Death of Alexei Navalny
Margaret Hodge Excerpts(2 months, 1 week ago)
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Leo Docherty
The benefit is to deliver messages of condemnation and outrage, and to continue to advocate for consular access for those held by the Russian regime.
Dame Margaret Hodge (Barking) (Lab)
I want to turn to the economic impact of the sanctions, which the Minister alluded to. A loophole in our sanctions regime means that countries such as China and India import Russian crude oil, process it and then sell it into the UK as refined oil. In 2023, we imported 5.2 million barrels of this oil. That means that we sent something like £141 million in tax revenue to the Kremlin’s war chest. Britain is also the biggest insurer of Russian oil moved by sea, most of which is sold at prices well above the price cap—again, violating sanctions. Does the Minister agree that tough words are no substitute for tough actions, especially after the shocking murder of the heroic Alexei Navalny? Will he agree to report back to Parliament before Easter with proposals to stop the sanctions-busting?
Leo Docherty
We should have confidence that the economic impact of sanctions has been very significant. Putin has been denied hundreds of billions of dollars because of the collective action of the G7 nations. Is it perfect? No, it is not. Are we looking at ways of making it more effective? Yes, we are. Will we keep the House updated? Of course.
Beneficial Ownership Registers: Overseas Territories and Crown Dependencies
Margaret Hodge Excerpts(4 months, 3 weeks ago)
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Dame Margaret Hodge (Barking) (Lab)
I beg to move,
That this House notes the implementation of public registers of beneficial ownership in the UK’s Overseas Territories and Crown Dependencies; believes that the Government needs to respect the will of Parliament and meet the implementation deadline at the end of 2023; encourages the Government to lay an Order in Council formally requiring the UK’s Overseas Territories to implement public registers of beneficial ownership if the deadline is not met; and considers public registers of beneficial ownership to be an essential transparency measure to combat tax evasion, money laundering and other economic crimes.
This debate should not be necessary. The House expressed its view when it agreed an amendment to the Sanctions and Anti-Money Laundering Act 2018 that required overseas territories to voluntarily introduce registers of beneficial ownership within two years or face an Order in Council mandating compliance. Five years have passed since the right hon. Member for Sutton Coldfield (Mr Mitchell) and I moved the amendment, and the only overseas territory to comply with the legislation is Gibraltar, which I salute. While I understand that the Minister is making progress with some of the other jurisdictions, they have yet to comply with our legislation.
Siobhain McDonagh (Mitcham and Morden) (Lab)
Journalists have revealed that the family of Asif Aziz, a landlord to my constituents in Britannia Point, Colliers Wood, manages a large property portfolio registered under dozens of companies on the Isle of Man. There is no beneficial owner listed, so complaints can never reach the landlord. We already have legislation that requires offshore companies that own properties to declare their owners on a register. Does my right hon. Friend agree that properly resourced enforcement is essential, and that having public registers of beneficial owners would make it much easier to identify and scrutinise the beneficial owners of offshore shell companies?
Dame Margaret Hodge
I am grateful to my hon. Friend for bringing that to our attention. Sadly, it is an issue not just of enforcement but of definition. I bet that the landlord in her constituency owns the properties through a trust, and there is no openness about beneficial ownership of trusts. She makes a very important point.
Sir Peter Bottomley (Worthing West) (Con)
I apologise for not being able to stay for the whole debate.
I strongly support this debate. I put it to the right hon. Lady that the reason why people hide things in trusts and offshore is either to avoid embarrassment or to avoid tax. People ought to do better, so that they will not be embarrassed, and they ought to pay tax properly.
Dame Margaret Hodge
I thank the hon. Member for his support. I agree that it is partly about reputation and partly about avoiding tax, but it is also about indulging in economic crime, from money laundering through to the worst crimes that stain our country and our economy.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
As the Father of the House has just intervened and I am the longest-serving Member on the Opposition side of the House, may I say that I am a long-term supporter of what my right hon. Friend has been trying to do? Owing to our time together as undergraduates at the London School of Economics, I know that she is a determined woman. Let us get on with it—let us hold these people to account and change the law.
Dame Margaret Hodge
I thank my hon. Friend for his support—he is probably my oldest friend in the House; we go back many years—and I hope that the Government heard his urging.
Sir Julian Lewis (New Forest East) (Con)
Could we add one more to the list of reasons why people conceal their identities in this way, which is to avoid sanctions, including sanctions placed by our own Government?
Dame Margaret Hodge
The right hon. Member makes a really important point, which I will come to later. He is right: this is a national security threat as well as a threat to our economy.
The Government have yet to comply with the legislation by making an Order in Council to mandate compliance by the overseas territories. After discussions between the Crown dependencies and the right hon. Member for Sutton Coldfield and myself, the three Crown dependencies —Jersey, Guernsey and the Isle of Man—announced in May 2019 that they were committed to introducing public registers and set out a plan to do so. Although I welcomed that in principle, I was concerned that their commitment was qualified and that their action plan contained a number of opt-out clauses. However, on the basis of their commitment, we chose not to legislate but to trust them. It now seems that our trust was misplaced. They are reneging on that commitment and using every excuse not to comply.
Sir Robert Neill (Bromley and Chislehurst) (Con)
I understand how strongly the right hon. Member feels. May I point out that, as a matter of constitutional fact, we have no right to legislate for any of the Crown dependencies? Constitutionally, they are not subject to the jurisdiction of this Parliament.
Dame Margaret Hodge
I have enormous respect and time for the hon. Member, but I have an opinion from a renowned KC that we sought at that time—I will come to it later—which contradicts entirely his point and says that we do have the constitutional right to legislate.
