Israel and Palestine

Liam Byrne Excerpts

Monday 16th December 2024 Westminster Hall

[Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)]

It is a pleasure to speak in this debate, Mrs Harris. First things first: I utterly condemn the attacks on 7 October. I utterly condemn the kidnap, torture and murder of hostages by Hamas. I also utterly deplore and condemn the destruction of Palestine and Palestinian life that has ensued. That destruction is now so complete that Israel is at risk of turning Gaza into a desert and calling it peace. The prosecution of the war is now so brutal that the Foreign Secretary himself said on 2 September that any exports of weapons from here lead to

“a clear risk that they might be used to commit or facilitate a serious violation of international humanitarian law.”—[Official Report, 2 September 2024; Vol. 753, c. 42.]

[Kim Johnson (Liverpool Riverside) (Lab)]

On arms sales, does my right hon. Friend agree that the UK Government need to make a different decision about F-35 parts, think about employing an immediate ceasefire, cease selling arms to Israel and impose sanctions to bring about peace?

[Liam Byrne]

Let me come to exactly that argument. The Foreign Secretary was followed by the Secretary of State for Business and Trade, who said that there were now “significant doubts” about Israel’s “record of compliance”. In court, His Majesty’s Government said bluntly, in their opening statement on 12 November 2024, that Israel is

“not committed to complying with international humanitarian law”.

Yet the Government have not cancelled all licences; they have cancelled some, but not all, and they have kept open the licences for F-35 parts.

[Carla Denyer (Bristol Central) (Green)]

Will the right hon. Member give way?

[Liam Byrne]

I will not, because time is so short.

Last week, in front of the Business and Trade Committee, a Defence Minister said that although it is technically possible to track the parts, it is contractually impossible. Indeed, Lockheed Martin has supplied me with a letter that states that, if I want to know anything about the parts, I need to address my queries to the Department of Defence in the United States.

The Government defend their case by pointing to the 28 words that allow them to make it up as they go along when it comes to weapons exports. Those words were written by the last Government and were published in the House on 8 December 2021. They state:

“The application of these Criteria”—

the selective licensing criteria—

“will be without prejudice to the application to specific cases of specific measures as may be announced to Parliament from time to time.”

There we have it. However, what Ministers have not explained is the part of criterion 1 that states:

“The Government will not grant a licence if to do so would be inconsistent with…the UK’s obligations under the United Nations Arms Trade Treaty”.

Of course, the UN arms trade treaty is very clear. Article 7 requires this Government, as a signatory, to assess any items that we may seek to export. If there is an overriding risk of the use of those weapons to commit or facilitate a serious violation of international humanitarian law,

“the exporting State Party shall not authorize the export.”

Now, if there was any question, doubt or dispute about whether F-35 parts that we supply could be used in such a way, perhaps the Government would have a case for keeping the licences open. But there is nodoubt, dispute or question about the Government’s analysis of F-35 parts, because in their opening statement to the High Court on 12 November 2024, they said:

“The F-35 carve-out accepts that there is clear risk that F-35 components might be used to commit or facilitate a serious violation of IHL”.

We now have the advisory opinion from the International Court of Justice, the arrest warrants and the Government’s own assessment. I cannot see how this Government can now legally defend a position of keeping these arms export licences open.

--- Later in debate ---

[Mr Falconer]

I want to be clear to my hon. Friend and to everybody here that the direct selling of F-35 parts to Israel has now been suspended; it is indirectly that we are not in a position to determine the end user. Members are saying that we could determine the end user. I reiterate the Government’s position that the global supply chain is critical to the operation of the F-35 programme and that we cannot suspend licences to end users in the way that my hon. Friend would like without imperilling that.

[Liam Byrne]

I am grateful to the Minister for giving way; he is being characteristically generous. As I understand it, we cannot track F-35 parts because we have signed a contract that basically renders us blind when they leave our borders. Technically, it is possible; the Ministry of Defence has said that. The issue the Minister has to address is that article 7 of the arms trade treaty is very clear that if there is an overriding risk of a breach of IHL, exports should not be made. His Government’s own submission to the courts is that that risk exists. We cannot have it both ways.

[Mr Falconer]

My right hon. Friend is making two distinct arguments. One is that we know who the end user is but cannot practically stop it, but we can also maintain the F-35 programme. The Government’s position is that we cannot take action on the global spares pool without bringing the F-35 programme into peril, which would have implications for international peace and security. That is the position of the Government. On the article of the arms trade treaty to which he refers, it is clear that consideration needs to be given to international peace and security. It is on that basis that we have set out our position.

Another Member asked me about the legal advice. We have set out the legal position as clearly as we possibly can—more clearly than any previous Government has on such a decision. It is being tested in the courts. We are proceeding with the utmost transparency on these questions.

War in Gaza

Liam Byrne Excerpts

Tuesday 7th May 2024 Commons Chamber

[Mr Mitchell]

The hon. Lady refers to a number of early incidents, which have been condemned. She will know that, in respect of each of those incidents, the Government have said that we want an independent and credible investigation and transparent conclusions, so that we know why and how those acts took place.

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

The Minister has said that the policy has not changed, but the facts on the ground have. Ordering the evacuation of 100,000 people is not a small operation; it is big one. He knows that the clear test for suspending arms sales is a clear risk of a breach of humanitarian law, but he has told the House this afternoon that he has no assurances that that breach is impossible because he has not seen a plan. Can he tell the House what advice he has given the Department for Business and Trade, and when, about its legal obligation to suspend arms sales now? Will he lay that out for us this afternoon, before he gives evidence to the Select Committee on Business and Trade on 21 May?

[Mr Mitchell]

The position on arms sales and legal advice is clear, as the right hon. Gentleman will be aware. He knows that we always follow carefully the legal advice, although we do not publish it, and we always act in accordance with it. He will also know that, in the light of that legal advice, as the Foreign Secretary announced on 9 April, the UK position with regard to export licences remains unchanged.

Israel and Gaza

Liam Byrne Excerpts

Tuesday 19th March 2024 Commons Chamber

[Mr Mitchell]

The right hon. Gentleman has put his finger specifically on the treatment of detainees. As he will be aware, the treatment of detainees is governed by international humanitarian law and the Geneva convention. He will have seen what the Foreign Secretary has said about the treatment of detainees, and Britain has consistently called for an inquiry, and for transparency in that inquiry, into any alleged abuses.

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

The Minister has laid great weight this afternoon on the legal and coded process that governs the export of arms, but a new international humanitarian law compliance assessment process cell has been created in his Department. Will he publish every assessment that that cell has made of Israel’s compliance with international humanitarian law, and will he tell the House whether the threshold has now been reached to review or cancel any extant open general export licence for arms sales?

Israel and the Occupied Palestinian Territories

Liam Byrne Excerpts

Monday 29th January 2024 Commons Chamber

[Mr Mitchell]

My right hon. Friend, the former Chair of the Defence Committee, is right to focus on that issue. I also spoke this morning to Sigrid Kaag, the humanitarian reconstruction co-ordinator for Gaza, and she made it clear to me that while we have zero tolerance of these dreadful things that are alleged to have been done, we cannot operate at zero risks. The politics of logistics and distribution are a nightmare in Gaza, as my right hon. Friend knows. We will look carefully at these reports, and we will suspend any future funding until we have them, but we recognise that the UNRWA assets are essential to delivering in Gaza.

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

The ICJ ruling is incredibly serious for all sides. Can the Minister tell us today whether it is His Majesty’s Government’s analysis that Israel is operating within the measures that have been set out and, crucially, what consequences there will be if there is no observance of the ICJ’s ruling? The Minister has told us for nearly 100 days now that we have been pressing for proportionate action in Gaza, but we have not got proportionate action in Gaza, so the question for the Minister must be: what are we now going to do differently to change behaviour on the ground?

