Business leaders make the case for electoral reform

We saw a significant intervention in the debate around electoral reform last week. More than 20 business leaders, including the chairman of the Virgin Group, Peter Norris, called for Westminster to scrap the failing First Past the Post voting system after the political chaos it has contributed to in recent years.

The letter to the Financial Times, which can be read in full below, argued that aside from the ‘carousel of prime ministers’ the country has endured, it is the ‘see-saw of policies’ that has hindered the UK’s economic prospects and performance. The business leaders warn that the accompanying political uncertainty has damaged business confidence and companies’ willingness to invest in the UK.

It is not hard to see how these problems track closely to the volatility being amplified by the stuttering electoral system at Westminster. We now have a two-party system trying to deal with five and six-party politics, and it simply cannot cope. We saw this at the last election, where the Labour Party took 63% of the seats in Parliament on just 34% of the vote. This was the most disproportional electoral result in British history – in laymen’s terms, this Parliament is the most unrepresentative of the way the country voted of any.

We could see an even more distorted result at the next election

However, the next election is shaping up to be little different as now five parties are polling regularly over 10%, risking an even more distorted result under First Past the Post. Current polls suggest we could plausibly see a party take a majority on 30% or get just short on not much less of the vote. The risk is that the seats parties receive bares less and less resemblance to the votes the public gives them.

These facts alone make a formidable case for reforming the voting system to one that properly reflects how people voted. Yet, the letter from the Democracy4Growth group highlights that the political volatility our dysfunctional electoral system is amplifying is having real-world consequences far beyond election day.

The result is that senior business leaders have now concluded that the distorting and misfiring Westminster electoral system is not good for business and economic growth and that “an electoral system that truly represents the electorate will be good for business, good for politics, and good for the British people”.

Do you think that the political chaos produced by First Past the Post is holding back growth? Add your name

Published in the Financial Times, 16th January 2026

Your leader “Britain’s prime ministerial carousel” (The FT View, January 6) notes: “It is hard to argue that this era of politics as blood sport serves the electorate. It can only deter investment and hiring as businesses wait to see what economic policies the next change will bring. It acts against long-term planning and implementation.”

We believe that it is not so much the “carousel” of prime ministers that is the problem, as the see-saw of policies, which is supported by our out of date and profoundly inequitable voting system. We consider that the electoral system no longer serves the interests of UK business in generating growth.

In today’s challenging world, economic success requires a positive partnership between government and business. And it is business that provides the basis for the prosperity of the country and of its citizens.

In the next general election we face the prospect of up to six parties fielding candidates, each party with wildly different ideologies, many ignoring long-term practical solutions, each striving to pass the post first. Whoever wins a majority of parliamentary seats, from perhaps fewer than 30 per cent of votes cast, and therefore the support of only a minority of the eligible electorate, in effect gains 100 per cent of the power and will probably force another ideological swing.

The UK’s consequent short-termist and unpredictable policies actively damage business confidence, creating the hesitancy to invest and discouraging the long-term planning your leader describes. Almost all of the countries with which the UK directly competes for inward investment (many with a higher GDP per capita) have stable consensus politics whose governments are formed by a coalition: as a British business leader recently noted, coalition governments foster a greater sense of cross-party agreement around big issues, “which means business can plan in budget cycles of five years and beyond”.

An electoral system that truly represents the electorate will be good for business, good for politics, and good for the British people, whether employed or not, and whether working in the public sector or dealing with the demands of commerce.

 Signed in a personal capacity:

•  Peter Norris: Chairman, Virgin Group
• Andrew Dixon: Director, ARC InterCapital Ltd
• Hugh Lenon: Senior Advisor, Phoenix Equity Partners
• Stephen Larkin: CEO, Africa New Energies Ltd
• Sean Hanafin: CEO, Silver Birch Finance
• Tilly McAuliffe: Owner, Director, Think Publishing Ltd
• Tracey-Ann Ginger: Managing Director, The Thrive Hive Talent Group Ltd
• David Barbour: CIO, Pallant Capital
• Geoff Eaton: Former Chairman, BPC
• Mike Harris: Founder, Cribstone Strategic Macro
• Alice Lankester: Director, Lankester Engineering
• Mark Petterson: Director, Warwick Energy Ltd
• Ash Nehru: Founder, Disguise Ltd
• Andy Parker: Managing Director, Elusive Brewing
• Frank McKenna: CEO & Group Chairman, Downtown in Business Ltd
• Pim Piers: NED, Palatine Growth Credit
• Sarah Walker-Smith: CEO, Ampa Group
• Ahmed Hindawi: CEO & Chairman, Nagwa
• Elizabeth Price: Co-founder, Carbon Re
• Naomi Smith: Co-Founder and Director, Cooler Heads Limited
• David Tarsh: Managing Director, Tarsh Consulting
• Roger Ward: Director, Applied Image Technology International Ltd