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Jeremy Corbyn branded the Tories the 'nasty party’ today after they denied increased disability benefits to 160,000 people - while cutting inheritance tax for the rich.

In a furious exchange with Theresa May, the Labour leader slammed her “shameful" decision not to raise Personal Independent Payment (PIP).

Two tribunals had ruled the benefit, which funds disabled people’s living costs, should be extended for people who can’t leave home without "overwhelming psychological distress”.

But Tory ministers blocked the court judgements saying they would cost £3.7bn.

Mr Corbyn told Mrs May at Prime Minister’s Questions: "This is a shameful decision that will affect people with dementia, those suffering cognitive disorders due to stroke, military veterans with post-traumatic stress disorder and those with schizophrenia.

"Can the Prime Minister look at the effects of her decision to override what an independent court has decided, and think again?”

Condemning No10 policy chief George Freeman, who defended the law by saying benefits should go to the “really disabled”, he said: “Isn’t that proof the nasty party is still around?”

And he slammed Tory ministers for cutting inheritance tax next month[APR] by £100,000 for people whose houses are worth over £650,000.

"A government that found £1bn in inheritance tax cuts to benefit 26,000 families seems unable to find the money to support 165,000 people with debilitating mental health conditions,” he said.

Mrs May insisted the move was not a policy change and no one previously receiving PIP would lose out.

But a war of words broke out when she denied welfare chief Damian Green had “sneaked out” the shake-up - despite publishing it on the day of two crunch by-elections last Thursday.

The PM revealed: "He called both offices of the Shadow Work and Pensions Secretary but there was no answer and they didn’t come back to him for four days."

Yet a DWP source later admitted Mr Green only a voicemail for Labour welfare chief Debbie Abrahams at 4pm last Thursday - after his shake-up had already been published.

Ms Abrahams responded with a furious statement to the media that same day.

Ms Abrahams said of the row: "We have no interest in backroom deals with the government over disabled people's livelihoods.

“We demand full scrutiny of these callous cuts to 160,000 disabled people.”

At least 40 MPs have signed a formal bid to defeat the PIP changes, which will take force permanently without a vote if they are not stopped within 40 days.

In the furious clash at Prime Minister's Questions, Jeremy Corbyn reminded Theresa May the last time the Government meddled with PIP led to welfare slasher Iain Duncan Smith resigning in disgust.

Mr Duncan Smith stood at one end of the chamber, smiling with his arms folded as his resignation was mentioned.

The Labour leader said: "The government sneaked out a decision to overrule a court decision to extend Personal Independence Payments to people with severe mental health conditions.

“A government that found £1bn in inheritance tax cuts to benefit 26,000 families seems unable to find the money to support 165,000 people with debilitating mental health conditions.

(Image: getty)

"Will the Prime Minister change her mind?”

Corbyn demanded the Tories “withdraw this nasty decision, accept the court’s judgement, and support those going through a very difficult time in their lives.

“That is how we will all be judged.”

Ms Abrahams shouted "not true" by Mr Corbyn's side and Tory welfare chief Damian Green pointed red-faced across the table when the rivals traded claims about the phones calls.

A No10 source said after the clash: "They (phone calls) were made to both, to the Parliamentary and the constituency offices. There was also a personal call from Damian Green direct to Debbie with a voicemail left."

Ms Abrahams said this was false, because there was no call to her constituency office or her mobile phone.

She said a voicemail was only left with her parliamentary office out of hours on Thursday evening - after the statement on PIP was issued at 3pm.

A senior Labour source said: “As I understand it the message was left out of office hours.”

But a DWP source said it was left at 4pm.

The DWP source said: "On Thursday morning our private office tried to call Debbie's parliamentary and constituency office.

"Damian didn't have Debbie's mobile number. There was no word so Damian personally called Debbie's Parliamentary office at about 4pm on Thursday, he left a voicemail.

"On Monday morning her parliamentary office finally came back with a mobile number which Damian texted immediately. We did call her on Thursday and as we couldn't reach her, we did keep trying."