Tariff Tensions: Trump Threatens UK with Trade Tariffs as FTSE 100 Tumbles, Starmer Optimistic on Negotiations
Starmer notes it's 'still early' following Trump's tariff warning
The FTSE 100 dropped after President Trump criticized the UK for being "out of line," though he believes a resolution "is possible."
By Alix Culbertson and Faye Brown, correspondents covering politics
Monday, February 3, 2025 7:07
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Sir Keir Starmer has stated that it is "still early" to discuss the potential of Donald Trump implementing tariffs on the UK.
During a press conference alongside NATO's Secretary General, Prime Minister Mark Rutte emphasized that his conversations with the new U.S. president have primarily focused on the importance of maintaining "open and robust" trade relationships.
This follows Mr. Trump indicating his readiness to extend his tariff policy to include both the UK and the EU, although he mentioned that he believes an agreement with Britain is achievable.
In response to an inquiry from Beth Rigby, the political editor at Sky News, about his concerns, Sir Keir stated, "Regarding tariffs, it is still too early to say, but I believe that maintaining open and robust trading relationships is crucial, and this has been at the core of my talks with President Trump."
The FTSE 100, a benchmark of top UK stocks, experienced a significant drop on Monday following remarks made by Mr. Trump.
When questioned by the BBC about imposing tariffs on the UK, the President of the United States responded, "The UK is not aligned with us, but I'm confident we can resolve that issue."
Mr. Trump was discussing the issue of trade deficits, which occur when a country imports more products from another nation than it exports to that same nation.
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Sir Keir Starmer believes he is capable of handling ties with the US, EU, and China, though this may prove more challenging than anticipated.
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UK officials have hinted that the UK might not face tariffs since the US does not maintain a trade deficit with Britain.
In response to Mr. Trump's remarks, a spokesperson from Downing Street earlier noted that the UK and US enjoy a mutually beneficial trading relationship that is equitable and advantageous for both parties across the Atlantic.
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"The spokesperson expressed enthusiasm about collaborating further with President Trump to enhance the trade connections between the UK and the US, benefiting the economy, enterprises, and citizens of Britain."
The United States accounts for 18% (£300 billion) of the UK's total trade, and the two nations are the largest investors in each other’s economies, with mutual investments totaling £1.2 trillion.
Explore further: Examining the potential effects of Trump's tariffs on American shoppers and the British economy. These tariffs might signal an initial move towards expansion for Trump. In response, Canada and Mexico have implemented reciprocal tariffs.
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U.S. statistics indicate that in 2023, America achieved a trade surplus against the United Kingdom totaling $14.5 billion. This positions the UK advantageously, especially if President Trump decides to impose stricter tariffs on countries where the U.S. faces large trade deficits.
According to data from the UK's Office for National Statistics, in 2023, the UK achieved a trade surplus of £71.4 billion (approximately $89 billion) with the United States.
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As Ed Conway, our economics and data editor, points out, the numbers are quite modest and essentially even out.
Despite issuing a warning, Mr. Trump also spoke favorably about the UK, noting that his conversations with the prime minister were "very pleasant."
"We've held several meetings and numerous phone conversations. Our relationship is progressing smoothly," he stated.
He adopted a contrasting tone when discussing the EU, stating that tariffs will "certainly" be imposed on imports from the region, describing America's trade deficit with it as "a disaster" and claiming "they hardly import anything from us, yet we import everything from them."
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The remarks and the following repercussions in the financial markets, which were also observed in Europe, have largely eclipsed Sir Keir Starmer's distinction of being the first UK leader to engage with all 27 EU heads since Brexit.
In a question-and-answer segment following his press briefing alongside Mr. Rutte, Sir Keir affirmed that the UK remains unwavering in its dedication to collaborate with both the US and the EU, emphasizing that Britain is not making a choice between the two.
In other news, Mr. Trump has declared that he will implement a 25% tariff on imports from the United States' closest allies and major trading partners, Canada and Mexico, along with a 10% tax on products from China.
Mexican President Claudia Sheinbaum subsequently announced her decision to deploy 10,000 troops to the U.S. border as part of an agreement with Mr. Trump to temporarily halt the 25% tariff.
Canada, Mexico, and China have all promised to impose tariffs on American products, raising concerns about a potential worldwide trade conflict.
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Controversy Surrounds Ofsted’s New Report Card Proposal in Wake of Tragedy: A Closer Look at the Shift from One-Word Grades to Color-Coded Scale
Proposed Changes to Ofsted's Reporting System Unveiled
Plans to overhaul Ofsted's evaluation framework have emerged, suggesting a shift from single-word ratings to a more nuanced, color-coded five-tier system. Despite these changes, a woman whose sister, a headteacher, tragically died by suicide, believes Ofsted has not sufficiently addressed the lessons from her sister's death.
By Anjum Peerbacos, education correspondent
Monday, February 3, 2025, 10:
Ofsted has unveiled potential designs for updated school evaluations, while a headteacher’s sister, whose tragic death was by suicide, criticizes the proposals as merely revamped versions of a perilous framework.
The government discontinued the use of single-word ratings following the demise of Ruth Perry in 2023, which occurred after her Caversham Primary School in Reading was demoted from "outstanding" to "inadequate".
Educational institutions in England might be evaluated on multiple criteria such as attendance and inclusivity, employing a color-coded scale with five levels.
Professor Julia Waters, Mrs. Perry's sister, expressed concern, stating, "I fear that this proposal merely recycles a flawed and hazardous scheme it's supposed to supplant."
She mentioned that although the updated version offers certain enhancements, it still preserves numerous problematic elements of the old system and also brings in various modifications that could potentially pose new threats to the welfare of teachers and principals.
"She stated that her sister, Ruth Perry, passed away due to a harsh and daunting inspection by Ofsted, which had excessive repercussions on her and her educational institution."
Ofsted claims to have paid attention, yet there seems to be a lack of sufficient learning on their part.
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Discussion: Can school report cards provide valuable information to parents?
Education Secretary Bridget Phillipson acknowledged the profound impact of Ruth Perry's death and her sister's call for reform, noting that she has discussed the necessity of changes to Ofsted with Prof Waters.
