The Guardian reports this morning:
George Osborne will warn that he would have to fill the £30bn black hole in public finances triggered by a vote to leave the European Union by hiking income tax, alcohol and petrol duties and making massive cuts to the NHS, schools and defence.
In a sign of the panic gripping the remain campaign, the chancellor plans to say that the hit to the economy will be so large that he will have little choice but to tear apart Conservative manifesto promises in an emergency budget delivered within weeks of an out vote.
It's an interesting claim. It's also wrong.
First, Osborne will not be Chancellor to deliver another budget. If Leave win he and Cameron will have to go.
And as I will argue in a blog that may see the light of day this morning depending on whether or not I finish it before I get to Kings Cross, if Remain win he has little chance of staying either because the margin of victory is likely to be so small that this will also require that he and Cameron go.
In other words, this is Osborne in political fantasy land.
Second, this is not true because he will not know the consequence within a weeks, and so would be most unwise to react hastily.
Third, it may be that running a bigger deficit funded by QE (which will be much easier outside the EU) is a completely viable option post a vote for Leave and he might actually realise that and change his absurd adherence to the demands of a balanced budget.
Fourth, his forecasting record is so bad why believe him?
In other words, these are the last gasps of a desperate man clinging to the last vestiges of the power that he once thought he enjoyed and which he now knows is moving beyond his grasp whatever happens in this desperately ill advised referendum for which he carries much of the responsibility. It would be wise to read it that way, however, serious the economic consequences of leaving might be.
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Funny. So inept have Cameron and Osborne been that we now wait and hope the markets do their thing and take a plunge in the next week.
To paraphrase the a line from the movie The Matrix: fate is not without a sense of irony.
What happens to austerity economics if we leave?
The public sector has already been reduced and demoralised and further cuts are planned regardless of the remain/leave decision.
The sector that we will need to rely upon during the 2 year transition period as it negotiates tariffs, procurement revisions, passport renewals,taxation revisions, visas, border controls etc.. just does not have the resources to do so.
The ultimate absurdity of austerity economic:- there is an existential need to do something, we have the people to do it but we cant do it because we don’t have the money. Where does this end? Can’t defend ourselves, can’t control our borders, can’t provide a health service.
I am not sure what you are arguing
What happens to austerity if Leave wins? My guess is that for the time being it will disappear without trace. Osborne goes and the new chancellor, who will inevitably have been a Leaver, will be able to start with a clean sheet and no history of claims and promises such as Osborne carries. There will be an enormous incentive to provide a ‘feel-good’ factor to ‘prove’ that the UK is better off outside the EU, so expect a goody bag full of sweeties. 5p off a pint of good English ale? 10p off a packet of fags? That’s Nigel’s sweeties dealt with; maybe something off fuel duty. Additional political bonus: it waves two fingers at the direction ‘Europe’ is heading. Plus a bunch of other things to re-assert growth and demonstrate ‘independence’ from the EU.
A year later when people are moving around saying “See how much better we are out of the EU?”, austerity will be re-discovered as a neat way of pursuing other policy goals.
Blog coming tomorrow now
I think you’ve hit the nail very, very squarely on the head there Robin. A year of ‘bread and circus’ goodies from the vote Leave shysters to keep the mugs who voted Leave happy and be able to claim that the Remain campaign’s predictions of economic damage were unfounded, then it’ll be full speed ahead with austerity as an excuse to privatise everything, and deregulate everything.
All accompanied by a rising tide of nationalistic bombast, and ever increasing attacks on the usual targets of the hard right; the poor, disabled and those ‘bloody foreigners’.
“The ultimate absurdity of austerity economic:- there is an existential need to do something, we have the people to do it but we cant do it because we don’t have the money.”
When the majority of a nation don’t understand that the main function of money is to facilitate our contracting with each other for the goods and services we all need and additionally also believes only commercial bankers can create money you have the perfect recipe for national decline!
Project Fear is rapidly turning into Project Threat, which is a clear sign of desperation from a Chancellor who has absolutely no idea what is going to happen in the future any more than any one of us.
As for the reliability of his past predictions, need I say more!
