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| Tory MPs threaten to block Osborne’s post-Brexit budget | Tory MPs threaten to block Osborne’s post-Brexit budget |
| (2 months later) | |
| George Osborne faces an extraordinary challenge to his authority as chancellor from 57 Conservative MPs who are threatening to block his emergency budget of tax rises and spending cuts if Britain votes to leave the EU. | George Osborne faces an extraordinary challenge to his authority as chancellor from 57 Conservative MPs who are threatening to block his emergency budget of tax rises and spending cuts if Britain votes to leave the EU. |
| Six former cabinet ministers - Iain Duncan Smith, Liam Fox, Owen Paterson, David Jones, John Redwood and Cheryl Gillan - are among the MPs who have said Osborne’s position would be untenable if he tried to impose a “punishment budget” in the event of Brexit. | Six former cabinet ministers - Iain Duncan Smith, Liam Fox, Owen Paterson, David Jones, John Redwood and Cheryl Gillan - are among the MPs who have said Osborne’s position would be untenable if he tried to impose a “punishment budget” in the event of Brexit. |
| The Labour leader, Jeremy Corbyn, also made clear that he would never support an austerity budget, meaning it would be impossible for the chancellor to get it through the House of Commons. | The Labour leader, Jeremy Corbyn, also made clear that he would never support an austerity budget, meaning it would be impossible for the chancellor to get it through the House of Commons. |
| Osborne nevertheless insisted there would be no choice but to hold an emergency budget and claimed cross-party support after his warning of a budget black hole was backed by his Labour predecessor, Alistair Darling. | Osborne nevertheless insisted there would be no choice but to hold an emergency budget and claimed cross-party support after his warning of a budget black hole was backed by his Labour predecessor, Alistair Darling. |
| “For the first time today you have a Conservative and a Labour chancellor agreeing on the scale of the decisions needed to fix the public finances if we quit the EU. There would have to be increases in tax, there would have to be cuts in public spending to fill the black hole,” Osborne told the BBC. | “For the first time today you have a Conservative and a Labour chancellor agreeing on the scale of the decisions needed to fix the public finances if we quit the EU. There would have to be increases in tax, there would have to be cuts in public spending to fill the black hole,” Osborne told the BBC. |
| He said a Brexit vote would amount to “self-imposed austerity for many years to come”. | He said a Brexit vote would amount to “self-imposed austerity for many years to come”. |
| Speaking at prime minister’s questions, David Cameron said the financial shock of leaving the EU must not be ignored. “Nobody wants to have an emergency budget, nobody wants to have cuts in public services, nobody wants to have tax increases,” he said. | Speaking at prime minister’s questions, David Cameron said the financial shock of leaving the EU must not be ignored. “Nobody wants to have an emergency budget, nobody wants to have cuts in public services, nobody wants to have tax increases,” he said. |
| “But I would say this. There is only one thing worse than not addressing a crisis in your public finances through a budget, and that is ignoring it. | “But I would say this. There is only one thing worse than not addressing a crisis in your public finances through a budget, and that is ignoring it. |
| “Because if you ignore a crisis in your public finances, you see your economy go into a tailspin, you see confidence in your country reduced. We can avoid all of this by voting remain next week.” | “Because if you ignore a crisis in your public finances, you see your economy go into a tailspin, you see confidence in your country reduced. We can avoid all of this by voting remain next week.” |
| Corbyn criticised the 57 pro-Brexit Tories as opportunistic for faking a “Damascene conversion” to the anti-austerity movement but made it clear he would direct his party to vote on the same side as them. | Corbyn criticised the 57 pro-Brexit Tories as opportunistic for faking a “Damascene conversion” to the anti-austerity movement but made it clear he would direct his party to vote on the same side as them. |
| The rebel Conservatives responded by casting doubt on Cameron and Osborne’s integrity and trustworthiness, saying no one would believe their economic claims in future. | The rebel Conservatives responded by casting doubt on Cameron and Osborne’s integrity and trustworthiness, saying no one would believe their economic claims in future. |
| Duncan Smith told LBC radio that he believed Osborne was deliberately trying to panic the markets. “Of all the things I think that the remain camp has done, this one probably is the most bizarre and the most ridiculous and, I have to say, it’s showing behaviour from a chancellor which I, more irresponsible than I’ve seen from any chancellor at any time in which he appears to be talking the economy down deliberately in the hope that somehow that will panic everybody, panic the markets in the next seven days and then force people to vote for remain because they’ll be so scared.” | Duncan Smith told LBC radio that he believed Osborne was deliberately trying to panic the markets. “Of all the things I think that the remain camp has done, this one probably is the most bizarre and the most ridiculous and, I have to say, it’s showing behaviour from a chancellor which I, more irresponsible than I’ve seen from any chancellor at any time in which he appears to be talking the economy down deliberately in the hope that somehow that will panic everybody, panic the markets in the next seven days and then force people to vote for remain because they’ll be so scared.” |
