Repurposing Russian Assets to Rebuild Ukraine

Debate between Stephen Doughty and Roger Gale

Tuesday 27th June 2023 Commons Chamber

[Alex Sobel (Leeds North West) (Lab/Co-op)]

Will my hon. Friend give way?

[Mr Deputy Speaker (Sir Roger Gale)]

Order. I am terribly sorry, but I think I am right in saying that the hon. Gentleman has just walked into the Chamber.

[Stephen Doughty]

We believe in deterrence not only in relation to Putin, but in relation to others who have egregiously breached the rules-based international order.

I have a great deal of respect for Ministers on these matters. Indeed, we have wholeheartedly welcomed the Government’s position on Ukraine, and we continue to show that unity, but we need to be clear that Ministers have not provided the answers. I ask them very directly and very pointedly: what consideration is being given to the seizure, sequestration and repurposing of Russian state-owned assets? I am afraid that our calls have been repeatedly met with haze. We continually hear the phrase “exploring all lawful routes”, which has been said to me five, six or seven times in the Chamber and in answer to written questions. We need greater clarity, as Ukraine does not have time to wait. There has been a clear call for urgency today.

The Government need to get on with this. They need to come up with the legislation and the necessary measures to allow frozen Russian state assets to be used to rebuild Ukraine. As our motion says, we hope and believe they can reasonably do this within the next 90 days. I hope the Minister can give us a clear timeline for when we can expect proposals. The President of the European Commission attended the Ukraine recovery conference, and she made it very clear that the EU will come forward with proposals before the summer. I hope we will see the same level of urgency from the Government.

I saw the scale of the damage for myself on my visit to Ukraine last year, and it was utterly shocking to see residential buildings with rocket holes through them and the wanton damage to civilian infrastructure, including railways and roads. We have all seen the terrible scenes at the Kakhovka dam and elsewhere in recent weeks.

As my right hon. Friend the Member for Tottenham (Mr Lammy), the shadow Foreign Secretary, said, we cannot forget that tens of thousands of civilians have lost their lives and millions more are now refugees. This war will leave lasting psychological scars on every Ukrainian.

As I have previously relayed to the House, the Kyiv School of Economics, working in conjunction with the National Bank of Ukraine, estimates that, as of December 2022, the damage to residential and non-residential infrastructure amounted to $137 billion. The vice-president of the World Bank has estimated that the figure could be up to $630 billion, which is treble Ukraine’s GDP. This year alone, Ukraine’s national budget has a $38 billion gap.

Of course, before any reconstruction can begin, it will be necessary to clear the huge number of mines and unexploded ordnance that have been scattered across the country, including on the prime agricultural land that feeds not only Ukraine but the world. I commend the HALO Trust and others that do incredible work to deal with mines and unexploded ordnance. The HALO Trust has made it clear to me that it will take more than a month for every day of fighting to clear the ground of unexploded ordnance and munitions. This means that, if the war stopped today, it would take more than 30 years and billions of dollars to make areas safe for habitation and economic activity to begin again. There is also incomprehensible environmental damage. The destruction of the Kakhovka dam will have huge consequences not only for people but for the future ecological welfare of Ukraine, its wildlife and its economy.

We have heard many different arguments today about the legal possibilities, and my right hon. Friend the shadow Foreign Secretary set out very clearly what is needed. The UN General Assembly has already voted on this issue. A resolution was adopted by last November’s special session on Ukraine, setting out a very clear framework for how to proceed. Resolution ES-11/5 recognised that Russia

“must bear the legal consequences of all of its internationally wrongful acts, including making reparation for the injury, including any damage, caused by such acts”.

The resolution also called for member states to recognise the need for

“the establishment, in cooperation with Ukraine, of an international mechanism for reparation for damage, loss or injury”.

Under international law, this would not be viable in ordinary circumstances but, by explicitly invoking a claim for compensation, the UN resolution clearly satisfies the specific prerequisites of notice and opportunity for Russia to comply.

It is worth noting that, as was referenced earlier, there is clear precedent for such action. A UN compensation commission was established in the case of the first Gulf war, and it paid out $52.4 billion-worth of Iraqi oil revenues to pay for reconstruction and reparations to Kuwait. Incidentally, Russia supported that resolution.

I hope the Minister can set out his thoughts on the many eminent legal proposals that are out there. There are clear examples of how we could proceed. There are proposals for temporary countermeasures and the temporary suspension of sovereign immunity—there are very clear grounds for that to be done. There are clear precedents in the law of countermeasures and clear grounds in the UN resolution, as well as other historical examples and precedents.

We are under no illusions that this is a complex area, and we recognise that drafting and implementing such legislation is challenging. However, given that extensive evidence out there, will the Minister tell us what review the Attorney General and his Department have made of it? When will he come forward with clear proposals? We heard repeatedly about the work of allies. Canada, the US and the EU have all taken or are taking practical, tangible steps to move in this area, in turning Russia’s state-owned assets into the means for Ukraine to forge a brighter future and to meet reconstruction needs now. They are taking the lead and we should be alongside them, as we have been on many other issues, be it on direct military support to Ukraine, humanitarian support or working together on sanctions.

In conclusion, the Prime Minister rightly stated at last week’s conference that Russia “must pay” for the damage it has inflicted. He said:

“we’re working with allies to explore lawful routes to use Russian assets.”

But we need to get on with this now. We must complement warm words with decisive and urgent action, beginning today. Labour is committed to working alongside the Government in their support for Ukraine, in ensuring that it wins this war and defeats Russia. We welcome the commitments made last week, but if we are to be a constructive and objective Opposition, we must make it clear that the UK can and must go further. Therefore, the motion is simple and clear, and if Members support it, it will begin a process that should have started many months ago. Russia forfeited its absolute rights to these assets when it embarked on this egregious, unlawful and unprovoked war of aggression, when it destabilised our continent and when it sought to dismantle the global rules-based order. The consequences not only in this situation, but for many others in the future if we do not act and ensure that there are consequences for Russia for what it has done are very serious and even more wide-ranging. I commend the motion to the House. Let us get on with it.

[Mr Deputy Speaker (Sir Roger Gale)]

With the leave of the House, I call the Minister.