The Racing Card

The Bet - Will the FTSE be higher or lower the day after the election?

(Source: City index)

If you want to pocket £250, then why not sign up for an account with the spread-betting company City Index? It is offering a free £250 bet on whether or not the FTSE will go up or down the day after the election. Given that the City likes nothing more than stability, and Labour is still 1-8 to win the election, the odds are that it will go up following a Labour landslide, as it did last time.

The FTSE stood at 4455 on 1 May 1997; today it's around 6200, a staggering increase. Shortly after the election, in his first Budget, Gordon Brown announced changes to the taxation of pension funds, which were designed to encourage more long-term investment. The Tories claimed this was a tax on pensions, even though they had wanted to make the same change. One Tory pension fund adviser even claimed that it would lead to a collapse in the FTSE of at least 4,000 points. In fact, the opposite happened, thus giving the Treasury the extra funds without hitting pensioners.

The Tories' U-turn on pensions was no doubt a smart move, although how they managed to get into the position of being seen to want to get rid of free TV licences and winter fuel payments is a mystery. Any focus group of pensioners would tell you how popular these payments are. I interviewed David "Two Brains" Willetts on the radio last week, and could tell he was unhappy about making this major change in policy. He is not a fan of focus groups - which is probably why he came up with the policy in the first place.

The Tories may be focusing on the "grey" vote in a big way, but despite the loss of Mandelson (or maybe because of it), the spread has moved away from them in the past week. Labour is on 372-380, the Tories 213-221 and the Liberal Democrats 37-40.