2020: the geography of Labour's next campaign

I've looked at the broad sweep of the next election from the viewpoint of each party in turn.  What of the geography of the next election?  In particular, how does the geography affect Labour's chances of electoral success?

A boundary review is due and it is likely that many constituencies will change considerably, so there is no point in looking at the 2020 marginals yet - we don't know where they are yet.  But we can look in broad terms at how the election is likely to be fought.

 

The starting point has to be the current map of the constituencies.

Every picture tells a story and the story this picture tells is on the surface fairly clear.  Northern Ireland is its own special patchwork.  Scotland is an SNP fiefdom.  England and Wales are dominated by the Conservatives except in some very specific areas.  

 

The effect is exacerbated by the different sizes of the constituencies.  I give below the same constituency map but this time presented with each constituency represented by an equal-sized hexagon:

Scotland has shrivelled.   Meanwhile, the Conservative dominance in England and Wales is now not quite so overwhelming as the Labour-held areas have dramatically expanded in size.

Both of these maps have important things to tell us.  The second map shows that the Conservatives are not so far out of sight of Labour as some of the commentary since the election would have you believe.  And the first map shows that Labour are nevertheless barricaded in a few heartlands that take them nowhere near a majority.  Labour need to break down those barricades.

 

Where do Labour retain strength?  A glance at the first map will tell you the answer: London, the English Core Cities, Hull, Leicester, Coventry, Stoke, south Wales, the north east as a whole and the wider north west surrounding Liverpool, including north east Wales.  Or, to put it more briefly, by and large, big cities.  With worryingly few exceptions, Labour have become an almost exclusively metropolitan party.  They have lost Scotland and they have lost smaller town England.

(For those that haven't come across the term before, the Core Cities are a grouping of the largest cities outside London.  I wrote about Labour's deep support in these last year:

 

http://newstonoone.blogspot.co.uk/2014/05/core-cities-labours-reservoir.html

 

At that time the grouping was only of English cities.  Since then, it has been expanded to include Cardiff and Glasgow, but not, oddly, Edinburgh.)

 

Labour made ten gains from the Conservatives.  Only two of these seats fell clearly outside the Labour fiefdoms listed above: Hove and Lancaster & Fleetwood.  Meanwhile, the Conservatives took Plymouth Moor View, Telford, Southampton Itchen, Derby North, Vale of Clwyd and Gower.  Labour are getting close to maxing out in the metropolitan areas, but all the time are being edged out of smaller towns and cities - and Southampton, Derby and Plymouth are not really that small.

 

Many of the exceptions to the general picture - Norwich South, Cambridge, Oxford East, Exeter, Lancaster & Fleetwood - are constituencies with a large university presence. They may be smaller places, but they have much in common with the metropolitan areas. They are places where the words "urban professional" would not produce a curl of the lip.

The Labour leadership campaign has spent much of the time so far discussing "aspiration" at great length.  But the language is very misleading.  Labour have no problems talking to the residents of the places with the highest aspirations.  Their problem is rather how to talk with those who live in places where the average resident has ambitions that are real but more limited, the strivers and battlers.

 

This is not a new idea.  Here's a New Statesman article on the subject from 2011:

 

http://www.newstatesman.com/blogs/the-staggers/2011/09/aspirational-voters-election

As the article acknowledges, it wasn't a new idea then either.

 

This seems to be why Labour have been more harmed by the rise of UKIP than the Conservatives.  It seems that the Conservatives eventually found a message that addressed the hopes and fears of a fair-sized section of the strivers and battlers.  Labour did not.  

If Labour want to win - by any definition of "win" - next time, they will need to reverse this trend.  They need to find a way to reach the unglamorous medium sized towns and cities of England.  

 

Let's look again at the Labour target list on existing boundaries:

https://drive.google.com/file/d/0Bygi8eZw-4q1SDZTLUl2NVd4aTQ/view?usp=sharing

It is stuffed full of such constituencies: Thurrock, Bedford, Lincoln, Corby and Carlisle are very different places, but none of them are world centres of anything and all of them have lots of people who quietly want a slightly better life for themselves - or at least, for life not to get any worse.  However the constituency boundaries are drawn up for 2020, there will be similar such constituencies that Labour will need to win over.

 

Indeed, Labour are not secure in all of the seats that they currently hold:

 

https://drive.google.com/file/d/0Bygi8eZw-4q1Tm54TU02a3E3R0U/view?usp=sharing

If the Conservatives can broaden their appeal, they will be circling around seats like Barrow & Furness, Newcastle-under-Lyme, Derbyshire North East and Wrexham.  In all of these seats the Conservatives closed the gap on Labour from 2010.  There are others on the Labour defence list that are becoming increasingly marginal.  However the boundaries are drawn for 2020, there will be constituencies like these that are trending away from Labour.  Unless Labour changes course significantly.

 

More generally, if Labour does not start to broaden its appeal, it may even find that other apparent heartlands that are outside its current metropolitan focus are vulnerable to attack if other parties get their acts together. South Wales and the north east, for example, don't fit particularly well with the rest of Labour's current heartlands.  Fortunately for Labour, its opponents in those areas are UKIP and Plaid Cymru, and neither has so far demonstrated much seat-winning prowess.  But things can change.  Labour needs to recognise the danger fast.

2020: Labour's challenge

Since the election we have been treated to a lot of angst from senior Labour politicians.  Liz Kendall claimed: "One more parliament like the last means we might be unable to form a majority government again."  Jon Cruddas, going further, said: "this could be the greatest crisis the Labour party has faced since it was created. It is epic in its scale.”  Are they right?

