General Election Betting / Chicken Dinner / 29 June 2009 / Leave a comment

Labour have decided to make their last stand in a desperate bid to win the next General Election... and it's going to cost us all a lot of money.

A 2006 survey into the musical tastes of MPs revealed that their favourite album was Led Zeppelin II, which kicks off with air guitar staple Whole Lotta Love, love being something that Labour MPs have not been enjoying a whole lotta lately.

This week, they really ought to be installing another artist as their all time favourite: Michael Jackson, for his superhuman ability to wash references to expenses claims and economic catastrophe clean out of all news bulletins. Indeed, the Labour party may even be thinking that because no one is putting the boot into them this week that they have been forgiven. Betfair punters are not so easily tricked, however. The party seat line market remains unmoved, with the Conservatives at 351.5-354, Labour at 206-210 and the Lib Dems at 50-54.5, a result which would represent a swing to the Conservatives of about 8.5%, and would give them a majority of around 60.

Strip away the media blizzard of autopsy analysis, fan grief, conspiracy theories and special 16-page tribute pullouts to the fallen king, and plenty of questions remain about Labour's own ability to deliver the kind of dazzling performance they need to rescue their own career. The debate has moved on from second homes and bank bailouts, and is now stuck on the decidedly less sexy topic of public spending, although this plain and unlovely landmark is probably where Labour will make their last stand.

The logic is this: Labour's only chance in the next election is if they can get the economy started and thriving - again. Their strategy involves heavy spending, but the clock is against them, and the Bank of England is having a cow at their unsustainable levels of borrowing.

As Gordon Brown prepares to reveal another giant spending round today, Peter Mandelson has been all over the press saying there will be no spending review before the election, effectively confirming the frantic, no-turning-back nature of the gamble. It's like the scene in the movie Around the World in Eighty Days in which the steamboat crossing the Atlantic is forced to burn the furniture, the cabins and everything else made of wood in order to get to England in time to win the bet. All that matters is that they get there and win, and if it means destroying the boat in the process then so be it. There's no prize for coming second (although for Labour there is the consolation that the wreckage becomes the Conservatives' problem.)

As economic strategies go, it is high stakes, high risk and so a-fizz with all-or-nothing recklessness that it is hard to believe it comes from the cold hand of Gordon Brown. Like all high stakes bets, the rewards are huge and the price of failure horrendous, but either way, this is going to be dramatic. And by that logic, the betting markets are not going to remain the still, untroubled waters they have been over the last few months.

But which way will the gamble fall? Yesterday's Sunday Times felt Labour's spending frenzy was doomed from the off. Privately, many cabinet ministers fear Brown is making promises that Labour cannot deliver and that voters do not believe, it wrote. In that case, the Tories are likely to come out on the high side of the current Betfair seats line (in 1983, when Labour took 27% of the vote and the Tories 42%, roughly in line with current forecasts, the Tories won 397 seats).

If the long shot hits, you will never, ever find the kind of prices currently offered on Labour in a two horse race again. The likelihood of their winning feels currently laughable, but for fans of betting on long shots who like to trade out when prices shorten, well, here's your long shot. It's government backed.