Archive for August, 2004


Monday Call – August 16 2004 [next planned update Wednesday]

Monday, August 16th, 2004


    Hartlepool – Can Labour hold on?

9am update
Campaigning has started in earnest for the Hartlepool by-election and Politicalbetting has urged William Hill to make a market available on-line ASAP. The date has yet to be fixed but already the contest is attracting more media interest than last month’s two contests and we expect this to be reflected in the betting activity. These are the ’01 party shares together with GE predictions from Martin Baxter based on his latest “poll of polls”.

LAB 59.1 (46.2) : CON 20.9 (20.2): LIBD 15.0 (21.3) : OTH 5.9 (12.4) : MAJ 38.3 (24.9)

The vote shares from the all-postal local elections in the seat in June were:-

LAB 36: LD 27: CON 13: UKIP 8

We called Leicester South for the Lib Dems even before the markets opened with the party at 11/8 but we had reservations about their prospects in Hodge Hill. We were right on both. The following are our assessments for Hartlepool.

Labour have got off to a faltering start after having to replace controversial Midlands MP, Tom Watson, as campaign manager whose main strategy was to try to “demonise” the LD candidate for the job she does just as he did in Hodge Hill. He accused, Jody Dunn, of “ making excuses for junkies” because, as a barrister, she represented them in court. Clearly party bosses saw that denouncing a lawyer for defending a client could be taking Labour into dangerous territory. Although party “spinners” said the change was “planned all along” there’s no question from reading Watson’s blog that he was going to be in Hartlepool for the duration. Chances of winning 45%.

The Conservatives. Even though they were second to Peter Mandelson in 2001 we don’t think they’ve a chance and look certain, as in July’s contests, to slip into third place. In spite of the Labour “spinning” last month their vote mostly held up but the last time they had a by-election gain was in the rarefied political atmosphere of the Falklands war in June 1982. Since then there’ve been 5 General Elections three of which they won. They have no by-election form. Their only plus point from Hartlepool is that it’s opened up divisions in UKIP which could help their overall national rating. Chances of winning 5%.

The Lib Dems. The stakes are high because anything less than a victory will be seen as a major setback and they lost council seats there to Labour in June. The margin they are trying to overhaul is bigger than the one in Leicester but less than what they did against the Tom Watson campaign in Hodge Hill where they came within 460 votes of Labour’s 14,800 lead. The early announcement of Mandelson’s new job has given them time to plan and organise and the Watson salvo has rebounded. It’s a brave punter who bets against the Lib Dem by-election team. Chances of winning 45%.

The United Kingdom Independence Party could just be the joker in the pack but it is a very long-shot made even longer by Robert Kilroy-Silk not being allowed to be the candidate. The machinations in the party that saw this decision showed that it is lacking in robustness because, conceivably, the former TV star could have made a huge impact there and kept the UKIP band-wagon rolling. Chances of winning 5%.

General Election
Even though our call that Labour will get most seats remains our ongoing view that the pundits are overstating the Labour position was given strong support in Nick Cohen’s column in the Observer yesterday. There might be a debate on detailed numbers but Labour are going to get nowhere near the number of MPs that almost all the pundits are predicting. This is part of Cohen’s piece:-

If you search for, you will see how advisers to spread betters are taking the conventional wisdom apart. ‘The “experts” are calling it wrong,’ when they predict a three-figure Labour majority. They are applying ‘the swings to the parties’ vote shares in pre-election opinion polls on a uniform national basis’ when it’s far from clear the country will behave in a uniform manner next time.

Complacent Blairites are taking no account of a potential collapse in tactical voting. Last time Labour won about 40 seats as a result of Liberal Democrat supporters voting tactically for Labour. Although the high-rollers predict that Labour supporters will happily vote Lib Dem to keep the Tories out, they doubt that Lib Dem supporters, and there will be a lot more Lib Dem supporters, will vote Labour. Because of Iraq, because of tuition fees, because of David Blunkett.

Without tactical voting, the Tories will be able to come through the middle in many seats. The gamblers also note that the Tories are in slightly better shape than they were and that the collapse in Labour Party membership will make it harder to get the vote out. Put these together and, they say, there’s only one conclusion: ‘sell Labour’.

