‘It brings an end to the economic deadlock’: industry response to Conservative landslide

Boris Johnson

Boris Johnson has been elected prime minister with the biggest Conservative majority the party has seen in almost 30 years. The mandate to ‘Get Brexit Done’ now draws an end to the stalemate, something that’s been welcomed by the advertising industry.

Johnson’s leadership campaign saw the Tories take 364 of the 650 seats in the House of Commons, its biggest victory since Margaret Thatcher’s election in 1987. In an address on Friday morning (13 December) he vowed push his EU withdrawal agreement through Parliament by 31 January, saying Brexit was now the “irrefutable, irresistible, unarguable decision of the British people”.

“The Conservative Party campaign was hugely impressive. Its ‘Get Brexit Done’ creative platform was a brilliant piece of political communication. It neatly summed up the problem they perceived the country faced (gridlock) and proposed a solution (leaving the EU) in an active yet colloquial way,” Benedict Pringle, the founder of politicaladvertising.co.uk, told The Drum.

“To complement this brand narrative, the Conservative campaign constructed a personal narrative the party around Boris Johnson as ‘the punk PM who doesn’t care what it takes to get Brexit done’. From smashing through brick walls on diggers, to anarchic digital press stunts, Johnson was the man who was willing to risk it all to get Britain out of its impasse," he added.

An end to the statis?

For many holding groups, agencies and industry bodies The Drum spoke to, there was a consensus that – personal feelings aside – this result has ultimately delivered a clearer picture of where the country will be next year.

Johnson's Brexit plan, if approved by parliament, will see him negotiate with the EU to secure a Free Trade Agreement by 31 December 2020.

The semblance of certainty was well received by the City. Despite warnings of the dire impact a no-deal Brexit would have on the economy, the pound and shares surged on Johnson's appointment, with sterling gaining 1.9% to $1.34 - its highest level since May last year – and leapt to a three-and-a-half-year high against the euro.

On the stock market, the FTSE 100 share index rose 1.5%, while the FTSE 250 hit record highs after a 4% jump.

This was equally welcomed by the advertising industry. Stephen Woodford, chief executive of the Advertising Association said that it was now “looking forward” to engaging with the new government’s plans, especially during discussions about the future trade deal with the EU.

“The UK is the European and global hub for the advertising industry, but this status is dependent on securing a good future trade deal with the EU, with a regulatory environment that enables the free flow of data and services across borders and a flexible, growth-friendly migration system that allows the UK to access the best global talent,” he added.

However, the picture is less clear for others. Sir Martin Sorrell, founder of S4 Capital, stressed that while there are promises of departure date, what a deal looks like is remains an unknown.

“Unfortunately, we won’t know what the trade deal with Europe will look like for some time, maybe even no-deal. So some uncertainty remains,” he said.

Sorrell added that the lingering uncertainty means that his business will push more “aggressively” in the Americas and Asia Pacific.

“Western Europe remains important, but we have to pivot, like the UK as a whole to different markets including the Middle East and Africa and Eastern Europe. I hope the new government will pursue the ‘Singapore on steroids’ approach. Low tax and regulation-lite, with an emphasis on education, mobility and infrastructure, both hard and soft,” he said.

Paul Bainsfair, director-general of Institute of Practitioners in Advertising (IPA) said clarity is still needed for marketing budgets to bounce back.

“We need clarity on access to EU talent – our industry relies on diverse minds from all backgrounds; we need clarity on political advertising for which we continue to lobby for a machine-ready universal register of all political ads online,” he noted.

“We also need a Culture Secretary in the post long enough to gain a good understanding of the incredible value that the creative industries bring to the UK and who can promote and defend our best interests accordingly.”

Alan Bishop, chief executive of the Creative Industries Federation, said the coming months will see the working through of a huge amount of crucial detail, especially on immigration.

“The future shape of the UK’s immigration system is clearly of immediate and urgent priority," he said.

"As we approach a now-imminent Brexit, it is crucial that we continue to attract the diverse global talent that has been so central to our success. The sector’s success relies on being able both to attract skilled and talented workers from across the globe and send our own creative people and exports around the world."

From his point of view, the UK will need an immigration system that looks beyond "arbitrary measures" such as salary and was not only accessible through cost and bureaucracy.

He continued: "An industry-led approach to a flexible, points-based system for permanent international workers should focus on the assessment processes and qualities most relevant to our sector."

"We must ensure that temporary workers have the flexibility needed to undertake multiple paid projects or performances across different employers and that improvements to our own system are reciprocated across the EU for touring artists among others post-Brexit.”

A 'wake up call' to the industry

Though the final result may not have been, the majority by which Johnson won was likely a surprise to the advertising industry.

Nearly half (48%) of advertising professionals self-identify as “left wing” compared to 28% of people from the ‘modern mainstream’ (the middle 50% in household income, with annual earnings of between £20,000-£55,000), according to a major piece of research published by The Drum last year.

Furthermore, 92% of workers voted Remain in the European Union referendum.

Despite Labour continuing to hold 49 out of 73 of the London constituencies, it won many with a smaller majority.

It’s yet another wake-up call to the advertising sector to look beyond the London bubble, said Xavier Rees, chief executive of Havas London and Havas helia.

“Regardless of your political allegiances, there is a clear message to our industry from last night’s election result: the London mindset is not shared by the rest of the country and the echo chamber that we inhabit does not reflect the views and experiences of the nation as a whole,” he said.

“We would do well to heed it as we seek to make our work resonate more strongly with the British people.”

The Conservative Party's manifesto promises: what the ad industry needs to know

On Brexit: Boris Johnson has pledged to get Brexit “done” in January next year, with the Conservative manifesto saying he’d negotiate a trade deal with the EU in the next 12 months. The party said it won’t extend the post-Brexit transition period beyond December 2020.

On trade: The Tories have promised to negotiate a trade agreement with the EU27 in 2020.

On tax: Johnson said he will postpone the Conservatives' scheduled corporation tax cut - from 19% to 17% - to save £6bn. There will be no increase to VAT either. He also made a commitment to maintain support for specific creative sector tax reliefs.

On immigration: Johnson has been promising an ‘Australian-style’ points-based immigration system following an end of free movement between the UK and EU. The implications on ad land’s talent pool could be wide-reaching as the proposed new system will require most people to have a clear job offer before they enter the UK. The Conservatives are proposing to treat EU and non-EU immigrants equally as part of this change, and they will also introduce a start-up visa to attract entrepreneurs. The party says it will “actively recruit” leaders in the field of tech and science to come live in the UK and offer them a fast-track visa.

On small businesses: The Conservatives will increase the employment allowance and reduce business rates for small companies, supporting them and start-ups through government procurement. Johnson says he will also clamp down on late payment and “strengthen the powers” of the Small Business Commissioner. There was also a proposal to launch a review to assess how government can better support the self-employed.

On energy and climate: Agencies and brands have put a huge focus on their contribution to tackling the climate crisis in 2019, but The Conservatives’ manifesto mentioned the issue just 10 times against Labour and the Lib Dems’ 59 and the SNP’s 33. The party wants to hit net-zero carbon emissions in the UK by 2050 and has pledged to do so by investing in making homes more energy efficient and protecting seas with a £500m ‘Blue Planet’ fund. However, climate campaigners say these plans don’t add up.

Additional reporting by Rebecca Stewart

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