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The foreign secretary has insisted “diplomacy makes a difference” as he meets senior members of the Chinese government in Beijing – despite questions back home over his party’s approach to the country.

The officials James Cleverly is meeting include foreign affairs minister Wang Yi and vice president Han Zheng and he is expected to discuss issues ranging from climate change to international security in what is the first visit to China by a UK foreign secretary in more than five years.

Politics live: Cleverly meets top Chinese officials in landmark trip

But it comes amid a rift in the Conservatives over whether the government should take a tougher stance on Beijing, with former party leader Sir Iain Duncan Smith going as far as comparing the current approach to the appeasement of Nazi Germany in the 1930s.

After meeting Mr Zheng early on Wednesday morning, Mr Cleverly told reporters his visit was about “making sure we are able to speak regularly about bilateral issues – both the areas where we disagree but also areas where we need to cooperate [such as] the fight against climate change”, as well as making sure China understands the UK’s core positions.

“[China] is an important country, it is a large country, an influential country, and a complicated country, and therefore our relationship with China will necessarily be just as complicated and sophisticated,” added the foreign secretary.

“We are clear-eyed about the areas where we have fundamental disagreements with China and I raise those issues when we meet, but I think it is important we also recognise that we have to have a pragmatic sensible working relationship with China because of the issues that affect us all around the globe.

More on China

“So, of course, we will pursue a pragmatic working relationship, but that does of course mean raising the issues where we disagree when we have the opportunity to do so.”

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‘Stakes are high’ as foreign sec visits China

Asked if words in meetings would be enough to spark change, Mr Cleverly replied: “Diplomacy makes a difference, that’s why it exists, that is why it is a function of international relations that has endured for centuries.

“Regular face-to-face discussions, where you can raise those issues where we disagree directly, unambiguously, without being filtered through media, are incredibly important.

“I am clear-eyed… that we are not going to change China overnight and we are certainly not going to do it in one individual meeting. But it is important that we maintain regular dialogue.”

‘Confusion across Whitehall’ on China

Mr Cleverly’s trip comes on the same day MPs on the Foreign Affairs Committee called for an unclassified strategy on China that does not just deal with trade and security, but also diplomatic engagement, human rights and technological cooperation.

The committee’s 87-page report is in response to the “Tilt to the Indo-Pacific” announced in the Integrated Review of 2021, in which the government identified Russia as an “active threat” and China as a “systemic challenge”.

But the committee’s report said there was “confusion across Whitehall” about the new policy focus, arising from a “failure to explain” it.

Alicia Kearns, the Conservative chair of the committee, told Sky News the government’s current China strategy was “at the highest possible security level”.

“That means that some government ministers have not even seen it,” she added. “So I question how you can have a comprehensive cross-government strategy where ministers themselves don’t know what they’re working towards.”

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Kearns: ‘It’s important Cleverly is in the room’

Ms Kearns said there was “big uncertainty” for the business community and academics, leaving them “unsure of the boundaries between caution and collaboration” with China.

“Now, the Chinese Communist Party are very explicit on what they’re seeking to achieve, and they are therefore exploiting this uncertainty, which is why we have to end it for the publication of an unclassified China strategy,” she said.

In the report, the chair also described Taiwan – which fears an invasion by China – as an “important ally and partner of the UK” and urged the government to “stand shoulder to shoulder” with the island and make clear that attempts to undermine its self-determination were “unacceptable”.

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‘China cannot be ignored’

Responding to the report, a government spokesperson said the Integrated Review refresh “outlines clearly and in detail our commitment to a free and open Indo-Pacific”.

They said Mr Cleverly had set out the China strategy too, “including strengthening our national security protections and engaging where it is in the UK’s interests to do so – that is what he is now doing during his trip to China”.

The spokesperson added: “We are reviewing the report’s findings in detail and will respond in due course.”

The visit signals a further move in government policy to engage with Beijing, despite ongoing calls from Tory MPs – some of whom have been sanctioned by China – to take a harder line on the country’s activities, especially when it comes to human rights violations.

Prime Minister Rishi Sunak has already softened his language – moving from calling China “the biggest long-term threat to Britain” in his leadership campaign last summer, to instead saying the UK should stand up to China “with robust pragmatism”.

But his predecessor in Number 10, Liz Truss, has criticised the direction of travel and called for a more robust approach, saying in a speech earlier this year that French President Emmanuel Macron’s own visit to China was “a sign of weakness”, and Western governments had been “appeasing” the autocratic regime.

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‘You can’t believe a word they say’

Ms Kearns didn’t criticise the foreign secretary’s trip, saying it was “more important James Cleverly is in the room vociferously disagreeing with them” and backed the idea of Mr Sunak meeting with Chinese President Xi at the upcoming G20 summit.

