[next planned update – Friday]

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

Picture http://www.learn.co.uk/citizenship/onlinelessons/government/contentimages/blair_argles.jpg