 

I do not propose looking directly at the direction that Labour should go in.  But I have taken a look at the electoral landscape that they now face.  Here are the seats that they currently hold (ranked from most marginal to safest):

 

https://drive.google.com/file/d/0Bygi8eZw-4q1Tm54TU02a3E3R0U/view?usp=sharing

 

And here are their target seats, ranked in order of swing that Labour require to take them:

 

https://drive.google.com/file/d/0Bygi8eZw-4q1SDZTLUl2NVd4aTQ/view?usp=sharing

 

I hope that these lists are fairly self-explanatory.  On the first list I have highlighted the majority in the colour of the party of the nearest challenger (I have used grey for the SNP simply on the ground of legibility).  On the second list I have highlighted the seat and the majority in the colour of the party of the incumbent.  On the second list I have also asterisked the majority if Labour is in third, with an additional asterisk for each position Labour has dropped below third.

 

Now it must be noted at once that we will probably have boundary changes before the next election (these may well make Labour's position weaker, though this is not certain).  So these lists should not be used unthinkingly.  The sands are expected to shift.

 

From these lists, however, quite a few conclusions can be drawn.

 

Know your enemy

 

One thing stands out from both of these lists: Labour should be focussed pretty much exclusively on the Conservatives.  Of their top 100 targets, all bar 14 are Conservative-held seats.  Of their top 100 most vulnerable seats, all bar 16 have a Conservative as nearest challenger.  The lesson is simple: Labour has to turn all its efforts towards its traditional battle with the Conservatives.

 

The point should not need making, but apparently it does.  Already Labour supporters are considering how to get back "their" Scottish seats from the SNP.  But only seven SNP-held seats feature in the top 100 targets.  When it comes to forming a majority in Westminster, Scotland is a sideshow.  Nothing that has happened since the election suggests that the tribulations of Scottish Labour have ended or even that it has yet reached its nadir.

 

Similarly, there has been much talk about how UKIP are now second-placed in a plethora of Labour-held seats.  And so they are.  But chiefly this is a feature of very safe Labour seats.  UKIP are second in only five of Labour's 100 most vulnerable seats.  If UKIP start getting swings the size that the SNP achieved in Scotland this time, then they will take lots of Labour seats.  But if that happens, Labour will have many other problems than just the challenge of UKIP.  And it's not as though the post-election period has been particularly happy for UKIP either.

 

Labour should not be distracted.  Everything it does needs to be geared towards undermining the Conservatives.  Everything else is of secondary importance.

 

The scale of the challenge

 

It has been noticed quite widely that Labour will need a very large swing if they are to win an overall majority: just under 10% on a uniform basis.  This is true.  Indeed, Labour need something like a 5% swing if they are even to get most seats.  To put this in context, a swing of the level required for an overall majority has been achieved since the Second World War only in the 1945 and the 1997 elections.  A 5% swing has been achieved in only three more elections in that period.  Clearly Labour have a major challenge ahead of them.

 

But Labour is demonstrating a goldfish-like ability to forget all the discussions before the election about what happens in the case of a hung Parliament.  Because most of the other Parliamentary parties dress to the left, Labour does not even need most seats to be best-placed to form a government.  It just has to gain something approaching 40 seats from the Conservatives and to be ready to play nicely with others.  This is rather less of a challenge.

 

Going back to my earlier point, Labour taking seats off the SNP in 2020 doesn't do all that much to improve Labour's prospects of leading a government: the SNP's supporters expect it to back a Labour government, so the seat count for a hypothetical coalition or minority government is left unaltered by transferring a seat from the SNP column to the Labour column. If Labour plus SNP totalled 326, all the huffing and puffing in the world from the Conservatives won't stop a Labour-led government from being formed.

 

Labour taking SNP seats would help, of course, in addressing scare stories put forward by the Conservatives about the malign influence of the SNP over policy and it would help in giving Labour legitimacy for forming a government if it got it closer to being the largest party.  But these are secondary rather than primary benefits.

 

Implications for the Labour leadership election

 

When selecting their new leader, Labour members need to be aware that they do not have very good prospects for an outright majority in 2020 in the absence of something big happening and that even getting most seats looks quite tough from where they start now.  There is much that is uncertain in the coming five years, but Labour would do well to plan on the basis that these uncertainties won't necessarily work in its favour. 

 

So if Labour prioritises power over ideological purity and if it wants to aim for an overall majority or most seats, it should avoid "no change" candidates.  It should look for the candidate that would most undermine the Conservatives' prospectus to the country.  And it should consider the quite likely possibility that its leader will need to work in concert with other progressive parties, so it should look for a good negotiator and someone comfortable with the idea of working on a cross-party basis.

 

The last time that Labour had such a leader, he managed to achieve a sufficiently large national swing to make the idea of a coalition entirely unnecessary.  By contemplating a broad coalition in 1997, Tony Blair was able to create one under the banner of his own party.  Are Labour party members ready to select a leader that offers a similar approach?  And do any of the current candidates actually do so?

The Labour battleground in April 2015

Over the months I have looked a few times at the individual constituency betting odds on party lines, ranking the seats in order of the odds on a given party taking that seat.  I last did this in a comprehensive manner in October/November last year.  Over the next week or so, I shall be giving my final pre-election look at the seat markets.