‘Chop and change’ should end

Labour Party chair Anneliese Dodds said the UK needed “a far more strategic approach towards China”, telling Sky News: “The Chinese leadership always takes a long-term approach when it comes to their interests, but as a country over the last 13 years, we’ve really not had a strategic approach towards China… We need to have that longer term approach.”

Asked if she would be happy for Labour’s shadow foreign secretary David Lammy to make the trip to Beijing, Ms Dodds said: “There needs to be engagement, but it can’t be ad hoc.”

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Civil service relocation and AI officials at heart of government cost cutting measures

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Civil service relocation and AI officials at heart of government cost cutting measures

AI civil servants and sending human workers out of London are at the heart of the government’s plans to cut costs and reduce the size of the state bureaucracy.

Shrinking the civil service has been a target of both the current Labour and recent Conservative governments – especially following the growth in the organisation during the pandemic.

From a low in 2016 of 384,000 full time workers, in 2024 there were 513,000 civil servants.

Politics latest: Your views on PM’s migration speech

The Department for Science, Innovation and Technology is claiming a new swathe of tools to help sift information submitted to public consultations could save “75,000 days of manual analysis every year” – roughly the work of 333 civil servants.

However, the time saved is expected to free up existing civil servants to do other work.

The suite of AI tools are known as “Humphrey”, after Humphrey Appleby, the fictional civil servant in the TV comedy Yes, Prime Minister.

The government has previously said the introduction of AI would help reduce the civil service headcount – with hopes it could save as much as £45bn.

Speaking today, Technology Secretary Peter Kyle appeared to take aim at expensive outsourcing contracts, saying: “No one should be wasting time on something AI can do quicker and better, let alone wasting millions of taxpayer pounds on outsourcing such work to contractors.”

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March: 10,000 officials could go

Move outside of London

Other money-saving plans announced today include moving 12,000 civil servants out of London and into regional hubs – with the government hoping it can save almost £100m by 2032 by not having to pay for expensive leases of prime office space in the capital.

Currently, 95,000 full time civil servants work in London.

Tens of millions of pounds a year are expected to be saved by the closure of 102 Petty France, which overlooks St James’s Park, and 39 Victoria Street, which is near the previous location of New Scotland Yard.

In total, 11 London offices are slated for closure, with workers being relocated to the likes of Aberdeen, Belfast, Darlington, Bristol, Manchester and Cardiff.

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The reforms of the civil service are being led by Chancellor of the Duchy of Lancaster Pat McFadden – one of Sir Keir Starmer’s most influential ministers.

Mr McFadden said: “To deliver our plan for change, we are taking more decision-making out of Whitehall and moving it closer to communities all across the UK.

“By relocating thousands of civil service roles we will not only save taxpayers money, we will make this government one that better reflects the country it serves. We will also be making sure that government jobs support economic growth throughout the country.

“As we radically reform the state, we are going to make it much easier for talented people everywhere to join the civil service and help us rebuild Britain.”

The government says it wants senior civil servants out of the capital too – with the aim being that half of UK-based senior officials work in regional offices by the end of the decade.

The government claims the relocations and growth of regional hubs could add as much as £729m to local economies by 2030.

Pat McFadden delivers a keynote speech to the CyberUK conference.
Pic: PA
Image:
Pat McFadden is leading the changes to the Civil Service. Pic: PA

Union welcome – cautiously

Unions appear to cautiously welcome the changes being proposed.

All of Prospect, the PCS and the FDA say it is positive to see better opportunities outside of the capital.

However, they have asked for clarity around whether roles may be lost and what will be offered to people transferring.

👉Listen to Politics at Sam and Anne’s on your podcast app👈

Fran Heathcote, the general secretary of the PCS union, said: “If these government proposals are to be successful however, it’s important they do the right thing by workers currently based in London.

“That must include guarantees of no compulsory redundancies, no compulsory relocations and access to more flexible working arrangements to enable them to continue their careers should they wish to do so.”

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US lawmakers call for change in corporate digital asset taxes

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US lawmakers call for change in corporate digital asset taxes

US lawmakers call for change in corporate digital asset taxes

Two US senators are calling on Treasury Secretary Scott Bessent to “exercise [the department’s] authority” and change a provision affecting taxes on corporate holdings of digital assets.

In a May 12 letter, Senators Cynthia Lummis and Bernie Moreno suggested Bessent had the authority to change the definition of “adjusted financial statement income” under existing US law in a way that could reduce what digital asset companies pay in taxes. The proposed adjustment was suggested as a way to modify a provision of the Inflation Reduction Act, signed into law in 2022.

“Our edge in digital finance is at risk if US companies are taxed more than foreign competitors,” said Lummis in a May 13 X post.

