Repurposing Russian Assets to Rebuild Ukraine

– in the House of Commons at 4:57 pm on 27 June 2023.

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Photo of David Lammy David Lammy Shadow Secretary of State for Foreign, Commonwealth and Development Affairs 4:57, 27 June 2023

I beg to move,

That this House
condemns Russia’s illegal invasion of Ukraine;
stands in solidarity with Ukrainians in their resistance to Russia’s invasion of their sovereign state;
recognises the enormous damage that Russia’s invasion has caused to Ukraine’s infrastructure, economy and institutions;
commends the recent commitments made by the Government to support Ukraine’s recovery during the Ukraine Recovery Conference 2023; and calls on the Government to present a Bill before this House within 90 days to allow frozen Russian state assets held in the UK to be repurposed for Ukraine’s recovery.

Some of the most horrifying images from the start of the Ukraine war came out of Bucha, a city just outside Kyiv. Bodies of innocent Ukrainians were strewn across the street, some with their hands tied behind their backs, and dozens were buried in mass graves beside burned-out tanks representing Russian aggression. Today, much of the damage wreaked on Bucha has been repaired. Walking down its streets, it is almost impossible to imagine the atrocities committed just one year ago.

Rebuilding has become a motif of Ukrainian resistance. By April, Ukraine had cleared debris from 2,100 km of road, rebuilt 41 of the 330 destroyed bridges and renewed 900 railway points. But as Putin’s barbaric war continues, there remains so much more to do.

Putin’s illegal invasion of Ukraine began not last year but in 2014. However, for the past 16 months since the start of the full-scale invasion, Ukrainians have been continually bombarded from the land, the sea and the air by a dictator determined to destroy everything that their country represents: its freedom, its vibrancy—which I have seen on two occasions—and its spirit. Yet in the face of Putin’s barbarism, Ukrainians have defended their country with courage and a fierce determination to defend the values that they cherish. Ukrainians have shown themselves to be free and proud people who refuse to be controlled or subdued.

Since the invasion began we have seen that Putin will seek to destroy that which he cannot control. We should be under no illusion about the sheer scale of the destruction that Putin’s war has brought to Ukraine, nor about the high price paid by ordinary Ukrainians. The statistics speak for themselves. The United Nations estimates that almost 10,000 civilians have been killed. Millions more have been displaced from their homes. Over 150,000 buildings have been destroyed or damaged, including homes, schools, hospitals and many businesses. Tens of thousands of kilometres of road have been rendered useless.

Landmines and munitions are strewn across the country. Vast swathes of farmland have been ruined, forests have been burned down and national parks have been destroyed. Millions of Ukrainians have been forced into poverty, and parts of the country are facing a humanitarian crisis. In total, the World Bank estimates that up to $600 billion will be needed to fund Ukraine’s recovery and construction. That is around three times the size of Ukraine’s GDP, and the figure is rising by the day.

Beyond the physical damage, we must remember the profound psychological impact of the invasion on the Ukrainian people. A people who were full of optimism for the future are now having to come to terms with the loss of loved ones and the destruction of their homes and livelihoods. Where once there was hope there is now uncertainty and fear, with the war making it impossible to plan for the future. Although Putin has succeeded in bringing about destruction, Ukrainians have resisted through a sense of strength, defiance, innovation and ingenuity. What they have achieved, frankly, is astounding.

In the early part of the invasion, Putin tried everything he could to destroy Ukraine’s energy sector. In raid after raid, energy resources were the targets of bombs. At one point, almost half the power generation was destroyed. Yet only months later, Ukraine’s electricity grid is once again fully operational, and even exporting power to Europe. Streets that were reduced the craters have been rebuilt. Bridges that only months ago were destroyed are standing once more. Homes that were reduced to rubble are now rising again. Across Ukraine, people are doing whatever they can to get on with their lives and rebuild their broken livelihoods.

However, with all the ingenuity and strength in the world, Ukraine cannot take on the job of national reconstruction on its own, nor should it be expected to do so. Our greatest strength in support of Ukraine against Russia is our unity, as I said yesterday. Labour will continue to stand united with the Government, our allies and our partners until Ukraine wins. Likewise, we will stand with Ukraine as it begins the long and difficult process of rebuilding its proud country and forging the bright and ambitious future that Ukrainians deserve.

The Ukrainian people deserve justice for the suffering they have endured and they deserve to see Russia held accountable for its actions. Ukrainians have already paid the ultimate price for Putin’s imperialism and they deserve to rebuild their country without having to bear the burden of the cost. That is why the Labour party believes Russia must pay for Ukraine’s recovery. It is not just a matter of justice; it is also a matter of deterrence. If Russia is not held accountable for its actions it will only embolden it against others, and other aggressors will be emboldened. The message will be sent that the international community is not serious about preventing future wars. That is why it is vital we show Russia that there are consequences for aggression. We must make it clear that the world will not tolerate its actions.

Photo of Alexander Stafford Alexander Stafford Conservative, Rother Valley

The right hon. Gentleman is making a very powerful point. I sympathise with what he is saying, but I am also if not concerned then questioning about some of his calls. The way I hear it is that he is calling for reparations. After the first world war, huge reparations were put on Germany and we know where that ended up. The German populace felt that they could not cope with the reparations, and that lead to the second world war. The right hon. Gentleman is calling for Russia to pay. Can we make sure that that does not affect the people of Russia, so they do not create another conflict?

Photo of David Lammy David Lammy Shadow Secretary of State for Foreign, Commonwealth and Development Affairs

This is a debate about repurposing. The hon. Gentleman might remember that after the first Gulf war, oil revenues were used to rebuild much of Kuwait. That is the central point that this debate is about. There is a consensus globally on the issue, with the Canadians, the United Nations and US Senators making progress in this regard. The debate is about repurposing. We have to be very careful to get the balance right. It is clear that we cannot leave Ukraine to do this on its own, so the question is: do we have the will to make this happen?

Photo of Iain Duncan Smith Iain Duncan Smith Conservative, Chingford and Woodford Green

I am grateful to the Opposition for selecting this subject for debate. I cannot be here to make a full contribution, but I just want to ask the right hon. Gentleman a simple question. During a recent debate in this place, we pretty much came to a consensus that the first stage is to look to repurpose the frozen assets: $300 billion-plus of national assets and maybe $50 billion of individual assets. They are sitting in our hands. They are not the same as reparations; they are funds that are in very clear existence. A lot of international lawyers think it can be done. I just wondered what the right hon. Gentleman thought.

Photo of David Lammy David Lammy Shadow Secretary of State for Foreign, Commonwealth and Development Affairs

The right hon. Gentleman is right. He is right about the football team we both support—it is not the only thing he is right about, but he is right about that—and he is right that more than $300 billion of Russian state assets have been frozen by our global partners, with £25 billion here in the UK. The central point is that those assets are frozen, so the question is, what are we going to do now?

Photo of Margaret Hodge Margaret Hodge Labour, Barking

My right hon. Friend is making a very powerful contribution. I think there is large consensus in the House on this issue. I just want to draw attention to the facts. We actually do not know how much money has been frozen, either Russian state money or money relating to sanctioned individuals. There is a figure I have seen from the Bank of Russia which suggests £26 billion and figures from the Government that suggest £18 billion. Does he not agree that it is imperative the Government should openly tell us how much money has been frozen, who it comes from and where it sits, so that we can follow the money and ensure that justice is done for the Ukrainians in their country?

Photo of David Lammy David Lammy Shadow Secretary of State for Foreign, Commonwealth and Development Affairs

My right hon. Friend has been so assiduous on these issues over many, many years. She is absolutely right that we cannot have the necessary quality of debate without transparency. That is what we need. I do not think that that ought to be a matter of dispute between us and the Government; I should have thought that it was something on which we could agree. I hope the Minister will be able to tell us whether those figures can, in a transparent fashion, be put in the Library and made available to the Foreign Affairs Committee, so that we can all work on a common basis.

Photo of Liam Byrne Liam Byrne Labour, Birmingham, Hodge Hill

My right hon. Friend Dame Margaret Hodge has provoked me into intervening. Would we not be better served in the House if the Office of Financial Sanctions Implementation not only disclosed the full measure of the assets that we have frozen, but came to the House once a month to tell us what sanction waivers it had written that have allowed oligarchs with fortunes in this country to live high on the hog in their well-tended mansions, paid for with money that has been stolen from the Russian people? The Minister himself came close to agreeing with us in the Foreign Affairs Committee that our sanctions regime is in danger of being undermined by the Treasury writing sanctions waivers left, right and centre.

Photo of David Lammy David Lammy Shadow Secretary of State for Foreign, Commonwealth and Development Affairs

I agree with my right hon. Friend, who has raised these issues time and again. The concern is, of course, that there is not the appropriate ministerial oversight, that this place is being kept in the dark about fundamental, key issues, and that in the end the money of taxpayers in all our constituencies will fund these waivers. That is why the House should have both transparency and the opportunity to challenge and question those who make these decisions on our behalf. I hope that that is what Ministers are doing, but it does appear that this is happening without ministerial oversight.

Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Conservative, The Cotswolds

I agree entirely with the thrust of the right hon. Gentleman’s speech. Does he agree that the possible lacuna in the tracing of Russian assets is in Companies House and shell companies? Does he agree that we need to amend the regulations surrounding Companies House to provide proper verification of the people in charge of those companies, and allow Companies House to liaise more closely with the fraud authorities and report suspected fraud?

Photo of David Lammy David Lammy Shadow Secretary of State for Foreign, Commonwealth and Development Affairs

The hon. Gentleman is absolutely right. That has been a standing issue that the official Opposition have taken up. We do think further reform is necessary at Companies House, and we were slightly concerned that that was not supported by the Government in the Economic Crime and Corporate Transparency Bill.

