politicalbetting.com

With all the attention on Tony Blair there has been very little recently on Charles Kennedy’s position as leader of the Lib Dems. The party has been totally focussed on the June 10 European and elections and the general view is that they are going to do well. But are they? The locals should be good but will the Euro vote prove to be the disappointment that it was five years ago?

A problem is that the Lib Dems always find it hard to meet expectations in the Euro Elections. In June 1999 the party was going through a good period and the ICM poll just before the Euro vote had them at 19%. Yet in the Euro Elections the party polled just 12.1%. Even with a PR voting system they picked up just 10 MEPs - far below what many had predicted.

Where would Charles Kennedy stand if his party’s share of the Euro vote is substantially below the current 20-22% opinion poll ratings? Could this be the pressure point on his leadership? Will the doubts that emerged a couple of months ago re-surface?

Kennedy’s problem is that in the aftermath of the Iraq war there are huge expectations on him and the Lib Dems. June 10 has to be a resounding success and if it isn’t it will provide vital ammunition for those Lib Dems who believe the party would do better if he stoody aside.

This time the overall number of UK MEPs is being reduced because of the enlargement of the European Union and all the parties will be doing well if they can hold onto what they already have. But as Andrew Grice writes in the Indpendent today the Lib Dems are expected to increase their contingent of MEPs by 2 or 3. So the expectations are very high. Can Kennedy deliver?

For Lib Dem campaigners the huge regional constituencies for the European Parliament are a nightmare. In Westminster and local elections the party is brilliant at focusing resources on target seats that it believes that it can win. In the other seats there are Lib Dem candidates but they are fighting what is known in the party as “paper campaigns”. They are there almost in name only.

But how can you target a whole region? This is very difficult. In addition the Lib Dem campaigin is hampered by the party’s positive approach to the EU that does not always resonate with the public mood. The decision to hold the 2004 local elections on the same day as the Euro vote should be very helpful because many more voters will be brought to the polls by local council campaigns.

The only betting market on the Lib Dem leadership is the “Party Leaders” on a betting exchange.

At the end of a difficult period for Tony Blair it’s tempting to bet on the Tories to win most seats at the General Election. The prices look good value and Labour is expected to take a real drubbing in the “Super Thursday” local, London and Euro Elections on June 10.

The mood is being reinforced by the way Michael Howard has been able to pursue the Government on Iraq. As Robin Cook writes in the Independent today “Howard may not be able to airbrush out of the record Tory support for invading Iraq in the first place, but he is determined to make as much capital as he can out of the monumental blunders of the subsequent occupation.”

The main betting activity in recent days has been on the Conservatives to win most seats at the General Election. On the betting exchanges, the most sensitive market, the price has now dropped to 3.6 – a move that was predicted in our Monday Call on April 19 when the price was at 4.3. Such a drop in such a short period is significant and reflects a real change of sentiment on the markets. But there are two dangers.

Firstly Labour could recover - perhaps prompted by a new leader. The rumour since John Prescott’s famous “Admiralty Arch” dinner last November is that Blair will stand down in July after 10 years as Labour leader - a scenario that punters have been betting on. This would allow a leadership process finishing off with Gordon Brown taking over at the Labour conference in the autumn. The recent YouGov poll had Labour and the Tories level pegging on 39% each if such a change happened.

Secondly the Westminster seat distribution makes it difficult for the Tories. Even to get equal with Labour on seats Howard needs to be 6-7% ahead. For a majority at the General Election the Conservatives need a lead of 10%.

Although the polls have been moving some way against Labour in the last few weeks we are nowhere near the area where the prospect of Labour not winning on seats becomes a possibility. Theoretically Labour can maintain an overall majority in the House of Commons on 32% of the vote.

But this calculation is based on the concept of the Uniform National Swing. The Conservatives might win more seats because of differential swings in different areas. There is also the affect of tactical voting which gave Labour many more seats than the general swing in both 1997 and 2001. What happens if this unwinds? We intend to look at in more detail in the next few days though its impact is not as great as some Tory supporters might hope.

