Public Opinion in the Post-Brexit Era: Economic Attitudes in Modern Britain

OCTOBER 2017 Public opinion in the post-Brexit era: Economic attitudes in modern Britain

by Matthew Elliott and James Kanagasooriam

www.li.com www.prosperity.com PROMOTING POLICIES THAT LIFT PEOPLE FROM POVERTY TO PROSPERITY

ABOUT THE LEGATUM INSTITUTE Cover image: Demonstrators protesting about Government austerity cuts. The word ‘legatum’ means ‘legacy’. At the Legatum Institute, we are focused 1 July 2017, London on tackling the major challenges of our generation—and seizing the major © Thabo Jaiyesimi / Shutterstock.com opportunities—to ensure the legacy we pass on to the next generation is one of increasing prosperity and human flourishing. We are an international think tank based in London and a registered UK charity. Our work focuses on understanding, measuring, and explaining the journey from poverty to prosperity for individuals, communities, and nations. Our annual Legatum Prosperity Index uses this broad definition of prosperity to measure and track the performance of 149 countries of the world across multiple categories including health, education, the economy, social capital, and more.

The Legatum Institute would like to thank both the Legatum Foundation and the Atlas Economic Research Foundation for their sponsorship and for making this report possible. Learn more about the Legatum Foundation at www.legatum.org.

The Legatum Institute is the working name of the Legatum Institute Foundation, a registered charity (number 1140719), and a company limited by guarantee and incorporated in England and Wales (company number 7430903) POPULISM AND POLITICAL CHANGE

CONTENTS

1. Foreword 2

2. Background 5

3. The poll findings 8

4. Segmenting the UK population 34

5. MaxDiff—what is most important to us? 55

6. Plotting the population 67

7. Business and political consequences 76

About the authors 78

| 1 POPULISM AND POLITICAL CHANGE

1. FOREWORD

by Matthew Elliott, During the General Election earlier this year, as most people were predicting an increased majority Senior Fellow, for the Conservative Party, I had a useful reality check up to half a dozen times every day. An email, Legatum Institute WhatsApp or Facebook message would pop up, all suggesting that the Labour Party were set to do better than expected. All the messages came from my friend Mark Bathgate, a senior political analyst 1st October 2017 at BlueBay Asset Management, who was convinced that the UK was in line for a hung parliament. He would send me Momentum videos with thousands of views, polls suggesting widespread support for nationalisation and charts demonstrating that election news in the Independent had far more social media engagement than any other media outlet, including the BBC. So the result on Thursday 8th June was a shock, but not a complete surprise. I had in all those messages the beginnings of an explanation. Following the election, Philippa Stroud, the Chief Executive of the Legatum Institute, asked me to conduct a comprehensive landscape poll on the state of public opinion in the UK. The Institute has a global focus—I have written publications on Dutch, French and German politics this year—but we obviously needed to understand the electoral upset which had just happened right on our doorstep. Our mission is to identify and create the pathways from poverty to prosperity and we believe that competition, entrepreneurship and free trade are key drivers for this, so do the British public agree with us? Proposing policy solutions without understanding the perspective of the electorate is like a doctor providing a diagnosis without seeing a patient. To conduct the poll and to help interpret the results, I approached James Kanagasooriam, the Head of Analytics at Populus. James and his team led the voter targeting and data analytics for Ruth Davidson’s Scottish Conservatives. Their work proved hugely effective both during the 2017 General Election campaign and the 2016 Holyrood elections. What impressed me was the way in which they carried out a detailed data strategy that glued together all the different components of a multi-year political campaign. Although the political dynamics were very different in Scotland compared to the rest of the UK, the extent of the Scottish Conservative surge was unexpected, except by those helping to execute it. James and his colleagues at Populus picked up on certain political dynamics in Scotland that others didn’t see coming, so I saw them as being the ideal people with whom to partner. There are a number of people who James and I would like to thank for their assistance with this report. Will Clothier, a Senior Research Executive in Populus’ Reputation and Strategy team, helped with the drafting and writing. He graduated three years ago from Durham University with a first class degree and holds the Market Research Society Advanced Certificate with a double merit. A number of my colleagues here at the Legatum Institute also took the time to provide detailed feedback, especially Stephen Brien and Danny Kruger. Jonathan Isaby gave up a Sunday afternoon to proof-read the report and Kay Webb was very patient designing an especially chart-heavy report, even by my standards.

2 | POPULISM AND POLITICAL CHANGE

I have been a strong supporter of free enterprise ever since I was taught A Level economics at Above: Leeds Grammar School by Terry Elsworth, who used the Milton Friedman’s Free to Choose as our Mark Bathgate (left) textbook (amongst other publications). I then joined the LSE Hayek Society—named after the with Matthew Elliott classical liberal economist and Nobel Prize winner, Friedrich Hayek—on my first day at the London at a Legatum Institute School of Economics, enrolled by the then President of the society, now Editor of the Sunday Foundation event Telegraph, Allister Heath. And in my early twenties, I founded the TaxPayers’ Alliance, to represent taxpayers and make the case for lower taxes and less wasteful spending. So I come at this report with an agenda: I believe that free enterprise policies are a key driver of prosperity. Sadly though, it appears that a large proportion of British voters do not share this view, as illustrated by Transport for London’s decision to suspend Uber’s right to operate and Shadow Chancellor John McDonnell’s wide-ranging plans for nationalisation. This report, however, is written up straight. The results are shown unadulterated and the purpose of the research is to show where we are today, not where we wished people were. Neither do we seek to explain how we have ended up where we are. That is another report entirely.

| 3 POPULISM AND POLITICAL CHANGE

It is easy for campaign groups and think-tanks to indulge in comfort polling, producing evidence to show how popular their ideas are in an attempt to persuade policy makers to adopt their policies. But real change requires proper understanding of the true state of public opinion, no matter how uncomfortable the findings are. This report is the beginning of a new phase of work for me here at the Legatum Institute. The nature of the Dutch, French and German elections this year meant that I have focused more attention to right- wing populists: Geert Wilders, Marine Le Pen and the Alternative für Deutschland. For the next phase of my work, I will be looking more closely at left-wing populists; not just Jeremy Corbyn’s Labour Party, but also Bernie Sanders in the US, the GreenLeft in the Netherlands, Jean-Luc Mélenchon in France and The Left in Germany. Having witnessed the growing popularity of left-wing populist ideas, we intend to explore the reasons for these attitudes and identify what can be done by all of us—campaigners, think- tankers, opinion-formers and politicians—to explain our case more effectively. For advocates of free enterprise, the findings of this report might make for concerning reading. But any successful campaign—as I know from both the AV referendum in 2011 and the EU referendum in 2016—begins with solid research. I hope you find it useful, and I would be grateful for any feedback you might have.

4 | POPULISM AND POLITICAL CHANGE

2. BACKGROUND

In the 1990s, Western democracies emerged from the Cold War with a renewed sense of political direction. The collapse of the Soviet Union, the end of the Thatcher-Reagan era, and the presumed victory of socially-considerate, market-friendly economics ostensibly spelled the end for socialist state ownership. A new ‘centrist consensus’ was born. Bill Clinton, guided by the New Democrat philosophy, left office as one of the most popular US Presidents of the post-war era.1 In the UK, Tony Blair swept to power in a landslide and stayed there for a decade under the New Labour banner. In Germany, Gerhard Schröder ended 16 years of Christian Democrat rule by Helmut Kohl with the promise of a ‘New Middle’ in German politics. The ‘Third Way’ had seemingly become the only way to win elections. Recent political events—and dramatic shifts in public opinion—have shattered this centrist consensus. Donald Trump’s populist campaign galvanised vast swathes of America to defeat Hillary Clinton, the heir apparent of American centrism. At home, UKIP surged in the polls, and its leader Nigel Farage was instrumental in extracting the pledge of a referendum on Britain’s EU membership from David Cameron. On the left, Jeremy Corbyn shocked the political establishment by increasing Labour’s voteshare on an outright populist manifesto, while Bernie Sanders’ democratic socialist campaign for the Democratic Party nomination would have been unthinkable in the 1990s. Elsewhere, Syriza and Podemos changed the political dynamic in Greece and Spain. Meanwhile, in Scandinavia, populist parties have broken through, with the nationalist Finns Party joining the government coalition for the first time and the ‘direct democracy’ Icelandic Pirate Party outperforming the centre-left Social Democrats in the 2016 parliamentary election. 2017 has seen Geert Wilders in the Netherlands and Marine Le Pen in France finish second in their election campaigns, with both recently governing centre-left, social democratic parties all but wiped out with only six per cent of the vote each.2 The ‘Overton window’—the range of ideas that the public will accept and which a politician can therefore voice—has shifted. Brexit was considered inconceivable only a decade ago. So too was the prospect of a Labour leader advancing in the polls by advocating the nationalisation of railways, water and energy. And the notion of Nazi supporters demonstrating in the US with only an equivocal condemnation from the sitting president was unimaginable. Some contend that all of this can be traced back to the catastrophic financial crash of 2007-08, but arguably its roots are deeper. The purpose of this report is not so much to examine the complicated shift in social attitudes— for example, on ethnicity or same-sex marriage—but rather attitudes towards capitalism and free markets.

1 Presidential Job Approval Centre, Gallup. Retrieved 7 September 2017. http://www.gallup.com/interactives/185273/presidential-job-approval-center.aspx 2 For more on the role of populism in the French and Dutch elections, see the following papers published by the Legatum Institute: A brief guide to the Dutch election: Will the rise of populism continue into 2017?, Matthew Elliott. Published March 2017 by the Legatum Institute. http://www.li.com/activities/publications/a-brief-guide-to-the-dutch-election-will-the-rise-of-populism-continue-into-2017 A brief guide to the French election: Populism across the spectrum—left, right and centre, Matthew Elliott. Published April 2017 by the Legatum Institute. http://www.li.com/activities/publications/a-brief-guide-to-the-french-election-populism-across-the-spectrum-left-right-and-centre

| 5 POPULISM AND POLITICAL CHANGE

2014: TREASURY EXTENDS AUSTERITY PERIOD UNTIL AT LEAST 2018

2010: COALITION ANNOUNCES LARGESCALE PUBLIC SPENDING CUTS

70 2007: START OF GLOBAL FINANCIAL CRISIS

50 INCREASE TAXES/SPEND MORE

KEEP TAXES/SPEND SAME 40

10 REDUCE TAXES/SPEND LESS 0 2011 1991 1981 2017 1997 1987 2015 2012 1995 1992 1985 2013 1982 1993 1999 2016 1996 2018 1983 2001 2010 1989 1998 2014 1990 1994 1986 1988 1984 2007 2005 2002 2003 2009 2006 2008 2000 2004

Figure 2a: In the following pages, we explore public attitudes towards: Public attitudes towards »» Political ‘isms’, including capitalism, conservatism and socialism tax and spending, 1983-2016 (British »» Public vs private ownership Social Attitudes 34) »» Free markets vs state regulation »» Businesses and profit »» Social issues and crime In addition, we look at how the population segments along these attitudes. Finally, we look at what is important to people, and how it varies by attitudinal segment. And finally, we conclude with some observations of the political consequences of these findings.

6 | POPULISM AND POLITICAL CHANGE

We discuss the decline in support for free markets in the developed world rather than the developing world: the number of people in absolute poverty has fallen by about 1 billion since 1981, according to the World Bank, and the story is very different in places where this rapid progress has been felt. Research has shown that in these developing countries, there is less opposition to free markets. In the UK, the rising prominence of populist discourse cannot be ignored. NatCen’s annual British Social Attitudes survey has shown that for the first time in a decade, more people want tax and spending to be increased than those who want it to stay the same (Figure 2a).3 This research aims to take a reading of underlying public attitudes towards the economy in the post-Brexit era. For advocates of free-market economics, the findings of this report might make for concerning reading.

3 British Social Attitudes 34, Key Findings. NatCen. Retrieved 7 September 2017. http://www.bsa.natcen.ac.uk/latest-report/british-social-attitudes-34/key-findings/a- backlash-against-austerity.aspx

| 7 POPULISM AND POLITICAL CHANGE

3. THE POLL FINDINGS

Populus and the Legatum Institute have conducted a wide-ranging poll to explore the UK public’s shifting attitudes towards enterprise, regulation, business, banks, nationalisation, capitalism and socialism, to examine the contention that free-market capitalism is in crisis.4 It is tempting for think tanks to conduct comfort polling that confirms a story they want to tell, but this piece of research is designed to give an accurate and realistic portrayal of public attitudes today. For some, it might make for uncomfortable reading, but this research is necessary to understand the appeal of populist ideas in modern society. The results are striking. We find that on almost every issue, the public tends to favour non-free market ideals rather than those of the free market. Instead of an unregulated economy, the public favours regulation. Instead of companies striving for profit above all else, they want businesses to make less profit and be more socially responsible. Instead of privatised water, electricity, gas and railway sectors, they want public ownership. They favour CEO wage caps, workers at senior executive and board level and for government to reign in big business. They want zero hours contracts to be abolished. The capitalism ‘brand’ is in crisis. It is seen as greedy, selfish and corrupt. The public’s instinctive associations with capitalism compare unfavourably to the public’s associations with liberalism, socialism and patriotism. Indeed, many of those negative associations with capitalism recur, albeit to a lesser extent, in the public’s associations with conservatism. In our poll, the notion that we live in a time of ‘responsible’ capitalism finds little credence among the public. Here we explore these findings and their political implications. 3.1 BRAND ASSOCIATIONS OF THE ‘ISMS'

We wanted to discover the public’s attitudes towards six major political ‘isms’: capitalism, socialism, liberalism, communism, patriotism and conservatism. To do so, we asked respondents to associate with each of the six isms up to three traits from a list of positive (e.g. practical, fair, tolerant and innovative) and negative (e.g. selfish, divisive and corrupt) words.5 We find that positive traits are more associated with liberalism and socialism, whereas negative traits are more associated with capitalism and conservatism. Capitalism is consistently described in negative terms (Figure 3.1a). More than 4 in 10 (42%) choose ‘greedy’ as one of their top 3 associations, while a third select ‘selfish’ (33%) and even ‘corrupt’ (32%). Only 8% select ‘delivers most for most people’ (vs 17% for socialism) and only 7% ‘for the greater good’ (vs 16% for socialism). As we show later, it is not just the term ‘capitalism’ that

4 Populus conducted an online poll of 2,004 members of the public between 4 and 6 August 2017. The results were weighted to be nationally representative of the population as a whole. Populus is a member of the British Polling Council and abides by its rules. Where respondents were asked to indicate the extent to which they agreed more with one statement over another, the order in which the statements were shown was randomised to remove bias. Some question wordings have been shortened for readability; for the full wording, please consult the full data tables. Further information at populus.co.uk 5 Full list of words: appeals to the head, appeals to the heart, attractive, constraining, corrupt, dangerous, delivers most for most people, disruptive, divisive, fair, for the greater good, forward-looking, generous, greedy, inclusive, innovative, inspiring, liberating, naïve, nostalgic, practical, principled, satisfying, selfish, sustainable, tolerant.

