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Osborne backs away from emergency Budget

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Chancellor George Osborne says the UK’s vote to leave the EU will not trigger an immediate emergency Budget.

In a statement today, Osborne says the UK is in a “position of strength” but that there would still be an “adjustment” to the economy.

Osborne says: “It is inevitable, after Thursday’s vote, that Britain’s economy is going to have to adjust to the new situation we find ourselves in.”

The Treasury says it has identified three main Brexit challenges, the first being economic volatility.

Osborne says: “Markets may not have been expecting the referendum result – but the Treasury, the Bank of England, and the FCA have spent the last few months putting in place robust contingency plans for the immediate financial aftermath in the event of this result.

“We and the PRA have worked systematically with each major financial institution in recent weeks to make sure they were ready to deal with the consequences of a vote to leave.”

The second challenge is uncertainty around executing a withdrawal from the EU.

Osborne says the UK has to trigger Article 50 to leave the EU, but says: “In the meantime, and during the negotiations that will follow, there will be no change to people’s rights to travel and work, and to the way our goods and services are traded, or to the way our economy and financial system is regulated.

“However, it is already evident that as a result of Thursday’s decision, some firms are continuing to pause their decisions to invest, or to hire people.

“As I said before the referendum, this will have an impact on the economy and the public finances – and there will need to be action to address that.

“Given the delay in triggering Article 50 and the Prime Minister’s decision to hand over to a successor, it is sensible that decisions on what that action should consist of should wait for the Office for Budget Responsiblity to assess the economy in the autumn, and for the new Prime Minister to be in place.”

Osborne adds  the UK economy is strong and competitive and that the country is “open for business”.

The final challenge is renegotiating trade agreements with Europe.

Osborne says: “Together, my colleagues in the Government, the Conservative party and in Parliament will have to determine what those terms should be – and we’ll have to negotiate with our European friends to agree them.”

The Chancellor’s statement is his first since the Brexit vote on Thursday.

Last week the Bank of England said it had a plan for handling any “volatility” from the EU referendum.

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Comments

There are 8 comments at the moment, we would lover to hear your opinion too.

  1. I’m beginning to wonder if G.O has got anything right ?

  2. Pension freedom. Lifetime ISA. He’s doing nothing now because nobody knows what to do. There’s been a sudden collapse in what we assumed was political wisdom. That’s what happens when you ask the public to make political decisions instead of making decisions about the people who make political decisions. My worst fear is NI. How will Republicans be restrained given English Brexiters insistence on taking their country where they do not want to go?

  3. Julian Stevens 27th June 2016 at 9:35 am

    Of course he’s backing away from an emergency budget, because he knows full well that fiddling (any further) with the tax system ~ on top of Cameron, in a fit of pique, having declared his intention to abdicate, despite having previously said that he wouldn’t ~ would merely intensify the present political and economic uncertainty. It was just a threat to try to put the frighteners on those planning to vote leave.

    As for “our European friends”, several of them seem to want to hustle us out of the EU as quickly as possible, even though we’ve not yet even given formal notice of our intention to quit, and are threatening to make life as difficult as possible for us on as many fronts as possible. What kind of friends are those? We may need them and they may need us, but friends they’re not.

    And just how much do we need formal trade agreements anyway? If we’ve got what another country wants, they’ll buy it and vice versa, as is the case with all the other countries outside the EU with which we have no formal trade agreements but with which we conduct international trade regardless.

    Rule Britannia.

  4. There is only one reason why we are not having an emergency budget:

    The politicians and civil service were not expecting the Leave vote and they have done no preparation for it.

    On Friday the senior civil service received a brief 4-line email from the head of the civil service which effectively said “Erm…bare with!”

    Normally during a general election campaign HM Treasury is looking at the different parties manifestos and penciling in numbers, so that depending on the result they can deliver a post-election budget within a few weeks. Without that preparation and with so many unknowns it will take until the Autumn to prepare an “emergency” budget.

    We are currently in the “phoney war” phase of Brexit. Virtually nothing will happen whilst the politicians decide who is going to run the country and the civil service work out which way is up.

    We have stumbled into the biggest change this country has seen for 50 years with no effective leadership and prospective leadership saying “It’s OK chaps, we’ll wing it!”

    Now in 10 years time we might come out of this OK. But there’s going to be a lot of unnecessary heartache in the meantime. I’m not confident this is going to end well.

  5. So no emergency budget before the Autumn Statement at the very least.
    Anyone would think George never meant it.
    Maybe that means Euromaggeden is cancelled

  6. Christine Brightwell 27th June 2016 at 2:56 pm

    Oh joy. We will now spends millions of tax payers money on dealing with amongst other things the legislation needed, deciding whether or not to reinstate the border across Ireland, and the fall out from the likely separation of Scotland etc.

    I seem to recall one of the arguments made to keep Scotland with the UK was that they would not be part of EU if they went it alone. But of course they will as things stand not be part of the EU anyway – unless they vote to separate from UK.

    And we will be nil point in Eurovision for ever now

    Nevermind, lets just cut the public services to pay for the changes – no one will notice

  7. Alison Wunderland 27th June 2016 at 3:22 pm

    We have heard comments like Britain is in a strong position; house prices will fall; prices will go up; the pound will fall against other currencies. Some of these scenario are good for some people and bad for others, and if the economy is so strong why all the austerity?

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