Photo of Margaret Hodge Margaret Hodge Labour, Barking

I too have been provoked, by the intervention from Sir Geoffrey Clifton-Brown. He was right to say that the reform of Companies House and greater transparency about beneficial ownership are vital, but that will give us information only about companies, as opposed to trusts. Last week Lord Agnew of Oulton, a Conservative peer, successfully moved an amendment that would have provided some visibility in who controls trusts. We know that Abramovich, for instance, has transferred a large amount of his money into trusts controlled by his children, including a daughter aged about nine. If we do not have transparency, we cannot follow the money, and we cannot ensure that the assets of sanctioned individuals are really being held so that they can be repurposed to help the people of Ukraine.

Photo of David Lammy David Lammy Shadow Secretary of State for Foreign, Commonwealth and Development Affairs

I am, again, grateful to my right hon. Friend—first for raising the issue of transparency, and secondly for raising the issue of Lord Agnew’s amendment and endorsing the point that has already been made. I hope the Minister will tell us whether the Government might give that amendment some support, so that we can benefit from the satisfaction we should gain from this debate. I recognise that it is an Opposition day debate, and we are using our time as an Opposition to bring these issues to the forefront because it has been many months since the Government said that they wanted to act, but the debate is being held in a spirit of the national interest, and I hope everyone can recognise that.

The question, then, is “Who should pay for Ukraine’s recovery?” The Labour party’s view is that the answer is Russia, and one way of ensuring that this happens is repurposing Russian state assets that have been frozen in the United Kingdom. The Government have said at least since October 2022 that they are supportive of seizing Russian state assets to fund Ukraine’s reconstruction, but in the eight months since, no specific proposals have been forthcoming. From the very beginning of Putin’s invasion, Labour has worked with the Government to ensure that our sanctions framework is as effective as it can be, notwithstanding the issues that have been raised from both Back Benches today.

Photo of Chris Bryant Chris Bryant Chair, Committee on Standards, Chair, Committee on Standards

If I am honest, Ministers have been a bit flip-floppy about this issue. The Foreign Secretary was remarkably snooty about it in the House only yesterday, when he said that I am apparently an idiot because I do not understand international law. Some of us have been arguing cross-party in favour of trying to seize Russian state assets and repurpose them for the rebuilding of Ukraine. I thought that that was the accepted, long-term destination of the Government, even if they had not quite managed to get there. I think that the objection the Foreign Secretary has is around the State Immunity Act 1978. We would need to amend it to be able to proceed, but that is perfectly available to us.

Photo of David Lammy David Lammy Shadow Secretary of State for Foreign, Commonwealth and Development Affairs

That is, of course, central to the work my hon. Friend has been doing in his Seizure of Russian State Assets and Support for Ukraine Bill. I think the House could come together to amend the State Immunity Act. I do not want to comment on the Foreign Secretary, except to say that, in my experience, if he has had an overnight flight, he can be a little prickly, but we will not hold it against him.

Since the beginning of the invasion, more than £25 billion of Russian state assets have been frozen in the United Kingdom, and more than $350 billion of Russian state assets have been frozen by our global allies, and those vital assets could be used to help fund Ukraine’s recovery. Since February last year, my hon. Friend Stephen Doughty and I have been pushing the Government on this issue relentlessly, and I pay tribute to the great work of my hon. Friend Sir Chris Bryant, who tabled his ten-minute rule Bill specifically to speed up the Government’s efforts in this area.

Each time, the Government’s response to Members of this House has been that the Government support repurposing Russian state assets but that it is complex. We fully accept that, but we do not accept—and I do not think, given its mood, that the House accepts—that this issue is insurmountably complex or that we should not try to meet this challenge.

We accept the concern that, on the whole, it is not good for any Government to seize another state’s assets and that the right to property is fundamental to the rule of law, but there are exceptions to that rule. For example, the law reserves the right to fine people and deprive them of ill-gotten gains. In the same vein, we recognise concerns that repurposing Russia’s central bank reserves could violate Russia’s sovereign immunity but, again, there are exceptions to that rule. We believe that Russia’s continued refusal to comply with international human rights law or to follow the orders of the International Court of Justice are good grounds for such an exception.

Simply put, we believe that Putin’s full-scale invasion of Ukraine represents a wholly exceptional act, from which exceptional countermeasures can flow, and we are not alone in that belief. As the Minister will know, the Canadians have had legislation in place since December last year to repurpose frozen Russian assets, and it is a similar common law jurisdiction to ours. The European Union is working at pace to ensure that Russian central bank reserves can be repurposed by the summer. Last month, United States politicians laid a Bill that would allow for state assets to be repurposed. Finally, we must remember that the UN General Assembly has voted on this very issue, adopting a resolution that calls for Russia to pay war reparations to Ukraine and for states to transfer Russian state assets into a central bank account to be repurposed. This begs the question: why, then, are the Government lagging behind our international allies in this area? We believe we must rise to this challenge, and we must rise to it now.

Photo of Iain Duncan Smith Iain Duncan Smith Conservative, Chingford and Woodford Green

I apologise for interrupting the right hon. Gentleman again.

Sovereign immunity applies in international law to foreign judicial processes. It is clear in international law that sovereign immunity does not apply to administrative or legislative processes, such as Bills. It is quite possible for us to pursue this by tabling legislation, as America has, to secure that process in the courts. Sovereign immunity applies only to judicial processes, so it would be wholly feasible in legislative terms.

Photo of David Lammy David Lammy Shadow Secretary of State for Foreign, Commonwealth and Development Affairs

The right hon. Gentleman is absolutely right. Very few countries now consider sovereign immunity to be an absolute immunity, and there have been many exceptions. Meeting damages, particularly those awarded by international courts and tribunals, is one such example. The State Immunity Act also expressly restricts sovereign immunity.

I agree with the right hon. Gentleman that Russia’s continued refusal to abide by international law provides us with exceptions, and we should now table legislation to make it clear that there are exceptions.

Photo of Richard Graham Richard Graham Conservative, Gloucester

The right hon. Gentleman is making a powerful point about the importance of rebuilding Ukraine. All of us who were at the Ukraine recovery conference will have noted the key point that about $400 billion-worth of rebuilding is needed, coming from both the public sector and the private sector with huge support from the World Bank, and so on. Does he agree that part of this is not just getting Russian assets to play their part, very important though that is, but thinking about some of the softer aspects of rebuilding, including the work of organisations such as the Westminster Foundation for Democracy, to make sure that Ukraine emerges from this horrible invasion into a much better world, in all senses—a stronger democracy, less corruption and more for us all to be incredibly happy about?

Photo of David Lammy David Lammy Shadow Secretary of State for Foreign, Commonwealth and Development Affairs

The hon. Gentleman is right. President Zelensky committed to that at last week’s Ukraine recovery conference, and we need to support him. Democracy is forged in people-to-people contact. That was the case before the war—I remember meeting civil society in Ukraine and, frankly, they were very clear that there was work to be done—and it will most definitely be the case after the war.

Photo of Chris Bryant Chris Bryant Chair, Committee on Standards, Chair, Committee on Standards

That prompts another thought in my little head. Quite a lot of people on social media have criticised the idea of doing any reconstruction of Ukraine now, saying that we should wait until the end of the war. I hope the shadow Foreign Secretary will agree that that is a preposterous suggestion. People need homes, schools, playgrounds and hospitals now and, actually, quite a lot of rebuilding is already ongoing. We need to give that a rocket booster to make sure it can happen at pace.

Photo of David Lammy David Lammy Shadow Secretary of State for Foreign, Commonwealth and Development Affairs

My hon. Friend is right, and it is why I wanted to mention in my speech that work is happening in Ukraine now, which is extraordinary. We should be behind that work, in defiance of Putin’s imperialism.

We will continue to work with the Government to ensure that Ukraine gets the support it needs to win this war. From the start of this invasion, we have been united on providing Ukraine with the military, economic, diplomatic and humanitarian support it needs. We commend the Government for the commitments they made to support Ukraine at the Ukraine recovery conference last week. We welcome the International Monetary Fund’s announcement of $15 billion to support Ukraine over four years, and we welcome the announcement of £250 million of extra funding from British International Investment. However, just as we pressed the Government to move further and faster on sanctions, in a constructive spirit, at the start of the full-scale invasion, today we are urging the Government to come forward with a legislative plan to repurpose Russian state assets for Ukraine’s recovery.

Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Conservative, The Cotswolds

The right hon. Gentleman is a lawyer. Is he aware that one of the biggest arbitration cases ever is before the United Kingdom commercial court? It concerns the seizure by Russia, a month before it went to war in Ukraine, of several hundred civil commercial aircraft. That case is going to cover many billions of pounds, both here and in the US. When we consider what measures we take against Russia, should we not consider that act of expropriation by the Russian authorities?

Photo of David Lammy David Lammy Shadow Secretary of State for Foreign, Commonwealth and Development Affairs

The hon. Gentleman puts before the House an important case, which we should look at very closely, as it will be of concern to all of us in relation to how we move forward in these areas. It has been some time since I practised law, although I was pleased to be made an honorary doctor of laws by the University of Glasgow last week.