8 | POPULISM AND POLITICAL CHANGE

Figure 3.1a: Top associations with capitalism

Figure 3.1b: Top associations with capitalism: 18-34s

Figure 3.1c: Top associations with capitalism: 35+

| 9 POPULISM AND POLITICAL CHANGE

Figure 3.1d: Top associations with capitalism: Labour voters at the 2017 General Election

Figure 3.1e: Top associations with capitalism: Conservative voters at the 2017 General Election

10 | POPULISM AND POLITICAL CHANGE

causes antipathy, but also the policies behind it. Taken together, the public’s top associations with capitalism resemble the kind of ‘brand personality’ one would expect from an organisation in acute reputational crisis. It is not only young people who view capitalism this way. In fact, those aged 35 and older are more— not less—likely to label capitalism ‘greedy’ and ‘corrupt’ (Figure 3.1c vs Figure 3.1b). Capitalism’s reputational problem spans generations. What is perhaps most interesting—and politically relevant—is that these top associations do not change between Labour and Conservative voters at the 2017 General Election. While Conservative voters (Figure 3.1e) are more positive about capitalism than Labour voters (Figure 3d), they still associate it with greed, selfishness and corruption more than anything else. Contrast this directly with socialism. It too attracts its fair share of negative associations—a fifth of Brits (20%) describe it as naïve and 16% as divisive (Figure 3.1f). Yet overall, public sentiment towards socialism is far more diverse and far less dominated by negative connotations. 17% most associate it with ‘delivering most for most people’, 16% with being ‘fair’, and 16% with the notion that it is ‘for the greater good’. Fewer people associate the word ‘dangerous’ with socialism than with capitalism (15% vs 18%). Communism takes as much flak as capitalism. It is viewed as ‘dangerous’ (by 41%), ‘corrupt’ (36%), and ‘constraining’ (27%) (Figure 3.1g). Interestingly, the proportion of the public who most associate communism with the word ‘corrupt’ (36%) is only 4% higher than the proportion who say the same of capitalism (32%). The ‘conservatism’ brand is tainted by many of the same negative associations that capitalism attracts. The public most commonly view it as ‘selfish’ and ‘greedy’ and ‘corrupt’ (Figure 3.1h). This is balanced, however, by similar proportions who view it as ‘principled’ and ‘practical’, unlike capitalism. It is also significantly more likely than capitalism to be viewed as ‘delivering most for most people’ and ‘forward-looking’. Reactions to liberalism are more positive. While 22% consider it naïve, its other most common associations are ‘liberating’, ‘tolerant’, ‘fair’, ‘inclusive’, and ‘appeals to the heart’ (Figure 3.1i). Patriotism ‘appeals to the heart’ and is ‘principled’ and ‘inspiring’, but is also viewed as ‘nostalgic’, ‘divisive’ and ‘dangerous’ (Figure 3.1j).

| 11 POPULISM AND POLITICAL CHANGE

Figure 3.1f: Top associations with socialism

Figure 3.1g: Top associations with communism

Figures 3.1h: Top associations with conservatism

12 | POPULISM AND POLITICAL CHANGE

Figure 3.1i: Top associations with liberalism

Figure 3.1j: Top associations with patriotism

| 13 POPULISM AND POLITICAL CHANGE

Table 3.1k shows the traits that each ism ‘owns’ the most—those with which it is associated more frequently than the other ideologies. Capitalism ‘owns’ being innovative, greedy and selfish, while conservatism comes top for being practical and appealing to the head: Table 3.1k: The words most commonly associated with each ism

CAPITALISM SOCIALISM COMMUNISM CONSERVATISM LIBERALISM PATRIOTISM Innovative Delivers most for Corrupt Practical Liberating Attractive most people Greedy For the Dangerous Appeals to the head Inclusive Inspiring greater good Selfish Fair Divisive Principled Tolerant Satisfying Disruptive Forward-looking Generous Appeals to the heart Constraining Sustainable Nostalgic Naive

Across all six political ideologies tested here, the public were most likely to select the words ‘corrupt’, ‘dangerous’ and ‘selfish’, which perhaps neatly sums up their view of political ideologies in general. 3.2 THE PUBLIC SECTOR VS THE PRIVATE SECTOR

We wanted to assess the public’s appetite for nationalisation across a range of industries. To do so, we simply asked the public say whether they believed that each industry should be in the hands of the public sector or the private sector. We found that for key utilities, public support for nationalisation is overwhelming (Figure 3.2a). More than three quarters of the public say that water, electricity, gas and railways should be in the hands of the public sector. According to the public, food distribution and retailing, mobile phone networks and airlines should all remain privatised. Jeremy Corbyn’s pledge to nationalise railways has broad appeal across age groups and even among Conservative voters (Figure 3.2b). This pattern is replicated for water, gas and electricity. The public are split 50:50 on whether banks—which for many are a symbol of their mistrust of capitalism—should be taken into public control (Figure 3.2c). Whereas support for public ownership of water, electricity and gas is fairly consistent across age groups (Figures 3d-f), there is a more pronounced generational division on financial sector nationalisation. A slim majority of younger people, who have arguably been most affected by the 2008 financial crisis, favour public ownership of banks, while those aged 65 or over are more likely to favour private ownership (Figure 3.2c).

14 | 17% 23% 23% 24% 34% POPULISM 50% AND POLITICAL 62% 65% 67% CHANGE 73% 76% 77%

83% 77% 77% 76% 66% 50% 38% 35% 33% 27% 24% 23%

Figure 3.2a: Car Gas Banks Trains The British public’s 17%Water Airlines

23% 23% 24% industry networks Electricity aerospace support for 34%Defence & Shipbuilding and retailing Travel agents 50% Mobile phone nationalisation 62% manufacturing 65%Food distribution 67% 73% 76% 77% PUBLIC SECTOR PRIVATE SECTOR

83% 77% 77% 76% 66% 50% 38% 35% 33% 27% 24% 23% Car Gas Banks Trains Water Airlines industry networks Electricity aerospace Defence & Shipbuilding and retailing Travel agents Mobile phone manufacturing Food distribution PUBLIC SECTOR PRIVATE SECTOR

20% 14% 24% 25% 24% 24% 22% 28% 35%

Figure 3.2b: Public support for nationalising trains 80% 86% 76% 75% 76% 76% 78% 72% 65%

20% 14% 24% 25% 24% 24% 22% 28% 35%

All 18-24 25-34 35-44 45-54 55-64 65+ GE2017 GE2017 Cons Lab voters voters

PUBLIC SECTOR PRIVATE SECTOR

80% 86% 76% 75% 76% 76% 78% 72% 65%

| 15

All 18-24 25-34 35-44 45-54 55-64 65+ GE2017 GE2017 Cons Lab voters voters

PUBLIC SECTOR PRIVATE SECTOR POPULISM AND POLITICAL CHANGE

Figure 3.2c: Public support for nationalising banks 36% 40% 48% 48% 47% 50% 55% 54% 62%

64% 60% 52% 52% 53% 50% 45% 46% 38%

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

PUBLIC SECTOR PRIVATE SECTOR

9% 17% 17% 16% 14% 16% 18% 21% 24%

Figure 3.2d: Public support for nationalising water 83% 79% 83% 84% 86% 84% 82% 76% 91%

All 18-24 25-34 35-44 45-54 55-64 65+ GE2017 GE2017 Cons Lab voters voters PUBLIC SECTOR PRIVATE SECTOR

16 | 19% 19% 14% 23% 24% 25% 23% 30% 32%

77% 70% 76% 75% 81% 81% 77% 68% 86%

All 18-24 25-34 35-44 45-54 55-64 65+ GE2017 GE2017 Cons Lab voters voters PUBLIC SECTOR PRIVATE SECTOR 9% 17% 17% 16% 14% 16% 18% 21% 24%

83% 79% 83% 84% 86% 84% 82% 76% 91%

POPULISM All 18-24 25-34 35-44 45-54 55-64 65+ ANDGE2017 POLITICAL GE2017 ConsCHANGE Lab voters voters PUBLIC SECTOR PRIVATE SECTOR

Figure 3.2e: Public support 19% 19% 14% 23% 24% 25% 23% for nationalising 30% 32% electricity

77% 70% 76% 75% 81% 81% 77% 68% 86%

All 18-24 25-34 35-44 45-54 55-64 65+ GE2017 GE2017 Cons Lab voters voters PUBLIC SECTOR PRIVATE SECTOR

19% 18% 14% 23% 22% 25% 22% 30% 31%

Figure 3.2f: Public support for nationalising gas

77% 70% 78% 75% 81% 82% 78% 69% 86%

All 18-24 25-34 35-44 45-54 55-64 65+ GE2017 GE2017 Cons Lab voters voters

PUBLIC SECTOR PRIVATE SECTOR

| 17 POPULISM AND POLITICAL CHANGE

HERE ARE SEVERAL PAIRS OF STATEMENTS. IN EACH CASE, PLEASE INDICATE WHERE YOUR OWN VIEW LIES ON THE SCALE. THE CLOSER YOU MOVE THE SLIDER TOWARDS A STATEMENT THE MORE YOU AGREE WITH IT. SHOWING NET A NET B

ALL 18 34 35+ Regulation is often necessary -46% Regulation is often an unnecessary burden Regulation is often necessary Regulation is often an unnecessary burden

The NHS needs more funding and higher Costs of the NHS are going up too much too fast The NHS needs more funding and higher taxes should pay for this -32% taxes should pay for this Costs of the NHS are going up too much too fast

Zero hours contracts should be abolished -22% Zero hour contracts offer useful work Zero hours contracts should be abolished Zero hour contracts offer useful work

People's obligation to pay their taxes is more People are rewarded for working hard People's obligation to pay their taxes is more People are rewarded for working hard important than their personal wealth by keeping more of what they earn important than their personal wealth -16% by keeping more of what they earn

I favour increased taxation, bigger I favour lower taxes, smaller I favour increased taxation, bigger I favour lower taxes, smaller government and more spending government and less spending government and more spending -15% government and less spending

The time of austerity is over Austerity should continue

The time of austerity is over 12% Austerity should continue

-50% -30% -10% 10% 30%

AGREE MORE WITH STATEMENT A AGREE MORE WITH STATEMENT B AGREE MORE WITH STATEMENT A AGREE MORE WITH STATEMENT B

NET scores (Statement B - Statement A). Note that the order in which each statement appeared in each pair was randomised NET scores (Statement B - Statement A). Note that the order in which each statement appeared in each pair was randomised

Figure 3.3a: 3.3 THE FREE MARKET VS THE STATE Support for non-free market ideas vs support To examine the public’s support for free market ideas, we put a series of opposing statements for free market ideas against each other: in each case, one statement leant towards state regulation while the other Here are several pairs of leant towards free markets. For each diametrically opposing pair of statements, respondents statements. In each case, were asked to indicate where their own views lay on the scale. We found that when faced with please indicate where your own view lies on a broad free market idea on the one hand and its non-free market opposite on the other, public the scale. The closer you opinion tends to favour the non-free market ideal (Figure 3.3a). move the slider towards a Regulation is deemed necessary, support for increased NHS funding is strong, zero hours statement the more you agree with it. [Showing contracts should be abolished and people’s obligation to pay taxes is deemed more important NET A—NET B] than rewarding them for working hard by allowing them to keep more of what they earn. Moreover, the public tends to favour increased taxation, bigger government and more spending as opposed to lower taxes, smaller government and less spending. On economic issues, the only

18 | POPULISM AND POLITICAL CHANGE

ALL 18 34 35+ Regulation is often necessary -46% Regulation is often an unnecessary burden Regulation is often necessary Regulation is often an unnecessary burden

Zero hours contracts should be abolished -22% Zero hour contracts offer useful work Zero hours contracts should be abolished Zero hour contracts offer useful work

