Archive for June, 2004


Monday Call – June 21 2004

Monday, June 21st, 2004


    “LAB 359: CON 198” – Is it really so bad for Michael Howard?

Our longstanding call on Labour to win most seats at the General Election and the huge mountain that Michael Howard has to climb are, on the face of it, reinforced by this latest General Election prediction by City financial mathematician, Martin Baxter.

LAB 33.22% (-8.87%): CON 32.46% (-0.24%): LIBD 20.77% (+1.93%)
This gives the following Commons seats-
LAB 359 (-44): CON 198 (+33): LIBD 58 (+7)
Overall Labour Majority of 72.

Baxter’s predictions are based on the main opinion polls which, as he points our in a new analysis on his site, have historically been BIASED TOWARDS LABOUR. These are his bias figures for the past three General Elections.

1992 General Election. Opinion Polls bias to Labour 9.5%
1997 General Election. Opinion Polls bias to Labour 3.5%
2001 General Election. Opinion Polls bias to Labour 6.5%
Average opinion poll bias to Labour in the last three General Elections – 6.5%

In terms of the election result the bias only mattered in 1992 when not one single poll predicted a Tory lead and John Major’s Government was returned. In 1997 and 2001 the polling errors were obscured by the Westminster seat distribution which is in Labour’s favour.

Thus in the Baxter projection above Blair wins easily with 161 more seats than the Tories for less than one per cent more votes. This could untangle to some extent if there are different swings in different parts of the country – as happened in this month’s local elections where Labour was losing to the Tories in the south and to the Lib Dems in the north.

Since 2001 YouGov has been carrying out the monthly poll for the Daily Telegraph using the internet and this has tended to show a better, and probably more accurate, position for the Tories in relation to Labour. YouGov appears to be less good with the Lib Dems and UKIP. But in this month’s Euro elections, when it was possible to test polls against real results, even YouGov had a 2.1% bias towards Labour.

    If it gets close what could make calling the General Election really tricky is that as well as factoring in the pollsters’ anti-Tory bias and the Westminsters seat distribution we’ll need to make assumptions about different regional swings and the possibility of some anti-Tory tactical voting unwinding.

Because of the in-built factors “close” here means consistent Tory polls leads of 6% or more – and we are a long way from that point. Our call remains – BACK LABOUR.

Our other main calls remain:-

BUY Lib Dem in the General Election spread markets because we believe the party will get more than the 58 seats – the current spread position. This is the figure in the Baxter prediction which, interestingly, has two thirds of the party’s projected “gains” from Labour, not the Tories.

DON’T BET against Tony Blair, Michael Howard or Charles Kennedy in the various party leader markets. We believe that they will all be the leaders of their parties on election day.

We believe that the election will be held on the first Thursday in May 2005 – 05/05/05.

DON’T BET on the outcome of the UK Euro Constitution Referendum. We do not know when the vote will be held and this could be in 2006. Current prices offer no value either way.

BET on John Kerry to be the next US President. Prices have now eased above 2 as Bush has recovered a bit in the polls.

2012 Olympic City. If you want to bet on London do not use a UK bookmaker which have it as second favourite of the five cities still being considered. The international betting prices, through Tradesports, has London second from bottom at double the odds.

NOTE: When we make a call we are stating that we believe that the chances of something happening are better than the odds that are available. All prices quoted are as at time of posting. We endeavour to ensure that material is accurate when posted. However can accept no respnsiblity for the information on the site or opinions expressed. Users make bets entirely at their own risk.


Polls show big opposition to Euro Constitution Referendum

Sunday, June 20th, 2004

Post Updated Sunday – 0530
eu flag

    But be careful about rushing in to bet

Unsurprisingly two opinion polls this morning show that a big majority of UK voters would vote NO in the planned referendum on the EU Constitution that was agreed in Brussels on Friday. YouGov for the Sunday Times has 23% in favour to 49% against. An ICM poll, commissioned by the non-party NO campaign, has 28% in favour to 57% against.

    But political gamblers should be very wary about puting up money at this stage. Six months ahead of the 1975 referendum on whether the UK should stay or leave the EEC the polls were showing big support for the NO position. Yet by the time it came to the actual election 67.5% voted to stay in.

Just one bookmaker has a market at the moment which is very much in line with the polls. We expect other bookmakers to follow as this become a bigger issue.

The prices are:- YES 2.62: NO 1.44. Thus if you bet £100 on it being rejected and it was you would receive back £144, including your stake. A successful £100 YES bet would produce £262 including your stake.

