Countering Russian Aggression and Tackling Illicit Finance

Debate between Pat McFadden and John Baron

Wednesday 23rd February 2022 Commons Chamber

[Mr McFadden]

I respect the right hon. Member’s experience and agree absolutely with his intervention. Let us call things what they are: not breakaway republics, but step-by-step annexation; not peacekeepers, but an invading force. We have seen the pattern over and over again.

The former High Representative of the European Union, Baroness Ashton, has spoken about President Putin’s strategy of the wedge. He seizes part of the territory of a neighbouring country—Abkhazia and South Ossetia in Georgia, or parts of the Donbas in Ukraine. By holding the wedge, he seeks to limit the freedom of those countries to join international associations. He seeks to absorb the rest of the country in managing the conflict that he has created. He uses up resources, he creates a refugee problem and, if he cannot take over neighbouring countries entirely, he at least ensures that they are not free to develop as they wish because they are not whole and their freedom is compromised.

That “Greater Russia” mindset has been behind President Putin’s policy towards Ukraine for the past eight years. Right now, it is not fully clear whether he will be content just to hold the wedge or whether he will go further, but even what he has done so far is already limiting Ukraine’s options and choices for the future.

How should we respond? Some lessons have been learned. The solidarity shown by the United States, the United Kingdom and most European countries in recent weeks has been important and impressive. Calling out the troop build-up and the creation of flashpoint incidents and false flag pretexts has shone a welcome light on what is happening. The development of open source intelligence has exposed the ham-fisted propaganda emerging from Russia and its troll factories.

Allied unity is important, but so too is allied resolve. In the past, we have set red lines, but when they were breached we have drawn back. The result in Syria was the repeated use of chemical weapons and the ability for Russia to dictate the course of events for years afterwards. This time, if we talk about maximum sanctions for military action, we have to be prepared to carry them out. Who really believes that sanctioning just three people who have already been on the US list for years will deter President Putin from acting further? No wonder the Royal United Services Institute, the respected defence and foreign policy think-tank, described yesterday’s actions as like having

“turned up to a gunfight with a peashooter.”

The Government’s actions have to match their rhetoric. Yesterday, that simply was not the case. The Minister’s defence is that this is simply the first tranche and that there is more to come, but what is the case for waiting, given what we have seen? Is there anything in President Putin’s actions in recent days to suggest that he is in compromise mode? He is not. He is testing us every hour.

Not only do we need a sanctions regime that matches the seriousness of what has been done, but we need determined action to clean up what the Intelligence and Security Committee has called the London laundromat.

[Mr Baron]

Will the right hon. Gentleman give way?

[Mr McFadden]

I will press on, because we are short of time.

Our country and our capital city should not be a welcome home for illicit finance, the proceeds of looting and the proceeds of kleptocracy. There is a basic problem: if sanctions are to work, we have to know what people own. The Government have been sitting on a registration of overseas entities Bill for four years, and it has been six years since it was first talked about. How can sanctions be effective if we do not have legislation to show us what people own? Queen’s Speech after Queen’s Speech has passed without action. Only a few weeks ago, the Government’s own counter-fraud Minister resigned, saying that that legislation was once again to be set aside. Today, it looks as if it may be delayed further. It must be brought forward as soon as possible.

At the heart of money laundering is the use of shell companies to hide the true nature of ownership behind layer after layer of needless complexity. That lack of transparency is the fraudster’s friend. Reform of Companies House is long overdue, but, again, pledges to reform it have not been matched by action. If we are serious about policing kleptocracy and fraud, we have to change this situation and empower our register of companies to be a regulator, not just a library of information—and sometimes a library of dodgy information at that. The recommendations of the Intelligence and Security Committee’s report on Russia have to be implemented. Our agencies have to be resourced to use the powers that they have, otherwise the legislation that we pass in this place is just bits of paper. We also have to be alive to the network of enablers who act as the praetorian guard for the oligarchs here in the UK.

As has already been said, it is not only money that is laundered here, but also reputations. The donation to a university, the purchase of a football club, the sponsoring of a gallery, donations to the Conservative party—all that is designed to burnish the reputations of those involved. In the whole history of this, one fact stands out: the interests of finance have trumped those of security. Then, when people call this out, there is the punitive legal action designed to shut people up and designed to stop the brave investigative journalists whom we should be thanking for the work they have done in exposing what is happening.

The Prime Minister’s defence yesterday was to accuse those of us who question many of these actions of Russophobia, and indeed the Minister repeated that today in her opening remarks. Does she, and does he, really think that the CVs of those involved in this are those of ordinary Russians? Russia is a country where the vast majority of the wealth is owned by about 500 people. We should not confuse those who live off Russia’s wealth with the sweat and toil of the Russian people who created the wealth in the first place. That is no defence for the funding of the Conservative party, and it is no defence for the actions of oligarchs. How does the Prime Minister think they made their wealth in the first place? They did it with the support and backing of the Russian regime. It is the wealth of the Russian people that is being laundered, not the proceeds of exceptional talent or enterprise or creativity or ingenuity.

