First published Feb 2014.
In theory building societies should surely be one component of a sustainable banking sector. In practice although they are ‘owned’ by members, the board always succeeds in getting all its nominees elected, and so members have no control. Banks which are plcs at least have to worry about the share price. Building society boards have been completely unaccountable. The Building Societies Members Association (BSMA) – www.building-societies-members.org.uk – exists to challenge this state of affairs. Help their campaign to get one or more member nominated directors elected.
Building Society legislation is not fit for purpose. Any changes are made on the advice of the Building Societies Assocation, which represents directors rather than members.
Someone has asked me exactly how it is that the building society boards manage to ensure that only their nominees get elected. It works like this:
The building society board will decide who they want to fill any vacancies that arise. They will nominate exactly as many candidates as there are vacancies. Members have the right to nominate their own candidates. However this fact is not advertised; to discover this members would have to search through the website for a copy of the rules, or contact the secretary to ask for a copy. Furthermore each such candidate needs to be nominated by 250 people, and the society will not contact members asking for nominators, so it is quite a task to contact the 250. Also if a second member wished to stand he or she has to find a different set of 250 nominators. In spite of that there have been member nominated candidates in the past.
If there are no member nominated candidates, members are invited to votes ‘yes’ or ‘no’ for each of the board nominated candidates. Unsurprisingly the ‘yes’ vote always wins; members are given no useful information on which to judge the individual candidates. If you want accountability always vote No to the elction of each board nominated candidate.
If there are member nominated candidates, then the multiple X vote is used to elect the requisite number of directors. Suppose there are four vacancies to fill and, in addition to the board’s nominees, there is one member nominated candidate. Each member is entitled to cast up to four votes but does not have to use all four of them – though the wording on the voting paper can suggest otherwise. If a member wants the the member nominated candidate to be elected and decides to cast all four votes then he or she has to decide which of the board candidates to leave out. Different members will make different choices and so votes cast for the member nominated candidate will be largely cancelled out.
In this situation if every member votes for the member nominated candidate then he or she will be elected. Suppose 10,000 members between them cast 40,000 votes. Then the member nominated candidate attracts 10,000 votes leaving 30,000 to go to the other four. That is 7,500 each if they are equally distributed. If however only 8,000 members vote for the member nominated candidate, then the others attract 32,000 votes between them, which if equally distributed is 8,000 each.
It follows therefore that if every member uses all their votes it is likely that in order to elect the member nominated candidate, then approaching 80% of voting members will have to vote for him or her. However if members can be persuaded to vote only for the member nominated candidate then the desired result becomes more possible.
Possible remedies for the unsatisfactory situation include:
- Elect directors by preferential voting (Single Transferable Vote). At the moment the legislation prevents this and it is not in the interest of the main political parties to change this.
- Provide that at least one place on the board is reserved for a member nominated candidate. Again this would require legislation but the main political parties might not be quite so vehemently opposed.
- Adopt the Swedish practice of including stakeholders other than board members on the nominations committee.
- Adopt a similar practice in relation to the remuneration committee.
Board members’ total remuneration packages are unacceptably high. If you want to challenge this always vote to reject the report of the remumeration committee (itself made up iof board members.)
Note that these suggestions are the author’s and not necessarily those of BSMA.
Brian Heatley of Greenhouse Think Tank has written a sobering but realistic assessment of the agreement reached in Paris ansd the implications. We have to come to terms with the fact that damaging climate change cannot be avoided and we have to live with it. Read this at, http://www.greenhousethinktank.org/uploads/4/8/3/2/48324387/paris_-_final2.pdf
This should surely not be too much of a surprise.
27 December 2015
Dear Mr Corbyn
Voting Reform – the Constituency Link
I write as a Green Party member who nevertheless hopes you can unite the Labour Party and cope with the right wing media. I am glad that you are thinking about voting reform. The Tories must be beaten in 2020 and this may involve an anti Tory alliance which undertakes to introduce a more proportional system and then call a further election. Of course there is the question of choosing which system. Is there time to leave this to a Constitutional Convention?
I understand you would insist on retaining the constituency link, but would ask you to reflect on what that means, and why it is important. Is it valued more by MPs or by their constituents, and which is more important? When they are elected, many MPs go on about how they aim to represent all their constituents, not just those who voted for them. All too often the reality is very different; the MP has no interest in engaging with a constituent who dares to challenge his or her party’s policies, and does not have the social skills to deal with more personal matters. The MP for South Dorset, in which constituency I live, is perhaps an extreme example. Experience has taught me that it is not worth trying to communicate with him. He is not my MP. I will not bore you with the story of when a group of us had the temerity to lobby him on the Health and Social Care Bill. If he could, he would have had us peasants transported to the colonies for daring to challenge him.
I suggest that most voters would far prefer a choice of three or four MPs in the hope that one of them would be someone they could relate to.