The idea behind this is not immediately obvious to everyone, so new readers may want to start here:

http://newstonoone.blogspot.co.uk/2014/04/end-of-part-one.html

The central point from that post is that such a table assumes that in aggregate the constituency odds are our best estimate of what's going on, while noting that there may be individual anomalies (more commonly known as betting opportunities). It also makes the heroic assumption that the individual constituency odds - for Labour and the Conservatives at least - are perfectly correlated contingencies (which of course they are not) to establish a handy tool for judging the chances of success for each of the main parties overall. The general idea is that looking exclusively at marginality takes insufficient account of the different nature of the seats (who's second, is there a relevant third player, where is the seat). The constituency odds factor those matters in to the best judgement of bookies and punters. By arranging constituencies by order of odds rather than majority, we can see how many seats gamblers expect the parties to take - or what the odds are that each party will take a given number of seats.

So, here's the table as of this morning:

https://drive.google.com/file/d/0Bygi8eZw-4q1aXVQM1lPXzNockk/view?usp=sharing

I've included every seat where Labour are priced between 1/16 and 16/1.  These prices are up to date so far as possible (subject to the inevitable transcription errors etc) as of first thing this morning.  

Here are the seat tallies that would be implied by taking these milestone seats:

210 Cardiff North (2/9)
220 Enfield North (2/7)
230 Plymouth Sutton & Devonport (4/11)
240 Hove (4/9)
250 Bury North (4/7)
260 Ayrshire Central (8/11)
270 Harrow East (5/6)
280 Lanark & Hamilton East (6/5)
290 Stevenage (5/4)
300 Glasgow Central (13/8)
310 Blackpool North & Cleveleys (7/4)
320 Rossendale & Darwen (2/1)
326 Aberconwy (9/4)

I last looked at the Labour position in October here:

http://newstonoone.blogspot.co.uk/2014/10/the-labour-battleground-in-october-2014.html

What has changed?  In the intervening months, the markets have become much more competitive.  We have many new entrants to the seats markets, with at least 14 different firms quoting on some or all of the different constituencies.  Prices have generally improved in aggregate and there are numerous seats where there is a practical underround (those who wish to seek out low risk double bets may wish to study these lists carefully).  A slight deterioration in the best price for a party may signify nothing more than a new entrant to the market.

But the glacier of safe Scottish Labour seats has melted.  All 41 Scottish Labour seats are far less safe than they were in October.  Some seats that were so safe in October that they were not even listed then are now odds against for Labour.  This has made Labour's task much harder.

Otherwise, the seat markets have moved predominantly in response to constituency polls (and then often not by as much as one might have expected).

Anyway, back to the present day.  5/6, the price on Labour for Harrow East, is sometimes referred to as the bookies' evens (reflecting their need to build in a margin to make a profit), so it seems that the current central expected point for Labour is between 265 and 270. 

For an overall majority, Labour would need 326 seats.  The 326th seat is Aberconwy, for which Labour are priced at 9/4.   As of this morning, you can get 41/1 with Betfair (with good volumes of money at 33/1) on the proposition that Labour will get an overall majority. 

That means one of two things.  Either the bookies' prices on the constituencies are ridiculously mean or the impact of how Labour will perform in individual constituencies has not been properly factored into the overall markets.  The two are not mutually exclusive, of course.

It's less clear how many seats would be required for Labour to have most seats.  You can get 7/4 with Bet365 on Labour getting most seats and do slightly better even than that on Betfair.  You don't start getting prices in the individual constituency markets until you approach the 310 seat mark.  310 would definitely be enough for Labour to have most seats - indeed, 280 might well be enough.  So once again, the most seats market offers far better value than the individual constituency markets if you are looking to back Labour.

So if you want to back Labour, the simplest strategy by far must be to ignore the constituency markets and instead to back Labour in the most seats market (and, if you so wish, the overall majority market).  I've been following this strategy for some time.

However, it is now worth considering whether to place some short term low risk bets on Labour in their safer seats.  2/7 in Newcastle-under-Lyme and 1/5 in Ashfield (where the previous dynamic Lib Dem candidate had to stand down in the worst circumstances) both look good, with UKIP apparently fading in their more distant prospects if other polling is to be believed.  I'm on both.  I haven't detected a Plaid Cymru surge, so I'm backing Labour at 1/8 in Llanelli also.  The rates of return seem well worth the increased risk over bank rates to me.

Tomorrow I shall look at the markets from the Conservatives' perspective. 

Testing the boundaries (2): Labour vs the SNP

One of the huge unknowns for 2015 is how the post-referendum fall-out will translate into votes in Scotland. The betting markets have been chaotic. Chaos is potentially very lucrative - or very expensive. But the time has come to take a position on this. 

I've looked at the Scottish seats several times over the last few months.  The battleground is as follows. The swings required for substantial SNP success are heroic. A 10% swing to Labour across the whole of the UK would give them a landslide majority. A 10% swing for the SNP would give it five seats.

But the SNP are currently polling well ahead of that level.  The most recent YouGov Scotland poll registers a 21% swing from Labour to the SNP.  So the question is: can they maintain this or will the balloon deflate?

So where are we now?

Ground game

Historically, Scottish Labour has been dominant in its ground game.  No longer.  The SNP has at a conservative estimate seven times as many members as Scottish Labour and possibly more than ten times as many members - Scottish Labour is cagey about its membership, to the point of not releasing absolute numbers of votes in the recent leadership contest:

http://paulhutcheon.blogspot.co.uk/2014/12/democratic-deficit.html 

Many of these new SNP members will be raw recruits with no political experience and some will no doubt be uninterested in the tedium of treading the pavements rather than waving saltires, but even making full allowance for this, the SNP will have far more people power than Scottish Labour.  So far, the enthusiasm seems undimmed, as shown by this recent account from a Labour supporter:

http://labourlist.org/2014/12/scottish-labours-next-leader-faces-a-huge-challenge-is-the-party-ready/

" Yesterday the SNP had 12,000 people pay to attend a rally, and a day later in the same city, Labour could barely scrape triple figures, for free, for a leadership contest. That’s 1/120th of the size of the SNP gathering, or 1/40th of the size of the Radical Independence Coalition event held the same weekend."

