one nation divided? the challenge for britain beyond brexit

1

One nation divided? The challenge for Britain beyond

Brexit

Heather Stewart, Political Editor at The GuardianDeborah Mattinson, Founding Director of Britain

ThinksCordelia Hay, Associate Director at Britain Thinks

Tim Montgomerie, Columnist at The TimesMatt Whittaker, Chief Economist Resolution

FoundationChair: Torsten Bell, Director of the Resolution

Foundation

DIVIDED BRITAIN?Perceptions, realities and prospects for the future

Matthew Whittaker22 September 2016

@MattWhittakerRF @resfoundation

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LONG DIVISIONAssessing the referendum vote by

place

3

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

But there’s more going on… with a clear division between higher and lower paying groups

Source: ONS, NOMIS 5

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

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)

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

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

SQUEEZED TOGETHER

Do living standards realities match the perceptions?

10

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

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

With households enduring more than a decade of weak growth, potentially leaving many (rather than the few) disillusioned


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 distributionSource: DWP, Family Resources Survey

Especially if we focus just on the working-age population


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

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

Economic divisions haven’t widened in the 21st century, but the general living standards backdrop has been tough

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• 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

GROWING APARTWhat does the future hold?

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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

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

halfSource: RF analysis using IPPR tax benefit model

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

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

Brexit and Beyond

From Divided Britain to One Nation?

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

Key take-outsPost 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

1The 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’

23For 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

Where people are starting from

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

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.


The British public is more likely to identify with the ‘have not’ than the ‘have’ category

Have44%Have

not56%

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)

18-24 25-34 35-44 45-54 55-64 65+

59% 50% 35% 30% 33% 57%

41% 50% 65% 70% 67% 43%HaveHave not

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 disenchanted

SEX

Disenchantment is – unsurprisingly – higher the lower your SEG

SEG

There is a clear North/South divide – most strikingly in the NE versus SE

GEOG-RAPH

Y

55% 45

%

57%

43%

HaveHave 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%AB

48%52% C1

38%62% C

2

18%

82%DE

Have Have notQ. 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)

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’


33%are

‘haves’


‘Leavers’ are more likely to feel left behind than ‘remainers’

EU REF

51%49%Remain

voters

38%62%

Leave voters

HaveHave not

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.

…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.

Does it matter if Britain is divided?

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

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!


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”.


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.


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.


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.


What should Brexit Britain look like?

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

And re Brexit, some unanimity emerges…

Everyone says they want clear and concrete plan as soon as

possibleWith clear next steps, timescales and

accountabilityAll 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.

Harlow, Male

I just want a plan - this is the only time I’ve ever said this sentence, but I’d quite like to see a PowerPoint presentation of the next steps, of what’s going to happen.


But there is little understanding of the trade offs that will follow Brexit• People no longer believe that the pledge of £350 million

extra for the NHS will happen• ‘Have nots’ have little concern for the trade vs

immigration trade off• ‘Haves’ are clear that trade is more important – although

acknowledge that continuing high levels of immigration will not be accepted

• ‘Have nots’ are adamant that immigration is the priority and feel no connection to discussions over trade deals. It seems illogical to them that immigration would not have to decreased now

• ‘Have nots’ expect that Brexit and lower immigration will free up the money needed to improve public services

No one round this table owns a multimillion pound company, or is trading in stocks and shares. It shows again that in Westminster, it’s about them lining their pockets, it’s not about us. It could well be about jobs. But they’re not hopping out their seats to bail out a steel mill in wales, but if it’s a bank, they’ve got their money invested in it and they care

Harlow, Male

Well you could say, we’re not going to have any immigration, but there’s no certainty that that’s achievable, so let’s go for trade unless there’s a plan otherwise.


Deliver a well-funded and efficient

NHS

Significantly reduce im-migration

Negotiate strong trade

deals for Britain as we leave the EU

Better sup-port for

struggling working fami-

lies

Building 1m new homes, with half to be council

houses

Bringing Britain to-

gether again following the

European referendum

30%

20%

10% 8% 6% 6%

Q1. Below are some policy ideas that have been proposed by leading politicians... Which one is the most important for you?

Immigration control, there’s a lot of things that they need to do, but the first thing she needs to do is control the population, help people get a job and somewhere to live

Harlow, Male

There’s a lot within the cog of the NHS which is wrong, but to keep cutting and to keep cutting… I see people on their knees on a daily basis. It’s not about increasing the spending, it’s actually looking at the management and making it work better


The public’s top priorities for the country are focused on the NHS and immigration

The policies that people don’t prioritise include:Reintroducing grammar schools, improving the transport infrastructure outside the South East,

cracking down on the pay of top executives, abolishing tuition fees and re-introducing the 50p top rate of tax

These priorities are shared by ‘haves’ and ‘have nots’


Immigration first – and the rest will flow, it will free up more money

Harlow, Female

The focus has got to be on supporting people who are already working rather than benefits for the unemployed


Bringing Britain together again following the European referendum

Building 1m new homes, with half to be council houses

Better support for struggling working families

Negotiate strong trade deals for Britain as we leave the EU

Significantly reduce immigration

Deliver a well-funded and efficient NHS

6%

6%

5%

16%

18%

35%

6%

7%

9%

6%

22%

29%

Have NotsHaves

Put workers onto the boards of big companies

Reintroduce grammar schools

Improving transport infrastructure to improve economy outside London and the South East

Reintroduce 50p top rate of tax for people earning more than £150k

Reducing the deficit in Britain's public sector finances

Abolish university tuition fees and bring back maintenance grants

1%

1%

2%

2%

3%

4%

0%

1%

1%

2%

1%

3%

Have Nots Haves

And equally, ‘haves’ and ‘have nots’ are less interested in the same policies


I think it gives nearly rich people a free education. I’d love for my kids to go to grammar school, but I don’t think it’s fair.


