Tories ‘have drawn a line’ under Frank Hester race row and should keep donations, Kemi Badenoch says
The government has “drawn a line” under the Frank Hester race row and shouldn’t have to give back the money he donated, Kemi Badenoch has said.
The business secretary, who was the first cabinet minister to break ranks and label his reported comments about Diane Abbott as racist last week, suggested she would be comfortable accepting further money from the Tory donor.
Politics: Sunak urges MPs to ‘stick to the plan’
Speaking to Sky News, she said she decided to condemn the remarks ahead of her colleagues because as the equalities minister and the only black woman in cabinet “this was something that it was important that I spoke up about”.
Asked if she would feel comfortable accepting further donations from Mr Hester, she said: “I think if somebody has apologised and the comments appear to have been first of all very flippant, said a long time ago, I think it is fine for us to be able to accept and forgive and draw a line under it.
“Obviously, if something else happens in the future that might be something that we reconsider.
“In regards to donations to the party, people keep asking me, ‘do you think the money should be kept’? I have been very clear that, yes, I do think so.”
Mr Hester, who donated £10m to the Tories last year, is reported to have said that left-wing MP Ms Abbott made him “want to hate all black women” and that she “should be shot”.
Ms Badenoch was the first cabinet minister to break ranks and say the comments were “racist” – though she added at the time that there should be space for “forgiveness”.
Until this point, ministers had said the comments were “wrong” but did not go as far as calling them racist.
Downing Street had also refused to call the remarks “racist”, insisting instead that they were “unacceptable”.
Prime Minister Rishi Sunak later condemned the remarks as “racist and wrong”, but he has continued to face calls to return the money Mr Hester has donated and confirm whether a further £5m is in the pipeline.
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Sky News understands the government is “in talks” about this extra money which, if accepted, would take the amount Mr Hester has donated to the party in the last year to £15m.
In other media interviews this morning, Ms Badenoch branded continued interest in the story “pure media bubble speculation”, saying on BBC Breakfast that it is only dominating front pages because “you are not interested in the work that the government is doing”.
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On LBC, she said: “This was something that happened five years ago. He wasn’t talking to Diane Abbott, it wasn’t even really about Diane Abbott.”
Ms Badenoch’s remarks reflect a government determined to move on from a row that dominated what some have dubbed Mr Sunak’s worst week in office.
The embattled prime minister has also faced rumours of a plot to replace him and the defection of former Tory deputy chairman Lee Anderson to the Reform party.
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‘Sunak will still be Tory leader at next general election’
He is seeking to shift the political debate to the gradually improving economic outlook as he tries to shore up his leadership.
Launching a fightback last night, Mr Sunak vowed that 2024 “will be the year Britain bounces back” in comments released by Downing Street.
Later today he will set out reforms to boost apprenticeships and cut red tape for small businesses, at a conference in Warwickshire that is being hosted by Ms Badenoch.
The chair of the Labour Party has insisted that Sir Keir Starmer will “absolutely” still be prime minister next Christmas, despite the party’s dire position in the polls.
Speaking to Sky’s Sunday Morning With Trevor Phillips, Anna Turley acknowledged that “things are still hard” for Britons, but struck an optimistic tone about the year ahead.
She said the government has “taken a lot of difficult decisions this year” to “stabilise the economy”, but we are now “starting to see that recovery”.
“As we go into the new year, I’m really optimistic about delivering the kind of change that people voted for last year, and to see them starting to see and feel it in their pockets and in their local communities,” Ms Turley insisted.
On average over the last 10 polls, the Labour Party is down in third place on 18.2%, while Reform UK is on 29.4%, and the Conservative Party is on 18.9%.
Trevor then asked if the public simply hasn’t noticed “how lucky they’ve been”, and the senior minister said: “Well, I think rightly, people are impatient for change. We all are. And people voted for change – that was on the front of our manifesto last year.
“But it takes time to deliver that. It takes time to stabilise things from the chaos that we inherited.”
She said fundamental changes, particularly those that require legislation, take time to deliver, pointing to the Employment Rights Bill, which only passed through parliament last week after the Lords repeatedly sought to amend it.
Ms Turley continued: “We live in the real world. We know things are still hard.
“But I’m conscious with every single day that goes by next year, people will really start to see and feel more money in their pockets, better public services when they’re looking for an appointment with a doctor, their streets and the neighbourhoods are looking better and better, and that change takes time.
