Brexit: Polls are split, but Market has decided

Updated (3 hours before polls close, June 23)

Interesting piece in The Telegraph that shows slight lead for Remain.

There will not be an election-style exit poll, but YouGov plans to release an election day poll at the moment the polls close (2pm PT / 5pm ET).  If there is going to be a shocking outcome, the first glimpse may be right then.

Gamblers are 84% certain of a Remain victory.  Do they know something we don’t know?  They are probably reading the polls as their main source of information.  If the polls are wrong, they’re wrong. UBC’s Sauder School Election Prediction market is made up of bettors betting real money to predict election outcomes.  In 2013, 85% predicted an NDP majority government; in 2015, only 20% predicted a Trudeau majority.  So, a sucker is born every minute.  We’ll see if the Brits are better bettors.

Professor John Curtice reiterates today that the polls can’t be trusted and it’s basically a crapshoot.  The public pollsters notoriously got it wrong in May 2015 and it was Curtice who conducted the election day exit poll that predicted the majority no one expected.  We might just have to wait until the votes are counted!

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John Curtice (@whatUKthinks), the polling expert who shocked the UK when he predicted a Conservative majority one minute after the polls closed in the 2015 General Election, says Brexit is too close to call.

The markets and the bettors are predicting a victory for Remain.  Political betting analyst Mike Smithson (@MSmithsonPB) has provided data that shows gamblers moved toward Leave about a week ago, but there was a sharp upturn for Remain after the Jo Cox murder.

Figure 1: Remain is a better bet for 75% of UK bettors.

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What are the markets doing?  British Sterling surged over the past few days, pricing in a Remain outcome.

Figure 2:  GBP climbs in final week

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And finally, what are the polls saying?

Figure 3: Compilation of Brexit polls (@MSmithsonPB)

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There has been a slight advantage for Remain via Telephone surveys and a slight advantage for Leave via Online surveys. While the markets and the bettors have turned toward the Remain camp as the likely outcome, those responding to polls are still very divided.

YouGov’s detailed tables reveal some of the underlying divisions in British society concerning Brexit.

The numbers shown in Figure 3 above are Decided support, however, as YouGov reminds us, there are still undecided voters (9%) and those who say they won’t vote (4%).  On decided vote, YouGov has it at 44 Remain, 43 Leave.

According to YouGov, here are some of the dividing lines:

Remain voters

  • Labour (64%) and LibDem (59%) voters
  • 18-24s (64%) and 25-49s (45%)
  • London (50%) and Scotland (56%)
  • Upper/Middle class – ABC1 voters (53%)

Leave voters

  • Conservative (55%) and UKIP (95%) voters
  • 50-64s (49%) and 65+ (58%)
  • Rest of South (45%); Midland-Wales (51%); North (47%)
  • Skilled working class/ working class/non-working -C2DE voters (52%)

When asked who is most certain to vote, Remain was at 79% and Leave at 84%.

On the dividing lines, there is a fundamental generational difference.  The range between young and old is stark.  The Euro debate, and underlying views on immigration, shape partisan leanings as evidenced in the Party ID splits. Class is also significant.  Then in Scotland, attitudes are tied somewhat to Scottish identity – leave Britain, but stay in EU.

But who will vote?

One would expect a high turnout.  YouGov indicates a tilt toward Leave voters.  Young people are expressing a strong preference for Remain but election turnout studies consistently show they vote at a lower rate.  Will they close the gap, like they did in Canada’s federal election, in the Brexit vote?  Will lower income voters vote at the same rate as higher income voters?  How will the UK’s sizeable immigrant communities vote and will they turnout to vote?  We don’t know this from the YouGov poll, possibly because it’s online which is typically less representative of people who don’t speak or read English well.  Telephone surveys are better in including those populations which may explain a slight leaning to Remain.

Going back to John Curtice, he is the most credible voice in the UK on polling and he believes it’s too close to call.   Curtice says the result could split the difference between the aggregate of phone polls which have Remain at 51% and the aggregate of online polls that have Leave at 51%.  A cliffhanger like the Quebec referendum of 1995.

This process ends in a vote and an outcome, but this discussion of the cold, hard numbers comes just days after a shocking murder of Labour MP Jo Cox.  This is no ordinary vote.  The referendum campaign has exposed the fault lines of UK society.  The stakes are extraordinarily high, especially in the context of a campaign that appears to be a photo-finish.

I’ll bet on Remain, based on voters pulling back due to perceived risk, like they did in Quebec in 1995 and in the recent Scottish referendum.  We’ll see if the gamblers and traders got it right.