[Mr Mitchell]

I do not agree with the right hon. Gentleman that we need to do things differently. We have been pressing very hard for these changes to be made. When he was in the region, my noble Friend Lord Cameron tried to advance the various issues epitomised in the five-point plan, which we are trying to drive forward. The right hon. Gentleman asks me specifically about the judgment on international humanitarian law. As I have said to the House before, we know that Israel plans to act in accordance with international humanitarian law and has the ability to do so. Clearly, these things are looked at all the time, but the judgments that we have made, which I have set out to the House in the past, remain current today.

Israel and Palestine

Liam Byrne Excerpts

Monday 11th December 2023 Westminster Hall

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

I congratulate my hon. Friend the Member for Lancaster and Fleetwood (Cat Smith) on so eloquently introducing this debate, and I, too, congratulate the petitioners on organising a petition with so much support across the country, including across my constituency. Thousands of my constituents have signed these petitions, and thousands more have written to me to express their feelings about the appalling violence they see unfolding in Gaza.

In almost every one of the getting on for 6,000 emails I have received, there has been unequivocal condemnation of the violence, attacks and brutality perpetrated by the terrorists of Hamas on 7 October: the indiscriminate slaughter of 1,200 people in Israel—it was indeed a pogrom—the rockets indiscriminately fired by Hamas; the indiscriminate hostage taking. My constituents, like the constituents of so many hon. Members here today, have watched in horror at the destruction that has now cost the lives of 18,000 people in Gaza, that has now injured 50,000 people in Gaza and that has now rendered Gaza the most dangerous place on earth to be a civilian. Some 2.2 million people are now in desperate need of food assistance.

UNRWA—the United Nations Relief and Works Agency, which we helped to create all those years ago to bring respite to the people of Gaza and the west bank—now calls Gaza “hell on earth”. The World Food Programme is now very clear:

“With just a fraction of the needed food supplies coming in, a fatal absence of fuel, interruptions to communications systems and no security for our staff…we cannot do our job.”

The World Food Programme—a food programme created by the world to feed those in need—is now saying clearly to us that it can no longer do its job.

Oxfam is also now clear that the safe zones are, in its words,

“a mirage: unprotected, not agreed…beyond Gaza itself”.

It fears that people will be forced out of Gaza for the last time, and that the aid agencies will be forced into the devil’s own choice of providing aid while collaborating with that evacuation of people from Gaza.

When we have violence that extreme, surely what we should be doing across this House is arguing for a binding-on-all-sides ceasefire, arguing for peace, and arguing for negotiations. Instead, our Government went to the United Nations, days before we celebrated the anniversary of the UN declaration of human rights, and abstained on a question of moral force and justice. That motion itself was triggered by the United Nations Secretary-General—not a nobody—using emergency provisions, because he warned that the humanitarian aid system was at “risk of collapse”. That is how bad it had become.

In a situation like that, it was the wrong call to abstain on that UN Security Council vote. We should have voted for a ceasefire. We should have voted with almost every other member of the Security Council and sent a message of peace, of negotiations and of a binding-on-all-sides ceasefire, not least because such a vote would not have been without precedent.

I was a member of the Cabinet in 2009 when we voted for Security Council resolution 1860. Despite United States opposition, that called for a ceasefire in the conflict between Israel and Hamas. We must be honest; it was not immediately successful, but it changed the terms of the debate on the ground. It laid the groundwork for the peace that eventually came. That is what it means to use our weight in the international institutions of which the UK is a member to make the case for peace—to make the case for a permanent ceasefire.

I therefore hope that the Minister will be able to explain, when he rises to his feet: if not now, then when? How many more people will die before the United Kingdom does the right thing and votes for peace, votes for negotiations and, yes, votes for a ceasefire?

International Development White Paper

Liam Byrne Excerpts

Tuesday 21st November 2023 Commons Chamber

[Mr Mitchell]

My right hon. Friend is right on that, and of course he was one of the 26 Conservative Members who voted not to cut the 0.7%. I hope that he will be energised by the alternative means we have found—the multipliers to ratchet in enormous amounts of money. He is right in what he says about the link between defence, development and diplomacy. When he gets a moment to read to read this White Paper, he will be enthused by the lines it is taking.

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

The right hon. Gentleman, my constituency neighbour, knows that I admire much about the mission he has set out in this White Paper, but chapter 3 needed to say a lot more about the money. He could have said more about doubling the fraction of the special drawing rights we share, as Japan is doing, which would have provided an extra £4 billion of development assistance. He could have said more about using the money we get back from the European Investment Bank to invest in building a bigger World Bank in order to unlock $200 billion of concessional lending over the decade ahead. He could have said more about leading a global initiative to keep the interest rate on special drawing rights down so that the International Monetary Fund remains as lender of last resort, rather than China. Those are practical steps that we could work on together—otherwise we end up with all mission and no model, which will not help the world’s poorest.

[Mr Mitchell]

If the right hon. Gentleman reads with care the chapter to which he referred, he will see that it is one of the most brilliant chapters in it—that is my biased opinion. The reason for that is that we have in Washington an extraordinary team of young and brilliant officials who have enormous influence in the World Bank, and he is a considerable expert on this area. As for the multipliers and making sure that we sweat the balance sheets of these multilateral banks to ratchet in huge amounts of more money, he will see a great deal to please him. If these reforms are implemented, as I believe they will be, driven hard by Britain through the multilateral sector, we will see a vast increase in funding. As for what he says about the SDRs, using them creatively is something we are keen to do. He will recall that at the spring meetings the Chancellor of the Exchequer announced that Britain would use its SDRs to the tune of £5.3 billion to elevate the two IMF funds that directly deal with poverty and international development.

Occupied Palestinian Territories: Humanitarian Situation

Liam Byrne Excerpts

Wednesday 8th November 2023 Commons Chamber

[Mr Deputy Speaker (Sir Roger Gale)]

Order. I indicated that I would endeavour to accommodate everybody. That remains the case. The Minister has indicated to me that he has effectively cleared his diary to accommodate this statement, because he realises how important it is. But there is a time when everything has to come to an end, because a large number of Members, particularly on the Opposition Benches, wish to speak in the King’s Speech debate and we want to get those people in as well. I will try to terminate this statement by 2.30 pm, bearing in mind that some 38 Members still wish to ask a question.

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

We are grateful to the Minister for his tireless work, but by his own analysis the aid is not getting through. I commend to him the motion passed by Birmingham City Council last night that calls for an immediate ceasefire binding on all sides, because it is the best way to save the hostages, get aid through, and let the war crimes inspectors do their work. I support that position. I do not think that he does, but could he tell us under what conditions the British Government would shift from a policy of supporting humanitarian pauses to a strategy of supporting an immediate ceasefire?

[Mr Mitchell]

I hope that the right hon. Gentleman will explain to our friends on Birmingham City Council the reason the Government and indeed his own Front Bench take the view that they do about a ceasefire, but he is right that the critical thing at the moment is to focus on the humanitarian pauses, which are designed to get food to those who need it. Nothing is more important in this context than that.

Illicit Finance: War in Ukraine

Liam Byrne Excerpts

Thursday 13th July 2023 Commons Chamber

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

My gratitude goes to the Chair of the Liaison Committee, the hon. Member for Harwich and North Essex (Sir Bernard Jenkin), and the Chair of the Backbench Business Committee, my hon. Friend the Member for Gateshead (Ian Mearns), for tabling the debate. My gratitude for this timing is matched only by my sadness that members of the Foreign Affairs Committee are travelling in Africa at the moment, in pursuit of their inquiry into counter-terrorism, and so the House will have to put up with me. I am not speaking on behalf of the Committee, but I am at least sharing the Committee’s analysis of what the Government have got right and where they have further to go—in some cases, much further.

