Financial Assistance to Ukraine Bill
Wednesday 20th November 2024
(3 months ago)
Commons ChamberFinancial Assistance to Ukraine Act 2025 Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Chief Secretary to the Treasury (Darren Jones)
I beg to move, That the Bill be now read a Second time.
I am proud of the unity that this House has shown in its support for Ukraine. This support has been steadfast since the onset of Russia’s illegal full-scale invasion in February 2022, regardless of the party in office, and it remains so today. We in this House recognise that while Ukraine is on the frontline, it is fighting for democracy and security across Europe. I want to make it clear that this Government stand, and will continue to stand, in unwavering support of Ukraine with our G7 allies.
On 22 October, my right hon. Friends the Chancellor of the Exchequer and the Defence Secretary announced that the UK would contribute £2.26 billion to the G7 extraordinary revenue acceleration loans to Ukraine scheme, the ERA. This landmark agreement will provide Ukraine with a total of $50 billion in vital additional funding, allowing it to continue to fight back against Putin’s war machine. Crucially, these funds will be repaid not by Ukraine, but from the extraordinary profits made on sanctioned Russian sovereign assets held in the European Union.
This Bill simply provides the spending authority for the UK to contribute to the ERA scheme, enabling us to begin disbursing funds to Ukraine. It is another important demonstration of the UK’s commitment to backing Ukraine for as long as it takes. It will unlock our £2.26 billion contribution to the ERA, funding which is additional to all previous commitments.
The UK has long been at the forefront of support for Ukraine. Our total military, humanitarian and economic support pledged since February 2022 already stands at £12.8 billion. We have often been the first mover on military support in particular, which ranges from training over 47,000 Ukrainian military personnel to providing a squadron of Challenger 2 main battle tanks. Earlier this year, the Government announced that the UK would continue to provide guaranteed military support of £3 billion per year to Ukraine for as long as it takes.
But while we can be proud of what the UK has already done for Ukraine, Members of the House need no reminding that Ukraine’s military, budgetary and humanitarian needs continue to be grave. Existing support is not enough; we must go further still to ensure that Ukraine wins this war. We must do this alongside our allies. The ERA is an ambitious scheme, and represents a united G7 pledge, with contributions from the United States, the European Union, Canada and Japan. Our £2.26 billion constitutes a fair and proportionate contribution to the scheme based on the UK’s GDP share in the G7 and EU.
Each lender will now negotiate a bilateral loan with Ukraine to govern how the funds are distributed and spent within a collective framework agreed by the G7. Repayments from the profits on immobilised Russian assets will be redistributed to the G7 lenders from the EU in proportion to our contributions. The EU regulation providing for this is already in place.
The Government have assessed that Ukraine’s most pressing need is for military support. The UK’s contribution to the ERA is therefore earmarked for military procurement to bolster Ukraine’s capacity for self-defence. This support will help ensure that Ukraine can continue to withstand Russian aggression and fight back against it. The UK is committed to ensuring value for money for both the UK and Ukraine, including through exploring the use of existing UK-enabled procurement channels for Ukraine to purchase the equipment that it needs. Our funding will be delivered in three tranches over three financial years, with the first tranche intended to be delivered in early 2025.
The Bill has one simple purpose: to unlock the UK’s contribution to the ERA. It consists of one substantive clause, which seeks the authority of Parliament to spend the money on the UK’s contribution and make good on our commitment. The Bill is not intended to be used for any purpose beyond that, and it will not be used to spend above the £2.26 billion figure that has been announced. Our figure has been agreed with the G7 and caps have been built into the scheme at a G7 level through the EU repayment mechanism.
Although slim, this Bill is essential. Royal Assent is required before we can begin disbursing funds to Ukraine, and before we can receive any repayments from the profits being held in the European Union. It is therefore vital that we pass this Bill as quickly as possible, so we can begin disbursement this winter, as Ukraine’s needs are immediate. I hope that I can count on the support of the House to achieve this, and help us get this vital money into Ukraine’s hands as quickly as possible.
The $50 billion collectively delivered through the ERA lays down a marker to show that we will continue to stand with Ukraine for as long as it takes. Collectively, we will pursue every available means of making Russia pay for the damage it has done in Ukraine. I am proud to present the UK’s contribution to the scheme today, which will make an immediate tangible difference to Ukraine’s capacity to defend itself. This Bill facilitates that contribution, and I commend it to the House.
Richard Fuller (North Bedfordshire) (Con)
Before I turn to the Bill, I just say that the Chief Secretary, in an earlier debate, kindly welcomed me to my new role, and I would like to reciprocate that welcome today. He and I have worked together as members of the Business and Trade Committee, which he chaired and of which I believe you were also a member, Madam Deputy Speaker. We had a shared desire to use Parliament to hold to account fearlessly, factually and, when needed, ferociously those who hold authority and power over our constituents. He now finds himself in such a position of authority and power, and I will hold him to account fearlessly, factually and, when needed, ferociously. However, today is not a day for ferocity.
We welcome this Bill. It is an important signal of the continuing commitment of the United Kingdom to the people of Ukraine, the defence of Europe and the achievement of peace through strength. We join the tributes to the people of Ukraine—the men and women who have had to leave behind their peaceful endeavours in order to stand shoulder to shoulder to defend their land and liberties. Today we are talking about financial contributions, but we should never forget that the greatest sacrifice is being made each and every day by members of the Ukraine military and civilians, upon whom Putin’s rockets rain down destruction each and every day.
Under the strong leadership of former Prime Minister Boris Johnson, the United Kingdom led the world in defending Ukraine, and since 2022 we have pledged more than £12 billion in overall support. We were often the first mover on vital lethal aid, from Storm Shadow missiles to Challenger and main battle tanks. We imposed the largest and most severe set of sanctions that Russia had ever seen, to cripple Putin’s war machine. We sanctioned around 2,000 individuals, companies and groups, and this economic pressure restricts Russia’s ability to prosecute its illegal invasion. More broadly, we built up a formidable sanctions regime during our time in office and brought in a major new sanctions strategy to deter and disrupt malign behaviour, and it is pleasing that the current Government are continuing those efforts.
On behalf of the United Kingdom, my right hon. Friend the Member for Richmond and Northallerton (Rishi Sunak) hosted the Ukraine recovery conference last year, raising over $60 billion for Ukraine’s recovery and reconstruction. This Bill takes a further step forward in our commitments to Ukraine, and does so alongside our allies. It fulfils the United Kingdom’s part of June’s G7 mandate—confirmed by G7 finance Ministers in Washington last month—to disburse for the benefit of Ukraine approximately $50 billion from the extraordinary revenue acceleration loan, or ERA, as the Chief Secretary termed it. The United Kingdom’s share is £2.26 billion, and this is earmarked as budgetary support for Ukraine’s military spending. I understand that it will be in addition to the UK’s existing annual commitment of £3 billion of military aid. Each loan will be in the form of a bilateral loan, but will be based on common principles to ensure consistency and co-ordination between each loan.
We support the Bill and will support the Government if any other party seeks to divide this House, but I would be grateful if the Chief Secretary or the Minister could provide further clarification on several questions. The first is about disbursements to Ukraine under the extraordinary revenue acceleration loan. Point 5 in the annexe to the G7 statement says:
“Loans will be fully disbursed to the benefit of Ukraine between 1 December 2024 and 31 December 2027.”
The whole House will be aware of the current heightened levels of military activity and the urgent demands from Ukraine for assistance, including UK Storm Shadow missiles. What discussions has the Minister had with the Secretary of State for Defence about the timings and scale of distributions?
Secondly, I want to ask about the asset base. Can the Minister update the House on the total value of Russian assets seized by the G7, and on the total assets seized by UK jurisdictions? The last estimates we had were in March 2023, when the total was £48 billion, of which £18 billion was seized by UK jurisdictions. As the extraordinary revenue acceleration loan refers only to sovereign assets, will the Minister tell us what consideration was given to the inclusion of income streams from other seized Russian assets, and why it was determined that they should not be included? Do the commitments made by each G7 country relate to the amount of Russian assets seized or held by a jurisdiction, or are they done on some other basis? If so, what is the basis for those allocations? Can the Minister give some indication of the allocation of seized sovereign assets by type? As they are sovereign assets, I assume that many will be in the form of cash holdings, but there may be properties and other assets. It would be helpful for the House to have some understanding of the allocation of these assets by type.
Thirdly, I want to ask about the use of anticipated income streams from Russian assets to repay the loans. The Bill’s explanatory notes claim:
“The extraordinary profits on the immobilised Russian sovereign assets will then be divided between the G7 lenders in proportion to their contributions. This will happen as the extraordinary profits accrue, on a 6-monthly basis…in three tranches”.
I have three similar questions on this issue. Has there been any modelling of the future flows of anticipated income from seized Russian assets that will be used to repay the loans? Has the Treasury made an assessment of the expected period for their repayment? Can the Minister provide the House with a forecast or estimate for the anticipated revenues available for repayment in each of the tranches?
Fourthly, I want to ask about contingencies. There are five participants in the loan agreement: the UK, the USA, Canada, Japan and the EU. Can the Minister advise whether the terms of the agreement will still stand if one or more of the participants do not ratify it? In the event of a peace settlement, subsequent to disbursements being made, point 12 of the annexe to the ERA loan initiative says that
“the outstanding balances that cannot be covered by extraordinary profits shall be repaid by Ukraine to each lender.”
Can the Minister advise whether that is the case? In such circumstances, what priority will the repayment of these loans have compared with other loans made to Ukraine?
Finally, I want to ask about the Government’s overall defence expenditure. The Government’s Budget committed to setting out a pathway to increase defence spending to 2.5% of GDP at a future fiscal event. Since then, however, Labour Ministers have been unable to confirm whether it remains Labour’s ambition to meet that target by 2030. Can the Minister confirm whether it is still Labour policy to increase defence expenditure to 2.5% of GDP, when that might be reached and whether the commitments contained in this Bill will be included in such estimates?
The principles underlying the Bill are sound. Our commitment to the defence of Ukraine is reinforced. Our prayers are with the people of Ukraine and the cause of peace and freedom. We support the Bill.
Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)
We are now 1,000 days into the Russian invasion of Ukraine and we are entering a crucial period for Ukraine and its people, with the Kursk offensive and Administration change in the United States. I would first like to praise our Government for their evolving strong support for Ukraine, reflecting the needs on the ground. The United Kingdom was the first responder and supporter of Ukraine. The Government’s participation in implementing President Zelensky’s 10-point victory plan is very welcome. Ensuring that the war does not last indefinitely and ends on fair terms is crucial. MPs of all parties work closely on campaigns around aid, sanctions, seizure of assets and so much more.
There is the potential that Ukraine could lose 50% of its military aid support from its international allies. The UK and other supportive nations struggle to make up the shortfall from our own stores. If this remains the case, Ukraine will slowly lose the ability to defend itself. Russia will increase and intensify its atrocities across the country. Where will Russia stop? The increasing rhetoric from the Kremlin needs a robust response. It has been shown again and again to take advantage of perceived weakness. Now, 1,000 days into the Russian invasion of Ukraine, we can take the first step in unlocking frozen Russian assets to support Ukraine. I welcome today’s Bill, which will ensure that the loans made will be repaid with the Russian state’s assets currently frozen in the UK.
The G7 must act collectively on this. At the start of the war, approximately $300 billion of Russian central bank reserves were frozen in the west. We need a route to mobilise these reserves. We must understand how other states have been able to disclose the amount of Russian central bank reserves they hold. We need to know how many billions of pounds of Russian reserves reside in the City of London. Canada has passed the Special Economic Measures (Russia) Regulations, which collects data on Russian assets, freezes them and publishes the value, which currently stands at 135 billion Canadian dollars frozen in Canada. Can the Government move to disclose the level of Russian assets held here in a similar way?
I also wish to call for the seizure of Russian central bank reserves to pay for the defence of Ukraine. Many Governments are seizing the profit generated from the frozen money and using that to back Ukraine. The US has passed legislation giving the President the power to do that, and I welcome this legislation, which will move us in the same direction. In the UK, we also have £2.5 billion frozen from the sale of Chelsea football club. If unlocked, it could create the second wealthiest charity in Britain, but it remains frozen in a UK bank account. Can the Minister outline what steps he is taking to immediately release this funding, which would provide much-needed humanitarian aid to Ukraine? In Ukraine, winter is not coming; winter is here.
We must decide on a route to mobilise the UK’s seizure of Russian assets. The estimated cost of reconstruction in Ukraine is at least $486 billion over the next decade, and growing every day. We must begin the process of confiscating the Russian central bank reserves in the UK with this Bill. Defending Ukraine’s democracy is defending our democracy. I look forward to the potential of this Bill to be a route to mobilising billions of pounds of Russian central bank reserves. Can the Minister clarify the position on whether the loans in the Bill today will be in the form of a recourse or non-recourse loan?
The Financial Assistance to Ukraine Bill allows the UK to fulfil our commitment made in the June 2024 G7 loan agreement to Ukraine. The UK’s expected contribution under this agreement is approximately £2.26 billion, which Ukraine can decide to utilise for its defence. We have Russian central bank deposits in the Bank of England, as well as Russian bonds that have matured and the funds deposited in UK commercial banks. Can the Minister outline when we will legislate to seize these assets for the defence and reconstruction of Ukraine, as they dwarf the sums we are debating today? I conclude by again thanking Ministers in the Treasury, the Foreign, Commonwealth and Development Office and the Ministry of Defence for their stalwart support of Ukraine. Slava Ukraini!
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Liberal Democrat spokesperson, James MacCleary.
James MacCleary (Lewes) (LD)
Yesterday, Ukraine entered its 1,000th day since the start of Russia’s illegal and unprovoked invasion, and it is about to enter its toughest winter yet. This Bill represents a significant and welcome step in providing much-needed financial support to Ukraine as it continues its courageous resistance. It will deliver tangible assistance during this critical phase of the conflict, providing a vital lifeline to our Ukrainian allies.
Before the war, my partner and I had the good fortune to travel in Ukraine, visiting both Kyiv and Odesa. We visited modern cities similar to any other in Europe, so the sight of ordinary Ukrainian families being forced, at the start of the Russian attack, to shelter in the Kyiv underground stations that we had both so recently used for sightseeing in that beautiful city was both shocking and moving for us. It also brought home why the UK’s unwavering support for Ukraine is so essential, not just for the brave people of that nation but for all of us. If liberal democratic nations do not stand together against tyranny and aggression, the tyrants will feel no constraint and the citizens of other European nations, including potentially the UK, might find that they are the ones forced into underground stations looking for shelter.
The Liberal Democrats support this Bill and its intent, but we are disappointed that it has taken so long to come to the House. My noble Friend Lord Purvis of Tweed raised this issue back in January, some 10 months ago, but now the Bill is finally here, we are pleased to see that it demonstrates a commitment to ensuring that those responsible for Ukraine’s devastation—Russia and its oligarch elites—should, at the very least, contribute financially to Ukraine’s recovery. However, we believe the Bill does not go far enough.
The UK should consider seizing all frozen Russian assets, not just their profits, and redirect them to aid Ukraine. With around £22 billion-worth of such assets currently held in the UK alone, the Government are missing a significant opportunity to amplify their support. Distinguished international lawyers have made a strong case for this step.
Although some economists have expressed concern about repercussions in the financial markets, we believe that, given the very specific circumstances of this conflict, the justification and the benefits far outweigh those concerns. Such action would provide an immediate and substantial financial boost to President Zelensky’s forces and Ukraine’s reconstruction efforts, while sending a clear message to the Kremlin that aggression against sovereign nations will have severe and lasting consequences. We therefore also back the calls for a special tribunal to prosecute those responsible for Russia’s war of aggression and to ensure accountability for the heinous crimes committed.
The Liberal Democrats have consistently called for the UK to lead by example in supporting Ukraine, extending it beyond financial assistance to include military, diplomatic and humanitarian measures. The provision of advanced weaponry, including longer-range precision arms, is critical to Ukraine’s success. We must also bolster British arms and ammunition supplies, work closely with our allies to replenish stockpiles, and maintain Ukraine’s defensive capabilities. It is essential that we co-ordinate effectively with NATO and the European Union to maximize collective impact, which is why I urge the Government to be bolder in their efforts to rebuild our relationship with the EU, including by deepening our security and military co-operation.
