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And speaking of the UK, what’s this about ‘having to get rid of much of its social safety net’? February 1, 2017

Posted by WorldbyStorm in Uncategorized.

From Bloomberg…

The U.K.’s decision to leave the European Union is going to lead to dramatic changes in the way the country’s economy operates, which could create opportunities for a firm like Terra Firma Capital Partners, Chairman Guy Hands said.


The country will have to get rid of much of its social safety net and may see a 30 percent decline in wages in real terms in the next 20 years to enable it to compete outside of Europe, Hands said in an interview on Bloomberg Television. Debt will command higher interest rates as more risk is ascribed to an independent U.K., and immigrants from Europe will be replaced with workers from the Indian subcontinent and Africa, who may be willing to accept “substantially” lower pay, he said.

Jesus Christ, they’re not exactly shy about the implications of the vote, are they?


1. sonofstan - February 1, 2017

Guy Hands is the man who destroyed EMI. (When there was no reason why.)


2. deiseach - February 1, 2017

Good call on Bloomberg’s part to record this. When such comments become toxic, Hands won’t be able to rely on his ‘hazy memory’ (https://www.theguardian.com/business/2016/jun/10/guy-hands-abandons-fraud-claim–citigroup-terra-firma-emi-takeover)


3. Ed - February 1, 2017

I think this is a case of people coming up with their wish-list of all the things they want to happen anyway and hanging it round the neck of Brexit (a bit like the response to 9/11). A 30 per cent decline in real wages over 20 years sounds massive, but there’s already been a 10 per cent decline in real wages since 2008, before any of the consequences of Brexit were felt (and that was in an economy that was still performing better than much of continental Europe). Even in the absence of Brexit, the likes of Guy Hands would still be pushing full-tilt for the destruction of Britain’s welfare state; and they’ll get it too, if there’s not enough resistance, inside the EU or out.

Liked by 2 people

CMK - February 1, 2017

This begs the question: what has the UK trade union got to lose by massively increasing resistance and militancy post-Brexit? Like many managers habituated to decades of trade union acquiescence with attacks on workers and acceptance of a forcefully imposed status quo, Hands clearly doesn’t factor in the possibility of workers resisting in an organised way. Were the RMT model of union organisation to be extended across the post-Brexit economy then huge drops in real wages will not take place or will, if they do take place, be heavily contested.

All that is a big if. There is an article from the FT doing the rounds on FB today (can find the link) about attitudes among the ‘Thatcher Generation’ (roughly 39-54) and the ‘Blair Generation’ (roughly 27-28) and the prevailing attitudinal stance would suggest that militant trade unionism would be difficult to engender on a large scale with either cohort. Apparently the researchers found the Blair kids were even more Right wing than Thatchers Kids.

Post Brexit Britain is going to be governed by substantial ‘unknown unknowns’ and the view that it is going to be tabula rasa for business to remake in whatever way they desire is barmy.

On a separate point today, interesting to see Ed Miliband effectively supporting Corbyn’s position on Trump. Is a sense of reality dawning upon the Blairites?


WorldbyStorm - February 1, 2017

It’s not so much the dropping standard of living as the framing of this in the context of Brexit that struck me as telling. Agree entirely, they’ll take any chance, and be doing it anyhow, but to so nakedly say x has happened and now this is why y must happen…

CMK, it would be great to see that upsurge in militancy, but the stats you quote are very concerning.

On another point I was talking to a group of workers recently who want to unionise but it’s a business where the majority of workers are non-nationals who are – and the Irish workers were entirely sympathetic to this – deeply terrified of rocking the boat. I advised them to get someone from a union in just to talk to them, see what advice they had. Any thoughts on other support they could be given?


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