I know quite a few of the Westminster pundits, and in the rare moments when they’re not drunk or in the grip of an egotistical mania, they’re a fine bunch of men and women. But I would trust a punter over a pundit any day. At least the gambler puts his money where his mouth is.

The current spread sell level on Labour has been declining and is the equivalent of an overall majority of 36, which is not the 100+ that many pundits are talking about and does not represent a comfortable margin.

Our favourite GE punt is combining bets on the Bet365 seat market for Tories to get 220 seats or less at 7/4 with one on Labour at 11/8 to get 335 seats or less. Unless there is a collapse by the LDs and/or the nationalist parties at least one and quite likely both are bound to come in. If Labour do better then you will win your Tory bet and vice versa. You can only lose on both bets if the Speaker, the Scottish and Welsh Nationalists ,the Northern Ireland parties, the LDs and any other party fail between them to get more than 89 seats and the main two parties are both very close to 221 and 336.

Latest spread-betting prices.

LAB 342-350: CON 212-220: LIBD 66-70 (No change)

HOLIDAYS: Site updated Monday, Wednesday and Fridays until next Monday – then next update on Wednesday September 8.

Mike Smithson



Has Blair’s New Labour been permanently damaged by Iraq?

Friday, August 13th, 2004

kennedy Charter 88 cook

    What are the prospects for the “Ginger Alliance”?

Judging by the state of the General Election betting markets and the scores of comments on the site this week the big divide amongst political gamblers is between those who believe that the Iraq War and its aftermath has permanently damaged Tony Blair and Labour and those who think there will be a recovery. Only time will tell which view is correct.

    The “recoverers” believe Labour will get back with a substantial majority – the “permanent damage” group think that we are heading for a hung parliament and both sides place their bets accordingly. Almost everybody agrees that the Tories are static and won’t move much from their current position.

Both factions will looking with great interest at DumpBlair – an organisation that had its origins in the anti-war movement – that plans to target 200 swing seats with a tactical voting message. They want a Robin Cook-Charles Kennedy government – which has been unkindly dubbed the “Ginger Alliance” – and say they will be supporting anti-war Labour MPs, Libdems and Scottish and Welsh Nationalists.

They will be opposing Blair loyalists and most Conservatives but they emphasise that they do not want to help the Tories. It is hard to see how they can succeed hurting Blair without giving some benefit to Michael Howard. We expect them to have the support of the Independent newspaper.

In 1997 and 2001 the tactical voting element was simple. The prevailing mood was against the Tories which lost many more seats than the national swing because LDs went with Labour where they were best positioned to beat Conservatives and vice versa where the LDs were the main challenger. This time sections of the public have “fallen out of love” with New Labour as well but have not rushed to embrace the Conservatives again. They might want to have an impact by tactical voting.

    Switching to a different party to stop another party only works if electors know what the position is in their constituency and there’s evidence that many “switchers” only make up their minds at the last minute. This puts a premium on local campaigning and how the message is put over on the door-step.

As well as the new “Dump Blair” move there are three other elements to consider.

Whether anti-Tory tactical voting will continue?. We believe that it will with Labour supporters more than ready again to vote LD the party will be able to hang on to most of the gains from the Conservatives of the past two elections and, perhaps, to pick up a few more seats.

Whether the Labour gains of 1997 and 2001 from tactical switching could be vulnerable? Many supporters of Charles Kennedy’s party are less likely to give their vote to New Labour again because of the war, issues like tuition fees, and the Home Secretary’s less than liberal law and order policies. There are perhaps 30-40 seats in this category and the scale of any “tactical unwind” could determine the outcome of the whole election.

Whether there will be anti-Labour tactical voting from the right? In the by-elections a proportion of Tories have shown themselves willing to vote LD to get Labour out where their party is not the main challenger. Fortunately for Tony Blair the number of LD 2nd place seats to Labour last time was fairly limited. But perceptions of which party is the main challenger are likely to be affected by recent LD local election successes, particularly in some of the cities.

