PARLIAMENTARY DEBATE
Sanctions - 28 February 2022 (Commons/Commons Chamber)
Debate Detail
The situation is fluid, but as of today, Putin has not taken any major cities. The advance has been slowed by Ukraine’s fierce resistance. Putin’s invasion is not proceeding to plan. He expected to take cities quickly. He expected Ukraine to retreat. And he expected the West to be divided. Instead, his forces were met by the heroism of President Zelensky and the resolute determination of the Ukrainian people. He has been met by a united west, together with our friends around the world, and we have taken decisive action.
Today, we have acted with the US, the EU, Japan and Canada to cut off Russia’s central bank from our markets. The rouble has fallen by more than 40% as a result. As much as $250 billion has been wiped off the Russian stock market and, today, its stock market is closed. The EU, Germany, Sweden and others are following our lead in providing defensive weapons to Ukraine, and Germany has frozen Nord Stream 2.
Putin has been confounded by our collective response. That is why he is resorting to more and more extreme rhetoric. But, of course, the situation remains dire. The Government and people of Ukraine are facing a continued onslaught. The days ahead are likely to prove tougher still.
The UK and our allies will have to undergo some economic hardship as a result of our sanctions, but our hardships are nothing compared to those endured by the people of Ukraine. Casualty numbers are rising, and more than 300,000 people have already been displaced. This is a struggle for Ukraine’s freedom and self-determination, but it is also a struggle for freedom and democracy everywhere and for the survival of a Europe whole and free. We feel a particular responsibility as the UK is a signatory to the 1994 Budapest memorandum, which provided Ukraine with security guarantees.
This premeditated invasion, in violation of international law and multiple international commitments, cannot succeed. Putin must lose. We are doing everything that we can to stop him and to restore Ukraine’s sovereignty and territorial integrity. We will do this by backing Ukraine against unjustified aggression, by degrading the Russian economy and stopping it from funding Putin’s war machine, and by isolating Putin on the world stage.
First, we are backing Ukraine with defensive weapons, humanitarian aid and economic support. The UK was the first European nation to send defensive weapons to the country, and those weapons are being used today to halt Russian tanks and defend Ukrainian towns and cities. Our latest consignment of defensive support left Brize Norton over the weekend. We are also leading on humanitarian support. Yesterday, my right hon. Friend the Prime Minister announced a further £40 million of humanitarian aid, which will provide Ukrainians with access to basic necessities and vital medical supplies. We call on Russia to enable humanitarian access and safe passage for civilians to flee the violence. The UK is also supporting Ukraine’s economy, including through £100 million of official development assistance and guarantees of up to $500 million in development bank loans.
Secondly, we are cutting off funding for Putin’s war machine. We are coming together with the US, the G7 and the EU to take further decisive steps. We have been joined by Australia, Singapore, Switzerland and many more. There is a growing list of countries who are determined that this aggression cannot stand. We have agreed that many Russian banks will be removed from the SWIFT system, kicking them out of international finance. That is the first step towards a total SWIFT ban. Our collective action against Russia’s central bank will prevent it from deploying its international reserves to mitigate the impact of our sanctions.
We are also launching a joint taskforce to hunt down the assets of oligarchs hit by our sanctions. The UK is proud to lead by example. We have already put in place the largest package of sanctions in our history. We have sanctioned Putin and Lavrov, Russia’s defence industry and a growing list of oligarchs. We have approved asset freezes on several Russian banks and we are banning Russian airlines and private jets from our airspace, but we are determined to go much, much further. We want a situation where they cannot access their funds, their trade cannot flow, their ships cannot dock and their planes cannot land.
Today, I inform the House that I will be laying two new pieces of sanctions legislation. The first will introduce a set of new powers against Russia’s financial sector, including powers to prevent Russian banks from clearing payments in sterling. With over 50% of Russian trade denominated in dollars or sterling, our co-ordinated action with the United States will damage Russia’s ability to trade with the world, and as soon as this legislation comes into force, we will apply it to Sberbank—Russia’s largest bank.
