Monday 26 September 2016

Cameron backs Osborne as resignation row deepens

Dean Gray in London

Published 22/03/2016 | 02:30

British Prime Minister David Cameron leaving Downing Street after being forced to defend his finance minister George Osborne. Photo: Hannah McKay/Reuters
British Prime Minister David Cameron leaving Downing Street after being forced to defend his finance minister George Osborne. Photo: Hannah McKay/Reuters

THE British Labour Party last night attempted to turn up the heat on prime minister David Cameron as he was forced to insist that he “absolutely” backs his finance minister after a senior minister quit over Budget cuts.

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Mr Cameron was engaged in desperate moves to try to unite an increasingly divided party.

Yesterday, Labour insisted that Chancellor George Osborne’s Budget was in “absolute chaos” and should be withdrawn.

Shadow chancellor John McDonnell was asking an urgent question about changes to the Budget including the decision to shelve disability benefit cuts.

The cuts led to the resignation of work and pensions secretary Iain Duncan Smith with a furious attack on the government.

Treasury Minister David Gauke said more was being spent on disabled benefits.

Spending on Personal Independence Payments (PIPs) was up by £3bn since 2010, he said, adding that the Budget “closes the gap between rich and poor and North and South”.

He said details of how the cash that had been earmarked from the benefit cuts would be recovered would be revealed in the Autumn statement from the exchequer later in the year.

Labour has called on Mr Osborne to resign following Mr Duncan Smith’s departure and the furore over the PIP cuts, but Downing Street says the chancellor has the full confidence of the prime minister.

Mr McDonnell said Mr Osborne’s absence from the Commons chamber “insults this House” and that Mr Gauke had been left to “defend the indefensible”.

He said he agreed with Mr Duncan Smith in his criticism of the decision to include Capital Gains Tax cuts alongside the disability benefit reforms in last week’s Budget, which the former work and pensions secretary said showed “we are not all in this together” as the government has repeatedly stated.

Mr McDonnell said there was now “an enormous hole” in the Budget as a result of the cuts being shelved, calling on the government to “withdraw this Budget and start again”.

He added: “This is no way to deliver a Budget and no way to manage an economy.”

Mr Gauke said the chancellor would be in the chamber for today’s Budget debate, and said Labour was not in a position to comment on “black holes” in Budgets.

Mr Cameron was left “puzzled and disappointed” on Friday when senior minister and former leader of the Conservative Party, Iain Duncan Smith, resigned his post over cuts to disability benefits which were outlined in finance minister George Osborne’s Budget last week.

The sudden departure of Duncan Smith not only widened divisions in the ruling party, split over whether to stay in the European Union, but also prompted calls from the opposition Labour Party for Osborne to step down.

Asked whether Mr Cameron had complete confidence in Osborne, the prime minister’s spokeswoman told reporters: “Absolutely.”

“We’ve faced ... tough decisions about how the country lives within its means and he (Mr Cameron) has worked very closely with the Chancellor and other ministers on that to date, and will continue to do so.”

She said Cameron would no longer pursue the cuts to disability benefits, meaning a loss for the Budget of stg£4.4bn (€5.6bn).

Osborne, once seen as a frontrunner to succeed Mr Cameron, will outline how he will fill that hole in the Autumn statement, she said, referring to one of two statements, usually held

in October, when the government makes its economic forecasts.

“The Chancellor has already said that he is looking at this issue and, yes, we will set out our approach at the Autumn statement,” she said.

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