Karen Bradley (Staffordshire Moorlands) (Con)
I want to comment not on the substance of what the right hon. Lady is talking about but merely on the procedural aspects. She will know that the Procedure Committee is looking at the impact of legislation in this place on devolved legislatures, the overseas territories and the Crown dependencies, and I am interested in her comments and look forward to her speech, but does she agree that we should try to find a way for the voice of the overseas territories to be heard when we legislate in this place if there are implications for them?
Dame Margaret Hodge
Indeed. I would love for us to be able to do this in a consensual way; that would obviously be the best way to proceed. Sadly, we have been waiting for 10 years, and my patience has worn a little thin. Given the implications both for national security and for the economy, the time has come to say, “Enough is enough.” We should use the powers that we have.
Dr Matthew Offord (Hendon) (Con)
The right hon. Member is being generous with her time. The 2022 ruling of the Court of Justice of the European Union stated that unrestricted public access to beneficial ownership information was incompatible with the right to life. Will she cover that?
Dame Margaret Hodge
I will. The hon. Member will know as well as I do that we are no longer a member of the European Union, so we are not bound by that finding.
Why does all this matter? The epidemic of tax avoidance, tax evasion and economic crime flourishes in an environment of secrecy, and our overseas territories and Crown dependencies facilitate that secrecy. We know from the ever-growing number of leaks of data on financial misdemeanours that their role is central to enabling economic crime. Half the shell companies exposed in the 2016 Panama papers were incorporated in the British Virgin Islands. In 2017, the Paradise papers—a massive tranche of documents leaked from the offshore law firm Appleby—showed that a frightening number of frontline politicians held secret accounts, with the overseas territories appearing prominently as destinations of choice for hiding money. Those included people such as Justin Trudeau’s chief fundraiser, Donald Trump’s Commerce Secretary, Brazil’s Finance Minister, Uganda’s Foreign Minister, and our own Lord Ashcroft, who had—and probably still has—a Bermuda-based trust where he hides some of his wealth.
Some 20% of the files in the FinCEN—Financial Crimes Enforcement Network—leak of 2020 contained clients that listed an address in the British Virgin Islands. The leak also revealed, because it was a leak of documents from an American agency, that the Americans viewed Britain as a higher-risk jurisdiction for its role in money laundering and financial crime. The Pandora papers leak of 2021 involved 12 million files, with data from 14 different law firms and company services providers. Over two thirds of the companies analysed in that batch of leaked documents were registered in the BVI. A World Bank review of 213 corruption cases that were investigated over the 30-year period to 2010 found that 70% involved anonymous shell companies. The UK, its overseas territories and Crown dependencies accounted for the second jurisdiction in terms of the number of corruption cases associated with it.
Mr Sheerman
What I am learning from my right hon. Friend’s excellent speech is that London is the centre of the world for hiding money, because so many professionals in this city know how to do it. Is that correct?
Dame Margaret Hodge
Yes. Sadly, London has become the jurisdiction of choice for too much of our dirty money. The all-party parliamentary group on anti-corruption and responsible tax has been successful—albeit not as much as I would have liked—in achieving changes to economic crime legislation to challenge and start tackling that.
Andy Slaughter (Hammersmith) (Lab)
I congratulate my right hon. Friend on leading the debate, and more particularly on the forensic and persistent way she has dealt with this issue over so many years. It is clear that London is the centre of much of the wrongdoing in this area. That is not a coincidence; it is because the Government have been permissive. Has she had an indication of whether they are now prepared to back her proposals?
Dame Margaret Hodge
My hon. Friend is right. I have often said that it is not just this Government who have done that; the Labour Government, in their time, also deregulated to such an extent that they allowed London to become the centre of this activity. I do not feel that the Government are doing all that they can to try to turn that around. I await a future Labour Government, and I will watch Labour Ministers with an eagle eye to ensure that they do that.
The debate is not just about the role of the overseas territories and Crown dependencies in facilitating economic crime; their activities as secrecy jurisdictions are a threat to our national security, as the right hon. Member for New Forest East (Sir Julian Lewis) said. The Foreign Affairs Committee said as much in a report on the matter, and as recently as November it called on the Government to ensure that the overseas territories fulfil their commitment, adding that
“there should be no further deadline extensions.”
We know, for example, that between 2008 and 2018, £68 billion flowed out of Russia and into our overseas territories. We are a favourite jurisdiction for receiving Russian-laundered money. We know that individuals who are sanctioned use the overseas territories and Crown dependencies to hide their assets just before sanctioning to prevent those assets from being frozen. Abramovich and Usmanov are two classic examples of that practice.
We know the role of the overseas territories in preventing us from knowing the actual beneficial owner of property in the UK. Over 70% of the properties in the list of those that we know about are owned by companies registered either in the Crown dependencies or the BVI. We still cannot identify the beneficial owners of two thirds of those 70%, because they use trusts to hide their identity, and 85%—more than eight out of 10—of those trust arrangements are based in the three Crown dependencies and the BVI.
Most recently, in the Cyprus papers, which have just been uncovered, we found a direct link between Vladimir Putin and Roman Abramovich, with money going from Abramovich to two men dubbed as “wallets” for Putin—a man whose salary is $100,000, but whose wealth is rumoured to be between $125 billion and $200 billion. The theft of money from the Russian people is facilitated by secrecy jurisdictions such as Cyprus, but also by our own tax havens.
The problem is massive, and the role of our overseas territories and Crown dependencies is central. Baron Cameron of Chipping Norton understood that when he went to Davos in January 2013—over 10 years ago—and warned multinationals to
“wake up and smell the coffee”.
I will give a few more quotes from him. In 2013, he pledged:
“Every one of the Crown Dependencies and Overseas Territories are going to have an action plan on beneficial ownership”.
