Nobody is unsackable, says Philip Hammond amid Boris Johnson 'disloyalty' accusations

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 Brexit negotiations and issued a call for higher public sector pay rises.

Former education secretary Nicky Morgan said on Sunday night that Mr Johnson "had to go" unless he could show his loyalty to the Government, while the British Chambers of Commerce warned that public disagreements between Government ministers were damaging business confidence.

Mr Hammond acknowledged that uncertainty over EU withdrawal negotiations were causing "a pause in business investment" which was harming the UK economy, and said it was the duty of all Cabinet ministers to "pull their weight" in support of the Prime Minister.

Asked whether Mr Johnson should be sacked, the Chancellor told ITV's Good Morning Britain: "We all serve at the Prime Minister's pleasure and we all owe the Prime Minister our allegiance and our loyalty within the Cabinet.

"I have always operated on the principle that it is probably best to believe that nobody is unsackable. Everybody has got to pull their weight within the Government."

Chancellor Philip Hammond said ‘nobody is unsackable’ and denies texting Boris Johnson during the general election offering his support pic.twitter.com/OjaQFTKxqB

— Good Morning Britain (@GMB) October 2, 2017

Mr Hammond's intervention came as he tried to keep attention on the domestic agenda, with the announcement of £400 million (€454 million) for transport links in the North of England.

Some £300 million (€340 million) will be used to ensure cities like 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 £100 million (€113 million) will go into local road schemes to cut congestion and unlock new sites for homes and businesses in the North.

Mr Johnson expressed surprise that his article stating the Brexit transition period should last "not a second more" than two years had overshadowed the first day of the Manchester conference, squeezing out Mrs May's attempts to make a pitch to younger voters.

The Foreign Secretary told the Daily Telegraph: "I think, actually, if you studied what I said, it was basically Government policy. I think it's extraordinary that so much fuss has been made about repeating Government policy, but there you go."

Mr Hammond flatly denied reports that he had offered Mr Johnson his support as leader in an early-morning text as the disastrous results of the June 8 election became clear.

Although he was in text and phone contact with Cabinet colleagues during the night, he told Good Morning Britain: "I did not text Boris Johnson during that morning and offer him my support."

‘She is the person to lead us through this process’ - Philip Hammond says he supports Theresa May '100 percent'

— Good Morning Britain (@GMB) October 2, 2017

The Chancellor added: "The Prime Minister has my 100% support. She has indicated that she intends to fight the next election as leader of the Conservative Party. If she does so, she will have my support."

Mr Hammond said ministers were "frustrated" at the pace of progress in Brexit negotiations and acknowledged the process had damaged business confidence.

"One of our challenges in the UK is the short-term uncertainty that the EU exit negotiations have created, causing a pause in business investment," he said.

"That's the reason we want to accelerate the process, that we want to agree an interim period with the EU, so we can get some business certainty back into the environment, so businesses can start investing again and we can get our economy pulling forward."

The director-general of the British Chambers of Commerce, Adam Marshall, said businesses wanted a transition period of at least three years, and called for an end to Government infighting over Brexit.

"Public disagreements between Cabinet ministers in recent weeks have only served to undermine business confidence, not just on Brexit negotiations but also on the many issues where firms need to see clear action from government closer to home," he said.

Mr Hammond was due to use his keynote speech to the Manchester conference on Monday to come to the defence of the free market economy which came under attack by Jeremy Corbyn in Brighton last week.

Rejecting the Labour leader's claim that the neo-liberalism which has dominated the past 40 years has failed, Mr Hammond will tell delegates that the market economy remains "the best system yet designed for making people steadily better off over time and underpinning strong and sustainable public services for everyone".

His announcement of extra cash for the Northern Powerhouse region follows accusations from figures including Greater Manchester Mayor Andy Burnham that the project has fallen off the Government's agenda since the departure of its originator, George Osborne.