UK Automotive Industry

Liam Byrne Excerpts

Monday 18th September 2023 Commons Chamber

[Ms Ghani]

The hon. Lady started off appropriately by talking about how we work collectively on this issue. The rules of origin and tariffs were not just negotiated by us—there was another party at the table. The tariffs, if they are implemented, will impact not only on the UK car manufacturing sector but on manufacturers in Europe. As there are more cars imported from Europe into the UK, the burden will be far greater on those countries. The negotiation took place pre-covid and before Russia’s invasion of Ukraine. Of course, there is now a tight deadline, but negotiations with Brussels always go to the wire.

The important thing is this: we are negotiating hard for the UK automotive sector. Those manufacturers in Europe were also desperately trying to negotiate hard, because this impacts them just as much. Just as we have the Society of Motor Manufacturers and Traders—the automotive sector’s umbrella group—campaigning, they have groups campaigning in Europe. Just last week, there was a huge amount of news coverage about how Europe is now incredibly concerned about the flood of cheaper electric vehicles into its market. The argument we are making should definitely be taken to the EU, because the tariffs would impact car manufacturing in mainland Europe, too.

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

The truth is that while gigafactories are now being built right the way across Europe, we need at least eight gigafactories with about 15 GW of capacity in the UK—including, I might say, one in the heart of the west midlands, which is home to about a third of UK automotive production. In the last Metro Mayor election, both the Conservative Mayor, Andy Street, and I promised that we would get that gigafactory built; it is still a large open space. When does the Minister anticipate those eight gigafactories being built in the UK? When does she anticipate a gigafactory coming to the Coventry airport site? If we fail, our automotive industry will be hit with tariffs soon and we will put 114,000 jobs in jeopardy.

[Ms Ghani]

The Tata gigafactory announcement ensures that we are front-footed when it comes to gigafactories—it will be one of the largest factories in Europe. The right hon. Member and the Labour party are obsessed with us needing five or eight gigafactories, but it is about capacity. It has been noted that we need, I believe, 89 GW by 2030, and with both Tata and Envision we are two thirds of the way there. That is how we need to compare with the rest of Europe: it is not about the number of factories; it is about the level of capacity that they provide. Even though we have those two in place, we are not complacent and will continue to do everything we can to secure further investment.

The right hon. Member talked about a particular site. Obviously, that will have to go through two funds within my Department, but we will always look at solid investment for even more gigafactory capacity in the UK.

[Liam Byrne]

I am grateful for that reassurance, because this is one question on which both the Conservative Mayor and I would be happy to come and lobby on behalf of the west midlands. The point is that we are told that we need 130 GW of capacity in the UK by 2040. Now, that may be eight sites or it may be more or fewer, but the key thing is that we cannot see a plan for the UK getting that capacity in place, unless the Minister gets up and tell us that there is a plan that she is about to reveal.

[Ms Ghani]

The right hon. Member and, of course, the Mayor for the West Midlands lobby incredibly hard—as they should, because they have fantastic sites for potential gigafactories—and those negotiations will continue. I always used to say at the Dispatch Box that we needed 100 GW of capacity, but the figure is now 89 GW. Envision and Tata provide us with a solid footing to get up to the capacity that we need, but we will not be complacent; we will continue our work.

As hon. Members will hear throughout my speech, over the summer we put in place a consultation on a battery strategy. I believe that, outside Norway, no other European country has such a strategy. We are working to produce a strategy to ensure that we have substantial capacity in the UK. The Tata commitment is huge, and I will allude to that as well. I mentioned Stellantis, which has started electric van production in its Vauxhall plant in Ellesmere Port. That transformation is also historic, as it makes the plant the first all-EV facility in the UK and one of the first in Europe.

I turn to gigafactories, the favourite topic of the right hon. Member for Birmingham, Hodge Hill (Liam Byrne). In the summer, we also helped to secure more than £4 billion of investment from Tata for a new gigafactory. At 40 GW, it will be one of the largest battery plants in Europe, equivalent to the size of almost 65 football pitches. It will create up to 4,000 highly skilled jobs as well as thousands of further jobs in the wider supply chain for battery materials and critical raw minerals. Most importantly, the investment helps to turbocharge our switch to zero-emission vehicles by providing almost half the battery production needed by 2030. It is not that we need 12, 15 or five; it is about the capacity we need. Tata takes us two thirds of the way there and Envision is on top of that.

The announcements are the most recent in a line of investment decisions over the last couple of years. In 2021, Nissan and Envision announced a £1 billion investment to create an EV manufacturing hub in Sunderland. Ford joined the line-up in 2021 with a £227 million investment in Halewood to make the company’s first EV components site in Europe, and increased its investment in the plant to £380 million in 2022. Last year, we saw Bentley commit more than £2.5 billion to transition its Crewe plant to zero emission vehicles, with the first EV model to roll off the production lines around 2025.

Jaguar Land Rover has also announced that it will invest £15 billion over five years into its industrial footprint as part of its move towards electrification. That is great news for the west midlands and Halewood, where Jaguar Land Rover has production sites, research and development facilities and its headquarters. These investment decisions are votes of confidence from a highly productive and innovative sector, showcasing that the UK has the best to offer when it comes to green manufacturing and new and future technologies.

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[Ms Ghani]

I hear my hon. Friend. With up-to-date policymaking, we ensure that consumers and taxpayers get the best possible option of modern auto transportation.