“But we will be delivering that in the new year, and I’m confident people can really start to see that.”
Sir Keir Starmer is under pressure amid Labour’s dire position in the polls. Pic: PA
Asked directly if Sir Keir Starmer will be Labour leader and prime minister by next Christmas, Turley replied: “Of course. Absolutely.
“As I said, people will really start to see and feel the change in their pockets. He has got a very clear vision for making sure that people can really deal with the cost of living, that public services will get back on their […] feet.
“And he’s building a Britain that is one that is tolerant, that is open, that is confident in itself. And that is really about renewal and investment in young people as opposed to the division and the decline of the opposition.”
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Her backing of the prime minister comes amid continued unease on the Labour benches about the party’s position in the polls, and the manoeuvrings of some big figures who are rumoured to be plotting a move against the prime minister if May’s local elections go badly.
One such person thought to be preparing for a potential leadership bid is the health secretary, Wes Streeting, who has told The Observer today that he is not ruling himself out as a candidate for the top job in future.
“I’m diplomatically ducking the question to avoid any more of the silly soap opera we’ve had in the last few months,” Streeting said, despite also noting the “pressure” and the “demands of that job”.
Greater Manchester mayor Andy Burnham is repeatedly refusing to rule out a return to Westminster to challenge Sir Keir for the Labour leadership, and former deputy prime minister Angela Rayner is thought to be preparing to potentially launch a leadership bid of her own.
‘We’re going to smash the local elections’
Also on Sunday Morning With Trevor Phillips, the Conservative Party deputy chair, Matt Vickers, was bullish about his party’s prospects at May’s local elections.
“We’re going to go out there and smash these next elections,” he said.
“The reality is we had a tough general election. If anybody thought that we were going to dust ourselves off and be back in the game within months, then they’re a bit mad.”
US lawmakers have introduced a discussion draft that would ease the tax burden on everyday crypto users by exempting small stablecoin transactions from capital gains taxes and offering a new deferral option for staking and mining rewards.
The proposal, introduced by Representatives Max Miller of Ohio and Steven Horsford of Nevada, seeks to amend the Internal Revenue Code to reflect the growing use of digital assets in payments. The draft is set “to eliminate low-value gain recognition arising from routine consumer payment use of regulated payment stablecoins,” per the draft.
Under the draft, users would not be required to recognize gains or losses on stablecoin transactions of up to $200, provided the asset is issued by a permitted issuer under the GENIUS Act, pegged to the US dollar and maintains a tight trading range around $1.
The bill includes safeguards to prevent abuse. The exemption would not apply if a stablecoin trades outside a narrow price band, and brokers or dealers would be excluded from the benefit. Treasury would also retain authority to issue anti-abuse rules and reporting requirements.
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US bill defers taxes on crypto staking rewards
Beyond payments, the proposal addresses long-standing concerns around “phantom income” from staking and mining. Taxpayers would be allowed to elect to defer income recognition on staking or mining rewards for up to five years, rather than being taxed immediately upon receipt.
“This provision is intended to reflect a necessary compromise between immediate taxation upon dominion & control and full deferral until disposition,” the draft said.
The draft also extends existing securities lending tax treatment to certain digital asset lending arrangements, applies wash sale rules to actively traded crypto assets, and allows traders and dealers to elect mark-to-market accounting for digital assets.
Related: Galaxy predicts stablecoins will overtake ACH transaction volume in 2026
Crypto groups urge Senate to rethink stablecoin rewards ban
Last week, the Blockchain Association sent a letter to the US Senate Banking Committee, signed by more than 125 crypto companies and industry groups, opposing efforts to extend restrictions on stablecoin rewards to third-party platforms.
The group argued that expanding the GENIUS Act’s limits beyond stablecoin issuers would curb innovation and increase market concentration in favor of large incumbents. The letter compared crypto rewards to incentives commonly offered by banks and credit card companies, warning that banning similar features for stablecoins would undermine fair competition.
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Politics
Watchdog criticises ‘unprecedented’ government offer to delay local elections – as five councils confirm requests for postponement
The elections watchdog has criticised the government for offering to consider delaying 63 local council elections next year – as five authorities confirmed to Sky News that they would ask for a postponement.
On Thursday, hours before parliament began its Christmas recess, the government revealed that councils were being sent a letter asking if they thought elections should be delayed in their areas due to challenges around delivering local government reorganisation plans.