The time of austerity is over Austerity should continue

The time of austerity is over 12% Austerity should continue

-50% -30% -10% 10% 30%

AGREE MORE WITH STATEMENT A AGREE MORE WITH STATEMENT B AGREE MORE WITH STATEMENT A AGREE MORE WITH STATEMENT B

Figure 3.3b: contentious point is on austerity and whether its time is over or whether it should continue, Support for non-free with the public tending to side with the latter. The apparent contradiction between public market ideas vs support support for increased taxation and more spending vs public support for the continuation of for free market ideas, austerity might indicate that a proportion of the public are willing to forgo a long-term desire by age for increased taxation and more spending for a little while longer. Added to this, the public also sends a clear message that politicians should pay more attention to the views of voters rather than trying to avoid being swayed too easily by public opinion—80% agree with the former vs only 18% who agree with the latter. Again, we find no great difference overall between the views of younger and older members of the public. Both tend to favour non-free market ideals (Figure 3.3b). Both 18-34s and 35s and over consider regulation a necessity and support increased NHS funding in similar measure. 18-34s are slightly less likely than those aged 35 and over to support the abolition of zero hours contracts—although they still support abolition overall. The most significant generational

| 19 POPULISM AND POLITICAL CHANGE

ALL GE 2017 CONS VOTERS GE 2017 LAB VOTERS

Regulation is often an Regulation is often necessary unnecessary burden

The NHS needs more funding and Costs of the NHS are going higher taxes should pay for this up too much too fast

Zero hours contracts Zero hour contracts should be abolished offer useful work

People's obligation to pay their People are rewarded for working hard taxes is more important than by keeping more of what they earn their personal wealth

I favour increased taxation, bigger I favour lower taxes, smaller government and more spending government and less spending

The time of austerity is over Austerity should continue

-70% -50% -30% -10% 10% 30% 50% 70%

AGREE MORE WITH STATEMENT A AGREE MORE WITH STATEMENT B

NET scores (Statement B - Statement A). Note that the order in which each statement appeared in each pair was randomised

Figure 3.3c: differences are on increased taxation, bigger government and more spending and the question Support for non-free of austerity. Younger people are slightly more likely to favour increased spending and an end to market ideas vs support austerity than their older counterparts: for free market ideas, by It is notable too that even those who voted for the Conservative Party in 2017 tend to favour 2017 party support certain non-free market ideas. They consider regulation necessary, want increased NHS funding through higher taxes and are ambivalent about whether it is preferential to pay higher taxes and have bigger government or pay lower taxes and have smaller government (Figure 3.3c). It is only on austerity that Conservative voters clearly favour the statement on the right-hand side of the chart. On this issue, they heavily support the continuation of austerity to reduce the debt and deficit. Labour voters, on the other hand, favour statist intervention and increased spending on each measure by a clear margin.

20 | POPULISM AND POLITICAL CHANGE

ALL GE 2017 CONS VOTERS GE 2017 LAB VOTERS

Regulation is often an Regulation is often necessary unnecessary burden As we show in the following section, the public’s broad tendency towards favouring state intervention extends itself to specific business regulation and corporate governance. The NHS needs more funding and Costs of the NHS are going higher taxes should pay for this up too much too fast 3.4 BUSINESS BEYOND PROFIT

Zero hours contracts Zero hour contracts We also asked the public a similar set of opposing statements regarding business and profit, again should be abolished offer useful work asking them to place themselves on a scale between the two statements. We find that the public’s confidence in businesses and markets to deliver the most beneficial outcomes for the country People's obligation to pay their People are rewarded for working hard taxes is more important than by keeping more of what they earn without intervention is severely diminished, as Figure 3.4a shows. The public overwhelmingly their personal wealth believes that senior pay should be capped rather than at the discretion of management and that government should do more to regulate business. I favour increased taxation, bigger I favour lower taxes, smaller government and more spending government and less spending They want a closer relationship between government and business in general and state intervention in the housing market specifically. Public attitudes towards profit are also reflective of a view that businesses have been allowed to run unchecked for too long. The public disagrees strongly with the The time of austerity is over Austerity should continue concept that businesses should solely seek profit, arguing instead that profit is one consideration among many. They also think that some companies ‘make so much profit it can’t be justified’ and that ‘Britain would be a better country if businesses made less profit’. -70% -50% -30% -10% 10% 30% 50% 70% In fact, on none of the below statements about business does the public show a tendency towards the free enterprise stance. AGREE MORE WITH STATEMENT A AGREE MORE WITH STATEMENT B In Figure 3.4b, both age groups oppose the notion that only lightly regulated markets produce a healthy economy—and indeed the over 35s are more radical on some of these measures (such as NET scores (Statement B - Statement A). Note that the order in which each statement appeared in each pair was randomised pay caps, inequality and unchecked profits) than their younger counterparts. Indeed, it is on these measures that 18-34s show their more libertarian inclinations than 35s and over—they want business to be controlled and regulated for the greater benefit of society, but they also want free choice to remain intact. Opposition to capitalism is often presented in the media as a preserve of millennials, but it is in fact those aged 35 and over who are most opposed to capitalism. For instance, 74% of Labour voters agree more with the idea that government needs to do more to regulate how businesses behave vs only 22% who think that the government regulates too much. Interestingly, even Conservative voters tend towards the interventionist end of the scale on some business issues. Theresa May’s recent attack on executive pay will chime with her own voters as— like Labour voters—Conservative voters overwhelmingly favour senior executive pay caps. They also think that profit should not come above other considerations and that the government should regulate more, not less.

| 21 POPULISM AND POLITICAL CHANGE

ALL 18 34 35+

The pay of senior execs should Businesses should pay their be capped -56% senior execs what they see ﬁt The pay of senior execs should Businesses should pay their be capped senior execs what they see ﬁt

Making a profit should only be The primary purpose of business one consideration among many -45% should be to make profit Making a profit should only be The primary purpose of business one consideration among many should be to make profit

Government needs to do more to Government regulates Government needs to do more to Government regulates regulate how businesses behave -32% businesses too much regulate how businesses behave businesses too much

Businesses and government The relationship between the businesses Businesses and government The relationship between the businesses need to work closely together -25% and government has been too close need to work closely together and government has been too close

The housing market is ﬂawed No one has automatic right to own a home & The housing market is ﬂawed No one has automatic right to own a home & and the government should intervene the government has no place stepping in and the government should intervene -25% the government has no place stepping in

Some companies make so Companies are entitled to make as Some companies make so Companies are entitled to make as much profit it can’t be justified much profit as they can much profit it can’t be justified -21% much profit as they can

Companies have a responsibility to ensure they It doesn’t matter if there aren’t Companies have a responsibility to ensure they It doesn’t matter if there aren’t have a decent number of workers at Board level any workers on boards have a decent number of workers at Board level -15% any workers on boards Britain would be a better country Britain would be a worse country if social if businesses made less profit responsibility made businesses less profitable Britain would be a better country Britain would be a worse country if social if businesses made less profit -13% responsibility made businesses less profitable Link people’s pay to the value their Allow people to get what their jobs contribute to broader society employers / customers are willing to pay Link people’s pay to the value their Allow people to get what their jobs contribute to broader society -8% employers / customers are willing to pay Profits are returns to rich people which Profits are the mechanism by could otherwise be passed on as lower prices which innovations are rewarded Profits are returns to rich people which Profits are the mechanism by could otherwise be passed on as lower prices -6% which innovations are rewarded There’s a limit to how much people’s The variation between people’s living living standards should be allowed to vary standards should be allowed to grow

There’s a limit to how much people’s -2% The variation between people’s living living standards should be allowed to vary standards should be allowed to grow -70% -50% -30% -10% 10% 30%

AGREE MORE WITH STATEMENT A AGREE MORE WITH STATEMENT B AGREE MORE WITH STATEMENT A AGREE MORE WITH STATEMENT B

Figure 3.4a: Support for state regulation in business vs support for free enterprise

22 | POPULISM AND POLITICAL CHANGE

ALL 18 34 35+

There’s a limit to how much people’s -2% The variation between people’s living living standards should be allowed to vary standards should be allowed to grow -70% -50% -30% -10% 10% 30%

AGREE MORE WITH STATEMENT A AGREE MORE WITH STATEMENT B AGREE MORE WITH STATEMENT A AGREE MORE WITH STATEMENT B

Figure 3.4b: Support for state regulation in business vs support for free enterprise, by age

| 23 POPULISM AND POLITICAL CHANGE

ALL GE 2017 CONS VOTERS GE 2017 LAB VOTERS

The pay of senior execs should Businesses should pay their be capped senior execs what they see ﬁt

Making a proﬁt should only be The primary purpose of business one consideration among many should be to make proﬁt

Government needs to do more to Government regulates regulate how businesses behave businesses too much

Businesses and government The relationship between the businesses need to work closely together and government has been too close

The housing market is ﬂawed No one has automatic right to own a home & and the government should intervene the government has no place stepping in

Some companies make so Companies are entitled to make as much profit it can’t be justified much profit as they can

Companies have a responsibility to ensure they It doesn’t matter if there aren’t have a decent number of workers at Board level any workers on boards

Britain would be a better country Britain would be a worse country if social if businesses made less proﬁt responsibility made businesses less proﬁtable

Link people’s pay to the value their Allow people to get what their jobs contribute to broader society employers / customers are willing to pay

Proﬁts are returns to rich people which Proﬁts are the mechanism by could otherwise be passed on as lower prices which innovations are rewarded

There’s a limit to how much people’s The variation between people’s living living standards should be allowed to vary standards should be allowed to grow

-70% -50% -30% -10% 10% 30% 50% 70%

AGREE MORE WITH STATEMENT A AGREE MORE WITH STATEMENT B

NET scores (Statement B - Statement A). Note that the order in which each statement appeared in each pair was randomised

Figure 3.4c: Support for state regulation in business vs support for free enterprise, by 2017 party support

24 | POPULISM AND POLITICAL CHANGE

ALL GE 2017 CONS VOTERS GE 2017 LAB VOTERS

The pay of senior execs should Businesses should pay their 3.5 DIVIDED ON SOCIAL ISSUES AND TOUGH ON CRIME be capped senior execs what they see fit Respondents repeated the exercise for social issues and crime, with very different results. It is only Making a profit should only be The primary purpose of business on social issues and law and order that the public tends to shy away from what might be considered one consideration among many should be to make profit the more liberal or ‘progressive’ stance (Figure 3.5a). The public tends to think that government benefits are too readily available, that immigration has on balance made the country worse and that Government needs to do more to Government regulates it is more important for a country to protect its own interests rather than to work together with regulate how businesses behave businesses too much other countries. Recent advances in marriage equality debates have led to most of the public thinking that marriage Businesses and government The relationship between the businesses need to work closely together and government has been too close should be open to any couple, although public opinion on the legalisation of cannabis is split 50:50. On law and order, public opinion strongly favours a strict rather than rehabilitative justice system The housing market is flawed No one has automatic right to own a home & and increased military spending. and the government should intervene the government has no place stepping in While we find remarkably few generational differences in attitudes towards capitalism and free markets, there are substantial age divides on all social issues and those relating to law and order. Some companies make so Companies are entitled to make as much profit it can’t be justified much profit as they can Younger people are considerably more likely to favour same sex marriage, cannabis legalisation, a generous benefits system, globalist foreign policies and, in particular, reduced military spending (Figure 3.5b). Companies have a responsibility to ensure they It doesn’t matter if there aren’t have a decent number of workers at Board level any workers on boards Those in the 18-34 age bracket still favour more jail time for criminals and a society with order over liberty, but they are markedly less staunch in these positions than those aged 35 and over. Britain would be a better country Britain would be a worse country if social if businesses made less profit responsibility made businesses less profitable Given these generational divides and the composition of Conservative and Labour voters, it is not surprising that these divisions on social issues and law and order also translate to even greater divisions by party support. Link people’s pay to the value their Allow people to get what their jobs contribute to broader society employers / customers are willing to pay As might be expected, the attitudinal gap between Conservative and Labour voters towards immigration, benefits and military expenditure is huge (Figure 3.5c). Profits are returns to rich people which Profits are the mechanism by could otherwise be passed on as lower prices which innovations are rewarded

There’s a limit to how much people’s The variation between people’s living living standards should be allowed to vary standards should be allowed to grow

-70% -50% -30% -10% 10% 30% 50% 70%

AGREE MORE WITH STATEMENT A AGREE MORE WITH STATEMENT B

NET scores (Statement B - Statement A). Note that the order in which each statement appeared in each pair was randomised

| 25 POPULISM AND POLITICAL CHANGE

ALL 18 34 35+

Marriage should be Marriage should be between open to any couple a man and a woman

Marriage should be Marriage should be between Cannabis should be Cannabis should not be legalised open to any couple -21% a man and a woman legalised and taxed

Cannabis should be Cannabis should not be legalised legalised and taxed 0% It is more important for countries to It is more important for a country work together on shared objectives to protect its own interests

It is more important for countries to It is more important for a country Immigration has made 9% Immigration has improved this country work together on shared objectives to protect its own interests this country worse

Immigration has made Immigration has improved this country 10% People have a right to seek Government beneﬁts are this country worse help from government beneﬁts too readily available

People have a right to seek Government benefits are help from government benefits 15% too readily available Military expenditure is too high Increase military spending

The justice system should be more Military expenditure is too high 16% Increase military spending I favour more jail time for criminals about rehabilitation than punishment

The justice system should be more 29% I favour more jail time for criminals It is more important that people It is more important to about rehabilitation than punishment are free to act as they wish have order in society

It is more important that people It is more important to are free to act as they wish 42% have order in society -70% -50% -30% -10% 10% 30% 50% 70%

AGREE MORE WIT STATEMENT A AGREE MORE WIT STATEMENT B AGREE MORE WITH STATEMENT A AGREE MORE WITH STATEMENT B

Figure 3.5a: Public attitudes towards social issues and crime

26 | POPULISM AND POLITICAL CHANGE

ALL 18 34 35+

Marriage should be Marriage should be between open to any couple a man and a woman

Marriage should be Marriage should be between Cannabis should be Cannabis should not be legalised open to any couple -21% a man and a woman legalised and taxed

Immigration has made Immigration has improved this country 10% People have a right to seek Government beneﬁts are this country worse help from government beneﬁts too readily available

