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Withdraw 'chaotic' Budget, says Labour Cameron defends Osborne and praises IDS
(35 minutes later)
George Osborne's Budget is in "absolute chaos" and should be withdrawn, shadow chancellor John McDonnell says. David Cameron has hit back at Labour calls for Chancellor George Osborne to quit as he sought to heal a rift in his party over Budget spending cuts.
Mr McDonnell was asking an urgent question about changes to the Budget including the decision to shelve disability benefit cuts. He praised Mr Osborne for "turning the economy around" and stressed his government was committed to "compassionate Conservatism".
The cuts led to the resignation of work and pensions secretary Iain Duncan Smith with a furious attack on the government. He also praised Iain Duncan Smith's record - after the minister quit in protest at "unfair" disability cuts.
Treasury Minister David Gauke said more was being spent on disabled benefits. Labour said Mr Osborne's Budget was in "chaos" and should be withdrawn.
Spending on Personal Independence Payments (PIPs) was up by £3bn since 2010, he said, adding that the Budget "closes the gap between rich and poor and North and South". Mr Cameron added his comments onto the end of a statement about the European Council following a weekend of turmoil and Conservative infighting triggered by Mr Duncan Smith's resignation.
He said details of how the cash that had been earmarked from the benefit cuts will be recovered would be revealed in the Autumn Statement later in the year. He told MPs Mr Duncan Smith "contributed an enormous amount to the work of this government and he can be proud of what he achieved".
'Enormous hole' But the PM also made clear his support for embattled George Osborne, who is now left casting around to find more than £4bn after his Budget unravelled.
Labour has called on Mr Osborne to resign following Mr Duncan Smith's resignation and the furore over the PIP cuts, but Downing Street says the chancellor has the full confidence of the prime minister. He said the Conservatives remained a "modern, compassionate, one nation" party and hailed the Chancellor's role in improving the life chances of the poor.
Mr McDonnell said Mr Osborne's absence from the Commons chamber "insults this House" and that Mr Gauke had been left to "defend the indefensible". After quitting, Mr Duncan Smith warned the government risks dividing society with politically-motivated spending cuts.
He said he agreed with Mr Duncan Smith in his criticism of the decision to include Capital Gains Tax cuts alongside the disability benefit reforms in last week's Budget, which the former work and pensions secretary said showed "we are not all in this together" and the government has repeatedly stated. The changes to Personal Independence Payments which prompted Mr Duncan Smith's resignation have now been shelved, and ministers say they will say how the planned £4bn savings will be found at the Autumn Statement later in the year.
The changes to the Budget were the subject of an urgent question from Labour before Mr Cameron's statement.
Shadow chancellor John McDonnell called on Mr Osborne to resign following Mr Duncan Smith's resignation and the furore over the PIP cuts, but Downing Street says the chancellor has the full confidence of the prime minister.
Mr McDonnell said Mr Osborne's absence from the Commons chamber "insults this House" and that Treasury Minister David Gauke had been left to "defend the indefensible".
He said he agreed with Mr Duncan Smith in his criticism of the decision to include Capital Gains Tax cuts alongside the disability benefit reforms in last week's Budget, which the former work and pensions secretary said showed "we are not all in this together".
Mr McDonnell said there was now "an enormous hole" in the Budget as a result of the cuts being shelved, calling on the government to "withdraw this Budget and start again".Mr McDonnell said there was now "an enormous hole" in the Budget as a result of the cuts being shelved, calling on the government to "withdraw this Budget and start again".
Solar panels
He added: "This is no way to deliver a Budget and no way to manage an economy."He added: "This is no way to deliver a Budget and no way to manage an economy."
Mr Gauke said the chancellor would be in the chamber for Tuesday's Budget debate, and said Labour was not in a position comment on "black holes" in budgets.Mr Gauke said the chancellor would be in the chamber for Tuesday's Budget debate, and said Labour was not in a position comment on "black holes" in budgets.
David Cameron is expected to defend his government's record during an EU statement later. He said spending on Personal Independence Payments was up by £3bn since 2010, adding that the Budget "closes the gap between rich and poor and North and South".
Mr Duncan Smith's replacement, Stephen Crabb, will also address MPs on the decision to shelve the PIP cuts.Mr Duncan Smith's replacement, Stephen Crabb, will also address MPs on the decision to shelve the PIP cuts.
As well as the welfare changes, Downing Street says ministers will not seek to oppose amendments to scrap the so-called "tampon tax" and an increase in VAT on solar panels.As well as the welfare changes, Downing Street says ministers will not seek to oppose amendments to scrap the so-called "tampon tax" and an increase in VAT on solar panels.