John Whittingdale (pictured attending Cabinet today) hit out at the 'Project Fear' approach of the In campaign in the EU referendum
A leading Cabinet minister warned today that David Cameron and George Osborne's 'Project Fear' approach to the EU referendum was 'dangerous'.
John Whittingdale, the Culture Secretary, said making 'Armageddon' forecasts about life outside the EU would create a self-fulfilling prophecy because people would react to an 'Out' vote on the basis of the disastrous warnings they had been told by the likes of the Prime Minister before the vote.
And just minutes after the Bank of England Governor Mark Carney described the prospect of a Brexit as the 'biggest domestic risk' facing the UK economy, Mr Whittingdale slapped him down by saying such warnings were 'wrong'.
He said there were many other uncertainties that would have an equal and potentially greater impact on the UK economy than leaving the EU.
Mr Whittingdale, who is one of the six Cabinet ministers who is backing an Out vote, added that the UK Government must draw up contingency plans for life outside the EU even though it is officially in favour of staying in.
Warning of the dangers of using scare tactics in the referendum campaign, he said: 'It is sensible in my view that the Government should prepare for both outcomes and telling people that Armageddon would follow from our withdrawal in my view is both wrong but also dangerous in that if Britain did decide to leave people may react on the basis that they have been told that this is going to cause all these economic shocks.
'Whilst it is true that the question of the UK's membership of the European Union is the biggest issue in domestic politics, there are so many uncertainties out there in the world today relating to China, to Greece, to the oil price - these are all others that the Chancellor has made clear [make for] quite difficult challenging times and that is what financial institutions are there to take account of and to hedge against.
GOVERNOR: BREXIT CALL BY BORIS HELPED SINK THE POUND
Boris Johnson's Brexit declaration 'concentrated minds' in the currency markets
Boris Johnson's declaration for the Out campaign may have driven a slump in the pound, Bank Governor Mark Carney has suggested.
The London Mayor finally declared for Brexit in a doorstep press conference a day after David Cameron formally fired the starting gun on the referendum.
The value of sterling fell in the early stages of the campaign and financial analysts have warned the pound could fall to 'parity' with the euro after a Brexit vote.
Asked whether the London Mayor's announcement had an impact, he replied: 'The combination of having the agreement, and therefore a date for the referendum, and the tangible evidence of a campaign in favour of Leave with credible politicians as part of that - not least represented on this committee - concentrated the minds.
'I know that seems a bit odd that sometimes financial markets ignore an issue until there are focal points that make it more tangible, but this is what happens time and time again.
'It was a combination of events that focused minds.'
Mr Carney said the moves in sterling were 'relatively large' but 'not unprecedented'.
'This in someways is a lesson about all the global challenges we face,' he said.
He was speaking after Mr Carney told MPs on the Treasury committee that leaving hte EU would have a 'profound economic shock' to Britain - echoing warnings from the Chancellor.
But the Bank of England Governor, who must remain neutral in the campaign, was immediately accused of making 'speculative' pro-EU claims and Tory MP Jacob Rees-Mogg said his statements were 'beneath the dignity of his office'.
Mr Whittingdale, speaking to journalists in Westminster today, insisted there would be no such shocks to the economy if Britain left the EU.
Instead Britain would be 'liberated' from signing lucrative free trade deals that it is unable to do as a member of the EU, he added, and said Britain's prospects would be 'immense' outside the 28-state bloc because it could forge new deals with fast-developing nations such as South Korea.
In the event that Britain votes In, however, he said the Prime Minister should immediately make a speech promising to demand more reforms in the EU.
He could do so because he could prove that a large proportion of the British population had voted to leave the EU.
Asked whether he accepts the view that there would be an economic downturn if Britain left the EU, Mr Whittingdale said: 'No. It is perfectly true that there are certain unanswered questions if we would choose to leave and we would have to negotiate new arrangements.
'But this country is the sixth biggest economy in the world, we sit on the G7, we have a seat on the UN Secruity Council - we are able to prosper outside the EU and in many ways we would be liberated to do things that we are prevented from at the present time.
'Our prospects are in my view better. I think we can enjoy the continuing benefits of having access to Europe, free trade through a new arrangement but we'll be able to look outwards.
'Yesterday I attended the Korea-UK creative industries forum. There is a country that is growing fast, where we have a great deal in common and where the export opportunities are immense.
'We should not just be focussed on Europe. The real opportunities lie outside Europe and that is why I believe this country should be seeking to take advantage of.'
'There is a very strong view that Europe is heading in the wrong direction and that Britain doesn't share the ambitions of the rest of the European continent and that we would be better outside.'
JEREMY CORBYN'S CHIEF SPIN DOCTOR SEUMAS MILNE ONCE RAN ELECTION CAMPAIGN PROMISING A MAOIST REVOLUTION IN BRITAIN
John Whittingdale (pictured) attended the same boarding school as Mr Milne and revealed a copy of the remarkable election poster at a lunch with Westminster journalists today
Jeremy Corbyn's chief spin doctor once ran an election campaign calling for a 'Maoist' revolution in Britain, it emerged today.
