Repurposing Russian Assets to Rebuild Ukraine

Stephen Doughty Excerpts

Tuesday 27th June 2023 Commons Chamber

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

It is a pleasure to speak in this debate, and I thank all my right hon. and hon. Friends, and indeed all Members, who have contributed to it. It has come at a pivotal moment, just a week after the Ukraine reconstruction conference, and at a critical time in Russia’s brutal war against the people of Ukraine. I draw attention to my declaration in the Register of Members’ Financial Interests as a shadow Minister.

Today’s debate has underscored not only the degree of unity and consensus in the House on the need to stand with Ukraine for as long as it takes, but the strong appetite for the UK to go even further. I commend the speeches we have heard from Members on both sides of the House, which had common themes. My hon. Friend the Member for Llanelli (Dame Nia Griffith) spoke powerfully about her experience of visiting Ukraine and seeing the destruction. My hon. Friend the Member for Stretford and Urmston (Andrew Western) set out the record of loss and damage. My hon. Friend the Member for Warwick and Leamington (Matt Western) explored how other allies, including Canada, are taking action. My hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) emphasised the need for urgency—that was a common message in all the speeches today. We heard a powerful speech from my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne), with whom I travelled to Ukraine in September last year, about the wider consequences of not acting, the importance of deterrence and the fundamental importance of justice. My hon. Friend the Member for St Helens South and Whiston (Ms Rimmer) gave a powerful illustration of the loss and destruction in the beautiful country of Ukraine.

We also heard many excellent speeches from the Government side. We had helpful legal clarity from the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith). We had a useful question from the right hon. Member for New Forest East (Sir Julian Lewis) about the accrual of interest on the assets that are being held. We heard many other powerful contributions, which all had one common message.

It is beyond doubt that there is only one perpetrator responsible for the unjustified and unprovoked invasion of Ukraine, and that is Russia and Putin. We all remain committed to a just and lasting peace based on respect for the UN charter and Ukraine’s sovereignty and territorial integrity, but also its future prosperity and the flourishing of its democracy. We all want to see that.

However, intention alone will not bring Ukraine to that destination. We all need to be clear that it will take decades of commitment, determination, consistency and investment to ensure that that happens. Labour has been consistent in calling on the Government to repurpose Russian state assets to help rebuild critical Ukrainian infrastructure, provide much-needed humanitarian aid to the country and invest in its future, and I commend the work of my hon. Friend the Member for Rhondda (Sir Chris Bryant) in that regard in his ten-minute rule Bill. We have called for those things because we believe in justice, but we also believe in deterrence—

[Alex Sobel (Leeds North West) (Lab/Co-op)]

Will my hon. Friend give way?

[Mr Deputy Speaker (Sir Roger Gale)]

Order. I am terribly sorry, but I think I am right in saying that the hon. Gentleman has just walked into the Chamber.

[Stephen Doughty]

We believe in deterrence not only in relation to Putin, but in relation to others who have egregiously breached the rules-based international order.

I have a great deal of respect for Ministers on these matters. Indeed, we have wholeheartedly welcomed the Government’s position on Ukraine, and we continue to show that unity, but we need to be clear that Ministers have not provided the answers. I ask them very directly and very pointedly: what consideration is being given to the seizure, sequestration and repurposing of Russian state-owned assets? I am afraid that our calls have been repeatedly met with haze. We continually hear the phrase “exploring all lawful routes”, which has been said to me five, six or seven times in the Chamber and in answer to written questions. We need greater clarity, as Ukraine does not have time to wait. There has been a clear call for urgency today.

The Government need to get on with this. They need to come up with the legislation and the necessary measures to allow frozen Russian state assets to be used to rebuild Ukraine. As our motion says, we hope and believe they can reasonably do this within the next 90 days. I hope the Minister can give us a clear timeline for when we can expect proposals. The President of the European Commission attended the Ukraine recovery conference, and she made it very clear that the EU will come forward with proposals before the summer. I hope we will see the same level of urgency from the Government.

I saw the scale of the damage for myself on my visit to Ukraine last year, and it was utterly shocking to see residential buildings with rocket holes through them and the wanton damage to civilian infrastructure, including railways and roads. We have all seen the terrible scenes at the Kakhovka dam and elsewhere in recent weeks.

As my right hon. Friend the Member for Tottenham (Mr Lammy), the shadow Foreign Secretary, said, we cannot forget that tens of thousands of civilians have lost their lives and millions more are now refugees. This war will leave lasting psychological scars on every Ukrainian.

As I have previously relayed to the House, the Kyiv School of Economics, working in conjunction with the National Bank of Ukraine, estimates that, as of December 2022, the damage to residential and non-residential infrastructure amounted to $137 billion. The vice-president of the World Bank has estimated that the figure could be up to $630 billion, which is treble Ukraine’s GDP. This year alone, Ukraine’s national budget has a $38 billion gap.