As a strategy we still suggest waiting until after the June 10 local and Euro elections because we can see the Conservative price fall even further and the Labour one to rise. The key thing post-June 10 will be the opinion polls. Unless these start to show Conservative leads in excess of 6% then backing Labour will be a value bet.

There is a danger that people might over-react to the Euro and Local elections. Following William Hague’s successful Euro Campaign in 1999 in which the Conservatives came out on top the opinion polls hardly changed. These are the ICM Labour-Conservative leads from that period -

May 1999 - Lab lead 23%
June 1999 - Labour lead 17%
June 1999 - Euro Election - Tory lead 7.6%
July 1999 - Labour lead 17%
August 1999 - Labour lead 18%

UPDATE - WHITE HOUSE 2004. Six US polls this week have Kerry and Bush within one point of each other. The Iowa market has the two almost at the same level. The race has never been as close and it’s Kerry who is moving forward.

Picture - www.srimedia.com/artman/uploads/_1942016_howard150.jpeg

The conventional opinion polls got the London Mayoral Election so badly wrong in 2000 over-estimating Livingstone’s support that it’s no wonder that they’ve mostly avoided this June’s battle.

There were six main polls in 2000 which showed leads over Steve Norris ranging from 34%-57% when on the day the margin was just 11.9%. The smallest error was a staggering 22%. Apart from one ICM survey reported in February the polling this time has been left to the internet pollster, YouGov.

Will YouGov’s unique methodology, so criticised by the other polling firms, make a better job? For if it does it could have far-reaching implications.

A close prediction of the London Mayoral Election will be a good pointer to the accuracy of YouGov’s General Election polls which have consistently shown higher shares for the Conservatives than the other opinion polls.

Following its accurate 2001 General Election forecast YouGov’s best performance was at last May’s elections for the Scottish Parliament. Then they got Labour, the Conservatives and the SNP to within one per cent. The only failure was with the Lib Dem vote which YouGov predicted at 19% against an actual 16%.

The big YouGov success was predicting the Conservative vote in Scotland. All the other polls had the party at either 11 or 12%. YouGov put them at 16% against an actual 17%. With Labour the other polls over-estimated the share by 4-8%. YouGov’s overestimation was 1%.

Getting an accurate Tory share has been a nightmare for many pollsters for many years. This has been put down to Tories being less reluctant to admit their allegiance to a compter as with YouGov, rather than to an opinion poll interviewer as with the conventional polls.

Will YouGov be able to repeat this in London on June 10? A challenging issue for all pollsters is the turnout – in Scotland last year it was 49.5%. At the London Mayoral Election in 2000 it was just 34% and the signs are that it could be lower this time. The conventional wisdom is that the lower the turnout the better it is for the Tories.

Political gamblers seem to be ignoring YouGov’s latest London poll that had a Livingstone lead of just 5% amongst those “certain to vote”. With such a gap in a normal election market you would expect prices of 1.5 for the leader and 2.5 for the challenger especially as the margin has been narrowing with every poll. Here even the betting exchanges still have Ken at 1.22 and Norris at 6.

UPDATE - WHITE HOUSE 2004.Prices are edging towards Kerry. On the Iowa Electronic Exchange, which we have explained before, Kerry is within a hair-breadth of Bush. The prices are rated out of 1 and Keery is on 0.49. On the UK markets Bush is still a clear favourite but the gap is tightening.

A new tool to help predict the next House of Commons

My biggest ever political gambling loss was on the 2001 General Election because I had not thought through the issue of relating votes to seats - the critical factor in UK General Elections. I bought the Conservatives in the spread betting Commons seat markets because I believed that the opinion polls were wildly overstating the Labour lead and that the election would be much closer than was being predicted.

I was completely right. Instead of the 25-30% leads that the pollsters were recording Labour’s eventual lead was 9% down 4% on the landslide victory of 1997. But all the accumulation of votes in their own areas did was to notch up the overall voting figures without producing what really mattered to them (and my bet!) - more MPs. They were also hit by strong tactical voting.

There were two lessons:- The Westminster seat distribution is totally skewed to Labour: Spread betting can be very expensive!