We urge the Government to build an international consensus for the proscription of the Wagner Group, whose activities represent a grave threat to international security. The UK must also take a strong stance against Russia’s continuing human rights violations and support anti-war activists within Russia, many of whom face persecution for their bravery. Offering asylum to such individuals and raising their cases in international forums is not only a moral imperative but a strategic means of undermining the Kremlin’s control.
It is vital to recognise that supporting Ukraine financially and militarily should not come at the expense of other nations in need. Restoring the 0.7% gross national income target for international development spending is a crucial step towards ensuring that humanitarian aid to Ukraine does not result in the neglect of our wider global responsibilities. The Government’s failure to meet this target undermines Britain’s reputation as a global leader in development and humanitarian support.
The Liberal Democrats also urge the Government to take robust action to close the loopholes in economic crime legislation that have allowed Putin’s allies to funnel dirty money through the UK for far too long. A Financial Times investigation published yesterday revealed that companies in British overseas territories exported $134 million-worth of goods to Russia in 2024, potentially breaching UK sanctions aimed at restricting access to military and high-tech supplies. I call on the Minister to give an undertaking that the Government will look to address these violations and close these loopholes.
The National Crime Agency must be properly resourced to tackle economic crime effectively, and Magnitsky sanctions should be used to target relatives and associates who attempt to evade existing measures. This is about far more than financial probity; it is about standing up for the rule of law and ensuring that our financial system cannot be used to bankroll aggression.
This Bill comes at a moment of uncertainty. The possibility of diminished US support for Ukraine, following the recent election and the imminent return of Donald Trump to the presidency, is deeply concerning. Should the United States falter in its support, Europe must step up. This should serve as a wake-up call for the UK Government to lead in Europe by seizing frozen Russian assets, reversing damaging cuts to our armed forces and strengthening co-operation with both NATO and the European Union on security and foreign policy.
With a hard winter ahead, time is of the essence. The UK must not waver in its commitment to Ukraine. This is about more than financial assistance; it is about justice, accountability and the preservation of international law. This Bill is a vital step forward, but it must not be the final word.
We must demonstrate bold leadership by acting decisively to ensure that Ukraine not only survives but prevails, and that the principles of sovereignty, freedom and democracy endure. Let this Bill be the beginning of a renewed and united effort to support Ukraine. By seizing frozen Russian assets, providing advanced military support and working closely with our allies, we can help Ukraine to secure a lasting victory and ensure a future of peace, stability and justice for Europe and beyond. Let us rise to this challenge for Ukraine, for Europe and for the values we hold dear.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Linsey Farnsworth to make her maiden speech.
Linsey Farnsworth (Amber Valley) (Lab)
It is a great privilege to be called to make my maiden speech in this most important debate, and it is an honour to represent the people of Amber Valley in this House.
I am proud to be part of a Government with five missions, but my sixth mission is to put Amber Valley firmly on the map. Any Members who have had the misfortune to sit with me in the Tea Room will know exactly where Amber Valley is, because it is my practice to suffix its name with “in Derbyshire”. In fact, Amber Valley is known as the heart of Derbyshire, and deservedly so, because not only is it right in the middle of our wonderful county, but its people have the biggest hearts. They are among the most friendly people in the world, but they are also unyielding. It is no surprise that they are descendants of those involved in the last revolution in England, the Pentrich revolution of 1817, during which a group of constituents plotted an armed uprising, angry about the state of the economy and demanding parliamentary reform. Hon. Members will understand my relief at being part of a Government who are committed to making people better off and reforming the House of Lords.
Originally a mining area, the local economy has since developed a diverse industrial base. I am delighted we are driving forward our industrial strategy, so that businesses such as those headquartered in Amber Valley can thrive. Firms such as Thorntons Chocolates, Denby Pottery, Bowmer and Kirkland, Berry Recycling, National Gas and David Nieper provide employment.
The last of those companies lends its name to a school in Alfreton, which it oversees. That is a fine example of business supporting the local community. The school’s ethos is to ensure children can raise their aspirations, breaking down the barriers to opportunity. That is so important for our young people in Amber Valley. Youth services have been cut back, and the gap that has been left is filled by the hard work and dedication of local people, such as James at Ayup in Alfreton, and Chrissie and Mikey at Old Farm Bus in Ripley Marehay.
I am the fourth MP for Amber Valley. The first, Phillip Oppenheim, is credited for having brought the mojito to the UK. I cannot promise to do anything so exciting when I leave this place, beyond perhaps sampling one or two of those in our new bar in Alfreton. It is aptly named the Moot Bar, by virtue of its overlooking the marketplace, where moot hearings, which are believed to have led to the modern day jury system, were held to settle disputes and try offenders. It is a fitting place for a former Crown prosecutor such as myself to frequent.
The second MP was Judy Mallaber, of my party, who still makes a huge contribution to our community. Judy worked hard for the introduction of the minimum wage. I am delighted this Government are building on that legacy, increasing the national living wage and introducing the biggest improvement of workers’ rights in a generation.
Most recently, Amber Valley was represented by Nigel Mills. Nigel is a thoroughly decent man, who served as a dedicated constituency MP for 14 years. He is rightly proud of being the longest serving MP for Amber Valley. I wish him well.
We have heard mention in many maiden speeches of firsts—the first female MP, the first MP for a new constituency and even the first MP with a beard. In that spirit, I found myself looking for mine. Could I be the first Crown prosecutor to enter Parliament? Rumour has it that someone has beaten me to that particular accolade. I am relieved that you are in the Chair, Madam Deputy Speaker, because I also found myself googling whether I am the first MP named Linsey. I hope that does not affect my chances of Mr Speaker calling me in the future. I am, however, the first Amber Valley MP to have been born in the constituency—technically. I was born in Ilkeston, a town now in neighbouring Erewash, but at the time Ilkeston was a constituency with my three towns, so I was technically born in the constituency, but perhaps that is a lawyer’s argument.
The Labour party was formed to give ordinary people a voice and to improve lives. My dad is David Farnsworth and he would say that he is an ordinary man. He also has a catchphrase: “Let me tell you a little tale.” To coin his catchphrase, I would like to tell the House a little tale about the Labour party through the life of that so-called ordinary man.
There has been much debate about what a working person is, but I know it when I see it: it is my dad. Originally a coalminer, like so many others he went into the dark so that his children’s lights would shine. I am pleased the Government are returning the pension fund to miners such as my dad and the 772 former mineworkers in Amber Valley. Righting that wrong was a manifesto commitment—and we are keeping our promises.
Our lives changed when I was 12 and my mum Margaret was diagnosed with cancer. She was one of the most caring people, always putting others first. Her late diagnosis was a result of her not wanting to be a burden on our already overstretched NHS. She died less than two months later. I do not want any family in Amber Valley to go through that. This Government will get our NHS back on its feet—we must.
After my mum died and the pits closed, my dad was out of work. The Labour Government gave him the opportunity to retrain as a bricklayer. He attended what was then South East Derbyshire College in Heanor, in a beautiful Victorian building. Long since closed and left derelict, it is now being refurbished and will house small businesses and provide community space. Together with the newly renovated marketplace, the Labour-controlled borough council is ensuring that Heanor town centre will be a welcoming place for residents to visit, while boosting our local economy.
My dad went on to build hundreds of houses and, had he not retired, I am sure he would be building his fair share of the 1.5 million homes that we have promised to provide within this Parliament. My dad would say that he is an ordinary man. I say “would say” because he cannot any more. Dementia has taken his voice. My wonderful stepmum Kate cares for him. She is one of the 5.2 million unpaid carers in the UK. I am glad that this Government are improving carer’s allowance, but we must go further and create a national care service.
My dad would say that he is an ordinary man. I say that he is extraordinary, for it is his values and guidance that have led me to this place. My upbringing instilled in me a drive—a drive to make society fairer. That led me to serve as a Crown prosecutor for 21 years, working to secure justice for victims. It was, until my election to this place, the greatest honour of my life. I intend to continue to fight for justice, to fight for those suffering injustice and to use my voice for the people of Amber Valley.
My goal to combat injustice extends particularly to the people of Ukraine. I visited Ukraine in September with fellow Labour MPs. We saw the human suffering of war: the homes destroyed, the children’s cardiology hospital bombed while young children were on the operating table, the cellar of a school where civilians were held captive by Russian troops in the most appalling conditions. Ukraine is defending herself, but she is also defending us, our values and our freedoms. We must do everything we can to support Ukraine both now and for the rebuild after the conflict is over, and I fully support the Bill.
We must deliver on our promises to rebuild trust in politics and show that it can be a force for good. My children have given me the affectionate nickname, “the vicious dictator”. I am not sure whether I am best placed to lead on this, but I shall try. I promise, Madam Deputy Speaker, that my home is not a dictatorship, but it can be seen through a political lens. My eldest son once made a placard at bedtime with the slogan, “We want another story and we want it now”. He was a strong campaigner even at the tender age of 10—he is now 17. My youngest son is an effective lobbyist, as his collection of trainers will attest. My stepdaughter is chief whip, managing to bring together the boys even in the most challenging of debates. My brilliant husband Martin makes a wonderful Speaker of our House, keeping order and holding it all together. We all know that politics is all-consuming and hugely onerous on families. The love, understanding and support that Martin and our children have given me has been integral to my being in this place.
No maiden speech for Amber Valley would be complete without mentioning Butterley Engineering, around which the town of Ripley was founded. Sadly no longer open, it leaves behind a blast furnace wall and an underground wharf, both now scheduled monuments. Friends of Butterley Ironworks Trust are hoping to turn this heritage into good use with a visitors’ centre. I will happily support them with that. Butterley Ironworks may be gone, but there is a reminder for me twice weekly, as I walk under the iron arches in St Pancras train station and pass the sign that reads, “Manufactured by the Butterley Company, Derbyshire, 1867”. The majesty of those iron arches is a constant link between representing Amber Valley in this place and the people responsible for sending me here, who I thank greatly and promise to serve in the spirit of the Amber Valley motto, “Per laborem progredimur”—"We progress through hard work”.
Richard Foord (Honiton and Sidmouth) (LD)
I pay tribute to the hon. Member for Amber Valley (Linsey Farnsworth) for her excellent maiden speech. She spoke movingly and touchingly about her father and about dementia, and it is a theme that we must come back to in this House. It is really profound. I also share her admiration for Nigel Mills, who was an excellent predecessor, and she was very magnanimous in her comments about him. I will be sure to see her in the Tea Room to hear more about Derbyshire. Hopefully, she will not be dictating that I drink a Mojito, because I cannot bear them.
I understand that the Financial Assistance to Ukraine Bill is being steered through the House by the Treasury—quite right too—but I think it would be worth my saying at the outset why the Bill is a positive development in security, defence and foreign affairs.
In December 2021, amid the build-up of Russian troops on the border of Ukraine, Vladimir Putin wrote two letters. He wrote one to the United States and one to NATO. His demands included a Russian veto on NATO membership for Ukraine and the implied removal of US nuclear weapons from Europe and the withdrawal of multinational NATO battalions from Poland and from the Baltic states of Estonia, Latvia and Lithuania. That would have been completely and utterly unacceptable, and we can only surmise why he might have wanted NATO to act in this way. It is because once ground is taken it is that much harder to take back. Offence is so much more costly than defence.
It is to the issue of costs that we must now turn. The purpose of the Bill is to support the $50 billion G7 initiative launched in June, which represented a co-ordinated effort by the G7 and the EU to support Ukraine. However, with Hungary potentially blocking concerted EU action, I welcome the provision in the Bill that will ensure that future financial assistance extends to any changes in subsequent arrangements, in case we can reach broader consensus later. It is crucial that we collaborate with our EU partners to swiftly advance the agreement.
The Minister talked about the UK being a first mover in this space, which is very welcome, although states such as Estonia, Finland and Czechia worked on it prior to us, and Canada has been a driver of it too. The UK’s £2.26 billion contribution to the G7 arrangement reflects our GDP share, but as a leader in supporting Ukraine, I feel we need to go beyond simply a proportional share. After all, doing so could provide support for Ukraine in place of some taxpayers’ money. It is welcome that the UK is contributing £3 billion annually, and the Government have pledged to maintain that for as long as it takes, but as Zelensky said, why should western taxpayers foot the bill when frozen Russian assets could be confiscated and given for use by Ukraine? The Bill is a positive step, but we should talk about not just future profits generated from frozen Russian assets, but the principle—the assets themselves. The approach set out today uses only a fraction of the $300 billion available, much of which is held at Euroclear central securities depository. To support Ukraine effectively, we must go further. We should repurpose all these assets—not just the profits, but the principle.
Some critics argue that confiscating the funds would pose legal risks. They talk about sovereign immunity—an argument that is also used by some who oppose the prosecution of leaders for the crime of aggression—but sovereign immunity should also apply when thinking about the sovereignty of states. Legally, we have to think about how Russia violated international law. It violated the UN charter and blatantly breached the charter’s principle of state sovereignty. It is estimated that Russia has already caused £400 billion worth of damage—that is what will be required to rebuild Ukraine—and Russia will ultimately have to pay to make good that damage, but what use will the frozen assets be to Ukraine if Ukraine no longer exists? The goal cannot be only to rebuild Ukraine from the rubble, but to help Ukrainians prevent their country from turning to ash.
Some argue that confiscating the assets could destabilise global markets, or deter other nations from holding reserves in western financial institutions in the future, but those fears are overstated, and need to be weighed against the risk of doing nothing. The dominance of western financial systems remains robust. Alternatives such as China’s renminbi lack the stability and scale of the US dollar. Cryptocurrencies are too volatile to be a viable alternative, so the risk of inaction should be thought of in terms of what has happened in global markets since the full-scale invasion of Ukraine in 2022. There was a very wobbly period, including here in the UK with the Liz Truss mini-Budget, which was partly about supporting people with their energy bills. At the time, the Government felt that they had to provide such support because of the rise in the price of gas caused by Russia’s illegal invasion of Ukraine. Again, we cannot just suppose that doing nothing will have no consequences. There are concerns that confiscation could reduce our leverage in future peace negotiations, but this war first needs to be won. This is not the Gulf war in 1991 when frozen assets were used to compensate Kuwait; this war is still not determined.
Other states considering investing in western institutions have nothing to fear if they have no intention of invading their neighbours. As things stand, Russia has shown little interest in meaningful dialogue. To simply wait and keep the assets as a negotiating tool is naive and defeatist. By repurposing the assets now, we not only support Ukraine’s immediate needs, but reinforce the principle that aggression must not pay and that nuclear sabre-rattling is completely unacceptable.
As the Liberal Democrat spokesperson, my hon. Friend the Member for Lewes (James MacCleary), said, the geopolitical context underscores the urgency of the moment. Trump commented in March that he sees US isolationism as attractive. When talking to the hon. Member for Clacton (Nigel Farage) on GB News, he said,
“We have an ocean in between some problems… a nice big, beautiful ocean.”
With the United States facing questions about whether its support for Ukraine could be reduced or even diminish, we need to think further about what more we can do with our European allies. Acting now to unlock the full potential of Russian assets would provide Ukraine with a financial lifeline insulating it from shifts in political will elsewhere in the world.
The Bill highlights the importance of collaboration with our European partners. As the shadow Chief Secretary to the Treasury, the hon. Member for North Bedfordshire (Richard Fuller), pointed out, UK taxpayers have already contributed over £12 billion in aid to Ukraine since February 2022, but our absence from EU defence frameworks limits our ability to co-ordinate effectively with those European allies. We could use some of the confiscated frozen assets to support joint procurement, perhaps associating with some of the frameworks, such as the European Defence Agency. Shared management of those confiscated funds would ensure transparency, accountability and maximum impact. The future profit funds, suggested as a base for the Bill, are scheduled to be disbursed between December 2024 and 2027. That timeline does not match the urgency of Ukraine’s need.
Just last weekend, we saw Russia’s largest attack on Ukrainian infrastructure in months. Russia launched 120 missiles and 90 drones. Three weeks ago, the Finnish Government took a bold step by confiscating $4.5 billion in Russian assets, making Finland one of the first countries to take decisive action. The Finnish confiscation must surely be hitting Russia where it hurts, and we should follow the examples set by Finland, Czechia and Estonia, working together to confiscate those Russian assets—including the principal, not just the interest.