The main problem with betting on this at the moment it that you do not know when the vote will take place or what the question will be – and this proved to be critical in 1975. You could be locking up your money for at least a year and a lot can happen in the intervening period.

These long-term political markets are fine if you are convinced that the prices will move substantially one way or the other. In this case neither the YES or NO odds seem to be particularly attractive and we would suggest, at the minimum, waiting for other bookmakers to come into the market. It would also be good if one of the betting exchanges came in though, until some of the key political issues are settled, there would be little liquidity in the market.



Our Mayor Call – we should have looked at London’s bus figures

Friday, June 18th, 2004

A week on from the London Mayoral Election and our abortive call you cannot but admire what an extraordinary politician Ken Livingstone is.

Looking at the results again the striking feature is that more than a third of all those who gave Ken their first preference did not vote Labour in the London Assembly election at the same time. They were voting for the man and not the party.

    To work out why all you have to do is get on a London bus.

While all the media focus has been on the congestion charge it’s easy to ignore the transport revolution that’s having a huge impact on Londoners – the transformation of London bus services that have become cheaper, faster, more comfortable, more regular and much more convenient to use. This is being funded by the planned revenue from the charge and Ken has been getting the credit.

    New fast services, the new comfortable “Bendy Buses” and a whole new approach to ticketing and bus infrastucture have boosted bus usage to upto 6 million trips a day – an increase of 31% since Ken was first elected.

Achieving this has cost an enormous amount and many in the Capital believe that London is better for it. Ken is popular because many believe he’s made the capital a better place to be – and we misjudged the impact.

All our thinking had been based on the view that Tories and Lib Dems would find it much harder to vote for Ken as Labour candidate than as in 2000 when he stood as an independent. In the end almost the same proportion of Tories who went with Ken last time made the same mayoral choice this time. .

But the level of voters switching party for Mayor has left Ken with an enormous headache as he seeks to lead London. The part of our call that proved to be 100% accurate was the huge increase for the Tories in the Assembly election. This has now elected a Tory chairman , who is very pro-motorist, and Ken has got some battles ahead.


Ignore the “rubbishing” of YouGov

Friday, June 18th, 2004

sheerman Labour’s Barry Sheerman

Polititcal gamblers should ignore what appears to be a concerted campaign, that includes Downing Street, to rubbish YouGov, the internet company that this week proved itself to be the UK’s most accurate polling company.

Only two of the four organisations that regularly look at voting intention in the UK carried out surveys ahead of the European elections, the results of which came out on Sunday and Monday. One was Populus that uses conventional methodology – the other YouGov that carries out all its work on the Internet. Given the difficulties of polling a low turnout election both did a reasonable job but there is no doubt that YouGov was the clear winner.

The eventual order of the parties was 1. CON: 2 LAB: 3 UKIP 4 LIBD which is precisely what YouGov had predicted. Populus , by contrast, had 1 LAB: 2 CON: 3 LIBD: 4 UKIP. YouGov 4 Populus 0.

    Almost since it started YouGov has been accused of over-stating the Tories. In the real test against real votes last week YouGov’s Tory prediction actually put them 0.7% below what they got. For Labour YouGov over-shot by 1.4%. These are pretty good results in which those who bet on elections can feel some confidence.

Populus, meanwhile understated the Tories by 2.7% and over-shot with Labour by 2.9% – not a bad performance but not as good as the internet pollster.

The biggest deviation for both pollsters was with UKIP. YouGov had 21% against an actual 16.1% – Populus had them at 13%. It is this that those who are gunning for YouGov are focussing on.

The leading Labour MP, Barry Sheerman (above), is quoted as saying – “The online poll organisations are a worry because they do not seem to show how they balance their polling methods – only 50% of people are online, how do they account for the other 50%? What is the mechanism, is it trustworthy?”

    Perhaps he ought to be asking why the telephone pollsters have to make six phone calls for each person they find to interview. Does not this restrict conventional surveys to just those with landlines who happen to be in when the polling firm calls? Does not that distort the sample?

Also joining the bandwagon is Lib Dem Campaign guru and CEO, Lord Chris Rennard, who said”We believe that internet polling has consistently overstated the Conservatives and understated the Liberal Democrats. We believe that may have had a decisive influence on the London mayoral contest.” That’s fine except – YouGov predicted that Simon Hughes would get 18% – he actually got 15%.

The Lib Dem strategy in London was to get Hughes seen as the only alternative to Ken in the hope of attracting Tory switchers. Hughes would then make it on 2nd prefs. This is standard Lib Dem campaigning – get the party seen as the challenger. At one stage they were quoting out of date betting odds to reinforce this. The polls, mostly YouGov, put paid to that strategy.

