It ought to be politically difficult for Labour to change the voting system at this stage in the parliament and with Labour trailing in both opinion polls and the EP elections. Changes to the system are best done when it doesn’t appear as if you’re looking for a partisan benefit. Labour has flirted with electoral reform and introduced PR for the Scottish parliament and Welsh Assembly, for the EP elections, and for local government elections in Scotland. It also commissioned the Jenkins report back in the early Blair days and could claim that electoral reform is unfinished business made all the more necessary by the recent crisis in Westminster as justification for making changes.

Even if the chances of a change to the voting system are low, they still need bearing in mind. For example, if the likely outcomes of the election are that the Tories would win 360 seats under FPTP, 340 seats under AV and 260 seats under list PR, with the probabilities of each system being used as 90%, 5% and 5% respectively, the market ought to be trading at about 354 – six seats lower than if FPTP was a certainty.

There are at least three big questions that punters need to answer in assessing the potential impact of electoral reform:

– What are the chances of each alternative system being brought in for the next election?

– How would the parties’ votes be affected by each system?

– How would that change in vote translate into seats?

People vote differently under PR and almost certainly would under a preferential system such as AV as well. Because both increase the effectiveness of voting for minor parties, more people do – hence Green and BNP MEP’s and Green and SSP MSP’s being elected. So while the number of Lib Dem seats won per hundred thousand votes might go up under PR, they might find it more difficult winning the votes in the first place. In fact, PR doesn’t look to have done the centre-left many favours at the European elections. The following figures are UK wide but comparable:

1997 GE (FPTP) – Labour: 43.2% / 1999 Euro (PR) – Labour + Lib Dem: 38.2%

2001 GE (FPTP) – Labour: 40.7% / 2004 Euro (PR) – Labour + Lib Dem: 36.3%

2005 GE (FPTP) – Labour: 35.3% / 2009 Euro (PR) – Labour + Lib Dem: 28.5%

Obviously, people vote for different reasons in European elections and general elections, each EP election contained a protest vote element against the government and the turnouts are very different but it’s still a striking set of statistics. The idea of an automatic centre-left government under PR (even if the Lib Dems were amenable to the suggestion) looks well wide of the mark.

Were these figures (or ones like them) the real reason that the government suddenly went into reverse so quickly on electoral reform, downgrading the idea to a consultation? Perhaps, but List PR is not the only type of electoral reform and AV – untested and hence unsullied in the eyes of optimists – might be an alternative, especially given the much smaller changes that would be required to implement it (no boundary review, for example).

Even if the chances of reform coming into being before the election are slim – probably less than 10% – they still need to be built into the odds of markets like Overall Majority and the Seats spreads which could be even more dramatically affected (and another reason to be wary of buying Tory seats or selling Lib Dems).

David Herdson