There is money to be made on a turnout of 60% or more

With the coming campaign looking as though it is going to be a bitter fight between Labour and Michael Howard we expect that the turnout will be substantially higher than the 59% recorded in 2001.

That was a record low because almost from the start it looked like what in boxing they would deem a mismatch. William Hague’s Tories never seemed like credible challenger, the result appeared a foregone conclusion, and it was very boring.

Judging by the bitter skirmishes this week then 2005 is going to create a lot of interest, not least because Tony Blair’s reputation has been tarnished by the war and Michael Howard provokes a level of antagonism from non-Tories not seen since the Thatcher era.

There is real hate by supporters on both sides and this will surely boost turnout to a much higher level than 4 years ago

When polled people say that they find all of this a great turn-off. Don’t believe a word of it. The more bitter it gets, as we saw with the Bush-Kerry contest, the more interest there will be and more people will vote.

There is also the Lynton Crosby factor – the Australian brought in by Howard to run the Tory campaign who has already shown how he can turn up the heat. It’s going to be an uncomfortable few weeks for Tony Blair and his team and, if the Dixon case is anything to go by, they will hit back furiously..

All of which leads us to conlude that there will be money to be made on the new turnout spread market from IG Index . The initial spread has been set at 58-60%.

At this price the downside risk is relatively low and there could be big profits if it got to 70%. We think that IG has got this wrong. BUY.

© Mike Smithson 2005