I associate myself with the support for the motion expressed so eloquently by the hon. Member for Harwich and North Essex. The motion is well drafted and deserves the support of the whole House. I want to complement his excellent speech by sharing some analysis of the report by the Foreign Affairs Committee at the centre of the motion.

The truth is that many Members of the House—I can see some of them in the Chamber—have been warning about the need to re-contain Russia since President Putin’s speech to the Munich Security Council back in 2012. Threats always evolve, and today they are evolving faster than ever. There are new spectres abroad, but the most dangerous of those spectres is Russia.

At the core of the debate is an argument about how we defend our freedom, by reinventing our security for new times. Because Russia is the principal of those spectres, it is right that we spend most of our time today discussing how we re-contain Russia. In truth, it is about not simply supporting Ukraine in its fight, but understanding the new theatres of violence where Russia is on the march. As I hope we will see in the defence Command Paper next week, they will require us, as a country, to re-enforce our defences in the Arctic and our alliances in central Asia, and, crucially, transform our presence in Africa, where the Wagner Group is still a threat in some 14 to 15 countries, where it has extracted at least a quarter of a billion pounds to cashflow the wars of President Putin.

That takes us to the core of the argument set out in the Foreign Affairs Committee report. The threats that we have to confront now are not simply places on a map, but domains; they are the political, cyber and, crucially, economic worlds. We have to recognise that the way we will be attacked will not simply be by states, but by states acting together with others.

Those proxy forces will be more dangerous, in many ways. Sometimes it will be organisations such as the Islamic Revolutionary Guard Corps, acting in concert with the Government of Iran, but at other times it will be private military companies, such as the Wagner Group. Increasingly, these nexus threats will couple with organised crime groups and together they will exploit our vulnerabilities in the economic crime space, to generate the millions needed to cashflow violence. That is why the Foreign Affairs Committee, under the leadership of the then Chair, the right hon. Member for Tonbridge and Malling (Tom Tugendhat), who is now the Minister for Security, spent so much time over the past couple of years looking at the question of illicit finance.

Russia is at the centre of the debate because we have to learn the simple truth that we have to re-contain Russia. When we look at Russian history, we see one clear lesson: Russia is constantly in the business of invading its neighbours. We have to remember the throttling of Berlin in 1948 and the invasions of Hungary, Czechoslovakia, Afghanistan, Georgia, Moldova and Ukraine. We in this House have to learn the lesson that a mainstay—a cornerstone—of our security policy has to be a strategy for re-containing Russia. We cannot change the geography of Russia, but we can and must end Russia’s ceaseless choreography of war.

With Sweden’s admission to NATO, along with Finland, we have now rebuilt NATO’s eastern flank. That task will not be complete, as the Chair of the Liaison Committee said, until Ukraine, and I hope one day Georgia, join NATO. But we have to recognise that there is an awful lot more that we need to do to close down the domains of politics, cyber and economy.

The Foreign Affairs Committee report focuses on the economic world. Frankly, it is a shame that it took the invasion of Ukraine to prompt the Government to get serious about bringing forward the Economic Crime and Corporate Transparency Bill, which is currently in the other House. At least the Government have made progress. I hope that we can build on what I hope is an emerging consensus in the other place about some of the reforms that will be needed. Together, we have to ensure that we have shut down Londongrad for good. For many years, our country has not simply been a target, but a crime scene. We have been the place where hundreds of billions of roubles, stolen from the Russian people, have been laundered and, in many cases, recycled into Putin’s ceaseless war of violence.

In the Foreign Affairs Committee’s report, we set out four basic sets of reforms needed in the fields of prevention, intelligence, enforcement and prosecution. In the realm of prevention, it is obviously vital that we impose upon directors some much tougher obligations and finally ensure that Companies House becomes a regulator, not a library where accounts are filed to gather dust.

Not many of us will remember this, but when this House decided to create limited liability laws, back in 1851, the Prime Minister of the day, Viscount Palmerston, confronted quite a contentious debate and a divided House. At one point he had to threaten the House with sitting right the way through to the summer in order to get the legislation on the books. Limited liability partnerships are not found in nature; they are the creation of us as legislators and create significant privileges for those who want to come together and form a company. Viscount Palmerston said that it would allow Britain’s army of small savers to combine their small pots together to create great firms of the future

“for the advantage of the community as a whole.”

He told the Commons:

“There is nothing that would more tend to the general advantage of the public.”—[Official Report, 26 July 1855; Vol. 139, c. 1390.]

Yet today many are exploiting the licence to create companies, to create firms, that subvert the common good. We should stop them. That is why our Committee underlined the imperative of building a stronger Companies House and creating stronger obligations on directors, their proxies and their enablers. The Economic Crime and Corporate Transparency Bill does offer some progress, but it could be stronger. Crucially, we need to create a duty on the registrar to verify information, not simply provide a power that enables the registrar to do something. We need to toughen the obligations of corporate criminal liability. In fact, the report cited in the motion says that

“reform of outdated and ineffective corporate criminal liability laws which mean that it is difficult to hold large companies to account for economic crimes”—

should be reformed.

On this front, the Government commissioned a report from the Law Commission some years ago. The options for change have been on the table since the summer of last year. I gently say to Ministers that it is time to move forward on those options.

It is not simply directors who need stronger obligations; enablers do, too. That is why our report advised the Government to study the lessons from, for example, the enablers Bill from the United States Congress and the Countering America’s Adversaries Through Sanctions Act. These contain protections that should be aligned with UK law. The Economic Crime and Corporate Transparency Bill makes it easier for the Law Society to impose penalties on bad lawyers, but far more important are Lord Agnew’s amendments to the Bill, which were passed in the other place. I hope the Minister can confirm that the Government will not resist those amendments when that Bill comes to us in the next week or two. These require nominees to declare who they are working for. That will help us to identify who the persons of significant control are. It introduces an offence for nominees who do not declare themselves. That is a recommendation of the Financial Action Task Force, and the investigations by both the BBC and The Times have underlined just why we need it. They found that Viktor Fedotov, a Russian-born oil executive accused of £143 million-worth of contracting fraud in Russia, owns two properties in the UK via offshore trust structures, administered by the wealth management firm JCC. But owing to the nominee loophole, Mr Fedotov is not named as the beneficial owner of the corporate trustees that hold property in his name. That is the kind of loophole that made Londongrad possible. We should close it and we should close it together.

The other place has also supplied amendments that close exemptions for trusts, which would stop trusts in the Register of Overseas Entities being used as an opaque vehicle for illicit finance. The other place has also introduced amendments creating sanctions for directors failing to prevent money laundering. It has also closed the loophole that allows small and medium-sized enterprises to escape these sorts of obligations. The amendments are sensible. They are supported by both sides of the House. I hope the Minister, when she winds up, will be able to confirm that the Government will not seek to oppose those amendments.

Secondly, our Committee reflected on the kind of intelligence that we will need to track down bad people who finance Putin’s regime. We thought it was therefore essential that the Government now fulfil their commitment to publish their review of the tier 1 golden visa scheme. That has been promised repeatedly and it is time that we saw it on the table here in the House. Crucially, our Committee was unanimous that better protection was needed for journalists under a revised and comprehensive anti-SLAPP set of laws, but also new protections with a whistleblowing Bill. We asked the Foreign, Commonwealth and Development Office to push for a whistleblowing Bill to offer protection for those who speak out or uncover economic crimes. As yet, we have had no plans from the Government to fulfil that recommendation.

The third area, which is possibly the most significant, is the enforcement gap. We know that this is a problem. Organisations such as the Atlantic Council have been so concerned that they have warned that the UK’s effort to tackle kleptocracy is

“in severe danger of being shown as a paper tiger”.