As recent investment decisions suggest, our message—I keep reiterating it as co-chair of our industry-Government forum, the Automotive Council—that the Government have the automotive sector’s back, was heard loud and clear. In that regard, we do not shy away from the challenges the industry has been facing: rising costs because of Putin’s horrific war in Ukraine; supply chains disrupted by covid aftershocks; and a fierce international competition for green manufacturing investment, rooted in an economic security concern, leading to countries choosing protectionist tools and consequently threatening the hugely important global supply chains that rely on cross-border collaboration. Those are all serious challenges for the UK automotive sector.

Those issues, however, are not unique to us. Countries across the globe face similar challenges and provide different responses. Some feel that the best way to reach pole position in the race to secure green manufacturing is to spend incredible, eye-watering amounts of their taxpayers’ money. We have taken a different approach and concentrate on the best way to encourage investment with targeted support. We have more than a chequebook to attract companies to these shores. Our highly productive and skilled workforce, focus on innovation and ease of doing business are key factors in a company’s decision to base itself in the UK. We do not need more evidence of that than the three recent announcements I mentioned earlier.

As co-chair of the Automotive Council, I consult regularly with representatives of auto companies and listen to their views on how the UK can raise its international competitiveness. Our competitive business environment and regulatory system evidently continues to stimulate investment in the UK, but that can only come from a fruitful exchange with industry and by addressing concerns raised. For example, in February, we announced the British Industry Supercharger, a range of targeted measures to ensure electricity prices for key energy-intensive industries, including battery manufacturing, are in line with major economies around the world. An issue raised by many colleagues on both sides of the House is skills. We understand automotive companies need highly skilled individuals across the entirety of their business. One reason the UK is attractive is our world-leading universities, with four UK institutions in the global top 10, according to the QS world university rankings. But that is not all. We support the auto sector through the apprenticeships levy, with £2.7 billion in funding by the 2024-25 financial year. That will support apprenticeships in non-levy employers, often small and medium-sized enterprises, where the Government will continue to pay 95% of apprentice training costs.

We also recognise the importance of a level playing field. That is why, at spring Budget, the Chancellor launched a new capital allowances offer. Businesses will now benefit from full expensing, which offers 100% first-year relief to companies on qualifying new main rate plant and machinery investments from April 2023 until March 2026; the 50% first-year allowance for expenditure by companies on new special rate, including long life assets until 31 March 2026; and the annual investment allowance, providing 100% first-year relief for plant and machinery investments up to £1 million.

One issue that has already been touched on is our relationship and tariffs with Europe. To support our industry through the transition, we must also address any and all barriers to trade with partners and markets all over the world. Our closest trading partner is the EU, with whom we share not only climate goals and a trajectory towards electrification, but deeply integrated supply chains. Over 50% of cars manufactured in the UK and exported are destined for EU consumers.

For those reasons, we are working closely with industry to address its concerns about planned changes to the rules of origin for electric vehicles in the trade and co-operation agreement between the UK and the EU. Since signing a deal, unforeseen and shared supply chain shocks have hit the auto industry hard. That has driven up the cost of raw materials and battery components, making it harder to meet the changing rules. That risks industry in the UK and the EU facing tariffs on electric vehicles at a crucial time in the transition to electrification. I and the Government are determined to seek a solution to that shared problem and to work with the EU to fix it for 2024.

[Liam Byrne]

There are, of course, proposals by Chinese battery makers to consider investing in the UK. Can the Minister tell the House whether, if investments are made by those Chinese firms, the cars we make with those products will still be allowed to be exported tariff-free and will not get caught by new tariffs because of the amount of foreign content they might contain?

[Ms Ghani]

The right hon. Gentleman raises a valuable point. We need to ensure not only that we support UK manufacturers, but that new investors and entrants into the market are treated equitably. We know that, because of the negotiations taking place on rules of origin, there has been a consultation taking place in Europe on its anxiety about the market being flooded by cheaper EVs. Obviously, we need to allow customers to make a choice, but we have to ensure that UK manufacturers are not dealt a blow by any new Chinese entrants into the market. He knows my history when it comes to dealing with China and sanctioning. That is why I have been doing so much work not only to support our UK manufacturers, but to ensure our supply chain is resilient. I hope that will give him some confidence on this issue.

As I mentioned to the hon. Member for Luton South (Rachel Hopkins), this will impact EU manufacturers just as much as it impacts UK manufacturers; because they import more into our economy, it will be a heavier burden for them.

G20 Summit

Liam Byrne Excerpts

Monday 11th September 2023 Commons Chamber

[The Prime Minister]

My right hon. Friend has focused on the issue of maritime security in the Black sea for some time, and he has been correct to do so. We are talking and working with partners, allies and, indeed, Ukraine in considering all the different ways in which we could ensure the safe exit of and access to grain from Ukraine, and will continue to do so.

As for the global food summit that we will host in London, it will focus on four themes: creating new approaches to ending the preventable deaths of children, building a climate-resilient food system, anticipating and preventing famine and food security crises, and using science and technology to boost food security and nutrition. We are also working to deliver the food summit in combination with partners including the United States and Somalia.

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

May I first associate myself with the sympathies extended to the people of Morocco?

