George Osborne to defend Budget ahead of Common vote

He will confirm he has dropped planned cuts to disability benefits – and praise Iain Duncan Smith, who resigned as work and pensions secretary over what he called “indefensible” changes.

The chancellor is under pressure 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Labour said Mr Osborne should resign and the Budget should be withdrawn.

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.

The BBC reports that the chancellor is expected to say – when he opens the debate at about 12:30 – 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”.

He will say it delivered on the Conservative manifesto commitment to “economic security, controlling public spending and lower taxes for working people and business”.

“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.

After listening to concerns, he will not proceed with changes to PIPs, he will say.

“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.”

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”.

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”.

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.

Cameron defence

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 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.