Seumas Milne, the Labour party's director of communications, laid out a chilling vision of a communist state in the UK where 'kibbutz-style communes' would be the 'first step toward the withering away of the state'.
His vision of a communist Britain came in a mock election when he was a schoolboy at the elite private school of Winchester college and was revealed today by Culture Secretary John Whittingdale.
In the manifesto - co-written by a fellow pupil - a young Mr Milne claimed the British public were only scared of communism because of 'ignorance'.
Jeremy Corbyn's top spin doctor Seumas Milne (left) once ran an election campaign calling of a Maoist takeover of Britain. The election poster (pictured right) was uncovered by John Whittingdale today
The manifesto read: 'Under a Maoist Government, factories and farms will be run by committees of workers, elected by workers (as in China where this has proved to work very well)'.
It added that 'population control would be effected in a number of ways'. Mr Milne, now 56, made the claims despite Chairman Mao overseeing tens of millions of deaths during the economic and social reforms under his 'Great Leap Forward' in China.
Mr Milne claimed: 'Communism has frightening connotations to most people in Britain mainly due to ignorance.'
The chilling manifesto - titled 'Vote Maoist, Foster & Milne' - went on to set out a foreign policy under a revolutionary takeover of the UK Government.
'If a Maoist government was elected foreign debts would be renounced, as after the Russian revolution and we would withdraw from Nato and the EEC. Military spending would be cut and all troops would be recalled.'
Mr Whittingdale attended the same boarding school as Mr Milne and revealed a copy of the remarkable election poster at a lunch with Westminster journalists today.
Mr Milne was a controversial appointment by Mr Corbyn and was greeted with outrage from Labour MPs.
The chilling manifesto - titled 'Vote Maoist, Foster & Milne' - went on to set out a foreign policy under a revolutionary takeover of the UK Government
The former left-wing Guardian journalist has a long history of defending communist regimes, in particular the Soviet Union, writing in one column that 'Stalin's terror has been progressively inflated over recent years'.
In 2014 he claimed there was 'not the slightest evidence the Soviet Union ever intended to attack' the West with nuclear weapons.
He also compared Winston Churchill to Lenin and Stalin, writing: ‘If Lenin and Stalin are regarded as having killed those who died of hunger in the famines of the 1920s and 1930s, Churchill is responsible for four million deaths in the avoidable Bengal famine of 1943.’
He has also defended more recent Russian aggression and appeared alongside Vladimir Putin at a recent propaganda summit designed to boost the Russian President's ego.
Every year, a hand-picked group of high-profile Westerners sympathetic to Russia are invited to the pseudo-economic summit, with expenses paid by the Kremlin. In 2014 Mr Milne was invited and chaired a 'discussion club' with Mr Putin in Sochi.
Photos emerged in October of the pair shaking hands and Mr Putin listening attentively to Mr Milne.
Bank of England Governor claims Brexit is the 'biggest domestic risk' to the economy but he's accused by Eurosceptics of making 'speculative' pro-EU claims
A Brexit vote is the 'biggest domestic risk' facing the UK economy, the Bank of England Governor warned today but he faced accusations he was making 'speculative' pro-EU claims.
In an almost three hearing with MPs today, Mr Carney insisted he was choosing all of his words carefully and said the Bank was neutral on the referendum question.
But Eurosceptic Tory Jacob Ree-Mogg blasted the Governor for making pro-EU statements that were 'beneath the dignity' of his office.
Jacob Rees-Mogg, left at today's hearing, accused the Governor of using language straight out of the In campaign's playbook. Mark Carney, right today, denied the charge and insisted he was 'careful' with words
Mr Carney hit back later in the session, claiming the North East Somerset MP had a 'selective memory'.
The crucial moment came in the final minutes of the treasury select committee hearing when chairman Andrew Tyrie pressed Mr Carney on whether Brexit would amount to a 'profound economic shock' to Britain, as claimed by Chancellor George Osborne.
Mr Carney said: 'The issue is the biggest domestic risk to financial stability.'
The Governor said Brexit was a 'known risk' to the markets and was not of the same magnitude as global risks such as a Chinese slowdown.
He warned: 'It has some potential to amplify pre-existing risks to financial stability.'
Speaking very slowly as he considered his words, Mr Carney added: 'The issue is the biggest domestic risk to financial stability because, in part, of the issues around uncertainty.
'But also because it has the potential - depending on how it is prosecuted and these issues can be addressed - to amplify risks around the current account, potential risks around housing, potential risks around market functioning we are trying to mitigate.
'Also associated risks with respect to the euro area.'
Ahead of the evidence session, Mr Carney said in a letter to the committee the deal secured by David Cameron on Britain's EU membership 'addresses' the concerns of the Bank around the eurozone.
