What the Electoral Reform Society doesn’t want you to know

In ten weeks’ time, Britons will be asked to vote on arguably the dullest question ever put to a referendum: whether to adopt the Alternative Voting system in our general elections.

Under AV, instead of picking one MP, voters would list their first, second and third preferences. Our elections would be made infinitely more complicated. Counting extra votes means extra bodies, computers, and so on. And that, in turn, means lots of money can be made. The additional cost of switching to AV could be as much as £120 million, since this complex system may require voting machines. Little wonder Britain’s largest provider of voter-counting software is pouring cash into the ‘Yes to AV’ campaign, then. And little wonder they are at great pains to keep their role quiet.

The main actor in this referendum drama is the Electoral Reform Society (ERS). Since its inception in 1884, the society has campaigned for the British to choose MPs by a proportional representation voting method. Precisely this conviction led it to denounce AV — which is little more proportional than our current system — as recently as last year as a monstrous compromise. Now, however, it has become AV’s loudest cheerleader. What explains this sudden change of heart? More puzzling still, the ERS has donated an astonishing £1.05 million to the ‘Yes to AV’ campaign: where would this little-known society find such a sum?

The Spectator has acquired internal documents from the society which help to explain the group’s change of mind and the source of its funding. The documents reveal that it is the majority shareholder in Britain’s leading supplier of election services. They show that the society’s ties to the ‘Yes to AV’ campaign are far closer than either side has admitted in public. Moreover, the documents suggest that the society has gone to great lengths to stop the full story emerging.

But follow the money — specifically, the £1.05 million donation made to the ‘Yes’ campaign — and the society soon begins to look like the political wing of Britain’s leading ballot-services business. Named Electoral Reform Services Ltd (ERSL), this company takes in £21 million a year — and, last year, made a enormous pre-tax profit of £5 million. Traditionally, a significant proportion of this profit is paid to the society in the form of a ‘dividend’ building up a cash reserve. It is from these profits that the ‘Yes to AV’ campaign received its largest donation. Its other main donor is the Joseph Rowntree Reform Trust.

So ‘Yes to AV’ is, in effect, being partly bankrolled by a company that is paid to send out, register and manage some of the votes in a yes or no referendum. And given that the costs of running an AV general election are estimated to be far higher than those of the current system, the society can look forward to far greater dividends should Britain vote Yes. It’s no surprise that, in its memos, society chiefs worry about a ‘negative effect on donation levels if the story becomes “we are rich’’’.

But the society’s members are not only backing the ‘Yes to AV’ campaign, they are running it too. Willie Sullivan, the Yes campaign’s director, is normally an Electoral Reform Society employee in Scotland. Carina Trimingham (for whom Chris Huhne, the Energy Secretary, recently left his wife) is employed by them too and is also on the steering committee of the Yes campaign. In total, about a dozen staff members from the society are now working for ‘Yes’.

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So far, neither the profit-making source of the society’s donation nor the full extent of their staffing of the campaign has been publicly declared. Together, however, they mean that well over half the resources used to fund the Yes campaign are directed by the Electoral Reform Society.

All this could prove highly embarrassing. The memos seen by The Spectator include the society’s guidelines to its communications officers on dealing with awkward questions from the press. These detail the most dreaded lines of enquiry, ranking them according to their potential threat: high, medium or low. (The threat from their documents being leaked, for instance, is judged to be ‘high’.) Pesky journalists enquiring about ERS’s relationship with ERSL should be told only that the society is a ‘major shareholder’ and ‘takes no operational role in its activities… We are financially independent and not in hock to any big donors.’ That phrase captures only a fraction of the truth.

In reality, ERSL’s role in British elections is huge. There is almost no aspect of our democracy their services do not touch — their stationery and postal voting packs, poll cards and ballot papers are used in parliamentary, European and local elections. They have already been awarded a contract to administer the 2012 London mayoral election using electronic counting machines. So, should Britain decide to hold more complex elections, as might happen under the Alternative Voting system, ERSL could be well-placed to receive the contracts.

