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The government’s Rwanda plan, devised to tackle illegal migration, has been dismissed by the Supreme Court, ending over 18 months of legal battles in the UK.

Lord Reed announced the “unanimous” judgment from the court’s justices on Wednesday, saying those sent to the country would be at “real risk” of being returned home, whether their grounds to claim asylum were justified or not – breaching international law.

Politics live: PM ‘prepared to change law’ – and will hold news conference today

While charities celebrated the decision as “a victory for humanity”, Rishi Sunak said the judgment was “not the outcome we wanted”.

But he appeared to double down on the policy, telling the Commons he was “prepared to change laws and revisit… international relationships” if they were “frustrating” his plans.

The new Home Secretary James Cleverly announced the government planned to change its agreement with Rwanda into a treaty, with extra clauses to stop asylum seekers from being returned home, in the hope of settling the court’s concerns.

However, shadow home secretary Yvette Cooper accused the government of “more of the magical thinking”.

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Mr Sunak will hold a press conference at 4.45pm where he is sure to face questions on both the ruling and his future plans, as well as brewing anger on his backbenches over the impact of international human rights laws on his policies.

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Rishi Sunak says he is prepared to ‘change laws’ and the government will do ‘whatever it takes’ to stop the boats.

The Rwanda scheme, which would see those arriving in the UK illegally – including via small boats – deported to the east African nation, was first put forward by Boris Johnson in April 2022.

Successive prime ministers all claimed the policy would act as a deterrent to those seeking to cross the Channel, as well as help to break up people-smuggling gangs.

But critics consistently called the proposal “inhumane”, and the plan was dubbed a “gimmick” by political opponents.

An injunction from the European Court of Human Rights stopped the first flight to Rwanda from taking off in June last year and the scheme has been embroiled in litigation ever since, meaning no asylum seekers have yet been deported to the country.

Explainer: Everything you need to know about the Rwanda plan

Delivering the Supreme Court’s ruling on Wednesday, Lord Reed said there were “serious and systematic defects in Rwanda’s procedures and institutions for processing asylum claims”, including a “lack of legal representation” and risks that judges and lawyers “will not act independently of the government”.

The justice also said there was a “surprisingly high rate of rejection of asylum claims from certain countries in known conflict zones”, including Syria and Yemen, which many people coming to the UK may originate from.

He pointed to an “apparent inadequacy of the Rwandan government’s understanding of the requirements of the Refugee Convention”, specifically that under the United Nations agreement, asylum seekers had to be protected from “refoulement” – being sent back to their country of origin – and there was evidence the country had failed to comply with this when it signed a similar deal with Israel.

And while he accepted the deal had been “entered into… in good faith”, the evidence showed “there is a real risk that asylum claims will not be determined properly, and that asylum seekers will therefore be at risk of being returned directly or indirectly to their country of origin”.

Lord Reed said changes to eliminate that risk “may be delivered in the future”, and he underlined that the Supreme Court’s decision was a “legal question” based on international law – including the European Convention on Human Rights and various UN treaties – with the court “not concerned with the political debate” about the scheme.

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After the ruling, Mr Sunak pointed to what he saw as the positives – namely that the court “confirmed that the principle of sending illegal migrants to a safe third country for processing is lawful”.

Speaking at Prime Minister’s Questions, he sought to reassure his own MPs that he remained committed to the Rwanda plan, telling them: “The government has already been working in advance on a new treaty with Rwanda which we will finalise in light of today’s judgment to address the challenges that were raised.

“But let me say this again, if it becomes clear that our domestic legal frameworks or international conventions are still frustrating plans at that point, I am prepared to change laws and revisit those international relationships.

“The British people expect us to do whatever it takes to stop the boats and that is precisely what this government will deliver.

But Labour leader Sir Keir Starmer pointed to the prime minister’s pledge in January that he would “stop the boats” by the end of the year, adding: “He has wasted all of his time on a gimmick and now he is absolutely nowhere.

“[He needs to] level with the British public and finally admit he’s failed to deliver on his promise.”

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Rwanda ruling ‘massive blow’ to PM

The ruling is now likely to reignite a row in the Conservatives over the UK’s future as a signatory of international human rights agreements – something the now ex-home secretary Suella Braverman has railed against.

MPs on the right of the party have been calling on the UK to exit or attempt to work around the European Human Rights Convention (EHRC), arguing the final say on government policy should be made in the British parliament rather than abroad.

One faction, called the New Conservatives, have been meeting this morning to discuss their next steps, and the party’s deputy chairman, Lee Anderson, said ministers should “ignore the law” and start sending asylum seekers to Rwanda anyway.

