Brexit and Trust

The UK goes to the polls in a week to decide whether or not to remain in the European Union. The electorate is evenly divided, with Leave ahead by a few points one week, Remain up two points on the next. The Edelman Trust Barometer 2016 gave advance warning about the deep divide between high net worth and low income population in the UK.

There is a 32 point gap between these groups on trust in business (67 percent vs. 35 percent) and a 28 point gap between these groups on trust in government (54 percent vs. 26 percent). As for future economic prospects, 40 percent of the low income households in the UK believe they will be worse off in five years, versus 13 percent of the high income households. Looking through the other end of the glass, only 20 percent of the low income households believe they will be better off in five years, while 47 percent of the high income earners believe they will be better off. As early as January of this year, 47 percent of the low income population wanted Brexit, while 61 percent of the high earners wanted to Remain.

Recent surveys have confirmed this distinct split between elites and lower income households. Those voters who did not complete high school, are over age 60, and have lower paid blue collar professions are backing the Leave campaign by a 2 to 1 margin (65 percent to 35 percent). Those who are university graduates, under 40 years of age, and in the professional class are backing the Remain campaign by 60 percent to 40 percent.

The charm offensive by the establishment in the past few weeks seems to have fallen on deaf ears. Despite reports from the Bank of England, the UK Exchequer, the World Bank, IMF and OECD on the dire economic consequences of Brexit, public opinion has hardly budged. Only 37 percent of voters believe that the UK would be worse off economically if it left the European Union, versus 38 percent three months ago. Our UK CEO, Ed Williams, said to me this morning, “The campaigning on Europe has not improved matters. One of the reasons people are erring towards Leave is precisely because every big national and international institution is saying Don’t Leave; as if these institutions want to protect the status quo and keep wealth to themselves.” He can imagine a voter thinking, “They would say that, wouldn’t they?”

Anatole Kaletsky, a former instructor of mine at Harvard and now a financial journalist in the UK, wrote this morning, “the Brexit referendum is part of a global phenomenon, a populist revolt against established political parties, predominantly by older, poorer and less educated voters angry enough to tear down existing institutions and defy establishment politicians.” He believes that anger has moved from the 2008 focus on the bankers to the elites more broadly.

The UK may represent only 2.5 percent of global GNP but the signal that a Brexit would send to the world is deeply distressing. It signals the change in media behavior from mainstream to social. It also signals the emergence of short form and emotional over rational long form journalism, with Tweets preferred to the Times of London. Whichever side wins, the world of campaigning is changed forever.The pyramid of influence is indeed flipped on its head, as influence moves to the mass and authority may shortly follow. In this volatile environment companies will have to take the initiative to tell their own story whether through earned or owned media.

I join my colleagues in the UK and around the world in mourning the passing of Jo Cox, a self-proclaimed “Yorkshire lass” who rose to be a member of Parliament and was brutally murdered today while in her constituency in Birstall. She had previously been with Save the Children, Oxfam and NSPCC.

Richard Edelman is president and CEO.