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Sir Keir Starmer has accused the Tories of using Brexit to deliberately run an “open borders experiment” in the UK.

The prime minister said the British people are “owed an explanation” after revised figures showed net migration reached a record high of almost one million under the previous government’s watch.

Follow live: Spending on asylum jumps to record high

Data from the Office for National Statistics (ONS) shows net migration for the year to June 2023 reached 906,000 – a big jump on what was previously thought and four times higher than pre-Brexit figures in 2019.

In a speech from Downing Street, Sir Keir said: “Failure on this scale isn’t just bad luck. It isn’t a global trend or taking your eye off the ball.

“No, this is a different order of failure. This happened by design, not accident.

“Policies were formed deliberately to liberalise immigration. Brexit was used for that purpose – to turn Britain into a one nation experiment in open borders.”

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Starmer quizzed over net migration

The ONS’s previous estimate for the year to 2023 was 740,000, which at the time was still a record amount.

The stats show net migration – the difference between people coming to live in and leaving the UK – is down 20% this year from the revised high of 2023, standing at an estimated 728,000.

Tory leader Kemi Badenoch yesterday admitted her party, which made repeated pledges to cut net migration by tens of thousands during their 14 years in office, had got immigration “wrong”.

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Badenoch asked about illegal immigration

But Sir Keir said their failures were “unforgivable” and can’t be separated from the Conservative Party’s “refusal to do the hard yards on skills, on welfare reform, on giving our young people opportunities”.

“Clearly the vast majority of people who entered this country did so to plug gaps in our workforce,” he added.

In his press conference, Sir Keir said Labour would reform the points-based immigration system to require companies that are heavily reliant on foreign workers to also train British people.

This will go alongside a crackdown on abuse of the visa system, including banning employers who flout the rules from hiring overseas staff for two years.

‘Landmark’ deal struck with Iraq

Sir Keir’s speech came as Home Secretary Yvette Cooper announced a “landmark” deal with Iraq, intended to crack down on the people smuggling fuelling illegal immigration.

Iraq is one of the top 10 countries people travelling in small boats come from (3,002 in the year to June). Around £300k of UK government money will be given to the country to help it with border security and law enforcement.

Home Secretary Yvette Cooper and Iraq's Minister of Interior Abdul Amir Al-Shimmari shake hands after signing a Joint Statement on Border Security following a meeting at the Ministry of Interior of Iraq, in Baghdad, during an official three-day visit to Iraq. Picture date: Tuesday November 26, 2024.
Image:
Home Secretary Yvette Cooper and Iraq’s Minister of Interior Abdul Amir Al-Shimmari shake hands after signing a Joint Statement on Border Security. Pic: PA

Home Office data released on Thursday also showed the cost of the UK’s asylum system has risen to £5bn, the highest level of spending on record, and up by more than a third in a year.

On Wednesday, Tory leader Ms Badenoch said there had been a “collective failure of political leaders from all parties over decades” to grasp migration, adding: “On behalf of the Conservative Party, it is right that I as the new leader accept responsibility and say truthfully, we got this wrong.”

Other Conservatives, including former home secretary Suella Braverman, sought to take credit for the numbers coming down in the year to July 2024, which the ONS said was driven mainly by a fall in the number of dependants arriving in the UK on study visas from outside the EU.

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US Fed pulls guidance blocking its banks from engaging with crypto

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US Fed pulls guidance blocking its banks from engaging with crypto

The US Federal Reserve has withdrawn a 2023 guidance that limited how Fed-supervised banks, including uninsured ones, engaged with crypto, as US regulators continue to pivot positively toward digital assets. 

The 2023 guidance required uninsured banks to follow the same rules as federally insured institutions, based on the principle that similar activities pose similar risks and should be subject to identical regulation.

This prevented uninsured banks from engaging in activities that weren’t permitted for national banks, like crypto services, which automatically disqualified Fed membership because the institution’s primary activities weren’t allowed.

Fed says financial system has evolved since 2023

The Fed said a key reason for withdrawing the guidance was that it was outdated and “the financial system and the Board’s understanding of innovative products and services have evolved.”

“As a result, the 2023 policy statement is no longer appropriate and has been withdrawn,” it said. 

Caitlin Long, the CEO of the crypto‑focused Custodia Bank, applauded the move in an X post on Wednesday, explaining the 2023 guidance was why her institution’s application for a master account was previously denied. 

Source: Cailtin Long 

A master account with the Fed enables a financial institution to hold balances directly with the US central bank and access its core payment systems, allowing for payment settlement in central bank money rather than relying on another bank as an intermediary.

Related: Trump’s views on interest rates will hold ‘no weight’ at Fed: Hassett

“The Fed broke the law by citing this very guidance in the Custodia denial, even tho the guidance hadn’t become official yet, that didn’t happen until Feb 2023,” Long said. 

“But most of that team is now gone or out of power at the Fed. Nature is healing. Thank you VCS Bowman & Gov Waller!” she added. 

New guidance to boost bank innovation

The move on Wednesday came as the Federal Reserve issued new guidance to establish a formal pathway for both insured and uninsured Federal Reserve-supervised state member banks to pursue “innovative activities,” such as cryptocurrencies, provided risk-management expectations are met, according to a statement on Wednesday by the Fed.

Source: Federal Reserve 

Fed vice chair for Supervision Michelle Bowman said that by “creating a pathway for responsible, innovative products and services, the Board is helping ensure that the banking sector remains safe and sound while also modern, efficient, and effective.”

Fed decision wasn’t unanimous

Fed Governor Michael Barr dissented to the decision, arguing that the principle of equal treatment among banks helps maintain a level playing field and prevents regulatory arbitrage.

“This principle continues to hold true today. Therefore, I cannot agree to rescind the current policy statement and adopt a new one that would, in effect, encourage regulatory arbitrage, undermine a level playing field, and promote incentives misaligned with maintaining financial stability. I dissent,” he said.

Barr has been accused of being linked to Operation Chokepoint 2.0, a federal effort to debank crypto companies. However, he was also previously an adviser at Ripple and has pushed for responsible stablecoin regulation.

Magazine: Unstablecoins: Depegging, bank runs and other risks loom