"Concerning the report cards, she expressed that parents are fully capable of comprehending and handling detailed insights about the goings-on in their children's school, including both its strong points and areas needing enhancement," she stated.
The minister emphatically dismissed the notion that parents are uninterested in learning about both areas requiring enhancement and those where excellence exists.
A three-month review period concerning the evaluation procedures for educational institutions serving students from all age groups, as well as tertiary education facilities, commenced this Monday.
The suggestions introduce a revamped grading structure for schools, moving away from the current system that categorizes them as "Outstanding", "Good", "Requires Improvement", or "Inadequate".
Assessments will be conducted using a five-point scale, labeled as follows: "Exemplary", "Strong", "Secure", "Attention Needed", and "Causing Concern".
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The existing evaluations will continue to be effective until the schools are reassessed using the updated framework.
Protection measures will be evaluated independently and will be categorized simply as either achieved or not achieved.
The quantity of areas assessed in schools will increase from four to nine, and to ten for schools that include a sixth form.
The latest proposal outlines several key focus areas for evaluation, including Academic Performance, Student Attendance, Conduct and Outlook, Educational Program, Teacher Advancement, Accessibility, Management and Oversight, Student Growth and Health, Advanced Studies, and Child Protection.
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Ofsted has begun preparing its inspectors to implement the updates required for the revamped inspection format.
Sir Martyn Oliver, the chief inspector at Ofsted, stated: "The updated report card is designed to provide parents with a more transparent overview and to assist schools in concentrating on significant enhancements."
"We are committed to fulfilling the needs of parents in all our actions.
"Our goal is to enhance educational opportunities for every child, with a focus on supporting those who are most in need."
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Daniel Kebede, the general secretary of the National Education Union, criticized Sir Martyn, stating that he "did not meet expectations."
"He stated that the suggestions presented in today's discussion would deteriorate the situation rather than improve it."
The decision by the secretary of state to eliminate single-word evaluations was justified, as she acknowledged the harm they inflict.
"Rather, the suggested 1 to 5 grading scale for the report card continues to use a simplistic, condensed method that fails to reflect the multifaceted nature of school life or offer detailed insights to parents."
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Weekend Waves: Uncovering the Surprising Uptick in Channel Crossings
Channel crossings surge: What's behind the weekend increase in migrant arrivals?
The factors contributing to a rise in migrants reaching the UK by small boats over weekends "cannot always be anticipated."
Authored by Ali Fortescue, political correspondent, and Josh Gafson, politics producer
Monday, February 3, 2025, at 1
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An increasing number of individuals are making the journey across the English Channel in small boats during weekends. According to our data analysis, last year saw nearly 40% of all arrivals occurring on either a Saturday or Sunday.
We've been investigating why there's a noticeable increase in the number of individuals reaching our shores by small boats over the weekends, and the reasons may surprise you.
Here are several hypotheses.
French employment and support services
It has been proposed that the performance of the French border force, police, and coastguard varies and is not uniformly maintained throughout the week.
"Groups have noticed that there is reduced or less attentive staffing during weekends on the French side," a former high-ranking official from the Home Office who was involved in negotiations with the French shared with Sky News.
A previous minister of immigration expressed frustration over the inability to direct operational deployments despite funding the French.
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The statement suggested that "it wouldn't be shocking if the French had reduced numbers on weekends, leading human traffickers to become aware of this."
The UK has allocated several hundred million pounds to France for patrolling the Calais coastline, including a substantial sum of nearly £500 million in 2023.
A previous high-ranking official in charge of border management mentioned that the French could show that "hundreds or thousands of officers are employed there," but "from a strategic standpoint, it benefits France for the pressure to be on us."
However, when we presented this to the French representatives, they resisted.
Marc de Fleurian, the Member of Parliament for Calais from Marine Le Pen's National Rally, describes attributing fault to "the other side of the Channel" as the "simple solution."
He described blaming the opposing side as "cowardly."
Learn more: UK set to launch pioneering sanctions framework aimed at smugglers. Will the government's ambitious strategy be effective? This is Starmer's year to demonstrate his ability to handle the small boat crisis.
Pierre Henri Dumont, the representative for Calais from 2017 to 2024, stated: "The truth is that no matter the number of police deployed, individuals will still migrate across the Channel. Whether there are eight or 100 officers in place, it makes no significant difference."
A source from the French coastguard informed Sky News that staffing levels remain consistent throughout the week, including weekends. They described claims of reduced weekend staffing as "laughable and a simplistic accusation."
A spokesperson for Sir Keir Starmer stated that collaboration between the government and France led to the prevention of over 28,000 risky and unwarranted attempts to cross borders last year.
He noted that French law enforcement regularly monitors the beaches, conducting patrols both on weekdays and weekends.
Plotting by a smuggler
Supply networks for smuggling operations could be associated with particular days due to various factors. For instance, a former high-ranking official from the Home Office pointed out that "boat engines, or components, might be delivered on a Friday."
Mr. Dumont explains that smuggling operations often employ individuals for minor roles, such as moving boats, who might also hold regular weekday jobs. He points out that the increase in activity during weekends does not always follow a predictable pattern.
One reason could be that since French authorities generally do not interfere after a vessel has launched, numerous small boats embark from inland channels. The canal-like waterways that extend inland from the Channel usually host a multitude of fishing boats during the week, thus facilitating launches from these waterways on weekends.
According to an insider at the Home Office, numerous migrants aiming to cross the Channel often reside in camps near Calais, but many depend on public transport to reach their scheduled departures. This reliance on public transportation means their travel options might be restricted by varying service schedules throughout the week.
Meteorological Coin
A confidential report from the Home Office reveals that there was a significant increase in the number of weekend days last year when favorable weather conditions made it more likely for small boat crossings to occur.
The data indicates that out of 197 days with favorable weather conditions for crossing the channel, 61 were weekends. Nonetheless, these statistics only cover the year 2024, and it appears improbable that weather conditions alone could explain the increased number of crossings on weekends over a three-year period.
