I agree entirely with Tim (Martin) that it is essential we join together to debate and achieve the potential that a redrawing of our constitutional arrangements might now offer. However, before we get to the “and with one bound we are free” scenario, we will have to deal with enormous issues some of which are so key to our democracy that getting to this new land of milk and honey will be extremely challenging. Tim refers to Project Fear but the reality is Project Lie – as coined by Martin Wolf in the FT– has been proven even within hours of the Brexit result. £350m to be saved and spent on NHS when we leave. Every leading Brexit campaigner is now saying, “it wasn’t me”, “we never really meant that figure”. It is simply inimical to any democracy that a popular vote is won on a blatant lie. The Brexiters knew it was a lie but persisted with it.

 

Immigration: Even if there is driving logic to the economic and sovereignty argument Brexiters found it difficult to make these issues stick. So instead they used the immigration card. We are already seeing apparently “reasonable” customers telling eastern European staff – “we have had a referendum now you can go home”. There have been reports of much worse across the country. Within hours of the result leading Brexiters have distanced themselves from this immigration lie. Once this particular genie escapes this rancid lamp recapturing a sense of decency, compassion and broad mindedness will be very difficult. To whom do the disappointed voters for Brexit turn when they find out the Brexiters didn’t really mean it and didn’t believe there would be no more immigration? The language used was inflammatory, hateful and absolutely disgraceful. They knew the threat of Turkey's assession to the EU was a lie – but they peddled it to the end.

 

Sovereignty: Tim addresses this in detail and who can really argue with the principle. I am a democrat – but do all of those who rail against the “unelected commissioners” understand how the EU actually works? What will our sovereignty look like when we have split the United Kingdom and potentially caused a rupture in the EU? Unlike Tim and Nigel Farage, I and many others have not seen the EU as an evil empire comparable with Russia or Nazi Germany. Rather I have experienced an enriching, civilising, liberal environment. Furthermore, despite the EU’s undoubted flaws (and I am 100% in agreement with Tim about the damage the euro has wreaked), the UK has seen the fastest growth in our economy compared with pretty much any other EU nation and pretty much any other mature global economy over the past 30 years. Sovereignty in the 21st century is also a little different to that which pertained in pre-independent USA.

 

So before we leap towards those bright sunny uplands, we now have no clear answers to many of the fundamental issues of daily life – where we have had certainty for four decades. We have no idea what our relationship with our former partners will be. We have no idea as to whether foreign investment to the UK will be maintained. We have no idea how overseas companies will view their UK operations post-Brexit. We have no idea as to the arrangements for the City of London. We have no idea as to what politics will now look like in the UK.

 

In the short-term we are likely to see less investment, more unemployment and worsened national finances. But don’t worry the EU is bound to give us what we want and in a time frame to suit us. I worry that socially and politically the UK is now in a most dangerous place and a considerably weaker place economically than it was before last Friday. The next few months will need our greatest political skills, both domestically and internationally.

 

We will get through it, we always have. We will get through it if we work together in an atmosphere of unity and decency in search of free trade and friendship. But when the journey sets off based on absolute lies – the early yards are likely to be very bumpy.

 

Whilst it is a doomsday scenario to plan for another industry downturn, the confusion of the post-Brexit era is making all business leaders reflect and plan for the uncertainty ahead. History does not necessarily repeat itself but what can the hospitality sector learn from the last economic downturn, officially in recession 2008/9 but in relative malaise until 2013. For me there were a few standout trends:

1. The prolific growth in value promotions and discounting

2. The rise and credibility of discount retailers – this is the era when Aldi became cool

3. A relative buoyance of the branded sector – offering a more reassured and familiar experience

4. Relatively strong consumer demand for affordable indulgences to make their day feel better – the coffee shop revolution seemed to continue through the downturn

5. A relative trade down within the eating out value chain – switching from higher spend full-service dining to more affordable and casual concepts

6. A drive for extended opening hours and offer extension to sweat the asset and maintain top line sales growth

7. A growth in new formats, with necessity being the mother of invention. For example the growth in fast-casual concepts (initially in the USA) and in the UK the emergence of the street food scene (fuelled by redundant chefs unable/unwilling to afford restaurant premises)

In the past couple of years the eating out sector has “enjoyed” the feel-good factor and growth and expansion has been prolific, both of new brands/concepts and of new locations (especially the regeneration of high streets into leisure zones). Now the consumer is feeling more fearful of the future and again there is risk that with economic uncertainty our customers will restrain their disposable income. And there are clear regional trends.

