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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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Labour ‘under no illusions about scale of task ahead’

Shadow chancellor Rachel Reeves addressing 400 business leaders at the Kia Oval.
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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.”

Read more:
Starmer promises to ‘fix stagnation’ in pitch to business

Labour reports to underpin new ‘party of business’ stance

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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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Whitehall officials tried to cover up grooming scandal in 2011, Dominic Cummings says

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Whitehall officials tried to cover up grooming scandal in 2011, Dominic Cummings says

Whitehall officials tried to convince Michael Gove to go to court to cover up the grooming scandal in 2011, Sky News can reveal.

Dominic Cummings, who was working for Lord Gove at the time, has told Sky News that officials in the Department for Education (DfE) wanted to help efforts by Rotherham Council to stop a national newspaper from exposing the scandal.

In an interview with Sky News, Mr Cummings said that officials wanted a “total cover-up”.

Politics latest: Grooming gangs findings unveiled

The revelation shines a light on the institutional reluctance of some key officials in central government to publicly highlight the grooming gang scandal.

In 2011, Rotherham Council approached the Department for Education asking for help following inquiries by The Times. The paper’s then chief reporter, the late Andrew Norfolk, was asking about sexual abuse and trafficking of children in Rotherham.

The council went to Lord Gove’s Department for Education for help. Officials considered the request and then recommended to Lord Gove’s office that the minister back a judicial review which might, if successful, stop The Times publishing the story.

Lord Gove rejected the request on the advice of Mr Cummings. Sources have independently confirmed Mr Cummings’ account.

Education Secretary Michael Gove in 2011. Pic: PA
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Education Secretary Michael Gove in 2011. Pic: PA

Mr Cummings told Sky News: “Officials came to me in the Department of Education and said: ‘There’s this Times journalist who wants to write the story about these gangs. The local authority wants to judicially review it and stop The Times publishing the story’.

“So I went to Michael Gove and said: ‘This council is trying to actually stop this and they’re going to use judicial review. You should tell the council that far from siding with the council to stop The Times you will write to the judge and hand over a whole bunch of documents and actually blow up the council’s JR (judicial review).’

“Some officials wanted a total cover-up and were on the side of the council…

“They wanted to help the local council do the cover-up and stop The Times’ reporting, but other officials, including in the DfE private office, said this is completely outrageous and we should blow it up. Gove did, the judicial review got blown up, Norfolk stories ran.”

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Grooming gangs victim speaks out

The judicial review wanted by officials would have asked a judge to decide about the lawfulness of The Times’ publication plans and the consequences that would flow from this information entering the public domain.

A second source told Sky News that the advice from officials was to side with Rotherham Council and its attempts to stop publication of details it did not want in the public domain.

One of the motivations cited for stopping publication would be to prevent the identities of abused children entering the public domain.

There was also a fear that publication could set back the existing attempts to halt the scandal, although incidents of abuse continued for many years after these cases.

Sources suggested that there is also a natural risk aversion amongst officials to publicity of this sort.

Read more on grooming gangs:
What we do and don’t know from the data
A timeline of the scandal

Mr Cummings, who ran the Vote Leave Brexit campaign and was Boris Johnson’s right-hand man in Downing Street, has long pushed for a national inquiry into grooming gangs to expose failures at the heart of government.

He said the inquiry, announced today, “will be a total s**tshow for Whitehall because it will reveal how much Whitehall worked to try and cover up the whole thing.”

He also described Mr Johnson, with whom he has a long-standing animus, as a “moron’ for saying that money spent on inquiries into historic child sexual abuse had been “spaffed up the wall”.

Asked by Sky News political correspondent Liz Bates why he had not pushed for a public inquiry himself when he worked in Number 10 in 2019-20, Mr Cummings said Brexit and then COVID had taken precedence.

“There are a million things that I wanted to do but in 2019 we were dealing with the constitutional crisis,” he said.

The Department for Education and Rotherham Council have been approached for comment.

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Flawed data used repeatedly to dismiss claims about ‘Asian grooming gangs’, Baroness Casey finds

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Flawed data used repeatedly to dismiss claims about 'Asian grooming gangs', Baroness Casey finds

Flawed data has been used repeatedly to dismiss claims about “Asian grooming gangs”, Baroness Louise Casey has said in a new report, as she called for a new national inquiry.

The government has accepted her recommendations to introduce compulsory collection of ethnicity and nationality data for all suspects in grooming cases, and for a review of police records to launch new criminal investigations into historic child sexual exploitation cases.

Politics latest: Yvette Cooper reveals details of grooming gangs report

Baroness Louise Casey answering question from the London Assembly police and crime committee at City Hall in east London. Pic: PA
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Baroness Louise Casey carried out the review. Pic: PA

The crossbench peer has produced an audit of sexual abuse carried out by grooming gangs in England and Wales, after she was asked by the prime minister to review new and existing data, including the ethnicity and demographics of these gangs.

In her report, she has warned authorities that children need to be seen “as children” and called for a tightening of the laws around the age of consent so that any penetrative sexual activity with a child under 16 is classified as rape. This is “to reduce uncertainty which adults can exploit to avoid or reduce the punishments that should be imposed for their crimes”, she added.

Baroness Casey said: “Despite the age of consent being 16, we have found too many examples of child sexual exploitation criminal cases being dropped or downgraded from rape to lesser charges where a 13 to 15-year-old had been ‘in love with’ or ‘had consented to’ sex with the perpetrator.”

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Grooming gangs victim speaks out

The peer has called for a nationwide probe into the exploitation of children by gangs of men.