The chief executive of the Electoral Commission, Vijay Rangarajan, hit out at the announcement on Friday, saying he was “concerned” that some elections could be postponed, with some having already been deferred from 2025.
“We are disappointed by both the timing and substance of the statement. Scheduled elections should, as a rule, go ahead as planned, and only be postponed in exceptional circumstances,” he said in a statement.
“Decisions on any postponements will not be taken until mid-January, less than three months before the scheduled May 2026 elections are due to begin.
“This uncertainty is unprecedented and will not help campaigners and administrators who need time to prepare for their important roles.”
Mr Rangarajan added: “We very much recognise the pressures on local government, but these late changes do not help administrators. Parties and candidates have already been preparing for some time, and will be understandably concerned.”
He said “capacity constraints” were not a “legitimate reason for delaying long planned elections”, which risked “affecting the legitimacy of local decision-making and damaging public confidence”.
The watchdog chief also said there was “a clear conflict of interest in asking existing councils to decide how long it will be before they are answerable to voters”.
Sky News contacted the 63 councils that have been sent the letter about potentially delaying their elections.
At the time of publication, 17 authorities had replied with their decisions, while 33 said they would make up their minds before the government’s deadline of 15 January.
Many councils told Sky News they were surprised at yesterday’s announcement, saying that they had been fully intending to hold their polls as scheduled.
They said they were now working to understand the appropriate democratic mechanism for deciding whether to request a postponement of elections. Some local authorities believe it should be a decision made by their full council, while others will leave it up to council leaders or cabinet members to decide.
Multiple councils also emphasised in statements to Sky News that the ultimate decision to delay elections lay with the government.
Reform UK has threatened legal action against ministers, accusing Labour and the Tories of “colluding” to postpone elections in order to lock other parties out of power – a sentiment echoed by Liberal Democrat leader Sir Ed Davey.
But shadow local government secretary Sir James Cleverly told Sky News this morning that the Conservative Party “wants these elections to go ahead”. Sky News understands that the national party is making that position clear to local leaders.
A spokesperson for the Ministry of Housing, Communities, and Local Government, said it was taking a “locally-led approach”, and emphasised that “councils are in the best position to judge the impact of postponements on their area”.
They added: “These are exceptional circumstances where councils have told us they’re struggling to prepare for resource-intensive elections to councils that will shortly be abolished, while also reorganising into more efficient authorities that can better serve local residents.
“There is a clear precedent for postponing local elections where local government reorganisation is in progress, as happened in 2019 and 2022.”
The five councils that confirmed they would be seeking postponements were:
- Blackburn with Darwen Council (Labour);
- Chorley Borough Council (Labour);
- East Sussex County Council (Conservative minority);
- Hastings Borough Council (Green minority);
- West Sussex County Council (Conservative).
The councils in Chorley, and East and West Sussex, had decided prior to Thursday’s government announcement that they would request a delay.
An East Sussex County Council spokesperson told Sky News: “It is welcome that the government is listening to local leaders and has heard the case for focussing our resources on delivery in East Sussex, particularly with devolution and reorganisation of local government, as well as delivering services to residents, such high priorities.”
They also pointed to the cost of electing councillors for a term of just one year, and argued that it would be “more prudent for just one set of elections to be held in 2027”.
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West Sussex County Council echoed those reasons and said it would cost taxpayers across the county £9m to hold elections in 2026, 2027, and 2028, as currently planned.
Chorley and Blackburn councils also cited the cost of delivering elections, and said they would prefer that money be spent on delivering the local government reorganisation and delivering services to local residents.
Meanwhile, 12 councils confirmed to Sky News that they would not be requesting delays:
- Basingstoke and Deane Borough Council (Liberal Democrat-Independents);
- Broxbourne Borough Council (Conservative);
- Colchester City Council (Labour-Liberal Democrat);
- Eastleigh Borough Council (Liberal Democrat);
- Essex County Council (Conservative);
- Hart District Council (Liberal Democrat-Community Campaign);
- Hastings Borough Council (Green minority);
- Isle of Wight Council (no overall control);
- Newcastle-under-Lyme Borough Council (Conservative);
- Portsmouth City Council (Liberal Democrat minority);
- Rushmoor Borough Council (Labour minority);
- Southampton City Council (Labour).
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