Tag Archives: democratic innovation

Democracy in corporate boardrooms

In this blog I have written mostly about politics and how innovation could reinvigorate our democracies. I have neglected to apply this principle to the corporate and financial sector. This is actually odd because I spent most of my career in the financial sector not as a “politics student”, or advisor to organisations involved in democratic innovation (what I now do).

An interesting article by Stuart Kirk of the Financial Times (May 25, 2024, “It’s time to let shareholders choose the CEO”), raises the question of democracy within corporations. He challenges the current approach “where elected board members are responsible” for CEO selection. Investors, who own the company, “are never given a list of candidates and asked to vote”. Many of these shareholders own their stakes via mutual funds or pension funds and do not even have the right to vote–that right is executed by the fund manager on their behalf.

Kirk argues that opening up the process will broaden the list of prospects. He also contends this will put downward pressure on CEO compensation which has ballooned in the past decade. Against this contention the recent award of circa $50 billion in compensation to Elon Musk at Tesla is worth pondering. Thousands of retail shareholders were the most supportive of Musk’s package and it was the institutions who were most opposed. Thus, individual shareholders may act in ways that are surprising, and/or arguably counter to their own interests, but at least such decisions will have far greater democratic legitimacy. In the same vein, there is no guarantee that engaging citizens in the political process will achieve better decisions—but they would also have greater democratic legitimacy.

What makes me most uncomfortable about the process of CEO selection in public companies is what I would describe as the “conspiracy of the interested”. Boards appoint new board members—often in their own likeness.  The board-appointed CEO obviously has an interest in placing on the board those most likely to be supportive–and CEOs normally have considerable influence on selection. Boards remuneration committees decide how much the CEO should earn.  It is easy to see how this creates a system where compensation levels remain high, especially as board directors are often CEOs of other companies. Few board members have a genuine interest in depressing executive wages, contributing to the stratospheric rise in CEO relative pay. This all acts to the detriment of shareholder interests.

Kirk makes an excellent point with regard to the investment banking industry where “the internal candidate whose business or region is currently making the most money” gets the nod to become CEO”. As someone who used to follow the investment banking industry, I was amazed at how difficult it seemed to be for investment bank boards to distinguish between luck and competence in choosing a CEO, and how rarely they search outside the company.

The most amazing case of this I saw at close quarters at Lehman Brothers, a firm I knew well (Disclosure: as an analyst and subsequently as Lehman’s Head of Equities in Europe in the 1990s). Richard Fuld emerged from the fixed income side of the business, which had enjoyed record years during the bull market–unsurprisingly he was selected to run Lehman Brothers, systematically displacing any rivals. In my opinion, despite the success in fixed income, he was not a good choice as an investment bank CEO. Fuld, led the firm into a spectacular bankruptcy in 2008, nearly bringing down the global financial system with it. He is reported to have been paid $500 million during his career at Lehman Brothers, according to James Sterngold of CBS News (April 29, 2010, “How much did Lehman CEO make?”), while the taxpayer bill to rescue Wall Street was $700 billion. There is no guarantee Lehman investors would have behaved differently, but the extraordinary preference for internal candidates, which Kirk criticises, is an issue with the current system.

Furthermore, one can argue that Musk created an enormously valuable company and deserves rich rewards. But Lehman Brothers was founded in 1850–is it really fair that at firms with reputations (and franchise value) have been established over decades or centuries, that today’s CEOs gobble up so much of the value created. Perhaps incompetents get fired when their luck runs out but often with generous “golden parachutes”. Heads I win, tails I win–this a huge problem.

It is hard to imagine how one might set about fixing this problem, or even to feel confident that more democratic decision-making would improve outcomes. But as in the political sphere, it seems hard to argue that the current situation is working so well that it could not benefit from experimentation. One answer could be for the fund managers to enable shareholders to vote their shares, so that the institution’s vote reflects the views of beneficial owners. From a technical standpoint this seems eminently doable, but probably few shareholders would bother to vote. But it would be a start and on important issues one suspects the turnout could be much higher. In any event, more democracy seems worth a try—in the boardroom and in politics.

