The range of possibilities: how the constituency markets look in aggregate in March

In late November I had a look at how the constituency markets were assessing the parties' chances in aggregate - not just by looking at how the favourites stacked up in aggregate but also at how many seats in aggregate were in practice in play:

 

http://newstonoone.blogspot.co.uk/2014/11/conventional-wisdom-on-next-election.html

 

I thought it was about time, on the eve of the campaign, to look at this again.  Here are the aggregates of the best prices favourites on the seat markets:

Conservatives 275
Labour 278
Lib Dems 31
SNP 40
UKIP 3
Plaid Cymru 3
Greens 1
Respect 1
DUP 9
SDLP 3
Sinn Fein 5
Lady Sylvia Hermon 1

We now have Northern Irish seats, so we have a full house.  I have treated the Speaker's seat as being in the Conservative column, though different "most seats" markets treat his seat differently, so check this.

 

Since the end of November, the SNP have risen dramatically in the best-guess seat tally.  Correspondingly, Labour have dropped substantially.   Interestingly, the polls haven't actually changed much since December.  Sentiment has changed.  It seems to be a dawning realisation that the Scottish polls reflect an underlying reality.

 

Otherwise, the aggregate of the favourites has stayed very stable.  That is also interesting, because the constituency markets assume a level of recovery by the Conservatives and the Lib Dems which doesn't so far seem to be happening.

 

As you can see, both main parties are thought to be quite a long way from an overall majority. 

Just as importantly, Labour are thought to be slightly ahead of the Conservatives in the battle for most seats.  Even if you take the view, as I do, that the seat markets still underestimate the SNP's chances in Scotland, the two main parties are neck and neck.  You'd never guess that from the "Most Seats" market, where Labour can be backed on Betfair as of this morning at 2/1.  This price is crazy and backing Labour heavily on the Most Seats market should be an essential part of any portfolio of political bets.
 

How stable is that projected outcome?

As before, I've looked at how strongly fancied the favourite is.  And as before, I've worked on the basis that if there is a second favourite at or below 2/1, this is a true marginal.  I've presented the results in a tabular format, with the parties' range shown below:

https://docs.google.com/document/d/1o_021oOlU0YpvApb62zBI0MGVNXdaH3G3YppG8JYFMM/edit?usp=sharing
 

And again we see a substantial change from late November in both the Labour and the SNP columns.  The Conservative band has edged up slightly, but the Labour band has shifted down roughly 20 seats.  Meanwhile, the SNP band has moved forward by roughly 15 seats.

The consequence is that even at the outer edges of this measure of the parties' safe seats and marginals, neither party will get to an overall majority.  Neither party looks very likely to get to 300 seats - everything within this bound of probability would have to come right for the Conservatives for that to happen for them and most things within this bound of probability would have to come right for Labour for that to happen for them.

For those that are interested, here are the Northern Irish seats presented on this basis:

	DUP	SDLP	Sinn Fein	UUP	Independent
DUP	8	1	0	1	0
SDLP	1	2	0	0	0
Sinn Fein	0	0	4	1	0
Independent	0	0	0	0	1
UUP	1	0	1	0	0
Total	8-10	2-3	4-5	0-2	1

These will not affect the outcome of the main battle, of course.

Taking a broader view of what makes a marginal

Let's push the boundaries further.

As previously, I've also had a look at the position if we use the test of marginality as a seat having a second favourite that is priced at 5/1 or less. This table is complicated by the presence of 13 three way marginals (hence the extra row).

 
https://docs.google.com/document/d/1GVCbP7pn701XM-uOhJH7HL3QMYBFpDjr5RDP2BNTaMQ/edit?usp=sharing

(The independent is Claire Wright in East Devon, who is a localist environmental type, who has apparently been quite fancied at the bookies.)

The ranges of outcomes are now much wider than when I used a 2/1 cut-off for assessing marginals, but these wider ranges barely differ from late November.  The betting public aren't that sure of the SNP's chances. 

