Sunday 6 February 2022 / 11:53 AM David Lammy / Rachel Reeves / Ukraine

Lammy and Reeves: joint letter on the Ukraine crisis and illicit finance

David Lammy, Labour’s Shadow Foreign Secretary, commenting on a new joint letter on the Ukraine crisis and illicit finance, said:

“The cosy links between the Conservative Party and Russian-linked donors raise serious questions about our national security at a time when tensions with Russia are on the rise.

“While Boris Johnson tries to talk tough with Vladimir Putin, his own party has been raking in millions from donors with links to Russia and in some cases reported links to Mr Putin himself. The Pandora Papers revealed the scale of the secret offshore wealth held by some of those donors, while others have spoken on the record about the Ukraine crisis in the past.

“It’s no surprise that Britain’s allies have sounded the alarm about the influx of dodgy Russian cash to the UK. It’s time the Conservatives returned donations from those who have made money from Russia or have alleged links to the Putin regime, stopped dragging its feet over measures to clamp down on dirty Russian money and brought in the economic crime and registration of overseas entities bills they promised.”

Joint letter from David Lammy MP and Rachel Reeves MP:

Dear Foreign Secretary and Chancellor,

Re: The Ukraine crisis and illicit finance

Since the crisis on Ukraine’s borders began, we have been clear in our robust support for Ukraine’s sovereignty and our opposition to Russian aggression. We have supported the government’s diplomatic efforts and the practical defensive support provided to Ukraine.

We believe however that there is much more that can be turn to address the UK’s openness to suspect Russian money.

This week in the House of Commons, the government outlined its plans to bring forward new legislation to enable a robust and extensive package of economic sanctions against Russia in the event of any incursion or attack on Ukraine.  We believe such sanctions must be broad, severe and comprehensive.

However, these sanctions are all conditional on Russia’s actions. Their purpose is to form a serious deterrent, which, when matched by unified action across the West, will make President Putin think again.

There is much more we must do irrespective of the decisions made by President Putin; measures it should not have taken an army threatening Ukraine to put in place and which we have repeatedly urged the government to take.

For years, the Labour Party have raised the alarm about the role of dirty money in the UK and the lack of action from the Conservative government. Despite repeated warnings, the government has been asleep at the wheel and needlessly left our defences down at home.

London is the destination of choice for the world’s kleptocrats. It is home to the services and enablers who help corrupt elites to hide their ill-gotten wealth. Britain has a completely deficient system of corporate registration that permits layers of secrecy to obscure the proceeds of corruption and crime. It is shameful that Britain is repeatedly described as the money-laundering capital of the world.

Now this openness to illicit finance has begun to damage our diplomatic efforts, with the Biden administration being warned that the widespread presence of suspect Russian money in the UK could jeopardise Britain’s response to this crisis.

We welcome the Prime Minister’s answer at Prime Minister’s Questions this week committing the government to bring forward an Economic Crime Bill in the third session of parliament. I hope the government recognises that had we already legislated for this then the UK would be in a stronger position to address dirty money from Russia.

This is not simply a matter of targeting some individuals or entities through sanctions but about fixing a broken system – Britain’s openness to fraud and money laundering, inadequate regulation of political donations, lax mechanisms of corporate governance, and weakness to foreign interference.

We believe we must take a broad range of robust steps to address these deficiencies and the Conservatives must do more including with the donations it receives. We would therefore be grateful if you address the following questions:

  • When will the government undertake comprehensive reform of Companies House to prevent fraud at home and abuse from abroad?
  • On what date will the government bring forward the Register of Overseas Entities Bill it has promised for years?
  • Will the government bring forward a Foreign Agent Registration law?
  • Where are the new counter-espionage laws, announced in the Queen’s Speech but still delayed?
  • When will the government reform the Tier 1 so-called ‘Golden Visas’?
  • Where is the replacement to the outdated Computer Misuse Act, as recommended by the Russia Report?
  • Where is the additional resource and power for the Electoral Commission, which will strengthen our democracy’s defence from overseas governments and interests?
  • Why does the government’s Election Bill make these problems worse by enabling limitless political donations from donors based overseas?
  • Donors who have made money from Russia or have alleged links to the Putin regime have given £1.93m to either the Conservative Party or individual Conservative associations since Boris Johnson took power in July 2019. Will the Conservative Party agree to return it?
  • Will the government reform the rules on political donations to defend our democracy from overseas interests using loopholes to influence British politics?

These steps to strengthen our national security and democracy at home are not distinct from sanctions or diplomacy abroad – they must form part of a unified and coherent response.

We can’t stand up to Russia’s aggression abroad while ignoring Russian-linked corruption at home.

It is in our national and economic interests for the government to address the challenges of hostile influence and interference which the government’s inaction and behaviour have regrettably permitted.

 

Ends