Will Labour get back on top with a new leader?

The above chart represents the collective decisions of a very odd group of political gamblers – people who have bet on the next General Election even though though they know they will locking up their cash for several years at not particularly attractive prices. The odds they bet at are represented over time as an implied probability and the changes produce a graphic illustration of how the chances for the two main parties are being perceived.

Note that the market here is on which party wins mosts seats – not on whether there’s a majority.

As can be seen it took six months after the Tories chose their new leader for the party to be ahead amongst the long-term gamblers. The switch-over point came in May after the local elections and the orchestrated effort by Brown-loyalists to get Tony to stand down.

The big uncertainty in all of this is what happens when Tony goes? Will the new leader, presumably Brown, give Labour a boost that’s sustained or will the Cameron-inspired Tory progress continue?

Two years ago the answer to such a question was obvious. Blair was perceived as a vote loser and Gordon a vote winner. In July 2004 ICM recorded Labour’s vote and margin increasing by six clear points if Brown replaced Blair. These findings and those from other surveys were all part in the pressure on Blair that led to him having to make his now famous statement on September 30th 2004 that he would stand aside before the end of the third term.

The idea that have Brown as a vote-gainer is still so fixed in the consciousness of many commentators that there’s been a reluctance to accept the July 2006 findings which show Labour’s share increasing but Cameron’s Tories having a lead of 8%. These are all hypothetical it is argued. So they are but then so are all opinion poll findings – and that argument would carry much more force if it had been used in 2004 as well.

A lot will depend on the manner of Blair’s departure. As long as Labour does not have the stomach to stage a Thatcher-style ousting Tony will go in his own time and on his own terms. My guess is that there will be a Labour resurgence in the round of polls after the change but predicting what will happen after that is much harder.

I remain impressed by the Cameron-Brown voting intention polls which to my mind give a better picture than the standard voting intention surveys where the party leader names are not mentioned.

The best betting strategy for those who want to put money on the Tories winning most seats next time might be to wait for the new leader’s honeymoon. For those who want to bet on Labour then today’s prices at substantially better than evens might be worth taking.

To avoid locking cash up I placed a spread bet on Labour coming second using my credit account with IG Index a couple of months ago. For serious punters a credit account like this is a good idea.

Mike Smithson