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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.”

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Shadow chancellor Rachel Reeves addressing 400 business leaders at the Kia Oval.
Pic: PA
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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.

“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 £28bn a 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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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”.

Labour leader Sir Keir Starmer and shadow chancellor Rachel Reeves during a visit to the London Stock Exchange Group, to outline Labour's plans to bring growth and stability back to Britain's economy. Picture date: Friday September 22, 2023.
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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.

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Feminists ‘feel braver about speaking out’ after gender ruling – but critics say it ‘stokes culture war’

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Feminists 'feel braver about speaking out' after gender ruling - but critics say it 'stokes culture war'

A former Labour MP who quit the party over Sir Keir Starmer’s leadership has welcomed the landmark Supreme Court ruling on the definition of a woman as a “victory for feminists”.

Rosie Duffield, now the independent MP for Canterbury, said the judgment helped resolve the “lack of clarity” that has existed in the politics around the issue “for years”.

She was speaking to Ali Fortescue on the Politics Hub on the same day the UK’s highest court delivered its verdict on one of the most contentious debates in politics.

Politics latest: MPs respond to Supreme Court ruling on gender

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How do you define a woman in law?

The judges were asked to rule on how “sex” is defined in the 2010 Equality Act – whether that means biological sex or “certificated” sex, as legally defined by the 2004 Gender Recognition Act.

Their unanimous decision was that the definition of a “woman” and “sex” in the Equality Act 2010 refers to “a biological woman and biological sex”.

Asked what she made about comments by fellow independent MP John McDonnell – who said the court “failed to hear the voice of a single trans person” and that the decision “lacked humanity and fairness” as a result, she said: “This ruling doesn’t affect trans people in the slightest.

“It’s about women’s rights – women’s rights to single sex spaces, women’s rights, not to be discriminated against.

“It literally doesn’t change a single thing for trans rights and that lack of understanding from a senior politician about the law is a bit worrying, actually.”

However, Maggie Chapman, a Scottish Green MSP, disagreed with Ms Duffield and said she was “concerned” about the impact the ruling would have on trans people “and for the services and facilities they have been using and have had access to for decades now”.

Susan Smith and Marion Calder give a statement, as the Supreme Court rules on an appeal by For Women Scotland about whether a person with a full gender recognition certificate which recognises that their gender is female is a woman under British equality laws, outside the Supreme Court in London, Britain, April 16, 2025. REUTERS/Maja Smiejkowska
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Susan Smith and Marion Calder, directors of For Women Scotland celebrate after the ruling. Pic: Reuters

“One of the grave concerns that we have with this ruling is that it will embolden people to challenge trans people who have every right to access services,” she said.

“We know that over the last few years… their [trans people’s] lives have become increasingly difficult, they have been blocked from accessing services they need.”

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‘Today’s ruling only stokes the culture war further’

Delivering the ruling at the London court on Wednesday, Lord Hodge said: “But we counsel against reading this judgment as a triumph of one or more groups in our society at the expense of another. It is not.

Campaigners for For Women Scotland (FWS) celebrate outside the Supreme Court in London after terms "woman" and "sex" in the Equality Act refer to a biological woman and biological sex, the Supreme Court has ruled. Picture date: Wednesday April 16, 2025.
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Campaigners celebrate outside the Supreme Court. Pic: PA

“The Equality Act 2010 gives transgender people protection, not only against discrimination through the protected characteristic of gender reassignment, but also against direct discrimination, indirect discrimination and harassment in substance in their acquired gender.

“This is the application of the principle of discrimination by association. Those statutory protections are available to transgender people, whether or not they possess a gender recognition certificate.”

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Asked whether she believed the judgment could “draw a line” under the culture war, Ms Chapman told Fortescue: “Today’s judgment only stokes that culture war further.”

And she said that while Lord Hodge was correct to say there were protections in law for trans people in the 2020 Equality Act, the judgment “doesn’t prevent things happening”.

“It may offer protections once bad things have happened, once harassment, once discrimination, once bigotry, once assaults have happened,” she said.

She also warned some groups “aren’t going to be satisfied with today’s ruling”.

“We know that there are individuals and there are groups who actually want to roll back even further – they want to get rid of the Gender Recognition Act from 2004,” she said.

“I think today’s ruling just emboldens those views.”

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Arsenal reach Champions League semi-final with dramatic win over Real Madrid

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Arsenal reach Champions League semi-final with dramatic win over Real Madrid

Arsenal have reached the semi-finals of the Champions League after a dramatic victory over holders Real Madrid in Spain.

The north London side, who became the first English team to win twice at the Bernabeu following their triumph there 19 years ago, will face Paris Saint-Germain in the last four after the French side beat Aston Villa on Tuesday.

It is the third time the Gunners have made it through to the semis of the top club football tournament in Europe, and the first since 2009.

Arsenal went into the second leg of their quarter-final clash on Wednesday with a 3-0 lead.

Backed by a raucous home crowd, Madrid tried to get off to a strong start and Kylian Mbappe scored after two minutes. However, the goal was disallowed for a clear offside.

Arsenal had the chance to go ahead in the 13th minute but winger Bukayo Saka missed a penalty.

The Spanish hosts were awarded a penalty of their own about 10 minutes later when Mbappe stumbled under pressure from Declan Rice in the box – but the decision was overturned by VAR.

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Saka atoned for his tepid penalty as he chipped the ball past Madrid’s keeper Thibaut Courtois when put through on goal by auxiliary striker Mikel Merino in the 65th minute.

