Sanctions

Liam Byrne Excerpts

Tuesday 22nd February 2022 Commons Chamber

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

May I follow up the question that was well posed by the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) earlier? On the package of sanctions announced today, what specifically is that designed to deter, and what is the ultimatum that is being sent to the Russian Government today?

[James Cleverly]

I will come to more details of the sanctions package and what we hope to achieve with it, but ultimately we are looking to prevent further territorial encroachment and aggression into Ukraine, and to get Russian troops to withdraw back to Russia, to de-escalate and to move away from the Ukrainian border. As I will say later in my speech, if the House gives me the opportunity to progress, we are working and co-ordinating closely with our international partners in our sanctions response to ensure maximum effectiveness.

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[Mr Lammy]

My right hon. Friend is exactly right: it could, but it needs enforcement and we need to hear more individuals named. The danger in this debate is that the punishment does not befit the crime. I understand the Government’s desire to maintain a broader deterrent against further escalation, but it is also clear that a threshold has been crossed. The gravity of Putin’s actions requires a broader, firmer and fuller response, otherwise we risk his calculating that the rewards of aggression outweigh the costs.

[Liam Byrne]

My right hon. Friend is making a brilliant speech. When the new sanctioning regime was introduced, it was all about increasing our capacity to act independently to sanction bad actors. Is my right hon. Friend therefore disappointed that, Magnitsky sanctions aside, we have added only three people to the sanctions list for economic crimes since 2014? That seems pathetic, given the threat we confront.

[Mr Lammy]

My right hon. Friend is exactly right. In this city of more than 7 million people, with at least a quarter of a million properties owned in London by foreign nationals, just three individuals have been named, when the EU has already indicated the naming of 27.

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[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

It is a pleasure to follow that excellent speech.

There is an old saying that no matter how elegant the strategy one should occasionally look at the results. The truth is that this Government threatened sanctions as a deterrent and the invasion proceeded, and this afternoon they have laid out the first of their concrete sanctions and the invasion has just stepped up. So surely the Government have got to recognise that the strategy they have laid out of deterrence has failed and they therefore need to think again and come back to this House with measures that are strong and Russia-stopping, because that is not what we have got today.

What has been so helpful about today’s debate is the wide acknowledgement in all parts of the House that we are now facing an adversary in Russia that has got to be stopped. This is a country that fights us in cyber-space and on the streets of Salisbury. It is a country that meddles in elections and cheats in winning medals. It is reckless in space. It shells its neighbours. Its ambitions are limitless and its tactics are merciless. The question we have to confront is: how much longer are we prepared to tolerate the intolerable?

President Putin is not hellbent on acquiring some kind of Lebensraum. His argument is not about trying to roll forward his borders to create some living space for the Russian people. If anything, his strategy, stated as it is, is more ominous: it is to restore the gory glory of the former Soviet Union and re-imperialise the borderlands across 10,000 km of Russia’s borders. That is not a secret, but we have to stop it. We have to work with our allies to put in place a regime that is going to stop this aggression now and once and for all.

That is why the package announced today is so disappointing. It has been revealing that almost no one in the House today has stood up to commend the package as good enough. Everything we have heard today has said that it is a disappointing package that falls well short of what we think is needed to deter President Putin. It is, as the old saying goes, like being savaged by a dead sheep.

The Government are not short of tools. Actually, after 9/11, one of the great legacies that Labour left was in transforming the architecture for deploying economic sanctions to deter and pursue bad people. However, as Lord Ricketts said in his excellent book late last year, it is no good having the tools if they are left in the shed. The problem we have with the Government today is that the tools are being left in the shed.

Let us look at a simple scorecard of some of the results. As the hon. Member for Isle of Wight (Bob Seely) said, how many unexplained wealth orders have been implemented against friends of President Putin? A grand total of zero. Apart from the Magnitsky sanctions, which were handed to us and relate to a crime back in 2007, how many sanctions against individuals guilty of economic crime have we proposed in this country? None since 2014—in fact, a grand total of just three individuals are on that sanctions list, yet, when the new independent sanctions regime was introduced, we were promised that it would transform our capacity to take on bad people around the world. If that was true, why on earth are we not using it today?

