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Rachel Reeves has defended her decision not to restore a cap on bankers’ bonuses, arguing businesses do not need “more chopping and changing”.

The shadow chancellor said that when the government scrapped the cap under Liz Truss, Labour did not “feel that was the right priority in that budget”.

But she said much stronger rules were now in place since the 2008 financial crash, when the cap was first introduced, and that it was no longer her priority to restore it.

“What I hear loud and clear from business is that what it will take to get them to invest in Britain is stability and the last thing they need is more chopping and changing,” she said.

“The chopping and changing has got to end if we’re going to give stability to business and that’s why we will not be bringing that back.”

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Shadow chancellor Rachel Reeves addressing 400 business leaders at the Kia Oval.
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Shadow chancellor Rachel Reeves addressing 400 business leaders at the Kia Oval on 1 February 2024. Pic: PA

Addressing Labour’s business conference in central London this morning, Ms Reeves also announced she would not increase the headline rate of corporation tax of 25% during the first term of a Labour government but left the door open to changes in the rate in the future.

She said: “There have been 26 changes to our corporation tax arrangements in this parliament alone. We can’t go on like this.

“The next Labour government will make the pro-business choice and the pro-growth choice: We will cap the headline rate of corporation tax at its current rate of 25% for the next parliament.

“And should our competitiveness come under threat, if necessary we will act.”

Ms Reeves also said Labour would maintain full expensing and the annual investment allowance and would provide a “road map” for business taxation within the first six months of government.

Ms Reeves has sought to portray herself as pro-business during her time as shadow chancellor, in contrast to her predecessor John McDonnell, who led Labour’s economic policy when Jeremy Corbyn was the leader of the Opposition.

Will Labour stick to £28bn a year green pledge?

However, the shadow chancellor is facing scrutiny over Labour’s pledge to spend £28bn a year on green projects until 2030 if the party comes into power.

In a Q&A following her speech, Ms Reeves failed to commit to the policy, which some in Labour want Sir Keir Starmer to drop because it allows the Conservatives to cast doubt on the party’s commitment to fiscal discipline.

Asked by Sky News’s political editor Beth Rigby whether the pledge had become “an albatross around your neck” that “threatens to unravel all the hard work you’ve done to be trusted with economic competence”, Ms Reeves said there were “big opportunities to invest alongside business in the jobs and the industries of the future”.

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Will Labour spend £28bn?

But she said it was “absolutely essential that all of our policies are consistent with our fiscal rules” and that the green prosperity plan “was no exception to that”.

The shadow chancellor said that after the next budget, the party will “set out our plans and ensure they are consistent with our fiscal rules because they will always take precedence to guarantee the economic security of family finances and of businesses as well”.

Labour leader Sir Keir Starmer and shadow chancellor Rachel Reeves during a visit to the London Stock Exchange Group, to outline Labour's plans to bring growth and stability back to Britain's economy. Picture date: Friday September 22, 2023.
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Sir Keir Starmer and Rachel Reeves during a visit to the London Stock Exchange Group last year. Pic: PA

Tories attack Labour over bonus cap change

The cap on bankers’ bonuses was first introduced in the wake of the 2008 financial crisis to limit annual payouts to twice a banker’s salary, but it was scrapped by former chancellor Kwasi Kwarteng during Ms Truss’s short time as prime minister.

During Prime Minister’s Questions this week, Rishi Sunak seized on the issue to argue that voters “cannot trust a word he [Sir Keir Starmer] says”.

“I was genuinely surprised that, after recently and repeatedly attacking not just me but the government for lifting the bonus cap, the shadow chancellor has announced, just today, that she now supports the government’s policy on the bankers’ bonus cap.”

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Labour reports to underpin new ‘party of business’ stance

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Sunak: ‘It’s the same old Labour party’

Ms Reeves and other senior Labour figures had been vocal critics of the government’s decision to axe the cap during a cost of living crisis, saying only three months ago that the decision to allow unlimited bonuses to be earned again “tells you everything you need to know about this government”.

The issue has caused some division within Labour, with Anas Sarwar, the party’s leader in Scotland, previously criticising Ms Truss as a “Thatcher tribute act” who would rather “boost bankers’ bonuses than help those in need”.

He told reporters in Westminster today that he stood by his previous words but added: “You have got to look at it in the balance. We have got to inspire confidence for them to make the strategic investments, but we can’t return to a situation where they get away with it.

“I’m not here to defend bankers’ bonuses, I’m not here to defend banks. That is something the UK Treasury has got to keep an eye on.”

Stephen Flynn, the SNP’s leader in Westminster and Labour’s main opponent in Scotland, sarcastically praised Mr Sunak for convincing the Labour Party to agree to a “bleak future”, saying it was a “great achievement” for the government.

