Anti-EU party up-ends UK politics by targeting left and right

(Reuters) - After years of promising a political earthquake, the UK Independence Party is causing tremors. It poached one of Prime Minister David Cameron's parliamentary seats and almost took another from the Labour party.

The anti-EU party's success, four months after it won European elections in Britain and seven months before a national election, threatens to up-end a generations-old political settlement which has seen the two main parties take turns to govern.

Britain already has a coalition government, its first since World War Two, and UKIP's rise, if sustained, promises to make such arrangements more common in the world's sixth largest economy.

"People want change," said Nigel Farage, UKIP's leader. "They've had enough of career politicians of three parties who don't even understand the problems they face in everyday life."

By luring right-leaning Conservative voters in southern England, UKIP won its first seat in the Westminster parliament, but it also came within a whisker of beating the opposition Labour party in its northern heartland on the same day.

While its first seat in parliament symbolises UKIP's new clout, coming just 618 votes short of winning the safe Labour seat of Heywood and Middleton sent tremors through Ed Miliband's left-leaning Labour.

"What happened up in Heywood was extraordinary, beyond our widest dreams," said Farage, who has long claimed but never before so conclusively shown he could pose a threat to Labour.

The Heywood result reflected just as badly on Cameron. Most of UKIP's surge there was due to a collapse in support for the ruling Conservatives and Liberal Democrats.

For the Conservatives, UKIP has long been a problem, forcing Cameron to toughen his Eurosceptic rhetoric to appease voters and the right of his own party while peeling off Conservative support in their traditional southern England heartlands.

The Conservatives haven't won an overall majority in a general election since 1992, a year before UKIP was founded to campaign for a British withdrawal from the EU. If Cameron fails to win in 2015 his leadership is likely to be challenged.

By taking on Labour in the north, UKIP has proved it poses a greater challenge than previously thought to the two-party system which has dominated British politics for so long.

Though there is little prospect of UKIP winning more than a handful of the 650 seats in parliament next May, its ability to take votes across the country increases the likelihood of a hung parliament, another coalition government and potential political instability.

Sterling fell against both the dollar and the euro on Friday, hurt in part by worries over the impact of surging UKIP support before the 2015 election.

LABOUR SHOCK

Some Labour lawmakers appeared stunned by how close they had come to losing a seat to UKIP.

Though a few points ahead of the Conservatives in most opinion polls, worries about the electability of leader Ed Miliband have existed for some time.

Perceived even by his supporters to have an image problem, Miliband made matters worse at the party's annual conference last month by forgetting chunks of his own speech, omitting to mention the budget deficit or immigration.

Some of his lawmakers in northern England, where the party has traditionally drawn much of its support, have long warned he has done too little to address concerns of voters outside London and its environs.

"If Ed Miliband does not broaden the Labour coalition to better include working class opinion then we cannot win a majority government," said John Mann, a Labour parliamentarian. "Ed Miliband does a lot of listening. Now he needs to do a bit more hearing."

Frank Field, another Labour lawmaker, said UKIP's potential to hurt the party's election chances shouldn't be underplayed.

"If last night's vote heralds the start of UKIP's serious assault into Labour's neglected core vote, all bets are off for safer, let alone marginal seats at the next election." he said.

While Labour's vote held up in Heywood and Middleton, it would have expected to win over Conservative and LibDem supporters in such a poll. Instead, UKIP cleaned up.

Richard Carr, a member of the Labour History Research Unit at Anglia Ruskin University, said UKIP's national breakthrough was the biggest of its kind in over three decades.

"For Labour it is particularly sobering," he said. "The party just isn’t cutting through, even amongst their historic base."

"VOTE UKIP, GET LABOUR"

Cameron, who once derided UKIP as a bunch of "fruitcakes, loonies and closet racists", said the 2015 election would be the most important in a generation, adding that a vote for UKIP would give Miliband the keys to power.

"We have seven months to demonstrate that only a Conservative government can give people the security and stability they we all want to see," he said.

UKIP's success will further raise pressure on Cameron to become more Eurosceptic, three years before a referendum on EU membership he has promised to hold if re-elected.

Douglas Carswell defected to UKIP from Cameron's Conservatives in August, triggering Thursday's Clacton vote. He switched allegiance partly because he doubted the prime minister's determination to reform the EU.

Cameron has promised to try to renegotiate Britain's EU relationship before offering voters an in/out referendum in 2017. But some of his own lawmakers are sceptical about his resolve to push for real change, viewing his promise as a tactical move to try to hold his divided party together.

Cameron has countered that his is the only party able to deliver a referendum on EU membership.

UKIP says it now has its sights set firmly on winning another seat at Cameron's expense at a by-election, also triggered by a defection, in Rochester, southern England, which is expected next month.

That is seen as a much safer Conservative seat. Lose that, and party jitters will escalate and further defections could follow.

"I'm very confident that we'll win that by-election too," said UKIP's Farage. "Something big is happening here: People want change."