I beg to move,
The statutory instrument before us was laid on Thursday
My right hon. Friend the Prime Minister has set out today the implications of Russia’s actions, and he has also set out our initial response via the sanctions regime. Russia’s actions are threatening innocent people in Ukraine, violating its sovereignty and undermining its security and stability, as well as the security and stability of Europe. President Putin must be halted in those ambitions, and we will use every lever under our control to that end. We will continue to work with our allies and partners to force him to halt the path of aggression.
We are acting in four ways. First, we are providing direct support to Ukraine, and in our view this is a moral duty. We have already sent defensive weapons to Ukraine, and we have trained over 22,000 troops through Operation Orbital. We are considering what further acts of support we can provide, including through our new trilateral partnership with Poland and Ukraine. We are also providing economic support. Last week, my right hon. Friend the Foreign Secretary announced that we will be increasing our support to Ukraine by £100 million. We are working closely with partners to ensure that we can quickly provide emergency humanitarian assistance if that is needed. Sadly, we could see a large-scale loss of life, a large-scale displacement of people and the destruction of vital civilian infrastructure, including schools and hospitals, so it is vital that the humanitarian response is ready to go, and we will continue to lead on this effort.
Secondly, we are providing political support to Ukraine, and we are working diplomatically to condemn Russia’s aggression at every level.
I am grateful that the Minister has emphasised the need for humanitarian support very early in this debate, because we are dealing with punitive actions. The Prime Minister himself said in his statement that, in a worst-case scenario, 44 million people could get pulled into a very aggressive war, which would mean a refugee crisis. What specific support are the British Government and their partners offering to provide to the neighbouring countries that would have to deal with the displacement of such individuals leaving Ukraine?
I am unable to give specifics at this point, but we are liaising closely—I have spoken to our ambassadors in neighbouring countries, and the Foreign Secretary has been holding regular conversations with her opposite numbers in the region and beyond—and we are ready to respond with what could be a range of options depending on whether we, as the international community, are successful or otherwise in deterring further incursions into Ukraine.
I will come to more details of the sanctions package and what we hope to achieve with it, but ultimately we are looking to prevent further territorial encroachment and aggression into Ukraine, and to get Russian troops to withdraw back to Russia, to de-escalate and to move away from the Ukrainian border. As I will say later in my speech, if the House gives me the opportunity to progress, we are working and co-ordinating closely with our international partners in our sanctions response to ensure maximum effectiveness.
I am grateful to the Minister for giving way, because this point is very relevant. I do not mean to put him on the spot—I have the advantage of looking at what the news has just said—but Putin has just now recognised the whole of the Donbas as independent, going beyond the ceasefire line and into the territory now held by the Ukrainian Government. Therefore, what we have announced is already out of date. I appreciate that the Minister may need to confer, but are the sanctions in these regulations appropriate? What is the trigger point for an escalation of sanctions? It was very clear that this House was not satisfied with what was brought forward earlier today.
The instrument that we are discussing is a framework that allows us to deploy a range of measures. As I will say later in my speech, we are also giving ourselves further legislative vehicles through which we can impose punitive sanctions on Russia.
Everything we have heard today has suggested that the Government have started from the point of saying, “Here’s some sanctions. We know you’re going to do more. And when you do more, we’re going to do more.” The message coming from this place could not be much feebler. I appreciate what the Minister has said about the conversations that he is having with partners across the west. Will he ensure that they know that the resolute opinion of this House is that the sanctions that have happened so far are only a start, and that much stronger action needs to come for the sake of Ukraine and for the sake of President Putin getting that message?
Earlier today my right hon. Friend the Prime Minister spoke in praise of the unanimity of voice that we experienced in the House, and I echo that. I give the hon. Gentleman, Layla Moran and other right hon. and hon. Members the absolute assurance that we regard these measures as the start of a range of sanctions that we can escalate in response to what Russia does. Our desire is to deter further aggression. We said right from the start, and in the intelligence that was declassified and put into the public domain, that we were highly concerned that an encroachment purely into the Donbas was not the ultimate limit of Putin’s aggressive ambitions, and that we would act to try to deter further aggression.
I am going to make some progress.
I assure the House that we will use this and other sanctions legislation that we might bring forward to deter further actions and to encourage Russia to de-escalate.
I am very content with the leadership shown, but the point I want to understand more clearly is: is the idea to deter President Putin from doing more or to get President Putin to step back? I am not all together clear. The force of the sanctions is dictated by what we are trying to do, and I would love to hear what we are actually trying to do.
My right hon. Friend makes a good point. Let me make it absolutely clear: our aim is to prevent further aggression, for Russian troops to withdraw from where they have advanced, and for them to move away from the Ukrainian border and remove that threat from the Ukrainian people. It is a series of events that I will explain further if the House gives me the opportunity.
My right hon. Friend will know from his career in the Army that the principle of “clout, don’t dribble” is an important one to ensure that the opposition understands that we are serious. Does he agree that the ratchet could be misinterpreted as giving a free pass at an early stage, rather than drawing a clear line that needs not to be crossed?
My hon. and gallant Friend makes a point I fully understand, and I can assure him the Government fully understand it too. The pace at which we ratchet up our sanctions response in conjunction with our international partners is very much to not just send a message, although sending a message is important, but to ensure the sanctions are meaningfully felt by the Russian leadership and those people around Vladimir Putin funding him and propping him up.
I am going to make some progress. Trust me, I will give the hon. Gentleman an opportunity to intervene later.
We are providing political support to Ukraine. My right hon. Friend the Foreign Secretary is in close and regular contact with Ukrainian Foreign Minister Dmytro Kuleba and other friends and allies around the world, and I pay tribute to our ambassador, Melinda Simmons, and her team, who remain in Ukraine operating from the British embassy office in Lviv providing what support we can for British nationals still in the country.
Thirdly, we are leading on the strategic communications response to Russian actions. At every stage, working closely with our international partners, we have exposed President Putin’s plans, lies and false flags activities, and we have exposed them for what they are: a pretext for aggression and an attempt to justify what is in every respect unjustifiable. Last week I highlighted the falsehoods put forward by Vladimir Putin at the United Nations Security Council.
I am very grateful. One of the problems with the Government’s argument is that President Putin has already said the whole of the Donbas is now effectively to be either independent or part of Russia. Two thirds of that territory is currently held by Ukrainians and a third by separatists. That is an incursion already. It feels as if what we have announced today by way of sanctions is remarkably puny, yet it feels also as if we are not going to do anything more if the Russians just stick with this. Does the Minister not understand the anxiety there is, I think across the House?
I have a huge amount of respect for the hon. Gentleman, as he knows—we speak when the cameras are not rolling—but I fear he is putting his prejudice ahead of the statement I am making, because were he to listen to the points I am making and allow me to get to the point in the speech where I am explicit about this, he would understand that the UK Government’s actions are not limited to what the Prime Minister has currently announced. He will hear that we are going to bring forward further legislation to further extend the measures available to us and that we are absolutely not ignoring the fact that there has already been Russian incursion into Ukraine, which we want to halt and reverse and then get those troops away from the Ukrainian border.
The Minister is being very generous in giving way. May I press him on this point? Many of us feel the package of sanctions announced today is comparatively modest. Is the Government strategy that further sanctions will come forward in the days ahead even if Vladimir Putin takes no further steps and acts of aggression against Ukraine, or is it that the further steps that are undoubtedly being planned by the Minister and colleagues within Government will come forward only should there be an additional ratchet in the level of aggression shown towards Ukraine?
I thank my right hon. Friend for giving me the opportunity to make clear our position. If this has not become clear to the House, let me make it clear now: we intend to escalate these sanctions—to ratchet up these sanctions—in response to what has already happened in order to deter further aggression and in order to stimulate Putin to withdraw the troops from Ukraine, take them away from the border and send them back home to their families and barracks in other parts of Russia.
I thank the Minister for kindly giving way. May I ask him to explain that point a little further? The items of sanction today were under the existing legislation, and what is being proposed today will enable further types of sanction. Obviously they will be worked on with foreign Governments, but will he also be looking at further sanctions from a UK perspective at the same time as looking at this with other countries?
Yes. I am going to make progress, because some of the points raised in interventions will be covered in my speech. I do recognise the huge level of interest in the House from right hon. and hon. Members, and this will address a number of points raised.
Fourthly, we will use Britain’s economic and financial might to hit Russia’s economy hard. The new sanctions regime that the statutory instrument brings into place is a vital part of that, but it is not limited to that. The legislation follows the made affirmative procedure as set out in section 55(3) of the Sanctions and Anti-Money Laundering Act 2018. It amends the Russia (Sanctions) (EU Exit) Regulations 2019 and allows the Government to impose sanctions on a much broader range of individuals and businesses who are, or have been involved in
“obtaining a benefit from or supporting the Government of Russia”, which includes those
“carrying on business as a Government of Russia-affiliated entity…carrying on business of economic significance to the Government of Russia…carrying on business in a sector of strategic significance to the Government of Russia” and those who own, control or act as a director, trustee or equivalent of any of those entities. That is a huge scope of individuals and entities.
Are the Government intending to release the Russia report on interference in UK democracy? Surely some of the names contained in it are exactly the people whom we should be sanctioning now. They previously interfered in our democracy and are clearly in hock to the Russian regime.
As my right hon. Friend the Prime Minister said, we have brought forward measures that go further than the recommendations of that report. I will impose discipline on myself, even if the House is not going to impose discipline on itself, to stay focused on the statutory instrument.
I am sure that what Sir Iain Duncan Smith would say is entirely agreeable, but can I ask the Minister specifically about what he just said about the statutory instrument? I am slightly concerned that the disinformation networks that Russia relies on—they are of strategic importance to it—including media outlets in this country, are not part of the package. Earlier the Prime Minister said, and admittedly it was correct, that whether RT can continue to broadcast is up to Ofcom, but surely we are all agreed that RT is not a normal news agency in any sense of the words as people understand them. How can we have a sanctions package that allows disinformation networks that are crucial to Russia to be dismantled in the UK?
I share the hon. Member’s frustration about the level of disinformation put out through Russia Today. However, we should be very careful before we advocate that a Government should close down news channels that they disagree with. We have a well established and effective regulator, and I think the right thing to do is to rely on that regulator to do the job for which it was designed.
My right hon. Friend the Minister is making steady progress through his speech. I want to help him slightly, and I have a pen here in my right hand. There is one individual I have heard of before from my hon. Friend Bob Seely, who made a very good case. Will my right hon. Friend write the name of Vladislav Surkov into his statutory instrument? He is the right-hand man to Putin—I think my hon. Friend referred to him as Putin’s Rasputin—who has organised the separatist movement in the Donbas area and continues to do so. Will my right hon. Friend do that to ensure that at least one person responsible for what is going on is sanctioned? The pen is here; if he is able to do it, he can.
I thank my right hon. Friend for his assistance. We are lucky that both officials in the Box and Hansard note takers in the Gallery have taken note of that individual. I remind the House that it is a long-standing convention that we do not discuss future targets of sanctions designation by name to prevent those sanctions potentially being less effective than they might otherwise be, but I can assure him and the House that that name has been noted.
I will make progress.
In response to President Putin’s decision last night to recognise sovereign regions of Ukraine as what he claimed—but we do not agree—to be independent states and to order troops into those areas, my right hon. Friend the Prime Minister today announced the initial set of sanctions that with immediate effect will freeze the assets of five Russian banks. Four of those banks are involved in bankrolling the Russian occupation. They include Bank Rossiya, which is particularly close to the Kremlin, the Black Sea bank for development and reconstruction, IS Bank and Genbank.
I am very grateful to the Minister for giving way; he is being very generous. I am interested to know the criteria we have applied in choosing those five banks, which are relatively small. He talked earlier about sanctions on entities of economic significance. The big banks in Russia are Sberbank and VTB. Why have we chosen five small banks, rather than the two largest ones?
I would make the point that the sanctions regime set out today is the initial range of sanctions. We reserve the right to extend the individuals and entities that come under this sanctions package. I will make the point shortly that we do intend to extend the measures available to us.
I have got to progress. I will be crucified otherwise.
In addition, over the forthcoming weeks, we will extend the territorial sanctions imposed in response to the Crimean incursion by Russia to territory occupied by Russian forces in what they claim to be the breakaway republics of Donetsk and Luhansk. No UK individual or business—no UK individual or business—will be able to deal with them until they are returned fully to Ukrainian control. We also intend to sanction the members of the Russian Duma and the Federation Council who voted for recognition of the independence of Donetsk and Luhansk, in flagrant violation of Ukraine’s territorial sovereignty.
