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But why aren’t the markets moving in his direction?

After the success of yesterday’s elections in Iraq can Tony Blair now draw a line under the war and its aftermath and start to relish in what some have described as his “Bagdhad Bounce”?

For if there had been any doubt at all about whether he will be returned with another huge majority it has been over his decision to take the country into the war without UN sanction and against huge opposition both within his party and throughout the country.

The war and its associated issues like the Andrew Gilligan interview, the Kelly suicide and the Hutton and Butler inquiries have taken their toll on the Prime Minister, particularly on the level of trust he enjoys from the British public. Labour has hardly been out of the 30s in the opinion polls and the only consolation the party has had is that the Tories have been doing even worse.

Can we expect Labour to climb into the comfortable poll positions that they had at this time before the last election - or is there still a worry for Tony Blair?

Will the fact that Iraq is now on the road to democracy secure, for certain, an unprecedented Labour third term with a huge majority?

So far the markets have been unimpressed. In spite of yesterday’s three new opinion polls all showing Labour well ahead and the news from Iraq the moves on the spread-betting markets have been in the opposite direction. It’s the Tory price, not Labour’s that has progressed today - something that we did not predict and cannot explain.

Latest IG Index spread prices: LAB 355-362 (nc): CON 190-197 (+1): LDs 70-74 (nc)

Mike Smithson

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Sending a message that’s only heard by the target audience

The real reflection of the state the Tories are in is that if they make the magic number of 200 seats it will be seen as some kind of victory. Yet even at that level Tony Blair would be returned with an overall majority of more than 70 - sufficient to sustain the party for a full third time.

It’s against this background that the poll moves after last week’s immigration speeches have to be judged. Both the pollsters that carry out very regular surveys so you can spot trends - YouGov and ICM - recorded 2% improvements for the Tories against Labour over the days before and after the announcement.

Does this mean that we’ll see more of what is known in in Australia as “dog-whistle politics” - putting out a message which, like a dog whistle that is inaudible to humans, is only heard by the people at which it is aimed.

As Andrew Grice of the Indpendent observed at the weekeend - the dog whistle looks as though it has been imported into British politics.

He wrote: Dog-whistle politics has been used successfully by John Howard, Australia’s conservative Prime Minister. He has played the immigration card without making overtly racist comments. It is no coincidence that the man who ran his four successful election campaigns, Lynton Crosby, is now Michael Howard’s election campaign director. The Tory leader’s carefully chosen words were designed to strike the right chord with his target audience. Labour strategists fear the subconscious message will play well in marginal seats in areas such as the West Midlands and among eurosceptics tempted to vote for the UK Independence Party.

Perhaps this is the first evidence of the impact that Lynton Crosby - described down-under as “the master of the black arts of politics” - could have on the coming election. It looks as though we wil be in for an interesting 13 weeks between now and May 5th.

As we predicted yesterday’s spate of polls have stalled the recent Tory progress on the spread-betting markets where punters bet on how many of the 646 Commons seats at stake each party will win.

Latest IG Index spread prices: LAB 355-362 (nc): CON 189-196 (nc): LDs 70-74 (nc)

Latest Spreadfair prices: LAB 357-359 (nc): CON 189-194 (-1): LDs 71-73.4 (nc)

Mike Smithson