People have a right to seek Government benefits are help from government benefits 15% too readily available Military expenditure is too high Increase military spending

The justice system should be more Military expenditure is too high 16% Increase military spending I favour more jail time for criminals about rehabilitation than punishment

It is more important that people It is more important to are free to act as they wish 42% have order in society -70% -50% -30% -10% 10% 30% 50% 70%

AGREE MORE WIT STATEMENT A AGREE MORE WIT STATEMENT B AGREE MORE WITH STATEMENT A AGREE MORE WITH STATEMENT B

Figure 3.5b: Public attitudes towards social issues and crime, by age

| 27 POPULISM AND POLITICAL CHANGE

ALL GE 2017 CONS OTERS GE 2017 LAB OTERS

Marriage should be Marriage should be between open to any couple a man and a woman

Cannabis should be Cannabis should not be legalised legalised and taxed

It is more important for countries to It is more important for a country work together on shared objectives to protect its own interests

Immigration has made Immigration has improved this country this country worse

People have a right to seek Government benefits are help from government benefits too readily available

Military expenditure is too high Increase military spending

The justice system should be more I favour more jail time for criminals about rehabilitation than punishment

It is more important that people It is more important to are free to act as they wish have order in society

-70 -50 -30 -10 10 30 50 70

AGREE MORE WIT STATEMENT A AGREE MORE WIT STATEMENT B

NET scores (Statement B - Statement A). Note that the order in which each statement appeared in each pair was randomised

Figure 3.5c: Public attitudes towards social issues and crime, by party support

28 | POPULISM AND POLITICAL CHANGE

ALL GE 2017 CONS OTERS GE 2017 LAB OTERS 3.6 SOCIAL, CULTURAL AND ECONOMIC TRENDS

Marriage should be Marriage should be between In order to assess the degree to which the public feel positive or negative towards recent trends, we open to any couple a man and a woman asked respondents to rate a series of social, cultural and economic trends on a continuous scale based on the extent to which the world has either benefited from or been damaged by each trend. The Cannabis should be net scores in Figure 3.6a show that the public tends to believe that the world has, overall, benefited Cannabis should not be legalised legalised and taxed from gender equality, tariff-free trade, LGBTQ equality, rising living standards outside the West and concerns about climate change.

It is more important for countries to It is more important for a country There is more ambivalence, however, about the net benefits of job automation and immigration, and work together on shared objectives to protect its own interests religion is the only trend that is seen categorically as more of a handicap than a benefit. On some social measures there are stark generational differences once more. While younger and Immigration has made older participants tend to share similar views, there is considerable division on LGBTQ equality and Immigration has improved this country this country worse immigration, with younger people tending to describe the impact of both these trends far more positively than those aged 35 and over. People have a right to seek Government benefits are On the surface, it may appear that the assessment of the net contribution of tariff-free trade to the help from government benefits too readily available world thus far is more positive than one might imagine, given the public’s dim view of capitalism and free enterprise.

Military expenditure is too high Increase military spending On this occasion, however, net scores only tell some of the story. The data in detail reveals that those who think that tariff-free trade has been a benefit are often only lukewarm in their conviction, with scores bunching up towards the mid-point (Figure 3.6b). Compare The justice system should be more I favour more jail time for criminals this with ‘equality for women with men’ (Figure 3.6c), where respondents who think this trend has about rehabilitation than punishment been a benefit are stronger in their belief and more likely to give a score in the 81-100 range (indicating strong conviction) rather than 1-20 (indicating a far more ambivalent view, as with tariff-free trade). It is more important that people It is more important to are free to act as they wish have order in society A similar effect is apparent with job automation. Respondents struggle to decide whether it has been more of a benefit or a drawback to the world’s development, with responses clustering around the mid-point (Figure 3.6d). On the impact of immigration, public opinion clusters around no central point. Instead it is distributed -70 -50 -30 -10 10 30 50 70 relatively evenly across the spectrum (Figure 3.6f). A clear picture is emerging of a public who are wary of the supposed benefits of free trade. They instinctively view capitalism negatively and question whether the current economic system can deliver for the country. AGREE MORE WIT STATEMENT A AGREE MORE WIT STATEMENT B At a general level, they tend towards interventionist policy rather than free market ideals and, at a NET scores (Statement B - Statement A). Note that the order in which each statement appeared in each pair was randomised specific level, they favour state regulation in certain areas and nationalisation of key utilities. They actively want the government to intervene and curb the excesses of capitalism—whether those are senior executive pay, an uncontrolled housing market, zero hours contracts or the profits of big business—redirecting focus away from ‘profit above all else’ to something more socially beneficial.

| 29 POPULISM AND POLITICAL CHANGE

ALL 1834 35+

Equality for women with men

Tariff-free trade

Equality for LGBTQ citizens

Rising living standards outside the West

Growing concern about climate change

Job automation

Immigration

Religion

-70% -50% -30% -10% 10% 30% 50% 70%

DAMAGED THE WORLD SEVERELY BENEFITTED THE WORLD GREATLY

NET scores (Beneﬁtted—damaged)

Figure 3.6a: Public attitudes towards social, cultural and economic trends, by age

30 | POPULISM 25% AND POLITICAL CHANGE

20%

15%

10%

5% Figure 3.6b: ALL 1834 35+ 25% 3% 2% 3% 5% 15% 25% 14% 13% 7% 10% Public attitudes 0% towards tariff-free 20% -1-20 Equality for women with men 1 - 20 -21-40 -61-80 -41-60 21 - 40 61 - 80 trade 41 - 60 -81-100 81 - 100 15% 0 : 3%

Tariff-free trade 10%

DAMAGED THE WORLD SEVERELY BENEFITTED THE WORLD GREATLY Equality for LGBTQ citizens 5% 3% 2% 3% 5% 15% 25% 14% 13% 7% 10% 0% Rising living standards outside the West -1-20 1 - 20 -21-40 -61-80 -41-60 21 - 40 61 - 80 41 - 60 -81-100 81 - 100 0 : 3% Growing concern about climate change

Job automation DAMAGED THE WORLD SEVERELY BENEFITTED THE WORLD GREATLY

Immigration

Figure 3.6c: 25% Religion Public attitudes towards equality for 20% women with men -70% -50% -30% -10% 10% 30% 50% 70% 15%

10% DAMAGED THE WORLD SEVERELY BENEFITTED THE WORLD GREATLY 5% NET scores (Beneﬁtted—damaged) 25% 4% 1% 3% 4% 9% 15% 13% 14% 13% 21% 0% 20% -1-20 1 - 20 -21-40 -61-80 -41-60 21 - 40 61 - 80 41 - 60 -81-100 81 - 100

15% 0 : 2%

10% DAMAGED THE WORLD SEVERELY BENEFITTED THE WORLD GREATLY 5% 4% 1% 3% 4% 9% 15% 13% 14% 13% 21% 0% -1-20 1 - 20 -21-40 -61-80 -41-60 21 - 40 61 - 80 41 - 60 -81-100 81 - 100

0 : 2%

| 31 DAMAGED THE WORLD SEVERELY BENEFITTED THE WORLD GREATLY POPULISM AND POLITICAL CHANGE 25%

20%

15%

10%

Figure 3.6d: 25%5% Public attitudes towards job 7% 5% 9% 11% 17% 24% 11% 7% 3% 3% 20%0% automation 15% -1-20 1 - 20 -21-40 -61-80 -41-60 21 - 40 61 - 80 41 - 60 -81-100 81 - 100 10% 0 : 2%

5% 7% DAMAGED5% THE9% WORLD 11% SEVERELY 17% 24%BENEFITTED 11% THE WORLD7% GREATL3% Y 3% 0% -1-20 1 - 20 -21-40 -61-80 -41-60 21 - 40 61 - 80 41 - 60 -81-100 81 - 100 0 : 2%

DAMAGED THE WORLD SEVERELY BENEFITTED THE WORLD GREATLY

25% Figure 3.6e: Public attitudes 20% towards rising living standards outside the west 15%

10%

25%5% 5% 2% 5% 8% 12% 22% 16% 12% 6% 9% 20%0%

15% -1-20 1 - 20 -21-40 -61-80 -41-60 21 - 40 61 - 80 41 - 60 -81-100 81 - 100

10% 0 : 2%

5% DAMAGED THE WORLD SEVERELY BENEFITTED THE WORLD GREATLY 5% 2% 5% 8% 12% 22% 16% 12% 6% 9% 0% -1-20 1 - 20 -21-40 -61-80 -41-60 21 - 40 61 - 80 41 - 60 -81-100 81 - 100

0 : 2%

DAMAGED THE WORLD SEVERELY BENEFITTED THE WORLD GREATLY 32 | POPULISM AND POLITICAL CHANGE

25%

20%

15%

10%

5% 15% 7% 11% 10% 9% 14% 11% 11% 5% 7% 0% -1-20 1 - 20 -21-40 -61-80 -41-60 21 - 40 61 - 80 41 - 60 -81-100 81 - 100

DAMAGED THE WORLD SEVERELY BENEFITTED THE WORLD GREATLY

While there are generational divides on many issues—from social trends, to foreign policy, to Figure 3.6f: domestic law and order—there is remarkably consistent agreement across age groups on the Public attitudes problems of our economic system. towards immigration Rife anti-free trade sentiment is especially critical to the Labour Party. Its supporters at the last election skew heavily towards non-free market ideas. Even among Conservative voters, though, unambiguous advocates of the free market appear to be in relatively small number. It is also clear that the public has little faith in politicians to sufficiently address these concerns. Four in five (80%) agree more with the idea that ‘politicians should pay more attention to voters’ views’ rather than ‘leading the way and not being swayed too easily by public opinion’. This is true of Labour voters and it is also true of Conservative voters. If the political establishment does not do enough to convince the public that it has answers to these concerns about the direction of our economy, it might find itself shocked again by voters in the years to come.

| 33 POPULISM AND POLITICAL CHANGE

4. SEGMENTING THE UK POPULATION

4.1: THE FIVE SEGMENTS

Public opinion clearly divides on social and economic issues. Utilising a statistical clustering technique known as latent class analysis, we have identified five separate groups that the UK population can be allocated into, with each group having a distinct collection of beliefs on the economic and social spectrums. These five segments are:

Left behind Cosmopolitan critics Disengaged pessimists Optimistic centrists Right of centre traditionalists

Figure 4.1a: The distribution of the five segments of the population

7% 16% 23% 29% 25%

Left behind Cosmopolitan Disengaged Optimistic Right of centre critics pessimists centrists traditionalists

34 | POPULISM AND POLITICAL CHANGE

Figure 4.1b: Top associations with capitalism: Left behind

LEFT BEHIND (7%)

Economically left-wing and pro-nationalisation, this nationalise are travel agents, mobile phone networks segment voted heavily to Leave the EU (60%). and car manufacturers. They are the most likely to think that zero hours Left behind demographics: contracts should be abolished and that opportunities • High number of those in the DE socio-economic are too limited to too few people. They attribute group, who consist of semi-skilled and unskilled this to capitalism, which they view very negatively, manual workers or those who are unemployed alongside conservatism. They are anti-free enterprise (39% vs 25% nationally) on almost every measure. While not as positive • Well represented in the North East, Wales and the towards socialism as Cosmopolitan critics, the Left South West behind segment still consider socialism to be ‘fair’ • Higher number of council house renters (27% vs and ‘delivering for most people’, though also ‘naïve’ 13% nationally) and have lower incomes overall and ‘divisive’. than other segments They are strongly in favour of nationalisation. Indeed, the only industries they would not

| 35 POPULISM AND POLITICAL CHANGE

Figure 4.1c: Top associations with capitalism: Cosmopolitan critics

COSMOPOLITAN CRITICS (16%)

Cosmopolitan critics are anti-capitalist, anti-free the most likely segment to describe socialism as enterprise and anti-conservative, but unlike ‘Left ‘delivering for most people’. behind’, they are extremely socially liberal and pro- Cosmopolitan critics demographics: Remain (64%). They have the lowest Conservative • Slightly younger than population overall Party representation, are economically ‘left wing’ • Highest number of people in the C1 socio- and want an end to austerity. economic grouping of any segment (supervisory They are the most likely to favour regulation to or junior managerial, administrative or protect workers, to demand more NHS funding and professional workers) (35% vs 28%) to support the legalisation of cannabis. Cosmopolitan • Regional bias towards the North, London and critics are the only segment to believe overall that other urban areas immigration has improved the country. • More renters than average and the least likely to They are hostile towards patriotism, with 32% own a car describing it as ‘dangerous’ and 31% as ‘divisive’. Capitalism is viewed very negatively, and they are

36 | POPULISM AND POLITICAL CHANGE

Figure 4.1d: Top associations with capitalism: Disengaged pessimists

DISENGAGED PESSIMISTS (23%)

Disengaged pessimists are Eurosceptic (with a Leave vote less optimistic than the population as a whole about of 56%) and dismissive of political ideologies. Capitalism recent social, cultural and economic trends. has a very bad brand image with this segment: 61% say Disengaged pessimists demographics: it is greedy, 53% selfish and 52% corrupt. • Tend to be female (57%) They are also scathing about liberalism, socialism • More 45-64s than average (40% vs 33% nationally) and communism, and are indifferent about • Most white segment (96%) conservatism. Despite their latent anti-capitalist values, their opinions on political decisions and • Highest number of housewives and househusbands voting behaviour do not necessarily reflect this. and lower than average income overall Nevertheless, they are politically authoritarian and extremely socially conservative. They are the segment with the highest support for more jail time for criminals, increased military spending and for countries to ‘protect their own interests’. They are

| 37 POPULISM AND POLITICAL CHANGE

Figure 4.1e: Top associations with capitalism: Optimistic centrists

OPTIMISTIC CENTRISTS (29%)

Optimistic centrists tend towards the centre-right On social issues, Optimistic centrists are more liberal on economic issues. They are broadly free market than most of the UK, and they are marginally more although capitalism still has a brand problem with likely to have voted Remain (51%). this segment (35% describe it as selfish). However, Optimistic centrist demographics: more Optimistic centrists describe capitalism as • Slightly more male than population as a whole (55%) ‘innovative’ and ‘appealing to the head’ than any other • More 18-34s (17% vs 11% nationally) segment, and they are strongly anti-socialist. • Largest number of those in the AB socio-economic Most Optimistic centrists believe that companies grouping (higher and intermediate managerial should be allowed to make as much profit as they can professionals) (36% vs 27% nationally) provided it is legal, and that businesses should be equally free to pay senior executives whatever they • Highest number of home-owners and largest see fit. Of all the segments they are the most sceptical income of any segment of nationalisation. Even so, they would still nationalise railways, water, electricity, gas and defence.