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UK Economic Growth Stalls: Forecasters Downgrade 2025 Outlook, Adding Pressure on Chancellor Reeves
Leading economic forecasters have revised downwards the UK's growth projections, delivering another setback to Chancellor Rachel Reeves following a sluggish second half of 2024 marked by stagnant GDP.
Monday, February 3, 2025, at 12
Economic growth in the UK is expected to pick up pace more gradually than earlier estimates suggested, following a period of stagnation at the end
The EY ITEM Club has revised its forecast for UK GDP growth in 2025 to 1%, a decrease from its earlier prediction of 1.5%.
The economic forecasting body has recently joined other prominent organizations in lowering its projections as companies face ongoing challenges, including upcoming increases in taxes and wages this April.
This marks yet another setback for Chancellor Rachel Reeves' ambitions to quickly expand the economy.
Predictions indicate that the economy expanded by 0.8% last year, hinting at a modest increase in economic growth.
The latter part of 2024 showed a disappointing economic performance, marked by a surprisingly low GDP growth of 0.1% in November and a decline of 0.1% in October.
Economic growth stalled during the third quarter of the year.
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Forecasts suggest that the UK's economy is anticipated to experience more robust growth, with projections showing a potential increase of 1.6% in 2026.
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Anna Anthony, the regional managing partner for EY in the UK, commented, "Although 2024 ended on a low note, there are indications that the UK economy might rebound and experience more robust growth this year.
"After enduring a lengthy phase of economic instability, there is an expectation for a rise in consumer confidence due to ongoing growth in real wages. This is anticipated to alleviate the financial pressure on numerous families by the close of 2025."
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She noted, "The future prospects for UK businesses present a varied landscape.
"Although there is an anticipation of a rise in business investment, the first half of this year may see a decline in private sector confidence due to stricter financial conditions and uncertainties in global trade."
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Labour’s 1,000-Job Pledge in Aberdeen Faces 20-Year Timeline, GB Energy Chairman Reveals
GB Energy's head acknowledges that fulfilling Keir Starmer's promise of 1,000 new jobs might span two decades. Labour envisions that GB Energy will facilitate the transition for employees from the oil and gas sectors, committing to creating 1,000 positions in Aberdeen, the planned hub for the project.
Scotland reporter @ConnorGillies
Monday, February 3, 2025, 1:
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The CEO of GB Energy informed Sky News that fulfilling the Labour party's promise to create 1,000 jobs in Aberdeen might span two decades.
Sir Keir Starmer assured the electorate that his premier environmental project, based in northeast Scotland, could reduce household energy costs by up to £300.
This is one of the five principal objectives Labour has set for this parliamentary term, following a pledge in their manifesto to "permanently reduce household expenses by hundreds of pounds, not merely as a temporary relief."
In his inaugural televised interview, Juergen Maier, named by Downing Street to be the founding chairman of GB Energy, described the initiative as a "very long-term project" expected to extend over many years. He consistently declined to specify when consumers might see a reduction in their energy bills.
"Regarding your request for a specific timeline, GB Energy has recently been established, and our focus is on reducing energy costs," stated Mr. Maier.
The government-run corporation will not provide electricity to residential areas, but it plans to fund new eco-friendly initiatives and seeks to draw in private investment.
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The Labour Party believes that GB Energy will facilitate the transition of employees from the oil and gas sectors and has committed to creating 1,000 new positions in Aberdeen, the chosen hub for this project.
According to Aberdeen and Grampian Chamber of Commerce, as reported by Sky News, around 50,000 local workers in the sector are feeling "anxious."
CEO Russell Borthwick commented, "The goals of GB Energy are commendable, but it requires some immediate successes."
At the moment, there's a palpable sense of anxiety in the city. It's crucial to boost the industry's confidence by ensuring that progress accelerates.
"We haven't made significant advancements yet. However, we've had numerous productive discussions with GB Energy. Over the coming six months, we're hopeful to see the outcomes of these meetings materialize."
In 20 years, a thousand jobs? 'Definitely'
Following recent statements by Energy Minister Michael Shanks MP, it has been confirmed that the UK government remains committed to its goal of generating "over 1,000 jobs."
Sky News pressed Mr. Maier for specifics on his commitment in light of the impending challenges facing the North Sea sector.
He stated, "Over the next five years, Great British Energy will generate between 200 and 300 job opportunities in Aberdeen. That's the team size we are looking at. In the distant future, as we grow into a leading energy powerhouse, the number could significantly increase."
When asked to clarify what he meant by "long term," he responded, "You know, we develop these businesses. Energy businesses expand over a period of 10 to 20 years, and we plan to still be here in 20 years."
When directly questioned if fulfilling the promise of 1,000 jobs could span two decades, he responded with a definitive "absolutely."
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"Significant danger of failure to deliver"
Labor groups expressed concerns to Sky News about GB Energy potentially making commitments they can't fulfill.
Derek Thomson, the Scottish Secretary for Unite, expressed concern, stating: "Considering the potential job losses in the northeast, if GB energy fails to accelerate its efforts, bringing in workers and establishing genuine green jobs, we might face a severe decline in the region."
Further information: Key challenges for UK ministers regarding domestically generated renewable energy. Calls for tax reductions to boost electric vehicle purchases, according to automotive sector. Insights into the Great British Energy initiative.
Prospect, the union representing over 22,000 employees in the energy sector, has expressed concerns that the existing strategy appears hazardous.
Richard Hardy, the secretary for Scotland, stated: "I'm not trying to be cynical, however, I am eager to see a strategy.
"If it turns out that it only leads to the creation of 200 or 300 jobs, then I believe the majority would view that as a disappointment. They are taking a significant gamble by not fulfilling expectations."
"They need to be aware of the political gamble involved in their actions. It's crucial that they succeed, as failure would provide their critics with ammunition against them."
"Merely a novelty"
The Tories slammed Mr. Maier's confession.
West Aberdeenshire and Kincardine MP Andrew Bowie stated: "This disclosure emphasizes that GB Energy is merely a superficial ploy aimed at diverting attention from the risks that Labour's strategies present to jobs in the northeast and our energy stability.