This in-built advantage for the SNP is not going to change over the next five months.

Meanwhile, the SNP dominated the Yes campaign and many of its members will have intimate knowledge of who voted for independence.  The No campaign was more pluralistic, which means that Scottish Labour will not have quite such good access to the data from the referendum. 

Party leaders

Both the SNP and Labour have new leaders in Scotland, and both have to endure the shadow of others in their party looming over them.  Alex Salmond stood down as leader in the wake of the referendum result, but even before his resignation took effect, he seemed to repent of his decision and is now going to run for a Westminster seat.  Nicola Sturgeon seems to have a good working relationship with Alex Salmond, but sooner or later there will come a question on which she disagrees with him.  Right now many are still behaving as if Alex Salmond is still leader.  Is Nicola Sturgeon going to look like she has all the authority that President Medvedev had?  It's hard enough following in the footsteps of a hugely popular party leader, especially if you are personally close to him, without having to deal with him remaining ever-present.

This is unlikely to be a problem before the May election, but it is quite possibly going to be important not that long after.  Who will be in charge of tactics and strategy for the SNP in a hung Parliament?  This relationship is one to watch.

Scottish Labour have avoided the worst outcomes from their leadership contest.  In Jim Murphy they have by far the most competent of the three leadership candidates available and he won by a sufficiently wide margin to silence his party opponents.  Neither of these outcomes was preordained.  A complete Scottish Labour meltdown looks markedly less likely as a result.

But it's hardly as though Scottish Labour are marching into sunlit uplands.  The Scots are notably contemptuous of Ed Miliband: he has worse ratings in Scotland for doing his job than David Cameron or even Nigel Farage:

https://d25d2506sfb94s.cloudfront.net/cumulus_uploads/document/19n7gw3lt9/Sun_Results_Scotland_December_2014.pdf

Ominously, only a third of Scottish Labour's current support thought that Ed Miliband was doing the best job.  And of the Holyrood 2011 Labour support, itself the cadre of Labour supporters from an appalling result for Labour, more people thought that Nicola Sturgeon was doing the best job than Ed Miliband. 

Jim Murphy is going to have to inspire the Scottish electorate without any confidence that he will be helped by his grand supremo and with the distinct possibility that he might find himself sabotaged from above at some point.

The shape of Scottish politics

At the last two Holyrood elections, the SNP has come out on top - narrowly in 2007 and by a landslide in 2011.  But in the last two Westminster elections, Labour has hoovered up almost all the Scottish seats, with the SNP trailing far behind in their wake.  Evidently Scottish voters understand the different systems and different purposes of the two different sets of elections.  If 2015 ran true to form, we could expect to see Labour do much better than current polls suggest.

There are, however, strong reasons to believe that 2015 will not follow the same pattern. Scottish politics at the end of 2014 remains dominated by the referendum vote.  Scotland's place in the union is the chief subject for discussion.  While the subject remains that of Scottish identity politics, Labour is in trouble.  In that YouGov poll, 39% of 2010 Labour voters are now recorded as supporting the SNP (though that's not as bad as for the Lib Dems, where 49% of 2010 Lib Dem voters are recorded as supporting the SNP).

This is very much to the SNP's liking, but by electing Jim Murphy as leader of Scottish Labour, Labour has chosen a leader who was one of the main faces of unionism during the referendum campaign. Merely by being who he is, it is going to be hard for Jim Murphy to move the topic of conversation.

There was talk in the wake of the referendum of the independence campaigners standing for Westminster under a unified Yes alliance.  That idea was formally adopted by the SNP, but seems to be being smothered under the guise of co-opting the Yes movement for the SNP, with the aim of getting some prominent independents to stand under this banner also.  This would exclude the Greens and the SSP.  Since these two parties together tally something like a 5% vote share in Scotland, that makes the SNP's task of taking seats that bit harder.  But that's the decision that Nicola Sturgeon seems to have taken.

The dangers of working off uniform national swing

Scottish politics has been upended since 2010 by three large polling movements.  The Lib Dems have dropped from 19% to roughly 5% in the polls.  Labour have dropped from 42% to 25% or so in the polls.  And the SNP have risen from 20% to 45% or more in the polls.  These are enormous movements.

Uniform national swing is designed for small swings.  In the case of the Lib Dems' drop, it simply breaks down mathematically, as I explained here:

http://newstonoone.blogspot.co.uk/2014/04/the-hunt-for-2010-lib-dems-part-1.html

 

The same problem arises to a lesser extent with Labour.

Uniform national swing can be made to work for large rises in the polls (though that would disregard the fact that a fair bit of the SNP's rise has come from the Lib Dems).  But there is an obvious objection to using it here, because we already know that the SNP's rise has been driven by something that we know was not geographically uniform: enthusiasm for Scottish independence.

As I have previously noted, there is something like an inverse relationship between past SNP Westminster success and support for Scottish independence in the referendum:

http://newstonoone.blogspot.co.uk/2014/10/scottish-post-referendum-special.html

Uniform national swing is most unlikely to help us judge what seats are going to fall in practice.