I will also be imposing a full asset freeze on three further banks: VEB, Russia’s national development bank; Sovcombank, the third largest privately owned financial institution in Russia; and Otkritie, one of Russia’s largest commercial banks. We will bring in a full asset freeze on all Russian banks in days, looking to co-ordinate with our allies. The same legislation will prevent the Russian state from raising debt here, and will isolate all Russian companies—more than 3 million businesses—from accessing UK capital markets. Global giants such as Gazprom will no longer be able to issue debt or equity in London.
The second piece of legislation will ban exports to Russia across a range of critical sectors. This includes high-end technological equipment such as microelectronics and marine and navigation equipment. This will blunt Russia’s military-industrial capabilities and act as a drag on Russia’s economy for years to come. I appreciate the consequences of this step for British people and British businesses operating in Russia. The Department for International Trade and the Treasury will offer advice and guidance to affected UK businesses. My consular staff will continue to support British nationals in Russia, as well as those in Ukraine.
We will keep ratcheting up our response. More legislation will follow in the coming weeks, sanctioning Russian-occupied territories in the Donbas, extending more sanctions to Belarus, and limiting Russian deposits in UK banks. We will continue working through our hit list of oligarchs, focusing on their houses, their yachts, and every aspect of their lives. In addition, we will introduce the economic crime Bill tomorrow; my right hon. Friend the Business Secretary will set out more in the next statement in the House. This is all about flushing out the oligarchs’ dirty money from the United Kingdom. We will continue to work with our G7 allies to cut off the Russian economy and cut the free world’s dependence on Russian gas, depriving Putin of his key source of revenue.
Finally, we are leading the diplomatic effort to ensure that there is a chorus of condemnation against President Putin. In the Organisation for Security and Co-operation in Europe, a key part of the European security architecture, 45 countries condemned Russia by name. At the UN Security Council on Friday, more than 80 UN members voted for, or co-sponsored, a resolution condemning Russia’s aggression. Russia stood alone in opposing it. Putin is isolated. No one is willing to back his war of choice. In recent days, I have spoken to my counterparts in more than 20 countries around the world. Yesterday, I met G7 Foreign Ministers. We were joined by Ukraine’s brave Foreign Minister, my friend Dmytro Kuleba. Everyone is clear that Putin must lose, and we will carry on increasing the pressure until he does.
We have all seen Ukraine’s determination to fight. Putin’s war could end up lasting for months and years, so I say to our Ukrainian friends, “We are with you. In Britain, and around the world, we’re prepared to suffer economic sacrifices to support you. However long it takes, we will not rest until Ukraine’s sovereignty is restored.”
I commend this statement to the House.
We have all been inspired by the gallant and tenacious actions of Ukrainians in defence of their country. This is true courage under fire. President Zelensky has epitomised the bravery, dignity and resolve of a nation fighting back, and fighting for values that we all share—democracy, freedom and the rule of law. The Foreign Secretary is right when she says that Putin’s invasion is not so far going to plan, but does she agree that we must not let our focus slip for even a second? We will continue to stand united with our allies and partners, supporting Ukraine and opposing this outrageous campaign of aggression.
This morning, I had the honour, with the shadow Defence Secretary my right hon. Friend the Member for Wentworth and Dearne (John Healey), of meeting Ukraine’s ambassador. He thanks all sides of this House for the united opposition we have shown to Vladimir Putin’s illegal war and the support we continue to show for Ukrainian sovereignty. Putin is not only facing a united west; he is facing a truly United Kingdom. Together, we have enacted sanctions that are having a strong effect. The rouble has crashed by over 40%, the main borrowing rate is up 20%, and inflation is reportedly hitting about 65% per year. Oligarchs are being frozen out of their bank accounts and the central bank of Russia is being blocked from part of the $640 billion war chest that it holds in foreign reserves. Labour’s priority is to cut off Putin’s rogue state from our economic system and to undermine his campaign of aggression in Ukraine.
