By Sadie Robinson
Downloading PDF. Please wait... Issue 2510

Bosses will use Brexit as excuse for more austerity and cuts – if we let them

This article is over 5 years, 10 months old
Issue 2510
World rulers and the rich have warned of economic meltdown after the Brexit vote
World rulers and the rich have warned of economic meltdown after the Brexit vote (Pic: Rafael Matsunaga/flickr)

The global rich claim that last week’s vote to leave the European Union (EU) will cause economic catastrophe.

US billionaire George Soros said people in Britain “stand to suffer significantly” because of the vote. Panic in the immediate aftermath of the referendum result seemed to back this up.

The pound fell to its lowest level since 1985 last Friday. Some £120 billion was wiped off the value of the FTSE 100 share index and a record £1.5 trillion from global share prices.

Most bosses’ and business organisations backed Remain, despite splits in the ruling class. This is because the EU works in their interests.

They are in turmoil because the vote didn’t go their way.

Bosses may cut investment if they feel their ability to make profit has been weakened. But this doesn’t mean economic meltdown or cuts are inevitable.

Firms that were planning to cut jobs to protect profits anyway may now cynically blame it on the Leave vote.

Bosses have a lot invested in Britain and won’t simply abandon it while there is money to be made. And it is costly and complicated to move jobs elsewhere.

Some warned that firms’ use of an “EU passport”, where those based in Britain can trade in the EU, is under threat. Yet countries such as Norway still have access to EU markets without being a member of the EU.


Some of the panic is overblown. One story on the Guardian website was headed, “Firms plan to quit UK as City braces for more post-Brexit losses”.

But the story showed that most firms did not plan to leave Britain. It was based on a survey by the Institute of Directors.

Nearly two thirds of more than 1,000 bosses surveyed said the Leave vote was bad for their business. But just 20 percent said they were “considering moving some of their operations” out of Britain.

Just 5 percent said they planned to make workers redundant. Nearly half said the vote would have no effect on their investment plans.

Bosses have been making cuts for years. HSBC threatened to scrap 1,000 jobs in Britain in the event of a Leave vote. Yet just last year it announced 8,000 job cuts as part of a “restructuring”.

The rich have fought to protect their profits since the financial crash of 2007-2008. They want us to pay for their crisis.

The cuts and austerity ordinary people have suffered are a political choice—they are not inevitable.

The rich are in crisis and are weakened by the EU vote. That means we have more of an opportunity to push them back. The deciding factor in whether we see more austerity and cuts is whether there is resistance.

Osborne promises punishment – again

Tory chancellor George Osborne will use the EU vote as an excuse to make more cuts.

In reality Tory austerity is part of a long-term project to shift wealth from workers to bosses.

In a statement on Monday of this week Osborne warned “it will not be plain sailing in the days ahead” and that Britain’s economy would need “an adjustment” in the future. “There is going to be an impact on public finances,” he said.

Osborne has shifted from a previous threat of an emergency “punishment budget”. He indicated that there would be no new package of cuts until the autumn.

But he laid the ground for future attacks. “You should not underestimate our resolve,” he warned.


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