Strategy for International Development

Liam Byrne Excerpts

Wednesday 6th July 2022 Commons Chamber

[Sarah Champion (Rotherham) (Lab)]

Thank you, Madam Deputy Speaker. It is always a pleasure to serve under your guidance. I also wish to thank the Backbench Business Committee for granting this debate on the spending of the Foreign, Commonwealth and Development Office on the strategy for international development.

A year ago, I stood in this Chamber to open an estimates day debate on the FCDO’s main estimate. At that point, the Department had recently changed the format of its spending plans, which made scrutiny incredibly difficult. I wish to take this opportunity to thank FCDO officials who have worked with House of Commons staff over the past year to restore and improve the quality of information available in the estimate, allowing my Committee and Members to fulfil their crucial role in holding the Government to account for how they spend their aid.

Much has changed since I made that speech last year, but one in 10 people around the world are still living in extreme poverty. That simply cannot be right. Today, I wish to reflect on the enormous potential that lies within the poorest communities in the world and on how the UK Government’s aid spending should seek to develop that potential, transforming lives and creating a fairer, more inclusive world for all.

In the past few weeks, we have finally seen the Government release their new international development strategy. Combined with this main estimate, the approach signals a new era in how the UK spends its development funding, but I am simply not convinced that this approach will help the very poorest people in the world. It is clear that the Government’s priorities are increasingly about trade, security and creating British jobs, but the legally mandated objective of UK aid spending is to reduce poverty. That must remain front and centre.

The Government’s plans described a more hard-nosed, investment-driven approach to UK official development assistance. Capital investment expenditure—spending that is used, for example, on infrastructure projects—has increased by 49% compared with the last financial year, but relative day-to-day spending, from which traditional aid programmes would typically be funded, has increased by only 8.5%.

Investment partnerships are becoming a more dominant feature of UK aid. British International Investment will receive a further £200 million in capital from the FCDO, and the amount of funding channelled through BII is set to increase dramatically over the next two years. Economic and investment-led development certainly has a place in any coherent development strategy, but it tends to benefit those who are engaged, or are able to engage, with the formal labour market. I am not convinced that this approach will help the poorest and most marginalised groups around the world. I am just not convinced that it will help them to achieve their potential or create long-lasting development in their communities.

Putting all of the UK’s development eggs in the economic basket will mean that swathes of people are left behind: disabled people, minorities, and women and girls. How does the FCDO’s approach help them to reach their potential and enrich their communities? I have no doubt that UK investments can fund and support some truly transformative projects. However, we need to get the basics right first, otherwise how will those projects succeed?

Investing in new roads does not help a girl who cannot access clean water. A new telecoms network is not much use to a boy who cannot get vital vaccines. We need basic support in place first, before those investments can succeed. Get the foundations right, and then development will flourish. Under DFID, it was clear how UK aid was working towards the attainment of the UN sustainable development goals—the map to lifting people out of poverty and keeping them out of it—but this strategy barely refers to the SDGs.

It is hard to know whether we are on the right path to development without the map that the SDGs provide. With the integration of development and wider foreign policy objectives, helping the poor increasingly seems to be seen as a by-product of British foreign policy, rather than an end in itself. In fact, this Government strategy has no qualms about UK aid being “overtly geopolitical”. The strategy seeks to actively draw lower income countries away from the influence of authoritarian regimes, and to promote freedom and democracy around the world.

However, what about the communities living in countries that are not a pressing priority for achieving a foreign policy aim, or whose Governments do not share UK objectives? Are we leaving those communities behind? What happens to their potential? In my Committee’s work, we have heard that different types of development problems require different approaches. Sometimes spending through bilateral programmes is effective, and sometimes putting funds through multilaterals—such as Gavi, the Vaccine Alliance, or the World Food Programme—is more effective. We need to use the right tools for the job.

The UK is stepping back from its commitment to multilateral co-operation and placing more emphasis on bilateral spending. The Foreign Secretary told my Committee that, in 2022-23, £3.7 billion of UK aid funding will be spent through multilaterals. By 2024-25, it will be £2.4 billion—a 35% reduction in just two years. The UK’s contribution to major multilateral institutions means that we generate goodwill and we also have a huge influence over the way global institutions spend tens of billions of dollars each year.

Our multilateral investments are also a lever in investments from elsewhere, meaning that they have a multiplier effect, but the UK will be reducing its contribution to the World Bank by an astonishing 54%. If the UK is looking to increase its influence on the global stage, it seems counter-intuitive to step away from that leadership role.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I am grateful to the Chair of the Select Committee, who is making a brilliant speech. Does she agree that it is in Britain’s interests to use multilateral institutions, rather than to simply donate bilaterally, because that multiplies the impact that we can have?

[Sarah Champion]

My right hon. Friend is absolutely correct. At a time of such international uncertainty, a policy of giving away influence and friendships that have taken decades, if not centuries, to build up seems a very strange way to further the interests of this country, let alone the poorest in the world.

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[Mr Andrew Mitchell (Sutton Coldfield) (Con)]

It is wonderful not to be on a four-minute time limit for a debate as important as this. I draw the House’s attention to my interests as set out in the Register of Members’ Financial Interests.

The Foreign Secretary has inherited a complete mess on development, and I have great sympathy for her in trying to bring some order to things. We are, of course, still spending a very substantial sum on ODA as part of our development budget. However, that sum has reduced from 0.7% to 0.5%, and I want to say a word or two about that.

If someone was looking for the least good time to reduce this expenditure, they would definitely have chosen the date and the day upon which the Prime Minister made that decision. It was in the foothills of Britain chairing the G7 and at the time of an international global pandemic. Development leadership was really needed, and Britain was in a position to provide it. Britain was acknowledged around the world as an international development superpower and was really in a position to move the dial on these things. But what happened? The Prime Minister reduced ODA from 0.7% to 0.5%, at the very time when British leadership was really needed. Of course, the Prime Minister had also dismantled the Department for International Development, and I will come on to that in a moment, but the point I am seeking to make is that, at a time when Britain could have given real leadership—in one of the few areas where it is acknowledged, post empire, that we are a superpower and have real leadership and skills to impart—the money was reduced.

Following the pandemic, we see the scourge of famine affecting parts of our world such as the horn of Africa and all the way down the rest of the eastern side of Africa. The right hon. Member for Leeds Central (Hilary Benn), who is a former Secretary of State for International Development, will remember the acute leadership that DFID gave, leading other countries to stop famines and starvation in the horn of Africa. That skill has never been more needed than it is today, as we stand before a real threat to people’s lives and livelihoods, but Britain is not in a position to give that leadership.

I will make two further points on the money. I do not think I will carry the Chair of the Select Committee with me here, although I pay tribute to her leadership of her Committee and the very good work that the Committee is doing, but my advice to the Foreign Secretary, given the complete mess on Britain’s development policy, was to find the money from the multilateral programmes and not from the bilateral programmes. If she is forced to make that decision, a decision she should never have had to make, it is clearly right to take the money from the multilateral programmes, for the same reason that Bonnie and Clyde robbed banks: that is where the money is.

The big multilateral programmes such as the World Bank are where the money is, and the Foreign Secretary is therefore in my view right to take it from there, but that is not a decision she should have had to make.

[Liam Byrne]

rose—

[Mr Mitchell]

The effects of taking money from the World Bank are very severe, as I suspect my friend the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) is about to make clear.

[Liam Byrne]

I am grateful to the right hon. Gentleman, my neighbour, but I disagree with him on this point. With the International Monetary Fund, for example, where we have collectively issued $650 billion of special drawing rights, it would have been sensible for the UK to have stepped up and provided some leadership, sharing a much bigger fraction of the £19 billion we have been given. That would have encouraged the rest of the G7 to follow suit, and the G7 is about one third of the SDR issuance.

[Mr Mitchell]

On that point I completely agree with the right hon. Gentleman. Although I do not want to put words into the Minister’s mouth, I suspect that the Foreign Office wanted to do precisely as the right hon. Gentleman has described, but the Treasury made it extremely difficult. My point is that the savage cuts made to the bilateral programmes, where food was literally removed from the plates of starving children in Yemen, show why, in the end, if the Foreign Secretary is forced to make such decisions, she is right to take the money out of the multilateral programme.

While I am on the subject, Britain has had a leadership role within the Global Fund, along with the Americans. After 2010, we made a number of substantive changes to make the Global Fund better. It is extremely good spending, for reasons that the Minister will be well aware of, and I urge the Government to ensure that we are as generous as possible on the replenishment of the fund, not least because the Americans have made it clear that they will be even more generous than they are already being if other countries put their money where their mouth is. There is a real incentive of getting far more bang for the British taxpayer’s buck in helping with the replenishment of the Global Fund.

My other point about the money, and again I hope the Chair of the Select Committee will forgive me for making it, is that I do not believe it is sensible to go in one year from 0.5% to 0.7%. The Chancellor has already committed to bringing back the 0.7% in two years’ time. The year before that, he should go to 0.6%. I say that for two reasons.

There is quite a lot of money involved, and although there is no doubt we could spend it well through the multilateral system, I do not think the British taxpayer would believe that such a big uplift in one year could guarantee that the money was really well spent, and I do not want to test their patience on this. I want to make sure that we can look the British taxpayer in the eye and say that, for every pound of their hard-earned money that we spend on international development, we are delivering 100p of value on the ground. I urge Treasury Ministers to consider bringing back the 0.6% next year and the 0.7% the year after, and not doing it in one lump, which I believe is the current plan.