 

 

 

 

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Brexit the latest chapter in year of protest

“No10 panics as Leave surges”, shouts today’s Daily Telegraph.  “Massive swing to Brexit“, screams another.

With only 11 days until the Brexit campaign reaches its conclusion, momentum appears to be swinging at a very inopportune time for the Remain campaign.  A new poll shows a 55-45 gap in favour of Leave (adjusted for voter turnout, it’s 53-47).  UK voters appear open to following a narrative that has developed over the past year on both sides of the Atlantic – defying the establishment.

Brexit

The papers and TV news are filled with Remain campaigners issuing dire warnings about the implications of leaving the EU.  Former prime ministers Tony Blair and John Major said peace in Northern Ireland was at stake.  BBC News discussed an open letter expressing concern for science funding.  Prime Minister David Cameron is visiting job sites to underscore the threat to employment.  Former Labour leader Ed Miliband exhorted Labour supporters to get behind Remain.

It’s a robust campaign.  The Remain campaign is backed by the leadership of the four major political parties – governing Conservatives, Labour, the Scottish Nationalists, and the Lib Dems.

Significant voices in the Conservatives and Labour are advocating for Leave, including former Mayor of London Boris Johnson, cabinet ministers, and Labour MPs, not to mention UKIP, which garnered 13% of the popular vote in last year’s general election and wholeheartedly embraces a Brexit.   Other than UKIP, the Leave campaigners are bucking against their own parties, and while there is an aroma of opportunism, there are also points given for authenticity.

There are some interesting divides at play. There is an elite/populism divide.  The insiders favour Remain while the outsiders look to Leave.  The pro Euro faction of Labour obviously favours Remain but a significant bloc of Labour voters are going the other way.  Labour was particularly vulnerable to UKIP in last year’s election as working-class white voters outside London looked for a new vehicle for protest.  There is a generational divide.  Polls claim that young people are strongly in favour of Remain while plus 55 year old voters favour Leave.

Some constituencies are not bearing as much fruit for Remain as previously thought. Columnist Stephen Bush writes that hoped-for support from liberals and multicultural communities for Remain is less than certain:

The [Labour] Party always knew that it had a problem with persuading white voters in its small-town heartlands to back staying in the European Union.  It now appears that they have a problem persuading middle-class liberals in big cities to turn out to vote, and that the party’s large ethnic minority vote is more hostile to the European project than either the Labour leadership or the Remain campaign ever expected.

We’ve seen this movie before in Canada when a cross-partisan alliance (of elites) fails to mobilize their parties’ followers.  The national referendum on the Charlottetown Accord in 1992 is a shining example where dire warning were made about the future of Canada if there was a No vote.  The outcome was actually “Hell, No”.  Canada survived.

Last year’s transit referendum in Metro Vancouver was another similar example.  Everyone supported Yes except the people.

The 1995 Quebec referendum and 2014 Scottish referendum offer more insights.  Dire warnings were made, and heeded, by voters.  There were moments in those campaigns where the Yes campaigns looked like they would succeed.  In Quebec, the ultimate margin was razor thin.  A key difference was that these campaigns advocated for independence.  The EU referendum is the reverse – “yes” means status quo.  Voting “no” means change.  To mobilize grumpy protest voters, it is arguably easier to coax a “no” than a “yes”.

In all cases, emotion is key.  Bombarding voters with facts and figures from self-interested elites is not the path to success when contrasted with fears over migrants or anger over EU spending.

In the Quebec example, while there were many factors at play, a late-campaign emotional outpouring from Canadians provided much needed momentum.  The federalist forces had their backs against the wall and they rallied, literally, in an historic and emotional show of force.

Can the Remain campaign muster a cogent emotional argument in the next 11 days?  In the past year, the success of Donald Trump, Jeremy Corbyn, and Bernie Sanders provides striking examples of the resolve of voters outside the establishment to go their own way and absolutely tune out traditional voices.  Remain will need to change up their playbook to reach voters that are turned off as much by the messengers as they are by the message.

Over pints at a pub here in the UK, I talked with a collection of university students.  They are incredulous that the UK could vote to Leave.  Their modern outlook sees the opportunities that the EU brings.  The Remain campaign will need to draw on generational differences and mobilize this group of voters that has been typically less likely to vote.

Will the UK vote to Brexit? Most here think not but the next week will be critical in swinging the momentum either way.  As has been said many times, campaigns matter.