George Osborne suffered fresh humiliation today after No10 was forced to say that David Cameron “absolutely” still had “full confidence” in his Chancellor despite his Budget being torn up by the disability cuts row.
In a huge blow to the Government’s claims to financial competence, Downing Street also admitted the £4.4bn welfare ‘black hole’ in Mr Osborne’s fiscal plans would not be filled until the autumn.
As Mr Cameron tried to stem the damage from Iain Duncan Smith’s resignation, No.10 said that he “remains a compassionate Conservative” and confirmed that the billions pencilled in for disability cuts will not go ahead.
It revealed for the first time that replacement savings wouldn’t be found until the Autumn Statement, due in November or December.
The £4.4bn earmarked for cuts to Personal Independence Payments (PIP) was the biggest single deficit reduction measure in the Budget and its removal now leaves the Treasury pleading with MPs to vote for it in the hope the figures will come right in a few months’ time.
Pressed on how the black hole will be filled, the Prime Minister’s official spokeswoman said: “There will be an opportunity for further forecasts at the Autumn Statement and decisions made in the light of that”.
Labour and Tory peers, MPs and the media pounced on No.10's remarks.
Mr Osborne intends to set out his plans on Tuesday during the Budget debate in the Commons but was accused of 'running scared' by sending fellow minister David Gauke in his place after Labour forced an urgent question today on the disability reforms.
The Prime Minister is due to use his EU summit statement in the Commons to try to heal the wounds that have being incurred by the Tory civil war that followed Mr Duncan Smith’s dramatic resignation on Friday night.
Newly installed Work and Pensions Secretary Stephen Crabb will have his own Commons statement later to outline his plans for the PIP reforms to MPs.
When asked if the Government was still committed to its ‘Welfare Cap’ that puts an annual ceiling on benefit spending, the Prime Minister’s spokeswoman said: “Yes...The public want us to control the welfare budget."
In a further signal of how much the Treasury is now in retreat following days of Tory infighting, No.10 also revealed that the Government will not oppose Labour and SNP amendments on the 'tampon tax' and plans to hike VAT on solar panels.
When pressed on the disability reforms, Downing Street insisted that they would not now go ahead 'in their current form'.
"There have been a lot of concerns raised about that policy. The Prime Minister is a man who is prepared to listen to concerns," his spokeswoman said.
Allies of Mr Duncan Smith and Government loyalists clashed repeatedly this weekend as the aftershocks of the resignation continued.
In an explosive interview on the Andrew Marr Show, the former Work and Pensions Secretary had accused Mr Osborne of targeting the poorest with cuts because 'they don't vote for us'.
Tory MPs and ministers in the DWP attacked pensions minister Ros Altmann after she claimed Mr Duncan Smith was motivated by his desire for 'Brexit' rather than disability cuts.
Downing Street today said that Ms Altmann was speaking “in a personal capacity”