A People’s Charter for Fair Voting

 

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Fair Voting

Changes in the way we vote operate on a geological scale in this country. The ‘40 shilling   franchise’, that gave the vote to all men in England and Wales who were property freeholders valued at or above 40 shillings, was introduced under Henry VI in 1430 and was not overturned until the ‘Great Reform Act’ of 1832, a wait of 402 years!

185 years’ later, on 30th October, 2017, there was a parliamentary debate in Westminster Hall on the merits of Proportional Representation. It was inspired by a public petition of one hundred thousand electronic signatures via email. Petitions to the King in England were introduced under the reign of Edward I around 1275, another ancient method. Yet, they were not commonly used by the general public on any large scale until the Chartists’ pursuit of the People’s Charter. After Peterloo, which will commemorate its 200th anniversary on 16th August, 2019, the Chartists attempted to gain universal suffrage with the 6 demands of the People’s Charter and brought forward several petitions to the House of Commons. These included millions of signatures, written on vast sheaves of paper and carried to the House of Commons by armies of volunteers that stretched several miles along the route to Parliament. These marches were major events in themselves, bringing out tens or hundreds of thousands of working people, waved on by large street crowds, still disenfranchised by the 1832 Act that gave the vote only to around 5% of the population (adding the capitalist class to the landowners). Each petition resulted in a debate in Parliament but, each was summarily dismissed by a ruling elite that would not relinquish power to those that they considered beneath them. The last Chartist Petition under their ‘leader’, Feargus O’Connor, was in 1848 and the cry for universal suffrage was defeated with no further extension to the vote until 1867.

Move forward 150 years and the result of the latest petition will, in the short term, be no change and no parliamentary debate on the floor of the House of Commons but the arguments for PR that were heard in Westminster Hall clearly outflanked those (mainly C/conservative) opponents.

It was not just the voting system but it is clear that democracy itself was being debated just as it was 200 years ago when Henry ‘Orator’ Hunt was speaking to a crowd of one hundred thousand in St Peter’s Fields in Manchester. The resultant charge of the Manchester and Salford Yeomanry that murdered around twenty and injured hundreds was named ‘Peterloo’ to resonate with the battle of Waterloo in 1815.

It is now ‘First Past the Post’ (FPTP) system that is on trial. FPTP has been our system for election to the Commons from at least 1430 but where, as the six demands of the People’s Charter of 1837 showed, democracy was only available to a few. In the 180 years after the People’s Charter was written, gradual changes have been made so that, once registered, every citizen of eighteen years and over has the right to vote in a local constituency, of which there are 650. The candidate with the most votes wins a constituency – a situation that remains the same as in 1832 (or even 1430) except that the votes are now by secret ballot. The winner of most ‘seats’ has a majority in the House of Commons. What could be wrong with that?

What is wrong is that ‘Winner-takes-all’, constituency-by-constituency, disenfranchises the vast majority of voters. The Electoral Reform Society calculated in 2015 that 74% of votes cast in the General Election were completely wasted as they are either votes for the losing party or votes for the winning party that exceeds the amount needed to win. Since I was first able to vote (at the 1974 General Election, when living in Manchester, when the Party I supported, the Liberals, gained 19.3% of the votes and only 13 seats!), I have not, at any General Election since, believed that my vote counted for anything – my preferred candidate has always lost! This is a form of disenfranchisement that results in reduced voter turnout, tactical voting that requires voters to vote for a second party to unseat their least favoured, protest voting in bye-elections and referendums (the Brexit vote has been viewed as, at least in part, such a protest) and a sense of voter irrelevance. So, despite having the ability to place a cross against a political party, the feeling is that the action is useless. At a time when the traditional two-party system is under siege, this results in the largest two parties obtaining government with lower votes than ever. It is a reason that Non-governmental organisations (NGO’s) are more popular than before because people believe that the political party system is not one where their vote counts and that pressure points have to be obtained through other means.

Of course, it is even worse than this because many of the individual constituencies are in areas where particular parties have had complete control for many years: Labour in inner-city heartlands, Tories in rural areas. Voting in these areas is akin to the rotten boroughs of the 1820’s so that anointed individuals take up their seats without the need to strive for election.

This leads to parties putting their efforts primarily in those constituencies that are properly contestable, where the luck of location means that more than one party has a chance of success. In these seats, just a change of a few percentage points can mean success. It can be easily argued that just a few thousand people in the whole country decide general elections. The fight for votes in the UK comes down to far less than 5% of the population, the situation that existed prior to 1832.

