How one resignation letter sent the Conservative party into open warfare
The Budget was the final straw for IDS after years of frustration over Europe and George Osborne
AT 5.45pm on Friday afternoon David Cameron was relaxing into his flight back from Brussels, reflecting on a tense but ultimately successful summit with his fellow European Union leaders.
He had just scored a valuable victory to overturn EU rules imposing tax on sanitary products, averting a rebellion from his own Tory MPs.
The Prime Minister did not know that at that moment an official limousine was pulling into Downing Street, carrying a single document that would blow apart his government’s Budget and engulf him in perhaps the gravest crisis of his career.
The driver of the ministerial car was charged with delivering one letter, marked for the attention of the Prime Minister. It was from the Work and Pensions Secretary, Iain Duncan Smith, announcing his resignation with immediate effect.
Inside the sealed envelope was a devastating critique of the Chancellor and Prime Minister, for pursuing a “distinctly political” agenda of cuts to benefits for the disabled.
Mr Duncan Smith said he could not defend the cuts and would, therefore, be leaving Mr Cameron’s government, of which he had been a key member since 2010.
When Mr Cameron’s plane touched down at Northolt in north-west London, he was immediately informed of his minister’s decision. Shocked, he rang Mr Duncan Smith from the back of the car as his prime ministerial mo- torcade sped back to Downing Street. “I don’t understand why you’re so upset about this,” Mr Cameron said. “If you do this it will be hugely damaging to us.”
The Work and Pensions Secretary, who was at home in Milton Keynes with his wife Betsy, was clear. He could not support cutting disability benefits at the same time as handing tax breaks to the wealthy.
“What can we do to make you reconsider?” the Prime Minister asked.
“I don’t want anything,” Mr Duncan Smith replied. “This is not a bargaining chip, it’s my resolved position.”
Mr Duncan Smith’s bolt from the blue clearly angered Mr Cameron. “I am the Prime Minister,” he said. “The least you could have done is come to see me to discuss this.” Back in Downing Street, the Prime Minister held crisis talks with his aides before calling Mr Duncan Smith a second time. But this conversation, at around 7pm, was short. Mr Duncan Smith told him that he would not travel in to Westminster to discuss the issue face to face, and would not be reconsidering his decision. A furious Prime Minister told Mr Duncan Smith he was “behaving dishonourably” and ended the call.
Mr Cameron was losing one of his most experienced Cabinet ministers, a euro-rebel, and a former Conservative leader revered by many Tory MPs. It was the first resignation Mr Cameron has suffered from a Cabinet minister furious at his own government’s policy.
The pledge
Mr Duncan Smith’s bombshell shocked Mr Cameron. But the origins of this crisis can be traced back three years, to January 2013, and the Prime Minister’s speech at Bloomberg’s London headquarters in which he bowed to pressure from his own MPs and pledged to hold an “in/out” EU referendum.
The short-term benefit was to unite his own party behind the mantra of giving the voters a say on Britain’s relationship with Europe. It kept the Tories together in the face of a surge of support for the UK Independence Party and helped them deliver a majority in last year’s general election.
But even while Tories celebrated their surprise victory last May, Eurosceptic MPs began plotting their campaign against Mr Cameron to persuade the public to vote to leave the EU.
In recent weeks ministers have warned privately that Tory MPs are now ungovernable, that they are ready to rebel over anything, all because they have been emboldened by the fight with the leadership over Europe.
Mr Cameron’s decision to give ministers the freedom to campaign publicly against him and in favour of leaving Europe has done little to calm Tory tempers. Many MPs resent what they see as Mr Cameron’s cynical and unfair attempt to rig the referendum campaign in favour of remaining in the EU.
Iain Duncan Smith was at the centre of the plotting. Rebel ministers would meet in his large Commons office to plan how the Leave campaign would be fought.
Mr Cameron’s allies claim that Mr Duncan Smith – known widely by his initials “IDS” – is “obsessed” by Europe, suggesting it is the referendum, not the benefit cuts, that have led him to leave the Cabinet, a claim that Mr Duncan Smith’s supporters flatly reject.
Anyone but George
Mr Cameron made a second mistake that has undermined his authority. On the eve of last year’s general election, he told a television interviewer that he would not be standing for re-election for a third term.
“Terms are like Shredded Wheat – two are wonderful but three might just be too many,” he quipped.
It marked the unofficial, unplanned, and certainly unwise, start of the next Tory leadership contest.
