Ukraine

Lord Newby Excerpts

Wednesday 26th January 2022 Lords Chamber

[Baroness Smith of Basildon (Lab)]

My Lords, this is one of those occasions where we start with questions because the Statement is not being repeated. I am sorry not to have the Statement repeated today because it is perhaps one of the very few occasions these days where there is, rightly, a very high degree of agreement between the Government and the Opposition, so the noble Baroness may have enjoyed repeating it on this occasion.

It is also significant that this issue was one of the questions when I was a panellist on BBC Radio 4’s “Any Questions?” programme last Friday. The audience response, first in putting forward that question and then their response to the answers, really highlighted what I think is genuine public concern on this issue.

Earlier today, I watched one of those live video film cams from Odessa. All of us have heard and seen interviews with those in Odessa, Kiev and other areas of Ukraine. People are trying to go about their daily lives and their work, but at the same time, they are living in fear of a Russian invasion as 100,000 troops with tanks and missiles hover at the borders.

Observing all this reminds me, and may remind others, just a little of reading George Orwell’s 1939 novel Coming Up for Air, where there is a pending war clearly in the atmosphere of everyday life. For those now living in Ukraine, it is more immediate and very much at their door. The Russian presence on the borders is unacceptable and unjustified aggression, and we have to be resolute in our total solidarity with Ukraine, with unreserved support for the country’s territorial integrity, sovereignty and independence. As the risk of conflict escalates, we support attempts at negotiation to de-escalate the current situation.

However, this Russian intimidation has not occurred in a vacuum. The annexation of Crimea and support for separatist conflict in Donbass illustrates why we should be so concerned at this further Russian aggression. We welcome all steps, as outlined in the Statement, to bolster Ukraine’s defence capabilities alongside those global efforts to find a diplomatic solution. International solidarity with Ukraine is crucial. Putin will seize on and exploit any division. Russia must be aware that its actions provoke unity that will have consequences both for its economy and its place in the world.

Ministers must prepare for all potential next steps, and that means working with targeted sanctions with allies to confront Russia’s access to the international financial system. Globally agreed sanctions are one of the most effective tools at our disposal, but they have to be agreed and implemented multilaterally. On that specific point, can the noble Baroness the Leader outline how the UK is working with our NATO and European allies to ensure these sanctions are readily drafted and able to be implemented?

On energy, the UK and Europe must also consider our overreliance on Russian energy supplies, including the proposals for the Nord Stream 2 pipeline which could fuel—bit of a pun there—even further dependency. On that point, can the noble Baroness the Leader confirm what recent steps the Government have taken to press for the cancellation of Nord Stream 2? Given recent reports that the United States is in talks with gas-producing Gulf states to increase supplies in the event of Russian invasion—however viable that may be or otherwise—can the noble Baroness confirm whether Ministers are currently engaging with European allies which are particularly reliant on Russian gas? While the impact on our supply may be less, it could well put further upward pressure on prices.

I want to turn to the issue of finance. I think we also have to address the long-term failure of the Government to rid our economic and political systems of the ill-gotten gains used to support the Putin regime. If we take our obligations to global security seriously, we cannot go on allowing ourselves to be the world’s Laundromat for illicit finance. It is astonishing that, more than 18 months after the Russia report was published, none of its recommendations has been fully implemented. We have put forward four proposals, and I hope the noble Baroness can respond on this.

First, we need to reform Companies House, because we need to crack down on shell companies. As a matter of urgency, we should be introducing a register of overseas entities. In your Lordships’ House, we have had debates—I can see the noble Lord, Lord Alton, nodding, as he has raised this issue on a number of occasions—about the origin and extent of Russian money buying up property and assets in the UK. Despite the Government’s Elections Bill that would make foreign donations to political parties easier, we need tougher regulations on overseas political donations. The Russia report was cross-party and at its core was our national security. It has to be implemented in full.

While we hope that all diplomatic efforts and threats of sanctions will lead to Russia changing course, the reality is that, whatever the outcome, we should have long ago addressed these issues. To be clear, we cannot stand up to Russian aggression abroad while facilitating Russian corruption at home. The Government need to get a grip and implement these measures. It would be helpful tonight if the noble Baroness could confirm that the Government will do that or explain why not.