Obviously, the key is to increase funding for law enforcement. The Government have promised £400 million to fund a three-year programme, but economic crime costs this country £350 billion. In 2019, the head of the National Crime Agency said that the budget needed for the NCA was closer to £3 billion. The Royal United Services Institute says that annual investment of at least a quarter of a billion pounds is needed. We could raise that money if only we took on the argument of setting, say, a £100 fee for setting up new companies, which is, of course, the fee level recommended by the Treasury Committee. That is double what His Majesty’s Government are currently proposing. We need stronger proposals from Ministers to plug the gap where our credibility should be.

Finally, enforcement will mean little if we cannot prosecute the criminals once we find them. That is why we welcomed the sanctions that have been passed by His Majesty’s Government, but, like many people in this House—I suspect that the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) will pursue this point—we are also clear on our Committee that assets should be seized, not simply frozen. We know that it will take some international action at the United Nations to change the norms in international law around immunity for organisations such as central banks. It is also important that we move ahead with the prosecution of Russia for aggression, so that it cannot claim in some way that it is a victim under the terms of the European convention. But, again, what most of us in this House want to see is a Bill on that table that shows how we will seize assets, not simply freeze them.

Important measures have been brought forward in the other place, too. The Economic Crime and Corporate Transparency Bill would widely extend cost caps beyond simply unexplained wealth orders. Again, it is extremely important that Ministers accept rather than reject those measures. But, taken together, we have now taken, through the work of many people on both sides of the House, some serious measures that will shut down Londongrad, and that will learn the lessons from the way in which Putin was able to cash-flow his violence through exploiting his friends in the City of London and elsewhere. We must accept that, even when Ukraine is triumphant, the Russian threat will simply transform itself once again. That is why we must ensure that our economic system, which we have worked so hard to create, is disrupted and denied to those who wish us ill.

[Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)]

I am grateful to be called to speak in this debate. I congratulate my hon. Friend the Member for Harwich and North Essex (Sir Bernard Jenkin) on securing this debate and on having spoken so clearly and passionately.

It is always a pleasure to follow the right hon. Member for Birmingham, Hodge Hill (Liam Byrne). As he knows, we have been following each other for some time over the past few years—actually I wish to rephrase that; this is not a stalking issue, but it could be seen to be something similar to that in a political context. It is good to follow him on this particular subject because he speaks a lot of common sense. I wish to go back to the last section of his remarks, which deal with seizure and the debate that is going on about that.

First, though, in response to the opening remarks of my hon. Friend the Member for Harwich and North Essex, it is hugely welcome that NATO membership has now expanded on the northern frontier. That is very important. It sends a strong message to Russia. Russian aggression has always been there below the surface. Sometimes it boiled over into remarks, but we always ignored it. The tendency of democracies and believers in freedom, freedom of speech and human rights is, sadly, too often to deal with countries on the basis of how they wish they were, rather than on the basis of what they are telling us what they are and what they will do. It happened in the 1930s. We ignored the nature of “Mein Kampf” and Hitler’s clear objectives, which he laid out endlessly. We kept saying that only one more step would satisfy that dictator and that he would be fine; it would not be a problem. But in fact, the more we gave him, the more he determined on and we ended up in a war. Appeasement did not work. It does not work here. And 60 million people died directly as a result of our failure to understand that, when dictators tell us what they are about to do, it is always good to recognise that they are actually sending us a signal, not wishing for something else.

That has happened here with Russia. Russia made it very clear what it was going to do, right the way from South Ossetia to the invasion of Crimea and the Donbas. These were very clear first steps in telling us that Greater Russia was on the move and was an objective of Putin, not just an idea. On the Minsk agreements, I remember sitting in Cabinet on this. I am not saying I was ahead of anyone else, but I remember saying, “How many of us here are really worried about the fact that there is an agreement now granting the right for Russia to sit on territory that it has invaded and occupied?” Everybody shrugged slightly and said, “Well, there’s not much we can do about it.” That, of course, was the signal to Putin that we were not prepared to stand up. That first phase only established for him the entirety of his project and its feasibility, and then there was the constant supply of weapons and the terrible shooting down of the airliner. Those were all constant steps, telling us the direction and that he was testing us. Every time he tested us, he succeeded: we backed down and did nothing. The result has been this final full invasion—or attempted invasion—of Ukraine.

In that context, I am slightly sorry that NATO was not able to send Ukraine a stronger signal about its future with regards to NATO. I agree with my hon. Friend the Member for Harwich and North Essex in that I applaud much of what the NATO-Ukraine Council did and think it is an excellent start, but I think we could have been more positive. America and Germany particularly stood in the way of the general mood of the council to offer more to Ukraine. I know that we probably could not have brought Ukraine in immediately, but everyone harped on about article 5 being the problem because it committed people to go to war. It does no such thing, by the way; it is always worth reading these things before pronouncing on them. Article 5 does not commit the nations in NATO to go directly to war. It commits them to agree together to take action as they deem “necessary”. Simply put, it is quite important that it is not an absolute: the declaration of a war against one is a war against all is then followed by actions as deemed necessary in nations. That means that, by and large, we will probably come together and do that, but it does not mean that we would have to be at war in Ukraine. We could have offered that relationship, and reading the article tells me that that is the case.

I commend the leadership of my right hon. Friend the Prime Minister in all this, as I commend the UK’s leadership. The beauty is that the Government and Prime Ministers have led the way on the issue in so many ways, as my hon. Friend the Member for Harwich and North Essex mentioned. The good news, of course, is that this House has not been divided on any of it. The House has sent a strong signal that Parliament stands by those in Ukraine and by the Government’s actions in trying to support them. That is very important because it is not always the case; in America, it is not necessarily the case at the moment. This Parliament has stood head and shoulders among most others, and it is because of that that we have been able to lead in terms of equipment, support, and recommendations with regards to NATO. The UK is influential in these matters and long may it remain so.

I return to the question raised by the right hon. Member for Birmingham, Hodge Hill: how do we deal with Ukraine’s aftermath? Right now, there is a debate taking place about frozen assets. We have frozen the private assets of some oligarchs and we have frozen the Russian national Government’s assets here in the UK, in America, in Canada and in various other nations through their markets. It is quite an interesting debate, though. We can certainly seize private assets, although even that has been debated—but it is quite clear that under international law it is wholly feasible for us to do so—but the real debate begins when it comes to very extensive Russian national assets that are now just sitting there. How can we deal with those? It is not the case that doing this immediately opens the door to the Chinese and others to seize our assets should they wish to. There are a number of arguments, which I will quickly run through.

There are a number of routes around the problem of sovereign immunity in relation to claims against Russia for its conduct in the war and an attempt to obtain access to those assets. Customary international law permits the imposition of sanctions and restraint of assets in furtherance of international peace and security and legitimate foreign policy objectives. That means that, if asset-freezing measures are failing to achieve those aims, it would seem—this is important—very permissible in principle for measures of seizure to be adopted as a necessary and proportionate next step. They are not ruled out; they are by a natural extension. We must view international law as a movable process that is not set in stone. It has always been capable to shift international law by what nations agree. This is an important, feasible point. States are obliged under international law to take all necessary and proportionate steps to bring an end to a breach of peremptory norms of international law. That is important, because it sets the tone for why we may look at this carefully.

[Liam Byrne]

The right hon. Gentleman is making an excellent speech. Is he as perplexed as I am about why NATO allies have not sought to bring forward, for example, a motion at the United Nations that could help to crystallise that change in norms? If we are to effect, for example, the interpretation of immunity laws, he is absolutely right that norms need to change. One way to do that is through a vote at the United Nations, which I would have thought we could win.

