Bloodbath

Hello, you glorious beasts. We hope you woke up as happy as Farage did this morning.

Speaking of ‘reform’, let us know what you think about the new format here.

Onward…

THE MARKETS

*courtesy of Google Finance as of market close

The FTSE 100 broke records last week, enjoying its longest ever winning streak with 15 days of gains. But this makes it sound better than it actually was. 

The markets are emerging from their (purely figurative) bomb shelter after fears of a trade war sent them scurrying underground. Basically, it got so bad that things could only get better.

ELECTIONS
Electoral “bloodbath” as Reform dominates local councils

Reform won 43% of the councils contested in Thursday’s election, winning more seats than the Conservatives lost. The same day, Reform took a parliamentary seat from Labour, bagged two mayoralties in Hull and Lincolnshire, and even managed to drive the Tories out of their Garden of Eden, Kent. The Tory leader summarised it perfectly: it was “a bloodbath”. 

What were the results?

23 councils comprising 1,600 seats were contested on Thursday. 

• Reform won 10 councils, going from zero seats to a staggering 677

• The Lib Dems won 3 councils, winning 163 seats, leaving them with a total of 370

• The Tories lost 16 councils and 674 seats, leaving them with a sad 319 (and no councils)

• Labour lost 1 council, 187 seats, so now they only have 98 left. 

The Runyon by-election was a shambles from Labour, considering it was the tenth-safest seat in the House of Commons, with Labour enjoying a 14,700 majority since the general election last year. But it was close: Reform managed to clinch it by just six votes.

Why did Reform smash it? 

According to data compiled by beloved eccentric uncle and national treasure John Curtice, Reform succeeded with people who like Brexit and Boris Johnson, but performed worst in wards where people were more likely to be middle class and have qualifications. Their lowest vote share was in Park ward on the University of Oxford’s campus, which says it all really. 

But it’s not that simple. Reform won the same share of votes in both Labour and Tory wards. The Government hasn’t exactly helped themselves. Many voters, said some Labour MPs, felt “betrayed”. After all, the Government slashed winter fuel payments to pensioners, and cut benefits for disabled people. 

How did the leaders react? 

• Kemi Badenoch called it a “bloodbath”

• PM Keir Starmer said, “I get it. We’re moving in the right direction, but people must feel the benefits of change”

• Nigel Farage declared “the end of two party politics” and then set off some fireworks. 

What happens now? 

Perhaps the Tories are heading for electoral oblivion. There’s been some murmuring around Westminster that they’ll have to form an electoral pact with Reform to hound Labour out of the next election. The Shadow Treasury Minister rhetorically spat out his brandy. “Nigel Farage has been very clear that he wants to destroy the Conservative Party.” 

Labour is doing some soul-searching. Some on the Left claim they have to stop courting right-wing voters because they’ll never vote for them anyway, and stop alienating all the people who actually like them, like the small army of disillusioned Labourites voting Green and Lib Dem. 

But that’s difficult to square with the fact that Reform’s average vote share was the same in Labour and Conservative wards.

Labour would do well to remember that pensioners are more likely to vote than young people. Giving old folks more money, not less, is a bona fide vote-winner. 

ARTIFICIAL INTELLIGENCE
Will artists get paid by AI companies?

Government ministers are reconsidering plans to let AI companies train their models on copyrighted work unless artists explicitly say no. 

According to someone lucky enough to be deemed “close” to tech bro secretary Peter Kyle, the controversial “opt-in, opt-out” proposal is no longer the Government’s “preferred option”. 

What is the controversy?

The Data (Use and Access) Bill lets AI companies train their models on the copyrighted works of British creatives—unless they say no. 

The tech secretary says AI companies will flock to Saudi Arabia if we don’t get this bill passed into law.

But artists are up in arms, accusing the government of essentially bending over backwards for American firms at the expense of the British public. Big names have spoken out. Kazuo Ishiguro. Ol’ Elton John. Paul McCartney. 

McCartney said, “We’re the people, you’re the government. You’re supposed to protect us. That’s your job.” 

