Countering Russian Aggression and Tackling Illicit Finance Debate
Full Debate: Read Full DebateDavid Lammy
Main Page: David Lammy (Labour - Tottenham)Department Debates - View all David Lammy's debates with the Foreign, Commonwealth & Development Office
(2 years, 6 months ago)
Commons ChamberI beg to move,
That this House expresses solidarity with the people of Ukraine, and supports their sovereignty and Ukraine’s territorial integrity; condemns Russian aggression and emphasises the UK’s commitment to NATO; resolves to end illicit finance that rewards and sustains the Putin regime in Russia; calls on the Government to introduce an Economic Crime Bill, an Overseas Entities Bill and a register of beneficial ownership by the end of March 2022; and further calls on the Foreign Secretary to make a statement to this House on the implementation of the recommendations of the Intelligence and Security Committee’s Russia Report, HC 632, published on 21 July 2020.
My ancestors knew what it was like to have freedom taken away at the barrel of gun. They knew what the twisted lies of imperialism sounded like. They knew what it was like to live without the vote. They were taken from their homes, enslaved, shackled to ships, and forced to work for the profit of a foreign empire. No act of authoritarianism is ever the same, but Vladimir Putin’s actions in Ukraine in recent weeks are an ugly attempt to restore the Russian empire.
The Russian President denied the right of a sovereign nation to exist. He unilaterally recognised separatist movements that seek to dismember Ukraine. Then, under the cowardly shield of the night, he sent in tanks and soldiers to enforce his diktat. Putin’s crimes against peace need a united and immediate response: a full set of sanctions, possible now; to provide continued support for the Ukrainian army; and to clean out the dirty Russian cash in our system. However, to stand up to Putin in the long term, we need to stand up to Putinism. Putin is not unique. He is the figurehead of an ideology that is being emulated by despots and dictators around the world.
My right hon. Friend is making an excellent speech. Does he agree that not nearly enough action is being taken to crack down on illicit Russian influence in the UK? Our structures are set up to be so opaque that we have no idea of how strong Russian influence is. With Putin’s money still being funnelled, can we not create a proper register of overseas entities, clearly to see and address this issue?
I appreciate that my right hon. Friend will say more on this issue. It is estimated that there is at least £2 billion of dirty money in the London property market—much of it is concentrated in high value areas including Kensington and my borough of Westminster—and we do not know the beneficial owners of those properties. Was he as surprised as me to hear the Prime Minister say that we may not expect the economic crimes Bill until the next Session?
My hon. Friend is so right. These properties are pricing out young people and challenging working people. Often, the lights are off and no one knows who owns them. If that is not an urgent issue, I do not know what is. I was staggered when the Prime Minister said that it did not merit action until the next Session.
It is not just about urgent action. Does my right hon. Friend agree that it is outrageous that legislation on publishing the beneficial ownership of UK properties owned by entities abroad was promised by the Government in 2016, there was consultation on a draft Bill—I think a Bill is sitting in Government, ready to go—and it was promised again in the 2019 manifesto and at G7 meetings but has yet to appear? Is that not an utter scandal?
Further to that point, my right hon. Friend will be aware that the Treasury Committee has published a report on economic crime in which it calls for an economic crime Bill, so this matter is supported not just by Opposition Members but by many Conservative Members. There is support right across the House, so why is there a lack of urgency from the Government?
My hon. Friend is right. We are talking about foreign ownership of property in our country, and that ought to command cross-party support. Just six or seven years ago, I would never have thought that this would feel like a partisan issue and be the basis of an Opposition day debate. It should have had time on the Floor, and we should have had an economic crime Bill years ago, but it takes the Opposition dragging the issue into the public domain to get a response.
To stand up to Putin in the long term, we need to stand up to Putinism, because Putin is not unique; he is the figurehead of an ideology that is being emulated by despots and dictators around the world. Putinism is imperialism. Putinism is authoritarianism. Putinism is ethno-nationalism. The Russian regime represents a fundamental geopolitical threat and we will not defeat the broader threat until we tackle the ideology that underlies it. Part of our message to Putin must be that his actions are a historic mistake.
This is not the first time that a Russian leader has waded into conflict as a result of his ideology. The same thing happened in East Berlin in 1953 when the USSR moved in to suppress riots. It happened in Hungary in 1956 when Russia sent in troops to invade the country as well as in Czechoslovakia in 1968 and in Afghanistan in 1979. None of those acts of aggression was a success in the long term for Russia, and civilians caught in the middle always pay a terrible price. In the invasion of Czechoslovakia, Russian soldiers strode in convinced that their invasion was liberating the Czech people from capitalism, but, when they are arrived, normal Czechs surrounded the invading forces and said, “Why are you here? You aren’t liberators—you are aggressors.” The Russian troops were deflated; the propaganda that they had been fed was a lie. The same thing will happen if Putin moves on the rest of Ukraine.
