Sanctions

Bob Seely Excerpts

Tuesday 22nd February 2022 Commons Chamber

[Bob Seely (Isle of Wight) (Con)]

It is a privilege to follow the hon. Member for Rhondda (Chris Bryant). It is quite clear that deterrence has failed and he is right to say that we have been naive. I make no criticism of the Minister, but I do criticise the policy over the past 10 or 15 years. This is too little, too late. In 2007 Putin stood up at the Munich conference—this year’s has only just finished—and said that he no longer recognised the post-war settlement. That was very clear. The same year, he tore up Georgia, and five years later Ukraine. It has been clear for many years that he seeks to dismember Ukraine, shatter the unity of the west and build a new sphere of influence, encompassing the former Soviet Union, including Moldova and potentially the Baltic republics, and that he wishes to ensure that in the eyes of the Russian people, the west is an existential enemy: a physical enemy, but also an enemy in its values.

Again, I make no criticism of the Minister, whom I hold in very high regard—but doing everything in our control? No. Ratcheting up the pressure? Not really. Rising to the moment? I am sorry, but please. Last week, ITV’s “Peston” show explained that £1.5 billion of property in the UK has been bought by Russians accused of corruption or with Kremlin links, and nearly 30% of that is in Westminster. The Russians certainly have a sense of irony. There are 2,100 UK-registered companies involved in Russian laundering and corruption cases, involving a staggering £82 billion.

My central point is that I keep being told that Whitehall now understands the hybrid threats. I am sorry, but I do not buy that. I strongly believe that our leaders need much better to understand the Kremlin’s complex hybrid conflict, which spans politics, economics, propaganda, military force, espionage, culture and religion. In Ukraine now, the frontline is the border. In Germany, the frontline is the gas pipelines. In this country, the frontline flows, like the Thames, along to the City of London. It was great to see the Home Secretary announcing the end of the golden visa scheme, but come on—that horse bolted a long time ago.

These sanctions are good, but there needs to be a willingness to use them. Will the Minister tell us how many unexplained wealth orders have been used on Putin’s allies in the UK? The answer is zero. Building on everything that has been said today by the hon. Member for Rhondda and so many others, the Prime Minister has promised an economic crimes Bill. I am going to be a bit repetitive here, because it needs to be said again and again: where is the economic crimes Bill? Where is the reform to beneficial interests—true ownership for offshore properties? For heaven’s sake, is it really in our national interest to have tens of thousands of properties used and owned by offshore shell trusts, hiding organised crime or the world’s kleptocrats? If the Government understand hybrid conflict, what are they doing to deal with this threat?

[Alison Thewliss (Glasgow Central) (SNP)]

The hon. Member is making excellent points. I sat on the Joint Committee on the Draft Registration of Overseas Entities Bill, and this information was well known four years ago. Does he share my frustration that despite that, there has been so little by way of action to tackle the problem?

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[Bob Seely]

We are 15 years late. It should not take the gravest crisis since world war two for us to get our house in order; this is just good housekeeping that we should have done 20 years ago. I thank the hon. Member for making that point.

Where is the adoption of the recommendations of the Foreign Affairs Committee and ISC reports? One of the most chilling elements of the ISC report was our own National Crime Agency saying that it lacks the resources necessary to take on the oligarchs. We—our own people, the public good—are being silenced in our own country by UK lawyers in the pay of some of the richest and most malign human beings on earth. Where is the tightening of the rules at Companies House? I know we have all said this, but I want to say it again. Banks in Germany, Denmark and Sweden all laundered billions of pounds from Russia but they used UK shell companies to do so. Is it really in our national interest to have a system so open to corruption? If the Government understand hybrid conflict, what are they doing to deal with this threat?

This SI is strong and I support it, but how many foreign lobbying scandals will the UK have to endure before we realise that we need a foreign lobbying Bill, or as some have called it, a foreign agents registration Bill? The US has had one since 1938, the Australians since 2018. The only way we found out about Lord Barker’s work for Deripaska was through The New York Times. Lord Goldsmith, a former Labour Attorney General—I make no political point here—said recently:

“I am sorry to have to take leave of absence, but felt it was the only option open to me given the choice between that or revealing privileged and confidential information.”

I understand he is off to work for the Russians. He keeps his title, but by not sitting in the House of Lords he does not have to declare. In the US or Australia he would be filling out form after form, saying what he was doing; in this country, hasta la vista, he is off to work for the Russians—be it the Russian Government or major Russian institutions—and what do we know? As the Russians would say, “nichevo”— we know nothing. We need a foreign lobbying Bill, and if we were serious about dealing with the Russian problem we would have one.

Where, too, are the measures to stop libel and data protection laws being abused by unscrupulous lawyers? Barely two weeks ago we had a very good debate on lawfare in this country, and we talked about the need for action against SLAPPs—strategic lawsuits against public participation. As the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) said, that is when legal action is used to frighten, harass or intimidate the media or civil society groups. The Government understand hybrid conflict; what are they doing about this threat?