We stand at a dangerous moment, one that requires not only unity between allies but resolve, for weakness here will be noticed by those elsewhere in the world who are looking for territorial gains. This is not just a matter of finance; it is a matter of national security, and that means the maximum package of actions. It means sticking to the red lines that we have set. That is what we urge the Government to do, and it is action that today’s Labour party will support.

European Union (Withdrawal) Bill

Debate between Pat McFadden and John Baron

Wednesday 13th June 2018 Commons Chamber

[Mr McFadden]

I cannot give way anymore because so many Members want to speak.

I know that there is a great deal of working-class disaffection behind the Brexit vote, and that people want action on migration and free movement. My right hon. and learned Friend the Member for Holborn and St Pancras read out a list of things we can address, and former Prime Minister Gordon Brown spoke about others in his speech last week. There are things that we can do, and we need to address working-class discontent, but we do not take the first step in doing so by voting for a path of making our country poorer, and of not generating the wealth required for the public services, regeneration, housing, and the better chance in life that our working-class communities need.

[Mr Baron]

Before speaking in support of Government amendments (a) and (b) in lieu of Lords amendments 1 and 2, to which I have put my name, I will briefly touch on the issue of immigration, which has been mentioned a number of times, particularly by the Scottish nationalists.

My education was very international. I did not return to start my education in this country until the age of 11. I suggest to those who say that Brexiteers tend to be anti-immigration that what many of us want is an immigration system that no longer discriminates against the rest of the world outside the EU. We are getting a little tired of the line that, somehow, we are anti-immigration. We want a controlled immigration policy, but we also want a fair immigration policy.

I suggest to Opposition Members that a controlled immigration policy—one that is fair to all and that no longer discriminates against any particular region—would actually help the wages of many in this country, because wages are a simple function of demand and supply. If we introduce a system of controlled and fair immigration, as Lord Rose admitted just prior to the referendum when questioned by the Treasury Committee, wages would rise faster but big business may not like it. Labour would be well advised to bear thought on that issue.

In addressing Government amendments (a) and (b) in lieu of Lords amendments 1 and 2, I will focus on the nature of the negotiations themselves. We have discovered today from the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) that the price that Labour is prepared to pay to be part of a customs union or the customs union is to sacrifice the right to negotiate trade deals with other countries outside the EU. That came from the Labour Front-Bench spokesman, and I hope that Ministers take that on board, because it is an important deviation from what the Labour party promised at the last general election.

Putting the referendum to one side for a moment, the Labour party’s manifesto actually said that we will be leaving the customs union and the single market. Labour seems to have conveniently forgotten that point, and we must drill that home because Labour is betraying its core support by ignoring what it put in the manifesto on which it stood at the last general election. We should also remember that 85% of those who voted at the general election—the 43% or 44% we got, and the 41% the Labour party got—actually supported that policy.

On the business of tying the Government’s hands in the negotiations, those who have conducted any form of negotiation will understand that that makes for worse outcomes. There is no getting away from that point. It also flies in the face of precedent. It is an accepted practice that Governments negotiate treaties, as was the case at the time of the European Communities Act 1972, and with the Lisbon treaty, the Nice treaty and so on. I do not remember any argument that Parliament should undertake negotiations on those treaties being made by people who today are arguing that Parliament should dictate the Government’s course of action in international negotiations. There is an absolute contradiction on that policy.

We often hear those who campaign on this issue, or who challenge the Government’s position, quoting the EU or Michel Barnier as though their words are gospel. What they should remember is that we are party to a negotiation. What is said publicly in a negotiation does not always translate to reality in the negotiation itself, so I do not think that we should take at face value this talk of, “Oh, Michel Barnier said that and therefore it must be true.” Let us have a bit more questioning, particularly when a negotiation is being undertaken. All too often, the remarks of the EU and Michel Barnier are taken at face value, and that is wrong. It is all part of a negotiation.

Finally, turning to the amendments, my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke)—we agree on many things, but not necessarily on European matters—was absolutely right that this is a pragmatic compromise. A customs arrangement can cover all manner of different scenarios, and we will undoubtedly revisit this topic at a later stage, notably with the Trade Bill. A Bill concerning how the law will apply post Brexit is not best suited for a discussion of our future trade arrangements. He is absolutely right that it is meant to get us to that stage. This is a pragmatic compromise so that we can do that and then discuss these issues in more detail when the time comes. I therefore urge all Members to support the amendments.