[Sir Iain Duncan Smith]

I agree; we are probably all going to agree. We have talked about the military alliance, but now we are in the realms of the economic alliance, because that is really where we win the peace. We may yet win the war, but that is no good if we leave behind a shell of a country that is incapable of operation, democracy or even economic wellbeing. Winning the peace is as vital, and we need to be planning for it now; they did that during the second world war. It is worth reminding ourselves that by the end of that war, they were very clear about what they were going to do.

Whether it is NATO, an alliance, the G7 or whoever, it is important that we form a bloc on these matters and agree, although I know there is a little resistance to that elsewhere. Furthermore, I believe that international law is not fixed, but is capable of development. Although the leadership of the UN Security Council is foreclosed because of Russia’s power of veto, there could be sufficient development to allow adjustment of the boundaries of state immunity in customary international law to allow enforcement of such international awards. For example, international law permits state assets to be frozen without any international court’s adjudication. We did not need permission for it; we did it. The reason it is done is because an action has taken place. International law could be developed to allow seizure pursuant to such adjudication.

The UN General Assembly has already adopted a resolution calling on Russia to pay reparations, and there is no reason why regional bodies such as the EU or the Council of Europe—not just NATO, but other bodies that could come together and do this—could not adopt specific resolutions providing a pathway to compensation and enforcement. That point was also made by the right hon. Member for Birmingham, Hodge Hill.

Frankly, there would appear to be no obstacle in international law to a state that imposes sanctions on Russian assets making it a condition for release of those sanctions that the Russian state honour any award made by the International Court of Justice or the European Court of Human Rights. This is another route that allows us to sanction Russia; if they fail to meet their requirements under the sanction, we simply seize their existing assets in balance with the sanctioning that was necessary. Overall, for those and many other reasons, the details of which I will not go through now, I think there is more scope for sanctioning.

It was Lord Bingham who said that the public policy consideration that had greatest claim on the loyalty of the law—this is really important—was that where there was a wrong, there should be a remedy. We must always be governed by that in law. That is why I believe it is wholly feasible for us now to start the process by which we may undertake the pathway to the potential seizure or subsequent seizure of Russian assets for reparations.

I will conclude by mentioning, as I did in a previous question to the Prime Minister, that I came back a few days ago from Ukraine. It was a privilege to be there, working with a remarkable charity that I have now supported twice in Ukraine, called Siobhan’s Trust, which—in a classically British kind of way—just set off when Russia invaded Ukraine and went towards the danger. The people from that charity have been feeding those dispossessed of their properties and fleeing the war. They moved into Ukraine and have now moved down near the frontline, and they feed people there from pizza trucks. They have made over 1 million pizzas for people in Ukraine, and they produce joy and hope in people’s hearts when they are there, as they wear what they call Ukrainian kilts and they put the boombox on. People’s faces really lift when they see this peculiarly quixotic British crowd—who seem impervious to the idea that they are within the range of shell shot—having fun; it lifts their spirits and brings them great hope.

The thing I discovered while I was out there, and the one thing I know from having served, is that war is terrible. War is horrendous. War hurts those who are not directly involved in it—more, perhaps, than those who are. It is a terrible, terrible affair, to be avoided at almost all costs, except when justice must prevail. However, talking to the military and to some of the guys I saw down there near the front about their problems and issues, I must say to the right hon. Member for Birmingham, Hodge Hill that we still have so much more to do.

Ukraine is the frontline of NATO. There is no beating about the bush: if Ukraine fails on this, we all fail, and the repercussions, as the right hon. Gentleman said, will be terrible. Ukraine’s war is already our war, whether we give it membership of NATO or not. It is our war. We started that when, much to Putin’s shock, we stood by what we said we would do.

The war in Ukraine has exposed our own failure to understand what war fighting really means. The truth is that almost all of us in NATO have abandoned the idea of the sheer extent of a full-scale war. When I talked to the Ukrainian soldiers, the amount of ammunition they told me they use on a daily basis is astonishing. We have forgotten that, so we do not have stockpiles appropriate to fighting war, and we have to replenish those in double-quick time, because they need that ammunition. They are running short of artillery ammunition, not because we do not want to give it to them, but because so many of us do not have enough artillery ammunition to give them right now, having placed contracts only recently. America, by and large, has many more stockpiles than we do, but it is a fact of life that if we wish to avoid war, we must prepare for it, and we simply have not prepared for it over the years to the extent we needed to.

The Ukrainians need that support. They need training; many of their soldiers get two or three weeks’ training and then they are on the frontline. I swear to God, having been a soldier myself, that it takes a long time to understand proper fieldcraft, and the less someone knows, the more likely they are to be wounded or killed, because they will take the wrong decisions. I will not say exactly what is required, but I must talk to the Government about what they could do. Ukraine also faces conscription issues.

The reality is that Ukraine must win this war, but it needs us to be literally, as Roosevelt once said, the “arsenal of democracy”. It is for us who are not on the frontline to supply those who are, so that they may achieve their goal of victory. With victory comes the second phase of reparations and restoration. We must be in that right to the finish, for if Ukraine fails first in the war, or fails subsequently in the peace, we will carry the blame for it, and rightly so. We will never be forgiven. I simply say to my right hon. Friend at the Dispatch Box, “This is our war. We must win it with them, or else we will all lose.”

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[Catherine West (Hornsey and Wood Green) (Lab)]

I thank the hon. Member for Harwich and North Essex (Sir Bernard Jenkin) for bringing this motion before the House. I also thank the hon. Member for Rutland and Melton (Alicia Kearns), who is currently travelling, and the Foreign Affairs Committee for their efforts in authoring the report, which shines a light on the scourge of illicit finance that continues to erode our economic and political institutions, the impacts of which have been made all the more apparent by Putin’s illegal and egregious war of aggression against Ukraine.

As was outlined in the integrated review of 2021 and reinforced in the refresh, Russia remains the UK’s most acute threat. Our national security and that of our closest allies is intrinsically linked to the outcome of the war in Ukraine, and it remains incontrovertible that assets laundered through London and the UK are having a direct impact on the Kremlin’s capacity to wage that war. Labour has been in lockstep with the Government all along on this question, and we will continue to be, should the Government bring forward further steps to strengthen the UK’s position. However, we consider it our duty as an Opposition to make clear where we believe the Government need to do more, and today is a good example.

I wanted to focus on the NATO question, but we went through it quite thoroughly this morning. In light of the Prime Minister’s challenge to us all to look back on what Mr Stoltenberg said at the conference and on page 4 of the report—I was making notes—perhaps collectively we should go back, look at the conference and its findings, and come back with a further strengthening of our position. I can guarantee that Labour will be in lockstep with the Government on this; I think both this debate and this morning’s statement have shown that.

Let me address very briefly the matters that have been raised in the debate. My right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne) outlined a number of concerns. He watches this issue closely and has been involved—together with my right hon. Friend the Member for Barking (Dame Margaret Hodge)—in these questions for many years in this House. It is imperative that the Government come forward as quickly as possible with the measures that are needed.

I extend my thanks to the charity that the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) mentioned. We all have examples of people who have come forward in the past couple of years and shown amazing compassion and strength. I know so many families in Hornsey and Wood Green who have opened their doors and had families stay, even beyond the six months. Even though the scheme was not perfect—we all knew that—it was fantastic to see our citizens come forward to help.

To move on to the substance of the FAC’s report, it is clear that if the Government had introduced the necessary legislation in time, they could have stemmed the flow of illicit finance prior to Russia’s full-scale invasion of Ukraine. However, kleptocrats and oligarchs have been emboldened, believing fundamentally that their vast wealth will be safe in London and that their assets will flourish. To go further on that thought, perhaps we could do more on the question of property and China, rather than waiting until tensions develop in that particular relationship.