The stakes could not be higher: Ukraine’s fight is a fight for eastern Europe and the west more broadly. It is a fight for the principles of democracy, sovereignty and international law that underpin global peace and security. I welcome the Bill, but it is vital that the provisions align with the goal of confiscating all Russian assets to support Ukraine financially. Let us rise to the challenge, demonstrate solidarity with Ukraine, and show leadership on the global stage and unwavering friendship to our European allies. By collaborating with those European allies to confiscate Russian assets, we can help pave the way for an outcome that makes it plain to any Government who are watching that aggression does not pay.
Alex Ballinger (Halesowen) (Lab)
It is a pleasure to have heard the beautiful maiden speech of my hon. Friend the Member for Amber Valley (Linsey Farnsworth), whose father must be really proud.
It is excellent to hear the details of the Bill, but Russia’s continued assault on Ukraine is absolutely terrifying. We must not buy into a narrative of peace on Russia’s terms; that would be tantamount to appeasement. A sovereign, democratic country ceding territory to an aggressive imperial country basically takes us back to world war two—an idea that I find absolutely terrifying. It would completely embolden Putin, and eastern Europe and the Baltic would be next on his target list.
It is completely right to say that defence of the UK starts in Ukraine. We are doing everything we can to support Ukraine. It was great to hear about the 50,000 Ukrainian troops who have been trained by the UK through Operation Interflex, and I am glad that that policy is being extended. It is excellent to hear about the military support that we are providing to Ukraine, including the Storm Shadow missiles that we are hearing about in the media at the moment. I trained on those weapons, and I hope that they can help to take the fight to the Russians. It is also excellent to hear that we are providing financial support of £12.8 billion, as well as an additional £2.26 billion from interest on seized Russian assets.
Unfortunately, 1,000 days since the invasion of Ukraine, the Russian economy is, despite sanctions, doing better than many of us expected at the start of the conflict. However, the Russians do face challenges, including the highest casualty rate since the conflict began, higher interest rates, and now a labour shortage in the Russian economy. We must sustain our support for Ukraine and increase the pressure on Russia, which cannot be allowed to succeed.
The Bill is an important step in sustaining our support for Ukraine. The £2.26 billion will help Ukraine to invest in air defence, artillery and other military equipment. I fully support the Bill, but I have a couple of questions for the Minister. What more can be done to seize frozen Russian assets? I think in particular of the £2.25 billion from the sale of Chelsea football club, and other assets that must be held in the City of London. We must use everything in our arsenal, and I would like the UK Government to do more to seize and use such assets, rather than using just the interest, as we are committed to doing at the moment. Will she confirm whether this is a non-recourse or recourse loan? It is important that, if the interest from Russian assets is not what we expect it to be, there is no expectation on the Ukrainians, given all the difficulties that they are facing, to repay the bill.
Stephen Gethins (Arbroath and Broughty Ferry) (SNP)
I add my congratulations to the hon. Member for Amber Valley (Linsey Farnsworth) on her maiden speech. It was so lovely to hear about her family. I was encouraged to hear about her revolutionary constituents who were keen on parliamentary reform. They will certainly have plenty of support from Scottish National party Members in those ambitions.
I thank the Minister for bringing the Bill to the Chamber. We are now 1,000 days on from the full-scale invasion, but it has been well over 10 years since Russia’s initial invasion of Ukraine. I reassert First Minister John Swinney’s acknowledgment of that anniversary yesterday, and the continued commitment to Ukraine of my party and the Scottish Government. This issue cuts across the Chamber, and it is good to see so much unanimity on it.
Why is that important? Because the Ukrainians are fighting for each and every one of us who values democracy, liberty and independence across Europe. They are the frontline defending us and those we represent, as well as our friends and colleagues around Europe. Sometimes, it is easy to lose sight of that. The Bill is about aiding Ukraine, but it is also about investing in our own security. This is a national security issue, and it is a good investment for us.
Let us think for a moment about the consequences of not supplying, arming and providing finance to Ukraine. It would mean a collapse and one of the worst refugee crises that Europe has ever experienced. It would mean a hit to the rules-based system, which I suspect those of us who believe in that system would see as difficult to recover from. Bluntly, it would mean a broadening of the war. Vladimir Putin is not stopping in Ukraine in the same way that he did not stop in Georgia, Chechnya, Syria, Libya—you name it.
Although we are absolutely supportive of the Bill, which certainly has my party’s support, I will pick up on a couple of points that have been raised, on which clarification would be helpful. I agree with the Liberal Democrat spokesperson, the hon. Member for Lewes (James MacCleary), who said that this Bill does not go far enough. From an arms and security perspective, we often provide supplies to Ukraine that allow it to fight and not lose the war, but not to win it. That goes for the arms and the finances being supplied.
I will pick up on a point made quite rightly by the hon. Member for Honiton and Sidmouth (Richard Foord). There are $300 billion-worth of frozen assets. I know that the Minister will not be able to pick up on this today, and it is not part of the Bill, but I encourage her to come back to the Chamber at some point and provide us with an update. She will find that she has support across the Chamber. I know that this issue is not easy and is about building links with other partners, and there will be some resistance to that, but the amount of money in the Bill, which I acknowledge is an important contribution, is dwarfed in scale by the amount of finances that it could provide by unfreezing those assets.
The hon. Member for Honiton and Sidmouth also made a point about sovereign immunity. Russia gave up its sovereign immunity when it launched the full-scale invasion and therefore forced this war on the sovereignty of Ukraine. We also have the principle of the universality of certain crimes, and we have seen allegations about universal crimes committed in Ukraine, with very substantial evidence. That is obviously a matter for the International Criminal Court, but I encourage lawyers to look into the principle of universality on some of the issues in that area. I know that the Minister is sympathetic and that this is not entirely as simple as many of us would like it to be, but from the comments we have heard from across the Chamber, there appears to be a great deal of support for the unfreezing of those assets. It would be fantastic to see the UK Government provide leadership in that area.
I also point to the fact that we have seen fantastic leadership from the Czechs, Estonians and Finns. What makes their leadership so compelling is that they know what happens if we give in to Russian aggression. They know at first hand and have generational knowledge within living memory of what happens when we give in to this kind of aggression. I encourage the Minister to look into that and endorse the points made about the sale of the proceeds from Chelsea football club, which is also very significant. That $300 billion would be transformative in helping Ukraine to fight this war for all of us.
I also ask the Minister about the broader finance issue of the effectiveness of sanctions. We know that Russia has been able to get around sanctions, but we must redouble our efforts. I make reference to a report that I was involved in writing when I sat on the Foreign Affairs Committee, which was on Moscow’s gold and dirty money. There were allegations about some of that money was going through London. I refer the Minister’s Treasury colleagues to have a look at that; it was a very good bit of work undertaken on a cross-party basis. This issue is crucial.
My final point is that our time is limited. We have a new Administration coming in in the United States in January, and we know that the signs are not entirely promising in terms of the support that we have seen from the United States in recent years. This war should actually have been a wake-up call to all of us in Europe 10 years ago. Given the fact that we have had this election in the United States, we are very late to the party on this issue, but we have a huge responsibility to pull together as Europeans. The Ukrainians are on the frontline and deserve our support. This is an investment in our own security. I absolutely support the Bill, but we need to go that little bit further.
Tim Roca (Macclesfield) (Lab)
I congratulate my hon. Friend the Member for Amber Valley (Linsey Farnsworth) on her fantastic maiden speech. She is a really powerful advocate for her constituents. She talked movingly about her father losing his voice, but she has certainly found hers in this place. I was with her on that visit to Ukraine in September, and I still find it incredible that in this day and age, in 2024, it is possible to visit the capital city of a fellow democracy on the European continent and hear air raid sirens and see civilians—women and children—heading for air raid shelters. That is the dystopian future that Vladimir Putin has set out for Ukraine in this terrible war, but also potentially for the rest of the continent if we do not get our act together.
Several times this afternoon, hon. Members have made the powerful point that this is an existential war for the people of Ukraine. They are not fighting for some unforeseeable future, but to ensure their national independence and preserve their sovereignty. Some 3 million Ukrainians are living under occupation at the moment, and the people of Ukraine know what the full occupation of their country would entail: the destruction of their national life and of their liberty. We know this because, despite Vladimir Putin’s mendaciousness, he has set out time and again his historical worldview—his perverted sense of world history and Russian revanchism. There is the essay that he published just before the invasion and the strange speech he gave on the eve of the invasion itself, in which he basically posited the idea that Ukraine was not a real country. Well, it has very much proved to be a real country, and it has defeated him in his evil ambitions for the past two years.
Because this war is existential and because it is crucial for the defence of this country, we have a duty to be realistic. I do not expect Ministers to comment on this today, but we in this Chamber are all very much aware that there has been a sea change in American politics, and that the comments from people who will either be part of the future Administration, or are likely to be part of it, suggest that the United States’ support for Ukraine might not be what it has been. That brings me to the issue that the hon. Member for Arbroath and Broughty Ferry (Stephen Gethins) mentioned, which is that we are running up against the clock. We have limited time. We have to be realistic: there is a new Administration coming in, so Europe has to pick up the slack and provide greater leadership.
However, we are also seeing massive changes in Europe. On the day that President Trump was elected, the German Government began to fall apart, and in France, we are seeing a presidency stumble towards the end of its term. The United Kingdom is the country that has to provide the leadership in Europe on these matters, as it has done since the start of the war, but we need to go even further.
The support that Ukraine gets at the moment is already subject to so many restrictions. It has been drip-fed to them over the past two years, rather than giving them what they need right away, which has potentially made the war longer. We have not given the Ukrainians the tools they have needed when they have asked for them. Ukrainians talk about the “long yes”, where European partners say “Yes, of course” and promise delivery of arms, but those arms take months or even years to arrive and make a difference on the battlefield. I wonder whether we would be in a different place if all the systems that have eventually been given to Ukraine had been given at the start of the war.
This Bill is absolutely crucial, as various Members have said, and I support it. I think it is extremely important, but Members have also talked about going further with Russian assets. I can completely understand why, a year or 18 months ago, it might have been rational to think that those assets could be used during the peace negotiations—that they could potentially be the source of funding for rebuilding Ukraine. However, as Members have pointed out several times, there may not be a Ukraine if this war is not won. That is why we have to give serious consideration to unlocking those funds and using them now for the defence of Ukraine.
The last time this country was fighting for its life, in 1940, there was also a presidential election. We were much luckier back then, because both the Democratic and Republican candidates were stalwart allies of the UK in its fight against fascism. This election has changed things, but going back to that time, when President Roosevelt announced lend-lease, he said that when your neighbour’s house is on fire, you do not haggle over the cost of the hose. You give them the hose—you give them what they need to put out the fire—and then you go back to the details later. That is the attitude European partners should have towards the defence of Ukraine.
Earlier today, I mentioned that one of the Defence Ministers has said that the world is becoming darker every day. If this war is not won, the world will be plunged into darkness, because it will send an incredibly dangerous message to other autocracies around the world about the rules-based order and “might is right”, and the refugee crisis that we see here in Europe at the moment will pale into insignificance as millions of Ukrainians flee the prospect of living under Vladimir Putin’s tyranny. As such, I welcome this Bill, but like many colleagues, I hope to see Britain’s leadership continue to grow and for us to go further, seizing Russian assets and giving the Ukrainian people what they need.
Mike Martin (Tunbridge Wells) (LD)
I, too, start by congratulating the hon. Member for Amber Valley (Linsey Farnsworth). Every time I hear someone give a maiden speech in this Chamber, I am really heartened by the passion and expertise of the new intake. As I said in my maiden speech, it is clear that we are going to have not just a good Parliament, but a great Parliament. I look forward to it very much. I welcome the Minister’s speech and the Bill. As is usual on Ukraine, there is agreement across the House. I was not quite expecting this degree of agreement on going further—on not just seizing interest or making loans, but going after assets.
This Bill fulfils the UK’s part of an agreement that the G7 made in June, and we of course want to fulfil our commitments. However, the commitment in that agreement was made before the recent election in the US. As many Members across the House have said, including most recently the hon. Member for Macclesfield (Tim Roca), the security calculus that Europe has applied for the last 80 years has now changed. We can no longer rely on an American security umbrella. NATO is the cornerstone of our defence—there is no disagreement about that in the House. The Government talks of NATO first, but NATO does not work without an American security guarantee, American logistics, or the American backbone that runs through it. It is the same with Ukraine. Since the outbreak of the war in February 2022, the United States has provided approximately 50% of the support for Ukraine. The UK led; that is something that the previous right hon. Member for Uxbridge and South Ruislip got absolutely right. However, we now face a world in which that support may be withdrawn, and that is not just a supposition. President-elect Trump has said that the Russians can
“do whatever the hell they want”
in Europe. This is a huge problem. We should have woken up to this five or 10 years ago. The fact that we are dealing with it now—well, I hope we are—should arouse the interest of Members in the Chamber today.
I want to outline what the consequences may be of a withdrawal of US support from Ukraine. We may end up with a grubby little deal that would involve taking a marker pen and drawing through Ukraine on a map. The problem with that is that this war is not about territory; those who understand it to be about territory misunderstand it. It is about identity. Russia sees Ukraine as part of its imperial identity. If Ukraine exists as an independent country, then Russia does not exist as an imperial country. It is that simple. We are trying to define the conflict by way of territory, but that it is not how Vladimir Putin sees it.
We may end up with a grubby deal; in effect, the US will withdraw support, and Ukraine will be forced to come to the negotiating table. A line will be drawn on the map through Kharkiv, Donbas and Kherson. However, Vladimir Putin will not stop there. Latvia, Lithuania and Estonia are all allies of ours that the United Kingdom has pledged to defend through NATO, under article 5. If Putin took a bite from Lithuania, and Britain and France stepped forward to defend it, as we are pledged to do under article 5, we would have a huge problem if we then heard from Washington that the US would not follow us.
Even if we do not get a grubby deal that empowers Vladimir Putin, we could end up with the collapse of the Ukrainian frontlines, if the Americans withdraw their support and the Ukrainians decide to fight on. If I was Ukrainian, I would fight on, because of what the Russians did in Bucha and their kidnapping of Ukrainian children. The Ukrainians may fight on, but the frontlines may collapse.
The hon. Member for Arbroath and Broughty Ferry (Stephen Gethins) spoke about a refugee crisis. The UN in Kyiv recently carried out a study of the crisis that could follow a collapse of the Ukrainian domestic power system. As we know, the Russians are targeting it at the moment. The UN estimated that between 5 million and 10 million Ukrainians would leave and move into western Europe—and that is just on the collapse of the power system. What would occur if the frontlines collapsed and the murderous, genocidal Russian army started to rampage through western Ukraine?
If we step outside Europe and look at possible consequences of a Ukrainian defeat, we can see that the idea of nuclear proliferation being kept under wraps, which we have cherished for the past 50, 60 or 70 years, would be under threat. The lesson we learn from the conflict is that if a state has nuclear weapons, it can bully its way into invading other states. Iran and other countries will see this and think, “That is something we need to get.” Colleagues have mentioned other autocratic states. China is watching what is happening in Ukraine carefully, as well as the western, European and American response. If we lose in Ukraine, we can kiss goodbye to Taiwan.
This is an existential conflict for Ukraine, in which it must succeed. The Bill goes some way to helping with that, but not far enough. The west collectively has $300 billion of Russian assets. Some $200 billion of those are in Belgium in Euroclear. To put that in context, the US has to date donated or pledged to donate approximately $180 billion to Ukraine, so the total amount of Russian assets we hold is 50% more than the total spend so far from the United States on the war. Given that we may well be losing US support for Ukraine, with all the second-order effects that has for our security, why are we not considering much more carefully sequestering and using those assets for the defence of Ukraine? If not now, when?
Jacob Collier (Burton and Uttoxeter) (Lab)
May I start by congratulating my hon. Friend the Member for Amber Valley (Linsey Farnsworth) on her excellent maiden speech? I have heard that former Crown prosecutors can go far in this place, and I am sure that she will.
I rise to speak in strong support of the Bill, and I am grateful to colleagues for showing their support for it, because it is essential to the UK’s continued steadfast support for Ukraine as it defends itself against Russia’s illegal and brutal invasion. Through the Bill, the Labour Government will ensure that funds derived from sanctioned Russian sovereign assets—assets that were once used to fuel Putin’s war machine—will help Ukraine in its fight for freedom. That is not only morally right but in Britian’s national interest, as so many hon. Members have said. Supporting Ukraine means supporting the frontline of our democracy and our shared values of liberty and self-determination.