He told the overseas territories to rip aside the “cloak of secrecy” by creating public registers of beneficial ownership. In 2014, he wrote to the overseas territories, saying that public registers were
“vital to meeting the urgent challenges of illicit finance and tax evasion.”
In September 2015, he accused them of
“frankly…not moving anywhere near fast enough…if we want to break the business model of people stealing money and hiding it in places where it can’t be seen: transparency is the answer.”
When Lord Cameron launched our UK register in 2016, he said that
“it’s better for us all to have an open system which everyone has access to, because the more eyes that look at this information the more accurate it will be.”
At the anti-corruption summit in May 2016, he said:
“We’ve talked about the need for every country to ultimately reach what I call the gold standard of having a public register of beneficial ownership. And I am clear that I include all the Overseas Territories and Crown Dependencies.”
Lord Cameron is now in a position to act, and I urge the Minister to tell his boss to do so. When even Nigeria, Ukraine, Albania and Morocco have introduced public registers, why can our tax havens not?
Using the European Court of Justice ruling to delay the implementation of public registers is a convenient but lame excuse. It actually has not deterred Gibraltar. While some countries have closed their registers, others have kept them open. Crown dependencies in particular are acting in a completely dishonourable way. Their role in facilitating economic crime and tax avoidance is indisputable, and their protestations to the contrary are simply untrue. Their behaviour in providing public assurances that they will move towards public registers but claiming that the European court ruling prevents them from doing so is, in my view, unforgivable.
Mr Sheerman
My right hon. Friend is being generous in giving way. I absolutely support everything that she is saying, but can we also have more publicity about what is happening with people who do not pay tax in this country? Jim Ratcliffe of INEOS has become very rich and now does not pay tax in this country. I understand that the Daily Mail does not pay any taxes. Could we not have an ad in The Sunday Times rich list about those who actually pay their taxes?
Dame Margaret Hodge
I am left wondering whether The Sunday Times would ever publish that—we shall see.
Let me address the point made by the hon. Member for Bromley and Chislehurst (Sir Robert Neill). In April 2019, the right hon. Member for Sutton Coldfield and I sought legal advice about whether it would be constitutionally lawful for the UK Parliament to legislate to compel all Crown dependencies to establish public registers of beneficial ownership. I have the advice here, which concluded:
“It is beyond doubt that the intrusion of criminal funds into the UK economy threatens the interests of the UK. It is also beyond doubt that extensive funds in this category emanate from the Crown dependencies.”
The last sentence states: “The proposed amendment”—we put an amendment to the King’s Counsel to consider whether it was lawful—
“is a constitutionally legitimate and lawful exercise of the UK’s powers to secure its domestic interests by protecting confidence in its financial institutions and the integrity of the commercial life of the nation”.
Finally—I recognise that we are running out of time— I want to touch on the compromise that I think the Minister is seeking to secure in his negotiations with our tax havens. The compromise is that in order to have access, a member of the public needs to have a legitimate interest, a term that was introduced in the European Union’s sixth anti-money laundering directive. We already have that proviso in relation to the register of overseas properties, and I draw to the Minister’s attention the fact that Transparency International has put in inquiries in six cases to get information, has waited for four to six months, and has then seen those requests for information turned down by His Majesty’s Revenue and Customs. All of those requests were in relation to trusts listed as the beneficial owners of overseas companies that hold property here in the UK, and we would have expected them to be on that register and for the information to be provided.
Dame Angela Eagle (Wallasey) (Lab)
Surely, every single citizen of this country has a legitimate interest in closing the kinds of loopholes that have allowed rotten, dirty money to come flooding into our jurisdiction. Does my right hon. Friend agree that it has had huge detrimental effects on ordinary people—who do not have trust funds and are unlikely to inherit anything—such as the huge increases in property prices that have forced many people out of the housing market?
Dame Margaret Hodge
My hon. Friend makes an important point: those who suffer the most are the poorest in our community. One must remember that no tax is levied on all this illicit finance, so it does not fund the public services that we require. I would also point out to the Minister that a legitimate interest proviso does not meet the requirements of the Sanctions and Anti-Money Laundering Act 2018: the terms of the draft Order in Council specifically said that we want
“a compliant publicly accessible register”.
I ask the Minister to think about that.
Sunlight is the best disinfectant—we all know that. If we are serious about our effects to clamp down on dirty money and eliminate it from Britain, and from our overseas territories and Crown dependencies, we must have public registers, so that we can at the very least start to follow the money.
Sir Julian Lewis
For the sake of people who might not be experts in this field, can the right hon. Lady explain the extent to which those Crown dependencies and overseas territories themselves know where the real ownership of the resources resides? Can we be sure that they themselves know what information is being concealed and ought to be made public, or that we will have got to the bottom of the matter if it is made public?
Dame Margaret Hodge
I am not sure I can answer that, because I do not know whether they know, but there have been one or two instances where whistleblowers have come to see me—about Jersey, for example. It has been very difficult to find out and identify how much the Jersey authorities knew, and why or whether they took action on the information that is available. It would be wonderful if the right hon. Gentleman’s Committee could look at this issue in greater detail to establish that.
Illicit finance is not just an evil in itself: it is the golden thread that runs through all serious crime, from drug smuggling to people smuggling. It threatens our national security, hits the poorest countries the hardest, and starves our public services of much-needed investment. It was in recognition of that importance that we established the strong cross-party consensus in the House that led to the 2018 law, which was agreed unanimously in this House. Ten years have passed since David Cameron first openly supported public registers, and five years have passed since we legislated, but we are still waiting. That is not good enough.
