More Tory jitters as YouGov poll hints at hung Parliament

Conservative fears that they will be a major casualty of the credit crisis - thanks to Gordon Brown's ability to command centre stage and win international plaudits for his bold action - are reinforced by the latest YouGov poll in the Daily Mirror.

The poll puts the Tories on 42 per cent and Labour on 34 per cent - a gap of eight per cent, which is way down from the high teens in many polls earlier this year. As I wrote on Friday, a single-figure lead threatens to rob David Cameron of the coveted title 'Prime-Minister-in-waiting' and could result in a hung Parliament at the next general election.

UK Polling Report, the political anoraks' favourite website, calculates that the Tories' 42 per cent would translate into 368 seats - a healthy 130 more Tory MPs than there are now, but not healthy enough in that they'd have a majority of just six.

One reason for suspecting that they may fall short of that is that the YouGov poll puts the Lib Dems on 14 per cent. That would mean them losing 40-odd seats, mostly to the Tories. But history suggests that Lib Dems are good at holding on to territory they occupy.

With 34 per cent of the vote, Labour would lose more than 80 seats. But it's worth remembering that 34 per cent is only a couple of points below their share in 2005 - which produced an overall Labour majority of around 60.

The truth is that the electoral system works fiercely against the Tories. They've sought to counter that disadvantage by pumping funds into key marginals under the direction of their former treasurer and now deputy chairman Lord Ashcroft.

Vulnerable Labour MPs have long been demanding that the Government close the "Ashcroft loophole" - the absence of limits on spending in constituencies outside the formal four-week period of a general election which 'Lord Cashcroft' has assiduously exploited.

Justice Secretary Jack Straw believes he has finally come up with a law that will do that. Today, he is introducing the Political Parties and Elections Bill, which will curb spending before a candidate's formal adoption. He can expect to be cheered on by his backbenchers.

The good news for the Tories is that it will take months for the Bill to become law and for the Electoral Commission to set the limits. And as long as Ashcroft isn't run over by a bus - he was reported at the weekend to be have decided to leave the vast majority of his fortune to charity - the spending spree in the marginals can continue.

In the meantime, desperate to limit the Brown bounce, David Cameron continues to try to keep the Tories in the headlines. He has followed up Friday's City speech - in which he attacked Brown for his "irresponsible" actions during his years as Chancellor - with ideas like the 1p cut in National Insurance for small businesses he is promoting today. His problem will continue to be that while he talks, the government can act - and that's likely to be what impresses voters.

Mike Smithson, editor of politicalbetting.com, predicts that the YouGov poll will make punters shy of putting more money on Cameron. "Things are in a state of flux and maybe the spread markets will move back down again."

THE MOLE: OPINION POLL

LAST UPDATED 1:07 PM, OCTOBER 20, 2008