Economic Crime (Transparency and Enforcement) Bill

Debate between Baroness Laing of Elderslie and Liam Byrne

Committee stage
Monday 7th March 2022 Commons Chamber

[Liam Byrne]

Thank you for calling me to speak, Dame Eleanor. I thank the Minister for his presentation to the House and for the spirit that I thought he brought to his remarks at the outset. He slightly walked back from some of that consensus, but I make the point to him that many of us across the House think that the Government’s approach to tackling economic crime is all holes and no net. We have tried, in 27 pages of amendments, to turn what should be a net into some snares. That is why we cannot understand why the Government are not taking on board some of the smaller, technical drafting amendments that we proposed tonight—and frankly, some of the bigger moves. The Minister has it in his power to drive those through tonight so that by the time the sun rises tomorrow, we would have in our country a much stronger framework for tackling economic crime to take to the other place.

I want to speak to the two amendments in my name—amendments 37 and 38—and weigh in on the debate on amendment 26 and new clauses 2 and 29. Let me start with amendment 26, because I was a Home Office Minister for a couple of years, and I have won and lost many cases as a Home Office Minister. I have to say to the Minister that the failure to remove the words “knowingly or recklessly” from the Bill is frankly the oligarchs’ loophole—their “Get out of trouble free” card. I add my plea to those of other hon. Members that we remove those words. Otherwise, frankly, we will stand by and watch the richest people on earth driving a coach and horses through our legislation.

My second point is about new clause 2. As my right hon. Friend the Member for Barking (Dame Margaret Hodge) said, the heart of our problem with sanctioning—our frankly embarrassing performance on it—is that as well as not having the right powers, we just do not have the right resources in place. The fact that the Government took away the title of Minister for Economic Crime tells us everything we need to know about their performance and attitude hitherto.

As my hon. Friend the Member for Rhondda (Chris Bryant) said, the United Kingdom has sanctioned 34 individuals and entities since the extension of the invasion; the EU has sanctioned more than 500. Of the Navalny list of 35 that the hon. Member for Oxford West and Abingdon (Layla Moran) read out in the House the week before last, the UK has sanctioned just eight; the EU has sanctioned 19. However, what really troubles me is the question of resources, because that is obviously the core problem.

When I submitted parliamentary questions to the Foreign Office, the Treasury and the Home Office last week, I was frankly horrified. My question to the Foreign Office, which leads on sanctioning policy, was pretty straightforward: how much money is devoted to sanctioning, and how many civil servants are working on it? The answer from the Under-Secretary of State, the hon. Member for Chelmsford (Vicky Ford), was about 16 lines long and did not mention either how many civil servants are working on sanctioning or how much money is being spent.

An answer to the same question came back from the Minister for Security and Borders. In a way, I admire the number of tropes folded into his answer:

“The National Crime Agency welcomes the announcement on the Combatting Kleptocracy Cell…They have already surged additional officers to support existing efforts and will”—

wait for it—

“move at pace to enhance the unit further”.

I put the same question to the Treasury. The Treasury being the Treasury, it said:

“The staff in post in OFSI was 37.8 FTE…This information can be found in HM Treasury’s Outcome Delivery Plan”.

That is the level of precision that we ask of every Department. Frankly, the silence tells us that all is not well. That is why new clause 2 is so very important.

New clause 29, tabled by the right hon. Member for Haltemprice and Howden (Mr Davis), is incredibly important, but I push the Minister to go further. We need to be able not only to freeze assets, but to seize them. Paragraph 3.1.3 of the UK financial sanctions guidance in December 2020 says that the use of an asset, even when it is frozen, is not prohibited.

The Minister will forgive the Opposition for growing frustrated over the years at the economic policy that the Government have pursued, which has created a country of haves, have-nots and have-yachts. He can imagine how frustrated we are that the Government will not even seize the yachts when they belong to oligarchs. Somebody has very kindly shared with me a list of candidates that the Minister might want to consider: the My Solaris, owned by Roman Abramovich; the Eclipse, which is sailing in the north Atlantic and which the Government would have no means of either seizing or freezing as an asset if it docked at a UK port; the Valerie, owned by Sergey Chemezov, which is currently in Barcelona; the Lady Anastasia, which is currently in Mallorca in Spain; the Tango, which is also in Mallorca; the Palladium, which is currently in Barcelona; the Aurora, in Barcelona; Here Comes the Sun, in Mallorca; Ice, in Genoa; the Ragnar, in Narvik; Sailing Yacht A, owned by Melnichenko—

[The Chairman of Ways and Means (Dame Eleanor Laing)]

Order. I appreciate that the right hon. Gentleman has a long list. It is enlivening proceedings and we are all grateful, but we do not have time. Will he please truncate his speech? Just say, “and 12 more,” or something like that.