The Tory party has now lost all political credibility in my view, so whether a Leave or Remain vote it is time for a vote of no confidence in both Cameron and Osborne.
For hundreds of years foreign dictators have tried to belittle and scare the British people into submission.
They failed.
Can Cameron and Osborne, our elected elite, succeed where others have failed?
It should be noted that Osborne was absent from today’s PMQs and in addition a point of order was raised about his absence from the following debate on the Opposition Day Debate on the economic benefits of UK membership of the European Union. The Speaker responded that he could not compel the Chancellor to attend but he did express surprise.
To me, this is what the EU vote is all about. It is just a distraction.
Osbourne is probably going to do this anyway. He has a record of opportunism in placing blame on others for the economic woes (lies) of the country.
I have yet to be convinced that Cameron and Osbourne will be out of a job however. I’m not certain about that.
I think the Tories will hold together – I suspect it – rather tenuously – but the option is there for me. The Letwins and Maudes of this world may have a big say on this and they will appeal to party unity to finish the job of hollowing out the state.
Something to consider – even if only a little.
Listening to Osborne on R4 this morning I so wanted the interviewer to ask him simply the question which you yourself blogged, Richard: if Brexit is such a terrible threat why did you impose this referendum on us?
“if Brexit is such a terrible threat why did you impose this referendum on us?”
Exactly!! I could not agree more; this should be shouted from the rooftops every time the Remain side in the Tory Party engage in Project Fear.
We are now all but forced to engage in a fight not of our choosing.
The most crucial time, if any, to have held a UK In/Out referendum would have been post an eventual EU ratification of TTIP.
The timing for this one was simply to steal UKIP votes for the Tories at the last GE, and then get it over with as quickly as possible, in the clear expectation of an easy win for Remain.
Now look what’s happened! And even if Remain should win, which I imagine they might well do regardless, the seething dissatisfactions of that large body of Brexit voters will not go away, and they will be seeking redress somewhere – most worryingly via UKIP.
An interesting speculation in the event of Brexit is what form the departure of Cameron and Osborne might take.
One option is for the defrocking to occur within the Conservative party. This would presumably install Johnson/Gove as leaders. The problems then are that the parliamentary majority is wafer thin, and also that the public is unlikely to take to an unelected PM. The inheritors of this arrangement are unlikely to have an pleasant experience running the show. It will be particularly bad since some strategy would need to be implemented quickly following a Leave vote, but an effective strategy requires years of planning and this hasn’t been done. Chances of an economic crash seem very high. Whoever is in power at that moment would be forever tarred, and unlikely to win the 2020 election, if they can even hold on that long.
The other option is for the defrocking to occur in parliament. This would require a vote of no confidence, triggering a general election. There are certainly the numbers for this (e.g. the 57 MPs who said this morning that they’d oppose Osborne’s budget, plus the rest of the non-Tory commons). However, it’s probably not in the interest of the Labour leadership to trigger a general election. The reason is, a choice between Corbyn, or Johnson/Gove riding high following the referendum victory, could result in an increased Conservative majority. This would be the end of the Corbyn/McDonnell Labour party.
The worst case scenario, in my opinion, is that the victorious “Leave” Conservatives would do all they could to trigger a vote of no confidence. Enough Blairite Labour MPs go along with this that the motion is carried, and an immediate general election is triggered. Johnson/Gove win. The result is a second Scottish independence referendum (this would be the price extracted by the SNP for calling the vote of no confidence), which is this time carried. Scotland, and then Northern Ireland, leave the UK. Labour has a new leader who is part of the former Blairite wing, and the soon-to-be rump UK staggers on to 2021 with Johnson/Gove in charge, and a Herculean task in rewriting all the EU legislation.
Better outcomes may be possible as well. Let’s hope so :-). However, the potential for turmoil is making Remain extremely attractive.
Blog son various scenarios are coming
Mmmmmm – yes some really good thoughtful stuff here about how it might unfold indeed.
It would be just like the Tories to forget about everyone else and just have a blood letting of some sort within their ranks.
