Ukraine

Baroness Wheatcroft Excerpts

Friday 25th February 2022 Lords Chamber

[Baroness Wheatcroft (CB)]

My Lords, the speeches we have heard today, including the remarkable maiden speech of the noble Lord, Lord Sedwill, have eloquently described the horror we all feel at the outrage in Ukraine and the need for a united response.

Putin has shown total contempt for the West and our democratic values, but what are those values? Too often they seem financial rather than moral. The UK has made life too easy for Putin and his Kremlin cronies. The sanctions being imposed now are welcome—although the first response was embarrassingly inadequate —but, as others have said, they must go deeper and be sustained. Much of the damage has already been done, in part by a UK that welcomed Russian money, often from the most dubious sources.

There used to be reason to be proud of the City of London, its banks and its professional firms. That surely can no longer be the case. The rot set in years ago. Since 2005, 39 Russian companies have listed on the London Stock Exchange, raising $44 billion. Much of that cash has gone to enriching Putin’s apparatchiks. But there have been only three listings since 2014—most of the Russian people’s assets had already been shared around the oligarchs, parcelled up and brought to London to be turned into cash. Instead, the 24 Russian companies currently listed need to be carefully investigated.

Freezing the assets of the Russian banks is only a start. The huge fees paid to bankers, lawyers and accountants to bring companies to market seemed an incentive for them to see the best, not the worst, in those companies. Now we need to be assured that these companies properly deserve a listing on our stock market. If the answer is no, investors from the UK will suffer, but their pain will be little in comparison with that of the people of Ukraine. We need Putin and his allies to be hurt.

We also have to look at the highly commercial approach of some of our major law firms. The noble Baroness, Lady Kramer, was among those to point out the failings that have led to London’s reputation as the favourite laundromat for dirty money. Last month, for instance, Mishcon de Reya, one of our major law firms, was fined £232,000 for serious breaches of the money laundering rules, but my Google search for “Mishcon de Reya” and “money laundering” only brought that up as the second result; what came first was the firm’s offer of services to companies on advice on dealing with money laundering regulations. It points out that it has on its staff Russian-speaking lawyers who are ready to help.

The noble Lord, Lord McDonald of Salford, spoke of the long-term pain that the UK may have to endure to help Ukraine. I believe that the City of London should be prepared to bear its share. It is time not just for more new regulations but for a change of culture. While our lax attitude to Russian riches has empowered Putin’s cronies, our laxness in another area has helped him destabilise the West. Russia’s interference in our election and referendum process was highlighted in the Intelligence and Security Committee’s Russia report. We now see the need for a united European approach to dealing with security issues. It may or may not be the case that Russian propaganda bots influenced the decision over Brexit, but it is now mighty clear that Russia wanted Brexit. We have to find a mechanism for engaging fully with the EU on security issues, and we have to be more vigilant in policing propaganda that attempts to influence our elections. Cyberwarfare was a reality even before the troops stormed into Ukraine, and we have to deal with it.