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  1. ITV Report

Osborne: Brexit will trigger £30bn in tax hikes and spending cuts

Chancellor George Osborne. Credit: Reuters

George Osborne says he will have to raise taxes and slash public spending if Britain votes to leave the EU.

Amid fears the leave campaign is gaining momentum, the chancellor will say that the economic consequences will be so severe that an emergency "Brexit Budget" would be needed to plug the £30 billion "black hole" in the nation's finances.

Schools, hospitals and the armed forces would all see their funding slashed under the plans, Osborne will warn.

He will share a platform with his Labour predecessor Alistair Darling to outline his concerns.

Robert Peston, our political editor, said ministers close to David Cameron were now "extremely worried" that Britain was on course to vote to leave the EU on June 23.

He said the chancellor's warnings were a sign that the remain camp were "ramping up" what the leave side has dubbed "project fear".

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Osborne will say that an emergency budget to "restore stability to public finances" would cause:

  • cuts of £2.5 billion to the NHS
  • the defence budget to be slashed by £1.2 billion
  • force education spending to drop by £1.5 billion
  • the basic rate of income tax to increase by 10%
  • inheritance tax to go up 5p to 45p
  • an increase of alcohol and petrol duties by 5%
  • severe cuts to Home Office, transport, and local government

He will say: "Quitting the EU would hit investment, hurt families and harm the British economy. As Chancellor, I would have a responsibility to try to restore stability to the public finances and that would mean an emergency Budget where we would have to increase taxes and cut spending.

"Far from freeing up money to spend on public services as the Leave campaign would like you to believe, quitting the EU would mean less money. Billions less. It's a lose-lose situation for British families and we shouldn't risk it."

Osborne will unite with Alistair Darling to warn of the risks of Brexit. Credit: Reuters

Darling, who ran the Treasury during the 2008 financial crisis, will say he is "even more worried" than he was back then, saying a Brexit will result in "years and years" of uncertainty.

He will accuse the leave campaign of performing a "giant con trick" for saying Brexit would result in more public service spending.

Vote Leave responded to the claims by accusing Osborne of threatening to break key Tory election pledges.

"I am shocked that the Chancellor is threatening to break so many key manifesto pledges on which all Conservative MPs were elected - I could not support these plans to cut the NHS and increase taxes on hardworking families," Tory MP Steve Baker said.