Osborne's Brexit fears have had a detrimental impact on the Treasury, the report suggests
Lord Kerslake, a former Whitehall chief who was commissioned by Shadow Chancellor John McDonnell to examine the Treasury’s role, claims Osborne’s scaremongering caused an “unprecedentedly hostile” public reaction to the Exchequer.
Kerslake found the former chancellor’s Brexit-bashing tactics have made the role of his successor far more difficult ahead of the triggering of Article 50 and the formal beginning of the UK’s exit talks.
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The report seen by the Observer states: “Whilst there is a debate still to be had as to whether the Treasury forecasts were completely wrong or just wrong in the timing, and how other factors such as the febrile political climate and criticisms of ‘experts’ played a part, there is no arguing that the standing and credibility of the Treasury was damaged by the widespread rejection of its warnings”.
The Treasury’s role in the referendum campaign has left it “weakened in the crucial economic debates about free movement of goods and services and the free movement of people post-Brexit”, according to the report.
Lord Kerslake (R), pictured meeting the Queen in 2013, authored the report
It is now clear the Treasury, and indeed the rest of the UK government, is unprepared and under-resourced for the tasks it faces in the immediate future and for some years to come
Lord Kerslake's report
Chancellor Philip Hammond will now need extra resources to tackle the mammoth task of negotiating Britain’s EU exit.
The City of London financial district accounts for 60 per cent of Europe’s capital market business and 40 per cent of its assets, and is likely to be an important bargaining chip in Brexit talks.
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The report continues: “It is now clear the Treasury, and indeed the rest of the UK government, is unprepared and under-resourced for the tasks it faces in the immediate future and for some years to come.
Speaking days ahead of the referendum last year, Osborne warned of “financial instability” if Britain left the EU, branding it an “irreversible” step which would leave Britain “with no economic plan”.
George Osborne, pictured speaking at an event in Belgium last week
He said Britain would be unable to "afford the size of the public services that we have at the moment,” adding: "There would have to be increases in tax and cuts in public spending to fill the black hole.”
Osborne was replaced as Chancellor by Philip Hammond when Theresa May took over as Prime Minister in July, and has since earned more than £600,000 in lucrative speaking engagements.
Last week, former Scottish First Minister Alex Salmond attacked Osborne in the Commons for his “scaremongering” in the runup to the referendum.
He said: “He may have argued the case with passion during the campaign.
“But it was his tendency to take perfectly reasonable Treasury forecasts as to the long-term damage that would be done by withdrawal from the Single Market in terms of GDP and wealth of this country and turn them into apocalyptic, emergency budget, day of judgement scaremongering that was one of the reasons the Remain side lost the campaign.
“Campaigns have to be built on more than fear.”
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