Monday Call – June 21 2004

Monday Call – June 21 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.

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