Labour’s future success is less clear-cut after the local elections
We went into this set of local and mayoral elections with two big questions: Is Labour on course for a majority and how bad is it going to be for Rishi Sunak?
On the Sunak question, it’s a very clear-cut story.
The Tories are having as bad a night as their worst nightmare.
There is a 19-point drop in the Conservative vote compared with the 2019 general election – one of its worst performances ever.
But it’s not an all-out win for Labour, either.
As it stands on these results, the party is not on course for an outright majority at the general election, according to our election expert Professor Michael Thrasher.
The projected National Equivalent Vote (NEV) share – the model we use to translate local council elections into a nationwide vote share – puts Labour on 35%, short of the 40%-plus territory some see as needed to catapult Sir Keir Starmer into No 10 and way off what Blair was hitting in the 1995 and 1996 local elections ahead of his massive landslide.
If you want to benchmark against how it compares to Blair’s performance in the run-up to 1997, in the 1995 local elections, Labour achieved an NEV of 47%, while in 1996 the party hit a NEV of 43%.
So what might that mean for the maths in the House of Commons?
The Tory majority is wiped out – with Sunak projected to win a 25% vote share – and Labour becomes the largest party in parliament, but 32 seats short of an outright majority.
That would give them a gain of 93 seats to 294, with the Tories dropping 130 seats to finish with 242.
The Lib Dems would add 30 seats to have 38 MPs, with others up seven on 66.
That raises questions for Labour.
While the country is clear in these results that the government is the problem, they seem less sold on whether Keir Starmer is the answer.
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Of the 260 seats lost by the Conservatives in the council elections as of 5pm on Friday, Labour has picked up less than half as the vote goes to independent and smaller parties.
Labour will argue two things: that they are winning in key battlegrounds across the country they need to win a general election, while voters are likely to turn out in bigger numbers and vote for the main parties when it comes to selecting MPs rather than councillors.
Labour insiders tell me it’s “wrong” to say they are not on course to win a general election.
“We are very happy with the efficiency of the vote from every corner of the country, from Hartlepool down to Thurrock, from Avon and Somerset up to Redditch, millions of people have sent out a message so loud and clear that even the prime minister in his private jet must have heard it,” said one senior figure.
“Labour’s on course to win a majority. We are very happy with where we are. Others and independents won’t get 24% in the general election.
“The voter distribution is where we need to be. In places like Tees Valley we have a huge swing.
“Where do you think all those smaller and independents are going at a general election where there is only a choice of two parties?
“A nine per cent lead is more than enough to win a majority and we are winning the seats we need to win a majority.”
Local election results: Relief for Sunak in key mayoral race
And there are some signs of direct transfer of seats from Tory to Labour in key constituencies.
Rushmoor, a council Blair never won and has been Conservative for 51 years, has switched.
Redditch, in West Midlands, was a straight swap to Labour.
In Swindon, another general election bellwether, Labour extended their lead.
“It’s not just the Tories losing, it’s us winning Rushmoor, Redditch. Whoever wins Redditch wins the country, Thurrock, Hartlepool,” the senior figure added.
“So we are winning in every type of seat, the Red Wall and the Blue Wall.
“Take Rushmoor. The position of a changed Labour Party is showing. Very satisfying that in a general election year, when the Tories are trying to use national security as a dividing line, they lose the home of the British Army.”
For the Tories, it’s a horror show – pure and simple. In Welwyn Hatfield, Portsmouth and Peterborough they are hitting their lowest seats ever, passing records set in 1996 when Blair was Labour leader and on the cusp of a landslide.
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Analysis: Local election results
But for all the good news for Labour, this is not a slam dunk by any means.
Because, in a nutshell, for all the seats the Tories are haemorrhaging, Labour is not by any means always their main beneficiary, as independents and smaller parties prosper from Conservative decline.
So take the nightmare of Peterborough for the Tories – Labour did well, but it was independents that picked up more seats.
