A crucial duty of senior leadership is to provide reassurance when an organisation receives a shock. As CEOs over Britain told their workers that the Brexit vote doesn’t mean the end of their jobs and prosperity, and as David Cameron has quit, it fell to chancellor George Osborne to do the same for UK plc.
‘Britain is open for business... we start from a position of hard-won strength... whatever the challenges, my colleagues and I will do the best for Britain... I want this great trading nation of ours to put in place the strongest possible links with our economic neighbours, both in Europe and abroad... Britain has the strongest major advanced economy in the world...’
Get the gist? Everything Osborne said – from advocating a less-haste-more-speed approach towards invoking Article 50, to playing down his earlier talk of an emergency budget – was meant to calm the panic.
That’s what everyone’s trying to do, it’s true, but Osborne’s platitudes have a greater impact for two reasons.
Firstly, the chancellor represents a sense of continuity (and a continuity of sense). Imagine what would have happened had he resigned instead this morning – the front bench abandoning ship, leaving BoJo and the Brexiteers at the helm, would hardly have inspired confidence.
Secondly, Osborne’s already proved he’s a tough nut in hard times. You may not like him or believe he was right about austerity, but over the last six years it’s hard to argue that his much-evidenced commitment to fiscal discipline hasn’t shored up confidence in the economy. If the chancellor says he’ll do what it takes, people will believe him.
Of course, this isn’t to say he or anyone else can magically end the panic that struck the markets on Friday. The root cause of that panic is short-to-medium term uncertainty (no one knows what the long-term implications of Brexit will be) and that will only clear up once a new government has been formed, once Article 50 has been invoked and once the negotiations with the EU start to take shape.
Market volatility will persist therefore, no matter how much we keep calm and carry on. But that doesn’t mean a little reassurance every now and again can’t help. The FTSE 100 dropped only 2.1% by lunchtime, less than expected, while sterling temporarily steadied.