I wholly support that if that is what the Government intend to do—
I know the Minister said that, but I am just trying to check whether he intends to do that under this proposed legislation. There is a legal argument that he cannot, not least because the statutory instrument lists what is considered to be a member of the Government of Russia and it does not include members of the Duma. However, in proposed new regulation 6(3)(a), I think the Minister is intending to include anyone who promotes a policy or action which destabilises Ukraine. It would just be helpful if he could explain that.
The hon. Gentleman is right that there is a difference. Those in this House understand that there is a difference between a legislature and a Government. The sanctions regime under which those sanctions have been brought forward is an extension of the pre-existing sanctions regime we brought forward in response to the aggression going into Crimea, rather than this one.
We are also ready to introduce new legislation, putting in place new measures which will prevent the Russian state from issuing sovereign debt on the UK markets. They will curtail the ability of the Russian state and Russian companies to raise funds in UK markets and further isolate Russian banks—touching on the point raised by my hon. Friend Kevin Hollinrake—and their ability to operate not just in the UK, but internationally.
This will not end today.
That is a very good question, but it has nothing to do with this SI.
Should Russia stage any further invasion into Ukraine, we will not hesitate to implement a comprehensive and unprecedented additional package of sanctions in close co-ordination with our allies around the world. That close co-ordination is important to ensure their maximum effectiveness.
I have to get on. These measures will curtail the ability of the Russian state, Russian companies and Russian individuals to raise funds on our markets and will further isolate Russian banks. We will keep ratcheting up the pressure, targeting more banks, more individuals and more companies that are significant to the Kremlin, to touch on the point made by a number of right hon. and hon. Members. Russia—rather, Vladimir Putin—has chosen a path of international isolation. The measures that the Prime Minister announced today demonstrate that it will bear a cost for doing so and, if it does not step back, these measures will only increase.
Russia’s aggression against Ukraine is part of a long- term strategy. We must not give ground now or try to accommodate the illegitimate concerns that Russia has put forward. Its strategy of aggression would not end. It would not stop at Ukraine. Instead, it would be emboldened. President Putin would simply focus on a new target, so we are absolutely resolute in our response. What we do now will shape European security for many years, and it will be viewed by other parts of the world and have an impact on security issues far more widely than in Europe. We must rise to the moment. We must stand shoulder to shoulder with the people of Ukraine in their desire to protect their homeland and to protect their freedom. We must, and we will, stand shoulder to shoulder with them, and I commend the regulations to the House.
I begin by thanking the Government for the confidential briefings that they have provided to the Opposition on this very urgent and pressing situation.
We sit in this Chamber with dark clouds gathering over Europe. For eight years now, Vladimir Putin has illegally occupied Crimea and stoked conflict and division in Donbas. For two months, he has menaced Ukraine’s borders, mustering the largest build-up of military forces in Europe since the second world war. Last night, he recognised the independence of the breakaway entities that he has created in Ukraine in a flagrant violation of international law and yet another rejection of the diplomatic commitments that he has made.
All the while, Putin has spun lies and mistruths, denied reality and fabricated justifications for his actions. In a speech to the Russian people, he sought to deny the legitimacy and sovereignty of Ukraine and the identity of its people. He concocted grievances and manufactured threats to legitimise his aggression. He spouted myriad lies to the people of Russia, with whom we and our NATO allies want only friendship and peace. And now he has followed that with the explicit deployment of Russian military forces into the internationally recognised territory of Ukraine. The prospect of tanks rolling across the borders of European states recalls the darkest moments of our continent’s history. This is a crime against peace; it is an assault on international law. Let us be in no doubt: Putin bears responsibility. There can be no justification for his actions, no defence of his aggression. While the west has sought a way out of this crisis through firm and principled diplomacy, Putin has doubled down.
The dream of Ukrainians—I felt this very definitely on my trip to Kyiv just four weeks ago—is to shape their own future, to decide their own destiny and to choose the sort of nation that they wish Ukraine to be. All states enjoy that fundamental right, which is why we must be very clear that a line must be drawn at this point. Putin’s assault on a sovereign United Nations member state should be condemned not just by the west, but by every single nation that has a stake in the universal principles at the heart of the post-1945 United Nations system, so Britain must build the widest possible international coalition to show Russia that the world will not tolerate this aggression.
The people of Ukraine have our complete and total solidarity. We admire their courage, we will champion their democratic rights and we will support their right to defend themselves and the democracy that they have built.
My right hon. Friend mentions the UN. At the UN last week, I met Lesia Vasylenko and Alona Shkrum, two Ukrainian MPs who impressed on me the importance of sanctions on Russian interests in the City of London. They will be disappointed today with the narrow scope of the regulations. I think that many Ukrainian MPs will want to see a far broader set of sanctions than those being proposed.
My hon. Friend is exactly right. I have already seen Ukrainian MPs saying today that they are disappointed that our sanctions regime does not go further.
We have sought to send a unified message across this House and to provide constructive opposition in the national interest. It is in that spirit that we approach today’s announcement. As the Minister knows, while we welcome these measures, we believe that they are too limited and too partial—five banks and just three individuals. The Prime Minister recognised at the Dispatch Box today that this move is a further invasion of Ukraine. It is very hard to square the rhetoric with the reality of these measures.
I have to agree with my right hon. Friend about the limitations of the sanctions on those individuals. However, does he agree that if the regulations’ definition of “involved person”, especially the reference to being
“involved in…obtaining a benefit from or supporting the Government of Russia”, is interpreted widely with the right political will, it could take in a lot of individuals who have a lot of money salted in the UK, including a lot of the oligarchs who have property or other interests here?
My right hon. Friend is exactly right: it could, but it needs enforcement and we need to hear more individuals named. The danger in this debate is that the punishment does not befit the crime. I understand the Government’s desire to maintain a broader deterrent against further escalation, but it is also clear that a threshold has been crossed. The gravity of Putin’s actions requires a broader, firmer and fuller response, otherwise we risk his calculating that the rewards of aggression outweigh the costs.
My right hon. Friend is making a brilliant speech. When the new sanctioning regime was introduced, it was all about increasing our capacity to act independently to sanction bad actors. Is my right hon. Friend therefore disappointed that, Magnitsky sanctions aside, we have added only three people to the sanctions list for economic crimes since 2014? That seems pathetic, given the threat we confront.
My right hon. Friend is exactly right. In this city of more than 7 million people, with at least a quarter of a million properties owned in London by foreign nationals, just three individuals have been named, when the EU has already indicated the naming of 27.
It does sometimes seem that the Government play hot and cold with Russia. They accept donations from Alexander Temerko and others, and then do not provide the fullest sanctions possible. This is not a new issue, is it? This is a long-running dispute. We know that Russia has been the aggressor here for a long time. Is there not a danger that this is a bit too late and too little, and is actually a signal to the Kremlin that it can keep getting away with its bully-boy tactics?
My hon. Friend has put it very well indeed. We must not fall into the trap of the past in taking actions that are too limited and too late, so Labour will continue to make the case for a fuller and more comprehensive package of sanctions now. President Biden is expected to announce, as soon as today, measures which will go further than those outlined by the Prime Minister. There are also reports that the EU is close to agreeing a package of measures including the targeting of more than 300 Russian Government officials and new restrictions on trading in Russian state bonds. Can the Minister reassure us that we will move in lockstep with our international allies?
Let me now turn to the actual text of the legislation. Although the Opposition of course welcome the spirit of what the legislation is seeking to achieve, we have some major concerns, and some suggestions as to how the Government could go further.
Concerns have been expressed to us that, given how the legislation is currently drafted, oligarchs who are close to Putin will find it too easy to avoid the impact of the measures. Although they may not hold a formal role in a sanctioned bank or company, they may exert significant control behind the scenes. Consequently, some of the most influential and notorious oligarchs—oligarchs who are close to Vladimir Putin, and have purposely structured their enterprises to avoid the appearance of majority ownership and control—would go untouched.
We believe that that is a crucial mistake. We know that Putin could not care less about sanctions laid against his country or the Russian people; that is one of the reasons why sanctions failed after the invasion of Crimea. The only sanctions that he really cares about are those against the richest people closest to him, and that must be the Government’s target. It would be a grave error to provide any loophole that would allow these people to escape sanction.
The Government could easily close that loophole by including a new category of person in the legislation which would encompass any oligarch close to Putin who obtains a benefit from, and supports, the Government of Russia. These designations should be made without fear or favour, and should include individuals with UK interests or even UK passports. In the same way, some of the oligarchs closest to Putin could currently slip through the net cast by this legislation, and so can Russian Government officials who have supported Putin’s regime and its goals. As it stands, paragraph 4 of the legislation would allow sanctions to be laid against individuals on the board of companies with certain links to the Russian Government but it would not enable sanctions to be laid against officials who enable the Russian Government to pursue their policy of aggression in Ukraine. The EU appears to be moving quickly on this, and this Government must keep pace.
It is not just Russian officials who could escape the pain of these sanctions, but also members of the Russian legislature. Paragraph 7 of the legislation defines what is meant by the “Government of Russia”, but it does not include members of Russia’s legislative branch, the Federal Assembly. This seems to be a remarkable oversight, and I would be glad to hear from the Minister what the rationale was for not including members of the Russian legislature in the scope of the instrument. We also have to ask what action the Government are taking to clamp down on assets owned by family members of those subject to sanctions. For example, will the Government also designate businesses that are owned by family members but controlled by a designated person?
The Government have yet to enact the registration of overseas entities Bill, which would require property owners and other business owners to show who the real beneficial owners of those overseas entities were. Is that not a huge weakness in our armoury?
My hon. Friend is right. Why do we have a system that is so opaque? What is the delay? I have raised this issue at the Dispatch Box at least three times, and I am happy to raise it on a fourth occasion, as my predecessor has done.
At present, this legislation provides for asset freezes of designated persons, but there is space for wider sectoral measures, such as those we have applied to other countries in the past. Will the Government bring forward other legislation to address this?
As Opposition Members have indicated, sanctions on their own are nothing unless they are rigorously enforced by the responsible agencies in the UK. Since the Office of Financial Sanctions Implementation was given powers in 2017, it has imposed penalties on only five occasions. If the Government have designed the most comprehensive sanctions package in our history, as the Minister assures us, it must be backed up by the most comprehensive resources it has ever been given. Will the Office of Financial Sanctions Implementation get those resources? What steps will the Minister take to ensure that enforcement agencies are able to function and take action under these new measures?
As my hon. Friend Nick Smith has already asked, is this not the moment to publish the Russia report? Lay it before the House! Put it in the Library so that we can see its contents, and so that we can act, move forward and worry those in the Kremlin. We believe that we must go further now. Only five banks and three individuals are facing sanctions as a result of the UK Government’s actions today. This is not a big enough punishment for the blatant breach of international law that has already been made. Let us not be too slow to act and fall behind our international partners.
We should be introducing the full set of sanctions that is available to us now. Russia should be excluded from financial mechanisms such as SWIFT—the Society for Worldwide Interbank Financial Telecommunications. We should ban trading in Russian sovereign debt. Donetsk and Luhansk should be subject to comprehensive trade embargoes. Putin’s campaign of misinformation must be tackled by preventing Russia Today from broadcasting its propaganda around the world. We should be working to support our allies in the EU to cancel Nord Stream 2. The Foreign Secretary says that we are in lockstep with our allies, but the reality is that our allies have gone further in sanctioning individuals in Putin’s regime. Why have we not done the same?
This is not simply a matter of individuals, of course; it is about fixing a broken system. Ending our openness to fraud and money laundering, our inadequate regulation of political donations, our lax mechanisms of corporate governance and our weakness to foreign interference requires a barrage of new measures, long called for but as yet undelivered, to shut down the shell companies that obscure the origins of wealth and hide corruption, to lift the veil on who owns property and land in the UK through a transparent register, as mentioned time and again, and to bring forward an economic crime Bill that will target the corrupt elites who store their wealth under our noses.
Sadly, due to Putin’s expansionism, targeting Russia may not be enough. The regime in Belarus is supporting Putin’s aggression, playing host to Russian forces and potentially being set up as a springboard for a wider assault on Ukraine. Are the Government considering expanding the powers they have to designate people in Belarus should a wider invasion take place?