Harlow is the same, with the party unable to unseat the Tories in a council they lost in 2021. The Conservatives lost 11 seats, but seven of those went independent rather than to Labour.
Labour is also struggling in some areas as tensions over the Israel-Hamas war are playing out at the ballot box.
Labour lost several seats to independents in Muslim majority wards, including in Blackburn with Darwen where the Labour vote share was down more than 20 points.
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In the Muslim area of Elswick in Newcastle, the Labour vote share plummeted and this time the Greens gained.
The Greens’ co-leader Carla Denyer told Sky News the win was predominantly because of Gaza.
The Greens are picking up seats from the Conservatives too.
The Lib Dems so far are underwhelming after a soaring performance last year, they could pick up when results from the South West and South East start coming in.
There are still plenty of results to go, but what is clear from the counts so far is that Sunak’s Tories are into John Major territory in these last big ballot box tests before the general election.
But what is less clear-cut is whether Sir Keir Starmer is riding the sort of New Labour wave that brought Blair crashing into Downing Street with a landslide in 1997.
The economy will have to be “strong enough” for the government to U-turn on winter fuel payment cuts, the business secretary has said.
Jonathan Reynolds, talking to Beth Rigby on the Electoral Dysfunction podcast, also said the public would have to “wait for the actual budget” to make an announcement on it.
Sir Keir Starmer said on Wednesday he would ease the cut to the winter fuel payment, which has been removed from more than 10 million pensioners this winter after it became means-tested.
He and his ministers had insisted they would stick to their guns on the policy, even just hours before Sir Keir revealed his change of heart at Prime Minister’s Questions.
But Mr Reynolds revealed there is more at play to be able to change the policy.
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Winter fuel payment cuts to be reversed
“The economy has got to be strong enough to give you the capacity to make the kind of decisions people want us to see,” he said.
“We want people to know we’re listening.
“All the prime minister has said is ‘look, he’s listening, he’s aware of it.
“He wants a strong economy to be able to deliver for people.
“You’d have to wait for the actual budget to do that.”
Read more:
Gordon Brown suggests people on top income tax rate should be excluded from winter fuel
Chancellor Rachel Reeves has committed to just one major fiscal event a year, meaning just one annual budget in the autumn.
Autumn budgets normally take place in October, with the last one at the end of the month.
If this year’s budget is around the same date it will leave little time for the extra winter fuel payments to be made as they are paid between November and December.
You can listen to the full interview on tomorrow’s Electoral Dysfunction podcast
Opinion by: Ahmad Shadid of O.xyz
Semiconductors scored a rare exemption from US President Donald Trump’s aggressive reciprocal tariffs, but the relief is symbolic at best. Most semiconductors enter the US embedded in servers, GPUs, laptops, and smartphones.
The finished goods remain heavily tariffed, some with duties reaching up to 49%. The exemption looks good politically but delivers little practical benefit. Nvidia’s DGX systems, crucial for training advanced AI models, do not fall under the exempted HTS codes. Nvidia could pay effective tariffs nearing 40% on these vital components. Such costs threaten to stall critical AI infrastructure projects across the country.
Semiconductor tariffs may compromise the goal of the CHIPS Act. The act promised tens of billions of dollars in subsidies to support domestic chip manufacturing. Yet advanced lithography machines — key equipment from countries like the Netherlands and Japan — face 20%–24% tariffs. Ironically, tariffs designed to boost American production increase the cost of essential manufacturing equipment.
The effect of new tariffs is already slowing progress in critical supply chains — just as generative AI and large language models are gaining momentum across sectors like finance and defense. Any delays or cost increases now could blunt America’s technological advantage.
Indirect costs undermine exemptions for AI
Modern semiconductor supply chains are global and highly integrated. An exemption on raw silicon means nothing when servers, GPUs and other finished products face steep tariffs. Tariffs indirectly inflate costs, eliminating any competitive advantage from domestic manufacturing.