In terms of systems, the choice is basically between Single Transferable Vote (STV) and a mixed system in which some MPs are elected into single member constituencies and others are appointed from a regional party list. Under STV constituencies would return typically four members, but this could vary to suit natural communities. In North London you could have a three member constituency covering the London Borough of Barnet or a six member constituency covering Enfield as well. In remote areas you might have a single member constituency. All the MPs would have been elected on the same basis. Voters would be able to take into account the personal qualities of the candidate, not just his or her party.
With mixed systems, German experience suggests you need as many list MPs as constituency MPs to achieve proportionality. This means doubling the size of constituencies and electing half the members to represent a whole region. Which system best preserves the principle of the constituency link? I suggest it is STV.
I will be at Tolpuddle in July representing ‘Make Votes Matter’.
Jeremy Corbyn is an inspiration and a symbol of hope to many, if only because he refuses to accept the message of despair, implied in the narrative of permanent austerity and ever increasing inequality. This is the reason why the majority of his parliamentary party hate him so much. But he is not Jesus Christ; he is a man. He is not perfect and I hope he has the humility to recognise it; I think he has.
He is in favour of reforming the voting system, but I believe he is wrong about the system he advocates. He insists on retention of the ‘constituency link’; fair enough; but he thinks it means choosing a mixed system (either the Additional Member System or Alternative Vote plus; I am not clear which). But there is another system which preserves constituency links, namely the Single Transferable Vote (STV).
The Weimar Republic illustrated the failings of a pure party list system; there was a proliferation of parties represented in the Reichstag and a lack of leadership. After World War II it was realised that there needed to be a constituency link and so a mixed system was devised which is now referred to in Britain as the Additional Member System (AMS). In this system around half the members of the Bundestag are elected by ‘first past the post’ (FPTP) in single member constituencies, but voters also vote for a party. Additional members are elected from party lists, the number elected being such that in a particular province (‘Land’) the total number of members elected is proportional to the party vote in that Land. However even with equal numbers of constituency and list members it is possible for a party to gain more constituency members than its total entitlement. The German system has measures to deal with this ‘overhang’ and to restore proportionality. Germans clearly take proportionality very seriously; it is implied in their Basic Law. The basic law did not define a mixed system; in fact in the first Bundestag election in 1949, the system used had to be agreed by heads of government of the German states (mostly now provinces ‘Lander’).
Meanwhile in Britain and elsewhere in the English speaking world, things had developed rather differently. The terms Proportional Representation and Single Transferable Vote had been virtually synonymous. The Electoral Reform Society had adopted STV as the best system within a year of its formation in 1884. It is used for all elections in the Irish Republic, in all elections except for Westminster in Northern Ireland, for local elections in Scotland, for Senate elections in Australia, and for all elections in Tasmania.
The change came with the publication in 1976 of the report of the Hansard Society’s commission on Electoral Reform. The commission decided firmly that there should be electoral reform and homed in on two possible systems. The first was STV – no surpise there, but the other was something they called the ‘Additional Member System’. This was similar to the German system in that there were to be constituency members elected by FPTP and ‘top up ‘ members. However it differed in three crucial respects:
- ‘Top up’ MPs would make up just a quarter of the total, rather than a half as in Germany. The system could not be fully proportional; there would be no provision for correcting for ‘overhang’.
- Voters would have just one vote which would be counted as both a personal vote and a party vote. In Germany (from the 2nd Bundestag election onwards) voters have had separate personal and party votes and sometimes vote for a person of different party than their party vote.
- List candidates would be resticted to those who were also standing for a constituency seat. Instead of parties ranking candidates in order of preference candidates would be placed in order according to their performance in the constituency elections.
All but one of the commission preferred this system to STV, though no cogent reasons were stated. The recommendations concluded with the following words, “We would conclude by emphasising that our basic recommendation is that there should be electoral reform. Whatever arguments there may be about the systems we have described, these should not be allowed to obscure our fundamental and unanimous decision.”
Subsequently Hansard AMS was widely criticised. It was said for example that list members would be elected as ‘best losers’. The versions of AMS implemented for the Scottish Parliament, Welsh Assemby and Greater London Assembly did not include items 2 and 3 above, though the top up is less than 50% and there is no correction for ‘overhang’. This suggests that the system was cobbled together rather quickly.
Some years later, James Knight, who along with many other people and organisations had given evidence to the commission, told me that the inclusion of AMS in the final report had come as a complete surprise. Those who gave evidence had thought it was a straight choice between sticking with FPTP and moving to STV. They were not able to comment on AMS. Why the last minute introduction of a completely new system? I won’t repeat James’ comments but it would seem it was developed to address MPs’ opposition to radical change. This is just one example of MPs’ attitude to democracy; their convenience trumps the common good. It does not occur to them that it should be the people who decide how they should be elected.