This is not the time for half measures. Putin has made his move, and the wider threat that Ukraine faces is immediate. The consequences for Europe and the west are stark. The effects of this moment will depend as much on our response to this aggression as on the aggression itself. Autocrats around the world are watching to see whether we meet the test of our strength and resolve. The Minister will have seen the strength across the House today. We need to go harder, deeper and broader, and we need to do so now. We stand ready to work with the Government to achieve this.
Quite a lot of people would like to speak in this time-limited debate. At this stage, I suggest not going beyond 10 minutes. I will not impose a time limit, but I want to get everybody in.
I welcome the Government’s plans for sanctions and increased action to try to clean up the mess in which we find ourselves here in the UK. This is certainly a welcome step in the right direction, and my right hon. Friend the Minister will remember that the Foreign Affairs Committee set out various options for how we should begin to think about this in May 2018, when we published our “Moscow’s Gold” report.
I welcome the direction we are taking but, along with many others on both sides of the House, I am afraid that I find myself asking, “Why not more? Why not further?” In many ways, we are using the actions of a hostile state in eastern Ukraine to justify something we should have done years ago. The UK, sadly, has for too long been an avenue for money laundering by despots and criminals around the world. For too long and on too many occasions, we have seen our institutions, our City and our service sector used to hide the gains from corrupt practices and criminality abroad.
This has now come to a head because those criminals, those thieves, who raped and murdered the Russian people for 20 years, who did not replace the oligarchs that rose up in Yeltsin’s day but merely nationalised them, have been using those same vehicles and avenues to hide the profits of their crimes—most tragically the theft of an entire country.
That act of naked brutality, that act of violence against an entire nation, an entire culture and an entire people, has sadly been allowed to profit a small number of individuals. That is an absolute tragedy. It is a tragedy for the people of Russia, who have lost so much, but it is also a tragedy for her neighbours, who are now under such pressure and such threat. It is not just Ukraine but the people of Belarus, the people of Estonia, Latvia and Lithuania and the people of Poland. It is a tragedy for those who are being weaponised in the human trafficking that we are seeing from the middle east, through Belarus and into the forests of eastern Europe. It is also, sadly, a tragedy for the people of these wonderful islands, the people of Great Britain and Northern Ireland—the people of the United Kingdom.
It is a tragedy for us because this marks what my right hon. Friend Mrs May mentioned only a few hours ago in this Chamber. We are seeing not just the aggression against Donetsk and Luhansk—not just a raid, an invasion, an opening salvo of a war that President Putin is trying to bring to Europe, in many ways for the first time in 80 years, although of course there was an exception in 2014 when he invaded Crimea and another in 2008 when he invaded Georgia; what he is doing to us, to the people of these islands, is unpicking the values and principles that our grandparents fought for 80 years ago.
President Putin is unpicking the principle that we embedded into the constitutions of the United Nations and the Council of Europe. He is unpicking the principle that the rule of law, that the debate among sovereign peoples, should be the way disputes are settled in this world. He is replacing the rule of law with the rule of force. Sadly, he is demonstrating that it works not only on the ground, but in the wallet; he is demonstrating that a leader can profit politically and personally from the abuses he conducts against his own people and his neighbours. That is why when I asked my right hon. and gallant Friend the Minister, who served with distinction in the Royal Artillery, about the classic gunner phrase “clout, don’t dribble”, what I was actually asking about—and he recognises it—is why do we not say immediately and clearly that what we are seeing today is wrong.
It is wrong for the people of the UK to have corrupt money flowing through our systems. It is wrong to have the profit of crime being laundered through our City and through jurisdictions overseas that depend on us. It is wrong to see the wages of war—quite literally—profiting a small cabal of thieves in Moscow. It is wrong because it undermines our security, it makes us more vulnerable and, sadly, it exposes the people we are privileged to represent to the dangers that we have, thank God, kept at bay for 80 years. It is wrong because it threatens the people of the United Kingdom.
We have set out ways to address that. We have spoken at various points about a foreign agents registration Act and about the exposure of beneficial ownership, not just in our own estates, but in the jurisdictions around the world. We have spoken about cleaning up the Companies House register and giving powers to the enforcement agencies, which could actually start to take action on this. We have spoken about all those things for many, many years, yet still we see names such as Mickey Mouse and Adolf Hitler in the list of directors in Companies House. Still we see the toleration, sadly, of fraud in too many of our institutions. Sadly, we still do not see the resources going into the policing of these different institutions.
My hon. Friend is making a superb speech. One thing that often gets missed in this debate about how we crack economic crime is the role of whistleblowers. They are the most likely people to identify wrongdoing in the banks he mentions and bring it to light and to the enforcement agencies. Does he agree that whistleblower protection, and potentially remuneration, should be included in this context?
I absolutely agree with my hon. Friend on that. He is completely right, as usual, in highlighting that the protection of whistleblowers is an essential part of the exposure to justice of those who have committed crimes. We need to think again about crime. We need to look again at the institutions, law enforcement bodies and agencies that are charged with protecting us and think really hard about their budgets. They are not simply ways of stopping the taxman from getting his hands on a little bit more loot; they are fundamental to our national security and to the protection of our people. We need to think of them as agents of the state in the same way as we think of the armed forces or the intelligence services. We need to think of them on the frontline of the protection of the people we are lucky to represent. Frankly, we need to put the money where so often our mouths have been when we have passed Acts in this House that have not had the resources to make them not just law but actionable law.
I am going to bang on about the draft Registration of Overseas Entities Bill. I served on the prelegislative scrutiny Committee on the Bill with several colleagues from different parties. We agreed a set of amendments and the Government accepted them, but they failed to bring through the Bill and the powers for Companies House and the Land Registry. Does the hon. Gentleman agree that it is about not just money but the fact that the Government have been sitting on their hands in respect of powers for the relevant organisations?
The hon. Member is right that more legislation would help, but fundamentally we need the resources for the agencies.
Let me close by saying that I welcome the direction the Government have taken. I welcome the commitment to do more to defend the people of Ukraine, which the Foreign Affairs Committee was privileged to visit only a few weeks ago. I welcome the fact that we are standing in defence of democracy, freedom and the rule of law. But I urge my right hon. and gallant Friend the Minister to look again at the sanctions, many of which were introduced four or eight years ago by the United States Government—I was just reading the United States Treasury document that listed the subjects of sanctions in, I think, 2014—because we can go further. There is so much more that we can do.
It is of course right that we act in concert with our partners and in tandem with our allies, and that we make sure we do not expose division by acting alone, but one of the great strengths of this Government, this House and this nation is that we have running through the sinews of our economy so much of the world’s finance that it puts a particular responsibility on us to stand up and defend the economic liberties that keep our people safe, enable our prosperity and build the rule of law around the world.
I am grateful to the Minister for advance sight of the statutory instrument and for our previous discussions and briefings. I exempt him from any personal criticism in what I am about to say, which is very much a criticism of Government policy.
It is worth my stressing our agreement throughout the House: nobody in this House has any fight with the people of Russia. We had a debate a number of weeks ago in which we all agreed on that point. I have always had a long and deep affection for Russia. Scotland and Russia share the same patron saint. I did my masters in Warsaw in central Europe and have always been fascinated by the wider region. My granddad served on the Arctic convoys when we fought with the people of Russia, and was bombed twice in that effort—that is not a reference to the vodka in Murmansk, where I suspect he was bombed more than twice, frankly. We have fought with the people of Russia against fascism. In the same way as Germany’s defeat was its liberation, the people of Russia have themselves been oppressed by their own Government. A successful disinformation and misinformation campaign has them dead afeared of war with us and of war arising from our aggression. In nothing that we do must we give the impression that we have any malevolent intent towards the people of Russia. I do not believe that any of us have done that today.
Equally and at the same time, we stand four-square in solidarity with the people of Ukraine. I was in Kyiv with my hon. Friends the Members for Glasgow South (Stewart Malcolm McDonald) and for Angus (Dave Doogan) just a couple of weeks ago and we met a number of politicians, members of civil society, academics and commentators. The people there are united in their frustration, because this is not a new invasion for them. The situation has been ongoing for eight years. I am troubled to see commentators and the media, and even some people in this House, talk about an invasion as if it was a new thing. It is not a new thing: it is a clear, ongoing, flagrant breach of international law and an act of aggression for which there have been minimal consequences. I am concerned to hear these sanctions being described as new measures that will be ramped up. Where are the consequences for what has gone before? I am worried about moral hazards when we are dealing with this Administration. Mr Putin has proven to be considerably better at salami slicing than we are, so now is not the time for half measures.
The SNP will support these regulations—of course we will. We have called for action on sanctions many times since 2014 in respect of the occupation and annexation of Ukraine. We have called for action on dirty money. We have called for action on Companies House. We have called for action on money laundering and action on Scottish limited partnerships. We have called for action on an economic crime Bill and action on opaque property transactions. We have called for action on tax havens, which are under the substantial control of the UK Government, yet are allowed to do almost anything they like, contaminating our financial system. We have called for action on political donations and action on data transparency. We have called for action to protect our democracy. All those laws are held by this place, not by Scotland, so the Scottish Parliament, in its defence, cannot do much on this, but this House has been notable in its lack of action. We have called for action on misinformation. My hon. Friend the Member for Glasgow South mentioned “Russia Today” earlier. I absolutely stand by his view—it has been my own long-standing view as well— that “Russia Today” is not a normal broadcaster and should not be operating on these islands.
We support this enabling legislation. If anything, I suspect that it needs to go further and will need to be brought back in the fullness of time. I hope that the Minister is taking good notes—I am sure he is—of the genuine concern around the House, from all points of the compass. I have previously criticised the UK Government’s policy on Chinese malfeasance and illegality as being homeopathic. I struggle to find a word for this one other than it is weak tea. It is not nothing, but it is not much, particularly when set against the actions of the German Government in announcing the icing—the cancellation perhaps, but the icing certainly—of the Nord Stream 2 project, a $10 billion project, which has huge implications for their energy security, and indeed ours, given the interconnectedness of the EU and the European energy markets. Set against that, this is really small beer, and I cannot understand it.
The UK seems to be casting about for somebody else’s leadership, because I really do not detect much in the actions and announcements that we have heard today. The UK seems to be being buffeted by events rather than forming any particular leadership.
I will close as I am conscious of time. I hope that I have not made too many party political points in this debate. It is important that we focus on the fact that we agree, and the SNP supports this measure, but there is a smell to this. There is a smell to the fact that the UK Government have allowed our financial and democratic systems to be as corrupted as they are. I was very struck by what the Chair of the Foreign Affairs Committee said in his speech. He said that it is not right that so many things are happening in relation to dirty money on these islands, and I include Scotland in that. There is a smell to this.
I am worried about the credibility of the UK Government in the eyes of the Kremlin. The Kremlin will act on weakness; it will seize on weakness. It will take advantage of weakness where it sees it, and of a lack of integrity, viability, sustainability and resilience. We have seen plenty of that from this Government thus far. Just a few weeks ago—this is almost too far-fetched for satire—as we were deeply concerned about the further incursion of Russian forces into Ukraine, the UK Prime Minister had a call booked with the President of the Russian Republic to discuss these matters and had to postpone it because he had to deal with a report about illegal parties in his office where he was ambushed by cake. What sort of impression is being given by this Government not just to our partners, but to our potential opponents?
The SNP will always support international law. International law is part of our DNA. We have a different world view and a different ambition for Scotland, but we can put that to one side on this, because this is too important. The Kremlin regime is a clear and present danger to international law not just in Ukraine, but everywhere else. What happens in Ukraine will be watched by every autocrat everywhere around the world. We need to act on this, and we need to act properly. The SNP will support further action on this. I hope that the UK Government will co-ordinate seriously with the international community, but we have not seen today anything like what we need to see, and I urge the Minister to redouble his efforts.
I am grateful to be called at this particular point, Madam Deputy Speaker. So that I do not end up repeating them, I first associate myself completely with the remarks of my hon. Friend Tom Tugendhat.
We can do, we should do and we must do more to root out the dirty money that flows through there. That is not to blame us—in some senses it goes through New York as well—but we should collectively ensure that we target those people. I am told that Putin has squirrelled away more than $250 billion around the world through his oligarchs; they are not actually wealthy individuals, but only nominally wealthy, because it is his money, which he has stolen from the Russian state. We should seek that out and nail it down, collectively, as nations in the free world.
I say to my right hon. Friend the Minister that I appreciate the difficulty the Government are in over this matter. The Government want to play their hand carefully, and I understand that; they want to deliver such that President Putin and co. have to pull back. The question, therefore, is not whether the Government are right to want to do that—we support them in wanting to do so—but whether the means that the Government have willed to themselves are enough.