I welcome the language in paragraph 50 of the G20 communiqué about building a bigger World Bank. The truth is that we need to triple the lending of multilateral development banks if we are to mobilise the climate finance that the world now needs, and we cannot do that simply by building a better World Bank; we need to build a bigger World Bank. In the United States, President Biden is asking Congress to support a capital call and boost the balance sheet of the World Bank. Why is the UK, one of the founders of the World Bank, not leading the same argument? We could even use the money we are getting back from the European Investment Bank, and the Prime Minister, if he so chose, could call it a Brexit dividend. The world leads a bigger World Bank now, and the UK should be leading the case.

NATO Summit

Liam Byrne Excerpts

Thursday 13th July 2023 Commons Chamber

[The Prime Minister]

I thank my hon. Friend for his question. In the interests of time, I might point him in the direction of the Secretary-General’s press conference from the day before yesterday, which explained—in more detail than I have time for now—the process and how this has been done previously. As he pointed out, accession to NATO has never been a question of timing; it has always been a question of conditions and circumstances. My hon. Friend will be familiar with the fact that there is an ongoing conflict. There are also requirements on all NATO members when it comes to areas such as modernisation, governance and interoperability, which Ukraine is now firmly on the path towards fulfilling, not least because of the help and support that we have provided over the past year.

I agree with my hon. Friend that history will judge this to be one of the most significant NATO summits. There was the significant change in the defence investment pledge, so 2% is now firmly established as a floor, not a ceiling. There was the most comprehensive update to NATO’s war fighting plans in decades, if not since the end of the cold war, and they are remarkable in their breadth and significance. There was the accession of new members—Finland, and Sweden to follow. Lastly, there was the move on membership for Ukraine. Taken together, that represents a significant set of NATO achievements, sitting alongside the multilateral security guarantees. As my hon. Friend says, it has been an historic and very important couple of days.

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

I hope that in his reply the Prime Minister will help clarify that it is we who owe gratitude to Ukraine, not the other way round. Will he update the House on plans not simply to help Ukraine win the war, but to win the peace? The reconstruction of Ukraine will cost at least $400 billion, and Russia should be helping to foot the bill. That means we need new laws to seize, not simply freeze, assets. It means we need action at the United Nations to change the norms around immunity of central banks. Crucially, it means we need to start prosecuting Russia for the crime of aggression. That will require us to mobilise not simply a military NATO, but an economic NATO. Will the Prime Minister update us on the conversations that he has had to make that a reality?

[The Prime Minister]

As the right hon. Gentleman knows, we have recently hosted the Ukraine recovery conference, for which the Ukrainian Government and people are extremely grateful. It was the most successful conference of its ilk that has happened, raising more than $60 billion for Ukraine’s reconstruction and mobilising private sector capital, as is necessary. It was seen as a significant achievement and the UK leading from the front. With regard to assets, I point him to a good couple of paragraphs in the NATO communiqué. All allies are taking steps, as are we, to legally freeze assets until suitable reparations from Russia have been put in place for reconstruction. He will understand that the international framework for doing so is untested and novel. It requires co-operation among allies, and that co-operation and work is happening.

G7 Summit

Liam Byrne Excerpts

Monday 22nd May 2023 Commons Chamber

[The Prime Minister]

I thank my hon. Friend for all her work in this area previously. She will be proud, as I am, that the Foreign Secretary launched the women and girls strategy in March, and one particular thing in that was to continue putting women and girls at the heart of everything to do with education. UK aid has supported 8 million girls to gain a decent education, which is part of our pledge to enable all girls to have access to 12 years of high quality education. That is something we will continue to champion in all international fora.

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

I declare an interest as chair of the international Parliamentary Network on the World Bank & International Monetary Fund. I also welcome the commitment in paragraph 10 of the G7 communiqué to enhance development finance, tackle the imminent debt crisis, tackle climate change, and advance progress towards the sustainable development goals. Would that be an awful lot easier if the UK stepped up and met the African Development Bank’s calls for hybrid capital, matched Japan’s commitment to share 40% of the new special drawing rights, and used the €3.5 billion that we get back from the European Investment Bank to help build a bigger World Bank? At a stroke, that would help to restore the global leadership and development that we have so needlessly and dangerously squandered.

G20

Liam Byrne Excerpts

Thursday 17th November 2022 Commons Chamber

[The Prime Minister]

My hon. Friend puts it very well. He is right about the importance of CPTPP, not only for its very significant economic benefits but for the strategic benefits to the United Kingdom of being an engaged member of the Indo-Pacific community. I discussed this with the Prime Ministers of Australia, Japan and Canada, and there is incredible excitement about our joining. We will continue to conclude those negotiations as quickly as possible.

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

The Prime Minister will know that the last G20 summit agreed to on-lend $100 billion of IMF special drawing rights to help tackle the crisis of food fragility and climate finance in the global south. To date, we have agreed to share much less of our entitlement than both France and China. The crisis is now. Will the Prime Minister look again at how we can increase our on-lending to this multilateral effort, not least to make good the appalling decision to slash our aid budget?

[The Prime Minister]

As Chancellor, I was pleased to usher through the special drawing rights allocation at the IMF, which is providing enormous relief to countries around the world. I met the IMF’s managing director to discuss how we can do more, but remember that the SDR allocation is just one part of our effort to support people around the world. I was recently pleased to announce our £1 billion commitment to the Global Fund, which was warmly welcomed, especially by countries in Africa.

Confidence in Her Majesty’s Government

Liam Byrne Excerpts

Monday 18th July 2022 Commons Chamber

[Mike Wood]

I really do not have time.