38 | POPULISM AND POLITICAL CHANGE

Figure 4.1f: Top associations with capitalism: Right of centre traditionalists

RIGHT OF CENTRE TRADITIONALISTS (25%)

Ideologically free market and patriotic, this segment a 22% national average) believe that female equality is the most opposed to big government. Indeed, it has been more damaging than beneficial. is the only segment that favours lower taxes and a Most of the segment also believe that rising living smaller state. standards outside of the West have been more Right of centre traditionalists are sceptical of damaging than beneficial. They are also the most regulation and are the only segment not to agree likely segment to say that patriotism is ‘for the greater as a majority that ‘in a civilised society people’s good’. They voted for Brexit (57%). obligation to pay their taxes is more important than Right of centre traditionalists demographics: their personal wealth’. Capitalism is viewed positively • More 25-34s than nationally (26% vs 17% of the overall by this group; the top four descriptors of the country overall) ideology are ‘practical’, ‘forward-looking’, ‘for the • More C2s (skilled manual workers) (26% vs 21%) greater good’, and ‘liberating’. • Mostly full-time workers (65% vs 58%) and more They are also socially conservative. Most believe that affluent than average immigration has damaged the world and even 36% (vs

| 39 POPULISM AND POLITICAL CHANGE

Table 4.1g: Top political ‘ism’ associations by segment

TOTAL LEFT COSMOPOLITAN DISENGAGED OPTIMISTIC RIGHT OF CENTRE BEHIND CRITICS PESSIMISTS CENTRISTS TRADITIONALISTS POSITIVE TRAITS Appeals to the head Conservatism Conservatism Patriotism Conservatism Conservatism Conservatism Principled Conservatism Socialism Patriotism Conservatism Conservatism Conservatism Forward-looking Conservatism Socialism Liberalism Conservatism Conservatism Conservatism Sustainable Conservatism Socialism Socialism Conservatism Conservatism Conservatism Practical Conservatism Liberalism Socialism Conservatism Conservatism Capitalism Delivers most for most people Socialism Socialism Socialism Socialism Conservatism Conservatism For the greater good Socialism Socialism Socialism Socialism Socialism Conservatism Fair Socialism Socialism Socialism Socialism Liberalism Liberalism Inclusive Liberalism Liberalism Socialism Socialism Liberalism Capitalism Generous Liberalism Liberalism Socialism Liberalism Socialism Liberalism Liberating Liberalism Liberalism Liberalism Liberalism Liberalism Liberalism Tolerant Liberalism Liberalism Liberalism Liberalism Liberalism Liberalism Innovative Capitalism Liberalism Liberalism Patriotism Capitalism Capitalism Attractive Patriotism Liberalism Liberalism Liberalism Patriotism Patriotism Inspiring Patriotism Patriotism Patriotism Patriotism Patriotism Patriotism Satisfying Patriotism Patriotism Patriotism Patriotism Patriotism Patriotism Appeals to the heart Patriotism Patriotism Patriotism Patriotism Patriotism Patriotism Nostalgic Patriotism Patriotism Patriotism Patriotism Patriotism Patriotism NEGATIVE TRAITS Greedy Capitalism Capitalism Capitalism Capitalism Capitalism Capitalism Selfish Capitalism Capitalism Capitalism Capitalism Capitalism Communism Corrupt Communism Communism Capitalism Capitalism Communism Communism Divisive Communism Conservatism Patriotism Capitalism Communism Socialism Naïve Communism Communism Communism Liberalism Communism Liberalism Dangerous Communism Communism Communism Communism Communism Communism Disruptive Communism Communism Communism Communism Communism Communism Constraining Communism Communism Communism Communism Communism Communism

40 | POPULISM AND POLITICAL CHANGE

4.2: THE SEGMENTS: CAPITALISM Left behind ‘BRAND’ ASSOCIATIONS

Capitalism’s image problem extends across vast sections of the population (Figure 4.2a). The only segment that does not view capitalism negatively are the Right of centre traditionalists. For the other segments, it is most commonly described as ‘greedy’. Outside of the Right of centre traditionalists, very few Cosmopolitan critics describe capitalism as ‘for the greater good’, ‘forward looking’ or ‘innovative’. Optimistic centrists are somewhat sympathetic to the notion that capitalism is ‘practical’, but even so, this segment are equally likely to describe it as ‘selfish’ and ‘corrupt’. Left behind, Cosmopolitan critics, and—most concerningly for capitalism’s proponents— Disengaged pessimists Disengaged pessimists are all vehemently disparaging of capitalism. This last segment are arguably the most politically ‘in-play’.

Optimistic centrists

Right of centre traditionalists

Figure 4.2a: Top associations with capitalism, by segment

| 41 POPULISM AND POLITICAL CHANGE

4.3: THE SEGMENTS: PUBLIC SECTOR VS PRIVATE SECTOR

Worryingly for advocates of private sector ownership, there is majority support across all five segments of the population for nationalisation of railways, water, electricity, gas, and defence/aerospace. Three of the five segments—Left behind, Cosmopolitan critics, and Disengaged pessimists—support the nationalisation of banks, and even Right of centre traditionalists are split almost 50:50. It is the Optimistic centrists who are most opposed to public sector ownership, preferring instead to see a free- market approach to business coupled with socially conscious domestic policy (see Figures 4.3a-f).

42 | POPULISM AND POLITICAL CHANGE

24% 24% 24% 35% 14% 8% 8% 19% 33% 32%

Figure 4.3a: PublicTrains support for nationalising trains, 24% 24% 24% 35% 14% 8% 8% 19% 33% 32% by segment 76% 76% 76% 65% 86% 92% 92% 81% 67% 68%

Trains

All 18-34 35+ GE2017 GE2017 Left Cosmopolitan Disengaged Optimistic Right of 76% 76% 76% 65%Cons 86%Lab 92%behind critics92% pessimists81% centrists67% centre68% voters voters traditionalists

All 18-34 35+ GE2017 GE2017 Left Cosmopolitan Disengaged Optimistic Right of ConsPUBLIC SECTORLab PRIVATEbehind SECTOR critics pessimists centrists centre voters voters traditionalists

PUBLIC SECTOR PRIVATE SECTOR

Figure 4.3b: Public support for nationalising water, 17% 19% 16% 24% 9% 6% 6% 12% 24% 23% by segment Water

83%17% 81%19% 84%16% 76%24% 91%9% 94%6% 94%6% 88%12% 24%76% 77%23%

Water

83% 81% 84% 76% 91% 94% 94% 88% 76% 77% All 18-34 35+ GE2017 GE2017 Left Cosmopolitan Disengaged Optimistic Right of Cons Lab behind critics pessimists centrists centre voters voters traditionalists

All 18-34 35+ GE2017PUBLIC SECTORGE2017 PRIVATELeft SECTOR Cosmopolitan Disengaged Optimistic Right of Cons Lab behind critics pessimists centrists centre voters voters traditionalists

PUBLIC SECTOR PRIVATE SECTOR

| 43 POPULISM AND POLITICAL CHANGE

FigureElectricity 4.3c: PublicElectricity support for nationalising electricity, by 23% 26% 22% 32% 14% 6% 9% 16% 36% 27% segment 23% 26% 22% 32% 14% 6% 9% 16% 36% 27%

77% 74% 78% 68% 86% 94% 91% 84% 64% 73% 77% 74% 78% 68% 86% 94% 91% 84% 64% 73%

All 18-34 35+ GE2017 GE2017 Left Cosmopolitan Disengaged Optimistic Right of Cons Lab behind critics pessimists centrists centre All 18-34 35+ GE2017voters GE2017voters Left Cosmopolitan Disengaged Optimistic traditionalistsRight of Cons Lab behind critics pessimists centrists centre voters voters traditionalists

PUBLIC SECTOR PRIVATE SECTOR PUBLIC SECTOR PRIVATE SECTOR

Figure 4.3d: Gas Public support for Gas 23% 25% 21% 31% 14% 5% 9% 17% 33% 28% nationalising gas, 23% 25% 21% 31% 14% 5% 9% 17% 33% 28% by segment

77% 75% 79% 69% 86% 95% 91% 83% 67% 72% 77% 75% 79% 69% 86% 95% 91% 83% 67% 72%

PUBLIC SECTOR PRIVATE SECTOR PUBLIC SECTOR PRIVATE SECTOR

40 40

44 | POPULISM AND POLITICAL CHANGE

Figure 4.3e: Public support for Defense and aerospace industry nationalising defence 34% 35% 33% 40% 25% 20% 21% 31% 40% 41% and aerospace, by Defense and aerospacesegment industry 34% 35% 33% 40% 25% 20% 21% 31% 40% 41%

66% 65% 67% 60% 75% 80% 79% 69% 60% 59%

All 18-34 35+ GE2017 GE2017 Left Cosmopolitan Disengaged Optimistic Right of Cons Lab behind critics pessimists centrists centre voters voters traditionalists

All 18-34 35+ GE2017 GE2017 Left Cosmopolitan Disengaged Optimistic Right of Cons Lab behind critics pessimists centrists centre voters voters traditionalists PUBLIC SECTOR PRIVATE SECTOR

PUBLIC SECTOR PRIVATE SECTOR

Banks

BanksFigure 4.3f: Public support for 50% 40% 54% 65% 41% 31% 42% 42% 63% 52% nationalising banks, by segment 50% 40% 54% 65% 41% 31% 42% 42% 63% 52%

50% 60% 46% 35% 59% 69% 58% 58% 37% 48%

50%All 18-3460% 46%35+ GE201735% GE201759% Left69% Cosmopolitan 58% Disengaged58% Optimistic37% Right48% of Cons Lab behind critics pessimists centrists centre voters voters traditionalists

All 18-34 35+ GE2017 GE2017 Left Cosmopolitan Disengaged Optimistic Right of Cons Lab behind critics pessimists centrists centre voters voters traditionalists PUBLIC SECTOR PRIVATE SECTOR

PUBLIC SECTOR PRIVATE SECTOR

| 45 POPULISM AND POLITICAL CHANGE

ALL OPTIMISTIC CENTRISTS 4.4 THE SEGMENTS: FREE MARKET VS THE STATE RIGHT OF CENTRE TRADITIONALISTS DISENGAGED PESSIMISTS COSMOPOLITAN CRITICS LEFT BEHIND Free market ideas find support among only a distinct minority of the population. All of the segments—even Right of centre traditionalists—are more likely to say that regulation is often necessary rather than a burden (Figure 4.4a). All segments support higher NHS funding through higher taxes, and only the Optimistic centrists do not oppose zero hours contracts. The anti-free enterprise attitudes of Left behind and Cosmopolitan critics are especially vehement. Regulation is often an There is particular division on the issue of austerity: Left behind and Cosmopolitan critics are Regulation is often necessary strongly anti-austerity whereas the rest of the population tend to believe that austerity is a unnecessary burden

necessary step that should continue for the time being. The NHS needs more funding and Costs of the NHS are going 4.5 THE SEGMENTS: BUSINESS BEYOND PROFIT higher taxes should pay for this up too much too fast

This pattern is replicated when it comes to business. The population as a whole tends to favour Zero hours contracts Zero hour contracts greater regulation of business and state intervention, but Left behind and Cosmopolitan critics are should be abolished offer useful work particularly adamant. The support within these segments for capping senior pay is almost total, as is People's obligation to pay their People are rewarded for working hard the belief that making a profit should only be one of many considerations. taxes is more important than by keeping more of what they earn their personal wealth 4.6 THE SEGMENTS: SOCIAL ISSUES AND CRIME I favour increased taxation, bigger I favour lower taxes, smaller

government and more spending government and less spending On social issues and crime, there is a clear divide between Cosmopolitan critics and everyone else (Figure 4.6a). Cosmopolitan critics are extremely socially liberal, favouring cannabis legalisation, globalism and increased immigration. The time of austerity is over Austerity should continue Although they cluster closer together, the other segments still have divergent attitudes. It is often the Disengaged pessimists and the Right of centre traditionalists who are most socially conservative—believing that immigration has made the country worse and that government benefits are too readily available. Optimistic centrists tend to be more socially liberal than the population as a whole—except when issues also become overtly economic. On government benefits, for instance, Optimistic centrists are more critical than the population as a whole. -90% -70% -50% -30% -10% 10% 30% 50% 4.7 THE SEGMENTS: SOCIAL TRENDS

On social and cultural trends like equality for LGBTQ citizens and concerns about climate change, the AGREE MORE WITH STATEMENT A AGREE MORE WITH STATEMENT B Left behind segment join Right of centre traditionalists and Disengaged pessimists in their tendency to be more cynical than the population as a whole. Left behind are particularly critical of the impacts NET scores (Statement B - Statement A). Note that the order in which each statement appeared in each pair was randomised of rising living standards outside the West (which is a key differentiator between segments) and job automation, believing these to have been detrimental to working class citizens in the UK. Optimistic centrists and Cosmopolitan critics are united in their perception that these social trends have been largely beneficial, even if they disagree strongly about the benefits of free markets.