I also speak as co-chair of the all-party parliamentary group on Magnitsky sanctions, with Chris Bryant. We have already listed names, and I genuinely and carefully question why my Government had not done more to sanction people already, long before this final crisis erupted—people in Russia, China, the United States and around the world who are clearly identifiable as in need of being sanctioned under the Magnitsky rules that we passed. I am ready to give the Government a list, and I know he feels exactly the same. He probably has it there.
I knew he would have it. We want to see that list actioned.
The trouble right now is that we have had the debate about President Putin and the Russians invading Ukraine as though they were about to invade Ukraine. I keep banging on about this: they have invaded Ukraine. They took over Crimea in 2014 and created this nonsense about separatists in the Donbas region, loads of whom we know to be Russian soldiers, dressed up in different uniforms and creating merry hell. There is no way on earth that they would have held the Ukrainian forces off for this long were it not for the fact that they have some very sophisticated support coming in from Russia. There is an idea that somehow the Russians are invading, but they are not—they have already invaded. Therefore, we have the right to do something about it.
The question therefore is what we do about it. In 2014 we let ourselves down: we did next to nothing. I was in Government at the time and I felt concern then, but the reality is that we did not do enough. The problem in dealing with dictators is that if we do not act early and act hard, the lesson they learn is that we will never act and we will always give way at the end. When will those lessons be learned? We have been through it time and again. Dictators have a single purpose. The problem with democracy is that we have many thoughts, many ideas and many people to bring with us, but we too should have a central purpose.
I have some questions for my right hon. Friend the Minister. Much as I really support what the Government have done, I cannot understand why we have not done much more immediately. Going now and going hard should be the way. If there are other things we are planning to do, there are many others we should be sanctioning—I mentioned one individual earlier in an intervention—and many other levers we could pull.
I do not understand—but perhaps my right hon. Friend can explain to me—why we have not driven forward on the SWIFT banking system or the trading of sovereign debt, which would affect the Russians very much. I agree that the Germans have moved swiftly, as we know, to suspend Nord Stream 2—I would like to see them end the whole idea of it—but if they are going to do more, we should be co-operating with them and going in hard ourselves this one time.
Will my right hon. Friend therefore keep this statutory instrument open so that we could even return to it tomorrow, if necessary, to add to the whole process and take it even further? We have to do more and we have to do it harder than we have done now, because President Putin will not take any lessons.
I come back to the question I asked earlier. Bearing in mind that the Russians still sit in Crimea and still have areas of Donbas, which in a way they were unofficially occupying but now have occupied, what I do not quite understand is what this first phase of sanctions is actually meant to do. I am utterly puzzled by it. Is it meant to say, “Thus far and no further”? My right hon. Friend said that it is meant to say, “Get back.” But if so, then we have to hit very hard with everything we have got, such that President Putin and his cohorts around him suddenly say to themselves, “They really mean business. They are united across the democracies.”
Within 10 minutes of the Minister rising to his feet, the sanctions were already out of date because the Russians had already gone further. During this debate, Putin has already gone further than he had at lunchtime, but we are yet to see any more announcements from the Government about further sanctions. The Russians are already laughing at us, aren’t they?
My worry is very much that they know exactly what they are doing, because they know exactly what we will do and they have already prepared the ground for this. They probably think to themselves, “We’ll do a certain amount and then we’ll discuss an awful lot more about what else we might do,” and then at some point a couple of countries will break ranks, go back to Putin and say, “Let’s work out a deal.” After all, the Minsk deal was a terrible deal because it forced on Ukraine the loss of its own territory, not necessarily in perpetuity but saying, “Don’t fuss about this any longer because we just want peace.” Peace at any price is not peace. Ukraine now faces an extended conflict and we see what is happening. A bad deal is a bad deal, and it leads to further pressure. That is what is happening.
I really do believe that the Government have to take this many notches further and hit the Russians very hard—yes, with the cleaning out of some of the Augean stables in the financial services area, but we also need to go on to grander, more supranational sanctions, working with our allies absolutely to cut off supplies of money, such that the Russians and President Putin cannot find a way through this and they feel the pain. When we hit them with these sanctions we must hear them squeal, not see them smile quietly and say, “They won’t get any further.” Let us do that earlier, now.
In conclusion, and returning to a point I made earlier, I genuinely believe that the free world has been half asleep on the watch. We thought that democracy was triumphant. We thought that there was no way, in coalition with the free markets, that the rest of the world would not turn to democracy automatically and embrace it, and we would have a fair and reasonable place. We failed to realise that the idea of totalitarianism—of brutality and oppression—exists and will go on existing. Unless we fight them wherever they exist, they will rise again. In China now, they practise slave labour, they have genocide, and they persecute people and lock them up. They absolutely dominate the citizens of that country. In Russia they are doing the same, as in Belarus, Iran and many other countries that the hon. Member for Rhondda and I have discussed in the APPG. They are on the move. This axis of totalitarianism supports itself across the board. If we do not act on Putin now and with firmness, then in China they will look at Taiwan and say, “They’ll never do anything; it’s even further away.” Then there is Iran and the nuclear weapons, and Belarus looking across at Poland. We must move hard, we must move now, and we must make them squeal. If we do not do that, then we will have failed.
I associate myself with everything that Sir Iain Duncan Smith has just said; I completely agree with him. Democracy is a very tender flower. We thought it was very robust and it would survive all weathers, but the truth is that it needs watering, care and tenderness. All too often, it is very easy for authoritarian regimes to trample on it and kill it.
I associate myself, too, with the comments of Alyn Smith. We have no beef with the people of Russia. The people of Russia are fine people with not only a strong culture and history, but many strong democratic traditions and understandings of what it is to be a human being and to work in solidarity with others. Our beef is with the regime; it is with Putin.
I agree that we have been recklessly naive for far too long in relation to our relationship with Vladimir Putin. It pains me—I understand why Tony Blair was doing it—that we gave him a state visit so early in his time. We wanted to press the reset button, as did Obama, and it gained us absolutely nothing; it just showed us to be weak. We have been pitiful. We have been puny. We have vacillated. We have been spineless. Quite often we have looked craven because we just want Russian money to prop up our banks, pay our lawyers and keep our consultancy firms going.
Maybe we could forgive the fact that Putin is a thieving kleptocrat—after all, most off the theft is done against his own people. It leaves his own people poorer than they were when he came to power, though. It is maybe just a matter for the Russian people that he has enriched himself beyond the wildest dreams of Imelda Marcos and Muammar al-Gaddafi put together. But three things make him truly dangerous: his territorial ambitions, his excessive use of force, and his lies and misinformation.
Just look at Beslan, where 334 hostages were killed in the end by Russian state actors, including 176 children. Just look at the Moscow theatre siege, where 130 hostages were killed by Russian state actors. Look at Chechnya—I could go on for ages—and look at Georgia. They compare the situation in Donetsk and Luhansk with the situation in Abkhazia and South Ossetia. Of course, it is exactly the same playbook: “Set up a pretext and then move in.” Look at the downing of Flight MH17. Look at the murders of Boris Nemtsov, Sasha Litvinenko, Dawn Burgess, Anna Politkovskaya, Sergei Magnitsky and so many others.
Yes, I am angered by the naivete that I sometimes see in this country. I have seen it often in this Chamber, and I have seen it also from the left. Stop the War said:
“We oppose the deployment of British forces to the borders of Russia as a pointless provocation.”
What utterly stupid naivete. Where on earth is the condemnation of the 190,000 Russian troops on the border, the annexation of Crimea, or the snipers shooting at Ukrainian forces now? This is not just naivete; it is monumental and dangerous stupidity, and we should call it out.
I confess that I was absolutely sickened by Putin’s speech last night. The Minister cannot say it, but I can: the man is deranged, unhinged and a danger to his own people, as well as to the people of Ukraine. I said in this House in March 2014:
“A Russian friend of mine says that Putin is not yet mad. That may be true, but what will our surrendering and our appeasement do for his sanity?”—[Official Report,
We can now see what his madness has done. I am reluctant to use the word “appeasement” too often, but sometimes what has been done has felt like appeasement.
Putin’s argument about Russians and Ukrainians being one people—again, I understand that the Minister cannot say this, but I can—is the same as Hitler’s about the Sudetenland in Czechoslovakia in 1938. Hitler said then that he only wanted to protect the Sudeten Germans. It was a lie. Some people said so in this Chamber in 1938. Some of them laid down their life in the ensuing slaughter, and they have their shields up here. However, Chamberlain bought the lie, and the following spring Hitler took the rest of Czechoslovakia without so much as a by-your-leave. Be in no doubt: this is not a Russian peacekeeping mission; it is an annexation, an invasion and a declaration of war. Putin knows that it will lead to significant bloodshed on a massive scale because the Ukrainians are more determined to fight now than they ever have been. If anything, Putin’s behaviour over these years has reinforced the Ukrainians’ sense of solidarity.
Putin is not just interested in the parts of Luhansk and Donetsk already in separatists’ hands; of course he is not. He wants Avdiivka, which is metres across the demarcation line, where the Foreign Affairs Committee saw Russian snipers pointing at Ukrainian troops just three weeks ago. He wants Kramatorsk, where we met community leaders, including the local priest. He wants Mariupol, and of course he wants Kyiv, Lviv, Kharkiv, Odessa—the whole of Ukraine. He wants to reshape the contours of Europe by force because he thinks that that is to be his legacy.
Of course, I support the statutory instrument and I am glad we are doing this, but today’s sanctions—the ones that have been announced today, which rely on this instrument—are wholly inadequate. I think that is the message from the whole House, and I hope the Government are hearing it loud and clear. They do not match the rhetoric of what the Government are saying, and when actions do not match rhetoric, we undermine that rhetoric and put ourselves in a worse position, not in a better one.
The banks are the small change of the Russian economy, they really are: they are shrapnel down the back of the sofa. The individuals have already been sanctioned for four years by the Americans. This really is netting in the minnows while letting the basking sharks swim freely. As somebody else said, it is taking a peashooter to a gunfight. Putin, frankly, will beat this feather duster away. He will just laugh at us. In effect, Medvedev was laughing at us yesterday, even before we announced anything, because he said that the Russians will be able to wear whatever we throw at them. It is a beautiful irony, is it not, that one of the people who will be sanctioned, when the Government are able to bring their measure in relation to Members of the Duma, is Andrey Lugavoy, who was one of the murderers of Alexander Litvinenko? Incidentally, can I just say that, if anybody has not met Marina Litvinenko, she is one of the most wonderful people who have ever walked the face of this earth?
I think a sanctions regime in this context has to go hand in hand with, first, a proper public register of beneficial ownership of property. I do not understand from the Prime Minister whether it is his intention now to introduce that, because it keeps on being conflated with various other forms. I hope that is the plan, but it has been promised for a long time, so some of us are beginning to get a little bit cynical.
Secondly, there has to be complete reform of Companies House, so that it actually has some powers to interrogate the information given to it. As the Chair of the Foreign Affairs Committee has said, at the moment anybody could say that they are Tom Tugendhat, or Mickey Mouse—or Vladimir Putin, no doubt—with impunity.
Thirdly, there has to be real openness about the review of the tier 1 visa scheme. The Home Secretary has cited “security concerns” about
“corrupt elites who threaten our national security and push dirty money around our cities.”
That is about people who already have tier 1 visas. As I understand it, this review is complete—it was completed some time ago—and it must be published soon. We need to understand what these tier 1 visas did, and where the vulnerabilities are in the British economy. I really hope that the Home Secretary will come to the House to do that very soon.
We need a foreign agents Act, as has been mentioned, and of course we need to reform the Official Secrets Act. We have no means of tackling spies in this country. It is almost impossible to send somebody to prison for spying in this country for the Russian Government.
Do we not need an update of the Treason Act? A treason charge can be laid only in relation to the person of the monarch, and this Act from 1351 really does need updating.
I agree, and on all these promises of legislation, which I think it is being suggested will come in the next Session of Parliament, frankly, we need to get a bit of a bloody—sorry, we need to get a bit of a move on, because all of this should have been in place years ago. Our report came out in 2018, the Intelligence and Security Committee report came out in 2019, and we still have not done any of this. I say to the Minister that we all stand ready to help in that process. We do feel a bit as though we are dragging him to be chased, so do not run away from us, but be chased and help us to bring in the legislation that will put us in a better place.
