The shock of exit from the European Union requires immediate and urgent action from the relevant authorities. 

This is needed to stabilise the situation given the weakness of the economy after six years of Tory austerity and failure. 

Labour will not allow the costs of exit to be borne by working people and their families.

The vote to leave the European Union represents a decisive rejection of the Conservative’s economic policy, resulting in stagnant real wages for a decade and widespread disaffection where people have not shared in prosperity.

Labour’s initial responses are:

1. The target for the Government Budget surplus in 2019-20 must be ditched. It has already damaged the economy and has no possible economic justification. Fiscal intervention is likely to be needed to reduce the shock to the economy.
2. There is no mandate or economic justification for an emergency austerity budget, as George Osborne threatened. We will oppose any attempts to impose one.
3. Government must reverse proposed cuts to government investment spending and urgently undertake a priority investment programme, targeted on those areas most exposed to the risks of an economic downturn.
4. Labour is taking steps to establish the extent of damage to pension funds, given their exposure to stock markets and the shadow banking system.

John McDonnell MP, Labour’s Shadow Chancellor of the Exchequer, said: 

“The government must now take steps to stabilize the economy, and to protect jobs, pensions, and wages. 

“Labour will not allow any instability to be paid for by the working people of this country. There is no justification or mandate whatsoever for an emergency austerity budget. We need a clear programme of action to protect our economy.”

Labour’s initial economic response to Brexit vote