| Paterson, a former environment secretary, said it was a sign the remain campaign had “reached panic stations”. “They have lost all the major arguments and have now resorted to scaring the British people. They are taking us for fools,” he said. | Paterson, a former environment secretary, said it was a sign the remain campaign had “reached panic stations”. “They have lost all the major arguments and have now resorted to scaring the British people. They are taking us for fools,” he said. |
| “If the chancellor thinks he could pass such a punishment budget through the House of Commons he is utterly delusional. I wouldn’t hesitate about voting against it.” | “If the chancellor thinks he could pass such a punishment budget through the House of Commons he is utterly delusional. I wouldn’t hesitate about voting against it.” |
| Christopher Chope, the MP for Christchurch and a Tory backbencher, attacked the “vindictive emergency budget” directly in a question to Cameron in the House of Commons. | Christopher Chope, the MP for Christchurch and a Tory backbencher, attacked the “vindictive emergency budget” directly in a question to Cameron in the House of Commons. |
| Such open defiance of Downing Street by Eurosceptics makes it difficult to see how the current Conservative leadership could continue if there were a vote to leave the EU, though no serving government minister has signed the letter of rebellion. | Such open defiance of Downing Street by Eurosceptics makes it difficult to see how the current Conservative leadership could continue if there were a vote to leave the EU, though no serving government minister has signed the letter of rebellion. |
| Cameron has always insisted he would continue in post to negotiate an exit with Brussels, but that has appeared increasingly untenable as the referendum approaches and Brexit MPs vent their fury about the force of his campaigning in favour of the EU. | Cameron has always insisted he would continue in post to negotiate an exit with Brussels, but that has appeared increasingly untenable as the referendum approaches and Brexit MPs vent their fury about the force of his campaigning in favour of the EU. |
| If Cameron does not step down in the event of a vote to leave, a major revolt against his chancellor’s emergency budget could force their resignation and spell the end of the current government. | If Cameron does not step down in the event of a vote to leave, a major revolt against his chancellor’s emergency budget could force their resignation and spell the end of the current government. |
| Osborne took the decision to publish an “illustrative budget scorecard” of tax rises and spending cuts at a time of panic within the remain camp about several polls suggesting leave is in the lead. | Osborne took the decision to publish an “illustrative budget scorecard” of tax rises and spending cuts at a time of panic within the remain camp about several polls suggesting leave is in the lead. |
| The document, issued jointly with Darling, comprises a long list of the sort of measures they say may have to be implemented including: | The document, issued jointly with Darling, comprises a long list of the sort of measures they say may have to be implemented including: |
| A Vote Leave statement issued in response said it was incredible that the chancellor was “threatening to renege on so many manifesto pledges”. | A Vote Leave statement issued in response said it was incredible that the chancellor was “threatening to renege on so many manifesto pledges”. |
| It said: “It is absurd to say that if people vote to take back control from the EU that he would want to punish them in this way. If he were to proceed with these proposals, the chancellor’s position would become untenable.” | It said: “It is absurd to say that if people vote to take back control from the EU that he would want to punish them in this way. If he were to proceed with these proposals, the chancellor’s position would become untenable.” |
| Osborne responded to the letter by saying an emergency budget would be necessary to stem financial chaos and fill a £30bn black hole triggered by a vote to leave. | Osborne responded to the letter by saying an emergency budget would be necessary to stem financial chaos and fill a £30bn black hole triggered by a vote to leave. |
| He said: “The kind of measures we would have to take are ones that any chancellor and any government would have to make. No Conservative wants to raise taxes, least of all me. | He said: “The kind of measures we would have to take are ones that any chancellor and any government would have to make. No Conservative wants to raise taxes, least of all me. |
| “But equally Conservatives understand, and indeed I suspect many Labour politicians understand, that you cannot have chaos in your public finances, you have to deal with the hole that would emerge if we quit the EU. And we would have to take the necessary measures.” | “But equally Conservatives understand, and indeed I suspect many Labour politicians understand, that you cannot have chaos in your public finances, you have to deal with the hole that would emerge if we quit the EU. And we would have to take the necessary measures.” |
| Osborne was pressed on how he could impose such a budget when 57 Tory MP were against it. He said: “The Conservative government would do what was needed to deal with huge instability in our economy and the chaos in the public finances. | Osborne was pressed on how he could impose such a budget when 57 Tory MP were against it. He said: “The Conservative government would do what was needed to deal with huge instability in our economy and the chaos in the public finances. |
| “Would it be easy for folk who pay their taxes for the public services? Of course not, but we would have imposed this on our country. And there is an alternative. If we vote to remain in the EU next week then we are going to be stronger, safer, better off. | “Would it be easy for folk who pay their taxes for the public services? Of course not, but we would have imposed this on our country. And there is an alternative. If we vote to remain in the EU next week then we are going to be stronger, safer, better off. |