As I said at the very beginning, at the heart of this are real people trying to live their lives, to go to work and to raise their families. They are having to stockpile food. They do not know what tomorrow brings. Ukraine should be free to determine its own future without fear or interference from Russia. It is up to the UK and our democratic allies to support that. However, we cannot escape the fact that, in recent years, Russia has produced a clear pattern of aggression which should have meant that we were better prepared for this moment and our ability to respond. As much as our immediate focus should be on deterring Russia’s invasion of Ukraine and acting accordingly if it does so, the recent actions of the Putin regime must represent a wake-up call for the UK, Europe and NATO.

[Lord Newby (LD)]

My Lords, as the Statement makes clear, the situation in Ukraine is now extremely perilous. The precise intentions of Russia are unclear, but if it were to launch a major invasion, as the Statement makes clear, the consequences would be horrendous. The Prime Minister set out the three strands of action which any attack would provoke from the UK and our allies: first, tougher sanctions on Russia; secondly, further steps to help Ukraine defend itself; and, thirdly, an increased NATO presence to protect our allies on the eastern front. These are all sensible and necessary, but I would like to concentrate on the issue of sanctions.

The Statement talks about imposing co-ordinated and severe sanctions against Russia should an attack take place. Clearly, economic sanctions are one area where we can really impact on the ability of the Russian regime to continue business as usual. It is, of course, unfortunate that sanctions are being discussed by the EU and the US with the UK often not being in the room. This means in reality that we will have no option but simply to follow what they decide. In practice, this may be of relatively little consequence, but it demonstrates how being outside the EU reduces Britain’s influence. More generally, it has been notable how small a diplomatic role the UK has played compared to France, Germany and the US. Having a Prime Minister who is spending several hours a day attempting to persuade his own Back-Benchers not to end his own political career does not help, nor does the Foreign Secretary’s peculiar sense of priorities, which puts a visit to Australia ahead of being involved in European and broader international discussions on Ukraine.

Whatever common sanctions are adopted, the UK has an ability to take unilateral action that can have a major impact on the kleptocratic Russian regime. This is by moving against Russians and their money in the UK, particularly in London. A number of measures need to be taken, but three could be instituted immediately. First, the Conservative Party is a major beneficiary of Russian money. This includes 14 members of the current Government, of whom six are in the Cabinet, including the Chancellor. The Conservative Party could decide today to stop taking donations from wealthy Russians, many of whom have links to the Putin regime. Will it do so? Secondly, one of the reasons so much Russian money is laundered in London is that it can done secretly. The noble Baroness, Lady Smith, has already alluded to this. For six years, the Government have promised to introduce a register of beneficial interests in overseas companies. Indeed, yesterday the Prime Minister stated—incorrectly, incidentally—that the Government were already doing so, but they are not. My colleague Layla Moran MP has just introduced a Bill to this effect in another place. Will the Government now fast-track this Bill, given that it enacts government policy, so that it can be in place before the end of the Session? Thirdly, Russian oligarchs benefit from “golden” visas which enable them to buy the right to live in the UK. Will the Government now stop this practice?

The Government are going to be faced with some extremely difficult judgment calls in the weeks ahead, as events on the Ukrainian border unfold. The measures I have just proposed are simple, easy to effect and would hit the Russian elite where it hurts most—in their pockets. The measures are all long overdue in any event, but the current emergency makes them even more necessary.

President Putin’s understandable desire to keep any vestige of democracy at bay in Russia means that he is willing to threaten, bully and, if he thinks he can get away with it, act illegally to preserve the regime. However, he acts only having weighed the costs. By the range of actions which we now take, or signal that we will take, if he crosses the Ukrainian border, I hope we can persuade him that the game is not worth the candle. Sanctions form a key part of those costs, and the Government should start acting on them without delay.

[The Lord Privy Seal (Baroness Evans of Bowes Park) (Con)]

I thank the noble Lord and the noble Baroness for their comments. They are both absolutely right that Russia’s pattern of military build-ups on the border of Ukraine and in illegally annexed Crimea are unacceptable and an attempt to destabilise Russia’s democratic neighbours and exert control over them.