"Doubts that GB Energy would merely establish a token presence in Aberdeen with just a small office and a sign are turning out to be entirely justified."
'Creating Positive Energy'
Following critiques, a representative from Downing Street clarified that the prime minister's remarks highlighted the "possible impact GB Energy might have on transforming Scotland's economy."
The representative further stated: "Ultimately, we aim to develop our energy sector to match the magnitude and scope of the foremost global publicly held energy firms.
"Already in Aberdeen, the advantages are becoming apparent, and GB Energy will determine the precise figures and timeline for employment opportunities."
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Prime Minister Starmer Faces Scrutiny Over Alleged Lockdown Breach for Voice Coaching During Tier 4 Restrictions
Starmer refutes claims of violating COVID restrictions by employing a voice coach
In December 2020, while serving as the leader of the Labour Party and during a period when London faced Tier 4 lockdown measures, Prime Minister Sir Keir Starmer engaged actress Leonie Mellinger.
Political journalist @alixculbertson
Monday, February 3, 2025, 6:
Sir Keir Starmer has refuted allegations of violating lockdown regulations following reports that a vocal coach visited the Labour headquarters amidst the COVID pandemic.
As his news conference in Brussels concluded on Monday, the prime minister faced inquiries about potentially violating pandemic guidelines.
"Absolutely not," he responded, stepping away from the podium. "We adhered to all the regulations, just as anticipated," he stated.
Earlier, the Labour Party also refuted claims that the prime minister violated COVID regulations in December 2020 by hiring actress and voice coach Leonie Mellinger to assist him in crafting a reply to Boris Johnson’s Brexit agreement.
In their book "Get In," Patrick Maguire and Gabriel Pogrund reveal that Ms. Mellinger offered guidance to Sir Keir on how to improve his public speaking skills.
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According to passages from the book, she met the criteria for "essential employee" status and went to the Labour Party's main office on December 24, 2020, donning a facial covering.
During that period, London and the South East were subject to Tier 4 measures, prohibiting the mingling of different households and mandating remote work, except for those who could not perform their jobs from home.
Former Conservative minister Richard Holden has penned a letter to Sir Keir, inquiring if he believes he was violating the law.
A spokesperson for the Labour Party stated, "At all times, the regulations were adhered to."
Sources indicate that at the time, Sir Keir was engaged in work alongside a select group tasked with devising his reaction to Mr. Johnson's Brexit agreement, all while being recorded by a television camera.
There was no probe into Starmer's activities
A testimonial on Ms. Mellinger's website from Sir Keir reads: "I appreciate all the assistance and support you've provided, which has made everything achievable."
Mr. Holden has requested that the prime minister appoint an independent investigator to resolve the allegations.
In his correspondence, the Conservative MP questioned: "Is it appropriate for other citizens to receive acting training while under tier 4 restrictions?"
Sky News has learned that there are no plans to launch an inquiry into whether Sir Keir was on duty.
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"Significant public scrutiny of your behavior"
Concluding his letter, Mr. Holden wrote: "The public has a significant interest in your actions during the pandemic. The recent disclosures show that you not only deceived the public but also showed a blatant disregard for the law when many were making tough sacrifices, all to further your own political ambitions.
"You've stated 'honesty and decency are important' – I trust that you will approach these questions with the same principles you expect from others."
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Earlier inquiries into 'beergate'
Mr. Holden has previously raised concerns about Sir Keir's behavior during the lockdown.
He questioned the behavior of the Labour leader during the "Beergate" incident, in which Sir Keir and deputy leader Angela Rayner were seen having beer and a takeaway meal at a Labour Party gathering in Durham amid a local election campaign in April 2021.
An inquiry by law enforcement concluded that no COVID regulations were violated, as the event fell within the guidelines for work-related gatherings, including a break for a meal.
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Scotland Rules Out Cat Ban but Considers New Wildlife Protection Measures
Scottish authorities address rumors of a potential cat prohibition
Estimates suggest that each year, cats in the UK are responsible for the deaths of countless wild creatures, ranging from birds and mammals to reptiles and amphibians. In reaction to similar issues, nations like Australia have implemented measures such as curfews and designated containment zones.
Scottish correspondent @Jenster13
Tuesday, February 4, 2025, 7:
The government of Scotland has firmly stated that it will not consider banning cats, despite calls for an investigation into how to safeguard vulnerable wildlife species.
The Scottish Animal Welfare Commission (SAWC) has advised the Holyrood government in a report, citing findings that cats greatly affect wildlife populations.
The Scottish Animal Welfare Commission (SAWC) is urging the Scottish government to direct NatureScot to undertake a study on the pros and cons of establishing cat containment zones in areas considered ecologically sensitive.
Should the proposal be enacted, individuals living in these areas might be required to confine their pets within their homes or possibly be prohibited from owning them at all.
SAWC proposed that new residential projects in countryside areas "might include a condition prohibiting the ownership of cats in zones critical for conservation", or near habitats of threatened birds and other wildlife.
The SAWC also suggested implementing mandatory microchipping and registration for domestic cats.
It additionally requested a detailed analysis on the advantages and disadvantages of mandatory spaying or neutering for cats in "at-risk areas."
The government of Scotland indicated that it would thoroughly review the suggestions provided by the SAWC, while encouraging all cat owners to think about microchipping their animals.
Late on Monday, a representative clarified, stating: "The report does not advise the prohibition of cats, and we firmly intend not to ban cats under any conditions."
SAWC's publication, named Responsible Ownership and Care of Domestic Cats in Scotland, highlights that the predatory behavior in cats is not motivated by hunger. Instead, domestic cats often toy with their catch and frequently return home with prey that is still alive but typically wounded, to their owners.
Annually, up to 700 million animals may be slaughtered.
Experts suggest that cats in the UK are responsible for capturing and bringing back home countless animals annually, ranging from birds to mammals and even reptiles and amphibians.
SAWC stated that since only a fraction of the prey caught is actually brought back to homes, the real total of wild prey animals killed annually in the UK could be as high as at least 700 million vertebrates.
The agency reported that both house cats and wild, stray cats pose a danger to the country's scarce wildcat populations by contesting with them over food and living spaces, and also by transmitting illnesses.
