Osborne faces Tory revolt over Brexit emergency budget

George Osborne’s announcement of an “emergency budget” that would follow a vote to leave the European Union has sparked an open revolt among Conservatives at Westminster, with 57 of the party’s MPs threatening to vote against it.

Labour leader Jeremy Corbyn said his party would also vote against the £30 billion (€38 billion) package of tax rises and spending cuts, as would the Democratic Unionist Party's eight MPs, making it impossible to pass.

The chancellor shared a platform with his Labour predecessor Alistair Darling to announce the illustrative measures, which he said would be necessary to plug a fiscal hole created by an expected economic downturn after Brexit.

“No Conservatives want to raise taxes, least of all me. But equally Conservatives understand, and indeed I suspect many Labour politicians understand, you cannot have chaos in your public finances. You have to deal with the hole that would emerge if we quit the EU,” Mr Osborne said.

The hypothetical measures include a rise of 2 per cent in the basic rate of income tax, higher duty on alcohol and petrol and cuts to spending on health, education and defence. Conservatives campaigning for Brexit condemned the chancellor’s proposal as irresponsible and 57 MPs signed an open letter promising to vote against it.

Most bizarre

Former work and pensions secretary

Iain Duncan Smith

said the emergency budget proposal was the most bizarre and ridiculous yet from the Remain campaign. “I have to say it’s showing behaviour from a chancellor more irresponsible than I have 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 force people to vote for Remain because they will be so scared. So Project Fear has really gone completely into hyperspace,” he said.

Despite Mr Darling’s shared authorship of the proposal, the Labour leadership said the party would vote against any such package of tax rises and spending cuts. Shadow chancellor John McDonnell said the measures would be the wrong response to an economic downturn after Brexit, when the economy would need stimulus rather than further austerity.

Deeply worrying

“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,” he said.

The Conservative government has a Commons majority of just 12 votes so Labour, Conservative rebels and the DUP could defeat the emergency budget if it were to be introduced.

The chancellor's proposal came as three out of the four most recent polls show Leave ahead by between six and eight points, well outside the margin of error. The latest poll from ComRes for the Sun newspaper shows Remain clinging to a lead of just one point, down from 11 points in that company's previous poll.

An Ipsos-MORI poll in Scotland shows Scots favouring Remain by a margin of 19 points, compared to 37 points in April. Scotland and Northern Ireland are the two parts of the UK most likely to vote against Brexit, according to polls, with voters in England and Wales almost evenly split but drifting towards voting to leave the EU.