The Oldham and Saddleworth by-election was the first electoral test for the Coalition government. As a three way marginal – with the contest triggered by the unusual removal of previous MP Phil Woolas – the poll had the potential to start 2011 with a bang. In the event, the result appears to have done little to alter the political dynamics.

Labour, and particularly Ed Miliband, are the clear victors. The party comfortably held the seat with a bigger majority than in May 2010 and an increased share of the vote. The result will dampen down murmurings in Labour ranks about Miliband’s leadership and with further gains expected in the local council, Welsh Assembly and Scottish Parliament elections in May, it should buy him ample time to clarify his as yet uncertain political strategy. The danger for Miliband is that comfortable election victories in 2011 – at a time when the Coalition was always going to be very unpopular – will foster complacency about the size of the challenge to win the next election.
 
For Nick Clegg, the result is a relief. The Lib Dem share of the vote held steady bucking the dismal trend in national polls. The Lib Dem electoral machine continued to function despite reports of the party’s low morale. The party also showed it could win the support of tactical Tory voters to help compensate for those lost to Labour. Feverish media speculation about the party’s, and potentially the Coalition’s, demise look somewhat premature.
 
However, Clegg still faces by far the most difficult year of the three leaders. The party’s poll rating is unlikely to improve greatly in the coming months. Large losses in May will hit the party’s activist base as well as its confidence. This could embolden discontented MPs to mount a leadership challenge – although the risks of bringing down the Coalition will preclude against any overhasty action.
 
In the meantime, Clegg needs to hunt around for some Lib Dem wins to convince voters (and his own party) that the government has an orange tinge amid all the blue. Banks are destined to remain under pressure from Clegg and Vince Cable – despite the government having to admit it has very limited tools available. The Lib Dems are likely to focus on some form of pay transparency for banks – or at the very least a plausible exit route from this commitment.
 
Although the Conservatives suffered the worst result, David Cameron will not be too displeased. Cameron’s bigger concern was to shore up the Coalition by preventing a catastrophic Lib Dem defeat. The Tory election effort was half-hearted at best. Only the Tory right is unhappy, fearing the result will only encourage Cameron to consider further informal by-election deals with the Lib Dems and even open up the possibility of running Coalition candidates in 2015, as has been advocated by Tory pro-electoral pact outriders like Nick Boles MP. Gossip about the relationship between the Tories and Lib Dems will inevitably continue throughout the year. But for Cameron the immediate priorities are simple: the health of both the economy and his Coalition partners.