She has not recommended another over-arching inquiry of the kind conducted by Professor Alexis Jay, and suggests the national probe should be time-limited.

The national inquiry will direct local investigations and hold institutions to account for past failures.

Home Secretary Yvette Cooper said the inquiry’s “purpose is to challenge what the audit describes as continued denial, resistance and legal wrangling among local agencies”.

On the issue of ethnicity, Baroness Casey said police data was not sufficient to draw conclusions as it had been “shied away from”, and is still not recorded for two-thirds of perpetrators.

‘Flawed data’

However, having examined local data in three police force areas, she found “disproportionate numbers of men from Asian ethnic backgrounds amongst suspects for group-based child sexual exploitation, as well as in the significant number of perpetrators of Asian ethnicity identified in local reviews and high-profile child sexual exploitation prosecutions across the country, to at least warrant further examination”.

She added: “Despite reviews, reports and inquiries raising questions about men from Asian or Pakistani backgrounds grooming and sexually exploiting young white girls, the system has consistently failed to fully acknowledge this or collect accurate data so it can be examined effectively.

“Instead, flawed data is used repeatedly to dismiss claims about ‘Asian grooming gangs’ as sensationalised, biased or untrue.

“This does a disservice to victims and indeed all law-abiding people in Asian communities and plays into the hands of those who want to exploit it to sow division.”

Read more:
Officials tried to cover up grooming scandal, says Cummings

Why many victims welcome national inquiry into grooming gangs
Grooming gangs scandal timeline

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From January: Grooming gangs: What happened?

The baroness hit out at the failure of policing data and intelligence for having multiple systems which do not communicate with each other.

She also criticised “an ambivalent attitude to adolescent girls both in society and in the culture of many organisations”, too often judging them as adults.

‘Deep-rooted failure’

Responding to Baroness Casey’s review, Ms Yvette Cooper told the House of Commons: “The findings of her audit are damning.

“At its heart, she identifies a deep-rooted failure to treat children as children. A continued failure to protect children and teenage girls from rape, from exploitation, and serious violence.

She added: “Baroness Casey found ‘blindness, ignorance, prejudice, defensiveness and even good but misdirected intentions’ all played a part in this collective failure.”

Ms Cooper said she will take immediate action on all 12 recommendations from the report, adding: “We cannot afford more wasted years repeating the same mistakes or shouting at each other across this House rather than delivering real change.”

Yvette Cooper makes a statement in the House of Commons, London, on Baroness Casey's findings on grooming gangs.
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Home Secretary Yvette Cooper responded to the report. Pic: PA

Conservative leader Kemi Badenoch said: “After months of pressure, the prime minister has finally accepted our calls for a full statutory national inquiry into the grooming gangs.

“We must remember that this is not a victory for politicians, especially the ones like the home secretary, who had to be dragged to this position, or the prime minister. This is a victory for the survivors who have been calling for this for years.”

Ms Badenoch added: “The prime minister’s handling of this scandal is an extraordinary failure of leadership. His judgement has once again been found wanting.

“Since he became prime minister, he and the home secretary dismissed calls for an inquiry because they did not want to cause a stir.

“They accused those of us demanding justice for the victims of this scandal as, and I quote, ‘jumping on a far right bandwagon’, a claim the prime minister’s official spokesman restated this weekend – shameful.”

The government has promised new laws to protect children and support victims so they “stop being blamed for the crimes committed against them”.

It is also launching new police operations and a new national inquiry to direct local investigations and hold institutions to account for past failures.

There will also be new ethnicity data and research “so we face up to the facts on exploitation and abuse,” the home secretary said.

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Families of British Air India crash victims ‘feel utterly abandoned’ and hit out at government

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Families of British Air India crash victims 'feel utterly abandoned' and hit out at government

The families of three of the British victims of last week’s Air India crash in Ahmedabad have criticised the UK government’s response to the disaster, saying they “feel utterly abandoned”.

It comes after an Air India Dreamliner crashed shortly after take-off from Ahmedabad airport in western India, killing 229 passengers and 12 crew. One person on the flight survived.

Among the passengers and crew on the Gatwick-bound aircraft were 169 Indian nationals, 53 Britons, seven Portuguese nationals and one Canadian national.

In a statement, the families of three British citizens who lost their lives said they were calling on the UK government to “immediately step up its presence and response on the ground in Ahmedabad”.

The families said they rushed to India to be by their loved ones’ sides, “only to find a disjointed, inadequate, and painfully slow government reaction”.

“There is no UK leadership here, no medical team, no crisis professionals stationed at the hospital,” said a family spokesperson.

“We are forced to make appointments to see consular staff based 20 minutes away in a hotel, while our loved ones lie unidentified in an overstretched and under-resourced hospital.

“We’re not asking for miracles – we’re asking for presence, for compassion, for action,” another family member said.

“Right now, we feel utterly abandoned.”

Read more:
Who are some of the crash victims?
Survivor recounts moments before impact

The families listed a number of what they called “key concerns”, including a “lack of transparency and oversight in the identification and handling of remains”.

They also demanded a “full crisis team” at the hospital within 24 hours, a British-run identification unit, and financial support for relatives of the victims.

A local doctor had “confirmed” the delays in releasing the bodies were “linked to severe understaffing”, according to the families, who also called for an independent inquiry into the UK government’s response.

“Our loved ones were British citizens. They deserved better in life. They certainly deserve better in death,” the statement added.

Sky News has approached the UK’s Foreign, Commonwealth and Development Office for comment.

Families and friends of the victims have already expressed their anger and frustration – mostly aimed at the authorities in India – over the lack of information.

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