First of all, good news from Nottingham where Labour won the election, gaining all 3 seats in my own ward (taking one from the Tories) and with a net gain of 4 seats overall.
That island of good news (as well as Labour retaking Leicester Council and gaining seats in York) was somewhat overcast by results elsewhere, especially in Scotland, Wales and the rest of England.
Well it certainly is true that Governments in power lose local elections. It happened under the Conservatives and under previous Labour administrations (including spectacular losses in the 60's and 70's - the BBC has a good page of recent local election reversals, which is quite instructive). A bad performance in local elections doesn't always mean losing the next General Election.
The Labour Party won in Nottingham for a number of reasons - first of all recognising that we would lose the election if we didn't do something radically different. Secondly by pulling out all the stops in the campaign. The Lib Dems complained that Labour won because of union support (I can't see it did much good any where else). The truth is that there was a well run campaign which started just after the 2005 election and a number of individuals putting in a phenomenal amount of work as well as a lot of people working hard on the day.
So I do not think that the next election is lost, but it will be a hard fight. The Scottish vote is very portentious of new developments and I will blog about that at some later point.
And to add to the general depression, tonight the French look likely to elect Sarkozy - if all of the opinion polls are correct (and I do mean all .... there will be some seriousl explaining to do if Segolene Royal wins, though I earnestly hope she does).