Rachel Reeves has defended her decision not to restore a cap on bankers’ bonuses, arguing businesses do not need “more chopping and changing”.
The shadow chancellor said that when the government scrapped the cap under Liz Truss, Labour did not “feel that was the right priority in that budget”.
But she said much stronger rules were now in place since the 2008 financial crash, when the cap was first introduced, and that it was no longer her priority to restore it.
“What I hear loud and clear from business is that what it will take to get them to invest in Britain is stability and the last thing they need is more chopping and changing,” she said.
“The chopping and changing has got to end if we’re going to give stability to business and that’s why we will not be bringing that back.”
Image: Shadow chancellor Rachel Reeves addressing 400 business leaders at the Kia Oval on 1 February 2024. Pic: PA
Addressing Labour’s business conference in central London this morning, Ms Reeves also announced she would not increase the headline rate of corporation tax of 25% during the first term of a Labour government but left the door open to changes in the rate in the future.
She said: “There have been 26 changes to our corporation tax arrangements in this parliament alone. We can’t go on like this.
“The next Labour government will make the pro-business choice and the pro-growth choice: We will cap the headline rate of corporation tax at its current rate of 25% for the next parliament.
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“And should our competitiveness come under threat, if necessary we will act.”
Ms Reeves also said Labour would maintain full expensing and the annual investment allowance and would provide a “road map” for business taxation within the first six months of government.
Ms Reeves has sought to portray herself as pro-business during her time as shadow chancellor, in contrast to her predecessor John McDonnell, who led Labour’s economic policy when Jeremy Corbyn was the leader of the Opposition.
Will Labour stick to £28bn a year green pledge?
However, the shadow chancellor is facing scrutiny over Labour’s pledge to spend £28bna year on green projects until 2030 if the party comes into power.
In a Q&A following her speech, Ms Reeves failed to commit to the policy, which some in Labour want Sir Keir Starmer to drop because it allows the Conservatives to cast doubt on the party’s commitment to fiscal discipline.
Asked by Sky News’s political editor Beth Rigby whether the pledge had become “an albatross around your neck” that “threatens to unravel all the hard work you’ve done to be trusted with economic competence”, Ms Reeves said there were “big opportunities to invest alongside business in the jobs and the industries of the future”.
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1:40
Will Labour spend £28bn?
But she said it was “absolutely essential that all of our policies are consistent with our fiscal rules” and that the green prosperity plan “was no exception to that”.
The shadow chancellor said that after the next budget, the party will “set out our plans and ensure they are consistent with our fiscal rules because they will always take precedence to guarantee the economic security of family finances and of businesses as well”.
Image: Sir Keir Starmer and Rachel Reeves during a visit to the London Stock Exchange Group last year. Pic: PA
Tories attack Labour over bonus cap change
The cap on bankers’ bonuses was first introduced in the wake of the 2008 financial crisis to limit annual payouts to twice a banker’s salary, but it was scrapped by former chancellor Kwasi Kwarteng during Ms Truss’s short time as prime minister.
During Prime Minister’s Questions this week, Rishi Sunak seized on the issue to argue that voters “cannot trust a word he [Sir Keir Starmer] says”.
“I was genuinely surprised that, after recently and repeatedly attacking not just me but the government for lifting the bonus cap, the shadow chancellor has announced, just today, that she now supports the government’s policy on the bankers’ bonus cap.”
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Sunak: ‘It’s the same old Labour party’
Ms Reeves and other senior Labour figures had been vocal critics of the government’s decision to axe the cap during a cost of living crisis, saying only three months ago that the decision to allow unlimited bonuses to be earned again “tells you everything you need to know about this government”.
The issue has caused some division within Labour, with Anas Sarwar, the party’s leader in Scotland, previously criticising Ms Truss as a “Thatcher tribute act” who would rather “boost bankers’ bonuses than help those in need”.
He told reporters in Westminster today that he stood by his previous words but added: “You have got to look at it in the balance. We have got to inspire confidence for them to make the strategic investments, but we can’t return to a situation where they get away with it.
“I’m not here to defend bankers’ bonuses, I’m not here to defend banks. That is something the UK Treasury has got to keep an eye on.”
Stephen Flynn, the SNP’s leader in Westminster and Labour’s main opponent in Scotland, sarcastically praised Mr Sunak for convincing the Labour Party to agree to a “bleak future”, saying it was a “great achievement” for the government.
Two Labour-run councils have said they are considering taking legal action to stop the use of hotels to house migrants in their areas after Epping council won a temporary injunction on Tuesday.
The leaders of Wirral and Tamworth councils both say they are considering their legal options in the wake of the Epping case, citing similar concerns about the impact of the hotels on their local communities.
Epping Forest District Council won an interim High Court injunction to stop migrants from being accommodated at The Bell Hotel, after arguing its owners did not have planning permission to use it to house migrants.
