The Bookies and the British Election
LONDON – I used to be considered a pretty good forecaster of British and other countries’ elections. I was, after all, once a party chairman.
I can now confess my method. It was not based on any novel political insight. I did not have a magic algorithm relating economic factors to voting intentions – though I do think that there is some correlation between net disposable income and how people normally vote. But my own technique, which I still use, has proved more reliable than even poring over the political entrails in every constituency.
What I do is not very sophisticated: I watch the bookmakers’ odds. Doing so proved invaluable as recently as the Scottish independence referendum last September. Two days before the count, bookmakers were paying out to gamblers who had bet that Scotland would vote “No” to independence. Guess which way Scotland actually voted.
My method is based largely on the observation that you rarely hear of a poor bookie. So I apply the American writer Damon Runyon’s famous adage: “The race is not always to the swift, nor the battle to the strong, but that’s the way to bet.”
The problem now is that the British general election in May is too close to call. So the bookmakers have 2:5 odds on no party gaining an outright majority, and 10:11 on either Labour or the Conservatives winning the largest number of seats.
So I cannot predict the outcome, and neither can the masters of the universe in the City of London, who always become jittery in the face of political uncertainty. What I can do is try to explain why that uncertainty exists.
First, as in many other democracies, support for the United Kingdom’s two main political parties is declining. When I first became interested in politics, nearly 50 years ago, Labour and the Conservatives attracted some 90% of the popular vote. In May, their combined share will be about 65% to 70%.
There are several reasons for this. One is the decline of the traditional working class and the growth of a more affluent middle class, underpinned by changes in occupation and housing. Trade-union membership and public-sector employment have fallen. The number of people joining political parties has dropped sharply as ideological identification with either the left or the right has waned.
Add to this the rise of populist and nationalist parties in Britain, partly a consequence of the political and economic alienation that have resulted from globalization and economic troubles, and Labour and the Conservatives are fighting over dwindling support. The latest polls indicate 34% support for Labour, and 32% for the Conservatives. Labour’s popularity has been trending down from the high 30s over the last couple of years; the Conservatives have remained stuck at around 30%.
Several factors make predicting the outcome even more problematic. For starters, the electoral system is tipped sharply in Labour’s favor. It takes more votes to elect a Conservative than a Labour MP, owing to the over-representation of urban Britain and some majority-Labour parts of the country. As a result, psephologists calculate that the Conservatives have to win at least 4% more of the popular vote than Labour in order to win more seats.
Second, the anti-immigration, anti-European UK Independence Party (UKIP) takes more votes – perhaps as much as 50% – from the Conservatives than it does from the Labour party. It looks as though UKIP’s support may have peaked, and that some of the air is escaping from the party’s tires. But no one really knows how much damage UKIP will do to the Conservatives’ chances.
Third, on the other side of the fence, the Scottish National Party appears to be attracting a large number of former Labour supporters. Many working-class voters in western Scotland used to vote for the SNP in Scottish Parliament elections, but would drift back to Labour in UK general elections. But some believe that this pattern has been disrupted, owing to a sense that Labour has taken its traditional supporters for granted. Ed Miliband, the Labour leader, seems to be just as unpopular in Scotland as his Conservative counterpart, Prime Minister David Cameron.
Leadership is an area where the Conservatives are already ahead in opinion polls. They have a substantial lead on economic issues as well, as the news continues to support the party’s contention that the recovery in growth and employment, along with low inflation, are now benefiting the entire country. Conservatives will hammer away on the economy, as they did in 1992, the last time that they won an election outright.
Labour, for its part, will seek to focus voters’ attention on issues that are thought to be toxic for the government, like the National Health Service. With the campaign already underway, no one should expect the main protagonists to depart significantly in the weeks ahead from the themes that they have already espoused.
What happens if the outcome matches the bookies’ predictions? There will presumably be months of attempts to build coalitions out of improbable alliances; then maybe there will be another election (assuming Parliament can change the law mandating its five-year term).
I hope it does not come to that, and that when the battle smoke clears, Cameron will be left – as he deserves to be – the only man standing. But before I place that bet, I will consider what the bookies have to say.
Copyright: Project Syndicate, 2015.
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