Financial Assistance to Ukraine Bill

James MacCleary Excerpts

Committee of the whole House
Wednesday 18th December 2024 Commons Chamber

[Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)]

I want to speak to new clause 1, which I have signed, but I first want to reiterate my support for the Government and the Bill. As I said on Second Reading, it is absolutely right and proper that Russia pays for the damage it has done to Ukraine and its people. The Bill is an important first step in providing that financial assistance from Russian assets to Ukraine. Echoing the comments from around the Chamber, we need to move with allies towards a position of seizing Russian assets, but it is a positive first step that we are using the proceeds of the interest on those assets to support Ukraine.

On Second Reading, I mentioned that

“Canada has passed the Special Economic Measures (Russia) Regulations, which collects data on Russian assets, freezes them and publishes the value, which currently stands at 135 billion Canadian dollars”.—[Official Report, 20 November 2024; Vol. 757, c. 312.]

I asked if the Government could disclose Russian assets held in the UK in the same way. New clause 1 goes a long way to providing that. It would ask the Government to lay a copy of a report before Parliament showing under the Act, as it will hopefully become,

“monies provided by the United Kingdom to Ukraine”

to the following level of disclosure:

“the United Kingdom’s share of the principal loan amount and interest accrued under the scheme”

and

“receipts of extraordinary profits from the Russian immobilised sovereign assets under the scheme.”

It would to an extent mirror what our close ally Canada has done. Although I do not expect to divide on new clause 1, I would appreciate it if the Minister would comment on how he will report progress to the House, disclose the level of Russian state assets that are here, and state how much of the interest accrued from those assets has been mobilised to support Ukraine in its war efforts.

[James MacCleary (Lewes) (LD)]

I thank the hon. Member for Leeds Central and Headingley (Alex Sobel) for outlining some of the things in the new clause we have tabled. I want to outline in some detail what is in new clause 1 and what we hope to achieve with it, and hopefully the Minister will be able to respond and outline some of his thoughts around reporting in particular.

New clause 1 would impose a reporting requirement on the Secretary of State to keep Parliament informed about three critical aspects of our support to Ukraine under the scheme. The reports would detail the monetary support provided to Ukraine, including the amounts disbursed and how that fits into the broader multilateral agreement. That ensures transparency and allows Members and the public to understand the precise scale of our financial commitment. The reports would also provide clarity regarding our share of the principal loan amount and any interest accrued. Such information is vital for proper scrutiny and public trust, ensuring that funds allocated are achieving their intended purpose.

Finally, and most importantly, the reports would shed light on any extraordinary profits arising from immobilised Russian sovereign assets under the scheme. While we cannot legislate here to seize those assets directly, the provision ensures that the question does not simply fade away. By requiring regular reports, we maintain focus on the issue and keep pressure on the Government to engage with our G7 partners. If, at some future point, there is an opportunity to use Russian state assets more directly for Ukraine’s recovery, Parliament will be fully informed and ready to act.

The reports must highlight any discussions the UK Government have had with other G7 countries about future steps, including expanding the range of assets considered or using them in new ways. That ensures ongoing diplomatic transparency and accountability. Parliament will know if the Government are pushing for more ambitious measures internationally or if they are hesitating while others lead. In practice, the first report would appear within six months of the Bill’s passage, with subsequent reports every six months until one year after the relevant international arrangements cease to operate.

The structured timeline guarantees sustained oversight, rather than just a one-off glance. Given the complexity and duration of the challenges Ukraine faces, such ongoing engagement is critical. It sets a framework for continued scrutiny, encourages more ambitious future action and underscores that, despite the Bill’s limited scope, our resolve to hold Russia accountable remains unwavering. Through those measures, we would ensure that Parliament remains fully informed and ready to stand by our Ukrainian allies when the opportunity to take bolder steps arises.

[Gregor Poynton (Livingston) (Lab)]

It is a pleasure to speak in support of the Bill. The battle for Ukraine is one of the defining issues of our age. In February 2022, Putin launched an illegal and reckless invasion of a sovereign European democracy. Seeing that happen in the third decade of the 21st century was a sobering moment; we had seen nothing like it on European soil since world war two. It put beyond any doubt the revanchist and irredentist ambitions of the Russian regime, and the need for all freedom-loving democratic peoples to resist those ambitions at all costs.

