One nation divided? The challenge for Britain beyond Brexit

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1. One nation divided?The challenge for Britain beyond Brexit Heather Stewart, Political Editor atThe Guardian Deborah Mattinson, Founding Director of BritainThinks…
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  • 1. One nation divided?The challenge for Britain beyond Brexit Heather Stewart, Political Editor atThe Guardian Deborah Mattinson, Founding Director of BritainThinks Cordelia Hay, Associate Director at BritainThinks Tim Montgomerie, Columnist atTheTimes MattWhittaker, Chief Economist Resolution Foundation Chair:Torsten Bell, Director of the Resolution Foundation 1
  • 2. DIVIDED BRITAIN? Perceptions, realities and prospects for the future Matthew Whittaker 22 September 2016 @MattWhittakerRF @resfoundation 2
  • 3. LONG DIVISION Assessing the referendum vote by place 3
  • 4. Do the haves and have nots explain the Brexit vote? Maybe… Looking across 378 of Britain’s 380 local authorities, a simple correlation shows that those with higher levels of median pay recorded lower votes for leave Source: ONS, NOMIS 4
  • 5. But there’s more going on… with a clear division between higher and lower paying groups Source: ONS, NOMIS 5
  • 6. Economics mattered for the Leave vote, but it was long- established divisions that stood out 6 ECONOMICS Employment rate Change in median pay (‘02-’15) Median pay Manufacturing change (‘95-’15) After controlling for all other factors, the employment rate in an area proved a statistically significant predictor of the vote – higher employment areas were less likely to vote Leave No significant link to recent changes in economic factors, suggesting that the economic divide is long-established
  • 7. Demographics also mattered, with the pace of change in migration in an area mattering more than the level 7 Areas with high numbers of students posted lower Leave votes after controlling for other factors The share of the population born outside of the UK had no significant bearing on the vote, but the pace of change in the migrant population over the last decade did DEMOGRAPHICS Students Non-UK born share of population Ratio of old to young Change in non-UK share (‘04-’15)
  • 8. Cultural differences played a role too, with some areas recording very different votes even after accounting for other factors 8 Areas were statistically less likely to vote Leave when reporting higher levels of ‘cohesion’ (where ‘people tend to get on well with those from different backgrounds’) and statistically more likely when homeownership rates were high Even after controlling for everything else, some areas recorded unusually low Leave votes (Scotland) and some recorded unusually high ones (West Midlands), implying other factors were also important CULTURE ‘Cohesion’ Home ownership Scotland West Midlands
  • 9. The biggest single predictor of the vote, education, straddled economics, demographics and culture 9 ECONOMICS Share of population with Level 4 qualification (degree) and above DEMOGRAPHICS CULTURE
  • 10. SQUEEZED TOGETHER Do living standards realities match the perceptions? 10
  • 11. British divide widened in the 1980s and hasn’t been bridged since Gini coefficient measures the level of inequality (after taxes and benefits) It climbed from 0.26 in 1980 to 0.34 in 1990 and has been broadly flat ever since Source: IFS 11
  • 12. But period of relatively even growth in incomes since then can be split into four distinct phases 12Source: DWP, Family Resources Survey Before the financial crisis, income growth was initially strong and shared, but then disappointed The post-crisis squeeze on incomes was felt across the distribution and the pace of the early recovery has been modest
  • 13. With households enduring more than a decade of weak growth, potentially leaving many (rather than the few) disillusioned 13Source: DWP, Family Resources Survey
  • 14. The picture looks a little more skewed once we account for differing experiences of housing costs 14 Higher income households less affected by housing costs than average inflation suggests, but housing costs have continued to drag on income growth in the bottom half of the distribution Source: DWP, Family Resources Survey
  • 15. Especially if we focus just on the working-age population 15Source: DWP, Family Resources Survey
  • 16. Clear that inclusion of housing costs paints a picture of a larger – and still widening – divide in Britain When measured after accounting for housing costs, the Gini increased from 0.27 in 1980 to 0.37 in 1990 but then continued to climb – peaking at 0.4 just before the financial crisis And this isn’t just a London story Source: IFS 16
  • 17. Source: ONS Poor income performance has coincided with a period of significantly increased immigration 17 EU migration picked up sharply from 2004 thanks to the A8 countries There was a further jump from 2014, after lifting of restrictions on Romanians & Bulgarians Had cultural and (small) economic impacts
