Iain Duncan Image Credit: AFP

London: A former leader of Britain’s Conservative Party, Iain Duncan Smith, resigned from the Cabinet on Friday over proposed cuts to welfare payments, dealing a significant and unexpected blow to Prime Minister David Cameron.

Duncan Smith, the work and pensions secretary, said in a statement that he was quitting over planned changes in benefits for disabled people that were announced Wednesday in a budget statement by the chancellor of the Exchequer, George Osborne.

Duncan Smith’s departure underscores the deep tensions within the government before a referendum scheduled for June 23 on whether Britain should leave the European Union.

While Cameron and Osborne want Britain to remain in the 28-nation bloc, Duncan Smith is one of several Cabinet ministers who want the country to quit the union.

Relations between Duncan Smith and Osborne are thought to have been strained for some time, but the issue that provoked the resignation arose from Wednesday’s budget statement, when limits on disability benefits were announced to help meet the government’s deficit-reduction plans.

Earlier Friday, there were clear indications that the government was retreating from the proposed cuts in the face of growing opposition in Parliament, but that failed to prevent Duncan Smith’s departure.

“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,” Duncan Smith said in a resignation letter.

He added that while such reductions were “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.”

“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,” Duncan Smith wrote.

In response, Cameron said a decision had been made early Friday “not to proceed with the policies in their current form and instead to work together to get these policies right over the coming months.”

“In the light of this, I am puzzled and disappointed that you have chosen to resign,” Cameron added.

Though the government insisted that overall spending on disability benefits would grow, the changes outlined Wednesday suggested an eventual savings of more than 4 billion pounds (about $5.7 billion) in disability benefits offered to about 640,000 people. At the same time, Osborne outlined plans to reduce corporate taxes and the capital gains tax.

The leader of the opposition Labour Party, Jeremy Corbyn, said the resignation revealed “a government in disarray and a chancellor who has lost the credibility to manage the economy in the interests of the majority of our people.”

“The budget has exposed George Osborne’s record of profound unfairness and economic failure,” Corbyn said in a statement.