Rwanda plan ruled unlawful by Supreme Court – as Rishi Sunak says he could change law to push ahead

Published

2 years ago

November 15, 2023

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The government’s Rwanda plan, devised to tackle illegal migration, has been dismissed by the Supreme Court, ending over 18 months of legal battles in the UK.

Lord Reed announced the “unanimous” judgment from the court’s justices on Wednesday, saying those sent to the country would be at “real risk” of being returned home, whether their grounds to claim asylum were justified or not – breaching international law.

Politics live: PM ‘prepared to change law’ – and will hold news conference today

While charities celebrated the decision as “a victory for humanity”, Rishi Sunak said the judgment was “not the outcome we wanted”.

But he appeared to double down on the policy, telling the Commons he was “prepared to change laws and revisit… international relationships” if they were “frustrating” his plans.

The new Home Secretary James Cleverly announced the government planned to change its agreement with Rwanda into a treaty, with extra clauses to stop asylum seekers from being returned home, in the hope of settling the court’s concerns.

However, shadow home secretary Yvette Cooper accused the government of “more of the magical thinking”.

Mr Sunak will hold a press conference at 4.45pm where he is sure to face questions on both the ruling and his future plans, as well as brewing anger on his backbenches over the impact of international human rights laws on his policies.

The Rwanda scheme, which would see those arriving in the UK illegally – including via small boats – deported to the east African nation, was first put forward by Boris Johnson in April 2022.

Successive prime ministers all claimed the policy would act as a deterrent to those seeking to cross the Channel, as well as help to break up people-smuggling gangs.

But critics consistently called the proposal “inhumane”, and the plan was dubbed a “gimmick” by political opponents.

An injunction from the European Court of Human Rights stopped the first flight to Rwanda from taking off in June last year and the scheme has been embroiled in litigation ever since, meaning no asylum seekers have yet been deported to the country.

Explainer: Everything you need to know about the Rwanda plan

Delivering the Supreme Court’s ruling on Wednesday, Lord Reed said there were “serious and systematic defects in Rwanda’s procedures and institutions for processing asylum claims”, including a “lack of legal representation” and risks that judges and lawyers “will not act independently of the government”.

The justice also said there was a “surprisingly high rate of rejection of asylum claims from certain countries in known conflict zones”, including Syria and Yemen, which many people coming to the UK may originate from.

He pointed to an “apparent inadequacy of the Rwandan government’s understanding of the requirements of the Refugee Convention”, specifically that under the United Nations agreement, asylum seekers had to be protected from “refoulement” – being sent back to their country of origin – and there was evidence the country had failed to comply with this when it signed a similar deal with Israel.

And while he accepted the deal had been “entered into… in good faith”, the evidence showed “there is a real risk that asylum claims will not be determined properly, and that asylum seekers will therefore be at risk of being returned directly or indirectly to their country of origin”.

Lord Reed said changes to eliminate that risk “may be delivered in the future”, and he underlined that the Supreme Court’s decision was a “legal question” based on international law – including the European Convention on Human Rights and various UN treaties – with the court “not concerned with the political debate” about the scheme.

After the ruling, Mr Sunak pointed to what he saw as the positives – namely that the court “confirmed that the principle of sending illegal migrants to a safe third country for processing is lawful”.

Speaking at Prime Minister’s Questions, he sought to reassure his own MPs that he remained committed to the Rwanda plan, telling them: “The government has already been working in advance on a new treaty with Rwanda which we will finalise in light of today’s judgment to address the challenges that were raised.

“But let me say this again, if it becomes clear that our domestic legal frameworks or international conventions are still frustrating plans at that point, I am prepared to change laws and revisit those international relationships.

“The British people expect us to do whatever it takes to stop the boats and that is precisely what this government will deliver.

But Labour leader Sir Keir Starmer pointed to the prime minister’s pledge in January that he would “stop the boats” by the end of the year, adding: “He has wasted all of his time on a gimmick and now he is absolutely nowhere.

“[He needs to] level with the British public and finally admit he’s failed to deliver on his promise.”

The ruling is now likely to reignite a row in the Conservatives over the UK’s future as a signatory of international human rights agreements – something the now ex-home secretary Suella Braverman has railed against.

MPs on the right of the party have been calling on the UK to exit or attempt to work around the European Human Rights Convention (EHRC), arguing the final say on government policy should be made in the British parliament rather than abroad.

One faction, called the New Conservatives, have been meeting this morning to discuss their next steps, and the party’s deputy chairman, Lee Anderson, said ministers should “ignore the law” and start sending asylum seekers to Rwanda anyway.

In her blistering letter to Mr Sunak after she was sacked earlier this week, Ms Braverman pre-emptively pinned the blame on the prime minister for the immigration policy she was charged with implementing falling in the courts, accusing him of not having a “plan B” to push forward.

Tweeting after the ruling, the former minister called for “emergency legislation” to “block” legal challenges, saying it would “give parliament a clear choice – control illegal migration or explain to the British people why they should accept ever greater numbers of illegal arrivals settling here”.

However, many in the party believe it is right to remain part of the agreements that protect human rights, standing alongside international allies.

Meanwhile, refugee charities celebrated the ruling, with the CEO of the Refugee Council, Enver Solomon, calling it “a victory for the rights of men, women and children who simply want to be safe”.

The chief executive of ActionAid UK also said the court’s decision came as a “huge sigh of relief”, as well as a vindication of “British values of compassion and dignity”.

And CEO of charity Choose Love, Josie Naughton, added: “Today’s decision is a moment of moral accountability.

“It shows the government cannot shirk its international obligations. Britain has a duty and legal responsibility to offer protection to refugees.”

