In 1917 Allan was elected to the Victorian Legislative Assembly as VFU member for Rodney, a district centred on Echuca.

In 1921 Allan withdrew his support from the Nationalist government of Harry Lawson, over the issue of abolishing the state-run wheat-marketing system which had been introduced during World War I, and which benefited small farmers by keeping wheat prices high.

The result was a bitter state election in which the Nationalists won 31 seats, Labor 21 and the Country Party 12.

Attempts by both Labor and Nationalists to reduce the over-representation of country areas were resisted by Allan and blocked by the Legislative Council.

A 1928 oil portrait of Allan by artist Aileen Dent hangs in the Victorian Parliament House.