‘A total farce’: Labour furious as govt reveals cost of Rwanda asylum policy
Rishi Sunak is facing fresh pressure over his Rwanda policy after it emerged the scheme has already cost £240m, despite never being used.
The government spent a further £100m in the 2023-24 financial year while flights remained grounded amid a series of legal setbacks – on top of the £140m previously paid out.
According to a letter from the Home Office to committee chairs, ministers expect additional costs of £50m in the coming year, which would bring the total to £290m.
Politics – latest: Rwanda vote not about leadership, says Rishi Sunak
It came just hours after Mr Sunak vowed to “finish the job” of reviving his plan to deport some asylum seekers to Kigali – despite the prospect of a bitter parliamentary battle.
On the additional £100m shelled out this year, Downing Street said it was signed off by former home secretary Suella Braverman.
But those close to the sacked cabinet minister insist it was approved by the prime minister and was part of the original plan.
Downing Street has rejected any suggestion the prime minister had misled MPs over the money for Kigali insisting that the original agreement stated the deal “involves subsequent funding”.
A spokeswoman said: “It was always set out that there would be funding attached to what is an economic and migration partnership. And this further funding was part of that.”
Home Office official Matthew Rycroft wrote to Home Affairs Committee chair Dame Diana Johnson, and Public Accounts Committee chair Dame Meg Hillier, on Thursday.
His letter said: “Ministers have agreed that I can disclose now the payments so far in the 2023-24 financial year.
“There has been one payment of £100m, paid in April this year as part of the Economic Transformation and Integration Fund mentioned above.
“The UK government has not paid any more to the government of Rwanda thus far.
“This was entirely separate to the treaty – the government of Rwanda did not ask for any payment in order for a treaty to be signed, nor was any offered.”
Will it be crisis delayed rather than averted for Rishi Sunak?
If there’s one thing to take from the parliamentary Brexit battles of 2019, it’s that if there’s a possibility to kick the can down the road and avoid a damaging Commons defeat, the government of the day will almost always take it.
So it may prove to be next week when the Safety of Rwanda (Asylum and Immigration) Bill faces its first vote by MPs.
Torpedoing legislation at the first possible opportunity is not a usual tactic for rebel backbenchers anyway.
That’s because later stages allow the chance for changes to be put forward and compromises extracted.
The newly appointed legal migration minister signalled on Friday the government is open to discussion.
This potentially pushes the crunch moment back to early next year.
But what could the government offer to get rebels on side?
Many Tory MPs would like the “full fat” option of disregarding the European Convention on Human Rights (ECHR) in totality.
Rishi Sunak has already made it clear that is not on the table as he says it would cause Rwanda to pull out of the deal.
Some have cast doubt on that with one Tory source hostile to the prime minister saying “questions need to be asked about the statement the Rwandans have given on our country’s laws. Was it requested by number 10?”.
Junking the whole of the ECHR would undoubtedly prompt a backlash from other parts of the party though and potentially risk cabinet resignations.
A hardening of the drafting or insertion of more “notwithstanding” clauses seems more feasible.
Another tactic sometimes used in situations like these is to draw up a separate statement or memorandum re-emphasising and cementing parts of the bill that could be referred to in the legislative text.
Whether that goes far enough for MPs remains to be seen and will depend on how dogmatic and philosophical backbenchers want to be.
One final point.
Even if this bill passes the Commons, it will certainly get a rough ride in the Lords – where the Tories have no majority.
Complicating matters further is the proximity of the next election, a tight timetable the Institute for Government says makes it impossible for the prime minister to overrule peers using the Parliament Act.
Crisis delayed rather than crisis averted then and for Mr Sunak, with 2024 looking no easier than 2023.
Labour described the revelation as “incredible” – with shadow home secretary Yvette Cooper saying: “How many more blank cheques will Rishi Sunak write before the Tories come clean about this scheme being a total farce?
“Britain simply can’t afford more of this costly chaos from the Conservatives.”