Of course, no system is perfect. The UK needs a system where every vote can count but there is a desire in this country to hang onto constituency representatives that work for that constituency. That entails a well-thought out plan for a form of proportional representation. The Jenkins Commission in 1997 produced a system that attempted to combine the benefits of constituency and proportionality but, after support from the Labour opposition, came to nothing when Labour gained power.

Will the UK ever achieve an improved form of democracy when those in power get there through FPTP? Is there enough pressure from the public that will drive politicians to proportional representation and change the system that has endured since 1430? Perhaps we need a charter for democracy in 2017. The People’s Charter of 1837 did not bring the Chartists universal suffrage but all except one of its demands (annual elections) have been met. What the People’s Charter did not envisage was that better forms of communication (even O’Connor’s Northern Star newspaper was no match for today’s online communication revolution) would engender the ability of so many viewpoints to be held and argued over that leads to the increased number of political parties. We now need a voting system that re-enfranchises all the people and also motivates people to become active participants in the election process.

 

We need a People’s Charter for Fair Voting.

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A People’s Charter for the Banks

 

In 1842, Feargus O’Connor led the working people of the United Kingdom into a general strike on behalf of the People’s Charter. The Chartists’ aim was for the House of Commons, then run by the elites of the landowning class plus some merchants and millowners after the 1832 reforms, to become more democratic. The six proposals were:

 

  1. A vote for every man over 21 years
  2. Secret ballots
  3. No land qualification for voters
  4. Payment for Members
  5. Equal constituencies
  6. Annual ballots

 

It took many years for the first five to be enacted and many more for women to achieve equality (something not even envisaged by the Chartists). The Chartists failed to drive change because the British economy continued to improve and the other motors for change (such as Trades Unions) were continuously provided with small (even if sometimes significant) improvements in factory conditions, better hours, better wages and the like. This meant that pressure for change in the way that the Chartists demanded were stifled by more practical changes that were seen to immediately impact the working classes.

 

However, the impact of elites continuing to run the country and ameliorated only by small improvements in conditions was (in hindsight) bound to result in extreme consequences. The First World War was a consequence of elites throughout Europe playing a game decidedly different to the vast majority of people and using them as mere playthings – whether in armies or in factories.

 

The BBC’s current six-parter, Tolstoy’s “War and Peace”, shows clearly who was in charge in 1805. That continued throughout Europe until 1918 at least after millions of lives were lost.

 

It may seem difficult to equate the financial crisis of 2007/8 and the consequences of that crisis to the class crises of the nineteenth century but the similarity of elites that are unwilling to give up any power over the economy remains. The elite may now be different (although bankers held great power in the nineteenth century as well) but the way that Banks and their allies in Governments in the UK (Conservative as well as Labour) see the rest of the country as mere playthings is no different.

 

A new film is about to hit the screens in London – “The Big Short”. Based on Michael Lewis’s book of the same name, published in 2010, it portrays the banking world in the USA as completely indifferent to the problems faced by society as they pursue their own, short-term gains and bonuses. Government is either unable or unwilling to address the problems because the banks are so important to the country – too big to fail – and also because most in Government do not understand what to do.

 

Just as the mill owners of the early nineteenth century were seen by landowners as a necessary partner for the future, Governments see bankers and banking in the UK as necessary for themselves. This means that they tolerate all but the very worst abuses.

 

The FCA – Financial Conduct Authority

 

The FCA is the organization that Parliament developed under the Financial Services and Markets Act 2000 to oversee the financial system. Part of its remit is:

 

The reduction of financial crime.

(1) The reduction of financial crime objective is: reducing the extent to which it is possible for a business carried on—

(a) by a regulated person, or

(b) in contravention of the general prohibition,

to be used for a purpose connected with financial crime.

(2) In considering that objective the Authority must, in particular, have regard to the desirability of—

(a) regulated persons being aware of the risk of their businesses being used in connection with the commission of financial crime;

(b) regulated persons taking appropriate measures (in relation to their administration and employment practices, the conduct of transactions by them and otherwise) to prevent financial crime, facilitate its detection and monitor its incidence;

(c) regulated persons devoting adequate resources to the matters mentioned in paragraph (b)

(3) “Financial crime” includes any offence involving—

(a) fraud or dishonesty;

(b) misconduct in, or misuse of information relating to, a financial market; or

(c) handling the proceeds of crime.