The UK has a part to play in supporting Ukraine not only today, but for tomorrow and in the decades to come. We believe that we can go further. The frozen Russian state assets held in the UK could have a transformative impact on the future of Ukraine. Let us imagine the good that £26 billion could do if we reappropriated it with the sole purpose of securing a positive future for the people of Ukraine. Russia forfeited its rights to these assets when Putin embarked on his barbaric and illegal invasion, and the least we can do is join our international allies in repurposing these assets for the benefit of Ukrainians. The Government have had more than a year to come up with this legislation, but there has been no plan, no action and no progress. We call on them to treat this matter with the urgency we believe it deserves and to come up with the required legislation within the next 90 days. That gets us to a place where in the autumn we could come together as a House to make this happen—if need be, this could be in the next Session of Parliament. Labour will support the Government in any way we can to make sure that this succeeds, and of course we will hold them to account if they should fail.

Photo of Leo Docherty Leo Docherty Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office) 5:27, 27 June 2023

Let me start by thanking Mr Lammy for the tone and substance of the debate, and indeed other colleagues who have participated. We are united in our outright condemnation of Putin’s brutal invasion of Ukraine, which is a fundamental violation of Ukraine’s territorial sovereignty. He drew a moving counterpoint between the terror and destruction of Bucha, and the remarkable appetite and spirit of rebuilding and reconstruction that is a motif of the Ukrainian people. That spirit of courage and determination was on magnificent display last week at our very successful Ukraine recovery conference.

The right hon. Gentleman also mentioned the capacity of Ukrainians’ innovation and their ability to make running repairs on all of their national infrastructure, including, most importantly, their electrical grid. That spirit of innovation and ingenuity will surely see them have a bright future, as and when Ukraine begins the rebuilding effort. That should not wait for the end of any conflict, but should be concurrent with the conflict. That was one of the main messages last week.

The right hon. Gentleman referred to the fact that unity is our greatest strength. The Government agree with that, and thank him and his colleagues very much for the consistent support they have outlined for our common efforts. We are right behind the efforts of the Ukrainians to rebuild their country now. The World Bank has estimated that rebuilding will cost £400 billion. Last week, there was a galvanising effort, where more than $60 billion towards Ukraine’s effort was outlined. It was a remarkable conference in terms of its convening power and the contributions from President Zelensky. As the Prime Minister said:

“Russia must pay for the destruction that they’ve inflicted. So we’re working with allies to explore lawful routes to use Russian assets.”

Those assets will pay for the damage Russia’s invasion has so recklessly caused.

That is also why, on Monday 19 June, we published new legislation to allow us to keep sanctions in place until Russia pays up. We are keeping up the pressure through our sanctions regime, with an unprecedented package targeting over 1,600 individuals, 130 of whom have more than £18 billion frozen. We believe in transparency and in keeping colleagues informed, so I will place an update in the House of Commons Library, showing the total value of assets frozen, to ensure that colleagues have the latest figure.

Photo of Margaret Hodge Margaret Hodge Labour, Barking

I do not think anybody can quarrel with the words the Minister has expressed, but I would like to urge him into action. Today, Lord Alton of Liverpool is moving an amendment in the House of Lords that would ensure that when somebody is sanctioned, there is a duty on them to disclose all their assets. If they fail to fulfil that duty, the agency could pursue them, as a criminal offence would have been committed, and seize the assets. That is a tiny window that we are opening, which would start to create the reality of seizing rather than freezing assets. Will the Government support that amendment? There will probably be a vote on it within the hour.

Photo of Leo Docherty Leo Docherty Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office)

I am grateful to the right hon. Lady for drawing my attention to that amendment. I cannot make a pronouncement on the Government position on it, as I have not read the amendment, but we will observe it and take note.

Photo of Liam Byrne Liam Byrne Labour, Birmingham, Hodge Hill

Will the Minister clarify the press release issued by the Foreign, Commonwealth and Development Office on 19 May? It said that

“consistent with our laws, Russia’s sovereign assets in our jurisdictions will remain immobilised until Russia agrees to pay for the damage it has caused to Ukraine.”

Will the Minister confirm whether it is now, in effect, the Government’s strategy to use frozen Russian assets to rebuild Ukraine?

Photo of Leo Docherty Leo Docherty Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office)

That legislation, which is a statutory instrument made using the affirmative procedure, gives us options in the future to extend sanctions, up until the point where Russia has paid. It gives us tremendous leverage into the future and has great utility.

We have maximised the impact of our sanctions by co-ordinating with our key international partners, at huge economic cost to Putin’s war machine. Russia’s economy posted a deficit of nearly $50 billion in 2022, the second highest in the post-Soviet era, and with our partners we are choking off Putin’s access to the key technologies he needs on the battlefield.

As I have mentioned, we are the first member of the sanctions coalition to lay legislation, which we did on 19 June, explicitly enabling us to keep sanctions in place until Russia pays for the damage it has caused. That builds on the commitment made by the Prime Minister and G7 leaders that sovereign assets will remain immobilised until Russia pays up. It also goes further, giving us maximum flexibility to act as the situation requires.

Our commitment does not stop there. As criticism of the war grows within Russia, we are introducing a new route for those under sanction to request that their frozen funds be used for Ukrainian reconstruction. Let me clear: there is no negotiation, no quid pro quo and no access for those individuals to their assets while they remain under sanction. However, if they wish to do the right thing and use those funds to help right the wrongs caused by Putin’s invasion, there will be an approved route for them to do so.

Photo of Chris Bryant Chris Bryant Chair, Committee on Standards, Chair, Committee on Standards

One sanctioned individuals who said, before he was sanctioned, that his assets could be given to the reconstruction of Ukraine was Roman Abramovich. The sale of Chelsea football club happened last May and I understand there is £2.3 billion sitting in a bank account. I am mystified as to why that money has not yet been handed over to the foundation. I have exchanged texts with the person who set it up. He said he is ready and he does not understand why he is not getting the money—he has not even been told why he is not getting the money.

Photo of Leo Docherty Leo Docherty Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office)

That is a non-governmental body. There are ongoing discussions with regard to the focus and the use of those funds—whether it be in Ukraine or outside Ukraine to benefit Ukrainians—which has drawn out the process, but we are seeking to expedite the matter at pace.

Photo of Chris Bryant Chris Bryant Chair, Committee on Standards, Chair, Committee on Standards

I am grateful to the Minister for giving way again, but discussions between whom? If Government Ministers are party to those discussions, what is the concern that people still have?

Photo of Leo Docherty Leo Docherty Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office)

It is not a Government discussion; it is a discussion within the new organisation that will disburse and utilise those funds. We will keep colleagues updated as and when that situation is resolved.

Photo of Chris Bryant Chris Bryant Chair, Committee on Standards, Chair, Committee on Standards

As I understand it, the Minister is saying that the members of the foundation itself are rowing with each other about to how to proceed, but surely that would not prevent the money being handed over by the Government.

Photo of Leo Docherty Leo Docherty Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office)

The hon. Member should not put words in my mouth. Details remain outstanding. A discussion is under way within the institution with regard to the focus and the utility of these funds. As and when that is clarified, I am sure that we will be able to keep colleagues updated. I remain grateful to him for his interest.

Photo of Margaret Hodge Margaret Hodge Labour, Barking

I am extremely grateful to the Minister for giving way again. Before that exchange, he was speaking about the ability of sanctioned individuals to voluntarily give some of their money to the Ukrainians. Can he reassure me, first, that this will not become a mechanism whereby sanctioned individuals can get themselves out of sanctions and continue to launder their money into the UK, and, secondly, that this is not a mechanism that will, in effect, buy them immunity from prosecution should they have committed an offence here in the UK?

Photo of Leo Docherty Leo Docherty Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office)

I am very happy to give the right hon. Lady an absolute assurance that it is not a mechanism for circumvention or for granting immunity. It is to ensure that those funds, if volunteered, can benefit Ukrainians.

We are tightening the net on those who are hiding assets in the UK. Under powers to be introduced by the Treasury, individuals and entities designated under our sanctions regime will be legally required to disclose assets they hold in this country. Failure to do so could result in financial penalties or the confiscation of assets.

We will legislate to require those holding assets in the UK on behalf of the Central Bank of the Russian Federation, the Russian Ministry of Finance or the Russian national wealth fund to disclose them to the Treasury. Our action will increase transparency on where those assets are held and limit opportunities for sanctions evasion. Taken together, these new measures mark a further strengthening in the UK sanctions approach against Russia, as Putin and his cronies continue their illegal war and as Ukraine embarks on its counter-offensive. This marks important progress, but I assure Members that our efforts will not stop there.

Many hon. Members will be aware of the active debate with our international partners on the use of sanctioned assets. As the Foreign Secretary and other Ministers have made clear to this House repeatedly, no country has yet found a legally tested solution to turn this commitment into reality at scale, despite various pieces of legislation having been laid or passed by our international partners.

We are at the forefront of a united effort, with our international partners, to see frozen assets repurposed for Ukrainian reconstruction. Nothing is off the table, and a cross-Government taskforce is considering all proposals carefully, including those that our partners may bring forward.

Photo of Liam Byrne Liam Byrne Labour, Birmingham, Hodge Hill

I thank the Minister for giving way; he is being characteristically generous. We might as well cut to the nub of the debate. Is it his ambition to bring forward to this House a Bill that fulfils the ambition of the Opposition’s motion?

Photo of Leo Docherty Leo Docherty Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office)

It is our ambition to find a legally workable route to repurpose Russian assets. As yet, no country has found one. We are working with partners to do so. As the House will appreciate, we must assure ourselves of the safety, robustness and legality of any proposal in this regard. If there is no legality, there can be no utility. That is why we continue to engage with every available option. The process will require creativity and innovation. I assure hon. Members across the House that we will continue to consider every lawful option to use sanctioned Russian assets to rebuild Ukraine.

Photo of Margaret Hodge Margaret Hodge Labour, Barking

I am extremely grateful to the Minister for his generosity. Can he perhaps explain what the Canadians are doing? It is my understanding that the Canadians have seized the assets. Would he consider being a kleptocratic state or perhaps being an aggressor state, as has been suggested, as concepts that could bring seizing state assets within the rule of law? There are two issues there.

