August 9, 2016 By FTI Consulting
The referendum on UK’s membership in the EU is uniting and dividing political parties, businesses and generations like no other since accession into the EEC back in 1975.
What is best for the City and UK businesses was discussed at an FTI Consulting hosted event with a spokesperson from the official campaigns: ‘Vote Leave’ and ‘Britain Stronger in Europe’. With 38 days to go before the UK’s referendum on EU membership, key points were debated after the presentation of FTI Consulting’s research with UK voters, businesses and Global Institutional Investors.
What follows is a highlight of the top 10 research findings.
FTI Consulting’s research shows that the present level of support to remain in the EU is presently at 57%. However, this result belies the current frustrations with the EU as when we included a third option of ‘Remain in but renegotiate’, 29% of UK voters were attracted to it and reducing the percentage to ‘Leave the EU’ to just 36%. This means 64% of UK voters would support remaining in the EU with a renegotiated relationship, but is the time for a renegotiation over?
With such strong support to renegotiate the relationship, we asked what the likely scenario is expected to be should the UK vote to ‘Leave the EU’. Surprisingly, less than half of the population (48%) believe Article 50 would be evoked. Article 50 of the Treaty on European Union allows a member state to notify the EU of its withdrawal and obliges the EU to try to negotiate a ‘withdrawal agreement’ with that state. Even those intending to vote ‘Leave the EU’, just over half (54%) believe Article 50 will be submitted. This leads to the question, is out perceived to be a watertight out or a substantial leverage for another renegotiation? At the moment, global institutional investors think this is more of a likely outcome than UK voters.
Polling requires voters to make their minds up on the spot and these results are used to trend results leading up to the big day itself. But the reality is many voters haven’t made their minds up when they’re asked and don’t intend to until they’ve digested all the communication before the day itself. It’s also anticipated that both opposing sides are following the idiom ‘keep the powder dry’ – to save their key messages until the most important 48 hours when they’ll have a final chance to win support. FTI Consulting’s research unsurprisingly shows the number of voters who could change their mind to be 38%. Those intending to vote ‘Remain in the EU’ are more open to potentially changing their vote compared to ‘Leave the EU’ voters (40% and 36%, respectively). Uncertainty is also split by gender and generation. The younger generation and female voters are presently more likely to consider changing their vote and they’re both presently more likely to be supporting the ‘Remain in the EU’ vote.
While the 2015 UK general election turnout was 66%, 77% claim they will definitely vote in the UK referendum on EU membership. Closer to reality, we estimate the turnout will be closer to 67% after taking into consideration the percentage who say they’ll vote and who actually do on the day, from our past general election research (i.e. a ‘Truth Factor’). However, turnout for referendums can be very unpredictable due to the uniqueness, ferocity of campaigning and emotions involved, as what was witnessed during the 2014 referendum on Scottish independence – an 85% turnout with a new record for any election held in the UK since the introduction of universal suffrage in 1918. Can this UK wide referendum reach similar levels of turnout? This will be an uphill struggle to both motivate and minimise the number of distractions on the day for UK voters, particularly for ‘Remain in the EU’ voters where 9% fewer claim they will definitely vote compared to ‘Leave the EU’ voters.
Reflecting the resolve of voters to persevere through distractions on the day to cast their vote, we assessed a wide variety of distractions which might transpire on the day to keep them away from the polling booth. A very high distraction was the inability to find their polling card for 25%, despite it not being compulsory to vote and worryingly for the ‘Remain in the EU’ campaign, 28% claimed this would distract them (8% higher than intended ‘Leave the EU’ voters). The heavens above can play their part with poor weather on the day distracting 20% of voters. A more earthly distraction could be a busy day at work or at home distracting 22% of voters and once again impacting 8% more ‘Remain in the EU’ than ‘Leave the EU’ voters.
Polling may have traditionally been seen as a benign assessor of the state of play leading up to an election or referendum, but with the media giving it such prominence it has been elevated to a tool of great influence. FTI Consulting’s research shows it also has a role to play in the UK’s referendum on EU membership with around 3 in 10 voters (29%) claiming forecasts for a close result would encourage them to vote. This forecast could play a key role in motivating 34% of the generally less motivated ‘Remain in the EU’ voters , 11% more so than the intended ‘Leave the EU’ voters.
Concentrating efforts on those voters who claim they could still change their minds on how to vote in the referendum, UK politicians may be dismayed to realise that just 17% claim it’s influential or reassuring to hear from them, but encouraged they’re considered almost twice as influential than politicians outside of the UK with 9%. Instead, UK business leaders assume the mantle as being considered the most influential and reassuring to hear from for 34% (twice as much as UK politicians). However, the challenge facing UK business leaders is choosing the appropriate channels, message and audiences, to mitigate against a possible backlash from those with staunchly opposing views.
Reflecting our research insight on the Scottish independence referendum, FTI Consulting’s research shows that millennials (aged 18 to 29 yrs old) and business leaders are intending to actively or passively campaign more so than other profiles. The contrast with Scotland is that both of these profiles are on the whole more likely to be supporting the same side, ‘Remain in the EU’.
Clear communication from employers on the possibility of a Brexit is shown to be an unambiguous requirement from their employees, with almost 9 in 10 (88%) wanting to know what impact a vote to leave the EU would have on their organisation. A similarly high proportion of 82% consider their leaders should also actively campaign for the best interests of the organisation. This opinion is also shared by both management and non-managerial employees.
FTI Consulting also conducted research with global institutional investors from organisations with a total of USD$7.15 trillion under management, for their views on the impact of a possible Brexit. Although they estimate a 35% probability of a ‘Leave the EU’ outcome for the referendum, 83% considered there would be a negative impact on the UK attracting investment and 69% estimated the pound sterling would decrease by an average of -7.9% (31% considered there would be either a positive impact or no impact at all).
FTI Strategy Consulting & Research conducted research online with the following 3 groups:
UK general population: A total of n=1,104 respondents representative of the UK adult general population. Research was conducted from 12th to 13th May 2016.
UK full time employees: A total of n=1,645 respondents. Research was conducted from 15th to 18th April 2016.
Global Institutional Investors: A total of n=83 respondents from organisations with a total of USD$7.15 trillion under management. Research was conducted from 12th to 16th May 2016.
All research was conducted online by FTI Consulting. Further information on the results and methodology can be obtained by emailing firstname.lastname@example.org.
Please note that the standard convention for rounding has been applied and consequently some totals do not add up to 100%