The Ukrainian people are fighting not just for Ukraine, but for all of us—for the values we hold dear: democracy, human rights, the rule of law, and freedom from global gangsters like Putin. By helping Ukraine to stand strong against Russian aggression, we are sending a clear message to dictators and autocrats around the world that we will not tolerate violations of national sovereignty or the use of force to change borders.

--- Later in debate ---

[James MacCleary]

Thank you, Madam Deputy Speaker, for the opportunity to speak in support of the Bill and to highlight the importance of our unwavering commitment to Ukraine. I thank the Chief Secretary to the Treasury for his detailed response to the points raised in my new clause, which I really appreciate.

When I addressed this House a few weeks ago, I expressed my desire for measures that would go further, particularly to empower the Government to seize Russian state assets frozen in the UK and use them to help rebuild Ukraine—an issue many hon. Members touched on in the Committee of the whole House. It remains, in my view and that of the Liberal Democrats, a critical step that must be taken. While procedural constraints have made such an amendment impossible within the scope of the Bill, the importance of ensuring accountability and justice cannot be overstated. The repurposing of frozen Russian assets is not just a financial issue; it is about ensuring that those who have enabled the Kremlin’s actions face tangible consequences. The UK has an opportunity to lead by example in demonstrating that aggression will not go unpunished.

The Bill, by enabling the UK to participate in the G7’s ERA loans programme, provides vital financial support to Ukraine at a critical time in its fight for freedom. Beyond financial measures, we must continue to stand resolutely with our Ukrainian allies in other ways. That includes providing advanced military aid, bolstering Ukraine’s defences, and working closely with NATO and the EU to co-ordinate our collective response to Russian aggression. The UK must lead by example, showing that our commitment to Ukraine is unshakeable even in the face of uncertainty about the future of US support.

Ukraine’s fight is not just for its own sovereignty, but for the principles of freedom and democracy that we all hold dear. With winter looming and the conflict showing no sign of abating, the UK must be a steadfast partner, ensuring that Ukraine has the resources, support and international backing it needs to endure and prevail. The Bill is a welcome step forward, but it cannot be the final word. Let us seize the moment to demonstrate moral leadership and resolve. Let us ensure that Ukraine’s struggle for freedom remains our shared cause, paving the way for a future of peace and resilience.

Question put and agreed to.

Bill accordingly read the Third time and passed.

Commonwealth Parliamentary Association and International Committee of the Red Cross (Status) Bill [Lords] (Programme) (No. 2)

Ordered,

That the Order of 22 October 2024 (Commonwealth Parliamentary Association and International Committee of the Red Cross (Status) Bill [Lords] (Programme)) be varied as follows:

(1) Paragraphs (4) and (5) of the Order shall be omitted.

(2) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour after the commencement of proceedings on the Motion for this Order.

(3) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion two hours after the commencement of proceedings on the Motion for this Order.—(Stephen Doughty.)

National Insurance Contributions (Secondary Class 1 Contributions) Bill

James MacCleary Excerpts

Committee of the whole House & 3rd reading
Tuesday 17th December 2024 Commons Chamber

[Dan Tomlinson]

I thank the hon. Member kindly for his intervention. I am not sure whether all Members know this, but the Labour party chair has appointed me as the growth mission champion, so I am very much in favour of economic growth. We can see the impact of the changes in the round at the Budget, leading to higher growth in the short term and further growth in the long run, which is very important.

Without the changes in this Bill and in the Budget as a whole, we will not be able to turn the page on the low growth we have experienced as a country over the last 14 years. Productivity growth since the financial crisis has been at just 0.2%, which is why we had the longest squeeze on wages since Napoleon was making his way around Europe on the Conservative party’s watch. We need to turn that around and make sure that we provide the foundation of stability, fund our public services and, yes, support some of the very smallest businesses with these changes, so that we can get the economic growth that Members on all sides, including growth champions, would very much like to see in the years ahead.