In her blistering letter to Mr Sunak after she was sacked earlier this week, Ms Braverman pre-emptively pinned the blame on the prime minister for the immigration policy she was charged with implementing falling in the courts, accusing him of not having a “plan B” to push forward.

Tweeting after the ruling, the former minister called for “emergency legislation” to “block” legal challenges, saying it would “give parliament a clear choice – control illegal migration or explain to the British people why they should accept ever greater numbers of illegal arrivals settling here”.

However, many in the party believe it is right to remain part of the agreements that protect human rights, standing alongside international allies.

Meanwhile, refugee charities celebrated the ruling, with the CEO of the Refugee Council, Enver Solomon, calling it “a victory for the rights of men, women and children who simply want to be safe”.

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‘Ruling is reminder no one is above the law’

The chief executive of ActionAid UK also said the court’s decision came as a “huge sigh of relief”, as well as a vindication of “British values of compassion and dignity”.

And CEO of charity Choose Love, Josie Naughton, added: “Today’s decision is a moment of moral accountability.

“It shows the government cannot shirk its international obligations. Britain has a duty and legal responsibility to offer protection to refugees.”

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US CLARITY bill could allow Tesla and Meta to evade SEC rules — Senator Warren

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US CLARITY bill could allow Tesla and Meta to evade SEC rules — Senator Warren

US CLARITY bill could allow Tesla and Meta to evade SEC rules — Senator Warren

The legislation to establish crypto market structure is one of three bills the US House of Representatives is expected to consider starting next week.

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What is a wealth tax, how would it work in the UK and where else has one?

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What is a wealth tax, how would it work in the UK and where else has one?

The idea of a wealth tax has raised its head – yet again – as the government attempts to balance its books.

Downing Street refused to rule out a wealth tax after former Labour leader Lord Kinnock told Sky News he thinks the government should introduce one.

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Lord Kinnock calls for ‘wealth tax’

Sir Keir Starmer’s spokesman said: “The prime minister has repeatedly said those with the broadest shoulders should carry the largest burden.”

While there has never been a wealth tax in the UK, the notion was raised under Rishi Sunak after the COVID years – and rejected – and both Harold Wilson’s and James Callaghan’s Labour governments in the 1970s seriously considered implementing one.

Sky News looks at what a wealth tax is, how it could work in the UK, and which countries already have one.

Chancellor Rachel Reeves and Prime Minister Sir Keir Starmer at the launch of the 10-year health plan in east London. Pic: PA
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Will Chancellor Rachel Reeves and Prime Minister Sir Keir Starmer impose a wealth tax? Pic: PA

What is a wealth tax?

A wealth tax is aimed at reducing economic inequality to redistribute wealth and to raise revenue.

It is a direct levy on all, or most of, an individual’s, household’s or business’s total net wealth, rather than their income.

The tax typically includes the total market value of assets, including savings, investments, property and other forms of wealth – minus a person’s debts.

Unlike capital gains tax, which is paid when an asset is sold at a profit, a wealth tax is normally an annual charge based on the value of assets owned, even if they are not sold.

A one-off wealth tax, often used after major crises, could also be an option to raise a substantial amount of revenue in one go.

Read more:
No wealth tax under a Labour govt, Rachel Reeves said in 2023

UN criticises Starmer’s welfare reforms and warns measures will ‘increase poverty rates’

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Wealth tax would be a ‘mistake’

How could it work in the UK?

Advocates of a UK wealth tax, including Lord Kinnock, have proposed an annual 2% tax on wealth above £10m.

Wealth tax campaign group Tax Justice UK has calculated this would affect about 20,000 people – fewer than 0.04% of the population – and raise £24bn a year.

Because of how few people would pay it, Tax Justice says that would make it easy for HMRC to collect the tax.

The group proposes people self-declare asset values, backed up by a compliance team at HMRC who could have a register of assets.

Which countries have or have had a wealth tax?

In 1990, 12 OECD (Organisation for Economic Co-operation and Development) countries had a net wealth tax, but just four have one now: Colombia, Norway, Spain and Switzerland.

France and Italy levy wealth taxes on selected assets.

Colombia

Since 2023, residents in the South American country are subject to tax on their worldwide wealth, but can exclude the value of their household up to 509m pesos (£92,500).

The tax is progressive, ranging from a 0.5% rate to 1.5% for the most wealthy until next year, then 1% for the wealthiest from 2027.