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[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

Let me declare my interest, at the outset of this debate, as the chair of the international parliamentary network on the World Bank and the International Monetary Fund. I congratulate the Chair of the Select Committee, my hon. Friend the Member for Rotherham (Sarah Champion), on bringing this debate to the House. Her timing, as ever, is impeccable. All of us here in this Chamber are watching the disintegration of the Government in real time, so in a way this debate is important because it is taking place at a hyphen moment between an Administration that are biting the dust and the construction of the new Administration that will no doubt take shape over the days and weeks to come. Like everyone who has spoken in this debate, I very much hope that the new Administration will look hard at the arguments we have made today and seek to reverse the appalling policy, the appalling cut and the appalling breach of trust represented by the slash in our aid budget.

I want to supply three thoughts for today’s debate. The first is that at the heart of it is the simple truth that when the world needed us to step up, we stepped back. We stepped away from our obligations, we stepped away from our duties and we stepped away from our promises. Those promises were enshrined when we signed up to SDG2 and made a commitment to end hunger. Not only has breaking our promise to help to supply the finance for that destroyed trust in our country around the world, but people will die this year as a result of that broken promise.

Many people here today have said that that decision could not have come at a worse time. The right hon. Member for Sutton Coldfield (Mr Mitchell) was among those who made that point, and he is absolutely right. We now have a crisis of food, fragility and finance that means that 200 million people around the world are facing a food emergency. We know that 60% of workers are still not earning what they did before the covid crisis, but we now have millions of people living almost in famine conditions and 200 million people who will face famine later this year unless things change. Things will change over the course of this year, but they will change for the worse.

Just a week or two ago, I was with the Foreign Affairs Committee in New York and we were privileged to see the NATO Secretary-General. He is fighting tooth and nail for the deal to try to get tens of millions of tonnes of grain out of Ukraine and Russia and, crucially, tens of millions of tonnes of fertiliser out of Russia. If we fail in that task, the spike in food prices that we have seen over the last year will get worse. Even more seriously, if we do not get the fertiliser out in the next few months, we will jeopardise not just the wheat harvest for next year but the rice harvest for next year. We will begin to see up to 1 billion people face a food crisis if we do not make progress on that deal. People were already in a bad position because of covid, and they are in a bad position because of inflation, but it has now deteriorated substantially because of the crisis in Ukraine.

Governments around the world are out of headroom on taking the fiscal measures needed to alleviate this coming crisis. More and more developing countries now denominate their debt in dollars rather than domestic currency, which means they are super-exposed to rising interest rates in the United States. Average interest rates on lower-income debt are up by about 77 basis points this year, and we now know that something like 12 countries around the world are already on the brink of debt distress. We already see unrest in some countries in Africa, and we see the consequences of the debt crisis in Sri Lanka. Things will become far worse this year unless we get our act together.

Of course, the problem is most acute in countries that are fragile and where there is violence. Frankly, countries and agencies such as Russia and the Wagner Group are already perpetrating barbaric human rights abuses in Mali, Libya, Syria and another 18 countries around the world. This crisis of food fragility and finance will not sort itself out, which is precisely why this is such an appalling time for the Government to make their aid cut.

My second point is a particular interest of mine, which is that the Government’s negligence is all the worse because they are not using the new tools they have been given. Last year, under Kristalina Georgieva’s leadership of the International Monetary Fund, the global community took the collective decision to mint $650 billion-worth of special drawing rights. Overwhelmingly because of the quota system, those special drawing rights go to richer countries like us. In fact, the special drawing rights coming to G7 countries total about $196 billion, which is about a third of the special drawing rights that have been issued.

Where are those special drawing rights? Where is the deployment of that resource to tackle this crisis of food fragility and finance? Right now, those SDRs are gathering dust in the vaults of central banks and treasuries around the world. They are just sitting there. We have failed to mobilise that resource in the way we promised when we signed off on the commitment to issue the special drawing rights in the first place.

The UK is a big shareholder that helped to found the International Monetary Fund, so we have been given £19 billion of special drawing rights. We have made commitments to share back about 20%. Why is 20% the magic number? We have just been given £19 billion. This is a slightly technical issue, but our SDRs go into something called the exchange equalisation account, which was set up in 1979 and underpins currency stability in this country. It has been restocked with £74 billion over the last 10 years to a level that the Treasury deems to be capital adequate, about £154 billion or $185 billion in total.

We have restocked the exchange equalisation account and then, from left field, comes another £19 billion that we did not forecast and that we do not need because we have already restocked the account. Why have we suddenly decided to share just 20% of it? There is no logic for that percentage.

The Government have so much grip on this topic that, when I asked the Foreign Secretary at last week’s Foreign Affairs Committee how much had actually come in through the special drawing rights, she did not know. She literally did not know that Her Majesty’s Government had just been handed £19 billion, which is twice the aid budget. I then prosecuted the argument and asked, “What is your target for sharing? How much are we supposed to share back?” She answered, “I don’t know.” I asked the Prime Minister the same question this week, and he did not know either. They could perhaps be forgiven if the numbers were not so big and if the crisis were not so serious, but this is absolutely crazy. We have a global crisis and the Government are simply not in control. They do not have a grip on sharing back and rechannelling some of the biggest assets and resources available to us.

The point about multilateralism, which my right hon. Friend the Member for Leeds Central (Hilary Benn) and my hon. Friend the Member for Rotherham (Sarah Champion) mentioned, is fundamental. Last week’s G7 communiqué made a very clear statement that G7 leaders want to step up the mobilisation of $100 billion, but the truth is that, of the G7 countries, we have made a commitment, Japan has made a commitment and the French have made a commitment. Congress has blocked the President of the United States sharing $21 billion, and we do not yet have information from the IMF on the others—I checked yesterday. So we are miles away from mobilising the $100 billion that was promised at the G7, and people are going to starve this year unless we get a grip. So my call on the Government today is to give us a good explanation for why we should not be sharing three quarters of the special drawing rights we have been given; why we are not leading a global effort to get to that $100 billion target; and why we are not insisting on more flexibility, such as giving the SDRs to multilateral development banks, such as the African Development Bank, which could be making such an impact on the ground. We need to be saying to the IMF that countries do not need to participate in a conditionality programme with the IMF in order to receive some of this money. I discussed that with the Secretary-General of the UN and we both agree on it. We are not going to lead the mobilisation of this effort if the politicians in charge at the helm are, frankly, in such a shambolic state. So my message to the Minister and the new Administration is: please get a grip of this enormous new resource that we have been given.

My final point is, in part, inspired by what my neighbour the right hon. Member for Sutton Coldfield (Mr Mitchell) said about China. For some years now, we have been having a debate in this country and among our allies about the influence of China and this vexed, significant issue of debt diplomacy. If we look at the countries that did not support the UN resolution on Russia, we see that, on average, they owe five times more debt to China than the countries that supported the resolution. As for whether that is a coincidence, you be the judge. The point is that the debt in many of these countries is about to fall over and the G20 common framework process, which we have held up as the great saviour of debt sustainability, has been so successful that precisely zero countries have engaged in it. So it ain’t working and we need a different approach. We could be restructuring developing country debt using IMF and World Bank resources. The World Bank has just committed $170 billion to an emergency programme that we could be using to restructure the debt of vulnerable countries around the world—right now we are simply not doing that. If we do not want to live in a world where China is the lender of last resort to countries around the world, let us use the Bretton Woods institutions that we set up in 1944 to avoid that dilemma.

In the midst of a big war, in 1941, the Atlantic charter was signed, and its story is extraordinary. Our Prime Minister at the time, Mr Churchill, was on the other side of the Atlantic with President Roosevelt and the draft of the charter was sent to Downing Street. Clement Attlee was in the Chair and he convened the Cabinet at two o’clock in the morning in order to review the draft and make one vital change. He added article 5, which said that one of our war aims would be that the victors would

“desire to bring about the fullest collaboration between all nations in the economic field with the object of securing, for all, improved labor standards, economic advancement, and social security”.

Three years later, at Bretton Woods, President Roosevelt, welcomed delegates from 44 countries from around the world with these words:

“the economic health of every country is a proper matter of concern to all its neighbors, near and distant.”

As we begin to think about what the new world looks like, those are wise words to guide us.

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[Vicky Ford]

I will try to address some of the comments. I will come to global health budgets, which my right hon. Friend raised.

The global pandemic was in nobody’s manifesto. We faced the worst economic contraction for more than 300 years. Our borrowing in 2021 was the highest that it has ever been outside wartime. It was a really difficult decision to reduce the ODA spend from 0.7% to 0.5%, but it is a temporary reduction and we are still the third-largest donor in the G7 as a percentage of GNI that we spend. We are committed to returning to 0.7% as soon as the fiscal situation allows, and we have set out the way in which that will be measured.

Looking at the next decade and beyond, the international development strategy recognises that the evolving development landscape is characterised by many major global challenges and shifting geopolitics. For many years, increasing openness, free markets, free trade and shared technology have helped to underpin global development progress, and that is important in being able to make sure that those in the developing world can try to access some of the opportunities we have. However, that whole era of progress has been completely challenged and set back by the new geopolitical context demonstrated by Putin’s illegal, unjustifiable and brutal invasion of Ukraine, which is causing these huge spirals in fertiliser, food and fuel prices.