Politics

UK central bank still ‘disproportionately cautious’ about stablecoins

Published

3 hours ago

November 14, 2025

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UK central bank still ‘disproportionately cautious’ about stablecoins

The UK’s central bank, the Bank of England (BOE), has released a proposed regulatory regime for stablecoins. The consultation paper took into account the perspectives of the crypto industry, but some observers say it remains restrictive.

BOE released the document on Nov. 10 — some two years after it announced the initial discussion paper. The original offered a vision for crypto that many in the industry claimed would doom the UK’s digital asset space.

The BOE said that it received comments and feedback from a broad range of 46 different stakeholders, including “banks, non-bank payment service providers, payment system operators, trade associations, academia, and individuals.”

The UK’s central bank may have scrapped some more hardline requirements, but some in the industry believe that it isn’t enough. Tom Rhodes, chief legal officer at UK-based stablecoin issuer Agant, said the bank remains “disproportionately cautious and restrictive.”

*The bank also released a roadmap for further rulemaking. Source:* *Bank of England*

Bank of England still cautious on stablecoins

The new iteration presents a number of improvements on the 2023 version, Rhodes told Cointelegraph.

“The latest proposals do include some innovative features, such as direct BOE liquidity lines and the ability to repo reserves for liquidity purposes.”

He said that, as it concerns the UK market, “these proposals can be further explored and potentially expanded to create a more competitive backing asset regime, without compromising on stability.”

But despite the “welcome progress in the BOE’s sentiment towards stablecoins,” it has been “unusually vocal about the perceived risks of stablecoins,” said Rhodes.

One of the more controversial restrictions in the paper was limits on what the BOE called a “systemic retail stablecoin.” In the paper, this is defined as a stablecoin that is “widely used by individuals to make everyday payments such as for shopping and receiving salaries.”

The central bank wants to see limits of 20,000 pounds for individuals and 10 million pounds for businesses that accept it as a form of payment. This is an increase from the initial proposal, but the idea of limits on how much crypto you can hold didn’t sit well with some.

Crypto influencer Aleksandra Huk wrote, “Bank of England wants to cap stablecoin holdings at £20,000. Who gave them the right to tell us what to buy, where to store our money and how much we can have? […] Honestly, this is the best advert ever for privacy coins and for leaving the UK.”

There are a few caveats to the suggested rule. Geoff Richards, head of community at the Ontology Network, noted, “The proposal applies only to sterling-denominated stablecoins used in UK payment systems that could become ‘systemic.’ Not USDT, not USDC, not random DeFi tokens.”

Ian Taylor, board member of crypto industry advocacy group CryptoUK, told Cointelegraph that he understands the central bank’s more cautious approach, at least as it applies to the stablecoin limits:

“The Bank of England has a mandate to protect against financial stability. And that financial stability is connected to the banking system. So insofar as banks take deposits and they issue loans against those deposits […] creates credit, this is an economic benefit to any economy that we have.”

The BOE is rightfully worried that taking deposits out of banks would reduce their ability to lend, affecting financial stability. “So, that’s why they want to baby-step this.”

Rhodes said that the “vast majority” of UK stablecoins will not fall under the regime anyway, at least not as stated in the paper. He noted that Mastercard was only recognized as a systemically important payment system in 2021 and that non-systemic stablecoins will be regulated under the Financial Conduct Authority’s (FCA) ruleset, “which is less restrictive.”

Still work to be done as UK opens up to crypto

Access to central bank liquidity and deposit accounts at the BOE was a welcome update for stablecoin issuers. But crypto industry representatives believe that there is still room for improvement in the central bank’s plan.

Regarding the stablecoin caps, “The systemic thresholds remain uncertain,” said Rhodes. He said it would be helpful to have clarification from His Majesty’s Treasury when an issuer has reached sufficient scale to “pose a risk to the UK economy as a whole, before they will recognize the issuer as systemic.”

Taylor also noted the difficulty of enforcing these stablecoin caps. If the government is licensing an issuer, then they’re the ones “responsible for monitoring each individual client or customer, whether wholesale, corporate or retail, as to how many stablecoins they’ve given them.”

The problem is that many people get their stablecoins on secondary markets or a “host of different sources.” People can receive stablecoins as compensation at work or on an exchange or peer-to-peer transaction. “So, the actual operational enforcement of that I question, and we’ve seen no detail in regards to that.”

Overall, “clarity and speed” will make the UK stablecoin ecosystem more competitive, said Arvin Abraham, partner at Goodwin Procter. He told Cointelegraph that regulators need to give issuers “a clean runway and predictable timelines” to navigate the approvals process.

Speed isn’t the government’s strong suit, however.

The British government has been working on crypto regulations since 2017, when it first adopted Anti-Money Laundering and Know Your Customer requirements for crypto-related businesses like exchanges. Now, eight years later, the central bank is still developing its policies based on industry feedback.

The slow pace of progress presents a problem. According to Taylor, “We’ve been consulting on a wider framework to regulate stablecoins for almost five years, and we still haven’t gotten any actual license framework in place, which is problematic for a number of reasons,” he said.

“It doesn’t help businesses that want to launch stablecoins in the UK. They don’t have a clear roadmap of how to do that,” he said, “which in turn forces them to move offshore to jurisdictions where there are other regulatory frameworks already live.”

This is for a number of reasons, Taylor explained, including consecutive changes in government, as well as a lack of “real champions in any of our key stakeholders, be that the current government, be that Treasury, be that the FCA.”

Progress on crypto regulations may be slow in the UK — slower than many in the industry would like — but for Abraham, “The Bank is being pragmatic and fair. The overriding message is that innovation is welcome, but if you want your token to function like money, you need money-grade controls.”

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