It was the Prime Minister’s personal intervention—he sent back early drafts of the roll-out strategy—that brought together the NHS, the armed forces and the private sector to get vaccines out quicker than other large countries did.

We can be proud that when Russian troops invaded one of our European partners, our Prime Minister did so much to lead international support for Ukraine. It is simply not credible to imagine that Britain would have stood as firmly against Russian aggression if it had been led by a man whose response to an assassination attempt on the streets of Salisbury was to demand that evidence be sent to Moscow.

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

Was it the right response to that poisoning to fix a meeting with a former intelligence agent of the KGB—a meeting without officials, minutes, or any report to this House of what the hell happened?

[Mike Wood]

I will tell the right hon. Gentleman what the right response was: it was to co-ordinate the biggest diplomatic response since the end of the cold war. The Prime Minister, then Foreign Secretary, got more diplomatic responses than have been seen in decades. The Prime Minister has many achievements of which he should be proud. His successor will have a strong foundation to build on, thanks to the decisions that he has taken over the past three years.

CHOGM, G7 and NATO Summits

Liam Byrne Excerpts

Monday 4th July 2022 Commons Chamber

[The Prime Minister]

My hon. Friend speaks wisely on this matter, which he knows very well. We keep the actual numbers under constant review. The most important thing is that our troops are the best in the world but they also have to have the best equipment in the world, and that is what we are paying for.

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

I was relieved to see the G7 recognise that 200 million people now face starvation around the world, along with the pledge to mobilise £100 billion in IMF special drawing rights to help to alleviate the crisis. Last week, however, the Foreign Secretary could not tell us how much the UK has been given in special drawing rights nor what her target was for sharing them back—presumably because it was not on Instagram—so can the Prime Minister help us? Can he reassure us that all £19 billion of the UK’s new special drawing rights will be shared to help with this crisis in order to set a good example to the rest of the world?

[The Prime Minister]

The right hon. Gentleman is absolutely right to draw attention to the use of special drawing rights. We are supportive of using those for the benefit of people around the world who are currently finding things very tough.

Sanctions

Liam Byrne Excerpts

Tuesday 1st March 2022 Commons Chamber

[Michael Ellis]

We work with our allies around the world on names. This is an effort between allies; we co-operate and discuss the matters, and officials work on that. The idea is to continue to work with our allies to bring forward further sanctions and press for further collective action to reduce western reliance, for example, on Russian energy.

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

I want to pursue the point made by my hon. Friend the Member for Rhondda (Chris Bryant), because 23 people on the EU sanctions list are not on the UK sanctions list. There are some surprising omissions—not just the oligarchs on the Navalny list, but the commanders in chief of the Black sea fleet, of Russian aerospace forces and of the Russian navy, and the Russian Defence Minister. We need a timetable for adding these people to the list. Crucially, I want to draw the Minister’s attention to paragraph 3.1.3 of the general guidance on sanctions implementation, which states:

“The everyday use by a designated person of their own economic resources for personal consumption is not prohibited.”

I would like the Minister to look at how we actually prohibit the use of the mansions, the jets and the economic assets that these people own. I do not just want them frozen; I want them put beyond use.

[Michael Ellis]

Nothing is off the table. Everything is being considered and is open for consideration. We have rightly taken unprecedented moves, which have been extremely rare in international precedent, if not unheard of, and which go further, in many instances, than what our allies have done. We have led the way in a number of different areas. That is not to say that there is not more still to do. I accept that there is, which is why I say that nothing is off the table.

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[Stephen Doughty]

I completely agree with the hon. Gentleman, especially in connection with the measures relating to SLAPP suits that we debated recently in the House. This is a crucial point. There is a whole infrastructure here, a whole systemic problem. What saddens me is that many of these measures were set out so clearly by, for instance, the Foreign Affairs Committee and in the Russia report, but were not introduced. I hope that the Government will now bring forward measures in all these areas. The measures do not, of course, apply only to Russia; they apply to other regimes that are doing heinous things.

Sixthly, we support wider sectoral measures, to cover insurance and reinsurance, for example, preventing UK firms from underwriting transactions with Russian entities or activity in Russia. I understand that the sanctions we are discussing today will apply to insurance and reinsurance as it applies to the specific transactions covered by these sanctions, but will the Minister tell us whether the Government are considering a wider prohibition on the provision of insurance and reinsurance services more generally to Russia and those engaging with the regime, not least given the key role that the UK plays in the international insurance market?

Seventhly, we have heard the point rightly made by one of the Minister’s own colleagues, the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie), about Scottish limited partnerships. May we have some urgent answers on that?

My right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne) raised a point about the use of assets. My understanding is that these sanctions would, for example, prevent service companies from servicing a large mansion somewhere in London in respect of, say, cleaning or facilities. Of course, the individual would still be able to make use of the asset.

[Liam Byrne]

My hon. Friend is right. There is a secondary question that the Minister needs to clear up: if a Russian oligarch has a mortgage on a mansion, is the bank that holds the mortgage legally entitled to take debt repayments or not?

[Stephen Doughty]

My right hon. Friend makes a crucial point. My understanding, which the Minister can clarify if necessary, is that it does apply to financial transactions including mortgages and remortgaging, but we need to understand this because we need to truly freeze the use of these assets and not allow loopholes.

