Betting price implied probability of Blair remaining until Jan 2008 or beyond

So what is happening with the Labour succession?

The Tory leadership, the by-elections and the Walter Wolfgang eviction have over-shadowed what surely, because Labour is the governing party, the most important question in British politics – when will Tony Blair hand over to Gordon Brown?

By Monday lunch-time things seemed a little bit clearer. One potential rival to Gordon Brown after another had given their public backing to the Chancellor and then we had Brown’s “New Labour renewed speech” with the announcement of his year long tour of the country.

But then then everything was knocked on the head with Cherie Blair’s off-the-cuff remarks and Tony Blair’s speech reinforcing the message that that he plans to go on and on.

The certainty of the Gordon Brown succession has also taken a bit of a knock as Andrew Grice observes in the Independent “..by the end of the week, the message from Team Blair to Mr Brown was much less conciliatory than at the start. It said it would be watching closely to see if Mr Brown signs up to the next health and education reforms planned by Mr Blair. Instead of saying Mr Brown was a shoo-in, the Blair camp’s line changed to: “Gordon is the most likely – but not the automatic – successor. In three years, a lot can change. You never know – someone else might emerge.”

Punters, meanwhile, are unimpressed. You can now get more than 2/1 on Tony Blair remaining until January 2008 – just 27 months away. The chart above shows the implied probability of Blair lasting until then based on the betting prices.

Given what we’ve seen in Brighton this week why aren’t gamblers rushing to place bets? After all you only have to tie your cash up for just over two years and you’d pick up winnings of twice the value of your stake.

Do they think that Tony Blair was not being truthful about his intention or can they foresee circumstances in which the Prime Minister will be toppled before then?

Mike Smithson