As we have heard, the people on the sanctions list announced today have been on a US list since 2018. None of the major Russian banks has been hit with sanctions, even though they are raising liquidity in London to finance their day-to-day banking operations. If we shut them off from the liquidity of London, they would be forced to go to the central bank in Moscow, putting immeasurably more pressure on the economic structure around President Putin. The truth is that the Government have failed to take aim and target the commanding heights of President Putin’s kleptocracy and that is a mistake for which the people of Ukraine are now paying.

At least 120 oligarchs should be on the Government’s sanctions list. At least four major banks—VTB, VEB, SberBank and Alfa-Bank—should be sanctioned immediately. That is the pressure that we need to ramp up to send a serious message. Today’s failure would not be so serious if it were not part of a much broader failure. Can anyone in the House tell me: who is the Minister responsible for tackling economic crime? It used to be the right hon. Member for Wyre and Preston North (Mr Wallace), who is now the Secretary of State for Defence. He had a title: Minister for Security and Economic Crime. However, that ministerial role has been deleted from the current ranks of Her Majesty’s Ministers. The new Minister is the Minister for Security and Borders.

We are told that the National Economic Crime Centre is comprehensively under-resourced for what it is trying to do. The National Crime Agency, we are told, makes a calculation as to whether it can afford the legal costs of a case before it prosecutes unexplained wealth orders. Literally, it is being scared off by the scale of the lawyers it opposes in court. The regulator Companies House does not check the information that is filed in front of it. We have journalists who are being silenced in English courts, for so long sanctuaries of justice, now arenas for silence. As we have heard so eloquently from others, we have no timetable for the economic crime Bill.

To judge the Government even on their own terms, let us look at the economic crime plan that they put forward. The analysis of the Royal United Services Institute is that 60% of the measures in the plan have not been implemented. Let us go through a couple of the points that are missing in action: clarifying the sanctions supervision powers—not done; reviewing the criminal market abuse regime—not done; developing a sustainable, long-term resourcing model for economic crime reform—not done; improving the policing response to fraud—not done. It would be laughable it was not so serious. This is not a Government who are serious about taking on economic crime and there are people around the world who are now paying the price for that negligence.

We need three things now. First, we need clear leadership. We need a Minister for economic crime, tasked with bringing forward the economic crime plan to this House at the earliest opportunity. Secondly, we need to start using our intelligence capabilities to light up who the bad actors are around the world. The fact that London and New York are the centres of financial transactions worldwide and the fact that we are the home to the SWIFT financial messaging system mean that we have unrivalled insight and intelligence into who is doing what with whom and where. Why are we not bringing those intelligence packages together and tasking them out to pursue these people? Thirdly, we need a final piece of the strategy that is modelled on the counter-terrorism strategy from a few years ago. The Contest strategy is deemed a good strategy. Its four principles—preparing, protecting, preventing and, crucially, pursuing—are good principles. The Government must now bring forward a Contest strategy for tackling economic crime. That is really what we needed as part and parcel of the sanctions legislation the Minister laid before the House today.

It was, as I have said before in the House, 33 years ago, back in 1989, that President Gorbachev went to the Council of Europe in Strasbourg and gave us a vision about a common European home that stretched from the Irish Atlantic coast to Siberia. It should be a place, he said, where there is the rule of law, our great gift to the people of this world. Those days are now gone. From Kaliningrad to Kamchatka, what we now have is a great kleptosphere taking shape. It is a place where might is right, where, as the saying goes, the strong do what they can and the poor suffer what they must. We now have a task to perform in this country. It is a task we perform with our allies for the benefit of billions of people around the world—to take on the kleptosphere in new and aggressive ways. That battle is already under way, but it is time the Minister now stepped up that fight.

[Several hon. Members rose—]

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[James Cleverly]

With the leave of the House, I will make a few concluding remarks and address some of the issues, queries and concerns that have been brought up by hon. and right hon. Members on both sides of the House. Those in the House who have been in government know that it is never a particularly fun experience at the Dispatch Box being questioned and criticised by both sides of the House.

[Liam Byrne]

Try sitting on this side.

[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.