My hon. Friend the Member for West Worcestershire (Harriett Baldwin) was absolutely spot-on when she spoke about Russian misinformation. It is really important to remind ourselves as well as others that the UK sanctions in place are not preventing exports of Russian grain and fertiliser to third countries. It is Russia’s illegal blockade that is preventing Ukrainian grain from leaving the country, and that is what is hurting global supplies. The economic pain hitting the world’s poorest most acutely is being caused by Putin’s aggression.

The new hon. Member for Tiverton and Honiton (Richard Foord), in his maiden speech, quite rightly spoke about reminding everybody of the importance of the Budapest convention, when Ukraine gave up what I believe was the world’s largest collection of nuclear weapons in return for the promise that Russia, as well as others, would respect its territorial integrity. We absolutely stand by the people of Ukraine in many ways. We are one of the leading bilateral donors. We have committed about £400 million in economic and humanitarian grant support, which is in addition to about £800 million in guarantees on World Bank lending to Ukraine. We are using a lot of guarantees to increase the amount of funding we can make available.

The right hon. Member for Leeds Central (Hilary Benn) asked whether we are adhering to international laws and what constitutes ODA, and I am very pleased to say that we are. The rules are set out by the OECD’s development assistance committee, and the DAC definition of ODA makes it very clear that no military equipment or services are reportable as ODA, so I hope that answers his question.

My hon. Friend the Member for West Worcestershire mentioned the importance of making sure that UK branding is included in what we are doing, so that while we are supporting developing countries, people know that the UK is standing beside them. I absolutely agree with that, and I would also say to Members in this House who care so passionately about international development that it is important that they remind people what good work is done with the money the UK taxpayer spends there.

I have attended the World Bank meeting—we do attend these meetings, and I regularly attend international meetings—and encouraged the World Bank to be giving a clearer message about the support it is giving and reminding those in donor countries how important this is.

[Liam Byrne]

The World Bank has just mobilised $170 billion of emergency response to the current crisis, but the first question everybody I have spoken to in the World Bank over the last year is: why on earth has the UK cut its commitment to the World Bank when we could be using that to mobilise more money in the future?

[Vicky Ford]

I am so glad that the right hon. Member has raised this point because the UK remains one of the top six largest shareholders of the World Bank. We are one of only six countries in the world that has its own voice at the World Bank spring and autumn meetings, and we use that very powerfully. We remain the third largest donor to IDA20 and we remain the fifth largest shareholder. We reduced our donations to IDA, bringing them in line with what we are doing elsewhere in the world through the international development strategy, but we remained the third largest donor. Indeed, the World Bank announced that it would release $170 billion at the spring meetings partly because the UK worked with our partners to say to the World Bank, “We are in unprecedented times and we need an unprecedented package.”

My right hon. Friend the Member for Sutton Coldfield (Mr Mitchell) raised in his excellent remarks the situation in the horn of Africa, which is absolutely dire. The UK was one of the first to step up. In January, I was in the horn of Africa and announced additional money, which was, as the hon. Member for Dundee West said, especially to help babies, children and feeding mothers. Since then, we have helped to convene an international conference and worked with the UN to have a roundtable that raised another $400 million. We will be putting more than £150 million of humanitarian aid into east Africa this year. To follow up the question from the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) about the World Bank, we have been encouraging it to put some of that $170 billion urgently into the horn of Africa.

[Liam Byrne]

rose—

[Vicky Ford]

I will make some more progress, because I want to answer many other questions.

Major global challenges are threatening the progress made over previous years. We had seen progress, especially in the last decade, but that has reversed in the last two years, which is partly to do with covid and partly to do with climate change. In that context, it is really important that our international development strategy provides a clear framework to enable people and countries to take control of the future.

Yes, a priority of the strategy is to deliver reliable investments through British investment partnerships, building on the UK’s financial expertise and the strength of the City of London. That is a way in which we can help, using Government—taxpayers’— money to bring more money into developing countries. That must be done in a way that also delivers on green priorities and supports countries to grow their economies sustainably. A key aspect of that is helping countries with the lowest incomes to build their trade capacity and infrastructure. That is not about putting all of our funding in the trade basket; it is about looking at ways in which we can harness investment to make a real difference for countries.

For example, I was in Sierra Leone earlier this year—I have visited 14 African countries since I took on this role, and Sierra Leone is one of those that most needs international development assistance—and one project that I saw was a solar microgrid. We have 95 of them going up across the country, and they are helping more than 300,000 people to get access to electricity. That means that kids can do their school work in the evening, that a sole trader can run her business and get herself an income and livelihood and, most importantly, that local services can get access to electricity. In the same town, I visited the women’s health clinic that we helped set up, where we have worked on training for those delivering babies and on bringing in oxygen services, blood bank services and electricity. That has reduced maternal deaths from one in 25—one in 25 women having a baby was dying—to one in 250. Putting infrastructure investment into that microgrid enabled the oxygen services and blood to be kept in the fridge. That helped to save lives and meant that lights were on when women were delivering their babies at night. As all of us who are mothers know, many women choose to have their babies at night—I have gone slightly off my speech.

Another priority is to empower women and girls. We want to tackle the social, economic and political structural barriers that hold them back, and unlock their potential. Indeed, restoring the funding for women and girls has been a key priority for the Foreign Secretary. I cannot put back the money that was not restored last year, so, in answer to the hon. Member for Putney (Fleur Anderson), the funding is being restored going forward, and it does include areas such as sexual and reproductive health and rights. I believe that that is absolutely central to women’s and girls’ fundamental right to have control over their lives and bodies.

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[Vicky Ford]

Let me try to address hon. Members’ questions first, because I have only another few minutes and Members have been sitting here throughout the debate.

I thank my hon. Friend the Member for Mid Derbyshire (Mrs Latham) for her passionate discussion of neglected diseases, including podoconiosis, which she now knows is a new one to me. What she said was very moving, and I will look into it further—what she said was very moving—and I reassure her that we are reviewing the Global Fund seventh replenishment investment case. I hope that that gives her the confidence she needs.

Our development priorities will be achieved by taking a patient approach to development. That means unlocking the power of people, ideas and institutions and tackling the causes of crisis, as that is the basis for delivering lasting growth, stability and poverty reduction. This is about getting the system to work.

Alongside ODA, we harness trade, defence, diplomacy and other UK strengths to work for lasting policy change in partner countries. We spend more of our budget directly. By 2025, the FCDO intends to spend about three quarters of the funding allocated in the current spending review through country programmes. That does not mean turning our back on multilateral partners. We will maintain a wide range of partnerships with multilateral organisations. They remain key partners for achieving shared objectives and tackling global challenges that the UK alone cannot solve. Geographically, we maintain our commitment to Africa, while we continue to focus on the Indo-Pacific, including by expanding the work of British International Investment in the region.

On the commitment to Africa, we are committed to building partnerships with African countries, leading to a freer, safer, more prosperous, healthier and greener continent. We prioritise key strategic partners such as South Africa, Nigeria, Ethiopia, Kenya and Ghana. We will target how we spend resources in fragile states or countries that need extra support, and we partner with the African Union when we see that our interests align and add value.

One of the questions from the Liberal Democrat spokesperson, the hon. Member for Oxford West and Abingdon (Layla Moran), was about Ethiopia. In the last financial year, we spent roughly £240 million of ODA in Ethiopia. That is about 7% of the entire UK spend. Ethiopia is a very important country. It is a very fragile state, particularly with famine in the south and conflict in the north. We have consistently called on all parties to work towards the ceasefire, which remains very fragile. Aid is flowing. It is not enough, but large proportions of the aid that is flowing is going on trucks that have been bought with UK aid, because we are one of the key contributors in that area.

[Liam Byrne]

I hope that the Minister may come on to not just the £10 billion of the aid budget, but the Government’s strategy on the £19 billion of special drawing rights.

[Vicky Ford]

Let me come to the special drawing rights; I was about to go through more of the specific questions that Members asked. We have committed to channelling up to £4 billion of our special drawing rights. The first £1 billion has already been committed as additional funding to the IMF’s poverty reduction and growth trust. In addition, the Chancellor made a commitment in April this year to allocate another £2.5 billion to the new IMF resilience and sustainability trust. That fills a crucial gap in the IMF’s toolkit. It provides affordable financing to low-income and vulnerable middle-income countries to address long-term challenges.

At the African Development Bank meetings that I attended in Ghana this year, I also explained that I was very keen to channel some of our SDRs through the ADB. Technically, the money does not come to us—it remains a shareholding in the bank. We cannot do that by ourselves; we have to do it collectively with some of the other owners of SDRs. I say that just to update the right hon. Gentleman that we are working on the matter. There are some technical issues as well.

[Liam Byrne]

Will the Minister give way?

[Vicky Ford]

No, because I want to get on to some of the right hon. Gentleman’s other points.

On ICAI, the budget is not actually reduced; it was to be a flat budget. In line with the framework agreement, we will consult with the International Development Committee if any changes to ICAI’s budget will have a significant impact on the Committee’s work plan. With ICAI, we will also work through whatever funding gap it may have, to understand what the impact could be.

