Monday, 27 June 2016

What happened to Project Fear, George?

George Osborne press conference at HM Treasury

George Osborne always has a fairly pallid complexion on the sunniest of days. But the chancellor hadn’t been seen in the light since Britain voted for Brexit so he looked particularly ashen-faced on Monday morning.

Osborne made a 7am appearance in the Treasury in an attempt to sooth the markets and reassure the nation with a keep calm and carry on message.

How long his own political life continues is a question he demurred from answering.

Osborne had three strong messages for the markets.

He said Britain has a strong, resilient economy ready for the stormy seas ahead because he had “fixed the roof” with five years of austerity (his mixed metaphors not mine).

There was plan for Brexit all along, a contingency worked out with the Bank of England to shore up the banks and the markets with £250 billion of loans.

He will not trigger Britain’s withdrawal from the EU through Article 50 until a new Prime Minister is in place, at least the Autiumn.

And there will be no emergency budget until the Office of Budget Responsibility assesses the fall-out of Brexit, again in the Autumn.

So no emergency budget, no punishment for the voters for going the wrong way. Whatever happened to Project Fear, the dire warnings of a £30 billion black hole in the British economy that would follow Brexit? Was it just a bluff?

Far from it, I suspect. Today was about reassurance not fear. Osborne warned it would not be “plain sailing” but that Britain is the fifth biggest economy in the world and prepared to absorb the economic shock. But if the economy goes of a cliff, there will be plenty to fear.

He also made an important point which, regardless of what you might think of his politics, displayed his calibre as a politician.

He said: “I do not want Britain to turn its back on Europe or on the rest of the world. We must bring unity of spirit and purpose and condemn hatred and division wherever we see it. Britain is an open and tolerant country and I will fight with everything I have to keep it so.”

He also appeared to rule out resigning in the near future, and asked whether he could serve in a government committed to leaving the EU, Osborne said: “It is my country right or wrong. And intend to fulfil my responsibilities to the country.”

Osborne will make it clear in the next few days what his plans are for the Tory leadership. His options appear to be to back Theresa May as a Stop Boris candidate or take a punt himself.

Either way we haven’t heard the last of him, or of austerity. 

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