General Politics Betting / Paul Krishnamurty / 02 June 2009 / Leave a comment

A disastrous showing is predicted for Labour at the forthcoming Euro Elections but the proportional representation voting system should still see the ruling party rewarded, says Paul Krishnamurty.

Faced with an economic crisis, a constitutional crisis and with several Cabinet members mired in controversy over expense claims, the last thing Gordon Brown needs right now is an election. But on Thursday, voters go to the polls for European and in some areas, local elections. It has become impossible to find anyone who believes Labour will suffer anything other than humiliation, which could in turn provide the final nail in the Prime Minister's political coffin.

The only remaining questions are how bad that defeat will be, which other parties benefit as a consequence and of course how this can be translated into a betting profit. For Labour are not the only ones viewing these polls with trepidation. Both the Conservatives and Lib Dems have had their share of grief over the expenses scandal, prompting widespread predictions of smaller parties like UKIP, the Greens and BNP recording their best ever result.

Such a trend away from the mainstream has been evident in recent opinion polls, but only limited conclusions can be drawn from some vastly different numbers. UKIP's predicted share, for instance, ranges between 10 and 19% depending which polling firm asks the question. It is perfectly possible to imagine either Labour, UKIP or the Lib Dems finishing either second, third or fourth behind the Conservatives, who seem set for somewhere around the 30% mark. Betfair offer a series of markets that deal with these critical close contests, including number of Labour and UKIP seats, and total seats match bets between Labour/UKIP and Labour/Lib Dems.

In my view, turnout is the key. Governing parties struggle to get their vote out at the best of times, let alone during times of crisis. Across the country, reports suggest that the mainstream parties have kept a low profile on the doorstep, preferring to avoid voters furious about their expenses. This is a particular problem for Labour, who have been dying as a mass membership party for some time. That shrinking party base has meant they've struggled to get their vote out for every election this century, with the result that they always seem to perform below the polls' expectations.

In complete contrast, UKIP, a party whose prime reason for existence is to oppose the EU, will have no trouble getting their supporters out and are bound to benefit from protest votes against the mainstream parties. And while the Lib Dems and Conservatives won't be setting any lofty targets, their presence on the ground is to some extent guaranteed with critical local elections also being held on Thursday. Consequently, it would take a very brave man to back Labour to win either of those matchbets against UKIP or the Lib Dems.

However, while even Labour cabinet ministers are openly dreading Thursday's result, it is important to remember that they are starting from a very low base. At the last Euro polls in 2004, Labour recorded a miserable 22.6%, the worst ever result from a governing party and widely reported as the party's lowest ebb. The fact that they still gained 18 seats in the European Parliament owes everything to the PR voting system used. And that system should once again limit the damage in terms of seats, even if Labour's appallingly low share of the vote grabs the headlines.

UKIP were the big movers in 2004, winning 12 seats and by far their best ever national total of 16.1%. That may have been partly down to the much-reported candidacy of TV presenter and former Labour MP Robert Kilroy-Silk, and after that marriage broke down acrimoniously, many expected UKIP to splinter and die. That was until the expenses scandal threatened to turn British politics on its head and offered Nigel Farage's party a new lease of life.

Nevertheless, they start from a strong position, so while UKIP are expected to move forward again, there is a definite limit to the number of seats they can win. It works against them that while UKIP will pick up plenty of seats in England, their presence in Scotland and Wales is minimal and will probably draw a blank. In contrast, Labour should pick up at least three seats in those two heartlands.

In fact, the distribution of seats looks fairly predictable. Because of the voting system, Labour will still pick up the odd seat despite finishing third or fourth in a region. Having studied each region, I very strongly expect Labour to gain somewhere between 12 and 14 seats, which would suggest the [3.0] about the 13-15 range in the 'Total Labour Seats' market represents excellent value.

Equally, I can't see the Lib Dems scoring less than 10 or more than 13 seats. As for UKIP, 12 seats looks an absolute minimum, 15 the maximum. Given such close numbers, perhaps the best play in those match bets is to back the tie at around [6.0]. My predictions suggest the correct price about the tie here should be no more [4.0].

As for the aftermath, watch this space. Rumours are already abound that Labour MPs will move against Brown over the summer, with Alan Johnson and David Miliband allegedly 'limbering up' for a leadership challenge. Expect plenty of volatility in the 'Next PM', 'Brown Exit Date' and 'Election Date' markets.