It is the job of the Executive to implement the will of Parliament. To that end, I ask the Minister to take two actions. First, will he now lay an Order in Council, requiring the overseas territories to introduce public registers of beneficial ownership forthwith? Secondly, will he legislate to require Crown dependencies to do the same? If the Government do not act, I can assure him that Parliament will, for we must—for the sake of our economy, for the sake of our security and for the sake of our reputation. I urge the Government to move forward on this issue.
Mr Deputy Speaker (Mr Nigel Evans)
Five people have indicated that they wish to speak, and the wind-ups will begin at 4.30. That means eight minutes for Richard Thomson, 10 minutes each for Stephen Doughty and Mr Rutley, and two minutes for Margaret Hodge to wind up. If people stick to five minutes, everybody will get equal time.
Dame Margaret Hodge
What has been great about this debate is that we mostly agree across the House. That has been the basis on which we have taken action down the years, and I am grateful for that. I want to acknowledge the teamwork that has gone on. The right hon. Members for Sutton Coldfield (Mr Mitchell) and for Tonbridge and Malling (Tom Tugendhat) both played a key role in pursuing transparency in the run-up to 2018 and beyond, before they became Ministers. Transparency is just one tool in the fight against economic crime, corruption, and tax evasion and avoidance.
I thank all the Members who have taken part in the debate. My hon. Friends the Members for Wallasey (Dame Angela Eagle) and for St Helens South and Whiston (Ms Rimmer) both mentioned the eye-watering sums of money that are lost to the legitimate system through tax avoidance, tax evasion and other ways.
May I thank everybody and finally say—
Israel and Hamas: Humanitarian Pause
Margaret Hodge Excerpts(5 months ago)
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Mr Mitchell
I am immensely concerned about the fate of all the hostages. As my right hon. and learned Friend will know, there were originally about 240 hostages, and as of midnight last night 58 hostages have managed to get out. At the same time, 117 prisoners have been released by the Israeli Government. The sooner that all the hostages are out, the better.
Dame Margaret Hodge (Barking) (Lab)
Like others, I felt a real sense of relief watching some of the hostages who emerged and were reunited with their families yesterday. The Minister said that this pause could turn into a one-off; it need not. I know the issues are incredibly complicated and I know it is only through international intervention that we will make progress, but could he tell us what steps are being taken not to get to a two-state solution at this point, but to start a peace process between the warring factions that will eventually, one would hope, lead to a two-state solution? What steps are being taken now by international bodies?
Mr Mitchell
I thank the right hon. Lady for her question. She speaks with great wisdom on these matters. I can tell her that the discussions to which she refers are going on throughout the region and internationally. Britain is playing a proper part, not least by the visit last week of the Foreign Secretary to the region.
Israel and the Occupied Palestinian Territories
Margaret Hodge Excerpts(5 months, 2 weeks ago)
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Mr Mitchell
We have condemned the settler violence without qualification. On the work of the United Nations, there will be many opportunities in the future, I hope, and we will neglect none of them.
Dame Margaret Hodge (Barking) (Lab)
I share what the Minister has said about the humanitarian tragedy that we are witnessing all the time on our televisions. We must try to unlock a process towards peace, and the issue of the hostages is key to that. What steps has he taken so far and what further steps will be taken by the new Foreign Secretary to ensure that the hostages are brought home? I really believe that that could unlock the route to peace.
Mr Mitchell
I thank the right hon. Lady for her comments. She has spoken movingly and with great expertise and humanity about this situation both on the media and in the House. If she will forgive me, we cannot give a running commentary on what we are doing to try to recover the hostages. I hope that she will accept my word that we are doing everything, across Government and internationally, to try to get them home as soon as we can.
Gaza: Al-Ahli Arab Hospital Explosion
Margaret Hodge Excerpts(6 months, 2 weeks ago)
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James Cleverly
The House needs to understand that prior to Hamas’s terrorist attack, tens of thousands of Gazans passed through the border into Israel every day in order to work. Israel provided—often without payment—water, electricity and gas to the people of Gaza. That was interrupted as a direct result of Hamas’s brutal terrorist action. Thousands of rockets are fired from Gaza into Israel from in and among schools, hospitals and civilian communities. We do of course always remind Israel, as we would any other nation involved in military operations, of their duties under international law. President Herzog, Israel’s head of state, has reinforced that commitment. We hear no such commitment from Hamas.
Dame Margaret Hodge (Barking) (Lab)
Last night’s absolute tragedy of the explosion at the Al-Ahli Hospital will simply intensify passions and polarise the debate even more. Many children and young people here in the UK will have seen the images on our televisions and screens and on social media platforms, and I think they will be influenced by that. While I thank the Government for the money and support they are giving to the organisations protecting faith schools, mosques and synagogues, can the Minister tell us what he is doing to provide advice and support to ordinary schools and our universities, where there is an intensification of hatred emerging and where I am hearing of both antisemitic and Islamophobic views being expressed and attacks being wrought on individuals?
James Cleverly
The right hon. Lady makes an incredibly important point. While I will not go into details of conversations in Cabinet, I can assure her that the protection of all communities in the UK was something that the Secretary of State for Levelling Up, Housing and Communities highlighted. That very much goes hand-in-hand with the commitment that the Home Secretary has made that we will protect all communities in the UK—Muslim, Jewish and others—and we will work with institutions, whether educational institutions or others, to try to ensure that the people at those institutions can go about their lives free from fear, intimidation and discrimination.
Repurposing Russian Assets to Rebuild Ukraine
Margaret Hodge Excerpts(10 months, 1 week ago)
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Mr Lammy
The right hon. Gentleman is right. He is right about the football team we both support—it is not the only thing he is right about, but he is right about that—and he is right that more than $300 billion of Russian state assets have been frozen by our global partners, with £25 billion here in the UK. The central point is that those assets are frozen, so the question is, what are we going to do now?
