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Divided Kingdom – now the real challenge is to negotiate with our own disaffected compatriots

Government Affairs, Trust
EU_Referendum_Divided_Kingdom

If we didn’t know it already, it’s clear now. We live in a Divided Kingdom. And a shocked one. Even those who championed the cause of leaving the EU seem to be surprised by what has happened. Many thought the financial markets had priced in the risks attached to a Leave vote. Nobody, politician or trader, had priced in the resignation of Britain's prime minister.

If we didn’t know it already, it’s clear now. We live in a Divided Kingdom. And a shocked one. Even those who championed the cause of leaving the EU seem to be surprised by what has happened. Many thought the financial markets had priced in the risks attached to a Leave vote. Nobody, politician or trader, had priced in the resignation of Britain’s prime minister.

David Cameron’s announcement that he will not stay in office has deepened the shock. The Leave campaign had been hoping he would stay on, but he has seen it differently. Now, the uncertainty attending the decision by the British people to shun union with Europe will be multiplied by the wait to see who will win what could be a vicious Tory leadership contest.

If there is division in the country, it will only be deepened by this continuing uncertainty, but should today’s results actually be a shock?

While Cameron’s rapid retreat from the fray was truly unexpected and will weaken Britain’s hand in the unprecedented and painful divorce negotiations with 27 angry governments, the decision that overthrew him was perhaps more foreseeable.

Back in January, I wrote about the disconnection that was taking place between the group traditionally described as elites, and the mass public, and specifically how this divide manifested itself in attitudes to Brexit.

The Edelman Trust Barometer told us that a deep division existed in Britain, especially between those who were doing well out of the recovery from the 2008 financial crisis and those who were stuck in the mud of austerity. It was expressed in many ways: trust in government, in business, in media were all much lower among the poorer people in the UK.

The majority wanted to leave the EU. But it was very clear that the better off were content to stay in a Union that their countrymen felt offered them less than nothing.

Now we see the stark figures. The biggest votes to Remain were in areas with much greater household income than the areas with the highest proportion of Leavers.

In Lambeth, where average weekly pay was £585, 79% voted to stay. In Boston Spa, 76% voted Leave where average weekly pay is just £302. In Islington the remain camp secured 75%, in an area where weekly income is £626. Compare that to South Holland where take home pay is on average £388 a week and the vote to leave was 74%. As the Financial Times has pointed out today, some of the highest share of votes to leave are in areas that are most intertwined and benefiting from trade and support from the EU.

Then of course, there was the huge division between parts of the country. The division between Scotland and England is already precipitating further constitutional crisis; less likely, but possible is political turmoil in Northern Ireland.

However, the division between London and the rest of England is a sign of a different gulf, one of optimism and expectation, which the Trust Barometer also revealed earlier this year. Additional research we conducted in Britain showed that only 10 per cent of the poorest Britons thought the next five years would see them better off; only 10% of the wealthiest thought they would be less well off by 2021, a point of view that perhaps is being reassessed today.

As more details emerge, we will see evidence of other divisions, between graduates and non-graduates, between young and old, between employed and unemployed. Can we believe in each other? What common ground can we find? What has this referendum done to the trust Britons hold in their compatriots? With 75% of under 25s voting to remain, how will they respond politically to an older generation voting on their futures?

Whoever takes over from Mr Cameron, and presumably it won’t be George Osborne, will face a bigger task than negotiating the separation from Europe. He or she will have to restore that mutual trust we enjoyed, or thought we did, in each other. The new prime minister will be handed a Divided Kingdom. Can anyone unite it? Depressingly, in our survey of UK trust, no politicians scored high enough to give us much confidence that they could.

EU Referendum Briefing: The Final Result

General
EU_Referedum_Leave_Win_What_Next

Edelman UK's Chairman, Paul Myners, shares his thoughts on the win for Vote Leave in the EU Referendum. Edelman's team of Public Affairs experts have also produced a full briefing on the result.

The United Kingdom faces a new chapter in its relationship with the world following yesterday’s historic vote. When judging what this new relationship will look like, it is prudent to take stock of what we know at this stage, and what too are the ‘known unknowns’.

So what do we know? We know that the country, by a small majority, has voted to exit the European Union and that the decision is deeply divided across the nation. Indeed, the split in sentiment defies all established political conventions. England and Wales, excluding London, are strongly in favour of today’s final outcome. Scotland and Northern Ireland, deeply opposed. The potential for this outcome to further polarise the nation will be one of the most important considerations for the new Prime Minister.