My final point is that I do not understand the Government’s ratchet decision at the moment. It is a complete mystery to me. There has already been an invasion and incursion, and we said prior to the incursion that we would hit Russia hard with sanctions. That is not what is on offer today. When the Prime Minister resigned as Foreign Secretary, he said that his greatest failure—his biggest mistake as Foreign Secretary—was his relationship with Russia. I think he has a long way to go to rescue what has happened today. We want tougher action and we beg the Government to introduce it.
It is a privilege to follow Chris Bryant. It is quite clear that deterrence has failed and he is right to say that we have been naive. I make no criticism of the Minister, but I do criticise the policy over the past 10 or 15 years. This is too little, too late. In 2007 Putin stood up at the Munich conference—this year’s has only just finished—and said that he no longer recognised the post-war settlement. That was very clear. The same year, he tore up Georgia, and five years later Ukraine. It has been clear for many years that he seeks to dismember Ukraine, shatter the unity of the west and build a new sphere of influence, encompassing the former Soviet Union, including Moldova and potentially the Baltic republics, and that he wishes to ensure that in the eyes of the Russian people, the west is an existential enemy: a physical enemy, but also an enemy in its values.
Again, I make no criticism of the Minister, whom I hold in very high regard—but doing everything in our control? No. Ratcheting up the pressure? Not really. Rising to the moment? I am sorry, but please. Last week, ITV’s “Peston” show explained that £1.5 billion of property in the UK has been bought by Russians accused of corruption or with Kremlin links, and nearly 30% of that is in Westminster. The Russians certainly have a sense of irony. There are 2,100 UK-registered companies involved in Russian laundering and corruption cases, involving a staggering £82 billion.
My central point is that I keep being told that Whitehall now understands the hybrid threats. I am sorry, but I do not buy that. I strongly believe that our leaders need much better to understand the Kremlin’s complex hybrid conflict, which spans politics, economics, propaganda, military force, espionage, culture and religion. In Ukraine now, the frontline is the border. In Germany, the frontline is the gas pipelines. In this country, the frontline flows, like the Thames, along to the City of London. It was great to see the Home Secretary announcing the end of the golden visa scheme, but come on—that horse bolted a long time ago.
These sanctions are good, but there needs to be a willingness to use them. Will the Minister tell us how many unexplained wealth orders have been used on Putin’s allies in the UK? The answer is zero. Building on everything that has been said today by the hon. Member for Rhondda and so many others, the Prime Minister has promised an economic crimes Bill. I am going to be a bit repetitive here, because it needs to be said again and again: where is the economic crimes Bill? Where is the reform to beneficial interests—true ownership for offshore properties? For heaven’s sake, is it really in our national interest to have tens of thousands of properties used and owned by offshore shell trusts, hiding organised crime or the world’s kleptocrats? If the Government understand hybrid conflict, what are they doing to deal with this threat?
The hon. Member is making excellent points. I sat on the Joint Committee on the Draft Registration of Overseas Entities Bill, and this information was well known four years ago. Does he share my frustration that despite that, there has been so little by way of action to tackle the problem?
We are 15 years late. It should not take the gravest crisis since world war two for us to get our house in order; this is just good housekeeping that we should have done 20 years ago. I thank the hon. Member for making that point.
Where is the adoption of the recommendations of the Foreign Affairs Committee and ISC reports? One of the most chilling elements of the ISC report was our own National Crime Agency saying that it lacks the resources necessary to take on the oligarchs. We—our own people, the public good—are being silenced in our own country by UK lawyers in the pay of some of the richest and most malign human beings on earth. Where is the tightening of the rules at Companies House? I know we have all said this, but I want to say it again. Banks in Germany, Denmark and Sweden all laundered billions of pounds from Russia but they used UK shell companies to do so. Is it really in our national interest to have a system so open to corruption? If the Government understand hybrid conflict, what are they doing to deal with this threat?
This SI is strong and I support it, but how many foreign lobbying scandals will the UK have to endure before we realise that we need a foreign lobbying Bill, or as some have called it, a foreign agents registration Bill? The US has had one since 1938, the Australians since 2018. The only way we found out about Lord Barker’s work for Deripaska was through The New York Times. Lord Goldsmith, a former Labour Attorney General—I make no political point here—said recently:
“I am sorry to have to take leave of absence, but felt it was the only option open to me given the choice between that or revealing privileged and confidential information.”
I understand he is off to work for the Russians. He keeps his title, but by not sitting in the House of Lords he does not have to declare. In the US or Australia he would be filling out form after form, saying what he was doing; in this country, hasta la vista, he is off to work for the Russians—be it the Russian Government or major Russian institutions—and what do we know? As the Russians would say, “nichevo”— we know nothing. We need a foreign lobbying Bill, and if we were serious about dealing with the Russian problem we would have one.
Where, too, are the measures to stop libel and data protection laws being abused by unscrupulous lawyers? Barely two weeks ago we had a very good debate on lawfare in this country, and we talked about the need for action against SLAPPs—strategic lawsuits against public participation. As Liam Byrne said, that is when legal action is used to frighten, harass or intimidate the media or civil society groups. The Government understand hybrid conflict; what are they doing about this threat?
It takes brave authors to deal with the threats from Putin’s oligarchs, people like Catherine Belton and Tom Burgis, and brave publishers like Arabella Pike at HarperCollins, but others, including Cambridge University Press, have been scared away from publishing books about Putin and Russia because of the power of Putin’s cliques in this country. Is it really in our national interest to have a system in which some of the world’s most sophisticated law firms have reduced themselves to offering a one-stop shop of intimidation and dirt-digging to some of the most corrupt people on earth? I do not think any of these things are in our national interest. I think they need to be challenged.
We have all heard about the threat of Putin, and I agree. I feel very strongly that this threat has been obvious for at least a decade and certainly since Crimea. I wish we had taken action then. Yet again, we are doing too little too late. Rather than veering from complacency to panic and back again, being unable to decide if we want to damn authoritarian regimes or suck up to their money, we need a consistent policy that sets out in a robust and intelligent way what our values are and the need to protect our institutions and our values against this growing threat.
It is a pleasure to follow that excellent speech.
There is an old saying that no matter how elegant the strategy one should occasionally look at the results. The truth is that this Government threatened sanctions as a deterrent and the invasion proceeded, and this afternoon they have laid out the first of their concrete sanctions and the invasion has just stepped up. So surely the Government have got to recognise that the strategy they have laid out of deterrence has failed and they therefore need to think again and come back to this House with measures that are strong and Russia-stopping, because that is not what we have got today.
What has been so helpful about today’s debate is the wide acknowledgement in all parts of the House that we are now facing an adversary in Russia that has got to be stopped. This is a country that fights us in cyber-space and on the streets of Salisbury. It is a country that meddles in elections and cheats in winning medals. It is reckless in space. It shells its neighbours. Its ambitions are limitless and its tactics are merciless. The question we have to confront is: how much longer are we prepared to tolerate the intolerable?
President Putin is not hellbent on acquiring some kind of Lebensraum. His argument is not about trying to roll forward his borders to create some living space for the Russian people. If anything, his strategy, stated as it is, is more ominous: it is to restore the gory glory of the former Soviet Union and re-imperialise the borderlands across 10,000 km of Russia’s borders. That is not a secret, but we have to stop it. We have to work with our allies to put in place a regime that is going to stop this aggression now and once and for all.
That is why the package announced today is so disappointing. It has been revealing that almost no one in the House today has stood up to commend the package as good enough. Everything we have heard today has said that it is a disappointing package that falls well short of what we think is needed to deter President Putin. It is, as the old saying goes, like being savaged by a dead sheep.
The Government are not short of tools. Actually, after 9/11, one of the great legacies that Labour left was in transforming the architecture for deploying economic sanctions to deter and pursue bad people. However, as Lord Ricketts said in his excellent book late last year, it is no good having the tools if they are left in the shed. The problem we have with the Government today is that the tools are being left in the shed.
Let us look at a simple scorecard of some of the results. As Bob Seely said, how many unexplained wealth orders have been implemented against friends of President Putin? A grand total of zero. Apart from the Magnitsky sanctions, which were handed to us and relate to a crime back in 2007, how many sanctions against individuals guilty of economic crime have we proposed in this country? None since 2014—in fact, a grand total of just three individuals are on that sanctions list, yet, when the new independent sanctions regime was introduced, we were promised that it would transform our capacity to take on bad people around the world. If that was true, why on earth are we not using it today?
As we have heard, the people on the sanctions list announced today have been on a US list since 2018. None of the major Russian banks has been hit with sanctions, even though they are raising liquidity in London to finance their day-to-day banking operations. If we shut them off from the liquidity of London, they would be forced to go to the central bank in Moscow, putting immeasurably more pressure on the economic structure around President Putin. The truth is that the Government have failed to take aim and target the commanding heights of President Putin’s kleptocracy and that is a mistake for which the people of Ukraine are now paying.
At least 120 oligarchs should be on the Government’s sanctions list. At least four major banks—VTB, VEB, SberBank and Alfa-Bank—should be sanctioned immediately. That is the pressure that we need to ramp up to send a serious message. Today’s failure would not be so serious if it were not part of a much broader failure. Can anyone in the House tell me: who is the Minister responsible for tackling economic crime? It used to be Mr Wallace, who is now the Secretary of State for Defence. He had a title: Minister for Security and Economic Crime. However, that ministerial role has been deleted from the current ranks of Her Majesty’s Ministers. The new Minister is the Minister for Security and Borders.
We are told that the National Economic Crime Centre is comprehensively under-resourced for what it is trying to do. The National Crime Agency, we are told, makes a calculation as to whether it can afford the legal costs of a case before it prosecutes unexplained wealth orders. Literally, it is being scared off by the scale of the lawyers it opposes in court. The regulator Companies House does not check the information that is filed in front of it. We have journalists who are being silenced in English courts, for so long sanctuaries of justice, now arenas for silence. As we have heard so eloquently from others, we have no timetable for the economic crime Bill.
To judge the Government even on their own terms, let us look at the economic crime plan that they put forward. The analysis of the Royal United Services Institute is that 60% of the measures in the plan have not been implemented. Let us go through a couple of the points that are missing in action: clarifying the sanctions supervision powers—not done; reviewing the criminal market abuse regime—not done; developing a sustainable, long-term resourcing model for economic crime reform—not done; improving the policing response to fraud—not done. It would be laughable it was not so serious. This is not a Government who are serious about taking on economic crime and there are people around the world who are now paying the price for that negligence.
We need three things now. First, we need clear leadership. We need a Minister for economic crime, tasked with bringing forward the economic crime plan to this House at the earliest opportunity. Secondly, we need to start using our intelligence capabilities to light up who the bad actors are around the world. The fact that London and New York are the centres of financial transactions worldwide and the fact that we are the home to the SWIFT financial messaging system mean that we have unrivalled insight and intelligence into who is doing what with whom and where. Why are we not bringing those intelligence packages together and tasking them out to pursue these people? Thirdly, we need a final piece of the strategy that is modelled on the counter-terrorism strategy from a few years ago. The Contest strategy is deemed a good strategy. Its four principles—preparing, protecting, preventing and, crucially, pursuing—are good principles. The Government must now bring forward a Contest strategy for tackling economic crime. That is really what we needed as part and parcel of the sanctions legislation the Minister laid before the House today.
It was, as I have said before in the House, 33 years ago, back in 1989, that President Gorbachev went to the Council of Europe in Strasbourg and gave us a vision about a common European home that stretched from the Irish Atlantic coast to Siberia. It should be a place, he said, where there is the rule of law, our great gift to the people of this world. Those days are now gone. From Kaliningrad to Kamchatka, what we now have is a great kleptosphere taking shape. It is a place where might is right, where, as the saying goes, the strong do what they can and the poor suffer what they must. We now have a task to perform in this country. It is a task we perform with our allies for the benefit of billions of people around the world—to take on the kleptosphere in new and aggressive ways. That battle is already under way, but it is time the Minister now stepped up that fight.
Hon. Members have been most disciplined in keeping their speeches to around 10 minutes, but I hope that now Members will keep their speeches to around eight minutes. We have managed without a formal time limit and it would be better if we could continue without one. If people keep to around eight minutes, everyone will have an equal chance to speak.
Thank you, Madam Deputy Speaker. The virtue of speaking late in the debate is that I can keep my remarks mercifully short.
