THE Conservatives have dramatically closed the gap on Labour as Tony Blair launches his attempt to win a third term.

A Populus poll for The Times today and three other polls boost Michael Howard as the Prime Minister goes to Buckingham Palace this morning to seek a dissolution of Parliament. All four point to solidifying Tory support.

The Times poll puts the Conservatives up three points to 35 per cent, with Labour slipping two to 37, and the Liberal Democrats down one at 19. The others show similar trends, suggesting that any gain from Gordon Brown’s Budget has been short-lived. An ICM survey in The Guardian puts Labour on 37 and the Conservatives on 34. NOP for The Independent puts Labour on 36, the Tories on 33 and the Lib Dems on 21 and a MORI poll in The Financial Times shows Labour’s lead down by 1 point.

Although the polls still point to a comfortable Labour victory, the narrowing gap may unnerve Labour politicians, particularly as they coincide with unfavourable economic data.

Gordon Brown will make a keynote speech in the City this morning confirming the economy as the centrepiece of the Labour campaign. A leap in oil prices yesterday, a dip in British companies’ profitability and signs that the housing market is faltering fuelled anxieties.

The Tories have gained three points over the past month, their highest rating since last May. Labour has lost two points to 37 per cent, the lower end of its recent range. The Liberal Democrats are down one.

The figures do not mean that the election is neck and neck. With a 37-35 per cent gap and a uniform national swing, Labour might still have a Commons majority of 100, down from 161. This is because the electoral system concentrates Labour voters more effectively. However, targeting of seats and gains by the Liberal Democrats could mean a smaller Labour majority.

The Tories have gained strongly among women and Labour has lost ground among men. The Tories have also performed well among working-class groups after high-profile campaigns on immigration, school discipline and gypsies.

More than two thirds of the public expect Labour to win an overall majority. This includes more than half (54 per cent) of Tory supporters, fewer than three in ten of whom expect their own party to win. More than half the public (55 per cent) would prefer a Labour government, with just a third wanting a Tory administration. A third of voters are disappointed with Labour but still prefer it to the Conservatives.

Mr Blair has delayed announcing the election by a day because of the Pope’s death. The parties will use the lull before his funeral on Friday to kickstart their campaigns. There will be another pause for the funeral and the royal wedding, now postponed until Saturday, both of which Mr Blair will attend. Mr Brown’s speech, followed by Mr Blair’s announcement, will be the first of a series of “double acts” designed to illustrate party unity. Mr Brown is reported to be more closely involved in the campaign than before.

However, the price of North Sea crude jumped yesterday to a record of $57.65 before easing back. Steep increases in energy costs were blamed for disappointing figures for UK companies’ profitability.

The overall rate of return dipped to 13.4 per cent in the final three months of last year, from 13.5 per cent in the previous quarter, with both services and manufacturing affected.

Brussels also questioned Mr Brown’s bullish view of the economy. The European Commission expects the economy to grow by 2.8 per cent this year — weaker than the Chancellor’s 3-3.5 per cent forecast.

A Treasury spokesman said: “With the longest unbroken growth for 200 years, low inflation, low interest rates, record levels of employment, the strength of the economy is clear. Just yesterday, we saw UK companies’ profits at their highest annual level for six years and the European Commission forecasting the UK to have the strongest growth of any major European country this year and next.”

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