As always, I must ask how these measures will apply to the British overseas territories and Crown dependencies. Will they be effective immediately in those territories or will we, or they, have to pass additional measures? We do not want a lag effect of days in those jurisdictions. I also want to ask about resourcing. I pay tribute to the officials in the FCDO sanctions unit, who are working on these matters at speed, but can I get an assurance from the Minister that their resourcing is being rapidly scaled up so that we can move swiftly, robustly and in a legally sound way? What consideration is being given to alternative routes for naming some of the individuals?

These are highly complex sanctions measures, especially in relation to the dual use of goods, and a major Government effort will be vital to ensure that there is detailed understanding across the private sector so that we can support their implementation, not least given the severe penalties outlined in the instrument and our desire for the measures to be implemented immediately and effectively. Will the Office of Financial Sanctions Implementation issue urgent and clear new guidance on these measures? Similarly, will additional resources be provided to the export control joint unit to support compliance and enforcement? If we want the toughest measures, we will also need the toughest enforcement, but unfortunately many of the agencies have been lagging behind the US. They do excellent work, but they have not had the resources they need.

There are multiple reports today that troops from Belarus might have been entering Ukraine. They are unconfirmed at this stage, but we know that attacks have been conducted from the territory of Belarus. We have all previously called for wider sanctions against Belarus, and indeed the EU has laid out such sanctions. Will these measures be effective against Belarusian entities and individuals? As has been said, sanctions are important but they alone will not deal with the wider problems of illicit finance and the UK’s role as a hub for corrupt, Russia-linked money. This is a matter not just of individuals but of fixing a broken system in which poor governance, weak enforcement and a lack of transparency have allowed the UK to be a haven for ill-gotten gains. We have to take action across the board.

There is a range of additional measures, and the Minister has hinted that we might see measures relating to shipping. Again, we want to understand that these will apply globally, in the light of our overseas territories and Crown dependencies. Can he tell us when he expects additional SIs and designations to be laid? We want to work with him in co-operation, but we need to have that information in order to understand when these things are coming.

Finally, today is St David’s day, the national day of my home—Wales. I have previously spoken in this place of the strong historic ties between Ukraine and not only my home city of Cardiff but the whole of Wales. I am hugely proud of the demonstrations of support and solidarity that we have seen across Wales, including in Cardiff, as well as across the UK, and I am delighted to report that the Welsh First Minister has in the last hour announced direct support from Wales of £4 million for humanitarian and medical needs. Wales stands ready to welcome Ukrainians fleeing the conflict, just as we have done for Afghans and so many other people across the globe throughout history. I hope that a strong message goes out from this House and from across the United Kingdom that we will unite to impose the strongest measures and provide the strongest support we can to the Ukrainian people in these dark days.

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[Mr Davis]

My hon. Friend and I sponsored the lawfare debate four weeks ago, and he played a sterling part—he made probably the most informative speech in the whole debate. Yes, we have to address lawfare, but it is a difficult area. There are quicker areas we can work on right now, bearing in mind that time means lives. We have to work faster than we have been.

As I said, the NCA was able to bring successfully only two unexplained wealth orders out of nine, but the truth is that it has 100 targets sitting in its files—not two or four—and it cannot pursue them. Its evidence was given to the Intelligence and Security Committee and is reflected in the Russia report, but Lynne Owens, who was then head of the NCA, said that it simply could not afford the huge legal bills that it faced. The truth is that frankly it does not have the huge calibre of skills—no agency can say that they have— that oligarchs with virtually infinite quantities of money can employ.

How can we get the Serious Fraud Office, Her Majesty’s Revenue and Customs, the Financial Conduct Authority, the Crown Prosecution Service and the NCA all to use this legislation properly? First, we must ensure that the costs of unexplained wealth orders are brought under control from the state point of view. Again, we must be careful that we do not undermine the rights of ordinary citizens, so we may say that the rules will apply only to unexplained wealth orders of, let us say, more than £50 million or something like that—that will not worry the ordinary citizen—and put a cap on expenditure. We must also use the private sector. We must say, “This is a national emergency” and ask everybody to put their shoulder to the wheel and make these UWOs work properly. The NCA has a list of 100, but those of us who took part in the lawfare debate know that roughly 140 Russian oligarchs should be on the target list. Not all of them are in Britain, but they should be on the list because their money may be in Britain, even if that is not the case.

It seems to me that there is a serious issue that should be in today’s regulations. I worry about the Government moving so slowly that their prey escape them and that the people who are in effect the enemies of the people of Ukraine by proxy get away with things that we should not allow. We must fight fire with fire and beat the oligarchs at their own game.

I will pick one oligarch out. We have already seen the results of actions taken so far, with oligarchs scrambling to protect their reputations. In the newspapers in the last few days we have seen Roman Abramovich doing things to protect himself. According to the Spanish Intelligence Committee, he is the man—or at least one of the men—who manages Putin’s business affairs. That is a really important issue in considering whether he should be on our target list. He was refused a Swiss residency permit due to suspected involvement in money laundering and contacts with criminal organisations and, when his UK visa was up for renewal, he chose to withdraw his application as it became clear that he would need to explain the source of his wealth due to the changes that we introduced in 2015. I picked one, but I could have picked any of 100-plus to illustrate that there is information and knowledge—it is not a question of being unable to identify the individuals. It should not have taken a war for us to make a start on that.

