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Iain Duncan Smith resigns from cabinet over disability cuts Iain Duncan Smith resigns from cabinet over disability cuts
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Iain Duncan Smith has resigned as work and pensions secretary in the row over cuts to disability benefits. Iain Duncan Smith has resigned as work and pensions secretary over cuts to disability benefits, in the most dramatic cabinet departure of David Cameron’s leadership.
The cabinet minister, who has been in post since 2010, said he disagreed with the cuts to personal independence payments as a “compromise too far” and had too often felt pressured to make huge welfare savings before a budget or autumn statement. In a sign that divisions over Europe have heightened tensions in the Conservatives, the former party leader stormed out of his job, saying he thought the cuts to welfare for disabled people known as personal independence payments (PIP) were a “compromise too far”.
In an attack on George Osborne in what was the biggest resignation since David Cameron became prime minister, Duncan Smith said the disability cuts were defensible in narrow terms of deficit reduction but not “in the way they were placed in a budget that benefits higher earning taxpayers”. Duncan Smith, who is campaigning to leave the EU in opposition to Downing Street, said he had too often felt under pressure to make huge welfare savings before a budget in a stinging critique of George Osborne’s entire approach to reducing the deficit.
Related: Iain Duncan Smith resignation: minister quits over disability cuts – liveRelated: Iain Duncan Smith resignation: minister quits over disability cuts – live
In a direct attack on Osborne and a blow to the chancellor’s hopes of becoming the next Tory leader, Duncan Smith said the disability cuts were defensible in narrow terms of deficit reduction but not “in the way they were placed in a budget that benefits higher earning taxpayers”.
He said he was stepping down because Osborne’s cuts were for self-imposed political reasons rather than in the national economic interest.He said he was stepping down because Osborne’s cuts were for self-imposed political reasons rather than in the national economic interest.
The work and pensions secretary, who is campaigning to leave the EU on the opposite side to Cameron, said he was resigning with enormous regret. “I am unable to watch passively whilst certain policies are enacted in order to meet the fiscal self-imposed restraints that I believe are more and more perceived as distinctly political rather than in the national economic interest,” Duncan Smith wrote in a resignation letter to Cameron.
Just hours earlier, government sources had signalled they were prepared to back down on the disability benefit cuts, which were facing a massive Tory rebellion, kicking them into the long grass. “Too often my team and I will have been pressured in the immediate run-up to a budget or fiscal event to deliver yet more reductions to the working age benefit bill. There has been too much emphasis on money saving exercises and not enough awareness from the Treasury, in particular, that the government’s vision of a new welfare-to-work system could not repeatedly be salami-sliced.”
“I am unable to watch passively whilst certain policies are enacted in order to meet the fiscal self imposed restraints that I believe are more and more perceived as distinctly political rather than in the national economic interest,” Duncan Smith wrote in a resignation letter to Cameron that was released to the media. Downing Street immediately attempted to portray the Duncan Smith’s resignation as consequence of the cabinet minister’s strong opposition to Cameron over Europe.
“Too often my team am I will have been pressured in the immediate runup to a budget or fiscal event to deliver yet more reductions to the working age benefit bill. There has been too much emphasis on money saving exercises and not enough awareness from the Treasury, in particular, that the government’s vision of a new welfare-to-work system could not repeatedly be salami-sliced.” Cameron replied to his letter saying he was “puzzled and disappointed” by the cabinet minister’s decision to resign, saying the disability benefit cuts had been “collectively agreed” between Duncan Smith, No 10 and the Treasury before being announced a week ago.
Duncan Smith’s resignation comes in the context of his Euroscepticism in opposition to Downing Street, but also longstanding bad political blood with Osborne himself. The resignation leaves a hole in the Department of Work and Pensions that Downing Street will want to fill with a pro-EU loyalist. There had been talk inside DWP that Duncan Smith would be reshuffled after the referendum and that Matt Hancock – Osborne’s own protege – would replace him, although such a move could irritate out campaigners.
