Philip Hammond warns No Deal would DESTROY his £26billion Treasury 'warchest'

Chancellor Philip Hammond has warned the free-spending Tory leadership contenders to 'be honest' about the cost of their bold plans for power, saying they risk destroying the party's reputation for economic competence.

The frugal chancellor hit out at Boris Johnson and Jeremy Hunt after they both pledged billions of pounds for their favoured policies.

They have unveiled plans to pump cash into areas including education as well as for No-Deal planning, prompting a rebuke from the top money man.

But he hit out at the scale of the plans, saying they risked the Government's 'reputation for fiscal responsibility'.

He said they 'would either require borrowing to be increased way beyond the government's cap on borrowing, or they'd require cuts in spending somewhere else, or they require increases in tax somewhere else'

He told the BBC: ‘My concern is that this Government has built up a reputation for fiscal responsibility and the British people have worked incredibly hard over a decade now to rebuild our public finances.

‘It’s very important that we don't throw that away. We have to live within our means, people have to be honest about the consequences of either spending more money or of cutting taxes.’

Asked if the candidates were being honest, he added: 'They need to be very careful setting out these ambitions.’

Philip Hammond (pictured today) delivered a withering response after Tory leader hopefuls pledged billions of pounds for their favoured policies

Philip Hammond (pictured today) delivered a withering response after Tory leader hopefuls pledged billions of pounds for their favoured policies

In a speech in London today (pictured), Jeremy Hunt said he would order the government to work on the assumption that there will not be a Brexit agreement

In a speech in London today (pictured), Jeremy Hunt said he would order the government to work on the assumption that there will not be a Brexit agreement

Tory front runner Boris Johnson has vowed to loosen the purse strings in Downing Street, with his Cabinet backer Matt Hancock saying today there was now 'money available'

Tory front runner Boris Johnson has vowed to loosen the purse strings in Downing Street, with his Cabinet backer Matt Hancock saying today there was now 'money available'

In a direct attack on the two candidates - both of whom are likely to remove him from his post and install a supporter - he added: 'Whether it's a leadership competition or a general election, there is always a temptation to sort of get into a bidding war about spending more and cutting taxes. 

'But you can't do both and if we're not careful all we end up doing is borrowing more, spending more on interest instead of on our schools

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