Northern Ireland Protocol Bill

Liam Byrne Excerpts

2nd reading
Monday 27th June 2022 Commons Chamber

[Mr Lammy]

I accept the sincerity with which the hon. Gentleman makes his remarks. Let me just say that they have said that trust is at an all-time low. The question for this House is whether the Bill maintains or assists trust, given that ultimately this will be an agreement and it will be negotiated.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

My right hon. Friend is making a brilliant speech. Is he aware of comments by the US trade representative Ambassador Tai, from Speaker Pelosi and indeed from a host of our American allies in Congress? They have been very clear with us that there will be no US-UK trade deal unless there is a durable way forward on the Northern Ireland question. Not only does this reckless approach risk destroying relations with the EU, but it puts a deal with America at risk.

[Mr Lammy]

My right hon. Friend is exactly right. I have been to Washington on three occasions in the past six months, and I can say that across the political divide, Republicans and Democrats have raised the issue. On my most recent visit, they were aghast; they had not seen the content of the Bill at that stage, but they were aghast at the proposition. Perhaps the Northern Ireland Secretary might tell us what our American friends and allies have said in relation to the Bill now that they have seen the draft.

My second question is whether the Bill is in the best interests of this country. As we stand here today, Britain faces the worst cost of living crisis in decades. Inflation is at more than 9%, bills are rising, energy costs are soaring and supply chains are under pressure. It beggars belief why, at this time, the Government would choose to risk new frictions in our trading relations with the EU. They cannot get away with abdicating responsibility for this reckless conduct. If we choose to break a contract, we cannot plausibly expect the other side to take no action in response. We cannot claim that we did not foresee the consequences. Of course the European Union would respond, just as we would if the situation were reversed. I will wager that the Foreign Secretary would be one of the first people to complain if the boot were on the other foot.

A game of brinkmanship with the European Union will only add to our economic problems, but this is not just about economic concerns, important though they are. We must also see the bigger picture. For four months, the Putin regime has fought a bloody war against Ukraine. As a Parliament, we have been united in our support for Ukraine and our staunch opposition to Russia’s aggression. NATO allies and European partners have stood together. How can this be the right moment to deepen a diplomatic row? How can this be the right time to tell our friends and partners that we cannot be relied on? I cannot help noting that some Conservative Members told us that the situation in Ukraine was too serious—that this was not the right time to change Prime Minister. Apparently, however, it is not serious enough to prevent us from starting a diplomatic fight with some of our closest allies.

Thirdly, is the Bill compatible with international law? [Hon. Members: “ Yes.”] Quite simply, the Bill breaks international law. It provides for a wholesale rewrite of an international treaty in domestic law. One of the most troubling aspects is the dangerous legal distortion that is used to justify it. The doctrine of necessity is not an excuse for states to abandon their obligations. It exists to do precisely the opposite: to constrain the circumstances in which states can legitimately claim that their hand has been forced. It requires this action to be the “only way” possible to resolve the issue, but the Government have not used article 16 and still say that a negotiated solution is possible. It requires a grave and imminent peril, but the Government have chosen a route that will involve months of parliamentary wrangling to fix issues such as unequal VAT rates, which no reasonable person could consider a matter of grave peril. It requires the invoking state not to have contributed to the situation of necessity, but the problems are a direct result of the choices that the Government made when negotiating with the European Union. If they were not, we would not need to change the text of the protocol at all.

Sanctions

Liam Byrne Excerpts

Monday 28th February 2022 Commons Chamber

[Elizabeth Truss]

We have seen the acts of incredible bravery from the Ukrainian population and Ukrainian politicians, including President Zelensky, who has led from the front. It is absolutely inspiring. Our message across the House today should be that however long it takes, however difficult it is and whatever difficulties we have economically, they cannot compare to the sheer hell that the people of Ukraine are going through. We will be with them through thick and thin, until Putin loses and until the sovereignty and territorial integrity of Ukraine are restored.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

The whole House will welcome the Foreign Secretary’s ambition this afternoon, but can we speed up the process of hitting the people on the hit list? There are 23 people on the EU sanctions list who are not on the UK sanctions list as of this morning. The ban on trading in state bonds is in place in Europe, but not in the UK. The ban on import and export from breakaway regions is in place in Europe, but not in the UK. The asset freeze and travel ban on Duma members is in place in Europe, but not in the UK. The asset freeze and travel bans in place in Europe number 22, but there are just eight in the UK announced in the past few days. What further power and resources does the Foreign Secretary need for us to catch up with our American and European allies?

[Elizabeth Truss]

We are leading from the front. For example, we are banning clearing from Sberbank, which the EU is not doing at the moment. We are freezing more bank assets. We have advocated the SWIFT ban, and we want to get all our allies to agree to a SWIFT ban, but this is not a competition between us and our allies; this is a concerted endeavour, where all of us are doing all we can as quickly as we can to show unity and to deliver a massive hit to the Russian economy. The House will have seen the drop in the rouble today, and the impact that this unity is having. I strongly encourage colleagues across the House to support our package, which is unprecedented in United Kingdom history, and to put pressure on more countries to join us, but there are areas where we are going a lot further than our allies. There are some areas where they have gone further than us. We need to continue to make progress together. That is what sends a strong message to Putin.

Recognition of the State of Palestine

Liam Byrne Excerpts

Thursday 24th February 2022 Commons Chamber

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

My congratulations to my hon. Friend the Member for Sunderland Central (Julie Elliott) on securing the debate, because on trial today is the complete incoherence in the Government’s approach to Palestine. Let me go through the three basic logical points in the argument.

First, do we believe that we have a moral responsibility to recognise the state of Palestine? Yes, we do. When we held the mandate between 1923 and 1948, we acknowledged a sacred trust of civilisation to prepare Palestinians for an independent country, thereby recognising the right to self-determination.

Secondly, is there now a legal responsibility and imperative to crack on with recognition? Yes, there is. In November 2011, Lord Hague said that Palestine met the criteria for statehood. In 2014, the House voted for recognition by 274 votes to 12. In October 2014, the Foreign Office said again that there should be a two-state solution on 1967 boundaries with East Jerusalem as a shared capital.

Thirdly, we recognise the moral responsibility and we recognise the legal responsibility to crack on. Do we now think that peace and a two-state solution is in jeopardy? Yes, we do. There are now 650,000 settlers breaking up the occupied territories. The threat is explicitly recognised by the UN Security Council in resolution 2334, which states that the cost of settlements is now

“a flagrant violation under international law and a major obstacle”

to peace.

Despite that moral responsibility, despite the legal urgency and despite the threat to peace, what are the Government doing? They are refusing to recognise the state of Palestine. They are pursuing a free trade agreement with Israel. They are standing by while products such as those made by JCB are destroying homes in the occupied territories. Frankly, they are not investigating the whys and wherefores of some of our arms exports.

Like many here, I have stood in Palestine and seen how the route taken by Mary and Joseph to Bethlehem is now impossible to take, because it is broken up by walls. I have heard children talk about the post-traumatic stress disorder they now suffer. I have listened to shepherds whose lives have been destroyed because they have no legal right to build a home of their own. I have listened to farmers whose water has been stolen.

Like everybody here, I deplore the attacks on Israel. I deplore the viciousness and madness of the madmen of Hamas, but I have to say to the Minister that the two-state solution is now becoming a mirage and we have to intervene now in order to act. We have to act for peace and that is why we should recognise the state of Palestine today.

Relationship with Russia and China

Liam Byrne Excerpts

Thursday 24th February 2022 Commons Chamber

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I congratulate the hon. Member for Isle of Wight (Bob Seely) on securing this important debate. His timing could not have been better.

It is clear from today’s events that we live no longer in an era of change but in a change of era. That has three significant implications for our strategy on Russia and China, which is why the hon. Gentleman’s timing today is so fortunate. The three shifts entail a worldview different from that of UK policy makers, and they require a shift in our defensive strategy and a renaissance in creative diplomatic strategy whereby, quite simply, we in this country need to build a new rules-based order for the new silk road.

Let me start with the new worldview that is going to be needed. I generally try to avoid a Manichean view of the world as divided into black and white, because the world is more complicated than that, but the truth is that, from Kaliningrad through to Kamchatka, we are now witness to the creation of an enormous kleptosphere. Inside the borders of that kleptosphere, the merciless logic is that might is right: in the old phrase, the strong do what they can and the weak suffer what they must. We have to be the guardians of what we might call the “canon-osphere”—the space around the world where there are rules, there is the rule of law and there is justice.

Just as we once rid the world of piracy and slave trading, we now have to be the place that leads the charge against economic crime, no matter where that crime is perpetrated. We have to be the guardians of the new rules-based order for this simple reason: if we think the scale of global corruption today is bad, we must think for a moment about the world that is to come. The World Bank estimates that the value of natural resources in countries with bad corruption scores is $65 trillion. Imagine the world of the future, in which those natural resources are extracted and the profits go to some of the worst people on earth. That is why there is now an urgency for a very different kind of philosophy to guide our foreign policy. We have to be the place, the country, the leader that seeks a world of not simply free trade but clean trade. That must be one of the defining features of our foreign policy for the years to come.

The second dimension is that we obviously need new defences. We in this House have to confront the reality that our strategy of deterrence has failed. Most of us who spoke in the debate on the economic sanctions were profoundly disappointed with the weakness of the package proposed. Frankly, many of us feel that the Prime Minister was a little late to the party. “Too little, too late” will be written on his political gravestone, I fear. None the less, we must now accept that the threat of sanctions has failed and we must now offer President Putin the iron fist. That has to take aim at Russia’s key strategic weakness, which is its 20 km border.