I am not the only one to have noticed this disparity.  Stephen Bush of the Telegraph has put together a model for trying to work out which seats will fall where:

http://www.telegraph.co.uk/news/uknews/scotland/scottish-politics/11238028/Labour-faces-slaughter-in-Scotland.html

While the model is not fully explained and the workings are not fully clear, I like the thrust of what he is trying to do.  I regard its stated assumptions as pretty friendly to Labour, but even so it would see 17 Labour seats fall to the SNP with a further seven in serious jeopardy:

"All in all, the following seats would fall to the SNP: Aberdeen North, Aberdeen South, Dundee West, Dunfermline & West Fife, Edinburgh East, Edinburgh North & Leith, Edinburgh South, Falkirk, Glasgow Central, Glasgow North, Inverclyde, Kilmarnock and Loudoun, Livingston, Linlithgow & East Falkirk, Midlothian, North Ayrshire & Arran and Ochil & South Perthshire.

The following seats would be held by fewer than 1,000 votes: Airdrie & Shotts, Ayr Carrick & Cumnock, Cumbernauld, East Kilbride, Glasgow East, Lanark & Hamilton East, and Stirling."

How will the rest of the run-up to the election pan out?

 

It's time to review where we are.  We now know how both Labour and the SNP are going to be led into the general election in May.  Political discourse is dominated by the question of Scotland's place in the UK and there is no sign that is going to change.  Jim Murphy has a Herculean job ahead of him to change that, and while he's capable, there's only so much that one man can do.  We can expect him to steady the ship, but he is not well-placed to appeal to the voters who have left Labour for the SNP.

Ed Miliband does not seem to appeal at all to Scots, so I expect the SNP to have a substantial lead over Labour in Scotland at the next election unless the SNP mess things up.  A self-inflicted SNP defeat, however, is not a trivial possibility, given the hubris floating around the nationalist movement: some of their post-referendum defeat rallies have come perilously close to The Triumph Of The Won't.

In the wake of the referendum, I expect turn-out to be higher than at previous general elections, as Scots have rediscovered their taste for democracy.  Unionists are quieter than nationalists, but they trooped out in very high numbers to defeat the referendum.  Equally, the nationalists did well to get many previous non-voters to vote Yes in the referendum and with knowledge of who these people are and with the foot soldiers available for a big ground game, I expect them to get a lot of them to vote again next May.

The betting markets

 

Let's have a look at the Labour seats that the SNP are competing for as they stand now:

https://drive.google.com/file/d/0Bygi8eZw-4q1QTZDRklGeVluTEk/view?usp=sharing

These are all the Scottish Labour seats ranked in order of the current prices on the SNP taking them.

Ladbrokes price the SNP as favourites to get most seats in Scotland at 8/15, and Labour at 11/8.  However, when you look at the individual constituency markets, the SNP are favourites to win only 16 of the 59 Scottish seats (and only three Labour-held seats), and  they will probably need at least 25 to take most seats.  Both Paddy Power and Ladbrokes have set an over/under market on SNP seats at 24.5, priced at 5/6 each side of the line.  There must be value here somewhere, so where is it?

Should I be betting now at all?

 

Much depends on how confident I am in my judgements as to what is going on.  In truth, not very, but the jelly does seem to be setting.

We are sure to get some Scottish constituency polls at some point from Lord Ashcroft.  At that point, all the value will go out of those constituencies in minutes.  And those polls will be snapshots not predictions, so they won't actually tell us how susceptible the Scottish public will be to the new Scottish Labour leader by the time of the general election.

Thanks to constituency bets placed before the referendum and since, I'm sitting on a nice notional profit already.  I could just sit on that, or if I was cautious, I could close it out.

But I'm greedy.  I think the constituency markets still substantially underrate the SNP's chances.  The world has changed after the referendum and I see no reason to think that it is going to change back any time soon.  The 8/15 on the SNP getting most seats looks about right to me.  So that means that the constituency markets have continuing value.  I'm going to increase my bets on the SNP.

How am I going to choose constituencies?

Given the conclusions I have reached, the first thing to do is not to take the 2010 results too seriously.  Roll up that electoral map of Scotland; it will not be wanted these ten years.  If I am right, we have new electoral coalitions constructed and they will not be quickly broken down.  So those apparently rock-crushing majorities for Labour are looking very vulnerable in reality.

How to locate the SNP's best prospects?  The Stephen Bush article is worth a lot of attention.  You could do a lot worse than putting stakes on a selection of those 17 seats that he has identified.  They're almost all odds against at present.  In my view, the SNP should be odds on in all of them.

One thing to look carefully at is the past share of the vote held by the Lib Dems.  In all post-referendum polls, at least a third of the Lib Dem vote has been recorded as going to the SNP and in the most recent YouGov poll just under half has made that journey.  That has barely been noted, but a third of the 2010 Lib Dem vote is over 6% of the whole electorate and half is just shy of 10% of the whole electorate.  This is a big chunk of the SNP's new coalition.  So seats with big Lib Dem presences in 2010 are well worth additional consideration.

I've chosen the following seats for an additional punt:

 

• Glasgow North, which is both in Glasgow (where Yes was victorious) and has a substantial 2010 Lib Dem vote.  
• Glasgow Central - it doesn't have the Lib Dem vote but it is in Glasgow.
• Linlithgow & Falkirk East and Kilmarnock & Loudoun, in each of which the SNP already had a quarter of the vote in 2010, giving them a substantial base to build on
• Aberdeen South.  Aberdeen was an area which broke 60:40 for No, so it's not immediately the SNP's most promising area.  But Aberdeen South had a reasonable 2010 vote for both the Lib Dems and the Conservatives, and the SNP can hope to take a large part of the former and that the latter are unlikely to be willing to vote tactically for Labour.  Something close to 40% of the vote might well be enough for the SNP to take the seat.