    From all of this the main beneficiaries will be the LDs, the Scottish and Welsh Nationalists, and to some extent the Tories. The big losers will be Labour.

We are solidly in the “Labour’s been permanently damaged camp” and this is reflected in our calls. Even with the recent shift in the number of Labour seats on the spread markets we still think the levels are too high and represent a good SELL opportunity. The Gerneral Election spread markets remain unchanged. LAB 342-350: CON 212-220: LIBD 66-70

We like Bet365’s Labour to get 335 seats or less try this link – which even at 11/8 looks good value, as does the 7/4 on the Tories for 220 seats or less. In the bookmaker’s size of Labour majority market its 4/7 on 51 or less and 7/4 on above 52 seats. If you are a “Labour will recover” supporter then that price looks less risky than spread betting. It works out at a Labour seat total of 349.

Peter Mandelson at the EU. William Hill have emailed us about their market on the former Labour minister not lasting the course in Brussels following his confirmation as EU Trade Commissioner yesterday. The price of 3/1 looks quite tempting.

The US Presidential Election markets still have Kerry and Bush at the same price.


Mike Smithson


Who will be PM AFTER the election?

Wednesday, August 11th, 2004

[next planned update – Friday]
blair voting

    Would Blair’s scalp be offered as the price for a coalition?

A big feature of the Election run-up will be the questioning of the Lib Dems about whether in a hung parliament they would prop up a defeated Blair Government or do a deal with Michael Howard – probing that could expose deep ideological differences in the party.

Unlike his predecessor, Paddy Ashdown, Kennedy has been much more detached from Labour and if his party picks up significant gains, as we think, it will be in large measure because of the divergance of Lib Dem policy on Iraq with Tony Blair’s. Siding with the current occupant of Number 10 is not a foregone conclusion. In the event of a hung parliament – and other parties like the SNP, PC and the various Northern Ireland bodies also have an interest – the big questions would be over the Prime Minister.

  • What would be the future of Tony Blair if he fails to get the 324 seats required for a Labour majority?
  • Would he step down voluntarily after not producing a decisive victory?
  • Would there be a post-election “coup” in the party?
  • Would Blair’s scalp be offered as part of the price of a coalition?
  • Could this be Gordon Brown’s moment or is there someone else waiting in the wings?
  • For Kennedy the pre-election questioning could provide a big opportunity to raise issues about “trust” in Tony Blair and keep Iraq and its aftermath on the political agenda.

      Could the party leadership develop a vote-winning rhetoric that gets over, without saying so explicitly, that the Lib Dems provide a way getting rid of Tony Blair without letting the Tories back? That could be powerful.

    All these factors come into play when assessing a market on post-election outcomes with “binary betting” from IG which they say combines elements of spread betting with the flexibility of the betting exchanges. Punters are asked to bet for or against who will be PM after the next election, which has been defined, after representations from Politicalbetting, as “who is asked by the monarch to form a government“. The prices are:

    Blair 67 – 71: Howard 14 – 18: Brown 10 – 14: Others 2 – 5: Kennedy 0 – 2
    Winner = 100 Everyone else = 0

    A possible bet might be against Tony Blair which would also cover you if , as seems less likely now, he steps down before the election. As a long-shot we quite like the “others” option but the pricing is crazy. If you bet for AN Other you get the equivalent of 20-1 and of you bet against then its 50-1. That is a bookmaker being greedy and it’s no wonder that the person who created IG is the Tory party’s biggest donor! A spread of 2-2.75 would be more reasonable.

    The other “hung parliament” punt – Labour to get 335 seats or less – has become considerably less attractive since Monday when we said it was good value at 2/1. As so often happens prices change quite quickly after they are mentioned on the site and the bookmaker, Bet365, link from here, has tightened the price to 11/8.

    Mike Smithson



    Monday Call – August 9 2004 [next planned update Wednesday]

    Monday, August 9th, 2004


      How the pundits will get the next General Election wrong

    We believe that the result of the next General Election will be seen as one of the great upsets of modern times to rank alongside 1970, February 1974 and 1992 when Edward Heath, Harold Wilson and John Major respectively defied the pundits, and to a large extent the opinion polls, to gain unexpected victories. A Guardian feature by two Labour thinkers today notes “..Given the volatility of contemporary politics, it is by no means impossible that Labour will lose in a reverse landslide.”