We must now envisage a different security environment along the Russian border. That means that we should have proactive talks with Finland and Sweden about how they partner with NATO; it means further reinforcing our presence in the Baltics; it means new kinds of conversations at the other end of the border, in Georgia; it means thinking about how we take on and equip those fighting the insurgencies in places such as South Ossetia and Transnistria; and it means that we have to take a completely different approach to the Balkans, and step up and accelerate the path towards NATO membership for Bosnia-Herzegovina.

We now have to start to roll NATO forward in strength across the border, so that President Putin’s tactical advance results in what is ultimately a strategic defeat. I am afraid part and parcel of that is that we will have to consider the deployment of intermediate ground-launched cruise missiles in Europe. The truth is that the intermediate-range nuclear forces treaty broke down because President Putin was breaking the rules and deploying SSC-8 missiles, which were prohibited by that treaty. Russia has built very effective anti-access and area-denial systems that safeguard it against air and naval attack. A defence against ground-launched cruise missiles is much more difficult. The Secretary-General of NATO has been right to rule out arming those missiles with nuclear warheads, but we must now think more aggressively about our defence posture, given the security threat President Putin now poses to this great homeland of Europe.

The final point I wish to make clear is that it is time for British grand strategy to go through something of a renaissance. This is not an original point of mine but something that people such as Lord Ricketts have been writing about for some time. If we look back over history, we see so many examples of how, when Russian and Chinese leaders feel strong at home, they advance into the periphery—into the borderland. That was true under Tsar Nicholas and under the Qing empire, and it is true today. That means that a corridor of chaos is potentially going to stretch from the Baltic to Ukraine, down through Syria and Iran, through Kashmir, into Myanmar, into North Korea and into the South China sea.

We have not only to think creatively and imaginatively about how we provide a security environment for that space but to think anew about creating a Marshall plan for that space, just as we did in Europe after world war two. Then, we created the OECD to foster Europe’s economic development; we now need to do the same for the silk road. The passage to India, the Pacific and beyond now needs a British-led institution that looks imaginatively at how we create new infrastructure. China will be spending something like $1.5 trillion on infrastructure across this great border zone. What are we spending? We do not know, but we could be using our skills to identify the infrastructure priorities in places such as Pakistan. We could be thinking imaginatively about how we mobilise infrastructure finance. London has been the home of infrastructure finance since we defeated Napoleon and Nathan Rothschild created the international bond market in London.

We have the wherewithal to mobilise sovereign wealth funds, which are growing radically and quickly in places such as the Gulf, and deploying that money in good strong contracts, with good strong standards, that avoid the kind of mistakes that we saw in the early days of the Qatari world cup stadium-building programme. We could be a force for good in building infrastructure, in financing infrastructure, and in making sure that there are good rules around that.

We could be thinking imaginatively about how we create free trade across this zone. We could be thinking imaginatively about how we settle disputes. We could be thinking imaginatively about the legal services and the consulting services that we offer out of London into this space. The reality is that, by 2050, the economies of the new silk road will be worth two and a half times the value of the economies on the Atlantic seaboard. The economic centre of gravity is moving east. This is possibly where I differ from the hon. Member for Isle of Wight. In my view, we need to think imaginatively about offering the welcoming hand of trade as well as offering a strong shield and a strong sword.

I will finish with a quote from Dean Acheson, the US Secretary of State after world war two, who famously boasted that he was present at the creation. He warned us that

“the future comes one day at a time.”

We now do not have a single day to waste. That is why this debate is so very important.

[Mr Deputy Speaker (Mr Nigel Evans)]

I call the Chair of the Foreign Affairs Committee.

Countering Russian Aggression and Tackling Illicit Finance

Liam Byrne Excerpts

Wednesday 23rd February 2022 Commons Chamber

[Amanda Milling]

Let me just finish this point. There are people of Russian origin in this country who are British citizens. Many are critics of Putin, and it is completely wrong and discriminatory to tar them with the same brush.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I am sorry that the Minister has to defend the indefensible. Will she confirm to the House today whether the vetting of Mohamed Amersi’s donation surfaced the news that he made $4 million in a business deal with a man who was President Putin’s telecoms minister? Did the vetting cover that—yes or no?

[Amanda Milling]

As I say, donations to the Conservative party are received in good faith. They receive appropriate due diligence, are from permissible sources, are properly and transparently declared to and published by the Electoral Commission, and comply with the law.

--- Later in debate ---

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I congratulate Labour Front Benchers on calling this debate, because we are required to come together today to discuss, to expose and to unravel what could be the greatest coincidence in British politics. The cynical would say, in the words of Yogi Berra, that it is almost too coincidental to be a coincidence, although of course this House would not hazard such a judgment, but here it is: on the one hand we have a Government who have presided over the most comprehensive failure to tackle economic crime, which is a failure so profound that we have earned a reputation around the world as one of the world’s capitals of money laundering, yet on the other hand we have a flood-tide of money—not £2 million, not £3 million but over £4 million, and counting—that has come into Tory party coffers from generous souls with close ties to Russia. The ministerial code, for what it is worth, says that Ministers are required not only to avoid a conflict of interest but to avoid an appearance of a conflict of interest.

I therefore speak today in a spirit of great generosity to the Minister, because I want to try to extract him from the pickle that he now finds himself in. I am seriously concerned that Tory Ministers are now exposed to the allegation that they are quite simply poodles on roubles. In that spirit of generosity, I want to set out the two problems that the Minister will be required to resolve if he is to escape such an appearance over the weeks, months and years to come. Problem No. 1 is the gaping hole where a plan for tackling economic crime should be. We know the scale of the problem because the National Crime Agency has told us. It says that the scale of economic crime is some £100 billion a year in money laundering and £190 billion lost to fraud—a total of £290 billion. That is a significant chunk of our nation’s GDP, so this is not an insignificant problem: it is a monumental problem over which the Government are presiding. Secondly, the reputational damage is so serious that think-tanks in Washington are writing reports saying things like:

“uprooting Kremlin-linked oligarchs will be a challenge given the close ties between Russian money and the United Kingdom’s ruling Conservative Party”.

How on earth has the Conservative party got itself into this mess? Well, it is quite a story. I am going to rattle through the 10 key steps that have led the Government to get into this mess. First, they abolished the Minister in charge of economic crime. When the Minister was appointed—[Interruption.] Well, he was appointed with the title of Minister for Security and Borders, whereas his predecessor was known as the Minister for Security and Economic Crime. So the Government are taking economic crime so seriously that they deleted it from the title of the Minister who has been asked to wind up this debate.

Secondly, the Government have now tasked not one, not two but 12 different agencies with tackling the problem of economic crime without going to the trouble of appointing someone to be in charge of these 12 different agencies so as to lead the charge. Thirdly, they have neglected to implement 60% of the measures in their own economic crime plan. Going through the list of measures rated “red” by the Royal United Services Institute, some of them are pretty significant, such as making sure that the police get serious about tackling fraud and economic crime.

Next, the Government have starved the National Crime Agency of so many resources that its director general says that it will not take on cases where it thinks the legal costs will be too high. Then they have failed to equip Companies House with the powers to check information sent in by people setting up shell companies. According to the Minister, there are now 11,000 companies on the register that still have not filed returns on who is the person with significant control, yet how many prosecutions have we had? One hundred and nineteen. It is pathetic; it is lamentable. Then they have failed to bring forward a register of beneficial ownership of property, like the multi-million-pound mansions in Westminster. Then they have failed to use our unique role in the global financial economy to light up where bad actors are doing bad things. SWIFT, the financial messaging system, is based in the UK. We are the global hub, along with New York, of financial settlement worldwide. We could be using the panorama of information to which we have access to light up bad people, to create intelligence packages and then to ensure that those people are pursued to the ends of the earth.

We have failed to stop our courts being used as arenas to silence journalists such as Catherine Belton and Tom Burgis, who are pursuing bad and corrupt companies. Thank God for HarperCollins and Arabella Pike because, frankly, without such brave publishing houses, we would not have the truth brought into the public domain. Then we have the Government’s failure to introduce a foreign agents registration Act, despite the fact that it works in America and Australia. To cap it all, they have failed to offer us any kind of hard timetable for the economic crime Bill, which is an omission so serious that they lost their own Minister to it in the House of Lords.

Those 10 elements—this 10-step decent into chaos—is why we now have a situation where the grand total of unexplained wealth orders targeted against oligarchs is zero. Apart from the Magnitsky sanctions, which came from a list of the crimes handed to us in 2007, we have not proposed any sanctions for economic crime against Russian-born individuals since 2014. Some might say that is benign neglect; others might say it is malign neglect; and others might say that the Conservative party has been paid to look the other way.

I am sure we were all reassured by the Secretary of State for Instagram’s appearance on “BBC Breakfast” this morning, where she—the Foreign Secretary—told a grateful nation that the Tory party vets its donors and that we must not confuse Russian heritage with proximity to President Putin. I think we would all agree with that, which is why, in the spirit of generosity and helpfulness, I offer my vetting services to those on the Conservative Front Bench this afternoon.

