01227 454627
Client Portal

Osborne warns of emergency budget if ‘Leave’ win

Posted: June 21, 2016

Finance minister George Osborne has said he would introduce an emergency budget if Britain voted to leave the European Union – but 57 of his own Conservative Party’s lawmakers said they would block his spending cuts and tax hikes.

According to Reuters, the escalation in the ruling party’s internal war over the EU raised the prospect of a government unable to operate normally in the event of a victory for “Leave” in the June 23 referendum on whether to stay in the bloc.

Osborne, who along with Prime Minister David Cameron is leading efforts to keep Britain in, said he would have to respond to a Leave vote with tax rises and spending cuts worth 30 billion pounds ($43 billion).

“There will be a big hole in the public finances and … we would have to raise taxes and cut spending,” Osborne told reporters after giving a speech in Ashford, southeast England.
Measures could include a 2-point rise in the basic rate of income tax to 22 percent and increases in tax rates and duties on alcohol and petrol, while spending on health, education and defence could be cut by 2 percent.

The official Vote Leave campaign hit back with a statement signed by 57 Conservative lawmakers who said they would block the proposed measures in parliament.

“If the Chancellor is serious then we cannot possibly allow this to go ahead … If he were to proceed with these proposals, the Chancellor’s position would become untenable,” they said.

Osborne said he would aim to introduce the emergency measures within two months of a Leave vote. “The one thing worse than not passing a budget like that is dealing with an economic tailspin, or the complete loss of confidence in the ability of the country to manage its money,” he said, without spelling out how he would get the measures through parliament.

“The economic uncertainty that the Leave campaign carelessly insist won’t be caused is already being seen,” Osborne said.