Don’t take us for fools, George!
÷Chancellor plotting ‘punishment’ Budget ÷Out vote ‘will add 2p to income tax’ ÷Death duty, booze and fuel costs will rise
A ‘ PANICKED’ George Osborne last night made an extraordinary threat to hike income tax by 2p in an ‘emergency Budget’ if Britain votes to quit the EU.
The Chancellor also warned of an increase in inheritance tax, a rise in the duty on alcohol and petrol and cuts to the police, the NHS, pensions and defence – though foreign aid would not be touched.
Furious Tory MPs said his plans for a ‘punishment Budget’ would be rejected by MPs on both sides of the Commons and he was taking the public for fools.
In a deepening of the Tory civil war on Europe, pro-Brexit MPs also warned that – by resorting to such ‘desperate and despicable’ scaremongering – Mr Osborne was putting his own political future in peril.
Amid a slew of polls putting Leave in the lead, the Chancellor will ramp up Project Fear today by appearing on a platform alongside former Labour Chancellor Alistair Darling.
Mr Darling – whose economic forecasts were mercilessly mocked by the Tories when he was in the Treasury – will claim that he is more worried now than in 2008 when the global economy crashed. Leave campaigners accused Mr Osborne of having a ‘hysterical’ reaction to Remain falling behind in the increasingly bitter contests. In the latest survey, released last night, Leave holds a seven-point lead.
Appearing at a factory in Essex, Mr Osborne and Mr Darling will today set out £30 billion of ‘illustrative’ measures that would need to be taken in an emergency Budget.
They claim it is based on the Institute for Fiscal Studies’ assessment of the impact of a vote to Leave on the public finances because of lower trade, investment and tax receipts. It includes £15 billion in tax rises, comprising a 2p rise in the basic rate of income tax to 22 per cent, a 3p rise in the higher rate to 43 per cent, and a 5p rise in inheritance tax rates to 45p. Alcohol and petrol duties would rise by 5 per cent.
Meanwhile, £ 15 billion in new spending cuts could mean NHS, education and defence spending being ‘slashed’ by 2 per cent. The Britain Stronger in Europe campaign said this would mean ‘a £2.5 billion-a-year cut to the health service, a £1.2 billion cut to defence and a £1.15 billion cut to education. Pensions spending could be cut by £2 billion a year.’
Spending in other areas, including the Home Office and policing, transport and local government, could take a 5 per cent cut, saving £5.8 billion.
Mr Osborne will claim: ‘Quitting the EU would hit investment, hurt families and harm the British economy. As Chancellor, I would have a responsibility to try to restore stability to the public finances and that would mean an emergency Budget where we would have to increase taxes and cut spending.
‘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.’
Details of the planned intervention last night leaked out at Westminster on social media and elsewhere, drawing a ferocious response from Tory backbenchers.
Senior Tory MP 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. The In campaign are panicking – but no one will believe these hysterical prophecies of doom any more.’
His colleague Michael Fabricant added: ‘These fear tactics are desperate and despicable.’
Ex- Cabinet minister Liam Fox said: ‘A punishment budget would be rejected by both sides of the House of Commons. It would damage the Chancellor’s credibility and would be putting his own position in jeopardy.
‘I think the British public would react adversely to such a threat based on the Chancellor being afraid they will vote the wrong way in his opinion.’
More than £30 billion was wiped off the FTSE 100 Index yesterday over mounting Brexit fears. More than £70 billion has been lost from the index since Monday.
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