Sanctions

Lord Beamish Excerpts

Tuesday 1st March 2022 Commons Chamber

[Dame Margaret Hodge]

That is indeed the case. It has been suggested that we could use parliamentary privilege to sanction those individuals through the House, or there is my suggestion that we use the powers under the unexplained wealth orders whereby the assets are removed and it is then up to the individual to justify the legitimacy of their access to those assets.

[Mr Kevan Jones (North Durham) (Lab)]

Does my right hon. Friend agree that, in many cases, it is not as though these assets are very mobile? They are expensive houses and apartments and other fixed assets. They are easily identifiable and could be sanctioned clearly, as Italy, France and others have done.

[Dame Margaret Hodge]

My right hon. Friend is absolutely right. That is why the Government should readily undertake that action, and I would add to that list that places in English public schools can be identified and halted very quickly.

I have been handed a list today of 105 oligarchs. I think that these names are not on the list that the hon. Member for Oxford West and Abingdon mentioned. These are wealthy businesspeople who are involved in companies of strategic importance to the Russian economy, in such things as energy, metals, chemicals, pharmaceuticals and construction. The list is of men—they are all men, I think—who have made a lot of money by robbing assets from the Russian people. That is where the money has come from and they have made their money only because they are close to the Kremlin, and they sustain their wealth only because they remain close to the Kremlin.

You will be delighted to hear that I will not read out the whole list, Mr Deputy Speaker, because I know that you think I go on a bit too long—

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[Bob Seely]

The hon. Lady brings me to a point about how oligarchs work. To go back to Ukraine, somebody such as Dmitry Firtash, who is now wanted by the Americans, was set up by Gazprom and Putin. He was given sweetheart deals to import vast amounts of cheap energy into Ukraine. The vast profits that he garnered from those sweetheart deals gave him a good life but, more importantly, he funnelled that money into buying up chunks of east Ukrainian industry, effectively as a front for the FSB, the former KGB. Critically, he also used it to purchase politicians and to fund the pro-Russian political parties in eastern Ukraine.

When it comes to oligarchs, therefore, it is important to understand that we are talking about an economic model within hybrid war. Of all the tools of hybrid war, if hon. Members read the Russian characteristics of war, they will see that the first characteristic of the Russian military doctrine is that there is an integrated military and non-military strategy. So they have their troops, paramilitaries, front organisations or assassins, but with that they have the politics, economics, culture, religion and even sport—sport matters very much.

When it comes to oligarchs, we are talking about not just obscenely rich people who are mates with somebody, but a structure of control and power, whether that is in eastern Ukraine or in the United Kingdom, primarily to facilitate vast money flows to tax havens or to intimidate and silence the western media into not reporting on those people. There are a series of outcomes to that, so I thank the hon. Lady for the intervention.

I return to Abramovich, Fridman and Deripaska. If they were so keen to smarten up their act—they are clearly scared of what might happen—I would like to know why, as of only a few weeks ago, they and their London lawyers were all abusing data protection Acts or libel law to target and intimidate individuals, such as Chris Steele and Catherine Belton, HarperCollins and others. At the end of last year and even this year, they have continued to intimidate a free press. They were enabled, and I make the point that it is not only the oligarchs but their millionaire servant class of enablers who enable the billionaire class of oligarchs who enable the neo-fascism that we see in Europe.

[Mr Kevan Jones]

I commend the hon. Gentleman for his speech today, his past work in the area and his knowledge of it. Is the issue not also close to home in his party? A co-chair of the Conservative party has a business with, as I understand it, an office in Moscow with 50 people in it whose job has been to facilitate those oligarchs and others and to use their money around the world for expensive travel and other things. Should people such as him not question what they have done to support Putin and his regime?

[Bob Seely]

The right hon. Gentleman makes a really good point. I do not have anything against Ben Elliot; he is a decent enough character. Do I think it is great that Hawthorn does PR for oligarchs? No, I really do not. Do I think it is great that there are Members of the House of Lords, whom we are not allowed to name—God knows why—who have set up their strategic advice so we know nothing about their clients, or who advise Russian oligarchs and their companies? No.

