The SNP secured 50 per cent of the vote but took 95 per cent of Scotland's seats. Photo: Getty Images
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The time is right for Labour to embrace electoral reform

The electoral system has always been unfair and undemocratic - but now it could shut Labour out for generations. The time is right to embrace reform. 

The election of 2015 was, it has to be said, one of the strangest results in recent electoral history – even by our bizarre voting system’s standards.

Labour increased their vote share – from 29 per cent to 30.4 per cent - while the Conservatives’ support went up by less than 1 per cent from 36.1 per cent to 36.9 per cent. Yet their votes were organised more effectively and resulted in a majority of twelve. 

Under winner takes all systems like ours, the number of votes a party needs to elect an MP varies widely. In 2015, the range was from 23,000 votes for a Democratic Unionist MP to over 3.8 million for UKIP. Conservatives got one MP for around 34,000 votes, while for Labour the magic number was around 40,000. Votes for parties other than the Conservatives, Labour or Liberal Democrats reached a record high - nearly a quarter of the votes cast (up from 11.9 per cent in 2010). This was multi-party politics being squeezed into a two-party voting system, as our new report makes clear.

Numbers matter. Five million UKIP and Green votes gave them one seat each, whilst the SNP got 95 per cent of Scottish seats on 50 per cent of the vote.  The relationship between votes and seats is now almost non-existent. We are used to governments on relatively small vote shares and unfairness for the third party - traditionally the Liberal Democrats. But the extent of disproportionality combined with the weirdly distorting effects the system now has on our electoral map has ignited interest among doubters and forged a more genuinely cross-party initiative than ever before – including many in Labour.

Why Labour should back reform

Multi-party politics conducted under first past the post is now capable of producing such random results, as Professor John Curtice demonstrated before May 7, that Labour will be forced to confront the anomalies – and unpredictability - thrown up by a two-party system being used by a multi-party electorate.

But the better impetus for Labour to consider first past the post and the alternatives is their place within wider debates about devolution and democracy.

First, there are the divisive effects of first past the post on debates about where power lies between the nations and regions of the UK. The system exaggerates divisions within and between the nations of the UK, instead of faithfully reflecting the democratic diversity of modern voters - wherever they live.  Yesterday’s Guardian editorial reaches a stark conclusion: ‘without a more proportional voting system it may be all the harder to get the wider reform of parliament and its relationship with the constituent nations of the Britain needed to save the union.’  

The second - and related – reason comes down to local politics. Devolution from Westminster to English regions and neighbourhoods is a policy area with genuine cross-party potential. The Government’s Cities Devolution Bill will give substantial new powers to major cities. The Opposition will have a vital role bringing democratic considerations to the devolution table, recognizing that with more powers should come greater scrutiny and accountability. A more proportional voting system that challenges one-party domination locally and ensures every area has an effective Opposition is worth considering as part of a reform package.

Third, Labour needs to address the obstacles first past the post creates for parties to thrive in every community. Parties have to focus resources on the most competitive areas, leaving safer seats to fend for themselves. Without the drive to win, in some though not all areas Labour withers away.  

Whilst exact numbers are hard to come by, it is obvious that the party’s strength in London dwarfs operations elsewhere. Some local parties beat the system but as joining a party becomes less usual - especially for younger generations, the challenges grow. Scotland offers a thought-experiment in the alternatives. Labour now has one MP in Scotland, a challenging basis for rebuilding the party.  Under the Single Transferable Vote (the system used for Scottish local elections since 2007) we predict that the party would now have 14 MPs - nearly half the estimated 34 for the SNP. Labour suffered such a big defeat in Scotland in part because of our broken voting system.

Labour can reject the alternatives to first past the post if it genuinely feels that for principle and party salvation the electoral status quo should be maintained. But as the party dissects the election results, decides on a new leader and deputy and embarks on soul-searching about Labour’s purpose in the 21st century, it can’t afford to ignore the wider impact that first past the post has for our democratic landscape, our constitution and the future of the UK. This election has put electoral reform back in the spotlight. Labour should seize the chance to scrutinise the system – on its own terms.  

Katie Ghose is chief executive of the Electoral Reform Society

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I was wrong about Help to Buy - but I'm still glad it's gone

As a mortgage journalist in 2013, I was deeply sceptical of the guarantee scheme. 

If you just read the headlines about Help to Buy, you could be under the impression that Theresa May has just axed an important scheme for first-time buyers. If you're on the left, you might conclude that she is on a mission to make life worse for ordinary working people. If you just enjoy blue-on-blue action, it's a swipe at the Chancellor she sacked, George Osborne.

Except it's none of those things. Help to Buy mortgage guarantee scheme is a policy that actually worked pretty well - despite the concerns of financial journalists including me - and has served its purpose.

When Osborne first announced Help to Buy in 2013, it was controversial. Mortgage journalists, such as I was at the time, were still mopping up news from the financial crisis. We were still writing up reports about the toxic loan books that had brought the banks crashing down. The idea of the Government promising to bail out mortgage borrowers seemed the height of recklessness.

But the Government always intended Help to Buy mortgage guarantee to act as a stimulus, not a long-term solution. From the beginning, it had an end date - 31 December 2016. The idea was to encourage big banks to start lending again.

So far, the record of Help to Buy has been pretty good. A first-time buyer in 2013 with a 5 per cent deposit had 56 mortgage products to choose from - not much when you consider some of those products would have been ridiculously expensive or would come with many strings attached. By 2016, according to Moneyfacts, first-time buyers had 271 products to choose from, nearly a five-fold increase

Over the same period, financial regulators have introduced much tougher mortgage affordability rules. First-time buyers can be expected to be interrogated about their income, their little luxuries and how they would cope if interest rates rose (contrary to our expectations in 2013, the Bank of England base rate has actually fallen). 

A criticism that still rings true, however, is that the mortgage guarantee scheme only helps boost demand for properties, while doing nothing about the lack of housing supply. Unlike its sister scheme, the Help to Buy equity loan scheme, there is no incentive for property companies to build more homes. According to FullFact, there were just 112,000 homes being built in England and Wales in 2010. By 2015, that had increased, but only to a mere 149,000.

This lack of supply helps to prop up house prices - one of the factors making it so difficult to get on the housing ladder in the first place. In July, the average house price in England was £233,000. This means a first-time buyer with a 5 per cent deposit of £11,650 would still need to be earning nearly £50,000 to meet most mortgage affordability criteria. In other words, the Help to Buy mortgage guarantee is targeted squarely at the middle class.

The Government plans to maintain the Help to Buy equity loan scheme, which is restricted to new builds, and the Help to Buy ISA, which rewards savers at a time of low interest rates. As for Help to Buy mortgage guarantee, the scheme may be dead, but so long as high street banks are offering 95 per cent mortgages, its effects are still with us.