I would like to associate myself with the many excellent and eloquent speeches we have heard, most of which I agree with almost entirely. Today is a sad day—a sad day most of all for the brave people of Ukraine, whose sovereignty is threatened and whose democracy and freedom are undermined. It is a sad day for the order we have known since the 1990s, which many right hon. and hon. Members have spoken of, which now seems shattered, damaged and diminished. It is also a sad day for the people of Russia. I am pleased to associate myself with the remarks of the many right hon. and hon. Members across the House who have said that we wish no ill on them and that we are sad to see the state of their country now. Twenty years ago, I lived and worked in Russia as a lawyer. Back then, Russia was by no means a democracy of the kind that we would recognise, but it was a more hopeful place than the Russia that we see today. It was a country in which one could do business and travel and in which young people were broadly optimistic about the future. After listening to President Putin’s remarks last night, I think we see a very different country, drifting darkly into authoritarianism.
I want to speak about two points and to reiterate those that Members across the House have made. The first is about understanding exactly what the Government’s strategy is today. The Prime Minister spoke of a ratchet. If we are going to take action, we should take action hard now. That is what a dictator such as Putin can understand. Deterrence by way of sanctions thus far has failed. It is probably likely to fail. It does have value, however: it shows resolve and inflicts cost on Russia. If we are going to do that, why would we not do it strongly now?
I do not understand why we would suggest that we will introduce the other measures that the Government are considering only in the event that Russia makes further incursions into Ukraine or makes further serious, egregious assaults on Ukraine or other allies in the region—[Interruption.] My right hon. Friend the Minister shakes his head. If, as I understand it, the Government will introduce those measures in the hours and days to come, perhaps because they require further thought or legislation or because we want to act in concert with our allies—for example, to make sure that the sanctions are synced exactly with those that the United States might bring forward—that is an entirely sensible and defensible policy.
I am listening with great care to my right hon. Friend’s important contribution. Does he agree that we could go even further and, with international action, impose positive obligations on Russia to withdraw from the regions in question, stating that, otherwise, further sanctions would follow? Would that not seize back the initiative in a positive way rather than passively waiting for things to happen?
My right hon. and learned Friend’s point has a lot to commend it. I suggest to the Government that they introduce further measures as quickly as possible, preferably in concert with our allies.
My real worry is that Putin has actually been very clever: he has advanced into an area that his forces effectively control already and he will stop there. That would divide our allies—for example, Hungary and Germany may not agree—and we would not be able to get sanctions agreed internationally. That is the real worry and why he is not perhaps as mad as we think. He is actually doing this with purpose and he has a plan.
My right hon. Friend makes a good point. If the scenario that plays out is the first of the ones that I described, there will be little opportunity to introduce further sanctions, because this may be all that Putin intends to do.
I want to make a last point on the specifics of the package that was announced, and I am afraid that I will repeat the comments of right hon. and hon. Members across the House. The banks that have been chosen are relatively minor. I worked as a corporate lawyer, including in Russia, and these are not the primary banks that international institutions, major corporations or the major oligarchs go to to seek finance, so the impact will be relatively limited. I have not seen the latest debates from the United States, but when I last looked at them, our colleagues and friends in the US Senate, for example, were looking at pursuing some of the larger banks such as SberBank. If we were going to make any impact, it would be important to bring forward measures against one, two or more of the larger banks, which are genuinely those that major institutions and the oligarchs whose names have been mentioned in this House today are more likely to use for finance.
Secondly, the list of individuals is very small, and the lion’s share of them have already been sanctioned for a long time by the United States. There are many others we could reach. In my work as a lawyer and in business, as managing director of Christie’s, I had the pleasure—if we can call it that—of meeting a number of the individuals who have been described today as oligarchs. Those individuals are not on the list. There is a much larger group of individuals we could and should now be reaching, and we could tackle them in a range of ways. In many respects, what they most fear is losing the ability to travel—to leave Russia and go skiing in France or Switzerland or shopping in London or Paris. It does not have to be a full sanction, but the list that we are currently considering is far too small.
If we were sitting in the same room as the Russian leadership today, I think we would see a very nonplussed reaction. There is more we can and should do. I hope that further measures will be brought forward in the coming days; I certainly stand ready, as I think all colleagues across the House do, to support them.
It is a pleasure to speak in this debate. I hope that the main thing that we are getting across to the Minister is our collective sense of the urgency of acting and, frankly, our full support for the Government doing so much more than they have done today. I put it on the record that the Liberal Democrats stand with the people of Ukraine and that we stand ready and waiting to impose the greatest possible sanctions on Vladimir Putin, his associates and the Russian economy if necessary.
We have to lead from the front. In that vein, we must take decisions that are going to be painful. So far we have talked the talk, but I am afraid that today’s list of sanctions was thin gruel. I do not think that it has done anything; I do not even think that there is a line in the sand. Within hours of the sanctions being announced, as the Minister rose to his feet just a couple of hours ago, even more had been done by Putin—and, incidentally, even more has been announced by our allies.
We have to do more. If we do not say that enough is enough now, what will be enough? Is it when Russia has invaded Donbas? Is it when it invades Kyiv, Lviv, Tallinn? Which is it and where is the trigger? We have some clarity in this debate, in so far as that if it does not pull back, time seems to be a trigger. That is good, but I am afraid to say that I do not think we have done anything that will have any effect at all.
Putin’s cronies must be subject to the strongest possible sanctions now, because it is through them that Putin and his inner circle keep their wealth. If we go after his associates, we go after him. Actually, we are rather uniquely placed to do so, because they choose London. They live here—it is “Londongrad” to them. That means that we have leverage. However, the reason for that leverage is more difficult for us to swallow: our country’s failure over many years to stand up for what is right has led us to this point. The blind eye turned, the questions not asked, the quick buck or donation made—that is how Putin’s associates have been able to sink their teeth into our society, our economy and indeed our democracy to such an extent.
Late is better than never, so of course I am glad that the Government are now deciding to do more, but there is so much more still to do. Some £1.5 billion of UK property has been bought with suspicious Russian wealth, according to Transparency International, and that is just the tip of the iceberg. I do of course welcome the sanctions announced today, but Germany’s first tranche of sanctions was Nord Stream 2. Up to this point, for the last two weeks, the narrative was about how we had done more than Germany, but this is round one in the boxing match: Germany has brought Nord Stream 2, and we have brought five banks that do not really matter and three people whom the United States had already sanctioned.
We have heard the Foreign Secretary say that the Government want to impose severe sanctions; well, now is the time. Let me be helpful, and say that I think we need to start by heeding the names of those who were identified by Alexei Navalny and his team as “key enablers” more than a year ago. There is a problem, outside this Chamber, with naming those individuals, because many of them have very deep pockets and very expensive lawyers. The speech of Bob Seely underlined the issues involved, and I am well aware that the Minister knows of them, but I am going to use my privilege to name 35 of those individuals, because I think it important for us to have their names. I can reassure you, Madam Deputy Speaker, that I have already checked this with the Clerks.
Here are those 35 names: Roman Abramovich, Denis Bortnikov, Andrey Kostin, Mikhail Murashko, Dmitry Patrushev, Igor Shuvalov, Vladimir Solovye, Alisher Usmanov, Alexander Bastrykin, Alexander Bortnikov, Konstantin Ernst, Victor Gavrilov, Dmitry Ivanov, Alexander Kalashnikov, Sergei Kirienko, Elena Morozova, Denis Popov, Margarita Simonyan, Igor Yanchuk, Victor Zolotov, Oleg Deripaska, Alexei Miller, Igor Sechin, Gennady Timchenko, Nikolai Tokarev, Alexander Beglov, Yuri Chaika, Andrei Kartapolov, Pavel Krasheninnikov, Mikhail Mishustin, Ella Pamfilova, Dmitry Peskov, Sergei Sobyanin, Anton Vaino and Andrey Vorobyev.
I thank the House for its patience. Some of those people have been named before under privilege, but I believe that it is important for all of them to be named, lest we forget that while Putin’s national security council engaged in that sham discussion—a discussion which, by the way, seemed to have been filmed hours before it was aired—Navalny was being tried, and faces potentially another 15 years in prison. We must be vigilant for any attempt by Putin to use this crisis as a cover for what would be, in effect, the murder of Navalny.
I urge the Government to recognise that now is the time to freeze, and begin the process of seizing, the assets of not just those three individuals, but all Putin’s cronies who are in the UK. We must kick them—and their families—out of this country, and publish the review of the golden visa scheme. Over the weekend the Home Secretary said she would present a statement on that to the House, but we have yet to see it. I hope we will see it this week, because it is time to make it absolutely clear that the era of Russian interference in our society, country and democracy is over.
My final plea, which echoes a plea already made by others, is for the Government to bring forward all the legislation that remains outstanding—legislation which is in the Conservative party manifesto and which Ministers have said from the Dispatch Box that they want to pass. It should not be so difficult to do something that the Government have said time and again that they want to do. Where is that register of beneficial ownership? What has happened to the Registration of Overseas Entities Bill? We know that it is ready; please can the Minister accelerate its passage, and also the passage of the economic crime Bill? We stand ready and waiting for the Government to do more. Our democracy is at risk and so is the international rules-based order. I urge the Minister to heed our calls and do more.
Can I say how heartening it has been to hear so much support for the brave Ukrainians who really need our help at this difficult time? When I looked at the regulations, a thought process arose and my key question was if, or to what extent, it was correct for us to amend existing regulations specifically to deal with Russia and especially those connected with Russia. I appreciate that there are some complicated questions to be asked here. For instance, to what extent are the actions of Russia interchangeable with those of President Putin? Can we say that what the kleptocratic dictatorship that he has established and developed, supported by a coterie of sycophantic oligarchs, wants is the same as what Russia wants? I think that most people, on any rational assessment, would say yes. In Russia, civil society, democracy, a free press and financial regulations have all gone to virtually nothing, while corruption, police statism, rotten judges and political gangsterism have reached new heights. It is frankly a brave person who now stands up in Russia to make any kind of criticism of President Putin, who sees himself in place for life.
There are other questions that go to assessing the status of Russian individuals, many thousands of whom live in the UK. Some of them may well be supportive of Putin’s regime, but there are many others who are not. In fact, many Russians are here to escape the clutches of Putin’s regime. On the other hand, the sources of those people’s wealth may lead to yet more questions concerning criminality, albeit criminality that is unconnected to Putin or indeed Ukraine. I urge the use of caution and due process in the way that those Russians here are treated. For instance, just throwing them all in prison, as the UK did with all the Germans resident here at the beginning of world war two, is not going to work and would not enhance our democratic reputation. On the other hand, there comes a tipping point towards war when individual interests are to some degree going to be affected or subsumed just by being a citizen of the country concerned. It seems that these regulations are effectively preparing the ground for that to happen.
I support these proposals and feel that ultimately, in the circumstances, they are appropriate. Moreover, I am ever more of the belief that the lacklustre response of the UK, the EU and the US to Russia’s 2008 invasion of Georgia and its 2014 Ukraine incursion is one of the main reasons that we are here today. It was lacklustre in terms of sanctions and also of military and economic support. Ukraine’s and Georgia’s borders were accepted by Russia—and indeed by the world community—and we should have been much tougher in protecting their integrity and their sovereignty.
The problem with dealing with dictatorships is not a new one. If they see a gap, they will take it; if they see a weakness, they will exploit it; and they can generally move faster than democracies. Russia clearly wants to have a series of weak, poor, corrupt countries along its border and to act like it was still 1980. We cannot let that happen. These regulations will provide the framework for sanctions, but not the sanctions themselves. That will depend on the ability of western-facing democracies to act together. This is now the challenge for our Government, but I have to say that, on their performance so far, I believe that it is one they can and will deliver.
Like others who have spoken, I welcome the regulations that we are discussing tonight, but I am underwhelmed by the announcement today of the Government’s sanctions. I have to say that I do not really understand the ratchet option. What we need now is a hard stop and tough action against the Russian Government.
These regulations are long overdue. I agree with Bob Seely that we are closing the stable door after the horse has bolted. What is happening in Ukraine today was summed up well by Mrs May, who said that we are seeing not just an attack on the sovereignty of the independent state of Ukraine, but an attack on our western values and the right of free people to decide their own future.
This has not happened by accident. We had the Foreign Affairs Committee’s 2018 “Moscow’s Gold” report and the ISC’s long-delayed 2020 report on Russia—I sat on the latter Committee—and those reports laid out all the issues. I am baffled by the Government’s reluctance to act against the Putin regime.
