Sean O'Grady: Three-party politics is here to stay

Tories could usefully stop claiming that a hung parliament - already priced in by the markets - or a proportional voting system would lead to a sterling crisis

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To adapt Vince Cable's celebrated quip about Gordon Brown, Nick Clegg seems to have been transformed by the British press, in the space of just one week, from Churchill to Nazi. If you believed everything in the Tory papers you would have to conclude that the leader of Britain's centre party is a cross between Bernie Madoff and Josef Goebbels.

Even if you think the Cleggmania is overdone, and that he's not the Messiah, he's just a very naughty boy, and that his star will fall, this press criticism is looking plain silly: they've overdone it, frankly, and there may even be a bit of a backlash and some sympathy for Clegg, who looks like the victim of a media mugging. Lest we forget, this is simply what the Tories and their press allies have always gone in for when they've found themselves in a tight spot – personal assassination. It worked with Neil Kinnock and Michael Foot. This time, I suspect, it won't do them any good. Clegg's cleverer, a better politician, and has saner policies to sell than Labour did in the 1980s and early 1990s. He'll survive.

So three-party politics is here to stay, and we will all soon realise that our voting system can't cope with this, no more than those with a vested interest in the old two-party system can.

One of my favourite toys at the moment is the BBC website's election seat calculator. You just put in the latest polls or your own latest wishful thinking, and the BBC's number-cruncher will convert the parties' putative vote share into seats in the Commons. It shows, pretty graphically, that the present system is bonkers.

If each party gets 30 per cent of the vote – not an impossible outcome – with the Nationalists, Ulstermen and fringe parties making up the balance of 10 per cent, then Labour gets 315 seats, the Tories 206 and the Lib Dems end up with 100. The point about this is not one of fairness – though you may agree that our present system is far from democratic – but one of effectiveness. The system has an enormous, in-built Labour bias that has exaggerated the party's real popularity for the past couple of decades, but if Labour slump to such a poor ebb, then even this electoral system cannot deliver them into power totally securely.

The Tories need a lead of about nine points in the vote to scrape any sort of majority. So, messing about with the BBC's little game again, if the Tories recovered to 36 per cent of the vote, Labour was behind on 32 per cent and the Lib Dems back at 22 per cent, Labour would actually "win" the election, by 294 seats to the Tories' 268 and a block of 59 for Clegg. Even with the help of the Liberal Democrats, the Conservatives would only just secure a bare majority of one seat.

Actually, our electoral system hasn't worked for years, but its inadequacies were concealed by the fact that six of the past seven general elections – each since 1979 except 2005 – have been won by one party or another with a huge lead in votes. Even the supposedly close 1992 contest saw John Major open up a seven-point lead against Labour – far better than Cameron is likely to do this time. But he was rewarded with a majority of only 21 seats, which was soon denuded. By contrast, in 2005 Blair managed a majority of 66 with a lead of a mere three per cent.

First past the post, in other words, does deliver decisive, clear majority government – but only Labour ones. An outcome as nutty as this on 6 May – Labour third but with most seats – will do two things. First, there will be another wave of debate about electoral reform, just as there was when the system last malfunctioned badly, in 1983 and 1974. But this time there is an added ingredient – not just that the system is so manifestly unfair, but that it doesn't even do what it is supposed to do and deliver stable government.

Partly, it is the fact of multi-party politics – Greens, Ukip and the others as well as the Lib Dems spoiling the systems' ability to deliver – and partly it is that anti-Conservative bias, which is nothing much to do with the boundary commissioners but simply the way that the Tory vote is so inefficiently distributed, building up big majorities in very safe seats.

It is an accidental effect, and it happened to work the other way in the 1950s when there was a pro-Conservative bias in the system (in 1951 Labour won more votes but the Conservatives returned to power). Our voting system is crazy – but, worst of all, won't give us stability, or at least stable majority Conservative government.

The Conservatives could usefully stop claiming that a hung parliament or a proportional voting system would lead to a sterling crisis. We've had lots of those under governments of both parties, when they have enjoyed massive majorities; and the nation with the healthiest public finances in Europe is Germany, where coalition building is a way of life. Capital Economics says that the markets have "priced in" a hung parliament now, and are calmer about the idea.

This brings me to the second consequence – the Tories embracing electoral reform. Impossible? Until now they have been adamant that our voting system is a glory of the British constitution. They might feel rather differently on 7 May, when the system will have robbed them of their best chance of power in many years. David Cameron could easily argue that in the unprecedented situation – at least unprecedented since the 1920s, when it also broke down badly – the time has come for change on voting, as on much else.

That would also enable him to do a deal with Nick Clegg. A Lib-Con arrangement of some kind would not be ideal from the point of view of many Lib Dems, who have spent their entire political lives resisting the forces of Conservatism; but an agreed economic programme, seats in Cabinet, and a promise of electoral reform would be hard for the Lib Dems to say no to. For many Liberal Democrats it wouldn't be a very liberal sort of government, but it would be arguably more democratic than putting Gordon Brown in for five more years. But, like Lord Adonis, I'm just not sure quite where it leaves progressive politics.

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