Russia’s deployment is not routine. It is equipped with tanks, armoured fighting vehicles, rocket artillery and short-range ballistic missiles. As we have made very clear—I am very grateful to the noble Lord and the noble Baroness for their support on this—a Russian incursion would be a terrible strategic mistake and subject to severe consequences, including, as both the noble Lord and the noble Baroness mentioned, co-ordinated sanctions to impose a severe cost on Russians’ interests and the Russian economy.

I can reassure the noble Lord and the noble Baroness that earlier this week, the Prime Minister agreed with the leaders of the US, Italy, Poland, France, Germany, the European Council, the European Commission and NATO that allies would enact a swift retributive response should a further Russian incursion into Ukraine happen, including an unprecedented package of sanctions.

I am afraid I do not recognise the noble Lord’s assertion that we are not central to these discussions; we are. My right honourable friend the Defence Secretary was at NATO today talking to the Secretary-General and, as noble Lords will know, the Prime Minister has been in regular contact with colleagues across Europe and the United States on this. We are working together and we are unified, and we continue to have these ongoing discussions. The Secretary of State for Defence also has an agreement with his Russian counterpart to meet. Details of those conversations and their timing are being discussed; obviously, we will make noble Lords aware once that has been confirmed.

We are looking at a package of broad and high-impact sanctions to raise the cost of further aggressive actions. We are working very closely with our allies, and sanctions have been central to our deterrence posture. The preparation of the package of sanctions, which is going on, by the UK and our allies is a clear signal to Russia of the significant economic cost it could and would bear if it invaded Ukraine.

Just to broaden on sanctions for a second, the noble Lord rightly said that we can take action ourselves, and we have done so. As he will be aware, last April we launched the new global anti-corruption sanctions regime, which enables us to impose asset freezes and travel bans on those involved in serious corruption around the world. We made immediate use of these powers and announced sanctions on 22 individuals who have been involved in serious corruption from six countries, including 14 individuals from Russia, and we have imposed sanctions under our autonomous global human rights sanctions regime on 25 Russian nationals who are responsible for appalling human rights violations in the case of Sergei Magnitsky. Therefore, across the board we have taken action and we will continue to do so.

The noble Baroness asked about energy. As she knows and said, we are not dependent on Russian gas supply; in fact, less than 3% of our gas was sourced from Russia in 2020. We meet around half of our supply from within British territorial waters and the vast majority of imports comes from reliable suppliers such as Norway. She is absolutely right: in our view, Nord Stream 2 is not compatible with Russia’s aggressive actions and we remain opposed to it. We regularly raise our concerns about Nord Stream 2 with our European colleagues and will continue to do so.

The noble Lord and the noble Baroness both mentioned the ISC Russia report. As they will be aware, we published our response immediately on publication of the report. Many of the recommendations are already in train and we are continuing work on further implementation. For instance, we have already implemented the NSC-endorsed Russia strategy and established a cross-government Russia unit. We have repeatedly exposed the reckless and dangerous activity of the Russian intelligence services, called out Russian malicious cyberactivity, and introduced a new power to stop individuals at the UK border to determine whether they are or have been involved in hostile state activity.

We have set out our plans to establish a register of beneficial owners for overseas entities that own UK property to combat money laundering and achieve greater transparency in the property market, and we have been clear about our intentions to significantly reform Companies House to strengthen our ability to combat economic crime.

The noble Lord asked about visas. The NCA has increased investigations into corrupt elites and we are currently reviewing all tier 1 investor visas granted before 5 April 2015, so action is going on there.

The noble Baroness asked about the registration of overseas entities. We are planning a Bill that will ensure transparency for foreign-owned land in the UK; currently it is easily disguised through offshore companies.

We are taking action on multiple fronts to crack down on economic crime. In recent years we have established a new National Economic Crime Centre to co-ordinate the law enforcement response, we have introduced new powers, including unexplained wealth orders and account freezing orders, and we have published a fraud strategy. I accept that there is more to do, but we have certainly been taking action in this area and will continue to do so.

More importantly, however, on the broader issue we are working closely with our allies and partners to make sure that we support Ukraine at this incredibly difficult time.