Iain Duncan Smith's exit undermines George Osborne’s leadership hopes
Tory MPs line up to vent frustration at Mr Osborne’s failure to consult over a series of controversial measures
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Your support makes all the difference.George Osborne’s leadership hopes are dangling by a thread amid mounting Tory anger at the “disastrous” fallout from last week’s Budget, and widespread expressions of support for Iain Duncan Smith.
Tory ministers and MPs lined up to vent their frustration at Mr Osborne’s failure to consult over a series of controversial measures, including the proposed cuts to disability benefits which sparked Mr Duncan Smith’s shock resignation on late on 18 March.
However, allies of the Chancellor hit back at the former Work and Pensions Secretary – accusing him of being “intellectually not up to the job” and of quitting before the referendum to escape the blame for overseeing his department’s universal credit “fiasco”.
The explosive row exposes the depth of ill-feeling within the Tory party which has been exposed by the EU referendum campaign.
David Cameron moved quickly to replace Mr Duncan Smith with the loyalist Stephen Crabb, while Alun Cairns was promoted to Secretary of State for Wales. Many ministers were privately seething about Mr Duncan Smith’s behaviour, but there was widespread acceptance that Mr Osborne had been badly damaged by the row.
One former Tory leadership contender, David Davis, said: “It’s the third time. After the omnishambles and tax credits, now this. This won’t help the ‘George the master tactician’ myth.”
He added: “The problem has been brewing for six years. Iain kept being asked for large savings on very short notice. That often ends up causing a lot of misery for the people who are reliant on welfare.”
Mr Davis dismissed claims that the referendum was the real reason for the resignation. “Choosing to resign is a pretty painful decision. He would not have resigned for minor tactical advantages in the EU debate,” he said.
Friends of Boris Johnson have also made it clear they back Mr Duncan Smith. A source close to the Mayor of London said: “It was just too much for Iain. It’s certainly damaging for George and his future ambitions. What goes up must come down.”
One ministerial aide said that Mr Osborne’s position was “precarious”, comparing Mr Duncan Smith’s resignation letter to Geoffrey Howe’s 1990 speech which brought down Margaret Thatcher. The aide added that Mr Osborne could be forced to go within the next two weeks.
He added: “This has very badly damaged him [Mr Osborne]. The fact of the matter is lots of MPs were worried about PIP [the Personal Independence Payment] and nobody was listening to them.”
The resignation also means that Mr Osborne’s Finance Bill could be defeated this week. The Chancellor thought he had calmed a rebellion on an amendment over renewable subsidies – Labour is angry that the EU is trying to force VAT to be increased from 5 per cent to 20 per cent on solar panels.
Conservative Eurosceptics have signed up to this amendment, but it looked as though the rebellion had been crushed by Mr Osborne’s concession that he would make sure solar remained exempt from the higher rate.
However, Labour is pressing on with the amendment because Mr Osborne has not guaranteed that this exemption would be made permanent. A Labour source said about 20 Conservative MPs were now expected to rebel.
A Tory rebel said: “If you drew a Venn diagram of people who don’t like the EU and people who don’t like George it would be a circle.”
The rebellion should be enough to defeat the Government, which has a slender working majority of just 16. This would be the first Government defeat on a Finance Bill since 1994.
Rebecca Long-Bailey, the Labour MP who tabled the solar amendment, added: “We want proper legislative action to protect green jobs, and that’s what our amendment would allow, so unless the Government gives us cast-iron guarantees then it will stay on the order paper.”
Demonstrating the depth of division within the Tory party, the MP Stephen McPartland insisted that Mr Duncan Smith had “lost his way” and welcomed his resignation.
Mr Duncan Smith is understood to have threatened to resign on up to four previous occasions.
A pro-EU minister said: “He’s decided to quit rather than get pushed after the referendum. There was a feeling that intellectually he was not up to the job. But at the end of the day, the big loser in this is Osborne – this is going to damage him quite a lot.” A source close to the Prime Minister said Mr Cameron had been “surprised” by Mr Duncan Smith’s resignation, given that disability benefit cuts were not raised as an issue at the Budget Cabinet meeting.
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