[Liam Byrne]

I am grateful for your guidance, Dame Eleanor, because I think I have made my point: the Government need to take on more power to seize and freeze these assets.

The final point I wish to make is about strategic lawsuits against public participation. We recently had a good debate on lawfare, sponsored by the right hon. Member for Haltemprice and Howden and myself. In amendments 37 and 38, we make proposals that the Government could adopt. I do not wish to press them to a vote tonight, but I would like the Minister to confirm what the Foreign Secretary and the Justice Secretary said in the media on Friday. The Justice Secretary told “BBC Breakfast” that SLAPPs were an

“abuse of our system and I’m going to be putting forward proposals to deal with that and to prevent that”.

The Foreign Secretary later told The Guardian that she had asked Government lawyers to “find literally any way” to crack down on SLAPPs. I would like this Minister’s confirmation that that is indeed going to happen, not in some consultation response to the Human Rights Act, but as a stand-alone piece of legislation, so that we can live in truth in this country. It is outrageous that English courts are being used as a means to silence journalists such as Tom Burgis, Carole Cadwalladr and Catherine Belton. I want great books such as “Butler to the World” by Oliver Bullough to be written with the freedom to tell the truth, and at the moment the oligarchs are denying us that freedom. They are launching a war on free speech in English courts, of all places. That scandal has surely got to stop.

I will conclude by saying that it is now clear that what our country needs Russia is a recontainment strategy towards Russia. That will entail a refortification of the NATO frontline to the east; resupplying the Ukrainian forces; and suppressing and repressing the Russian economy. Sanctions do not produce instant results—Presidents Mugabe and Maduro presided over economies in ruin for many years—but this would give us progress.

Countering Russian Aggression and Tackling Illicit Finance

Debate between Baroness Laing of Elderslie and Liam Byrne

Wednesday 23rd February 2022 Commons Chamber

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I congratulate Labour Front Benchers on calling this debate, because we are required to come together today to discuss, to expose and to unravel what could be the greatest coincidence in British politics. The cynical would say, in the words of Yogi Berra, that it is almost too coincidental to be a coincidence, although of course this House would not hazard such a judgment, but here it is: on the one hand we have a Government who have presided over the most comprehensive failure to tackle economic crime, which is a failure so profound that we have earned a reputation around the world as one of the world’s capitals of money laundering, yet on the other hand we have a flood-tide of money—not £2 million, not £3 million but over £4 million, and counting—that has come into Tory party coffers from generous souls with close ties to Russia. The ministerial code, for what it is worth, says that Ministers are required not only to avoid a conflict of interest but to avoid an appearance of a conflict of interest.

I therefore speak today in a spirit of great generosity to the Minister, because I want to try to extract him from the pickle that he now finds himself in. I am seriously concerned that Tory Ministers are now exposed to the allegation that they are quite simply poodles on roubles. In that spirit of generosity, I want to set out the two problems that the Minister will be required to resolve if he is to escape such an appearance over the weeks, months and years to come. Problem No. 1 is the gaping hole where a plan for tackling economic crime should be. We know the scale of the problem because the National Crime Agency has told us. It says that the scale of economic crime is some £100 billion a year in money laundering and £190 billion lost to fraud—a total of £290 billion. That is a significant chunk of our nation’s GDP, so this is not an insignificant problem: it is a monumental problem over which the Government are presiding. Secondly, the reputational damage is so serious that think-tanks in Washington are writing reports saying things like:

“uprooting Kremlin-linked oligarchs will be a challenge given the close ties between Russian money and the United Kingdom’s ruling Conservative Party”.

How on earth has the Conservative party got itself into this mess? Well, it is quite a story. I am going to rattle through the 10 key steps that have led the Government to get into this mess. First, they abolished the Minister in charge of economic crime. When the Minister was appointed—[Interruption.] Well, he was appointed with the title of Minister for Security and Borders, whereas his predecessor was known as the Minister for Security and Economic Crime. So the Government are taking economic crime so seriously that they deleted it from the title of the Minister who has been asked to wind up this debate.