[Liam Byrne]

The right hon. Gentleman is making a brilliant speech. Will he give the House his perspective on the potential weakness in the sanctions regime? Its focus is obviously on asset freezing, but while Abramovich, who is widely regarded as Putin’s cashier, has tried to take pre-emptive measures by transferring control of Chelsea football club to a charitable trust, there is a real issue that the mansions, the jets and the yachts owned by oligarchs will continue to be available for their use because the regulations do not prohibit the use of economic resources for personal consumption.

[Mr Davis]

That is true. We must also face facts on the sophistication of the targets that we are aiming at. The assets that the right hon. Member talked about—the blocks of flats, the grand houses and the yachts—are probably owned by six or seven layers of companies through various offshore entities in the Cayman Islands, the British Virgin Islands or whatever, and it is incredibly difficult for the state to find out who the owner is. That is why these unexplained wealth orders are at least the first weapon that we should sharpen up. That is also why speed is important.

Every day we give to these people allows their advisers to develop more sophisticated tactics of concealment and distraction. In at least a couple of the unexplained wealth orders, it turned out that the state was pursuing the wrong ownership because of distraction tactics. Speed, determination, sophistication and clear targeting, which is not difficult given what I have just been saying, are critical to succeeding in this. It should not have taken a war for us to start rooting out dirty Russian money in the UK, but we are where we are and we must not wait any longer.

We must start by going after the 140 or so oligarchs who have been identified as having direct links with Putin. We must take that action immediately and make clear to those corrupt oligarchs that their money is no longer welcome on these shores, and indeed that it is unsafe while they continue to provide financial support to Putin, whatever they say in the public press. I would have liked that process to have started today with these SIs. Sadly it has not, but hopefully it will be in next week’s economic crime Bill. However, if that takes weeks as well, every single week means more lives lost, more opportunities for these people to escape justice, and a worsening of the chances of our rescuing the Ukrainian nation from the fate in front of it.

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

Like everyone who has spoken in this debate, I support these regulations, but I want the Paymaster General to become a paymaster for taking on Kremlin paymasters with a lot more force and power behind him. We are now about to see what could be the “Syrianisation” of the conflict in Ukraine. We have seen horrifying pictures of the shelling intensifying this afternoon. We know there are Spetsnaz and paratroopers ready to drop. We know Ramzan Kadyrov has readied thousands of Chechen fighters to go in and pursue a murderous, barbarous campaign. We are on the brink now of a humanitarian disaster in Ukraine. Therefore, what we needed to see from the Government this afternoon was a step change in a plan for economic warfare, targeted to defeat President Putin.

I said to the House yesterday that we remain troubled that our neighbours are so much further ahead in targeting and sanctioning institutions and individuals. The Foreign Secretary, who is not in her place, said something very strange in response: she said that

“this is not a competition”.—[Official Report, 28 February 2022; Vol. 709, c. 726.]

Of course it is not a competition; it is an exercise in not leaving a gap through which bad people escape justice and our campaign.

The ban on trading in state bonds is in place in Europe, but not here in the United Kingdom. The ban on import and export from breakaway regions is in place in Europe, but not here in the United Kingdom. The sanctions on state Duma members are in place in Europe, but not here in the United Kingdom. There are 23 serious players on the EU sanction list who are not on the UK list. They are key economic players, such as Mr Kostin, the president and chairman of VTB Bank.

Missing from our list are key political figures such as Anton Vaino, chief of staff to President Putin. Missing is Mr Grigorenko, the deputy Prime Minister. Missing are key propagandists such as Margarita Simonyan. Missing, surprisingly, are military figures such as the commander-in-chief of the Black sea fleet, the commander-in-chief of Russian aerospace forces, the commander-in-chief of the Russian army and the Russian Defence Minister. I am well aware that the sanctioning business is not a competition, but I want to know from the Paymaster General why these individuals who are being sanctioned by our neighbours are not in the regulations presented to this House.

[Bob Seely]

I try to agree on this issue with almost everything the right hon. Gentleman says, but I would put an alternative argument to that point, and I am sorry to do so. People such as Gerasimov are potentially valuable because they are soldiers and can see some of the craziness of what the politicians are doing. The Black sea fleet is potentially a good target, but I would caution against going after senior military men, provided that they are seen to be credible military men. I apologise for disagreeing.

[Liam Byrne]

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

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

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

[Mr Kevan Jones]

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

[Liam Byrne]

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

[Mr David Davis]

One of the reasons the sanctions are milder than perhaps the right hon. Gentleman or any of us would like may well be the problem that in British law, the stiffer the sanction, the greater the reaction. We may well have to take action in two stages, by freezing the assets in the first instance and then sequestering them.

[Liam Byrne]

That could well be the case, but if the Paymaster General has told us this afternoon that nothing is off the table, then we in this House need to hold him to his word and ask him to come back to us with an explanation, because at the moment the regime prohibits the dealing in economic resources but permits the Office of Financial Sanctions Implementation to make available those resources. Personal consumption is not prohibited, according to the regulation. I guess we are asking him please to commit to us today to look at this question and bring back proposals for our urgent consideration, because I believe I speak for the whole House when I say that we will give the green light at a moment’s notice.