46 | POPULISM AND POLITICAL CHANGE

ALL OPTIMISTIC CENTRISTS RIGHT OF CENTRE TRADITIONALISTS DISENGAGED PESSIMISTS COSMOPOLITAN CRITICS LEFT BEHIND

Regulation is often an Regulation is often necessary unnecessary burden

The NHS needs more funding and Costs of the NHS are going higher taxes should pay for this up too much too fast

Zero hours contracts Zero hour contracts should be abolished offer useful work

People's obligation to pay their People are rewarded for working hard taxes is more important than by keeping more of what they earn their personal wealth

I favour increased taxation, bigger I favour lower taxes, smaller

government and more spending government and less spending

The time of austerity is over Austerity should continue

-90% -70% -50% -30% -10% 10% 30% 50%

AGREE MORE WITH STATEMENT A AGREE MORE WITH STATEMENT B

NET scores (Statement B - Statement A). Note that the order in which each statement appeared in each pair was randomised

Figure 4.4a: Support for non-free market ideas vs support for free market ideas, by segment

| 47 POPULISM AND POLITICAL CHANGE

ALL OPTIMISTIC CENTRISTS ALL OPTIMISTIC CENTRISTS RIGHT OF CENTRE TRADITIONALISTS DISENGAGED PESSIMISTS RIGT OF CENTRE TRADITIONALISTS DISENGAGED PESSIMISTS COSMOPOLITAN CRITICS LEFT BEHIND COSMOPOLITAN CRITICS LEFT BEIND

The pay of senior execs should Businesses should pay their be capped senior execs what they see fit Marriage should be Marriage should be between Making a profit should only be The primary purpose of business open to any couple a man and a woman one consideration among many should be to make profit

Cannabis should be Government needs to do more to Government regulates Cannabis should not be legalised legalised and taxed regulate how businesses behave businesses too much

Businesses and government The relationship between the businesses It is more important for countries to It is more important for a country need to work closely together and government has been too close work together on shared objectives to protect its own interests

The housing market is flawed No one has automatic right to own a home & and the government should intervene the government has no place stepping in Immigration has made Immigration has improved this country this country worse Some companies make so Companies are entitled to make as much profit it can’t be justified much profit as they can People have a right to seek Government benefits are help from government benefits too readily available Companies have a responsibility to ensure they It doesn’t matter if there aren’t have a decent number of workers at Board level any workers on boards

Britain would be a better country Britain would be a worse country if social Military expenditure is too high Increase military spending if businesses made less proﬁt responsibility made businesses less proﬁtable

Link people’s pay to the value their Allow people to get what their The justice system should be more I favour more jail time for criminals jobs contribute to broader society employers / customers are willing to pay about rehabilitation than punishment

Proﬁts are returns to rich people which Proﬁts are the mechanism by could otherwise be passed on as lower prices which innovations are rewarded It is more important that people It is more important to are free to act as they wish have order in society There’s a limit to how much people’s The variation between people’s living living standards should be allowed to vary standards should be allowed to grow

-70 -50 -30 -10 10 30 50 70 -100% -80% -60% -40% -20% 0% 20% 40% 60%

AGREE MORE WITH STATEMENT A AGREE MORE WITH STATEMENT B AGREE MORE WIT STATEMENT A AGREE MORE WIT STATEMENT B

Figure 4.5a: Support for state regulation in business vs support for free enterprise, by segment

48 | POPULISM AND POLITICAL CHANGE

ALL OPTIMISTIC CENTRISTS RIGT OF CENTRE TRADITIONALISTS DISENGAGED PESSIMISTS COSMOPOLITAN CRITICS LEFT BEIND

Marriage should be Marriage should be between open to any couple a man and a woman

Cannabis should be Cannabis should not be legalised legalised and taxed

It is more important for countries to It is more important for a country work together on shared objectives to protect its own interests

Immigration has made Immigration has improved this country this country worse

People have a right to seek Government benefits are help from government benefits too readily available

Military expenditure is too high Increase military spending

The justice system should be more I favour more jail time for criminals about rehabilitation than punishment

It is more important that people It is more important to are free to act as they wish have order in society

-70 -50 -30 -10 10 30 50 70

AGREE MORE WIT STATEMENT A AGREE MORE WIT STATEMENT B

NET scores (Statement B - Statement A). Note that the order in which each statement appeared in each pair was randomised

Figure 4.6a: Attitudes towards social issues and crime, by segment

| 49 POPULISM AND POLITICAL CHANGE

ALL OPTIMISTIC CENTRISTS RIGT OF CENTRE TRADITIONALISTS DISENGAGED PESSIMISTS COSMOPOLITAN CRITICS LEFT BEIND

Equality for women with men

Tariff-free trade

Equality for LGBTQ citizens

Rising living standards outside the West

Growing concern about climate change

Job automation

Immigration

Religion

-100 -80 -60 -40 -20 0 20 40 60 80 100

DAMAGED TE WORLD SEEREL BENEFITTED TE WORLD GREATL

NET scores (Benefitteddamaged)

Figure 4.7a: Attitudes towards social trends, by segment

50 | ALL OPTIMISTIC CENTRISTS POPULISM RIGHT OF CENTRE TRADITIONALISTS DISENGAGED PESSIMISTS COSMOPOLITAN CRITICS LEFT BEHIND AND POLITICAL CHANGE

45% 40% ALL OPTIMISTIC CENTRISTS RIGHT OF CENTRE TRADITIONALISTS DISENGAGED PESSIMISTS 35% COSMOPOLITAN CRITICS LEFT BEHIND 30% 4.8 25% THE SEGMENTS: ATTITUDES TOWARDS SOCIAL TRENDS IN DETAIL 20% 15% 10% Figure 4.8a: 45% 5% Tariff-free trade 40% 0% 35%

30% 0% 20% 60% 80% 40% -20% -60% -80% -40% 100% 25% -100% % OF TOTAL POPULATION SAYING 0: 3% 20% 15%

10% DAMAGED THE WORLD SEVERELY BENEFITTED THE WORLD GREATLY 5% 0% 0% 20% 60% 80% 40% -20% -60% -80% -40% 100%

-100% % OF TOTAL POPULATION SAYING 0: 3%

DAMAGED THE WORLD SEVERELY BENEFITTED THE WORLD GREATLY

45% Figure 4.8b: 40% Equality for women 35% with men 30% 25% 20% 15% 10% 45% 5% 40% 0% 35% 0% 20% 60% 80% 40% -20% -60% -80% -40% 30% 100% -100% 25% % OF TOTAL POPULATION SAYING 0: 2% 20%

15% DAMAGED THE WORLD SEVERELY BENEFITTED THE WORLD GREATLY 10% 5% ALL OPTIMISTIC CENTRISTS 0% RIGHT OF CENTRE TRADITIONALISTS DISENGAGED PESSIMISTS 0% 20% 60% 80% COSMOPOLITAN CRITICS LEFT BEHIND40% -20% -60% -80% -40% 100% -100% % OF TOTAL POPULATION SAYING 0: 2%

DAMAGED THE WORLD SEVERELY BENEFITTED THE WORLD GREATLY

ALL OPTIMISTIC CENTRISTS RIGHT OF CENTRE TRADITIONALISTS DISENGAGED PESSIMISTS COSMOPOLITAN CRITICS LEFT BEHIND | 51 POPULISM AND POLITICAL CHANGE

Figure 4.8c: 45% 45% Equality for 40% 40% LGBTQ citizens 35% 35% 30% 30% 25% 25% 20% 20% 15% 15% 10% 10% 5% 5% 0% 0% 0% 20% 60% 80% 40% -20% -60% -80% -40% 0% 100% -100% 20% 60% 80% 40% -20% -60% -80% -40% 100% -100% % OF TOTAL POPULATION SAYING 0: 2% % OF TOTAL POPULATION SAYING 0: 2%

DAMAGED THE WORLD SEVERELY BENEFITTED THE WORLD GREATLY DAMAGED THE WORLD SEVERELY BENEFITTED THE WORLD GREATLY

45% Figure 4.8d: 45% 40% Growing concern 40% 35% about climate 35% 30% change 30% 25% 25% 20% 20% 15% 15% 10% 10% 5% 5% 0% 0% 0% 20% 60% 80% 40% -20% -60% -80% -40% 0% 100% -100% 20% 60% 80% 40% -20% -60% -80% -40% 100% -100% % OF TOTAL POPULATION SAYING 0: 2% % OF TOTAL POPULATION SAYING 0: 2%

DAMAGED THE WORLD SEVERELY BENEFITTED THE WORLD GREATLY DAMAGED THE WORLD SEVERELY BENEFITTED THE WORLD GREATLY

ALL OPTIMISTIC CENTRISTS ALL OPTIMISTIC CENTRISTS RIGHT OF CENTRE TRADITIONALISTS DISENGAGED PESSIMISTS RIGHT OF CENTRE TRADITIONALISTS DISENGAGED PESSIMISTS COSMOPOLITAN CRITICS LEFT BEHIND COSMOPOLITAN CRITICS LEFT BEHIND

52 | POPULISM AND POLITICAL CHANGE

45% 40% 35% Figure 4.8e: 30%45% Immigration 40%25% 20%35% 30%15% 25%10% 20%5% 15%0% 0% 20% 60% 80% 10% 40% -20% -60% -80% -40% 100% -100% 5% 0% % OF TOTAL POPULATION SAYING 0: 1% 0% 20% 60% 80% 40% -20% -60% -80% -40% 100% -100% DAMAGED THE WORLD SEVERELY BENEFITTED THE WORLD GREATLY % OF TOTAL POPULATION SAYING 0: 1%

DAMAGED THE WORLD SEVERELY BENEFITTED THE WORLD GREATLY

45% Figure 4.8f: 40% Religion 35% 30%45% 40%25% 20%35% 30%15% 25%10% 20%5% 15%0% 0% 20% 60% 80% 10% 40% -20% -60% -80% -40% 100% -100% 5% 0% % OF TOTAL POPULATION SAYING 0: 2% 0% 20% 60% 80% 40% -20% -60% -80% -40% 100% -100%

DAMAGED THE WORLD SEVERELY BENEFITTED THE WORLD GREATLY % OF TOTAL POPULATION SAYING 0: 2%

DAMAGED THE WORLD SEVERELY BENEFITTED THE WORLD GREATLY ALL OPTIMISTIC CENTRISTS RIGHT OF CENTRE TRADITIONALISTS DISENGAGED PESSIMISTS COSMOPOLITAN CRITICS LEFT BEHIND

ALL OPTIMISTIC CENTRISTS RIGHT OF CENTRE TRADITIONALISTS DISENGAGED PESSIMISTS COSMOPOLITAN CRITICS LEFT BEHIND

| 53 POPULISM AND POLITICAL CHANGE

Figure 4.8g: 45% Job automation 40%45% 40%35% 30%35% 30%25% 20%25% 20%15% 10%15% 10%5% 0%5% 0% 0% 20% 60% 80% 40% -20% -60% -80% -40% 100% -100% 0% 20% 60% 80% 40% -20% -60% -80% -40% 100% -100% % OF TOTAL POPULATION SAYING 0: 2% % OF TOTAL POPULATION SAYING 0: 2%

DAMAGED THE WORLD SEVERELY BENEFITTED THE WORLD GREATLY DAMAGED THE WORLD SEVERELY BENEFITTED THE WORLD GREATLY

45% 40%45% Figure 4.8h: 40%35% Rising living 30%35% standards outside 30%25% the West 20%25% 20%15% 10%15% 10%5% 0%5% 0% 0% 20% 60% 80% 40% -20% -60% -80% -40% 100% -100% 0% 20% 60% 80% 40% -20% -60% -80% -40% 100% -100% % OF TOTAL POPULATION SAYING 0: 2% % OF TOTAL POPULATION SAYING 0: 2%

DAMAGED THE WORLD SEVERELY BENEFITTED THE WORLD GREATLY DAMAGED THE WORLD SEVERELY BENEFITTED THE WORLD GREATLY

ALL OPTIMISTIC CENTRISTS ALLRIGHT OF CENTRE TRADITIONALISTS DISENGAGEDOPTIMISTIC CENTRISTS PESSIMISTS COSMOPOLITANRIGHT OF CENTRE CRITIC TRADITIONALISTSS DISENGAGEDLEFT BEHIND PESSIMISTS COSMOPOLITAN CRITICS LEFT BEHIND

54 | POPULISM AND POLITICAL CHANGE

5. MAXDIFF—WHAT IS MOST IMPORTANT TO US?

As new technologies and social trends develop, it is tempting to speculate about the changing importance of utilities and public services. How essential is the internet to our lives? Is it still important to young people to have a well-paying job? Are the minimum wage, universal healthcare and free education still considered necessities in today’s world? We test this empirically, using a ‘MaxDiff’ analysis (where respondents repeatedly choose the most important and least important items from a constantly changing list) to create a ‘hierarchy of needs’ for the modern world. MaxDiff analysis does not simply ask respondents to rank each utility in order of importance. Instead, it is used to determine importance based on people’s real choices when faced with three or four options which constantly swap in and out. The political implications of the findings are significant. We know the problems of modern capitalism as defined by the public. By analysing the public’s key priorities, we can start to ascertain what their desired solutions might be. The following outlines those key priorities. 5.1 SUMMARY: WHAT WE NEED MOST

