EU Referendum

Reality Check: Would there have to be emergency Brexit tax rises?

George Osborne saying there would have to be an emergency budget.

The claim: If there was a vote to leave the EU there would have to be an emergency budget.

Reality Check verdict: There is no legal requirement to have an emergency budget but the Chancellor could have one if he wanted to make immediate changes to tax rates or spending cuts.

Speaking on a platform with former Chancellor Alistair Darling on Wednesday, George Osborne warned that a vote to leave the European Union would mean there would have to be an emergency budget.

"Legislating for the kind of measures required to tackle a large structural deficit takes time and Britain would need to get on with it."

The Reality Check team has discussed the warnings from the Institute for Fiscal Studies (IFS) of how the public finances would be hit by the sort of slowing growth predicted following a Brexit.

On Sunday, there were warnings of hits to pensions, defence and the NHS.

This time, Mr Osborne and Mr Darling went a step further, saying that there would have to be a 2p rise in the basic rate of income tax and a 3p rise in the higher rate, while spending on the police, transport and local government could take a 5% cut.

Under the National Insurance Contributions Bill and 2015 Finance Bill, increasing income tax, National Insurance or VAT before 2020 would be illegal, so that would presumably have to be repealed.

Faced with a Brexit, the IFS predicted that the Chancellor would have to abandon his target of balancing the budget by 2019-20, bringing in an extra year or two of austerity at the current level.

There is no legal requirement to have an emergency budget. Even if something happened that had a considerable impact on the economy, the Chancellor could decide to wait until the Autumn Statement.


Read more: The facts behind claims in the EU debate


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