Post EU Referendum Analysis

Post EU Referendum Analysis

How the UK Voted

Out of four home nations, two voted to remain within the EU on 23 June (Scotland and Northern Ireland), while two voted to leave (England and Wales). Much has been made of the EU Referendum result in Scotland, however, little has been said about the voting patterns in each of the other three home nations as opposed to the UK result overall. Only Nicola Sturgeon adopted the position that reflected the view of her home nation. The Prime Minister and the First Ministers of Wales and Northern Ireland were out of step with the majority view in each of their nations.

The outcome of the referendum in Wales is significant when you consider that the First Minister supported the remain campaign. Indeed, Carwyn Jones, like Jeremy Corbyn, could now see his authority challenged due to the fact that a significant portion of the core Labour vote in Wales chose to leave the EU. However, this result is not surprising given the rise in UKIP support across Wales, with voters electing seven UKIP regional Assembly Members back in May. In turn, this prevented Welsh Labour from securing a majority and reduced the Conservative group in the Assembly, despite the gains it made in Wales in the 2015 General Election.

Just as Carwyn Jones went against the majority of Welsh voters by supporting remain, so to Arlene Foster, First Minister of Northern Ireland, went against voters by supporting leave. While Arlene Foster and the DUP supported Brexit, the majority voters in Northern Ireland chose to remain within the EU. However, Foster has the benefit of having backed the side that won the referendum and, as such, her authority is unlikely to be challenged.

Who Swung the Result?

A key demographic for both the Yes campaign in the Scottish independence referendum and the leave campaign in the EU referendum was the working class, which voted against the status quo in both cases. In contrast, the elderly voted differently across the two referendums. While a majority of elderly people voted for the status quo in the Scottish referendum, that is to remain part of the UK, a majority of elderly people voted against the status quo and to leave the EU on 23 June.

This is what tipped the result in favour of the leave campaign, as it was also demonstrated that turnout was much higher in areas where there is a larger elderly population. Indeed, the elderly are typically much more likely to vote in an election or referendum than younger generations. Taken with the minority of nationalists of all hues in each of the home nations, and you have a toxic mix that can deliver an unprecedented result.

Two Possible Outcomes

Although the Conservatives were the only major political party to offer a referendum on EU membership within their manifesto in the run up to the General Election in 2015, it was not the Conservatives who lost the vote. Rather, it was Labour that failed to secure working class voters who, in recent years, have become disillusioned from party and moved towards the Conservatives or, in a lot cases, towards UKIP.

It has become apparent throughout the EU referendum that Corbyn was, and still is, unable to unify the Labour vote, while the fallout post-referendum has shown that he is also unable to manage his parliamentary party. This scenario was also reflected in the Scottish independence referendum, which saw a significant portion of Labour’s core vote swing in favour of independence. The poor management of the Scottish Labour vote then continued into the 2015 General Election, when the party was almost completely wiped out in Scotland.

As such, the UK is now in a situation where the possibility of two leadership contests could result in the outcome of the referendum being challenged. Indeed, if the ensuing leaders of both the Conservative Party and, possibly, the Labour Party are challenged by their MPs over the result, they could find themselves in a position where neither has enough support to form a national Government capable of negotiating Brexit on behalf of the UK as a whole.

If there is no Government to take forward Brexit and, more importantly, if there is no Conservative Government, which the people chose to elect last year, then the UK could find itself in a position where another General Election has to be called. In this scenario a newly elected Government could call for another referendum, on the basis that the premise of the last referendum result has changed. This could lead to another EU referendum later this year.

However, this scenario is unlikely. It is in fact more likely that a newly elected Conservative leader will garner enough support from MPs in order to proceed with Brexit, and enact Article 50 sometime in the Autumn or Winter of this year. Like it or not we appear to be heading for the exit door in Europe.

Devolution Post-Referendum

With regards to how devolution will proceed post-referendum, Scotland has already come to an agreement with the UK Government over more powers prior to 23 June. On the other hand, the Welsh Government is in the process of agreeing control over more powers and, as such, could be affected by the result. Indeed, the pace of devolution for both Wales and Northern Ireland will most likely significantly slow down as the UK Government initiates the EU exit procedure.