The Governor insisted the Bank was neutral on the referendum question and warned there were risks on both sides.
But the eueosceptic Conservative MP Jacob Rees-Mogg blasted the approach in an exchange about the benefits of the single market on Britain.
Mr Carney insisted: 'There is a reason why a substantial proportion more global banks, more internationally active banks are head quartered in London than any other European country or all other European countries combined.
'That's partly because of the cluster of expertise that it here but also in many cases... that is because of the passporting ability of this economy in terms of the activity.'
Today's hearing took centre stage in the increasingly angry EU referendum campaign as Mr Carney was pressed for the Bank's view
Mr Rees-Mogg said: 'This is what I think is doing your reputation and the reputation of the Bank of England harm - you are coming out with the standard statements of the pro-EU group.
'The statements you make about the dynamism of the economy could just as well refer to reforms introduced by Margaret Thatcher.
'It is speculative and beneath the dignity of the Bank of England to be making speculative pro-EU comments.'
Mr Carney insisted: 'I'm not going to let that stand.'
The Governor said he was confident in his assessment of the implications of the EU single market.
He continued: 'What you see... is the growth of UK trade with the rest of Europe is arguably - not conclusively but arguably - because of the single market is greater.'
The two men renewed their clash at the end of the session when Mr Rees-Mogg insisted Mr Carney had only focused on the 'positive' aspects.
The Governor insisted this was 'entirely unfounded'.
Mr Carney insisted the language used in his reports was 'careful'.
Committe chairman Andrew Tyrie joked that the long pauses as Mr Carney chose his words could have paved the way for an alternative career as a 'bomb disposal expert'.
Elsewhere in his evidence, Mr Carney said EU membership 'reinforces the dynamism of the UK economy'.
Treasury select committee member John Man claimed Mr Carney had been 'reliant on fear factor' during his evidence to the MPs today
Conservative MP Kevin Hollinrake picked up on Mr Carney's evidence that banks based their businesses in London because of the advantages of the EU
But he also warned the unfinished monetary union - the rules around the euro currency - represented a risk of staying in.
Vote Leave Chief Executive Matthew Elliott said: 'Mark Carney made clear that there are financial risks to Britain voting to stay in the EU. He stressed the need for the UK to retain flexibility but the Government failed to secure any meaningful reforms to protect UK taxpayers.
Ukip MP Douglas Carswell was last night critical of the Bank's announcement it would provide finance around the referendum to ensure stability
‘As the previous Governor Lord King has warned, the euro is likely to “explode”. If we vote to remain our money will be used to bailout the euro when it next hits crisis point.
‘Voting remain means giving away more power, and more of our money every year to Brussels. The safer option in this referendum is to Vote Leave and take back control.’
Mr Carney said the City of London would 'without question' lose business if it failed to negotiate the continuation of existing mutual recognition agreements within the financial sector following a vote for Brexit.
He warned that negotiations of this kind 'in general take a very long time to achieve' and may involve ceding some measure of the UK's sovereignty.
Mr Carney's letter to the committee said: 'The Settlement addresses the issues the Bank identified as being important, given the likely need for further integration of the euro area, to maintaining its ability to achieve its objectives.'
It added: 'It makes clear that the UK retains responsibility for supervising its financial stability, financial institutions and markets as well as maintaining responsibility for the resolution of failed financial institutions within its jurisdiction.
'At the same time, it acknowledges the existing powers of the Union to take action that is necessary to respond to threats to financial stability.'
Pressed on whether Downing Street had any involvement in the positive tone of the letter, Mr Carney dismissed the notion out of hand.
He said: 'We are expressing views that are the views of the institution. We are not leaned on by anybody.
'It would have no effect if they did.
'To be absolutely clear, we are choosing our words carefully.'
The Prime Minister's spokeswoman said: 'It's for the BoE to consider what measures they should take with regard to the financial stability of the UK economy. The Prime Minister is very clear on the reasons why we should remain in the EU...
'We've heard the Prime Minster and the Chancellor talk about the risks that there would be of leaving. An EU exit would be a profound economic shock. We are going to focus on making the case for remaining in the EU.'
The Bank of England was last night accused of scaremongering after offering emergency cash to Britain's biggest lenders ahead of the EU referendum.
In an unprecedented move, the central bank announced it is taking extra precautions to ensure the June 23 vote does not spark another banking crisis.
In a statement issued after markets closed yesterday evening, it said it will offer extra loans to banks and building societies so they can protect themselves against turmoil on financial markets.
Douglas Carswell, MP for Ukip and a prominent member of campaign group Vote Leave said: 'We can now see vividly that the big corporate banks and the Bank of England are aligned with Project Fear.
'We know the banks got massive bailouts and we know the Bank of England gives cheap credit subsidies to the banks.
'Now we know that in the run-up to the referendum banks will be given even more access to easy money.
'This is cronyism and collusion between vested interests in government and vested interests in big corporate banks.'
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