There is anger in number 10 at the “obtuse approach” of Philip Hammond to leaving the EU, according to BBC political editor Nick Watt.
It stems from an article which Philip Hammond wrote in The Times which prompted the paper to run an analysis with a front-page headline saying, “Hammond refuses to budget for hard-Brexit”.
Speaking on Newsnight, Nick Watt said: “There is immense irritation in number 10 over what is being described as the ‘obtuse’ approach of Philip Hammond to politics.
“There was not an actual problem with his article because that was approved – which he said he would spend the money but will only spend it when it is necessary.
“But there was an annoyance in Downing Street over how he handled his relations with The Times, which quite rightly and justifiably wrote a rather dramatic story on their front page.”
This led former Conservative leader Ian Duncan Smith to ask a planted question at Prime Minister’s Question Time.
He asked Theresa May for an assurance if “all the money will be spent if necessary”, to which the PM said yes.
Newsnight presenter Kirsty Wark said: “But what this suggests is there might be wider tensions that are not just necessarily Philip Hammond not getting the tone right.”
Mr Watt replied: “Yes, there was what you might describe as a pretty tense discussion at cabinet on Tuesday about Brexit.
“As I understand it, Michael Gove asked for regular updates on Brexit preparedness.
“The reason for this is that there is immense suspicion in the cabinet at the six-strong cabinet subcommittee that is overseeing the Brexit negotiations.
“Of those six cabinet ministers, only two – David Davis and Boris Johnson – are Brexiteers. And the meeting that took place before the Prime Minister’s Florence speech, Boris Johnson wasn’t there.
“Admittedly because he was in the Caribbean, but that was one of the things that inflamed Boris Johnson.”
The Chancellor is set to reveal how he will steer the nation’s economy in his Autumn budget on November 22 in the clearest sign yet of how the Treasury will respond to Brexit.
In his article, he wrote: “Britain will have a bright future beyond Brexit because the fundamentals of our economy are strong and will serve us well in years to come.
“But to unleash that potential, we must be honest about the near-term challenges and exchequer, it is my duty to be realistic about these challenges, and to carefully navigate the economy through this process in a way that protects our jobs, supports our businesses, underpins the prosperity of working families, and secures our public finances for decades to come.
“I also need to ensure that we are prepared for all outcomes, including a no-deal scenario.
“The government and the Treasury are prepared.
“We are planning for every outcome and we will find any necessary funding and we will only spend it when it’s responsible to do so.”
Mr Hammond supports a softer business-first approach to leaving the EU, claiming the major issue in Brexit is companies being unsure which direction the nation is heading in.