There has been much talk in the USA about the Republicans committing electoral suicide and it seems the phenomenon has spread to the UK Left, with the Labour Party seemingly hell-bent on implosion.
Ahead of key elections across the UK on Thursday, Labour are in a terrible place. Ken Livingstone’s suspension amid accusations of anti-semitism within the party is all over the news. To make matters worse, rather than let the story die down, the former London Mayor and his allies are pouring fuel on the fire by blaming ’embittered Blairites’.
There should be *some* good news on Thursday, with Sadiq Khan rated 89% likely to become Mayor, but losses are expected across local councils and further disaster looms in Scotland, where they could even finish a humiliating third, beaten by the Tories. Remember, one of Corbyn’s selling points was that he could win back lost Scottish Labour voters.
It is by no means clear that Corbyn himself is the problem. Considering everything that has been thrown at him from both inside and outside the party, he’s done well to survive. He’s been vindicated over some issues – tax credits, for example – and Labour are running close behind the Tories in the polls. I doubt any of his rivals for the leadership would have fared dramatically better.
Rather Labour’s problems stem from the party being fundamentally divided on both political and personal grounds. Corbyn and his closest allies are mortal enemies of a large chunk of MPs, and viewed with deep scepticism by another large chunk. It isn’t just ’embittered Blairites’ that were outraged by Livingstone’s comments.
Remember the far-left of the party couldn’t get 15% of MPs to back John McDonnell’s challenge in 2007, and both Corbyn and Diane Abbott in 2010 only found their way onto the ballot paper because other candidates lent them supporters to mount what seemed like a token bid. It won’t take much co-ordination among Labour MPs to force a leadership contest.
Corbyn’s critics are already out in force even before Thursday’s vote, and some will probably be calling for a leadership challenge by the weekend. I’m not convinced it will materialise just yet but it almost certainly will at some stage before the next election in 2020, so the betting angle is to predict that date.
Potential markets differ between betting companies. Betfair’s market rates him 67% likely to leave post before the next election while some traditional bookmakers are offering odds on the exact year. In this instance, I think better value lies with the latter.
Corbyn is just 3.0 (33%) to leave post in 2016, but this strikes me as a poor value bet for several reasons. First, UK politics will be dominated by Brexit for the next few weeks, and the fallout from it within the Conservative Party may take centre stage thereafter.
Besides, the Labour Party has a long history of agonising over such coups due to the complexity of the rules governing a challenge. The next few months will involve both sides trying to amend those rules to suit their interest in a fight that could play out at the autumn conference.
Plus an early coup would unlikely yield the desired result. It wouldn’t be too difficult garnering the signatures of 20% of Labour MPs to nominate a challenger, but the plotters would need to keep Corbyn off the ballot paper. He remains popular with the membership that gave him 60% of first preference votes, and they would probably react angrily, especially without any demonstrable proof that Corbyn is any more of an electoral albatross than his two predecessors Gordon Brown and Ed Miliband.
If mistiming the move now, the plotters may not get another chance before 2020 but eventually a full-blown crisis is inevitable, probably over policy divisions. Another foreign policy split or a parliamentary vote on Trident, for example. When it does, the media will pour fire on it and betting markets will respond accordingly. In the past, we’ve seen some crazy over-reactions to leadership speculation.
Therefore, on the basis that by 2020, it will be too late to change leader ahead of the election, the value bet lies with one or more of 2017, 2018 and 2019, available respectively at 5.5, 11.0 and 13.0.
A combined bet on those three pays around 2.85 (35%) or alternatively just the latter two around 6.0 (17%). Both options make sense, but at this stage I’ll go for the cheaper combination. Covers can always be added later and, if Corbyn is still there in 12 months as expected, this will probably have developed into a great position.
When the timing becomes clearer, there will be a great opportunity in the form of a new leadership contest. Right now, my pick would be Lisa Nandy, the Shadow Energy and Climate Change Secretary – loyal to Corbyn, cut from the same political cloth as the membership and younger, without the baggage that comes with Corbyn and McDonnell.
The race is wide-open though, including at least ten plausible candidates, and her odds of 7.5 (14%) don’t stand out as particularly generous. Better, on this market, to wait.
Recommended bets (With either www.skybet.com or www.ladbrokes.com)