    We believe that the “experts” will call it wrongly because they will apply the swings to the partys’ vote shares in pre-election opinion polls on a uniform national basis that will produce seat projections for Labour that are far in excess of what they actually get.

    We believe that there is an inherent “fault” in the seat totals from last time because Labour won upto 40 extra Tory seats as a result of Lib Dems voting for them and not their own party – something they are much less likey to do now creating the real possibility of serious seat losses over and above the national swing.

    We believe that the pundits and the pollsters always seriously underestimate the roles that local party machines have in getting their votes out. This will be particularly diffifcult for Labour this time because of the collapse in the number of party members, councillors and other activists – factors that will aid Lib Dem targeting and create new possibilities for seats to change hands outside the national swing. We also think that many local Tory organisations are in better shape than they were.

    We cannot yet predict what the unexpected outcome will be but we stick by our call on Labour to win most General Election seats because this market is NOT about gaining a majority.

    But we say BUY Lib Dem in the General Election spread markets because we believe the party will get more than the 70 seats – the current spread position. When we first made this call on June 16 the BUY level was 58 seats so those who took the advice have already chalked up some nice profits.

    We said SELL Labour at 346 – it’s now down four and we still say sell. It went up to that high level after the media bought Downing Street’s spin that the 27% swing against Labour at Birmingham Hodge Hill and the loss of Leicester South meant that the two by-elections on on July 15 had ended in a “score draw“.

    LAB 342-350 (-4): CON 212-220 (+3): LIBD 66-70 (+2)

    With the boundary changes north of the border the total of MPs required for a majority will be 324 seats. If you don’t like the risks of spread betting take the Labour to get 335 seats or less at 2/1 with Bet365 in a market that they do not make available through the betting odds search engines – but link from here.

    Even though there’s renewed criticism of the Prime Minister today from within the Labour establishment we think it’s too late now to see any any changes in the position of 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. The pricing starts to look quite attractive.

    WAIT for prices to move out before you BET on John Kerry to be the next US President. The latest round of polls almost all show comfortable leads for the Democrat ticket..

    SUMMER SITE UPDATE SCHEDULE Planned updates will be on Mondays, Wednesday and Fridays until we go on holiday in the last week in August and the first week in September.

    Mike Smithson



    The White House Race – Now it gets tough [Next planned update – Monday]

    Friday, August 6th, 2004


      Punters should hold their nerve on John Kerry

    After the euphoria of the Boston Convention John Kerry has been moving in and out of favourite position in the UK as the polls have reported differing messages on the impact of his formal nomination last week. We stick by our CALL on Kerry, first made nearly three months ago and repeated nearly twenty times since but we think that it’s going to be a tough August for the Democrat contender.

    Betting Markets. Once the Boston effect has worn off and the Republicans have had their Convention we excpect the Kerry price to weaken which is what is happening in the US. It might be worth holding off for a weeks to see what happens. The US-foused Tradesports has Bush firm favourite as has the Betfair betting exchange. The Iowa Electronic Exchange, where political futures are traded like stock and shares has seen a significant move back to Bush. This is their plotting chart. UK price movements have tended to track the US but are about two weeks behind.

    Campaign Spending. A big factor that could affect the betting is a quirk in the rules on the maximum limit a candidate can spend. This starts from the official nomination so the Kerry-Edwards taxi-meter began running last Friday. But the Bush-Cheney campaign will not be subject to the constraints until after the Republican Convention in New York at the end of the month. Expect a huge blast of spending on TV ads attacking Kerry in the next few weeks which his campaign will not be able to match. This will depress Kerry’s poll ratings and, no doubt, the betting prices.

    The Polls. The expected Boston Bounce in the polls happened but not to quite the same extent that some predicted. Most of the surveys since the Convention have Kerry ahead but one or two don’t. One interesting feature is a huge gender gap. The Newsweek poll has Kerry 53-37 amongst women but behind at 43-48 with men.

