GEORGE KEREVAN : Drubbing for Labour means general election starts here

THE results of the English and Welsh local elections were worse for Labour than anyone predicted.

The government is already shrugging off this drubbing with the traditional riposte that it is possible to lose badly at mid-term and storm to victory at the following general election. Tony Blair did that in 2005 following the 2004 local polls, which put Labour in third place behind the Lib Dems, just as they did on Thursday.

But here is what is dramatically different from 2004: the election on Thursday was the first major poll in half a decade that was not a referendum on Tony Blair or the Iraq war. Blair is gone and Iraq is now a minor political irritant.

No, this was an election fought on bread-and-butter issues: higher taxes, inflation, a wobbly housing market and crime. Coming third on this agenda bodes ill for Gordon Brown. One instant reaction to Thursday: the bookies have switched from expecting a hung parliament to a Tory majority after the general election.

A glance at the numbers shows the election result is more than a mid-term blip. With 44 per cent of the vote, the Tories are registering the kind of support they would need to command a majority at the next general election. Anything less and all the Conservatives would gain would be Lib Dem seats rather than Labour ones.

But Labour's 24 per cent poll share is its worst ever – a crushing verdict on a new prime minister who has the advantage of not being Tony Blair. Incidentally, in Scotland, where there was no voting on Thursday, Labour's average share of the poll in all the by-elections since last May is 22 per cent, compared with 35 per cent for the SNP.

As a result of Thursday, the UK political landscape has been transformed in two major ways.

First, a year ago, even six months ago, no-one thought there was a serious prospect of a Conservative government. But that has changed overnight. This is not to say that Cameron's Tories are by any means a shoo-in. Brown could still fight on the "I'm the best man in a crisis" ticket and scrape back – though a growing penchant for dithering is eroding his reputation as a safe pair of hands.

The second shift in the political tectonic plates is that a debate on who will replace Gordon has begun in earnest inside the Labour parliamentary ranks. Labour MPs are nowhere near plotting a coup but there are now 100 of them who know they will not be coming back to Westminster unless there is some drastic reversal in Labour's fortunes. And they include several prominent cabinet ministers.

Much depends on how long Gordon Brown wishes to stay. It has been common gossip around Westminster that he intended to fight only one election, serve a full term then quit. By then he would be well into his sixties and facing voter ennui, not to mention growing frustration among ambitious colleagues. The Prime Minister also has a young family which he wants to enjoy while he can. After Thursday, it is not inconceivable – though unlikely – that he could quit early.

But even if Gordon Brown fights the next election, the Labour Party has started to look to the day when he has departed. Brown has been grooming his protégé, Ed Balls, for the succession. Balls is the Schools Secretary for England, where his dedication to paternalist intervention in the Brown mould (as opposed to the Blairite parental choice agenda) has won the sympathy of Labour back-benchers. Many see this as an early marker in the undeclared succession contest.

However, Balls may well go down with his master. The current most likely candidate to replace Gordon Brown is the Foreign Secretary, David Miliband, largely because other cabinet members see him as the best bet to stop the detested and arrogant Balls. Yet Miliband comes across as too much the intellectual when Labour needs a bruiser to take on a resurgent Tory Party.

Then there is Alan Johnson, the Health Secretary, who has the working-class credentials and earthy style to appeal to Labour activists and win back core Labour voters disappointed by Brown.

Not to be ruled out is that old survivor, Jack Straw, the Justice Secretary, who recently threatened to punch Ed Balls. Straw might make an excellent interim leader though age may tell against him – he is five years older than Brown.

The key to the Labour succession depends on when it takes place. A Tory majority can only happen if a third of Labour MPs lose their seats – which would take out most of the New Labour moderates elected in 1997. If Gordon Brown led the party to defeat at the next general election, the new leader would then be chosen by an electoral college which gives a third of votes to MPs, a third to the unions and a third to Labour activists. After an election defeat, all three constituencies are likely to be well to the left.

Even if they are willing to concede that a Cameron victory is possible, Labour backbenchers are comforting themselves with the view that the Tories would form a weak government. The analogy is made with Harold Wilson's unexpected defeat in 1970 which ushered in the short-lived Tory government led by Ted Heath. Labour MPs think Cameron lacks the policies or credibility to prosper in office. The voters would then return to a "refreshed" Labour government.

Whether that analysis is wishful thinking or not can only be determined by history. The salient fact is that Labour politicians are already factoring a Tory victory into their thinking – something they would not have done a year ago.

However, a general election is still two years away plus European elections in June of next year. Gordon Brown will attempt to regain the initiative in next month's draft Queen's speech, which will announce a plethora of new initiatives to reform public services and the constitution. There is also talk of an imminent ministerial reshuffle that could see Alistair Darling moved from the Treasury. Gordon will blame current woes on the international economy and claim he is still the best man to pilot the ship to safety. The next general election may not be until 2010, but the campaign has just started.

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