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Rishi Sunak on rack as Tory election losses mount

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Rishi Sunak’s Conservatives were on the rack on Friday after the party suffered big losses in local elections across England and Wales and was trounced by Labour in the Blackpool South parliamentary by-election.

Overnight results in the last big test before a general election expected this year suggested the UK’s governing party could lose half the council seats it was defending.

Labour leader Sir Keir Starmer said the 26 per cent swing to his party in Blackpool was “seismic”, as Sunak’s leadership of the Tories came under renewed pressure.

But early signs were that rightwing Conservative critics of Sunak would pull back from trying to topple him. “A strong ‘stay calm’ message is going around the WhatsApp groups,” said one former cabinet minister.

Dame Andrea Jenkyns, a Boris Johnson supporter who submitted a no-confidence letter in Sunak last November, told the BBC: “It’s looking unlikely that the MPs are going to put the letters in. So we’ve got to pull together.”

Tory chair Richard Holden insisted that Sunak was safe. “The prime minister is going to lead the party into the general election, there’s no doubt about that,” he said.

The prime minister’s allies hope the Conservatives can hold on to the key mayoralty of Tees Valley, where the result is due on Friday lunchtime, to calm party nerves, although defeat there could create Tory panic.

Projections that the Conservatives could lose half the council seats they held were based on results in 35 of the 107 councils being contested; some voters in England and Wales were also electing mayors as well as police and crime commissioners.

Sir John Curtice, the veteran elections expert, said the results were “not far short” of catastrophic for the Conservatives and “one of the worst, if not the worst” result for the party in local elections for 40 years.

Starmer’s overnight focus was on Labour’s parliamentary by-election victory, where the new MP, Chris Webb, beat the Conservatives’ David Jones with a 26 per cent swing. Reform UK came a narrow third, just 117 votes behind the Conservatives.

“This seismic win in Blackpool South is the most important result today,” Starmer said. “This is the one contest where voters had the chance to send a message to Rishi Sunak’s Conservatives directly, and that message is an overwhelming vote for change.”

Labour’s victory in Blackpool South was its third-biggest swing against the Conservatives in a postwar by-election and is ominous for Tory MPs defending similar working-class seats in the “red wall” of northern England.

Labour overturned a Tory majority of 3,690 votes to take the parliamentary seat with a 7,607 majority. The seat was formerly held by Scott Benton, who was forced to quit in a lobbying scandal.

Reform UK, formerly the Brexit party, secured 17 per cent of the vote in Blackpool South, one of the races it focused on, after standing candidates for only 12 per cent of contested council seats.

The fact that Reform UK, founded by Nigel Farage, did not come second will be one crumb of comfort for Tory strategists, although its performance was another reminder of how it is splitting the vote on the right.

A Conservative spokesperson said: “What has been clear is that a vote for Reform is a vote for Sir Keir Starmer.”

It was not all good news for Labour. The party lost control of Oldham council in Greater Manchester, after ceding several seats to independents who stood on a pro-Palestine platform. It also lost seats in Newcastle.

Pat McFadden, Labour’s elections co-ordinator, admitted that the Gaza war was costing the party votes. “There’s no denying this is a factor in some parts of the country,” he said.

The Conservatives also narrowly held on to power in Harlow in Essex, a Conservative-Labour battleground seat. A Tory figure claimed the result showed there was “absolutely no love for Keir Starmer”.

As counting continued, Labour had made net gains of 58 council seats against 96 Tory losses. The Liberal Democrats and Greens had also made advances with nine and 13 new seats, respectively.

About a third of the councils holding elections counted results overnight and posted them in the early hours of Friday.

The first mayoral election results, for the East Midlands, North East, Tees Valley, and York and North Yorkshire, will be announced at about lunchtime on Friday, while results from London and the West Midlands will be declared on Saturday.

A Conservative victory in either or both of the Tees Valley and West Midlands mayoralties will be seized on by Sunak to try to reassure his restive party.

Number 10 has been on alert for the possibility that more Tory MPs will submit letters of no confidence in his leadership; 52 would trigger a confidence vote.

Put your questions to George Parker and colleagues at a webinar for FT subscribers on Wednesday 8 May 1300-1400 UK (GMT+1). Register at ft.com/ukwebinar



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Who is Paula Vennells? Ex-Post Office boss in Horizon IT inquiry

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The ordained priest who led the Post Office from 2012 to 2019 faces three days of questioning at the Horizon Inquiry.



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Deutsche Bank lifts S&P 500 target on strong earnings By Investing.com

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Deutsche Bank strategists increased their year-end target for the to 5,500, up from the previous 5,100.

The revision is based on a strong earnings cycle and the anticipation that market confidence will grow by the end of the year, which should positively influence US stocks.

“We see the earnings cycle having plenty of legs,” strategists said in note to clients on Friday.

“While all the growth may not materialize this year, we see market confidence in a continued recovery rising by year end, supporting equity multiples.”

However, the strategists also cautioned about potential market volatility due to geopolitical risks. Moreover, they warned that a hung election poses a “real risk” for markets.