It takes brave authors to deal with the threats from Putin’s oligarchs, people like Catherine Belton and Tom Burgis, and brave publishers like Arabella Pike at HarperCollins, but others, including Cambridge University Press, have been scared away from publishing books about Putin and Russia because of the power of Putin’s cliques in this country. Is it really in our national interest to have a system in which some of the world’s most sophisticated law firms have reduced themselves to offering a one-stop shop of intimidation and dirt-digging to some of the most corrupt people on earth? I do not think any of these things are in our national interest. I think they need to be challenged.

We have all heard about the threat of Putin, and I agree. I feel very strongly that this threat has been obvious for at least a decade and certainly since Crimea. I wish we had taken action then. Yet again, we are doing too little too late. Rather than veering from complacency to panic and back again, being unable to decide if we want to damn authoritarian regimes or suck up to their money, we need a consistent policy that sets out in a robust and intelligent way what our values are and the need to protect our institutions and our values against this growing threat.

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[James Cleverly]

No.

The House may be surprised to hear that I have taken a huge amount of positivity from the exchanges today, because this House has once again spoken with such a commanding, concerted and collaborative voice in support of the territorial integrity, sovereignty and independence of Ukraine and in support of the Ukrainian people. More than that, this House has demanded of the Government that we go further with our sanctions—that they are harder and inflict greater economic pain on the individuals and entities in the Russian system who have done so much damage not just to the Russian people, but now also to the Ukrainian people. I am happy that is the tone of the House because I can confidently inform the House that it is demanding something of the Government that the Government are absolutely determined to do. It is pushing at an open door.

A number of questions have come up repeatedly, so I will address them.

[Bob Seely]

Will the Minister give way?

[James Cleverly]

I will rush on, because I was excessively generous earlier. The question was asked: will these sanctions be escalated only in response to further aggression? I can assure the House that these sanctions will be ratcheted up because of what has already happened, and not just in response to what might happen in the future. Our intention is to prevent even further invasion of Ukraine, to have those troops who are in Ukraine removed, and then to have them return to their home barracks once they are back in Russia. That is our ultimate aim, and the ratchet effect will be done to pursue that as a strategic aim.

There have been questions about asset flight. We are very conscious of this, and that is why we are not explicitly naming people or institutions that may be subject to future sanctions. It is also why it is very important that we work hand in hand with our international allies and friends, who are just as determined as we are to address this situation.

The shadow Foreign Secretary, the right hon. Member for Tottenham (Mr Lammy), compared what we have announced today unfavourably with what our allies say they are going to announce. If I were to say that this sanctions package is as far as the Government are willing to go, that might be a legitimate criticism, but the point we have made is that, just as our friends and allies intend to go further, we intend to go further. I have given some suggestions about where that additional ratchet effect may be focused, but we reserve the right to explore whatever is necessary to dissuade further aggression and to force Vladimir Putin to withdraw the troops that have entered Ukraine.

Questions were asked about the application of this statutory instrument in the OTs. This SI does cover the OTs. Members asked whether individuals who may not be in direct managerial or ownership roles would be subject to these sanctions. This SI is worded specifically to be broad in scope. I think implicit in the question my hon. Friend the Member for Huntingdon (Mr Djanogly) asked was that it might even be too broad in scope, but I can assure the House that it was written specifically to be broad in scope so that the ownership maze often put in place to hide the beneficiary of ownership can be addressed.

There have been some questions about family members. A family member is caught within scope where they are acting for or deriving benefit from their relationship with the Russian Government. However, just being the relative of someone who may be subject to sanctions is not necessarily enough on its own. There need to be reasonable grounds, and we always act with reasonableness, although we do act with firmness.

In the debate, it has sometimes sounded as if the only Russians subjected to UK sanctions are the ones who were named by my right hon. Friend the Foreign Secretary this morning. It is worth reminding the House that 58 entities and 186 Russian individuals are currently subject to financial sanctions under the Russia regime, including the ones designated today. There are already limitations on the activities in the UK of SberBank, VTB bank, Gazprombank and others, and as I say, we will not speculate on where future sanction designations may land.

Across the House, my right hon. and hon. Friends—including my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) and my hon. Friends the Members for Isle of Wight (Bob Seely) and for Tonbridge and Malling (Tom Tugendhat)—have called on us to do more, and their message was absolutely echoed, very effectively and eloquently, by the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), my shadow, the hon. Member for Cardiff South and Penarth (Stephen Doughty), and the hon. Members for Stirling (Alyn Smith) and for Oxford West and Abingdon (Layla Moran). I hear—the Government hear—exactly the points that they are making.

The hon. Member for North Durham (Mr Jones)—