The MaxDiff rankings summary table below shows that the top necessities in modern society—food and water, emergency services, universal healthcare, good housing and a decent job—rarely change across different sections of the population. Below this, the hierarchy of needs looks very different for different groups. Older people and Conservative voters prioritise military security and financial savings over decent well-paying jobs, educational provision and the minimum wage, which in contrast are all more important to younger people and Labour voters.

| 55 POPULISM AND POLITICAL CHANGE

BELOW AVERAGE IMPORTANCE ABOVE AVERAGE IMPORTANCE Table 5.1a: MaxDiff rankings summary—most important services by demographic

GENDER AGE SOCIAL GRADE GE2017 PARTY 400 300 200 100 0 ALL MALE FEMALE 18-24 65+ AB DE CONS LAB 6 1. Food and water Food and water 1 1 1 1 1 1 1 1 1 Emergency services 2 2 2 3 2 2 2 2 2 13 2. Emergency services Universal healthcare 3 3 3 2 3 3 3 3 3 18 3. Universal Healthcare free at the point of use A good house 4 4 4 4 4 4 4 4 4 A decent well-paying job 5 5 5 5 6 5 5 6 5 22 4. A good house to live in Compulsory & free education 6 6 6 6 7 6 7 8 6 44 5. A decent well-paying job Armed Forces 7 7 7 10 5 7 6 5 9 Ability to save funds/bank 8 8 8 9 8 8 9 7 8 64 6. Compulsory and free education Minimum wage 9 9 9 7 11 9 8 10 7 70 7. The Armed forces Further & higher education 10 10 10 8 14 10 11 13 10 Large supermarkets 11 13 11 12 13 13 10 12 11 77 8. The ability to save funds and withdraw from a bank Television & radio 12 11 12 16 9 11 12 11 12 98 9. The minimum wage Your own car 13 12 14 17 10 12 15 9 16 Internet and search engines 14 14 15 11 15 15 13 14 13 133 10 Further & higher education Books 15 15 13 13 12 14 14 15 14 143 11. Large supermarkets Subsidised public transport 16 16 16 14 16 16 16 16 15 Smart devices 17 17 17 15 17 17 17 17 17 146 12. Television & radio (whether online or boxset) The arts 18 18 18 18 18 18 18 19 18 158 13. Your own car Affordable air travel 19 19 19 19 19 19 19 18 19 Social media platforms 20 20 20 20 20 20 20 20 20 172 14. Internet and key search engines (e.g. Google)

176 15. Books

5.2 IN DETAIL: TOTAL POPULATION 213 16. Subsidised public transport

237 17. Smart devices (phones, tablets & watches) The five most important utilities to the public overall are food and water (ranked 1 out of 20), the emergency services (2) and universal healthcare (3). After these necessities, a good house to live in (4) is more important than a decent well-paying job 305 18. The arts (theatre, galleries & music) (5), while compulsory and free education (6) is considered more important than the Armed Forces (7). 323 19. Affordable air travel The internet (14), smart devices (17) and social media (20) are all way down the hierarchy of needs for the public as a whole— below television and radio (12), supermarkets (11) and cars (13). 371 20. Social media platforms

Subsidised public transport is not considered a necessity (16). Likewise, affordable air travel (19) and the arts (18) are luxuries, not essentials. The MaxDiff scores on the chart below work as follows. 100 is the average score; anything smaller than that (i.e. closer to 0) is of above average importance to an individual’s life, and anything greater than 100 is of below average importance.

56 | POPULISM AND POLITICAL CHANGE

BELOW AVERAGE IMPORTANCE ABOVE AVERAGE IMPORTANCE

400 300 200 100 0

6 1. Food and water

13 2. Emergency services

18 3. Universal Healthcare free at the point of use

22 4. A good house to live in

44 5. A decent well-paying job

64 6. Compulsory and free education

70 7. The Armed forces

77 8. The ability to save funds and withdraw from a bank

98 9. The minimum wage

133 10 Further & higher education

143 11. Large supermarkets

146 12. Television & radio (whether online or boxset)

158 13. Your own car

172 14. Internet and key search engines (e.g. Google)

176 15. Books

213 16. Subsidised public transport

237 17. Smart devices (phones, tablets & watches)

305 18. The arts (theatre, galleries & music)

323 19. Affordable air travel

371 20. Social media platforms

Figure 5.2a: Total population

| 57 POPULISM AND POLITICAL CHANGE

BELOW AVERAGE IMPORTANCE ABOVE AVERAGE IMPORTANCE

400 300 200 100 0

12 1. Food and water

23 2. Emergency services

27 3. Universal Healthcare free at the point of use

32 4. A good house to live in

40 5. A decent well-paying job

53 6. Compulsory and free education

7. The minimum wage UP 67 2 78 8. Ability to save funds and withdraw from a bank

UP 100 9. Further & higher education 1 DOWN 101 10. The Armed forces 3

133 11. Internet and key search engines UP 3 DOWN 142 12. Large supermarkets 1

UP 165 13. Subsidised public transport 3 DOWN 166 14. Television & radio (online/boxset) 2

170 15. Books

UP 181 16. Smart devices 1 DOWN 189 17. Your own car 4

266 18. The arts (theatre, galleries & music)

284 19. Affordable air travel

304 20. Social media platforms

Figure 5.3a: 18-34 (with changes vs total population highlighted)

58 | POPULISM AND POLITICAL CHANGE

5.3 IN DETAIL: 18-34s

The top six societal needs for people aged 18-34 remain unchanged when compared to the population as a whole. Beyond these top needs, however, there are a number of differences between younger people and the wider population. Younger people are far less concerned about having a car than the population as a whole. Unlike their older counterparts, the MaxDiff analysis shows that 18- 34s prioritise subsidised public transport over owning a car. They are the only age group to do so. They are also significantly less likely to consider the Armed Forces important. When viewed with the poll’s other findings—which show young people supporting reduced military spending while the rest of the population supports the opposite—it is clear that 18-34s want the defence budget to be redirected to areas they consider more beneficial. These include increasing support for lower paid workers and further and higher education. The internet, public transport and smart devices all rise in importance for younger people when compared to the population as a whole, while large supermarkets and television and radio fall lower down the hierarchy of needs. 5.4 IN DETAIL: 65+

For the oldest portion of the population, the importance of education, decent jobs and the minimum wage all fall as they move into retirement. So too does the importance of large supermarkets and the internet. On the other hand, 65s and over are more likely to consider the Armed Forces, television and radio, owning a car and books more important when compared to the rest of the population. It is clear that universal healthcare free at the point of use and decent housing are critical to the UK public across all ages, ranking just below food and water and the emergency services in terms of necessity. In addressing concerns that capitalism has overstepped the market, the political establishment must show that it wishes to protect universal healthcare and promote a fair housing market if it is to convince the public that it truly cares about its needs. It should also be noted, given the importance of good housing to all sections of society, that our poll also finds considerably more support for the idea that ‘the housing market is flawed and the government should intervene’ than that ‘the government has no place stepping in’.

| 59 POPULISM AND POLITICAL CHANGE

BELOW AVERAGE IMPORTANCE ABOVE AVERAGE IMPORTANCE

400 300 200 100 0

0 1. Food and water

3 2. Emergency services

6 3. Universal Healthcare free at the point of use

11 4. A good house to live in

UP 43 5. The Armed forces 1 DOWN 58 6. A decent well-paying job 1 DOWN 65 7. Compulsory and free education 1

68 8. Ability to save funds and withdraw from a bank

131 9. Television & radio (online/boxset) UP 3 134 10. Your own car UP 3 DOWN 136 11. The minimum wage 2

146 12. Books UP 3 DOWN 147 13. Large supermarkets 2 DOWN 149 14. Further & higher education 4 DOWN 203 15. Internet and key search engines 1

223 16. Subsidised public transport

299 17. Smart devices

314 18. The arts (theatre, galleries & music)

343 19. Affordable air travel

421 20. Social media platforms

Figure 5.4a: 65+ (with changes vs total population highlighted)

60 | POPULISM AND POLITICAL CHANGE

5.5 MAXDIFF: WHAT EACH SEGMENT PRIORITISES

As we found with age and party support, the top priorities—food and water, emergency services, universal healthcare, good housing and decent well-paying jobs—change little between the five segments of the population. There are, however, some differences below these top needs. For the Left behind segment, the minimum wage, the Armed Forces and having cars and subsided public transport are all more important than for the population as a whole. For Cosmopolitan critics, the minimum wage and books are more important but the importance of the Armed Forces, large supermarkets and owning cars all fall. Disengaged pessimists are fairly similar to the population as a whole in terms of their most important needs. The importance of education for this (slightly older) segment falls slightly. When it comes to their hierarchy of needs, Optimistic centrist are the most representative of the population as a whole. The needs of Right of centre traditionalists differ considerably from the overall population. As an older segment, they are less personally concerned about education, the arts, books and subsidised public transport. Instead, they place a greater importance on the Armed Forces and easy access to large supermarkets, TV and radio, cars, smart devices and affordable air travel. 5.6 THE SEGMENTS: POLITICAL IMPLICATIONS

The five segments reveal that significant portions of the country—especially Cosmopolitan critics and Left behind—are vehemently anti-capitalist. Free markets find strong support among Right of centre traditionalists and some support among Optimistic centrists, but even the latter of these segments views capitalism with negativity. Interestingly, the Disengaged pessimists, who make up 23% of the country and are arguably the most politically ‘in-play’ segment, have a clear latent hostility towards capitalism—even if this is not explicitly factored in to all of their preferred policy choices.

| 61 POPULISM AND POLITICAL CHANGE

BELOW AVERAGE IMPORTANCE ABOVE AVERAGE IMPORTANCE BELOW AVERAGE IMPORTANCE ABOVE AVERAGE IMPORTANCE

400 300 200 100 0 400 300 200 100 0

0 Food and water 0 Food and water

5 Emergency services 5 Emergency services

7 Universal Healthcare free at the point of use 7 Universal Healthcare free at the point of use

13 A good house to live in 13 A good house to live in

22 A decent well-paying job 28 A decent well-paying job UP 49 The Armed forces 1 32 Compulsory and free education DOWN 51 Compulsory and free education 1 UP 46 The minimum wage 2 61 The minimum wage UP 1 75 The ability to save funds and withdraw from a bank DOWN 70 The ability to save funds/bank DOWN 1 88 The Armed forces 2

122 Further & higher education 95 Further & higher education

138 Large supermarkets 125 Books UP 4 UP 145 Your own car 1 149 Television & radio (whether online or boxset) UP 167 Books 2 161 Internet and key search engines (eg Google) UP DOWN 1 182 Television & radio 2 162 DOWN Large supermarkets 3 UP 211 Subsidised public transport 168 Subsidised public transport UP 1 1 DOWN 215 Internet and key search engines 203 DOWN 2 Your own car 3 277 Smart devices (phones, tablets & watches) 241 UP The arts (theatre, galleries & music) 1 332 The arts (theatre, galleries & music) DOWN 247 Smart devices (phones, tablets & watches) 1 Affordable air travel 356 323 Affordable air travel 395 Social media platforms 375 Social media platforms

Figure 5.5a Left behind (with changes vs total population highlighted)

62 | POPULISM AND POLITICAL CHANGE

BELOW AVERAGE IMPORTANCE ABOVE AVERAGE IMPORTANCE BELOW AVERAGE IMPORTANCE ABOVE AVERAGE IMPORTANCE

400 300 200 100 0 400 300 200 100 0

0 Food and water 0 Food and water

5 Emergency services 5 Emergency services

7 Universal Healthcare free at the point of use 7 Universal Healthcare free at the point of use

13 A good house to live in 13 A good house to live in

122 Further & higher education 95 Further & higher education

Figure 5.5b: Cosmopolitan critics (with changes vs total population highlighted)

| 63 POPULISM AND POLITICAL CHANGE

BELOW AVERAGE IMPORTANCE ABOVE AVERAGE IMPORTANCE BELOW AVERAGE IMPORTANCE ABOVE AVERAGE IMPORTANCE

400 300 200 100 0 400 300 200 100 0

4 Food and water 7 Food and water 10 Emergency services 14 Emergency services 14 Universal Healthcare free at the point of use 17 Universal Healthcare free at the point of use 18 A good house to live in 23 A good house to live in 45 A decent well-paying job 45 A decent well-paying job 64 The Armed forces UP 1 64 Compulsory and free education DOWN 67 Compulsory and free education 1 66 The Armed forces 72 The ability to save funds/ bank 76 The ability to save funds and withdraw from a bank 101 The minimum wage 119 The minimum wage UP 144 Large supermarkets 1 130 Further & higher education 145 Television & radio UP 1 UP 142 Television & radio (whether online or boxset) 1 DOWN 149 Further & higher education 2 DOWN 145 Large supermarkets 1 154 Your own car 149 Your own car 185 Books UP 1 161 Internet and key search engines (eg Google) DOWN 189 Internet and key search engines 1 175 Books 234 Subsidised public transport 224 Subsidised public transport 261 Smart devices (phones, tablets & watches) 232 Smart devices (phones, tablets & watches) 328 The arts (theatre, galleries & music) 299 The arts (theatre, galleries & music) 352 Affordable air travel 310 Affordable air travel 394 Social media platforms 380 Social media platforms

Figure 5.5c: Disengaged pessimists (with changes vs total population highlighted)

64 | POPULISM AND POLITICAL CHANGE

BELOW AVERAGE IMPORTANCE ABOVE AVERAGE IMPORTANCE BELOW AVERAGE IMPORTANCE ABOVE AVERAGE IMPORTANCE

400 300 200 100 0 400 300 200 100 0

Figure 5.5d: Optimistic centrists (with changes vs total population highlighted)

| 65 POPULISM AND POLITICAL CHANGE

BELOW AVERAGE IMPORTANCE ABOVE AVERAGE IMPORTANCE

400 300 200 100 0

13 Food and water

20 Emergency services

31 Universal Healthcare free at the point of use

32 A good house to live in

57 A decent well-paying job UP 73 The Armed forces 1 DOWN 83 Compulsory and free education 1

85 The ability to save funds and withdraw from a bank

112 The minimum wage

UP 130 Large supermarkets 1 Television & radio (whether online or boxset) UP 141 1 147 Your own car UP 1 DOWN 149 Further & higher education 3 162 Internet and key search engines (eg Google)

203 Smart devices (phones, tablets & watches) UP 2 DOWN 205 Books 1 Subsidised public transport DOWN 209 1 UP 303 Affordable air travel 1 DOWN 322 The arts (theatre, galleries & music) 1

332 Social media platforms

Figure 5.5e: Right of centre traditionalists (with changes vs total population highlighted)

66 | POPULISM AND POLITICAL CHANGE

BELOW AVERAGE IMPORTANCE ABOVE AVERAGE IMPORTANCE 6. PLOTTING THE POPULATION

400 300 200 100 0

13 Food and water

20 Emergency services Using the results from our poll, we have created a single data point for each participant that 31 Universal Healthcare free at the point of use encapsulates the degree to which he or she is pro-free enterprise and socially liberal. This allows us to plot where different segments of the population lie on the free enterprise vs social liberalism spectrum. 32 A good house to live in The free enterprise index and the social liberalism index are calculated using a Principal Component 57 A decent well-paying job Analysis. This reduces a range of variables from our poll into single data points that sum up the views of respondents on the economic spectrum (using variables such as their attitudes towards capitalism UP 73 The Armed forces 1 and regulation) and the social liberalism spectrum (using variables such as their attitudes towards DOWN 83 Compulsory and free education 1 immigration, same-sex marriage and the justice system amongst other social issues).

