The victory of Rep. Thomas P. "Tip" O'Neill Jr. (D-Mass) over his Republican opponent William A. Barnstead yesterday virtually assures his election this January as Speaker of the House with the retirement of the current Speaker, Rep. Carl B. Albert (D-Okla).

As of 10 p.m. last night, election returns showed O'Neill leading 17,821 to 3383. O'Neill, whose district includes Harvard, estimated last night he would win by approximately 75 per cent.

Barnstead admitted prior to the election that he didn't have much chance of beating the popular incumbent but in his concession speech last night he said it was important to "give the people a choice." O'Neill, now entering his thirteenth term in Congress, has not faced Republican oppostion since 1962.

Barnstead ran on a platform opposing "big government, big spending and professional politicians." Unlike O'Neill, he supported a constitutional amendment banning busing and is opposed to federally-funded public employment projects.

In his victory speech last night O'Neill, who has served as House Majority Leader since 1973, said his campaign workers did a "magnificent job of getting out the vote."

The tall burly Irishman predicted the large voter turnout would enable Jimmy Carter to carry Massachusetts by a half million votes, creating a "tidal wave that will sweep across the nation."

Anticipating a Carter victory, O'Neill was reluctant to discuss exactly what type of rule he will assume as Speaker until he has an opportunity to consult with the former governor.

O'Neill, who has campaigned actively throughout the country on the behalf of Democratic candidates who faced tough challengers, said he didn't expect the balance of party power to shift in the House by more than "ten votes either way."

Democrats Tops

"The only thing this nation has going for it is a Democratic Congress," he said. Congress can be more effective in effecting change when it is working with a Democratic president, he added.

The victor stressed the importance of improving the "image of Congress in the eyes of the people" as well as his intent to continue working for reform and a "code of ethics" within Congress.