(4) “Offence” includes an act or omission which would be an offence if it had taken place in the United Kingdom.

(5) “Regulated person” means an authorised person, a recognised investment exchange or a recognised clearing house.

 

All this is within a framework of law that sits the financial community within itself. By this I mean that the regulator is charged with the above but only insofar that it does not harm banking competitiveness and so that the resources of the FCA are used efficiently under Section 2 of the law. While consumer information is called up in the law, there is no balancing of the “reduction” of financial crime against the needs of the consumer and nothing about how the financial system and banking in particular is to be used to benefit the overall British economy.

 

This means that the FCA is bound by rules that err on the side of the banking and financial fraternity – a financial brotherhood – and does nothing to impact the financialisation of the economy to which I referred in a previous blog.

 

Evidence of the ability of Government to “rebalance” the objectives of the law in favor of the banks is the recent decision of the FCA to shelve its report on the culture of banking and for it to work on an individual basis with banks (behind the scenes). As Michael Lewis’s book and the film so amply shows, culture is at the heart of the problem. The FCA’s step backwards under acting Head Tracey McDermott appears to be sold evidence of its inability under the current law to be effective on behalf of the British economy unless it has a leader within the FCA with enough integrity of his or her own to challenge the banks on behalf of all consumers and all those potentially impacted by wrongdoings of the banks – like Martin Wheatley. Ms McDermott is now no longer in the running for the Chief Executive position. Does anyone on the shortlist that Chancellor of the Exchequer, George Osbourne, has interviewed come up to those exacting standards: someone that has the integrity to see through the shortcomings of the Financial Services and Markets Act 2000 (FSMA 2000) and is able to bring the banks into line so that they serve the economy?

 

I doubt it as this Government has shown repeatedly that it is hell-bent on balancing the books at the expense of all else – even if that means allowing banks to keep the economy from re-balancing to an economy that uses banks and finance from one where the banks suck the rest dry.

 

This means that the law needs to change. It is so important that the UK is “de-financialised” (like an addict that needs to be properly drawn from drugs) that we should seek the FSMA 2000 to be brought up to date with a Charter for economic improvement so that, at the very least, the FCA has to minimize financial crime not just reduce it and so that, in any decisions it makes, the needs for economic well-being override the considerations in Section 2 that could lead to favouritism towards bank and those individuals within that system.

 

Because it has never been shown that a massive banking system does anything other than reduces the ability of other industries to survive because it raises exchange rates, raises property values, sucks the best people into it, restricts business loans because of short-terminism, pays for short-term advantage and (often) criminality at the expense of good business decisions and overly impresses economically uneducated civil servants and politicians with their results.

 

The lessons of an elite taking hold of an economy and leading it to disaster have not been learned. The lessons of 1842 that led to the First World War and the lessons of 2007/8 have been sidelined as this Government now has a majority in the first-past-the-post House of Commons (still undemocratic) and a Chancellor who has decided that bashing the banks has gone far enough. He has done this without any notion of economic objectivity whatsoever.

 

We now need a People’s Charter for Banking and De-financialisation – maybe just two elements to start with:

 

Change the Financial Services and Markets Act 2000 to:

 

  • Section 6 – Minimize criminal wrongdoing not “reduce”
  • Section 2 – Add an over-riding requirement so that any decision of the FCA has to show that it is taken in regard to overall economic well-being of the country not just to the financial industry.

 

Just like those that had been left out of the elite ruling classes of the 1830’s and 1840’s, those that are not allowed entry to the financialised sector, i.e. the mass of people – the British public, need to challenge how decision-making in that sector, now taking far too much of the British economy and with very disputed benefits to the mass of people (just like early capitalism) need to agitate for change.

In the 1840’s, the Chartists were successful only in bringing the issues of the working class to the attention of the ruling classes. They did not succeed in most of their demands. It took decades until those demands were met and eighty years before women were given the vote. This country still has a House of Lords and unrepresentative democracy in the Commons as a result of first-past-the-post: we are very conservative. Nevertheless, when British people have their backs to the wall, they react. The FCA is putting British people’s back to that financial wall by their inability to tackle banking as it should be tackled – at the centre. With a pending recession in the UK – in the midst of austerity – this is a dangerous situation. Time to make changes.