UK's Labour Party suffers heavy early losses as Reform gains in elections - Finance news and analysis from Global Banking & Finance Review
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UK's Labour Party suffers heavy early losses as Reform gains in elections

Published by Global Banking & Finance Review

Posted on May 8, 2026

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· Last updated: May 8, 2026

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Starmer vows to fight on after Labour punished in polls across Britain

Labour Party Faces Setbacks Amid Rising Opposition in UK Elections

By Andrew MacAskill and Elizabeth Piper

LONDON, May 8 (Reuters) - British Prime Minister Keir Starmer vowed on Friday to stay in office to "deliver change" after his Labour Party suffered heavy losses in English local elections and parliamentary votes in Scotland and Wales, deepening doubts over his ability to govern.

Just under two years after winning a landslide national election, Starmer saw voters punish his Labour government, with support evaporating even in its traditional strongholds in London, former industrial regions in central and northern England, and in Wales.

The main beneficiary was the populist Reform UK party of Brexit campaigner Nigel Farage, which gained more than 1,000 council seats in England, and will likely form the main opposition in Scotland and Wales to the pro-independence Scottish National Party and Plaid Cymru.

Early results underscored the fracturing of Britain's traditional two-party system, with the once-dominant Labour and Conservative parties losing votes not only to Reform, but to the left-wing Green Party at the other end of the political spectrum, and to nationalists in Scotland and Wales. 

Starmer's Response to Election Losses

Leadership Under Pressure

I AM NOT GOING TO WALK AWAY, SAYS STARMER

Despite the losses, Starmer's allies signalled their support for a man whose popularity ratings have sunk to among the worst for any British leader.

"I am not going to walk away," Starmer told reporters in Ealing, west London, a rare bright spot where Labour retained control of the council.

Admission of Mistakes and Pledge for Change

To Labour activists, he showed a moment of contrition when he said he took full responsibility for the losses and admitted his government had made some "unnecessary mistakes" including failing to offer hope to Britain when the party took power. 

But he argued voters were more frustrated with the pace of change than with his government, and vowed to set out "the steps that we will take to deliver the change that they want and that they deserve".

In what seemed to be a nod to the latest government reset, Starmer said he would double down on efforts to tackle a cost-of-living crisis compounded by conflicts in Ukraine and Iran.

Market Reactions

That message seemed to cheer investors. Sterling strengthened against the U.S. dollar and British government borrowing costs fell - outperforming against U.S. and German debt.

Labour's Electoral Setbacks and Internal Dissent

Scale of Losses

But even for Starmer, there was no denying the scale of the terrible losses for Labour in elections for 136 local councils in England, and the devolved parliaments in Scotland and Wales - the most significant test of public opinion before the next general election due in 2029.

Calls for Leadership Change

While an immediate challenge to his leadership looked unlikely, more than 20 Labour lawmakers publicly and privately called on Starmer to consider his position and set out a timetable for his departure.

"The prime minister cannot take our party into the next election," Simon Opher, a Labour lawmaker from southwest England said in a statement.

Defence minister John Healey rejected this, saying the last thing voters wanted was "the potential chaos of a leadership election".

"He’s not going to go, and he's not going to set a timetable," Technology Secretary Liz Kendall told BBC News.

Rise of Insurgent Parties and Changing Political Landscape

Fracturing of the Two-Party System

INSURGENT PARTIES FRACTURE TWO-PARTY SYSTEM

Starmer may struggle to turn things around after Labour lost control of a swathe of councils, responsible for services ranging from adult social care to rubbish collection, and prospective nationalist governments in Scotland and Wales.

The party lost power in Tameside in Greater Manchester in northern England for the first time in almost 50 years and in nearby Wigan, which it has controlled for more than 50 years, Labour lost all of its 20 seats to Reform.

Reform also took control of a London borough for the first time, winning in Havering in the east of Britain's capital, while the Greens won the mayoralty of traditionally Labour-supporting Hackney in east London.

Voter Sentiment and Reform's Appeal

In the town of Romford in Havering, retiree Gary Orford summed up the mood of many, by saying he wanted to give Farage a chance after being fed what he called a "pack of lies" by other politicians. "You can only give him a chance," he said.

Historical Context and Recent Trends

While incumbent governments often struggle in midterm elections, pollsters forecast that Labour could lose the most council seats since 1995.

The Reform UK party had added 1,151 council seats in England by Friday evening. Labour had lost 1,015 seats and the official opposition Conservative Party was down 466 seats. Plaid won the most seats for the Welsh Senedd assembly, followed by Reform, and the SNP was well ahead in the Scottish parliament election.

The results showed how far the British political system had changed since as recently as 2017, when the two traditionally dominant parties - Labour and the Conservatives - gained a combined 82% of the vote in a general election.

They also showed how quickly voters have turned against Starmer. Since 2024, his time in office has been marked by several attempts to reset his agenda, policy U-turns, a rotating cast of advisers and scandal over the appointment of Peter Mandelson as Britain's ambassador to the United States.

(Reporting by Andrew MacAskill and Elizabeth Piper; additional reporting by Alistair Smout, Sarah Young, William James, Michael Holden and Millie McCaughan; Editing by Toby Chopra and Cynthia Osterman)

Key Takeaways

  • Labour looks set to lose approximately 1,900 council seats, the worst local election performance of any modern PM, while Reform UK and the Greens make major gains (theguardian.com).
  • Reform UK gained over 200 seats in early returns, seizing control of councils like Tameside and Wigan from Labour for the first time in decades (reddit.com).
  • Political analysts, including John Curtice, warn these results mark a backlash against the traditional two-party system and underline a growing multi-party fragmentation of UK politics (theweek.com).

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