Speaking of which, another thing we know: despite promising to stay on, David Cameron has announced he plans for a new Prime Minister to be in place by the Party Conference in October. And we know who the frontrunners for this race are, with Boris Johnson and Theresa May leading the odds. We also know that the Conservative Party has a history of electing the ‘underdog’ in its leadership races, but also that it has never conducted one in such peculiar circumstances.

And finally, one of the last important things we know is how the markets will react. Despite fluctuations, the overarching trend will be a reduction in international investment resulting in a slowing of economic growth, pushing the new Government to reassess its fiscal objectives when monetary policy is at the limits of what is prudent and sensible.

Moving, perhaps more positively, to the most significant ‘known unknowns’. We do not know how the rest of Europe and the EU will react to today’s decision. While the EU may wish to demonstrate how uncomfortable leaving its membership can be for nation states, it may also wish to use the vote to revisit its own purpose and to reflect on some of the causes of the UK’s decision. This may make a better European Union than the one Britain has decided to leave, one which is more acceptable for its increasingly concerned members.

We also do not know how Parliament will respond to today’s decision. We know that the majority of MPs support continued membership, but that the new Prime Minister will almost certainly be elected on a Eurosceptic platform. This could present an interesting democratic tension, and one which may require a redefining of the debate if we, as a country, are to move forward.

Lord Paul Myners is the Chairman of Edelman in the UK, providing senior strategic counsel. He spent most of his professional career in fund management with N.M. Rothschild & Sons and Gartmore before chairing a number of major companies, including Guardian Media Group, Marks & Spencer and Land Securities. He has also experienced frontline politics, serving as City Minister in the Labour Government between 2008 and 2010. He was a trusted advisor to Gordon Brown over many years.

Edelman has prepared a full briefing on the result of the EU Referendum, to read it please click here or see below.

For more information, please contact Gurpreet Brar on 020 3047 2466 or at gurpreet.brar@edelman.com.

Internet of Things: The Game-Changer for the Gaming Industry

Innovation, Technology
Gaming_IoT_EdelmanTech

What comes to your mind when you think about entertainment? Art, music and theatre or perhaps TV and film. Sports maybe? What about gaming? Odds are that the gaming industry was not one of your top picks.

What comes to your mind when you think about entertainment? Art, music and theatre or perhaps TV and film. Sports maybe? What about gaming? Odds are that the gaming industry was not one of your top picks.

Even though the global games market is predicted to generate an estimated revenue of $99.6 billion by the end of 2016, a number of misconceptions about gaming still undermine perceptions about the industry’s influence in the minds of consumers. However, the long-standing taboo that games are for children only is likely to be diminished as aging Millennials, who grew up playing video games, are now raising their own children with technology and games being an integral part of their lives.

A recent Ofcom report on UK adults’ media use habits further demonstrates that gaming is just as appealing to women as it is to men, showcasing the impact mobile games have had on opening the market to a wider audience, which may not have been interested in games otherwise.

However, this particular shift is one of few examples of how technology is directly influencing consumer behaviour and changing the industry from the inside out.

Figures from UKIE – the UK’s gaming trade body, revealed that the biggest gains of the nearly £4.2bn, generated by the UK gaming industry in 2015, came from sales of gaming devices such as consoles and PCs. In a sense, the Internet of Things (IoT) is already enabling consumers to use these devices as central entertainment hubs, which they can connect to via their smart devices (including mobile phones, tables, etc) and use to stream movies and TV series, listen to music and browse the web.

Thus, the functionality such devices offer could encourage even non-gamers to consider purchasing a console to replace the multiple TV peripherals required to achieve similar streaming flexibility. And who knows what else it will be able to control within the home in the future?

All this, however, raises some major concerns about the cybersecurity threats both consumer and businesses could be exposed to.

On one hand we are already seeing a number of successful campaigns, lead by organised cybersecurity gangs such as the famous Lizard Squad, targeting market-leading organisations in the sector. As IoT becomes a reality for the average consumer, every single device connected to the network via the Internet turns into a potential target for cybercriminals.

To stay ahead of the game, however, businesses need to first of all ensure they have a cybersecurity strategy in place to ensure compliance with any relevant regulation in their sector. Yet, educating consumers on how to stay safe within the expanding IoT network should be next on organisations’ list of priorities as personal data is now perhaps the most valuable currency, which people are not willing to share if they cannot trust businesses to protect it.

