George Osborne’s credibility has been hanging by a thread for some time after missing just about every single fiscal target he’s ever set himself, but his latest contribution to the referendum debate is beyond the pale. He simply cannot possibly know the economic impact a leave vote would have and, besides, any immediate reaction by financial markets would tell us nothing about the effects Brexit would have on the public finances in the long run, be they positive or negative. Far from being necessary, the proposed tax hikes would damage economic growth, something Osborne has been at great pains to point out during his chancellorship but sadly seems to have forgotten. Just days ago he stated his belief that Brexit would hit the poor, so his plans to increase fuel duty and the basic rate of income tax are nothing short of vindictive. This was not the act of a responsible chancellor, but of a desperate politician.
Laura Swire, director of Hanover Communications, says No.
The Institute for Fiscal Studies (IFS) has predicted a £30bn black hole should we leave Europe; it would be a dereliction of duty if the chancellor did not illustrate what an economic shock of this size would mean in practice for people’s finances and our public services. There is an overwhelming consensus that Brexit will have a negative impact on the UK’s economy. I don’t believe that the majority of voters buy Vote Leave’s accusation that the IMF, IFS, OECD and Bank of England are all involved in some sort of global conspiracy and their forecasts should be ignored. However, there is a difference between understanding the likelihood of economic chaos and predicting its practical impact. This was, therefore, a necessary intervention to bring the statistics to life. The fact that over 50 Conservative MPs have said that the chancellor’s position would be “untenable” if he put this budget forward damages George Osborne’s chances of becoming leader of the Conservative Party. But it does not undermine his credibility as a chancellor.