Blessed are the kingmakers: who will the Lib Dems be after May?

Conventional wisdom now has it that we are going to have a hung Parliament.  And it is entirely possible that the Lib Dems will have a central part to play in the formation of the next government.  A lot of thought has been given to how many Lib Dems will survive.  Not much thought has been given to what the Lib Dems will look like in the next Parliament. 
 

The Lib Dems span a wide range from those who place most emphasis on the social aspects of liberal democracy, like Charles Kennedy and Tim Farron, to those who place most emphasis on the small state aspects of liberal democracy, like Danny Alexander and Jeremy Browne.  If the Lib Dems are to lose a lot of seats, as we currently expect, the balance of the Parliamentary party could be crucial to the shape of negotiations.

Who's going?

I'm going to assess this in the main by strict reference to the odds.  I'll divide this into four groups: those who look very likely to stay (1/2 or shorter); those who look very likely to go (2/1 or longer); those who are more likely than not to stay but no sure thing (between 1/2 and evens); and those who aren't expected to stay but who have a decent chance of overcoming the odds (evens to 2/1).  Here is the current state of play in the Lib Dem held seats:

https://drive.google.com/file/d/0Bygi8eZw-4q1ZTQ1djlSWjIyZUE/view?usp=sharing

As you can see, this is not a pretty picture for the Lib Dems.  They are rated at 1/2 or better in only 18 seats and are odds-on in only 11 more, while they are at 2/1 or worse in 21 seats and evens or worse in a further seven seats.  They look set for a spanking and the only question is how sore they're going to be by the end.

Doomed (2/1 or longer)	Safe (1/2 or shorter)
Danny Alexander Gordon Birtwistle Annette Brooke (standing down, replacement Vikki Slade) Sir Malcolm Bruce (standing down, replacement Christine Jardine) Lorely Burt Sir Menzies Campbell (standing down, replacement Tim Brett) Michael Crockart Lynne Featherstone Stephen Gilbert David Heath (standing down, replacement David Rendel) John Leech Tessa Munt Alan Reid Sir Robert Smith, Bt. Ian Swales Jo Swinson Sarah Teather (standing down, replacement Ibrahim Taguri) Viscount John Thurso David Ward Jenny Willott Simon Wright	Norman Baker Tom Brake Vince Cable Alistair Carmichael Edward Davey Tim Farron Don Foster (standing down, replacement Steve Bradley) Martin Horwood Simon Hughes Charles Kennedy Norman Lamb David Laws Greg Mulholland John Pugh Bob Russell Sir Andrew Stunell (standing down, replacement Lisa Smart) Steve Webb Roger Williams
Up against it (evens to 2/1)	At risk (1/2 to evens)
Sir Alan Beith (standing down, replacement Julie Pörksen) Jeremy Browne (standing down, replacement Rachel Gilmour) Andrew George Duncan Hames Mike Hancock (expelled from party, replacement Gerald Vernon-Jackson) Sir Nick Harvey Michael Moore	Paul Burstow Nick Clegg John Hemming Julian Huppert Mark Hunter Stephen Lloyd Dan Rogerson Adrian Sanders Mike Thornton Mark Williams Stephen Williams

The politics of all this

If we want to see what the Lib Dems will look like after the next election, we should focus on the right hand column.  Obviously there may be upsets, but if the bookies are even approximately right, the Parliamentary party will be drawn largely from those names.  But let's look at some different cases.

The full-on hammering

If the Lib Dems take only their safe seats, Nick Clegg would be gone.  Three leading rightwingers will remain: Ed Davey, David Laws and Norman Lamb.  But the influence of leading leftwingers will be much greater than at present, especially with Nick Clegg out of Parliament.  Vince Cable, Charles Kennedy, Tim Farron and Steve Webb are generally thought to be much more comfortable looking leftwards (though Steve Webb has worked effectively in the coalition government, making his policy area very much his own).  

Actually, though, the internal composition of the Lib Dems in these circumstances wouldn't make much difference in a hung Parliament: the Lib Dems' 18 seats would be unlikely to be decisive, except in circumstances where they had only one choice. Also, after such a hammering, it's unlikely that the Lib Dems would want to be in government with anyone.  They'd want to regroup.