Cryptocurrencies, Law, Taxes, Senate
May 12 letter to Treasury Secretary Scott Bessent. Source: Cynthia Lummis

According to the two senators, the proposed modification would provide “relief to corporations that invest in digital assets.” Lummis has been one of the most outspoken digital asset advocates in Congress, while Moreno took office in January after crypto-backed political action committees spent roughly $40 million to support his 2024 Senate race.

Related: Arizona governor kills two crypto bills, cracks down on Bitcoin ATMs

The Inflation Reduction Act, which went into effect in 2023, imposes a 15% minimum tax on companies that report more than $1 billion in profits for three consecutive years. The measure would seemingly include unrealized crypto gains and losses, leading to Lummis’ and Moreno’s calls for the Treasury Department to “act swiftly.”

Senate awaiting second vote on stablecoin bill

The call from the two senators came as lawmakers in the Senate are expected to consider another vote on the Guiding and Establishing National Innovation for US Stablecoins, or GENIUS Act — legislation to regulate payment stablecoins in the US. A motion for consideration failed to move forward in the Senate on May 8 due to Democratic lawmakers pushing back on Donald Trump’s ties to the crypto industry.

Lummis, one of the bill’s co-sponsors, suggested that she would continue to support digital asset regulation. The Senate could take up another vote in a matter of days.

Magazine: Best and worst countries for crypto taxes — plus crypto tax tips

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What are the next steps for the US stablecoin bill?

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What are the next steps for the US stablecoin bill?

What are the next steps for the US stablecoin bill?

Proponents of a bill to regulate stablecoins in the US Congress will likely take up another vote on the legislation in a matter of days without responding to concerns about President Donald Trump’s financial ties to the cryptocurrency industry.

The Guiding and Establishing National Innovation for US Stablecoins, or GENIUS Act, failed to get enough votes to pass in the US Senate on May 8 amid calls from some Democratic lawmakers to halt any legislation related to digital assets until Republicans could address Trump’s potential conflicts of interest.

Immediately following the vote, some lawmakers from both parties suggested they could reconsider the bill as early as this week, but without agreeing on a bipartisan path forward.

After the GENIUS Act failed to proceed in a 48 to 49 vote in the Senate, Majority Leader John Thune made a motion to reconsider, setting up a possible vote on the matter within days. A source familiar with the matter told Cointelegraph Republicans who backed the bill were unlikely to modify it to block Trump or any member of his administration from investing in digital assets, claiming it was beyond Congress’s authority under the Constitution.

“[…] this delay is not inherently detrimental,“ said Liat Shetret, vice president of global policy and regulation at blockchain analytics firm Elliptic. “We can expect the bill to return to the floor, with this pause giving both parties time to clarify provisions and address lawmakers’ concerns.”

The Cedar Innovation Foundation, an organization tied to the political action committee (PAC) Fairshake, issued a warning to Senate leadership to “avoid political games” and pass a stablecoin bill “in the coming days.” Fairshake spent more than $131 million to support candidates in the 2024 US elections, some of whom are currently serving in the House and Senate. There are still more than 500 days until the 2026 midterms, when many members of Congress are up for reelection.

On May 12, the Senate resumed consideration of the motion to proceed to consideration of the GENIUS Act, suggesting another vote soon.

Related: US Treasury Secretary expresses support for crypto bills at hearing

Changes to stablecoin or market structure bills?

Should Republicans in the Senate reintroduce the bill without any changes, it’s unclear whether they would have enough support to clear a 60-vote majority to avoid a Democratic filibuster — a process to delay or sometimes block a vote on a bill.

The Trump family’s ties to the crypto platform World Liberty Financial and its stablecoin, USD1, have raised potential corruption concerns, as has offering the top holders of his TRUMP memecoin the chance to pay for access to the president through an exclusive dinner and reception. 

“[…] the Republicans’ bill did nothing to address Trump’s conflict, and instead voted to hand Trump the authority to write the rules over his and his competitors’ stablecoins,” said Democratic Representative Maxine Waters in a May 6 statement. She blocked a hearing to discuss a possible digital asset market structure bill, citing concerns about Trump’s “ownership of crypto.”

Democratic lawmakers have already introduced possible solutions to what they called the “biggest corruption scandal in the history of the White House” — with legislation in the House and Senate to bar members of Congress, the president, the vice president, and their families from profiting off memecoins. Senators Elizabeth Warren and Chris Van Hollen also reportedly called on the president to fully divest from USD1 before making any possible deals with foreign governments.

The nonpartisan organization State Democracy Defenders Action reported in April that Trump’s crypto holdings were worth roughly $2.9 billion, which accounted for 40% of his wealth. This report came before the launch of World Liberty Financial’s stablecoin, which an Abu Dhabi-based investment firm said it would use to settle a $2 billion investment in Binance. Trump’s sons, Eric, Donald Trump Jr., and Barron, were all listed as “Web3 ambassadors” for the platform.

Magazine: Trump’s crypto ventures raise conflict of interest, insider trading questions

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