Dame Margaret Hodge (Barking) (Lab)
My right hon. Friend is making a very powerful contribution. I think there is large consensus in the House on this issue. I just want to draw attention to the facts. We actually do not know how much money has been frozen, either Russian state money or money relating to sanctioned individuals. There is a figure I have seen from the Bank of Russia which suggests £26 billion and figures from the Government that suggest £18 billion. Does he not agree that it is imperative the Government should openly tell us how much money has been frozen, who it comes from and where it sits, so that we can follow the money and ensure that justice is done for the Ukrainians in their country?
Mr Lammy
My right hon. Friend has been so assiduous on these issues over many, many years. She is absolutely right that we cannot have the necessary quality of debate without transparency. That is what we need. I do not think that that ought to be a matter of dispute between us and the Government; I should have thought that it was something on which we could agree. I hope the Minister will be able to tell us whether those figures can, in a transparent fashion, be put in the Library and made available to the Foreign Affairs Committee, so that we can all work on a common basis.
Mr Lammy
The hon. Gentleman is absolutely right. That has been a standing issue that the official Opposition have taken up. We do think further reform is necessary at Companies House, and we were slightly concerned that that was not supported by the Government in the Economic Crime and Corporate Transparency Bill.
Dame Margaret Hodge
I too have been provoked, by the intervention from the hon. Member for The Cotswolds (Sir Geoffrey Clifton-Brown). He was right to say that the reform of Companies House and greater transparency about beneficial ownership are vital, but that will give us information only about companies, as opposed to trusts. Last week Lord Agnew of Oulton, a Conservative peer, successfully moved an amendment that would have provided some visibility in who controls trusts. We know that Abramovich, for instance, has transferred a large amount of his money into trusts controlled by his children, including a daughter aged about nine. If we do not have transparency, we cannot follow the money, and we cannot ensure that the assets of sanctioned individuals are really being held so that they can be repurposed to help the people of Ukraine.
Mr Lammy
I am, again, grateful to my right hon. Friend—first for raising the issue of transparency, and secondly for raising the issue of Lord Agnew’s amendment and endorsing the point that has already been made. I hope the Minister will tell us whether the Government might give that amendment some support, so that we can benefit from the satisfaction we should gain from this debate. I recognise that it is an Opposition day debate, and we are using our time as an Opposition to bring these issues to the forefront because it has been many months since the Government said that they wanted to act, but the debate is being held in a spirit of the national interest, and I hope everyone can recognise that.
The question, then, is “Who should pay for Ukraine’s recovery?” The Labour party’s view is that the answer is Russia, and one way of ensuring that this happens is repurposing Russian state assets that have been frozen in the United Kingdom. The Government have said at least since October 2022 that they are supportive of seizing Russian state assets to fund Ukraine’s reconstruction, but in the eight months since, no specific proposals have been forthcoming. From the very beginning of Putin’s invasion, Labour has worked with the Government to ensure that our sanctions framework is as effective as it can be, notwithstanding the issues that have been raised from both Back Benches today.
The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Leo Docherty)
Let me start by thanking the right hon. Member for Tottenham (Mr Lammy) for the tone and substance of the debate, and indeed other colleagues who have participated. We are united in our outright condemnation of Putin’s brutal invasion of Ukraine, which is a fundamental violation of Ukraine’s territorial sovereignty. He drew a moving counterpoint between the terror and destruction of Bucha, and the remarkable appetite and spirit of rebuilding and reconstruction that is a motif of the Ukrainian people. That spirit of courage and determination was on magnificent display last week at our very successful Ukraine recovery conference.
The right hon. Gentleman also mentioned the capacity of Ukrainians’ innovation and their ability to make running repairs on all of their national infrastructure, including, most importantly, their electrical grid. That spirit of innovation and ingenuity will surely see them have a bright future, as and when Ukraine begins the rebuilding effort. That should not wait for the end of any conflict, but should be concurrent with the conflict. That was one of the main messages last week.
The right hon. Gentleman referred to the fact that unity is our greatest strength. The Government agree with that, and thank him and his colleagues very much for the consistent support they have outlined for our common efforts. We are right behind the efforts of the Ukrainians to rebuild their country now. The World Bank has estimated that rebuilding will cost £400 billion. Last week, there was a galvanising effort, where more than $60 billion towards Ukraine’s effort was outlined. It was a remarkable conference in terms of its convening power and the contributions from President Zelensky. As the Prime Minister said:
“Russia must pay for the destruction that they’ve inflicted. So we’re working with allies to explore lawful routes to use Russian assets.”
Those assets will pay for the damage Russia’s invasion has so recklessly caused.
That is also why, on Monday 19 June, we published new legislation to allow us to keep sanctions in place until Russia pays up. We are keeping up the pressure through our sanctions regime, with an unprecedented package targeting over 1,600 individuals, 130 of whom have more than £18 billion frozen. We believe in transparency and in keeping colleagues informed, so I will place an update in the House of Commons Library, showing the total value of assets frozen, to ensure that colleagues have the latest figure.
Dame Margaret Hodge
I do not think anybody can quarrel with the words the Minister has expressed, but I would like to urge him into action. Today, Lord Alton of Liverpool is moving an amendment in the House of Lords that would ensure that when somebody is sanctioned, there is a duty on them to disclose all their assets. If they fail to fulfil that duty, the agency could pursue them, as a criminal offence would have been committed, and seize the assets. That is a tiny window that we are opening, which would start to create the reality of seizing rather than freezing assets. Will the Government support that amendment? There will probably be a vote on it within the hour.
Leo Docherty
I am grateful to the right hon. Lady for drawing my attention to that amendment. I cannot make a pronouncement on the Government position on it, as I have not read the amendment, but we will observe it and take note.