In a statement, Paula Basnett, the Labour leader of Wirral council, said: “Like many other local authorities, we have concerns about the Home Office’s practice of placing asylum seekers in hotels without consultation or regard to local planning requirements.
“We are actively considering all options available to us to ensure that any use of hotels or other premises in Wirral is lawful and does not ride roughshod over planning regulations or the wishes of our communities.
Image: Police officers ahead of a demonstration outside The Bell Hotel. Pic: PA
“Wirral has always been proud of its record in supporting families and those fleeing conflict, but it is unacceptable for the government to impose unsuitable, short-term arrangements that disrupt communities and bypass local decision-making.
“If necessary, we will not hesitate to challenge such decisions in order to protect both residents and those seeking refuge.”
Carol Dean, the Labour leader of Tamworth Borough Council, said she understands the “strong feelings” of residents about the use of a local hotel to house asylum seekers, and that the council is “listening to their concerns and taking them seriously”.
She pointed out that under the national Labour government, the use of hotels has halved from 402 to 210, with the aim of stopping the use of any hotels by the end of this parliament.
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5:43
Migrant hotels a ‘failure of policy’
But she continued: “Following the temporary High Court injunction granted to Epping Forest District Council, we are closely monitoring developments and reviewing our legal position in light of this significant ruling.”
Cllr Dean added that they had previously explored their legal options to challenge the use of the hotel but decided against them, as temporary injunctions were not being upheld.
However, the Epping ruling “represents a potentially important legal precedent”, which is why they are “carefully assessing” its significance for Tamworth.
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11:48
Minister ‘gets asylum frustration’
“We fully recognise the UK government has a statutory duty to accommodate people seeking asylum. However, we have consistently maintained that the prolonged use of hotel accommodation may not represent the best approach – either for our local community or for the asylum seekers themselves,” she said.
“We will continue to work constructively with government departments and all relevant agencies while making sure the voice of our community is heard at the highest levels of government.”
Last night, Conservative-run Broxbourne Council also announced it was exploring its legal options, and the Reform UK leader of Kent County said she was writing to fellow leaders in Kent to explore whether they could potentially take legal action as well.
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Asylum hotels: ‘People have had enough’
Use of Epping hotel ‘sidestepped public scrutiny’
The prime minister and the home secretary are under huge pressure to clear the asylum backlog and stop using hotels across the country to house those waiting for their applications to be processed.
Protests have sprung up at migrant hotels across the country. But The Bell Hotel in Epping became a focal point in recent weeks after an asylum seeker housed there was charged with sexually assaulting a 14-year-old girl.
Epping Forest District Council sought an interim High Court injunction to stop migrants from being accommodated at the hotel, owned by Somani Hotels Limited, on the basis that using it for that purpose contravened local planning regulations.
Image: The Bell Hotel in Epping. Pic: PA
The interim injunction demanded that the hotel be cleared of its occupants within 14 days, but in his ruling on Tuesday, Mr Justice Eyre granted the temporary block, while extending the time limit by which it must stop housing asylum seekers to 12 September.
Somani Hotels said it intended to appeal the decision, its barrister, Piers Riley-Smith, arguing it would set a precedent that could affect “the wider strategy” of housing asylum seekers in hotels.
A government attempt to delay the application was rejected by the High Court judge earlier on Tuesday, Home Office barristers arguing the case had a “substantial impact” on the Home Secretary, Yvette Cooper, in performing her legal duties to asylum seekers.
But Mr Justice Eyre dismissed the Home Office’s bid, stating that the department’s involvement was “not necessary”.
The judge said the hotel’s owners “sidestepped the public scrutiny and explanation which would otherwise have taken place if an application for planning permission or for a certificate of lawful use had been made”.
He added: “It was also deliberately taking the chance that its understanding of the legal position was incorrect. This is a factor of particular weight in the circumstances of this case.”
Reacting to Tuesday’s judgment, border security minister Dame Angela Eagle said the government will “continue working with local authorities and communities to address legitimate concerns”.
She added: “Our work continues to close all asylum hotels by the end of this parliament.”
A row has broken out between the Tories and Reform about previous comments on migrant hotels, so who said what and when?
At the centre of the argument is an interview Robert Jenrick did with Sky News back in November 2022, one week after he was appointed immigration minister in Rishi Sunak’s government.
His appearance came amid a crisis at an asylum seeker processing centre in Kent, which had become severely overcrowded – with migrants sleeping on the floor and families being housed in marquees.
The home secretary at the time, Suella Braverman, had also been accused of allowing the situation to develop by failing to procure sufficient alternative accommodation – such as hotels – for migrants to be taken to.
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Full clip: Jenrick on hotels in 2022
Asked about this by Sky News in 2022, Robert Jenrick said: “More hotels have been coming online almost every month throughout the whole of this year.
