Osborne backs off from Budget threat
GEORGE Osborne has brought an end to Project Fear after he announced he will not unleash the “punishment” emergency Budget he had threatened during the referendum campaign.
The Chancellor made a statement yesterday morning, admitting he had contingency measures in place for a Brexit vote to protect the economy, despite warning of Armageddon if Leave won.
His comments were welcomed by Vote Leave leader Boris Johnson, who said: “It is clear now that Project Fear is over, there is not going to be an emergency Budget, people’s pensions are safe, the pound is stable, markets are stable. I think that is all very good news.”
Mr Osborne had threatened to hold an emergency Budget with £30billion of cuts if there was a Brexit vote, when it appeared Remain had lost the argument.
It was part of a strategy over months by Downing Street and the Remain campaign to warn a Leave vote would bankrupt the UK and lead to economic chaos.
The attempts to scare voters from throwing off Brussels rule included two reports from the Treasury, as well as support from pro-EU organisations like the International Monetary Fund and Institute for Fiscal Studies.
Mr Osborne insisted that the British economy is strong enough to go through the uncertainty of the aftermath of a vote to leave the EU. He went on to say that Britain must aim to establish “the strongest possible economic links with our European neighbours”, as well as with trading partners around the globe.
“I do not want Britain to turn its back on Europe or the rest of the world,” he added. “We must bring unity of spirit and purpose and condemn hatred and division wherever we see it.
“Britain is an open and tolerant country, and I will fight with everything I have to keep it so.”
Mr Osborne admitted the humiliating defeat over Brexit last week was “not the outcome I wanted”, but sought to reassure the markets ahead of them opening. He told reporters: “I fully accept the result of the referendum and will do everything I can to make it work. I am completely focused on the tasks ahead.”
Speaking at the Treasury, he added: “It will not be plain sailing in the days ahead. But let me be clear – you should not underestimate our resolve.
“We were prepared for the unexpected and we are equipped for whatever happens. And we are determined that, unlike eight years ago, our financial system will help our country deal with any shocks and dampen them.”
Asked about his own position, the Chancellor, who has faced repeated calls to resign from his post, said: “I’ve got a very important job to do. That is what I am 100 per cent focused on and will continue to be focused on in the weeks ahead.”
He then dodged a question on his future role in the Conservative Party, saying only that the matter would be addressed “in the coming days”.
The money markets yesterday held up better than expected, although the FTSE 100 Index plunged back below the 6,000 mark, falling 156.5 points to 5,982.2.
Sterling fell to a fresh 31-year low of 1.3151 US dollars before rallying to a 3.4 per cent fall to 1.321 US dollars. Yields on 10-year government bonds also slid below one per cent for the first time.