Do I think it is great that we have had a former member of the Scott Trust, Geraldine Proudler, who has represented the organised crime interest that killed Magnitsky? No, I do not. Do I think that there are advisers to the current Leader of the Opposition who have very questionable records when it comes to advice to oligarchs? No, I do not. Do I defend any Tories in that space as well? No, I do not.

What worries me is that, as well as having a very obvious commitment to not hurting the City of London—putting our national interests ahead of the City of London would be awful: it would never do—we build up a quiet collection of very powerful individuals who then effectively gently corrupt our system. I am sure they may be acting in the best interests, but, collectively, they have to be careful.

I think it was in the 1930s that Michael Foot wrote “Guilty Men”. In the past 10 years there have been guilty men and women who have done a really bad job of facilitating the agents of fascism, and those people are going to start coming out of the woodwork. It would be better for many of those people to consider their positions now, rather than becoming the targets for the media and people such as ourselves.

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[Liam Byrne]

I am grateful for the nuance the hon. Gentleman brings to the debate. Gerasimov was not on the list I cited and I do not believe he is on the EU list either, but what disturbs me, which I have not yet heard an explanation for, is why these individuals are sanctioned across the channel and not yet sanctioned here. That deserves an explanation.

My second point is to push the Paymaster General on just what sanctioning means. We have heard a lot of rhetoric over the past week about the biggest and boldest sanctioning regime in living history, going further and faster against the Russians than ever before. Frankly, that does not say much, given the lassitude with which the Government have approached this question over the past few years.

I am seriously concerned that, whereas France is talking about taking away assets such as mansions, yachts and jets, paragraph 3.1.3 of the UK financial sanctions guidance in December 2020 does not prohibit the use of assets even if those assets are technically frozen. Are we seriously saying that we will step back and watch people such as Abramovich and Usmanov parade around the world in jets and in yachts and make use of property here in the United Kingdom because we did not tighten up the regulations strongly enough? Are we in this House seriously prepared to stand by and watch that? I do not believe we are.

[Mr Kevan Jones]

Like my right hon. Friend, I am baffled by the Government’s approach. The Foreign Secretary said that she had a list that they were working through, but does my right hon. Friend agree that the action taken not just in France but, for example, in Italy, where the Italian Government have taken over certain properties, is the level of action we want to see here, and that some of these regulations are limited in what they can actually do?

[Liam Byrne]

My right hon. Friend is absolutely right. We are now seeing a sanctions gap emerge, where the UK is the soft touch, the weakest link, and the slowest to the punch. None of us in this House wants to be in this position. We all welcome the regulations that the Paymaster General has brought before the House this afternoon, but the question that we put back is: “Tell us what further power and resources you need so that we can genuinely be best in class around the world.”

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[Layla Moran (Oxford West and Abingdon) (LD)]

It is a pleasure to follow the right hon. Member for East Antrim (Sammy Wilson). To pick up his point at a moment of reflection, we are all tired because yesterday we were here until late voting, but I walked into work this morning with a spring in my step because we have a democracy to walk into work for. We are here in this debate in defence of another democracy, and what a debate it has been. My goodness, would Russia not be a very different place if it allowed this level of discourse and challenge from both sides of the House and of the Government? That is what we are defending.

I wish to put on record my delight—I hope the whole House will join me in this—in congratulating the Servant of the People party, the party of Volodymyr Zelensky, which has become an associate member of the Alliance of Liberals and Democrats for Europe. It marks the first step—one of many, I am sure—to show that the entire reason why Putin has done this, to try to split us apart, is not working and quite the opposite is happening. The Liberal Democrats are therefore proud to call the Servant of the People party our sister party, and I am sure all hon. Members feel that way about that party and all parties in Ukraine.

