Spread-betters still backing Labour

CITY traders are continuing to back a Labour majority of between 50 and 60 seats in the next parliament, despite one of the most successful spread-bet executives of recent years punting on a Conservative revival.

Stuart Wheeler, former chairman of spread-betting firm IG, has opened an account with his old company and put money on the Tories to do better than IG's quote.

Wheeler, who contributed £5 million to former Tory leader William Hague's coffers ahead of the 2001 election, has bet on Michael Howard's mob to pick up more than 197 seats this time.

He has taken encouragement last week from a Mori poll showing Labour's lead over the Tories has dwindled to just 2% after Howard's policy initiatives on immigration and council tax bills for pensioners appear to have chimed with voters.

'I think the spreads are very pessimistic about Conservative chances,' Wheeler said. 'The Tories have had a pretty good month and the opinion polls have narrowed.'

But he remains at odds with the City professionals, media types, party workers and academics who dominate political spread-betting.

David Buik at rival City bookie Cantor Index said: 'The Tories have had a better few weeks but the smart money is still on Labour.'

Since Wheeler placed his bets earlier this month, IG's spread on the number of Tory seats has crept up to 193-200.

But an 'election friendly' Budget looms on 16 March, and IG was yesterday quoting Labour to capture 352-359 seats, enough to give it an overall parliamentary majority of more than 50. Four years ago, Tony Blair took 413 seats and Hague 166.

IG quotes Charles Kennedy's Liberal Democrats to take 68-72 seats on voting day - widely tipped to be 5 May - up from 55.

Wheeler said his bets are purely aimed at making profit, but there is an intriguing parallel with the lead-up to the US Presidential election last November, when hedge fund guru George Soros was rumoured to be placing bets on John Kerry. These reports may have generated some positive publicity for his campaign late on.

Wheeler said: 'It would be silly to deny Labour are favourites to win the election but I think the Conservatives have a chance. There are a huge number of undecided voters.'