    Our view. We made our call on Kerry because we believed that the desire of Bush’s opponents to get him out exceeded those of the President supporters that he should get four more years. Boston has reinforced that view and this will show on November 2.

      Although we recognise Kerry’s failings as a candidate we think that he’s much more able than Al Gore was four years ago to beat the Bush machine. It’s going to be tough; its going to be close and it’s going to be very dirty. Stick with Kerry.

    BBC Online – One of the BBC’s top political web-sites

    A big thank you to those who nominated as one of the BBC’s top political web-sites. The nomination has led to a doubling of site usage from our previous peak at the time of last month’s by-elections. This is what BBC Online said:- scored highly with News Online readers. Essentially an online tipping service for anyone who likes an election-time flutter, the site is crammed with analysis and commentary and was praised for providing a “different angle” on the UK political scene.

    Thank you for all your support and feed-back. The site is going from strength to strength and if users are not making much money yet I hope, at least, that they are finding it interesting!

    Mike Smithson


    Labour’s in trouble as well [Next planned update – Friday]

    Wednesday, August 4th, 2004


      Blair needs a clear poll lead to avoid a hung Parliament

    The fact that only the Guardian seems to be reporting that all is not well with Labour does not mean that it’s not in electoral trouble. Support down by a quarter since the General Election; membership at a 70 year low having lost almost half of those that were there when Tony Blair came to power in 1997; a collapse in the popularity of the Prime Minister, and an article like this one by former minster, Peter Kilfoyle, in the Guardian on Monday on the disappearance of the Labour activist.

      For the party to be losing its activist base could be highly dangerous. Labour’s always found it harder than the other main parties to get its vote out and we might have to consider applying a discount when assessing its poll ratings.

    This week’s Populus Poll in the Times has Labour down at 32% – the same as the Tories who’ve put on 4% in a week and a half. The Lib Dems are back at their pre-Leicester South 24%. Amazingly the politicians (including the Tories), the media and political punters cling onto the belief that the figures mean that Labour will win a majority. They go to Martin Baxter’s famous “seat calculator” and get the following seat figures from the polling data.

    LAB 331 seats (32%) CON 208 seats (32%) LIBD 76 seats (24%)

      We believe that this is giving a false picture and will go on giving it right until the election day.

    The Baxter process works out an average of the latest polling data and then does a computation for each of the 646 seats based solely on what happened last time. It does not take account of special factors which can produce “Non-Baxter change seats“. If we can identify and quanitfy these there’ll be money to be made on a range of betting markets. SELL Labour at 346 in the spread markets and BUY the Lib Dems at 68. We think the Baxter prediction will be out as a result of three factors

  • It assumes that anti-Tory tactical voting will continue as last time. WRONG.
  • It asssumes that Lib Dems gains will be limited to the poll swings. WRONG
  • It assumes that Labour has the activists as last time to get its vote out. WRONG.
  • We think that the anti-Tory tactical voting that saw Labour supporters voting Lib Dem will continue. But we are much less certain that Lib Dems will carry on switching their vote to Labour in the pattern that saw the the Tories lose 25-40 seats at the last two elections. With the war, issues like tuition fees and the decline in trust in Blair many of these voters will return to their own party which is itself moving forward?

    Thus the Tories could regain St. Albans WITHOUT increasing their vote. There the Baxter calculation puts the Tories 1.4% behind. In 1997 and 2001 many times that number Lib Dems voted tactically for Labour. It does not require that many to stay loyal and a Non-Baxter gain occurs. The same factor applies in several Hertfordshire seats including Welwyn Hatfield which is included as a gain by Martin Baxter and so not a Non-Baxter seat.

    Applying the latest Baxter calculation to Cambridge , another category of constituency, Labour’s 20% lead in 2001 becomes a 5% lead over the Lib Dems. There are enough Tories to squeeze for a further Non-Baxter Gain

    The Labour poll decline of about a quarter and the Lib Dem increase by about a third opens up many new target possibilities. We are in uncharted territory because Labour hasn’t been down at these low levels in the polls for a generation. What’s confusing is that the media focus has been almost solely on the inability of the Tories to benefit and there’s an irrational assumption that the electoral system will somehow see Labour home. But if Labour lost 20 seats to the Tories on the tactical vote unwind and 25 to special Lib Dem targeting then the Baxter projection from yesterday’s poll would look like this.

