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The process of electoral reform had been started by the Alliance government after the United Kingdom general election, 1993. During the 1980s, the rise of the Alliance had caused the existing to system to produce anomalous results. In the 1984 general election, Labour had won nearly five times as many seats as the Alliance despite receiving 1.3 million less votes.
In the two referenda of 1994, 60.9% of voters voted in favour of changing the system, while STV was nominated as a replacement voting system. Keeping in line with their plan from the 1993 general election, the government then scheduled a second referendum to take place alongside the 1995 local elections. Even though electoral reform had been overwhelmingly endorsed the previous year, the government of Jeremy Ashdown knew that they would face a harder battle to persuade voters to adopt the second referendum.
The Yes to Fair Votes campaign was supported by the following organisations and figures:
- The Liberal Party
- The Social Democratic Party
- The Labour Party
- The Scottish National Party
- The Plaid Cymru
- The SDLP and Alliance in Northern Ireland
- The Guardian
- The Independent
- The Times
- Daily Mirror
- Financial Times
- The Economist
- Morning Star
- New Statesman
- The Electoral Reform Society
- Former Prime Ministers Edward Heath and James Callaghan
The political left were united in support of the campaign. Since the Alliance victory in 1993, the Labour Party and its supporters feared they would become marginalized if the voting system was not reformed. In addition, there was support from centrists and even a few right-wing organisations. Former Prime Minister Edward Heath went against the rest of the Conservatives by endorsing a "Yes" vote.
Although Ashdown was fearful of being "buried" by an onslaught of anti-STV campaigning from the press, several print media sources endorsed the campaign. These included left-leaning The Guardian and Daily Mirror and the market liberal Financial Times and Economist. Despite its traditional of being politically neutral, The Independent endorsed the campaign in an editorial that argued "as a newspaper which is free of political influence, we endorse this campaign, because this referendum is worth more than any general election."
Another surprise endorsement came from The Times, which had previously been a staunchly conservative newspaper until 1993. An editorial argued that the Conservatives had taken a "wrong turn" in opposed the campaign and that a Liberal-SDP-Labour electoral alliance (which had been proposed by SDP leader Tony Blair) would marginalize them even further. The far-left Morning Star also supported the campaign on the ground that it would be easier to get communist candidates elected.
The Say No to STV campaign was supported by the following organisations and figures:
- The Conservative Party
- The UUP and DUP in Northern Ireland
- Daily Telegraph
- The Sun
- Daily Mail
- Daily Express
- London Evening Standard
- The Spectator
- Former Prime Minister Margaret Thatcher
The "No" campaign was supported by most of the print media. The campaign was also able to mobilise many right-wing voters who opposed the reforms, but struggled to win over support from left-wing or centrist voters. The primary reason but forward by the "No" campaign for opposed the system was that it would lead to the country being ruled by unstable coalition governments and "permanent dominance" of the Alliance. Ashdown responded to the argument that the Alliance wanted to introduce STV for partisan reasons by pointing out that their landslide victory in 1993 would not have happened under a proportional system. Others took the opposite tack, criticizing Ashdown for proposing a system that would weaken his own party. Margaret Thatcher suggested he was "shooting the Alliance in the foot."
Around the time that the referendum date was announced on 4 November 1994, polls showed that the yes campaign was leading in the polls by a 20-point margin, while 25% of voters were undecided. In the run-up to the election, this lead decreased rapidly to as little as 4-points, as the "No" campaign began mobilizing their support. However, the "Yes" campaign retained their consistent lead.
The result of the referendum was that 54.6% of voters backed the change, while 45.4% voted against it. Turnout was 57.4%. As a result, the new voting system was adopted and first employed in the 1997 general election and every subsequent election. In 2010, a referendum was held on whether to change the voting system back but 63.4% of voters voted against the proposal.