Only the Ukrainian people should have the freedom to determine their own futures. That fundamental belief in self-determination is shared across so many of our borders. It is a founding principle of so many of our closest allies and partners across this great continent and beyond it. The logic of democracy is why Putin will never win in the end. Any reward that he gains will be pyrrhic.
Putin has made his move. The wider threat that Ukraine faces is immediate, but the consequences for Europe and the west are also stark. This is likely the end of the post-cold war era, but we do not yet know what era is next, because it has not been decided. The effects of this moment will depend as much on our response to this aggression as on the aggression itself.
I thank the right hon. Member for putting forward an impressive contribution to the debate. Following his line of thought, does he agree that, having decided our first step of imposing sanctions, we must do so properly and with wisdom? We also need to act in co-operation with other nations to ensure that we do not see Russian money supply transferred from our banks to friendly banks—those in Switzerland, for example, among other nations—in the next few days.
The hon. Gentleman is right. He knows a lot about violence and the corruption of money to fund that violence, and I am sure that the whole House is grateful for his wisdom.
What we know is that autocrats from around the world are watching to see if we meet this test of our strength and resolve. China will be watching to see how the west responds to Russia as it plots its next move. We must be strong not only to defend the people of Ukraine whose dignity and resilience has been an inspiration to all of us throughout the crisis but to defend the liberal international order that we need to stay safe.
Labour would go deeper, broader, stronger and faster on sanctions. The Government’s targeting of just five banks and three individuals is simply not enough. They claim that these are the toughest ever sanctions on Russia, but, after the annexation of Crimea, the UK froze the assets of almost 200 individuals and 50 entities alongside a range of other measures. Labour would go much further. We would increase the depth of sanctions by targeting more oligarchs and more banks. We would increase the breadth of sanctions by widening the measures beyond just asset freezes to sectoral measures, blocking dealing in Russian sovereign debt and banning the fake-news producing Russia Today. We would ramp up the speed of sanctions—we would not wait for Putin’s next act of war but introduce the full set of sanctions now. We would increase their coherence, moving in lockstep with our allies who have sanctioned more people more quickly than us. We would have stopped Nord Stream 2 and targeted Belarus as well, and we would make our sanctions stronger by targeting the systems people operate in as well as individuals. That means reforming Companies House so that it is fit for purpose, creating a register of overseas owners of UK property, as has been mentioned, delivering a strong economic crime Bill, as has been mentioned time and again, and implementing the recommendations of the Russia report finally in this House.
My right hon. Friend will be aware that an estimated £100 billion a year is run up through money laundering, fraud and corruption, so he is right that it is imperative that the Government take action now. When the Minister for Security and Borders, the right hon. Member for East Hampshire (Damian Hinds), gave evidence to the Treasury Committee, he admitted that the Government have been found wanting—not his words, but more or less so—and that there is much to do. This week is the moment to act.
I thank my right hon. Friend for allowing me to intervene once again. The words the Minister for Security and Borders, the right hon. Member for East Hampshire (Damian Hinds) used when giving evidence to the Treasury Committee were that he was “not happy”—that is the quote in our report—with the progress the Government have made in tackling economic crime. That is in the Treasury Committee report. I share his unhappiness with the progress the Government have been making. If the Minister is not happy with the progress the Government are making and we are not happy with the progress the Government are making, we can only guess why there still seems to be a lack of progress.
I have to say to my hon. Friend that it is challenging all our consciousness when the Government say they are not happy and the Minister says he is not happy and nothing happens. They are in charge and they have to fix this.
Sanctions are the way we punish Russia for its crimes, but there is so much more action we should have taken years ago to defeat the corruption, crime and lies that define the ideology and operating system of Putinism. That means rooting out the dirty money that is corrupting our economy and our democracy. It is no use tackling Russian aggression abroad while doing nothing to tackle Russian corruption at home. For a decade, the Tories have failed on this. Worse, they have enabled it. We are working with the Government on standing up against Russian aggression in Ukraine, but we must work in the UK to get our own house in order. It is a great shame that the UK is regularly described as the money laundering capital of the world. It is shameful that our US allies have said they are concerned that the influence of Russian money has compromised us. It is shameful that the Tories have failed to stop Russian money from turning London into a laundromat for ill-gotten gains.
