The polls are tight, so George Osborne has a cunning plan. He’ll present a “Brexit budget” where he will spell out how he’ll punish voters if they vote to leave the European Union. He’ll be forced to tear up his election pledge not to raise taxes: the voters will have provoked him, you see. Pushed him too far. He has all kind of sums in mind, that they won’t like one bit, starting with an extra 2p on the basic rate of income tax. Fuel duty will rise. The higher rate of income tax will go up 3p. Another 5 per cent on alcohol and fuel duties. Then £2 billion off pensions, and another £2 billion from public services. All told, £15 billion of tax rises: you can almost sense his nose growing longer as he reels off his list.
Writing in The Times tomorrow, Osborne says this is all a fair representation of what would be needed to plug the black hole that Brexit would create. Three flaws with this argument…
- If Brits vote for Brexit, it will take minimum two years – probably five years. So why raise taxes in an emergency budget now? Unless you’re trying to scare voters, that is…
- Osborne has been nursing a black hole since he stepped into the job. Why the sudden urgency to fill a Brexit one? As he knows better than anyone else, there’s an alternative to tough fiscal decisions: more debt. That’s what you do should you encounter a financial shock: borrow and stimulate. Cut taxes, increase spending. More debt is the option he has gone for time and time again, whenever he encounters difficulty. So what on earth makes us think he would not take that option this time? Especially given that the worldwide gilt slump has just pushed government borrowing costs to the floor.
- If Britain votes for Brexit than George Osborne won’t be giving any more Budgets. He’ll be on the backbenchers, writing his memoirs – or (more likely) asking Rupert Harrison for a job.
So his intervention is disingenuous, and outrageous – but, I suspect, intentionally so. Having threatened World War III and the end of Western civilisation, what more can the Remain campaign do? James Forsyth and I were discussing this for Coffee House shots, our now-daily politics podcast (subscribe here) and we ran through the logic.
By process of elimination, we said, the only trick left was the economy. The only card Remain have left to play is to hype up the economic threat even more, coming up with even bigger porkies than Osborne’s now-notorious claim that households would be £4,300 worse-off. In fact, what about a package of cuts so outrageous that it will get people talking and – here’s the trick! – change the subject away from immigration? Sure, people can talk about what a bounder Osborne is. But at least they’ll be talking about the economy.
At the weekend, David Cameron threatened the over-65s with pension cuts if they defied him on Brexit – a threat would mean him tearing up his triple-lock pledge on pension. Shocking, but I could more or less understand his sinking so low, given that he’s on his way out and doesn’t need to win another election.
But George Osborne has years left to run – at least in theory. Which makes it all the more surprising that he is using such tactics. He promised not to raise taxes, in the same manifesto that promised a referendum. Now he says he is ready to tear up his supposedly cast-iron pledges if it suits him.
I suspect that Remain will still win, but at this rate Osborne may have sacrificed his reputation in the process. He is a man whose promises melt in the political heat. Tory party members, who choose the next leader, won’t forget his behaviour in a hurry.
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