But Arsenal were pegged back just two minutes later as Vinicius Junior caught William Saliba dawdling on the ball and fired Real Madrid level.

Arsenal’s resolute defending kept the home side at bay until Gabriel Martinelli made a late break through the home side’s defence to put his side 2-1 ahead three minutes into injury time, as the Gunners made it 5-1 on aggregate.

(L-R) Arsenal's Declan Rice and Mikel Merino celebrate after the defeat against Real Madrid. Pic: AP
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(L-R) Arsenal’s Declan Rice and Mikel Merino celebrate after the defeat against Real Madrid. Pic: AP

‘We knew we were going to win’, says Rice

Arsenal midfielder Declan Rice has insisted his team are intent on winning the Champions League after their victory in Madrid.

Speaking to TNT Sport, Rice, who was named player of the match, said: “It’s such a special night, a historic one for the club. We have the objective of playing the best and winning the competition.

“We had so much belief and confidence from that first leg and came here to win the game. We knew we were going to suffer but we knew we were going to win. We had it in our minds, then we did it [in] real life. What a night.

“I knew when I signed, this club was on an upward trajectory. It’s been tough in the Premier League but in this competition we’ve done amazingly well.

“It’s PSG next, who are an amazing team.”

‘We have to be very proud of ourselves’, says Arteta

Arsenal boss Mikel Arteta told TNT Sport: “One of the best nights in my football career.

“We played against a team with the biggest history.

“To be able to win the tie in the manner we have done, I think we have to be very proud of ourselves.”

He added: “The history we have in this competition is so short. The third time in our history of what we have just done and we have to build on that. All this experience is going to help us, for sure.”

Real Madrid were seeking their third Champions League title in four seasons.

Mbappe twisted ankle

Their forward Mbappe twisted his right ankle during the game and was jeered by part of the crowd when his substitution was announced after a lacklustre performance.

The French star, who is still looking for his first Champions League title, was replaced by Brahim Diaz in the 75th minute following his injury. He was able to walk off the pitch by himself, but was limping slightly.

The other semi-final will be between Barcelona and Inter Milan.

The first legs are set to be played on 29 and 30 April, with the second legs on 6 and 7 May.

The final will be on 31 May.

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Labour’s policy on China under the spotlight

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Labour's policy on China under the spotlight

After a dramatic weekend with ministers passing legislation to wrest control of British Steel from its Chinese owners, Labour’s China policy is under the spotlight.

Sir Keir Starmer’s government came in, promising a “strategic and long term” relationship with Beijing, after years of “inconsistency” under the Conservatives.

David Lammy went on the first trip by a foreign secretary in six years. Sir Keir met Xi Jinping in the margins of the G20 in November and floated a UK-China visit.

Rachel Reeves went to the Chinese capital in January, saying her trip had secured £600m of growth for the UK economy.

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Business Secretary Jonathan Reynolds appeared to turn the tables this weekend, suggesting Chinese parent company Jingye had neglected or even sabotaged British Steel after buying it five years ago. He told Sky News he would not personally “bring a Chinese company into our steel sector”.

He changed his tune on Tuesday, while visiting Scunthorpe to oversee the delivery of a shipment of materials, saying the row was just with one company.

It’s now emerged he is expected to travel to China later this year, to restart a joint economic and trade commission which has been on ice since 2018.

But this is no return to the golden age of some years back.

Tensions in government over China may well emerge in the coming months – as the Treasury’s drive for investment and growth jars with concerns over security.

Ministers are discussing whether parts of the Chinese state should be designated a national security threat, under new rules on foreign influence, due to come in this summer.

Russia and Iran will be covered by the enhanced tier of the foreign influence registration scheme – but ministers are yet to say anything about China.

Applying it even in a limited way would be controversial with large companies and within government – seen as a barrier to doing business.

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Reynolds rows back on China comments

The Treasury’s view is that engagement with the world’s second largest economy is essential to economic growth.

Ed Miliband’s energy department is pursuing big clean energy projects, many of them backed by Chinese investment.

Wholly state-owned companies already own stakes in Heathrow Airport and Thames Water.

While Huawei was dramatically banned from the UK’s 5G network back in 2020, Chinese companies fund nuclear power, and the National Grid network.

Senior Conservatives, some sanctioned by the Chinese government, have been vocal about what they see as national security risks from this approach.

A report by parliament’s Intelligence and Security Committee in 2023 said China had penetrated “every sector” of the UK economy. It warned that “Chinese money was readily accepted by HM Government with few questions asked”.

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Some Labour MPs view this with growing concern. One senior MP, speaking privately, said: “The problem is it costs billions of pounds to build reservoirs and nuclear reactors, and we’re not raising that from taxes, so China is where we get that investment.

“There are significant concerns in the party – whether it’s about the security of critical sectors, espionage, or concerns about the use of slave labour in their products.”

Liam Byrne, the Labour chair of the business and trade committee, said there needed to be clearer ground rules on Chinese investment.

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If we want to stay ahead of our adversaries, we’ve got to make sure that we’re not handing the most advanced technology to our adversaries,” he said.

“We need a clear definition of economic security from the government, we need a clear threat assessment, and we need a clear way in which business and government are going to work hand in hand to keep our country safe in what are now very different and more dangerous times.”

After a rebuke from the Chinese embassy, which defended the actions of Jingye, the government insists nothing has changed in the relationship.

China is now embroiled in a trade war with the US, and the global trade rules are changing.

The tension emerging is whether economic growth overrides security concerns.

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