Photo of Leo Docherty Leo Docherty Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office)

Our Canadian friends have legislated, but they have not yet found a legally watertight route to seizing those assets. The right hon. Lady speaks about other concepts that are of interest, and we will certainly consider them as we move forward.

Photo of Chris Bryant Chris Bryant Chair, Committee on Standards, Chair, Committee on Standards

I am very grateful to the Minister. I am sorry, but what is the legal impediment, to his mind?

Photo of Leo Docherty Leo Docherty Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office)

The hon. Gentleman knows a great deal about international law, so he will know that ideas such as these will be tested internationally and that if they are not watertight, they have no utility. It is not legally straightforward; this is entirely new ground and therefore it requires a robust legal framework. I think he would probably admit that it is unclear that one exists as yet. However, as ideas come forward, we are interested in testing them.

We are steadfast in our commitment to ensuring Ukrainian economic stability. We have committed to providing approximately £4.2 billion of fiscal support to Ukraine and, along with our G7 partners, we are committed to helping it to emerge from the war with a modernised economy that should be entirely resilient to Russian threats.

Let me conclude by saying that the recovery conference last week, which I referred to at the start, marked a further milestone in support for Ukraine and in ensuring that Russia pays for its actions. With our partners, we will keep up the pressure, while standing by Ukraine’s side until it wins and rebuilds.

Photo of Dave Doogan Dave Doogan Shadow SNP Spokesperson (Defence) 5:41, 27 June 2023

Where will we find half a billion dollars to rebuild Ukraine? The international community, certainly; the World Bank, almost certainly; the EU and/or the US, definitely—but we should certainly shine a very bright searchlight on the ill-gotten gains of the Russian elites who stood by and watched Putin, who relies on the co-dependency they create, systematically destroy the natural and built capital of Ukraine for reasons so spurious that they would be comic if they were not so egregious and deadly for the innocent people of Ukraine.

Let us not forget where the playgrounds of those Russian elites were. They were in Paris, in Manhattan and in Mayfair, and elsewhere in London, where their inexplicable wealth sloshed around the property markets, casinos and car dealerships of this city. The Londongrad laundromat was a clear and present threat to national security, but in the tension between national security and the Tories’ access to wealthy Russians, national security came off second best.

London is the most notorious safe haven for looted funds in the world, with much of the money hidden via London in offshore trusts in British overseas territories. Even after years of campaigning by SNP Members and other stakeholders, it took Putin’s barbarism against the people of Ukraine for the Conservatives finally to stop accepting Kremlin-linked donations and to impose sanctions on Putin and his cronies. It is clear now what lies behind this Government’s pedestrian approach to pivoting from freezing assets to seizing them: the sheer value of Russian assets held within the UK. In this instance, as in many others, when I say the UK, I of course mean London.

Contrast that with Estonia, whose Government have declared they will present a blueprint for how Russian frozen assets can be legally seized. Their goal is to use the funds to pay for Ukraine’s reconstruction. The Estonian Prime Minister, Kaja Kallas, said last month that her country plans to offer a legal rationale for the expropriation of the €20 million in Russian assets that it has frozen. What it is to be a small EU nation that can act nimbly and remain in touch with its populace.

However, a country does not have to be a small EU nation to do the right thing. In Canada, the Frozen Assets Repurposing Act aims to allow Canadian courts to take the frozen assets of foreign officials whose misrule creates forced displacement and humanitarian needs. It essentially foresees new powers to seize and sell assets of sanctioned Russian oligarchs while repurposing the proceeds to help with the rebuilding of Ukraine. In Switzerland, should an oligarch fail to demonstrate the lawfulness of their wealth, the law on asset recovery would allow for the confiscation of frozen assets without the need to commence a separate civil proceeding. The European Commission has also followed suit, presenting in May a new directive on asset recovery and confiscation. The proposal seeks to modernise EU rules on asset recovery through a series of measures, including an asset recovery and management office with the power to trace and identify criminal assets, ensure that frozen property does not lose value, and enable its sale for the purposes of rebuilding Ukraine.

Photo of Iain Duncan Smith Iain Duncan Smith Conservative, Chingford and Woodford Green

To clarify, there is a difference between the seizure of private assets and the seizure of state assets. Sovereign immunity simply does not stand in the way of the seizure of private assets, which requires only that legislation be passed, therefore negating the sovereign immunity. I accept that the Government could do that quite quickly—they have been talking about it—but state assets are a bigger issue because of state immunity. Again, legislative action could be taken, but it should be done in co-operation with other states so that there is no flight of capital.

Photo of Dave Doogan Dave Doogan Shadow SNP Spokesperson (Defence)

I thank the right hon. Gentleman for his intervention, particularly because he highlights, as he did in his earlier intervention, the issues to do with state immunity. At the heart of this debate is an appeal for urgency on legislation that tests the very boundaries to which he refers. I take no issue with that intervention.

In contrast with what is happening in other jurisdictions, the UK has yet to transform its words about hoping that the proceeds of sanctions pay for reconstruction into a more informed policy and legislation-focused debate with action to follow. The UK cannot afford to be the weakest link in the western alliance’s struggle against Russian illicit finance. We recommend, as a minimum, that the UK Government review the designation criteria underpinning the global anti-corruption sanctions regime to consider whether an abuse of function would provide greater flexibility for FCDO officials to impose designations. Any new legislation must be properly funded, of course. New laws are useful only if they are properly implemented with the correct resource. Economic crime has been the poor relation in UK policing for too long. Economic crime enforcement in the UK is woefully under-resourced, particularly given the scale of the challenge posed by dirty money in the UK economy.

The UK has taken some steps—if belatedly—to freeze assets, but it must now legislate at the earliest opportunity to seize Russian assets, in accordance with international ambition and international law, with adequate funding and in co-ordination with allies who have done the same. While other countries are taking strides to legislate for how frozen Russian assets can be lawfully seized, the UK Government are, thus far, yet to make the transition from warm words to legislative effect. We need a step change on that immediately.

Several hon. Members:

rose—

Photo of Roger Gale Roger Gale Deputy Speaker and Chairman of Ways and Means

Order. Eight Members are seeking to participate in the debate. We need to start the wind-ups at about 20 minutes to 7. It is a self-denying ordinance; I will not put a time limit on at this stage, but I may have to do so. If hon. Members could stick to six minutes, we will probably get everybody in comfortably.

Photo of Jonathan Djanogly Jonathan Djanogly Conservative, Huntingdon 5:48, 27 June 2023

The sanctions regimes, and measures taken under them against named individuals and Russian state assets, have played a vital role in the Ukrainian resistance, albeit one of a more slow-burning nature than military help. They are a slow-paced, grinding remedy against what has turned into a slow, grinding war in which bravery, defiance and the spirit and determination of enlisted men will ultimately allow Ukraine to prevail. We must play our part. As of May, records show that 1,604 individuals and 228 entities under the Russian regime are subject to the UK’s freezing sanctions to a value of approximately £18 billion. In addition, an estimated £26 billion of Russian state assets are frozen here in the UK. Russia is the most sanctioned country in the world, and while innocent Ukrainians continue to be killed for Russian imperialist ambitions, that must remain the case. More broadly, it is estimated that some £275 billion-worth of Russian assets have been frozen worldwide.

The Government are actively freezing assets. Freezing is good, but reallocating frozen assets to Ukraine’s benefit will be better, not least because of the monumental sums that are estimated to be needed to fund reconstruction—that is, reconstruction of homes, businesses, infrastructure and lives. I was therefore interested and pleased to read the detail of the statutory instrument—the Russia (Sanctions) (EU Exit) (Amendment) (No. 2) Regulations 2023—laid by the Minister of State, Foreign, Commonwealth and Development Office, my right hon. Friend Mr Mitchell, last Monday. Its introduction enables freezing order sanctions to be maintained until Moscow pays compensation to Ukraine for the destruction that Russians have caused and will continue to cause until the war ends. It is a positive step towards the calls that I and many other Members of this House have been making for assets forfeiture, although we are certainly not there yet.

As part of the joint Foreign, Commonwealth and Development Office, Treasury and Home Office press release last week detailing these new legislative measures, I read with interest that the Government’s

“proposal to force sanctioned individuals to disclose UK assets will bring in greater transparency and leaves less room to hide.”

This proposal is long overdue, and I encourage the Government to make it a legal reality as soon as possible. Could the Minister explain the planned legislative process to enable that?

Questions over the specifics of the proposal remain. When brought forward, it is crucial that if sanctioned individuals are found to be in breach of the legislation, the proposal should open all their frozen assets to seizure and reallocation. I ask the Minister: would a breach of this provision cover an individual’s entire sanctioned asset base—at least that in the UK, and not just that which may have been found to have been hidden? That would have the dual effect of equipping the Government with a large motivational stick when it comes to greater transparency and allowing the effective forfeiture of a potentially significant amount of assets if breaches are identified. Both effects are desirable, and I would be interested to hear whether the Minister agrees.

Ultimately, the strength of the UK’s response to Russia’s attack on the post-1945 world order rests on being in lockstep with our international allies. The US, the EU and Canada are all proactively working on or have already implemented means of asset seizure and reallocation, even if only in a limited way. The move to allow frozen assets in the UK to be allocated towards Ukraine’s reconstruction complements similar moves in the US and Canada last year and EU proposals made earlier this month. All of this is very welcome.

