Chancellor Says Tax Hikes and Spending Cuts Ahead

Chancellor George Osborne has indicated that increased taxes and cuts to spending are likely to lie ahead for the UK. These measures, the Chancellor said, will be a necessary evil in order to deal with the economic “shock” of leaving the EU.

Speaking on radio to the BBC’s Today programme, Osborne reiterated warnings he had given prior to the referendum, and said that he continues to stand by the view that the UK’s future outside of the EU would not be “as economically rosy” as a future inside. The warnings he gave before the vote was taken, he claimed, “have started to be borne out by events.”

The UK’s economy has already felt the initial shock of the decision to leave the Union. After the referendum result was announced, with a narrow majority voting in favour of “Brexit,” financial markets were sent reeling with the stock market falling markedly and the value of the pound rapidly descending to its lowest levels since 1985.

Osborne said that the result of the economic impact of leaving the EU would leave the country poorer. He emphasised the government’s responsibility to “provide fiscal security” and the need for the country to “live within its means.”

After making these comments, Osborne was asked whether this would mean the need for increases in tax and cuts to government spending. His response to this question was “Yes, absolutely.”

A decision regarding the shape that these austerity measures might take, however, would have to be made by the new Prime Minister, Osborne said. With David Cameron announcing in the wake of the referendum that he would step down, the role of his successor as leader of the Conservative Party and therefore the current government is up for grabs. Making such a significant decision on matters of spending and tax, Osborne said, would not be possible while this leadership contest was still ongoing, but rather would fall to whoever emerged from that contest as the new leader of the country.

Osborne also said that it was a decision for those who had supported “Brexit.” Those who campaigned for the country to withdraw from the European Union, he said, are the ones responsible for drawing up a plan for the country following this withdrawal.

Despite reiterating warnings he had given before the referendum and predicting austerity as a result of Brexit, Osborne said that he stood by the Conservative Party’s decision to hold a referendum.

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