Rishi Sunak stuck between rock and hard place as Tories battle over migration policy
Back in January 2022, Rishi Sunak made a promise to the British people and his party that he would stop small boat crossings.
Immigration – particularly illegal migration – was an issue that mattered to his voters and he insisted that he would be a prime minister of delivery.
Politics Live: Home secretary can’t guarantee migrants will be sent to Rwanda before next election
But the past few weeks have revealed the yawning gap between his rhetoric and reality as Mr Sunak now battles to keep his policy on track against the backdrop of a parliamentary party that looks like it could be about to go into freefall.
For he has ended the year more than 20 points behind in the polls, with net migration at a record high and his party on the precipice of a huge blowup over how he responds to the Supreme Court blocking plans to send asylum seekers to Rwanda.
The Conservative Party hasn’t just broken its 2019 manifesto promise to get migration below 250,000 but totally destroyed it, with migration at an estimated 745,000 in the year to December 2022.
Now the prime minister is trying to get back on track with a three-part migration plan.
On Monday, he published a five-point plan to get net migration back below 500,000 – the figure he inherited when he became prime minister last October. It’s still beyond the promise his predecessor Boris Johnson made to voters in 2019, but it is at least a start.
Far more thorny is how he might handle his most recent promise to voters – getting flights to Rwanda off the ground after the Supreme Court ruled last month that Rwanda was not a safe country.
On Tuesday the prime minister dispatched his new home secretary to Kigali on Tuesday to sign an update treaty which James Cleverly says should address the judges’ concerns.
But it is the third act, the emergency legislation to declare Rwanda safe and prevent further court challenges – that is the most politically significant for the prime minister who is struggling to maintain any authority over this party as the election gets closer but the gap between two parties in the polls remains desperately wide.
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Cleverly can’t guarantee that migrants will arrive in Rwanda from the UK before the next election
And now his MPs are in open revolt, with many fearful that he might fail to deliver on getting flights to Rwanda and another chunk fearful of what he might do to ensure they do. And both sides are now making their positions public as tensions over what Mr Sunak might do go into overdrive.
On the right of the party a trio of groupings – the European Research Group, the New Conservatives and the Commonsense Group – are teaming up tonight to discuss the policy and their position.
Perhaps up to 100 MPs in total, members I have spoken to are clear: the prime minister must include a controversial “notwithstanding” clause to disapply UK’s international and domestic human rights obligations when it comes to Rwanda policy.
Their cheerleaders are the former home secretary Suella Braverman and the immigration minister and once close ally of the prime minister, Robert Jenrick. One former cabinet minister told me on Tuesday that Mr Jenrick was now on resignation watch as he pushes for these measures against others in cabinet – Justice Secretary Alex Chalk and Attorney General Victoria Prentis – who are concerned about the UK withdrawing from international obligations.
“I think the PM has underestimated Rob on this. He thought that this stuff was all being pushed by Suella and Rob was just going along with it, and now he learns that it is actually what Rob believes in,” said the source, adding that Mr Jenrick could quit if the PM doesn’t embrace this option.
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And then this evening the One Nation caucus, which has a membership of 106 MPs, put out its own release arguing that the government can reduce migration without undermining the ECHR, and warned of trouble if the prime minister presses ahead.
“Leaving the ECHR..would be a mistake and doesn’t have public support,” said Stephen Hammond in a statement “Furthermore, moderates and mainstream Conservatives MPs may struggle to support the so-called full-fat deal.”
I think this is what you’d describe as being between a rock and hard place, with the prime minister destined to provoke a battle with a sizeable chunk of his backbenchers whatever he decides.
He will no doubt have front and centre of his mind his pledge to the British voting public when he decides how to proceed: how to make the legislation as watertight as he can in order to get those planes off to Rwanda by the spring.
The problem is, it’s not in his gift: his emergency laws must pass through both Houses of Parliament and then survive the inevitable legal wrangling that will follow.