“So, Suella Braverman and her predecessor, Priti Patel, were procuring more hotels. What I have done in my short tenure is ramp that up and procure even more because November, historically, has been one of the highest months of the year for migrants illegally crossing the Channel.”
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3:40
Council wins asylum hotel case
Fast-forward almost three years, and this clip has been seized on by Reform UK as evidence that Mr Jenrick “boasted” about how many migrant hotels he had opened.
That’s a potentially damaging accusation, given the now shadow justice secretary recently joined protests outside a migrant hotel in Essex.
Mr Jenrick responded by accusing Reform of posting a “selectively clipped” video that didn’t include the context about the Kent processing centre.
To an extent, he has a point.
Image: Nigel Farage’s party has posted clips of Mr Jenrick speaking from 2022
Pic: PA
At the time, the government was fighting accusations that they were risking an expensive court action from migrants claiming they were being detained unlawfully.
The minister’s response was to point out that they were sourcing alternative options to make sure this didn’t happen and to prevent order breaking down in Kent.
Mr Jenrick has also pointed to other comments he made at the time saying, “it is essential we exit the hotels altogether” and describing the expensive hotel bill as “disgraceful”.
But that’s not to say Robert Jenrick hasn’t undergone quite a pronounced shift in both language and substance when it comes to migration.
Image: Mr Jenrick has accused Zia Yusuf of “pushing false and petty crap”
Pic: PA
For instance, in the same Sky News interview in 2022, he said: “I would never demonise people coming to this country in pursuit of a better life. And I understand and appreciate our obligation to refugees.”
At the time, this wasn’t a surprising view from a minister commonly considered to be in the centre of the Tory party.
But Mr Jenrick’s time as immigration minister saw him move further to the right.
As he has since said himself: “I could see the breakdown of the British state was doing immense damage. It angered me, and it motivated me to do absolutely everything to fix the problem.”
The following months saw Mr Jenrick significantly harden his position, to the point that he resigned over the government’s approach.
But the bigger contradiction Reform is trying to get at by picking this fight is around the Tory record.
It is a fact that the use of hotels to house asylum seekers peaked at just over 55,000 while the Conservatives were in power.
Similarly, it’s a fact that legal migration reached record levels on the Tories watch.
Mr Jenrick can fairly claim that – in the final year of his front-bench career – he did go further than most to try to change this.
But he can’t change the data from the time.
Reform knows that – just as it also knows the Tory record on migration is one of the big pull factors bringing their voters over to them.
A former Church of England priest who ran a rave-inspired “cult” group has been found guilty of indecently assaulting nine women.
Chris Brain, 68, led the Nine O’Clock Service (NOS) in the 1980s and 1990s in Sheffield, with services aimed at 18 to 30-year-olds featuring multimedia, scantily-dressed women, and a live band.
The movement was initially seen by the church as a “ground-breaking” success story and attracted between 500 to 600 people to worship at 9pm on Sundays after NOS moved from St Thomas Church to The Rotunda in Ponds Forge.
Brain, from Wilmslow, Cheshire, denied committing sexual offences against 13 women, including one count of rape and 36 counts of indecent assault between 1981 and 1995.
Today he was found guilty of 17 counts of indecent assault relating to nine women and acquitted of 15 similar charges.
The jury is still deliberating on five outstanding counts, including the rape charge.
Image: Brain led NOS. Pic: BBC/EVRYMAN/BREACH OF FAITH
Inner London Crown Court heard Brain’s ordination was “fast-tracked”, including claims he cheated in his exams, and he wore the same cassock as Robert De Niro in The Mission for the ceremony in 1991.
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But prosecutors said NOS became a “closed and controlled group”, in which Brain “dominated and abused his position” to sexually assault a “staggering number of women from his congregation”.
Image: NOS started at St Thomas Church in Sheffield
NOS collapsed in 1994 after women made allegations about Brain, who resigned from his holy orders in 1995 amid “enormous media interest”, the court heard.
Image: Brain was accused of one count of rape and 36 counts of indecent assault between 1981 and 1995. Pic: Elizabeth Cook/PA
‘Allegations destroyed my life’
Giving evidence, Brain admitted receiving back massages from some NOS members, which he said started as a way to relieve tension headaches, but would “very rarely” lead to sexual activity.
“With some of my closest friends, it would be kissing sometimes, occasionally massaging, stroking. Anything more than that, we would back off,” he said.
He told the jury any touching was done with “100%” consent, and he would’ve “instantly stopped” if anyone had indicated they were uncomfortable.
Brain said the allegations had “basically destroyed my life” and suggested the women had “to exaggerate these things to make it either sexual or controlling” in order “to make a criminal case”.
Brain said he became involved in the dotcom boom in the late 1990s before setting up a business helping smaller firms transition into big companies, which folded once he was charged.