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George Osborne tribute to Duncan Smith as he defends Budget George Osborne tribute to Duncan Smith as he defends Budget
(35 minutes later)
George Osborne told MPs he was "sorry" Iain Duncan Smith had resigned and said he was "proud" of their work together.George Osborne told MPs he was "sorry" Iain Duncan Smith had resigned and said he was "proud" of their work together.
Defending his handling of the economy ahead of a vote to approve his Budget, the chancellor said Treasury talks with departments had often been "robust".Defending his handling of the economy ahead of a vote to approve his Budget, the chancellor said Treasury talks with departments had often been "robust".
But where mistakes were made he was ready "to listen and learn", he addedBut where mistakes were made he was ready "to listen and learn", he added
Mr Osborne's performance comes after Mr Duncan Smith's post-Budget decision to quit, with a blast at "indefensible" changes to disability benefits.Mr Osborne's performance comes after Mr Duncan Smith's post-Budget decision to quit, with a blast at "indefensible" changes to disability benefits.
In his Commons statement, Mr Osborne confirmed he has dropped those planned cuts to disability benefits but came under pressure to explain how he will cover the £4.4bn gap in the Budget left by the rethink. In his Commons statement, Mr Osborne confirmed he had dropped those planned cuts to disability benefits, but came under sustained pressure from Labour to explain how he will cover the £4.4bn gap in the Budget left by the rethink.
Labour said Mr Osborne should resign and the Budget should be withdrawn. Shadow chancellor John McDonnell attacked what he called "the grubby, incompetent manipulations of a political chancellor" while Lib Dem leader Tim Farron said Mr Osborne's reputation was tarnished and his continued presence in the role risked damaging the campaign to keep the UK in the EU.
'Proud of record'
Reforms to the Personal Independence Payment (PIP) had been due to save a total of £4.4bn from the welfare budget by 2020 as part of Mr Osborne's commitment to reducing benefits spending by £12bn a year.Reforms to the Personal Independence Payment (PIP) had been due to save a total of £4.4bn from the welfare budget by 2020 as part of Mr Osborne's commitment to reducing benefits spending by £12bn a year.
But critics said the changes could have affected up to 640,000 people, making them as much as £100 a week worse off.But critics said the changes could have affected up to 640,000 people, making them as much as £100 a week worse off.
The chancellor, who is speaking the Commons now, is expected to say the Budget he set out on 16 March was that of a "compassionate, one-nation Conservative government determined to deliver both social justice and economic security". The chancellor told MPs that the plans did not "command support" and had been withdrawn but insisted that spending on disability benefits would still be higher in 2020 than it was now and higher than under the last Labour government.
He will say it delivered on the Conservative manifesto commitment to "economic security, controlling public spending and lower taxes for working people and business". He said he was "proud" of the government's record on social policy, saying there were a million fewer people on in-work benefits than in 2010 and 300,000 people with disabilities had found work during that time.
"We know that those who suffer most when Britain loses control of its public finances and the economy crashes aren't the best off but the poorest and the most vulnerable," he will say. Praising Mr Duncan Smith, with whom he is reported to have had a history of disagreements, he said: "I'm sorry that my right honourable friend chose to leave the government and let me here in this House recognise his achievements in helping to make work pay, protecting the vulnerable and breaking the decades old cycle of welfare dependency."
After listening to concerns, he will not proceed with changes to PIPs, he will say. But he rejected his former colleague's charge that the chancellor's aim of balancing the books by 2020 risked dividing society and working-age benefit claimants were being unduly penalised by a "desperate search" for savings.
"But this Budget will lift 1.3 million of the lowest paid out of income tax, it will deliver improvements to our schools, help the least well-off to save, and support business and enterprise to create jobs and boost social mobility." "There is not some inherent conflict between delivering social justice and the savings required to deliver sound public finances," he said. "There are one and same thing. Without some public finances there is no social justice."
Mr Duncan Smith resigned on Friday over the cuts to disability payments, which came at the same time as tax cuts for higher earners. He also rejected calls for free pensioner benefits and the "triple lock" on pensions to be reconsidered, saying pensioners who had worked hard all their lives deserved a "decent, generous basic state pension and I am not going to take that away from people".
He said this flew in the face of the prime minister's and Mr Osborne's oft-repeated claim that "we are all in this together". Welfare savings
Mr Osborne is expected to tell the Commons he is sorry Mr Duncan Smith chose to leave the government, and that he wants "to recognise his achievements in helping to make sure work pays, breaking the old cycles of welfare dependency and ensuring the most vulnerable in our society are protected". Mr Duncan Smith resigned on Friday over the cuts to disability payments, which came at the same time as tax cuts for higher earners. He said this flew in the face of the prime minister's and Mr Osborne's oft-repeated claim that "we are all in this together".
Former Conservative minister John Redwood told BBC Radio 4's Today programme it was "nonsense" to suggest Mr Duncan Smith - a prominent Eurosceptic - was really motivated by a desire to wound the government ahead of the EU referendum.Former Conservative minister John Redwood told BBC Radio 4's Today programme it was "nonsense" to suggest Mr Duncan Smith - a prominent Eurosceptic - was really motivated by a desire to wound the government ahead of the EU referendum.
"It was entirely about welfare," he said."It was entirely about welfare," he said.
Cameron defence In his first act - on Monday - as Mr Duncan Smith's replacement as work and pensions secretary, Stephen Crabb confirmed the proposed benefit cuts had been dropped and that there would be no further raid on welfare spending to plug the gap.
In his first act as Mr Duncan Smith's replacement as work and pensions secretary, Stephen Crabb confirmed they had been dropped and that there would be no further raid on welfare spending to plug the gap. The chancellor reiterated this on Tuesday, saying the government had already met its manifesto promise on identifying £12bn worth of welfare savings and its focus would be on implementing the cuts already approved by Parliament.
The chancellor is not expected to bring forward alternative measures to meet the shortfall until the Autumn Statement at the end of the year.
Labour leader Jeremy Corbyn said the decision to abandon the planned cuts had left an enormous hole in the Budget, while shadow chancellor John McDonnell called on Mr Osborne to resign.
He added that his absence from the Commons chamber on Monday "insults this House" and that Treasury minister David Gauke had been left to "defend the indefensible".
He added: "This is no way to deliver a Budget and no way to manage an economy."
But Prime Minister David Cameron defended his chancellor and said the Conservatives remained a "modern, compassionate, one-nation" party under his leadership.
Mr Cameron listed policies aimed at low-earners including the National Living Wage and rebuilding "sink estates", adding: "None of this would be possible if it wasn't for the actions of this government and the work of the chancellor in turning our economy around."
As well as the welfare changes, Downing Street said ministers would also 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 said ministers would also not seek to oppose amendments to scrap the so-called "tampon tax" and an increase in VAT on solar panels.
What are Personal Independence Payments?What are Personal Independence Payments?
Who would the PIP changes have affected?Who would the PIP changes have affected?