Photo of Julian Lewis Julian Lewis Chair, Intelligence and Security Committee of Parliament

I am grateful to my hon. Friend for giving way, and I apologise for missing the opening of the debate. Has any consideration been given to what should happen to the interest or other income generated by those assets during the period that they are frozen? Surely, even if the assets are not seized in the end, their owners should not benefit from anything that the assets earn during that frozen period.

Photo of Jonathan Djanogly Jonathan Djanogly Conservative, Huntingdon

My right hon. Friend makes a different but important point. That aspect has been pursued by the European Union; in fact, I believe that it set up a committee a month or two ago to look at that very point. I think it is a very good idea, and we should certainly be pursuing it. Obviously, all these sanctioned assets cost money to keep—flats have to be maintained; boats have to be maintained—and we should be using income from these assets at least to pay for the maintenance of them, if not to get income that we can then give to Ukraine. He makes a very good point.

The Minister said earlier that the use of frozen assets towards reconstruction would not be allowed as a means of circumvention. It would, however, seem rather unlikely that a Russian sanctioned person would permit their frozen assets to be donated to Ukraine unless there was some benefit to them, such as sanctions cancellation. Perhaps the Minister could explain why else the sanctioned individual would want to do so. Why would they want to give their assets to Ukraine if there was not a deal to be had? The Ukrainians, it has to be said, have expressed concern at the prospect of deals being done with oligarchs in individual countries—they think that might breach the wall, so to speak. As such, could the Minister confirm that if deals are done at all, they would only be done on a multilateral basis?

To make one final point if I may, the original purpose of our adopting the Magnitsky sanctions was to protect those whose human rights are ignored by foreign regimes. As the Russian Federation staggers on, we must remain vigilant towards those of its citizens who support democracy. At this very moment, Open Russia’s vice-chairman Vladimir Kara-Murza—twice poisoned, and now sentenced to 25 years—languishes in a Russian prison, even though his lawyers and family are unsure of his exact whereabouts. Mr Kara-Murza, whose brave wife I had the honour of meeting in Parliament last week, is a valiant spokesman for democracy and human rights. The Government have sanctioned only five of his dozens of tormentors; even Lithuania has sanctioned 15 of them. As a British citizen, should Mr Kara-Murza not expect us to be leading the way on this issue? I hope that Ministers will now respond with appropriate resolution.

Photo of Nia Griffith Nia Griffith Shadow Minister (International Trade) 5:55, 27 June 2023

I rise to speak in this very important debate on repurposing Russian assets to rebuild Ukraine. I congratulate my right hon. Friend Mr Lammy on setting out so clearly the case for doing so, and my hon. Friend Stephen Doughty on his work on the issue.

In February of this year, I had the privilege of going to Ukraine with the all-party parliamentary group on Ukraine on the anniversary of last year’s invasion, and to see Irpin and Chernihiv. There, we saw the destruction of bridges, homes and schools—a reminder of the fact that Russians have targeted civilian areas so often—and the need for generators, because time after time those areas have been hit by power cuts. However, all of that pales into insignificance against the destruction in the east, where whole cities—homes, hospitals and schools—have been left with no power supply and no water, their populations dispersed abroad, to other parts of Ukraine or to the frontline. We have also seen the flooding from the Kakhovka dam, and of course, vast areas of agricultural land are unusable now because of landmines. The task is absolutely immense.

This month saw the Ukraine recovery conference, held in London. A number of events and meetings ran alongside it, including Inter-Parliamentary Union events, which I was able to attend. It was very moving to hear Ukrainian MPs speak of the huge challenges facing their country, but impressive to see their absolute determination to build back better, strengthen democracy and tackle issues such as corruption. Time after time, Ukrainian MPs made clear that they want Russian assets seized to rebuild Ukraine.

We have to admire the immense resilience and determination of the Ukrainian people to rebuild. I have found that whether meeting bosses from the biggest telecoms company in Ukraine, whose workforce have repeatedly been the first out there to restore communication after yet another Russian hit; meeting the CEO of Naftogaz, who stated plainly that tackling corruption has to come before reconstruction; and meeting the deputy Minister for digital technology, who described some of the remarkable progress made in the digital sphere. However, he also pointed out that his departmental budget has been cut by 86%, with the money redirected to the Defence department. That reminds us of the huge economic challenges that Ukraine faces.

The task is enormous; the World Bank estimates that some $400 billion is needed to reconstruct Ukraine. Using frozen Russian state assets must be part of that, but the UK appears to be lagging behind. In the US, the Rebuilding Economic Prosperity and Opportunity for Ukrainians Act, which would give the US President the power to confiscate Russian assets frozen in the US, has been introduced in the Senate and the House of Representatives; and in Canada, the Government are looking to seize $26 million from Granite Capital Holdings Ltd. But here in the UK we are still lagging behind.

This issue has been raised time after time in this House. We had a whole Backbench Business debate on the issue not very long ago, in which suggestions and mechanisms were set out very clearly by my right hon. Friend Liam Byrne and others. Today, we have heard suggestions on what could be done from my right hon. Friend Dame Margaret Hodge and my hon. Friend Sir Chris Bryant. Time after time, we have made it very clear to the Government that they need to move faster on seizing frozen Russian state assets so that they can be used for rebuilding Ukraine.

Recently, like Mr Djanogly, I had the immense privilege and the very sobering experience of meeting the Evgenia Kara-Murza, the wife of Vladimir Kara-Murza, a prominent Russian dissident who has spoken out against the war in Ukraine. She told us of the terrible treatment of anyone speaking out and opposing or seeming to oppose the war, with detentions and arrests all the time, the routine torture of prisoners and the removal of children from so-called dissident parents. We heard how, back in November 2022, Canada first sanctioned Vladimir Kara-Murza’s persecutors, and how in March the US also sanctioned all 38 of his persecutors. However, to this day the UK has only sanctioned five. I have to tell the House that Vladimir was actually brought up in the UK and has UK citizenship, so I implore the Minister to make it a priority to sanction the remaining 33 persecutors, and to do everything possible to secure the release of Vladimir. Rather than lagging behind in this case, the UK should be taking the lead.

Many businesses in the UK have had to make alternative arrangements and different business decisions because of the sanctions regime. Although this may have been inconvenient or costly, they understand and accept the importance of using the strongest possible sanctions against Russia to try to exert maximum pressure on Putin’s regime to stop his illegal invasion of Ukraine. I would hope that Departments want to set an example by making sure they too stick rigorously to all sanctions, and do everything possible to ensure that no taxpayers’ money is inadvertently finding its way into supporting Putin’s regime.

In this context, I raise the question of the Home Office planning to use the Stradey Park hotel in my constituency for housing asylum seekers. The Stradey Park hotel was taken over a couple of years ago by an investment firm, which then sold investments in parts of the hotel, rather like timeshares, to a whole range of investors. There are now some 77 of those investors registered at the Land Registry as part owners of the hotel, and they can of course receive dividends from their investments in the hotel. One of them is a Russian domiciled in Russia, so the question is: what due diligence has the Home Office carried out to ascertain what connections this individual has with any individual, entity or sector against which we have sanctions? Departments should be taking extra care to ensure that no taxpayers’ money is being used in any way that inadvertently breaks sanctions.

In conclusion, I would like to stress to the Minister the need to be meticulous about the implementation of sanctions, and I urge him to speed up taking the necessary steps to enable Russian state assets to be seized and repurposed to rebuild Ukraine.

Several hon. Members:

rose—

Photo of Roger Gale Roger Gale Deputy Speaker and Chairman of Ways and Means

Order. Before we proceed, I think as a courtesy I should explain to the House that I have given consent to certain hon. Members to leave in order to attend a meeting with a very senior Ukrainian military officer. It is no discourtesy to the House; they have my consent.

Photo of Robbie Moore Robbie Moore Conservative, Keighley 6:02, 27 June 2023

Following the comments that all Members have made, I am sure we all agree that Russia’s appalling assault on Ukraine is an unprovoked, premeditated attack against a sovereign democratic state. Our Government, through their actions, have illustrated that they are completely committed to supporting Ukraine in its fight to liberate the country.

We are all supporting Ukraine, as we are the world’s second-largest military donor, with this Government having given £2.3 billion in military aid. This year we have given a total of £9.3 billion of humanitarian, economic and military support. We are also training many Ukrainian pilots and troops in the UK and offering sanctuary to well over 230,000 Ukrainians. I am proud to say that many of them have made Keighley, Ilkley and other parts of my constituency their home, and I have been pleased to meet many of them.

We are also punishing Putin’s regime with the most severe set of sanctions that Russia has ever seen. We are sanctioning over 1,500 individuals and entities, and freezing £275 billion of their personal assets. Those sanctions are specifically designed to deal a severe blow to the Russian economy, hobble Russia’s military-industrial complex and punish Putin and his allies, including 120 oligarchs worth over £140 billion combined.

In addition to those sanctions, we have ended imports of Russian coal and oil, cutting off a key source of funding for Putin’s regime, while limiting the impact on our consumers. We have also stopped the export of high-end luxury goods to Russia and sanctioned Putin and his political allies, including Sergei Lavrov, hitting the Kremlin regime at its heart. We are working, too, in lockstep with allies to exclude Russian banks from the SWIFT financial system. Our sanctions hit not only Russia but it allies in Belarus. We are sanctioning Belarus for aiding and abetting Russia’s illegal invasion, making sure not only Russia but its allies feel the economic consequences of support for Putin.

Of course, our sanctions are only one part of what we are doing as a country. We have also provided much military support for Ukraine, including by donating Storm Shadow missiles, giving it the long-range strike capabilities it needs to defeat Russia and liberate its country. We will deliver £2.3 billion of military support this year in addition to the Challenger 2 tanks and self-propelled guns we have already provided, and the hundreds of armoured vehicles and advanced missiles that we provided last year and at the beginning of this year. We have also committed to train 20,000 Ukrainian troops this year, building on the success of the training programmes we have put in place which saw 11,000 Ukrainian troops trained last year, and we have provided £4.7 billion in economic and humanitarian aid to the Ukrainian people.