I've put most on Glasgow North and least on Aberdeen South.  But there is quite a bit of guesswork in this.

What if I'm wrong about Labour's chances?  Are there any bargains anywhere on this table?  In short, I don't think so.  The bet to make if you think the SNP are going to fizzle is the 11/8 on Labour most Scottish seats.  But that's an awful lot of faith to be putting in the abilities of Jim Murphy.  

Testing the boundaries (1): Conservatives vs Labour

In the last couple of posts, I've seen how there are multiple axes of British politics and I've looked at what the markets expect to happen.  A party may perform well on one of these axes and poorly on another, since there is no obvious correlation between some of the battles.  In the next couple of posts, I shall consider the ways in which the market could be wrong and what bets might be worth considering as a result.

Conservatives against Labour

The markets are assuming at present that Labour will take a substantial body of seats from the Conservatives.  Here are the Labour targets organised by swing:

https://drive.google.com/file/d/0Bygi8eZw-4q1eXB4WmVIWloxMTA/view?usp=sharing

This is in fact not the first time that I have looked at this table.  I looked at this in April, here:

http://newstonoone.blogspot.co.uk/2014/04/the-crimson-tide.html

It can be seen that in general Labour's prices have strengthened against the Lib Dems in their target seats, weakened against the Conservatives, weakened rather more wherever UKIP are seriously involved and drifted as if carried by a riptide whenever the SNP are involved.

To get an overall majority, Labour would need a swing that took every seat up to and including Norwich North (and not lose any of their own seats - something which now looks distinctly unlikely given the sharp rise in SNP support in Scotland).

Let's organise these seats by the odds on Labour taking them, and concentrate just on those seats which are Conservative-held.  That leaves 103 target seats:

https://drive.google.com/file/d/0Bygi8eZw-4q1eEdGUUdnZS1QcW8/view?usp=sharing

Viewing them from the other side of the equation, here they are organised by the odds on the Conservatives keeping them:

https://drive.google.com/file/d/0Bygi8eZw-4q1SWdoU1dyMGtfYzg/view?usp=sharing

As you can see, these tables differ considerably.  For judging how Labour and the Conservatives do against each other, the Labour table is more helpful, because the top of the Conservative table includes seats where UKIP are well-placed.  But you need to look at both.

As a general rule, the more out of place the seat is by reference to its target number, the more consideration you should give to the idea that it is mispriced.  Some of the movements are explicable by constituency polling, by the expected impact of UKIP or by the presence of a large squeezable Lib Dem vote.

On this last point, I attach a table setting out the impact of reallocating the Lib Dem vote on the basis that half of it is cast for either Labour or the Conservatives and that it breaks 3:1 in Labour's favour.  You can argue about what proportions to use, but I used this rule of thumb in the summer and it still seems convenient to me:

https://drive.google.com/file/d/0Bygi8eZw-4q1ZWk1R1h3cTYxVlE/view?usp=sharing

The battle

If all the other seats go with the odds, Labour and the Conservatives will each gain around 10 seats from the Lib Dems.  The Conservatives are set to lose five seats to UKIP and Labour are set to lose seats to the SNP (but on a day when an opinion poll has been published that would give the SNP 34 Labour seats on a uniform national swing, I'm not inclined to use the constituency odds to make predictions on that front).

Let's be cautious about Scotland for now and assume that Labour are going to lose about a dozen seats to the SNP.  That means that they would need to take somewhere around 70 of the seats on their list of targets for an overall majority.  Cleethorpes is the 70th seat on this list, with a Labour price of 5/2.  For most seats, Labour would need to take around 30 seats on this list on that same assumption.  That seat is Ipswich, with a Labour price of 4/6.

So what if the Conservatives do rather better against Labour than expected (I'll treat that as being covered by Labour's 20th to 35th most likely gains) and what if they do rather worse (I'll treat that as being covered by Labour's 60th to 75th most likely gains)?

Lord Ashcroft has taken a poll of every seat in the first of these bands.  Labour were ahead in every single seat except for Pudsey (which showed the Conservatives winning on a photo finish).  If the Conservatives are to get most seats, they are going to have to take at least a few of the seats in this band.  If the bookies' odds for the general most seats market are to be believed, this is an even money shot (11/10 on Betfair still though).  Yet their shortest price is evens in only one seat (Wirral West). Either the evens available on Labour for most seats with William Hill is value or some of these constituency prices are worth a shot.  Personally, I think the answer is the Labour price with William Hill, but if you disagree (and even if you don't), the 11/8 on the Conservatives in Pudsey on what looks like an even money shot on the limited specific evidence that we have available looks like a decent bet.

What if Labour do rather better?  So far, the only constituency polls we've had in this higher band are in Thurrock, Watford and Great Yarmouth - all seats with third party interest.  I don't propose to look at complex seats of this type in this post anyway (so I shall also ignore Cleethorpes and Dover).

For the rest, we're thrown back on general principles. Filton & Bradley Stoke has a large Lib Dem vote, but the Conservatives have a large majority.  At 1/3, the Conservatives look like value.  If Labour win this seat, they should be getting a good overall majority.  Right now, that looks unlikely and more than 3/1 unlikely.  And indeed, there is nothing in the marginals polling that I have seen that gives any indication that any of the Labour prices in this segment represent value.  If you must bet on a Labour overall majority, do so via the general markets where you can get 9/2 on the proposition with Ladbrokes or Bet365.  I won't be doing that though.  The prices all round look far too short.