I agree with the hon. Members for Tonbridge and Malling (Tom Tugendhat) and for Stirling (Alyn Smith) that we have no problem with the people of Russia. In fact, I would say the Russian people are the victims of Vladimir Putin and his regime. We have to understand that over the past 10 to 15 years this individual has been in control with a group of kleptocrats around him. If we are to get him to wake up and listen, we have to attack those individuals.
Layla Moran named some of those individuals, and they are known to people. It is not a great secret, as my right hon. Friend Liam Byrne said. There is an option to identify individuals under proposed new regulation 6(4):
“For the purposes of this regulation, being ‘involved in obtaining a benefit from or supporting the Government of Russia’”.
There is no way that any of these individuals, who are doing business in Russia and have laundered money sitting in this country, could operate without supporting the Government of Russia, so I think there is an option to do it under these regulations. [Interruption.] The Minister is gesticulating that that is the point, and I agree with him, but the big issue is not whether it is in the regulations but whether it will be acted on by the Government. I am sorry, but this Government’s record so far has not been good.
There is an opportunity to do what the hon. Member for Oxford West and Abingdon suggests, and we now need to see action. The Russians will be baffled by the limitations on the sanctions that have been announced, and some of them will be laughing. They will think, “That’s what the UK has announced today. We’ll do a bit more and they’ll do something else tomorrow.” No, we need a hard stop now, and these regulations give us that opportunity, but the Government have to follow through.
Ken McCallum, the director general of MI5, was interviewed for the Daily Mail last week. He is the head of the Security Service, and he was venting his frustration in public that the laws to tackle spying are outdated, that the Official Secrets Act is no good, that the promised espionage Bill is not forthcoming—as someone said, the United States has had such an Act since 1938—and that there are issues with beneficial ownership and the reform of Companies House.
Those things were all laid out in the Foreign Affairs Committee’s report, and reinforced in many ways by the ISC’s 2020 report. We have a Government who seem to be sitting back. The invasion of Ukraine has now focused their attention, but we cannot allow this to continue. As the right hon. Member for Maidenhead said, this is an attack on our way of life and our democracy, which we all take for granted.
We will support these regulations tonight, but we also have to take action. The Government should make legislative time for the economic crime Bill and the other measures, as I am sure they would have united support on both sides of the House to get them on to the statute book. We now need action, not talk.
The Government also have to ensure that their communications are a damn sight clearer than they have been to date, because otherwise we are feeding our enemies who are now threatening the brave people of Ukraine.
It is clear that Putin is not afraid to weaponise his foreign policy through his armed forces, and through oil and gas supplies. It is therefore only right that we look to weaponise our foreign policy in this regard using the City of London. It may well be that, as the Minister said, we will go further quickly, but so far we have not gone far enough. Of course it might not be in our financial interests to do this. Some financial interests—some of our domestic financial organisations—might suffer, but their financial interests cannot supersede the national interest.
When we have looked at sanctions on Russia before, not least in 2015, following the invasion of Crimea, we did not go anywhere near far enough. We did not sanction Russia’s oil and gas supplies, which make up 70% of its exports. We sanctioned things such as exports of milk—clearly, that is never going to go far enough. While Russia has been reducing its dependency on our capital markets, because it saw something like this happening in the future, countries in the EU, in particular, have not being doing the same with their dependency on Russian oil and gas exports.
Lots of people have talked today about Nord Stream 2. Obviously, I welcome the fact that there will be a sanction on that, in terms of preventing it from ever—at this point in time—pumping gas. However, we should not forget that no gas is travelling down Nord Stream 2 now and that all the gas comes into Germany on Nord Stream 1. Again, those oil and gas exports will continue into Germany and other nations. Clearly, there is a huge economic need for that gas going into Germany, but it is incumbent on us and on every nation across Europe—every peace-loving nation—to reduce our dependency on Russia in every economic area.
Russia is not a large economy—its economy is smaller than that of Italy—so there are many things we can do to put further pressure on Russia through sanctions. These are things we have not done today—we have not discussed the potential for them today at all. People have talked about the SWIFT payment system. Clearly, Russia has other opportunities and can use other communications systems, but none the less addressing this would help. Preventing Russia from trading in sovereign debt has been mentioned, but what has not been mentioned is access to clearing banks. It would be catastrophic for Russia if we prevented its access to our clearing banks. Instead, we have sanctioned five very small banks. There may be good reason for that; there may be more provisions we need to put in place before we can apply further sanctions to the larger banks, and clearly there is interdependency between Russian banks and banks around the rest of the world.
The banks that we should be looking at are: VEB, which is the Russian development bank; the Russian Direct Investment Fund, which is the sovereign wealth fund; and, as a few Members have mentioned, Russia’s retail banks. SberBank has roughly 36% of SME—small and medium-sized enterprise—lending in Russia, with VTB having 20% of consumer loans. Clearly, we have to do this carefully and it may well be that we act in concert with other parties, not least the US, the EU and others. If we simply put sanctions on today, that could mean that Russian banks avoid having to settle debts to UK banks and banks in different parts of the world. Although we do not want to do anything that would cause systemic risk to UK financial markets, we are talking in the billions of dollars here rather than in the trillions, and there are other ways of shoring up our system to prevent that happening. However, what is important now is that there is no doubt that we need to go much, much further than we have done already.
Mr Putin may well have won, because we have not reacted hard enough. Small banks have been sanctioned, but we have not put in place real sanctions. So he will be sitting in Moscow tonight thinking, “I’ve just got to sit this one out and I will be able to play up the gains we have got extremely well to the Russian people.” We are really on dangerous ground by our weakness.
That is certainly how it looks to me at this point in time, so it is important that we now move very quickly to take the further measures we have discussed today on the Floor of the House.
There is, of course, a wider context around this debate. Many Members on the Government and Opposition Benches have been calling for an economic crime Bill and talking about the failure to prevent economic crime. It is vital to make sure that measures such as sanctions are not subverted—that our banks follow the rules, basically. That would apply a lot of pressure on banks to make sure that sanctions are properly imposed. I have previously mentioned whistleblowers, the proper resourcing of our crime agencies, and the need to change the rules on unexplained wealth orders so that we can take wealth very quickly from people we identify.
I have outlined some more long-term measures that it will take some time to implement, but we could move very quickly with a register of overseas entities. We have previously had draft legislation—Members have mentioned being on the scrutiny Committees—so we could move really quickly. As has been mentioned, £1.5 billion-worth of property in the UK is owned by Russians who are connected to crime and corruption. Some 50% of that is registered in overseas territories and Crown dependencies, the public registers of which are not supposed to go live until 2023. The reform of Companies House would serve as a check and balance, and the move from register to regulator would mean we could properly establish the identities of directors and shareholders.
All those things I have mentioned could and should be done very quickly. That would have a meaningful effect on people connected to the Russian state. We need to act very quickly—we need action this day.
I am going to do something slightly unusual and speak about the statutory instrument, although I shall make some brief introductory remarks. I welcome the measures, as far as they go. I do not think they go far enough, but I think the Minister will have already picked up that message from around the House. I welcome what he said about working together and being in lockstep with our allies. The problem is that Gennady Timchenko, Igor Rotenberg and Boris Rotenberg were sanctioned by the United States in 2018. With the measures before the House today, we are not even playing catch-up with where we need to be.
I am frustrated, and there is a general frustration, because, notwithstanding what the Minister said today—that he may go further with sanctions on the basis of what Russia has already done—there is a perception that Russia has to do more and worse before we really ratchet up what we are planning to do. Either Russia has invaded the sovereign territory of an independent nation state or it has not. We do not need to see the tanks encircling Kyiv for tough action to be taken. Russia has already invaded and annexed parts of a sovereign state.
Sir Iain Duncan Smith said—I think I caught him correctly—that perhaps $250 billion had been sloshed about outside Russia. I fear that does not come close to the mark. In 2017, the US National Bureau of Economic Research suggested that $800 billion had been stashed offshore since the collapse of the Soviet Union. Some people will have moved their money for good reasons. Some people will have been terrified—there will be fear. There will be crime involved and fraud and all sorts of things happening. However, a great deal of that money may well have been placed overseas, in the hands of trusted custodians and friendly overseas businesses—the modus operandi of the KGB prior to the collapse of the Soviet Union.
This is where I will ask the Minister a question about the instrument itself. When it comes to sanctioning individuals and to freezing cash or other assets that are at the beck and call of the Russian state, no matter whose name they appear to be held in, will this legislation actually do what is required? The explanatory notes suggests that an “involved person” now includes a person who is or has been involved in
“obtaining a benefit from or supporting the Government of Russia.”
Regulation 4 says:
“For the purposes of this regulation, being ‘involved in obtaining a benefit from or supporting the Government of Russia’ means”— among other things—
“owning or controlling directly or indirectly…or working as a director (whether executive or non-executive), trustee, or equivalent, of…a person”.
The word “trustee” is interesting. Will this legislation allow the Government to freeze an asset if it is held in the name of an individual who appears to be completely clean, but who the Government have information to suggest is a Russian-trusted custodian of what is, for all intents and purposes, a Russian state asset?
Can we have clarity on this? I think that this goes back to the point that Mr Jones made earlier. Will this instrument actually allow the Government the tools that they need to freeze the assets that are required to be frozen to punish Russia for the invasion of Ukraine?
It is a pleasure to speak in this debate, and I congratulate all right hon. and hon. Members on their contributions.
I want to make it clear that, having come from a place where I have lost loved ones to terrorism, where I have grown up with the threat of attack, where I have experienced the righteous anger when I have learned of senseless death, I am not a person who wants to see any community facing this. I do not want to see Ukraine facing this either. My heart is with the decent people of Ukraine whose lives are nothing more than pawns in a game, who will potentially lose their homes, their jobs and their loved ones as they seek simply to retain the ability to live their lives as Ukrainian citizens.
One of my very vivid memories as a child is seeing images of the six-day war, during which untrained women and young children took up arms to defend their nation. I remember thinking that this was amazing. It was only when I grew older that I realised that war is no place for anyone, let alone for untrained civilians, children and families.
Never did I imagine that I would again be at home watching a TV screen with images of elderly women and young teenagers being taught the rudimentaries of taking up arms to defend themselves, their homes and their nation against unacceptable aggression. This image did not inspire me as it did when I was a child. Instead, it saddened me that life for that lady will never be the same after she pulls that trigger—possibly—and does what she must do to protect herself and those whom she loves in Ukraine.
This time round, there is a difference for me. I am no longer a boy with dreams of a glorious war, when I did not really understand what it was. I am a man living with the scars of war, as others do in this Chamber. I am thinking here of Bob Stewart.
Just today, I have been contacted by constituents urging us to do the right thing by the Ukrainian people, as, in doing so, we are doing the right thing by democracy. There is nobody in this House who believes that we should do nothing and allow Putin to carry out his plans for Ukraine. The call of freedom and democracy is far too loud, and the question for this House is how we respond.
It is clear from all the comments we have heard so far that, with respect to the Minister and the Government, the steps that are being taken are understandable but do not go far enough. I welcome the sanctions outlined in the statutory instruments, and I welcome these steps, but it must be made clear that they are initial steps—the first stage in what we do. They must be a precursor to decisive action taken with our allies, because it is clear that Russian aggression will not dissolve in the face of what will equate to a parking fine for a millionaire—irritating, but in no way life-changing. That disappoints me.
While we must not rush to war, we must not rule out the need for our troops, along with our allies, to remind Putin that democracy is something we have laid our lives down to protect before and that, if necessary, we will do so again. I firmly believe that NATO should invite Ukraine to join it, or Ukraine should apply to NATO and be accepted. Upon that acceptance, NATO troops could carry out NATO manoeuvres in Ukraine, support our allies against the aggression of Russia and protect the 44 million Ukrainians.
I thank the hon. Gentleman, my good friend. As I know, having spent a lot of time working in NATO, the problem is that NATO requires unanimity for any action. There are 30 members, and one of them is Hungary, which has already said it supports Putin. That will hamstring any action whatsoever.
I thank the right hon. Gentleman for that intervention. He always brings his wisdom and his knowledge to these debates. At the same time, I am the eternal optimist in this world; I always believe in better things to come—it is probably my nature—so I believe that NATO can reach out collectively and strongly to support that request from Ukraine, if it comes.
