Cabinet Office Final

7/31/2019 Cabinet Office Final

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Analysis prepared for The Cabinet Office

The Post-Recession Consumer/Citizen


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Presentation structure

The recession and the response

How people are feeling

Have their values changed?

What do people worry about?

People and institutions

Source: Base:


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THE RECESSION AND THERESPONSE


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In previous downturns, it was

over by now

-9%

-8%

-7%

-6%

-5%

-4%-3%

-2%

-1%

0%

1%

2%

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Total GDP, quarterly change after pre-recession peak

(0% = pre recession peak)

Great depression

80s recession

90s recession

Current downturn

Source: Office of National Statistics

The sheer length of the downturn is unlike anything consumers have experiencedbefore (even the Great Depression was over by this point in the 1930s), and will have

far more than a temporary affect on attitudes and behaviour


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Not all consumers have been affectedin the same way

Low income Belowmiddle

income

Middleincome

Abovemiddle

income+

High income

Unemployment

Inflation

Public Spending

Low interest rates

Changes in income

Consumer confidence

Wealth buffers the effects of the economy in some circumstances


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Not all consumers have been affectedin the same way

Younger Families EmptyNesters

Poorer older Wealthierolder

Unemployment

Inflation

Public Spending

Low interest rates

Changes in income

Consumer confidence


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And they have responded

differently tooDoing fine

Hunkering

down

Worried well

Wising up

Fightingback

Perfect storm

Most affected byrecession

Least affected

Moreaffluent

Lessaffluent

Longer

term

societal

change in

attitudes/

values

Short term

adaptation to

circumstances


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Consumer experience of the downturn hasbeen determined by three independent

factors

Financial habits

Incomehigh

low

Life eventspositivenegative

High income, badfinancial habits,

negative life events =struggling

Low income, goodfinancial habits,

stable life events =doing fine


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Understanding the post-recession consumer

Commissioned by the Harvard Business Review to identify andevaluate the trends driving the post-recession consumer mind-set.

First published in 2009, reprinted in Spring 2010


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HOW ARE PEOPLE FEELING?


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Levels of happiness have dropped a great

deal during the recession in the UK, but theyre

still higher than some other countries, even

Germany

38%

20% 20%

35%

25%

15%

21%

33%

18% 19%

51%

36%

19%14%

22%

18%

12% 12%

0%

10%

20%

30%

40%

50%

60%

UK France Germany Spain

% who are very happy

1981-1984 1989-1993 1994-1997 2005-2007 2011-2012

Source: Trajectory Global Foresight 2011-12; World Values Survey 1981-2007Base: 28,829


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Peoples life satisfaction has alsodropped in the UK since the

recession

6.00

6.20

6.40

6.60

6.80

7.00

7.20

7.40

7.60

7.80

1981-1984 1989-1993 1994-1997 2005-2007 2011-2012

Levels of satisfaction with life overall (1-10 scale where 1=not

at all satisfied and 10=completely satisfied)




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People feel like they have lesschoice and control over their lives

since the recession

5.60

5.80

6.00

6.20

6.40

6.60

6.80

7.00

7.20

7.40

1981-1984 1989-1993 1994-1997 2005-2007 2011-2012

Feeling of freedom of choice and control (1-10 scale where

1=none at all and 10=a great deal)




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HAVE PEOPLES VALUESCHANGED?


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Since the recession, Brits think it is more

acceptable avoid transport fares and cheat

on taxes but less acceptable to commit

benefit fraud

.00

.50

1.00

1.50

2.00

2.50

3.00

3.50

1981-1984 1989-1993 2005-2007 2011-2012

How justifiable is the following? (1-10 scale where 1=never

justifiable and 10=always justifiable)

Claiming state benefits which you're not entitled to

Avoiding a fare on public transport

Cheating on tax if you have the chance

Source: Trajectory Global Foresight 2011-12; World Values Survey 1981-2007Base: 8,745 UK respondents


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Attitudes towards welfare are

much harder than they were

during the 90s recessionOnly 28% of those asked wanted to see more spending on

welfare - down from 35% at the beginning of the recession in

2008, and from 58% in 1991

Public attitude to welfare state 'toughens' despite recession

If you look back at the previous recession, you find that

people became more sympathetic . . . that hasnt happened

this time

Alison Park, NAtCen


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But people have not just

become less caringthe

context is very different this time

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

1983 1987 1993 1997 2001 2005 2009

% who agree that 'government

should spend more on welfarebenefits even if it leads to higher

taxes'