Let us start with Lubov Chernukhin, who has donated £2.1 million. The Guardian revealed that her husband, Vladimir, who was appointed deputy chairman of VEB, which was not sanctioned yesterday, received $8 million from Suleiman Kerimov, who was sanctioned by the US Treasury in 2018. The transfer to Vladimir came on 29 April 2016, mysteriously just before a donation of £1.5 million to the Conservative party. Then there is Alexander Temerko, a man who, it is said,

“forged a career at the top of the Russian arms industry and had connections at the highest levels of the Kremlin”.

He was a former deputy chairman of Yukos Oil Company and somehow mysteriously escaped the purge of his colleagues. He has now donated £747,000. He has been working very closely with Viktor Fedotov, a director of Aquind, a source of great largesse to many Members in the House. Mr Fedotov is the former head of a subsidiary of Lukoil, and was revealed in the Pandora papers as a man who, along with two others

“made fortunes from the company in the mid-2000s, around the time it was alleged to have been siphoning funds from the Russian state pipeline monopoly Transneft.”

Then we have Dmitry Leus, who has donated £54,000. According to the Daily Mail, he was

“found guilty of money laundering and jailed in Russia in 2004. The conviction was later overturned and he insists the prosecution was politically motivated.”

Here is the mystery: he also donated to the Prince’s Foundation, which has decided to return Mr Leus’s money. The House will be amazed to hear that the Conservative party has not.

Then we have Mohammed Amersi. He and his wife have given £793,000 to the Conservative party. The BBC said he was involved in one of Europe’s biggest corruption scandals, which entailed $220 million being paid to a Gibraltar-based company owned by the daughter of the President of Uzbekistan. He has always insisted that his donations came from UK profits, but the Financial Times tells us that he

“received $4m from a company he knew to be secretly owned by a powerful Russian”—

Putin’s then telecoms Minister.

Then we have Murtaza Lakhani, whose firm Mercantile & Maritime has donated £500,000. This is the chap who Bloomberg tells us has been revealed as making large parts of his fortune through channelling

“a $6 billion torrent of cash”

from the Russian oil giant Rosneft to Kurdistan. The money flowed to a company registered in the tax haven of Belize, with a mailing address in Cyprus.

Then we have David Burnside, formerly of this parish. His firm has donated £200,000. Mr Burnside boasts links to senior figures in the Kremlin. The Guardian reported that he

“has introduced several prominent Kremlin figures to senior Conservatives”,

including Mr Putin’s old friend, Vasily Shestakov.

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. I note that the right hon. Gentleman has a long list. I wonder whether he could just deliver it a little bit faster.

[Liam Byrne]

I will conclude, Madam Deputy Speaker, because I think my vetting services have been exhausted for the Front Bench. I will conclude by saying that Conservative Ministers are behaving like innocents abroad in a world that is not innocent. No wonder people are now saying that the capital of Londongrad is not Mayfair but Matthew Parker Street, home of Conservative central office. The cruel would say it is 5 Hertford Street, co-owned by Jamie Reuben, scion of the family that made its fortune in the Russian aluminium wars and, as we know, the place where the Foreign Secretary insists on her £3,000 lunches.

The Government have to work harder to persuade us that there is not a coincidence. They have to persuade us that they are not poodles on roubles. They have to bring forward a proper plan for tackling economic crime, not least because of the fact that the financial services industry is worth £165 billion to this country, and it employs millions of people who work hard every day. But we trade on our reputation, and right now, this Government are destroying that reputation for good.

--- Later in debate ---

[The Minister for Security and Borders (Damian Hinds)]

I welcome this important debate. I thank the Opposition for securing it, and I am grateful for the manner in which the shadow Foreign Secretary opened it, the manner in which the shadow Chief Secretary to the Treasury closed it, and the tone in which it has largely, if not quite completely, been conducted.

Of course Government must be scrutinised and must be held to account. In our oppositional parliamentary liberal democracy, that is what we do, and I think it is what this House does rather well. But is also a great strength of this House that we can come together to show the unity of our ultimate purpose—the defence of freedom and democracy at home and abroad—and I believe that, collectively, we have done that today.

In his statement yesterday, the Prime Minister was clear. In recognising the supposed independence of the so-called people’s republics of Donetsk and Luhansk in eastern Ukraine, President Putin has flagrantly violated international law. Ukraine is a sovereign country, and has a right to choose its own security arrangements. It is clear that the deployment of Russian forces in sovereign Ukrainian territory amounts to a renewed invasion of the country. The Prime Minister referred yesterday to “our valiant Ukrainian friends”, and added:

“We will keep faith with them in the critical days that lie ahead, and whatever happens, Britain will not waver in our resolve.”—[Official Report, 22 February 2022; Vol. 709, c. 175.]

The United Kingdom also has an absolute commitment to defend our NATO allies. We have already doubled the size of our deployment in Estonia, where the British Army leads the NATO battlegroup.

Yesterday the UK, in co-ordination with international partners, announced a first wave of targeted sanctions. I say a first wave, but in fact more than 270 individuals are already sanctioned under previous programmes. Yesterday’s measures placed banks worth £37 billion under sanctions, in addition to more oligarchs, and there is more to come. My hon. Friend the Member for Basildon and Billericay (Mr Baron) rightly mentioned the importance of calibration. It is also vital that after this first barrage we continue to work in lockstep with our friends and allies around the world, as my hon. Friend the Member for Devizes (Danny Kruger) rightly pointed out. These measures will hit more oligarchs and banks close to the Kremlin, sending a clear message that the UK will use our economic heft to inflict pain on the Putin regime and degrade its strategic interests.

The UK will also sanction those members of the Duma and the Federation Council who voted to recognise the independence of Donetsk and Luhansk, violating Ukraine’s territory. We will extend the territorial sanctions imposed on Crimea to non-Government controlled territory in the so-called breakaway republics of Donetsk and Luhansk, and we are ready to go much further if Russia does not pull back from the brink. In the event of further aggressive acts against Ukraine from Russia, we have an unprecedented package of further sanctions ready to go. I will not, from the Dispatch Box, go into future designations or who we will target and with what measure, but Moscow should be clear that we will use these powers to maximum effect if Russia further invades Ukraine.

Corruption and illicit finance are the lifeblood of the kleptocratic Russian Government, and individuals associated with the Russian state can try to further their influence through investment. This Government are strongly committed to tackling—and we continue to act against—the threat from illicit finance. Through the economic crime plan launched in 2019, we are overhauling our suspicious activity reports framework against money laundering, including from Russia. We are increasing the number of financial investigators in the National Crime Agency, and we are substantially increasing funding for our economic crime response, with an additional £400 million over the next three years, funded in part by a new economic crime levy.

[Liam Byrne]

I want to clarify one point. The Minister seemed to imply that further sanctions would be contingent on a further roll-forward of Russian troops, but that is not what the Minister for Europe and North America, the right hon. Member for Braintree (James Cleverly) said to the House yesterday. He said that there would be further sanctions regardless of whether there was any further advance. Can the Minister clarify that point?

[Damian Hinds]

We will work together in lockstep with our friends and allies around the world. I will not go into detail now about what future designations might be or the precise nature of them, but as I said earlier, Moscow should know that we will use these measures to their full effect.

Sanctions

Liam Byrne Excerpts

Tuesday 22nd February 2022 Commons Chamber

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

May I follow up the question that was well posed by the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) earlier? On the package of sanctions announced today, what specifically is that designed to deter, and what is the ultimatum that is being sent to the Russian Government today?

[James Cleverly]

I will come to more details of the sanctions package and what we hope to achieve with it, but ultimately we are looking to prevent further territorial encroachment and aggression into Ukraine, and to get Russian troops to withdraw back to Russia, to de-escalate and to move away from the Ukrainian border. As I will say later in my speech, if the House gives me the opportunity to progress, we are working and co-ordinating closely with our international partners in our sanctions response to ensure maximum effectiveness.

--- Later in debate ---

[Mr Lammy]

My right hon. Friend is exactly right: it could, but it needs enforcement and we need to hear more individuals named. The danger in this debate is that the punishment does not befit the crime. I understand the Government’s desire to maintain a broader deterrent against further escalation, but it is also clear that a threshold has been crossed. The gravity of Putin’s actions requires a broader, firmer and fuller response, otherwise we risk his calculating that the rewards of aggression outweigh the costs.

[Liam Byrne]

My right hon. Friend is making a brilliant speech. When the new sanctioning regime was introduced, it was all about increasing our capacity to act independently to sanction bad actors. Is my right hon. Friend therefore disappointed that, Magnitsky sanctions aside, we have added only three people to the sanctions list for economic crimes since 2014? That seems pathetic, given the threat we confront.

[Mr Lammy]

My right hon. Friend is exactly right. In this city of more than 7 million people, with at least a quarter of a million properties owned in London by foreign nationals, just three individuals have been named, when the EU has already indicated the naming of 27.

--- Later in debate ---

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

It is a pleasure to follow that excellent speech.

There is an old saying that no matter how elegant the strategy one should occasionally look at the results. The truth is that this Government threatened sanctions as a deterrent and the invasion proceeded, and this afternoon they have laid out the first of their concrete sanctions and the invasion has just stepped up. So surely the Government have got to recognise that the strategy they have laid out of deterrence has failed and they therefore need to think again and come back to this House with measures that are strong and Russia-stopping, because that is not what we have got today.