The Prime Minister took part last week in the Ukraine recovery conference, at which he secured well over £60 billion of combined support from other countries, galvanising international backing for Ukraine in the face of Putin’s ongoing attacks. The conference raised that money to go towards Ukraine’s recovery and reconstruction from nearly 500 countries as well as the G7 and EU member states. That is on top of our announcing last week a multi-year financial support package worth over £2.5 billion for Ukraine, helping Ukrainians win the war.

One year on, this Government are absolutely illustrating that we remain committed more than ever to making sure Putin’s barbaric venture will fail, and we will continue Ukraine’s fight as long as it takes until the war criminal Putin is brought to justice.

Photo of Andrew Western Andrew Western Labour, Stretford and Urmston 6:07, 27 June 2023

It is not possible to calculate the true cost of Putin’s barbaric attack on Ukraine—the misery caused by the death, destruction, and despair he has inflicted cannot be quantified—but there are some costs that we are able to calculate, enormous though they are. We know that the illegal invasion has caused approximately $137.8 billion of damage to Ukraine’s infrastructure, and we know that approximately $50 billion-worth of damage has been inflicted on Ukraine’s housing stock and that its agricultural sector, which is vital to countries beyond Ukraine, has seen a hit of $9 billion.

Behind each of these statistics are of course people—people who must pick up the pieces of this carnage. It is essential that we provide them with every possible means of support to do that. So I am pleased that the Opposition have secured a debate today to push forward a vital way in which we can fund this support. For it is not enough to fully stand behind Ukraine’s resistance to Putin; we must also be fully behind Ukraine’s recovery after, as I hope, this awful war has ended and Putin has been defeated. I fully back today’s motion, which is consistent with the unwavering support we have shown for Ukraine in the last year.

As we have heard today, the cost of rebuilding Ukraine is estimated to be around $400 billion, equivalent in scale to the Marshall plan that helped rebuild Europe after the horrors of world war two. We must pull every lever at our disposal to help meet that cost. One such lever is the repurposing of seized Russian assets. From the very beginning of Putin’s invasion, Labour has called on the Government to do that. In that time, conservative estimates state that the UK has seized more than £18 billion and possibly, as we have heard today, up to £26 billion in Russian-owned assets, and I commend that effort. I also commend the Government announcement last week that Russian sanctions will remain until compensation is paid to Ukraine. However, we must go further and faster. There are vast numbers of Russian assets in this country, often acquired through the corruption of the Russian state. It is morally and politically right to re-purpose them.

Photo of Matt Western Matt Western Shadow Minister (Education)

I commend my hon. Friend on making an excellent speech. Does he agree that Canada is showing exceptional leadership in how it is dealing with the seizing of ill-gotten Russian assets gained from Ukraine?

Photo of Andrew Western Andrew Western Labour, Stretford and Urmston

My hon. Friend makes an important point, and I will give some other examples later on of other institutions and nations that are also leading the way in that regard. For all that there is unity across the House in our support for Ukraine, the Government have not made enough progress on overcoming the obstacles that stand in the way of repurposing Russian state assets. Indeed, we had a debate in this place on these issues back in March, when my hon. Friend Stephen Doughty set out a timeline of Government commitments: Ministers had said on five occasions between July of last year and February this year that they were considering all options on using seized Russian assets to help rebuild Ukraine. We are a year on now from those first commitments on repurposing assets, and it is not clear that we are any further forward.

I urge the Government to take inspiration from what is happening not just in Canada but in the US, where legislation has been introduced in the Senate and the House of Representatives that would give the US President the authority to confiscate Russian assets frozen in the United States and transfer them to help Ukraine. The European Commission President has said that the EU bloc will put forward a proposal before the summer break on how the proceeds from the more than €200 billion belonging to the Central Bank of Russia frozen in the EU will be used to be pay for Ukrainian reconstruction. That is the level of urgency we need. I hope that when the Minister rises to wind up, they can let the House know what conversations the Government have had on the feasibility of replicating measures taken by our allies in the US and the EU.

We are all agreed on the importance of maintaining western unity in support for Ukraine, and part of that must not be falling behind our allies in the efforts to make Putin take financial responsibility for the damage he has done. The unity that exists in this House to support Ukraine is vital, but as part of that united effort, we must be able to press Ministers to go further and faster when it is needed. That is what today’s motion is about. I know that it is difficult, but Ukraine has no time to wait. We must see a concrete plan soon. The Government will have support from across the House in drawing it up and implementing it.

Photo of Catherine McKinnell Catherine McKinnell Chair, Petitions Committee, Chair, Petitions Committee 6:13, 27 June 2023

The illegal and unjust war that President Putin has waged in Ukraine has now lasted for 16 months, and it is likely to be some time before it comes to an end. As the shadow Foreign Secretary, my right hon. Friend Mr Lammy outlined, Ukraine, a country of more than 40 million people, has been subject to devastation on an unimaginable level. The country’s critical infrastructure has been deliberately targeted by Russian attacks, with hospitals, roads, energy infrastructure and hundreds of thousands of homes callously destroyed. But Russia’s illegal invasion has broken neither the Ukrainian people’s spirit nor the resolve of NATO and allies to stand alongside them both now and once victory has been achieved, as Ukraine rebuilds from this inflicted disaster.

As hon. Members have outlined, the World Bank estimates a recovery cost of more than $400 billion; it may cost up to $1 trillion. It is hard to wrap our minds around those figures, but, whatever the cost, the Ukrainian people deserve to emerge stronger from the conflict, and Russia needs to see that Ukraine emerges stronger from it. It is therefore absolutely right that we are thinking about how we best support Ukraine now and into the future. We should plan for victory and what that means. While Ukraine’s future must be determined by the Ukrainian Government, we must be doing all we can to support and contribute to the international effort that is clearly required.

That brings us to Russian assets here in the UK and whether and how they should be used for that reconstruction. The UK’s commitment to Ukraine has been steadfast, and proudly so, yet on this question we seem to be lagging behind. Our allies in the US and the EU are already taking steps towards developing the legislation needed to repossess Russian state assets to contribute to mending the impact of this illegal war. We must clearly act within the law, but we cannot hide behind the law. It is for us as legislators to find the legal means necessary to maximise financial support for Ukraine.

For far too long, the UK—London in particular—has been a repository for Russian wealth. The London laundromat served as a haven to billions of pounds of Russian money. We have a moral duty to put things right. We also have a significant opportunity to do that, and the need to do that speaks for itself. It is a matter of justice. The Treasury’s commitment to producing a plan that will criminalise the non-disclosure of Russian assets is welcome, but we need to see it and know when it will be introduced. There is no time for delay.

We need to start planning now for investing in reconstruction projects and ensure that every dollar and pound possible reaches Ukraine. To that end, I absolutely welcome the clarification sought by my right hon. Friend Dame Margaret Hodge for the Government to publish transparently where Russian assets are held, how much they are and who they have come from. We must also take steps to ensure that whatever money is transferred in whatever form and however it is spent—I appreciate that there was a debate about that, which could explain some of the delays—we minimise the risk of any corruption.

The Government must start turning their rhetoric into action. We have heard for months about the intention to ensure that Putin pays and that these assets will be used, but warm words will not help Ukraine. Ukraine needs to rebuild itself, and we need to create the legal mechanisms to give it support to do so.

Once Ukraine succeeds, it needs not only to recover but to thrive. Whether that costs $400 billion or $1 trillion, it is clear that Russia and Putin must contribute towards repairing the immense damage they have caused. We can support making that happen. We have the means to do so by ensuring that the proceeds of Russian state assets held here in the UK go towards building Ukraine’s future. We need to give Ukrainians back their future—a future that they deserve—in a stable, secure and democratic state, where they can rebuild their lives. Let us as a country continue leading on support for Ukraine, and let us lead on financial support, too. Let us see the Government put their money where their mouth is, support our motion and show how they will ensure that these frozen Russian state assets are repurposed to rebuild Ukraine.

Photo of Layla Moran Layla Moran Liberal Democrat Spokesperson (International Development), Liberal Democrat Spokesperson (Foreign and Commonwealth Affairs) 6:19, 27 June 2023

None of us will forget waking up nearly 18 months ago to the most dreadful scenes—images of war—happening on our doorstep in Europe. The people of Ukraine have endured the most unimaginable hardships in the last year and a half. I add my voice and that of the Liberal Democrats to today’s messages of solidarity with the Ukrainian people. We have not forgotten them, and we will continue to stand with them.

I also extend my thanks to the people of the UK. We must all be proud of the support that we have seen in this country. The British public have shown their deep generosity over the last year, opening their doors to Ukrainians. Over 2,000 Ukrainian guests have arrived in my home county of Oxfordshire—the fourth highest of any local authority in England. I opened my door to them, and it was a wonderful experience that I would highly recommend to anyone.

That war is not over, and it is vital that we do not rest on our laurels while Putin and his cronies continue to wage unimaginable destruction. We have known since the beginning that the best way to hit Putin where it hurts is through the wealth and assets of his cronies. We know that he funnels money through his oligarchs, which they squirrel away in property, superyachts and shell companies. They also hide it in far less glamourous places.

It was recently reported in Private Eye that the developers behind Botley West Solar Farm in Oxfordshire are potentially backed by dubious Russian money. Botley West would be the largest solar farm in Europe, sited on Blenheim Palace and Merton College land. The company behind it, Photovolt Development Partners, is registered in Germany but owned by Cyprus company Cranssetta Investments Ltd. The sole shareholder is a Yulia Lezhen.