Democratic Innovation and Impact Investment are Similar–Why This Matters

My master’s degree (UCL, 2023) was in Democracy and Comparative Politics, and my dissertation focused on democratic innovation.  In writing it, I noticed an explosion in academic literature regarding innovations in democracy, in particular since 2010[1]. For a relative newcomer to the field, the passion and volume of academic work offered hope that the continuous global decline in support for democracy[2] might be halted or even reversed.  At its core, simplifying considerably, were the concepts of citizen engagement and deliberation. The first would reinvigorate democracy and bring greater legitimacy to political decision-making. The second involved initially providing participants with information and objective expertise, who could then openly discuss and debate issues in the facilitated pursuit of a consensus, which would formulate policies that possessed greater legitimacy AND were objectively better than those which result from current legislative processes.

Immersing myself in this hopeful world was exhilarating.  Not only was there a growing abundance of academic literature, but thousands of real-life cases were taking place all over the world[3] and important political leaders seemed committed to the ideals of innovation in our democracies[4].  My excitement waned however as I returned to the real world (from the “groves of academe”).  Hardly anyone I knew was aware of any of these democratic innovations and in our day-to-day lives whatever innovations had been implemented seemed to have had very little impact.

This reminded me of my experience in the impact investment world which began roughly 25 years ago. Pioneers (less so academics in that case) were publishing reports about this emerging world of social enterprise and investment (it was called that before Americans insisted on the shift in nomenclature to “impact investing” in 2007) and the arguments in support.  Also, a host of new mission-oriented companies (think Body Shop or Ben and Jerry’s) emerged which added “doing good” to doing well.  I can remember vividly this sense of frustration that an obviously good idea which was destined to improve the way in which our financial markets and commercial enterprises operated was pretty much ignored. Again, the average “man in the street” had absolutely no awareness of the shift and in terms of genuine impact, it was microscopic.  Despite the noble efforts of these committed pioneers, and the seemingly obvious benefits that such a shift would engender, the commercial and investment world were not changing.

What I do recall vividly is the frustration of these pioneers as they presented compelling, passionate and extremely well-intentioned arguments in favour of incorporating impact into the world of investing, to no avail.  They were met with comments like, “lovely idea, we will get back to you”.  Investing institutions feared that bringing impact into the equation would diminish returns.  Large corporations worried that taking non-financial factors into account would threaten profitability. 

I was reminded of this when reading the equivalently passionate academic pieces extolling the virtues of citizen engagement and deliberative democracy, and the mounting frustration at how little was actually changing in the political realm.  What I saw then and now was that wagging your finger at the people who benefit from the status quo and telling them what they “should” do and demanding change because “it’s obviously the right thing to do” very rarely result in any notable progress.  At best, you will get “lovely idea, we will get back to you”.

Since that time the impact investment world has grown by leaps and bounds.  From non-existence in the early 2000s, the sector has mushroomed to $1.164 trillion in 2022[5] according to the Global Impact Investment Network’s latest published report.  This sum is growing at 10-20% per annum, much faster than the overall investment sector.  In the UK, Better Society (was “Big Society” until recently) Capital estimates that the value of UK social investments in 2022 was worth £9.4 billion, roughly 11 times (!) the level in 2011.  Large companies who sneered at the idea of impact in the early part of this century has restructured to take impact into account, which has been well-received by customers and employees alike—some (8,653 at last count) have even become “B Corporations”[6].

I contend that critical to this was a shift in the language of the pioneers, as they attempted to persuade large institutions and corporations.  Instead of finger-wagging or preaching, the emphasis was placed on how it was in the selfish interest of these large organisations to undertake the shift. For example, large investment firms became convinced that impact assets under management would grow rapidly (this has clearly proven to be the case), and that in addition the fees for managing these assets would be higher, the money would be “stickier” (less likely to leave the institution once it arrived then mainstream investments) and that investment returns would not suffer.  Corporations saw the benefit in customer and staff engagement. 

I believe a similar shift is needed in the area of democratic innovation.  My dissertation therefore focused on trying to identify the factors that might convince politicians and civil servants to undertake exercises in democratic innovation because it was in their interest to do so.  As part of my work, I surveyed dozens of democracy technology companies across Western Europe and asked what they perceived to be the factors that do entice politicians to undertake democratic innovation. To be fair, these companies noted that some politicians were willing to do things simply because it was “the right thing to do”.  But this was a small minority.  The bulk of the politicians and civil servants were more effectively persuaded when the arguments focused upon factors of tangible interest. I grouped these factors into “7 Cs”—for example, cost savings or compliance (to national or international requirements).   