Anyhow – some good news – I actually saw a Remain poster on the way home from work this pm – I was so surprised I nearly drove off the road.
There is hope!
I did think of a positive outcome following Brexit.
If Labour concede Scotland to the SNP, they could join a formal coalition with the SNP and enjoy something like their pre-2015 election figures. In order to do this, they would have to plan for a federal UK. Such plans do exist. For example, it might be possible to adapt the Regional Assemblies plan which John Prescott tried unsuccessfully to implement in the mid-2000s.
The mandate in this case would be to devolve as much power as feasible to Scotland, Wales and Northern Ireland. There would need to be an English Parliament as well, distinct from Westminster. The centre of the UK federal system would remain the Houses of Parliament.
This plan would seem nuts to the Sun/Mail reading electorate, and would normally have no chance of going through.
However, following Brexit, it would soon be apparent that Scotland and Northern Ireland won’t remain in the UK.
Therefore, the choice to the electorate would be between:
* a rump UK (Tory Brexit)
* a federal UK (Labour/SNP Brexit).
I think the rump UK idea would be more terrifying to the electorate than the federal UK idea. Also, the anti-federal propaganda is difficult. For example, it would be necessary to simultaneously villify Corbyn, Sturgeon, and whoever Wales and Northern Ireland put forward.
Therefore, I think there’s a fair chance that a party, or coalition, promising federal UK could win a general election post Brexit. The outcome is even quite pretty. For example, Scotland would retain sterling as a currency. All the incoming parties would be likely to support people’s QE.
To really make it stick, it would be necessary to address immigration, if only because it’s such an electoral dog whistle. The promise of renegotiations with the EU might be enough. More strongly, the immigration issue can be neutered, by starting a debate over whether free movement within the UK should be possible. Obviously free movement in the UK should be possible, but a Tory Brexit wouldn’t maintain free movement within the UK. When the English Leavers realise they voted for using passports to go over the border to Scotland or Wales — and moreover can’t use the fast lane when going to France or Spain — they’re likely to relax their feelings towards free movement within the EU.
If it was possible to achieve a Labour/SNP coalition, a priority for the first term would have to be a switch to proportional representation. I think this would greatly reduce the chances of any future government undoing the good work.
Osborne is the consummate amateur-he has brought politicians further into disrepute -he is incapable of intellectual engagement and devoid of thinking outside a mind that is tuned into one wavelength -rentier capitalism.
And he has the gall to talk about cuts, when,if they could do it themselves they would do.
I think this is a topic you probably agree with Andrew Neil on. He was tearing the remain campaign MP to pieces over it on the Daily Politics.
When you are in agreement it shows how unbelievable the statement was.
That is quite worrying
I’d like to think we are not a people to be scared into doing the right thing. Having said that, the modern style of campaigning seems to rely on fear, innuendo and over-simplification.
The only way Cameron and Osborne can hang on would be a pretty solid win for the Remain camp.
Personally I think Cameron was so afraid of Tories defecting to UKIP he felt he had to do something and now the whole country is kowtowing to a party with one MP.
This government has reduced our country to chaos and for once no one can try to blame Jeremy Corbyrn. He infact has been the only clear voice in the Remain campaign in my view. The real fear for me is that this is all a subterfuge for secret trade deals behind closed doors. The campaign has been so embarrassing by both sides by the Tory party as well as UKIP. Labour was right to distance itself & only give their views for In or Out. Osbourne has broken our country, reduced our public services across the board to numbers that are unable to effectively work so that whoever gets into power will have an impossible task. t I think is what this governemnt has always wanted. Complete privitisation. I wait with bated breath for what you have to say tomorrow Richard. In the meantime I just had a thought,do you think Osbourne asberger? wiki def: a developmental disorder characterized by significant difficulties in social interaction and nonverbal communication, along with restricted and repetitive patterns of behavior and interests.
No, I do not think Osborne has Avoberger’s syndrome
I do think he suffers the blindness of affluence
Not the same thing at all
not even “the restricted & repetitive patterns of behaviour & interests”? I agree with your blindness of affluence though.How can someone do so much damage? .. he can now walk away and blame his successor.