The Labour party has been pressing the Government for action for years, and has raised the issue of illicit finance several times on the Floor of the House. In January, the shadow Foreign Secretary, my right hon. Friend the Member for Tottenham (Mr Lammy), made it clear that when we are in Government we will answer calls from the US and beyond to establish a transatlantic anti-corruption council to co-ordinate the international fight against corruption, money laundering and illicit finance. In a speech just this week at the Bingham Centre, my right hon. Friend announced that Labour would join calls for the establishment of an international anti-corruption court designed to prosecute the most egregious acts of corruption across the globe.

The FAC report illustrates that the measures adopted in the Economic Crime (Transparency and Enforcement) Act 2022 did not go far enough to tackle to the problem. It states that the steps taken by the Government since February last year

“are not preventative but rather constitute damage limitation”—

damage brought about by years of apathy on the issue. The new Economic Crime and Corporate Transparency Bill finally acts on some, but not all, of the promises in the Government’s 2019 economic crime plan. Indeed, the six-month delay between the two pieces of legislation has allowed thousands more illicit companies to register.

We welcome the Bill, but it must go much further to ensure not just that we keep up, but that when it comes to cracking down on illicit finance, Britain holds the gold standard. It was therefore profoundly disappointing that in Committee back in January there was little in the way of movement from the Government, even when they struggled to find fault with our amendments and new clauses. Every single effort by Opposition parties to strengthen the Bill was met by resistance from Ministers, and every Opposition amendment that was pressed to a vote was defeated. As a result, Committee stage amounted to little more than a litany of missed opportunities, forcing us to return to those arguments once again in this debate, as we will no doubt have to do again during the Bill’s remaining stages.

Although we welcome the fact that the Government have finally U-turned on introducing a corporate criminal liability offence, the Bill’s provisions on Companies House and the supervision of third-party enablers, especially trusted company service providers, are too weak and do not match international standards. The Bill also fails to set out a strategy to recoup assets seized through economic crime enforcement and to compensate the victims. The right hon. Member for Chingford and Woodford Green mentioned righting a wrong—finding a remedy.

Indeed, although we also welcome the steps taken in the Bill on cryptocurrencies, what consideration is being given to sanctioning cryptocurrency mixers Tornado Cash and Blender? [Interruption.] It is not a cocktail! The US Treasury has sanctioned both; why have we not? Will the Government bring the UK into line with the US Treasury’s approach? Putin and his cronies are more than capable of exploiting such gaps in our regime, so why are we so slow and allowing that to persist? That example is illustrative of the Government’s strategy when it comes to tackling Russia here at home. The report outlines that well:

“Although Ministers have spoken eloquently in the House about the need to clamp down on kleptocrats, rhetoric has not been matched by constructive action. Meanwhile, corrupt money has continued to flow into the UK.”

More broadly, even the limited progress that the legislation offers is hampered by the fact that the Government are not sufficiently resourcing the bodies tasked with enforcing the changes. The hon. Member for Inverclyde (Ronnie Cowan) went into the question of resource in detail, so I will not repeat that point, but the report finds that 0.042% of GDP is spent on funding national-level economic crime and enforcement bodies. As a result, money laundering prosecutions have dropped by 35% in the past five years.

[Liam Byrne]

My hon. Friend is making a brilliant speech. On her point about enforcement, one thing the Government could commit to this afternoon is the Prime Minister appointing a new anti-corruption tsar, which would help. Many of us in the House are grateful for the leadership of my right hon. Friend the Member for Barking (Dame Margaret Hodge), who is not in her place. She has written to the Prime Minister asking him to make that appointment. Surely that is something that the Minister could give us some good news about.

[Catherine West]

I will allow that message to pass straight across the Dispatch Box to the Minister so that she can answer it. That query was going to be in my concluding remarks, so now I will not need to repeat it.

Spotlight on Corruption highlights that the Bill

“only funds the first two years of the plan”,

so we need to plan for more and more finance, particularly as this sort of crime and online crime become more complex. Will the Minister outline how the Government will ensure that the plan has necessary funding to ensure that public investment matches the scale of the challenge that we face? The National Crime Agency, the Serious Fraud Office and other bodies urgently need further resourcing to row back years of inactivity in this area and to protect legitimate business and safeguard our national security.

We must also do far more to oppose those who seek to use their wealth to avoid scrutiny, skirt the law and remain beyond the reach of those who enforce it. We therefore welcome the fact that the Government are, through amendments to the Economic Crime and Corporate Transparency Bill, finally providing judges with greater powers to dismiss lawsuits designed purely to evade scrutiny and stifle freedom of speech. We in this House all followed the case of the excellent author Catherine Belton, who was taken to court on a frivolous basis, on one of those trumped-up charges, and suffered a great deal of distress as a result.

In January, revelations came to light that in 2021, the Treasury, which was then under the leadership of the current Prime Minister, issued special licences allowing Wagner Group warlord Yevgeny Prigozhin to circumvent sanctions issued before Putin’s illegal invasion of Ukraine and to level legal proceedings against a UK journalist. That highlights fundamental problems in the Government’s competence—not only on SLAPPs, but in their seemingly flippant issuing of general licences and exemptions to our sanctions regime, with virtually no ministerial oversight. As my right hon. Friend the Member for Barking made clear in a letter to the Prime Minister, and as my right hon. Friend the Member for Birmingham, Hodge Hill reminded us, it has now been 400 days since the Government’s anti-corruption champion resigned.

Labour will continue to push the Government on the full seizure and repurposing of Russian state assets. There has been little or no movement from the Government on that issue in more than 500 days, despite our Opposition day motion of three weeks ago setting out the means to do so, and despite the fact that our allies are finding the courage to forge ahead. We must keep up. When can we expect the Government to introduce legislation that would allow the repurposing of Russian state assets? The Canadians have already done it; when will the UK Government catch up?

That issue is coupled with the challenge of closing loopholes in our regime that still allow the prohibitions established in secondary legislation to be circumvented. I understand that the Minister will write to the shadow Minister, my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty), after he raised at a statutory instrument Committee on Monday the question of the continued flow of Russian oil.

Fundamentally, the FAC report catalogues a litany of errors and shortfalls, and illustrates the extent of the Government’s sluggishness in bringing forward legislation fit to tackle the challenges that it outlines. We support the steps taken in the Economic Crime Act and the Economic Crime and Corporate Transparency Bill, which has been in the other place, but changes in the law must be accompanied by a decisive shift in culture on tackling illicit finance, on Government proactiveness, and on authorities having the means, resources and focus to tackle the issues at their core.

I thank all colleagues for their contributions, and particularly the Foreign Affairs Committee for its forensic and fair appraisal of the UK’s performance in this area. Positive steps have been taken, and we welcome them. We have made it clear that we will support the Government where we believe they are getting it right, but progress cannot now beget apathy and complacency. There is a long way to go to expunge dirty money from this country entirely. We owe it to the people of Ukraine to tear such finances from our institutions root and stem.

I hope that the Minister has heard the views of colleagues and will provide assurances that the Government will not take their foot of the pedal when our priority must be to build on the progress that has been made.

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[Anne-Marie Trevelyan]

If my right hon. Friend will give me a moment, I shall attempt to answer that question in due course.

[Liam Byrne]

I am grateful to the Minister for giving way; she is being characteristically generous. Could she tell the House whether that bearing down on economic criminals will include Government acceptance of the excellent amendments tabled by Lord Agnew in the other place, which have widespread support in this House?

[Anne-Marie Trevelyan]

The right hon. Member will know that I am unable to answer that at this point—it is a question for the Leader of the House—but I have no doubt that it has been heard and that the cross-party support for that measure has been duly noted.

