George Osborne defers emergency Brexit budget

Speaking from the Treasury, chancellor says UK will face decision to leave European Union from a "position of strength" – but defers decision to cut spending and raise taxes

Chancellor George Osborne at the Treasury to give his first statement since Britain voted to quit the European Union. Image: Stefan Rousseau/PA Wire

By Josh May

27 Jun 2016

George Osborne has said Britain is well-placed to deal with the economic shock of leaving the European Union, but warned it would not be “plain sailing” – as he rowed back on a pre-referendum promise to make further public spending cuts in the immediate aftermath of a vote to leave the EU.

The chancellor stood by his campaign warnings that Brexit would have drastic negative implications for the economy, but said he would not immediately be bringing forward his promised emergency Budget.

In a statement designed to reassure the markets before they opened on Monday morning, Osborne said the Treasury had “robust contingency plans” for dealing with the aftermath of the referendum.

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The chancellor also said he would address his own political future “in coming days”, leaving open the possibility of a run for the Conservative leadership or an endorsement of another candidate.

While stressing that he did not “resile from” his warnings in the referendum campaign, he talked up the state of the economy.

“Today I want to reassure the British people, and the global community, that Britain is ready to confront what the future holds for us from a position of strength,” he said.

“That is because in the last six years the government and the British people have worked hard to rebuild the British economy.

“We have worked systematically through a plan that today means Britain has the strongest major advanced economy in the world.”

The chancellor provoked an outcry from pro-Brexit Conservative MPs when he said he would implement £30bn-worth of tax rises and public spending cuts in the months after a vote to leave the EU.

After more than 60 Tories pledged to vote it down, hwoever, Osborne said any new Budget would wait until at least October, when a new prime minister takes the helm.

“There will be an adjustment in our economy because of the decision that the British people have taken,” he said.  

“I respect that decision and we’re going to get on and deliver on that decision. But that impact on the economy will have an impact on our public finances.

“Given the delay in triggering Article 50, given the decision by the prime minister to hand over to a successor, I think it’s perfectly reasonable to wait for a new prime minister before we determine what that action is.”

Today was the first public statement from the chancellor since the referendum outcome was revealed.

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