The dissertation was obviously written for academic purposes, so is tediously dull, but if readers of this blog wish to have a copy please just e-mail me at rod@schwartzuk.com and I would be happy to send it.  I do so not to bore more readers with my academic prose, but in order to try to persuade those who care about the adoption of democratic innovations, focused on citizen engagement and deliberation, to concentrate on factors which are in the selfish interests of politicians and the civil servants who serve them. This may feel like a compromise to purists, but I would argue that getting politicians to do things which improve the functioning of our democracies is more important than the elegance of academic logic deployed in the course of this persuasion.

 Rodney Schwartz, London, 11 May 2024

I started my career in mainstream finance and shifted into impact investing before returning to my lifelong passion of politics in early 2021.  This blog reflects that return and is my way of sharing the impressions of someone journeying from “proper jobs” in the investment world back into education to study politics after four decades.  For those interested in why I started this blog click here, and to read my declaration of known biases, click here.  I welcome any comments.

[1] Elstub, S. & Escobar, O. (2019) “Handbook of Democratic Innovation and Governance”, Elstub S. & Escobar, O. (eds.). Northampton: Edward Elgar Publishing.

[2] V-Dem (2023) “Democracy Report 2023: Defiance in the face of autocratization”, Gothenburg: University of Gothenburg, V-Dem Institute.

[3] Participedia identified 2,228 cases as of 4 May 2024 (https://participedia.net/)

[4] https://www.theguardian.com/cities/2014/oct/08/parisians-have-say-city-first-20m-participatory-budget  downloaded 4/5/24 at 16:14

[5] https://thegiin.org/assets/2022-Market%20Sizing%20Report-Final.pdf   downloaded 4/5/24 at 16:47

[6] https://www.bcorporation.net/en-us/  downloaded 11/05/24 at 16:02

The Joy (?) Of Finishing a Dissertation

“You must be thrilled to get that off your plate!”, was the refrain I heard from nearly everyone I spoke with after completing and submitting the dissertation for my masters degree at UCL.  Well, errr, ummmm, actually the truth is that I wasn’t.  Having dedicated most of the past 24 months to my learning in the area of democracy and innovation, I was actually sad that this part of my journey from business was actually at its end. In fact, as my finger hovered above the ”send” button, it was nothing like joy or relief which I felt.

This was not the case the last time I handed in academic work, over four decades ago, at the Simon Business School of the University of Rochester.  Back then I was as thrilled as any normal student to be finished with education and to start “real life”.  Something is really different in approaching a degree as a mature student–especially if, like me, the degree was not designed primarily to fulfil some new career aspiration.  This was perhaps a component of the exercise, but the prime motivation was the learning in and of itself.

For anyone considering going back to school and studying a subject at any level of depth, I cannot recommend it highly enough.  Learning new things is nearly always interesting, but for myself, the process of achieving some level of “mastery” of any new subject is its own reward (the masters degree is therefore well-named). I had been interested in democratic innovation (the subject of my dissertation) for some time and had even begun reading on this subject before the formal course began.  Two-thirds of the way through that work, my spirits lifted as I began to make connections, become familiar with certain authors and their work, and see the big picture of a particular subject in some context and within a particular framework. For me this fostered a sense of pure joy.

Beyond joy, I derived a real sense of purpose from this academic exercise.  At my age (I am now 65) this becomes increasingly important.  As I look around me at friends my age or consider those of my parents when they were in their twilight years, there seemed a discernible difference in mental and physical health between those individuals who had and did not have a sense of purpose and positive engagement with the world.  Frankly speaking, the prospect of a quiet retirement fills me with anxiety and some measure of dread.  My father worked until his late 80s, and not only did this keep him sharp, but I suspect it kept him alive (he is now 95).  In a more mundane sense, studying kept me engaged during some of the Covid lockdowns—for which I am extremely grateful.

