The Post-Recession Consumer/Citizen

Analysis prepared for The Cabinet Office

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:

THE RECESSION AND THE RESPONSE

2%
1% 0% -1% -2% -3% -4% -5% -6% -7% -8% -9% 1

In previous downturns, it was over by now

Total GDP, quarterly change after pre-recession peak (0% = pre recession peak)

Great depression 80s recession 90s recession Current downturn 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

The sheer length of the downturn is unlike anything consumers have experienced before (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
Source: Office of National Statistics

Not all consumers have been affected in the same way

Wealth buffers the effects of the economy in some circumstances
Low income Below middle income Middle income Above middle income+ High income

Unemployment Inflation Public Spending Low interest rates Changes in income

Consumer confidence

Not all consumers have been affected in the same way

Younger
Unemployment

Families

Empty Nesters

Poorer older

Wealthier older

Inflation
Public Spending Low interest rates Changes in income Consumer confidence

More affluent

And they have responded differently too

Worried well Wising up Fighting back Perfect storm Hunkering down

Longer term societal change in attitudes/ values

Doing fine

Short term adaptation to circumstances

Less affluent

Most affected by recession

Least affected

Consumer experience of the downturn has been determined by three independent factors
Income
high
High income, bad financial habits, negative life events = struggling

negative

positive

Life events
Low income, good financial habits, stable life events = doing fine

Financial habits
low

Understanding the post-recession consumer

Commissioned by the Harvard Business Review to identify and evaluate the trends driving the post-recession consumer mind-set. First published in 2009, reprinted in Spring 2010

HOW ARE PEOPLE FEELING?

Levels of happiness have dropped a great deal during the recession in the UK, but theyre still higher than some other countries, even Germany
% who are very happy
1981-1984 60% 50% 40% 30% 22% 20% 51% 1989-1993 1994-1997 2005-2007 2011-2012

38% 35% 33% 25% 20%

36%

18%

19% 18% 15% 12%

21% 20% 19% 14% 12%

10%
0% UK
Base: 28,829

France

Germany

Spain

Source: Trajectory Global Foresight 2011-12; World Values Survey 1981-2007

Peoples life satisfaction has also dropped in the UK since the recession
Levels of satisfaction with life overall (1-10 scale where 1=not at all satisfied and 10=completely satisfied)
UK
7.80 7.60 7.40 7.20 7.00 6.80 6.60 6.40 6.20 6.00 1981-1984
Base: 28,829

France

Germany

Spain

1989-1993

1994-1997

2005-2007

2011-2012

Source: Trajectory Global Foresight 2011-12; World Values Survey 1981-2007

People feel like they have less choice and control over their lives since the recession
Feeling of freedom of choice and control (1-10 scale where 1=none at all and 10=a great deal)
UK
7.40 7.20 7.00 6.80 6.60 6.40 6.20 6.00 5.80 5.60 1981-1984
Base: 28,829

France

Germany

Spain

1989-1993

1994-1997

2005-2007

2011-2012

Source: Trajectory Global Foresight 2011-12; World Values Survey 1981-2007

HAVE PEOPLES VALUES CHANGED?

Since the recession, Brits think it is more acceptable avoid transport fares and cheat on taxes but less acceptable to commit benefit fraud
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 3.50 3.00 2.50 2.00 1.50 1.00 .50 .00 1981-1984
Base: 8,745 UK respondents

1989-1993

2005-2007

2011-2012

Source: Trajectory Global Foresight 2011-12; World Values Survey 1981-2007

Attitudes towards welfare are much harder than they were during the 90s recession
Only 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

0.7

But people have not just become less caringthe context is very different this time
% who agree that 'government should spend more on welfare benefits even if it leads to higher taxes' % who agree that unemployment benefits are too low and cause hardship % who agree that unemployment benefits are too high and cause dependency

0.6

0.5

0.4

0.3

0.2

0.1

0 1983 1987 1993 1997 2001 2005 2009 Source: British Social Attitudes

Since the recession people have become less tolerant of immigrants, heavy drinkers and people with criminal records
% who would not like the following as neighbours
1981-1984 0.8 0.7 0.6 0.5
65% 59% 62%