This stability of range is itself noteworthy.  These markets aren't shifting very much.  I haven't changed my views on the question of how correlated the results in different constituencies will be.  In my opinion, the answer is different for different parties.  The SNP will see very correlated results, since the election in Scotland is either going to be all about their turf (as seems likely right now) or Labour will have reframed it to some extent on UK-wide terms.  At the other extreme, Labour and the Conservatives are fighting multiple different battles and so the correlation will be much less.  To get a fuller version of my views on this subject, I went into this in much more detail last time, so have a look at the link at the top of the page if you want.

Again, for those that are interested, here are the Northern Irish seats presented on this basis:

https://docs.google.com/document/d/1EVhvEvf3wZDQmJbF55wNavDpAHUMRn0n6Jf5GGyPSwA/edit?usp=sharing

It is a more stable position than the rest of the UK, even at this level of marginality.

Conclusions



If the seat markets are to be believed, there is only a slim chance of either main party achieving an overall majority.  Even on the most generous interpretation of what makes a marginal, each main party is going to have to get close to taking everything thought to be in play to get there. 

Incidentally, it would be nice to be able to produce a neat graph which shows the exact implied probabilities of a hung Parliament, but the degree to which the results in individual constituencies will be correlated is uncertain, so it will be a matter of guesswork rather than science.

Are the seat markets to be believed?  Good question.  Two considerations push me in opposite directions. 

On the one hand, the two main parties have been regularly polling in the low 30s in the national polls.  On those national vote shares the winners in many seats will do so on relatively low local vote shares, meaning that the winners may be considerably less predictable at an individual level than the constituency markets suggest.  (The corollary to that is that some of the odds against shots may well offer good value.)  Set against that, the unpredictability is quite likely to cancel out to a considerable extent at an aggregate level.

So on balance I probably do believe the overall story of the seat markets.  That leads me to three conclusions:

1) Don't bet against a hung Parliament unless you get long odds.
2) Labour most seats is a terrific value bet at 2/1.
3) Since the Conservatives look unlikely to get above 300 seats (I'd guess at least 3/1), the next Government is very likely to be a Labour-led government.  Lay David Cameron as Prime Minister after the next election at anything close to, or even not very close to, current prices.  He's odds on at present to keep his job.  This is a crazy price.  Enjoy.

 

 

 

 

 

 

 

 

Laugh about it, shout about it, when you've got to choose: who is going to win the candidates' debate?

So we are going to get some debates after all.  After what seems like endless faffing about, we are getting the following format:

http://www.bbc.co.uk/news/uk-politics-32001383

• 26 March: Live question and answer programme on Channel 4 and Sky News featuring David Cameron and Ed Miliband, presented by Jeremy Paxman and Kay Burley

• 2 April: Debate with seven party leaders on ITV, moderated by Julie Etchingham

• 16 April: Debate between five opposition party leaders on the BBC, moderated by David Dimbleby

• 30 April: BBC Question Time programme with David Cameron, Ed Miliband and Nick Clegg, presented by David Dimbleby

You don't have to be particularly keen-eyed to realise that there are in fact only two debates in this, and David Cameron features in only one, on 2 April.  I can think of better ways of spending the evening of Maundy Thursday than watching a debate (I'll be on a plane when it takes place, as it happens).  But that doesn't stop me considering the betting implications, and Ladbrokes do have a market on this:

http://sportsbeta.ladbrokes.com/TV-Debates/7-Way-Live-TV-Debate/Politics-N-1z124w7Z1z0ql15Z1z141ng/

So, who is going to win? 

Constraints of the system

 

In a seven-way debate, participants have a limited number of messages that they can major on, bearing in mind the time that they have available and the time that others will spend trying to counteract their messages.  So each leader will need to consider carefully what they are going to try to achieve in that limited time.  How are they going to decide what to say and do?  For this we need to get mathematical.
 

Game theory
 

Among Janos von Neumann's many achievements (including helping to inspire the film Dr Strangelove) was the foundation of game theory.  In that area of mathematics, we regularly encounter the truel - a three-way duel of the type seen in The Good, The Bad And The Ugly.  Apparently weaker gunslingers are disproportionately likely to win because the stronger gunslingers need to focus their fire on each other.

