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Friday, 10 June 2016

Brexit will mean more cuts and tax rises say Labour

Labour have today set out new analysis showing what the party say a Tory Brexit Budget would look like if the UK were to leave the European Union. Labour claim the hit to the UK economy caused by leaving the EU would weaken the public finances and leave a Tory Government committed to austerity being forced to set out how they would meet their discredited fiscal targets.

Labour’s analysis of figures from the Institute for Fiscal Studies shows that a Tory Brexit Budget will hit our public services and family finances hard.

If the additional Tory austerity was shared equally between cuts to day-to-day public spending, reductions in social security and tax rises, it could mean:

  • Spending: Departmental resource budgets would fall by 2.8 per cent in 2019-20 on top of existing plans. The Department of Health would be cut by £3.5 billion, the Department for Education by £1.6 billion, the Home Office by £300 million and the Ministry of Defence by £800 million.
  • Social security: The Tories would need make cuts to social security reductions which are the equivalent of: re-introducing the cuts to Personal Independence Payments they tried to get through in March’s Budget; increasing the taper rate for Universal Credit, hitting low-paid working people; and abolishing child benefit and rolling it into Universal Credit
  • Tax: The Tories would need to increase taxes, for instance increasing VAT to 22 per cent, in order to make up the difference

Commenting Labour’s Deputy Leader, Tom Watson, said: "Austerity is a political choice, not an economic necessity. If the UK was to vote to leave the European Union we know the Tories would choose more austerity to deal with the economic fall-out and meet their discredited fiscal promises."

Mr Watson continued: "Leave campaigners like Boris Johnson and Michael Gove need to tell the British public what a Tory Brexit would mean in terms of the public finances and further austerity. But what is clear is that working people across the country would pay the price of leaving the EU– through cuts to public services, social security cuts and higher taxes like another Tory VAT rise. This is the price of Tory Brexit. It is a price that Boris Johnson, Michael Gove and the like are happy for other people to pay."

"Britain is faced with a fundamental choice: whether to choose jobs and growth by voting to remain, or to choose exit and the Tory cuts and tax rises that would bring. Working people would be hurt by a vote to leave. Labour won’t stand by while that happens so we’re redoubling our efforts and saying loud and clear: we’re in for Britain." Tom Watson added.