Boris Johnson must pay EU’s £39 billion Brexit bill if he becomes prime minister, says chancellor

Philip Hammond says UK should stand by its existing obligations to the EU

Philip Hammond has warned the candidates for the Tory leadership that they should stand by Britain’s “obligation” to pay the £39 billion Brexit divorce bill negotiated by Theresa May.

In a veiled attack on Boris Johnson, who threatened to withhold the financial settlement payment as leverage for further Brexit concessions, the chancellor said he “would not recommend” that a future leader renege on the commitment to the EU.

“We’ve always said that the UK is a country which honours its obligations,” Mr Hammond told reporters arriving at a meeting of EU finance minister in Luxembourg.

“At least part of the sum which was agreed to be paid is part of our obligations under the existing [EU budget] so I would not recommend any of my colleagues to threaten to withhold payments which are part of an existing obligation that the UK has.”

The chancellor declined to endorse any of the candidates for the leadership of his party, saying he had not “declared my hand at this stage” and the he prefers “to commentate on what’s happening” instead.

He also said he would rather resign than serve in a Cabinet led by any of the candidates who advocated a no-deal Brexit.

Asked specifically whether he would serve in Boris Johnson’s cabinet, he said: “I don’t think this is about personalities, its about policies. Before I could serve in any government I would want to look at the policies that the prime minister was setting out. I would not be able to serve in any government that had as its policy leaving the European Union without a deal.”

Mr Hammond last night urged Tory leadership candidates to continue to commit to austerity levels of spending, arguing that the policy was a “dividing line” with Labour and representing “fiscal responsibility”.

The EU has said it will not open any trade talks with the UK until it has settled the issue of the issue of the divorce bill, as well as those of the Northern Ireland border and citizens’ rights.

The financial settlement is mostly commitments made by the EU to fund the current EU budget round, also known as the multi-annual financial framework or MFF. It also includes other liabilities like pension payments for EU civil servants.