Image: logoboom / Shutterstock.com

We should listen to the voices missing from the Referendum debate – voices from the past

Government Affairs
Eu_Referendum_Ballot_paper

In the century of summers since our troops stood in the damp trenches of the Somme waiting to go over the top, we Brits have always trusted our instinct to help Europe through crisis rather than hide from it. This instinct is not the product of some patronising altruism, but rather enlightened self-interest.

In the century of summers since our troops stood in the damp trenches of the Somme waiting to go over the top, we Brits have always trusted our instinct to help Europe through crisis rather than hide from it. This instinct is not the product of some patronising altruism, but rather enlightened self-interest.

In 1914 we chose to fight Prussian militarism, while at the same time protecting our own imperial needs. In the 1930s, we heard the siren call of Oswald Mosley’s Blackshirt rhetoric and gave it short shrift. Like successive extremists of left and right, Brits rejected something that would unbalance our easy way of life. Similarly, as Hitler threatened, the British eventually trusted their instinct to fight rather than pander, though only when they could bear the dilemma no longer.

It would have been easier not to take a stand, just as it would have been easier not to protect Europe during the Cold War, when all our financial resources were needed to protect our crumbling economy. In all cases, the British assessed the pros and cons coldly and decided that our interests aligned with the greater interests of humanity.

And of course, we hope that they still do.

This approach leaves a great deal of room for cynicism. Paul Cambon, the French ambassador to Britain in 1914, said that nothing gave an Englishman greater pleasure than to discover that his country’s interests matched those of humanity at large “and where such a congruence does not exist, he does his best to create it”.

Now, faced with a choice that both the Leave and Remain side agree is momentous, we are being asked again to choose between helping with, or hiding from, a stumbling European experiment that is not clearly in our interests, but with which our interests certainly align. We are being asked to make a distasteful choice between sticking with a very unappealing status quo or going against our instincts to help and by doing so, help ourselves.

We are being asked to trust one vision of Britain or another, and the fact is that it is hard to trust either.

The Remain campaign has stretched trust to breaking point with theatrical visions of economic and political ruination; Leave has moved from attempting to present a vision of British strength through independence to concentrate on what many think was always its motivation – a fear of migrants coming to our shores in uncontrollable numbers.

Remain has rolled out an impressive array of supportive experts, from the IMF and the Institute of Fiscal Studies to President Obama and an array of Nobel Prize winners and business chiefs. Leave has countered with the extraordinary statement by Michael Gove, holder of the office of Lord Chancellor, a role occupied by some of the greatest minds our nation has produced, that “this country has had enough of experts”.

Apart from the inherent absurdity of a man elected and promoted presumably because of some personal expertise dissing experts, Mr Gove was factually completely wrong. The Edelman Trust Barometer showed this year that the most trusted people in the UK are either “academic or technical experts”, who hold the trust of two-thirds of the general population, compared with a little more than a third who trust “government officials” such as the Lord Chancellor.

The Trust Barometer, the largest survey in the world of how people view the institutions and individuals who rule their lives, also showed how keenly this referendum and its central (if embarrassing) issue – immigration are taxing British tolerance and understanding.

The two factors that stood out most clearly in a special British supplement to the research as reasons that we might trust our politicians more were first, “more honesty in government communications” and second, “better management of refugees and migrants”. In both cases, Brits have not been well served by their leaders.

The performance of Leave in recent weeks suggest that the opinions of experts are indeed less trusted in this debate. Perhaps it is because they have been adduced by politicians of all sides in a way that seems untrustworthy to the public. CEOs, also heavily used by both sides, are barely more trusted than politicians, according to Trust Barometer research.

The missing voice, which is highly trusted is what Edelman categorises as “people like me” – the ordinary person in the street. The Leave campaign has been avowedly populist; Remain has not. Neither has used ordinary people as more than extras in their cast.

But if we are tempted to call a plague on both their houses, how should we vote? In my view, this is where we should look back on what our parents and grandparents and great-grandparents did and follow them – they at least are people we can trust.

And what they did was, in successive crises that confronted Britain from the direction of our continental neighbourhood, roll up their sleeves and help others so they could help themselves. They did it with their blood, sweat and tears and with the sacrifice of those they loved.

All we have to do is put a cross on a piece of paper.

Image: chrisdorney / Shutterstock.com

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