Government rejects calls to label China a threat despite parliament ‘spy’ arrest

Published

2 years ago

September 11, 2023

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The government is facing renewed calls to label China a threat after the arrest of a parliamentary researcher on suspicion of spying for the superpower.

Deputy Prime Minister Oliver Dowden was delivering a statement on the matter in the House of Commons.

Earlier in the afternoon, Speaker Sir Lindsay Hoyle warned MPs against going into details on the matter – or naming the suspect who was arrested – during the debate.

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A slew of Conservative MPs – some of them sanctioned by China – shared their displeasure about the fact they were not told about the arrest of the researcher when it happened.

They, alongside MPs on opposition benches, called on the government to label China a threat to the UK.

Prime Minister Rishi Sunak also spoke in the Commons after meeting with China’s premier Li Qiang at the G20 over the weekend.

Mr Sunak said: “The sanctity of this place must be protected and the right of members to speak their minds without fear or sanction must be maintained.

“We will defend our democracy and our security – so I was emphatic with premier Li that actions which seek to undermine British democracy are completely unacceptable and will never be tolerated.”

Mr Dowden repeated the government’s position laid out in the integrated review refresh earlier this year, that China was a “systemic challenge” to the UK.

Liz Truss, the former foreign secretary and former prime minister, labelled China as the “largest threat, both to the world and to the United Kingdom, for freedom and democracy.”

Sir Iain Duncan Smith, another ex-leader of the Conservative Party, said: “It’s appalling news that we have a potential cell operating in and around Westminster, an espionage cell, and I as a sanctioned individual alongside many of my colleagues are particularly perturbed by this particular news.”

He added: “The problem lies in the mess we’ve got into over what we define China as in respect to us. Are they a threat or are they not? If they are a threat, why don’t we call them a threat and take the relative action that is necessary to deal with them on that basis and sanction some people?”

Conservative MPs Tim Loughton, Theresa Villiers and Sir Bob Seely also called for the government to take more action.

How much difference is there between a challenge and a threat?

Rob Powell

Political correspondent

@robpowellnews

Quite a lot, according to several Conservative MPs who got up to call for a more robust approach to China in the Commons this afternoon.

Deputy Prime Minister Oliver Dowden did say the government was “clear about the threat that China poses” but the core position still appears to be that Beijing represents a “systemic challenge”.

That’s not hard enough for many on the backbenches who want China officially designated as a threat, sanctions imposed on individuals and the country barred from an artificial intelligence conference being held in the UK this autumn.

Such a change seems unlikely for now.

The Foreign Office has set out a clear policy of cautious engagement with Beijing, on the grounds of economic necessity and in the search for global solutions to problems like climate change and pandemics.

In a Commons session where any talk of the arrested individual was quickly shut down by the Speaker, one specific question connected to the case did come up.

Did Foreign Secretary James Cleverly raise the alleged Chinese spy with Beijing when he visited two weeks ago?

No, came the answer from Mr Dowden, who said while ministers regularly raise the broader issue of interference – they wouldn’t talk about specific cases, especially ones currently subject to a police investigation.

Mr Dowden conceded China was the “number one state-based threat” to the UK’s economic security.

The minister added the UK government had been “clear-eyed” about the threats China poses towards the UK, and was taking action to tackle them – such as banning Huawei from UK infrastructure and banning TikTok on government phones.

Sir Keir Starmer, who responded to Mr Sunak’s statement, pushed the government on whether Foreign Secretary James Cleverly knew about the arrests before he became the first foreign secretary to visit China in five years.

The visit took place in August, five months after the arrest took place.

Mr Sunak said: “I am sure he will appreciate that as there is an ongoing investigation, as you have also said Mr Speaker, I am limited in what I can say specifically.

“But I have been emphatically clear in our engagement with China that we will not accept any interference in our democracy and parliamentary system.”

Sir Iain asked Mr Dowden a similar question earlier, and was told by the minister that a running commentary could not be provided.

In a statement released by his lawyers, the arrested man said: “I feel forced to respond to the media accusations that I am a ‘Chinese spy’. It is wrong that I should be obliged to make any form of public comment on the misreporting that has taken place.

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“However, given what has been reported, it is vital that it is known that I am completely innocent. I have spent my career to date trying to educate others about the challenge and threats presented by the Chinese Communist Party.

“To do what has been claimed against me in extravagant news reporting would be against everything I stand for.”

Politics

What is a wealth tax, how would it work in the UK and where else has one?

Published

2 hours ago

July 9, 2025

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What is a wealth tax, how would it work in the UK and where else has one?

The idea of a wealth tax has raised its head – yet again – as the government attempts to balance its books.

Downing Street refused to rule out a wealth tax after former Labour leader Lord Kinnock told Sky News he thinks the government should introduce one.

Sir Keir Starmer’s spokesman said: “The prime minister has repeatedly said those with the broadest shoulders should carry the largest burden.”

While there has never been a wealth tax in the UK, the notion was raised under Rishi Sunak after the COVID years – and rejected – and both Harold Wilson’s and James Callaghan’s Labour governments in the 1970s seriously considered implementing one.

Sky News looks at what a wealth tax is, how it could work in the UK, and which countries already have one.

What is a wealth tax?

A wealth tax is aimed at reducing economic inequality to redistribute wealth and to raise revenue.

