Iain Duncan Smith has resigned as work and pensions secretary in protest at the scale of disability cuts made in George Osborne's Budget, saying they are a "compromise too far" and throwing the government into chaos ahead of the EU referendum.
The work and pensions secretary, who has been in the job for almost six years and implemented some of the government's most controversial reforms, quit on Friday night saying he could no longer support further reductions in the welfare budget.
Although Duncan Smith said he was "incredibly proud" of his record in government, he said he was "unable to watch passively whilst certain policies are enacted in order to meet the fiscal self imposed restraints" set by the chancellor.
Duncan Smith's resignation letter was a sustained and damning attack on Osborne's economic policy which could cause serious damage to a man who was already under sustained attack from Tory backbenchers over plans to remove the personal independence payment from hundreds of thousands of disabled people.
David Cameron said he was "puzzled and disappointed" by the resignation and insisted his former cabinet colleague had agreed to the cuts before changing his mind.
On Friday morning the government was officially insisting it would persist with the cuts but by mid-afternoon they were preparing for a U-turn after realising the scale of the Conservative backbench revolt. By the evening the government was briefing journalists that it intended to delay the £1.3bn cut to disability payments and kick them "into the long grass" when Duncan Smith shocked Westminster by quitting.
"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," he said in his strongly-worded resignation letter.
"Too often my team and I have been pressured in the immediate run up to a budget or fiscal event to deliver yet more reductions to the working age benefit bill. There has been too much emphasis on money saving exercises and not enough awareness from the Treasury, in particular, that the government's vision of a new welfare-to-work system could not be repeatedly salami-sliced."
He also finished with an attack on Osborne: "I hope as the government goes forward you can look again, however, at the balance of the cuts you have insisted upon and wonder if enough has been done to ensure 'we are all in this together'."
Labour leader Jeremy Corbyn responded to the letter by calling on Osborne to "follow the honourable course taken by Iain Duncan Smith and resign".
"The Budget has exposed George Osborne’s record of profound unfairness and economic failure," he said. "Not only must the cuts to support for disabled people be abandoned, but the Government must change economic course. The Chancellor has failed the British people."
Although Duncan Smith said he was resigning over the latest cuts, he is a leading campaigner against the EU and it was thought he would struggle to have stayed in his job regardless of the result in June's referendum, raising suggestions he chose to quit in order to cause the maximum damage ahead of the vote.
In particular suspicions have been raised by how his own department announced the disability cuts seven days ago but it took until Tory MPs were in open rebellion – and the government had already indicated its intention to change direction – for Duncan Smith to formally resign.
Osborne is also known to have long held concerns over Duncan Smith's flagship universal credit scheme, leading to frosty relations between the pair. This resignation has ended the former work and pensions' secretary cabinet career but it may have caused even more longterm damage for the chancellor.
Read Iain Duncan Smith's resignation letter in full:
I am incredibly proud of the welfare reforms that the Government has delivered over the last five years. Those reforms have helped to generate record rates of employment and in particular a substantial reduction in workless households.As you know, the advancement of social justice was my driving reason for becoming part of your ministerial team and I continue to be grateful to you for giving me the opportunity to serve. You have appointed good colleagues to my department who I have enjoyed working with. It has been a particular privilege to work with with excellent civil servants and the outstanding Lord Freud and other ministers including my present team, throughout all of my time at the Department of Work and Pensions.
I truly believe that we have made changes that will greatly improve the life chances of the most disadvantaged people in this country and increase their opportunities to thrive. A nation's commitment to the least advantaged should include the provision of a generous safety-net but it should also include incentive structures and practical assistance programmes to help them live independently of the state. Together, we've made enormous strides towards building a system of social security that gets the balance right between state-help and self-help.
Throughout these years, because of the perilous public finances we inherited from the last Labour administration, difficult cuts have been necessary. I have found some of these cuts easier to justify than others but aware of the economic situation and determined to be a team player I have accepted their necessity.
You are aware that I believe the cuts would have been even fairer to younger families and people of working age if we had been willing to reduce some of the benefits given to better-off pensioners but I have attempted to work within the constraints that you and the Chancellor set.
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. Too often my team and I have been pressured in the immediate run up to a budget or fiscal event to deliver yet more reductions to the working age benefit bill. There has been too much emphasis on money saving exercises and not enough awareness from the Treasury, in particular, that the government's vision of a new welfare-to-work system could not be repeatedly salami-sliced.
It is therefore with enormous regret that I have decided to resign. You should be very proud of what this government has done on deficit reduction, corporate competitiveness, education reforms and devolution of power. I hope as the government goes forward you can look again, however, at the balance of the cuts you have insisted upon and wonder if enough has been done to ensure "we are all in this together".