Leo Docherty
The hon. Member should not put words in my mouth. Details remain outstanding. A discussion is under way within the institution with regard to the focus and the utility of these funds. As and when that is clarified, I am sure that we will be able to keep colleagues updated. I remain grateful to him for his interest.
Dame Margaret Hodge
I am extremely grateful to the Minister for giving way again. Before that exchange, he was speaking about the ability of sanctioned individuals to voluntarily give some of their money to the Ukrainians. Can he reassure me, first, that this will not become a mechanism whereby sanctioned individuals can get themselves out of sanctions and continue to launder their money into the UK, and, secondly, that this is not a mechanism that will, in effect, buy them immunity from prosecution should they have committed an offence here in the UK?
Leo Docherty
I am very happy to give the right hon. Lady an absolute assurance that it is not a mechanism for circumvention or for granting immunity. It is to ensure that those funds, if volunteered, can benefit Ukrainians.
We are tightening the net on those who are hiding assets in the UK. Under powers to be introduced by the Treasury, individuals and entities designated under our sanctions regime will be legally required to disclose assets they hold in this country. Failure to do so could result in financial penalties or the confiscation of assets.
We will legislate to require those holding assets in the UK on behalf of the Central Bank of the Russian Federation, the Russian Ministry of Finance or the Russian national wealth fund to disclose them to the Treasury. Our action will increase transparency on where those assets are held and limit opportunities for sanctions evasion. Taken together, these new measures mark a further strengthening in the UK sanctions approach against Russia, as Putin and his cronies continue their illegal war and as Ukraine embarks on its counter-offensive. This marks important progress, but I assure Members that our efforts will not stop there.
Many hon. Members will be aware of the active debate with our international partners on the use of sanctioned assets. As the Foreign Secretary and other Ministers have made clear to this House repeatedly, no country has yet found a legally tested solution to turn this commitment into reality at scale, despite various pieces of legislation having been laid or passed by our international partners.
We are at the forefront of a united effort, with our international partners, to see frozen assets repurposed for Ukrainian reconstruction. Nothing is off the table, and a cross-Government taskforce is considering all proposals carefully, including those that our partners may bring forward.
Leo Docherty
It is our ambition to find a legally workable route to repurpose Russian assets. As yet, no country has found one. We are working with partners to do so. As the House will appreciate, we must assure ourselves of the safety, robustness and legality of any proposal in this regard. If there is no legality, there can be no utility. That is why we continue to engage with every available option. The process will require creativity and innovation. I assure hon. Members across the House that we will continue to consider every lawful option to use sanctioned Russian assets to rebuild Ukraine.
Dame Margaret Hodge
I am extremely grateful to the Minister for his generosity. Can he perhaps explain what the Canadians are doing? It is my understanding that the Canadians have seized the assets. Would he consider being a kleptocratic state or perhaps being an aggressor state, as has been suggested, as concepts that could bring seizing state assets within the rule of law? There are two issues there.
Leo Docherty
Our Canadian friends have legislated, but they have not yet found a legally watertight route to seizing those assets. The right hon. Lady speaks about other concepts that are of interest, and we will certainly consider them as we move forward.
Russian Assets: Seizure
Margaret Hodge Excerpts(1 year, 1 month ago)
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Dame Margaret Hodge (Barking) (Lab)
I join the right hon. Gentleman in welcoming the Ukrainian MPs who are with us today. A letter has been sent by 45 Ukrainian MPs to our Prime Minister urging him to do precisely what we want, which is not to freeze assets but to seize them. Given that support from the Ukrainian Parliament, does he not agree that there is now an urgent need for the Government to be bold and to act?
Sir Iain Duncan Smith
I do agree with the right hon. Lady. We have a lot of Russian assets that are currently frozen, while Ukraine is screaming out for money and support to help all those devastated areas. We can bring the two together, and that is what today’s debate is all about.
Sir Iain Duncan Smith
I absolutely agree with the hon. Lady.
I want to talk about what Russian state assets are frozen and what could be frozen. It is important to note that, in Congress right now, they are already discussing this—I spoke to someone there just 24 hours ago—and in Canada, they are seriously talking about it. European Parliaments are also discussing the matter. This is a moment for us to give a lead on this and help to shape the nature of it, as we have a conference coming up shortly and I wonder whether that might be the place to lead on this matter.
According to the Bank of Russia’s own 2021 annual report, £26 billion of Russian state reserves are in the United Kingdom and, on a wider level, western Governments have now frozen some $350 billion of Russian central bank reserves in response to the invasion. There is yet more that they could do. The combined value of frozen UK properties belonging to Russian oligarchs is at least £2 billion. Funds frozen under the UK sanctions regime are passive, and that is the problem. Those funds would enable us to finance the rebuilding of Ukraine and to show Russian dirty money the door. This is the key: we send the message and we help with reparations. Several countries, including Canada, as I said earlier, and the EU are already on to this process and I urge our Government to help to give a lead on this.
Dame Margaret Hodge
May I draw the right hon. Gentleman’s attention to the fact that the Canadians have gone even further? My understanding is that they have already started taking action by pursuing the forfeiture of US$26 million from Roman Abramovich’s holding in Granite Capital Holdings Ltd. If Canada can do it, surely we can, too.
Sir Iain Duncan Smith
I agree with the right hon. Lady. If countries do this individually, it will allow terrible regimes to dodge their money around from one financial centre to another, as some will not have done it. This has to be done in one go by all the developed world’s major centres, otherwise it will end up with disputes and problems. I applaud Canada for starting, but we need the City of London, New York, Zurich and all the other major centres to be serious about making sure this cannot happen and these assets will always be seized.