What has been so helpful about today’s debate is the wide acknowledgement in all parts of the House that we are now facing an adversary in Russia that has got to be stopped. This is a country that fights us in cyber-space and on the streets of Salisbury. It is a country that meddles in elections and cheats in winning medals. It is reckless in space. It shells its neighbours. Its ambitions are limitless and its tactics are merciless. The question we have to confront is: how much longer are we prepared to tolerate the intolerable?

President Putin is not hellbent on acquiring some kind of Lebensraum. His argument is not about trying to roll forward his borders to create some living space for the Russian people. If anything, his strategy, stated as it is, is more ominous: it is to restore the gory glory of the former Soviet Union and re-imperialise the borderlands across 10,000 km of Russia’s borders. That is not a secret, but we have to stop it. We have to work with our allies to put in place a regime that is going to stop this aggression now and once and for all.

That is why the package announced today is so disappointing. It has been revealing that almost no one in the House today has stood up to commend the package as good enough. Everything we have heard today has said that it is a disappointing package that falls well short of what we think is needed to deter President Putin. It is, as the old saying goes, like being savaged by a dead sheep.

The Government are not short of tools. Actually, after 9/11, one of the great legacies that Labour left was in transforming the architecture for deploying economic sanctions to deter and pursue bad people. However, as Lord Ricketts said in his excellent book late last year, it is no good having the tools if they are left in the shed. The problem we have with the Government today is that the tools are being left in the shed.

Let us look at a simple scorecard of some of the results. As the hon. Member for Isle of Wight (Bob Seely) said, how many unexplained wealth orders have been implemented against friends of President Putin? A grand total of zero. Apart from the Magnitsky sanctions, which were handed to us and relate to a crime back in 2007, how many sanctions against individuals guilty of economic crime have we proposed in this country? None since 2014—in fact, a grand total of just three individuals are on that sanctions list, yet, when the new independent sanctions regime was introduced, we were promised that it would transform our capacity to take on bad people around the world. If that was true, why on earth are we not using it today?

As we have heard, the people on the sanctions list announced today have been on a US list since 2018. None of the major Russian banks has been hit with sanctions, even though they are raising liquidity in London to finance their day-to-day banking operations. If we shut them off from the liquidity of London, they would be forced to go to the central bank in Moscow, putting immeasurably more pressure on the economic structure around President Putin. The truth is that the Government have failed to take aim and target the commanding heights of President Putin’s kleptocracy and that is a mistake for which the people of Ukraine are now paying.

At least 120 oligarchs should be on the Government’s sanctions list. At least four major banks—VTB, VEB, SberBank and Alfa-Bank—should be sanctioned immediately. That is the pressure that we need to ramp up to send a serious message. Today’s failure would not be so serious if it were not part of a much broader failure. Can anyone in the House tell me: who is the Minister responsible for tackling economic crime? It used to be the right hon. Member for Wyre and Preston North (Mr Wallace), who is now the Secretary of State for Defence. He had a title: Minister for Security and Economic Crime. However, that ministerial role has been deleted from the current ranks of Her Majesty’s Ministers. The new Minister is the Minister for Security and Borders.

We are told that the National Economic Crime Centre is comprehensively under-resourced for what it is trying to do. The National Crime Agency, we are told, makes a calculation as to whether it can afford the legal costs of a case before it prosecutes unexplained wealth orders. Literally, it is being scared off by the scale of the lawyers it opposes in court. The regulator Companies House does not check the information that is filed in front of it. We have journalists who are being silenced in English courts, for so long sanctuaries of justice, now arenas for silence. As we have heard so eloquently from others, we have no timetable for the economic crime Bill.

To judge the Government even on their own terms, let us look at the economic crime plan that they put forward. The analysis of the Royal United Services Institute is that 60% of the measures in the plan have not been implemented. Let us go through a couple of the points that are missing in action: clarifying the sanctions supervision powers—not done; reviewing the criminal market abuse regime—not done; developing a sustainable, long-term resourcing model for economic crime reform—not done; improving the policing response to fraud—not done. It would be laughable it was not so serious. This is not a Government who are serious about taking on economic crime and there are people around the world who are now paying the price for that negligence.

We need three things now. First, we need clear leadership. We need a Minister for economic crime, tasked with bringing forward the economic crime plan to this House at the earliest opportunity. Secondly, we need to start using our intelligence capabilities to light up who the bad actors are around the world. The fact that London and New York are the centres of financial transactions worldwide and the fact that we are the home to the SWIFT financial messaging system mean that we have unrivalled insight and intelligence into who is doing what with whom and where. Why are we not bringing those intelligence packages together and tasking them out to pursue these people? Thirdly, we need a final piece of the strategy that is modelled on the counter-terrorism strategy from a few years ago. The Contest strategy is deemed a good strategy. Its four principles—preparing, protecting, preventing and, crucially, pursuing—are good principles. The Government must now bring forward a Contest strategy for tackling economic crime. That is really what we needed as part and parcel of the sanctions legislation the Minister laid before the House today.

It was, as I have said before in the House, 33 years ago, back in 1989, that President Gorbachev went to the Council of Europe in Strasbourg and gave us a vision about a common European home that stretched from the Irish Atlantic coast to Siberia. It should be a place, he said, where there is the rule of law, our great gift to the people of this world. Those days are now gone. From Kaliningrad to Kamchatka, what we now have is a great kleptosphere taking shape. It is a place where might is right, where, as the saying goes, the strong do what they can and the poor suffer what they must. We now have a task to perform in this country. It is a task we perform with our allies for the benefit of billions of people around the world—to take on the kleptosphere in new and aggressive ways. That battle is already under way, but it is time the Minister now stepped up that fight.

[Several hon. Members rose—]

--- Later in debate ---

[James Cleverly]

With the leave of the House, I will make a few concluding remarks and address some of the issues, queries and concerns that have been brought up by hon. and right hon. Members on both sides of the House. Those in the House who have been in government know that it is never a particularly fun experience at the Dispatch Box being questioned and criticised by both sides of the House.

[Liam Byrne]

Try sitting on this side.

[James Cleverly]

No.

The House may be surprised to hear that I have taken a huge amount of positivity from the exchanges today, because this House has once again spoken with such a commanding, concerted and collaborative voice in support of the territorial integrity, sovereignty and independence of Ukraine and in support of the Ukrainian people. More than that, this House has demanded of the Government that we go further with our sanctions—that they are harder and inflict greater economic pain on the individuals and entities in the Russian system who have done so much damage not just to the Russian people, but now also to the Ukrainian people. I am happy that is the tone of the House because I can confidently inform the House that it is demanding something of the Government that the Government are absolutely determined to do. It is pushing at an open door.

A number of questions have come up repeatedly, so I will address them.

Elections Bill

Liam Byrne Excerpts

Report stage
Monday 17th January 2022 Commons Chamber

A boundary review is coming. Let’s face it: the public do not know very well what a constituency boundary means. I can demonstrate that perfectly in my constituency. Just on the bottom corner is Atherstone. While not in my constituency, everyone locally knows exactly where it is. Although it is thought of as part of where I represent in Bosworth, Leicestershire, were I to live there, my address would come up as North Warwickshire. That creates confusion when it comes to the people we are trying to represent. I simply urge the Government to consider the amendment, to bring something forward and to find a set of words that could easily allow us all to have that choice of representing in safety.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I rise to speak to new clause 16, in my name and that of Members from four of the parties represented here in Westminster. We tabled the new clause because the Bill has many flaws, but among the worst is the lack of any attempt to clean up the laundromat of British politics, which is now awash with dark money from dubious sources. We cannot in good conscience now pretend we are unaware. The Government can no longer plead ignorance or innocence: they are either careless or culpable and we in this House cannot tolerate the situation for a moment longer. That is why the amendments we are moving are so important.

Our Pandora amendments are simple. They would insist that party donations must come from profits made here in the UK, and they would establish a new regime that would allow the Electoral Commission to call in donations for an assessment on national security grounds. As it happens, the Government have just introduced precisely that regime for investments in critical national infrastructure. What infrastructure in this country could be more important than the essence of our democracy itself? We have heard warnings from Chatham House, the Intelligence and Security Committee and from Lord Evans this weekend that our system of party funding is now wide open.

We have heard and debated in this House the example of Mr Banks, Leave.EU and the mysterious source of his gigantic loans from Rock Services—or was it Rock Holdings? Thanks to evidence given to Carole Cadwalladr and the heroic reporting of The Guardian, we know that there are all kinds of interesting and no doubt innocent connections, such as the fact that Mr Banks’s wife, Katya Banks, was given entry into the country on a passport serially numbered to a passport given to someone who MI5 reported as a Russian spy. That is no doubt completely innocent, but the fact is that, when the National Crime Agency dropped its investigation into the source of the money, it left the source of the money shrouded in mystery. The Electoral Commission was so alarmed that it issued a warning that it could open the floodgates to donations from offshore.

Let me underline why the national security assessment is important to those on the Opposition Benches, but should be of importance to the Conservative party, too. Let us take another honourable donor, Mr Mohamed Amersi, a man who together with his partner has given nearly £800,000 to good causes and who, it would seem, might qualify for a walk-on part in John le Carré’s “The Night Manager”, but not as Jonathan Pine.