[James MacCleary (Lewes) (LD)]

I have to start by disappointing the hon. Member for Chipping Barnet (Dan Tomlinson), in that I rise to support the amendments tabled by my hon. Friend the Member for St Albans (Daisy Cooper). I will speak about my deep concerns about the proposed national insurance changes because of the real-world impact they will have businesses, GP surgeries, community organisations and vital care services in my constituency of Lewes. While I recognise the fiscal pressures, which have been mentioned by a lot of Members, I ask that we fully consider how these changes will affect those working tirelessly to keep our communities vibrant, secure and healthy.

GP surgeries are the frontline of the NHS. A local GP practice in my constituency has been in touch with me just today to describe its shock at discovering that it will be paying at least £60,000 more a year under these changes. GP practices provide vital healthcare services to our local population and in doing so are under ever-increasing pressures. Yet under the new proposals, GP practices are treated as if they are private businesses capable of absorbing significant cost increases. The reality is, of course, quite different. Every additional £1 spent on national insurance is £1 that is not spent on patient care, staffing or critical medical equipment. For practices already operating under immense strain, this extra burden could be the tipping point that pushes them towards unsustainable financial territory. When cutbacks occur, it is our communities that will lose vital healthcare access, and the NHS, which is already stretched, will be left struggling even more.

We must also acknowledge that our social care providers, including hospices such as St Peter and St James hospice, which looks after my constituents so well—I visited it recently—are caught between rising wages, fixed local authority fees and higher national insurance. They cannot pass on these costs without threatening their very viability. If care providers close or scale back, the most vulnerable in our community will suffer, and so will our healthcare system as hospital stays lengthen and A&E attendances rise. In other words, it will drive up costs for the NHS, making the system less efficient and less humane. It is particularly galling that NHS employers are set to be compensated for the changes while there is no equivalent commitment for the social care sector. Separating social care reform from NHS support will not only hurt vulnerable people today, but make it impossible to achieve strategic priorities for the health service tomorrow.

We must also consider community organisations. Take the Sussex Community Development Association in my constituency. It is a local organisation that reinvests every penny of surplus into essential services such as youth work, emergency food provision and childcare for deprived communities in my constituency. It is already contending with increased wage costs, and it now faces an estimated additional £70,000 per year due to the national insurance rise. Because of its size, it does not qualify for allowances that might soften the blow. This facility was invested in to deliver Sure Start services under a previous Labour Government, and it is now considering cuts to essential services thanks to this one. It now faces a desperate scramble for funding at a time when its services have never been more crucial.

The rise, coupled with the increases to the national living wage and the minimum wage, will hit the early education and childcare sector particularly hard. As chair of the all-party parliamentary group for childcare and early education, I must make the Committee aware of how dire the situation is. An average nursery will face additional staffing costs of nearly £40,000 a year due to the increases. That is because staffing costs account for 75% of nurseries’ running costs, compared with just 30% for the average restaurant. If Government funding rates do not cover the gap, parents will face higher fees, potentially leaving them to reduce their working hours or to leave the workforce altogether.

The situation is exacerbated by the fact that private nurseries delivering Government-funded hours may not be eligible for employment allowance. That means that they may not receive the intended financial support from the Government. The sector is already facing recruitment challenges, with 29,000 new staff needed by September 2025 to deliver the promised 30 hours of funded childcare. The national insurance changes could lead to recruitment freezes, reduced staff training and even nursery closures. That is the precise opposite of what this Government claim they want to see for working parents and carers. That would have a detrimental effect on families and the economy, hindering economic growth, and it could seriously impact the Government’s commendable aim of having half a million more children hitting early learning goals by 2030.

Finally, let us not forget that even successful local businesses are feeling the strain. Rathfinny, a renowned Sussex wine producer in my constituency that has invested in our local economy and environment, faces a significantly higher national insurance bill. It may be forced to slow its growth, reduce investment or even curb local employment opportunities, undermining the prosperity that benefits us all. This Government talk about economic growth, as Government Members have done today, but this tax increase will inhibit the ability of many British businesses to expand and flourish.