Secondly, the Government have now tasked not one, not two but 12 different agencies with tackling the problem of economic crime without going to the trouble of appointing someone to be in charge of these 12 different agencies so as to lead the charge. Thirdly, they have neglected to implement 60% of the measures in their own economic crime plan. Going through the list of measures rated “red” by the Royal United Services Institute, some of them are pretty significant, such as making sure that the police get serious about tackling fraud and economic crime.

Next, the Government have starved the National Crime Agency of so many resources that its director general says that it will not take on cases where it thinks the legal costs will be too high. Then they have failed to equip Companies House with the powers to check information sent in by people setting up shell companies. According to the Minister, there are now 11,000 companies on the register that still have not filed returns on who is the person with significant control, yet how many prosecutions have we had? One hundred and nineteen. It is pathetic; it is lamentable. Then they have failed to bring forward a register of beneficial ownership of property, like the multi-million-pound mansions in Westminster. Then they have failed to use our unique role in the global financial economy to light up where bad actors are doing bad things. SWIFT, the financial messaging system, is based in the UK. We are the global hub, along with New York, of financial settlement worldwide. We could be using the panorama of information to which we have access to light up bad people, to create intelligence packages and then to ensure that those people are pursued to the ends of the earth.

We have failed to stop our courts being used as arenas to silence journalists such as Catherine Belton and Tom Burgis, who are pursuing bad and corrupt companies. Thank God for HarperCollins and Arabella Pike because, frankly, without such brave publishing houses, we would not have the truth brought into the public domain. Then we have the Government’s failure to introduce a foreign agents registration Act, despite the fact that it works in America and Australia. To cap it all, they have failed to offer us any kind of hard timetable for the economic crime Bill, which is an omission so serious that they lost their own Minister to it in the House of Lords.

Those 10 elements—this 10-step decent into chaos—is why we now have a situation where the grand total of unexplained wealth orders targeted against oligarchs is zero. Apart from the Magnitsky sanctions, which came from a list of the crimes handed to us in 2007, we have not proposed any sanctions for economic crime against Russian-born individuals since 2014. Some might say that is benign neglect; others might say it is malign neglect; and others might say that the Conservative party has been paid to look the other way.

I am sure we were all reassured by the Secretary of State for Instagram’s appearance on “BBC Breakfast” this morning, where she—the Foreign Secretary—told a grateful nation that the Tory party vets its donors and that we must not confuse Russian heritage with proximity to President Putin. I think we would all agree with that, which is why, in the spirit of generosity and helpfulness, I offer my vetting services to those on the Conservative Front Bench this afternoon.

Let us start with Lubov Chernukhin, who has donated £2.1 million. The Guardian revealed that her husband, Vladimir, who was appointed deputy chairman of VEB, which was not sanctioned yesterday, received $8 million from Suleiman Kerimov, who was sanctioned by the US Treasury in 2018. The transfer to Vladimir came on 29 April 2016, mysteriously just before a donation of £1.5 million to the Conservative party. Then there is Alexander Temerko, a man who, it is said,

“forged a career at the top of the Russian arms industry and had connections at the highest levels of the Kremlin”.

He was a former deputy chairman of Yukos Oil Company and somehow mysteriously escaped the purge of his colleagues. He has now donated £747,000. He has been working very closely with Viktor Fedotov, a director of Aquind, a source of great largesse to many Members in the House. Mr Fedotov is the former head of a subsidiary of Lukoil, and was revealed in the Pandora papers as a man who, along with two others

“made fortunes from the company in the mid-2000s, around the time it was alleged to have been siphoning funds from the Russian state pipeline monopoly Transneft.”

Then we have Dmitry Leus, who has donated £54,000. According to the Daily Mail, he was

“found guilty of money laundering and jailed in Russia in 2004. The conviction was later overturned and he insists the prosecution was politically motivated.”

Here is the mystery: he also donated to the Prince’s Foundation, which has decided to return Mr Leus’s money. The House will be amazed to hear that the Conservative party has not.

Then we have Mohammed Amersi. He and his wife have given £793,000 to the Conservative party. The BBC said he was involved in one of Europe’s biggest corruption scandals, which entailed $220 million being paid to a Gibraltar-based company owned by the daughter of the President of Uzbekistan. He has always insisted that his donations came from UK profits, but the Financial Times tells us that he

“received $4m from a company he knew to be secretly owned by a powerful Russian”—

Putin’s then telecoms Minister.