% who agree that

unemployment benefits are too

low and cause hardship

% who agree that

unemployment benefits are toohigh and cause dependency

Source: British Social Attitudes


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Since the recession people have becomeless tolerant of immigrants, heavy drinkers

and people with criminal records

41%

12%16% 15%

59%

9% 8%

21%

65%62%

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

People who have

AIDS

Homosexuals Immigrants / foreign

workers

Heavy drinkers People with a

criminal record

% who would not like the following as neighbours

1981-1984 1989-1993 1994-1997 2005-2007 2011-2012



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Whilst other countries in Europe havecontinued to be more accepting of

immigrants since the recession, the UK has

become less

30%

35%

40%

45%50%

55%

60%

65%

70%

75%

80%

1989-1993 1994-1997 2005-2007 2011-2012

% who agreed that when jobs are scarce, employers should

give priority to nationals over immigrants




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Little BritainPeople in the UK are very focussed on domestic issues and are

more likely than others in Europe to think ethnic diversity is

damaging

6.75

7.59

6.84

7.07

6.87

7.09

6.43

7.58

.40 1.40 2.40 3.40 4.40 5.40 6.40 7.40 8.40

Does ethnic diversity erode a country's unity

(1) or enrich life (10)?

Should your country's leaders give top

priority to help reducing poverty in the world

(1), or should they give top priority to solve

your own country's problems (10)?


Source: Trajectory Global Foresight 2011-12Base: 14,195


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WHAT ARE PEOPLE WORRIEDABOUT?


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whilst half feel under time

pressure in their daily lives

52%

67%

57%

44%

30%

35%

40%

45%

50%

55%

60%

65%

70%


% who often feel under time pressure in their day to day life

Source: Trajectory Global Foresight 2011-12Base: 14,195


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People are most concerned with fighting rising

prices, whilst other issues, like protecting

freedom of speech have become less

important

0%

5%

10%

15%

20%

25%

30%

35%

40%

1981-1984 1989-1993 1994-1997 2005-2007 2011-2012

% responding that the following is most important to them

(prompted)

Maintaining order in the nation Give people more say

Fighting rising prices Protecting freedom of speech



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Unlike elsewhere in Europe,corruption is seen as less of a

problem in the UK than terrorism

6.89

7.71

6.92

9.07

7.13 7.37

6.62

7.86

.00

1.00

2.00

3.004.00

5.00

6.00

7.00

8.00

9.00

10.00


How big a problem is the following in your country? (1-10 scale

where 1=not a problem at all and 10=a very big problem)

Corruption Terrorism



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PEOPLE AND INSTITUTIONS


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Peoples demands from the

public sector are changing Demographic change

Aging population

Large numbers of young families More complex identities

Fragmentation of demand

Rising expectations Technology


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People are scrutinising institutionsmore than ever

confidence in the armed forces has risen since the recession, butit has fallen in police, major companies and parliament

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1981-1984 1989-1993 2005-2007 2011-2012

% who have a great deal or quite a lot of confidence in

Armed forces

The police

Parliament

Major companies



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Confidence has also fallen in thegovernment, political parties and the EU,

but has slightly increased in the UN

34%

18%

26%

44%

30%

14%

22%

49%

0%

10%

20%

30%

40%

50%

60%

The government Political parties EU UN

% who have a great deal of confidence in

2005-2007 2011-2012



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The majority of Brits want info on stayinghealthy and dont mind if the government

encourages them to consume more

healthily

41%

68%

54%

0% 20% 40% 60% 80%

People should be free to eat and drink

whatever they like even if it damages their

health

Individuals should be encouraged to eat

and drink more healthily through public

health campaigns

I like to hear the latest information about

how to stay healthy

% agreeing with the following statements

Source: Trajectory Global Foresight 2011-12Base: 4,036 UK respondents


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Thank you: Any questions?

Please contact:NAME (email address)

www.trajectorypartnership.com

T:+44 (0)20 7902 1171
http://www.trajectorypartnership.com/http://www.trajectorypartnership.com/

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Cabinet Office Final