We are working closely with our international partners to address the impact of Russia’s war on global food prices and food security for the world’s poorest. That includes working to keep exports of Ukrainian grain flowing through the UN Black sea grain initiative, which has helped more than 32 million tonnes of grain and other foodstuffs to reach countries around the world.

To respond to the point that my right hon. Friend the Member for Esher and Walton (Dominic Raab) made about Turkey’s commitment—that country’s assistance in keeping that grain initiative flowing despite the continued challenges—we should all commend its efforts, quietly and behind the scenes, to make sure that those flows of food can continue. Its commitment has been exemplary.

Russia continues to delay and obstruct inspections of ships, but food cannot be a weapon. It is reprehensible that Russia is threatening not to extend the deal, which would increase food prices for the world’s poorest, so the UK is supporting Turkey and the UN in their very focused efforts to ensure that the initiative can continue unimpeded, and to renew the grain deal beyond 17 July. Just yesterday, the UN Secretary-General sent a further proposal to Russia to address concerns over the export of Russian food and fertiliser. The UN offer on the table will give stability to both the Black sea grain initiative and Russian agricultural exports, helping to provide easier access to food across the world.

[Anne-Marie Trevelyan]

I thank my right hon. Friend for his intervention. Turkey, in particular, is making incredible efforts and has continuing negotiations and conversations as a close neighbour and the guardian of the Dardanelles—that critical piece of water through which all these ships have to pass. It is clearly managing that situation, and we continue to support Turkey’s efforts to find ongoing solutions. My right hon. Friend the Foreign Secretary will be chairing a session of the UN Security Council next week to discuss exactly these issues—the impacts of the war, both in Ukraine and across the world.

Turning to an issue that colleagues are rightly focused on, we are of course looking to the future while dealing with the present-day challenges of supporting the Ukrainians as they prosecute the war. We are supporting the office of Ukraine’s prosecutor general to help it investigate and prosecute alleged war crimes. The UK provided £2.5 million of funding to support Ukraine’s domestic investigations and prosecutions in 2022, and we intend to provide similar levels of funding this year. We welcome the steps taken by the independent International Criminal Court to hold those at the top of the Russian regime to account, including Vladimir Putin. We have provided an additional £2 million to the ICC for evidence collection and support for victims and witnesses, and in May, along with 40 other states, we signed an agreement to create a new international register of damage caused by Russian aggression against Ukraine. That is an important step in the pursuit of justice for the Ukrainian people.

Just a few weeks ago, in June, we co-hosted with our Ukrainian friends the 2023 Ukraine recovery conference here in London. That conference raised over $60 billion, including a new €50 billion EU facility and $3 billion in UK guarantees to World Bank lending. Almost 500 companies from 42 countries, worth more than $5.2 trillion, pledged to back Ukraine’s reconstruction through the Ukraine business compact. The conference also agreed to forge a new G7+ clean energy partnership to help Ukraine rebuild a net zero energy system connected to Europe.

Members rightly want to see continued sanctions, asset freezes and travel bans during this very difficult time. Just last week, I was proud to bring in new legislation that will enable sanctions to be maintained until Moscow pays compensation for the reconstruction of Ukraine and a route is developed for Ukrainian reconstruction. We will, of course, also be creating a route to allow individuals to voluntarily hand over those assets of theirs that are presently frozen into a fund to support reconstruction. That will be a one-way ticket: if those people feel that they have realised the error of their ways, it will be an opportunity for them to support Ukraine’s reconstruction.

[Liam Byrne]

I am grateful to the Minister, because I do not think the House had had a chance to cross-examine her on that point. Is she saying that sanctions will remain in place until Russia has stumped up the full bill for reconstruction, and if so, what are the expectations of the amount that Russia will need to pay in order to get those sanctions lifted?

[Anne-Marie Trevelyan]

The right hon. Member asks an important question. Sadly, that figure grows day by day—I think the latest assessments are that something like $400 billion is expected for the reconstruction, but as the war goes on, that figure is likely to grow as more infrastructure is damaged. Greater reparations would be required to help Ukraine get back on her feet completely, but the new legislation will enable existing sanctions to stay in place until agreements on that compensation payment are reached. Discussions about what that might look like will continue in due course.

Repurposing Russian Assets to Rebuild Ukraine

Liam Byrne Excerpts

Tuesday 27th June 2023 Commons Chamber

[Mr Lammy]

My right hon. Friend has been so assiduous on these issues over many, many years. She is absolutely right that we cannot have the necessary quality of debate without transparency. That is what we need. I do not think that that ought to be a matter of dispute between us and the Government; I should have thought that it was something on which we could agree. I hope the Minister will be able to tell us whether those figures can, in a transparent fashion, be put in the Library and made available to the Foreign Affairs Committee, so that we can all work on a common basis.

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

My right hon. Friend the Member for Barking (Dame Margaret Hodge) has provoked me into intervening. Would we not be better served in the House if the Office of Financial Sanctions Implementation not only disclosed the full measure of the assets that we have frozen, but came to the House once a month to tell us what sanction waivers it had written that have allowed oligarchs with fortunes in this country to live high on the hog in their well-tended mansions, paid for with money that has been stolen from the Russian people? The Minister himself came close to agreeing with us in the Foreign Affairs Committee that our sanctions regime is in danger of being undermined by the Treasury writing sanctions waivers left, right and centre.

[Mr Lammy]

I agree with my right hon. Friend, who has raised these issues time and again. The concern is, of course, that there is not the appropriate ministerial oversight, that this place is being kept in the dark about fundamental, key issues, and that in the end the money of taxpayers in all our constituencies will fund these waivers. That is why the House should have both transparency and the opportunity to challenge and question those who make these decisions on our behalf. I hope that that is what Ministers are doing, but it does appear that this is happening without ministerial oversight.

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[Leo Docherty]

I am grateful to the right hon. Lady for drawing my attention to that amendment. I cannot make a pronouncement on the Government position on it, as I have not read the amendment, but we will observe it and take note.

[Liam Byrne]

Will the Minister clarify the press release issued by the Foreign, Commonwealth and Development Office on 19 May? It said that

“consistent with our laws, Russia’s sovereign assets in our jurisdictions will remain immobilised until Russia agrees to pay for the damage it has caused to Ukraine.”

Will the Minister confirm whether it is now, in effect, the Government’s strategy to use frozen Russian assets to rebuild Ukraine?

[Leo Docherty]

That legislation, which is a statutory instrument made using the affirmative procedure, gives us options in the future to extend sanctions, up until the point where Russia has paid. It gives us tremendous leverage into the future and has great utility.

We have maximised the impact of our sanctions by co-ordinating with our key international partners, at huge economic cost to Putin’s war machine. Russia’s economy posted a deficit of nearly $50 billion in 2022, the second highest in the post-Soviet era, and with our partners we are choking off Putin’s access to the key technologies he needs on the battlefield.

As I have mentioned, we are the first member of the sanctions coalition to lay legislation, which we did on 19 June, explicitly enabling us to keep sanctions in place until Russia pays for the damage it has caused. That builds on the commitment made by the Prime Minister and G7 leaders that sovereign assets will remain immobilised until Russia pays up. It also goes further, giving us maximum flexibility to act as the situation requires.

Our commitment does not stop there. As criticism of the war grows within Russia, we are introducing a new route for those under sanction to request that their frozen funds be used for Ukrainian reconstruction. Let me clear: there is no negotiation, no quid pro quo and no access for those individuals to their assets while they remain under sanction. However, if they wish to do the right thing and use those funds to help right the wrongs caused by Putin’s invasion, there will be an approved route for them to do so.

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[Leo Docherty]

I am very happy to give the right hon. Lady an absolute assurance that it is not a mechanism for circumvention or for granting immunity. It is to ensure that those funds, if volunteered, can benefit Ukrainians.

