RED Alan Johnson: GREEN David Miliband: BLUE David Blunkett: BLACK Alan Milburn

What if “events” blew the Chancellor’s career plan off course?

While all the focus has been on the Tory leadership race it’s easy to forget that there’s almost certainly going to be a Labour leadership contest before the General Election. Gordon Brown, of course, is the red hot odds-on favourite but at 0.29/1 you would probably be better off leaving your stake in the building society than locking it up for maybe three years.

What makes this interesting to gamblers can be summed up in the famous quote attributed to the former Tory Prime Minister, Harold Macmillan. When he was asked by a young journalist what was his biggest worry, he answered “Events, dear boy. Events”. In short, politics is unpredictable.

Clearly anything could happen before the Labour leadership election actually does take place and it’s interesting to look at how punters are rating the other contenders. The above chart shows the implied probability of the top-rated alternatives to the Chancellor based on the betting prices.

The “event” that made the market change in such a dramatic fashion at the end of May was the French referendum result. This led to Tony Blair abandoning the plan for a UK referendum which had been seen by many observers as the moment when he would stand aside. Although the talk now is of a handover in late 2007 or early 2008 nobody can be really certain.

The contender making the most progress is Alan Johnson – the Secretary of State for the Department for Trade and Industry. David Miliband – the Minister of Communities and Local Government – is following closely behind while David Blunkett still finds favour with punters following his return to the Cabinet after the General Election. What is interesting is that the “big beasts” of Tony Blair’s cabinet are not rated. The Foreign Secretary, Jack Straw, is down at 69/1 while Charles Clarke and Peter Hain are at 35/1.

With Brown being seen as such a certainty there has been very little interest in this market which would only take-off if the Chancellor’s likely succession looked less of a shoo-in.

Mike Smithson