The biggest pitfall political gamblers are likely to make at the coming General Election is to assume that Tory poll leads will simply translate into a Commons majority. As we’ve been saying here for months the way the seats are distributed gives Labour a huge advantage and whenever we have reported new poll results we have also tried to demonstrate what this would mean in terms of seats at Westminster. Our main tool has been the calculator produced by the Cambridge and now City mathematician, Martin Baxter. This operates using a uniform national swing and it is very simple to work out a given outcome from new poll findings.

Now a new tool that should interest political gamblers considering General Election bets has been produced by the polling commentator, Anthony Wells. He’s created, for download, a spreadsheet that allows simple projection of the House of Commons on any given share of the vote.

All you have to do is enter percentage vote shares for Labour, the Tories and the Lib Dems and up comes a projection of what the new Common make-up would be. All very simple.

You can choose either the current boundaries, or the new Scottish boundaries. The Wells programme differs
slightly from Martin Baxter calculator, which we use a lot on Politicalbetting.com, due to slightly different
methodology when dealing with split wards. Comparing the two the Wells system seems to be less generous to the Lib Dems. Thus taking the May Populus Poll the two calculators produce the following predictions.

Populus Poll: CON 36%, LAB 32%, LIB 22%
In Commons seat terms these vote shares convert to-
WELLS: CON 253 seats; LAB 305 seats; LIB 56 seats
BAXTER: CON 245 seats; LAB 305 seats; LIB 65 seats

A useful function with Wells allows the user to include anti-Labour tactical voting. The figure is the percentage of those voting for a third candidate (who must be significantly behind the second placed candidate) who would instead vote tactically against Labour. Anthony points out that this is very basic at the moment, and unrealistic figures would produce odd results. This is the Wells calculator version of the May Populus Poll with a 10% third party tactical voting element.

WELLS (10% Lab Tactical) CON 262 seats; LAB 295 seats; LIB 57 seats

Another polling expert, Chris Lightfoot has produced his own one-dimensional calculator based mainly on Martin Baxter’s system.

No doubt that at the General Election the BBC and several of the newspapers will be making their own versions of the Wells and Baxter calculators available. Now all we need is a 100% accurate system for determining which opinion poll is the most accurate.

WILLIAM HILL UPDATE: More readers recorded problems yesterday trying to place bets on Norris in the London Mayoral market. It seems you can put as much money as you want on Livingstone - but hardly anything on Norris. This is creating a false market. When last week’s poll came out showing Norris only 5% behind Ken the prices should have got much tighter. This has not happened in any significant way. If you have any more experiences please let us know. What better argument can there be in favour of betting exchanges!

Unlike almost all the other political betting markets that we comment on we have refrained from making a call on the eventual result of the 2004 US Presidential Election because we have not had a clear view. But now we have come to the conclusion that Senator John Kerry can and will win in November.

What has persuaded us is the view that Kerry will not win the election; Bush will lose it. The lacklustre performance of Kerry to date owes, we think, to his realisation that the election is first and last a referendum on Bush.

Thus the significant poll figures to follow are not Bush v. Kerry but Bush’s personal approval ratings - down again this week to 42%. Almost right across the board, issue after issue, these numbers are on the decline. By comparison in the immediate aftermath of 9/11 Bush’s personal rating was 90% and at the turn of the year he was getting 60%.

A key part of this strategy is for John Kerry to do what Tony Blair did so successfully at the 1997 UK General Election when he persuaded traditional Tories that a Government led by him would be “safe”.

Is John Kerry’s quiet approach and his very public “wooing” of John McCain – the Republican Senator from Arizona, beaten for the nomination by Bush in 2000 – a way of saying to Republicans that it’s “safe” to support him or even just not to vote for George W. Bush? If significant numbers don’t turnout for the President then Kerry is in.

We have been impressed by John Kerry’s attempt at bi-partisanship and the way he is building up awareness of his relationship with and McCain who like Kerry is a Vietnam veteran. The New York Times observed at the weekend that John Kerry refers to John McCain whenever he is able to and the two men’s joint initiative on Vietnam POWs figures prominently in his TV campaigns.

