What’s the basis of the Tories being favourites?
The chart shows the changing prices on the Tories and Labour winning most seats at the next general election. As can be seen Labour was seen by punters as being in a very strong position and was favourite in the betting right until May-June of last year.
The Tory sentiment reached its peak at the end of October and since then the prices have got much closer. This morning you can get 1.18/1 against Labour while the Tories are at 0.88/1.
This is an odd market because it is driven by punters ready to lock their money up over considerable period and even now you could have to wait well over three years to pick up any winnings
But what is really wrong about the market are the prices themselves. Surely both parties should be at about evens?
The Tories are not enjoying the consistent 6% plus poll leads that are going to be necessary for them to win enough seats even to end up as top party in a hung parliament situation. Unless Labour’s new leadership moves public opinion sharply either way the best guess is that Labour and the Tories will finish very close to each other in terms of seats – although the Tories are likely to get a bigger share of the national vote.
Meanwhile there’s a good piece by Anthony Wells on UK PollingReport about the dangers of making comparisons with what the polls were doing in the pre-1997 general election period when Labour chalked up margins of 40%. The essence of his article is that polling has advanced a lot in the past decade and a half and those mega figures simply cannot be compared with what happens today.
Whenever people tell me that governments always recover as we get closer to elections I respond by saying that a lot of that was probably a product of poor polling techniques that over-stated Labour.