Then we have Murtaza Lakhani, whose firm Mercantile & Maritime has donated £500,000. This is the chap who Bloomberg tells us has been revealed as making large parts of his fortune through channelling

“a $6 billion torrent of cash”

from the Russian oil giant Rosneft to Kurdistan. The money flowed to a company registered in the tax haven of Belize, with a mailing address in Cyprus.

Then we have David Burnside, formerly of this parish. His firm has donated £200,000. Mr Burnside boasts links to senior figures in the Kremlin. The Guardian reported that he

“has introduced several prominent Kremlin figures to senior Conservatives”,

including Mr Putin’s old friend, Vasily Shestakov.

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. I note that the right hon. Gentleman has a long list. I wonder whether he could just deliver it a little bit faster.

[Liam Byrne]

I will conclude, Madam Deputy Speaker, because I think my vetting services have been exhausted for the Front Bench. I will conclude by saying that Conservative Ministers are behaving like innocents abroad in a world that is not innocent. No wonder people are now saying that the capital of Londongrad is not Mayfair but Matthew Parker Street, home of Conservative central office. The cruel would say it is 5 Hertford Street, co-owned by Jamie Reuben, scion of the family that made its fortune in the Russian aluminium wars and, as we know, the place where the Foreign Secretary insists on her £3,000 lunches.

The Government have to work harder to persuade us that there is not a coincidence. They have to persuade us that they are not poodles on roubles. They have to bring forward a proper plan for tackling economic crime, not least because of the fact that the financial services industry is worth £165 billion to this country, and it employs millions of people who work hard every day. But we trade on our reputation, and right now, this Government are destroying that reputation for good.

Lawfare and UK Court System

Debate between Baroness Laing of Elderslie and Liam Byrne

Thursday 20th January 2022 Commons Chamber

[Liam Byrne]

rose—

[Madam Deputy Speaker (Dame Eleanor Laing)]

The right hon. Gentleman has already spoken, but he has the leave of the House to speak again.

[Liam Byrne]

This has been one of the most remarkable debates that I have sat through in 18 years in the House. The issue is extremely serious, there has been a high level of cross-party consensus and immense practical detail has been offered. I have been in the Minister’s position, when there is turbulence at the top. I urge him to keep his head down and to plough on. We cannot afford anything less.

Thirty-two years ago, President Gorbachev came to the Council of Europe and talked about his dream of a common European home and a single legal space, our great gift to the world. That dream is now shattered, but that means that we have a special obligation in this country, as the home of the Magna Carta and the Bill of Rights, to be a beacon and a champion of freedom, rights and free speech. That is the challenge to which the Minister must now rise.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I am glad that the right hon. Gentleman had the leave of the House to speak again.

Question put and agreed to.

Resolved,

That this House has considered the matter of lawfare and the UK court system.

Business of the House

Debate between Baroness Laing of Elderslie and Liam Byrne

Thursday 18th November 2021 Commons Chamber

[Madam Deputy Speaker (Dame Eleanor Laing)]

Dreadful!

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

We have made a degree of progress this week on taking unfortunate money out of politics. Now we need to take the next step and clean up the laundromat of British political party funding. In the wake of the Intelligence and Security Committee report on Russia last year, will the Lord President confirm that no British political party should be taking cash from suspicious fortunes made in Russia and Uzbekistan? Can we have a debate in Government time as soon as possible to crystallise a cross-party consensus on this critical topic?

COP26

Debate between Baroness Laing of Elderslie and Liam Byrne

Monday 15th November 2021 Commons Chamber

[Madam Deputy Speaker (Dame Eleanor Laing)]

We have been considering this subject now for an hour, which is the normal time for a statement. As this is a historically important statement, I would like to ensure that everybody who wishes to ask a question has the opportunity to do so, but they really will have to be short questions now. I am slightly concerned about the Prime Minister’s voice; I am sure he is not concerned, but I am concerned about his voice. It would be a terrible thing if he were prevented from other things on which he has to make speeches in the near future because we kept him at the Dispatch Box for too long—[Interruption.] The Prime Minister is not concerned; nevertheless we will be as quick as possible now, because there is other business to get on to.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

The Prime Minister probably admits that the weakest link of the deal was the lack of progress on defunding the polluters. The catchily-named GFANZ—Glasgow Financial Alliance for Net Zero—initiative disappointed many. That now means that 1,400 of the world’s 2,000 biggest companies do not have net zero targets. Their combined turnover is nearly $15 trillion, but most pension savers are funding them, because the information is not there in their accounts. When will that great deficit be fixed?