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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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Rachel Reeves urged to cut national insurance and hike income tax in upcoming budget

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Rachel Reeves urged to cut national insurance and hike income tax in upcoming budget

Rachel Reeves has been urged by a think tank to cut national insurance and increase income tax to create a “level playing field” and protect workers’ pay.

The Resolution Foundation said the chancellor should send a “decisive signal” that she will make “tough decisions” on tax.

Ms Reeves is expected to outline significant tax rises in the upcoming budget in November.

The Resolution Foundation has suggested these changes should include a 2p cut to national insurance as well as a 2p rise in income tax, which Adam Corlett, its principal economist, said “should form part of wider efforts to level the playing field on tax”.

The think tank, which used to be headed by Torsten Bell, a Labour MP who is now a key aide to Ms Reeves and a pensions minister, said the move would help to address “unfairness” in the tax system.

As more people pay income tax than national insurance, including pensioners and landlords, the think tank estimates the switch would go some way in raising the £20bn in tax it thinks would be needed by 2029/2030 to offset increased borrowing costs, flat growth and new spending commitments. Other estimates go as high as £51bn.

Torsten Bell appearing on Sky News
Image:
Torsten Bell appearing on Sky News

‘Significant tax rises needed’

Another proposal by the think tank would see a gradual lowering of the threshold at which businesses pay VAT from £90,000 to £30,000, as this would help “promote fair competition” and raise £2bn by the end of the decade.

The Resolution Foundation also recommends increasing the tax on dividends, addressing a “worrying” growth in unpaid corporation tax from small businesses, applying a carbon charge to long-haul flights and shipping, and expanding taxation of sugar and salt.

“Policy U-turns, higher borrowing costs and lower productivity growth mean that the chancellor will need to act to avoid borrowing costs rising even further this autumn,” Mr Corlett said.

“Significant tax rises will be needed for the chancellor to send a clear signal that the UK’s public finances are under control.”

He added that while any tax rises are “likely to be painful”, Ms Reeves should do “all she can to avoid loading further pain onto workers’ pay packets”.

The government has repeatedly insisted it will keep its manifesto promise not to raise income tax, national insurance or VAT.

A Treasury spokesperson said in response to the think tank report it does “not comment on speculation around future changes to tax policy”.

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Chancellor urged to freeze alcohol duty

Meanwhile, Ms Reeves has been urged to freeze alcohol duty in the upcoming budget and not increase the rate of excise tax on alcohol until the end of the current parliament.

The Scotch Whisky Association (SWA), UK Spirits Alliance, Welsh Whisky Association, English Whisky Guild and Drinks Ireland said in an open letter that the current regime was “unfair” and has put a “strain” on members who are “struggling”.

The bodies are also urging Ms Reeves “to ensure there will be no further widening of the tax differential between spirits and other alcohol categories”.

A Treasury spokesperson said there will be no export duty, lower licensing fees, reduced tariffs, and a cap on corporation tax to make it easier for British distilleries to thrive.

Leave retailers alone, Reeves told

This comes as the British Retail Consortium (BRC) warned that food inflation will rise and remain above 5% into next year if the retail industry is hit by further tax rises in the November budget.

The BRC voiced concerns that around 4,000 large shops could experience a rise in their business rates if they are included in the government’s new surtax for properties with a rateable value – an estimation of how much it would cost to rent a property for a year – over £500,000, and this could lead to price rises for consumers.

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Latest ONS figures put food inflation at 4.9%, the highest level since 2022/2023.

The Bank of England left the interest rate unchanged last week amid fears that rising food prices were putting mounting pressure on headline inflation.

“The biggest risk to food prices would be to include large shops – including supermarkets – in the new surtax on large properties,” BRC chief executive Helen Dickinson said.

She added: “Removing all shops from the surtax can be done without any cost to the taxpayer, and would demonstrate the chancellor’s commitment to bring down inflation.”

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US lawmakers urge SEC to act on Trump’s crypto retirement plan

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US lawmakers urge SEC to act on Trump’s crypto retirement plan

US lawmakers urge SEC to act on Trump’s crypto retirement plan

Nine US lawmakers asked the SEC to move forward on last month’s executive order to speed up the inclusion of alternative assets like crypto in US retirement funds.

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US, UK joint task force to explore crypto regulatory collaboration

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US, UK joint task force to explore crypto regulatory collaboration

US, UK joint task force to explore crypto regulatory collaboration

The Transatlantic Taskforce for Markets of the Future will focus on exploring crypto laws and regulations between the two countries.

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