Mr Hammond insisted the Treasury was not the “enemy of Brexit” as he outlined his vision of Britain forging a trade relationship which builds on 45 years of European Union membership.
Just two weeks ago, a recording emerged in which Mr Johnson told a private dinner of an “inner struggle” within the UK government over the best way to leave the bloc.
The Foreign Secretary claimed Mr Hammond’s department was the “basically the heart of Remain” as it wanted to sacrifice the medium- and long-term benefits of Brexit for fear of “short-term disruption” at borders.
At the annual Mansion House speech in London, the Chancellor hit back, saying: “Our clear long-term goal is to secure an enduring partnership that reflects the four-and-a-half decades the UK has been a member of the EU.”
Mr Hammond said that Britain’s European neighbours were its most important trading partners, that its peoples were connected by centuries of shared history and culture, and the entire continent depended on a mutual commitment to defending it.
“So as we leave the EU 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,” he said.
Mr Hammond added: “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.”
The Chancellor confirmed plans to boost NHS budgets was the government’s “No 1 priority” in its forthcoming spending review. He echoed Prime Minister Theresa May’s warning that “taxpayers will have to contribute a bit more, in a fair and balanced way, to support the NHS we all use”.
Mr Hammond also insisted a Brexit deal must make sure the City of London and the European Union financial centres remained “highly aligned and deeply interconnected”.