‘Just remember this – in this country they drive on the wrong side of the road’: why we should have expected the referendum result we got.
Not only will businesses have to live with the consequences of the result for a long-time, Brexit also serves as a case-study on how to make a bad decision. Nate Silver, the American uber-predicator, says his failure to predict Trump’s rise was because he refused to follow the data and instead allowed his intuition and prejudice to get in the way. The EU Referendum had data in spades.
Just over a week on from the EU Referendum and it’s time to take stock and grapple with a key question: Why was the referendum result such a surprise to so many?
Previous referendums around the world have tended to drift back to the status quo, so most experts anticipated a Remain win (guilty as charged here). When polled by Opinium on the 22nd June, the majority of the population expected Remain to win. Clearly Nigel Farage thought Remain was going to win, exemplified by his hokey-cokey concede/unconcede act throughout the night. And from Sarah Vine’s diaries in the Daily Mail, it’s clear Michael Gove thought Remain would win:
“‘You were only supposed to blow the bloody doors off,’ I said, in my best (i.e. not very good) Michael Caine Italian Job accent. In other words, you’ve really torn it now.”
For those who have not seen Italian Job here is a reminder of that iconic moment:
— GIS Reports Online (@GIS_Reports) June 24, 2016
Yet, with hindsight, the evidence was all there that Remain were going to struggle.
A YouGov poll on the 18th June found that 51% didn’t believe that the Remain campaign understood the concerns of ordinary people (only 30% said it did).
By contrast 46% felt that the leave campaign was more in touch (only 35% argued it wasn’t).
On the 21st June YouGov poll, the Leave campaign was seen as more honest and more positive. While the BBC TV debate on the 21st June was also seen as a win for Leave.
Neither did the Remain campaign’s warnings (the so-called ‘Project Fear’) cut through, with only 26% believing they would be worse off personally if we voted to leave (compared to 19% who believed they would be better off and 51% who felt it would make no difference – Opinium 23rd June).
— #vote Andrea Leadsom (@gemcch) June 23, 2016
YouGov, on the 23rd June, found that 51% stated that immigration would decline if we left the EU and 35% said that the NHS would also be better (24% said it be worse). Leave also had the less ‘unpopular’ political party leader (excluding Scotland) with IPSO-MORI on the 22 June showing a net dissatisfaction with
Since the Crash there has been a dismissal of economists and the markets, while the polling firms suffered their own humiliation in the 2015 General Election. Forecasting is always a challenge but if the methodology is robust and the qualifications are duly monitored the numbers are much closer than our gut-feeling, or even historical records where there’s a small sample. Plus, we need to be honest about our own biases and try to factor those into any analysis. We won’t always be right, but we can be less wrong!
Consequences: Screwed pound, house prices; expensive goods, healthcare pensions; higher inflation, rates, rent, unemployment #EUrefresults
— Mike Butcher MBE (@mikebutcher) June 24, 2016
Apart from the numbers it’s also important to look for underlying issues that may overturn conventional thinking. If we’d spent more time thinking about the erosion of median wages over the last 30 years and the impact of this on family budgets, we would have drawn the conclusion that higher house prices and mortgage debt were unsustainable much earlier than we did. Which would have led us to question the assumption about the vitality of the financial services market. In many respects, the EU Referendum was the same failure to understand the lives of ordinary families and how this should have changed the optics of our analysis.
Driving this insurrection against the nation’s elites (and polls consistently showed that the Remain campaign was seen as an elite project) there were structural factors in the UK that were overlooked. Michael Savage’s essential ‘Social Class in the 21st Century’ (2015) captures the transformation of class relations, the spatial divide resulting in fewer inter-class interactions, and the emergence of an elite class and the Precariat. The latter aren’t just poorer, they have been stigmatised, marginalised and patronised, and they know it.
‘Their resilience and resistance in difficult circumstances are misrecognized as crassness; their protection of their preferences is known as ‘bad taste’, and that, coupled with their sense of community, is viewed as part of their bad judgement and rigidity. Although the precariat are highly visible, and their ‘bad taste’ the rationale behind the practice of vilifying them, the value they have remains invisible. Today’s class culture is too loaded towards the privileged to allow them a place.’
(Savage et al 2015:358)
The wailing of Remain supporters since Friday morning serves to reaffirms Savage’s critique of contemporary Britain and why continual demands for another referendum, or setting-aside the result, may be more risky than making the best of a bad situation.
For businesses this means a bumpy ride and planning for the worst case scenario. Bluntly, that is leaving the EU with no trade deal in 2019 and then negotiating as a third party nation. The Canada option.
Those talks have just concluded after 7 years and now require ratification by all 28 EU states. The could mean a trade deal in about 2026. Though remember, a case study of one doesn’t make it an iron law or a reliable prediction, just an initial estimate.
Like at the culmination of the Italian Job we’re all perched precariously on a cliff edge and one false move and we’ll fall together.Comments Off on Why we should not be surprised at the #EUReferendum result