Philip Hammond also slapped down the Foreign Secretary’s insistence that a transitional period must last “not a second more” than two years – calling it a “rhetorical flourish”.
And he warned Cabinet divisions were damaging the chances of success in the Brexit talks, saying: “The more we can show unity, the stronger our negotiating position.”
Mr Hammond insisted the Cabinet had agreed a united position that the transition now being sought by the Prime Minister should last “around two years” – while admitting he had pushed for up to four years.
The Chancellor’s comments come after senior Tories rounded on Mr Johnson’s open challenge to Brexit policy. One told The Independent he was “incredibly disloyal”.
Meanwhile, the British Chambers of Commerce launched an outspoken attack on the Cabinet squabbling, demanding the Tories pull themselves together and show “competence and coherence”.
“Public disagreements between cabinet ministers in recent weeks have only served to undermine business confidence, not just on Brexit negotiations,” said the BCC’s director general, Adam Marshall.
Speaking on BBC Radio 4’s Today programme, Mr Hammond admitted that Brexit uncertainty was “dampening” business investment in Britain – and that investors were making “irreversible” decisions.
“If we don’t give business clarity about the future, they will have to make decisions assuming the worst possible outcome,” the Chancellor said.
But he urged the BCC to “recognise that the Prime Minister has decisively moved forward”, with the transition proposals set out in her Florence speech.
The Conservative conference in Manchester has been dominated by discussion of Mr Johnson's leadership ambitions, after he set out his own personal red lines for the Brexit negotiations.
They also included that the UK should not abide by new EU regulations and legal judgments during the transition – demands Brussels is certain to reject.
Last night, former education secretary Nicky Morgan said Mr Johnson “had to go” unless he could show his loyalty to the Government.
Mr Hammond said all ministers “serve at the Prime Minister's pleasure and we all owe the Prime Minister our allegiance and our loyalty within the Cabinet”.
“I always work on the sound and cautious principle that everyone is sackable,” he added.
However, he Chancellor denied he was “the Eeyore to Boris Johnson’s Tigger” on Brexit – the voice of doom, next to the Foreign Secretary’s boundless optimism.
In his conference speech, Mr Hammond will try to switch attention to the Government’s domestic agenda, with the announcement of £400m for transport links in the North of England.
Some £300m will be used to ensure cities including Liverpool, Manchester, Sheffield, Leeds, York and Leicester can be linked up with the HS2 high-speed rail route between London and the North.
And a further £100m will go into local road schemes to cut congestion and unlock new sites for homes and businesses in the North.
The Chancellor also defended higher borrowing to fund an expansion of the Help to Buy scheme, insisting the Tories borrowed for “carefully costed commitments” – while Labour would do so to “pour into public spending”.
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