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Cats 'ought to have the option to go outdoors'
Cats Protection collaborates with groups like Saving Wildcats to mitigate the effects that domestic and feral cats have on indigenous animal populations.
The organization backs the demand for compulsory microchipping and holds the view that every cat "should be given the opportunity to explore outdoors."
Alice Palombo, who handles advocacy and governmental relations for the charity in Scotland, stated: "It is essential for cats to engage in behaviors typical to their species to ensure they lead content and healthy lives."
"Such behaviors, including scratching and climbing, are more readily fulfilled outdoors."
Providing cats with outdoor access allows them to engage in more physical activity and experience the enriching variety of fresh scents, visuals, and noises.
"While some cats adapt to indoor living, lacking these essential activities may cause issues such as stress-induced behaviors including marking territory, over-grooming, or even physical health problems."
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Australia has implemented designated quarantine zones and enforced curfews.
SAWC's study highlighted that various states in Australia have established designated zones, implementing a 24-hour cat curfew in certain areas, while others enforce limitations during nighttime hours.
The only exceptions are for fenced-in outdoor areas or if owners walk their pets on a leash.
A representative from NatureScot stated: "We have taken into consideration the report issued by the Scottish Animal Welfare Commission.
"It's up to Scottish ministers to make any decisions regarding the recommendations in the report."
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Early Days in US-UK Trade Tensions: Starmer Optimistic Despite Trump’s Tariff Threats and Market Turbulence
Starmer remarks it's still 'the beginning' following Trump's tariff warning
Following President Trump's comment that the UK is "not in compliance," the FTSE 100 index experienced a drop, though he believes a resolution "is possible."
By Alix Culbertson and Faye Brown, political correspondents
Monday, February 3, 2025, 19:
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Sir Keir Starmer has stated that it's "too soon" to discuss the potential of Donald Trump implementing tariffs on the UK.
During a joint press conference with NATO's Secretary General, Prime Minister Mark Rutte emphasized that establishing "open and robust" trade relationships has been a central theme in his conversations with the newly elected President of the United States.
Following remarks by Mr. Trump, he appears ready to extend his tariff policy to include the UK and the EU, though he mentioned that he believes an agreement with Britain is achievable.
When questioned by Sky News's political editor Beth Rigby about his concerns, Sir Keir responded, "Regarding tariffs, it's still early on, but I believe that maintaining open and robust trade relationships is crucial, and that has been at the core of my talks with President Trump."
The FTSE 100, a key indicator of top British stocks, experienced a significant drop on Monday following remarks made by Mr. Trump.
When questioned by the BBC about imposing tariffs on the UK, the President of the United States responded, "The UK is not in compliance, but I am confident that issue can be resolved."
Mr. Trump was addressing the issue of trade deficits, which occur when a country imports more goods from another nation than it exports to them.
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China retaliates following the implementation of fresh US tariffs, while similar measures against Mexico and Canada are temporarily halted.
Sir Keir Starmer is confident in his ability to handle diplomatic ties with the US, EU, and China, though this may prove more challenging than anticipated.
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In a significant post-Brexit development, Starmer engages with EU officials
UK officials have previously indicated that the UK might not face tariffs since the US does not maintain a trade deficit with Britain.
In response to Mr. Trump's remarks, a spokesperson from Downing Street earlier stated that the UK and US maintain a trade relationship that is equitable and advantageous, serving the interests on both sides of the Atlantic.
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"The spokesperson expressed enthusiasm about collaborating further with President Trump to enhance the trade relationship between the UK and the US, which will benefit the economy, businesses, and the citizens of Britain."
The United States accounts for 18% (£300 billion) of the United Kingdom's total trade, and both nations are the largest singular investors in each other's economy, with mutual investments totaling £1.2 trillion.
Further reading: Exploring how Trump’s trade tariffs might affect American shoppers and the economy of the UK. Is this the beginning of Trump’s expansionist agenda? In response, Canada and Mexico impose their own counter-tariffs.
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Based on data from the United States, in 2023, America achieved a total trade surplus of $14.5 billion with the United Kingdom. This surplus could place the UK in a strong position should President Trump decide to impose stricter tariffs on countries with large trade deficits.
According to data from the UK's Office for National Statistics, the United Kingdom achieved a trade surplus of £71.4 billion (approximately $89 billion) with the United States in 2023.
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As Ed Conway, our economics and data editor, points out, both numbers are quite minimal and essentially even out.
Amid his warnings, Mr. Trump also expressed favorable sentiments towards the UK, noting that his conversations with the prime minister were "very pleasant."
"We've held several discussions and had many phone conversations. Our relationship is progressing smoothly," he noted.
He adopted a contrasting tone when discussing the EU, declaring that tariffs will "certainly" be imposed on imports from the bloc, labeling America's trade deficit with it as "an outrage" and asserting that "they hardly import anything while we import everything from them."
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The remarks and the ensuing repercussions in the financial markets, which were also observed in Europe, have largely eclipsed Sir Keir Starmer's distinction as the first UK leader to engage with all 27 EU heads since Brexit.
In a question and answer segment following his press briefing alongside Mr. Rutte, Sir Keir emphasized that the UK remains firmly committed to its collaborations with both the US and the EU, clarifying that Britain is not making a choice between the two.
In other news, President Trump has declared that he will implement a 25% tariff on imports from America’s closest neighbors and major trading allies, Canada and Mexico, along with a 10% tariff on products from China.
Mexican President Claudia Sheinbaum subsequently announced her plan to deploy 10,000 troops to the U.S. border as part of an agreement with Mr. Trump to temporarily halt the 25% tariff.
Canada, Mexico, and China have each promised to impose tariffs on American products, raising concerns about the potential for a worldwide trade conflict.
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Grading the Graders: New School Report Card System Sparks Controversy and Concern
Are school ratings beneficial for parents?
Under the updated framework, every school will receive a rating ranging from "exemplary" to "causing concern," along with a color-coded indicator using red, amber, and green.