A New York court case last year revealed that Yulia Lezhen’s husband, Dmitry Glukhov, was the primary beneficial owner of a goldfield development company that borrowed $58 million from Uralsib bank. The litigating company said that there was never any goldfield to be found. It looked for infrastructure, but did not find it. It alleged that the company was, in fact, a front to syphon off assets. It further said that it was not the only one, and that there were dozens of such companies, of which Photovolt—about to build to Botley West—was one. I ask the Minister: how can we know that Russian money is not still being greenwashed through our economy here in the UK? I would welcome a meeting with him or Treasury Ministers to get to the bottom of where the money is coming from.

Further historical questions remain for the Government about the money, most notably golden visas. A review of them was promised five years ago. The Government finally delivered a, frankly, pathetic statement a few months ago. I continue to challenge them to release the full report. If they have nothing to hide, they have nothing to fear. The cross-party work that we did in this place on the Economic Crime (Transparency and Enforcement) Act 2022 has been some of the most valuable work I have done in Parliament. It was a real opportunity to ensure that we are able to better fight kleptocracy and economic crime, not just in this case but in others in future.

It is not enough that we have seized Russian assets; it is time that we send those assets to where they will make the most difference. As we have heard, the estimated bill for post-war construction is in the order of $400 billion. The Ukraine recovery conference last week made an important start to those discussions. I welcome the UK’s part and our pledges. But the real prize is that $400 billion: all the assets we know exist that we could send. We are still unclear on what is stopping the Government from doing it. All I would say to the Minister is this: we have done it before and we can do it again. Where there is a will in this House, we can pass legislation quickly to help the Government. I urge them to come up not just with warm words, but a plan for how they will repurpose the assets and get them to where they are needed before it is too late. If we do not start rebuilding Ukraine now, morale will dip and that itself will affect the war effort.

The leader of the Liberal Democrats’ sister party Holos, Kira Rudik, said:

“This is the way we will ensure justice for all and will give a clear signal to other tyrannies about what consequences await them in case of encroachment on other people’s property.”

The Liberal Democrats continue to be proud to stand shoulder to shoulder against tyranny and will stand with Ukraine until it is victorious. When the Ukrainians are victorious, we will not walk away and leave them to pick up the pieces, or indeed the bill, alone.

Photo of Liam Byrne Liam Byrne Labour, Birmingham, Hodge Hill 6:25, 27 June 2023

I would like to start with a word of praise for what was a brilliant opening speech by my right hon. Friend Mr Lammy, the shadow Foreign Secretary. He gave the House not just a cry of anger or a plea for solidarity, but a demand for justice. Justice is exactly what the people of Ukraine need and they need it now.

There are three questions at the core of this debate, which were eloquently set out by the shadow Foreign Secretary: a practical question about who pays for violence; a moral question of who is punished; and a political question of how we in this country stay on track and keep pace with our allies. We should start with the question of who pays, because that was where we ended last week at the Ukraine reconstruction conference. As we heard, the bill for reconstruction is now enormous: $400 billion and counting, a one-third hit to Ukraine GDP, a fiscal deficit that is through the floor and interest rates that are through the roof. Where on earth will that money come from? We give thanks to the Bretton Woods institutions, which, best case, have mobilised something like $55 billion between them. Notwithstanding the money that was raised, promised, committed and vowed at the reconstruction conference last week, the gap is still enormous. That gap takes us to the question of justice and the requirement on Russia to make good the gap.

Ultimately, we on this continent of Europe are not simply a rules-based order; we are a rights-based order. In the ashes of world war two, we stood together with 10 of our great allies and, on 5 May 1949, founded the Council of Europe, which Churchill declared would hold up

“moral concepts…able to win the respect and recognition of mankind”,

a council united behind what Churchill called the charter of human rights

“guarded by freedom and sustained by law.”

That is the charter Russia signed in May 1998 and that is the charter it has breached ever since. If we believe in rules, we believe in punishment for those who break the rules. If we believe the aggressor must pay, then we must punish the aggressor. If there is no sanction, sentence, penalty or punishment for those who break the rules, we can expect those rules to be broken time and time and time again. Is that not the lesson that we should learn from even a casual glance at Russia’s history: the throttling of Berlin in 1948, the invasion of Hungary, the invasion of Czechoslovakia, the invasion of Afghanistan, of Georgia, of Moldova, of Ukraine? When are we ever going to learn the necessity of re-containing Russia? We cannot change the geography of Russia, but we can and we must end Russia’s ceaseless choreography of war.

This is no time for the sentence to be deferred. Why should the people of Ukraine wait? Why should they suffer in the sight of their enemies luxuriating in riches while their soldiers die and their children shelter in basements? Why should they watch oligarchs who stole from the people of Russia live high on the hog in their well-tended mansions here in London and elsewhere. Why should the gold of the Russian central bank, all £170 billion of it, sit gathering dust in a vault while the Ukrainian people suffer? That is not justice. Justice deferred is justice denied. Every day that we fail to take action is a day that we fail Ukraine, a day that we fail justice, a day when we neglect our duties to stand up against the brutal code of tyrants who think that might makes right and the strong do what they can while the weak suffer what they must. That is why we have to ensure that Russia picks up the bill for Ukraine’s reconstruction today.

That is the case for justice. As for the political case, it is pretty straightforward. Our allies are moving forward in not just freezing but seizing assets; is it not time we moved with them? The United States Senate is moving forward; is it not time we moved with it? The Canadian Government are moving forward; is it not time we moved with them? The President of the European Commission says that the frozen assets of the Russian central bank will be used to pay for reconstruction; is it not time we moved with the EU? Why should we fall behind? Our allies are sending a message to us here in the House—pick up the pace!—and that is the message that we send to the Minister.

It is time for us to crack on. First, as the shadow Foreign Secretary says, we need a Bill to be brought to the Dispatch Box within 90 days. Let us make sure that it amends the State Immunity Act 1978, which gives central banks immunity from jurisdiction and from enforcement. Let us empower Ministers with the authority to make seizure and forfeiture orders. Let us change the relevant terms of international law to safeguard that Bill. Let us move a motion for debate at the UN General Assembly to make it very clear that the majority of states now see the phrase “entitled to immunity” in a different light in different circumstances, now that war has been committed on this scale. To protect ourselves from any attempts to misuse the European convention on human rights, let us immediately begin prosecuting Russia for the crime of aggression, so that it cannot pretend that it is in any way some kind of victim in this illegal invasion.

Let me end by saying this. No one in the House forgets their first visit to Kyiv, that glorious city of Europe’s eastern border. No one forgets the message that they see emblazoned everywhere, on the posters in the squares, on the trains and in the cafés: “Be brave like Ukraine.” That is the message that the House sends to the Ministers on the Treasury Bench today: “Be brave like Ukraine. Strike a blow for freedom, and send the message from this mother of Parliaments that democracy on this continent will never be defeated.”

Photo of Marie Rimmer Marie Rimmer Labour, St Helens South and Whiston 6:32, 27 June 2023

Ukrainians are fighting for their country. They are fighting for their freedom and democracy, they are fighting for our shared values, and they are winning. Yet we must not be complacent: support for Ukraine needs to increase, and to keep increasing. Ukraine is strengthened with our international support.

The question now rightly turns to what will happen when Ukraine wins. Many of the invaded towns and cities have been left in ruins. Mariupol, once a bastion of tourism and the arts, has been turned into a ruin. A centuries-old theatre was completely destroyed. The Russian forces acted barbarically, and it is estimated that nearly 300 civilians were killed. That is only one example among many horrific war crimes that have been committed by Putin’s henchmen.

In March, the House rightly debated the seizure of Russian assets. The Government can and must do more to ensure that dirty money and Russian assets do not remain hidden here. London must no longer be the laundromat for oligarch and kleptocrat dirty money. However, that money must be put to good use. The money generated or hidden here for decades has helped to finance the brutal invasion of Ukraine, and for too long a blind eye was turned to it. The Government have a duty to ensure that it is now used to rectify that mistake. Now is the time to start planning how to use the money.

Russian assets should be used to undo the damage and destruction that Putin’s army has caused. Nothing will bring back the brave Ukrainian fighters who lost their lives defending their homeland, but we have a duty and a responsibility to honour their sacrifice. We must honour their sacrifice by rebuilding their country; we must honour their sacrifice by ensuring that dirty Russian money is finally put to a good use. Many of the foreign policy mistakes over decades have been caused by Governments failing to plan ahead. This must not be another example. We must not wait until the war is over to start taking action.

Last October, the Government indicated support for repurposing Russian assets, yet there have been no specific proposals. Other countries—our own allies—are taking the first steps to achieve that goal. Time and time again, we hear the Prime Minister say how we are standing shoulder to shoulder with our allies to support Ukraine. Our biggest ally, the United States, has introduced the Rebuilding Economic Prosperity and Opportunity for Ukrainians Act to repurpose frozen Russians assets towards Ukraine, and Canada and the EU are doing something similar. Our country should be doing the same. We are not standing shoulder to shoulder; we are following when we should be leading—especially as London has long been known as the Russian money laundromat. We need to correct this error.

Since the unjustified and brutal Russian invasion of Ukraine began, I have been delighted by the unity across the House in support of Ukraine, and I hope the same will be true of the efforts to rebuild Ukraine. This motion is the start of that process—a process that will likely go on for years after Ukraine wins—but it is the very least we can do. Putin invaded Ukraine because it dared to be a modern and free-thinking European nation. With our continuing multinational support, Ukraine will win. Russian assets and dirty money hidden here should and must be spent on rebuilding Ukraine for our brave Ukrainian friends, who are fighting for freedom and democracy. It is a war for our shared values, and that makes it our war as well. We must act now.