What I have not secured as a result of my learning is a clear sense of what I will do with it or how I will devote my talents professionally in the years to come—many have asked, which I take as a compliment and that they believe there is something useful I might be able to do.  My studies have however resolved for me my “direction of travel”.  I know now that I would like to spend most of my remaining useful years in the pursuit of learning about democratic innovation and how it can be deployed to improve the functioning of our faltering democracies.  I was not wholly confident that my degree course would lead to this degree of certainty, but I am immensely glad that it has.  What else I will do around democratic innovation (I am currently a senior adviser to the Innovation in Politics Institute in Vienna) remains to be seen, of course. It depends on whether or not I can be of any use to practitioners in the sector and if I can persuade them of that.  Let’s see.  But I am hopeful that the combination of lifetime experience with private firms and charities at all stages of development combined with the beginnings of some knowledge regarding the subject of democratic innovation will be of use.  And ultimately I believe we all want to be of use, somehow, in some way, to someone.  This is now my quest.

My masters degree, and in particular my dissertation, fully absorbed my capacity to do any other learning or writing.  I had been playing at learning French again, which had been going extremely badly, and my efforts to sustain this blog fell by the wayside. I am obviously hopeful that this piece I have just penned (the first in six months) will be the first of many and of course, I hope that they are of some use to those of you who are struggling with some of the same questions. 

As I have mentioned before this blog is designed for those with an interest in politics as well as those with an interest in learning after a career.  I genuinely hope that my reflections, which I have tried to capture as honestly as possible, will be of some value to some of you.

Rodney Schwartz

London, UK—20 September 2023

I started my career in mainstream finance and shifted into impact investing before returning to my lifelong passion of politics in early 2021.  This blog reflects that return and is my way of sharing the impressions of someone journeying from “proper jobs” in the investment world back into education to study politics after four decades.  For those interested in why I started this blog click here, and to read my declaration of known biases, click here.  I welcome any comments.

The System for Choosing Party Leaders is Ruining Britain

UK financial markets are currently in complete disarray.  The British Pound has fallen to an all-time low against the US Dollar and is tumbling against other currencies as well.  Yields on government gilts have risen sharply, which will raise borrowing costs for the UK Government, which is piling on debt to an unprecedented extent.  Mortgage holders and other borrowers will suffer a severe increase in costs as the Central Bank raises interest rates to protect the Pound and to try to reduce inflation.  This all adds a heavy financial burden to an already stressed economy, adding to the pain from the huge leap in energy prices with which households are struggling.  Make no mistake, these policies will cause suffering and hardship—people will get sick (forced to choose between heating and eating), find an NHS they are unable to access, and will die as a result.

This latest blow, as with so many others (like Brexit) has been self-inflicted.  The Conservative Party has been kicking own goals into their net with abandon for years and will surely face the wrath of the electorate by the end of 2024.  Starting with Theresa May, continuing with Boris Johnson and now accelerating under Liz Truss we are witnessing an ideological lurch to the right.  In some ways this is a pan-European trend, with the far-right recently entering the Governments in Sweden (for the first time ever) and in Italy (for the first time since Mussolini).  However, my sense is that the resultant policies will be moderated in both these countries by their coalition partners and the dynamics of coalition, however our First Past the Post (FPTP) system in the UK, which causes large majorities even on small pluralities, grants the Tories astonishing power with their 70+ seat majority.  But FPTP conveys power but does not necessarily result in an ideologically extreme programme—what brings this about?

Here we need to see the role of the leadership election system.  The system allows Tory MPs to whittle down the list of aspirants to two, and then grants the party membership the final say over who becomes party leader—and Prime Minister in this case.  However, Tory members tend to be rather more “Tory”, and ideologically committed to the cause, than Tory voters or the electorate in general.  In July, YouGov reported[1] that Britons overall preferred Sunak to Truss as Tory leader by 28% to 25%, and that among Conservative voters Truss led by 41% to 36%–which is in stark contrast to the 57% to 43% vote by Tory members in the recent leadership election.  The nature of the selection process has a built in bias towards the keenest of Tories—the bluest of the blue.