Most Members of the House recognise that it is critical to stand with Ukraine, but I am deeply disappointed that some question our unwavering support. Some have suggested that concessions should be made on both sides in this war, as if there is some kind of equivalence between Ukraine’s fight for its freedom and Russia’s criminal and illegal invasion. Let us be absolutely clear that calls for concessions send the wrong message to Ukraine, the world and future generations. These calls undermine Ukraine’s sovereignty, reward Putin’s recklessness and disregard the horrific suffering that has been inflicted on the Ukrainian people.
Jim Shannon (Strangford) (DUP)
The hon. Gentleman is right to mention what the future holds. We all want peace, Ukrainians above all, but that peace must be based on justice, and we in this House must commit to that. The message from this House today should not be about the Ukrainians under pressure from Russian troops, but about our commitment in this House to them. We can influence the United States President to ensure that things look more positive for Ukraine. Does the hon. Member agree that that has to be the message that we send from this House?
Jacob Collier
I now have a parliamentary medal: I have taken an intervention from the hon. Member for Strangford (Jim Shannon). I am grateful, and I agree with what he said.
Some of the views that we hear are a dangerous form of appeasement that only emboldens the aggressor and undermines the cause of peace, freedom and democracy. That weakens Ukraine, our position and the values that we in this House should defend. We must reject such defeatism and appeasement, and we must stand firm in the face of tyranny, for Ukraine and for the values that we hold dear in this democracy. To do anything less is to surrender our ideals, and that is not an option.
The Bill demonstrates that this Government are committed to doing the opposite. It builds on our already substantial support, including £3 billion in annual military aid and £2.3 billion in additional funding, drawn from immobilised Russian assets. It also enables the UK’s £2.26 billion contribution to the G7’s extraordinary loan scheme. This funding will directly support Ukraine’s defence by providing vital air defence systems, artillery and armoured vehicles. That support is vital, not only for Ukraine but for the security of the UK and the wider world. As the Chief Secretary to the Treasury rightly highlighted, a safe and secure Ukraine means a safe and secure United Kingdom.
It is testament to our country’s leadership on the global stage, and a point of pride, that the issue has had cross-party support in this Parliament. The Prime Minister’s commitment to continued military aid, and the UK’s role in driving the largest sanctions package ever imposed on a major economy, reflect our iron-clad determination to hold Russia to account. Putin is now 1,000 days into a war that he thought would last just a few. His miscalculation has drained Russia’s economy; 40% of its annual budget is now consumed by the war effort. His forces have suffered their highest rate of casualties since the conflict began. This is no time for us to falter.
I pay tribute to the bravery of the Ukrainian armed forces, and the crucial work of the UK armed forces in training their Ukrainian counterparts. Let me say how proud I am of our troops’ vital contributions to Ukraine’s defence efforts—a pride that was reinforced by my visit to the 29th Regiment Royal Logistic Corps and the Commando Training Centre Royal Marines. Seeing their dedication at first hand was a reminder of the professionalism and commitment of our armed forces, who are making a tangible difference in Ukraine’s fight for freedom. The unity of this House, our Government and our allies is essential to ensure that Ukraine has the resources that it needs to prevail. Let us send a clear message today: Britain will stand with Ukraine for as long as it takes.
James Naish (Rushcliffe) (Lab)
I congratulate my hon. Friend the Member for Amber Valley (Linsey Farnsworth) on her wonderful maiden speech—actually, I have actually shifted up to sit in her spot so that I can accept all the plaudits that are coming from others. Yesterday marked 1,000 days since the start of Russia’s full-scale invasion of Ukraine. One thousand days later, missiles and bombs continue to rain down on sleeping civilians, Ukraine’s critical energy infrastructure is targeted, and in the south and east of the country, approximately 3 million Ukrainians live in occupied territories, where their human rights are routinely violated. The Ukrainians living under occupation must be liberated. Ukrainians across the rest of the country must be able to move on with their lives in peace, without fear of being bombarded.
The Bill provides the Government with the spending authority to provide an additional £2.26 billion in financial assistance to Ukraine, paid for not by the British taxpayer, but through the extraordinary profits made on immobilised Russian sovereign assets. Many of my Rushcliffe constituents will welcome this very serious and sensible proposal, which gives Ukrainians more tools to defend themselves, and would join some of the calls today to look at ways in which we may be able to go still further.
I trust that the House will join me in paying tribute to the Ukrainian armed forces who are fighting so valiantly to defend their country and their democracy, and to the members of our UK armed forces who are involved in training Ukrainian armed forces in the UK through Operation Interflex, which has now trained more than 50,000 Ukrainian recruits. That includes Nottinghamshire armed forces personnel, such as Corporal James Noble of C Company 4 Mercian, who spoke publicly about the training. Describing its impact, he recalled:
“Completely out of the blue, a Ukrainian soldier came over to me with a picture on his phone and said: ‘This is my wife and this is my young child. Thanks to you and what you’ve done, I have a much greater chance of living to see them again.’”
In Rushcliffe, many of my constituents will welcome the Bill. Since the full-scale invasion started, over 300 Ukrainians fleeing the war have been sponsored by Rushcliffe residents as part of the Homes for Ukraine scheme. From a solidarity march in West Bridgford to a concert for Ukraine in Keyworth that raised £1,800, so many of my constituents have done what they can to support the Ukrainian people and they will welcome the Government using profits made on immobilised Russian sovereign assets to support Ukraine during its darkest hour.
We have the opportunity today to progress legislation that will unlock vital additional funding for Ukraine to invest in more of the equipment that it needs to defend itself from Russia’s illegal invasion. That additional funding comes on top of the UK’s existing £3 billion a year for military aid for Ukraine. Our support for Ukraine is iron-clad, as it should be. I therefore support the Government and commend the Bill to the House.
Mark Ferguson (Gateshead Central and Whickham) (Lab)
I wish to associate myself with the comments of many other Members who congratulated my hon. Friend the Member for Amber Valley (Linsey Farnsworth) on her wonderful maiden speech. She spoke particularly movingly about the impact that being in this place has on our families. I am sure that all of us will be thinking of our friends and family as we think back on that speech.
I am proud to speak in support of the Bill. I am proud of the additional money that is being provided for the defence of Ukraine and its people. I am proud that the sum of £2.26 billion, as my hon. Friend the Member for Rushcliffe (James Naish) said, is in addition to the £3 billion that has been committed each year. I am proud, too, that this House stands for Ukraine and democracy, and in opposition to Putin and tyranny. That position is shared almost universally across this House, and certainly universally in this debate.
In my early contributions in this place, I have spent much of my time decrying the legacy of the last Conservative Government. I dare say I will do that a few more times, Madam Deputy Speaker, but I certainly will not be doing that on Ukraine. One area in which the last Government deserve real praise is their support for the Ukrainian people. In their darkest hour, this House and this country stood as one—in defence of Ukraine, in defence of democracy, in defence of freedom.
At a time when the opinion of politics and politicians is low, I think it speaks well of the House that we can come together on issues of such great magnitude. The support for the people of Ukraine under the last Government and under this Government make me proud to be British, and proud to be a Member of this House, because defending Ukraine, its independence and its way of life, is also defending our way of life. It is drawing a line in the sand and saying to those who wish to tear up our democracy and subvert our society that we will not stand idly by. I am sure that I am not the only Member to have stood at his or her local cenotaph on Remembrance Sunday or Armistice Day and thought of those who are fighting right now for their freedom and for their loved ones in Ukraine.
At the same time, we must not think that those who are taking on Russian aggression are solely those on the frontline. This war is being fought with more than just bombs, bullets and missiles. It is fought by the families who keep on living despite the presence of a dictator who wishes to snuff out the existence of their nation. It is fought by those who are willing to say, in this House and anywhere else where speech is free, that Vladimir Putin is an illegitimate tyrant. It is fought by those inside Russia who stand—or seek to stand—in democratic elections, knowing that the elections in which they stand are neither free nor fair, but doing so anyway. It is fought through the dignity and defiance of those nations who also stand on the border of the Russian aggressor state, wishing only to remain free. We must stand with them too.
Across the UK, including in Gateshead and Whickham, people have taken Ukrainian refugees into their homes. They have made them welcome. They too are part of the fight for dignity and democracy. Today we take the next critical step in that fight, at a time when, as has been said, it is more urgent than ever. We do not know when this war will end, but we do know that it must end, and how it must end: with a peace that is just for the Ukrainian. Slava Ukraini: glory to Ukraine.
Madam Deputy Speaker (Ms Nusrat Ghani)
We now come to the final Back-Bench contribution.
Dave Robertson (Lichfield) (Lab)
Thank you, Madam Deputy Speaker. I sincerely hope to be last but not least.
Let me begin by congratulating my hon. Friend the Member for Amber Valley (Linsey Farnsworth) on her first speech in the Chamber. I too, like many Members who are present today, am relatively new to the House, and I do not think I will ever forget the first time I walked into the Chamber with that real sense of awe that we have when we walk in here. We are faced with the history of this place which stretches back for centuries—the ideas that have been debated, discussed and decided in this room—but we are on the next page. This debate, and the debates that we will have over the coming months and years, are the next step on that journey, the next page of that history, and as we move forward we must continue to remember our place in the story—a story of the importance of democracy and the importance of ordinary people standing up, having their say and ensuring that ideas such as democracy, justice and self-determination are never forgotten, and are always close to the forefront of what happens in this place, in this country and around the world.
We should be proud of the history of this place in defending those ideals, as I am proud of this country’s support for Ukraine. I am also proud of the support from people throughout my constituency, in Lichfield, Burntwood and the villages, who have thrown open their homes to welcome those who have been displaced from Ukraine. It is heartening to see how many people across the country have acted so quickly in saying, “These are our friends—these are people who are in need”, and making sure that there was a place for them to come and to be safe. Let us make no bones about it: the Ukrainians are defending our values. They are Europe’s eastern flank, and Europe’s bulwark against autocracy. The fight in which they are involved, the fierce fighting that is taking place, is not for some nebulous idea; it is not for drawing lines on a map; it is for something as fundamental as the values that we hold dear.
I think it is important for us to remember where we want to be when those next pages of the history of this place are written. What do we want it to say? I know that when I play my part in that, I want it to say that I was on the right side of history—on the side of our values, justice and democracy. That is why I support the Bill, so that we can provide support to Ukraine. More than that, I want to be part of sending a message—a G7 message, a NATO message, a European message—to Washington about the importance of supporting Ukraine, and part of sending a very strong message to Moscow, and its supporters in Tehran, Pyongyang and anywhere else that supports this illegal war in Ukraine, that it has to stop. But it can only stop with a Ukrainian victory. Slava Ukraini.
Madam Deputy Speaker (Ms Nusrat Ghani)
We now come to the Front Benchers, starting with the shadow Minister.
Richard Fuller
I will respond briefly to the debate for the Opposition. First, I commend all the speakers, and particularly the hon. Member for Amber Valley (Linsey Farnsworth). It is rare for so many in this House to congratulate a Member on their maiden speech, but it was warranted because she spoke so nicely and kindly about her constituency, as well as with great generosity about her predecessor and very movingly about her father. She should take away the great support from all Members across the House, and we wish her the best of luck in her future here.
The Minister will be aware, having listened to the debate, of the comprehensive support for the Bill. She will have heard calls from some quarters to extend the provisions of the Bill to include seizing not only proceeds from the profits, but the assets. Such a move would be a very large step for the UK to take, and I do not think the official Opposition would support that without very strong convincing from the Government. But on all the other aspects, she will have seen the comprehensive support.
Stephen Gethins
On the seizure of assets and the $300 billion, we were trying to make the point that this needs to be explored very seriously. It would be transformative for the Ukrainian war effort and would therefore be transformative for our security. I take on board the hon. Gentleman’s point that this is not easy and about the impact that it might have. However, will he join me in encouraging the Treasury to look at this and come back to us with further details about the possible implications and how it might take this forward, so that we can all, as a House, examine it in greater detail?
Richard Fuller
I think I can assure the hon. Gentleman that the Treasury looks at these options on a continuing basis, but, consistently, the point of view held by the previous Government—and I would assume by the current Government—is that that is not the right step to take. But perhaps the Minister will update the House on her views on that in a moment.
Given the support, there was the opportunity for the Government to move forward with all stages of the Bill, so that it could proceed and be completed in this House today. Will the Minister say why that decision was not made and perhaps provide some sense of the timetable for when the Bill will be brought to the House for its concluding stages? But the Opposition’s general message is that we fully support the intentions of the Bill, and we will support it on Second Reading.
The Economic Secretary to the Treasury (Tulip Siddiq)
It is a pleasure to close this debate on what remains a very important and pressing issue. As Ukraine enters yet another difficult winter, I am proud of the consistent support that this Government have shown through not just our £2.26 billion ERA contribution, but the long-term commitments we have made to supporting Ukraine’s capacity for self-defence.
I join the Opposition spokesperson, the hon. Member for North Bedfordshire (Richard Fuller), and my right hon. Friend the Chief Secretary to the Treasury, along with my hon. Friends the Member for Burton and Uttoxeter (Jacob Collier) and for Gateshead Central and Whickham (Mark Ferguson) in saying how proud I am that there is unity across the House in standing shoulder to shoulder with Ukraine at this very difficult time. This is a complex issue, and I will try to answer the questions posed by the Opposition and my hon. Friends. If I have missed out anything, I am happy to write to Members.
Before I get into the nitty-gritty of the Bill, I pay tribute to my hon. Friend the Member for Amber Valley (Linsey Farnsworth) for making such a powerful maiden speech. I think I am right in saying that her late mother Margaret, David, Martin and all her children would be extremely proud of their extraordinary daughter, mother, stepmother and wife. I very much welcome this “vicious dictator” to the House. We need more of them in the women’s parliamentary Labour party, so I am pleased to have her here.
The hon. Member for North Bedfordshire asked about the timing of the release of the funds. We intend to begin spending the funds early next year to ensure that the funding supports our Ukrainian allies as soon as possible. We intend to do so in three equal tranches over three financial years, starting in 2024-25, and the G7 has agreed that all ERA funds will be given out by the end of 2027. He also asked about how the UK will be repaid. We are providing the funding as part of the wider G7’s extraordinary revenue acceleration loan initiative, which means that the UK will be repaid via the extraordinary profits generated from immobilised Russian sovereign assets in the EU. The EU has already enacted the necessary regulations to operationalise the Ukraine loan co-operation mechanism, which will distribute the profits. That came into effect on 29 October, as he is probably aware.
The hon. Member asked about what will happen to the UK if the loan is not repaid. The repayment will rely on profits continuing to flow from immobilised RSAs into the EU over multiple years. The UK and the wider G7 have committed to ensuring that Russian sovereign assets remain immobilised across our jurisdictions until Russia ceases its war of aggression and pays for the damage that it has caused to Ukraine, and G7 lenders have worked closely together to design the ERA in a way that allows for repayment in a scenario in which profits cease and Russia pays Ukraine. I hope that answers his question, but I can write to him if he wants more detail.
On NATO’s spending target, there is a clear commitment from the Government to spend 2.5% of our GDP on defence, which has categorically not changed. The hon. Member will have seen in our manifesto that we will set up a path towards spending 2.5% of GDP on defence, and this will be done at a future fiscal event.
The hon. Member asked about the total value of assets and private assets. Between February 2022 and October 2023, £22.7 billion-worth of Russian assets were frozen due to UK financial sanctions regulations—a marked increase on the figure of £18.39 billion that was provided in the Office of Financial Sanctions Implementation’s annual report in 2021-22. OFSI is currently analysing data on immobilised assets, and on the type and value of the assets.
Like many Members, the hon. Member for Lewes (James MacCleary) asked about the involvement of the ERA in asset seizure. I have to make it clear that the G7’s ERA scheme does not represent the seizure of Russian sovereign assets in any way; it is about using the extraordinary profits that the EU has set aside to pay a series of loans to Ukraine. He and the hon. Member for Honiton and Sidmouth (Richard Foord) asked about seizing Russian sovereign assets in the UK. Russia’s obligation under international law is clear: it must pay for the damage it has caused to Ukraine. The G7 agreement to use the profits from immobilised Russian sovereign assets for the loan is an important step towards ensuring that Russia pays. Although we continue to consider all lawful avenues by which Russia is made to meet its obligation to Ukraine under international law, it is important that the UK and the G7 remain focused on delivering the ERA and the benefit that it will give to Ukraine right now, because we are very conscious of the situation in which the country finds itself.
