No further raid on welfare spending as charities welcome Government U-turn

New Work and Pensions Secretary Stephen Crabb has said there will be no further raid on welfare spending to fund the £4 billion black hole in the Budget left by the dramatic decision to abandon planned cuts to disability benefits.

Making his first appearance in the Commons since his appointment in the wake of the bombshell resignation on Friday of Iain Duncan Smith, Mr Crabb said there were “no further plans” for welfare savings beyond the Welfare Reform and Work Act.

“We won’t be seeking alternative offsetting savings and … we are not seeking further savings from the welfare budget,” he told MPs.

Earlier David Cameron sought to defend under-fire Chancellor George Osborne – insisting that he deserved the credit for turning round the economy.

He also sought to begin the process of healing the deep wounds opened up by the departure of Mr Duncan Smith, praising his welfare reforms and reaffirming his commitment to “compassionate Conservatism”.

However the Chancellor came under fire from Labour leader Jeremy Corbyn, who said the decision to abandon the planned cut to Personal Independence Payments (PIPs) had left an “enormous hole” in his Budget plans.

He called on Mr Osborne to come to the House to explain why “for the first time in my memory in Parliament, a Government’s budget has fallen apart within two days of its delivery”.

Mr Cameron played down Mr Osborne’s decision not to answer a Commons emergency question by shadow chancellor John McDonnell on the changes himself – leaving it to junior Treasury minister David Gauke – saying the Chancellor would wind up the Budget debate on Tuesday.

Earlier however Downing Street disclosed that Mr Osborne would not now be bringing forward alternative measures to meet the shortfall left by the cancellation of the cuts to PIPs until the Autumn Statement at the end of the year.

Mr Cameron also sought to defuse a damaging backbench revolt, confirming that ministers would not seek to oppose amendments to the Budget on the so-called “tampon tax” and VAT on solar panels.

Some Tory Eurosecptic MPs had signalled they intended to vote with Labour in an attempt to embarrass the Government over the role of the European Union in setting VAT rates ahead of the referendum on June 23.

However the Prime Minister’s official spokeswoman said EU leaders had now agreed that VAT could be scrapped on women’s sanitary products while the amendment on solar panels simply confirmed the current position while consultations were ongoing.

While Mr Cameron was reportedly furious over the way that Mr Duncan Smith resigned, there was no hint of anger with his former colleague as he paid tribute to the “enormous contribution” he had in six years in charge of welfare policy.

He nevertheless sought to reject Mr Duncan Smith’s most damaging charge that he and Mr Osborne had sought to balance the books at the expense of the poor, insisting it was only possible to improve the life chances of the least well off if the economy was strong.

“Without sound public finances you end up having to raise taxes or make even deeper cuts in spending. You don’t get more opportunity, you get less and it’s working people who suffer,” he said.

“So we must continue to cut the deficit, control the cost of welfare, and live within our means. We will continue with this approach in full because we are a modern, compassionate, One Nation Conservative Government.”

While Mr Crabb said it would be “absurd” rule out any further welfare changes, he told MPs: “I can confirm that, 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.”

Mr Duncan Smith’s resignation was particularly explosive as it came amid a highly-charged debate within the party over the EU referendum with Mr Cameron and Mr Duncan Smith on opposite sides of the party.

Eurosceptic former cabinet minister Peter Lilley sought to link the two issues, warning: “The British people will not take kindly to the idea that we must cut benefits to vulnerable people in order to hand over every penny to the EU.”

His intervention underlined the difficultly Mr Cameron faces in bringing the two sides of his warring party together again once the referendum is over.

His former leadership rival David Davis – who like Mr Duncan Smith backs Leave – said the row had damaged Mr Osborne’s chances of succeeding him as Prime Minister.

“If the leadership election were to be in the next six months I think he’d be sunk without trace. It doesn’t kill him for ever, but I think at the moment it is quite harmful,” he said.

Tory former health and social security secretary Lord Fowler criticised the role played by spin doctors and briefers in the war of words between Mr Osborne and the former minister.

Sitting next to ex-chancellor of the exchequer Lord Lawson of Blaby as the welfare statement was repeated in the upper house, Lord Fowler said: “Surely, we should remember that it has always been the case there has been tension between any social security secretary and any chancellor of the exchequer – and there have been rougher chancellors than this one.