When he made the pledge to stop small boats in January it seemed hard enough, and now he closes out the year with another promise he will not only struggle to keep but looks certain to further split his parliamentary party.
Bitcoin’s latest pullback may already be bottoming out, with asset manager Grayscale arguing that the market is on track to break the traditional four-year halving cycle and potentially set new all-time highs in 2026.
Some indicators are already pointing to a local bottom, not a prolonged drawdown, including Bitcoin’s (BTC) elevated option skew rising above 4, which signals that investors have already hedged “extensively” for downside exposure.
Despite a 32% decline, Bitcoin is on track to disrupt the traditional four-year halving cycle, wrote Grayscale in a Monday research report. “Although the outlook is uncertain, we believe the four-year cycle thesis will prove to be incorrect, and that Bitcoin’s price will potentially make new highs next year,” the report said.
Related: Cathie Wood still bullish on $1.5M Bitcoin price target: Finance Redefined
Still, Bitcoin’s short-term recovery remains limited until some of the main flow indicators stage a reversal, including futures open interest, exchange-traded fund (ETF) inflows and selling from long-term Bitcoin holders.
US spot Bitcoin ETFs, one of the main drivers of Bitcoin’s momentum in 2025, added significant downside pressure in November, racking up $3.48 billion in net negative outflows in their second-worst month on record, according to Farside Investors.
More recently, though, the tide has started to turn. The funds have now logged four consecutive days of inflows, including a modest $8.5 million on Monday, suggesting ETF buyer appetite is slowly returning after the sell-off.
While market positioning suggests a “leverage reset rather than a sentiment break,” the key question is whether Bitcoin can “reclaim the low-$90,000s to avoid sliding toward mid-to-low-$80,000 support,” Iliya Kalchev, dispatch analyst at digital asset platform Nexo, told Cointelegraph.
Related: Strategy unveils new credit gauge to calm debt fears after Bitcoin crash
Fed policy and US crypto bill loom as 2026 catalysts
Crypto market watchers now await the largest “swing factor,” the US Federal Reserve’s interest rate decision on Dec. 10. The Fed’s decision and monetary policy guidance will serve as a significant catalyst for 2026, according to Grayscale.
Markets are pricing in an 87% chance of a 25 basis point interest rate cut, up from 63% a month ago, according to the CME Group’s FedWatch tool.
Later in 2026, Grayscale said continued progress toward the Digital Asset Market Structure bill may act as another catalyst for driving “institutional investment in the industry.” However, for more progress to be made, crypto needs to remain a “bipartisan issue,” and not turn into a partisan topic for the midterm US elections.
That effort effectively began with the passage of the CLARITY Act in the House of Representatives, which moved forward in July as part of the Republicans’ “crypto week” agenda. Senate leaders have said they plan to “build on” the House bill under the banner of the Responsible Financial Innovation Act, aiming to set a broader framework for digital asset markets.
The bill is currently under consideration in the Republican-led Senate Agriculture Committee and the Senate Banking Committee. Senate Banking Chair Tim Scott said in November that the committee planned to have the bill ready for signing into law by early 2026.
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Poland’s President Karol Nawrocki declined to sign a bill imposing strict regulations on the crypto asset market, drawing praise from the crypto community and sharp criticism from others in the government.
Nawrocki vetoed Poland’s Crypto-Asset Market Act, saying its provisions “genuinely threaten the freedoms of Poles, their property, and the stability of the state,” according to a statement by the president’s press office on Monday.
Introduced in June, the bill has drawn criticism from industry advocates such as Polish politician Tomasz Mentzen, who had anticipated the president’s refusal to sign it as it cleared parliamentary approval.
Although crypto advocates welcomed the veto as a win for the market, several government officials condemned the move, claiming the president had “chosen chaos” and must bear full responsibility for the outcome.
Why the president vetoed the bill
One of the main reasons cited for the veto was a provision allowing authorities to easily block websites operating in the crypto market.
“Domain blocking laws are opaque and can lead to abuse,” the president’s office said in an official news release.