A few other Members, including my hon. Friend the Member for Leeds Central and Headingley (Alex Sobel), asked about the proceeds from the sale of Chelsea FC. The Government are working hard to ensure that the proceeds from the sale of Chelsea reach humanitarian causes in Ukraine as quickly as possible. My hon. Friend might know that the proceeds are currently frozen in a UK bank account while a new independent foundation is established to manage and distribute the money, but this is something that we are working on and we are trying to move it along as quickly as possible.
My hon. Friend the Member for Halesowen (Alex Ballinger) asked whether this was an unlimited resource loan. The negotiations remain ongoing on the details of the loan terms, but I am focused on ensuring that there is limited impact on Ukraine’s balance sheet. My hon. Friend the Member for Macclesfield (Tim Roca) talked about the implications of the Trump victory for Ukraine. I cannot speculate on any policy decisions that the incoming Administration of President-elect Trump may make, but we have welcomed bipartisan US support for Ukraine, which has been key in the international effort. I feel that Ukraine’s security is vital for global security. If there are any other questions that I have not answered, I will write to Members. I am conscious of the time and I want to finish by thanking hon. Members across the Chamber for their contributions to the debate.
Richard Foord
I am grateful to the Minister for giving way. I have heard her say that at this stage the Government intend to work on the profits rather than the seized assets themselves, but will she undertake to talk to ministerial colleagues in Finland, Czechia and Estonia to find out how they have gone about seizing and using confiscated assets?
Tulip Siddiq
I have listened closely to what the hon. Gentleman has said, especially with regard to other countries, and I am happy to have conversations with ministerial colleagues across different countries and find out what they are doing. This is our position for now, but this is an ongoing situation and things will move. I am happy to speak to Ministers from different countries who are using assets differently.
The ERA is an innovative scheme. It will ensure that Ukraine receives vital support throughout 2025 and beyond. It will take the money generated from Russian sovereign assets and use it to support Ukraine in the best possible way. This is further proof for us that the G7’s support for Ukraine will not falter, and that the UK will stand shoulder to shoulder with Ukraine for as long as it takes.
I echo the comments of my hon. Friends the Members for Lichfield (Dave Robertson) and for Rushcliffe (James Naish) in thanking the people of our country for all the support that they have shown Ukraine. Madam Deputy Speaker, I hope you will indulge me for one minute while I say that my own constituents of Hampstead and Highgate have opened their doors for Ukrainian refugees, giving them their homes, community spaces and education spaces, and I particularly pay tribute to my local synagogue, South Hampstead synagogue, which is providing free English lessons for Ukrainian refugees. I was very pleased to meet those people in Parliament last week.
Question put and agreed to.
Bill accordingly read a Second time.
Financial Assistance to Ukraine Bill (Programme)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Financial Assistance to Ukraine Bill:
Committal
(1) The Bill shall be committed to a Committee of the whole House.
Proceedings in Committee, on Consideration and on Third Reading
(2) Proceedings in Committee shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.
(3) Any proceedings on Consideration and proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion two hours after the commencement of proceedings in Committee of the whole House.
(4) Standing Order No. 83B (Programming committees) shall not apply to proceedings in Committee of the whole House, to any proceedings on Consideration or to proceedings on Third Reading.
Other proceedings
(5) Any other proceedings on the Bill may be programmed.—(Anna McMorrin.)
Question agreed to.
Financial Assistance to Ukraine Bill (Money)
King’s recommendation signified.
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Financial Assistance to Ukraine Bill, it is expedient to authorise the payment out of money provided by Parliament of any sums required by the Treasury or Secretary of State for the purpose of providing loans or other financial assistance to, or for the benefit of, the government of Ukraine as a result of—
(a) the arrangements described as the Extraordinary Revenue Acceleration Loans for Ukraine announced on 14 June 2024 at the G7 summit in Apulia in Italy, or
(b) any subsequent arrangements that are supplemental to or modify or replace those arrangements.—(Anna McMorrin.)
Question agreed to.
Speaker’s Committee for the Independent Parliamentary Standards Authority
Ordered,
That Marie Goldman, Leigh Ingham, Gordon McKee, Charlotte Nichols and Jesse Norman be appointed to the Speaker’s Committee for the Independent Parliamentary Standards Authority until the end of the present Parliament, in pursuance of paragraph 1(d) of Schedule 3 to the Parliamentary Standards Act 2009, as amended.—(Lucy Powell.)
House of Commons Members’ Fund
Ordered,
That Holly Lynch, Sir Charles Walker and Peter Grant be removed as Trustees of the House of Commons Members’ Fund and Mark Tami, Chris Elmore and Dr Danny Chambers be appointed as Trustees in pursuance of section 2 of the House of Commons Members’ Fund Act 2016.—(Lucy Powell.)
Financial Assistance to Ukraine Bill
Wednesday 18th December 2024
(2 months ago)
Commons ChamberFinancial Assistance to Ukraine Act 2025 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 18 December 2024 - (18 Dec 2024)
The Second Deputy Chairman of Ways and Means (Caroline Nokes)
I remind Members that in Committee, they should not address the Chair as Madam Deputy Speaker. Please use our names when addressing the Chair. “Madam Chair”, “Chair” and “Madam Chairman” are also acceptable.
Clause 1
Provision of Loans or other Financial Assistance to Ukraine
Question proposed, That the clause stand part of the Bill.
The Second Deputy Chairman
With this it will be convenient to consider:
Clause 2 stand part.
New clause 1—Reports on loans or other financial assistance to Ukraine—
“(1) The Secretary of State must—
(a) prepare reports on the operation of assistance provided in accordance with section 1(a),
(b) lay a copy of each report before Parliament.
(2) Each report must provide details of the amount of—
(a) monies provided by the United Kingdom to Ukraine under section 1;
(b) the United Kingdom’s share of the principal loan amount and interest accrued under the scheme; and
(c) receipts of extraordinary profits from the Russian immobilised sovereign assets under the scheme.
(3) Each report must also provide a summary of discussions between His Majesty’s Government and other G7 governments about discussions on any subsequent arrangements that are supplemental to or modify or replace the arrangements referred to in section 1(a), including any discussions concerning—
(a) the range of Russian assets to which the arrangements might apply, and
(b) the use of those assets.
(4) The first report must be laid within the period of 6 months of the passing of this Act.
(5) Each subsequent report must be laid within the period of 6 months beginning with the day on which the previous report was laid.
(6) The duty under subsection (1) ceases to have effect 12 months after the arrangements referred to in section 1(a) or any subsequent arrangements of the kind referred to in section 1(b) cease to operate.”
This new clause establishes an annual reporting requirement relating to the UK share of loans to Ukraine and receipts from the extraordinary profits from the freezing of Russian state assets and to any G7 discussions to extend the arrangements.
The Chief Secretary to the Treasury (Darren Jones)
It is a pleasure to serve under your chairmanship today, Madam Chair.
We had a very constructive debate on Second Reading of the Bill. In particular, I wish to express my appreciation for the universal support that the House has shown for the provision of this vital funding. It is clearly a subject close to the hearts of many of us across the House. I look forward to further discussion on this important Bill today.
As the Committee is aware, the extraordinary revenue acceleration is an ambitious scheme designed to provide Ukraine with a total of $50 billion in additional support, to be repaid by the extraordinary profits generated on Russian sovereign assets held in the European Union. The United Kingdom’s contribution of £2.26 billion is joined by pledges from the United States, the European Union, Canada and Japan.
The Bill contains only two clauses. They are both straightforward. Clause 1 grants the Government the legal spending authority to fulfil the commitment we have made to provide Ukraine with the UK’s contribution to the extraordinary revenue acceleration. The clause empowers the Treasury or the Secretary of State to provide the Government of Ukraine with funds approved by Parliament as a result of the extraordinary revenue acceleration loans for Ukraine scheme, or
“any subsequent arrangements that are supplemental to or modify or replace those arrangements.”
Payments made under clause 1 will be those that are necessary to perform the UK’s commitment to the ERA scheme.
Sir Julian Lewis (New Forest East) (Con)
In of course welcoming the Government’s measures, I note that the Minister referred to the extraordinary interest from the frozen Russian assets. Have the Government permanently set their mind against any possible actual seizure of the assets themselves, perhaps in agreement with other G7 members or EU members?
Darren Jones
I thank the right hon. Member for his contribution. As we debated on Second Reading, this is a commitment across G7 partners and with the European Union to take action on the proceeds of the assets that are held. For other complicated legal reasons, there is no intention to seize those assets at this time.
Stephen Gethins (Arbroath and Broughty Ferry) (SNP)
I thank the Minister for his acknowledgement of the cross-party support for this measure, but to back up my colleague, the right hon. Member for New Forest East (Sir Julian Lewis), the $3 billion from the UK is generous and will make a difference, but the $300 billion in frozen assets would be utterly game changing. I accept the Minister’s argument at the moment about some of the more complicated legal issues. I know that he accepts the very serious situation that the Ukrainians are facing on the front, defending all of us. May I encourage him merely to continue to look at this issue and see whether he can work with G7 colleagues to find a way of unpicking the difficulties that he has highlighted?
Darren Jones
I welcome the hon. Gentleman’s encouragement, which I take in good faith. He will know that these matters are multilateral and subject to negotiation with other allies and G7 colleagues, but he will also know, as I am sure the whole House does, that we go into 2025 with a strength of resolve across those G7 countries to do all that we can to help Ukraine continue to mount its defence against the illegal invasion from Russia.
Any other payments beyond the extraordinary revenue acceleration loans to Ukraine or any other country that are unrelated to the ERA scheme are not covered by the provisions of the Bill; this money is in addition to other grants and payments that have been referred to in the House previously.
The clause contains provision for the UK to provide funding towards subsequent arrangements that are supplemental to, modify or replace the ERA. This provision allows for flexibility in the unlikely event that the scheme itself should significantly alter. It is not intended to be used without this change in circumstances.
Clause 2 simply sets out the short title of the Bill.
Richard Fuller (North Bedfordshire) (Con)
I thank the Minister for opening the debate. The Conservative Government were a vociferous advocate for mobilising Russia’s frozen sovereign assets to support Ukraine. We drove G7 and European partners to try to coalesce around the most ambitious solution possible to achieve that outcome. The announcement on 22 October marked progress on that journey and is a step in the right direction. We understand that the Government’s position is that the United Kingdom’s contribution should be earmarked for supporting Ukraine’s military expenditure, including on air defence, artillery and other equipment. The Opposition would support that. We need to persevere with our efforts to put Ukraine in the strongest possible position to counter Russia’s unprovoked and illegal invasion.
Matters since Second Reading have been fast moving, so let me pose some questions to the Minister. Since Second Reading, the United States has given Ukraine $20 billion, funded by the profits of frozen Russian assets. That economic support forms a significant part of the overall $50 billion package agreed by G7 member nations and announced in June. The US Treasury said that it had transferred the $20 billion to a World Bank fund, where it will be available for Ukraine to draw. Money handled by the World Bank cannot be used for military purposes.
The US Administration had initially hoped to dedicate half the money to military aid, but that would have required approval from Congress, which the President did not seek. Perhaps the Minister can update the House on what discussions the UK Government have had with the US Administration, Canada and the European Union about the use of funds provided for military purposes. Are any strings attached to the funds that will be provided by the UK? As the US has already provided its share of moneys anticipated in the G7 package, can the Minister advise the House on the timing of the UK’s contribution? I think it was made clear on Second Reading, but it would be helpful to have an update, given the move by the US since then.
As the Minister and the Government have advised, the loans that the UK will pay will form part of the extraordinary revenue acceleration loan agreement by the G7. The loans that the UK will provide will be repaid by the Ukraine loan co-operation mechanism, established by the European Union under regulation 2024/2773 on 24 October. The ability of the UK to have its loans repaid depends in large part on a decision by the European Union to maintain its freeze on Russian assets. The EU renews Russian sanctions every six months, and efforts to extend that to a three-year review cycle were rebuffed by Hungary earlier this year. Will the Minister confirm that there is a risk, in the event that the EU does not extend its sanctions on Russia, that the costs of the loan will be borne by UK taxpayers, and what mitigations he might consider if that situation arises?
Finally, the EU controls more than two thirds of Russia’s $300 billion of sovereign assets that have been frozen by western allies following Russia’s full-scale invasion of Ukraine. Of those EU-held frozen assets, 90% are held by the Belgian-based financial services company Euroclear. The profits from the EU-held assets, estimated to be between $2.6 billion and $3.2 billion per year, have been used to arm Ukraine and finance its post-war reconstruction. We understand that the EU’s top diplomat, Kaja Kallas, said in an interview with The Guardian on 12 December that the European Union should use the billions in frozen state assets to aid Ukraine. She emphasised that Ukraine had a legitimate claim for compensation, and described the Russian assets held in the EU as
“a tool to pressure Russia.”
The Minister responded to earlier interventions, but can he confirm the UK Government’s position? Has he discussed the matter with the EU and Belgium, and does he have any plans for the UK to go further on the use of those assets?
Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)
I want to speak to new clause 1, which I have signed, but I first want to reiterate my support for the Government and the Bill. As I said on Second Reading, it is absolutely right and proper that Russia pays for the damage it has done to Ukraine and its people. The Bill is an important first step in providing that financial assistance from Russian assets to Ukraine. Echoing the comments from around the Chamber, we need to move with allies towards a position of seizing Russian assets, but it is a positive first step that we are using the proceeds of the interest on those assets to support Ukraine.
On Second Reading, I mentioned that
“Canada has passed the Special Economic Measures (Russia) Regulations, which collects data on Russian assets, freezes them and publishes the value, which currently stands at 135 billion Canadian dollars”.—[Official Report, 20 November 2024; Vol. 757, c. 312.]
I asked if the Government could disclose Russian assets held in the UK in the same way. New clause 1 goes a long way to providing that. It would ask the Government to lay a copy of a report before Parliament showing under the Act, as it will hopefully become,
“monies provided by the United Kingdom to Ukraine”
to the following level of disclosure:
“the United Kingdom’s share of the principal loan amount and interest accrued under the scheme”
and
“receipts of extraordinary profits from the Russian immobilised sovereign assets under the scheme.”
It would to an extent mirror what our close ally Canada has done. Although I do not expect to divide on new clause 1, I would appreciate it if the Minister would comment on how he will report progress to the House, disclose the level of Russian state assets that are here, and state how much of the interest accrued from those assets has been mobilised to support Ukraine in its war efforts.
James MacCleary (Lewes) (LD)
I thank the hon. Member for Leeds Central and Headingley (Alex Sobel) for outlining some of the things in the new clause we have tabled. I want to outline in some detail what is in new clause 1 and what we hope to achieve with it, and hopefully the Minister will be able to respond and outline some of his thoughts around reporting in particular.
New clause 1 would impose a reporting requirement on the Secretary of State to keep Parliament informed about three critical aspects of our support to Ukraine under the scheme. The reports would detail the monetary support provided to Ukraine, including the amounts disbursed and how that fits into the broader multilateral agreement. That ensures transparency and allows Members and the public to understand the precise scale of our financial commitment. The reports would also provide clarity regarding our share of the principal loan amount and any interest accrued. Such information is vital for proper scrutiny and public trust, ensuring that funds allocated are achieving their intended purpose.
Finally, and most importantly, the reports would shed light on any extraordinary profits arising from immobilised Russian sovereign assets under the scheme. While we cannot legislate here to seize those assets directly, the provision ensures that the question does not simply fade away. By requiring regular reports, we maintain focus on the issue and keep pressure on the Government to engage with our G7 partners. If, at some future point, there is an opportunity to use Russian state assets more directly for Ukraine’s recovery, Parliament will be fully informed and ready to act.
The reports must highlight any discussions the UK Government have had with other G7 countries about future steps, including expanding the range of assets considered or using them in new ways. That ensures ongoing diplomatic transparency and accountability. Parliament will know if the Government are pushing for more ambitious measures internationally or if they are hesitating while others lead. In practice, the first report would appear within six months of the Bill’s passage, with subsequent reports every six months until one year after the relevant international arrangements cease to operate.
The structured timeline guarantees sustained oversight, rather than just a one-off glance. Given the complexity and duration of the challenges Ukraine faces, such ongoing engagement is critical. It sets a framework for continued scrutiny, encourages more ambitious future action and underscores that, despite the Bill’s limited scope, our resolve to hold Russia accountable remains unwavering. Through those measures, we would ensure that Parliament remains fully informed and ready to stand by our Ukrainian allies when the opportunity to take bolder steps arises.