If introduced without nuance, these national insurance changes risk delivering a series of damaging shocks to my community and places across the country. I urge the Government and the Minister to reconsider, to review the thresholds, to consider exemptions for sectors that cannot pass on costs and to ensure that our GP practices, childcare providers, community organisations and valued local employers are not left shouldering burdens they cannot bear. I implore the Government to recognise the unintended consequences and to commit to measures that will preserve local jobs, sustain our community services and uphold the quality of care we offer our vulnerable citizens. I hope that the Government will do more to ensure that this tax increase does not harm the very communities and services we have pledged to serve and protect.

[David Chadwick]

The Liberal Democrats agree that the country’s finances are in a mess thanks to the previous Conservative Government. However, we do not agree that increasing national insurance is the way to address the problem, as doing so will undermine efforts to improve public services across the United Kingdom. For example, last month Care Forum Wales issued a stark warning that the rise in national insurance could cause a collapse in the social care system in Wales, creating a £150 million funding gap. Social care in Wales is already on its knees. Over the past four years, 40 Welsh care homes have closed. If yet more are forced out of business due to increased costs, we will have even fewer social care spaces available. We know that the scenes of ambulances left queueing for hours outside our hospitals are the result of them being unable to discharge patients due to shortcomings in social care.

It is not just care homes that are affected, but primary care too. Our GPs, dentists and pharmacies will suffer from this tax rise. A local GP practice in my constituency told me that it will have to cut one day of practice nurse time and one day of GP time from April 2025. That is a direct result of the projected £30,000 increase in its national insurance bill, alongside an overall lack of funding for GPs. A second surgery is projected to have an increase in its NI bill greater than £100,000 in April 2025. Both are clear that without an exemption for health and social care providers, the NHS in Wales could face collapse. It already has the worst outcomes of any nation across the United Kingdom.

Charities and local authorities will suffer too from this decision. In my constituency, the chief executive officer of Powys Association of Voluntary Organisations has stated that the national insurance increase will

“place considerable financial pressure on voluntary sector organisations, many of whom are crucial partners in delivering essential services.”

That is the reality of the decision taken by the Government to use such a blunt tool to try to fix the nation’s finances. Many of my constituents are asking why Labour has chosen to go after the small businesses, charities, and health and social care providers rather than target the big banks, the oil and gas giants, or the social media giants. I urge the Government to reconsider their decision to raise income in this manner and to make exemptions for the health and social care sectors as well as for charities.

Financial Assistance to Ukraine Bill

James MacCleary Excerpts

2nd reading
Wednesday 20th November 2024 Commons Chamber

[James MacCleary (Lewes) (LD)]

Yesterday, Ukraine entered its 1,000th day since the start of Russia’s illegal and unprovoked invasion, and it is about to enter its toughest winter yet. This Bill represents a significant and welcome step in providing much-needed financial support to Ukraine as it continues its courageous resistance. It will deliver tangible assistance during this critical phase of the conflict, providing a vital lifeline to our Ukrainian allies.

Before the war, my partner and I had the good fortune to travel in Ukraine, visiting both Kyiv and Odesa. We visited modern cities similar to any other in Europe, so the sight of ordinary Ukrainian families being forced, at the start of the Russian attack, to shelter in the Kyiv underground stations that we had both so recently used for sightseeing in that beautiful city was both shocking and moving for us. It also brought home why the UK’s unwavering support for Ukraine is so essential, not just for the brave people of that nation but for all of us. If liberal democratic nations do not stand together against tyranny and aggression, the tyrants will feel no constraint and the citizens of other European nations, including potentially the UK, might find that they are the ones forced into underground stations looking for shelter.

The Liberal Democrats support this Bill and its intent, but we are disappointed that it has taken so long to come to the House. My noble Friend Lord Purvis of Tweed raised this issue back in January, some 10 months ago, but now the Bill is finally here, we are pleased to see that it demonstrates a commitment to ensuring that those responsible for Ukraine’s devastation—Russia and its oligarch elites—should, at the very least, contribute financially to Ukraine’s recovery. However, we believe the Bill does not go far enough.

