Tax fears 'to cost Tories by-election': Heavy victory for Liberal Democrats forecast by Independent/NOP poll in Milligan constituency

THE TORIES are heading for a third crushing by-election defeat at the hands of the Liberal Democrats, according to an NOP/Independent poll in the Hampshire constituency of Eastleigh.

The poll, which puts Liberal Democrat support at 43 per cent, the Tories at 32 and Labour at 25, shows that with electors bracing themselves for the first round of big tax increases in April, half expect their financial circumstances to worsen in 1994 despite senior ministers' efforts to talk up economic recovery.

The first opinion poll to be carried out in the constituency since the bizarre death of the sitting MP, Stephen Milligan, suggests that the Tories, already anticipating heavy losses in May's council elections and European elections in June, have little hope of holding the seat.

The grim figures, for the Government, on the economic optimism of voters suggest Tory planners are right to think the by-election should be delayed until June in the hope of a strengthening economic recovery. The length of time until a probable polling date in Eastleigh means all three parties have much to play for before the campaign proper.

Mr Milligan secured a majority of 17,702 in the 1992 general election, with 51.3 per cent of the vote. He took 38,998 votes compared with the Liberal Democrats' 21,296 (28 per cent) and 15,768 votes for Labour (20.7 per cent) The poll suggests the likeliest outcome is a Liberal Democrat victory to rival those in Newbury, which it won by a margin of more than 12,000 votes, and Christchurch, taken by more than 23,000.

The findings underline that the Tories' best hope of a slender victory is if Labour, which is promising an all-out campaign in the hope of winning the seat, starts an early bandwagon but fail to secure enough votes for victory.

However, it also shows Labour, which has began campaigning in the constituency, also has a chance of a narrow win. By asking current Liberal Democrats how they would vote if Labour was the party most likely to beat the Tories, the poll reveals enough Liberal Democrats would defect to Labour to put it at 41 per cent, the Tories at 37 and the Liberal Democrats at 22.

However, tactical defections by Labour supporters are much more likely. With Labour voters deciding the Liberal Democrats were the most likely to win, the poll shows the Liberal Democrats would coast home with 56 per cent of the vote - producing a landslide victory on the scale of Christchurch and casting further serious doubt on Labour's potential in the South.

The remarkably high degree of pessimism in response to the question about how respondents see the financial position of their household over the next 12 months suggests media coverage and opposition exploitation of the forthcoming April tax rises have found their target.

Fifty per cent expected their financial situation to get worse, 35 per cent to stay 'about the same' and 12 per cent to get better. Those findings also provide Tory party managers with another reason for delay, though there could be little respite for the Tories because of the second batch of tax increases planned in April 1995.

The findings were published after Kenneth Clarke, the Chancellor, had downplayed John Major's troubles yesterday, insisting during an appearance on BBC Radio 4 Desert Island Discs that the 'fairly permanent crisis' facing Margaret Thatcher in the early 1980s ranked 'higher on the Richter scale'.

Mr Clarke, who named himself as a potential party leader 'when John eventually retires', said: 'I remember thinking we had no chance at all of winning another election. I began to wonder whether the Conservative Party as a whole was going to stay in one piece.'

Today's poll shows it would make little difference if Mr Major were replaced. While 9 per cent of electors say they would be more likely to vote Tory if he went, 3 per cent say they would be less likely to do so. And 86 per cent say it would make no difference.

The poll also shows support for the government decision to back possible air strikes in Bosnia: 53 per cent agreed with the decision and, of those supporters, nearly three-quarters said they would back strikes even if it led to Britain becoming 'involved in the Bosnian civil war'.

Labour will seek to upstage the Government today by combining a radical call for substantial injections of private investment into infrastructure projects across the public sector, including schools and hospitals.

Proposals in its document, Financing Infrastructure Investment, would sweep away many Treasury restrictions on the use of private finance in government-agreed transport and construction projects.

The paper, backed by Labour's front-bench economic team, spotlights the slow pace of the Government's private finance initiative. It will be exploited by Labour to deflect Tory claims that full employment pledges can be met only by higher taxes and public spending.

Robin Cook, trade and industry spokesman, emphasised yesterday that in the guise of new- style 'public interest companies' the Post Office and British Rail would enjoy a 'secure and thriving' future within the public sector under a Labour government.

----------------------------------------------------------------- VOTING INTENTIONS IN THE EASTLEIGH BY-ELECTION ----------------------------------------------------------------- Liberal Democrat . . . . . . .43% Conservative . . . . . . . . .32% Labour . . . . . . . . . . . .25% -----------------------------------------------------------------

Poll analysis, page 4

Leading article, page 15