  • 18. Economic divisions haven’t widened in the 21st century, but the general living standards backdrop has been tough 18 • Income inequality little altered in the last 15 years, but a historic divide helped to drive the Brexit vote • However, the mood of the country is likely to have been affected by a generalised slowdown in income growth since ~2002 (and a painful post-crisis squeeze) • This has been exacerbated for many by rising housing costs and reduced access to homeownership • Likely to form part of a potentially growing divide between the living standard experiences of the generations • Meanwhile, the coincidence of higher migration in this period of disappointing income performance is likely to be correlated in many people’s minds
  • 19. GROWING APART What does the future hold? 19
  • 20. Economic impact of Brexit is very uncertain, but the Bank of England has knocked £45bn off its 2018 GDP projection Unemployment is also projected to be higher and wage growth slower than previously thought Heading forward, post-referendum economic projections point to slower growth 20Source: Bank of England
  • 21. And existing (pre-Brexit) tax and benefit policies suggest more division, not less 21 National Living Wage provides a boost to low earners, but gain spreads across much of the income distribution In contrast, working-age benefit cuts are concentrated in the bottom half Source: RF analysis using IPPR tax benefit model
  • 22. Providing for a difficult outlook, even before factoring in any post-Brexit slowdown 22 At the top end of the income distribution, pre- Brexit forecasts pointed to a continuation of disappointing growth At bottom end, planned welfare cuts meant that incomes were set to fall Source: RF analysis using IPPR tax benefit model
  • 23. Meaning welcome words from the PM need to be backed with action 23 • Brexit vote brought existing divisions to the fore of political debate • Impact of Brexit hugely uncertain – but most likely negative over the course of this parliament • Even before the referendum, there were existing challenges on earnings, housing, intergenerational fairness, entrenched geographical inequality and regressive tax/benefit plans • All of which means the new PM faces a tough economic inheritance • But the good news is those issues are explicitly on the agenda
  • 24. Brexit and Beyond From Divided Britain to One Nation?
  • 25. Methodology: what we did Harlow, Essex Leamington Spa, Warwickshire• Women aged 30-50 • All self-define as working class • C2/D • A mix of Leave and Remain Voters • Men aged 30-50 • All self-define as working class • C2/D • A mix of Leave and Remain Voters • Women aged 30-50 • All self-define as middle class • B/C1 • A mix of Leave and Remain Voters • Men aged 30-50 • All self-define as middle class • B/C1 • A mix of Leave and Remain Voters Online survey of 2,053 British adults weighted to be nationally representative Qualitative phase: four focus groups Quantitative phase: nationally representative survey
  • 26. Key take-outs Post EU Referendum, Britain is divided – a nation of people who describe themselves as ‘haves’ and ‘have nots' • In our poll 44% describe themselves as ‘haves’ and 56% as ‘have nots’ • ‘Have nots’ were much more likely to vote Brexit 1 The public’s biggest priorities post-Brexit are focused on the NHS and immigration • They also believe politicians should be focused on post Brexit economy/trade, support for working families, new homes, and ‘bringing Britain back together’ 2 3 For most, the jury is out on Theresa May • Though many see reason to feel cautiously positive – describing her as a steady hand and a change from Eton-dominated politics • Others are impatient for change and growing concerned that May is slow to take action
  • 27. Where people are starting from
  • 28. The public finds it increasingly difficult to talk about ‘one’ Britain – the word that they most associate is ‘divided’ I think the country’s not broken but fractured…after the referendum as well, you were labelled as either racist or unpatriotic depending on which side you were. Harlow, Male Divided – the 52% and 48%, the country is very much unsure what to do. I voted to stay, and I’m appalled that we are going to leave the EU, I’m appalled that some of the people that voted won’t even be here. And I think it’s the worst decisions we’ve made in 50 years. Leamington Spa, Male I love the idea of diversity in Britain and I actually embrace that but I feel that these days there’s quite an undercurrent of xenophobia, and that makes me feel that Britain is broken. An undercurrent of intolerance. Leamington Spa, Female
