Andy Burnham has not just won Makerfield — he has won it in a landslide, with a bigger majority, in both percentage terms and actual votes cast, than Labour managed in 2024. He took 54 per cent of the vote (up from Labour’s 45 per cent in 2024), and won 24,927 votes (up from 18,202).

It puts him in a commanding position in the looming Labour leadership election. The two most powerful messages in any internal party contest are “I share the party’s values”, something he has spent much of the past decade profiling to be able to say, and the second is “I can win us the election”. His victory, deep into Reform’s territory (Makerfield is in their top 10 targets at a general election), allows him to argue the latter with far greater force than any opinion polls.

As for Reform, this is another election that demonstrates the biggest barrier to Nigel Farage reaching Downing Street, which is that Reform is an intensely polarising political party. The combined vote share for the Conservatives, Liberal Democrats and the Greens was just 3 per cent. Yes, that’s in part because of Burnham’s popularity and the Conservative Party’s ongoing loss of support to Reform across much of the UK. But it’s also because the fear of a Reform victory led voters — including some 2024 Conservatives — to tactically row in behind Burnham, the obvious candidate to defeat Reform.

Reform has had astonishing success in local elections, and on current form they will supplant the Tories as the main party of the right in local government. But they have just one by-election victory in this parliament, in Runcorn and Helsby in May 2025, where the departing Labour MP had been convicted of assaulting one of his own constituents. They won by just six votes!

Compare and contrast that with the Conservative victory in Aberdeen South. In Aberdeen South total turnout was down on 2024, the normal pattern for a by-election. In Aberdeen South, the Labour and Liberal Democrat vote was both down on 2024, as unionist voters broke tactically for the Tories to beat the SNP. That’s not a feat that Reform can pull off. They can take some, but not all, of the Conservative vote, and that’s it.

And what both results demonstrate is this: for all the talk of electoral fragmentation, people understand how the UK’s electoral system works and they know how to get what they want, or, at least, how to prevent what they don’t want. They don’t want a Farageist MP, in the main: that is a serious impediment to Farage’s prime ministerial ambitions, and his hopes of killing off the Conservative Party, whoever ends up emerging as Labour’s next leader.

What does this mean for pensions?

A couple of months ago, the pressure on gilts was enormous and the price of Government debt actually exceeded gilt yields in November 2022.

But gilts have recovered, partly because the Iranian war did not turn into something nastier , partly because the market seems to see Andy Burnham as rather less bad news than they had feared.

The major caveat to happiness  was the Makerfield by-election, which took place yesterday. The result is in ,  the stakes have been clear for a month. Andy Burnham, the Labour Party mayor of Greater Manchester, was running to enter parliament and in all likelihood challenge Sir Keir Starmer for the premiership. Burnham’s vibes-based approach to politics and fiscal policy spooks everyone with an understanding of the UK’s fiscal position. And it has probably contributed to a temporarily higher risk premium on gilts.

Happily, there are signs this episode of politically driven gilts volatility may be drawing to a close. If Burnham were to become prime minister, he says he would stick to the current government’s fiscal rules. The chance of higher borrowing for investment is already, to some extent, baked in. If he gets into office, he’ll discover the UK’s fiscal constraints are not just make-believe. But if Burnham plays his hand right (or has the sense to appoint smart advisers), clarity on his plans could bring some relief to the bond market.

None of this makes Britain a screaming buy. Growth is still sluggish. Debt is still high. But some of the gloom around the sell-off this spring may have gone too far. If Burnham doesn’t alarm the market further, gilts could end up among the bigger market beneficiaries of the deal in Iran.

This could at last bring confidence to British companies and that at a time when pensions are changing. I hope that Rachel Reeves and Torsten Bell will be able to see the reforms of pensions that will lead to more growth-making investment strategies.

Speaking before the Iran agreement, Karen Ward of JPMorgan Asset Management said the bearishness on gilts was overdone.

Political resolution and pro-growth policies within the bounds of the fiscal rules could bring yields down by up to half a percentage point. It should bring a smile to the Treasury and to pensions.

A better outlook for pensions for sure; I wrote earlier this week about the threat to LGPS from  a Reform victory, LGPS must do something to return surpluses and I hope that it discussed their vulnerability to criticism from sources (including this blog) concerned that councils are overpaying contributions and council tax payers overpaying their taxes.

LGPS is just the icing on a much bigger cake. The bigger cake is private pensions, it needs to be re baked and I hope that a combination of the Pension Schemes Act and the introduction of CDC workplace pensions will make the cake more appetising.

Burnham and Labour’s upturn, following their election success ,  will be good news for pensions.