George Osborne and Alistair Darling warn of emergency Budget post Brexit
George Osborne has warned he would be forced to introduce an emergency Budget with tax hikes and spending cuts if the UK votes to leave the European Union.
The Chancellor argued the Treasury would be forced to unveil a Budget post the vote on 23 June in order to make up for the £30bn "black hole" created by leaving the EU.
This would be comprised of £15bn of tax rises and £15bn of spending cuts, Mr Osborne will say.
He will appear alongside Labour's Alistair Darling later today, who will claim he is more worried about Britain’s finances if we pull out of the EU than he was at the time of the financial crash in 2008 when he was in Number 11.
Possible tax rises Mr Osborne will outline include a 2p rise on the basic rate of income tax and a 3p in the higher rate, and raising inheritance tax by 5p.
The current and former chancellor will say spending on police, transport and local government could take a 5% cut, while another 5% rise on alcohol and fuel duties could be introduced.
They will also say the ring-fenced NHS budget could be "slashed", along with education, defence, police and there would also be cuts in the pension bill.
To substantiate their claims, the politicians will cite research by the Institute for Fiscal Studies that warned leaving the EU could lead to an extra two years of austerity.
But Brexiteer and Tory MP Steve Baker said he was "shocked" that Mr Osborne was threatening to break Conservative manifesto pledges.
Mr Osborne will say later: “Far from freeing up money to spend on public services as the Leave campaign would like you to believe, quitting the EU would mean less money. Billions less.
“It's a lose-lose situation for British families and we shouldn’t risk it.
“If you doubt it, look at what’s happening on financial markets. The economic uncertainty the Leave campaign blithely insists won’t be caused by a vote to leave is already being seen.”
Mr Darling will add: “I am even more worried now than I was in 2008.
“The Leave campaign has no idea, no plan whatsoever. Any political party seeking election on such a flimsy and fraudulent prospectus would have been torn to pieces by now.
“We know we'll have not just a short period of uncertainty - but years and years of it. Far from having more to spend on public services - the giant con trick at the heart of the Leave campaign - we'd have tens of billions of pounds less. As a former Chancellor, I have to tell you that would mean an emergency Budget where we would have to increase taxes and cut spending.
“Why on earth would we inflict that on ourselves all over again?”
In response, Vote Leave campaigner Steve Baker said: "I am shocked that the Chancellor is threatening to break so many key manifesto pledges on which all Conservative MPs were elected.
"I could not support these plans to cut the NHS and increase taxes on hardworking families."