In contrast, the call for a second referendum in Scotland will be high on the political agenda for both the UK and Scottish Governments moving forward. It is a distinct possibility that the Scottish Parliament will vote in favour of a second independence referendum if it is offered. Indeed, between the SNP and the Green Party, there is majority support for independence, while many Scottish Labour MSPs will now reconsider their position in light of the result on 23 June.

If the SNP Government do decide to pursue another independence referendum, it will need to do so within the two year exit period from the EU. This would allow Scotland to negotiate the best possible deal with both the EU and the UK Government before Brexit, in order to protect the benefits it receives from the UK’s rebate and currency. Indeed, it is likely that the Scottish Government will want to negotiate a currency union with the UK. However, the logistics and consequences of an independent Scotland sharing a currency with a non-member state are unknown.

Open Letter from North East Business Leaders: EU Referendum

Open Letter from North East Business Leaders: EU Referendum

“Together we employ thousands of people across the region. EU membership has been an important driver of economic development in the North East.
 
Businesses in the North East need unrestricted access to the European market of 500 million people in order to continue to grow, invest and create jobs.
 
We support the UK remaining a member of the European Union, and add our voice to the major unions, business organisations, manufacturers, local government leaders, major party leaders and our international allies and friends sharing this common desire.
 
We recognise the EU is not perfect. However, we also recognise that the UK has benefitted enormously since the joining in 1975, making the terrible 70’s a distant past, and helping in no small measure to make the UK one of the strongest economies in the world.
 
We believe that leaving the EU would deter investment, threaten jobs and put the North East economy at risk. 
 
The UK is one of the most powerful nations within the EU and has made significant contributions to making the EU better in terms of trade, rights and security.
 
We wish this role to continue and we believe continued membership to be in the best interests of jobs, trade and investment, security and maintaining and enhancing the UK’s leading position in the world. Britain will be stronger, safer and better off remaining a member of the EU.”

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EU Referendum: Brexit is not Bankable

EU Referendum: Brexit is not Bankable

Our Head of Public Affairs Mark Stephenson has been speaking to BDaily about the EU Referendum and what it means for businesses, particularly in the North East. Here is what he had to say:

Mark Stephenson - Head of Public Affairs

Mark Stephenson – Head of Public Affairs

“For business confidence, investment, growth and freedom of trade there is only one way to vote – and that’s to stay in the EU. Divorcing ourselves significantly reduces the UK’s attractiveness to investors, including the large multinationals who seek entry to our region because they deem it attractive.

“Manufacturing giants Nissan and Hitachi are in favour of the UK remaining in the European Market and there is a reason for this. Likewise, the majority of businesses polled in every survey favour us remaining in the UK.

“Leaving would be disproportionately harmful to our clients’ operations in the UK nations and regions. Add to this exporters relying on the access provided by EU membership to a common market of over 500m consumers, and it is clear our economy is better off in.

“Devolution of policy and regulatory power to the nations and regions is now embedded in some areas and emerging in others. The PM’s deal with EU leaders ensures that the UK can take its place in the EU on terms we are comfortable with, without impacting negatively on other member states. The deal is not perfect, nor is the EU, but it serves us well.

“If we want to make our own decisions in the North East, devolution will continue to benefit from EU membership. Everyone interested in job and wealth creation, must play our part in communicating the importance of voting to remain EU members. All businesses are familiar with risk. We will opt for risk if there is reward but only with an evidence based plan. We have no such plan – Brexit is not bankable.”

Read the full B-Daily EU Referendum North East Business Round Up Here

Brexit Beware – experts use anniversary to issue referendum warning

Brexit Beware – experts use anniversary to issue referendum warning

NEWCASTLE-based political consultancy Invicta Public Affairs is celebrating its first birthday in the city, not with candles and a cake, but with a warning on the dangers that lie in a vote to leave the EU.

With a little over a month until the referendum, the firm of business and political experts has outlined its fears on the potential devastating impact a Brexit could have on UK firms and economic growth. Mark Stephenson, Invicta head of public affairs, said:

“Invicta is celebrating one-year at our Milburn House base in Newcastle against the backdrop of huge political uncertainty, not least of all due to the EU Referendum on 23 June, which is clearly impacting on business’ appetite to invest and grow.