In the same interview, Mr Cameron named his closest friend in the Commons, George Osborne, as a potential successor, along with his great rival, Boris Johnson, and Theresa May, the Home Secretary.
At Westminster, Mr Cameron’s clear support for Mr Osborne as his chosen heir has irritated MPs.
Despite the Chancellor’s promotion of his allies as ministers and his own promotion to become the PM’s official deputy, as First Secretary of State, Mr Osborne’s reputation as a brilliant political schemer has been severely tarnished in the fall-out.
With a tiny Commons majority of just 17, the Government has faced a series of defeats at the hands of its own MPs, and Mr Osborne has become the chief target for the rebels.
MPs, including Cabinet ministers, were dismayed last autumn over Mr Osborne’s handling of his plan to cut tax credit payments to working people. He was ultimately defeated and forced to scrap the cuts, with the result that the Government broke its own self-imposed cap on overall welfare spending.
One minister said: “There is a sizeable group who do not want George as the next leader and have a clear aim of defeating him whenever they can.”
The Chancellor was beaten by rebels on his own side into abandoning ambitious reforms to pensions, which would have radically cut tax relief for middleclass savers. “I want to be a big reformer. I want to be radical. Everybody tells me I have to be radical at the beginning
‘There is a sizeable group who do not want George as the next leader and have a clear aim of defeating him whenever they can’
of the Parliament,” he confided to friends at the time.
But the Tory rebellion over pension reforms resulted in him promising to leave the tax incentives untouched at the Budget this month.
Just a week before his Budget statement, Mr Osborne suffered a further defeat over moves to relax Sunday trading laws to allow large shops to open for longer. Some 25 Tory MPs rebelled and yet another of the Chancellor’s cherished reforms had to be scrapped.
Welfare wars
Every year, Mr Osborne follows the same ritual when it comes to writing his Budget speech. He collects together all his briefing notes and official forecasts and shuts himself in his study. There, alone with his thoughts, he begins to write his Budget statement.
But, at 1.15pm last Sunday afternoon, with Westminster deserted but for a few tourists, the quiet and seclusion that Mr Osborne was expecting was shattered. As he sat at his desk, outside on Whitehall, Top Gear were filming stunts in a car – tyres screamed, and the smell of singed rubber filled the air.
But it was once his Budget was over that the real noise started. Scores of Conservative MPs drew up plans to rebel over the cuts to the Personal Independence Payments for 640,000 disabled people.
The cuts – which would save £1.3billion – were essential to Mr Osborne’s efforts to balance the nation’s books and control spiralling welfare costs.
But MPs warned the plan was unfair and had been so badly explained that they could not justify it to their own constituents.
Mr Osborne was facing yet another revolt and this time he was likely to be defeated on his own Budget, by the MPs he was hoping would one day elect him their leader. A frantic briefing operation began.
The disability benefit cuts were the final flashpoint in the “terrible” relationship between Mr Osborne and Mr Duncan Smith. The Chancellor recently confided to a colleague that he and the Work and Pensions Secretary “can’t bear each other” and that the situation was “a real problem”. Downing Street advisers, on Mr Cameron’s instructions, ordered Mr Duncan Smith to defend the benefit cuts far more strongly than they were doing.
Mr Duncan Smith and his aides had already raised concerns that the policy was being rushed through after they were told to draw up the plan in time for the Budget.
Now the Work and Pensions Secretary was being told to clear up the mess that he had warned Mr Cameron and Mr Osborne they were making, his allies said. Dutifully, Mr Duncan Smith wrote a letter to Tory MPs defending the policy.
Yet at the same time, Downing Street was letting it be known that the Prime Minister was not as wedded to the plan as Mr Duncan Smith appeared to be.
To Mr Duncan Smith, Number 10’s aim was clear: they wanted to make him publicly take ownership of the cuts, to “throw him to the wolves”. If he was seen as the driving force behind this policy, Mr Cameron and Mr Osborne could appear to be more reasonable, offering to “think again” about Mr Duncan Smith’s unpopular plan.
The scheming, over the course of Thursday and Friday, was the “straw that broke the camel’s back”, in the words of one of Mr Duncan Smith’s supporters. Within hours he had quit.
In one of the most explosive resignation statements of recent political history, Mr Duncan Smith signed off his letter to Mr Cameron with a devastating rebuke to his own party leader.
“I hope as the Government goes forward,” he said, “you can look again at the cuts you have insisted upon and wonder if enough has been done to ensure ‘we are all in this together’ ”.