  • 29. Most of all, Britain is seen as divided between ‘haves’ and ‘have nots’ ‘Have nots’ describe: • A powerful sense of injustice about their situation in life • The feeling that systems are in place which work in favour of elites and against their best interests ‘Haves’ describe: • Awareness of different levels of wealth and success in the UK • And a growing contingent of people who feel ‘left behind’ and disenchanted • Themselves as different to that group - and are grateful that that’s the case We as a country have created a society of levels. And this won’t change, because politicians, most politicians are millionaires. So how are they representative of us? When they’re making laws. The rich people could make change but won’t because the system works for them Harlow, Male My family come from Stoke on Trent, and it’s a really impoverished city. Their outlook on the EU was so different to my friends here, and in London, and these are my cousins, the same family, age. It’s Cities vs Rural, but also cities with outdated industries that have no regeneration. My cousin by the time she was 26 had been made redundant 4 times, in an industry our family had worked in for generations. It’s so different to my life. Leamington Spa, Female
  • 30. The British public is more likely to identify with the ‘have not’ than the ‘have’ category Have 44%Have not 56% Q. People often talk about our divided society nowadays and how Britain is now a nation of “Haves” and the "Have nots". Which group do you feel best describes you? Base: Representative sample of the British public
  • 31. 59% 50% 35% 30% 33% 57% 41% 50% 65% 70% 67% 43% 18-24 25-34 35-44 45-54 55-64 65+ Have But within this there are significant differences in terms of age, geography and socioeconomic grade Disenchantment increases with age up until pension age AGE Men and women are more or less equally likely to feel disenchantedSEX Disenchantment is – unsurprisingly – higher the lower your SEG SEG There is a clear North/South divide – most strikingly in the NE versus SE GEOG- RAPHY 55% 45% 57% 43% Have Have not 77% of people living in the North East identify as a ‘have not’ 46% of people living in the South East identify as a ‘have not’ 68 % 32 % A B 48 % 52 % C 1 38 % 62 % C 2 18 % 82 % D E Have Have not Q. People often talk about our divided society nowadays and how Britain is now a nation of “Haves” and the "Have nots". Which group do you feel best describes you? Base: Representative sample of the British public excluding those who say ‘don’t know’ (n=1,384)
  • 32. And by political leaning and beliefs Conservative leaners are MUCH less likely to feel disenchanted than Labour/UKIP supporters PAST VOTE 66% are ‘haves’ 34% are ‘have nots’ 32% are ‘haves’ 68% are ‘have nots’ 33% are ‘haves’ 67% are ‘have nots’ ‘Leavers’ are more likely to feel left behind than ‘remainers’ EU REF 51 % 49 % Remai n voters 38 % 62 % Leave voters Have Have not
  • 33. People in different parts of Britain are living totally different lives… Kerry, Cleaner, Waitress and Nanny, Harlow • Single mum of a 10 year old boy, and rents a room in her mum’s house • Works three jobs to cover all the bill and childcare and even then has very little to spare at the end of the month • Feels that people like her are ignored and that more money is spent on services for immigrant communities Charity should start at home. There are a lot of people struggling, and they can’t get any help. I work 3 jobs and I can’t afford somewhere to live. I live with my mum, with my 10 year old son in a room, we’re earning just enough to get by. If I didn’t have my mum’s support I couldn’t manage. Martin, Civil Servant, Leamington Spa • Is proud of what he’s achieved in life: was the first person in his family to go to university and has built a comfortable life by working hard • Felt pleased when his oldest daughter was accepted in to university, but worries about her future beyond that • Blames struggles for young people getting onto the property ladder on poor management by successive politicians I came from a working class background and I went to university and it took me to a life that I wouldn’t have had. I think now young people are looking at the debt and are put off.
  • 34. …and holding totally different views of the same issue Steve, Builder, Harlow • Has lived in Harlow all his life, and describes the area as in decline – especially public services • Thinks that places like East London are now too dangerous for White British people as the Muslim community is so dominant • Feels he can no longer fly an England flag when the football is on because of political correctness gone mad Chris, HR Manager, Leamington Spa • Feels optimistic about his local area and the economy • Thinks that multiculturalism has been a great thing for the UK and has made it a more interesting and vibrant place to live • Says that most immigrants he has met or worked with have been hardworking, polite and a great addition to the country – much harder working than ‘white benefit scroungers’ There are British citizens who aren’t working and there are people coming in and it’s nothing to do with colour or religion, it’s to do with whether you’re willing to do certain jobs for that amount of money. British culture is fading away, the influx of the migrants is changing things in Britain. People who don’t want to integrate. When they come over here, and they can’t speak English properly, and you can’t talk to them at work, you have to get someone to interpret.
