There’s no disguising the fact that last night’s result was a very disappointing one for Conservatives.

There were three small crumbs of comfort.

First, the poor performance of Labour, our only realistic rivals in terms of winning the next Election. The opinion polls say Labour are doing 12 or 13 percentage points better than they did at the last Election, but on the ground in Eastleigh they increased their share of the vote by just 0.22 per cent. In the 1994 Eastleigh by-election, held before Tony Blair was elected Leader, Labour came second with 27.6% of the vote.  Yesterday, they managed fourth place with just 9.8% of the vote, suggesting – as do local government by-election results week in week out – that their opinion poll lead is soft and that they will struggle to win their target seats, particularly in the South.

Second, logistically the campaigning team at CCHQ ran a good operation.  The campaign centres were well run, the literature looked professional and every time I went to help my time was well used.

Third, the Party was up for the fight. Lots of people went to Eastleigh to help, many of them on more than one occasion, making up for our lack of organisation in the seat.

But though we can draw some comfort from these three crumbs, the result demonstrates to anyone who didn’t know it already that we face three big challenges.

First, rebuilding our ground organisation in many target seats.

Second, the difficulty of gaining Liberal Democrat seats.  Eastleigh shows that we cannot rely on a national fall in the Liberal Democrat share of the vote to deliver lots of seats to us. In seats with a strong Liberal Democrat presence, people vote Liberal Democrat because of their local record, not their national record – Chris Huhne’s conviction, the accusations about Lord Rennard were never going to make much difference.  When I was out knocking on doors, I met elector after elector who said they were voting Liberal Democrat because ‘they do a good job round here’.  At the General Election, we will have an additional argument at our disposal – we will be able to say that unless people vote Conservative there is a real risk that they will end up with Ed Miliband as Prime Minister. But as people like Andrew Jones and Steve Brine demonstrated at the last Election, we have to match the Liberal Democrats at pavement politics in the years leading up to an election to get permission to make these national arguments. In Eastleigh, where every single councillor was Liberal Democrat, we hadn’t done that.

And finally, the UKIP threat. Now that the Liberal Democrats are in government, UKIP have taken over as the natural party of protest at by-elections attracting support from all quarters (according to a post-election poll by Lord Ashcroft, 22 per cent of 2010 Conservatives voted UKIP but so did 19 per cent of 2010 Liberal Democrats). But we shouldn’t just dismiss this as a protest. UKIP won’t do as well at the General Election – in Eastleigh or anyone else – as they did last night (Lord Ashcroft’s poll found that just 43 per cent of those who voted UKIP yesterday plan to do so again at the General Election), but there is a real risk that they will poll higher than at the last Election and if those votes come from people who would otherwise vote Conservative it will cost us seats. Of course, we need to reassure disaffected Conservatives on Europe and on immigration, but we cannot out-UKIP UKIP. Nor can we afford to focus exclusively on this group of voters – we also need to reach out to floating voters who may be more concerned about jobs, the cost of living or the NHS. As Tim Montgomerie has argued on Conservative Home this morning, we need a broad offering.

And most of all, we need to avoid panicking. It was a bad result. It has laid bare the strategic challenges we face. But plenty of governments have recovered from worse mid-term results and won. If we stick together and address those challenges, so can we.

Gavin Barwell is the Conservative MP for Croydon Central.

Tags: Conservatives, Eastleigh, Eastleigh by-election 2013, UK politics