Political reporter @tamcohen
Monday, February 3, 2025, 3:
The administration has introduced a new method for evaluating schools, which has promptly drawn criticism from displeased educational unions.
The simplified labels such as "good", "outstanding", "requires improvement", or "inadequate" that were used for years to evaluate schools in England are no longer in use.
Education Secretary Bridget Phillipson has introduced a new framework for evaluating schools, which includes assessments in nine distinct categories, including leadership, behavior, academic performance, attendance, and safeguarding.
Participants will receive one of five ratings, ranging from "exemplary" to "causing concern," along with a color-coded system using red, amber, and green indicators.
Latest in Politics: Downing Street claims Starmer has confidence in Trump
Newly formed regional squads, allocated as much as £100,000 for each school, will assist in improving schools that consistently rank in the lowest performance tiers.
The debate swiftly escalated between critics who argue that it will cause undue stress for educators and create confusion, and government officials who assert that parents deserve more comprehensive information.
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Tuition costs at universities in England to rise for the first time in nearly a decade
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The Association of School and College Leaders (ASCL) has commented that report cards seem to be "even worse" than assessments that use only one word to describe performance.
An educational chief commented to the Financial Times that the color coding system reminded them of Nando’s spice chart. "It ranges from lemon and herbs to extra hot," they mentioned, suggesting that assessing additional aspects would increase anxiety among school administrators.
In a speech in Westminster, the education secretary responded to her detractors by stating: "I completely disagree with the notion that offering more information and highlighting both areas needing enhancement and those where excellence exists is unwelcome by parents."
Learn more: Potential changes to Ofsted's evaluation format in the spotlightAlternative educational approaches gaining traction among studentsCalls for stricter mobile phone policies by parents
Following prolonged scrutiny and disapproval of Ofsted, the organization's framework underwent significant changes, which were underscored by the tragic suicide of Ruth Perry. Perry, a headteacher, ended her life two months after her institution, Caversham Primary in Reading, saw its rating plummet from "outstanding" to "inadequate" due to concerns about safeguarding.
Her sibling, Professor Julia Waters, labeled the recent suggestions as a "risky repetition" of the previous scheme.
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The education secretary stated that schools in England, now with 90% being rated as good or outstanding, a major accomplishment of the previous Conservative administration, might now be suffering from their own success.
She mentioned that many parents believe that the "good" rating, assigned to schools across the spectrum, from the highest to the lowest 1% in achievement, does not provide a complete overview.
Inspectors are now required to conduct more frequent and intricate assessments.
Over the course of the next three months, a study will explore whether parents feel more empowered to make decisions for their children or if they believe they are presented with better choices.
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Balancing Act: Starmer’s Strategy to Navigate US-EU Trade Tensions Amidst Trump’s Tariff Threats
What strategies does Starmer use to maintain good relations with both Trump's America and the European Union?
Monday, February 3, 2025, 18:35
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Following the implementation of trade tariffs on Canada and Mexico this past weekend, President Donald Trump has issued threats of import taxes on European Union products. Nonetheless, he stated that the United Kingdom would remain exempt from these tariffs "for the moment."
Sir Keir Starmer has stated that Britain does not have to make a choice between the two, emphasizing the importance of collaborating with both on issues such as trade and security.
On today's episode of Sky News Daily, Niall teams up with deputy political editor Sam Coates and US correspondent Mark Stone to analyze how Starmer could manage the competing influences of the EU and Trump on Britain’s economic prospects.
Producer: Alex Bishop
Editor: Philly Beaumont
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Building a Future: Tackling the UK’s Construction Workforce Crisis Amidst Government Growth Ambitions
A lack of builders is posing a significant obstacle to the government’s ambitions for expansion
An analysis done for Sky’s Sunday Morning With Trevor Phillips shows that the UK's population increase is significantly exceeding the expansion of its construction workforce.
Authored by Jack Parker, producer for Sunday Morning With Trevor Phillips
Sunday, February 2, 2025, 10:
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This week, Chancellor Rachel Reeves announced that the government will back numerous major initiatives aimed at enhancing economic expansion, in addition to Labour's ongoing commitment to construct 1.5 million new homes.
Significant changes to the planning system are being implemented to achieve goals, yet one of the key obstacles the government encounters in executing these plans is determining who will carry out the construction.
Industry leaders in construction are sounding the alarm over a severe lack of labor. According to the Construction Industry Training Board (CITB), there is a need for at least 50,000 additional workers each year to keep up with ongoing demand.
Research highlighted on Sky News' "Sunday Morning With Trevor Phillips" indicates that the UK's population increase is significantly surpassing the growth of its construction sector workforce.
Since 2019, the United Kingdom's population has increased by 2.5 million, yet the construction sector has seen a reduction of 320,000 workers. Presently, there are only 29 construction workers for every 1,000 residents, marking an all-time low
To tackle the deficit, the construction sector has progressively looked abroad.
Examination of the Annual Population Survey data from the Office for National Statistics reveals that in 2007, approximately one out of every twelve workers in the construction or civil engineering sectors came from abroad. By 2016, this figure had increased to one in seven.
As of 2022, the APS no longer tracks job data based on the country of origin, leaving us without a complete understanding of the current situation.
In July 2023, the Conservative administration led by Rishi Sunak sought to draw in additional foreign construction labor by including positions such as bricklayers and stonemasons on the Shortage Occupation List.
Now known as the Immigration Salary List (ISL), more than 25% of the positions listed are in the construction sector.
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Labour has expressed its intention to decrease the net legal immigration, which is projected to reach 728,000 by June 2024.
Home Secretary Yvette Cooper has initiated a report by the Migration Advisory Committee, due in June, to evaluate which industries depend too heavily on hiring from abroad.
Explore further: Economic expansion is a battle Starmer and Reeves must win. Shell plans to deploy a new gas platform in the North Sea.
Should the influx of construction workers from abroad be restricted, it is anticipated that domestic apprentices would step in to fill the resulting gap.
Official statistics reveal that approximately 15,500 individuals commence apprenticeships in construction annually, yet almost half (47%) fail to complete their programs. This represents a significant increase in the dropout rate, which was 30% in the 2014/15 period.
