Chancellor's £4bn nightmare

The £4.4bn black hole caused by George Osborne’s u-turn over disability benefits will not be filled with further cuts to welfare, Stephen Crabb MP has said.

In a statement to the House of Commons, he said: “After discussing this issue over the weekend with the Prime Minister and the Chancellor we have no further plans to make welfare savings beyond the very substantial savings legislated for by Parliament two weeks ago.”

It was announced during last Wednesday’s Budget that Peronsal Independent Payments for disabled people were due to be slashed to save the Treasury £4bn.

Following the resignation of Work and Pensions Secretary Iain Duncan Smith, who said the policy had little bearing on the Government’s mantra ‘we are all in this together’, the Government has now dropped the plan.

They say new forecasts will be released in November during the Autumn Statement, but that leaves months of uncertainty and speculation ahead on how they will plug the £4bn gap.

Shadow John McDonnell said it was unprecedented for a Government to withdraw a large part of its budget the day before it is voted on and said the House of Commons had been insulted by the Chancellor not failing to attend.

He said the proposed £150 a week cuts to disabled people’s incomes, while slashing captal gains tax was clearly an attempt to appease higher earners.

Former shadow Home Secretary Yvette Cooper said the Chancellor should have appeared in person.

The MP for Normanton, Pontefract and Castleford, said: “If the Chancellor is too scared to answer questions in this house on this issue he is not fit to do the job.”

Financial Secretary David Gauke MP said the Chancellor would be participating in the second day of the Budget debate today, which is something no Chancellor has done on the 11 previous occasions.

He cited Gordon Brown several times as having never fielded questions on his Budgets beyond his initial statement.

Dozens of Labour MPs rallied together to lambast the Chancellor’s accounting during the two hour session, clearly buoyed by the fact the Government had been forced to accept two of their amendments for a zero rate of VAT for tampons and reduced rate for solar panels, or face the first defeat on a Budget vote since 1994.

However there was confusion around why the Labour leader Jeremy Corbyn and John McDonnell had failed to seize the opportunity to confront either Mr Gauke or the Prime Minister over the loss of Iain Duncan Smith from the cabinet.

Neither mentioned his name throughout the afternoon’s discussions, despite it being a highly dramatic exit from the Conservative front bench.

The financial blackhole caused by the welfare u-turn, the departure of Mr Duncan Smith and the impending EU referendum is considered one of the most unstable times for the Conservative party since 2010.

However David Cameron insisted their policies create a fairer society, and the parties policies are compassionate ‘One Nation’ Conservatism.

He cited the £900 pay rise the poorest families in Britain will get through the National Living Wage introduced later this year.