The truth is that Peter Kyle hasn’t exactly tried to win hearts and minds. Since introducing the bill into the House of Commons, he’s had 30 meetings with tech companies, and absolutely zero with creatives. 

What’s the plan now? 

The government is throwing disgruntled creatives a bone or two. 

• Apparently exploring ways to set up licensing agreements so artists actually get paid if their work is used to train AI models

• Once the bill is passed, they’ll publish reports on whether artists are getting paid

• They promise they’ll do an economic impact assessment after 1 year.

All of which is rather funny, when you remember that Baroness Beeban Kidron had already suggested all of the above in January. 

Will the bill pass? 

Labour commands a supermajority in the Commons, so the Government can do what it likes. The bill has already raced through the Commons to the report stage. 

But whether the House of Lords passes it is another story. There are more Tories than Labourites in the Lords. And besides, they’ll want amendments. 

One Lord (a Lib Dem) said the bill could easily be struck down unless AI companies are forced to reveal whose work they’ve trained their models on. 

That way, artists get paid and everyone’s a winner.

CRYPTO
You can’t borrow money to buy crypto anymore

The Financial Conduct Authority (FCA) wants to stop people from borrowing money to buy crypto. The regulator said on Friday they’ll even restrict their credit cards just to do so. 

This comes after the Government announced last week they’d bring crypto under regulation, with all lenders, issuers and dealers falling under regulatory scrutiny. 

What are they planning?

The FCA has a few ideas for this brave new world. 

• Stop people from using credit cards and credit lines to buy cryptoassets

• Start running credit checks on crypto investors

• Restrict people lending and borrowing crypto. 

With one exception: stablecoins. Their value is tied to fiat currencies like the US dollar. Clue’s in the name, I suppose: they’re (relatively) stable. 

Why are they doing this? 

More Brits own crypto now, 7 million in total—that’s 12% of this green and pleasant land. 

Plus, the number of Brits who use borrowed money to buy crypto doubled since 2022, according to a YouGov survey. 

They’re cashing in. Everyone from central banks to the US government are adding crypto coins to their reserves. Donald Trump even launched his own, which he (quite naturally) named after himself. In the last quarter, bitcoin’s value has destroyed previous records. There’s money to be made.

But the FCA isn’t as enthusiastic about cryptocurrencies as The Donald, going so far as to claim crypto investors “should be prepared to lose all their money.” 

NEWS BITES
This just in…

• 🏠️ 📉 UK house prices fell this month because fewer people wanted to buy them. No wonder. The Government lowered the stamp duty threshold to £125,000, meaning more Brits are forking out thousands more in tax per house. Is this “getting Britain building”, Sir Keir?

• 🚕 💷 In a worrying sign of just how screwed our economy is, Uber drivers will now accept cash from anyone outside London, where cash payments are still under review.

• 🐶 🚂 Labour minister Lucy Powell described grooming gangs as a “dog whistle” during a debate on BBC Radio 4 with right-wing political activist Tim Montgomerie. It caused a political shitstorm. Calls for her resignation duly followed. Powell, who was “mortified” according to colleagues, said later, “I regard issues of child exploitation and grooming with the utmost seriousness. I’m sorry if this was unclear.” 

• 🍺 🏟️ Some MPs want to lift the 1985 drinking ban in football stadiums, putting it in line with the women’s game, which doesn’t suffer from the same ban. Which is pretty bloody sexist if you ask Dan down the Horse and Blimey. 

• 😴 🚸 No one knows what 13% of 16-24 year-old Brits are actually doing, according to the ONS. Because they’re not in education, training, or working. 

• 🍆 🧱 Archaelogists found a 4th-century good luck charm in the form of a penis pendant while digging near Hadrian’s Wall. Such penis pendants used to be worn as good luck charms by Roman soldiers garrisoning the frontier. “You can see the pendant is quite smooth,” said director of excavations at Vindolanda Dr Andrew Birley. “No doubt because the wearer touched the charm for good luck.