Greetings from a slightly stunned United Kingdom, which Friday morning felt like a guest waking up with one shoe missing, a hangover and a vague sense that something bad happened at the party last night. Something very bad.
Procurement folk will be scrambling already to work out what exactly the U.K. voting to leave the E.U. means, and the whole Spend Matters team will have more analysis to come. We would hope that many will have contingency plans already developed, but my feeling is not many people really thought it would come to this.
The bookmakers — usually the best judges of uncertainty — got this spectacularly wrong, as did the City of London. If I had moved faster when the first two results came in, or even a little later, I could have made a fortune — Chris Hanretty at the University of East Anglia developed a great model of predicted outcomes and called the result hours ahead of the BBC, Sky and other media sources. I was following him on Twitter. If I had bet on his probabilities I could be a rich man now!
Anyway, I thought our U.S. readers might like our analysis of why and how this happened. There were three communities that came together to push the "Leave" vote over 50%.
- The dispossessed, ignored, nothing-to-lose voters mainly from depressed northern parts of the country, older, white and male in the main. (You may see some Trump similarities here.) They have seen no benefits from the E.U. or globalization. They see immigration keeping down wages and changing the nature of their local communities. They are mad (usually in a quiet, British way) and this was a chance to express that.
- Voters who hate some combination (but probably all three) of Prime Minister David Cameron, the Conservative Party and London. You have no idea how much many people from the provinces hate "London" and everything about it, from the governing elite to the oligarchs parading around the place to the hordes of gawping tourists. Many Labour Party voters ignored their own leaders (who gave a very half-hearted support for "remain") and saw the chance to kick Cameron where it would hurt — which it did.
- The more positive, globally orientated types, often senior people, who see the E.U. as yesterday's idea, and look to models such as the U.S., Singapore and Switzerland as evidence that you don't have to be tied to the continent with the lowest growth rate in the world. You might be surprised as to some of the people I spoke to with this view — the CPO for a huge U.S. financial services firm, or the owner of a major procurement solutions business. I would have guessed both as "sensible,” cautious folks, but they were firmly in the "leave" camp.
Bring these three groups together — my guess is around 40% of the "leave" voters fall into each of the first two categories and 20% in the third — and there you have it. The biggest shock to Europe in decades, and one that will take a long time to play out. I suspect it will be 50 years before we know whether the U.K. has made the most stupid mistake in its history or taken a brave step that leads to success for the nation — and perhaps even for the rest of the EU, which surely must now change and become more responsive to the needs and wishes of its citizens, not just its elites and masters.