Photo of Stephen Doughty Stephen Doughty Shadow Minister (Foreign and Commonwealth Affairs and International Development) 6:36, 27 June 2023

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

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

We also heard many excellent speeches from the Government side. We had helpful legal clarity from Sir Iain Duncan Smith. We had a useful question from Sir Julian Lewis about the accrual of interest on the assets that are being held. We heard many other powerful contributions, which all had one common message.

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

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

Photo of Roger Gale Roger Gale Deputy Speaker and Chairman of Ways and Means

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

Photo of Stephen Doughty Stephen Doughty Shadow Minister (Foreign and Commonwealth Affairs and International Development)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Photo of Leo Docherty Leo Docherty Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office) 6:46, 27 June 2023

Thank you, Mr Deputy Speaker. The Minister of State, Foreign, Commonwealth and Development Office, my right hon. Friend Anne-Marie Trevelyan has had to go away to deal with an urgent welfare issue. So, with the leave of the House, let me begin by thanking all right hon. and hon. Members from across the House for the constructive tone of this debate and for their continued support for Ukraine in the face of Putin’s deplorable and illegal invasion. We have heard many thoughtful and considered speeches and interventions. First and foremost, I would like to reiterate our absolute determination to ensure that, fundamentally, Russia pays for the damage it has caused in Ukraine.

I was grateful for the contribution of Stephen Doughty, and I will try to cover some of the points he raised. It was welcome that he reiterated the fact that Putin is to blame. We work on the basis that the perpetrator must pay, which is exactly what the Prime Minister outlined last week during the very successful Ukrainian recovery conference.

Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Conservative, The Cotswolds

The Russian economy is worth about $1.8 trillion, ranking it 11th in the world. Does my hon. Friend agree that the UK has a strong legal base and that we need to work with our international partners so that we can send out a strong message to the Ukrainians today that there is a hope that one day their country will be rebuilt?

Photo of Leo Docherty Leo Docherty Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office)

I am grateful for that intervention, as I entirely agree with it. If we look at the work that has been carried out by G7 allies, European nations and other states around the world in constraining the export of Russian hydrocarbons and finding alternative supplies, we see that the European energy picture has changed radically overnight. That was a consequence of allied will and effort. If we bring that same determination to the issues we have discussed today, we can have a very significant impact.

The perpetrator must pay and we are very clear about that. I will come on to what consideration we have given to the various options that have been laid out today, but I should say—

Photo of Roger Gale Roger Gale Deputy Speaker and Chairman of Ways and Means

Order. I am nothing if not even-handed. I said to Alex Sobel that it is not appropriate to come into the Chamber at the end of a debate and then intervene, and that applies to the right hon. Lady as well.

Photo of Leo Docherty Leo Docherty Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office)

I am grateful to the hon. Member for Cardiff South and Penarth for laying out the various options. He asked what consideration we have given, give and will continue to give to them. First and foremost, we are working at pace. Our officials were in Brussels earlier this week, liaising with EU officials and looking at various models, so the work is continuing at pace. Clearly, if that were easy we would have done it already, but that does not mean that significant institutional effort and energy is not being put into the matter.

Photo of Jonathan Djanogly Jonathan Djanogly Conservative, Huntingdon

The Minister is speaking about the EU. Is the issue not that at the start of the conflict the UK was leading the pace, particularly in financial services and other areas, but as the war has progressed, we seem to have been waiting for the EU, as he mentioned, and the US to lead the way? Is it not now time for the UK to regain the initiative once again?

Photo of Leo Docherty Leo Docherty Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office)

I respectfully disagree with my hon. Friend’s characterisation. We are all looking at these issues. Clearly, the EU has some ideas about the potential use of interest payments on seized assets. That is an idea, not a legally tested, viable route. As the EU is considering that, so are we, which is why our officials were in Brussels earlier this week.

Photo of Jonathan Djanogly Jonathan Djanogly Conservative, Huntingdon

To follow that theme, let us take the question of interest as an issue. That idea has not come out of the EU in the past two months; it has been spoken about for at least six months, but the EU has decided to look at it in the past two months. Has my right hon. Friend not considered that that is something we should have done by now?

Photo of Leo Docherty Leo Docherty Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office)

It is certainly under consideration, but it will depend upon legality. If there is no legality, there is no utility.

Photo of Stephen Doughty Stephen Doughty Shadow Minister (Foreign and Commonwealth Affairs and International Development)

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

Photo of Leo Docherty Leo Docherty Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office)

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

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

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

Photo of Robbie Moore Robbie Moore Conservative, Keighley

In my speech, I mentioned that the Prime Minister had attended the Ukraine recovery conference last week. Does the Minister agree that that demonstrates that the Prime Minister and the Government are taking world leadership on the issue, by bringing together countries from across the world, including EU member states and G7 states, to commit at least £2.5 billion as part of the recovery package for Ukraine, once the war has finished?

Photo of Leo Docherty Leo Docherty Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office)

I entirely agree with my hon. Friend. Last week was a remarkable show of the convening power of the UK, the tremendous resolve of our Ukrainian friends and the remarkable scale of global support, not just in military hard power but in global capital. When that global capital is mobilised to help Ukraine resurrect itself, that will, in tandem with the military effort, lead to a Ukraine that is sovereign and able to resist all potential future threats. Last week was a great success, but there is more work to do.

Finally, let me say to the hon. Member for Cardiff South and Penarth that I am grateful for his reflections on his visit to Ukraine. His insights into the scale of the destruction are very welcome. I am grateful also that he mentioned the HALO Trust, which does heroic work to expedite de-mining. It is 30 years of work, and we are proud to be putting some of our investment into that. It is money extremely well spent. It also speaks to the horrendous scale of environmental damage that has been wreaked right across the country. I am very grateful overall for the hon. Member’s constructive tones.

I should reassure the House that our sanctions have inflicted a severe cost up until this point on Putin for his outrageous imperialist ambitions. In collaboration with key partners, we have now sanctioned more than 1,600 individuals, including 130 oligarchs. We have frozen more than £18 billion-worth of assets in the UK and sanctioned more than £20 billion-worth of UK-Russia goods trade. We will stand with Ukraine for as long as it takes in that regard.

Photo of Catherine McKinnell Catherine McKinnell Chair, Petitions Committee, Chair, Petitions Committee

The Minister has set out the significant recovery of assets through sanctions, which rather brings us back to the point that the Government have not really been clear about: what is the delay on deciding how and whether those assets can be repurposed for reconstruction in Ukraine? Am I right in thinking that the Government responded to a parliamentary question back in July 2022—so almost a year ago—saying that they were considering all options on assets that have been seized, including whether they can contribute towards the reconstruction of Ukraine? Why is it taking so long? It does create the fear that the Government have considered it, but have not yet come up with the answer.

Photo of Leo Docherty Leo Docherty Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office)

It is taking a long time because it is very complex. There is no straightforward legal route. No other nation has yet come up with a tested legal proposition despite legislative activity. We are therefore moving in tandem with our allies to expedite and find a route, but if it were very simple, we would have done it already.

Through the G7 leaders’ statements, we have been very clear that the perpetrator should pay. We have underlined our continued commitment to that objective by introducing new legislation to enable us to keep sanctions in place until Russia compensates Ukraine. Nothing is off the table, as I have already said today, and we continue to work with our international partners on the options for using sanctions for reconstruction purposes. However, of course, if it is not legal, it is not viable and therefore not useful.

Photo of Robbie Moore Robbie Moore Conservative, Keighley

I thank my hon. Friend for giving way. Of course, the whole purpose of imposing sanctions is to stifle the economic drive that Russia is undoubtedly using to fund its aggression against Ukraine. Can my hon. Friend confirm that he and the Government are using their ability to encourage other allies to keep their sanctions in place and to take their lead from us?

Photo of Leo Docherty Leo Docherty Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office)

That is a very relevant and good point. We have made the point to colleagues around the world that all allies must stand together to prevent circumvention, because economies more connected and more proximate to Russia face severe economic impact. We do work with allies to ensure compliance and also to prevent circumvention.

As we saw last week, the new measures that were announced during the Ukraine recovery conference marked a significant step forward to driving Ukraine’s reconstruction through a number of different ways. Both the Prime Minister and the Foreign Secretary emphasised the UK’s continued commitment to ensuring that Russia pays for the reconstruction of Ukraine. The Foreign Secretary announced fresh action to increase the pressure on Putin and his supporters through a series of key measures: first, the new legislation, which I have referred to, enabling us to maintain the sanctions on Russia until Moscow pays compensation to Ukraine; secondly, the development of a route to allow sanctioned individuals to volunteer their money to go to Ukraine to help reconstruction; and, thirdly, under the sanctions regime, delivering a new requirement for sanctioned individuals and entities to disclose assets they hold in the UK.

That, in the round, will ensure that we drive forward, that the perpetrator pays and that we can help our Ukrainian friends to rebuild their magnificent country.

Question put and agreed to.

Resolved,

That this House
condemns Russia’s illegal invasion of Ukraine;
stands in solidarity with Ukrainians in their resistance to Russia’s invasion of their sovereign state;
recognises the enormous damage that Russia’s invasion has caused to Ukraine’s infrastructure, economy and institutions;
commends the recent commitments made by the Government to support Ukraine’s recovery during the Ukraine Recovery Conference 2023; and calls on the Government to present a Bill before this House within 90 days to allow frozen Russian state assets held in the UK to be repurposed for Ukraine’s recovery.