Gregor Poynton (Livingston) (Lab)
It is a pleasure to speak in support of the Bill. The battle for Ukraine is one of the defining issues of our age. In February 2022, Putin launched an illegal and reckless invasion of a sovereign European democracy. Seeing that happen in the third decade of the 21st century was a sobering moment; we had seen nothing like it on European soil since world war two. It put beyond any doubt the revanchist and irredentist ambitions of the Russian regime, and the need for all freedom-loving democratic peoples to resist those ambitions at all costs.
The Ukrainian people are fighting not just for Ukraine, but for all of us—for the values we hold dear: democracy, human rights, the rule of law, and freedom from global gangsters like Putin. By helping Ukraine to stand strong against Russian aggression, we are sending a clear message to dictators and autocrats around the world that we will not tolerate violations of national sovereignty or the use of force to change borders.
Melanie Ward (Cowdenbeath and Kirkcaldy) (Lab)
Last week I met Ukrainian refugees in my constituency who conveyed not just their gratitude for our country’s steadfast support for their war action against Russia, but their sense of desperation because many of their visas run out early next year. Does my hon. Friend agree that the Government should act quickly to give those people the certainty that they will continue to be welcome in the UK for the foreseeable future?
Gregor Poynton
I agree with my hon. Friend about visas. We need to do everything we can to support the Ukrainian people, whether here in the UK or abroad.
Our support for Ukraine is an investment not just in its future but in the security and stability of Europe and the world. Russia’s war against Ukraine has not only devastated the lives of millions, but challenged the very foundations of the international rules-based order. The brutality of Russia’s actions, the targeting of civilians and the displacement of more than 8 million Ukrainians are stark reminders of the atrocities that war brings to ordinary people. This is a tragedy for the Russian people, too. Many tens of thousands of Russian troops have been needlessly killed in Ukraine—victims of the vainglorious and deranged ambitions of their leader. Our quarrel is not with ordinary Russians; it is with the regime that oppresses and lies to them.
Ukraine, meanwhile, has shown resilience, courage and an unwavering determination to protect its land, its people and its freedom. President Zelensky and the Ukrainian people have stood firm in the face of adversity. As I have said before, they are fighting not just for Ukraine, but for all of us. Let us make no mistake: if we do not send the weapons and financial support that the Ukrainians need to fight this war, we will one day have to send our sons and daughters to confront Putin and his regime.
I am proud to say that our unwavering support for Ukraine unites Members on both sides of the House, and it has united our country, too. I am very proud to walk around my Livingston constituency and see Ukrainian flags in windows and gardens as a sign of our solidarity. From providing military aid to offering humanitarian assistance, and from imposing sanctions on Russia to offering refuge to those fleeing war, we have acted with purpose and resolve, and many British people, including individuals in this House, have opened their doors to Ukrainian refugees.
The UK has provided £450 million in humanitarian assistance since the start of this full-scale invasion, including £20 million to double this year’s support for Ukraine’s energy system, and £40 million for stabilisation and early recovery, which the Foreign Secretary announced in Kyiv in September. The Labour Government have stepped up for Ukraine. The UK will deliver £3 billion of military aid to Ukraine every year for as long as it is needed—their fight is our fight. The UK’s military, financial, diplomatic and political support for Ukraine is ironclad. The Bill provides the Government with the spending authority to enable the UK to provide the Ukrainians with financial assistance, as part of the G7 extraordinary revenue acceleration loans to Ukraine scheme, which is an important part of this effort. It represents an advance of approximately $50 billion, repaid from the extraordinary profits made on immobilised Russian sovereign assets held in the UK.
We must continue to stand with Ukraine, confront Russian aggression, and pursue Putin for his war crimes. Our response must be one of strength, resilience and unity for as long as it takes.
Dr Neil Shastri-Hurst (Solihull West and Shirley) (Con)
At a time of existential threat to Ukraine, I have been heartened by the tone from across the House towards the Ukrainian people. It is critical at this moment in history that this House and all European Governments step up and do not give up. While I welcome the details of this short Bill, we should be focusing on the untapped countermeasure and counter-offensive that is at our disposal. Like a number of colleagues, I gently say to the Minister that we should think about the use of frozen Russian assets to support Ukraine in its non-violent economic and political reconstruction. The UN General Assembly has already endorsed an international mechanism for compensating Ukraine, but we cannot wait for the war to be over before we enact that countermeasure. Back in 2022, Ukraine lost 29% of its GDP, so if it only receives its compensation at the end of the war, that will be far too late.
Joe Morris (Hexham) (Lab)
It is a pleasure to speak in support of this Bill, and to pay tribute to the Government for their support for Ukraine and to the consensus across the House that Ukraine must be supported against the barbaric and illegal invasion of a sovereign nation, as my hon. Friend the Member for Livingston (Gregor Poynton) said. The invasion of one European state by another in February 2022 was something I never thought I would see in my lifetime—we all thought that had been consigned to the history books, where it belongs. I am very pleased that we are backing the Ukrainian people in their struggle, and I hope that in time, the Russian people can vote in free, fair and democratic elections to choose their own path.
I also pay tribute to the community of Northumberland, who have come together to welcome families from Ukraine in Hexham, in Riding Mill, and in other towns and villages across my constituency. When I am out and about in my constituency, I am always struck by the Ukrainian flags that I see, sometimes in the most incongruous places—on country lanes, on the sides of churches and in private homes. It really gives me a renewed optimism to see those flags flying beneath the beautiful Northumbrian sky. One question that has been put to me by constituents, and on which I would like to gently probe the Minister, is the future of the Homes for Ukraine scheme. Many families who have taken in Ukrainian refugees have asked me to pursue clarity on that scheme, so I would be grateful if the Minister could give some assurance about it, or some timetable for it.
Ultimately, this short Bill is needed to promote and protect one of our sovereign democratic allies, to protect our institutions, and—as my hon. Friend the Member for Livingston said—to avoid the need for further conflict in the years to come. Putin’s war machine could quite easily continue to impinge on our lives and on people’s lives across the rest of Europe.
Stephen Gethins
I would endorse the comments that have been made by colleagues. I think we sometimes need a little bit of perspective. In my constituency and in Tayside and Fife—the hon. Member for Cowdenbeath and Kirkcaldy (Melanie Ward) will be well aware of this—we have defensive barriers that were built during the second world war. The barriers in Tayside and Fife were built by Polish and, as they now are, Ukrainian soldiers who were standing up to tyranny. They built those defences to defend Scotland, and to defend the rest of the United Kingdom as well. They knew that there is no point in standing up to tyranny just in one corner of Europe; we have to do it throughout Europe. Those defences stand as a testament to the time when the Poles and the Ukrainians stood by us. Now is the time for us to once again stand by them.
I echo the remarks made by the hon. Member for Livingston (Gregor Poynton) about the way that Ukrainians have come to our homes and have enriched our society and our communities. I know they are keen to go home, but we can just give them that little bit of certainty. I also pay tribute to the hon. Member for Tunbridge Wells (Mike Martin) for his work and that of others on frozen assets. That speaks to the enormous challenge that Ukraine is facing, and that the rest of us are therefore facing at exactly the same time.
I acknowledge the work of the Minister in seeking to untangle those assets. I welcome his remarks—I really do—but some of the administrative burdens are as nothing compared with the burdens that have been carried by Ukrainian troops on the frontline in Kursk, Donbas and elsewhere, and compared with the challenge we will see from conflict and a refugee crisis should that front collapse at any point. I know he gets that, and there is agreement across the Chamber on it, but I think it is worth underlining.
I also welcome the remarks made by the Conservative shadow Minister, the hon. Member for North Bedfordshire (Richard Fuller), about engaging with our European partners on this, because that is pivotal. I fully endorse his remark about where a number of these funds are being kept, and about how if one moves, we all need to move. There is unanimity in this Committee, and I have been struck by the outstanding work done by a number of colleagues, That unanimity and resolve reflect the magnitude of the challenge that each and every one of us faces if we do not stand up to tyranny and secure the future of Europe right now.
Phil Brickell (Bolton West) (Lab)
I wholeheartedly welcome this Bill, which allows us, alongside our G7 partners, to provide £38.6 billion of loans to Ukraine to be repaid using profits from sanctioned Russian assets, and I wholly support this Government’s commitment to stand unequivocally with Ukraine. I believe that Putin and his cronies should be the ones who pay for the damage they have caused across Ukraine. To that end, while this is a very welcome first step, does the Minister agree that we should be doing all we can within the rule of law to seize frozen Russian assets, both private and state, and use them to finance the reconstruction of Ukraine?
Moreover, may I gently suggest to the Minister that we must secure a swift resolution on the proceeds of the sale of Chelsea football club? In March 2022, Roman Abramovich pledged to sell Chelsea football club and donate the £2.5 billion—nearly seven times the value of the humanitarian assistance that the UK has pledged since the invasion in 2022—to support victims of the war in Ukraine. However, as I think all Members know, two years on from the sale, this has hit a stalemate, and regrettably no money has been delivered to the victims of the conflict.
With that in mind, the Government should commit to a number of recommendations that the campaign group Redress has worked on, and all of which I support. The first recommendation is taking steps to ensure that the proceeds of the sale of Chelsea football club are swiftly transferred to a charitable foundation in the UK, or adopting other existing mechanisms set up to deliver reparations to victims of the conflict. The second is ensuring that a substantial percentage of the funds is used for reparations for victims of the conflict, particularly victims of gross violations of international human rights and humanitarian, such as survivors of conflict-related sexual violence. The third recommendation is to engage Ukrainian civil society, victims and survivors in guiding the repurposing of those funds. The fourth and final recommendation is to establish a working group between the Government, civil society and survivors to ensure that funds are distributed in an effective and timely manner.
I very much welcome the substantial progress that the Government have made in the past few months in standing shoulder to shoulder with the Ukrainian people, including the recent announcement of a new anti-corruption champion, the further designation of vessels in the Russian shadow fleet and increasing collaboration across Government to tackle Putin’s war economy, bearing down on both the Kremlin and the wider network of cronies who enable his unlawful and persistent invasion of Ukraine. As my hon. Friend the Member for Leeds Central and Headingley (Alex Sobel) said, the Bill is an important step, and I welcome further initiatives to support the Ukrainian people as they continue their struggle to protect their sovereignty and territorial integrity in the face of Putin’s unlawful invasion.
David Taylor (Hemel Hempstead) (Lab)
It is a pleasure to follow my hon. Friend the Member for Bolton West (Phil Brickell). He has demonstrated why he will be such a valuable addition to the Foreign Affairs Committee, and I congratulate him on his election to it. I associate myself with his comments and those of other Members. We often find ourselves disagreeing over the smallest of details, so I am proud that we can all come together on an issue of such magnitude in unity with the people of Ukraine. Long may that cross-party support continue.
Earlier this year, as some Members may know, I had the privilege of visiting Ukraine. I went over with an Estonian charity, driving a couple of military pick-up trucks over from the UK as part of a much larger convoy that went into Kyiv. Those vehicles were handed over to the Ukrainian soldiers, and it brought home that there was not only support and solidarity in this country for Ukraine, but solidarity across the whole of Europe. That is why we are coming together on the measures in this Bill. Hopefully we will have an opportunity to go again, and I associate myself with the comments of my hon. Friend the Member for Leeds Central and Headingley (Alex Sobel). We were both on a call earlier, and I know that he and other Members have also made trips to Ukraine and been part of aid convoys to help people, and long may that continue.
This Bill is another tool in the arsenal when it comes to fighting one of the world’s greatest tyrants. Ukraine’s fight against Russian tyranny is not just for Ukraine’s sovereignty, but for the freedom and security of the whole of Europe. One striking thing in making that journey is realising just how flat Europe is. I know that seems a silly point, but it brings home that there is nothing stopping Putin at the borders of Ukraine if we do not stand up against him now. The fact that another of the world’s tyrants, Assad, is now cowering in Moscow demonstrates the importance of curtailing Russia’s aggression.
I am proud that this Government and the Government before have stood foursquare behind Ukraine. As other Members have said, the Bill will land a deafening blow on Putin’s war machine and unlock a £2.26 billion contribution from the UK to the extraordinary revenue acceleration scheme, which crucially will not be paid by Ukraine or by British taxpayers. It comes from dodgy cash from profits owned by sanctioned Russian assets held in the EU.
I associate myself with the comments of my hon. Friend the Member for Livingston (Gregor Poynton), who listed the various ways in which the previous Government and the current Government have supported Ukraine. Long may that continue. It is so important that we continue to stand four-square behind Ukraine for as long as it takes. I urge the Committee to do all in our power to ensure that the Bill receives Royal Assent as urgently as is feasible, especially as we approach winter, when the battle conditions will become even tougher. Finally, I use this opportunity to pay tribute to the Ukrainian forces fighting on the frontline, the British troops involved in training and equipping them and all those showing resilience in the face of Putin’s illegal war.
Darren Jones
In closing, I thank right hon. and hon. Members for their contributions. I thank my hon. Friends the Members for Leeds Central and Headingley (Alex Sobel), for Livingston (Gregor Poynton), for Cowdenbeath and Kirkcaldy (Melanie Ward), for Hexham (Joe Morris), for Bolton West (Phil Brickell) and for Hemel Hempstead (David Taylor) and the hon. Members for Solihull West and Shirley (Dr Shastri-Hurst) and for Arbroath and Broughty Ferry (Stephen Gethins), the shadow Chief Secretary to the Treasury, the hon. Member for North Bedfordshire (Richard Fuller), and the Minister of State, Foreign, Commonwealth and Development Office, my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty), for being here for this important debate.
Sir Julian Lewis
Among some of the excellent contributions we heard in this debate was the remark by the hon. Member for Livingston (Gregor Poynton) that if Putin is not seen to fail in Ukraine, British troops will ultimately end up being involved in some sort of conflict directly. Will the Minister take that message back to his Treasury colleagues? Some of us feel that the arguments about whether 2.5% of GDP should be spent now or in a couple of years’ time rather miss the point, because if we get to the stage where British forces are engaged, we will be spending far more than that. As a Treasury Minister, he should realise that investment in defence in peacetime can deter a much more expensive conflict.
Darren Jones
The Government’s position, as the right hon. Gentleman will know, is that we will set out the trajectory to 2.5% of GDP on NATO qualifying spend in 2025, following the conclusion of the strategic defence review and the spending review. He will also know that we fund our armed forces not just to be prepared, but to be ready to contribute. But clearly, I cannot comment on hypothetical scenarios in 2025. He was right to allude to contributions in the debate that rightly highlighted the Ukrainian armed forces on the battlefield fighting not just for their own country but for the security of Europe and the United Kingdom. I think we are all clear-eyed about that and, therefore, our responsibility to help them. That is why the Bill is one part of the package of support that we are putting in place and will continue to put in place over 2025.
I think I have answered most of the points substantively, and so I conclude my remarks.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clause 2 ordered to stand part of the Bill.
The Deputy Speaker resumed the Chair.
Bill reported, without amendment.
Bill, not amended in the Committee, considered.
Third Reading
Darren Jones
I beg to move, That the Bill be now read the Third time.
Once again, I extend my gratitude to Members from across the House for contributing to today’s debate and facilitating the swift passage of the Bill. Today, and throughout the Bill’s passage so far, this House has made clear its strong feelings on the plight of the Ukrainian people. Members of all political stripes have spoken eloquently in favour of continued support for Ukraine in its ongoing fight against Russia’s tyrannical, unprovoked and illegal aggression. Since Russia’s full-scale invasion of Ukraine in February 2022, no matter which party has been in office, the UK Government have remained committed to fully supporting Ukraine for as long as it takes.
The G7 extraordinary revenue acceleration scheme and this Bill, which facilitates the UK’s contribution, are another demonstration of the UK delivering on that promise. Beyond the ERA, the UK has now committed £12.8 billion in military, humanitarian and economic support to Ukraine. Earlier this year, the Government announced that we will continue to provide guaranteed military support of £3 billion per year to Ukraine for as long as it takes, and our ERA commitment goes further still. As hon. Members will know, the Bill unlocks the UK’s contribution of £2.26 billion, which constitutes a fair and proportionate contribution to the scheme based on our GDP share within the G7 and EU. It remains crucial that we pass the Bill as swiftly as possible to begin disbursing funds this winter to meet Ukraine’s urgent needs. Taken together, the ERA will provide Ukraine with an additional $50 billion in support. I pay tribute to our G7 partners for their collective determination to bring the ERA to fruition in just a few short months. We all remain united in our support for Ukraine against Russian provocation.
