Chancellor accuses pro-Brexit ministers of leaks in public sector pay row

Mr Hammond has spoken in favour of continuing the public sector pay cap

Philip Hammond has hit back at cabinet colleagues after reports that he said public sector staff were "overpaid" in a cabinet meeting.

The Chancellor declined to deny that he made the comments, which were reported in the Sunday Times.

But he accused colleagues of making damaging leaks in an attempt to undermine him after a dispute over the best approach for Brexit.

The reports have prompted speculation Mr Hammond was the target of a briefing war by colleagues jockeying to succeed Theresa May.

Asked about the reported comments today, he said "I’m not going to talk about what comes out of a private cabinet meeting" on an appearance on the Andrew Marr show on Sunday.

He criticised fellow ministers who were briefing against him, saying they should "focus on the job we've been elected to do" as the UK prepares to leave the EU.

According to The Sunday Times report, Mr Hammond said that, with their pensions were taken into account, public sector workers were "overpaid", and that train drivers were "ludicrously overpaid".

It said five sources attested to the Chancellor using the word.

One cabinet source was quoted as saying Mr Hammond's comments were "fairly inflammatory" and "caused some general astonishment" among cabinet colleagues.

It came just a day after another report suggest that during a discussion on transport Mr Hammond had quipped that driving a train was so easy that "even a woman" could do it.

Mr Hammond is known to be in favour of continuing the public sector pay cap.

The Treasury has denied Mr Hammond had used the words attributed to him, saying he was referring to the public sector pension premium.

Some of Mr Hammond's colleagues have criticised his stance on Brexit Credit: PA

Asked about both alleged remarks, Mr Hammond was quick to deny making the supposed comment on women drivers, adding "I would not say anything like that".

In contrast, he repeatedly said he did not want to comment on private meetings when asked if he had said public sector staff were "overpaid".

He went on to say that public sector pay had "raced ahead" in recent years and remained above that of private sector pay once benefits like their "extremely generous" pensions were taken into account.

"We have sought to be fair to public sector workers but also taxpayers."

He added: "If you want may opinion, some of the noise is generated by people who are not happy with the agenda which I, over the last few weeks, have tried to advance of ensuring that we achieve a Brexit which is focused on protecting our economy, protecting our jobs, and making sure that we have continued rising living standards in the future."

John McDonnell produced a payslip on the programme. Credit: PA

The row over Mr Hammond's alleged comments comes as ministers begin considering a future race to replace Theresa May, who emerged from the election deeply damaged after losing the Conservative majority.

Mr Hammond has also irked some hardline Brexiteers in the Cabinet, including Foreign Secretary Boris Johnson, by arguing for a deal which prioritises jobs and economic growth over controlling immigration.

First Secretary Damian Green - effectively Mrs May's deputy - said the briefings needed to stop.

"There are a lot of very serious things going on the world and now is absolutely not the time for this type of activity," he told BBC Radio 5 Live's Pienaar's Politics.

"Talk of leadership challenges is completely overblown and completely the wrong thing for the country. The last thing anyone wants is for the Conservative Party to turn in on itself."