UK government rejects proposal to use frozen Libyan assets
A Union flag blows in the wind near the Houses of Parliament on October 3, 2019 in London, England |The British government has rejected a parliamentary proposal debated in the House of Lords on Thursday, May 1, 2025, which called for the use of frozen Libyan assets to provide compensation to victims of IRA bombings that utilised explosives supplied by the Gaddafi regime.
During the debate, Lord Collins of Highbury, the Parliamentary Under-Secretary of State for Foreign Affairs, stated that the government distinguishes between victims of IRA attacks using Libyan-supplied Semtex and victims of operations 'directly carried out by Libya' in other Western countries.
The proposal, put forward by Baroness Hoey, aimed to utilise a portion of the approximately £12 billion in frozen Libyan assets held in the UK to compensate around 150 victims of IRA bombings.
Baroness Hoey noted that victims from France, Germany, and the United States had received compensation from the Gaddafi regime averaging $5 million per victim, with these victims collectively seeking about £353 million in compensation.
Baroness Hoey argued that recent UK legislation allowing the seizure of frozen Russian assets to aid Ukraine—specifically a £2.26 billion loan to be repaid using profits generated from sanctioned Russian sovereign assets—created a legal precedent that could be applied to the Libyan assets case. She characterised this as 'What is good for the Russian goose's assets is good for the Libyan ganders assets.'
The government defended its decision by citing United Nations resolutions stipulating that frozen Libyan assets should be preserved 'for the future benefit of the Libyan people.' Officials argued that seizing these assets could undermine international efforts toward Libyan stability.
The government also declined to redirect the estimated £5 million collected annually in taxes from these frozen assets, with Lord Collins explaining that these funds go into 'the Government's consolidated fund, which is used for essential public services.'
During the parliamentary debate, several peers expressed frustration over what they described as 'secret arrangements' with the former Gaddafi regime that successive Conservative and Labour governments have maintained, prioritising these agreements over compensation for victims.
Lords also pressed for the publication of a government-commissioned report by William Shawcross regarding compensation options.
The government refused this request, maintaining that the report contained 'private and confidential conversations' and that its release would potentially harm 'UK national security and international relations.'
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