The heavy pounding

If the Lib Dems take their safe seats and those that they are narrowly odds-on to take, they would tally a more respectable 29 seats.  At that point, they could start having influence in hung Parliament discussions.

And this group would be dominated by the left.  14 of the MPs who would remain are in the Beveridge Group, who represent the socially liberal wing of the party:
+ http://en.wikipedia.org/wiki/Beveridge_Group

This group is much keener on the public sector than market provision.  These 14 MPs do not include Vince Cable, Steve Webb or Charles Kennedy.  Other MPs who would survive the cull, such as Paul Burstow, have made no secret of their hostility to the Conservatives.

Even if Nick Clegg makes it back, it's hard to imagine a grouping like this cosying up to the Conservatives for another five years unless they are driven to it by numerical necessity.  And it appears that Nick Clegg is going to have a hard fight now.  Without him, I don't see any Lib Dem voice who is going to be arguing hard for a link-up with the Conservatives again.

The light dust-up

If the Lib Dems, Houdini-like, manage to keep those seats which they are currently up against it to keep, they will have 36 seats.  At this point, they start to become credible coalition partners and not just confidence and supply material.   Note that the seven seats in the "up against it" category are all Conservative targets. 

The extra seven MPs would not obviously alter the weight of the party decisively.  Duncan Hames is an acolyte of Nick Clegg and Andrew George is in the Beveridge Group.  Sir Nick Harvey and Michael Moore are both one-offs who are not too easy to categorise.  We can infer from his long friendship with Mike Hancock that Gerald Vernon-Jackson is likely to be in tune with the Beveridge Group.  But otherwise we can't easily tell where prospective MPs fit on the spectrum: their campaigns are very local.  

Overall, we should still expect the Lib Dems to want to look left on this scenario also.  For a contrary view, I attach an article from the New Statesman's site May2015:

http://may2015.com/featured/the-lib-dems-will-be-a-centre-right-party-after-the-election/

I think that this article is utterly wrong, since it ignores the politics of the individuals who will make up the post-2015 Lib Dem Parliamentary party.  But make your own mind up.

Betting implications

If I am right, it will not be enough for the Conservatives to gain most seats to stay in power.  They will need to get a sufficient number of seats so as to make it practically impossible for any other stable government to be formed.  To form a stable government, the Conservatives with the Lib Dems are going to need something of the order of 330 seats as a minimum.  That means that on either the "hard pounding" or the "light dust-up" scenarios, the Conservatives will need 300 seats or near enough to form the next government.  If they have fewer, the Lib Dems will find the lure of the left irresistible.  295 looks the absolute minimum for a continuation of the Conservatives in power.

The midpoint with the various bookies on their over/under bets on the Conservatives is 281.5 for Ladbrokes, 282.5 for Paddy Power and Coral, 283.5 for SkyBet and 285.5 for Bet365, and with all of these bookies you can back either option at the same price.  The Sporting Index spread at present is 281-287.  At these levels, the Conservatives would not continue in office.

So lay David Cameron on Betfair to be Prime Minister after the next election (available on Betfair at prices between 4/6 and 4/5).  This should be somewhere around 6/4.  It is certainly not close to an evens bet at present, even if you believe that the Conservatives will get most seats, which itself is far from clear at present.  This price is a steal.  You can get 13/8 with William Hill that David Cameron will remain Prime Minister to 2016, and that seems more realistic.

Alternatively, back Ed Miliband to be Prime Minister on 1 August 2015 at 11/8 with William Hill.  This is taking the risk that he might not survive the mayhem of hung Parliament negotiations, which will be a topic for discussion if Labour has considerably fewer seats than the Conservatives, so it's a bit less satisfactory.  But it remains a good bet.

And generally, place bets on post-election negotiations bearing in mind that the Lib Dems who return will have a firm political preference for swinging to the left.  If the Conservatives are to stay in power, they're going to have to do most of the work all by themselves.