The president’s office also cited the bill’s widely criticized length, saying its complexity reduces transparency and would lead to “overregulation,” especially when compared with simpler frameworks in the Czech Republic, Slovakia and Hungary.
“Overregulation is an easy way to drive companies to the Czech Republic, Lithuania or Malta, rather than create conditions for them to operate and pay taxes in Poland,” the president said.
Nawrocki also highlighted the excessive amount of supervisory fees, which may prevent startup activity and favor foreign corporations and banks.
“This is a reversal of logic, killing off a competitive market and a serious threat to innovation,” he said.
Critics jump in: “The president chose chaos”
Nawrocki’s veto has triggered a strong backlash from top Polish officials, including Finance Minister Andrzej Domański and Deputy Prime Minister and Minister of Foreign Affairs Radosław Sikorski.
Domański warned on X that “already now 20% of clients are losing their money as a result of abuses in this market,” accusing the president of having “chosen chaos” and saying he bears full responsibility for the fallout.
Related: Spain’s junior ruling party proposes 47% crypto tax in ‘attack against Bitcoin’
Sikorski echoed the concern, saying that the bill was supposed to regulate the crypto market. “When the bubble bursts and thousands of Poles lose their savings, at least they will know who to thank,” Sikorski argued on X.
Crypto advocates, including Polish economist Krzysztof Piech, quickly pushed back, arguing that the president cannot be held responsible for authorities failing to pursue scammers.
He also noted that the European Union’s Markets in Crypto-Assets Regulation (MiCA) is set to provide investor protections across all EU member states starting July 1, 2026.
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The US Federal Deposit Insurance Corporation will propose a framework for implementing US stablecoin laws later this month, according to its acting chair, Travis Hill.
“The FDIC has begun work to promulgate rules to implement the GENIUS Act; we expect to issue a proposed rule to establish our application framework later this month,” Hill said in prepared testimony to be delivered on Tuesday to the House Financial Services Committee.
He added the agency will also have a “proposed rule to implement the GENIUS Act’s prudential requirements for FDIC-supervised payment stablecoin issuers early next year.”
President Donald Trump signed the GENIUS Act in July, which created oversight and licensing regimes for multiple regulators, with the FDIC to police the stablecoin-issuing subsidiaries of the institutions it oversees.
The FDIC insures deposits in thousands of banks in the event that they fail, and under the GENIUS Act, it will also be tasked with making “capital requirements, liquidity standards, and reserve asset diversification standards” for stablecoin issuers, said Hill.
Federal agencies, such as the FDIC, publish their proposed rules for public feedback, and they then review and respond to the input, if necessary, before publishing a final version of the rules, a process that can take several months.
Related: Republicans urge action on market structure bill over debanking claims
The Treasury, which will also regulate some stablecoin issuers, including non-banks, began its implementation of the GENIUS Act in August and finished a second period of public comment on its implementation proposal last month.
FDIC is working on tokenized deposit guidelines
Hill said in his remarks that the FDIC has also considered recommendations published in July by the President’s Working Group on Digital Asset Markets.
“The report recommends clarifying or expanding permissible activities in which banks may engage, including the tokenization of assets and liabilities,” Hill said.
“We are also currently developing guidance to provide additional clarity with respect to the regulatory status of tokenized deposits,” he added.
Fed helping regulators with stablecoin rules
The Federal Reserve’s vice supervision chair, Michelle Bowman, will also testify on Tuesday that the central bank is “currently working with the other banking regulators to develop capital, liquidity, and diversification regulations for stablecoin issuers as required by the GENIUS Act.”
Bowman added, according to her prepared remarks, that “we also need to provide clarity in treatment on digital assets to ensure that the banking system is well placed to support digital asset activities.”
“This includes clarity on the permissibility of activities, but also a willingness to provide regulatory feedback on proposed new use cases,” she said.
The House Finance Committee’s hearing on Tuesday will also see remarks from the heads of the Office of the Comptroller of the Currency and the National Credit Union Administration, which will both have a role in implementing stablecoin rules.
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