I want to pull together some of the brilliant contributions that we have had in this debate over the past few years and, in particular, over the past couple of weeks. If we write down the contributions that we have heard from all hon. Members, we basically get a call on Ministers for a 10-point plan to drive hard behind the powers that are being granted. First, surely it is now time for a Minister for economic warfare. This came up in conversation with the right hon. Member for Haltemprice and Howden (Mr Davis). We are now settling into what will be a long confrontation with Russia, yet the sanctions team is in the Foreign Office, the instructions to the Bank of England are issued by the Treasury, and the Minister for Security is in the Home Office. I have been a Minister with a foot in two different Departments, and I can tell the House that it is an absolute nightmare. Surely it is now time to unite the political leadership in a single department for economic warfare that begins to take the fight to President Putin in a far more aggressive way.

Secondly, there are 12 different agencies currently tasked with taking on economic crime, and the Government, in their negligence, have not yet appointed a lead authority. Surely that now has to change. The National Crime Agency was bewildered to hear that a kleptocracy cell was being set up, as were the people in the National Economic Crime Centre. We have to do away with this nonsense and create a single lead agency that brings to this House a CONTEST-style strategy for taking on economic crime in which we prepare, protect and prevent, and pursue economic criminals to the ends of the earth.

Thirdly, there are Government reports that now need to see the light of day, starting with the Home Office’s review of the golden visa scheme. The Home Secretary has said that her ambition is for it to published. Why on earth has it not been published this week? We need to know where the weaknesses are, so let us get the facts on the table.

Fourthly, we need to resource the fight against economic crime far more seriously. Lynne Owens, the former director general of the National Crime Agency, is on the record as saying that its budget needs to double. When we consider the £100 billion-plus in economic damage to our country, surely doubling the National Crime Agency’s budget is a very small ask of the Treasury. While we are at it, we need to introduce cost capping orders in relation to unexplained wealth orders, as the hon. Member for Isle of Wight (Bob Seely) said, so that the costs of prosecution are that much smaller.

Fifthly, we need policy infrastructure such as a register of beneficial ownership of property and a proper targeting system based on our financial information. There is a group of urgently overdue laws that must be introduced over the next couple of months. We need a foreign agents registration Act, an update to GDPR legislation so that abusive data subject access requests can be stopped, and SLAPP-back laws to allow judges to throw out abuses and attempts to silence journalists such as brave Catherine Belton and Tom Burgis. We need updated espionage laws before the House as quickly as possible.

I have to say to the Government that there needs to be a ban on political donations from profits earned outside the UK. We need a regime for calling in donations from improper sources for national security assessment. Fortunately enough, the Elections Bill is in the House of Lords, and as it happens I have tabled amendments that would allow us to achieve exactly that. The answer that normally comes back—it is getting slightly wearing now—is “Just because there are people with Russian links donating to political parties, not all Russians are bad.” No one is saying that. Stop patronising our intelligence!

We have named specific individuals with links to Russia, such as Mohamed Amersi, who, together with his partner, has given £750,000 to the Conservative party, despite making millions of dollars from a deal that involved President Putin’s telecoms Minister. In case anybody is in any doubt about the gravity of the situation, let me quote from a letter from Carter-Ruck that I have been sent in defence of Mohamed Amersi.

[Mr David Davis]

Haven’t we all!

[Liam Byrne]

The right hon. Gentleman might have had a similar letter. Mine is many, many pages long and must have cost an absolute fortune. It says:

“Our client did not know, and cannot reasonably have been expected to know or suspect, that Ms Karimova was the ultimate controller of Takilant Limited”—

that was the corrupt telecoms deal that he was involved in. Anybody who was doing business in the country knew that that family were behind pretty much every major industry. Mr Amersi is many things, but he is not stupid. At the bottom of page 4, the letter goes on:

“To be clear, all of our client’s…dealings in Russia and the former Soviet Union…were entirely legitimate, lawful and transparent.”

Surely this is not the kind of individual that the Conservative and Unionist party should be taking money from. I could go on; I have made previous contributions in the House about the matter. Dmitry Leus—a man whose cheque the Prince’s Foundation has sent back—has given something like £30,000 to the Justice Secretary’s constituency party. Please stop patronising our intelligence, stop telling us that all the donations were given under the rules that existed at the time, stop pretending that we are trying to smear the entire Russian people, look at the people writing the cheques with suspect links, and pay the money back.

Let me set out the final couple of points in our 10-point plan. In addition to the five pieces of legislation that need updating, we need to update the regulation of the Solicitors Regulation Authority. Many of us have heard time and again how firms such as Mishcon de Reya and Carter-Ruck abuse the legal process in order to create and inflate costs and intimidate others. Frankly, that has to stop.

As the hon. Member for Isle of Wight said, it is a tragedy that it has taken a war to bring us together across the House around a plan for tackling economic crime. When the Berlin wall fell, and also on that tragic day of 9/11, I looked out on the world and thought, “We are moving into a different era”, and now I think we are moving into a different era again. We will need to rethink the way in which we fortify our frontline with Russia across the NATO territories, and we will need to get serious about taking on the cancer of economic crime once and for all. If we do that, I believe that we will ultimately prevail.

--- Later in debate ---

[Robert Jenrick]

I do, and I completely understand what my hon. Friend is saying. The point I am trying to make is that we must not spend all our efforts on the individuals, although most of us would like to see those individuals punished in some way or form, and that the most important thing is to target the things that will have a real and major impact on Putin’s ability to finance his campaign in Ukraine. On the individuals, there is a distinction—as my hon. Friend has just said—between those individuals who we know through our intelligence to be directly involved in the Putin regime today and others who may have drifted away, and we should order in priority those individuals that we take action against.