This time we have a seven-way duel (a heptuel?).  Perhaps disappointingly, they will all be standing physically at the end of the process and every participant will get multiple shots.  How is that going to pan out?  We need to consider in turn the strength of the various shootists and their objectives.  Because the party leaders aren't all aiming for the same thing and they have different starting positions.

As with the truel, this heptuel features gunslingers of differing strengths.  I see them falling into three categories: the main contenders (David Cameron and Ed Miliband); the outsiders (Nigel Farage, Leanne Wood, Natalie Bennett and Nicola Sturgeon); and Nick Clegg.  In many ways, Nick Clegg throws up by far the most interesting problems, as we shall see.

Better brains than me will be crunching the mathematics, but we can make do with a debased version.  As we shall see, this is a most peculiar heptuel.

The party leaders' aims and capabilities

First, let us consider what each party leader is going to aim for and how capable they are of achieving that aim.  The order will seem a little strange, and there is an element of iteration, but bear with me.

Ed Miliband

Ed Miliband needs the public to take a fresh look at him.  He is the single greatest impediment to his party's chances.  He therefore needs to come across as fluent and thoughtful, and to hold his own with David Cameron.

In the absence of intervening factors, I would expect him to have a very decent chance of achieving this.  He is intelligent and when not being tormented by the press reasonably likeable.  Set against that, he is undeniably nerdy and can get bogged down in detail.  He can also be slow to realise when he needs to change tack once things have turned in an unexpected direction.

As I shall explain below, however, he has a major problem in this format that hasn't been fully appreciated yet.

David Cameron

Conversely, David Cameron's chief opponent is Ed Miliband.  He needs to be seen to have decisively beaten him so that the public don't take a second look at him.  The Conservatives' one clear advantage over Labour is in their leaders, so they cannot afford to have that advantage eroded.

In the absence of intervening factors, this would be a fairly stiff challenge for David Cameron, given that Ed Miliband can be more capable and personable than the public appreciates.  That said, David Cameron looks and sounds the part of a leader, is an experienced debater and in a crowded field that is unlikely to be eroded unless he makes a serious blunder.

What David Cameron does not have time to do is challenge properly Nigel Farage's assertions about him.  Eagles don't have the time to strain at gnats.  This means that he is very vulnerable to an attack on the anti-immigrant flank.

Nigel Farage

Nigel Farage has a very simple task: to go after the votes of David Cameron's grumpy right wing.  He will do so by labelling all the other parties as the same and having no real answer to the problem of immigration.  He will be positioning himself as bluff and plain-speaking.

He has excellent chances in the absence of intervening factors of achieving this.  He was perceived to have done well in the debates with Nick Clegg before the Euro-elections and neither Ed Miliband nor David Cameron have the time to be attacking him with any great zeal. He may well have the coast clear to make his points (though perhaps not, as I shall explain below).

Natalie Bennett, Leanne Wood and Nicola Sturgeon

Why have I grouped these three together?  Because they group themselves together:

http://www.theguardian.com/politics/2015/mar/06/green-party-talks-alliance-snp-plaid-cymru-caroline-lucas-labour-coalition
http://www.theguardian.com/politics/2014/dec/16/snp-plaid-cymru-greens-join-forces-austerity-election

Effectively they are respectively the English, Welsh and Scottish wings of anti-austerity parties (the Greens operate in all three countries but de facto are going to be competitive only in England).  They have at the debates the identical purpose of taking a big anti-austerity bite out of Ed Miliband's left flank.

And, critically, together they have three times as much firepower as everyone else in the debate.  Natalie Bennett has not exactly impressed as a political figure, but Nicola Sturgeon in particular is formidable.  Between the three of them, they are going to attract a lot of attention.  They will have the wind behind them from the start.

From Ed Miliband's viewpoint, this is a disaster.  Half of all the voices against him are going to be virulently anti-austerity.  Either he is going to have to spend some of his time rebutting them, time that he would otherwise be spending attacking David Cameron, or he is going to have to let this attack go unchallenged.  He's really going to struggle to avoid being spread way too thinly.

Labour might not have been able to avoid it, but this is a really poor format for them.
 