  • 35. Does it matter if Britain is divided?
  • 36. It does matter to the ‘have nots’ because they feel they are losing out to an indistinguishable class of elites who are just out for themselves… ‘Them’.. they don’t get our lives, they don’t live in our shoes. The working lower class voted out, and the upper class voted in because they’ve got the money and they have more to lose. It affects them more than it affects you. People with money. They’re panicking more that we’re out [of the EU]. Harlow, Female The ‘big people’, they think that it’s a united country, because they don’t know about our lives. Harlow, Male They don’t know about anything about real life, their daily shop probably cost what our weekly shop costs. Harlow, Female When it comes to these tax laws, and you tax these higher earners they’ll go “so long”…it’s those higher earners that donate to the Conservative party, who own the big newspapers. It sounds good taxing them more but how are you going to do it? Harlow, Male
  • 37. It matters to ‘haves’ too, who are angry and embarrassed about a group of people they see as ignorant and uneducated The thing about Wales is they all voted out, but they’re reliant on an industry that – unfortunately – doesn’t work, and people need to understand that this industry doesn’t work anymore. And yet the EU was plugging money into Wales! Leamington Spa, Female I was always proud of Britian’s tolerance but the Referendum campaign became ‘if you vote to leave all the immigrants will go’. A lot of the guys I know from working class areas, are very much “the immigrants ruin everything so they should go away”. Leamington Spa, Male When those people get angry they will turn out in their droves to show their displeasure. We’re not the political power anymore. The same people chose Boaty McBoatface at the end of the day. Leamington Spa, Male I’m still appalled that we ever had the vote personally, I still can’t believe they gave the public the chance to vote on it. Most people don’t know enough and don’t pay any attention to the facts. Leamington Spa, Male
  • 38. Brexit is viewed as bringing these long- simmering divides to a head Seen by ‘have nots’ as: • Ordinary people triumphing over elites • An opportunity to fight back against the personal and local impacts of immigration • Being given licence to say things they wouldn't say previously because of fears of being ‘un-P.C.’ Seen by ‘haves’ as: • Vulnerable downtrodden people who have been manipulated • Scapegoating immigration because of problems in their lives • Threatening dearly held values like tolerance and diversity We as a country have created a society of levels. And this won’t change, because politicians, most politicians are millionaires. So how are they representative of us? When they’re making laws. The rich people could make change but won’t because the system works for them Harlow, Male My family come from Stoke on Trent, and it’s a really impoverished city. Their outlook on the EU was so different to my friends here, and in London, and these are my cousins, the same family, age. It’s Cities vs Rural, but also cities with outdated industries that have no regeneration. My cousin by the time she was 26 had been made redundant 4 times, in an industry our family had worked in for generations. It’s so different to my life. Leamington Spa, Female
  • 39. What should Brexit Britain look like?
  • 40. Everyone agrees that there needs to be change – otherwise Britain will become more and more divided • Brexit is perceived as a catalyst for change • Even remainers agree that ‘Brexit must mean Brexit’ • Critical for democracy • And they are united in feeling fed up of slow progress • Politicians seeming to go on holiday rather than focus on the task at hand • Done right, Brexit is seen as an opportunity to bring Britain back together • It is hoped that Brexit can lead to a fairer and more equal Britain Make Britain better, make it a fairer system. People who are working basically have to fend for themselves. I split up with my husband, my baby was 3 weeks old, I couldn’t pay the mortgage, but because I was employed I got nothing. Harlow, Female Do something! They’ve not done anything so far, a couple of them have taken some holidays. At the point of the biggest decision this country has ever made. Harlow, Male
  • 41. And re Brexit, some unanimity emerges… Everyone says they want clear and concrete plan as soon as possible With clear next steps, timescales and accountability All the speeches, they sound very good. I’d like them to give a timescale of when things are going to happen. Not just taking quotes out of the sky, give a rough idea of when they’re going to try to achieve these. So we can have more faith in what they’re telling us.
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