The UK should consider seizing all frozen Russian assets, not just their profits, and redirect them to aid Ukraine. With around £22 billion-worth of such assets currently held in the UK alone, the Government are missing a significant opportunity to amplify their support. Distinguished international lawyers have made a strong case for this step.

Although some economists have expressed concern about repercussions in the financial markets, we believe that, given the very specific circumstances of this conflict, the justification and the benefits far outweigh those concerns. Such action would provide an immediate and substantial financial boost to President Zelensky’s forces and Ukraine’s reconstruction efforts, while sending a clear message to the Kremlin that aggression against sovereign nations will have severe and lasting consequences. We therefore also back the calls for a special tribunal to prosecute those responsible for Russia’s war of aggression and to ensure accountability for the heinous crimes committed.

The Liberal Democrats have consistently called for the UK to lead by example in supporting Ukraine, extending it beyond financial assistance to include military, diplomatic and humanitarian measures. The provision of advanced weaponry, including longer-range precision arms, is critical to Ukraine’s success. We must also bolster British arms and ammunition supplies, work closely with our allies to replenish stockpiles, and maintain Ukraine’s defensive capabilities. It is essential that we co-ordinate effectively with NATO and the European Union to maximize collective impact, which is why I urge the Government to be bolder in their efforts to rebuild our relationship with the EU, including by deepening our security and military co-operation.

We urge the Government to build an international consensus for the proscription of the Wagner Group, whose activities represent a grave threat to international security. The UK must also take a strong stance against Russia’s continuing human rights violations and support anti-war activists within Russia, many of whom face persecution for their bravery. Offering asylum to such individuals and raising their cases in international forums is not only a moral imperative but a strategic means of undermining the Kremlin’s control.

It is vital to recognise that supporting Ukraine financially and militarily should not come at the expense of other nations in need. Restoring the 0.7% gross national income target for international development spending is a crucial step towards ensuring that humanitarian aid to Ukraine does not result in the neglect of our wider global responsibilities. The Government’s failure to meet this target undermines Britain’s reputation as a global leader in development and humanitarian support.

The Liberal Democrats also urge the Government to take robust action to close the loopholes in economic crime legislation that have allowed Putin’s allies to funnel dirty money through the UK for far too long. A Financial Times investigation published yesterday revealed that companies in British overseas territories exported $134 million-worth of goods to Russia in 2024, potentially breaching UK sanctions aimed at restricting access to military and high-tech supplies. I call on the Minister to give an undertaking that the Government will look to address these violations and close these loopholes.

The National Crime Agency must be properly resourced to tackle economic crime effectively, and Magnitsky sanctions should be used to target relatives and associates who attempt to evade existing measures. This is about far more than financial probity; it is about standing up for the rule of law and ensuring that our financial system cannot be used to bankroll aggression.

This Bill comes at a moment of uncertainty. The possibility of diminished US support for Ukraine, following the recent election and the imminent return of Donald Trump to the presidency, is deeply concerning. Should the United States falter in its support, Europe must step up. This should serve as a wake-up call for the UK Government to lead in Europe by seizing frozen Russian assets, reversing damaging cuts to our armed forces and strengthening co-operation with both NATO and the European Union on security and foreign policy.

With a hard winter ahead, time is of the essence. The UK must not waver in its commitment to Ukraine. This is about more than financial assistance; it is about justice, accountability and the preservation of international law. This Bill is a vital step forward, but it must not be the final word.

We must demonstrate bold leadership by acting decisively to ensure that Ukraine not only survives but prevails, and that the principles of sovereignty, freedom and democracy endure. Let this Bill be the beginning of a renewed and united effort to support Ukraine. By seizing frozen Russian assets, providing advanced military support and working closely with our allies, we can help Ukraine to secure a lasting victory and ensure a future of peace, stability and justice for Europe and beyond. Let us rise to this challenge for Ukraine, for Europe and for the values we hold dear.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call Linsey Farnsworth to make her maiden speech.