Cameron appoints Stephen Crabb after Iain Duncan Smith resigns over disability cuts
David Cameron has moved to shore up his Cabinet team after Iain Duncan Smith quit as work and pensions secretary and launched an all-out attack on "indefensible" Budget cuts.
Stephen Crabb is to take over from Mr Duncan Smith, while Alun Cairns has been promoted to the role of Welsh Secretary.
In a brutal parting shot last night, Mr Duncan Smith complained that curbs to disabled benefits in George Osborne's financial package were politically driven and the Chancellor had undermined the principle of "all in this together".
The rift, which erupted with Tory tensions running high over the EU referendum, could escalate even further with the disgruntled ex-minister due to appear on the BBC's Andrew Marr show tomorrow.
In his resignation letter to the Prime Minister, Mr Duncan Smith wrote: "I have for some time and rather reluctantly come to believe that the latest changes to benefits to the disabled and the context in which they've been made are a compromise too far.
"While they are defensible in narrow terms, given the continuing deficit, they are not defensible in the way they were placed within a Budget that benefits higher earning taxpayers. They should have instead been part of a wider process to engage others in finding the best way to better focus resources on those most in need.
"I am unable to watch passively whilst certain policies are enacted in order to meet the fiscal self-imposed restraints that I believe are more and more perceived as distinctly political rather than in the national economic interest."
Mr Duncan Smith has been at loggerheads with Mr Cameron and Mr Osborne over whether Britain should stay in the EU, joining a handful of other Cabinet ministers in calling for Brexit.
But his letter to the Prime Minister indicated that the row over cuts to the Personal Independence Payment (PIP) had been the final straw. His announcement came just hours after the Treasury signalled a humiliating climbdown over the plans to change PIP assessment criteria, which were expected to slash around £1.3 billion a year off the cost. Government sources said they wanted to kick the proposals - initially announced by the Department for Work and Pensions last week - "into the long grass" and were not "wedded" to the savings figures featured in the Budget.
It is not clear whether the briefing was an abortive effort to persuade Mr Duncan Smith to stay, but allies pointed out that he still faced finding equivalent savings from working age benefits.
Mr Osborne also retreated on two other Budget issues that ran into strong opposition from Tory backbenchers - promising legislation next week to abolish the so-called "tampon tax" and ruling out higher VAT on solar panels and energy efficiency equipment.
In his letter responding to Mr Duncan Smith, Mr Cameron said he was "puzzled and disappointed" by the decision.
"I regret that you have chosen to step down from the Government at this moment," he said.
"Together we designed the Personal Independence Payment to support the most vulnerable and to give disabled people more independence. We all agreed that the increased resources being spent on disabled people should be properly managed and focused on those who need it most.
"That is why we collectively agreed - you, No 10 and the Treasury - proposals which you and your department then announced a week ago. Today we agreed not to proceed with the policies in their current form and instead to work together to get these policies right over the coming months.
"In the light of this, I am puzzled and disappointed that you have chosen to resign."
Labour leader Jeremy Corbyn has demanded that Mr Osborne follow Mr Duncan Smith's example and resign.
Mr Crabb posted on Twitter: "A privilege to be appointed new Work & Pensions Secretary this morning. Looking forward to working with my new team."
Downing Street said Guto Bebb would take Mr Cairns' previous job as junior minister at the Wales Office and government whip, which was unpaid.
Mr Duncan Smith has been holed up at his father-in-law's house in Buckinghamshire, with wife Betsy telling reporters he would not be making any further statements.
However, he did smile and wave to the waiting media through a window.
Employment minister Priti Patel paid tribute to Mr Duncan Smith as a "great social reformer".
"Since coming to office in 2010, he has made a real difference to the life chances of people throughout the country by reforming the welfare system to ensure that work always pays," she said.
"The Budget has shown that this Conservative Government are delivering on our commitments to provide security for working families.
"We are letting people keep more of the money that they earn by taking low-paid workers out of tax, increasing salaries through introducing the National Living Wage and supporting people on low incomes to save.
"I look forward to continuing to play my part as Minister for Employment in transforming people's life chances by working closely with the incoming Secretary of State for Work and Pensions and the Chancellor of the Exchequer."