Nick Clegg

Nick Clegg is in a unique position.  His best source of votes is from those potentially opposed to the Conservatives.  So he will need to find ways to pile into David Cameron.

He is likely to be disregarded by almost everyone else because of his remarkable unpopularity - you don't kick a dead dog.  But he is the leader of a party of government.  He needs the public to take a second look at him - to that extent the format is really bad for him, because he risks getting lost in the mix.

That means that he needs to do something unexpected that will attract attention.  The Lib Dems have already shown that they appreciate the need for this with the much-derided Yellow Box stunt after the budget:

That didn't work, and the Lib Dems are going to need to do something more.  What could Nick Clegg do in the debates to attract (positive) attention?

The odds are stacked against Nick Clegg from the start, so he needs to find someone in the room to attack aggressively that people that he would hope might be "his" people would enjoy seeing attacked.  David Cameron registers for that purpose, but that is already priced in. 

Nick Clegg needs to shake things up more than that, to be a wildcard.  Otherwise, he is going down quietly to crushing defeat.  He may well be defeated anyway, but he should at least go down fighting.

He might think about really laying into Nigel Farage.  The advantage of doing so in this format is that Nigel Farage will really not want to waste much time on Nick Clegg (who is already roadkill) when he could be using his valuable time on David Cameron.  Progressives would love to see Nigel Farage on the back foot, and the warmth from that might help Nick Clegg.  He was judged by the public to have lost the debates against Nigel Farage last year, but that was one on one.  You don't have to be the biggest bruiser to get a vicious jab in when you're in a confused melée.

Or he might try something entirely different. 

I don't expect Nick Clegg to win the debate.  Too much water has flowed under the bridge since his debating triumph in 2010.  But he's an experienced debater and will make a dramatic contribution: he needs to.  I just don't know what that contribution will be.

Judging the heptuel

If the contest was to be judged by the commentariat, Nigel Farage wouldn't stand a chance.  But the contest will be judged by pollsters, and their respondents have a habit of seeing things quite differently.

It is human nature to regard the leader of your preferred party.  This gives David Cameron and Ed Miliband a headstart.  Equally, it is human nature to have one's expectations confirmed.  This gives David Cameron and Nigel Farage a headstart.

The fourth serious contender must be Nicola Sturgeon, as leader of the anti-austerity trio.  She is unlikely to come under sustained attack from anyone and in any case is a very capable and personable presenter of arguments.

In a seven-way contest, the winner doesn't need to get that high a share of the vote.  It's more likely than not that the winner will get no more than 30% of the vote and possibly less.

Given the strategic pressures that Ed Miliband will come under in the debate, I'm not expecting him to break through.  Battling both the anti-austerity trio and David Cameron from opposite positions is just too tough.  At 3/1 he looks way too short to me. 

Nicola Sturgeon is worth considering at 8/1 since she is a confident speaker who will not come under much fire, but I'm doubtful whether non-Scots will be receptive to the SNP badge.  8/1 is fair value but no more for me.

Nigel Farage has to stand an excellent chance.  He is hated by many but adored by many too.  There will be no tactical voting in this contest, so the Faragistas will ensure that he is in serious contention.  Only if he slips up seriously will he fall out of contention.  But at 2/1 he's just a bit too short to be fanciable for me.

The format, however, favours familiarity.  David Cameron is well-known and well-liked, and so long as he doesn't say anything absurd, offensive or patronising, his own loyal cadre of supporters will ensure that he is there or thereabouts.  4/1 looks like a very good price for the most familiar and experienced candidate.  I'm on.

Party games: constructing the next government

Everyone has their own pet theories about what the next government will look like.  I've already had one look at this in early December:

http://newstonoone.blogspot.co.uk/2014/12/the-next-government-picking-through.html
 

I am still following the same general approach, but the numbers need quite a bit of updating, which in turn changes the dynamics. We've had a few more statements of intent from the various political parties, which need decoding.  So my thinking has moved on a bit.

A game of consequences

In my previous post on the subject, I looked at the various parties' positions.  Not much has changed here and the underlying dynamics remain the same. 