“We work closely with a wide range of investors from around the world and all, bar none, are concerned about the possibility of a UK-EU exit. Added to this, clients within the UK are holding back on major and minor investment decisions while this period of uncertainty lingers. The direction of policy and of our economy could change greatly come 24th June so businesses are being understandably cautious.”

The public affairs consultancy last year relocated its UK headquarters to Newcastle, while expanding its team of advisers which work with businesses in the energy, housing, retail and commercial development sectors.

“We have had a fantastic first year and we look set for that to kick on into our second,” added Mark. “But it’s a huge shame that the referendum is casting such a huge shadow across all sectors and our political landscape – it would be wrong of us to celebrate our anniversary when our clients are so concerned about the UK’s uncertain future.”

Invicta advises 150 clients and has helped businesses realise over £2bn of UK investment in the past ten years alone.

Jessie Joe Jacobs, North East Field Director with Britain Stronger In Europe, said:  “Invicta, like many growing North East businesses, is doing well. It is no surprise therefore that they are fearful about the results of the referendum and want to use their birthday to highlight these fears.

“The 100,000 jobs related to EU trade, our economy, regional investment and hard earned workers rights are all at risk. Its enough to bring any party to an early end.”

Mark added: “Invicta has gone from strength to strength and we hope to recruit and grow further in the coming months. Ideally the UK will continue to reap the benefits of EU membership and this would undoubtedly provide opportunities for us, our clients with resulting jobs and wealth creation that this entails.”

Director Mark Cummings: 2016 UK Elections highlight the challenges of Devolution

Director Mark Cummings: 2016 UK Elections highlight the challenges of Devolution

Invicta Public Affairs’ Director Mark Cummings has argued last Thursday’s election results show a very fragmented picture and point to a new reality for British politics. Where in the past we would have seen a uniform sweep across local, national and devolved elections, the differential nature of voting throughout the UK now means far less political certainty.

Invicta Public Affairs has 15 years experience advising businesses across a range of sectors in Scotland, helping to navigate the often complex regulatory frameworks. The firm uses it’s expertise and experience in working with devolved Government to assist businesses throughout the UK in successfully navigating the challenges and opportunities that go hand in hand with greater decentralisation of powers.  

Reflecting on the implications of Thursday’s results Director of Invicta Public Affairs Mark Cummings explained:

“We are currently in a period of significant political change.  We see an electorate energised by the upcoming EU referendum and this is not necessarily good for businesses. The increase in support for UKIP in England and particularly Wales this week points to at least another 1-2 months of further political uncertainty as the referendum remains too close to call.”

While the results of the English Local Elections were largely unremarkable, Mr Cummings argues we are likely to see further fragmentation of voting patterns in England over the next few years as the planned devolution of powers to city regions becomes a reality. He explains the risks:

“There is still little certainty as to the expected political makeup of these devolved bodies or how they would operate. The truth is we don’t know how voters will react when asked to vote for a regional mayor but our experience working with devolved government suggests to us it will deviate from traditional voting patterns.

“As is the case with the EU referendum and the threat of a further vote for Scottish Independence, the lack of certainty engendered by these proposed changes ultimately discourages businesses from making investments and will stymie growth in the areas impacted.”

The results last week in Scotland on the other hand seem to signal an unexpected period of much needed political stability. He continued:

“The SNP’s failure to secure an overall parliamentary majority means they are far less likely to seek to push through a further independence referendum during this parliament. Without the necessary backing from MSPs they would struggle to get enough support for such a vote.

“This is excellent news for businesses in Scotland; it has reached a period of relative political normality and the leadership can now look forward to bringing in their programme of Government without the constitutional wrangling that dogged the previous Parliament.”

 

Scottish Parliamentary Election 2016 – At a Glance…

Scottish Parliamentary Election 2016 – At a Glance…

In recent weeks Scottish party leaders have clashed over their proposed policies on tax reform during live televised debates ahead of the Holyrood elections. Education is another prominent issue which seems to be dividing the parties and is expected to play a central role in the campaign discourse.

This new focus on policy may be for some a welcome break from arduous and long running debates over constitutional matters and with manifestos due in the coming week, the parties are honing their key messages.

There is a strong possibility the SNP will win an overall majority for a second time, and form a Government for the third. Indeed it is difficult to see where they would likely drop votes in any meaningful quantity. 