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TON’s UAE ‘golden visa’ mishap shows why legal reviews matter

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TON’s UAE ‘golden visa’ mishap shows why legal reviews matter

TON’s UAE ‘golden visa’ mishap shows why legal reviews matter

The TON Foundation could have avoided its golden visa controversy in the UAE with a brief legal review, a local lawyer told Cointelegraph.

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Norman Tebbit: Former Tory minister who served in Margaret Thatcher’s government dies aged 94

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Norman Tebbit: Former Tory minister who served in Margaret Thatcher's government dies aged 94

Norman Tebbit, the former Tory minister who served in Margaret Thatcher’s government, has died at the age of 94.

Lord Tebbit died “peacefully at home” late on Monday night, his son William confirmed.

One of Mrs Thatcher’s most loyal cabinet ministers, he was a leading political voice throughout the turbulent 1980s.

He held the posts of employment secretary, trade secretary, Chancellor of the Duchy of Lancaster and Conservative party chairman before resigning as an MP in 1992 after his wife was left disabled by the Provisional IRA’s bombing of the Grand Hotel in Brighton.

He considered standing for the Conservative leadership after Mrs Thatcher’s resignation in 1990, but was committed to taking care of his wife.

Prime Minister Margaret Thatcher and party chairman Norman Tebbit.
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Margaret Thatcher and Norman Tebbit in 1987 after her election victory. Pic: PA

Tory leader Kemi Badenoch called him an “icon” in British politics and was “one of the leading exponents of the philosophy we now know as Thatcherism”.

“But to many of us it was the stoicism and courage he showed in the face of terrorism, which inspired us as he rebuilt his political career after suffering terrible injuries in the Brighton bomb, and cared selflessly for his wife Margaret, who was gravely disabled in the bombing,” she wrote on X.

“He never buckled under pressure and he never compromised. Our nation has lost one of its very best today and I speak for all the Conservative family and beyond in recognising Lord Tebbit’s enormous intellect and profound sense of duty to his country.

“May he rest in peace.”

Lord Tebbit and his wife Margaret stand outside the Grand Hotel in Brighton.
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Lord Tebbit and his wife Margaret stand outside the Grand Hotel in Brighton. Pic: PA

Tory grandee David Davis told Sky News Lord Tebbit was a “great working class Tory, always ready to challenge establishment conventional wisdom for the bogus nonsense it often was”.

“He was one of Thatcher’s bravest and strongest lieutenants, and a great friend,” Sir David said.

“He had to deal with the agony that the IRA visited on him and his wife, and he did so with characteristic unflinching courage. He was a great man.”

Reform leader Nigel Farage said Lord Tebbit “gave me a lot of help in my early days as an MEP”.

He was “a great man. RIP,” he added.

Prime Minister Margaret Thatcher with Employment Secretary Norman Tebbit.
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Lord Tebbit as employment secretary in 1983 with Mrs Thatcher. Pic: PA

Born to working-class parents in north London, he was made a life peer in 1992, where he sat until he retired in 2022.

Lord Tebbit was trade secretary when he was injured in the Provisional IRA’s bombing in Brighton during the Conservative Party conference in 1984.

Five people died in the attack and Lord Tebbit’s wife, Margaret, was left paralysed from the neck down. She died in 2020 at the age of 86.

Before entering politics, his first job, aged 16, was at the Financial Times where he had his first experience of trade unions and vowed to “break the power of the closed shop”.

He then trained as a pilot with the RAF – at one point narrowly escaping from the burning cockpit of a Meteor 8 jet – before becoming the MP for Epping in 1970 then for Chingford in 1974.

Norman Tebbit during the debate on the second reading of the European Communities (Amendment) Bill, in the House of Lords.
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Lord Tebbit during an EU debate in the House of Lords in 1997. Pic: PA

As a cabinet minister, he was responsible for legislation that weakened the powers of the trade unions and the closed shop, making him the political embodiment of the Thatcherite ideology that was in full swing.

His tough approach was put to the test when riots erupted in Brixton, south London, against the backdrop of high rates of unemployment and mistrust between the black community and the police.

He was frequently misquoted as having told the unemployed to “get on your bike”, and was often referred to as “Onyerbike” for some time afterwards.

What he actually said was he grew up in the ’30s with an unemployed father who did not riot, “he got on his bike and looked for work, and he kept looking till he found it”.

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‘Oui’ or ‘non’ for Starmer’s migration deal?

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'Oui' or 'non' for Starmer's migration deal?

👉Listen to Politics at Sam and Anne’s on your podcast app👈       

The first European state visit since Brexit starts today as President Emmanuel Macron arrives at Windsor Castle.

On this episode, Sky News’ Sam Coates and Politico’s Anne McElvoy look at what’s on the agenda beyond the pomp and ceremony. Will the government get its “one in, one out” migration deal over the line?

Plus, which one of our presenters needs to make a confession about the 2008 French state visit?

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