Why the Lib Dems are confident they can win the Eastleigh by-election

Lib Dem activists point out that the party has gained seats in recent local elections.

Conservative MPs are already talking up their party's chances in the Eastleigh by-election triggered by Chris Huhne's resignation, with one, Alec Shelbrooke, describing it as "an early opportunity to exact revenge on the Lib Dems over boundaries". The Tories have no intention of going easy on their coalition partner; this is a must-win seat for them. 

Given how poorly the Lib Dems are polling nationally and the slimness of their majority (3,864), it's unsurprising that many expect a Tory victory. But Lib Dem activists are confident that they can hang on. They point out that the party has actually gained seats in recent local elections, increasing its majority on Eastleigh Borough Council from 34 seats to 36 in May 2012 (the Lib Dems hold 40 to the Tories' four). The Lib Dems, who plan to treat the next general election as 57 by-elections, have long argued that they will lose fewer seats than expected in 2015 because their vote is holding up in key local strongholds. The by-election will be an early test of this claim. 

It is no less of a test for the Tories, whose hopes of winning a majority in 2015 depend on them taking a  large number of seats off the Lib Dems. The party has included 20 Lib Dem MPs on its 2015 target list of 40 in the belief that they will prove easier to dislodge than their Labour counterparts. Were the list purely based on the swing required, only nine would appear. But if the Tories fail to win Eastleigh, even after the sitting MP has been forced to resign in disgrace, a Conservative majority in 2015 will begin to look impossible. 

The Liberal Democrats increased their majority on Eastleigh Borough Council from 36 seats to 38 in May 2012. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty Images
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How can Britain become a nation of homeowners?

David Cameron must unlock the spirit of his postwar predecessors to get the housing market back on track. 

In the 1955 election, Anthony Eden described turning Britain into a “property-owning democracy” as his – and by extension, the Conservative Party’s – overarching mission.

60 years later, what’s changed? Then, as now, an Old Etonian sits in Downing Street. Then, as now, Labour are badly riven between left and right, with their last stay in government widely believed – by their activists at least – to have been a disappointment. Then as now, few commentators seriously believe the Tories will be out of power any time soon.

But as for a property-owning democracy? That’s going less well.

When Eden won in 1955, around a third of people owned their own homes. By the time the Conservative government gave way to Harold Wilson in 1964, 42 per cent of households were owner-occupiers.

That kicked off a long period – from the mid-50s right until the fall of the Berlin Wall – in which home ownership increased, before staying roughly flat at 70 per cent of the population from 1991 to 2001.

But over the course of the next decade, for the first time in over a hundred years, the proportion of owner-occupiers went to into reverse. Just 64 percent of households were owner-occupier in 2011. No-one seriously believes that number will have gone anywhere other than down by the time of the next census in 2021. Most troublingly, in London – which, for the most part, gives us a fairly accurate idea of what the demographics of Britain as a whole will be in 30 years’ time – more than half of households are now renters.

What’s gone wrong?

In short, property prices have shot out of reach of increasing numbers of people. The British housing market increasingly gets a failing grade at “Social Contract 101”: could someone, without a backstop of parental or family capital, entering the workforce today, working full-time, seriously hope to retire in 50 years in their own home with their mortgage paid off?

It’s useful to compare and contrast the policy levers of those two Old Etonians, Eden and Cameron. Cameron, so far, has favoured demand-side solutions: Help to Buy and the new Help to Buy ISA.

To take the second, newer of those two policy innovations first: the Help to Buy ISA. Does it work?

Well, if you are a pre-existing saver – you can’t use the Help to Buy ISA for another tax year. And you have to stop putting money into any existing ISAs. So anyone putting a little aside at the moment – not going to feel the benefit of a Help to Buy ISA.

And anyone solely reliant on a Help to Buy ISA – the most you can benefit from, if you are single, it is an extra three grand from the government. This is not going to shift any houses any time soon.

What it is is a bung for the only working-age demographic to have done well out of the Coalition: dual-earner couples with no children earning above average income.

What about Help to Buy itself? At the margins, Help to Buy is helping some people achieve completions – while driving up the big disincentive to home ownership in the shape of prices – and creating sub-prime style risks for the taxpayer in future.

Eden, in contrast, preferred supply-side policies: his government, like every peacetime government from Baldwin until Thatcher’s it was a housebuilding government.

Why are house prices so high? Because there aren’t enough of them. The sector is over-regulated, underprovided, there isn’t enough housing either for social lets or for buyers. And until today’s Conservatives rediscover the spirit of Eden, that is unlikely to change.

I was at a Conservative party fringe (I was on the far left, both in terms of seating and politics).This is what I said, minus the ums, the ahs, and the moment my screensaver kicked in.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.