This is not solely a problem in the Conservative Party. In the 2015 contest to select the Labour Party leader to succeed Ed Miliband, the party opted for a similarly extreme ideolog in choosing Jeremy Corbyn. He won the contest by securing roughly 60% of the vote of party members, a far higher percentage than the 19% won by Andy Burnham, the 17% secured by Yvette Cooper, or the roughly 5% for Liz Kendall. Andy Burnham or Yvette Cooper would have proven more popular with the British electorate, I suspect, but the system was biased in favour of the candidate who was the reddest of the red. It is hard to judge the extent of the impact of those who became members just in order to choose Corbyn, but the system already was tilted towards the more extreme candidate. I think if Corbyn had not been proven to be so disastrous in the 2019 general election, perhaps the centrist Keir Starmer would not have emerged as the party’s leader thereafter.

The extremist bias in both parties leader selection systems, combined with the large majorities generally conveyed to the winning party under the FPTP system, means that there is a high likelihood of a successive series of leftward and rightward lurches. This cannot be good for a smooth functioning of democracy, or the economy which politicians are entrusted to manage. 

Business people, who value stability and predictability also find decision-making in this environment particularly difficult.  This may lead to a reluctance to invest, which undermines productivity and thereby hampers overall economic growth.  The chaotic plans announced by Truss and her Chancellor, Kwasi Kwarteng, have further undermined this stability and are likely to reduce growth and productivity, precisely the opposite of what they have sought to accomplish.  But to be fair, they are merely implementing the strategy promised to Tory members during the long leadership selection campaign—members knew what they were getting.  Sunak offered a different vision, which was rejected by the membership, but I contend would have been far better for the country—or at least less immediately destructive.  The issue is this system.  It must be changed.

Interestingly both these party leadership selection systems have developed out of a desire to improve the democratic nature of these contests. For example, what preceded the “one man one vote” system adopted by the Labour Party before 2015 was a system which granted 1/3 of the votes to the parliamentary Labour Party, 1/3 of the votes to the labour unions and affiliated societies and 1/3 of the votes to the party members.  Philosophically this was an attempt to make the process more democratic, but the results raise what in my opinion are more serious problems—the road to hell is paved with good intentions.

It will require a brave party or leader to readjust the system in a way that takes power away from party members, especially where the members choose the current leader.  However, such bravery is exactly what we need—not only as it concerns party leaders.

Rodney Schwartz

London, UK—28 September 2022

I started my career in mainstream finance and shifted into impact investing before returning to my lifelong passion of politics in early 2021. This blog reflects that return and is my way of sharing the impressions of someone journeying from “proper jobs” in the investment world back into education to study politics after four decades. For those interested in why I started this blog click here, and to read my declaration of known biases, click here. I welcome any comments.

[1] https://yougov.co.uk/topics/politics/articles-reports/2022/07/27/where-do-britons-stand-liz-truss-and-rishi-sunak downloaded 11:20 on 28/9/22

The Voiceless 60% and Keir Starmer’s most important task if he becomes PM

The Democratic Chasm

There is a sizeable progressive majority in the UK—which might seem surprising given this very Tory Government and the nature of the Cabinet.  However, according to recent polls of polls[1], the support for a combination of progressive parties is 63%–these figures appear below (Note: These figures are from poll results which preceded the collapse in Tory support since the “fiscal event” and subsequent market meltdown, which would have the progressive majority at over 70%):

                             Labour                43%

                             Lib Dem              10%

                             Greens                6%

                             SNP                      4%

                             Total–4 above   63%

Conservatives   31%

The results of the last general election[2] are displayed below:

Labour                32%

                             Lib Dem              12%

                             Greens                3%

                             SNP                      4%

                             Total—4 above 51%

Conservatives   44%

The results are not as solidly progressive, but the total still adds up to a majority at 51%.  We can quibble about whether or not the SNP is really a progressive party, but the implication is clear.  The majority, or at least a plurality of UK voters are progressive, but the political system returned a Conservative majority of 80ish seats; the Tories secured 56% of Parliamentary seats on 43% of the vote (on 67% turnout).  The quirks of a first past the post (FPTP) voting system are well known and much studied, but I have seen little comment on the grotesqueness of this imbalance at the present time. And with the Conservative Party implementing legislation which moves the country in an increasingly extreme direction, the democratic chasm between voters and rulers grows dangerously large.

Those of us with a progressive bent may choose to cheer at current voting intentions–especially since the fiscal event. However, anyone with an interest in the state of our democracy must be deeply concerned at the widening gap between the electorate and the elected. How one approaches these figures and their implications will be partly determined by political orientation but also one’s mood. Allow me to feel modestly optimistic—I am praying for a Tory defeat, which I also believe is almost certain.  Regardless, they have important consequences for the Labour Party and in particular Keir Starmer in the run up to the next election, which will take place by the end of 2024.