Labour yesterday explicitly ruled out a coalition with the SNP (though not a supply and confidence arrangement).  UKIP has become firmer about not entering a coalition with the Conservatives:

http://www.telegraph.co.uk/news/politics/nigel-farage/11467020/This-is-my-deal-Mr-Cameron-an-immediate-EU-referendum-where-my-German-wife-is-banned-from-voting.html

"First, would UKIP wish to form a formal coalition with the Tories? The answer is no. We are radicals; we want real change to help Britain get back self-governance and self-confidence. There are many other areas where we can make a contribution. But I have no desire to swap the short-term privilege of a ministerial car for everything that we have fought for. I would look to do a deal where we would back key votes for them – such as the Budget – but in return for very specific criteria on an EU referendum."

This logic would seem to apply equally to deals with Labour, though Nigel Farage avoided commenting on this.

What does that leave us with?

When you eliminate the impossible, whatever remains, however improbable, must be the truth.  Donning my deerstalker (though without the aid of cocaine), I can identify the following possible outcomes:

1) Labour majority government
2) Conservative majority government
3) Labour-Lib Dem coalition - not necessarily a majority coalition
4) Conservative-Lib Dem coalition - not necessarily a majority coalition
5) Labour minority government (with or without explicit confidence and supply from other parties)
6) Conservative minority government (with or without explicit confidence and supply from other parties)
7) Grand coalition

That, or we're being lied to by one or more of the ensemble.  But I'm a trusting soul and I put my trust in them all.  If you back all of these options at best prices in appropriate proportions, you can get a return in two months of 10%. 

There are three risks in this.  First, one or more politicians may indeed eat their words, or may be replaced by others with different approaches.  Secondly, you may have arguments with bookies about some of these bets - do the coalition options include minority coalitions?  They should, but it's worth checking in advance.  Thirdly, I have treated as "impossible" coalitions that involve parties such as the DUP, the Greens and Plaid Cymru.  You could find your bets losing on this basis (though that really would be bad luck).

So on balance, I don't particularly recommend backing all of the above possibilities indiscriminately, but choosing a bit more carefully.  So let's go further and look at how the numbers are currently adding up.

The current par result

Since early December, the Conservatives have strengthened a bit in the markets, Labour has weakened a bit more and the SNP have strengthened a lot.

This morning, Sporting Index had the following midpoint prices:

Conservative Seats 284
Labour Seats 269

SNP Seats 42

Liberal Democrats Seats 26

UKIP Seats 8

Green Party Seats 1.5

Plaid Cymru Seats 3.3

Compiling the current favourites in the individual constituency markets would not get you to a very different point (though it should be noted that this totals nearly three more than the 631 seats in Parliament for constituencies outside northern Ireland).

The models based on the polls are coming in thick and fast, and in general they are broadly in line with the markets, though the SNP are generally forecast by pundits to do better than the markets currently envisage.  As of 13 March, May2015 predicted the following result:

Polling Observatory, unusually, forecast that Labour will get most seats:

http://may2015.com/featured/election-2015-academics-predict-labour-will-win-20-more-seats-than-tories-and-form-next-government/

Their forecast yesterday was:

Labour — 285 (260-313)
Tories — 265 (235-293)
SNP — 49 (34-56)
Lib Dem — 24 (17-33)
Ukip — 3 (1-5)
Others — 6 (4-9)

The May2015 forecast is more in line with the predictions of most other forecasters at present.  Mind you, Polling Observatory may be right - just because they're out of line with the consensus doesn't mean they're wrong.

What would these figures mean?

For the moment, I'll work off the May2015 numbers.  These, in common with most of the pundits' projections, show that not only should we expect a hung Parliament but the only combinations of two parties to command a majority in Parliament are (1) Conservatives plus SNP and (2) Conservatives plus Labour.  The SNP have explicitly and repeatedly ruled out the first of these, as noted above.  The second also looks like a remote prospect, the entreaties of the likes of Lord Baker notwithstanding: neither party looks anywhere near ready for the idea just yet.

So if we get the par result we look set for a government that is going to be dependent on the support, passive or otherwise, of three or more parties.  That sounds like fun. 