But defending the growing bill, legal migration minister Tom Pursglove told Sky News: “When you consider that we are unacceptably spending £8m a day in the asylum system at the moment, it is a key part of our strategy to bring those costs down so I think this is the right investment to make that will help us achieve those objectives of saving lives at sea, stopping people drowning in the Channel, as well as getting those costs under control in a way I think taxpayers across the country want to see.”
Read more:
Rishi Sunak facing political fight of his life
He also signalled the government could be open to compromises with rebel Tory MPs to push through emergency legislation, which declares that Rwanda is a safe destination for asylum seekers in a bid to overcome legal obstacles.
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‘My patience has worn thin, right?’
But the bill has divided backbenchers with Conservative hardliners arguing it does not go far enough and pressing for it to effectively override international law, while MPs on the moderate side of the party are said to be “very nervous” about the implications of the proposed law.
Despite the public splits, Mr Pursglove said: “I think there is a unity of purpose among Conservative MPs that action does need to be taken that we do need to deliver on this.
“There will be parliamentary debates, there will be opportunities for people to bring amendments, the house will consider them in the normal way and as ministers we will engage constructively with parliamentarians around any concerns that they have and handle that in the way that we would any other piece of legislation.
“We will engage with colleagues around concerns that they have, but I am pretty clear that this plan is the right plan and we are determined to see it through.
“This is the right approach to move this issue forward.”
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New Rwanda bill: What now?
He added: “I do think parliamentarians across the House should come together to back this.
“If you really want to stop the small boat crossings, this is such a critical part of the plan I think all MPs should be getting in behind it.”
Mr Sunak has insisted his new law would end the “merry-go-round of legal challenges”.
MPs will get their first chance to debate and vote on the Safety of Rwanda (Asylum and Immigration) Bill on Tuesday.
The prime minister dismissed suggestions he will make it a confidence vote, meaning that MPs would have the whip withdrawn if they defied him.
Under the government’s plan first unveiled in April 2022, people who arrive in the UK by irregular means – such as on small boats – could be sent on a one-way trip to Rwanda, where the Kigali government would decide on their refugee status.
Panama’s capital city will accept cryptocurrency payments for taxes and municipal fees, including bus tickets and permits, Panama City mayor Mayer Mizrachi announced on April 15, joining a growing list of jurisdictions globally that have voted to accept such payments.
Panama City will begin accepting Bitcoin (BTC), Ether (ETH), Circle’s USDC (USDC), and Tether’s USDt (USDT) stablecoin for payment once the crypto-to-fiat payment rails are established, Mizrachi posted on the X platform.
Mizrachi said previous administrations attempted to push through similar legislation but failed to overcome stipulations requiring the local government to accept funds denominated in US dollars.
In a translated statement, the Panama City mayor said that the local government partnered with a bank that will immediately convert any digital assets received into US dollars, allowing the municipality to accept crypto without introducing new legislation.
Panama City joins a growing list of global jurisdictions on the municipal and state level accepting cryptocurrency payments for taxes, exploring Bitcoin strategic reserves to protect public treasuries from inflation and passing pro-crypto policies to attract investment.
Related: New York bill proposes legalizing Bitcoin, crypto for state payments
Municipalities and states embrace digital assets
Several municipalities and territories around the globe already accept crypto for tax payments or are exploring various implementations of blockchain technology for government spending.
The US state of Colorado started accepting crypto payments for taxes in September 2022. Much like Panama City said it will do, Colorado immediately converts the crypto to fiat.
In December 2023, the city of Lugano, Switzerland, announced taxes and city fees could be paid in Bitcoin, which was one of the developments that earned it the reputation of being a globally recognized Bitcoin city.
The city council of Vancouver, Canada, passed a motion to become “Bitcoin-friendly city” in December 2024. As part of that motion, the Vancouver local government will explore integrating BTC into the financial system, including tax payments.
North Carolina lawmaker Neal Jackson introduced legislation titled “The North Carolina Digital Asset Freedom Act” on April 10. If passed, the bill will recognize cryptocurrencies as an official form of payment that can be used to pay taxes.
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As digital assets gain mainstream adoption, establishing a legal framework for stablecoins is a “good idea,” said US Federal Reserve Chair Jerome Powell.