The key test for Starmer’s leadership

Should Starmer become the next Prime Minister, there will be a bulging in-tray—the cost of living crisis, the plummeting Pound, surging interest rates, massive debt levels, etc.  However, I believe that one key issue will determine the long term political direction of the nation—and it will also tell us a great deal about Starmer’s level of courage and whether or not he is a leader with principles.  That issue is voting systems—in particular, what I believe is a necessary shift to more proportional voting.  To become Prime Minister, Starmer may have to collaborate with the other progressive parties, given the FPTP system. Even if Labour are elected with a massive majority, Starmer must resist the temptation to ignore attendees at the recent Labour conference (who voted to support PR) and make PR one of the centrepieces of his tenure.

Starmer has already demonstrated a sensible willingness to work with the other progressive parties and this is already showing results.  The first sign that an important change was underway was in the Chesham and Amersham by-election on 17 June 2021.  the Liberal Democrats won that seat with a swing from the conservative party of 25%.  Later that year, by-elections in Batley and Spen, and Old Bexley and Sidcup saw Labour and the Tories returned, respectively.

But the big sign that there was an earthquake underway, and that Amersham and Chesham was not a fluke, was in North Shropshire.  It struck me as an early indicator of what can be achieved when progressive parties put their narrow interests aside and work together. A 23,000 seat majority was massively overturned, and for the first time in nearly 200 years North Shropshire did not return a Conservative MP (a Lib Dem MP was elected, and Labour fell from 2nd to 3rd place). By-election results can often be dramatic and not a reflection of likely outcome in a general election, but the implication of the results are clear—progressive parties must put aside parochial interests and concentrate on what is best for the country.  Thereafter there was no change in Southend West and Birmingham Erdington, but the success of tactical voting was once again evident in Wakefield, where a swing of 13% saw Labour defeat the Tories (importantly, the Lib Dem share fell from 4% to 2%), and in Tiverton and Honiton saw the Liberal Democrats overturn a Conservative majority of 24,239 with a swing of 30% to take that seat.  This demonstrates the potential for progressive parties to defeat the Conservative party in the next election—to be held by December 2024.

The blockage here has historically been the Labour Party. It has held to the idea that it must run a candidate in nearly every seat, avoid pre-electoral deals, and shun cooperation. Things could have been vastly different if Prime Minister Tony Blair, in the aftermath of the 1997 general election, followed the recommendations of the Commission established under the chairmanship of Roy Jenkins and supported a form of proportional representation (the Jenkins Commission recommended the “Alternative Vote Top-Up System”). Blair and then Liberal Democrat leader Paddy Ashdown spoke at length about this before the election and many observers were surprised when Jenkins, a Lib Dem, was made Chair of the Commission.  The Labour Manifesto in 1997 also stated that, “We are committed to a referendum on the voting system for the House of Commons. An independent commission on voting systems will be appointed early to recommend a proportional alternative to the first-past-the-post system.”  Who remembers that campaign promise?

Unfortunately, the Blair-led Labour Party in 1997 was just too successful.  It won 418 seats out of 659 available in that election—this was 63% of seats on 43% of the vote, making the 2019 pro-Tory allocation look mean by comparison.  It would appear their belief in a fair electoral system extended only to the extent they might need Lib Dem support to govern.  When this proved unnecessary, their principles and manifesto commitment were summarily jettisoned, and they decided to enjoy an unfair system which now worked solidly in their favour.  Starmer and his Cabinet must avoid this temptation, because today and for the last twelve years, we have been living with the dire consequences of that missed opportunity!  The Labour leader has an hoistorical opportunity to fix this tragic historical mistake. How should he go about doing it?

