Could Labour lose the Rotherham by-election?

The party still expects to win but is increasingly nervous about the UKIP threat.

As well as the publication of the Leveson report, tomorrow sees three parliamentary by-elections - in Middlesborough, Croydon North and Rotherham (all currently Labour-held). Of these, it is the latter that Labour is concentrating resources on. A combination of factors - the date (which will reduce turnout), the child grooming scandals, Denis MacShane's resignation over false invoices, a divided local party and, most recently, the UKIP fostering row - means that the result is increasingly hard to predict.

It was initially Respect, which is fielding Yvonne Ridley, a former journalist who famously converted to Islam after her capture by the Taliban, that was seen as the main threat, but it is now UKIP, support for which has surged since the weekend, that represents the greatest challenge to Labour. The latest YouGov poll puts Nigel Farage's party on 11 per cent (up from eight per cent), the party's highest-ever rating, and it is likely to have enjoyed a far larger swing in Rotherham.

The expectation among those Labour MPs I've spoken to remains that the party will retain the seat (as well as Middlesborough and Croydon North), albeit, one said, with a "significantly reduced majority". The advantage for Labour, which currently holds a majority of 10,462 in Rotherham, is that the protest vote will be split four ways between UKIP, Respect, the BNP (which polled 10.4 per cent in 2010) and the English Democrats. One hope among party activists is that the Tories will be pushed into third or even fourth place, leaving them unable to spin the result against Labour.

Ed Miliband speaks to reporters after Labour candidate Andy Sawford won the Corby by-election. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Why relations between Theresa May and Philip Hammond became tense so quickly

The political imperative of controlling immigration is clashing with the economic imperative of maintaining growth. 

There is no relationship in government more important than that between the prime minister and the chancellor. When Theresa May entered No.10, she chose Philip Hammond, a dependable technocrat and long-standing ally who she had known since Oxford University. 

But relations between the pair have proved far tenser than anticipated. On Wednesday, Hammond suggested that students could be excluded from the net migration target. "We are having conversations within government about the most appropriate way to record and address net migration," he told the Treasury select committee. The Chancellor, in common with many others, has long regarded the inclusion of students as an obstacle to growth. 

The following day Hammond was publicly rebuked by No.10. "Our position on who is included in the figures has not changed, and we are categorically not reviewing whether or not students are included," a spokesman said (as I reported in advance, May believes that the public would see this move as "a fix"). 

This is not the only clash in May's first 100 days. Hammond was aggrieved by the Prime Minister's criticisms of loose monetary policy (which forced No.10 to state that it "respects the independence of the Bank of England") and is resisting tougher controls on foreign takeovers. The Chancellor has also struck a more sceptical tone on the UK's economic prospects. "It is clear to me that the British people did not vote on June 23 to become poorer," he declared in his conference speech, a signal that national prosperity must come before control of immigration. 

May and Hammond's relationship was never going to match the remarkable bond between David Cameron and George Osborne. But should relations worsen it risks becoming closer to that beween Gordon Brown and Alistair Darling. Like Hammond, Darling entered the Treasury as a calm technocrat and an ally of the PM. But the extraordinary circumstances of the financial crisis transformed him into a far more assertive figure.

In times of turmoil, there is an inevitable clash between political and economic priorities. As prime minister, Brown resisted talk of cuts for fear of the electoral consequences. But as chancellor, Darling was more concerned with the bottom line (backing a rise in VAT). By analogy, May is focused on the political imperative of controlling immigration, while Hammond is focused on the economic imperative of maintaining growth. If their relationship is to endure far tougher times they will soon need to find a middle way. 

George Eaton is political editor of the New Statesman.