I can tell the Minister of State, Foreign, Commonwealth and Development Office, my right hon. Friend the Member for Berwick-upon-Tweed (Anne-Marie Trevelyan), that we understand the underlying problem, but my point is that the issues are not insuperable.
Sir Iain Duncan Smith
I agree. These individuals, Abramovich and others, may want this to be done, but somebody has to do it for them, and my hon. Friend is absolutely right to follow the chain down, because we have to capture all the individuals down the chain, not just the one at the top. That is the key, because without those, this does not happen. He rightly says that, to avoid the sanctions, three weeks before the war began Abramovich was busy restructuring radically his assets. I believe that my hon. Friend is right to say that between £4 billion and £7 billion was squirreled away as a result, and we were not able to do anything about it. But we should have been ahead of the game on that one.
Dame Margaret Hodge
The right hon. Gentleman is making an excellent contribution. I want to say one thing: I do not think the Government are using their current powers as effectively as they could on this issue. Under section 11 of the Sanctions and Anti-Money Laundering Act 2018, the powers can be used against somebody “associated with” the person sanctioned. If that is the case and I have read the legislation right, does he agree that the Government could have stopped Abramovich giving all this to his young children and could have sanctioned them because they were associated with Abramovich himself?
Persecution of the Rohingya: International Response
Margaret Hodge Excerpts(1 year, 6 months ago)
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Rushanara Ali (Bethnal Green and Bow) (Lab)
May I extend my deepest condolences to Sir David Amess’s family? He was a friend to us across the House.
In August, we marked the fifth anniversary of the Burmese military’s genocide against the Rohingya people. For the Rohingya, it has been five long years of pain, trauma, grief and displacement in camps far from their homes, with their families destroyed. They have been robbed of their livelihoods, their education, their peace of mind and their future. For the perpetrators, the soldiers and the men who issued the orders—the heads of the Burmese military—it has been five years of evading justice for their crimes.
I thank colleagues across both Houses who have served on the all-party parliamentary groups on democracy in Burma—I am grateful for the support of my co-chair, the right hon. Member for South West Surrey (Jeremy Hunt)—and on the rights of the Rohingya. Both groups have the support of a number of parliamentarians in each House, including Baroness Cox. I am also grateful for the work of the former Member of Parliament for St Albans, Anne Main, who helped to set up the all-party group on the rights of the Rohingya after the genocide five years ago.
After years of campaigning with hundreds of parliamentarians across this House, I welcome the decision—a rather belated one, but I am grateful to Ministers for confirming it—that the UK will intervene to support international justice in the case of The Gambia v. Myanmar at the International Court of Justice. I would have liked that to happen sooner, as Britain is the penholder on Burma at the UN Security Council, but it is good to see the Government supporting the case, along with other countries.
I thank the Burma Campaign, which has given critical support to parliamentarians campaigning on this important issue, not only in this country but in the US and elsewhere. I must also thank a number of international non-governmental organisations. The list is extensive, but I want to name a few. The International Rescue Committee supported my visit to the camps at Cox’s Bazar a few years ago. BRAC has thousands of staff who have been supporting people, along with other international and national NGOs in Bangladesh, after the displacement of 700,000 refugees during the genocide five years ago; the country now hosts 1 million Rohingya refugees. I also thank Save the Children, Refugees International, which supported my visit to Rakhine state in 2013, and other international NGOs that have supported subsequent visits to Cox’s Bazar and Rakhine state in 2017.
It is also thanks to the Rohingya community organisations, both in this country and internationally, that the issue has been raised not only in the international media but in our Parliament and Parliaments across the world. However, keeping it on the agenda has been a challenge, given the many crises, sadly, that have been happening around the world, not least the most recent challenge facing the Ukrainian people in the conflict perpetrated by Russia.
I am pleased that Ministers have announced that sanctions will be stepped up against the companies that are propping up the military dictatorship, including the Star Sapphire Group of Companies, the International Gateways Group of Companies Ltd, and Sky One Construction Company Ltd. I also welcome the Government’s commitment, in principle, to bring the Burmese military to the International Criminal Court.
On 23 September, in answer to a written question from me, the Minister of State at the Foreign, Commonwealth and Development Office, the right hon. Member for Hereford and South Herefordshire (Jesse Norman), stated:
“The UK is clear that there must be accountability for the atrocities committed in Myanmar. We condemn the continuing grave human rights violations by the Myanmar Armed Forces, as well as historic atrocities against the Rohingya. The UK is supportive, in principle, of any attempts to bring these issues before the International Criminal Court…where they can be scrutinised.”
Unfortunately, however, the Minister went on to say that the Government remained resistant to convening the Security Council to refer the case to the International Criminal Court because of
“insufficient support amongst Security Council members”.
I understand the challenges, but that is not good enough. As I said earlier, Britain is the penholder at the UN Security Council when it is concerned with Burma/Myanmar. It is imperative for our Government to take a leadership role in the international community to build that alliance and consensus, so that a referral can be made and we can make further progress in seeking and achieving justice for the Rohingya people, who have faced genocide.
Even in the months since the military coup on 1 February 2021, the military has stepped up attacks in ethnic areas including Chin, Karenni and Karen state, including the torching of villages, the murder of children, and people being burned alive. The international community must speak out with one voice, and prove the strength of its collective institutions by bringing the Myanmar military regime to justice. There is more that we can do right now. That requires leadership from our Government, building on what has been achieved so far.
It is—unfortunately—shameful that the British Government have drastically reduced their aid to the Rohingya refugees over the last few years. For the 2021-22 financial year, British aid to the camps was reduced to 45% of the level of the previous financial year, and a reduction of 67% on the financial year before that. The need in the camps has not been reduced; it has grown.
