When it comes to predicting the outcome of this May’s general election who should we trust to be more accurate, the bookies or the pollsters?
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There was a great deal of media excitement last week following the publication of various opinion polls. First, on Tuesday, a YouGov poll put the SNP at forty-eight per cent, twenty-one points ahead of Labour on twenty-seven per cent and suggested the SNP could gain as many as thirty seats at Labour’s expense.
The poll had followed others that have been conducted since the referendum showing, to varying degrees, a rise in support for the SNP at the expense of Labour.
Then on Thursday another of Lord Ashcroft’s mega polls predicted that of fourteen Labour constituencies polled the SNP would gain thirteen of them and that the Liberal Democrats would also be humiliated. Labour’s election strategist Douglas Alexander could face defeat in Paisley while Liberal Democrat Chief Secretary to the Treasury Danny Alexander could lose in Inverness. Jim Murphy was forced to acknowledge Labour has a huge challenge to regain support but warned voting SNP would only make a Conservative government more likely.
I suspect many people thought, “Well he would say that”, but if such doubters were to consult what the bookies are saying then Jim Murphy’s warning is not without reason. For me the real story of the week was what respected polling commentator Mike Smithson pointed out in a Tweet – that despite being ahead in only one of the last eleven UK polls the Conservatives are odds-on favourites with all bookies to win the most seats.
This fact is important, for as predictors of outcomes the bookies have a more reliable record than pollsters. They called the general election right in 2010 and were right about last year’s vote on 18 September. In the Scottish independence referendum bets placed on the outcome made it Paddy Power’s biggest ever non-sporting event. Throughout the period of the campaign bookmakers were receiving huge bets on the outcome being No, making it an odds-on outcome for the duration of the process.
This compared to the YouGov poll that showed the Yes campaign ahead and others that had the outcome far narrower than it eventually was. While pollsters can have dented reputations if they call an election wrong bookmakers stand to lose significant sums if they offer the wrong odds.
No one appears to be predicting an outright majority for any party so who ends up with the most MPs will become the deciding factor. Looking at the coming general election the mid-point in House of Commons seats won, listed by SportingIndex, shows Conservatives on 284, nine ahead of Labour’s 275, with the Liberal Democrats on 27, the SNP on 37 and Ukip on 8.
What then happens if the bookies are right and that is the result? Although such an outcome would present the Conservatives with a challenge to form a government they would be in the driving seat for any negotiations. There would no doubt be some megaphone negotiating for public consumption but the first meetings would be set by the party with the most seats. This is because by convention the largest party has the first go at forming an administration.
The outcome could be a Tory coalition in alliance with a number of parties, a minority Conservative administration or even a minority coalition government. Whatever the permutation David Cameron would have the leading role in the process. In other words the SNP’s success at denying Labour a swathe of seats in Scotland could give Cameron the moral authority to try and remain as prime minister – just like Murphy is warning.
And if Cameron were successful Nicola Sturgeon could hardly complain given that the SNP relied upon Annabel Goldie’s Conservatives to support Alex Salmond’s minority government at Holyrood between 2007-11.
Why is it that the bookies have proven to be more reliable? The difference with a betting forecast and a polling sample is that the former is a reflection of where punters have invested. Punters have not responded to questions but made a judgement on an outcome, nor do the odds reflect punters’ past voting behaviours or their political loyalties, they have literally put their money where their mouth is.
Unlike pollsters who reveal their statistical findings the bookies’ odds reflect the investments made by punters who are able to take account of a wide range of factors. They can and will include polling information but will also consider variables such as potential voter turnout, the unwillingness of particular voters to go to the polls if they think their preferred party is unlikely to win, and making a judgement on the relative popularity of different political leaders. And when punters look at those personal ratings and hear that Ashcroft has consistently found Cameron to be more popular than Miliband – even in Scotland – then they think Labour is in trouble.
Punters are also better able to take account of regional variations that national polls might not detect, so while the shift from Labour to SNP is unlikely to show in a UK-wide poll punters can allow for how that will deny Labour seats.
Statements by Sturgeon about her willingness to cut a deal with Labour only serve to heighten punters’ expectations that the SNP will do well against Labour and reinforce the view that the Conservatives could remain the largest party even if they lose seats against their 2010 performance. That Labour has not ruled out striking up a Faustian pact with the SNP counts for little if Miliband never gets the chance because he comes second to Cameron.
Polling will be weekly from now until the general election and eventually it will become daily. Instead of getting excited by what polling samples capture Scots should look to the bookies to see what their votes might deliver. They might even consider joining in and putting their own money where their mouth is.