Good morning from New Economy Brief.
On Thursday, voters across England will go to the polls to elect councillors in 24 of the country’s 317 councils. Metro mayors will also be elected in the West of England, Cambridgeshire, Peterborough, Hull and East Yorkshire, and Greater Lincolnshire.
Local elections are often about hyper-local issues. But they can also be barometers for what the country is thinking more generally. For Labour and the Conservatives, Thursday’s results may well make for grim reading, as commentators anticipate an “anyone but the big parties” election.
This week we’re looking at what to expect from the local elections, digging deeper into Labour’s worries about Reform, and exploring how voters’ views about the economy are often more nuanced than much of the pre-election commentary implies.
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Which elections are taking place?
The 24 councils holding elections this week include 14 county councils, eight unitary authorities, one metropolitan district, and the Isles of Scilly (which has its own governance structure). In total, 1,750 councillors will be elected (which includes 93 by-elections). Another 21 county council elections which should have happened on Thursday have been postponed. This includes councils that have opted to join the government’s new devolution priority programme. These have been allowed to defer elections to provide more time for any restructuring necessary for further devolution. A parliamentary by-election will also be held in Runcorn and Helsby, after its previous Labour MP Mike Amesbury stepped down earlier this year having pleaded guilty to assaulting a constituent.
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What to look out for.
Metro mayors will be elected for the first time in Greater Lincolnshire and Hull and East Yorkshire. YouGov polling suggests that Reform candidate and former Conservative MP Dame Andrea Jenkyns is likely to win the former. The latter is thought to be a four-horse race between the Conservatives, Labour, the Liberal Democrats and Reform (whose candidate is an Olympic medallist). Another contest to watch is Doncaster. It’s the only council being contested this year that Labour currently holds, and polls are pointing to a potential win for Reform.
Sky News’s Beth Rigby has characterised Thursday’s election as “the first big ballot box test of Sir Keir Starmer’s premiership”. The results are also likely to reveal how much British politics is changing. As Labour List’s Morgan Jones argues, “we’re no longer in a two-party system, and should stop acting like we are”. And with a broad but shallow ‘sandcastle’ majority, Labour will be paying particular attention to any data that might tell them who they can win over and what coalitions they need to build to win again.
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The economic backdrop.
It’s worth remembering that Labour suffered significant losses last time most of these seats were up for election in 2021, so losses on the same scale are unlikely this year. However, as Oxford University’s Professor Jane Green points out, Labour has been losing support among voters who feel most economically insecure, and “these feelings of economic insecurity are higher among voters who might consider voting for the Greens, Liberal Democrats, or Reform UK.”
Analysis by Green and Professor Geoffrey Evans for the Joseph Rowntree Foundation found that overall Labour had lost 40% of its general election voters, and had lost 46% of its economically insecure voters. According to Green, “a party that delivers on economic security – supporting people by bringing down costs and giving people a chance to restock their savings safety net – can feel much more secure in their electoral prospects too. Without it we’re likely to see much more political volatility and further electoral fragmentation.”
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So where do voters stand?
A complex picture. Clearly, Labour’s big worry is Reform. With much of their recent campaign labelling Farage’s party as “secret Tories” and talk of the red wall turning turquoise, the party is spooked. But new research by Persuasion UK suggests that simply adopting Reform UK policies is not an effective strategy for Labour. For starters, it finds that historically, there is not much overlap between Reform and Labour voters: almost three quarters (74%) of Reform voters at last year’s General Election have not voted Labour in a single general election since 2005. And while there are ‘Reform-curious’ Labour voters, they make up only 11% of Labour’s 2024 support – a much smaller percentage than 2024 Labour voters who are now open to voting Green (29%) or Lib Dem (41%). Translating this into general election seat projections, Persuasion UK’s MRP polling suggests that Labour would lose 123 seats if all Reform-curious Labour voters defected, but more than twice that (250) if all Green-curious voters abandoned Labour.
