THE sudden emergence of Michael Howard as favourite to become Tory leader seems to have set off alarm bells at the top of the Labour and Liberal Democrat parties.

THE sudden emergence of Michael Howard as favourite to become Tory leader seems to have set off alarm bells at the top of the Labour and Liberal Democrat parties.

Sitting outside the committee room where IDS was making his last stand on Wednesday, two Labour MPs bowled up to me to say how delighted they would be if Mr Howard wins the crown.

Not to be outdone, the Lib Dems believe Michael Howard will be a Godsend in their self-appointed task to overtake the Tories and become the main opposition to Labour.

Of course, they would try to rubbish the man who will have the advantage of leading a unified Conservative Party – something no Tory has not had the luxury of since 1989. For the past 14 years, the Conservatives have been fighting like cats in a sack and the probability of a settled Tory Party seems to have rattled the other parties.

Michael Howard will have one other advantage – his wife Sandra, the former model Sandra Paul. Mr Howard is her third husband and last year was mugged outside their Pimlico home when her engagement ring and other jewellery worth £7,000 was married.

Mrs Howard returned to her career in the 1990s, famously modelling for the Marks and Spencer catalogue while her husband was in the Cabinet.

Mr Howard's path to the leadership was sensationally cleared on Wednesday when David Davis, who looked odds-on to stand, announced he would not.

One of his key allies, Bury St Edmunds MP David Ruffley, hailed the decision as setting a moral example to Tory colleagues on the need for unity to defeat Tony Blair's government.

"This personal self-sacrifice on David's part shows that there is still decency in politics," said Mr Ruffley. "David received calls from many colleagues telling him to stand, but he believed that the party could not stomach a long battle for the succession. He has put the party and the country before his own personal ambition.

"By standing aside so soon, he paved the way for other contenders such as Tim Yeo and Michael Ancram to make similar announcements."

There was relief among Tory Euro MPs that a contest was likely to be avoided. Geoffrey Van Orden, who will lead the party's East of England's candidates in the European elections, said: "We now have the chance to become a strong and united party after so many years of strife and division. I'm sorry IDS has gone – his contribution to the Conservatives has been greatly underestimated."

Liberal Democrat leader Charles Kennedy at his party's conference issued a decapitation threat to top Tories in marginal seats where the Lib Dems are main challengers.

Among those whom Mr Kennedy said his party was out to get was Mr Howard, who has a majority in Folkestone and Hythe of 5,907. As party leader, he will be barnstorming his way around the country during an election campaign – but I fully expect him to double his majority.

Constituents take a pride in having a party leader as their MP and can be expected to turn out in force to re-elect Mr Howard.

TONY Blair and Michael Howard may not have much in common – but one thing that does unite them is to expose the Liberal Democrats' bottomless purse when it comes to public spending.

For the second week running, the Prime Minister tore to shreds Lib Dem leader Charles Kennedy when he raised the question of spending plans and priorities.

The Lib Dems are rather keen on a local income tax to replace the council tax, and Mr Kennedy asked the Prime Minister to justify the unfairness of property taxes, especially for pensioners, since under his government, council tax has risen 70%.

Mr Blair professed to understand the difficulties that pensioners and others will have with council tax rises. "In the end, council taxes are set by local authorities, but the Government's job is to make sure that we give a proper amount of support to local government, and we are doing that.

The Lib Dem leader then suggested it would be better "to scrap the unfair system that is the council tax and replace it with a tax related to people's ability to pay."

Big mistake, Charles. "The Liberal Democrat proposal to substitute a local income tax for the council tax would mean that people's income taxes went up by something like 6p in the pound. That is a huge burden," said Mr Blair.

And he launched into another attack on Lib Dem spending, much to the delight of his own MPs and the Tories, who loudly cheered him on. Mr Howard, the Shadow Chancellor, took great delight at this onslaught, and no doubt will now relish the opportunity to warn Middle England of the rise in taxes should the Lib Dem ever gain power.

The Prime Minister insisted Mr Kennedy "simply cannot afford all his pledges on behalf of the Liberal Democrats out of raising the top rate of tax, or by means of a local income tax or anything else.

"I said last week that the Liberal Democrats had 70 commitments. The cost of those commitments would run to literally billions of pounds. It would take too long to go into detail, as we would run over the time available for Prime Minister's questions.

"They include things like £400 million for village halls. We all support village halls, but £400 million? Other commitments are £750 million for small businesses, and an extra £2 billion for road traffic accidents. A further 25 commitments were made at the Liberal Democrat party conference. My favourite was commitment 65, which stated: `funded training for teachers and specialists on sex education, providing them information and material to aid honest, non-judgmental and thought-provoking lessons."

He added to laughter – not shared by Mr Kennedy's hapless backbenchers – "Let me suggest that commitment 71 should be funded training for Liberal Democrat Treasury spokesmen to aid honest, non-judgmental and thought-provoking lessons on financial discipline."