Indirect tariff costs hit high-end systems disproportionately hard. The effect ripples through AI model training, data center expansions and major infrastructure projects, significantly slowing the industry’s momentum.
Tariff impasse halts investment
So far, it’s clear that the US president’s tariff plan didn’t follow any conventional economic trends or calculated strategy. The uncertain tariff situation stalls investment decisions across the technology sector. Companies need predictable costs to justify large capital expenditures. Ongoing tariff volatility prevents them from committing resources to new data centers and manufacturing lines.
This mirrors the supply chain chaos of 2020. At that time, uncertainty caused massive order cancellations and slowed industry recovery for years. If tariff ambiguity continues, we could see similar waves of cancellations in 2025. This would further compound existing inventory and revenue issues in the semiconductor sector.
Domestic production is not optimal
The border argument for these tariffs is that they’re meant to boost domestic production. They do little, however, to encourage genuine domestic semiconductor production. Despite subsidies under the CHIPS Act, most US semiconductor companies still rely on international foundries for manufacturing. Instead, they face increased equipment and operational costs.
Recent: How trade wars impact stocks and crypto
The idea that tariffs promote domestic production ignores the reality of global semiconductor manufacturing. Costs rise across the board, putting American companies at a disadvantage rather than offering protection.
AI projects face heightened risk
The blockchain and crypto sectors, particularly AI-driven projects, also feel the pinch. Projects depend heavily on GPUs and high-performance servers for mining, validating transactions and running decentralized AI computations. Increased hardware costs directly affect profitability and growth, potentially stalling innovation in blockchain applications.
AI developments have just started to pick up the pace in the blockchain and Web3 space. The industry saw increased interest from investors and VCs just a year ago. So, they are still on tighter budgets. Elevated costs can, however, lead to stagnation. We might see innovators and developers exiting the market. The ripple effect extends beyond the general technology sector and could threaten future digital economies.
Moreover, these cost pressures disproportionately affect startups and smaller tech firms. Industry giants can absorb additional expenses, but innovative, smaller players face existential threats. This dynamic risks stifling innovation at the grassroots level, harming the entire tech ecosystem.
What to expect
Semiconductors have momentarily escaped direct tariffs, but the exemption provides little benefit. Tariffs continue to hit finished products, driving up indirect costs across the industry. Instead of boosting domestic manufacturing, these tariffs create economic paralysis, stall critical infrastructure projects, and threaten America’s lead in AI innovation. Policymakers must acknowledge these realities and adjust their approach before irreversible damage is done to the nation’s technological future.
Opinion by: Ahmad Shadid of O.xyz.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
California Representative Maxine Waters, ranking member of the US House Financial Services Committee, has announced plans to introduce legislation “to block [Donald] Trump’s memecoin and stop his crypto corruption.”
In a May 22 notice, Rep. Waters said the Stop Trading, Retention, and Unfair Market Payoffs (TRUMP) in Crypto Act of 2025 bill would be aimed at blocking the US President, Vice President, members of Congress, and their families from engaging in “crypto crime.” The US lawmaker referred to Trump and his wife, Melania, issuing personal memecoins in January, his family launching a stablecoin, USD1, through the crypto platform World Liberty Financial, and the president attempting to establish a national Bitcoin (BTC) reserve as his sons back a BTC mining venture.
“Donald Trump is preparing to dine with the top donors of his memecoin who’ve made him, and his family, richer,” said Waters, adding:
“Trump’s crypto con is not just a scam to target investors. It’s also a dangerous backdoor for selling influence over American policies to the highest foreign bidder.”
Waters’ bill was one of many actions announced to oppose the president’s dinner to reward memecoin holders. Senators Chris Murphy and Elizabeth Warren are expected to attend a press event with representatives for the consumer advocacy group Public Citizen, and two Democratic organizations will protest at the Trump National Golf Club outside Washington, DC, where the memecoin dinner will be held.
This is a developing story, and further information will be added as it becomes available.
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