Behind all of this is the devastating fact, proven by the Euro elections, that far from inflating the Tory shares and under-estimating Labour – the opposite has been the case. YouGov’s pretty accurate prediction of the Tory and Labour shares in the Euro vote is dynamite. No other polling organisation can point to passing such an harsh test and, almost without exception, the other pollsters have been putting Labour in a better position than YouGov.

The General Election spread-betting markets which are totally sensitive to opinion poll changes are unmoved.


What would have happened if June 10th had been the General Election?

Thursday, June 17th, 2004


    How Labour’s 22.6% Euro votes would have produced 300 Westminster seats

For several months we’ve been warning political gamblers about the risks of backing the Conservatives for the General Election because the way that Westminster seats are distributed means that the system is skewed towards Labour. With the rise of non-traditional parties such as UKIP this bias has become even more acute.

    It’s now possible for Labour to be 9% behind on votes and end up with more MPs.

Nothing better illustrates this better than applying the vote shares achieved in last week’s European Elections to a General Election – assuming a uniform national swing across the country.

To demonstrate how votes relate to seat we normally use Martin Baxter’s calculator which has now been revised to deal with Labour shares down to 25%. But unfortunately this does not allow a Labour share of 22.6% which is what Tony Blair’s party got last week. For this we’ve used Anthony’s Wells’s online election predictor which calculates which party would have won each of the 646 seats in the next House of Commons for whatever vote shares you want to test. The figures from Thursday’s European elections were:-

CON 26.7: LAB 22.6: UKIP 16.1: LIBD 14.9: GRN 6.3

This produced a House of Commons made up as follows:-

LAB 300: CON 248: LIBD 62 Others 34

Thus in spite of coming in second place with substantially less than a quarter of the votes cast Labour would have 52 more seats than the Conservatives and be just 24 seats from an overall Commons majority. We do this simply to demonstrate how skewed the seat distribution is and to emphasise how difficult it is for any party other than Labour to come out on top.

The pro-Labour bias shows up even more by inputting the vote shares from Thursday’s local elections which had-

CON 38: LIBD 29: LAB 26

This produces a House of Commons made up as follows

CON 292: LAB 240: LIBD 80: Others 32

Thus in spite of coming in second place and being 3% ahead of Labour the Lib Dems would be miles behind with barely a third of the number MPs that Labour would have achieved.

Of course Thursday was not a General Election but applying the figures to the seat distribution shows dramatically how diffifcult it is for the Tories and, even more, the Lib Dems to get secure a fair number of seats for votes cast. No wonder the party is such a supporter of proportional representation and it’s no wonder why Labour dragged its feet on the issue.

There is a real possibility that the next General Election will be won by the party in second place on votes as happened in 1951 when Labour lost power. At least then the parties were within a fraction of one per cent of each other. The difference now is the scale of what could happen that could make the rows over the result of US Election in 2000 look tame.


Can the Lib Dems win 6 seats or more?

Wednesday, June 16th, 2004

lib dem 2001
This 2001 General Election poster seeks to address a big problem for the Lib Dems – that of credibility. Electors might be attracted by the policy platform, they might give them a try at a local level as 29% did last Thursday, but at a General Election many do not believe they can win in a particular seat and see the Lib Dems as a “wasted vote”.

    But performances like this year’s local elections might start to change perceptions, especially as they are showing that they can challenge Labour in its heartlands. Could a bet on the LibDem performance at the next election be a smart and profitable move?

The party is rigorous at putting its entire focus on existing and target seats and this will pay dividends. At the next election we believe that they will:-

  • hold on to almost all the 52 seats they won last time because the very fact of them having a sitting MP takes away the “wasted vote” issue
  • have some problems making further serious inroads in Tory seats
  • pick up more than a few Labour seats – particuarly where their local government position gives them a crediblity
  • hold on to Brent East and Leicester South – if indeed they do take that in the coming by-election
  • The problems is where do you bet. Even the most bullish LibD optimists do not believe they can end up as top party even though odds of 80-90 might seem attractive. You can get 20+ on the LDs winning the second most seats but in spite of beating Labour for this position on Thursday it’s hard to make a case that this is achievable.

    But you can bet on the total number of seats – and the target has got lower following the market reaction to the Euro elections. This is on the spread betting market. Currently the Lib Dem “spread” is 53-58 seats. This means that if you BUY at, say ?10 a seat and they end up with 78 seats then you would win 20 times your stake – ?200. But if they just finished with 48 seats you would lose ten times your stake – ?100.

