MPs asked to vote on Budget with a £4bn black hole in finances

Chancellor George Osborne's Budget unravelled over the weekend with the announcement the Government will drop their controversial plans to cut Personal Independence Payments for disabled people.

This plan was due to save the Government £4bn and was the single biggest debt reduction measure planned for the Parliament by the Treasury.

But after public outcry and the resignation of former Work and Pensions Secretary Iain Duncan Smith on Friday night the Chancellor has scrapped the key Budget proposal in its current form.

The Prime Minister's spokeswoman said a new financial plan with detail on welfare spending will be released at the Autumn Statement in November and David Cameron still had 'absolute' faith in the Chancellor.

Demands are also being made for George Osborne to go before the House of Commons this afternoon to account for the changes in the Budget by Shadow Chancellor John McDonnell after he tabled an urgent question.

And as MPs prepare to vote on the financial plans tomorrow, Labour are also claiming victory as the Government has announced it will not oppose two amendments calling them to drop the 5% tax on sanitary products and the VAT rate on solar panels.

The Prime Minister's spokeswoman said on the Personal Independence Payments: "The Chancellor has already said that he is looking at this issue and we will set out our approach at the Autumn Statement.

"We have been clear that we won't be proceeding with these policies in their form. There will be a new public finance forecast at the Autumn Statement and any assessments will be made in light of that."

She said the Government has shown it is 'listening to concerns', and later today the new Department for Work and Pensions Stephen Crabb MP is expected to formally drop the plans in a statement he makes to the House of Commons.

Despite the £4bn black hole, she said the Government was still committed to its fiscal rule of returning a £10.4bn surplus to the Budget by 2019.

David Davis, MP for Haltemprice and Howden, said this morning that the Cabinet must work in a more collegiate way as a lack of diversity in the leadership at the very top leads to a 'lack of wisdom'.

The duo of David Cameron and George Osborne does not work, the Conservative politician wrote on website Conservative Home

"The Conservative leadership has been criticised on many occasions for being too narrowly based. But in some ways the “Posh Boys” attack misses the point," said Mr Davis, who challenged David Cameron for the Tory party's leadership in 2005.

"In truth, this criticism bites not because of the issue of class – which is how it is very often couched – but because it narrows the range of experience and background that is brought to bear on the most difficult issues. A lack of diversity of insight leads to lack of wisdom in government. With difficult matters such as welfare reform, this is particularly important.

"So it is vital that we see a more serious commitment to Cabinet government. The Prime Minister and the Chancellor have to devolve more power and control to their Cabinet colleagues if we are going to see the improvement in the quality of government that is now plainly necessary."