The Budget: is our political system fit for economic stability?

October 29, 2024

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The Budget: is our political system fit for economic stability?

Over the past few hundred years, our society and democracy have developed and changed beyond recognition. However, our voting system has failed to keep pace. We believe that First Past the Post has no place in a modern democracy, and should be replaced by a system of Proportional Representation. If you agree, sign the petition. If you want to know why, read on:

Minority rule

The idea of a minority ruling over the majority goes against our most basic ideas about democracy. But with First Past the Post, it's the norm. For about 90% of the time since 1935 we've had single-party 'majority' governments, but not one of them had the support of a majority of voters. The Conservatives currently hold a majority of seats with just 43.6% of the votes. In the 2019 election they gained an extra 48 seats despite an increase of only 1.2% of the vote share. Almost since the first general election, politicians who most of us didn't vote for and don't agree with have had the power to govern the UK however they like.

Proportional Representation means majority rule, not minority rule. With PR, any government must have a majority of votes behind it - so in order to govern, a party needs to either work collaboratively with other parties, or persuade most of us to vote for it.

Demand Real Democracy

The idea of a minority ruling over the majority goes against our most basic ideas about democracy. But with First Past the Post, it’s the norm. For about 90% of the time since 1935 we’ve had single-party ‘majority’ governments, but not one of them had the support of a majority of voters. The Conservatives currently hold a majority of seats with just 43.6% of the votes. In the 2019 election they gained an extra 48 seats despite an increase of only 1.2% of the vote share. Almost since the first general election, politicians who most of us didn’t vote for and don’t agree with have had the power to govern the UK however they like.The idea of a minority ruling over the majority goes against our most basic ideas about democracy. But with First Past the Post, it’s the norm. For about 90% of the time since 1935 we’ve had single-party ‘majority’ governments, but not one of them had the support of a majority of voters. The Conservatives currently hold a majority of seats with just 43.6% of the votes. In the 2019 election they gained an extra 48 seats despite an increase of only 1.2% of the vote share. Almost since the first general election, politicians who most of us didn’t vote for and don’t agree with have had the power to govern the UK however they like.The idea of a minority ruling over the majority goes against our most basic ideas about democracy. But with First Past the Post, it’s the norm. For about 90% of the time since 1935 we’ve had single-party ‘majority’ governments, but not one of them had the support of a majority of voters. The Conservatives currently hold a majority of seats with just 43.6% of the votes. In the 2019 election they gained an extra 48 seats despite an increase of only 1.2% of the vote share. Almost since the first general election, politicians who most of us didn’t vote for and don’t agree with have had the power to govern the UK however they like.The idea of a minority ruling over the majority goes against our most basic ideas about democracy. But with First Past the Post, it’s the norm. For about 90% of the time since 1935 we’ve had single-party ‘majority’ governments, but not one of them had the support of a majority of voters. The Conservatives currently hold a majority of seats with just 43.6% of the votes. In the 2019 election they gained an extra 48 seats despite an increase of only 1.2% of the vote share. Almost since the first general election, politicians who most of us didn’t vote for and don’t agree with have had the power to govern the UK however they like.The idea of a minority ruling over the majority goes against our most basic ideas about democracy. But with First Past the Post, it’s the norm. For about 90% of the time since 1935 we’ve had single-party ‘majority’ governments, but not one of them had the support of a majority of voters. The Conservatives currently hold a majority of seats with just 43.6% of the votes. In the 2019 election they gained an extra 48 seats despite an increase of only 1.2% of the vote share. Almost since the first general election, politicians who most of us didn’t vote for and don’t agree with have had the power to govern the UK however they like.The idea of a minority ruling over the majority goes against our most basic ideas about democracy. But with First Past the Post, it’s the norm. For about 90% of the time since 1935 we’ve had single-party ‘majority’ governments, but not one of them had the support of a majority of voters. The Conservatives currently hold a majority of seats with just 43.6% of the votes. In the 2019 election they gained an extra 48 seats despite an increase of only 1.2% of the vote share. Almost since the first general election, politicians who most of us didn’t vote for and don’t agree with have had the power to govern the UK however they like.

