Lords delay Rwanda bill to next week in blow to Rishi Sunak’s agenda
The House of Lords has delayed the passing of the government’s Rwanda bill until next week – in a blow to Rishi Sunak’s attempts to get planes off the ground deporting illegal migrants to the country.
MPs overturned Tuesday’s attempts by the House of Lords to dilute the plan – but peers have now put forward even more changes to the proposed new law.
It is now expected that the Commons will consider the changes on Monday next week, dashing No 10’s hopes to get it through today.
Downing Street has been unwilling to concede any ground on the areas that peers are trying to amend, including on the treatment of people who served with or for the British armed forces abroad.
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No 10 had set its sights on passing the legislation this week as part of its plans to get planes in the air in the spring.
The Safety of Rwanda (Asylum and Immigration) Bill was tabled last year after the Supreme Court ruled the previous scheme to deport asylum seekers who arrived illegally in the UK was unlawful.
The current bill aims to declare Rwanda safe and not allow courts to consider the safety of the nation during appeals.
This is being done based on a new treaty agreed between the UK government and the government in Rwanda.
Speaking earlier on Wednesday, the prime minister’s spokesperson ruled out doing a deal on any of these changes. “We are not considering concessions,” they said.
“We believe the bill as it stands is the right bill and the quickest way to get flights off the ground.”
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What are the latest amendments suggested by the Lords?
Of the four amendments added on Tuesday, three were tabled by Labour peers and one by a crossbencher.
The proposed changes sought to:
• ensure the bill complies with domestic and international law;
• that Rwanda would not be declared safe until a report was completed;
• that appeals based on safety would be allowed;
• and that exemptions would be allowed for people who served with or for the British armed forces.
Peers want to insist on the amendments about people who assisted the UK’s armed forces, and a report advising on the safety of Rwanda, in particular.
The government was defeated on the first by 245 votes to 208 – a majority of 37, and the second by 247 votes to 195 – a majority of 52.
Labour and crossbench peers – those who do not associate with a political party – worked together to outvote the Conservatives.
A government source told Sky News: “We wanted to get it done today, but it shows Labour for their true colours.”
Responding to the latest defeats, Northern Ireland minister Steve Baker told Sky News that he was “extremely disappointed” with the delays.
He denied the government had “slammed the door” on people like interpreters in Afghanistan who worked with UK armed forces.
But Mr Baker said people wanting to come to the UK who had served with British armed forces had to go through the Ministry of Defence.
“They shouldn’t be travelling with people smugglers illegally across the channel – and that’s what we’ve got to break,” he said.
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Approach to military interpreters ‘shameful’ – Labour
The amendment on people who helped the armed forces has been at the centre of a heated debate – with the government saying it is waiting for a report on the Afghan Relocations and Assistance Policy (ARAP) before setting out its steps.
But Labour’s shadow home secretary Yvette Cooper said: “Tory MPs just voted to insist that Afghan interpreters who served British armed forces can be sent to Rwanda.
“A scheme which costs £2m per asylum seeker. A £500m plus scheme for less than 1% of asylum seekers. Which now includes those who worked with our troops
“Shameful and shambolic.”
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Johnny Mercer, a former soldier and the government’s veterans minister, replied: “My team have worked night and day to find permanent accommodation for circa 25,000 Afghans who the UK have provided sanctuary to, without you lifting a finger to help.
“We want them to use safe routes, not undertake lethal channel crossings. Your concern is fake.”
The Chancellor Rachel Reeves has acknowledged there were “too many leaks” in the run-up to last month’s budget.
The flow of budget content to news organisations was “very damaging”, Ms Reeves told MPs on the Treasury select committee on Wednesday.
“Leaks are unacceptable. The budget had too much speculation. There were too many leaks, and much of those leaks and speculation were inaccurate, very damaging”, she said.
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The cost of UK government borrowing briefly spiked after news reports that income taxes would not rise as first expected and Labour would not break its manifesto pledge.
An inquiry into the leaks from the Treasury to members of the media is to take place. But James Bowler, the Treasury’s top official, who was also giving evidence to MPs, would not say the results of it would be published.
Committee chair Dame Meg Hillier asked if the group of MPs could see the full inquiry.
“I’d have to engage with the people in the inquiry about the views on that”, replied Mr Bowler, permanent secretary to the Treasury.
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OBR leak ‘a mistake of such gravity’
The entire contents of the budget ended up being released 40 minutes early via independent forecasters, the Office for Budget Responsibility (OBR).
A report into this error found the OBR had uploaded documents containing their calculations of budget numbers to a link on the watchdog’s website it had mistakenly believed was inaccessible to the public.
Tax rises ruled out
The chancellor ruled out future revenue-raising measures, including applying capital gains tax to primary residences and changing the state pension triple.
Committee member and former chair Dame Harriet Baldwin had noted that the chancellor’s previous statement to the MPs when she said she would not overhaul council tax and look at road pricing, turned out to be inaccurate.