The stinging critique of the Treasury’s zeal for welfare cuts in order to save money delivers a blow to Osborne’s arguments that they are necessary to bring down Britain’s national debt. “There were discussions at the top level and we had decided this,” said a senior government source, who argued that Duncan Smith had – only on Friday – written a “dear colleague” letter to MPs defending the policy.
Duncan Smith’s resignation comes after a growing number of Tories signalled their alarm over reductions in personal independence payment (PIP), which the chancellor said would save £4.4bn over the course of this parliament. It is clear that Downing Street and the Treasury have been irritated by Duncan Smith’s interventions over the EU, not least his dismissal of government publications as “dodgy dossiers”. The work and pensions secretary is known to have been unhappy about his officials being cut out of policy discussions related to the EU referendum.
It was announced by the Department of Work and Pensions (DWP) a week ago but confirmed in Osborne’s budget and defended by Downing Street until Friday. Related: 'A compromise too far': Iain Duncan Smith's resignation letter in full
After Cameron said the reforms would need time to make sure they were right, a Treasury source said: “This is going to be kicked into the long grass. We need to take time and get reforms right, and that will mean looking again at these proposals. But sources close to Duncan Smith said he had longstanding concerns about the government’s approach to welfare and was particularly unhappy with the “arbitrary” promise to cut £12bn from the welfare budget before the election.
“We are not wedded to specific sums ... it’s not an integral part of the budget.” There was also irritation that the Treasury had sought to paint the disability benefit cuts as a DWP policy and not a budget measure approved by Osborne, saving the Treasury £4.5bn over the course of this parliament.
The pause in the plans is a humiliating blow for the chancellor, who had hoped to use his eighth budget on Wednesday to burnish his credentials for the Conservative leadership. Osborne has long been seen as Cameron’s successor but the growing questions over the budget will remind backbenchers of the notorious “omnishambles” of 2012, when he was forced to reverse a series of planned stealth taxes, on everything from pasties to caravans – and was criticised for cutting the 50p top rate of tax, benefiting the highest earners.
The Treasury stressed that the figures included in the budget were the DWP’s work; but department insiders had complained that they were bounced into publishing the proposals without the time to build support. He is seen increasingly by Tory backbenchers as having made too many unforced political errors, including having to reverse plans to cut tax credits, welcoming Google’s underwhelming tax deal with the UK, backtracking on pension reforms, and unsuccessfully trying to bring in Sunday trading.
Speaking in Brussels on Friday evening, Cameron suggested he might be prepared to soften the controversial cuts, promising to consult with disability groups and “make sure we get this right”. Some of Osborne’s Eurosceptic colleagues argue that he has been so focused on managing what they deride as “Project Fear” – the campaign to keep Britain in the EU – that he failed to devote enough attention to laying the political groundwork for his budget.
Asked by the Guardian about concerns among his MPs and disability charities, the prime minister had said: “A number of reviews have been done, a lot of work has been done and that is why these proposals have been put forward. As the chancellor said, but I will repeat, we will be discussing this with disability charities and others and make sure we get this right.” On Friday night, Labour leader Jeremy Corbyn called for Osborne to resign as well, saying the chancellor has “lost the credibility to manage the economy in the interests of the majority of our people”.
The comments appeared to back up remarks made by Nicky Morgan, the education secretary, on Thursday that the proposals were only a “suggestion”. “The chancellor has failed the British people. He should follow the honourable course taken by Iain Duncan Smith and resign,” he said.
The apparent climbdown came as Conservative rebels turned their fire on Osborne over what they see as the toxic politics of the budget, which juxtaposed the PIP cuts with tax giveaways for businesses and higher earners. Duncan Smith’s resignation comes in the context of his Euroscepticism in opposition to Downing Street but also longstanding bad political blood with Osborne.
Conservative backbenchers voiced their concerns, including the former GP Sarah Wollaston, who tweeted that the government would, “never meet approval for change that would reduce entitlement to PIP at the same time as raising the higher rate tax threshold”. The senior cabinet minister’s resignation letter went wider than a rejection of the disability benefit cuts into a stinging critique of the Treasury’s zeal for welfare reductions for the purpose of saving money, dealing a blow to Osborne’s arguments that they are necessary to bring down Britain’s national debt.
