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UK economy showing signs of shock: Osborne

Press AssociationPress Association 1/07/2016

Britain's economy is showing "clear signs" of shock in the aftermath of the vote to leave the European Union, Chancellor George Osborne says.

The chancellor - who strongly backed a Remain vote in last week's referendum - says a "supreme national effort" will be needed to overcome the fallout from the Brexit vote.

His comments came as Tony Blair called for "serious statesmanship" in the talks with the EU that will shape the future of the UK.

The former prime minister warned "our nation is in peril" after the Brexit vote, and he said negotiations on the UK's future relationship with the other countries would be of "extraordinary complexity".

His assessment of the seriousness of the situation was echoed by a tweet from the treasurer as Osborne visited Manchester: "Clear signs of economic shock in aftermath of Leave vote. Will require supreme national effort but we can come through this challenge."

Blair urged the contenders in the Tory leadership race to act with "genuine patriotic regard" to the country's future as he accepted his own party was "effectively disabled".

In an article in the Daily Telegraph, Labour's former leader said: "There is going to be a negotiation of extraordinary complexity where there are a thousand devils in every detail. Those we used to call 'our European partners' are, unsurprisingly, divided and uncertain themselves."

He said some countries wanted a quick divorce, while others favoured a delay in commencing the Article 50 process, which starts a two-year countdown to Brexit.

"This needs serious statesmanship," he said.

"So before any formal negotiation begins, we need to get a high level sense of where the boundaries are going to be, the things that might be compromised, the things that are red lines."

In a stark assessment of the task, he added: "Our nation is in peril. To allow us to come safely through this we need to be adult in our politics, to proceed with calm, maturity and without bitterness; because our future as a nation in the world and as the UK itself is at stake."

Blair warned that Ukip leader Nigel Farage's performance in the European Parliament could damage the country's ability to secure a favourable deal.

In highly-charged exchanges in the wake of the Brexit vote, Farage was booed and barracked by MEPs as he accused them of being "in denial" about the failure of their single currency and their attempt to create political union in Europe.

The Ukip leader said he had been laughed at when he arrived in Brussels 17 years ago with a message that Britain must leave. And he told MEPs: "You're not laughing now."

Blair said: "Don't underestimate the damage having Nigel Farage address the European Parliament in that way does to our interests. Remember who has to agree any new deal for Britain: the European Parliament."

With David Cameron set to leave the stage, the next leader of the Conservative Party will have the task of negotiating Brexit.

Blair said: "On the Leave side, there are some who are triumphalist and some more inclined to reach out. Those Leave leaders now so powerful within the politics of our nation should demonstrate they are in 'reach out' mode fast.

"With the Labour Party effectively disabled we need the Conservative Party to conduct its leadership battle with genuine patriotic regard for our nation's interest."

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