In an April 16 panel at the Economic Club of Chicago, Powell commented on the evolution of the cryptocurrency industry, which has delivered a consumer use case that “could have wide appeal” following a difficult “wave of failures and frauds,” he said.
Powell delivers remarks at the Economic Club of Chicago. Source: Bloomberg Television
During crypto’s difficult years, which culminated in 2022 and 2023 with several high-profile business failures, the Fed “worked with Congress to try to get a […] legal framework for stablecoins, which would have been a nice place to start,” said Powell. “We were not successful.”
“I think that the climate is changing and you’re moving into more mainstreaming of that whole sector, so Congress is again looking […] at a legal framework for stablecoins,” he said.
“Depending on what’s in it, that’s a good idea. We need that. There isn’t one now,” said Powell.
This isn’t the first time Powell acknowledged the need for stablecoin legislation. In June 2023, the Fed boss told the House Financial Services Committee that stablecoins were “a form of money” that requires “robust” federal oversight.
Related: Stablecoins are the best way to ensure US dollar dominance — Web3 CEO
Support for stablecoin legislation is growing
The election of US President Donald Trump has ushered in a new era of pro-crypto appointments and policy shifts that could make America a digital asset superpower.
Washington’s formal embrace of cryptocurrency began earlier this year when Trump established the President’s Council of Advisers on Digital Assets, with Bo Hines as the executive director.
Hines told a digital asset summit in New York last month that a comprehensive stablecoin bill was a top priority for the current administration. After the Senate Banking Committee passed the GENIUS Act, a final stablecoin bill could arrive at the president’s desk “in the next two months,” said Hines.
Bo Hines (right) speaks of “imminent” stablecoin legislation at the Digital Asset Summit on March 18. Source: Cointelegraph
Stablecoins pegged to the US dollar are by far the most popular tokens used for remittances and cryptocurrency trading.
The combined value of all stablecoins is currently $227 billion, according to RWA.xyz. The dollar-pegged USDC (USDC) and USDt (USDT) account for more than 88% of the total market.
Magazine: Unstablecoins: Depegging, bank runs and other risks loom
An appellate court has granted a joint request from Ripple Labs and the Securities and Exchange Commission (SEC) to pause an appeal in a 2020 SEC case against Ripple amid settlement negotiations.
In an April 16 filing in the US Court of Appeals for the Second Circuit, the court approved a joint SEC-Ripple motion to hold the appeal in abeyance — temporarily pausing the case — for 60 days. As part of the order, the SEC is expected to file a status report by June 15.
The SEC’s case against Ripple and its executives, filed in December 2020, was expected to begin winding down after Ripple CEO Brad Garlinghouse announced on March 19 that the commission would be dropping its appeal against the blockchain firm. A federal court found Ripple liable for $125 million in an August ruling, resulting in both the SEC and blockchain firm filing an appeal and cross-appeal, respectively.
However, once US President Donald Trump took office and leadership of the SEC moved from former chair Gary Gensler to acting chair Mark Uyeda, the commission began dropping multiple enforcement cases against crypto firms in a seeming political shift. Ripple pledged $5 million in XRP to Trump’s inauguration fund, and Garlinghouse and chief legal officer Stuart Alderoty attended events supporting the US president.
Related: SEC dropping Ripple case is ‘final exclamation mark’ that XRP is not a security — John Deaton
Despite support for the end of the case coming from both Ripple and the SEC, the August 2024 judgment and appellate cases leave some legal entanglements. Alderoty said in March that Ripple would drop its cross-appeal with the SEC and receive a roughly $75 million refund from the lower court judgment. It’s unclear what else may result from negotiations over a settlement in appellate court.
New leadership at SEC incoming
Acting chair Uyeda is expected to step down following the US Senate confirming Paul Atkins as SEC chair on April 9.
During his confirmation hearings, lawmakers questioned Atkins about his ties to crypto, which could create conflicts of interest in his role regulating the industry. In financial disclosures, Atkins stated he had millions of dollars in assets through stakes in crypto firms, including Securitize, Pontoro and Patomak.
Magazine: SEC’s U-turn on crypto leaves key questions unanswered
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