The brokerage firm noted that although all growth may not materialize this year, the market’s confidence in a continued recovery is expected to rise by year-end. This sentiment is projected to support equity multiples.

Alongside the revised index target, Deutsche Bank has also raised its base case for S&P 500 earnings to $258 per share from the previous estimate of $250. This adjustment indicates a year-over-year growth of 13%.

If the macroeconomic growth continues to exceed trends as it has for the past seven quarters, the strategists suggest earnings could reach as high as $271 per share, which is at the upper end of their original forecast range of $250 to $271.

 





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Mercedes-Benz workers in Alabama vote against union

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United Auto Workers (UAW) members and supporters on a picket line outside the ZF Chassis Systems plant in Tuscaloosa, Alabama, US, on Wednesday, Sept. 20, 2023.

Andi Rice | Bloomberg | Getty Images

Mercedes-Benz workers in Alabama have voted against union representation by the United Auto Workers, the National Labor Relations Board said Friday.

The results are a blow to the UAW’s organizing efforts a month after the Detroit union won an organizing drive of roughly 4,330 Volkswagen plant workers in Tennessee. Voting started Monday and ended Friday.

Union organizing failed with 56% of the vote, or 2,642 workers, casting ballots against the UAW, according to the NLRB, which oversaw the election. More than 90% of the 5,075 eligible Mercedes-Benz workers voted in the election, according to the results.

The NLRB said 51 ballots were challenged and not counted, but they aren’t determinative to the outcome of the election. There were five void ballots. 

The union and company have five business days to file objections to the election, including any alleged interference, according to the NLRB. If no objections are filed, the election result will be certified, and the union will have to wait one year to file for a union election for a similar bargaining unit.

Mercedes-Benz in a statement said company officials “look forward to continuing to work directly with our Team Members to ensure [Mercedes-Benz US International] is not only their employer of choice, but a place they would recommend to friends and family.”

United Auto Workers President Shawn Fain (right) and UAW Secretary-Treasurer Margaret Mock (left) lead a march outside Stellantis’ Ram 1500 plant in Sterling Heights, Michigan after the union called a strike at the plant on Oct. 23, 2023.

Michael Wayland / CNBC

The loss is expected to hurt the UAW in an unprecedented organizing drive launched late last year of 13 non-union automakers in the U.S. after securing record contracts with Detroit automakers Ford Motor, General Motors and Stellantis. Those agreements included significant wage increase, reinstatement of cost-of-living adjustments and other benefits.

UAW President Shawn Fain said while the Mercedes-Benz vote was obviously not the result the union wanted, it was a valiant effort, adding the vote “isn’t a failure” but a “bump in the road.”

“While this loss stings, I’ll tell you this, we’re going to keep our heads up, keep our heads up high. These workers have nothing to do but be proud in the effort they put forth and what they’ve done,” he said Friday during a media conference. “We fought the good fight and we’re going to continue on, continue forward. Ultimately, these workers here are going to win.”

The Mercedes-Benz vote was expected to be more challenging for the union than the Volkswagen plant in Tennessee, where the union had already established a presence after two failed organizing drives in the past decade and where it faced less opposition from the automaker.

Stephen Silvia, author of “The UAW’s Southern Gamble: Organizing Workers at Foreign-Owned Vehicle Plants,” noted Mercedes-Benz replaced the plant’s leader weeks ahead of the election. He said companies routinely do this, promising workers changes at their facilities in an effort to stave of organizing.

“Companies do anti-union campaigns because they can be effective, and I think this one was effective,” said Silvia, a professor at American University in Washington, D.C. “A common piece of an anti-union campaign is firing the plant manager … That seems to have persuaded enough of the workers to vote against the union.”

Mercedes-Benz Alabama plant votes against unionization

Alabama Gov. Kay Ivey, who was one of six Republican governors to condemn the union’s organizing drive, hailed the outcome of the vote.

“The workers in Vance have spoken, and they have spoken clearly! Alabama is not Michigan, and we are not the Sweet Home to the UAW. We urge the UAW to respect the results of this secret ballot election,” she said.

Workers at Mercedes-Benz’s Tuscaloosa plant, located about 60 miles southwest of Birmingham, have produced more than 4 million vehicles since the plant opened in 1997, including 295,000 vehicles in 2023, according to the plant’s website.

The Alabama plant currently produces vehicles such as the gas-powered GLE and GLS Maybach SUVs as well as the all-electric EQS and EQE SUVs.

The NLRB last week said it continues to process and investigate open unfair labor practice charges filed by the UAW against automakers, including six unfair labor practice charges against Mercedes-Benz since March.

Fain said Friday the union would continue to move forward with those charges. He declined to say whether the union plans to challenge the election results, saying he’d “leave that” to the union’s legal team.

The charges allege that Mercedes-Benz has “disciplined employees for discussing unionization at work, prohibited distribution of union materials and paraphernalia, surveilled employees, discharged union supporters, forced employees to attend captive audience meetings, and made statements suggesting that union activity is futile,” the NLRB said.

The union has filed other charges against automakers Honda, Hyundai, Lucid, Rivian, Tesla and Toyota, according to the NLRB.



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