The tactics for a non-deal deal

Negotiating a deal between the four progressive parties will be well-nigh impossible. Although staunch support may exist for such a move in the Liberal Democrat party, the Greens will be less enthusiastic, and it would be an unnecessary distraction at this moment for the Labour Party. The SNP might be supportive, but one can well imagine what the price for such support will be and how Tory shrieks of “destroying the union” will promptly follow.  But the key problem will be the Labour Party and the fact that there is both a principled objection and a practical one.  Many potential Labour MPs will be robbed of their opportunity to win seats—and Labour supporters robbed of their chances to vote consistently with their interests (the principled reason).  And the UK public hates such formal deals (witness the Tory-Lib Dem Coalition)! And it would pointlessly give the Tories ammunition.  This is the practical objection.

However, Starmer does not appear to be as popular as Blair was, although that is beginning to change, and the Labour Party of 2022 is not the Labour Party of 1997. Also, it is worth remembering that in May 2021 they saw the previously safe seat of Hartlepool switch to the Tories, with the Conservatives winning over 50% of the vote and Labour barely held on to their seat in Batley and Spen (their vote share declined by 7% from the poor 2019 result). I guess this is a long way of saying a 1997-style Labour landslide may not take place. But even if it does, thanks to the Truss/Kwarteng inspired collapse in Tory support, progressive parties should by now have learned they must work together to ensure that Britain’s progressive majority should not be undermined by the quirks of the British electoral system.  They must work together.  But how to do this in the absence of a formal deal?

First, they need to focus on winning—and this Starmer seems to be saying and doing.  He talks about winning being the main goal (he describes himself as an extremely competitive player on a football pitch—and intends to bring that competitive spirit into the campaign) and has put in place a Shadow Cabinet which looks ready to govern—comparing very favourably against those currently in Government.  He brought back Yvette Cooper and replaced Annelise Dodds with Rachel Reeves as Shadow Chancellor and appointed Wes Streeting as Shadow Health Secretary—these were all smart moves.  It seems clear from the extent of Lib Dem victories that Labour did not put up a strong fight in these  constituencies.  The British electorate is sophisticated about tactical voting and, to defeat the Tories, will know what to do (and sites like “Swap My Vote”[3] are there to help them with smart tactical voting advice).  People forget that in the 1997 General Election, the Lib Dems won 46 seats (up sharply from 18 beforehand) partly thanks to smart tactical voting, but this jump was overshadowed by the Labour landslide.

Labour will need to make some hard choices in order to bring both the Lib Dems and Greens onside.  The former will be much easier—the seats which could swing yellow are easier to identify and are mostly Tory-held. There are few seats likely to swing Green—the mountain is too high to climb.  Here Starmer and the Labour Party should exhibit a quality all too rare in politics—generosity—and identify a few seats where Greens could possibly have a chance at winning and effectively step aside.  For the Green Party to go from 1 to even 3 or 4 seats would be an enormous boost for them, not much skin off the other’s noses, and probably good for the country (confession: I have a bias as a Green Party member).  In Scotland, there is no need for any deal or cooperation in advance of the election—the hard negotiating will come after the election is fought and the key issue will be obvious.  Starmer can take a view then on what is the practical and principled arrangement to be struck with the SNP.

If asked by political journalists they should just repeat two things: 1) “there is no deal”, and 2) “Isn’t it an affront to democracy that the 60%+ (or 70%) of voters who want a progressive Government are ignored by a system that is sustaining a right wing cabal whose only interest is their rich mates?”.  Or given the current preference for three word catch-phrases, “Represent the 60%”.  OK, maybe its technically four words, but at least it rhymes.

Starmer needs to be practical, principled, and courageous to become Prime Minister.  I think he can do it.  I think he will do it.  Given the outcome of the recent Labour conference, it is clear that the blockages of support within the party are disappearing. And if he moves towards PR, he will help to transform himself from being “that boring guy who lacks any charisma” to being “the bold PM who fundamentally reformed British politics and our democracy.”  I told you that I was in an optimistic mood 😊.

Rodney Schwartz

London, UK—27 September 2022

I started my career in mainstream finance and shifted into impact investing before returning to my lifelong passion of politics in early 2021. This blog reflects that return and is my way of sharing the impressions of someone journeying from “proper jobs” in the investment world back into education to study politics after four decades. For those interested in why I started this blog click here, and to read my declaration of known biases, click here. I welcome any comments.

[1] Politico.eu downloaded 27/09/22 at 13.50

[2] https://www.bbc.co.uk/news/election-2019-50779901  downloaded 16:50

[3] https://forwarddemocracy.com/swapmyvote/