Time to make a call on the next General Election

Over the weekend the city mathematician who runs Electoral Calculus, Martin Baxter (right), produced another of his General Election predictions based on his “poll of polls” and applying the swing to each Westminster seat. His figures with the Tories 3.37% ahead produced a projected House of Commons of CON 267: LAB 311: LD 36 seats.

So Labour would be just 13 short of an overall majority. The Tories, in spite of their higher vote share, would be 44 seats behind and the Lib Dems would see their parliamentary party almost halved. In practical terms a 13 seat deficit should be just about manageable for Labour without the need for formal pacts. The Labour Government would continue.

In spite of this I have used one of my spread-betting credit accounts this weekend to bet that Labour will NOT end up with most seats. The account structure means I can make a substantial long-term wager without the usual down-side in such markets of having to lock up my stake for several years.

I’ve been pondering about the General Election for some time and two things have caused me to act: the detailed data from last week’s Populus Poll and a conversation with a recently retired teacher who is switching from her life-long support for Labour to David Cameron because, as she put it, “he’s less likely to be in awe of big business than Labour”. If someone like her is changing her allegiance then something is happening.

The poll, which we looked at last week, took a very different approach to trying to measure the effect of a change in the Labour leadership on voting patterns. After examining the full dataset my confidence in similar Brown-Cameron-Campbell voting intention surveys has been enhanced.

What seems to be happening is that the base Tory support is up at least a tenth from May 2005; the addition of Cameron’s name to the polling question gives his party a further boost and Labour look set to lose Tony Blair’s personal vote when he steps down. This adds up to a margin of at least eight points which appears to be quite robust.

I’m convinced, to the extent that I’m risking a lot of money, that in the current climate adding the party leader name to a voting intention question gives a substantially better picture than conventional surveys.

So what about Frank Luntz – the US pollster who has caused much argument on the site after his focus groups on BBC’s Newsnight programme? Well the results of Populus and ICM polls which have used party leader names seem to fully vindicate what his focus groups in October 2005 and April 2006 were suggesting. And the retired teacher conversation could have come straight from a Luntz discussion.

IG Index’s BinaryBet spreads on which party will win most seats at the General Election are LAB 46-52: CON 48-54. So if I’m right I get 46 times my unit stake level if Labour is in second place and I lose 54 times the amount if they win. The prices are slightly worse than you can get on Betfair but with my credit account I am not having to tie up any cash now.

The reason I am “selling” Labour rather than “buying” the Tories is that the prices are effectively the same and I’m covered if a freak result such as the Lib Dems coming out on top happens.

Mike Smithson