1989-1993

1994-1997

2005-2007

2011-2012

0.4
0.3 0.2 0.1 0
12% 9% 16% 8%

41%

21%
15%

People who have AIDS

Homosexuals

Immigrants / foreign workers

Heavy drinkers

People with a criminal record

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

Whilst other countries in Europe have continued to be more accepting of immigrants since the recession, the UK has become less
% who agreed that when jobs are scarce, employers should give priority to nationals over immigrants
UK
80% 75% 70% 65% 60% 55% 50% 45% 40% 35% 30% 1989-1993
Base: 28,829

France

Germany

Spain

1994-1997

2005-2007

2011-2012

Source: Trajectory Global Foresight 2011-12; World Values Survey 1981-2007

People in the UK are very focussed on domestic issues and are more likely than others in Europe to think ethnic diversity is damaging
UK France Germany Spain

Little Britain

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)?

7.58 7.09 7.07 7.59

6.43 Does ethnic diversity erode a country's unity (1) or enrich life (10)?
6.87 6.84

6.75
.40
Source: Trajectory Global Foresight 2011-12 Base: 14,195

1.40 2.40 3.40 4.40 5.40 6.40 7.40 8.40

WHAT ARE PEOPLE WORRIED ABOUT?

In the UK, 7 in 10 think the world is more dangerous than it used to be

% who agree that 'the world is a more dangerous place than it used to be'

75%
71% 70% 65% 60% 55% 50% 45% 40% UK
Base: 14,195

63%

62%

61%

France

Germany

Spain

Source: Trajectory Global Foresight 2011-12

whilst half feel under time pressure in their daily lives

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

70%
65%

67%

60%
55% 52%

57%

50%
45% 40% 35% 30% UK
Base: 14,195

44%

France

Germany

Spain

Source: Trajectory Global Foresight 2011-12

People are most concerned with fighting rising prices, whilst other issues, like protecting freedom of speech have become less important
% responding that the following is most important to them (prompted)
Maintaining order in the nation
Fighting rising prices 40% 35% 30% 25% 20% 15%

Give people more say

Protecting freedom of speech

10%
5% 0% 1981-1984
Base: 8,745 UK respondents

1989-1993

1994-1997

2005-2007

2011-2012

Source: Trajectory Global Foresight 2011-12; World Values Survey 1981-2007

Unlike elsewhere in Europe, corruption is seen as less of a problem in the UK than terrorism
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
10.00 9.00 8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 .00 UK
Base: 8,745 UK respondents

Terrorism
9.07

6.89

7.13

7.71

7.37

7.86 6.92 6.62

France

Germany

Spain

Source: Trajectory Global Foresight 2011-12; World Values Survey 1981-2007

PEOPLE AND INSTITUTIONS

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

confidence in the armed forces has risen since the recession, but it has fallen in police, major companies and parliament
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1981-1984
Base: 8,745 UK respondents

People are scrutinising institutions more than ever

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

Armed forces The police Parliament Major companies

1989-1993

2005-2007

2011-2012

Source: Trajectory Global Foresight 2011-12; World Values Survey 1981-2007

Confidence has also fallen in the government, political parties and the EU, but has slightly increased in the UN
% who have a great deal of confidence in
2005-2007 60% 50% 40% 30% 20% 49% 44% 34% 2011-2012

30% 26% 22% 18% 14%

10%
0% The government
Base: 8,745 UK respondents

Political parties

EU

UN

Source: Trajectory Global Foresight 2011-12; World Values Survey 1981-2007

The majority of Brits want info on staying healthy and dont mind if the government encourages them to consume more healthily
% agreeing with the following statements
I like to hear the latest information about how to stay healthy
54%

Individuals should be encouraged to eat and drink more healthily through public health campaigns

68%

People should be free to eat and drink whatever they like even if it damages their health 0%
Source: Trajectory Global Foresight 2011-12 Base: 4,036 UK respondents

41%

20%

40%

60%

80%

Thank you: Any questions?

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