Bogota in Colombia, which has a wealth tax
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Bogota in Colombia, which has a wealth tax

Norway

There is a 0.525% municipal wealth tax for individuals with net wealth exceeding 1.7m kroner (about £125,000) or 3.52m kroner (£256,000) for spouses.

Norway also has a state wealth tax of 0.475% based on assets exceeding a net capital tax basis of 1.7m kroner (£125,000) or 3.52m kroner (£256,000) for spouses, and 0.575% for net wealth in excess of 20.7m kroner (£1.5m).

Norway has both a municipal and state wealth tax. Pic: Reuters
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Norway has both a municipal and state wealth tax. Pic: Reuters

The maximum combined wealth tax rate is 1.1%.

The Norwegian Labour coalition government also increased dividend tax to 20% in 2023, and with the wealth tax, it prompted about 80 affluent business owners, with an estimated net worth of £40bn, to leave Norway.

Spain

Residents in Spain have to pay a progressive wealth tax on worldwide assets, with a €700,000 (£600,000) tax free allowance per person in most areas and homes up to €300,000 (£250,000) tax exempt.

Madrid in Spain. More than 12,000 multimillionaires have left the country since a wealth tax was increased in 2022. Pic: Reuters
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Madrid in Spain. More than 12,000 multimillionaires have left the country since a wealth tax was increased in 2022. Pic: Reuters

The progressive rate goes from 0.2% for taxable income for assets of €167,129 (£144,000) up to 3.5% for taxable income of €10.6m (£9.146m) and above.

It has been reported that more than 12,000 multimillionaires have left Spain since the government introduced the higher levy at the end of 2022.

Switzerland

All of the country’s cantons (districts) have a net wealth tax based on a person’s taxable net worth – different to total net worth.

Zurich is Switzerland's wealthiest city, and has its own wealth tax, as do other Swiss cantons. Pic: Reuters
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Zurich is Switzerland’s wealthiest city, and has its own wealth tax, as do other Swiss cantons. Pic: Reuters

It takes into account the balance of an individual’s worldwide gross assets, including bank account balances, bonds, shares, life insurances, cars, boats, properties, paintings, jewellery – minus debts.

Switzerland also works on a progressive rate, ranging from 0.3% to 0.5%, with a relatively low starting point at which people are taxed on their wealth, such as 50,000 CHF (£46,200) in several cantons.

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Jingye and Whitehall officials hold talks over British Steel future

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Jingye and Whitehall officials hold talks over British Steel future

The Chinese owner of British Steel has held fresh talks with government officials in a bid to break the impasse over ministers’ determination not to compensate it for seizing control of the company.

Sky News has learnt that executives from Jingye Group met senior civil servants from the Department for Business and Trade (DBT) late last week to discuss ways to resolve the standoff.

Whitehall sources said the talks had been cordial, but that no meaningful progress had been made towards a resolution.

Money blog: €1 home goes on sale – but there are T&Cs

Jingye wants the government to agree to pay it hundreds of millions of pounds for taking control of British Steel in April – a move triggered by the Chinese group’s preparations for the permanent closure of its blast furnaces in Scunthorpe.

Such a move would have cost thousands of jobs and ended Britain’s centuries-old ability to produce virgin steel.

Jingye had been in talks for months to seek £1bn in state aid to facilitate the Scunthorpe plant’s transition to greener steelmaking, but was offered just half that sum by ministers.

More on British Steel

British Steel has not yet been formally nationalised, although that remains a probable outcome.

Jonathan Reynolds, the business secretary, has previously dismissed the idea of compensating Jingye, saying British Steel’s equity was essentially worthless.

Last month, he met his Chinese counterpart, where the issue of British Steel was discussed between the two governments in person for the first time.

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Inside the UK’s last blast furnaces

Jingye has hired the leading City law firm Linklaters to explore the recovery of hundreds of millions of pounds it invested in the Scunthorpe-based company before the government seized control of it.

News of last week’s meeting comes as British steelmakers face an anxious wait to learn whether their exports to the US face swingeing tariffs as part of US President Donald Trump’s trade war.

Sky News’s economics and data editor, Ed Conway, revealed this week that the UK would miss a White House-imposed deadline to agree a trade deal on steel and aluminium this week.

Read more from Sky News:
Is Britain going bankrupt?
Public finances in ‘relatively vulnerable position’, OBR warns

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Jingye declined to comment, while a spokesman for the Department for Business and Trade said: “We acted quickly to ensure the continued operations of the blast furnaces but recognise that securing British Steel’s long-term future requires private sector investment.

“We have not nationalised British Steel and are working closely with Jingye on options for the future, and we will continue work on determining the best long-term sustainable future for the site.”

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