In reality the majority of hospitality expansion and buoyancy in the past couple of years has been in the metropolitan areas and especially London/the M25. These are the homes and workplaces of the customers who have felt more confident with their economic outlook – with strong employment, high house price inflation, lower fuel costs and low mortgage rates. These were the people more inclined to vote “Remain” to retain their current security – and they are now in short-term shock their security and relative prosperity feels threatened.

Contrast that to the out of London consensus towards “Leave”, and the feelings of those living further from London that their quality of life is not improving and their economic situation has stagnated for the long term. Credit to Tim Martin and JD Wetherspoon who have tuned into this customer base in their regional locations and have so successfully positioned their brand to be accessible and favoured by the democratic mass market. So assuming a period of economic uncertainty and a consequent risk to short-term eating out expenditure, what should brand leaders be doing now to maximise their resilience in the months ahead? 

Firstly, retaining focus on the quality of the overall guest experience is paramount. Cost control is undoubted good practice, but the guest is savvy and social media sharing so intense that any reduction in offer or experience quality to protect margins will be noticed and punished by the guest.

Value is key. Customers will not want to stop eating out, and the more you can protect their patronage by offering them value for money incentives the better – without resorting to destructive and unsustainable discount. Previous trends are that customers trade down rather than out of the eating out market, so they will be looking for ways to continue to afford their visits.

In times of uncertainty and insecurity, comfort and a friendly face is important. Familiar brands and familiar favourites become more attractive – how can brands tap into this emotional desire with their service, their menu range and their communications?

In tighter markets brands need to stand out more to be noticed. Are you clear on what makes your brand distinctive and desirable? If you are, ensure you get the message across to both your staff and your guests clearly. If you are not then work on fixing that quickly!

In the last downturn brands extended dayparts with breakfast etc to sustain sales. One of the opportunities this time is the growth of the delivery market – lower margin for the brand, but participation at least keeps you in the heads and hearts of your customers

Avoid both inertia and frantic activity as a response to the moment. Over the years I have observed both responses. To become paralysed to market change is a long-term risk, whilst to adopt a chaotic frenzy of initiatives to simply reassure yourself/your organisation that you are really trying hard is not often successful – well considered and highly focused/prioritised responses are normally the winner in the long-term.

And do not abandon innovation. Remember it is often in more challenging times that new ideas and new concepts are created and developed as creative thinkers identify new market opportunities and offers to meet the needs of modern times.

But most of all, let’s hope this is short-term paranoia and the instant economic insecurity that Brexit has enabled quickly subsides into a clearer pattern for the industry to manage and respond to.

 

Like most people living in London I was disappointed and dismayed by the vote to leave the European Economic Community (EEC). Tim Martin has for many years continued to quote Warren Buffet, the “Sage of Omaha”. In his recent article in Propel, Tim quoted Buffet as saying, “he cannot forecast where the stock market is going and he doesn’t think anyone else can either”. One needs to qualify that statement and in what context it was said by Buffet.

I quote the context from Buffet: “The small investor has great opportunities in a market dominated by Big Boys…their erratic behaviour creates volatility and creates buying opportunities hitherto not available.” Furthermore says Buffet: “Consistency is the mother of capital gain…you want to be relatively certain of the outcome of any investment.”

One of the consequences of Brexit is the creation of an environment without certainty or consistency for the foreseeable future. It doesn’t need a Mystic Meg to see it could be a decade or more before it becomes apparent whether or not the perceived shortcomings of the EEC have been replaced by anything better. In the meantime uncertainty will prevail.

Few people divorce after 45 years, and Buffet says: “Management changes, like marital changes, are painful, time consuming and chancy.” Benjamin Graham, who was Buffet’s teacher at Columbia University in New York and his mentor for many years after, wrote about the stock market in perhaps the best book ever written on investment “Security Analysis”.

He said: “The market is not a weighing machine, on which the value of each issue is recorded by an exact and impersonal mechanism, in accordance with its specific qualities. Rather should we say that the market is a voting machine, where countless individuals register choices, which are the product partly of reason and partly of emotion?”

 

I like many people believe the emotion played a great part in the vote. Bill Gates says of Buffet, “Warren’s gift is being able to think ahead of the crowd”. Let us hope Brexiters have similar abilities.