We recognise that on 24 February the European security order changed. Our continent faces a transformed strategic context. Our world is at the start of a new era. I pay tribute to the political courage shown by all our partners, particularly our allies in Germany who have recognised that by taking the difficult and brave decisions to provide Ukraine with lethal weapons for its fight and to commit to the significant increases in defence spending that this new reality demands.
Yesterday, President Putin raised the alert level of Russian nuclear forces. As the five nuclear weapon states, including Russia, reaffirmed in January, a nuclear war cannot be won and must never be fought. What assessment has the Foreign Secretary made of that decision, given the understandable concern it will have caused among the public?
Turning to sanctions, we welcome the further steps the Government have announced today. Labour has been calling for some time for progress by the UK, the EU and the US on cutting off Russian banks from SWIFT. The moves finally to clamp down on dirty money—so long demanded by Labour and colleagues across the House—are long overdue. It is regrettable that it has taken so long and a crisis of this nature for such action, but we welcome the steps and will study them carefully. However, there is still more the Government can do.
The last time I stood at the Dispatch Box, I asked what steps the Government had taken to ensure that members of Russia’s legislature, the Duma, could be sanctioned. Still today, I am waiting for that answer. Similarly, although I welcome the Foreign Secretary’s action against Russia’s financial sector, the Government should go further to ensure sanctions can also be placed against Russia’s extractive industries, energy industries and technological industries. We must ensure that the insurance industry cannot underwrite and de-risk Putin’s war. As I said at my last time at the Dispatch Box, it is vital that the sanctions are broad enough to inflict damage on every aspect of Russia’s economy. We welcome the moves the Government have taken to ensure Russia is cut out of the SWIFT banking system, but can the Foreign Secretary explain what dialogue she has had with our allies on cutting the country out of the Visa-Mastercard system, too?
Finally, can the Foreign Secretary give assurances that Putin will also feel the consequences of his despicable actions in terms of international opportunities available to the country in sports and culture? The diplomatic unity of the west is crucial, but we must also widen the global coalition opposing the war. Some countries, such as Kenya, have spoken out with clarity and elegance against Putin’s imperialism, but others have stayed silent. Some are even allies of the UK and fellow democracies. What steps is the Foreign Secretary taking to ensure the widest possible range of voices speaks up in opposition to this war?
As well as commending the bravery of the Ukrainians defending their country, we must also praise the courage of the ordinary Russians taking to the streets of Moscow, St Petersburg and beyond under the threat of repression to show their opposition to this despot. This is the fifth day of fighting. Ukraine is still facing an all-out war from Putin’s army. It is a mark of the bravery of Ukraine’s forces that neither Kyiv nor Kharkiv have fallen. We salute their courage, and this whole House will continue to stand with them.
Yesterday, I joined a call with the G7 Foreign Ministers. We agreed that the sanctions that we had put in place so far are having an impact, but we need to do more. We need to work in unison and act in unity. We also agreed to increase the supply of defensive weapons in Ukraine.
The right hon. Gentleman is correct: Germany has taken courageous steps. It has transformed its energy policy and its defence policy, and we have seen a huge rising of public opinion right across Europe. I also want to praise Japan, South Korea and Singapore, which have put sanctions on for the first time.
I and my Foreign Office colleagues are putting in calls to Foreign Ministries around the world. We are encouraging more countries to put on sanctions and to speak out at the UN. The right hon. Gentleman is right that there are some countries that are democracies which should be standing up against the invasion of a sovereign democracy, and we are making that point to them day and night. What we are seeing is that Putin is completely isolated. There is nobody else backing him up in international forums and there is a growing group of countries prepared to put sanctions on and to supply defensive weapons. We are leading the charge in bringing those countries on board.
On the specific issues that the right hon. Gentleman mentioned, we have a hit list of oligarchs and Duma members that we are working through to sanction as soon as we can. Foreign Office officials are working through the night. We have extra lawyers and have tripled the amount of people in our sanctions department to make that happen. We are looking at more sanctions on the energy industry and the technology industry. We want to see a total ban on SWIFT transactions. We are encouraging our allies across the world to back that. We also want to see a full bank freeze in the coming days.