Other seats to note

 

Are there any other seats which have prices that look out of line?  The Conservatives look value in Portsmouth North at 4/5 given the size of swing required.  This price seems to be driven by the decision to close the Portsmouth shipyards, but the constituency poll in the adjacent Portsmouth South constituency shows the Conservatives taking that seat, so this may be overdone.

The Conservatives are priced at 5/2 in Hove and 13/8 in Brighton Kemptown.  Lord Ashcroft conducted polls for both of these constituencies on the same day, finding that Labour had a lead of 3% in Hove and 4% in Brighton Kemptown.  These should not be priced so far apart and the 5/2 in Hove looks fair value, given the uncertainties of any opinion poll (never mind a constituency poll) and given that the poll did not name the individuals contesting the seat.  Don't stake fortunes on the basis of constituency polls though.

On the other side of the fence, Stevenage also looks out of place.  The 13/8 on offer looks like decent value to me.  There's no iron rule that says that Labour can't take a seat in southern England.

When I looked at London in the summer, I tipped Labour in Finchley & Golders Green.  Lord Ashcroft has since polled various north London Conservative/Labour marginal constituencies.   In his polls, Labour are recording a 8.5% swing in Hampstead & Kilburn, a 7.5% swing in Hendon and a 7% swing in Enfield North.  Labour need a swing of just over 6% to take Finchley & Golders Green (which is sandwiched between Hampstead & Kilburn and Hendon).  They're still priced at 3/1 to do so and I've topped up again.

The Labour battleground in October 2014

Over the months I have looked a few times at the individual constituency betting odds on party lines, ranking the seats in order of the odds on a given party taking that seat.  I last did this in a comprehensive manner in June, but a lot has happened since.  It's time to do so again.

The idea behind this is not immediately obvious to everyone, so new readers may want to start here:

http://newstonoone.blogspot.co.uk/2014/04/end-of-part-one.html

The central point from that post is that such a table assumes that in aggregate the constituency odds are our best estimate of what's going on, while noting that there may be individual anomalies (more commonly known as betting opportunities). It also makes the heroic assumption that the individual constituency odds - for Labour and the Conservatives at least - are perfectly correlated contingencies (which of course they are not) to establish a handy tool for judging the chances of success for each of the main parties overall. The general idea is that looking exclusively at marginality takes insufficient account of the different nature of the seats (who's second, is there a relevant third player, where is the seat). The constituency odds factor those matters in to the best judgement of bookies and punters. By arranging constituencies by order of odds rather than majority, we can see how many seats gamblers expect the parties to take - or what the odds are that each party will take a given number of seats.

So, here's the table as of this morning:

https://drive.google.com/file/d/0Bygi8eZw-4q1TVZiVTNsNGhLWkE/view?usp=sharing

I've included every seat where Labour are priced between 1/16 and 16/1.  These prices are up to date so far as possible (subject to the inevitable transcription errors etc) as of first thing this morning.  Note that some Scottish constituency markets have been taken down at present, so the prices I have used are those that were in place yesterday morning.

If they take every seat up to and including their most vulnerable seat of Falkirk, they will take a further 49 seats, taking them to the Conservatives' current tally of 307 seats.  5/6, the price on Labour for Falkirk, is sometimes referred to as the bookies' evens (reflecting their need to build in a margin to make a profit), so it seems that the current central expected point for Labour is to step into the position the Conservatives are currently in.

That's neat, but let's look at a potentially financially remunerative comparison.  For an overall majority, Labour would need 326 seats.  The 326th seat is Vale of Glamorgan, which Labour are priced at 11/8.  As of this morning, you can get 11/4 with Bet365 on the proposition that Labour will get an overall majority and 5/2 with Ladbrokes.  That means one of two things.  Either the bookies' prices on the constituencies are ridiculously mean or the impact of how Labour will perform in individual constituencies has not been properly factored into the overall markets.  The two are not mutually exclusive, of course.

It's less clear how many seats would be required for Labour to have most seats.  They would take 300 seats if they took all seats in order of the odds quoted up to and including East Dunbartonshire, which is priced at 4/6.  290 seats would be theirs if they stopped at Nuneaton, which is a 1/2 shot.  Up to and including Carlisle only would bring Labour 280 seats, and Carlisle is priced at 2/5.  As of this morning, you can get 5/6 with both Ladbrokes and Bet365 on Labour taking most seats.  So once again, the most seats market offers far better value than the individual constituency markets if you are looking to back Labour.

I last looked at the Labour position in June here:

http://newstonoone.blogspot.co.uk/2014/06/the-labour-battleground-in-june-2014.html

You will see that the prices in the constituency markets around the point where Labour would get an overall majority have barely flickered - 5/4 then and 11/8 now (indeed the 325th seat now is Portsmouth North which was previously the 326th seat but is still priced at 5/4 for Labour).  Curiously, however, Labour have drifted a little more in the band of seats where they would be potentially securing most seats.  They still remain good odds-on favourites in that band of seats, but not quite as good as they were in the early summer.  Yet at the same time, the market price on most seats has shortened a bit.  Figure that out.

You should consider closely whether to back the 5/6 on Labour most seats.  Whether or not you think it will happen, the Conservative alternative can be backed at more tasty prices, giving quasi-arbs.  I'll look at this again tomorrow.