Dividing lines. One of the most interesting findings in Persuasion UK’s analysis is that there are clear differences between Reform voters and Reform-curious Labour voters when it comes to the economy. Reform-curious Labour voters are much more likely to be economically populist, “backing things like government regulation and taxation of the richest in far greater numbers”, as well as being “more attracted to ideas like building more council housing, being more likely to be social renters themselves.”
Net zero/red herring. These Reform-curious voters are also much less hostile to net zero than Reform voters and are actually “broadly sympathetic” – in line with the general public. Also like the general public, these voters are more likely to blame high energy prices and low economic growth on profiteering by energy companies and reliance on imported gas rather than net zero.
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Shared priorities.
When it comes to building electoral coalitions, there are some eye-catching similarities between Labour voters who are wavering to both the right and the left. Large majorities of both Reform- and Green-curious Labour voters agree that the wealthy should be taxed more. Persuasion UK’s research also found that a commitment to significantly increase funding for the NHS and other front-line services is the policy that would be most likely to make the average Labour voter stick with the party, and would reduce the likelihood of them voting for either Reform or the Greens. The message to Labour is clear: progressive economic policies and a focus on improving public services is an effective way to unite its voter base.
This is backed up by new research from Hold Sway for the Trades Union Congress, which found that Labour’s Employment Rights Bill “improves Labour's favourability among voters". This was especially true of Labour 2024 voters who would now vote Reform. Persuasion UK also found that large majorities of both Reform-curious and Green-curious Labour voters believe that employers have too much power over workers, and that “more regulation of business is in the interests of ordinary people”. A major issue, though, says Hold Sway, is that public awareness of the legislation is low: 72% of people had heard nothing or only a little about before being asked. Another lesson for Labour here, then – it needs to communicate popular policies if it is to reap electoral rewards for them.
Nationalise gas to lower bills. Common Wealth has published a new report explaining how a ‘public strategic reserve’ could lower energy costs – by stopping rent-seeking behaviour and profiteering – and enhance energy security. This would involve the government taking gas power plants into public ownership to ensure consistency of supply while they are being phased out in the 2030s, via a “sensible and pragmatic capital swap between the public and private sectors, with the latter enabled to reinvest in new clean energy sources.”
Geopolitics of electric vehicle manufacturing. Sociologist and political theorist Paulo Gerbaudo has a deep dive in Phenomenal World explaining how the leading Chinese electric vehicle manufacturer BYD has rapidly expanded its operations abroad. BYD is now setting sights on increasing EV sales in Europe, and “threatening to overtake other leaders not only in the EV market, but in the [global] automotive industry as a whole”. (Check out last week’s New Economy Brief for an explainer of how escalating trade frictions could affect the UK car industry.)
Privatisation of space? Corporate lobbying forces and right wing think-tanks are trying to privatise space in order to enable profiteering from activities like asteroid mining. Writing for Common Wealth, Carla Ibled warns that if the efforts of the ‘New Space corporate lobby’ succeed in rewriting international law, then resources beyond the Earth will be attributed on a first-come, first-served basis to incumbent tech billionaires, exacerbating inequality. She calls on governments to protect the legal infrastructure of common ownership of outer space.
Voters want the ‘nanny state’, actually. New polling from the Institute for Public Policy Research’s (IPPR) Amy Gandon and Public First’s Yasmeen Sebbana finds that voters from all parties want bold action from the government to improve public health, especially those in key battleground seats. This goes beyond spending on the NHS, and includes other health-based interventions on strengthening rules for landlords to ensure healthier living conditions, or early childhood interventions like Sure Start and free school meals for state school pupils.
Dads for growth. New research from the Joseph Rowntree Foundation (JRF) and the Centre for Progressive Policy (CPP) finds that more generous Statutory Paternity Leave would boost both household financial security and economic growth. They calculated that extending paternity leave to six weeks at 90% of a father’s average weekly earnings could deliver £2.68 billion to the economy.