The Electoral Reform Society also stands to profit. It owns the majority of ERSL and, because of the company structure, is the only shareholder to draw a dividend from its profits. The society’s financial dependency is near total and, in order to finance the Yes campaign, it drew an ‘advanced dividend’ in December — on the understanding that it would draw less money from the business in future years. In this way, the society has become a conduit through which donations from Britain’s leading election business have been funnelled into the coffers of the ‘Yes’ campaign without the true source of funding becoming known.

As the documents make clear, the society seems well aware of the conflict of interest. They state that ‘it is possible that ERSL will profit as a result of a Yes vote (increased business opportunities)’. Far from declaring this conflict of interest, however, the society chooses instead to deny it.

Last week, when asked whether the society stood to profit from AV, its spokesman said: ‘Frankly, no. We play no operational role in ERSL.’ He omitted to say that it is almost entirely financed by them.

The Electoral Reform Society predates its money-spinning division by several decades — but there are serious questions about whether its principles are being suborned to financial interests. Why does it now support the AV system, having opposed it in the past? Since its inception, the society has advocated full proportional representation. As its memos admit, there are quotes galore from society members saying that nothing less will do.

Several pages of these memos are devoted to strategies for explaining this embarrassing U-turn. ‘Policy is the source of the most serious problems facing the society at present,’ one says. ‘Our opponents’ message dovetails almost exactly with our prior position, forming a conclusion that we ourselves have pointed to. That AV is an “unwanted reform”.’

It goes on to detail its previous position, which bears repetition because it does indeed cut to the heart of the drawbacks of AV. In 2006 the ERS website announced: ‘As AV is not a proportional system, the society does not regard it as suitable for the election of a representative body — e.g. a parliament.’ A former staffer is on the record saying, ‘AV is a weak reform. It is still poor at including minority points of view.’

When Gordon Brown was advocating AV two years ago, the society was adamant that a referendum on this question would be a waste of time. ‘First-past-the-post is the politics of no ch
ange,’ it said. ‘AV is a modest reform for those who don’t do change.’ It also said, ‘With a referendum on AV, Brown’s Choice would be too much like Hobson’s Choice — whichever way you vote, it’s business as usual at Westminster.’

The leaked memos go on to quote the society’s former chief executive Ken Ritchie, writing in a newspaper article in 2009: ‘If we are to have a referendum, it has to be about something that can make a real difference. Changing our system to the alternative vote hardly qualifies. A straight shift to AV would be a hugely timid move, motivated more by self-preservation than the need to change our politics.’

Since the 19th century, the society’s purpose has not been to campaign for AV at all but for a completely different electoral system. As its Memorandum of Association states, the objective is to ‘secure the adoption of the principle of proportional representation by the method of the Single Transferable Vote in elections in the British Isles’. It makes no reference to the AV system, and nor does the written commitment given by each new member of the society. The written commitment also demands that members ‘support the principal objects of the society which include the promotion of a proportional representation by the Single Transferable Vote method’ — and not AV.

It was this commitment to proportional representation that was discussed and agreed in the quiet meetings between Lewis Carroll, C.P. Scott and Thomas Hare — some of the early founders of the society in the 19th century. Hare himself invented the STV system which is now used across the world. What the founders would make of the society’s jettisoning of their beliefs one can only guess. To have abandoned its principles so completely will — as its internal memos suggest — leave the society open to accusations of hypocrisy.

In response to all this, those supporting AV have argued that it is a first step towards obtaining proportional representation, which remains their main objective. But this is a peculiar idea. What will be the response if those same people who, having argued for the adoption of AV before the referendum, then campaign for its replacement with yet another system immediately afterwards? It all sounds rather like the ‘miserable little compromise’ Nick Clegg warned that AV would be before last year’s election.

Buried deep in the Electoral Reform Society’s own memos there is an admission that, unless they successfully change the terms of debate, their ‘ability to influence policy after the referendum is worsened, because we are seen as turncoats without a credible position.’ Whatever the outcome of the referendum, that seems certain.

This article first appeared in the print edition of The Spectator magazine, dated