After the French NON will Blair now serve a full third term?

In April last year Tony Blair came under huge criticism for agreeing to a UK referendum on the EU constitution. Many commentators saw the sort-term gain of taking the wind out of Conservatives’ sails ahead of the Euro election campaign but Tony Blair would still have to deliver on the commitment. A prevalent view was that he had made a huge mistake but now the whole treaty issue looks as though it has been kicked into touch.

The French vote means, surely, that the Prime Minister has had all the political benefit of agreeing to a referendum without actually having to hold it – for us he is the Great Conjurer

Just two weeks ago the spread-betting market on how long Tony Blair’s third term will last offered a range of 80-89 weeks starting from the second week of May 2005. Today the same market from Spreadfair has 94-102 weeks which takes us until April 2007.

All the thinking had been that Tony Blair’s intention would be to fight the UK EU Constitution referendum campaign and then step aside for Gordon Brown shortly afterwards. Next year was by far and away the favourite for his departure year.

The Gordon Brown camp had been hoping that a suitable moment for the Prime Minister to leave would be after leading a successful referendum campaign. Now that the EU Constitutional treaty looks dead it is hard to see what political event could trigger Tony Blair’s departure.

He has said that he wants to serve a full third term – maybe we ought to believe him? William Hill’s When will Blair go will surely see revised prices this morning. The current odds on the year of his departure are:-

2005 – 2/1: 2006 5/4: 2007 5/1: 2008 11/2: 2009 12/1: after January 1 2010 20/1

As a general rule we do not like these long-term markets where you hand over money to the bookmaker for years but if unchanged those 2008/9 look quite attractive.

Mike Smithson