    LAB 286: CON 228: LIBD 101

    Given that this is based on the two main parties getting the same number of votes Labour would still be 58 seats ahead but would be 37 MPs short of a majority. That’s a far cry from the current spread ranges of:-

    LAB 346-354: CON 210-218: LIBD 64-68

    We believe that almost everybody is reading this wrongly and we are reading it right. With Non-Baxter seat losses to contend with and a diminishing activist base Labour needs a big poll lead to be secure a Commons majority at 324 seats or more. At the moment it’s not got one.

    Mike Smithson


    Monday Call – August 2 2004 [Next planned update – Wednesday]

    Monday, August 2nd, 2004


      Are the Tories right to cry “foul” over the “biased” electoral system?

    The Tories are said to be drawing up plans to attack the “inbuilt advantage” in the electoral system that in recent elections has given Labour far more seats in proportion to votes cast than the other parties. In 2001 the Tories needed to get almost twice as many votes for each seat while the Lib Dems required three and a half times more.

    Partly this was due to lower turnouts in Labour seats and that its incumbents did a bit better than the national average – both elements that its hard for the Tories to make a fuss about. But Labour did get the equivalent a 20+ seat bonus because its seats had on average much smaller electorates.

      But the real problem for the Tories was that people were so opposed to them that they switched parties to get them out costing 40-50 seats. Will this happen on the same scale as last time or will Labour also be the victim of tactical voting?

    The small electorate in Labour seats bonus has been partly resolved through the boundary changes in Scotland that reduce MPs north of the border from 72 to 59 – something the spread-betting markets have yet to notice. The Welsh over-representation remains and in England Labour seats have, on average 6,000 fewer voters than the norm. At the next election these elements should give Labour a bonus of 12+ extra MPs.

    But this is far from certain. The Respect victory in a council by-election in Stepney last week and the Labour losses to the Lib Dems in the cities on June 10 underline that all is not as it was in Labour’s small inner city seats where only a few votes need to change hands. There’s also the University factor discussed in the previous article.

    The Tactical voting Labour bonus was by far and away the main distorting factor last time and was caused by people feeling so strongly that they wanted the Tories out that they switched from their normal affiliation. Estimates range from 25-40 of the extra seats Labour got at the expense of the Tories because of anti-Tory tactical voting. The Lib Dems got about 15 seats. But this is all part of the democratic process and the Tories can’t really complain – in any case they might be the beneficiaries next time round.

      The big unknown is the extent of the benefit, if any, that Labour will get from tactical voting. Might it even work against them with a net loss of seats?

    We all need to be aware that Election Prediction calculators like Martin Baxter’s apply the changed poll rating to what happened in 2001 and assume that the Labour benefit will stay constant. The Labour spread betting prices are based very much on this with tactical voting continuing as it was and the Scottish anomoly remaining.

    Labour to win most General Election seats.

    BUY Lib Dem in the General Election spread markets because we believe the party will get more than the 68 seats – the current spread position. SELL Labour at 346 in the same markets because they are vulnerable to the Lib Dems in many city seats and they can’t rely on the tactical voting cushion.

    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.

    POSSIBLY BET on Peter Mandelson not lasting the course in his new job in Brussels as a European Commissioner. William Hill have 3/1 on Mandelson not doing a full term. Given what’s happened with his last two jobs then this price looks quite good.

    BET on John Kerry to be the next US President.

    SITE UPDATES. With little political activity in August the normal pattern of updates every weekday is changed to Mondays, Wednesdays and Fridays only – unless something major happens. Next planned update – Wednesday.

    BANDWIDTH COSTS. Politicalbetting is not a commercial operation although we do get a small commission on bets placed through the site using the odds search engine, Bestbetting. This does not cover our costs which have shot up because so many more people are visiting us. We would be grateful if when making a bet, on politics or anything else for that matter, if you could use this link. It will help keep the site going.

    Mike Smithson