We in this House recognise the sacrifice that the people of Ukraine are making. They are fighting not only for their own survival and national identity, but for the security of Europe and the United Kingdom. The Bill will enable the Government to provide Ukraine with the essential support it requires to continue its battle against Putin’s unjust and illegal aggression.
At this point, Madam Deputy Speaker, given that this is probably my last contribution to the House this year, I wish you and the House a very merry Christmas, and say to the Ukrainian people that we hold them all in our hearts over this difficult period. I commend the Bill to the House.
Richard Fuller
On behalf of the official Opposition, I thank the Government for bringing forward the Bill and concluding its stages in this House before we break for Christmas. I also thank the Chief Secretary to the Treasury, the right hon. Member for Bristol North West (Darren Jones), for the way he has handled the discussions on the Bill at each stage, providing Members with all the information they need at any stage and in answer to all questions. He has done an exemplary job.
I note the uniformity of support across this House from Members, whichever party they represent. However, it goes deeper than that: since former Prime Minister Boris Johnson galvanised the west into defence of Ukraine, through former Prime Minister Liz Truss, to my right hon. Friend the Member for Richmond and Northallerton (Rishi Sunak), and now, with our current Prime Minister, the right hon. and learned Member for Holborn and St Pancras (Keir Starmer), the United Kingdom Government have been determined in support of the people of Ukraine. It says something of the depth of support in this country for the people of Ukraine that if we swept away a large proportion of the Members of this House and replaced them with different representatives from across the country, the resolve in support for Ukraine would remain the same.
We must not give up our efforts. Since we started our debates, there have been further actions in Ukraine. I will quote the latest summary from the Institute for the Study of War, which demonstrates the urgent need for the support set out in the Bill that we are passing today:
“on December 14…Russian forces fielded more than 100 pieces of equipment in a recent assault in the Siversk direction and noted that there were 55 combat engagements in this direction on December 13—a significant increase in tempo in this area of the frontline.”
It goes on:
“The GUR reported that a contingent consisting of Russian and North Korean servicemen in Kursk Oblast lost 200 personnel as of December 14 and that Ukrainian drones swarmed a North Korean position, which is consistent with recent reports of North Korean forces engaging in attritional infantry assaults.”
Our support, the military support the United Kingdom provides under this measure, is desperately needed, but the need goes further. Since Russia’s invasion of Ukraine, an estimated 8 million Ukrainian citizens have been displaced and 6 million people have left the country as refugees, with many still unable to return. As hon. Members have said, over 200,000 Ukrainian citizens are living in the United Kingdom. Our thoughts and prayers are with them and their families. We should also note the work of British charities and non-governmental organisations, including the British Red Cross, which estimates that, with other Red Cross and Red Crescent societies around the world, assistance has been provided to over 18 million people in Ukraine.
As we take our break, many of us will be celebrating Christmas. I hope that the Christian message of peace and hope will resonate in the new year, and that all of us in western Europe and particularly in Ukraine can look forward to a peaceful future.
Madam Deputy Speaker (Judith Cummins)
I call the Liberal Democrat spokesperson.
James MacCleary
Thank you, Madam Deputy Speaker, for the opportunity to speak in support of the Bill and to highlight the importance of our unwavering commitment to Ukraine. I thank the Chief Secretary to the Treasury for his detailed response to the points raised in my new clause, which I really appreciate.
When I addressed this House a few weeks ago, I expressed my desire for measures that would go further, particularly to empower the Government to seize Russian state assets frozen in the UK and use them to help rebuild Ukraine—an issue many hon. Members touched on in the Committee of the whole House. It remains, in my view and that of the Liberal Democrats, a critical step that must be taken. While procedural constraints have made such an amendment impossible within the scope of the Bill, the importance of ensuring accountability and justice cannot be overstated. The repurposing of frozen Russian assets is not just a financial issue; it is about ensuring that those who have enabled the Kremlin’s actions face tangible consequences. The UK has an opportunity to lead by example in demonstrating that aggression will not go unpunished.
The Bill, by enabling the UK to participate in the G7’s ERA loans programme, provides vital financial support to Ukraine at a critical time in its fight for freedom. Beyond financial measures, we must continue to stand resolutely with our Ukrainian allies in other ways. That includes providing advanced military aid, bolstering Ukraine’s defences, and working closely with NATO and the EU to co-ordinate our collective response to Russian aggression. The UK must lead by example, showing that our commitment to Ukraine is unshakeable even in the face of uncertainty about the future of US support.
Ukraine’s fight is not just for its own sovereignty, but for the principles of freedom and democracy that we all hold dear. With winter looming and the conflict showing no sign of abating, the UK must be a steadfast partner, ensuring that Ukraine has the resources, support and international backing it needs to endure and prevail. The Bill is a welcome step forward, but it cannot be the final word. Let us seize the moment to demonstrate moral leadership and resolve. Let us ensure that Ukraine’s struggle for freedom remains our shared cause, paving the way for a future of peace and resilience.
Question put and agreed to.
Bill accordingly read the Third time and passed.
Commonwealth Parliamentary Association and International Committee of the Red Cross (Status) Bill [Lords] (Programme) (No. 2)
Ordered,
That the Order of 22 October 2024 (Commonwealth Parliamentary Association and International Committee of the Red Cross (Status) Bill [Lords] (Programme)) be varied as follows:
(1) Paragraphs (4) and (5) of the Order shall be omitted.
(2) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour after the commencement of proceedings on the Motion for this Order.
(3) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion two hours after the commencement of proceedings on the Motion for this Order.—(Stephen Doughty.)
Financial Assistance to Ukraine Bill
Thursday 19th December 2024
(2 months ago)
Lords ChamberFinancial Assistance to Ukraine Act 2025 Read Hansard Text Amendment Paper: Committee of the whole House Amendments as at 18 December 2024 - (18 Dec 2024)
Financial Assistance to Ukraine Bill
Wednesday 15th January 2025
(1 month, 1 week ago)
Lords ChamberFinancial Assistance to Ukraine Act 2025 Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 18 December 2024 - (18 Dec 2024)
The Financial Secretary to the Treasury (Lord Livermore) (Lab)
My Lords, it is a privilege to open this debate and to speak alongside so many expert noble Lords. I take this opportunity to welcome the noble Baroness, Lady Batters, to your Lordships’ House and very much look forward to her maiden speech.
More than 1,000 days since Russia launched its illegal invasion of Ukraine, the Ukrainian people face a third winter of struggle for survival. They have paid a heavy price—thousands of lives lost, families torn apart, and whole communities destroyed beyond all recognition. Russian artillery continues to target civilian infrastructure and degrade Ukrainian energy networks, leaving ordinary people to freeze in icy cold conditions. Every day on the battlefield, Ukrainian soldiers give their lives in defence of their homeland and the common values that we share. Despite all this, the spirit of the Ukrainian people remains unbroken and Ukrainian forces continue to take the fight to their Russian aggressors with courage and conviction.
We should be under no illusion about the stakes. As the Foreign Secretary has said, Putin’s invasion of Ukraine is being driven by an “imperialist” desire to expand his
“mafia state into a mafia empire”.
It has involved forcibly seizing territory to which Russia has no legal right and for which the Russian people are paying an enormous price. It is a strategy built on corruption and the crushing of dissent—including courageous opponents such as Alexei Navalny—and is backed by the spread of disinformation at home and abroad.
Noble Lords will note that this is a fight not only for Ukraine’s territorial integrity and the safety of its people but for the future of Europe’s collective security and prosperity. The Government have consistently been clear that Putin must fail, but our words of condemnation are not in themselves enough. Action is required. That is why the UK’s support for Ukraine has never wavered, regardless, I am pleased and proud to say, of which party has been in government. I pay tribute to noble Lords opposite who stood side by side with President Zelensky and the Ukrainian people in their hour of need. We are united in saying that we will continue to stand with Ukraine for however long it takes.
Last year, the Prime Minister announced the Government’s commitment to provide £3 billion of military support to Ukraine each year for as long as is needed. Overall, the UK’s combined military, humanitarian and economic support for Ukraine now stands at £12.8 billion. That includes state-of-the-art Challenger 2 battle tanks and Storm Shadow missiles, as well as NLAW anti-tank missiles produced in Belfast that helped Ukrainian soldiers bravely repel the initial attack on Kyiv. Through the hugely successful Operation Interflex, UK Armed Forces have helped train more than 50,000 Ukrainian military personnel.
In total, the UK has now delivered around 400 different military capabilities to Ukraine, with a new £225 million package of drones, boats and munitions announced in December. This builds on the introduction of the most wide-ranging sanctions regime ever imposed on a major economy. As a result of this, we have successfully restricted Russia’s access to global financial markets, reduced its energy revenues and weakened its ability to finance this illegal war. This includes sanctions on more than 2,100 individuals and entities, amounting to over £20 billion. More than 100 ships used for transporting Russian energy have been targeted, including 93 oil tankers that form part of Russia’s shadow fleet, used to illicitly transport billions of pounds’ worth of oil across the globe. The oil price cap has reduced Putin’s tax revenues from oil by 30%.
We are continuing to keep up this pressure. Just last week, the Foreign Secretary announced the designation of two Russian oil giants that together produce more than 1 million barrels of oil per day. The UK has also taken steps to bolster the Ukrainian economy, including by signing the UK-Ukraine digital trade deal to ensure that Ukraine benefits from cheaper and quicker trade. UK Export Finance has provided over £500 million in loan guarantees, including for Ukraine’s own defence industry. We have committed £4.1 billion in fiscal support through loan guarantees on World Bank lending.
However, we cannot stop there. We must continue to back Ukraine, to help its people deter Russian aggression so that they can secure a just and lasting peace on their terms. That is why the Chancellor has committed £2.26 billion to the G7’s extraordinary revenue acceleration loans to Ukraine scheme. This scheme will provide a combined upfront loan of £50 billion from G7 lenders—including the US, Canada, Japan, the UK and the EU. This loan will be repaid from the extraordinary profits generated on holdings of immobilised Russian sovereign assets held in the Euroclear bank in the EU. Euroclear is an international central securities depository with a unique business model, allowing for these profits to be generated.
The EU has already enacted the necessary regulation to operationalise the Ukraine loan co-operation mechanism, which will distribute the profits from the immobilised sovereign assets. The UK’s contribution to the scheme will be provided to Ukraine as budgetary support earmarked for military procurement such as air defence and artillery. It will be delivered in three tranches over three financial years, with the first tranche intended to be delivered early this year. The funding will be issued from the Treasury estimate and was scored in the Budget in October. This new funding is additional to the £3 billion of bilateral military support, which, as I have said, the Government are committed to providing for as long as it takes.
I am aware that the noble Lord, Lord Blencathra, has tabled an amendment to the Motion, calling for immobilised Russian state assets to be used to fund financial assistance to Ukraine. I commend the noble Lord for his work on this issue and the support he has shown for Ukraine. The Bill does not allow for the seizure of assets themselves, in the EU or elsewhere. The Government continue to actively consider all lawful options for ensuring that Russia pays for the damage it has caused in Ukraine. Any action must be taken in tandem with the G7—this is vital to maintain the strength and unity the G7 has already shown in the face of Putin’s aggression. The Bill before your Lordships’ House is designed to deliver new funding to Ukraine as quickly as possible.
Importantly, the Government have agreed with our G7 allies to ensure that Russian sovereign assets remain immobilised across our jurisdictions until Russia ceases its war of aggression and pays for the damage it has caused to Ukraine. G7 lenders have worked closely together to design the scheme in a way that allows repayment in a scenario where profits cease and Russia pays reparations to Ukraine. The sole purpose of the Bill is therefore to provide the Government with a spending authority to deliver this contribution to the G7 scheme. It enables the Government to sign the loan agreement with Ukraine and begin dispersing funds.
By unlocking new funding backed by profits generated from immobilised Russian sovereign assets, we will enhance Ukraine’s ability to defend itself and step up international pressure on Putin’s war machine. We know that this war is already costing Putin dearly. It is a fight for land to which Russia has no right and for which the Russian people are paying an enormous price. To restore peace we must ensure that Putin has no path to military victory. That means deepening our resolve by working in partnership with G7 allies to provide the support Ukraine needs for as long as it takes, not only in defence of Ukrainian sovereignty and the safety of its people but for the liberal democratic values we cherish and the security we depend on. I beg to move.
Baroness Neville-Rolfe (Con)
My Lords, I thank the Minister for his helpful and descriptive introduction. I will not repeat all the detail he kindly gave us. Like him, I much look forward to the maiden speech of the noble Baroness, Lady Batters. She is a near neighbour of mine in Wiltshire and a trailblazing first female president of the National Farmers’ Union. We worked together professionally, and I know the House will benefit hugely from her talents and energy.
It is clear from discussions in the other place that there is practically universal support for helping Ukraine in its struggles. The United Kingdom was a first mover in supporting Ukraine in 2022. Prime Minister Boris Johnson led the charge and there has been an encouraging consistency in support through the premierships of Liz Truss, Rishi Sunak and, of course, our Prime Minister Sir Keir Starmer. We have pledged over £12 billion since 2022 and sanctioned more than 2,000 entities. Moreover, many people in Britain have generously welcomed displaced Ukrainian families into their homes.
The proposed arrangement is an unusual one, of which the UK was a vociferous advocate. From these Benches we support the UK loan to Ukraine of £2.26 billion, which will be repaid from revenue earned on frozen Russian assets. We also support the decision to earmark the UK contribution towards military expenditure, including on air defence, artillery and other equipment so desperately needed by our Ukrainian allies. This is particularly important as the £20 billion coming from the United States is being handled by the World Bank, which I believe means that it cannot be used for military purposes.
We therefore support the Bill. We would, however, need convincing if the Government were minded to contemplate seizing Russian assets themselves. That would be a large step with wider ramifications and would need detailed scrutiny.
I should add that I have some professional experience of dealing with Ukraine and, to speak frankly, there were issues with the siphoning off of expenditure in the health area, which the not-for-profit development body I chaired helped to end—with the support of some brave reformers in the Ukraine Government. This was before the accession of Mr Zelensky, and I know that his leadership is determined to avoid a return of this kind of practice. However, it means that the detailed arrangements for the loans need to be clear and transparent, so I have some questions to ask the Minister about the practical application of the Bill.
First, can he outline for the House the specific mechanisms by which our UK loans will be distributed and managed? Ensuring that this significant financial commitment is deployed in a timely way will be critical to achieving the desired impact.
Secondly, what parties will be involved in the transfer of these loans? Will the money be transferred directly by HM Treasury to the Government of Ukraine, will it be added to a shared pot with the G7 or will the Government use a third party, as the US is doing, which in our case might be a law firm, a specialist bank or some other body?
Thirdly, I have a novel point since we will have a new United States President in a matter of days. He has expressed a determination to bring the war in Ukraine to an end, so we need to reflect on the ramifications for this Bill. Any Trump deal might contain financial provisions. The Government need to be vigilant in ensuring that any terms ensure that the repayment of the sums provided by the Treasury continues—otherwise, there will be a substantial and unplanned cost to the UK taxpayer. The Minister will wish to comment and let us know whether the arrangements planned make that a needless concern, as I very much hope.
As we provide financial aid, we must also remain vigilant about the broader security implications of this conflict. The war in Ukraine is a stark reminder that the peace and stability we often take for granted are not guaranteed but must be actively defended. The international situation is more concerning by the day, whether in the Middle East, North Korea or the South China Sea. In recent weeks, NATO chiefs have issued warnings that the alliance must increase defence budgets to match the levels of threat we face. The new US President has called for a major increase in spending by European states, so this is a matter of key concern. The Government are yet to announce when they will reach the target of 2.5% of GDP on defence spending, a figure that many influential observers now consider to be too low. There is a strong case for speeding up this announcement. Perhaps the Minister will be kind enough to update us on the Government’s plans.
Furthermore, it is vital that we take a long-term view on this issue. Have the weapons that we have sent Ukraine been replaced? While immediate military aid to Ukraine is crucial, we must also ensure that our own Armed Forces are adequately equipped, trained and funded to address a broad spectrum of potential threats. This includes not only conventional military readiness but investments in emerging domains, such as cyber defence, where adversaries are increasingly active.