In fact on these numbers, the only arrangements of parties that come close to stacking up given the politics involved both require Labour and the SNP to work together, and then either patch up a ragtag army of Plaid Cymru, Respect, Greens and friendly (or bribed) northern Irish politicians or work with the Lib Dems. 

Will the SNP vote on English-only matters? This is important.  If the SNP are going to abstain on English matters, the practical level of an overall majority reduces to 295, but 55 potentially helpful votes also disappear.  Even if Labour can get Plaid Cymru, the Greens, Respect, the SDLP, Lady Sylvia Hermon and the DUP onside, the government still would not have a majority on the May2015 numbers on English-only votes.  This remains true even if the SNP take 20 fewer seats from Labour, because the practical level of an overall majority increases at half the rate that Labour rises in the seat count.  The Conservatives and the Lib Dems would have a blocking majority in England.  

Labour need something like 290 seats as a minimum to be able to disregard the Lib Dems if the SNP are abstaining on English-only matters (more, if they want to avoid being blackmailed by the DUP).  So if the SNP aren't going to help on English votes, Labour would need to deal with the Lib Dems.

So that means that there remain two critical questions.  First, would the SNP help on English votes?  And secondly, if they wouldn't, what would the Lib Dems do?

The SNP strategy

The SNP's long term aim is no big secret: it wants independence for Scotland.  Nicola Sturgeon has named three preconditions for Labour to get its support: no renewal of Trident; more powers for Scotland; and an end to austerity.  The first and last of these are practically unacceptable to Labour, as she well knows.  So what is she doing?

Given that the SNP has just suffered a clear referendum defeat, it cannot make that a precondition.  But it can use its clout in a hung Parliament to advance that cause.  

Nicola Sturgeon has already indicated that the SNP might vote on English matters where they can claim a Scottish interest:

http://www.channel4.com/news/nicola-sturgeon-nhs-election-devolution-referendum

Her pretext:

"The current Westminster agenda of austerity, privatisation and patient charging in the NHS in England threatens to harm Scotland's budget, on which our NHS depends.

"Therefore, SNP MPs elected in May are prepared to vote for a bill which would restore the national health service in England to the accountable public service it was always meant to be."

This is a fairly screeching handbrake turn from the SNP's previous stance, but makes complete sense from a strategic view.  It winds up the English and maximises the destabilisation of the UK-wide government.  Note, the SNP are not committed to voting on all English-only laws.  But they reserve the right.  Nicola Sturgeon is setting up the opportunity to make the SNP as unpredictable as possible and to destabilise the union as much as possible.  

 

That means that if Labour is to be able to govern reliably on English-only matters, it will need Lib Dem assistance.  Will it get it?

 

The Lib Dems' next steps

The good news for Labour is that the Lib Dems look as though they are likely to be moving leftwards after May, if I am right in my previous deductions:

http://newstonoone.blogspot.co.uk/2015/02/blessed-are-kingmakers-who-will-lib.html

But the Lib Dems seem to be getting steadily wobblier about the idea of being in coalition  with anyone at all.  Vince Cable has pretty much ruled out the possibility of the Lib Dems playing ball with either the SNP or UKIP:

http://www.theguardian.com/politics/2015/mar/13/vince-cable-lib-dem-snp-deal-after-election-inconceivable

"He said: “I think it’s inconceivable that we would be getting into tie-ups with the SNP and I would be very surprised if Labour did that but certainly not the Tories.”

The business secretary likened a deal with the SNP to working with the UK Independence party. He said: “The same is true of the attitude towards Ukip; they want to take Britain out of the EU which is just as fundamental a constitutional change as – well, almost as fundamental as – membership of the UK, so we take a comparable approach to that.” "

And the rank and file are potentially unreliable even to their own leadership:

http://www.theguardian.com/politics/2015/mar/15/liberal-democrat-leaders-asked-about-coalition-without-party-approval

"Despite the Liberal Democrat campaign focusing on the idea that the party as a moderating force in coalition with either Labour or the Conservative party, sources in the party say they are increasingly worried that a deal with either of the main parties would not achieve the two-thirds of support needed by the membership.

While there is a lot of anger about the coalition with the Conservative party, “Labour hates us and we hate Labour”, said one source.