Labour and the Conservatives meanwhile are locked in a battle for second place, one that Labour really must be seen to have won convincingly if it is to retain any legitimacy north of the border.  However, the fact that it is even up for debate is more down to Labour’s demise in Scotland rather than any great national swing in support towards the Conservatives.

The smaller parties with existing seats in Holyrood, the Lib Dems and the Greens are also in a tussle, namely to be the fourth largest party and ensure they do actually win a seat. The Lib Dems go into the election with 5 seats from 2011 compared to the Greens’ 2. Any slight change in percentage of the vote share could seriously impact the electoral fortunes for either of these two parties.

Below we take an at a glance look at the 5 main party’s election pledges through the lens of the 2 prominent campaign issues; tax & education.


SNP

Leader: Nicola Sturgeonsnp

Number of seats won in 2011:   64

Tax: Nicola Sturgeon has thus far resisted the calls to reduce the burden of austerity by taxing the richer more, leaving rates largely in line with the rest of the UK and arguing no significant changes are necessary. Instead Sturgeon argues that there is no mechanism in place to stop high earners simply moving south of the border in the event of a tax hike and that a policy of a 50p tax rate would leave Scotland worse off.

Education: The SNP has previously confirmed in an address to the Scottish Parliament that the SNP plans to double government-funded childcare to 30 hours a week as well as re-committing to free university education in Scotland. This is an area where the SNP is vulnerable from opposition criticism with official statistics showing  declining levels of literacy among students leaving primary and secondary school education.

 


Scottish Labour
scottish labour logo

Leader: Kezia Dugdale MSP

Number of seats won in 2011:   38

Tax: Labour has committed to an immediate 1p rise in income tax setting itself apart from the SNP and Conservatives. The increase would leave higher-rate taxpayers out of pocket and give low earners a rebate. It has also pledged to scrap council tax in favour of a tax based on property value.

Education: Labour will also focus on education having been very critical of the SNP’s handling of the education system. The proposed changes to the tax system will see the additional revenue from the higher those earning more than £150,000 a year will protect schools from cuts and increase investment.


Scottish ConservativesNew-Scottish-Conservatives-Logo

Leader: Ruth Davidson

Number of seats won in 2011: 16

Tax: While Labour, the Greens and Lib Dem are all proposing some kind of income tax increase, if only for the higher earners, and with the SNP looking on course to stick with status quo on revenue raised through taxation, it is left to the Conservative party to present a taxation alternative. They are proposing to lower income tax where possible, reducing the overall tax burden. However, this message has been dented somewhat by criticism of further proposals to introduce university and prescription fees which have dubbed ‘hidden taxes’.

Education: The Conservatives have highlighted the fall in standards presided over, as they see it, by the SNP Government. Ruth Davidson’s party have pledged that their education policy will be steered with a view to reversing this trend. During the 2nd TV debate however, the Scottish Conservative leader spoke of her intentions introduce a £1,500 annual charge for a four-year Scottish degree, arguing the SNP had paid for free university tuition by cutting thousands of college places.


Scottish Liberal DemocratsScottish_Liberal_Democrats

Leader: Willie Rennie

Number of seats won in 2011: 5

Tax: The Lib Dems have announced they plan to increase the basic and higher rates of income tax. Their proposals are very similar to Labour’s but have received far less publicity. They have however pledged to spend the £475 million per year raised through tax reform on education.

Education:  They have argued the revenue collected from the additional income tax would be used to help fund pre school childcare, introduce a Scottish Pupil Premium to help close the attainment gap, and ensure students leave education with skills employers demand.


Scottish Greens Scottish_Green_Party_Logo.svg

Co-Conveners: Patrick Harvie and Maggie Chapman

Number of seats won in 2011: 2

Tax : The Greens are expected unveil reforms to the income tax system in their manifesto with plans to raise income tax to 60p for the very highest earners. The changes would come into effect once the appropriate powers over tax rates and bands has been devolved to Holyrood in April 2017. They are also looking at scrapping council tax in favour of a ‘progressive’ system of local taxation based on wealth.

Education: The Greens argue their tax policy would raise £331 million additional funding to invest in public services than the SNP’s income tax plans. They point to this revenue when discussing public services funding.  They have highlighted the pressure put on schools through the SNP’s programme of cuts and pledge to use their tax changes to make a more equal society.