Philip Hammond has denied allocating more money to Brexit preparations than NHS spending in the Budget.
The Chancellor has committed £3bn more to provisions for the UK’s exit from the EU, with only £2.8bn extra being handed to the NHS in England.
It has raised fears public services could be missing out as the Government prepares for Brexit, with the sum allocated to health services less than NHS bosses asked for.
But Mr Hammond pointed to how an additional £3.5bn of extra capital funding for the NHS means he gave it “significantly more money” on Wednesday than he was committing to Brexit.
Defending the Brexit spend as an “absolute obligation” for the Government, Mr Hammond told Sky News: “Things are going to be different after we leave the EU, we’re going to need new arrangements and facilities at the border.
“We’re going to need new computer systems for clearing goods through customs and so on.
“We have to make these arrangements and these investments to make sure things are operating smoothly, that trade and business is not disrupted.
“These are sensible investments to make and we have to be prepared for a range of possible outcomes from these negotiations.”
After pledging less money to hospitals than the £4bn NHS England boss Simon Stevens has claimed is needed to protect services, Mr Hammond suggested he was still expecting results from previous cash the Government has injected.
He said: “Let me remind you that the NHS bosses set out a plan in 2014, a five-year plan for the NHS which we funded in full.
“That plan set out to transform the way the NHS works, to make big efficiencies in the way it operates that could then be recycled to the frontline to provide additional patient care.
“That plan hasn’t yet been fully delivered, we’ve agreed to put some additional money in to support it.”
The Chancellor also defended the lack of measures on social care funding, highlighting the more than £2bn injected into social care in his previous Budget in March.
Mr Hammond said a review of social care – announced after the Conservatives dumped their plans for a so-called “dementia tax” following June’s snap General Election – aimed to provide people with the support they need… in a way the nation can afford”.
Despite criticism of his headline proposal to slash stamp duty for first-time buyers, the Chancellor insisted the move would benefit one million first-time buyers.
The Office for Budget Responsibility calculated the plan will help just 3,500 extra buyers get onto the housing ladder, but Mr Hammond claimed that figure ignores other measures in his Budget.
“What we did yesterday is set out a very large package to stimulate housing supply to build more houses, to create more opportunities for first-time buyers and others to get on the housing ladder,” he said.
The Chancellor admitted growth predictions for the UK economy were “disappointing” after being cut sharply for the next five years, although he denied Britain is becoming the “sick man of Europe”.
He insisted the UK economy is “fundamentally strong” and suggested investment would return to Britain once there was more certainty over the country’s future relationship with the EU.
Also speaking to Sky News, Labour’s John McDonnell claimed the Budget was “more about Philip Hammond saving his job than it was tackling the real underlying issues within our economy”.
The shadow chancellor criticised an absence of action on education spending and no pay boost for public sector workers amid a “pretty bleak” outlook for the UK economy.