Of course, before any reconstruction can begin, it will be necessary to clear the huge number of mines and unexploded ordnance that have been scattered across the country, including on the prime agricultural land that feeds not only Ukraine but the world. I commend the HALO Trust and others that do incredible work to deal with mines and unexploded ordnance. The HALO Trust has made it clear to me that it will take more than a month for every day of fighting to clear the ground of unexploded ordnance and munitions. This means that, if the war stopped today, it would take more than 30 years and billions of dollars to make areas safe for habitation and economic activity to begin again. There is also incomprehensible environmental damage. The destruction of the Kakhovka dam will have huge consequences not only for people but for the future ecological welfare of Ukraine, its wildlife and its economy.

We have heard many different arguments today about the legal possibilities, and my right hon. Friend the shadow Foreign Secretary set out very clearly what is needed. The UN General Assembly has already voted on this issue. A resolution was adopted by last November’s special session on Ukraine, setting out a very clear framework for how to proceed. Resolution ES-11/5 recognised that Russia

“must bear the legal consequences of all of its internationally wrongful acts, including making reparation for the injury, including any damage, caused by such acts”.

The resolution also called for member states to recognise the need for

“the establishment, in cooperation with Ukraine, of an international mechanism for reparation for damage, loss or injury”.

Under international law, this would not be viable in ordinary circumstances but, by explicitly invoking a claim for compensation, the UN resolution clearly satisfies the specific prerequisites of notice and opportunity for Russia to comply.

It is worth noting that, as was referenced earlier, there is clear precedent for such action. A UN compensation commission was established in the case of the first Gulf war, and it paid out $52.4 billion-worth of Iraqi oil revenues to pay for reconstruction and reparations to Kuwait. Incidentally, Russia supported that resolution.

I hope the Minister can set out his thoughts on the many eminent legal proposals that are out there. There are clear examples of how we could proceed. There are proposals for temporary countermeasures and the temporary suspension of sovereign immunity—there are very clear grounds for that to be done. There are clear precedents in the law of countermeasures and clear grounds in the UN resolution, as well as other historical examples and precedents.

We are under no illusions that this is a complex area, and we recognise that drafting and implementing such legislation is challenging. However, given that extensive evidence out there, will the Minister tell us what review the Attorney General and his Department have made of it? When will he come forward with clear proposals? We heard repeatedly about the work of allies. Canada, the US and the EU have all taken or are taking practical, tangible steps to move in this area, in turning Russia’s state-owned assets into the means for Ukraine to forge a brighter future and to meet reconstruction needs now. They are taking the lead and we should be alongside them, as we have been on many other issues, be it on direct military support to Ukraine, humanitarian support or working together on sanctions.

In conclusion, the Prime Minister rightly stated at last week’s conference that Russia “must pay” for the damage it has inflicted. He said:

“we’re working with allies to explore lawful routes to use Russian assets.”

But we need to get on with this now. We must complement warm words with decisive and urgent action, beginning today. Labour is committed to working alongside the Government in their support for Ukraine, in ensuring that it wins this war and defeats Russia. We welcome the commitments made last week, but if we are to be a constructive and objective Opposition, we must make it clear that the UK can and must go further. Therefore, the motion is simple and clear, and if Members support it, it will begin a process that should have started many months ago. Russia forfeited its absolute rights to these assets when it embarked on this egregious, unlawful and unprovoked war of aggression, when it destabilised our continent and when it sought to dismantle the global rules-based order. The consequences not only in this situation, but for many others in the future if we do not act and ensure that there are consequences for Russia for what it has done are very serious and even more wide-ranging. I commend the motion to the House. Let us get on with it.

[Mr Deputy Speaker (Sir Roger Gale)]

With the leave of the House, I call the Minister.

--- Later in debate ---

[Stephen Doughty]

I thank the Minister for giving way; he is being generous. It is welcome that he is having those discussions with our allies in the EU, and I hope he is speaking to the United States and Canada about it as well. Will he give us an idea of the timetable? The motion is very reasonable and specifies 90 days, as we recognise these are complex issues. The EU has committed to coming forward with proposals before the summer break. Will he do the same?

[Leo Docherty]

I will not commit right now, but I can give an assurance to the hon. Gentleman and the House that we are working at pace, as we recognise that this is an urgent issue. Urgent is what we will be and do, in terms of pushing the business forward.

On a similar theme, the hon. Member for Cardiff South and Penarth made some interesting comments about the United Nations General Assembly resolution ES-11/1. We note that resolution and recognise that there are interesting parallels that might be considered with regards to the situation post-war, vis-à-vis Iraq and Kuwait. Of course we will consider that, as we do all other options.

The hon. Gentleman mentioned the Canadian model. For the clarification of the House, the Canadians use the term “seizure” for freezing. Like the UK, Canada is not yet able to test the lawfulness of any potential seizing fully, as we understand it, through their court system. They have the legislative start, but it has not yet been legally tested. We will keep in touch with our Canadian colleagues as they move forward. He asked what role the Attorney General, my right hon. and learned Friend the Member for Banbury (Victoria Prentis), might have. He will know that she is much vested in this matter. She has visited Kyiv to look at accountability issues and she will keep colleagues updated as she reviews those issues.