Whether McCain would come on the John Kerry ticket as the Vice-Presidential running mate is unclear. But it very much helps Kerry for this speculation to continue.

The John Kerry price on who will win most votes in November on the Iowa Electronic Markets, described here in March, has been notching upwards to the point where it is almost on level with Bush. In the UK you can still get more than 2.2. BET.

UPDATE - UK GENERAL ELECTION SPREAD BETTING. In the Monday Call yesterday we commented that the weekend moves against Labour on the Commons seat market were an “over-reaction”. They’ve now slipped back to where they were at the end of last week - LAB 320-330; CON 248-258; LIB 53-58.
UPDATE - LONDON MAYORAL ELECTION. William Hill is offering a good price on Norris but seems to be restricting punters to ridiculously small stakes. One Politicalbetting.com reader said he could only put on £1.54 - another only managed to get £0.76 on. The bookmaker price affects the betting exchange price which is not moving. Does anybody know why William Hill is doing this? Their 1.12 on Ken is so low that you cannot imagine that it will be attracting many backers and they seem to be restricting bets on Norris. It is almost as though they do not want to be in this market.

Party winning most seats at UK General Election. Our CALL is to wait until after the Euro and Local Elections on June 10 and then BACK LABOUR when the prices will be better. As happened last time the Tory Euro win had no impact on the General Election. The mood might be different now but the Westminster seat distribution means that the Tories need to be 7% ahead on votes to be equal on seats and they are nowhere near that in the polls. To win a Commons majority Michael Howard needs a 10% lead on votes. Tony Blair/Gordon Brown can do it even if Labour is 2% behind.

Spread Betting on Commons seats. The pressure on Labour has seen the spreads drop even further during the week to well below the 324 seats that the party needs to secure an overall Commons Majority. Currently LAB 318-228; CON 250-260; LIB 53-58. With this form of betting if you think that Labour will get more than 328 then you BUY and will win your stake multiplied by the number of seats that they get above 328. If Labour gets less than 328 then you lose on the same basis. We think that the latest movements are an over-reaction but we see no value in any of these spreads. DON’T BET.

Labour Leader at General Election. Gordon Brown was almost at the same level as Tony Blair yesterday but we are not convinced that Tony Blair will be going so DON’T BET in the Betfair and William Hill market. If you think that Blair will not be there William Hill’s price is much better.

Mayor of London - person or party. The news that the Green Party is refusing to endorse Ken as their second preference choice because he is Labour candidate could be decisive. Last time Ken received more than 160,000 first and second preference votes from Green supporters. Our long-standing call that this is a close race remains. We think that Ken Livingstone and Steve Norris have an equal chance of winning. The current price on Norris is at least TWENTY-FIVE TIMES that of Livingstone. Even if you are not convinced it is worth a punt at 6 or 7 to one. With every national and local poll showing the Tories increasing this gets tougher for Ken by the day. BET before the next poll comes out.

US Presidential Election. The UK price on Kerry has held up even though Bush has had a pretty awful week. We aim to be making a major call on this election this week.

Kerry’s Running-Mate. The Irish-based but US-focussed Tradesports betting exchange is running a market on John Kerry’s choice as Vice-Presidential running mate. It lists fifteen possibilities with the current favourite being John Edwards who put up such a good show in the primaries. Our call at the price of about 5 is the “none of the above” option.

Will the result be challenged? Looking back to the Bush-Gore race of 2000 Tradesports has a market on the “2004 Presidential Election is Certified on or before Dec 13 2004”. Surely there will be no repeat of the Florida mess-ups last time - or will there? If it’s a close result, as seems likely, the precedent has been set for making challenges in the courts. At a price of about 8 it might be worth a small punt.

UK Euro Constitution Referendum. Even though the terms of the new EU constitution have still to be agreed one bookmaker has now opened a market on which way the country vote in the referendum that was promised by Tony Blair last month. This seems to be totally premature. We do not know what the vote will be about, what the question will be and when the referendum will take place. The odds are not very encouraging on either side. DON’T BET.

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 Politicalbetting.com can accept no respnsiblity for the information on the site or opinions expressed. Users make bets entirely at their own risk.