Information I have seen from well-placed sources in the Kremlin shows that Mr Amersi is an associate and business partner of people with all sorts of friends, including some with close connections to the SVR and FSB. They include Yuri Lopatinsky, Ernst Stauffer, and Aleksandr Barunin, with whom Mr Amersi worked on several telecom deals, including the takeover of Megafon, the firm later accused by the Georgians of

“illegal business operations and participation in the military and economic annexation of Georgia”.

Mr Amersi made a fortune helping to sell PeterStar to a Luxembourg-based company, which—surprise, surprise—turned out to controlled by Leonid Rieman, who was none other than President Putin’s former telecoms Minister. Coincidence? You be the judge, Mr Deputy Speaker.

[Clive Lewis (Norwich South) (Lab)]

My right hon. Friend has made some excellent points. The chair of the Trade Union and Labour Party Liaison Organisation, Mick Whelan, has said that trade union money is the cleanest money in British politics, and, listening to my right hon. Friend’s speech, I think I can agree with him. Given that the Bill will make that more difficult, do we not begin to see a pattern forming?

[Liam Byrne]

My hon. Friend is right and he will horrified to hear that there is more.

Perhaps the most concerning of Mr Amersi’s connections is Leonard Bogdan, a man with very interesting friends in the FSB and the SVR. Mr Bogdan was a minor partner in Tempbank, which held Soviet Union Communist party assets and then specialised in covert foreign transfers. The bank was associated with several Syrian citizens supplying arms to Syria and Iran and was sanctioned by the US Treasury in 2014. But Tempbank also helped to facilitate another sanctioned firm, Hudsotrade, which dealt with Russian arms and ammunition suppliers. Sources inside the Russian Government say that Mr Amersi was involved in these deals, providing finance from Switzerland and the United Arab Emirates, along with private clients from Syria and Iran, to help exports into the middle east. Mr Amersi, it is said, dealt directly with Hudsotrade and two of the shareholders, who were later sanctioned.

Despite those connections, however, correspondence that I have seen shows that Mr Amersi was asked to chair COMENA—Conservative Friends of Middle East and North Africa—a new political interface between the Conservative party and the middle east established

“on the authorisation of CCHQ”.

Mr Amersi says that he had a half-hour chat with officials from the Conservative party before writing his cheques, but on the basis of the evidence to which I have drawn attention today, I think we would all benefit from the Electoral Commission’s being empowered to call in donations for a national security audit. We have allowed this regime for donations and investments in critical national infrastructure; we now need to bring in that regime to clean up the laundromat of British political funding.

Time does not allow me to highlight further coincidences—

[Cat Smith]

Has my right hon. Friend read the transcript of our Committee hearings? I hope that the Minister has had a chance to read the Russia report, because it is imperative for all of us to be well aware of the security threats that face our democracy.

[Liam Byrne]

My hon. Friend is absolutely right. The point is that I can raise questions here that warrant further investigation—questions about, for example, Lubov Chernukhin, the model of generosity who has given the Conservatives £2.1 million, £1.9 million of it after her husband Vladimir—the same Vladimir who was appointed by Mr Putin’s deputy chairman of Vnesheconombank—received money from Suleiman Kerimov. This was a man who was later sanctioned by the United States Treasury, and not only for being a Russian Government official: he was arrested in France for smuggling in hundreds of millions of euros in suitcases.

Then there is Mr Temerko, another honourable man, who has donated £1.2 million to the Conservative party. I am told that the Prime Minister’s whiff-whaff bats are on the wall of his reception room. The only slight issue is that Mr Temerko is the man who used to operate at the very top of the Russian arms industry, with connections high up in the Kremlin—but, of course, Mr Temerko is an honourable man. He works with another honourable man, Mr Fedotov, who is a key shareholder in Aquind Ltd, which, The Guardian reports, has donated £700,000 to the Conservative party, along with another firm. This is, unfortunately, the same Mr Fedotov who, according to the Pandora papers, has revealed that his fortune was made through an offshore financial structure in the mid-2000s, at about the time when it was alleged to have been siphoning funds from the Russian state pipeline company Transneft. But, of course, Mr Fedotov is an honourable man.

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

rose—

Human Rights: Kashmir

Liam Byrne Excerpts

Thursday 23rd September 2021 Commons Chamber

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I thank the Backbench Business Committee for scheduling this debate and I am grateful to the all-party parliamentary group on Kashmir for its work.

I want to make three very quick points, but the bottom line is this: if this Government are serious about the rules-based order—you never know, they might be—then it is time for them to step up the fight for justice for Kashmir. There are three ways in which this can be done. First, we must say what we mean and mean what we say. All of us will have seen in Hansard that there is now a new trope, cliché, turn of phrase or diplomatic nicety: “We are aware of human rights concerns.” Well, firing pellets indiscriminately at children is not a concern: it is an abuse. Detaining thousands of people without trial for up to two years, including former chief Ministers, is not a concern: it is an abuse. Detaining people without trial for years on end, as we have heard today, is not a concern: it is an abuse. Beatings and torture: that is not a concern; it is an abuse. Troops who shoot dead labourers without trial or suspicion: that is not a concern; it is an outrage, and we should be angry in this House. Abuse after abuse; outrage after outrage; offence after offence: it is about time we started telling the truth in this House about what is going on in Kashmir.

Secondly, the Government can make it clear to both India and Pakistan that there will be no trade deals unless human rights are observed. We know that the prize for an India-UK deal is significant, at up to $15 billion over the next nine years. That is quite a treasure, but are we seriously saying here, in this House, that for $15 billion we will look the other way on human rights abuses? The world of trade is built on trust, and we cannot trust countries that break their agreements, break international agreements and perpetrate the human rights abuses we see in Kashmir.

Finally, how can we pretend that this is a bilateral issue? This is no longer a bilateral issue. The changing of the facts on the ground broke the Simla agreement. Human rights is always a multilateral issue. There have been nearly 300 international conflicts since 1945 and nearly 200 of them were settled through international brokering—think of Holbrooke in Yugoslavia and President Carter in Israel and Egypt. We need a trilateral solution.

The economies of the new silk road will be two and a half times the size of the Atlantic by 2050. Our interest and our duty is in getting involved and delivering justice for Kashmir now.

Withdrawal from Afghanistan: Joint Committee

Liam Byrne Excerpts

Wednesday 15th September 2021 Commons Chamber

[James Cleverly]

I really do have to make some progress. There are a lot of points that I wish to cover. I am sure Members will be able to bring that up in the forthcoming debate.

The FCDO team in London and internationally continue to work around the clock to support processing and responding to the correspondence that has been sent by Members of this House. During the evacuation operation alone, the FCDO received, as I have said previously at the Dispatch Box, over 200,000 emails. Approximately 30,000 of these emails were from MPs. That volume reflects the concern and passion of the House, and we completely understand that. However, working through that volume of emails has been a Herculean task.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

On that point, will the Minister give way?

--- Later in debate ---

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

Never has the old saying been more true: a failure to plan is a plan to fail. This Government failed to plan and these Ministers are now failing. They are failing people in Afghanistan and their loved ones here in this country.

I put on record my heartfelt thanks to those who went in to serve, to help and to aid those in need, and I put on record my thanks to all our caseworkers and staff, my own included. My staff are now supporting 1,400 people in Afghanistan, the loved ones and family members of people in Birmingham, Hodge Hill constituency. The stories they have heard have been heartbreaking, yet the Government cannot and will not even give us the courtesy of updates on that trauma. Worst have been the cases where family members here in Birmingham have had to listen to their loved ones screaming in terror down the phone and having nothing to do, nothing to say, no update, no comfort to give. One constituent said:

“I literally am on the phone...hearing them scream and cry and beg for help. I have no other choice but to listen and cry dreading if they will be found by the Taliban…they have already executed his brother. I’ve tried calling various immigration numbers, but still of no help.”

Another constituent talked of the cold fear that comes as the Taliban go door to door, hunting those who worked with the fallen regime. One told us how their father was a high-ranking colonel and former Afghan national army instructor, and their sisters were helping women to become literate and learn their rights. We were told:

“This threat is directly facing all my family”.

Another let us know that they had already received a warning letter from the Taliban and they were now in fear of going out to find food. A constituent said to me, “How is that family going to feed their children when they dare not venture into the street to get food?” She said to us that their siblings

“can’t even go outside to provide food for their kids because…Taliban is after my whole family”.

All of us in Birmingham are extremely proud of the way in which our city has stepped up—we are a city of sanctuary and we are very proud of it. Some 1,600 refugees are currently being supported in our city, and I want to put on record my thanks to Councillor John Cotton and his team for their extraordinary work. I have to say that that is in contrast to the council in the constituency of the Minister with responsibility for Afghan resettlement, the Under-Secretary of State for the Home Department, the hon. Member for Louth and Horncastle (Victoria Atkins), who was in her place a moment ago. I am told that that local authority has supported just one asylum seeker since 2016. Can that really be true?

We have no details of the new scheme. We have no updates on the 1,400 cases we have filed for. We have no clarity on the resources that our city needs to provide help. We have no leadership to pull together councils in this country to provide proper support. We have no notice of the so-called “contingency hotels” that are popping up at very short notice. We have no answers to the challenges we put to Serco. We have no strategy, no updates, no clarity, no leadership and nothing to say to our constituents, citizens of this country about to lose the people they love most. These Ministers are not only risking the lives of those abroad; they are breaking the hearts of their family members here at home. The good people of Afghanistan stood with us and it is about time we stood with them.