Lib Dems predict victory in Eastleigh, with UKIP in second

Counting in the by-election continues as the Lib Dems say they have held the seat and predict that UKIP has beaten the Tories.

The counting is ongoing in Eastleigh, with the Lib Dems increasingly confident that they've held the seat. The party, which first won the constituency in 1994 (another by-election), expects its majority to be in the thousands, not the hundreds (it is currently 3,864).

Both the Lib Dems and Labour are predicting that UKIP has finished second, pushing the Tories ino third place. If true, this would be a disastrous result for David Cameron. His old rival David Davis was likely right when he suggested earlier this week that it would provoke a "crisis". But Cameron's right-wing critics will have trouble explaining why the Tories performed so poorly after a hard-edged campaign that focused on immigration and welfare and after the promise of an in/out EU referendum.

Labour is resigned to finishing fourth, although the party believes it has increased its share of the vote from the 9.6 per cent recorded in 2010. The result will undermine Ed Miliband's "one nation" narrative but shadow ministers point out that while the seat is 16th on the Tories' target list, it is 258th on Labour's. The swing required to win Eastleigh would put Labour on course for a majority of 362.

Turnout was a relatively impressive 52.8 per cent, down from 69.3 per cent at the general election. We'll bring you the result as soon as it's announced around 4am.

Party representatives watch as votes for the Eastleigh by-election begin to be counted. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.