85 The ability to save funds and withdraw from a bank Take, for instance, Labour and Conservative voters at the 2017 General Election. Figure 6a shows that—as one would expect—Labour voters tend to be more socially liberal and less in favour of free Figure 6a: 112 The minimum wage enterprise, whereas Conservative voters are less socially liberal and more in favour of free enterprise. Socio-economic axes: UP 130 Large supermarkets 1 Conservative 2017 GE While most respondents cluster towards the centre, there is a clear diagonal dividing line cutting voters vs Labour 141 Television & radio (whether online or boxset) UP through the cluster, above which an individual is far more likely to be a Labour voter and below which 1 2017 GE voters they are far more likely to be a Conservative voter. 147 Your own car UP 1 DOWN 149 Further & higher education 3 162 Internet and key search engines (eg Google)

203 Smart devices (phones, tablets & watches) UP 2 DOWN 205 Books 1 Subsidised public transport DOWN 209 1 UP 303 Affordable air travel 1 DOWN 322 The arts (theatre, galleries & music) 1

332 Social media platforms CONSERVATIVE

LABOUR

LESS SOCIALLY LIBERAL MORE

LESS PROFREE ENTERPRISE MORE PROFREE ENTERPRISE

| 67 POPULISM AND POLITICAL CHANGE

REMAIN

LEAVE LESS SOCIALLY LIBERAL MORE

LESS PROFREE ENTERPRISE MORE PROFREE ENTERPRISE

Figure 6b: Contrast this to the distribution of Leave and Remain voters at the EU referendum (Figure 6b). Socio-economic axes: Here we can see that the dividing line (horizontal this time, rather than diagonal) is predicated Remain voters to a much greater extent on social—rather than economic—attitudes. There is also a greater vs Leave voters dispersion of attitudes among both Leave and Remain voters than among Labour and Conservative voters.

68 | POPULISM AND POLITICAL CHANGE

1835 65+ LESS SOCIALLY LIBERAL MORE

LESS PROFREE ENTERPRISE MORE PROFREE ENTERPRISE

A similar dispersion is to be found by age (Figure 6c). Comparing younger and older people, we Figure 6c: notice that there is little correlation between age and the economic liberalism of a respondent Socio-economic axes: (both young and old individuals are scattered horizontally). It is almost as easy to find anti-free 18-35s vs 65+ trade younger people as anti-free trade older people. Conversely, age is a large determinant of social liberalism (with younger people far more likely to be placed above the centre line than below it). To illustrate more clearly still that there is no strong correlation between age and economic liberalism but that there is a correlation between age and social liberalism, we have plotted each in isolation in Figures 6d and 6e.

| 69 POPULISM AND POLITICAL CHANGE

2 65 R = 0.06526

55 R2 = 0.06526 Figure 6d: 65 50 Age vs economic liberalism index 60 45

55 40 Average age at each percentile 50 35

45 30 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 40 Average age at each percentile Economic liberalism percentile

35 LESS PRO FREE ENTERPRISE MORE PRO FREE ENTERPRISE 30 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Economic liberalism percentile

LESS PRO FREE ENTERPRISE MORE PRO FREE ENTERPRISE

Figure 6e: 70 Age vs social R2 = 0.78429 liberalism index 65

7055 R2 = 0.78429 5065

6045 Average age at each percentile

4055

5035

3045 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Average age at each percentile 40 Social liberalism percentile

35 LESS SOCIALLY LIBERAL MORE SOCIALLY LIBERAL 30 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Social liberalism percentile

LESS SOCIALLY LIBERAL MORE SOCIALLY LIBERAL

70 | POPULISM AND POLITICAL CHANGE

LEFT BEHIND LESS SOCIALLY LIBERAL MORE

LESS PROFREE ENTERPRISE MORE PROFREE ENTERPRISE

Where do the five segments of the population fit on these axes? Figure 6f: Socio-economic axes: The Left behind segment are heavily skewed towards the anti-free enterprise end of the Left behind spectrum (Figure 6f). They also tend to be less socially liberal.

| 71 POPULISM AND POLITICAL CHANGE

COSMOPOLITAN CRITICS LESS SOCIALLY LIBERAL MORE

LESS PROFREE ENTERPRISE MORE PROFREE ENTERPRISE

Figure 6g: Cosmopolitan critics can be found in each quadrant but they cluster most in the top left Socio-economic axes: corner—where respondents are most socially liberal and least in favour of free enterprise Cosmopolitan critics (Figure 6g).

72 | POPULISM AND POLITICAL CHANGE

DISENGAGED PESSIMISTS LESS SOCIALLY LIBERAL MORE

LESS PROFREE ENTERPRISE MORE PROFREE ENTERPRISE

Disengaged pessimists cluster around the middle of the quadrants (Figure 6h). They are more Figure 6h: likely to be politically disengaged, although this does not stop them having a strong latent Socio-economic axes: hostility towards capitalism. Disengaged pessimists

| 73 POPULISM AND POLITICAL CHANGE

OPTIMISTIC CENTRISTS LESS SOCIALLY LIBERAL MORE

LESS PROFREE ENTERPRISE MORE PROFREE ENTERPRISE

Figure 6i: Socio-economic axes: Optimist centrists show a similar distribution to Disengaged pessimists and can be found in all Optimistic centrists four quadrants of the chart (Figure 6i). Nevertheless, they tend to be more pro-free enterprise and more socially liberal, clustering most heavily in the top right quadrant.

74 | POPULISM AND POLITICAL CHANGE

RIGHT OF CENTRE TRADITIONALISTS LESS SOCIALLY LIBERAL MORE

LESS PROFREE ENTERPRISE MORE PROFREE ENTERPRISE

Right of centre traditionalists map closely to Conservative voters (Figure 6j). They are the Figure 6j: direct opposite of Cosmopolitan critics, with very few occupying the socially liberal, anti-free Socio-economic enterprise quadrant in the top left corner. axes: Right of centre traditionalists Plotting the centre of gravity of each of these groups on one graph, we can see how groups cluster together and where they diverge. Labour voters in the 2017 General Election are remarkably similar in both social and economic views to the Cosmopolitan critics segment. Conservative voters in the 2017 General Election are most similar to the Right of centre traditionalists in attitudes, while the Optimistic centrists and Disengaged pessimists are currently found somewhere between the voters of the two main parties. Leave voters, Remain voters, 18-34s and those aged 65+ vary remarkably little on economic attitudes. It is on the question of social attitudes where Leave voters and those aged 65+ diverge from Remain voters and 18-34s.

| 75 POPULISM AND POLITICAL CHANGE

7. BUSINESS AND POLITICAL CONSEQUENCES

7.1 BUSINESS CONSEQUENCES

The findings of this report have potentially huge consequences for businesses if politicians and policy makers begin to heed mounting public appetite for greater regulation of big business. On 22 September, Uber was hit by a shock rejection of its application to operate in London by Transport for London (TfL), which argued that “Uber’s approach and conduct demonstrate a lack of corporate responsibility”. London mayor Sadiq Khan added that “providing an innovative service must not be at the expense of customer safety and security”, echoing public sentiment in our research that businesses must be forced to take wider responsibilities beyond profit into consideration. Populus has been tracking the reputation among the public of a wide range of companies, including Uber.6 In February, Uber’s Reputation Credit Score was relatively low compared to other companies, as was its Intensity Score: the extent to which a company elicits strong and varied opinions (Figure 7.1a). This suggests relatively few people had strong views about Uber. This has, however, changed in recent months. Uber’s Reputation Credit Score has fallen further and its Intensity Score has increased, which suggests that more and more people are forming strong views about the company—often in a negative sense. That was even before TfL’s ruling. By addressing intensifying public scrutiny around its operating practises—amid a broader public desire to see corporate irresponsibility penalised—it is possible that Uber could have avoided a roadblock of its own making. What is also noticeable about the companies which perform poorly in the Populus Reputation Model, is that despite their different business models, sectors and financial performance, they have factors in common. Transparency issues, legal procedures, customer/consumer scandals, and faulty products/ delivery all—to a degree—plague the reputations of these poorly performing companies. What’s also fascinating is that nearly all of them have had to withstand political pressure as a consequence of their poor reputations. This political pressure is due, in part, to the shifting economic attitudes amongst voters, and a waning tolerance for companies that are seen to be transgressing a natural sense of fairness. Although not within the specific remit of this report, the business implications of a changing landscape in public opinion on attitudes towards the free market are enormous. 7.2 POLITICAL CONSEQUENCES

This research finds that a clear anti-capitalist sentiment permeates throughout many segments of the population. Majority support for nationalisation of railways, water, gas and electricity is overwhelming. The public tend to reject free market ideas in favour of state regulation. They believe that big business has been

6 See also the Populus paper: ‘On warning: why businesses must improve their reputation’. Published December 2016 http://www.populus.co.uk/2016/12/on-warning-why-businesses-must-improve-their-reputations/

76 | POPULISM AND POLITICAL CHANGE

700

600

500

400 UBER (Feb 2017) UBER (Jun 2017) Goldman Sachs 300 G45 Southern Railwa y FIFA

REPUTATION CREDIT SCORE 200 QuikQuid Wonga

100 100 200 300 400 500 600 700 800

INTENSITY SCORE

given too much free reign for too long and that the economy needs to be reoriented away from a focus Figure 7.1a: on profit. Moreover, anti-capitalist tendency is similarly prevalent across ages—and we find that it is in The Populus fact those aged 35 and over who are slightly more anti-free enterprise, not those who are younger. Reputation Model There are important demographic divisions on social issues—on which the public as a whole tends to lean to the right—but we focus here on populist economic attitudes which have allowed the Labour Party (so often characterised as ‘weak’ on the economy, and indeed, rated poorly on the subject in opinion polls) to win more votes than many believed possible. The public appears to be more economically left wing than many commentators realise. In the wake of the EU referendum debate, much focus has been given to the social attitudes of voters. Now, the political class will need to turn its attention to economic attitudes, or face the risk of the ground shifting beneath its feet. And for those who believe that competition, entrepreneurship and free trade are key drivers to make societies more prosperous, it’s time for us to up our game.

| 77 POPULISM AND POLITICAL CHANGE

ABOUT THE AUTHORS

Matthew Elliott Matthew’s work as a Senior Fellow at the Legatum Institute includes researching the rise of Populism and political change. Having been Chief Executive of Vote Leave, the official Brexit campaign in the 2016 EU referendum, Matthew is now one of the UK’s foremost political campaigners. He also led NOtoAV and won the 2011 referendum on the Alternative Vote. As a policy entrepreneur, he has founded and run numerous award-winning campaigns, including the TaxPayers’ Alliance (TPA) and Business for Britain (BfB), the precursor to Vote Leave. Matthew has been described by the Financial Times as “one of the most formidable political strategists in Westminster”, and by the New European as “an unsung titan of the Brexit cause”. Through the Westminster Foundation for Democracy, he has worked with political parties across the world, including in Azerbaijan, Belarus, Georgia, Ghana, Guatemala, Kenya, the Maldives, Montenegro, Serbia and Ukraine. He has written four books, numerous op-eds, appears regularly on TV and radio, and is a frequent speaker both in the UK and overseas. He is also currently the Senior Political Adviser to Shore Capital.

James Kanagasooriam James is Head of Analytics at Populus, joining in 2014. His work focuses on both corporate reputation issues and the application of data science techniques to political campaigns and voter micro-targeting strategies. James and his Populus team most recently utilised these techniques for the Scottish Conservatives at the 2016 Holyrood elections, and at the recent 2017 General Election. Before joining Populus, James was an investment banker at Rothschild and previously worked at the think-tank Policy Exchange. He is a graduate of Cambridge University. He writes intermittently for Times RedBox and tweets regularly on all things political and data related @jameskanag.

78 | LEGATUM INSTITUTE 11 Charles Street Mayfair London W1J 5DW United Kingdom t: +44 (0) 20 7148 5400

Twitter: @LegatumInst www.li.com www.prosperity.com

OCTOBER 2017