Treasury making "significant" contingency plans for Brexit, says George Osborne

Chancellor says Treasury civil servants planning for the impact of leaving the EU on financial stability in the UK – but Number 10 maintains no wider policy planning taking place

By Josh May

11 May 2016

George Osborne has admitted for the first time that Treasury officials are drawing up plans in the event that Britain votes to leave the European Union.

The chancellor said the department had done a “serious amount” of contingency planning for the impact of leaving the EU on financial stability in the UK.

His surprise comments came just two days after Number 10 insisted that only the Bank of England, not the government, were carrying out such work ahead of June's referendum.

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Appearing before the Treasury Committee on Wednesday, Osborne said: “There would be very significant financial volatility around the vote to leave and the Bank of England and the Treasury are doing quite a serious amount of contingency planning for the impact on financial stability in the immediate aftermath of a vote to leave.”

He revealed he had met Bank of England governor Mark Carney "regularly" to discuss the potential consequences on financial stability. 

But the the chancellor insisted that there had been no other policy areas subject to contingency planning. 

Asked about how the government would react after a vote for Brexit, he replied: “We would be trying to make the best of a very bad job but we have not done a lot of contingency planning about the arrangements we would be seeking. It’s not what myself, the PM and the great majority of government support.”

The comments appear to contradict Downing Street’s position on Monday.

After David Cameron had suggested a vote for Brexit could make war in Europe more likely, the prime minister's spokesman denied that anyone in the government was looking at how the UK should prepare for the threat of a conflict.

“The government has a position that we should vote to remain and we are not contingency planning for leaving,” the spokesman said. 

Speaking after Osborne had made his comments, the same spokesman said: "The Treasury is doing contingency planning for the financial market consequences and stability."

However, he insisted no contingency planning was taking place "for the policy decisions that would need to be required" after a Brexit vote.

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