The Scottish National Party is calling on David Cameron to “immediately and completely” scrap cuts to disability benefit announced in Wednesday’s budget following the resignation of Iain Duncan Smith.

Duncan Smith resigned as work and pensions secretary over the weekend citing pressure to make £4 billion of savings through changes to the Personal Independence Payment (PIP).

He added that the latest cuts to welfare were a “compromise too far” in a Budget that benefits higher earning taxpayers.

It is thought the proposals will see around 40,000 disabled people in Scotland worse off.

Social justice secretary Alex Neil has written to the UK government’s minister for disabled people to voice his opposition to the cuts which will wipe £130 million a year from disability benefits in Scotland.

The Chancellor’s Budget confirmed that up to 30,000 disabled Scots will not receive the daily living component of PIP and so will be £2,873 worse off a year. A further 10,000 will see a reduced amount of award which means they will be £1,418 worse off a year.

This will impact on access to wider support such as Carer’s Allowance and free bus travel leaving people isolated and excluded.

PIP is one of the disability benefits which is set to be devolved under the Scotland Bill.

Stewart Hosie MP, economy spokesperson and deputy leader of the SNP, said the issue must not distract people from the real issue of cuts to the welfare and disability budget.

He said: “Iain Duncan Smith’s crocodile tears are a distraction from the real issue at hand – while the deep divisions at the top of the Tory party widen and the mud-slinging continues, disabled people and those on low-incomes are still expected to bear the brunt of the Tories’ obsession with austerity.

“The UK government was warned that slashing £12bn from the welfare budget would do real and lasting harm but the Tories are determined to plough on, cutting even more from the disability budget. What this resignation proves beyond doubt is that the Tories’ must abandon their ideological commitment to austerity cuts.

“David Cameron and George Osborne must immediately and completely scrap these cuts.”

Dr Eilidh Whiteford MP, SNP spokesperson on social justice and welfare, added: “Iain Duncan Smith’s resignation proves beyond doubt how wedded the Tories are to austerity as a political choice, and how far they are willing to go to balance the budget on the backs of disabled and disadvantaged people.

“If the latest cuts to disability support are too much for Iain Duncan Smith, the architect of the bedroom tax, it shows the Tories need to rethink their whole approach to welfare reform, and abandon their ideological commitment to austerity cuts.

“Disabled people must not be made to pay the price of politically driven austerity or Conservative civil war over Europe.

“David Cameron must take control of his divided government and confirm that these reckless and poorly thought-out cuts - the latest in a long line of cuts to disability support - will be scrapped completely.”

Iain Duncan Smith’s resignation letter in full:

I am incredibly proud of the welfare reforms that the government has delivered over the last five years. Those reforms have helped to generate record rates of employment and in particular a substantial reduction in workless households.

As you know, the advancement of social justice was my driving reason for becoming part of your ministerial team and I continue to be grateful to you for giving me the opportunity to serve. You have appointed good colleagues to my department who I have enjoyed working with. It has been a particular privilege to work with excellent civil servants and the outstanding Lord Freud and other ministers including my present team, throughout all of my time at the Department of Work and Pensions.

I truly believe that we have made changes that will greatly improve the life chances of the most disadvantaged people in this country and increase their opportunities to thrive. A nation’s commitment to the least advantaged should include the provision of a generous safety-net but it should also include incentive structures and practical assistance programmes to help them live independently of the state. Together, we’ve made enormous strides towards building a system of social security that gets the balance right between state help and self help.

Throughout these years, because of the perilous public finances we inherited from the last Labour administration, difficult cuts have been necessary. I have found some of these cuts easier to justify than others but aware of the economic situation and determined to be a team player I have accepted their necessity.

You are aware that I believe the cuts would have been even fairer to younger families and people of working age if we had been willing to reduce some of the benefits given to better-off pensioners but I have attempted to work within the constraints that you and the chancellor set.

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. While they are 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. They should have instead been part of a wider process to engage others in finding the best way to better focus resources on those most in need.

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.

Too often my team and I have been pressured in the immediate run up to a budget or fiscal event to deliver yet more reductions to the working age benefit bill. There has been too much emphasis on money saving exercises and not enough awareness from the Treasury, in particular, that the government’s vision of a new welfare-to-work system could not be repeatedly salami-sliced.

It is therefore with enormous regret that I have decided to resign. You should be very proud of what this government has done on deficit reduction, corporate competitiveness, education reforms and devolution of power. I hope as the government goes forward you can look again, however, at the balance of the cuts you have insisted upon and wonder if enough has been done to ensure “we are all in this together”.