at the borders. They don’t want any disruption. So they’re sacrificing all the medium and long-term gains amid fear of short-term disruption."
But in his Mansion House speech this evening, Mr Hammond dismissed Mr Johnson's criticisms and insisted it was his job to ensure that the British economy does not suffer as the UK leaves the European Union.
He said: "We need to forge a new relationship with our European neighbours that protects those patterns of trade; those business relationships that have been painstakingly built over decades - that maintains low friction borders and open markets.
"That does not make the Treasury, on my watch, 'the enemy of Brexit'; rather, it makes it the champion of prosperity for the British people outside the EU, but working and trading closely with it."
Mr Hammond also called on Brussels to do more to ensure the EU and Britain maintain close links on financial services after Brexit.
He said that the EU's current proposals were aimed at attracting more businesses to the continent rather than co-operating with the UK.
Mr Hammond said: "The UK will continue after Brexit to lead and influence international thinking on the regulation of financial services – and we will do so as the hosts of a global financial centre.
"But we will all be stronger and have more influence in shaping the global debate, if we and our EU neighbours remain closely connected.
"Divided, we damage all our chances of growing businesses in Europe capable of competing in a future that will be dominated by major global players located in the US and Asia - players who operate not only in the field of finance, but in data and technology, the new drivers of competitiveness."
Elsewere in his speech, Mr Hammond confirmed that taxes will need to rise to pay for the billions of pounds of extra funding Theresa May has promised for the NHS.
But he made no specific mention of the "Brexit dividend" which the Prime Minister said would also help meet the costs of the new investment in the health service.
The Chancellor said: "This week the PM announced a five-year NHS funding package that will boost spending on health by over £20bn a year in real terms in England alone, partly funded by lower contributions due to Brussels. Making the NHS our number one priority in the forthcoming spending review.
"But she also confirmed we will stick to our fiscal rules and will continue to reduce debt. So, as the Prime Minister said, taxpayers will have to contribute a bit more, in a fair and balanced way, to support the NHS we all use while delivering on our fiscal commitments."