A study conducted last year by the British Association of Construction Heads identified the primary causes of attrition in the industry as layoffs, terminations, and insufficient pay.
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This implies that fewer than 9,000 individuals annually complete their apprenticeship, which is only one-fifth of the estimated yearly need according to the CITB.
The government is financing 32 training centers designed to provide accelerated learning for an additional 5,000 apprentices annually by 2028, focusing on professions including bricklaying and scaffolding.
In this morning's edition of Sunday Morning With Trevor Phillips, host Trevor Phillips will welcome Home Secretary Yvette Cooper for a conversation on whether increasing immigration or boosting domestic training is the better solution.
Tune in to "Sunday Morning With Trevor Phillips" on Sky News, broadcasting every Sunday starting at 8:30 AM
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Brexit’s Bitter Anniversary: Public Regret Meets Political Reluctance
The majority believe exiting the EU was an error, yet politicians are unlikely to revisit the Brexit debate. Five years later, several Brexit supporters, Nigel Farage included, admit it hasn't succeeded. But why do major political parties hesitate to acknowledge their mistake to the electorate?
Sky News pundit @adamboultonTABB
Sunday, February 2, 2025, 11:
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This weekend commemorates the fifth anniversary of the United Kingdom's successful departure from the European Union, an event often heralded as "taking back control."
The decision to exit was made via a public vote on June 23, 2016. Following that, it required three and a half years filled with discussions in Brussels, debates and legal challenges in the UK's Parliament, and the involvement of three UK Prime Ministers, before Boris Johnson fulfilled his commitment to "get Brexit done."
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The outcome of the referendum was narrowly decided. Approximately 51.9% opted for departure, while around 48.1% chose to stay, figures which are commonly simplified to 52% to 48%.
In the UK's overall vote, England and Wales predominantly supported the departure, while Scotland and Northern Ireland favored remaining.
Recent survey results indicate that a majority of the population now believes that leaving the EU was an error.
Marking the fifth anniversary, YouGov posed the question: "Looking back, do you believe it was correct or incorrect for Britain to exit the European Union?"
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The outcome showed 55% indicating it was "Incorrect" and 30% saying it was "Correct". Remarkably, three-quarters of the 18 to 25-year-old group, who largely were ineligible to vote in the referendum, believe that the decision to leave was erroneous.
Support for the Leave campaign appears to be declining, yet clear divisions remain within political parties. Sixty percent of those who voted for the Conservatives in the previous election, along with eighty percent of Reform UK backers, continue to believe that leaving was the correct choice. Conversely, eighty percent of voters for both the Labour and Liberal Democrat parties believe it was a mistake.
Warnings from those opposed to Brexit that the economy would instantly collapse did not come to fruition, yet the UK has not thrived since its departure from the EU.
The number of Europeans in the nation has declined, yet overall immigration figures have soared to unprecedented heights post-Brexit.
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"Gradual tire deflation"
Disentangling the effects of Brexit from other economic disturbances like the COVID pandemic, the Ukraine conflict's impact on energy costs, and rising inflation proves challenging.
Nonetheless, the majority agree with the independent Office for Budget Responsibility's assessment that there will be a long-term decrease in productivity of about 4%.
In the recent publication titled "The Brexit Files" by the UK In A Changing Europe research group, Professor Jonathan Portes commented: "On the whole, the economists' depiction of Brexit as a 'slow puncture' instead of a catastrophic collision has proven accurate."
This indicates that the United Kingdom's ties with Europe, who are both its nearest neighbors and its most significant commercial ally, remain a pressing matter for the nation, despite the hesitance of weary lawmakers to discuss it.
Five years after the referendum, the future direction of the UK remains unclear. The country's major political parties, Labour and the Conservatives, have firmly stated their opposition to rejoining the EU, participating in its single market or customs union, or allowing free movement of people. Prior to the Brexit decision, both parties regarded these elements as crucial for the UK's economic success.
In the legislature, solely the Green party and nationalist groups explicitly favor re-entering the EU.
Discover further: UK Business Secretary suggests possibility of joining European trade zone. Was Tusk advocating for Brussels with his call for 'Breturn'? According to Badenoch, Conservatives exited EU lacking a strategy for economic expansion.
The Liberal Democrats, historically strong supporters of European integration, are gradually regaining their footing after narrowly escaping political oblivion in the 2015, 2017, and 2019 general elections, and are now moving forward with caution.
During the Prime Minister's Questions session last week, the Liberal Democrat leader softly confronted Sir Keir Starmer.
Sir Ed Davey inquired respectfully, "If the Prime Minister remains firm on his stance against a customs union today, could he initiate discussions for the UK to become part of the Pan-Euro-Mediterranean Convention, in order to begin dismantling the trade barriers that have hindered growth, established by the Conservatives?"
In effect, his role might simply serve as a shield enabling a hesitant government to participate in PEM, a pact that includes members beyond the EU.
Numerous proponents of Brexit, such as Nigel Farage, now acknowledge that Brexit has not succeeded. Farage argues that it was poorly handled. His political group, now known as Reform UK, has shifted its focus to issues like immigration and criticizing large-scale government instead of emphasizing the positive outcomes of their successful Brexit vote.
Labour is increasingly worried about the challenge posed by Reform UK in constituencies they currently control, particularly in areas traditionally known as the Red Wall. Sir Keir, previously a supporter of a second referendum, is not inclined to suggest to voters that they erred in their decision. Instead, he's subtly trying to improve relations with the EU, careful not to overstep the boundaries outlined in his 2024 election manifesto.
Since the Labour Party won the election, government ministers have had over 60 meetings with their counterparts from the European Union.
Sir Keir is set to become the first UK prime minister in five years to participate in a meeting with all his EU counterparts.
Under the leadership of Mr. Johnson, Ms. Truss, and Mr. Sunak, these offers were declined.
A yearly summit between the UK and the EU has been established. While the Conservatives had previously formed a Department for Exiting the EU, Sir Keir has now designated Nick Thomas-Symonds, a Cabinet Office minister, with the support of senior civil servant Mike Ellam, to oversee "relations with the EU".
