Labour tells George Osborne to scrap his Budget and start again after £4 billion 'hole' appears in it

The Government has made a number of changes to the Budget just days after it was announced

Labour's shadow chancellor John McDonnell (House of Commons)

George Osborne should withdraw his Budget after leaving a chaotic “hole” in the public finances, Labour has said.

As well as a major U-turn on steep cuts for disability benefits, the Government has said it will not oppose a number of Labour amendments on issues including the so-called Tampon Tax and VAT on solar panels.

John McDonnell said there would be at least a £4.4 billion gap in the Budget’s Red Book if the disability benefit cuts were cancelled. He said it would thus be “prudent” for the Chancellor to withdraw his Budget and start again.

George Osborne has made significant changes to his Budget (Getty Images)

“The Budget process is in absolute chaos,” he said. “It is unprecedented for a Government to have withdrawn a large part of its Budget and accepted two opposition amendments before it even reached the third day.

“If the Chancellor halts the attack on disabled people a £4.4 billion hole is created in the Budget. At to this the billions of unidentified cuts and the amendment on Tampon Tax and solar panels we have won today – within five days an enormous hole has appeared in the Budget.

“Isn’t it the prudent thing for the Chancellor to do to withdraw this Budget and start again. This is no way to deliver a Budget and no way to manage an economy.”

The Treasury minister did not directly answer the question but stood by the Budget.

“Does the shadow chancellor really want to talk about fiscal black holes? Does he really want to do that?” he said.

“It’s a Budget that continues [Britain’s] economic recovery, a Budget that takes us into surplus by the end of this parliament,” he said.

Following the statement Labour leader Jeremy Corbyn said Mr Osborne should come to the House of Commons to defend his Budget or that David Cameron should sack him.

David Cameron told MPs: “We must continue to cut the deficit, control the cost of welfare, and live within our means. We must not burden our children and their children with debts we didn’t have the guts to pay off in full.”

He said the Budget would “strengthen the economy and make sure we have a fairer society”.

MPs will vote on the Budget as a whole on Tuesday.