Why might you not take this bet?  Much depends on what view you take of what is happening in Scotland.  Two polls in a row have suggested that the SNP now have a lead over Labour that is either big or epic, depending on whether you believe YouGov or IPSOS Mori.  If this was replicated at the next election, Labour would lose 30 seats or more.  Yet in the seats markets at present, only three Scottish seats held by Labour are priced at longer than 2/5 (the SNP constituency prices have been shortening a lot recently, as we'll see early next week, but not to the point of affecting the dynamics of pricing Labour most seats or overall majority yet - this is likely to change sooner rather than later). 

It's hard to know how to factor this in (shadsy at Ladbrokes politics tweeted yesterday that he had no idea what to do about the IPSOS Mori poll, and I have every sympathy with him on this).  This may be a particular spasm in response to Scottish Labour's obvious current problems and their new leader may be able to turn things around so that they suffer no significant seat losses.  Or things might get worse for Scottish Labour.  It's just not clear yet.

Right now, I'm inclined to strip out the Scottish seats from the table, since they aren't telling us much that is meaningful given how fast the politics of Scotland are moving at present, and work on the basis that Labour are going to lose quite a few seats in Scotland to the SNP.  You've got to respect two separate polls showing large leads for the SNP.  To be conservative on current information, let's say 15.  That makes Labour's task on that front that bit harder, though since those aren't seats lost to the Conservatives, things could be worse for Labour.

That would mean that the 326th seat would in fact be Peterborough, with Labour priced at 2/1.  The 300th seat would be Elmet & Rothwell, where Labour are at 5/4.  The 290th seat would be Worcester, where Labour are at 8/11.  And the 280th seat would be Erewash, where Labour are priced at 1/2. 

If Labour lose 15 seats to the SNP, I expect that Labour will need somewhere in the 280s or low 290s to secure most seats.  So I would compare the 8/11 for Labour in Worcester with the 5/6 that you can get on Labour most seats with Bet365 and Ladbrokes.  The latter still looks like a relatively sound bet even with this type of adjustment to the table.  For it to look dubious, you need to assume that the SNP are going to make still greater inroads.

It's also worth noting that punters believe that UKIP have so far have not really harmed Labour's chances at all.  UKIP may look like stealing Labour's lunch in a few Conservative-held seats that Labour would have been hoping to take, but it's only a handful.  Meanwhile, the only Labour-held seats which are currently seen as seriously at risk of being lost as a result of UKIP's intervention are Rotherham, Walsall North and Great Grimsby.

Given this imbalance between the constituency markets and the most seats and overall majority markets, it should be unsurprising that Labour generally look relatively bad value in the constituency markets.  The best value is in some of the short priced seats, but those can wait till closer to the election.  And in the meantime, the strategy remains to prefer to back Labour in the most seats market.

Tomorrow I shall look at the markets from the Conservatives' perspective. 

The Labour battleground in June 2014

Having looked at the Conservative side of the picture, it's time to look at things from a Labour perspective.  So here are the important seats for Labour, arranged by odds:

https://drive.google.com/file/d/0Bygi8eZw-4q1cHEtUkNTc21VemM/edit?usp=sharing

I've included Labour's top 125 targets, the 35 most marginal Labour held seats and any other seat where the odds on Labour are between 1/10 and 10/1.

You will see that some seats that Labour already hold are seen as rather less safe bets than some seats that they are targeting. I struggle to see why Southampton Itchen should have a better price on Labour than Waveney or Birmingham Edgbaston should have a better price on Labour than North Warwickshire.  Sentiment on individual constituencies can lead to skewings of prices in aggregate.

How are Labour shaping up?  To gain an overall majority, they need to take 68 seats.  If these seats fall in the order of the current odds, the 68th extra seat is Portsmouth North, for which Labour are quoted 5/4.  You can back an overall majority for Labour at 9/4 with Betfair as I write, and odds of 2/1 are widely available with conventional bookies on the same proposition.

It's a similar story when you look at proxies for a bet on Labour most seats.  If these seats fall in the order of the current odds, Labour would have 290 seats if it took Nuneaton (odds 4/9) and 300 seats if it took City of Chester (odds 4/7).  You can back Labour most seats at 10/11 with Bet365 or Betfair as I write.

That means that you generally will get much better value by betting on the general markets than on the constituency markets if you want to back Labour (and the 10/11 on Labour getting most seats in particular looks like good value).  You should only be wanting to back Labour in an individual constituency if you are confident that the price is wildly out of line or if you have compelling local knowledge.

The conventional Conservative/Labour marginals don't offer much value on the Labour side, in my opinion.  The few seats where Labour may be worth backing in individual constituencies rather than the general markets are those where Labour faces different opponents. and in particular the Lib Dems.  In Scotland, the Lib Dems' polling remains appalling.  Labour should be considerably shorter than 4/5 in Edinburgh West.  Simon Hughes may be hugely personally popular in his constituency, but the Lib Dems are being flattened in London at present, and 2/1 on Labour taking his seat also looks like good value.

I looked at the Labour targets in April:

http://newstonoone.blogspot.co.uk/2014/04/the-crimson-tide.html

Since then, there has been a slight drifting of Labour prices in their targets, mirroring the slight tightening on the Conservative side in their own seats.

Finally we can look at the Labour battleground and the Conservative battleground together, to see how the two battlegrounds dovetail.  The link to the Conservative battleground is here:

https://drive.google.com/file/d/0Bygi8eZw-4q1Y1N1M1dYMkxqTHc/edit?usp=sharing

The hinge point is at Nuneaton at present: appropriate for a place very close to the centre of the country.  If all seats fell in order of odds on both sides to that point, the Lib Dems would lose 22 seats to Labour and the Conservatives.  Right now, I expect the Lib Dems would take that.  Who has most seats may well depend on which of the main parties can take most of their Lib Dem targets.