Mr. Thomas-Symonds identifies "three pillars" essential for improving relations: security, safety, and prosperity.
In light of the current threat posed by Russia, there is a shared interest between the UK and the EU in enhancing their security collaboration. This sector appears to be the most straightforward path to better their ties. Notably, defense and foreign affairs are not included in the EU-UK Trade and Co-operation Agreement established post-Brexit.
Explore further political updates: Miliband may struggle with backing for third runway, Senior Conservative intensifies critique on immigration history, Blair and Brown pay homage to Lord Prescott.
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To continue being a reliable force, the UK must secure the necessary funds to uphold its highly regarded military prowess.
Should European nations increase their defense spending due to President Trump's urging, a potential issue may arise regarding the extent to which the UK defense sector is allowed to participate in EU countries' defense procurement.
Enhancing security involves reestablishing partnerships in law enforcement, such as rejoining Europol, an organization the UK left voluntarily following Brexit. However, the question remains whether improved diplomatic ties will effectively halt illegal immigration or dismantle criminal networks.
Economic growth hinges on repairing the harm inflicted on trade relations. The EU stands as the largest trading partner for the UK, representing 50% of the goods exchanged. However, this relationship is not reciprocated equally, as only 22% of the EU's goods exports are directed towards the UK. Consequently, securing trade agreements is significantly more crucial for the UK than for the EU.
To realize substantial advantages, the UK needs the EU to reconsider its stance against selective agreements in particular sectors rather than insisting on all-encompassing deals post-Brexit.
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Currently, the primary exports of the United Kingdom are services rather than goods. Government officials are aiming to maintain a low profile in hopes of avoiding the UK's involvement in a potential trade conflict involving tariffs between the European Union and the United States.
What are the prospects for a definitive agreement? Considering the possibility of re-entry or conducting another vote on membership – this assumes, of course, that a wounded EU would be willing to consider welcoming back such an inconsistent and divided partner.
Business mogul and television personality Lord Alan Sugar is known for his straightforwardness. On the fifth anniversary of Brexit, he stated, "The greatest catastrophe of my lifetime was our exit from the European Union," and urged, "Rejoin the EU."
The UK's counterpart to Donald Trump on The Apprentice might be intimidating, but British mainstream politicians are even more terrified of the unpredictable outcomes that could arise if they revisit the issue of Brexit.
It required three decades for the UK to join Europe and an additional four decades to leave. Don't wait up!
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Yvette Cooper Criticizes Business Reliance on Foreign Recruitment, Advocates for Increased UK Worker Training
Home Secretary Yvette Cooper has expressed concerns over companies preferring to hire from overseas instead of developing talent within the UK for "far too long." Speaking on Sunday Morning with Trevor Phillips, Cooper highlighted the issues she sees with the current "relaxed free market approach," noting that it has resulted in a fourfold increase in net migration over the last four years.
Sunday, February 2, 2025, 11:
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The government has committed to halting the practice of companies hiring workers from abroad rather than developing the skills of individuals within the UK.
On the program "Sunday Morning with Trevor Phillips," Home Secretary Yvette Cooper voiced her criticism of the existing "relaxed free market approach" to immigration, attributing it to the fourfold increase in net migration over the last four years.
"She noted that a major factor has been the significant increase in hiring from abroad in various fields where domestic training has declined."
"This has resulted in a laissez-faire economic policy that allows companies to hire from abroad rather than investing in training within the UK."
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She stated that companies must be compelled to demonstrate their efforts in hiring locally through additional mandatory criteria.
Ms. Cooper stated that the government is "developing additional strategies" specifically aimed at sectors like IT, construction, and engineering, where there has been "an excessive reliance on overseas recruitment for too long."
Ms. Cooper announced that the recently unveiled Border Security Asylum and Immigration Bill will integrate the immigration framework with organizations such as Skills England, which participate in planning for workforce needs.
She stated that the government plans to maintain the salary threshold for skilled migrant workers at £38,700, and it has abolished the 20% wage reduction for non-EU international employees that was introduced by the Conservatives in 2019.
She also noted that the ongoing limitations will still apply to foreign graduate students and social care workers wishing to bring family members.
Discover additional details on Sky News: AI-generated images featuring children banned. Leading Conservative acknowledges errors in immigration policy. AstraZeneca cancels plans for a £450 million facility in Liverpool.
The remarks from the home secretary follow a report by the Office for National Statistics (ONS), which forecasts a growth of five million people in the UK's population over the next decade, primarily due to immigration.
In a conversation with Sir Trevor, Andrew Griffiths, the shadow trade and business secretary, remarked, "Certainly, our stance has been straightforward. The Conservative Party has undergone a change in leadership. Previously, immigration levels were excessively high, and during that time, the immigration system experienced numerous shortcomings."
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Rejecting the idea of global digital ID cards
In an article published by the Sunday Telegraph, Chris Philp, the shadow home secretary, criticized the government for dismantling portions of the 2023 Illegal Migration Act that essentially barred individuals arriving via small boats from seeking citizenship.
He further indicated that the administration is planning to undo the Conservative policy that categorizes individuals who decline to participate in scientific age verification as adults.
A spokesperson from the Home Office stated: "The majority of the Illegal Migration Act has yet to be implemented (this includes the section on age assessments); it will not be initiated under the current government's policy.
"Strong procedures are implemented to confirm and evaluate a person's age when uncertainties arise, involving the National Age Assessment Board. We continue to uphold the measures regarding scientific evaluations outlined in the Nationality & Borders Act 2022."
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When questioned on ex-Prime Minister Sir Tony Blair's suggestion that digital ID cards could alleviate immigration issues, Ms. Cooper did not support the idea.
She noted, "While non-UK citizens are required to possess biometric resident permits, these are seldom verified."
Regarding trade policies, Ms. Cooper reaffirmed Labour's position, stating that the UK has no plans to rejoin the Customs Union or the European Single Market, nor will it reinstate free movement rights.
"We'll explore strategies to minimize hurdles, yet rejoining a Customs Union is off the table. Our approach must recognize that we are no longer part of the EU and there's no going back. It's time to progress."
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