Putin has met with Macron, spoken with the PM and Zoomed with America’s president, yet those discussions have only allowed him more time to plan and co-ordinate, and time to wage his misinformation war online to stir up Russians who believe his lies and will stake their lives for the honour of their nation—honour that has not, in reality, been impinged by any actions of the Ukrainian people. We can debunk their videos by looking at timestamps and comparing sound files, and it is clear that misinformation is the cause of the day.
Putin has lied to us, he has lied to his own and he will continue to lie to fulfil his agenda. We cannot take anything he says at face value. We must make the most of the alliance of NATO, the EU and the USA. I have been heartened to see the American President remember that, rather than mere “Brits”, as he calls us, we are, he states, America’s greatest ally. We must be united in the steps that are taken. We must show Putin that division over our exit from Europe or any other issue will not stop the NATO alliance and our determination to meet these acts of aggression in a responsive and suitable manner, as our shared responsibility.
I am thankful for the Prime Minister’s statement of our defence capacity and state of readiness, and I am proud that our troops are well known to be the best in the world. Putin knows that too; while we consider sending troops, he must know there is a mechanism to make that happen if he does not immediately pull back from his nefarious aims.
I support these sanctions, but only as part of a clear and forceful plan to stand against Putin’s aggression and with those who stand for democracy. If we are silent now, there is no doubt in my mind that the forced reunification of the USSR will be the only end to Putin’s scheme. We have a duty to act. We must act with caution, with wisdom and with a cool head, but President Putin must be under no illusion: the British people will meet our obligations through this country and through NATO, with the co-operation of others and the USA, and take action in defence of the very same principle, so important and so critical, that our grandparents fought for and won the victory for—freedom itself.
I first thank the Minister for his courtesy and that of his officials in discussing the measures before us on a number of occasions over recent weeks, and I pay tribute to the FCDO staff in country, who have been doing so much in difficult circumstances. He can be assured that, as we spoke as one earlier on the overall response to the aggression of Putin’s Russian regime, we speak as one in wanting these measures to succeed, and we in the official Opposition support the principle of them today.
As my right hon. Friend Mr Lammy said in opening the debate, we sit in this Chamber with
“dark clouds gathering over Europe”.
We must be in no doubt about the clear and present danger not only to the sovereignty, territorial integrity and people of Ukraine, but to the rest of Europe.
Ukraine is not some far-flung land; the ties between Ukraine and my home of Wales are strong, deep and enduring—not least with the Donbas region, given our shared coalmining heritage. Indeed, Donetsk itself was founded by a Welshman, John Hughes, in 1869, on the site of an older town, and Luhansk was twinned with my own city, Cardiff, for many years. Cardiff residents have helped civilians hit by the impact of war over the past eight years, and Luhansk residents sent aid to help striking miners in south Wales in 1980s. These links run strong and deep.
I think too of young, optimistic and proud Ukrainians whom I taught in Ukraine in the early 2000s—of what horrors may now befall them and their families if Putin carries out further bloody and hostile acts. But I am absolutely sure that Ukrainians are proud, they are motivated, and they will resist; they will not welcome an imperialist invader with open arms. I think of the Russian and Ukrainian mothers who may see sons and daughters return, tragically, in coffins because of the paranoias and obsessions of this one man. Who is next: Moldova, Georgia again, our Baltic NATO allies or Finland? Those who had not already read Putin’s bizarre, dangerous and historically revisionist essay should be left in no doubt by his words yesterday evening or by the finally revealed truth emerging from the façade of lies built by him and his associates over recent weeks while others had entered into good-faith diplomacy and the pursuit of peace, mutual security and respect.
We need to wake up to what we now see unfolding before our own eyes. This is an invasion, not an incursion. These are not peacekeepers. In response, we must be bold, decisive, urgent, and under no illusions about the fact that only the toughest of measures that hit the pockets, property and privileges of those who facilitate and sustain the Putin regime may yet convince them to think again. They cannot and must not be able to use London or the United Kingdom as their bolthole. We must accept that the previous measures did not work and did not go far enough. Indeed, the section 46 report provided with these sanctions makes this clear, stating that the existing measures under the 2019 regulations have not achieved the desired outcomes. The Minister should be in absolutely no doubt—I am sure he is not, as he has heard the unanimous and powerful voices from all parts of the House—that we must go further, deeper and faster if we are to respond to the scale of the threat and have an impact on preventing further bloody escalation. I am afraid that, as we have heard, we have started too low and too slow. We have a chance to turn that around, and we as the Opposition will work with the Government to ensure that tough measures are implemented.
The Minister will have heard time and again questions about objectives and the desire to see the ratchet mechanism explained more clearly, so I hope he can do that in his concluding remarks. He said earlier that the objectives were to prevent further invasion and to seek withdrawal. Will he be absolutely clear about that and what the steps will be if further actions are taken? What will he do to deal with the asset flight by individuals and entities who are not sanctioned today, and banks that may be cashing in that are not included on the list and should have been? We have heard many names mentioned by hon. and right hon. Members. What is the implementation and enforcement mechanism in relation to these sanctions, not only here but in our overseas territories and Crown dependencies where many of these people are stashing their money? He has said much about further lists and further legislation. When are we going to see the legislation that allows us to target the members of the Duma who voted for this illegal recognition?
We need to be moving in lockstep with our allies. According to reports, the EU has today announced 27 individuals and entities that it will be targeting. Why are we not doing all that and more? What discussions have we had with the United States today about new measures that President Biden will be announcing? How are we going to further resource and expand our own sanctions unit to ensure that we can respond as needs be? I have asked questions about this and we have not been able to get clarity on the number of officials and the resources that it is getting.
There have been reasonable questions raised on a number of other technical matters. New legislation is unlikely to affect oligarchs close to Putin who do not hold an official position in a company and who own less than 50% of the shares. Will the Minister clarify that point? I have seen him shake his head a number of times during the debate. I am happy if he wants to correct and clarify anything, as it is really important that we get clarity on these matters. I understand that officers in companies who set policy but are not on the board cannot be sanctioned under the new legislation. Will he clarify that point? What is the situation regarding family members of sanctioned individuals? Will they also face sanctions?
We have heard powerful speeches from across the House. Tom Tugendhat made a tough and powerful speech saying that we need to put our money where our mouth is. Alyn Smith joined in the agreement that we need to take tougher measures. Sir Iain Duncan Smith, who is no longer in his place, spoke about the oligarchs holding Putin’s money stolen from the Russian state and where we need to be hitting, and again asked questions about the objectives and consequences. My hon. Friend Chris Bryant said that we have been recklessly naive for far too long, and also said that he could not understand the ratchet mechanism. Bob Seely and many others gave powerful and strong messages to the Minister, and I hope those have been heard and that the Minister has heard the will of the House today.
We stand ready to work constructively with the Government to urgently pass tougher and broader measures, whether that is under the regulations today, the Magnitsky sanctions regime or urgently considering further legislation needed to take action. We will work with the Government on those things. We are at a critical juncture. We need to act decisively and robustly. We know the Putin playbook—we have seen it in operation in Georgia, in illegally annexing Crimea and in supporting violence in the Donbas since 2014. Thousands of civilians and soldiers have already lost their lives.
For two months, Putin has menaced Ukraine’s borders, mustering the largest build-up of military forces in Europe since the second world war. Last night—we all saw the footage—he sent his troops to invade a sovereign democratic European state, in flagrant violation of international law and in violation of the diplomatic commitments that he and his own Government have signed up to over decades. The Minister served honourably and gallantly in the Royal Artillery, and I am sure he will agree that peacekeepers do not come into a country alongside artillery and tanks. It is absolute nonsense, and we can all see it for what it is. It is a crime against peace and an assault on international law, and the people of Ukraine have our complete solidarity. We admire their courage, we will champion their democratic rights, and we will support their right to defend themselves and the democracy they have built.
The effects of this moment will depend as much on our response to this aggression as they will on the aggression itself. Autocrats around the world are watching to see whether we meet this test of our strength and resolve. It is not a time for half-measures or naivety as to President Putin’s intentions. We should believe what we see written on the tin and act accordingly. Members on the Opposition Benches and across the House will stand with the people of Ukraine. We will stand unified in this country in the face of this aggression. Of that, Vladimir Putin and those who sustain his kleptocratic, corrupt and authoritarian regime should be in absolutely no doubt.
With the leave of the House, I will make a few concluding remarks and address some of the issues, queries and concerns that have been brought up by hon. and right hon. Members on both sides of the House. Those in the House who have been in government know that it is never a particularly fun experience at the Dispatch Box being questioned and criticised by both sides of the House.
The House may be surprised to hear that I have taken a huge amount of positivity from the exchanges today, because this House has once again spoken with such a commanding, concerted and collaborative voice in support of the territorial integrity, sovereignty and independence of Ukraine and in support of the Ukrainian people. More than that, this House has demanded of the Government that we go further with our sanctions—that they are harder and inflict greater economic pain on the individuals and entities in the Russian system who have done so much damage not just to the Russian people, but now also to the Ukrainian people. I am happy that is the tone of the House because I can confidently inform the House that it is demanding something of the Government that the Government are absolutely determined to do. It is pushing at an open door.
A number of questions have come up repeatedly, so I will address them.
I will rush on, because I was excessively generous earlier. The question was asked: will these sanctions be escalated only in response to further aggression? I can assure the House that these sanctions will be ratcheted up because of what has already happened, and not just in response to what might happen in the future. Our intention is to prevent even further invasion of Ukraine, to have those troops who are in Ukraine removed, and then to have them return to their home barracks once they are back in Russia. That is our ultimate aim, and the ratchet effect will be done to pursue that as a strategic aim.
There have been questions about asset flight. We are very conscious of this, and that is why we are not explicitly naming people or institutions that may be subject to future sanctions. It is also why it is very important that we work hand in hand with our international allies and friends, who are just as determined as we are to address this situation.
The shadow Foreign Secretary, Mr Lammy, compared what we have announced today unfavourably with what our allies say they are going to announce. If I were to say that this sanctions package is as far as the Government are willing to go, that might be a legitimate criticism, but the point we have made is that, just as our friends and allies intend to go further, we intend to go further. I have given some suggestions about where that additional ratchet effect may be focused, but we reserve the right to explore whatever is necessary to dissuade further aggression and to force Vladimir Putin to withdraw the troops that have entered Ukraine.
Questions were asked about the application of this statutory instrument in the OTs. This SI does cover the OTs. Members asked whether individuals who may not be in direct managerial or ownership roles would be subject to these sanctions. This SI is worded specifically to be broad in scope. I think implicit in the question my hon. Friend Mr Djanogly asked was that it might even be too broad in scope, but I can assure the House that it was written specifically to be broad in scope so that the ownership maze often put in place to hide the beneficiary of ownership can be addressed.
There have been some questions about family members. A family member is caught within scope where they are acting for or deriving benefit from their relationship with the Russian Government. However, just being the relative of someone who may be subject to sanctions is not necessarily enough on its own. There need to be reasonable grounds, and we always act with reasonableness, although we do act with firmness.
In the debate, it has sometimes sounded as if the only Russians subjected to UK sanctions are the ones who were named by my right hon. Friend the Foreign Secretary this morning. It is worth reminding the House that 58 entities and 186 Russian individuals are currently subject to financial sanctions under the Russia regime, including the ones designated today. There are already limitations on the activities in the UK of SberBank, VTB bank, Gazprombank and others, and as I say, we will not speculate on where future sanction designations may land.
Across the House, my right hon. and hon. Friends—including my right hon. Friend Sir Iain Duncan Smith and my hon. Friends the Members for Isle of Wight (Bob Seely) and for Tonbridge and Malling (Tom Tugendhat)—have called on us to do more, and their message was absolutely echoed, very effectively and eloquently, by Liam Byrne, my shadow, Stephen Doughty, and the hon. Members for Stirling (Alyn Smith) and for Oxford West and Abingdon (Layla Moran). I hear—the Government hear—exactly the points that they are making.
Right honourable. Exactly. It is appropriate to say that; apologies. The right hon. Member for North Durham made a point about what this framework enables us to do. This is the point we are making: this is legislation that enables us to apply sanctions very widely indeed and we will always do so in the way we believe to be most effective: that is, hand in hand with our friends and allies. We will repeat the message that the people of Ukraine have suffered enough. The aggression and intimidation must end. This will form part of our response to Vladimir Putin’s aggression. We will work towards a time when the people of Ukraine no longer live under the intimidation of Vladimir Putin, and indeed, as has been made clear by a number of Members around the House, the people of Russia can again enjoy a relationship with other countries around the world not tainted by the actions of this individual.
Question put and agreed to.