My second point is that the regime we have in place for targeting individuals is clearly not fit for purpose. We were told that there was a hit list of oligarchs and that we would be taking action against them, yet days have passed and very few if any further individuals have been put on that list of sanctions. That leads me to believe that the legal bar that we have to reach before sanctioning those individuals is too high and that the group of officials doing that work is either insufficiently resourced or we do not have the right people. That is no disrespect to those officials, but we need to be able to sanction these individuals faster than we are doing today; otherwise, our rhetoric simply will not match up with reality. I am afraid that that is the situation today.

Anyone listening to the rhetoric would say that it is very strong, but the action is fairly weak. I would like to hear from the Minister what more we can do to help him and the Government to get those individuals sanctioned. As I say, it feels to me that that means more resources for the team providing the legal basis, and a lower legal test in order to sanction the individuals. If that requires changes to the legislation, let us bring them forward to the House, because there is clearly cross-party agreement on this.

My third point is that a large number of British businesses are going to be affected by the sanctions, the overwhelming majority of which are perfectly legitimate individuals and businesses in our own constituencies. I would like to see the Government bring forward some simple plain-English guidance for those businesses as quickly as possible. It is not available today. If we look online, we can see that there is not much guidance at all, and the guidance that is available is quite complex. If we are going to ask businesses, including small ones, to abide by these rules and regulations, the Government need urgently to bring forward some plain-English guidance for them.

Linked to that is the point I made during the urgent question earlier in the week, which was that in order to address a small number of seriously bad apples, we must not do anything that hurts legitimate small businesses and entrepreneurs in this country. The issue I am most concerned about there is the reforms to Companies House in the White Paper. It is a great thing in this country that for £12 someone can incorporate a company and get their certificate of incorporation within 24 hours. With that comes a serious concern about nefarious intent from those individuals who are not legitimate businesses, but before we legislate for that, I want proper reassurances from the Government that legitimate businesses will not be hurt. I do not want to live in a country where that £12 becomes £500 or where 24 hours becomes four weeks, because we all know other jurisdictions around the world, including in Europe—France is an example—where it is much more complicated and time-consuming to incorporate a business and operate it legitimately.

[Liam Byrne]

The right hon. Gentleman is right to make this point. Surely we have to get the balance right, though. I say as a former Chief Secretary to the Treasury that we have to guard against the Treasury insisting that Companies House is in some way cost neutral—that it covers its own costs. We want to have good “know your customer” checks in place, but we also want to avoid that cost being loaded on to sky-high fees. I am afraid that resolving that balance might well require the Treasury to think creatively.

[Robert Jenrick]

As two former Treasury Ministers, we both know that situation. In these discussions, I strongly urge the Chancellor not to lose the UK’s obvious competitive advantage of being a jurisdiction in which it is easy to incorporate a company. I do not want small businesses to be badly affected by these measures. We all talk in this House of our desire to help small businesses or to cut red tape, but invariably we do the absolute opposite. Tackling corruption and money laundering must not come at the expense of legitimate businesses in our constituencies.

I will leave it there, but my central point to the Minister is that our strong words are not being matched by our actions. If there is anything we can do to legislate further, I urge him to do so. We would not want the UK to be a laggard in not sanctioning the banks and individuals that we all wish to sanction as soon as possible.

Ukraine

Liam Byrne Excerpts

Thursday 24th February 2022 Commons Chamber

[The Prime Minister]

The lesson of 2014 is that the whole of the west failed to respond in the way that we should have done. I am afraid that it was quite wrong that, when a sovereign country was invaded and part of that country was occupied, we tried to manage the situation with various diplomatic processes, which, in the end, produced absolutely nothing except, finally, this catastrophic invasion today. We have learned a bitter lesson about how to deal with Vladimir Putin.

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

I agree with the Prime Minister that it seems like the curtain has now come down on the era that began in 1989. We have lived in an era of change since then, and this now feels like a change of era. In this new era, the permissive environment that we created for the Kremlin’s quartermasters to live, invest and party in London, sometimes with the Prime Minister himself, must now come to an end—[Interruption.] So let me ask the Prime Minister this: will he undertake to ensure that every visa issued to a Russian dual national is now reviewed? Where proximity to President Putin is proven, that citizenship should be stripped away.

[The Prime Minister]

Yes, we are doing that, although I think it is worth the House remembering the point that I made the other day: not every Russian is a bad person.

Ukraine

Liam Byrne Excerpts

Tuesday 22nd February 2022 Commons Chamber

[The Prime Minister]

Different countries have different priorities and considerations. It is considerably easier for us to impose economic sanctions, and it is difficult for some other countries to impose sanctions to block hydrocarbons, but I am very pleased by the progress that the German Government have made.

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

This is a day of infamy in Russian history, but the truth is that we are here today because our strategy of deterrence has failed. President Putin has built an arsenal of kleptocracy—he perverts history for his pretexts, and he perverts science for his weapons—but the risk is that today’s slap on the wrist will not deter him from doing anything further. Apart from the Magnitsky sanctions, sanctions for economic crimes have not been proposed since 2014; the oligarchs listed have been sanctioned by the Americans since 2018; and missing from the list were VTB, VEB, Alfa and Sberbank. The Prime Minister has to recognise that pulling our punches does not work with President Putin. We need to punch harder, and if we are not prepared to send bombers, we should at least take on the bankers.

[The Prime Minister]

We certainly are taking on the bankers. We are hitting Russia’s financial interests, and we will continue to hit them harder.