    To get to the current 58 seat BUY level the party needs to get just 6 more seats than it won at the 2001 General Election. With spread betting the more you are right the more you win. Conversely the more you are wrong the more you lose. Spread betting can be very expensive and normally we do not this form of betting because of the risks. But in this case it’s hard to envisage the party getting less than 40-45 seats even if there’s a huge Tory recovery. That’s the down-side. On the up-side the potential for 58 or more looks good.

    We think that this is a good bet.

    BIAS CHECK: Although I strive to be objective when I make a call users should be aware that I am a Lib Dem and ran for Parliament in 1992. I supported Simon Hughes for the Lib Dem leadership – Mike Smithson



    Labour leadership price wobble after Blair health scare

    Wednesday, June 16th, 2004

    The price on Tony Blair being Labour leader at the General election dropped nearly a third in the aftermath of yesterday’s press conference when he appeared to look unwell.

    Prior to yesterday the Blair price had been trading at about 1.6. In the immediate period afterwards it went to touch 1.8 and has now settled down at about 1.68.

    For those not familiar with this form of pricing it means that if you had £100 at 1.6 you would receive your stake back plus £60 if Tony Blair is still there at the General Election. When the market rose to 1.8 bets placed at that level would bring a return of £80 plus the stake if he was still there. So when we say the price moved by a third we mean that your winnings would be a third higher.

    Inevitably this sort of market is going to focus on the health of the leaders involved as well as the politics. In addition the “Still Party Leaders” market which lists a number of options that were relevant in October 2003 also saw some movement.

    The most stable party leader market is on Michael Howard although you can still get 1.1 which seems good value given there is almost no political risk. Thus if you bet £100 you would receive £110 back, including your stake, at the General Election.


    What did “Super Thursday” mean for the General Election?

    Tuesday, June 15th, 2004

    big ben

      Are the spread gamblers reading it wrongly?

    Either spread gamblers or the spread bookmakers seem to have concluded that Super Thursday was better for Labour than the Tories or Lib Dems and prices have moved Labour’s way.

    LAB 328-338 (+5)
    CON 240-250 (-3)
    LIB 53-58 (-2)

    Although our General Election CALL remains with Labour this was not reinforced by Thursday’s elections and we think that the spread markets are reacting wrongly. The Lib Dem spread seems to offer good value as a BUY – this is the first time we have made a call on General Election spread betting. The main General Election market is stable. So what is there to learn, if anything, from the local, London and Euro elections?

    Voters cast their ballots differently in domestic and European elections. If the results from Thursday had been announced the other way round, the locals coming after the Euros, commentators would now be dismissing the UKIP element and talking, instead of the good Lib Dem and Tory performances. General Elections are usually decided on UK rather than international issues so the local results are probably more significant. UKIP has got a boost and will do better than the 1.5% it got in 2001 – but today’s ICM poll has it at just 4%.

    We can have reasonable confidence in YouGov’s ability to measure the Tory-Labour split. The Euro Election against was the first time that we have been able to test the new and controversial internet pollster,YouGov, in a fully national election since it took over the regular monthly General Election polls for the Daily Telegraph. YouGov failed badly with its huge prediction for UKIP and under-shot with the Lib Dems. In terms of measuring the difference between Labour and the Conservatives it came out pretty well. It underestimated the Tories by 0.7% and over-estimated Labour by 1.4% – a useful fact to bear in mind when assessing today’s ICM poll showing Labour at 34 and the Tories at 31. The last YouGov General Election poll, taken on Thursday, had the Tories 4% ahead.

    Tory supporters will vote tactically to get rid of Labour. At the very minimum we would expect to see some “unwinding” of the anti-Tory tactical voting that lost 24-35 Tory seats in 1997 and which stayed lost four years later. In many of the big cities, traditional Labour heartland, Tories switched to Lib Dem in the locals to get Labour out. This gives the party a good platform to campaign for tactical anti-Labour votes at the General Election. The coming Leicester South by-election will be a good test of this.

    All-postal voting can give Labour an extra 5%. In a low-turnout election there was a measured boost for Labour. How much of this would there be in a high-turnout General Election? There probably would be an impact but on a much lower scale. The fact the postal voting did benefit Labour so much means there’s going to be a huge political debate with the Tories and LDs highlighting where it went wrong.

    POLITICALBETTING.COM’s PREDICTION – SPOT ON. Because there were no markets on the Euro Elections we did not make a forecast here. However on another site’s, Mike Smithson, published the following prediction last Tuesday – “I think that UKIP will get 17%. The Tories will get 3-4% more than Labour and the Lib Dems will get 14-15%”. This proved to be almost precisely right in every respect – though it’s no consolation for those who followed the Mayor market call!