Tax hikes will follow Brexit, warns UK finance minister

Tax hikes will follow Brexit, warns UK finance minister

George Osborne unveils package of vast spending reductions to counter a post-Brexit crash

LONDON (AA) - Britain’s finance minister Tuesday unveiled a “Brexit budget” of tax increases and deep spending cuts that he says would be needed if the U.K. votes to leave the European Union next week.

George Osborne, the chancellor of the exchequer, said that large-scale reductions would need to be made to defense, education, and health spending -- all areas that have so far been protected from the U.K. government’s six-year austerity program.

But 57 lawmakers in Osborne’s own Conservative Party said they would not support such a budget if it was brought to parliament, threatening the party’s slim House of Commons majority.

In a joint article in The Times with his Labour Party predecessor as chancellor Alistair Darling, Osborne wrote an emergency budget would be necessary because a Brexit "would lead to a profound economic shock that would hit the economy and could tip Britain back into recession."

The proposed measures include a 5 percent increase in fuel and alcohol duties, a £2 billion ($2.8 billion) reduction in the public pension fund, and a 7-10 percent income tax hike.

These would be necessary to balance out a £30 billion ($42.6 billion) deterioration in public finances, Osborne and Darling said.

But the 57 pro-Brexit lawmakers said in a joint statement on Tuesday: "It is absurd to say that if people vote to take back control from the EU that he would want to punish them in this way. We do not believe that he would find it possible to get support in Parliament for these proposals to cut the NHS, our police forces and our schools.

“This is a blatant attempt to talk down the market and the country. The chancellor risks doing damage to the British economy in his bid to win this political campaign.”

Speaking to BBC radio Tuesday morning, Osborne said he accepted the emergency measures would not be easy: "No Conservative wants to raise taxes, least of all me. But equally Conservatives understand -- and indeed I suspect many Labour politicians understand -- that you cannot have chaos in your public finances.

“You have to deal with the hole that would emerge if we quit the EU, and we would have to take the necessary measures.”

He added: “There is an alternative. If we vote to remain in the EU then we're going to stronger, safer, better off. We'll be going on building that economy, creating jobs, businesses will be out there working hard to grow our economy.”

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