Philip Hammond fails to deny Cabinet split over tax credits

Philip Hammond has failed to deny a Cabinet split over the Chancellor’s plans to cut tax credits for millions of families by the end of the year.

Ian Duncan Smith, the Work and Pensions Secretary, is reportedly battling against George Osborne's plans to raid his department's Universal Credit benefit, as a means of reducing the scale of the cuts to tax credits.

Sources have suggested Mr Duncan Smith could resign if he is forced to compromise on his universal credit reforms in the spending review later this month.

Asked on the BBC1's Andrew Marr Show if there was a possibility of a Cabinet resignation, the Foreign Secretary replied, "I don’t think so."

Speaking on Sunday morning he said: "We all have robust discussions with the Chancellor. That's the nature of the way government works.

"Of course people fight their corner and of course people seek to sway the agenda in one way or another.

Last month the Conservatives were left furious after Labour and Liberal Democrat peers voted to halt George Osborne’s controversial cuts to tax credits.

"But I think every single one of my Cabinet colleagues would agree that the number one task in front of us is eliminating the deficit and getting Britain's economy on an even keel for the future."

The Chancellor’s reform to tax credits will see 3.3 million families lose an average of £1,300 next year.

Mr Duncan Smith's tough stance is being supported by the former environment secretary Owen Paterson.

Mr Paterson said: "It is completely unacceptable for the Treasury to try to get out of the tax credits muddle by wrecking the universal credits benefits reforms which have been one of the Government's great successes."