Tory leader can celebrate but not with the best champagne

Yesterday was an Asti Spumante, rather than a champagne, day for Michael Howard. The local election results show that the Conservative Party has made solid and steady progress in a number of crucial councils.

Yesterday was an Asti Spumante, rather than a champagne, day for Michael Howard. The local election results show that the Conservative Party has made solid and steady progress in a number of crucial councils.

Its national share of the vote entitles the Tories to spin a good story. This is the first time that the governing party has been reduced to third place in mid-term council elections. Not even at the height of John Major's unpopularity did the Tories come third.

And some of the Tory council gains - in Trafford, Dudley, Worcester, Monmouth, Rossendale and Thurrock - are significant because they are in constituencies that they must win back from Labour at the general election. Elsewhere, they reversed previous Liberal Democrat gains at their expense.

Mr Howard has passed the initial electoral test in his first rendezvous with the voters, but it would be premature for his wife, Sandra, to start measuring up for new Downing Street curtains. Thursday's elections were the first for many years when genuinely solid foundations were laid for a possible Tory general election victory, but fell short of "stunning". Labour performed disastrously - especially in its heartland areas of the North-east, but it was the Liberal Democrats, rather than the Tories, who made the running in Newcastle.

Herein lies the Tories' problem. While the Newcastle result was a Labour rout, not a single Tory councillor was elected. Similarly, in Manchester, Liverpool and Oxford, where there were once Tory MPs, there are still no Tory councillors.

In the 1970s, when Labour was previously in power and suffering similar unpopularity, there was a straight transfer of support to Margaret Thatcher's resurgent Tories. On this occasion the Tories have had to share - almost evenly - the spoils of victory with the Liberal Democrats. On a rough rule of thumb, for every two council seats that Labour has lost, one each has gone to the other two parties. This means the Tories now operate in a three-party system that blunts the extent to which they can repeat the truly stunning gains in the run-up to the 1979 election.

In London, the Tories performed well in the Assembly election; many London Labour MPs must be vulnerable, but the headline win for Ken Livingstone deprives Mr Howard of a great prize. If Steve Norris had not been so hostile to the congestion charge, and tarnished by his chairmanship of Jarvis, the result might have been an awful lot closer.

So at half-time this weekend there will be quiet satisfaction in the Tory camp. Overall, however, the current bias in the electoral system still gives Labour advantages. Assuming some Labour recovery, should the main parties end up, on the eve of a general election, in percentage terms in the mid-30s, Labour can still win with a solid overall working majority.