“[A coalition with either of the main parties] might get through the parliamentary party and the federal executive might have their arms twisted to support it, but the party as a whole would probably reject it.” "

But we don't need to get into the Lib Dems' hive mind to work out their preferences.  Ultimately, if the Lib Dems are reduced to anything like the 24 seats that May2015 predicts, they will not have enough bodies to form a credible coalition partner.  Whether they offer confidence and supply or, more likely, simply deal with Labour on a case-by-case basis, they will probably not form part of the government.  They don't look like getting the 35+ MPs they would need to start demanding seats at the table.  They will secure what terms they can from Labour to ensure that the nation has a viable government, then find a corner to lick their wounds. 

Interestingly, all this logic is still broadly applicable if the Polling Observatory prediction comes true rather than the May2015 prediction: Labour would still need the SNP to commit to vote on English-only laws and it is not in the SNP's interests to be a reliable partner.  So Labour will need Lib Dem support, which will probably be given in some tenuous form.

The sum total of all this is that anything reasonably close to what is currently widely seen as the par result will probably result in a Labour minority government.

When do the dynamics change?

Given what the various parties have said and my reading of what's going on, I expect a different dynamic to the ultimate form of government only if:

1) Labour is greater than 290; or
2) Conservatives are greater than 295.

Other possibilities also open up if the Lib Dems get 35 seats or more, UKIP get 20 seats or more or if the SNP fall far short at the last minute.  But all of these outcomes now look unlikely, so I'm not factoring them into my thinking.  

The first case is not too complicated.  If Labour can form a government without needing the unreliable SNP as partners for the difficult English-only votes, they will.  They can expect SNP support when it's not needed too.  Labour will rely on the Lib Dems or the Parliamentary shrapnel to get their majority in these cases.  That support may be tenuous, but it will be sufficient to get them into office in a minority government - unless they surpass all expectations and get an overall majority.  But that looks like a very outside chance right now.

When do the Conservatives get the chance to stay in power?  Given that the SNP is avowedly left-wing and anti-austerity and the Lib Dems would describe themselves as progressive, the Conservatives need to secure a seat count for themselves that makes an effective majority impractical without them.  For that they need a seat count that either is sufficient with the Lib Dems to reach an overall majority or to have a seat count at or above the effective level for passing English-only laws if the SNP abstains.  In those circumstances, particularly if Labour is unable to put together a coalition or formal supply-and-confidence arrangement, the Conservatives would fancy their chances of staying in power.  For the reasons given in the previous posts linked to above, I assess that level at 295 seats.

If they get the chance, the Conservatives will form a minority government unless the Lib Dems scramble to 35 or more seats or unless the Conservatives get their overall majority.  Neither outcome looks to be in prospect.

How likely are these other possibilities?

This is the critical question. Most importantly, how likely is it that the Conservatives will get to 295 seats?

I have not repeated my analysis from late last year as to the implications from the betting market on this:

http://newstonoone.blogspot.co.uk/2014/11/conventional-wisdom-on-next-election.html

(I'm hoping that I'll get time to do a full round-up of all the seat markets on the eve of the election.)

My lick-of-the-finger guess is that the Conservatives would have roughly a 1 in 3 chance of getting to 295 seats at present, bearing in mind current polling.  Feel free to disagree with me though.

On that basis, I make the current probabilities something like the following:

Labour minority: evens
Conservative minority: 3/1
Anything else: 3/1

So I see some value in backing a Conservative minority government, but loads and loads of value in backing a Labour minority government.  If anything, I feel that I'm being cautious about my assessment of the chance of a Labour minority government.  You can still back this at 7/2 with SkyBet and 3/1 is widely available.  I've backed this heavily and so far I've ignored the option of backing Conservative minority government (I backed it at 7/1 in November and December and it has improved as a bet since then).  If you are more bullish than me about the Conservatives' prospects, you will want to cover Conservative minority government too.  But for myself, I wouldn't bother with anything else.

The other bet that still looks good is laying David Cameron on Betfair as Prime Minister after the general election.  To me this looks firmly odds against now, and by quite some way.