LAST week’s Budget might have got a kicking form most in the City, but spread betters continue to short David Cameron’s Conservative party. “This is the first time that Labour’s popularity has jumped after a budget since Gordon Brown became prime minister,” says Chris Shillington from Extrabet.
For the Conservatives to win an outright majority at the next election they need 326 seats out of the total 650 up for grabs. Last Tuesday, prior to the Budget, Extrabet had a spread of 330-335 for the Conservatives and 227-232 for Labour.
But after chancellor Alistair Darling announced plans to cut the stamp duty paid by first-time home buyers, increase the rate of income tax for the UK’s biggest earners and force state-owned banks to lend more to small businesses, Labour saw the number of seats it is expected to win at the election increase to 233-238 while the Conservatives fell back to 320-325.
So what has gone wrong? Zak Taylor, from Sporting Index, says that the narrowing in the Tory lead does not really show a surge in support for the Labour party: “People have been selling Conservative seats rather than buying Labour seats, they want a change from the current government but they can’t stomach the Tories.”
The Tory lead has actually been narrowing since the party conference season, last September, when shadow chancellor George Osborne gave his rather unpopular austerity speech. This is reflected in the spreads. In October Extrabet had a spread of 358-363 seats for the Conservatives. Now the spread for the Tories to win has reduced by 38 seats.
Another interesting feature of this election, says Extrabet’s Chris Shillington, is the increase in support for the Liberal Democrats. Extrabet offers a spread of 58-61 seats, an increase of 12 seats since October last year. Support for the Lib Dems has grown considerably in the past month.
There is also scope to have fun with spread bets. Sporting Index will be offering spreads on the number of female candidates elected and the number of cabinet ministers to be unseated, as well as a spread on the smallest winning majority. In the 1997 election, Liberal Democrat Mark Oaten won the Winchester seat by just two votes. The same provider will offer spreads on 100-200 individual seats, where you win if the candidate you choose comes in first or second.
Finally, another interesting bet is on the next chancellor of the exchequer. Gordon Brown announced after the Budget that Alistair Darling would remain in the role if Labour wins the next election. George Osborne remains the front-runner though he is beginning to look like a liability for the Conservative party due to his unpopularity in the City and elsewhere in recent months. The Lib Dems’ Vince Cable is also in with a chance especially if there is a hung parliament.
For spread betters there are a range of opportunities to make money out of the election before the next government try to make money out of you during the coming fiscal squeeze.