It is a direct levy on all, or most of, an individual’s, household’s or business’s total net wealth, rather than their income.

The tax typically includes the total market value of assets, including savings, investments, property and other forms of wealth – minus a person’s debts.

Unlike capital gains tax, which is paid when an asset is sold at a profit, a wealth tax is normally an annual charge based on the value of assets owned, even if they are not sold.

A one-off wealth tax, often used after major crises, could also be an option to raise a substantial amount of revenue in one go.

How could it work in the UK?

Advocates of a UK wealth tax, including Lord Kinnock, have proposed an annual 2% tax on wealth above £10m.

Wealth tax campaign group Tax Justice UK has calculated this would affect about 20,000 people – fewer than 0.04% of the population – and raise £24bn a year.

Because of how few people would pay it, Tax Justice says that would make it easy for HMRC to collect the tax.

The group proposes people self-declare asset values, backed up by a compliance team at HMRC who could have a register of assets.

Which countries have or have had a wealth tax?

In 1990, 12 OECD (Organisation for Economic Co-operation and Development) countries had a net wealth tax, but just four have one now: Colombia, Norway, Spain and Switzerland.

France and Italy levy wealth taxes on selected assets.

Colombia

Since 2023, residents in the South American country are subject to tax on their worldwide wealth, but can exclude the value of their household up to 509m pesos (£92,500).

The tax is progressive, ranging from a 0.5% rate to 1.5% for the most wealthy until next year, then 1% for the wealthiest from 2027.

Norway

There is a 0.525% municipal wealth tax for individuals with net wealth exceeding 1.7m kroner (about £125,000) or 3.52m kroner (£256,000) for spouses.

Norway also has a state wealth tax of 0.475% based on assets exceeding a net capital tax basis of 1.7m kroner (£125,000) or 3.52m kroner (£256,000) for spouses, and 0.575% for net wealth in excess of 20.7m kroner (£1.5m).

The maximum combined wealth tax rate is 1.1%.

The Norwegian Labour coalition government also increased dividend tax to 20% in 2023, and with the wealth tax, it prompted about 80 affluent business owners, with an estimated net worth of £40bn, to leave Norway.

Spain

Residents in Spain have to pay a progressive wealth tax on worldwide assets, with a €700,000 (£600,000) tax free allowance per person in most areas and homes up to €300,000 (£250,000) tax exempt.

The progressive rate goes from 0.2% for taxable income for assets of €167,129 (£144,000) up to 3.5% for taxable income of €10.6m (£9.146m) and above.

It has been reported that more than 12,000 multimillionaires have left Spain since the government introduced the higher levy at the end of 2022.

Switzerland

All of the country’s cantons (districts) have a net wealth tax based on a person’s taxable net worth – different to total net worth.

It takes into account the balance of an individual’s worldwide gross assets, including bank account balances, bonds, shares, life insurances, cars, boats, properties, paintings, jewellery – minus debts.

Switzerland also works on a progressive rate, ranging from 0.3% to 0.5%, with a relatively low starting point at which people are taxed on their wealth, such as 50,000 CHF (£46,200) in several cantons.

Politics

Jingye and Whitehall officials hold talks over British Steel future

Published

5 hours ago

July 9, 2025

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Jingye and Whitehall officials hold talks over British Steel future

The Chinese owner of British Steel has held fresh talks with government officials in a bid to break the impasse over ministers’ determination not to compensate it for seizing control of the company.

Sky News has learnt that executives from Jingye Group met senior civil servants from the Department for Business and Trade (DBT) late last week to discuss ways to resolve the standoff.

Whitehall sources said the talks had been cordial, but that no meaningful progress had been made towards a resolution.

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Jingye wants the government to agree to pay it hundreds of millions of pounds for taking control of British Steel in April – a move triggered by the Chinese group’s preparations for the permanent closure of its blast furnaces in Scunthorpe.

Such a move would have cost thousands of jobs and ended Britain’s centuries-old ability to produce virgin steel.

Jingye had been in talks for months to seek £1bn in state aid to facilitate the Scunthorpe plant’s transition to greener steelmaking, but was offered just half that sum by ministers.

British Steel has not yet been formally nationalised, although that remains a probable outcome.

Jonathan Reynolds, the business secretary, has previously dismissed the idea of compensating Jingye, saying British Steel’s equity was essentially worthless.

Last month, he met his Chinese counterpart, where the issue of British Steel was discussed between the two governments in person for the first time.

Jingye has hired the leading City law firm Linklaters to explore the recovery of hundreds of millions of pounds it invested in the Scunthorpe-based company before the government seized control of it.

News of last week’s meeting comes as British steelmakers face an anxious wait to learn whether their exports to the US face swingeing tariffs as part of US President Donald Trump’s trade war.

Sky News’s economics and data editor, Ed Conway, revealed this week that the UK would miss a White House-imposed deadline to agree a trade deal on steel and aluminium this week.

Jingye declined to comment, while a spokesman for the Department for Business and Trade said: “We acted quickly to ensure the continued operations of the blast furnaces but recognise that securing British Steel’s long-term future requires private sector investment.

“We have not nationalised British Steel and are working closely with Jingye on options for the future, and we will continue work on determining the best long-term sustainable future for the site.”