MPs set great store on the relationship of a single MP with his or her ‘own’ constituency. MPs when elected typically go on about how they undertake to serve all their constituents regardless of whether they voted for them. If this meant anything an MP ought at least be able to listen to a point of view with which he or she disagrees, to understand it and give a rational response. If a constituent has a personal problem he or she must feel the MP can be trusted. Too often this is simply not the case.
Under STV we would have larger constituencies – as far as possible reprsenting natural communities, and typically returning four MPs. Voters would have the choice of whci MP to approach. On certain issues, MPs of different parties in a constituency would have some interest in co-operating – a very welcome change in culture.
Those who advocate AMS should define what they mean. The German system would be highly proportional but constituencies would be twice as big as under FPTP. The Scottish Welsh and London Assembly systems are not fully proportional.
All systems of PR other than STV deliver more power to the party. In the case of the Conservatives this in practice means more power to big business and media moguls, more power to manufacture consensus. In Britain in the age of heavy industry Unions acted as a reasonably effective counterweight. With changes in the economy solidarity has reduced, and has allowed governments to weaken union rights. Peaceful protest has its limitations. Many people who vote conservative do so against their own interests, and I would suggest against their basic instincts of fairness. If there were a voting system in which voters could influence what sort of candidate got elected, governments might have to listen to the people. That system is STV. Corbyn is trying to listen to people. He really should consider STV.
The Youth Parliament is a brilliant innovation, see http://www.ukyouthparliament.org.uk/about-us/, but for those of us that argue for voting reform, the arrangements for electing MYPs are slightly disappointing. Each Local Education Authority (LEA) that participates in the scheme (that is most of them) makes it own arrngements for the conduct of elections and other support. As far as I can ascertain most if not all of them use some form of ‘First-Past-the-Post’ (FPTP). The conduct of the election is the responsibility of the LEA support officer, not the British Youth Council, and not the people who run adult public elections in the area. There is no national guidance as to whether FPTP or some other system be used.
In the Youth Parliament elections in Dorset, “this year’s election took place on Monday 2 February to Friday 6 February 2015. 40 schools in Dorset took part in the election, including those attending Learning Centres and Special schools. The election has been a huge success, with a total of over 35,000 votes cast by over 17,500 students, making 2015 a record turnout for Dorset”, (see, https://www.dorsetforyou.com/ukyp ) . Two MYPs and two deputies were elected. Disappointly there were just eight candidates drawn from seven schools. One MYP and one deputy were elected from one school in Dorchester. The others were elected from two establishments in Weymouth. Schools in all other towns, such as Bridport, Sherborne, Beaminster, Blandford, Christchurch, Wareham, Wimborne… were unrepresented. This seems a little unbalanced to me.
By contrast the first elections in the London Borough of Sutton were conducted by Single Transferable Vote (STV) and the results were pretty representative. Counting the votes was hard work but was carried out by students themselves supervised by a very experienced member of the Electoral Reform Society, with the full co-operation of the support officer. Later the support officer changed and the use of STV was discontinued. The new support officer was not of course an expert in voting systems, but felt she must be in charge and adopted the simpler system of FPTP. Another motive could be that the council frowned on innovation.
If a better system is to be more generally adopted, I suggest it requires an initiative from the Youth Parliament itself. It could approve and promote one or more models of how elections could be conducted. Students and support officers in a particular LEA could innovate with more confidence and counter negative comment. Youngsters should stand up and say that if MPs insist on choosing the method by which they are elected without interference from the public, then they the young should be able to do likewise.
One excuse for not using STV is that it is complicated. That has never fazed voters where it has been applied. Yes the count takes longer but computers can help. In Scotland STV is used for electing local councillors, but the ballot papers are read by machine (optical character recognition) and counted by computer. This would involve licencing the appropriate software and securing the use of the local council’s OCR machines, but there are lower cost alternatives:
a. There are plenty of enthusiasts could provide a counting program for free. Of course it would have to be tested to the satisfaction of the UKYP. The election could be run online. Writing code to capture votes should not be too difficult. This could be run on school intranet servers and votes files trabsmitted to a central computer which would count the votes.
b. One of the Dorset objectives is, “Principles of youth elections – young people learn about what a real election is: free, fair, transparent, accountable and accessible for all.” To this end the count could be done manually by students under the supervision of a person using a computer program which tells him or her exactly what has to be done at each stage and why. It would provide not only the final results sheet but also a log file duplicating the dialogue in detail. The superviser would need little training, and need not fear making a boo boo. Again there are plenty of people capable of writing such a program and supplying it at no cost. Anyone learning about the disciplines involved in an STV count would thereby have a good appreciation of those involved in a FPTP election.
PS. For those voting reformers who favour a party list system or AMS over STV, and who say why am I focussing on the latter; the answer is simple. MYPs are not supposed to engage in party politics, and STV is the only fair system that is not based on the concept of party.