Brexit Poses a Double Threat to Britain's Economy - An Initial Shock Followed By More Years of Tory Austerity

Today Labour set out the choice facing the British public in just under two weeks. It's a choice between Labour investment in growth, jobs and skills on the one hand and even more Tory austerity on the other.

Today Labour set out the choice facing the British public in just under two weeks. It's a choice between Labour investment in growth, jobs and skills on the one hand and even more Tory austerity on the other.

We have been confronted in recent weeks with a wealth of respected, independent economic organisations coming out against Brexit. They all universally told us that the impact on our economy would be significant and damaging. The inevitable consequence would be a reduction in our national income, and under a Tory government it would be ordinary working people who would suffer.

The economic impact we would be sure to see if the UK leaves the European Union would blow a black hole in the government's finances. With the economy faltering and unemployment rising, tax receipts would plummet and a Tory government would do more of the things we are used to seeing from them- taking the knife to vital public services and cutting support for working families.

The Institute for Fiscal Studies says that leaving the EU would mean more austerity, by wiping out the Tories planned surplus in 2019-20 and leaving a deficit of up to £28billion. If they sought to eradicate this- as they most likely would, it would be working people that suffer.

Additional Tory austerity could mean a third of the £28billion coming from Whitehall Departmental cuts, a third from reductions in social security spending and a third from tax rises. All of which would have devastating consequences.

Whitehall's Departmental spending could fall by a further 2.8% in 2019-20. Frontline public services have already suffered under this Government with 18,000 fewer police officers, longer NHS waiting lists and 700 fewer children centres. All this would be set to get worse as Whitehall gets squeezed even more. But this still wouldn't be enough to fill the Tory Brexit deficit.

Further cuts to welfare could see the Tories re-introducing their hated and much criticised cuts to Personal Independence Payments they tried to push through in Osborne's March Budget. A cut that would do untold damage to disabled people already driven to the brink by this Government.

Shockingly, the state of the public finances, and the Tory determination to reach a budget surplus, is such that on top of further cuts to Whitehall and welfare that tax rises would also be needed. The Tories might need to increase VAT to 22 per cent, in order to make up the difference, and of course this is something they were more than prepared to do it in 2010 when they increased VAT to 20 per cent.

Brexit is therefore a double threat, it would cause an economic shock affecting jobs and growth, but it would also mean a Tory Government implementing drastic austerity measures, with working people left to suffer.

We know this because we know it will be the same old Tory Party in government post-Brexit. The same Tory Party that said they wouldn't cut tax credits before the last General Election and then did just that once in office. And the same Tory Party that cut taxes for millionaires at the same time as introducing the cruel and unfair Bedroom Tax.

This is the price of Brexit and it is a price that Boris Johnson, Michael Gove and the like are happy for other people to pay.

Labour is clear that it isn't a price working people can afford, that's why Labour is campaigning to stay in Europe. It brings us jobs, growth and investment and it is working families that benefit. Leaving would put this at risk, and it's a risk working families can't afford.

Labour has a positive vision for the future of Britain and how we grow and share our prosperity. Of course the EU isn't perfect- but we should be changing it from the inside, leading not leaving. That's how we will secure better jobs, more investment and greater growth that benefit working people. Vote to Remain on the 23rd June.

Seema Malhotra is the shadow Chief Secretary to the Treasury, and Labour MP for Feltham and Heston

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