Related: Iain Duncan Smith's resignation letter in full The cuts to PIP were announced by the Department of Work and Pensions a week ago but confirmed in Osborne’s budget and defended by Downing Street until Friday.
Labour leader Jeremy Corbyn said: “The resignation of Iain Duncan Smith reveals a government in disarray and a chancellor who has lost the credibility to manage the economy in the interests of the majority of our people. Related: The Guardian view on Iain Duncan Smith: a very political resignation
“The budget has exposed George Osborne’s record of profound unfairness and economic failure. Not only must the cuts to support for disabled people be abandoned, but the government must change economic course. Downing Street initially said it “remained committed” to the changes, but at a press conference in Brussels, Cameron suggested he was prepared to soften the cuts.
“The chancellor has failed the British people. He should follow the honourable course taken by Iain Duncan Smith and resign.” Asked by the Guardian about concerns among his MPs and disability charities, the prime minister said: “A number of reviews have been done, a lot of work has been done and that is why these proposals have been put forward. As the chancellor said, but I will repeat, we will be discussing this with disability charities and others and make sure we get this right.”
Some of Osborne’s Eurosceptic colleagues argue that he has been so focused on managing what they deride as Project Fear – the campaign to keep Britain in the EU – that he failed to devote enough attention to laying the political groundwork for his budget. The Treasury then executed a full U-turn, with a government source saying: “This is going to be kicked into the long grass. We need to take time and get reforms right, and that will mean looking again at these proposals.
DWP sources suggested the timing of last Friday’s announcement on the cuts was driven by the Treasury. Even though they were expected to save more than £4bn, ministers have stressed that the total cost of disabled support will increase in cash terms. “We are not wedded to specific sums … it’s not an integral part of the budget.”
Osborne has been called to appear before the cross-party Treasury select committee on Thursday to give evidence about the economic costs and benefits of EU membership. It will be a day after they have heard from Boris Johnson, the Eurosceptic mayor of London widely seen as a rival for the Tory crown. The pause in the plans is a humiliating blow for the chancellor, on top of Duncan Smith’s resignation, as Osborne had hoped to use his eighth budget on Wednesday to burnish his credentials for the Conservative leadership.
Osborne has already faced scepticism from the Institute for Fiscal Studies, which said he had a “50-50 chance” of meeting his self-imposed target of achieving a surplus on the public finances by the end of the parliament, even allowing for a series of accounting tricks to “shuffle” revenue from one year to another. The Treasury stressed the figures included in the budget were the DWP’s work; but DWP insiders had complained that they were bounced into publishing the proposals without the time to build support.
A significant number of backbench Conservatives have now turned their fire on Osborne over what they see as the toxic politics of the budget, which juxtaposed the PIP cuts with tax giveaways for businesses and higher earners.
These include Sarah Wollaston, the chair of the Commons health committee and a former GP, who tweeted that the government would “never meet approval for change that would reduce entitlement to PIP at the same time as raising the higher rate tax threshold”. David Burrowes, the Tory MP for Enfield Southgate, urged the government to “press pause”.
Related: Is Iain Duncan Smith’s resignation about disability cuts – or Europe?
Amid attempts by the Treasury to distance itself from the PIP cuts, Owen Smith, Labour’s shadow work and pensions secretary, said: “It is ludicrous for the Tories to pretend that this was anything other than a major part of Wednesday’s budget.
“If the Tories are now postponing or cancelling these cruel cuts altogether it is a humiliating climbdown for George Osborne, although it will come as an incredibly welcome reprieve for hundreds of thousands of disabled people who were due to be affected.”
The Institute for Fiscal Studies said the cuts, which help people pay for the costs of living with a disability, would hit 370,000 people, with an average loss of £3,500 a year.
Osborne insisted on Friday night that the government would “protect the most vulnerable” and ensure that it got the proposals “absolutely right”. But there were rumb­lings among Conservative backbenchers that the anger unleashed by the disability cuts had won new converts to the “Anything But George” campaign that is seeking an alternative to Osborne as a potential future leader.