In that spirit of cross-party co-operation, I welcome these measures on behalf of the Liberal Democrat party. It is right that we are targeting the Russian financial sector and the export of dual-use and critical-use goods. I ask again about the 30-day grace period. One of the benefits of speaking last is that I waited for those who are much more practised in such things—a former Chair of the Public Accounts Committee, and others—to explain to me, a relatively new Member, what I did not understand. But I still do not understand. If we are not going to publish the names, even quietly, and assuming they do not leak, and if we cannot say who we are sanctioning and who is on that designated list, I do not understand how we can distinguish between a company that is legitimately winding up its business, and one that is winding up its illicit goods to go somewhere else. How do we do that without divulging that list to someone? I would like some explanation for that.

[Mr Kevan Jones]

Does the hon. Lady think it strange that the Government are reluctant to name the individuals they are going to sanction? Our European partners are not only sanctioning individuals, but taking property off them and naming them publicly. Does she understand why the Government are reluctant to do that?

[Layla Moran]

I am so grateful for that intervention, and I absolutely do not understand. I intervened about that at the beginning of the debate. I have listened to the whole debate and am none the wiser, having listened to many sage Members also try to work it out. I think we are owed an explanation from the Minister. He went away for a bit but he has come back, I hope with an explanation. What is going on? We have the benefit of parliamentary privilege in this place. I will not pre-empt what Mr Speaker may or may not allow in future business of the House, but if we need to sit here and read out all the names, we have to do it. But it should not be up to us, and a lot of the names are ones that the Government already have. The information is there, and there is no reason we should be waiting.

Some of the new names on the EU sanction list include Mikhail Fridman, Alisher Usmanov, Petr Aven, Igor Sechin, and Nikolay Tokarev—they are there. There is now a joint taskforce for sharing information, which is good. Apparently it always existed, so I did not quite understand the announcement—perhaps it is being shared more. However, if we look at the number of people we have sanctioned recently, it is nine, one of whom is Putin, which we all know is just symbolic. We can go further.

I disagree with the right hon. Member for Newark (Robert Jenrick), who said that these measures will not do very much. They will do quite a lot, because we know that is how Putin manages his money. If we go after these people, we are going after him. That is how he operates. The broader point, which it is important to make, is that it feels as if, because of the tragedy unfolding before our eyes, the wool is being pulled from many people’s eyes. I fully congratulate Members across the House who have been raising these points over many years and indeed across many countries.

Our own reports have also warned about this, not least the Russia report, which states:

“This level of integration—in “Londongrad” in particular—means that any measures now being taken by the Government are not preventative but rather constitute damage limitation… The links of the Russian elite to the UK…provides access to UK companies and political figures and thereby a means for broad Russian influence in the UK. To a certain extent, this cannot be untangled.”

How did we get here? That was the question that the hon. Member for Isle of Wight (Bob Seely) posed in his excellent speech. I will posit an answer. I think it was greed, and not just from one political party; it was a collective greed, and a wilful naivety to what has been in front of us. All the signs were there, and there was a collective wilful naivety for the sake of rapid economic growth and actually some very laudable aims—trade, for example, being a tool of diplomacy. We want to support business and the City. All those things can be true at the same time, but there came a moment when some people sniffed a rat and they did not call the exterminator. That was many years ago.

I think it was the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) who described this as a cancer. As we know, removing a cancer is painful to the person who has it—it can even be dangerous—but the reason we do so is for the person’s medium and long-term health. We have to do this, so I end simply by urging the Minister not to shy away from the difficult questions, or from things that are not coming in the Economic Crime (Transparency and Enforcement) Bill and the overseas entities register, and to deal with some of the issues of lawfare, or at least put a framework in place in order to deal with them.

How can it be right, if transparency is the best disinfectant, that we do not allow our free press and media to investigate individuals and companies, because they are being consistently harassed? That is bad for democracy, so I hope to add my voice to all of those on the Back Benches in the debate. I urge the Minister, and the Government, to grasp this nettle, as painful as it may be. If he wants to go further and faster, the Liberal Democrats will support him.