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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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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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Nationwide police operation on grooming gangs announced

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Nationwide police operation on grooming gangs announced

A nationwide police operation to track down those in grooming gangs has been announced by the Home Office.

The National Crime Agency (NCA) will target those who have sexually exploited children as part of a grooming gang, and will investigate cases that were not previously progressed.

Home Secretary Yvette Cooper said in a statement: “The vulnerable young girls who suffered unimaginable abuse at the hands of groups of adult men have now grown into brave women who are rightly demanding justice for what they went through when they were just children.

“Not enough people listened to them then. That was wrong and unforgivable. We are changing that now.

“More than 800 grooming gang cases have already been identified by police after I asked them to look again at cases which had closed too early.

“Now we are asking the National Crime Agency to lead a major nationwide operation to track down more perpetrators and bring them to justice.”

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Starmer to launch new grooming gang inquiry

The NCA will work in partnership with police forces around the country and specialist officers from the Child Sexual Exploitation Taskforce, Operation Hydrant – which supports police forces to address all complex and high-profile cases of child sexual abuse – and the Tackling Organised Exploitation Programme.

It comes after Sir Keir Starmer announced a national inquiry into child sex abuse on Saturday, ahead of the release of a government-requested audit into the scale of grooming gangs across the country, which concluded a nationwide probe was necessary.

The prime minister previously argued a national inquiry was not necessary, but changed his view following an audit into group-based child sexual abuse led by Baroness Casey, set to be published next week.

Ms Cooper is set to address parliament on Monday about the findings of the near 200-page report, which is expected to warn that white British girls were “institutionally ignored for fear of racism”.

One person familiar with the report said it details the institutional failures in treating young girls and cites a decade of lost action from the Independent Inquiry into Child Sexual Abuse (IICSA), set up in 2014 to investigate grooming gangs in Rotherham.

The report is also expected to link illegal immigration with the exploitation of young girls.

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Kemi Badenoch, the Conservative leader, said on Saturday that Sir Keir should recognise “he made a mistake and apologise for six wasted months”.

Speaking to Sky’s Sunday Morning With Trevor Phillips, Chancellor Rachel Reeves refused to say if the government will apologise for dismissing calls for a national public inquiry into grooming gangs.

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Rachel Reeves on Sunday Morning With Trevor Phillips

She said: “What is the most important thing here? It is the victims, and it’s not people’s hurt feelings about how they have been spoken about.”

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Career spy Blaise Metreweli to become first woman to head MI6

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Career spy Blaise Metreweli to become first woman to head MI6

Career spy Blaise Metreweli will become the first woman to head MI6 in a “historic appointment”, the prime minister has announced.

She will take over from Sir Richard Moore as the 18th Chief, also known as “C”, when he steps down in the autumn.

“The historic appointment of Blaise Metreweli comes at a time when the work of our intelligence services has never been more vital,” Sir Keir Starmer said in a statement released on Sunday night.

“The United Kingdom is facing threats on an unprecedented scale – be it aggressors who send their spy ships to our waters or hackers whose sophisticated cyber plots seek to disrupt our public services.”

Of the other main spy agencies, GCHQ is also under female command for the first time.

Anne Keast-Butler took on the role in 2023, while MI5 has previously twice been led by a woman.

Until now, a female spy chief had only headed MI6 – also known as the Secret Intelligence Service (SIS) – in the James Bond movies.

A motorboat passes by the MI6 building in Vauxhall, London. Pic: Reuters
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Blaise Metreweli is the first woman to be named head of MI6. Pic: Reuters

Dame Judi Dench held the fictional role – called “M” in the films instead of “C” – between 1995 and 2015.

Ms Metreweli currently serves as “Q”, one of four director generals inside MI6.

The position – also made famous by the James Bond films, with the fictional “Q” producing an array of spy gadgets – means she is responsible for technology and innovation.

Ms Metreweli, a Cambridge graduate, joined MI6 in 1999.

Unlike the outgoing chief, who spent some of his service as a regular diplomat in the foreign office, including as ambassador to Turkey, she has spent her entire career as an intelligence officer.

Much of that time was dedicated to operational roles in the Middle East and Europe.

Ms Metreweli, who is highly regarded by colleagues, also worked as a director at MI5.

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In a statement, she said she was “proud and honoured to be asked to lead my service”.

“MI6 plays a vital role – with MI5 and GCHQ – in keeping the British people safe and promoting UK interests overseas,” she said.

“I look forward to continuing that work alongside the brave officers and agents of MI6 and our many international partners.”

Sir Richard said: “Blaise is a highly accomplished intelligence officer and leader, and one of our foremost thinkers on technology. I am excited to welcome her as the first female head of MI6.”

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Woman, 23, dies after falling in water at beauty spot in Scottish Highlands

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Woman, 23, dies after falling in water at beauty spot in Scottish Highlands

A woman has died after falling into the water at a popular beauty spot in the Scottish Highlands.

The 23-year-old had fallen into the water in the Rogie Falls area of Wester Ross.

Police Scotland confirmed emergency services attended the scene after being called at 1.45pm on Saturday.

“However, [she] was pronounced dead at the scene,” a spokesperson said.

“There are no suspicious circumstances and a report will be submitted to the Procurator Fiscal.”

Rogie Falls are a series of waterfalls on the Black Water, a river in Ross-shire in the Highlands of Scotland. They are a popular attraction for tourists on Scotland’s North Coast 500 road trip.

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