It is vitally important that we maintain unity with our allies. There are many countries that are heavily dependent on Russian oil and gas. The UK gets only 3% of its energy from Russian oil and gas. The figure for some countries is as high as 90% or 100%; we have to reduce that over time, and that is what we are working on through the G7.
I am very pleased that the right hon. Gentleman has backed the approach we are taking. I want to continue to work cross-party to do all we can to support the brave people of Ukraine and to make sure that Putin loses.
If anything, I urge more. I support the statement and we will support the sanctions measures as they come forward, but I urge more and I urge faster ambition, particularly on refugees. The UK needs to waive visas, not wave flags. The EU has really given the lie to the generosity of the UK’s response on refugees by waiving visas for three years for all Ukrainian nationals. The UK needs to do the same. I appreciate that it is not in the Secretary of State’s remit, but I really urge the Government to act on the issue, because it is certainly the one most raised with me.
The EU’s response through the civil protection mechanism and the peace facility dwarfs the UK’s. The EU has acted with one voice: 27 member states are acting together. I really urge the UK to complement those efforts and match their scale and ambition in its measures, which we support but wish to see more of.
I have some specific questions about sanctions. We all agree about tackling oligarchs, but what plans are there to tackle and target the family members of oligarchs? When we were in Kyiv recently, that was mentioned as a particularly effective way of putting on pressure. I also note that there will be an advice facility for UK businesses affected by the sanctions. Is any consideration being given to providing financial aid for UK businesses hit by the sanctions? That seems the morally correct thing to do.
The Foreign Secretary will be aware of reports of a Russian tanker heading for Orkney to pick up oil. Will the legal powers to impound such vessels be in place in time for us to do so?
As my right hon. Friend the Home Secretary said at Home Office questions, we are creating a new Ukrainian humanitarian route to enable families of British nationals to come to the United Kingdom. It will mean that an additional 100,000 Ukrainians can seek sanctuary in the United Kingdom.
Through the export support service, the Department for International Trade will be helping businesses. The Secretary of State for International Trade will lay out more details in due course.
We in the Foreign Office and Ministers across Government are making those points to our counterparts around the world, but this is where I think parliamentarians can help: many people in this House have good contacts with overseas Governments. We need to encourage those Governments to stand up and put sanctions in place. I had a call this morning with some Foreign Ministers who had never put sanctions in place before but are now considering it. There are many more who are on the verge of imposing sanctions. I strongly encourage Members across the House to get on the phone to those Ministers and those Governments, because this has created global outrage and we need to see that reflected in complete degradation of the Russian economy.
My right hon. Friend also spoke about chasing the oligarchs. We should remind everyone that the oligarchs are mostly in possession of Putin’s own personal fortune, which is in the order of $200 billion to $250 billion, squirrelled away through their accounts. However, my right hon. Friend will be slightly hamstrung, because although we pursue the oligarchs and their money, it is still not an offence for those who have worked with them—their lawyers, their estate agents and all the others—to fail to yield the information about what deals they have done. Will she now, in the Bill, make it mandatory for all those in the chain immediately, when someone is sanctioned, to pass that information up directly, or they will themselves be committing a criminal offence?
On the subject of humanitarian relief in neighbouring countries, we have sent teams to support Poland and Slovakia. We have launched our campaign, and we will launch a further public appeal to secure further humanitarian donations. In fact, I am due to meet my Polish counterpart in Geneva tomorrow, and we will be working very closely with our allies in eastern Europe to support the people of Ukraine.
International sanctions now include Russia’s civilian aircraft fleet. The UK has a part to play in their enforcement because, as of yesterday, 713 leased Russian aircraft are registered in Bermuda, a British overseas territory. For far too long, weak UK regulation of Londongrad and tax haven overseas territories has enabled Putin’s regime. What discussions has the right hon. Lady had with the British overseas territories to ensure the immediate and effective implementation of UK sanctions against Russia?
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