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Electoral Power

Summary

Last week the UK parliament was dissolved ahead of the May 7th general election. We then had to endure a televised debate between seven party leaders live on national TV. Actually it wasn’t that bad. The SNP leader Nicola Sturgeon came across well which is interesting as she may hold the balance of power on the 8th of May, especially interesting as she seeks independence for Scotland!

Last week the UK parliament was dissolved ahead of the May 7th general election.  We then had to endure a televised debate between seven party leaders live on national TV.  Actually it wasn’t that bad.  The SNP leader Nicola Sturgeon came across well which is interesting as she may hold the balance of power on the 8th of May, especially interesting as she seeks independence for Scotland!
Scottish devolution brings me back to last year’s Scottish independence vote.  The media and various opinion polls had us believe it was undecided right until the votes were counted whereas the bookmakers who deal with real money, had called it correctly and in some cases had paid out early! Admittedly, the end result was quite close but the bookies were right.
In the next five weeks, we will be deluged with opinion polls swaying one way then the other and UK asset prices perhaps moving in sympathy.  Whether that’s appropriate or not is not for me to say but volatility is unlikely to fall.
So as we await the next slew of polls, what are the bookmakers saying?  For this exercise I have used Paddy Power (other bookmakers are available) and permission was granted by my IT department to use an inappropriate website beforehand!
When parliament was dissolved on 30 March 2015, the composition of parliament was as follows:-
Screen Shot 2015-12-09 at 12.20.31
(No other party held more than 10 seats with Northern Ireland’s Democratic Unionist Party being the largest with 8.  In aggregate, the others amounted to 28 seats.)
There are 650 seats in total so for an overall majority, a party needs 326 seats.  An overall majority looks unlikely at this juncture.
So betting predictions forecast Labour taking a number of seats in the mid-to-high teens from the Conservatives.  More dramatic in absolute and relative terms is the SNP gain which actually comes from Labour in Scotland but from the above table looks likes it is at the expense of the Liberal Democrats.  The UKIP influence is minimal and far less than the media circus gives it air time.
If the bookmakers’ accuracy is reasonable as it was last year, it will be difficult to form a coalition government that accounts for more than 325 seats.  The Conservatives are 4/9 to win the most seats and probably be asked to form a government but would not have enough seats with their current coalition partners only getting them to 312. Adding UKIP into the mix would amount to 317, even adding the 8 Democratic Unionists would only almost get there with a total of 325. Would a minority government have much chance of lasting?
Of course a grand coalition of the two main parties has been mentioned but seems unlikely.
So the SNP, who want away from the United Kingdom, become the swing factor.  A Conservative/SNP total would add up to 331, add in the Liberal Democrats and you get a comfortable working majority with a total of 357, close to the previous 358 coalition total.
A Labour/SNP coalition would only total 319 and would need the Liberal Democrats to get over the 325 line at 345. A possibility.
But is a Conservative led or Labour led coalition of three parties likely?
Here’s what Paddy Power thinks as at 7 April 2015.
Government After the Next Election
Screen Shot 2015-12-09 at 12.21.27
Note: no prices for a Conservative/SNP coalition or one with those two and the Liberal Democrats.
Probably not then but quite an open election with one of the major political parties likely to be at the helm in one form or another.  Will it be sustainable?  I don’t know but I will be watching the bookmakers’ websites (IT permissions granted) and not giving much shrift to the media hype about this or that poll but perhaps wondering why they never refer to the odds and where people and indeed bookmakers’ money is.  Not wanting to spoil a good story, like last year’s Scottish vote?  Maybe, but to quote another Paddy – McGuinness – the power is in your hands.

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