Statement on Chancellor's Announcement

Speaking this afternoon in Clevedon, in his constituency of North Somerset, The Rt Hon Dr Liam Fox MP said:

“This morning the Chancellor announced that the Government has abandoned its plan to eliminate the deficit by 2020.  This is hugely disappointing.  This failure to balance the books has been publically blamed on last week’s vote to leave the European Union.  It is argued that, such is shock that the referendum delivered to the UK Economy, it would be impossible for the Government to collect enough tax receipts in the midst of the recession that must surely grip Britain soon.

This statement is clearly disingenuous.  The economic shock that the Chancellor blames is already evaporating.  The FTSE 100 has rebounded to a ten-month high, as optimism replaces ‘Project Fear’.  More importantly, the Treasury has been missing its self-imposed borrowing targets for several years now.  In 2014-15 Britain was forced to over borrow by £2.7bn. In 2015-16 this rose to £4bn. In April this year alone, the government extended its borrowing by over £1bn to cover the funding gap.

Two days before the referendum, the Financial Times predicted that the target would be missed again in 2016-17.  There are several reasons why the elimination of the deficit is taking longer than the Treasury predicted, including ring-fenced Government spending and lower than expected tax receipts.  But to scapegoat the Leave vote, and apportion the blame for Treasury failings to the greatest democratic exercise in Britain’s history is profoundly misleading and reprehensible, and a potentially damaging extension of project fear”.

Many thanks.