 

In the wake of the EU referendum result, and the momentous political events that have followed over the past week, it seems almost banal to return to everyday stuff. I watched the results of the referendum over the course of the night and into the early hours – sleeping fitfully, but returning to the television screen to see the unfolding picture. For me as a “remainer” the nightmare was happening whilst I was awake! But the decision is made and I don’t intend to rehearse the issues of the campaign (you’ll be glad to hear). But I feel that more has changed than just our relationship with the EU.

 

I find myself returning to everyday normality, but with a strong Pythonesque sense of the surreal. Take the issue of minimum unit pricing (MUP). Readers may recall the European Court of Justice (ECJ) published a judgment on this measure in December 2015. It kicked the decision back to the Scottish courts on the basis MUP did break EU free movement of goods regulations, and taxation might be a better way for the Scottish government to achieve its health goals in relation to alcohol. The Scottish government now has to convince the Scottish Court of Sessions there is no measure it could take that would be less trade-restrictive than MUP and could achieve the same results. And of course the boys and girls from Sheffield University were on hand with a new mathematical model.

 

What strikes me as surreal is in a couple of years’ time the UK will no longer be a member of the EU and therefore not covered by the jurisdiction of the ECJ. Except that Nicola Sturgeon would like, somehow, for Scotland to remain in the EU, even in advance of another Scottish independence referendum. But the UK is in until it is out – and both sides in the MUP case have stated they will appeal the Scottish court’s decision to the Supreme Court in London, should they lose.

 

Will any of this matter in a couple of years’ time? We will have left and therefore Scotland can impose MUP if they want to and the EU won’t be able to do anything about it, right? Well, not quite. If Scotland, outside the EU, introduces MUP then the ECJ won’t be able to act, but the EU will be able to impose trade sanctions on, for example, exports of Scotch whisky. Maybe a quota system, or a 15% surcharge. Of course we will have “got our sovereignty back” and we will “no longer be subject to the dictats of a foreign court” so that’s alright then. People should reflect on which is preferable: an orderly judicial process or a trade war – echoes of gunboat diplomacy and the whiff of cordite – we don’t have Lord Palmerston any more, but we do have, er…Boris. Oh, but we don’t – he’s just bottled it and declared he’s not standing for leader. He who wields the knife rarely wins the crown!

 

Another unwelcome development earlier this year was the publication of the new low-risk alcohol guidelines. The guidelines proposed an upper limit of 14 units of alcohol a week for both men and women and a new mantra: “There is no safe level of alcohol consumption.” On Tuesday (28 June), Byron Davies, Conservative MP for Gower, secured a debate in Westminster Hall on the alcohol consumption guidelines. The minister Jane Ellison and her Labour counterpart Diane Abbott were both present and summed up the government’s and the opposition’s viewpoint respectively.

 

Davies made an excellent speech, criticising the unrealistic level of “low-risk” consumption; the way that decades of science that proved the health-protective effects of low and moderate consumption had been ignored by the review; and the disproportionate influence of members of the temperance movement whose members served on the advisory committee that drew up the guidelines. All good stuff.

 

But again, I found this more than a little surreal. Abbott gave a speech in which she banged on about cancer and alcohol-related ill-health, completely missing the point of the whole debate. As far as she was concerned alcohol was “A Bad Thing”, and anything that was intended to reduce consumption was therefore “A Good Thing”. This prompted Andrew Griffiths, MP for Burton, to comment: “Your speech is ridiculous.” But perhaps Abbott had other things on her mind – like the disintegration of the shadow cabinet and the coup underway against Jeremy Corbyn. It amazes me that in the wake of the political earthquake taking place in both the main political parties, Abbott can still find the energy for an anti-alcohol rant.

 

I said at the beginning of this article I thought something more had changed than just our relationship with the EU. I respect the considered views of those who want to leave, but I can’t help but feel the whole tone of the debate has exposed a dark side to our political discourse. The upsurge of hate crimes comes to mind. Michael Gove commented on what experts had said about the economic consequences of Brexit: “I think the country’s had enough of experts.” Perhaps he could give us an example of where anti-intellectualism has ever led to anything other than bigotry. Introducing the politics of identity into the Brexit debate was playing with fire. Fear of foreigners and an upsurge of racism have somehow slithered on to the agenda.

 

Perhaps the way to restore some sense of normality and stability is to retreat into the small stuff – the everyday stuff. I fear that prospect might be some way off.