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Labour is the “party of change”, leader Sir Keir Starmer declared, after its victory in the by-election in Scotland.

Michael Shanks’s win in Rutherglen and Hamilton West returned the seat to Labour after it was won by the SNP in 2019.

Speaking after the win this morning, Sir Keir said: “We’ve changed. And because we’ve changed we are now the party of change here in Scotland. We’re the party of change in Britain, we’re the party of change right across the whole country.”

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Speaking to the press afterwards, the Labour leader said: “I don’t think anybody will look back at this and think it’s anything other than a historic day for Labour in Scotland.”

He added to a rally: “They said that we couldn’t change the Labour Party and we did it.

“They said that we couldn’t win in the south of England and the north of England, and we did it. They said ‘you’ll never beat the SNP in Scotland’ and Rutherglen, you did it.

“When I left here a week ago with the team, I said ‘you’ve got to win it’. You blew the doors off!”

Mr Shanks replaces the former SNP MP Margaret Ferrier, who was ousted from her seat in August following a successful recall petition for breaching COVID restrictions during lockdown in 2020.

Created in 2005, the seat was held from then until 2015 by Labour, before going to the SNP. It was won back by Labour in 2017 before flipping back to the SNP in 2019.

It is the first Westminster by-election loss for the SNP, with a 20.4-point swing.

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As Sky election analyst professor Michael Thrasher points out, it was “much worse than had been expected from recent Scottish-wide polling, which suggested a swing of half this size”.

He also notes that “history shows that Labour needs a strong presence in Scotland to help drive electoral success”.

But turnout was low, with just 30,531 votes cast from an electorate of 82,104 – meaning just 37.19% of those eligible took part in the election.

This compares to the 53,794 – 66.48% – who cast ballots in the 2019 general election.

Labour secured 17,845 votes, compared to the 8,399 won by the SNP.

Stephen Flynn, the SNP’s leader in Westminster, said his party cannot carry on with “business as usual” following the election loss.

“It has obviously been a very tough night for the Scottish National Party,” he told the BBC.

“We’ve had long-standing challenges in relation to Margaret Ferrier and her conduct in terms of breaking coronavirus rules, we’ve obviously had a lot of internal differences over recent months.

“It is important for us now to reflect on the scale of the defeat that we have had, to look internally at what’s gone wrong and to see what we can do better in future to ensure that we win this seat back in the general election next year.

“We have lost by a significant margin, we know that our vote has not turned out, and we know that we need to remotivate people to vote for the Scottish National Party.

“Ultimately, the Scottish National Party has unfinished business … and I want to get on and ensure that we are an independent nation before too long.

“The party needs to recognise it can’t just be business as usual. I don’t think anybody is going to say it should just be business as usual.”

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Reeves urged to reject ‘path of least resistance’ at budget

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Reeves urged to reject 'path of least resistance' at budget

Chancellor Rachel Reeves has been urged to “reject the path of least resistance” and consider increasing taxes in the budget.

The Institute for Government (IfG), a leading think tank, said Labour’s “rash” and “unrealistic” approach to tax has left the chancellor reaching for “piecemeal changes”.

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The government has repeatedly said it will not increase VAT rates, income tax or national insurance at the budget in November.

But a report by the think tank calls on Ms Reeves to commit to serious tax reform, instead of reaching for an “eclectic grab bag of tax raisers”, which could further complicate the system.

It comes after the Resolution Foundation proposed a 2p cut in national insurance, matched by a 2p rise in income tax, to create a “level playing field” and protect workers’ pay.

Tory shadow work and pensions secretary Helen Whately said Ms Reeves was “preparing even more tax rises, set to hit families already struggling and choke off jobs at the very moment we need them most”.

She added: “Every Labour government ends the same way, with more people out of work, higher taxes and a bigger black hole in the public finances.”

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Ms Whately’s remarks came as the government announced a £25m funding boost for the expansion of youth hubs.

The Premier League has joined forces with Labour to support the expansion, with top football clubs signing up to help get more young people into work.

Work and Pensions Secretary Pat McFadden will be speaking to Sky News Breakfast about the plans this morning.

Scrapping two-child benefit limit would reduce child poverty, report suggests

Meanwhile, a report has suggested scrapping the controversial two-child benefit limit would reduce child poverty, but not necessarily help with a youngster’s early development and their readiness for school.

The Institute for Fiscal Studies (IFS) concluded the policy has “no statistically significant impact” on the proportion of children in England achieving what is known as a “good level of development” by age five.

The two-child limit, which was announced by the Conservatives in 2015 and came into effect in 2017, limits child tax credit and universal credit to the first two children in most households.

The government is expected to publish a strategy to tackle child poverty this autumn and has been under pressure to scrap the policy, which charities and organisations working in the sector estimate pulls more than 100 children a day into poverty.

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Crypto policy shift to bring cycle-breaking wave of investors: Novogratz

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Crypto policy shift to bring cycle-breaking wave of investors: Novogratz

Crypto policy shift to bring cycle-breaking wave of investors: Novogratz

Galaxy Digital’s Mike Novogratz says US crypto legislation will unleash new market participation, which could break the traditional four-year cycle.

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CFTC initiative to allow stablecoins as collateral in derivatives markets

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CFTC initiative to allow stablecoins as collateral in derivatives markets

CFTC initiative to allow stablecoins as collateral in derivatives markets

US Commodity Futures Trading Commission acting chair Caroline Pham said her agency is looking to allow derivatives traders to post stablecoins and tokenized assets as collateral.

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