This week’s Budget marks a key milestone in the Labour government’s approach to achieving what it has described as much-needed growth in the economy. So, if growth is the aim, what are the conditions needed to sustainably achieve it? One key asset needed to promote growth is infrastructure. Infrastructure is often seen as code for physical capital, but equally important are things like a trusted exchange system, education, communications networks, effective healthcare, law and order. The uniting factors needed to deliver all of these things are strategy, time and investment.

Another commonly accepted critical factor in achieving growth is confidence. People and businesses only spend when they understand the conditions upon which they invest their money. They crave consistency, understanding and security – they crave stability. Britain hasn’t had trouble attracting investment in the past, it has some of the best economic infrastructure in the world, a brilliant education system, a world-leading financial services sector, world class R&D output and a large internal market. But what about its political infrastructure?

A destabilising force

Majoritarian voting systems like First Past the Post facilitate sudden and substantive policy changes, ironically almost always without the support of the majority of the public. This is because under First Past the Post, a party with a minority of support amongst the public often gains absolute power over policy without the need to consult other stakeholders to find a way forward that the majority of the public support. This cyclical uncertainty and lack of cross-party and cross-societal agreement on projects, regulatory regimes and strategy causes significant economic instability¹ and therefore reduces incentives for private investment in the economy over the long term.²

And it’s only likely to get worse. First Past the Post is supposed to suppress third parties, yet at the last election, the share of the vote going to the two main parties was at its lowest ever level. A mere continuation of this decades-long downward trend at future elections will render First Past the Post, in the words of The Economist, little more than “a random number generator.” Far from guaranteeing representative, stable government, the UK’s voting system, the magazine concludes, “increasingly guarantees the reverse.”

When competing for investment in this environment, if policy or political stability is one of the key criteria for a good investment, Britain is out of step with most of its European OECD peers. In using First Past the Post as a voting system, Britain sits alongside only Belarus. Given the fact that long-term investment windows are deemed critical to improving productivity and productive capacity, it’s imperative that our political infrastructure isn’t a primary cause of a lack of confidence in our economic outlook.

A proportional alternative

Nations using proportional electoral systems, in which political parties are accorded a degree of power proportional to their popular support, have been found to foster greater stability, and with it, economic performance. In compelling governments to secure the support of a wider range of stakeholders for their policies, decisions around national economic strategy and infrastructure building can take place over a longer decision-making timeline, reducing uncertainty and therefore increasing confidence in the economy in the eyes of investors. Researchers have even found there to be a causal relationship between the proportionality of an electoral system and the level of growth attained by the nation’s economy, finding that PR systems that combined a degree of personal accountability and proportional representation received the greatest boost to their relative rate of growth.³

So it’s clear that in terms of instilling confidence in the long-term economic trajectory of a nation, policy stability matters, and therefore the degree to which the government’s approach has public consent matters. It’s clear that the way we elect our politicians, the way we legitimise their policy positions, and crucially the conditions upon their power matter to the way our economy is viewed, and how people participate in it. If growth is the aim, we need to look to the long term, to promote consensus building, and to ensure that our political system is built to instil confidence rather than doubt.

PR: a voting system we can rely on

At this important juncture for the UK, we need a voting system we can rely on. One that combines proportionality, accountability and stability. One that gives us the confidence to look into the future as one nation, able to harness the wishes of as many citizens as possible, and not one that stokes instability, division and uncertainty. Minority rule isn’t stable, it’s not sustainable and it doesn’t deliver. If we want a national renewal that lasts, we can’t retain a First Past the Post electoral system that bakes in instability.

Lijphart, A. 1999. Patterns of Democracy: Government Forms and Performance in Thirty-Six Countries. New Haven & London, Yale UP. ↩︎
Rodrik, D. 1991. Policy uncertainty and private investment in developing countries. Journal of Development Economics, 36 (2): 229–242. ↩︎
Alfano, M.R. and Baraldi, A.L., 2014. Electoral Systems and Economic Growth: What is the Importance of the Proportionality Degree? (No. 06/2014). EERI Research Paper Series. ↩︎

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