During the budget, an electric vehicle charge per mile was introduced, as was an additional council tax for those with properties worth £2m or more.
Strategy, the largest Bitcoin treasury company, submitted feedback to index company MSCI on Wednesday about the proposed policy change that would exclude digital asset treasury companies holding 50% or more in crypto on their balance sheets from stock market index inclusion.
Digital asset treasury companies are operating companies that can actively adjust their businesses, according to the letter, which cited Strategy’s Bitcoin-backed credit instruments as an example.
The proposed policy change would bias the MSCI against crypto as an asset class, instead of the index company acting as a neutral arbiter, the letter said.
The MSCI does not exclude other types of businesses that invest in a single asset class, including real estate investment trusts (REITs), oil companies and media portfolios, according to Strategy. The letter said:
“Many financial institutions primarily hold certain types of assets and then package and sell derivatives backed by those assets, like residential mortgage-backed securities.”
The letter also said implementing the change “undermines” US President Donald Trump’s goal of making the United States the global leader in crypto. However, critics argue that including crypto treasury companies in global indexes poses several risks.
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Crypto treasury companies can create systemic risks and spillover effects
Crypto treasury companies exhibit characteristics of investment funds, rather than operating companies that produce goods and services, according to MSCI.
MSCI noted that companies capitalized on cryptocurrencies lack clear and uniform valuation methods, making proper accounting a challenging task and potentially skewing index values.
Strategy held 660,624 BTC on its balance sheet at the time of this writing. The stock has lost over 50% of its value over the last year, according to Yahoo Finance.
Bitcoin (BTC) is also 15% below its value at the beginning of 2025, when it was trading over $109,000, meaning that the underlying asset has outperformed the equity wrapper.
The high volatility of cryptocurrencies may heighten the volatility of the indexes tracking these companies or create correlation risks, where the index performance would mirror crypto market performance, according to a paper from the Federal Reserve.
The “common use” of leverage by crypto traders amplifies volatility and lends to crypto’s fragility as an asset class, the Federal Reserve wrote.
MSCI’s proposed policy change, set to take effect in January, could also prompt treasury companies to divest their crypto holdings to meet the new eligibility criteria for index inclusion, creating additional selling pressure for digital asset markets.
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The American Federation of Teachers (AFT), a union championing educators in the United States, has voiced its opposition to crypto market structure legislation moving through the Senate, claiming it “threatens the stability of their retirement security.”
In a Monday letter to Republican and Democratic leaders on the US Senate Banking Committee provided by CNBC, the AFT said it opposed passage of the Responsible Financial Innovation Act, the bill that senators said “built on” the House of Representatives’ proposed solution to market structure, the CLARITY Act. According to the teachers’ union, the bill presents “profound risks” to economic stability and retirement plans.
“This bill fails to provide a regulatory structure for crypto assets and stablecoin that is equivalent to that for other pension holdings,” said the letter. “Most pensions do not carry crypto assets because of their risk. This legislation pretends that crypto assets are stable and mainstream, and they are not.”
The CLARITY Act, a July draft of the market structure bill proposed by the Senate Banking Committee, and a November draft from the Senate Agriculture Committee did not explicitly mention allowing digital assets to be used in pensions or retirement funds. The AFT claimed that if the bill were to be passed, “Pensions and 401(k) plans will end up having unsafe assets even if they were invested in traditional securities.”
The American Federation of Labor and Congress of Industrial Organizations raised similar concerns over the market structure bill posing risks to “retirement funds and to the overall financial stability of the US economy” in an October letter to the banking committee. The group claimed that the legislation would “increase workers’ exposure by greenlighting retirement plans like 401(k)s and pensions to hold this risky asset.”
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The AFT represents 1.8 million members working in education, healthcare and public services. According to the National Association of State Retirement Administrators, aggregate public pension assets, including teachers, totaled more than $6.5 trillion as of the second quarter of 2025, while the Investment Company Institute reported in September that total retirement assets in the US were about $45.8 trillion.
Trump is addressing crypto in retirement funds through executive orders
Separate from the Senate’s efforts to pass market structure, US President Donald Trump has attempted to change policy to allow cryptocurrencies to be included in 401(k) retirement plans. In August, Trump signed an executive order directing the Labor Department to reevaluate restrictions around alternative assets in defined-contribution plans, including digital assets.
Asset management companies have already been making moves signaling openness to adding digital assets to individual retirement arrangements (IRAs) and 401(k)s.
In October, Morgan Stanley reportedly began allowing its advisers to suggest crypto funds as part of its clients’ retirement portfolios. State-managed retirement funds, such as those in Michigan and Wisconsin, also have exposure to crypto through digital asset-linked exchange-traded funds.
It’s unclear when the Senate will vote on a market structure bill in the full chamber. Wyoming Senator Cynthia Lummis, one of the bill’s most outspoken proponents, said on Tuesday that she anticipated the banking committee releasing an updated draft this week, with a possible markup hearing before Congress broke for the holidays.
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