When’s the normal pre-election poll swing to the Government going to happen?

The move back to the Tories on the spread-betting markets has continued with the money going on Michael Howard’s party. There are few Labour punters about at current prices.

In just two weeks the IG Index “spread” on the Tories, based on what punters are prepared to bet, has moved from 183-190 seats to today’s price of 192 -199 seats. It seems that a lot of the betting activity is coming from Tory activists who are taking a more bullish view of their party’s prospects.

Labour, meanwhile, has seen its price fall from 359-366 seats to today’s 352-359. Thus, based on the mid-point, the balance of opinion of punters is that Tony Blair will be returned with a majority of 65 down from 80 a fortnight ago.

One issue that might be affecting the betting is that the widely predicted improvement in polls ratings by Labour as we get nearer to the election has not yet happened. In fact the margin is getting a smaller.

The conventional wisdom is that it is normal for governments to lose popularity and see poll rating plummet in mid-term, and then to regain ground as the general election approaches. This was true of each of the four Tory governments between 1979 and 1997, and also of the Labour governments of the 1960s and 1970s.

But it did not happen before the 2001 General Election and so far there are no signs of it happening now. Maybe things are different because of the total dominance that Labour has had since John Major’s Tory government was forced out of the ERM in September 1992.

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Copyright 2005 Mike Smithson