Dame Margaret Hodge (Barking) (Lab)
We can endlessly debate here the terrible iniquities that the Rohingya people have been experiencing for a number of years, and my hon. Friend and I worked together when we were in the Westminster Foundation for Democracy to try to further the support of the UK Government, but in the end it is money that counts. There have been enormous cuts in international aid, and hence an overall cut in support for the Rohingya refugees. Does my hon. Friend agree that that is simply not good enough, and that the Government ought to rectify it with urgency? They have said that they are not cutting their public expenditure, so let them put it where it is needed most.
Sanctions
Margaret Hodge Excerpts(2 years, 2 months ago)
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Mr Speaker
Order. I am looking to run this statement for about an hour. Short questions and speedy answers would help us all.
Dame Margaret Hodge (Barking) (Lab)
I thank the Foreign Secretary for the progress that she is making. I ask just two questions. First, it is still unclear to me and, I think, to most members of the public whether members of the Duma can be sanctioned by this Government. Will the Foreign Secretary clarify that point for us? Secondly, it is not just Russia; jurisdictions such as Kazakhstan and Azerbaijan are also complicit in supporting Putin in his endeavours. Is she taking any action to sanction members of those jurisdictions?
Elizabeth Truss
Members of the Duma can and will be sanctioned. We are working through the list of members in the same way as we are working through our hit list of oligarchs. I will look into the issues surrounding Kazakhstan and other nations. We are already sanctioning Belarus, and we will shortly impose more sanctions on it for its complicity in this abhorrent invasion.
Countering Russian Aggression and Tackling Illicit Finance
Margaret Hodge Excerpts(2 years, 2 months ago)
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Mr Lammy
My hon. Friend is so right. These properties are pricing out young people and challenging working people. Often, the lights are off and no one knows who owns them. If that is not an urgent issue, I do not know what is. I was staggered when the Prime Minister said that it did not merit action until the next Session.
Dame Margaret Hodge (Barking) (Lab)
It is not just about urgent action. Does my right hon. Friend agree that it is outrageous that legislation on publishing the beneficial ownership of UK properties owned by entities abroad was promised by the Government in 2016, there was consultation on a draft Bill—I think a Bill is sitting in Government, ready to go—and it was promised again in the 2019 manifesto and at G7 meetings but has yet to appear? Is that not an utter scandal?
Mr Lammy
My hon. Friend is absolutely right. We note, do we not, individuals who are the target of sanctions in Europe and who have been the target of sanctions in the United States since 2018? And we wait and we wait and we wait. And we wonder why this Government are so slow to act.
Today, we call on the whole House to come together to end the tidal flow of dirty Russian money flooding into our country by: ending our openness to fraud and money laundering with an economic crime Bill that should be brought forward this month; fixing our inadequate regulation of political donations by reversing the Conservative’s Elections Bill that is setting us back; strengthening our lax mechanisms of corporate governance; enabling our national agencies to clamp down on economic crime; and blocking the threat of foreign interference in our politics. We need transparency with an overseas entities Bill and the reform of Companies House to shut down the shell companies that obscure the origins of wealth and hide corruption, and reveal who owns land from abroad. Finally, this House must come together and recognise the urgency of implementing the Russia report, which was published in July 2020—nearly two years ago.
Dame Margaret Hodge
I am grateful to my right hon. Friend for giving way and I welcome the commitments he has made on the sort of action a Labour Government would immediately put in place. There is one area he has not covered, which I think is of great importance: the role played by the financial services sector and the enablers here in London in supporting money laundering and illicit finance. Whether lawyers, accountants, the banks or other advisers, they are often complicit in this activity. Does he agree that the economic crime Bill also needs clauses that tackle the role of enablers in enabling illicit finance?
Mr Lammy
My right hon. Friend is exactly right. Over two thirds of our economy is the service sector. The consultants, lawyers and accountants are absolutely a part of the process of dirty money and the laundromat. We must act to deal with them. [Interruption.] Of course not all of them, but there are facilitators and we expect to see the appropriate clauses in the economic crime Bill.
Defeating Putinism starts with leadership that represents our values. If we are to be taken seriously on the world stage when we talk about democracy, we cannot be watering it down at home with unfair reforms such as voter ID and loose rules about overseas donations. If we are to be credible champions of international law, our leaders must practise the laws they set at home. The best way to defend the rule of law is to follow it.
Amanda Milling
I am grateful to the hon. Gentleman for his intervention. I will talk about what we want to crack down on, but, as he will recognise, such things need to be legally robust.
To go back to the examples that I was giving before that intervention, the UK is a world leader in corporate transparency. It is the first country in the G20 to implement a central public register of company beneficial owners, showing who ultimately owns and controls UK companies. However, we are determined to go further to crack down on dirty money and financial exploitation, and we are enhancing the already strong regulation, supervision and legislative powers that are at our disposal.
Dame Margaret Hodge
More in sorrow than in anger, I raise the issue of Russian money and its role within the Conservative party. Fedotov, Temerko, Chernukhin, Mikheev, Knaster and New Century Media are all Russians or Russian companies who have close links to the Conservative party and have given money to Conservative MPs, Conservative constituencies or the Conservative central office. The figure I have is greater than the one that Labour Front Benchers have been using; I think it has been at least £3.6 million over the past decade.
I urge the Minister—I really do say this more in sorrow than in anger—to go back to her colleagues, sort this out and get that money out. I would not give it back to Russia; I would give it to organisations such as Transparency International, which does a fantastic job helping us to fight corruption. Until the Conservative party does so, it will have no credibility at all in the argument on fighting corruption.
Amanda Milling
Let me be clear. The Conservative party does not accept foreign donations—after all, they are illegal. All donations to the party are received in good faith, after appropriate due diligence, from permissible sources. Donations are properly and transparently declared to the Electoral Commission and published by it, and they comply fully with the law.