| “If we walk through that door and we quit the EU, taxes will go up, public spending will be cut and we be living for the consequences for years to come.” | “If we walk through that door and we quit the EU, taxes will go up, public spending will be cut and we be living for the consequences for years to come.” |
| Darling brushed off the row in the Tory party, but backed Osborne’s warning. “I will leave the Tories to get on with it,” he told Sky News. | Darling brushed off the row in the Tory party, but backed Osborne’s warning. “I will leave the Tories to get on with it,” he told Sky News. |
| “If we decide to leave the European Union, all commentators are saying that we are going to take a hit, which will mean our economy will be smaller. That means you’ve got less money around to spend on things like the health service, on education, on transport. You do start having to look at tax increases. You can’t ignore these things. | “If we decide to leave the European Union, all commentators are saying that we are going to take a hit, which will mean our economy will be smaller. That means you’ve got less money around to spend on things like the health service, on education, on transport. You do start having to look at tax increases. You can’t ignore these things. |
| “If our economy gets smaller as happened in the financial crisis eight years ago, there are consequences and you can’t ignore them. You will force the chancellor of the day to have to take decisions that he or she would not want to take.” | “If our economy gets smaller as happened in the financial crisis eight years ago, there are consequences and you can’t ignore them. You will force the chancellor of the day to have to take decisions that he or she would not want to take.” |
| Challenged on the remain campaign’s tactics, Darling said: “It is entirely legitimate to ask tough questions of your opponents. How else are people going to make a sensible decision? | Challenged on the remain campaign’s tactics, Darling said: “It is entirely legitimate to ask tough questions of your opponents. How else are people going to make a sensible decision? |
| “After [the crash of 2008] some very difficult decisions had to be made in order to stop a complete meltdown. I don’t want our country, eight years on, just when we are beginning to grow again, to be facing exactly the same sort of trauma, perhaps years of uncertainty. It is just the wrong thing to do. It is very damaging.” | “After [the crash of 2008] some very difficult decisions had to be made in order to stop a complete meltdown. I don’t want our country, eight years on, just when we are beginning to grow again, to be facing exactly the same sort of trauma, perhaps years of uncertainty. It is just the wrong thing to do. It is very damaging.” |
| The shadow chancellor, John McDonnell, made it clear Labour would never support such a plan and suggested Darling would not actually do so himself. | The shadow chancellor, John McDonnell, made it clear Labour would never support such a plan and suggested Darling would not actually do so himself. |
| “This may be a natural Tory approach, but no Labour chancellor would respond to an economic shock in this manner,” he said. “And neither did Alistair Darling in 2008. Any credible economist would tell you that raising taxes or cutting spending or both in response to an economic shock is the wrong thing to do. | “This may be a natural Tory approach, but no Labour chancellor would respond to an economic shock in this manner,” he said. “And neither did Alistair Darling in 2008. Any credible economist would tell you that raising taxes or cutting spending or both in response to an economic shock is the wrong thing to do. |
| “It’s deeply worryingly that this suggests the current Tory chancellor thinks this is a sensible response. But it highlights what is on offer under a Tory Brexit as George Osborne is only saying what those Tories campaigning for a Tory Brexit truly believe deep down.” | “It’s deeply worryingly that this suggests the current Tory chancellor thinks this is a sensible response. But it highlights what is on offer under a Tory Brexit as George Osborne is only saying what those Tories campaigning for a Tory Brexit truly believe deep down.” |
| The likelihood of an emergency budget divided economic experts. Prof John Fender, a lecturer in macroeconomics at the University of Birmingham, said the prospect of such an emergency budget was feasible. | The likelihood of an emergency budget divided economic experts. Prof John Fender, a lecturer in macroeconomics at the University of Birmingham, said the prospect of such an emergency budget was feasible. |
| “If there is a vote to Brexit on 23 June, its likely consequences for the public finances need to be taken very seriously,” he said. “Any economic downturn will reduce revenues and put in question the chancellor’s goal of achieving budget balance by the end of the decade. | “If there is a vote to Brexit on 23 June, its likely consequences for the public finances need to be taken very seriously,” he said. “Any economic downturn will reduce revenues and put in question the chancellor’s goal of achieving budget balance by the end of the decade. |
| “Something will need to be done to restore confidence, and an emergency budget similar to that suggested by the chancellor may well be on the cards.” | “Something will need to be done to restore confidence, and an emergency budget similar to that suggested by the chancellor may well be on the cards.” |
| Jonathan Portes of the National Institute of Economic and Social Research, and a former government economist, said it would be “precisely the wrong response”, which he said “should not and will not happen”. | Jonathan Portes of the National Institute of Economic and Social Research, and a former government economist, said it would be “precisely the wrong response”, which he said “should not and will not happen”. |