Our openness to kleptocracy and its money has weakened our country. Dirty Russian money props up Putin’s regime by shielding the dark money of the Russian oligarchs and Putin himself. It fuels crime on our streets. When kids risk their lives to deal drugs on county lines, that is dirty money. When vulnerable women are trafficked across the country to be abused, that is dirty money. When people are forced to live in fear because of criminal gangs on the streets, that is funded by dirty money. Dirty money makes the housing crisis worse by inflating prices and buying up properties to lie empty as assets not homes. And it leads people to ask questions about the Conservative party, which has accepted £2 million in donations since Boris Johnson took power in 2019. Mr Speaker, it must give that money back.
One thing my right hon. Friend has not mentioned yet is tier 1 visas. I note that Lubov Chernukhin was given a tier 1 visa in 2011 and Alexander Temerko was given a tier 1 visa in 2011 by Conservative Home Secretaries. Subsequently, between them they have given millions of pounds to the Conservative party and lots of individual Members of this House have taken money from those individuals. It certainly looks like corruption, does it not, if you give out a visa, do not insist on that person surrendering their Russian nationality, and those people use extensive shell companies in the British Virgin Islands and elsewhere to hide where their money is coming from? That is corruption, is it not?
What concerns me is that the way that Russia is set up at the moment—I described it yesterday as a mafia state—means that if you are going to make money out of Russia you have to have the permission of Mr Putin, otherwise you are out of the picture. Does my right hon. Friend therefore not share my concern that a lot of the money coming in is directly or indirectly linked to the activities of Putin himself?
My hon. Friend is absolutely right. We note, do we not, individuals who are the target of sanctions in Europe and who have been the target of sanctions in the United States since 2018? And we wait and we wait and we wait. And we wonder why this Government are so slow to act.
Today, we call on the whole House to come together to end the tidal flow of dirty Russian money flooding into our country by: ending our openness to fraud and money laundering with an economic crime Bill that should be brought forward this month; fixing our inadequate regulation of political donations by reversing the Conservative’s Elections Bill that is setting us back; strengthening our lax mechanisms of corporate governance; enabling our national agencies to clamp down on economic crime; and blocking the threat of foreign interference in our politics. We need transparency with an overseas entities Bill and the reform of Companies House to shut down the shell companies that obscure the origins of wealth and hide corruption, and reveal who owns land from abroad. Finally, this House must come together and recognise the urgency of implementing the Russia report, which was published in July 2020—nearly two years ago.
I am grateful to my right hon. Friend for giving way and I welcome the commitments he has made on the sort of action a Labour Government would immediately put in place. There is one area he has not covered, which I think is of great importance: the role played by the financial services sector and the enablers here in London in supporting money laundering and illicit finance. Whether lawyers, accountants, the banks or other advisers, they are often complicit in this activity. Does he agree that the economic crime Bill also needs clauses that tackle the role of enablers in enabling illicit finance?
My right hon. Friend is exactly right. Over two thirds of our economy is the service sector. The consultants, lawyers and accountants are absolutely a part of the process of dirty money and the laundromat. We must act to deal with them. [Interruption.] Of course not all of them, but there are facilitators and we expect to see the appropriate clauses in the economic crime Bill.
Defeating Putinism starts with leadership that represents our values. If we are to be taken seriously on the world stage when we talk about democracy, we cannot be watering it down at home with unfair reforms such as voter ID and loose rules about overseas donations. If we are to be credible champions of international law, our leaders must practise the laws they set at home. The best way to defend the rule of law is to follow it.
The right hon. Gentleman rightly emphasises what the UK can do to clean up matters in the UK. One commentator has talked about the need to tackle what he calls the ecosystem of Russian influence over UK democracy, which would mean going further and including direct donations to politicians—some of whom are Members of this House—the actions of public affairs companies and lobbying companies, and in particular the funding of think-tanks. Does he agree that a very comprehensive package of measures is needed?
The hon. Gentleman makes the list more comprehensive and he is exactly right.
Enough is now enough. Putin has invaded Ukraine, a sovereign state and a friend and partner of the United Kingdom. That is an attack on the hopes, dreams and aspirations of ordinary Ukrainians. We can no longer let him exploit the holes in our system at home to enable his aggression abroad. This is not a partisan issue, and nor should it be difficult. It is shameful that the Government have not acted long ago. We want to work with the Government not only to win against Putin’s aggression abroad, but to defeat the ideology of Putinism at home. We are united in this House in support of NATO, in support of freedom, and in support of democracy and equality. Let us send a clear message to President Putin and authoritarians around the world that the UK is no longer a haven for dirty money.