“In the future it might be better to sort out differences, as we did, without the intervention of the spin doctors and anonymous briefers.”

Pensions Minister Lord Freud replied: “I do accept his point that George Osborne is a pussy cat compared with some previous chancellors sitting not very far from me.”

The Minister then heaped praise on Mr Duncan Smith.

“He was a remarkable champion for reform. I say it with feeling, there is a reason that no one transformed the system for the last 70, 80 years, and that is because it is very difficult to do.

“And he had the political guts to get on and do it, and I am very proud to have supported him and got the programme as far as it has gone, so I think he will go down in history for that achievement,” Lord Freud said.

Charities welcome Government U-turn on cuts to welfare budget

Disability charities welcomed the Government’s U-turn over planned cuts to the Personal Independence Payment (PIP) and the surprise announcement that there are “no plans” for a further raid on the welfare budget.

Stephen Crabb confirmed the plan to cut £1.3 billion a year by imposing tighter conditions on PIPs had been dropped and told MPs the Treasury would not make up the money through alternative benefits cuts.

Mr Crabb was making his first Commons appearance as Work and Pensions Secretary following Iain Duncan Smith’s resignation in protest at the way the Treasury had insisted on targeting benefits at the same time as cutting taxes for the better-off.

Mark Atkinson, chief executive of disability charity Scope said: “We welcome the Government’s decision not to go ahead with previously planned changes to PIP.

“Life costs more if you are disabled and these extra costs make it extremely hard for disabled people to pay the bills.

“It has been a worrying time for many disabled people. We are taking on extra helpline staff to deal with the increase in calls about benefits and finance.

“Disabled people will be relieved that the new Secretary of State used his first speech to confirm that there are no plans to make further welfare cuts and that he would like to start a new conversation with disabled people.”

Michelle Mitchell, chief executive of the MS Society, said: “This will be a huge relief for thousands of people who rely on PIP for vital support to live independently and with dignity.

“We hope this marks a watershed moment in Government welfare policy. We embrace Stephen Crabb’s invitation for a new conversation: this is an opportunity to fundamentally rethink disability benefit assessments and design a system that makes sense.

“We urge the minister to stick to his commitment that the Government will not give with one hand and take with another. Support for disabled people must be protected from further savings.”

Mencap’s head of policy Dan Scorer said: “Today’s welcome decision not to proceed with hugely damaging cuts to PIP may be long overdue recognition by the Government that disabled people and their families have already endured massive cuts to benefits and care services they rely on.

“However, many people with a learning disability in future stand to lose £1,500 a year from cuts to Employment and Support Allowance and Universal Credit that the Government forced through parliament earlier this month. This is on top of £4.6 billion worth of funding cuts to social care in the past five years, which has reduced disabled people’s access to vital support, pushing them to the fringes of society.

“The decision to go back on cuts to PIP will be a huge relief to hundreds of thousands of disabled people across the UK, who time and again have been hit hardest by cuts to the benefits and social care they rely on, but it doesn’t go nearly far enough. We urge the Government to focus instead on improving support necessary so that people with a learning disability can find employment, be part of their communities and live independent and fulfilling lives.

“We look forward to hearing from the Government on how they will deliver Stephen Crabb’s commitment to listen to disabled people and their families about the changes they want to see.”

Torsten Bell, director of the Resolution Foundation think tank said: “This is welcome news if it means the government has ruled out low-and-middle income families being asked to make-up the £4bn shortfall from the U-turn on disability benefit cuts through further reductions to in-work support.

“But very significant cuts to Universal Credit are already due to take place over the course of the parliament. These cuts will reduce how much work pays for millions of families and leave some thousands of pounds out of pocket.

“If meaningful, today’s announcement also further reduces the flexibility the Chancellor has to respond to any further deterioration in the public finances. Tax rises, further departmental spending cuts, or rethinking the scale of any surplus, would have to take the strain instead. The first port of call should be reversing recent tax cuts that disproportionately benefit the richest households.”

Child Poverty Action Group Policy Director Alison Garnham said reversing the cuts to Universal Credit would be the next priority.

She said the cuts to work allowances – the amount people can earn before their Universal Credit starts to be withdrawn – announced last year “will make it harder for low income families to get better off by earning more, hitting the incomes of working families in much the same way as the now abandoned plans to cut the thresholds for tax credits”.

“Very soon, a rethink of Universal Credit cuts must be a priority.”

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