Mr Hammond insisted no final decisions have been taken on trans-Pennine electrification and all options for improving journeys are being considered.
Transport Secretary Chris Grayling prompted an outcry before the summer when he scrapped electrification of the Midland Mainline between Nottingham and Sheffield and later suggested the long-promised electrification of the trans-Pennine route could be downgraded.
A summit of northern leaders in Leeds last month called for full electrification and a clear Government commitment to develop a high speed rail link in the longer term.
Mr Hammond told The Yorkshire Post: “Just to be clear no decisions have been taken on electrification, the Government’s position hasn’t changed.”
He said Network Rail was looking at “different options” for improving journeys on the trans-Pennine route.
“My own view is, and I was transport secretary at the very beginning of my ministerial career, my own view is that we should start from outputs and work backwards.
“What are we trying to deliver? On this particular route we are trying to deliver an increased frequency, higher capacity, shorter journey times and greater reliability.
“That may well be delivered through electrification, that may well be the way to do that, but I think we should be clear that what we are trying to deliver is a result for passengers not some conceptual thing based on inputs.
“It is a difficult piece of railway between Manchester and Leeds and people won’t want to sacrifice the benefits of local services stopping at the intermediate stations but at the same time they want faster journey times overall between Manchester and Leeds,” he said.
The controversy over rail electrification led to wider questions from council leaders on both sides of the Pennines over the Government’s commitment to the so-called Northern Powerhouse.
Mr Hammond’s comments on electrification and his similarly conciliatory tone on Yorkshire devolution made during a visit to Leeds yesterday appeared designed to try and draw a line under a summer of damaging headlines for the Government.
Earlier in the day the Chancellor had met the metro-mayors of Greater Manchester, Liverpool and Tees Valley where he promised the “commitment” to the Northern Powerhouse idea remains.
“Northern Powerhouse is not going to be one year or one parliament, it is a very long term project the objective of which is to get productivity levels in the northern cities up to the levels we see in London and the South-East,” he said.
“Doing that will do two things, it will help close the productivity gap with our foreign competitors, very important for our national economy, and it will help to close the North-South gap in incomes which is very important for national and social cohesion.
“Getting this right is a big part of our economic challenge for the next 20, 30 years, it’s that sort of timescale. We are not going to deliver this overnight.”
Mr Hammond is expected to set out more detail of the Government’s commitment to the Northern Powerhouse idea in the Budget this autumn when he may also review its approach to public sector pay.
Strict limits on public sector pay rises became an issue in this year’s general election after an NHS worker questioned Theresa May in a television debate broadcast from York.
Mr Hammond described public sector pay as a “complicated, dynamic, balancing act” which needed to protect taxpayers while ensuring public services remain “sustainable”.