Peter Kellner: 10 out of 10 hacks really envy him

How do pollsters know whether the people they poll are telling the truth? Peter Kellner, the former political journalist who is now chairman of the fast-expanding internet pollster YouGov, has an unexpected answer.

It is a well known problem in face-to-face political polling that respondents will claim they voted Labour when they did not. If they support the British National Party, they will not admit it. They will claim to be in favour of extra taxes to improve health and education services when they would rather trouser the money. They give the answer they think their interviewer expects of them, rather than the truth.

Kellner believes that respondents are more truthful when replying on line. In the privacy of their homes, typing on to a computer screen rather than speaking to a human, people will reply with an unembarrassed honesty.

Sex polls are perhaps the most relevant case in point. "We don't do many sex surveys," Kellner explains, "but we have done a few. In one we ended up asking people to describe their sexual fantasy. We gave people the opportunity to drop out, but very few did, and when you read them you knew this was the authentic voice of a lot of people."

Evidently, YouGov's big corporate customers - who include Barclays Bank, British Gas, Carphone Warehouse and HSBC - have been convinced of the authenticity of what they hear from YouGov. Last week, the pollster astonished the City by announcing its pre-tax profits had soared to £4.1m, from £1m the previous year, on sales of £9.5m.

Its success relies on being able to poll a very large of people very cheaply, because it is all done online with a small payment - usually £5 a poll - to everyone who takes part. Their total panel is large enough for YouGov to use its database to find an adequate sample of people who - for instance - use a particular brand of cosmetic.

Kellner's career path confounds those who assume that a left-wing journalist could not preside over an expanding, multi-million pound business. In the 1980s and 1990s he was a full-time political commentator, with his allegiance to the social democratic wing of the Labour Party emblazoned on his sleeve. He first rose to prominence as political editor of the New Statesman. He still has a very public vested interest in the survival of the Labour government in the person of his wife, Baroness Ashton of Upholland, a minister in the Department for Constitutional Affairs.

He admits it might cause him pain if at the climax of a tightly fought general election, YouGov produced the one poll that might encourage voters to move over to the Conservatives, but believes - or hopes - that professional scrupulousness would get the better of personal loyalty.

There is, of course, the question of whether his wife will hold on to her job when the current Prime Minister moves on. Is she a Brownite? "I never discuss Cathy's politics or role in government" is the only answer he will give to that.

Kellner made a career change four years ago by becoming the "semi-executive" chairman of YouGov, then a new company with a staff of eight. Now it has 40 in the UK - working out of a first-floor office in Smithfield, London - and 20 more in Dubai, running a Middle East operation.

Kellner announced in last week's chairman's statement that he will soon be moving over to a new post as non-executive president while the company looks for an executive chairman. This will give him more time to concentrate on his specialist areas, such as the political polls.

These polls account for only 10 per cent of YouGov's UK turnover - 5 per cent of overall total - but they are what makes the company famous. An accurate forecast of an election result brings a great deal of free, favourable publicity. With an upcoming election in mind, YouGov is building a database of trade union members, a hard-to-reach group who make up a third of the electoral college in a Labour leadership election. The last time the party elected a leader, in 1994, no polling company had the resources to conduct a poll.

But calling an election wrongly - as when YouGov forecast in 2004 that John Kerry would beat George Bush by 3 per cent - brings the wrong sort of publicity. "We were at the edge of sampling error," Kellner says. "It was not our finest hour. The Republican right was just more effective than we realised in getting its vote out."

Embarrassments like that make it vital to the business that they read the views of the voters correctly, and that depends on finding an accurate sample. As a commentator in the 1980s, Kellner took to task the new polling companies that conducted surveys by telephone rather than face-to-face for overstating the Liberal vote, at Labour's expense, by failing to allow for the proportion of Labour voters who had no telephones. Those who remembered his words were a little surprised to find him reincarnated as an internet pollster, a business without access to 40 per cent of the population.

"The early telephone polls didn't adequately compensate for people who had no phones," he says. "We acknowledge that we have a task on our hands to make the 60 per cent who do have internet access look like the 100 per cent, and I would say we do that successfully.

"These days a great many grandparents are on the internet. They keep in touch with their grandchildren, and as you become less mobile it's a window of contact in your own home. The elderly were the last to take up the telephone, but once they got it, it became a lifeline. Something of the same thing is happening with the internet."

Only 8,000 of YouGov's 116,000 panel members are over 65, which means that the senior end of the population is underrepresented. There's a particular shortage of elderly working-class women. High-earners are also better represented than those on income support. But Kellner believes there are enough people from every section and age group to allow YouGov to construct proper samples for every poll. And at a much lower cost.

"Almost everything we do could be done conventionally. But it would be fantastically expensive. If you poll 10,000 people you should be able to find 600 trade union members who pay the political levy, who you can then poll, so anybody can do that. But there aren't any clients I know of who would be willing to pay the cost."

Kellner now has money in much greater quantity than if he had stuck to political commentaries. His shares in YouGov alone are worth well over £1m, but like a lot of well-paid people, he is coy about his wealth, going off at a tangent when quizzed about how many times over he now qualifies as a millionaire.

"I once read that when Dominic Lawson was editing The Sunday Telegraph he banned the use of the word millionaire because, he said, 'we're all millionaires now'. And if you take into account the value of your house and your pension fund, yes, most of us are millionaires - I mean 'we' as London journalists, not the general public," Kellner claims. "Am I well off? Yes, but, Andy, I'm somewhat nearer you than I am Bill Gates."