George Osborne warns UK to expect spending cuts and tax rises after Brexit vote

The next Conservative government will have to cut spending even further and raise taxes to ensure the country can live within its diminished means post-Brexit, George Osborne has said.

The Chancellor said it was “very clear” that the country would be poorer following the people’s decision to leave the EU and while ruling out an immediate ‘emergency budget’, he said that the next prime minister would “absolutely” have to inflict further austerity measures on the population.

Once seen as the frontrunner to succeed David Cameron as Conservative leader, Mr Osborne’s reputation with the party lies in tatters following the Brexit vote, which he vehemently argued against, and he has ruled himself out from running in the imminent Conservative leadership contest.

However, in an interview with BBC Radio 4’s Today programme – his first since Thursday’s vote – the Chancellor hit back at critics who have said the Government was under-prepared for a Leave vote. He said extensive contingency measures had been put in place to stabilise financial markets, but insisted that it was not the responsibility of those who had campaigned to stay in the EU to plan for the longer term future of Britain’s future relationship with Europe outside of the bloc.

“We need a plan as a country to get ourselves out of this, while respecting the decision of the British people,” he said. “We have extensive contingency plans for the financial stability consequences of Brexit… and we spent a long time preparing those plans. It was not the responsibility of those who wanted to remain in the EU to explain what plan we would follow if we voted to quit the EU. Those who wanted to quit the EU had a whole range of different visions. There were some who wanted all the benefits of EU membership without any of the costs. I’m not sure that’s very realistic

"We as a country and we as the Conservative party have to determine which model we are seeking in terms of our relationship with our nearest friends and allies. That is what the Conservative leadership contest is about.”

Mr Osborne said his staunch support for Remain meant he was not the leader to unify he party.

Asked whether he regretted the fact the referendum had been called in the first place – a decision he is understood to have privately argued against during the Coalition years – Mr Osborne said he regretted the result, but would not dispute the will of the people.

“Did I want Britain to remain in the EU? Yes. Did I fear the consequences if we quit? Yes. Did I argue passionately for that during the referendum? Absolutely I did… I’ve made my argument, the British people have chosen a different course but I love this country. As I say, my country right or wrong, I will do everything I can to make it work for Britain in the difficult months and years ahead.”

Mr Osborne is widely expected to be ousted as Chancellor under the next Conservative prime minister, who will be in office by September. He said that his future would be up the next party leader.