Daily Management Review

Brexit Will Be An Harbinger Of An ‘Emergency Budget’, Warns Osborne


U.K voting in favour of Brexit will cause economic instability, which would appear in various ways, while an emergency budget of post Brexit has been proposed by Osborne.

Chancellor George Osborne has categorically warned that if the Britain votes in favour of Brexit then an “emergency budget” will have to be out in place whereby implicating on cutting down on spending and rising tax fares.
As per Osborne, the IT rates would rise up “from 20p to 22p”, while the top rate would climb up “from 3p to 4p and inheritance tax” will jump from “5p to 45p in the ‘Brexit Budget’”.
Digitallook informs:
“There would also be cuts to state budgets: 2.5bn cut to the NHS, £1.2bn to defence and £1.15bn to education. Spending on pensions would be cut by £2bn, Home Office, transport and local government by £5.8bn. Alcohol and petrol duties would rise by 5%”.
Osborne confirmed that the said figures were the result of a study conducted by the “Institute of Fiscal Studies”. On the other hand, total fifty seven members of parliament such as “Dr Liam Fox, Owen Paterson and Iain Duncan Smith” among others “wrote a letter”, wherein they said that they would turn down the “proposed Brexit Budget”. Ex-chancellor Lord Darling as well as George Osborne wrote in unison that effect of Brexit will cause a "profound economic shock that would hit the economy and could tip Britain back into recession.
"We know all too well what happens when Britain loses control of its public finances. We're agreed that a vote to leave risks doing the same thing to Britain all over again."
Moreover, Osborne also told BBC:
"For first time for we have a Conservative and Labour chancellor agreeing 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. We have the markets warning us now what will happen. You’ve got the experts spelling out the consequences. It would be self-imposed austerity for many years to come. For years we’ve been dealing with the consequences of the last recession”.
In Osborne’s words Brexit would be an “enormous leap in the dark” which will affect the low and middle class people the most. Nevertheless, MP Chris Grayling, who is in favour of Leave campaigner dismissed the signs of the “pound falling” and the “reduction in consumer spending” and he added:
“I don’t think its coincidence this is happening when the Remain campaign is struggling in the opinion polls.”
However, John McDonnell refused to “support Osborne's proposed post-Brexit emergency budget”, by saying:
"This maybe a natural Tory approach but no Labour chancellor would respond to an economic shock in this manner. 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."

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