Policies that affect ‘other people’ (e.g. taxing the highest

earners) are felt to have too little impact on people’s own lives to be a priority by both

groups

Immigration is the lens through which people see each of these policies and issues • It is seen as the main cause of the ‘overburdened’ NHS,

rather than a lack of funding• Everyone agrees that immigration must be better controlled

and they want a clear and concrete plan for what this will look like• ‘Have nots’ are adamant that controlling immigration would

solve many of the problems in the UK• ‘Haves’ agree that immigration needs to be controlled, so that

only the ‘best’ and most appropriate foreign workers are allowed to live in the UK

• An Australian points based system is a popular example given for how to control immigration successfully

It’s who you bring in rather than the number – it’s got to be like the Australians with a point system. It would solve a lot of problems rather than letting everyone in who becomes unemployed and is on benefits.


For me looking at a lot of them, the money’s got to come from somewhere, and the only way you can get that is migration, stopping people coming to claim money then disappearing. We can put money in to schools, the NHS.

Harlow, Male

Is Theresa May the right person to lead Britain through Brexit?

For many voters, the jury is out on May • For some, it is too soon to judge

Theresa May as Prime Minister or to see if she’ll be different to other politicians• Too little has happened and she has

had too little time to prove herself

• But many voters – particularly women – do see reason to feel cautiously optimistic• In contrast to the perception of David

Cameron as an out of touch Etonian, May appears more in touch with the average person

Nothing she could do or say in those 5 minutes on the telly would make me think that this one’s different. It’s going to be actions over the next 5 years that matter.

Harlow, Male

I just don’t know enough about her – I’m just watching her avidly to see whether she delivers on her promises. She obviously thought very carefully about her speech but she’s made some interesting appointments. It’s watch and wait really.


David Cameron sometimes talks like he’s above everybody, he couldn’t explain the struggles of what normal people are going through. They’re from the same party, but she talks with more compassion, she comes across as a warm person, addressing people as individuals. More sincere.

Harlow, Female

Her ‘One Nation’ speech is felt to indicate that things might be moving in the right direction While the speech is little known, when shown the clip most voters are positive, particularly on people left behind…

“Make Britain a country that works not for a privileged few, but for every one of us”“Life is much harder than many people in Westminster realise”“I know that sometimes life can be a struggle”“The government I lead will be driven not by the interests of the privileged few, but by yours”“If you’re at a state school, you’re less likely to reach the top professions than if you’re educated privately”“If you’re just managing, I want to address you directly”“You have a job but you don’t always have job security”“We will do everything we can to help anybody, whatever your background, to go as far as your talents will take you”

She showed empathy, when she was talking about we know your lives are hard

Harlow, Female

She mentioned ‘privileged few’ on at least a few occasions so they’re showing that they realise that there’s anger and anti-establishment feeling.


It gives me goosebumps – I thought it was brilliant. Stunning stuff.


And on the public’s top priorities, Theresa May is trusted to do a better job than Jeremy Corbyn – even with the NHS

38%46%

58%

30%

12% 12%

1%9%

2%

31% 33%28%

Theresa May Jeremy CorbynI don't agree with this policy Don't know

Q2. For each of these policies who would you trust most to do a good job Theresa May or Jeremy Corbyn?

I don’t think there’s an alternative. I’ve never voted blue in my life but there’s no one else out there who makes me feel passionate the way Theresa May does.


There’s no opposition at the moment, so the Tories can do what they want


Number 1 priority:

Number 2 priority:

Number 3 priority:

But voters now want to see action – and are unanimous that delivering Brexit will be May’s biggest and most important test• Those who know a little about her

see May as a potentially strong negotiator• May is perceived as tough and no-

nonsense from her time as Home Secretary. This is seen as a valuable asset to have during Brexit negotiations

• But those who know less worry that she is just another politician• Who will lie, let them down and fail to

deliver on their promises

I think she’ll be a much stronger person – she’s shown it already in her role as Home Secretary. She was very adamant in things that she said and she stood by them. I think Ken Clarke was caught on TV saying she was a very strong character.


You see that from politicians all the time – saying they’re being inclusive when they’re not.

Harlow, Male

A plan to bring Britain back together means 3 things:

A Brexit Action Plan• Timetable• Impacts spelt out

1Immigration promises kept• Points (or similar)2

3A fair deal for the (deserving) ‘have nots’

53

One nation divided? The challenge for Britain beyond

Brexit

Heather Stewart, Political Editor at The GuardianDeborah Mattinson, Founding Director of Britain

ThinksCordelia Hay, Associate Director at Britain Thinks

Tim Montgomerie, Columnist at The TimesMatt Whittaker, Chief Economist Resolution

FoundationChair: Torsten Bell, Director of the Resolution

Foundation

one nation divided? the challenge for britain beyond brexit

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