We are tightening the net on those who are hiding assets in the UK. Under powers to be introduced by the Treasury, individuals and entities designated under our sanctions regime will be legally required to disclose assets they hold in this country. Failure to do so could result in financial penalties or the confiscation of assets.

We will legislate to require those holding assets in the UK on behalf of the Central Bank of the Russian Federation, the Russian Ministry of Finance or the Russian national wealth fund to disclose them to the Treasury. Our action will increase transparency on where those assets are held and limit opportunities for sanctions evasion. Taken together, these new measures mark a further strengthening in the UK sanctions approach against Russia, as Putin and his cronies continue their illegal war and as Ukraine embarks on its counter-offensive. This marks important progress, but I assure Members that our efforts will not stop there.

Many hon. Members will be aware of the active debate with our international partners on the use of sanctioned assets. As the Foreign Secretary and other Ministers have made clear to this House repeatedly, no country has yet found a legally tested solution to turn this commitment into reality at scale, despite various pieces of legislation having been laid or passed by our international partners.

We are at the forefront of a united effort, with our international partners, to see frozen assets repurposed for Ukrainian reconstruction. Nothing is off the table, and a cross-Government taskforce is considering all proposals carefully, including those that our partners may bring forward.

[Liam Byrne]

I thank the Minister for giving way; he is being characteristically generous. We might as well cut to the nub of the debate. Is it his ambition to bring forward to this House a Bill that fulfils the ambition of the Opposition’s motion?

[Leo Docherty]

It is our ambition to find a legally workable route to repurpose Russian assets. As yet, no country has found one. We are working with partners to do so. As the House will appreciate, we must assure ourselves of the safety, robustness and legality of any proposal in this regard. If there is no legality, there can be no utility. That is why we continue to engage with every available option. The process will require creativity and innovation. I assure hon. Members across the House that we will continue to consider every lawful option to use sanctioned Russian assets to rebuild Ukraine.

--- Later in debate ---

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

I would like to start with a word of praise for what was a brilliant opening speech by my right hon. Friend the Member for Tottenham (Mr Lammy), the shadow Foreign Secretary. He gave the House not just a cry of anger or a plea for solidarity, but a demand for justice. Justice is exactly what the people of Ukraine need and they need it now.

There are three questions at the core of this debate, which were eloquently set out by the shadow Foreign Secretary: a practical question about who pays for violence; a moral question of who is punished; and a political question of how we in this country stay on track and keep pace with our allies. We should start with the question of who pays, because that was where we ended last week at the Ukraine reconstruction conference. As we heard, the bill for reconstruction is now enormous: $400 billion and counting, a one-third hit to Ukraine GDP, a fiscal deficit that is through the floor and interest rates that are through the roof. Where on earth will that money come from? We give thanks to the Bretton Woods institutions, which, best case, have mobilised something like $55 billion between them. Notwithstanding the money that was raised, promised, committed and vowed at the reconstruction conference last week, the gap is still enormous. That gap takes us to the question of justice and the requirement on Russia to make good the gap.

Ultimately, we on this continent of Europe are not simply a rules-based order; we are a rights-based order. In the ashes of world war two, we stood together with 10 of our great allies and, on 5 May 1949, founded the Council of Europe, which Churchill declared would hold up

“moral concepts…able to win the respect and recognition of mankind”,

a council united behind what Churchill called the charter of human rights

“guarded by freedom and sustained by law.”

That is the charter Russia signed in May 1998 and that is the charter it has breached ever since. If we believe in rules, we believe in punishment for those who break the rules. If we believe the aggressor must pay, then we must punish the aggressor. If there is no sanction, sentence, penalty or punishment for those who break the rules, we can expect those rules to be broken time and time and time again. Is that not the lesson that we should learn from even a casual glance at Russia’s history: the throttling of Berlin in 1948, the invasion of Hungary, the invasion of Czechoslovakia, the invasion of Afghanistan, of Georgia, of Moldova, of Ukraine? When are we ever going to learn the necessity of re-containing Russia? We cannot change the geography of Russia, but we can and we must end Russia’s ceaseless choreography of war.

This is no time for the sentence to be deferred. Why should the people of Ukraine wait? Why should they suffer in the sight of their enemies luxuriating in riches while their soldiers die and their children shelter in basements? Why should they watch oligarchs who stole from the people of Russia live high on the hog in their well-tended mansions here in London and elsewhere. Why should the gold of the Russian central bank, all £170 billion of it, sit gathering dust in a vault while the Ukrainian people suffer? That is not justice. Justice deferred is justice denied. Every day that we fail to take action is a day that we fail Ukraine, a day that we fail justice, a day when we neglect our duties to stand up against the brutal code of tyrants who think that might makes right and the strong do what they can while the weak suffer what they must. That is why we have to ensure that Russia picks up the bill for Ukraine’s reconstruction today.

That is the case for justice. As for the political case, it is pretty straightforward. Our allies are moving forward in not just freezing but seizing assets; is it not time we moved with them? The United States Senate is moving forward; is it not time we moved with it? The Canadian Government are moving forward; is it not time we moved with them? The President of the European Commission says that the frozen assets of the Russian central bank will be used to pay for reconstruction; is it not time we moved with the EU? Why should we fall behind? Our allies are sending a message to us here in the House—pick up the pace!—and that is the message that we send to the Minister.

It is time for us to crack on. First, as the shadow Foreign Secretary says, we need a Bill to be brought to the Dispatch Box within 90 days. Let us make sure that it amends the State Immunity Act 1978, which gives central banks immunity from jurisdiction and from enforcement. Let us empower Ministers with the authority to make seizure and forfeiture orders. Let us change the relevant terms of international law to safeguard that Bill. Let us move a motion for debate at the UN General Assembly to make it very clear that the majority of states now see the phrase “entitled to immunity” in a different light in different circumstances, now that war has been committed on this scale. To protect ourselves from any attempts to misuse the European convention on human rights, let us immediately begin prosecuting Russia for the crime of aggression, so that it cannot pretend that it is in any way some kind of victim in this illegal invasion.

Let me end by saying this. No one in the House forgets their first visit to Kyiv, that glorious city of Europe’s eastern border. No one forgets the message that they see emblazoned everywhere, on the posters in the squares, on the trains and in the cafés: “Be brave like Ukraine.” That is the message that the House sends to the Ministers on the Treasury Bench today: “Be brave like Ukraine. Strike a blow for freedom, and send the message from this mother of Parliaments that democracy on this continent will never be defeated.”

Oral Answers to Questions

Liam Byrne Excerpts

Tuesday 2nd May 2023 Commons Chamber

[James Cleverly]

I commend my hon. Friend on the work he has done in building not only trade links but a strong bilateral relationship between the UK and Brazil. I will be seeking to reinforce his efforts on my forthcoming trip to Brazil because, as he says, it is an important and influential country, which has huge natural resources and is the lungs of the world.

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

One of the fastest ways we could transform our influence with non-aligned countries is to step up and help to lead the debate about the availability of green and development finance. One thing the Foreign Secretary could do this year is to make the case that if we are to give our multilateral institutions a bigger task, we must give them a bigger balance sheet as well. We could be using the money we get back from the European Investment Bank, all €3.5 billion of it, to help to lead the argument for a bigger World Bank. Is that an argument that the Foreign Secretary is prepared to lead now?

[James Cleverly]

We are, and my right hon. Friend the Development Minister is personally leading the conversation on behalf of the UK Government about international financial institutions’ being more active in that very field, to ensure that they look again at their risk appetite so that we can unlock the trillions of dollars of available finance to help countries to transition from hydrocarbon, high-emitting sources of energy to renewable sources. That is a conversation we have regularly, both bilaterally and multilaterally, and I am proud that the UK is one of the leading voices on that agenda.