Iain Duncan Smith arrives in Downing Street on September 5, 2012. Photograph: Getty Images.
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How Duncan Smith's departure would help Osborne

The pair are divided over where future welfare cuts should be made.

Is Iain Duncan Smith set to resign his post in next Monday's reshuffle? Westminster has been abuzz with speculation all day after a commuter wrote on Facebook that she overheard a "20 something brunette, with a very posh voice" remark on a train to London that "someone called Ian [sic] is leaving the DWP (apparently he wants to go and has agreed to go)." Rumour links Duncan Smith with a move to Defence as part of what the BBC's James Lansdale reports will be a "far wider reshuffle" than initially thought. 

It's worth recalling that the Work and Pensions Secretary previously turned down the offer of Justice in the 2012 reshuffle in order to "see through" the reforms he had started (albeit with little success since). One person who pushed for his departure then was George Osborne. As Matthew d'Ancona's In It Together revealed, the Chancellor believes that Duncan Smith is "just not clever enough". He has long been sceptical of his grand plan to transform the welfare system, Universal Credit (involving the merger of six benefits into one), fearing that the costs will outweigh any gains (hence why the Treasury still hasn't signed off the business case for it). To date, the DWP has written off £40.1m of assets developed for the programme and expects to write down a further £91m by March 2018, prompting the National Audit Office to warn that it has has "not achieved value for money". 

The pair previously clashed over Osborne's announcement at the 2010 Conservative conference that child benefit would be removed from high-earners, which Duncan Smith was not briefed on in advance and which he regarded as a punitive raid on families.

Further disagreement has come over post-2015 welfare cuts. While Osborne is committed to achieving £12.5bn of savings through further reductions to working-age benefits (in addition to the £21.5bn already announced), Duncan Smith believes that "you can’t keep hacking at the same people" and that wealthy pensioners cannot remain exempt from austerity. He would like to see universal payments such as the Winter Fuel Allowance, free TV licences and free bus passes means-tested in order to achieve a more "balanced" approach. But dismissing the prospect of cuts, Osborne has stated that pensioner benefits are "not where you need to make the substantial savings required". Another consideration is the electoral importance of the over-65s (the age group most likely to vote) and the risk that a raid on their benefits would allow Ukip to outflank the Tories by promising to safeguard all payments. 

Ahead of negotiations over the Conservative manifesto, then, the departure of Duncan Smith from the DWP, and his replacement with a more compliant figure, would help Osborne to secure the welfare policies he wants. 

George Eaton is political editor of the New Statesman.

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PMQs review: Theresa May shows how her confidence has grown

After her Brexit speech, the PM declared of Jeremy Corbyn: "I've got a plan - he doesn't have a clue". 

The woman derided as “Theresa Maybe” believes she has neutralised that charge. Following her Brexit speech, Theresa May cut a far more confident figure at today's PMQs. Jeremy Corbyn inevitably devoted all six of his questions to Europe but failed to land a definitive blow.

He began by denouncing May for “sidelining parliament” at the very moment the UK was supposedly reclaiming sovereignty (though he yesterday praised her for guaranteeing MPs would get a vote). “It’s not so much the Iron Lady as the irony lady,” he quipped. But May, who has sometimes faltered against Corbyn, had a ready retort. The Labour leader, she noted, had denounced the government for planning to leave the single market while simultaneously seeking “access” to it. Yet “access”, she went on, was precisely what Corbyn had demanded (seemingly having confused it with full membership). "I've got a plan - he doesn't have a clue,” she declared.

When Corbyn recalled May’s economic warnings during the referendum (“Does she now disagree with herself?”), the PM was able to reply: “I said if we voted to leave the EU the sky would not fall in and look at what has happened to our economic situation since we voted to leave the EU”.

Corbyn’s subsequent question on whether May would pay for single market access was less wounding than it might have been because she has consistently refused to rule out budget contributions (though yesterday emphasised that the days of “vast” payments were over).

When the Labour leader ended by rightly hailing the contribution immigrants made to public services (“The real pressure on public services comes from a government that slashed billions”), May took full opportunity of the chance to have the last word, launching a full-frontal attack on his leadership and a defence of hers. “There is indeed a difference - when I look at the issue of Brexit or any other issues like the NHS or social care, I consider the issue, I set out my plan and I stick to it. It's called leadership, he should try it some time.”

For May, life will soon get harder. Once Article 50 is triggered, it is the EU 27, not the UK, that will take back control (the withdrawal agreement must be approved by at least 72 per cent of member states). With MPs now guaranteed a vote on the final outcome, parliament will also reassert itself. But for now, May can reflect with satisfaction on her strengthened position.

George Eaton is political editor of the New Statesman.