All this week, we bring you a Guide to What the Experts to Say; the top insights from the Morningstar Investment Conference in London; emerging markets, stock picks and the impact of politics.
Emma Wall: Hello, and welcome to Morningstar. I am Emma Wall and I am joined today by Joe Twyman of YouGov. Hello, Joe.
Joe Twyman: Hi.
Wall: So, we just heard from you in your presentation at the Morningstar Investment Conference that there are divisions across Europe. And then not just about whether you want to be in the EU or not. Along what lines are people increasingly divided?
Twyman: Well, that's right. In the old days people would talk about things in terms of left and right, liberal and conservative. And now people think about things in terms of leave and remain. But actually, it is a lot more complicated than that and there are a number of factors that really define these new groups that we are increasingly looking at in order to understand the country better, not just here but actually across the Europe and developed democracies as well.
So, there are things like age, differences in age can have a huge impact on all things; education; social caste. But also, the way that people look at the world around them and so some people may look very much inward and see their country is, where their future lies; others will see a more international perspective. And so, the contrast of all of these and how they interplay together is really providing – starting to provide a much greater level of detail for the population.
Wall: And how important are these divisions when trying to predict the outcomes of the various political decisions that have to be made in the next 12 months?
Twyman: Well, massively important because the world – particularly the political world has changed over the last two, three years and things that one would not expect to happen based on historical precedent, based on lot of other information have indeed occurred whether it is Brexit, whether it is the election of Donald Trump.
And the reasons for those are complicated but they are linked to the fact that the country is now dividing in different ways. And so there is a group of people within both our population in this country, but also in other countries who feel that they are dissatisfied, distrusting and disapproving not just of politicians or political parties but of political institutions.
And often the establishment, as a whole, they feel they've been left behind and the world has moved on in a way that they are not comfortable with and crucially that they do not consent to. And the implications for that in terms of how the established political parties address it be it for a referendum campaign or for a general election are enormous.
Wall: Why is it such a surprise that these divisions exist because you certainly saw over the last 12 months as you touched upon, Brexit was not an outcome people were predicting. Donald Trump was again, not an outcome that the polls predicted and yet here we are in this political landscape where it's very evident that people are angry. Why were we not aware of that before?
Twyman: Because in a lot of cases, its more complicated than simply anger and so the story of the last parliament in this country was about the rise of UKIP and going from 3% in 2010 to nearly 4 million people voting for them in 2015. And that growing anger, that growing dissatisfaction, distrust, disapproval was very clear, when it was manifesting itself in terms of voting for UKIP.
And it was pretty certain that the vast majority of those people would then vote to leave the European Union. But the fact that the referendum on the European Union became a referendum on really modern life in general for a lot of people and became a referendum on the establishment, on the established way of doing things, meant that it was far more difficult to predict because ultimately, it's just a lot more complicated.
Wall: And have we reached peak dissatisfaction or is this just the beginning of something that's going to stretch far out past June 8 and into other political elections?
Twyman: When you look at opinion data across all different measures for this sort of thing. What you're interested in and not the individual polls and small fluctuations or the outliers and everything else. What you're really interested in is identifying the long-term trends, that's what key here. And so, as a political analyst such as myself, I'm looking for the distinction between talking point and turning point.
The difficulty we have at the moment is that it's too soon and we don't know whether Brexit and Trump are the turning points or the talking points or whether for instance, France and Austria, are the turning points or the talking points. We'll only know perhaps in a number of years' time, but it's one of those questions that we're now focused on heavily.
Wall: Prediction for the General Election 2017 in the U.K.?
Twyman: It will take place on June 8.
Wall: Thank you very much Joe. This is Emma Wall for Morningstar. Thank you for watching.