Although the moneys under discussion today do not come out of the defence budget, it is important, in an increasingly dangerous world, to focus on our defence. Can the Minister reassure the House that the Government remain fully committed to raising defence spending to 2.5% of GDP as soon as possible?
In conclusion, supporting Ukraine is not only a moral imperative but a strategic necessity. This Bill, which we support, represents a new step in reinforcing our commitment to Ukraine’s sovereignty and independence. However, it is incumbent upon us, as legislators, to ensure that this financial assistance is delivered effectively and transparently. I look forward to hearing from all noble Lords and to receiving answers to my questions from the Minister. Let us together send a clear and united message that the United Kingdom stands firmly with Ukraine.
Baroness Smith of Newnham (LD)
My Lords, from these Benches, as always, I associate my comments with those of the Minister and the noble Baroness, Lady Neville-Rolfe, on our unwavering support for Ukraine. One thing that has been notable over the past almost three years is the extent to which there has been unwavering cross-party support for Ukraine. The previous Government were clear in their commitments and the present Government are making the right noises and the right commitments to Ukraine. I welcome the Minister’s tone in seeking to reiterate that support for Ukraine in opening the debate.
As the noble Baroness, Lady Neville-Rolfe, reminded us, this is not just a question of Ukraine and its sovereignty but a wider issue. I would like to take the discussion a little beyond the G7 and further than the Official Opposition position. The Liberal Democrat Benches would like the Government to consider going further and seizing frozen Russian assets—to go beyond spending the revenue, which is welcome, and look at the assets.
We are wholly committed to the Bill and do not in any way wish to delay it. It needs to go through today to demonstrate the commitment to the G7 agreement and to allow the £2.26 billion British loans to go forward, but we would like the Government to think again. My understanding is that the regret amendment in the name of the noble Lord, Lord Blencathra, may be about going further. From these Benches we would like to go further but not at the expense of delaying the Bill, which would not be appropriate.
As part of the international community, we have given much support to Ukraine. As we have heard, the United Kingdom has given significant military support and financial aid. That is vital. As the noble Baroness, Lady Neville-Rolfe, said, if our renewed commitments and the loans go towards military defence for Ukraine, that will be welcome. At the same time, as the noble Baroness pointed out, we need to reassure ourselves and the country, as well as our NATO allies, that we are committing sufficient resources to our own defence. There is a very real concern that our defence expenditure is too little and our Armed Forces are too small, not adequately resourced and without sufficient equipment. The 2.5% commitment is essential.
Is the Minister able to help the House understand when the spring fiscal event may happen? One thing about parliamentary or governmental time is that it does not necessarily fit with a standard calendar. For most of us, spring starts either on 1 March or in late March, depending on which approach you take and whether you look to the moon or to the calendar. For the Government, sometimes an Autumn Statement has happened in late December. Can the Minister reassure the House that a spring fiscal event might happen well before Easter and will ensure not just that the £3 billion in military support for Ukraine is still in place but that His Majesty’s Government are not making any cuts to defence, providing us with a clear timeline for 2.5% of GDP for defence?
Earlier in the week, there was discussion in the other place about the Chancellor’s visit to China and the fact that, since taking over last July, the Prime Minister has been very active on the international scene. It is very welcome that Government Ministers talk frequently to our partners and allies in the G7 and NATO, and to the wider international community. The discussions with China are perhaps a little more unusual.
Is the Minister able to tell the House whether the Chancellor was able to talk to China about the sanctions that have been imposed? While the Minister was very clear that we need to work with the G7 and the European Union in terms of the imposition of sanctions, those sanctions would be so much stronger if China were also fully on board.
Further, what conversations have the Foreign Secretary, the Prime Minister or the Chancellor—or indeed any other Minister—had with our Commonwealth allies? While the response from the West, including the United States, so far to the Ukraine crisis has been very strong, the support from our Commonwealth partners has not been so strong. If the international relations in which the Government are currently engaged are really to be as effective as they might be, using the opportunity to engage with our Commonwealth partners to try to explain to them the importance of the sanctions regime and the importance of supporting Ukraine would reinforce the United Kingdom’s place on the international scene and help us give additional support to Ukraine.
In short, from these Benches we support the Bill, but we would like to see the Government go further and use all the tools at their disposal, diplomatic as well as military and financial, to give Ukraine as much support as we can as it reaches the third anniversary of the Russian invasion.
Lord Blencathra
At end insert “but regrets that the Bill as introduced does not include provisions to allow immobilised Russian state assets, reserves, or any other property to be used to fund financial assistance to Ukraine”.
Lord Blencathra (Con)
My Lords, I beg to move the regret amendment standing in my name on the Order Paper. I too am looking forward to the maiden speech of the noble Baroness, Lady Batters, and her take on the situation in British agriculture at the moment, which is quite interesting.
Let me make it absolutely clear that I will not press my regret amendment to a vote. I will do nothing to delay the passage of this Bill and, in the highly unlikely event that there is a vote on the Bill, I shall vote for it. I support the Bill, but I have had to adopt this tactic because I cannot table a simple amendment I would like—because it is a money Bill—to add a little additional power to the Bill. I simply cannot understand why the Government are not taking that power, as the United States and Canada have done. Having said that, I congratulate the Minister on his speech and congratulate the current Labour Government for being as robust on Ukraine as my right honourable friend Boris Johnson was when this appalling war first started. I
I am proud of the financial assistance that this United Kingdom has already provided to Ukraine. We have committed £7.8 billion in military support and £5 billion in non-military support. In hard cash terms, the United States has given $135 billion, Germany $16.5 billion and I think our £12.8 billion is $15 billion. However, in terms of GDP we find that Estonia has committed 3.5% and Denmark 1.8%. Norway, Lithuania, Latvia, Finland and Poland also stand out as the highest donors in terms of GDP. The closer you are to Russia, the more you have to fear and the more you spend on defeating the aggressor. In GDP terms, the US contribution is only 0.32%, Germany’s is 0.57% and we are at 0.55%.
Nevertheless, in these difficult financial times we have done a remarkable job in assisting. Of course, as the Minister pointed out, we have done other things as well. We have trained over 51,000 Ukrainian troops and sent over 400 different types of military capabilities and kit, including drones, boats and munitions. Defeating Putin is a point the United Kingdom—including the present Government—repeatedly makes at the United Nations and we have imposed sanctions on over 2,100 individuals and entities, including 100 ships and shadow tankers. We are taking a leading role in the recovery and reconstruction of Ukraine, co-hosting the London Ukraine Recovery Conference in 2023.
Then we come to the G7 summit in Italy in June 2024, which is the father of the Bill before us. The official communiqué said:
“We, the Leaders of the Group of Seven … gathered in Apulia … reaffirm … Ukraine’s fight for freedom and its reconstruction for as long as it takes … we decided to make available approximately USD 50 billion leveraging the extraordinary revenues of the immobilized Russian sovereign assets, sending an unmistakable signal to President Putin”.
The important words there are
“leveraging the extraordinary revenues of the immobilised Russian sovereign assets”.
So what are those assets? The figures vary, but total immobilised Russian assets are believed to be from $280 billion to about $300 billion. About $240 billion is in the EU, up to $28 billion to $30 billion in the United Kingdom and the rest elsewhere. The US does not have much at all. The $50 billion loan will be advanced to Ukraine under the G7’s extraordinary revenue acceleration scheme—the ERA—and is due to be paid back to lending countries from the interest that we are making from those immobilised Russian assets. The UK, as the Minister said, is about to extend our share of £2.26 billion under the ERA loan scheme, to be repaid from approximately 15 years-worth of interest on those Russian state assets that have been immobilised in the EU.
That $50 billion in ERA loans is, however, merely a temporary financial buffer. It falls far short of addressing Ukraine’s long-term needs, with damage requiring reconstruction surpassing $486 billion, according to the World Bank’s February 2024 assessment, and western contributions to Ukraine’s defence expenditure of roughly $105 billion annually.
The little amendment that I wanted to make to this Bill was simply to add after the words “money provided by Parliament” a sentence that said, “or out of any assets, reserves or any other property held within the jurisdiction of the United Kingdom directly or indirectly by, for or on behalf of the Russian Federation”. That would permit us, if we so decided—it is a permissive power—to utilise the whole of the $30 billion of Russian assets that we have. I am very happy to use taxpayers’ money in the Bill, but I am more keen to use Russian money. The whole purpose of my amendment today is to ask the Government: why on earth not take that permissive power to utilise Russian assets? Why are those words not in the Bill?
Since it is morally and legally right in international law to keep the Russian money immobilised but spend the interest raised on it to help the reconstruction of Ukraine, it must also be legally right in international law to spend the capital assets themselves to help Ukraine. Canada and the United States have taken this path. In 2022, Canada introduced legislation that enables its Government to seize state and individual assets frozen in Canada in cases of grave breaches of international peace and security. In 2023, the United States passed the Rebuilding Economic Prosperity and Opportunity for Ukrainians Act—the REPO Act—which allows immobilised Russian sovereign assets seized and transferred under US jurisdiction to be sent to Ukraine.
Some have suggested that our Treasury has blocked this because of a misguided fear that it will deter foreign investment in the City or the UK, since it could send a message to foreign investors that the UK will suddenly seize their assets without good reason. That is just not the case and is not going to happen. The concerns that seizure would lead to the withdrawal of global reserves held in the G7 currencies and their ultimate devaluation are grossly exaggerated. The practical impact of indefinite immobilisation, as we have done, and confiscation is exactly the same. Three years of immobilising these Russian assets have not led to a flight of capital from the US dollar, the euro or Great British pounds, and there are no grounds for believing that confiscation will have that effect either.
In January 2024, the United Kingdom and Ukraine signed an agreement on security co-operation. Among the 66 paragraphs or articles were the following:
“The Participants reaffirm that the Russian Federation must pay for the long-term reconstruction of Ukraine. Russian sovereign assets in the UK’s jurisdiction will remain immobilised until the Russian Federation has paid for the damage it has caused to Ukraine. The UK, working with its partners, will continue to pursue all lawful routes through which Russian assets can be used to support Ukraine … As a priority, the Participants will continue to work together with others, including G7 states, to explore options for the development of appropriate mechanisms to provide reparation for damage, loss, or injury caused by Russian aggression”.
That is what the last Government said, but what do the current Government say? It seems exactly the same, I am pleased to say.
On 6 December last year, in answer to a Written Question from my noble friend Lord Banner, the Minister said:
“This Government is clear that Russia must be held responsible for its illegal war. That includes its obligations under international law to pay for the damage it has caused in Ukraine. Working with allies, we continue to pursue all possible lawful avenues by which Russia is made to meet those obligations. Our agreement with G7 partners to provide approximately $50 billion in additional funding to Ukraine, repaid by the profits generated on sanctioned Russian sovereign assets, is an important step towards ensuring Russia pays.”
Note the words, “an important step”—not the only step. The only way that Russia can be made to pay is to use all the immobilised assets held in the UK, EU and US. These should be transferred to an international fund, as the Council of Europe has called for.
It is morally right to use those assets; it is legally right under international law to use those assets. The whole point of my Motion today is to plead with the Government to take those permissive powers, to use when the time is right. Will the Government please explain to me and the House in more detail why they are not taking that route? I beg to move.
Lord Browne of Ladyton (Lab)
My Lords, it is a pleasure to have the opportunity to rise to offer unambiguous support for this Bill. I thank my noble friend Lord Livermore, the Financial Secretary to the Treasury, for his characteristically clear introduction to this debate. I, like others, am looking forward to the maiden speech of the noble Baroness, Lady Batters. I am pleased to follow the noble Lord, Lord Blencathra, and to commend him for the same reasons my noble friend the Minister did: his consistency and his contribution in this area, with particular reference to the issue that informs his regret amendment—which I regret I cannot support. I will come back to that in a few minutes.
This is a short Bill, but one freighted with enormous consequences, as we have heard from the contributions thus far, which were characteristically cogent for your Lordships’ House. It gives effect to our commitment to devote £2.26 billion to the G7 extraordinary revenue acceleration loans to Ukraine scheme, the ERA. This is separate from the £3 billion of military aid that we will also provide this year. I applaud Ministers for their decision to hypothecate these funds and to ensure that they are directed squarely to military procurement.
It is worth being clear-sighted about the purpose of this disbursement. It is to enable Ukraine to stand against unprovoked aggression and to ensure that the new era of great-power competition that is already upon us does not see the normalisation of such aggressive expansionism—a course taken by powers who see their own strength as justification enough for such actions. It is clear that the incoming US Administration cannot necessarily be relied upon either to shoulder its share of the burden in the provision of military support for Ukraine, or indeed to enforce international norms around the appropriate behaviour of great powers or aspirants to that status.
Last week, the President-elect offered a justification for his threat to annex Greenland either by force or via economic pressure. In a somewhat circular piece of logic, he asserted that such a course of action is justified by the fact that the US “needs” Greenland for its economic security. Although Putin’s speech that launched the invasion of Ukraine was more rococo in style, the central message was remarkably similar: that Russia had the moral right to invade to protect its own security interests. In making this comparison, I emphatically do not suggest a scintilla of moral equivalence between the two men or the countries they represent. But taken together, the US, Russia and China will help shape the new norms of this era of great-power competition. As we debate this Bill, we have to ask ourselves what lessons President Xi, for instance, will draw from recent history as he contemplates what he considers to be the daily annoyance of a free and independent Taiwan.
Being mindful of these precedents is one of two reasons why I believe this Bill and our wider aid for Ukraine is important. The other is the state of public opinion in western Europe. In democratic politics, public opinion today is in general a pretty accurate guide to the attitude of leaders tomorrow. That being the case, polling conducted by YouGov in December makes sobering reading. It reveals that in seven key European countries, including our own, support for continuing assistance for Ukraine has fallen markedly. Equally, support for ceasing support and reconciling ourselves to a compelled peace, even on terms markedly unfavourable to Ukraine, has increased.
To some extent, this is a consequence of the more ambivalent US attitude Europeans expect from the new Administration when they take office. The figures are striking, none the less. In Germany, Spain, France and Italy, support for continuing assistance to Ukraine is now lower than for concluding a peace favourable to Russia. Even in Britain, there is only 4% between the two options.
Concerning though these figures are, the purpose of government is not to act as a weathervane reflecting public opinion but to lead it. I applaud the efforts of Ministers in the previous Administration—not least the noble Lord, Lord Ahmad, who I regret is not in his place to hear this—in the support they afforded Ukraine. I also have complete confidence in the Ministers on our Front Bench and in the other place; I am sure they will prove equally adamantine in their resolve.
What Ukraine needs is constancy, and the mechanism to which this Bill gives effect provides that. An ebbing of our support and that of our allies would lead to a collapse of the rules-based international order, a spiralling refugee crisis and the subjugation of a free and sovereign people. It would be not only morally wrong but run counter to our own interests and those of any country which values stability and collective security.
In 1941, President Roosevelt gave one of his celebrated fireside chats in which he described the US as an “arsenal of democracy”. It contained some words which apply to our situation, as they did to his:
“We have furnished … great material support and we will furnish far more in the future. There will be no ‘bottlenecks’ in our determination … No dictator … will weaken that determination by threats of how they will construe that determination”.
It is in that spirit that I offer this Bill my unambiguous support.
There is more to do in exploring the use of frozen Russian assets, but that lies outside the scope of this legislation. I am sure that those who support that ambition and who are yet to speak, or who will speak on other occasions, are aware that there was a Back-Bench debate on this issue in the other place, led by the Liberal Democrat Mike Martin, on 6 January. I draw noble Lords’ attention—I am not stepping in for the Minister; he is perfectly capable of doing this himself— to column 671 of that debate. Stephen Doughty, the Minister of State at the Foreign, Commonwealth and Development Office, responded to the debate. I will read the following passage in full to your Lordships:
“The fundamental questions about what more we can do to use Russian assets for the benefit of Ukraine were at the heart of the debate. The Government and our G7 partners have repeatedly affirmed our position. Russia’s obligations under international law are clear: it must pay for the damage it has caused to Ukraine. The ERA loan and our contribution will ensure that Ukraine can receive the financial support that it needs now—it was right to focus on getting that out the door, because we urgently need to support Ukraine now—with the profits generated on sanctioned Russian sovereign assets providing that. I reassure colleagues throughout the House who have rightly asked a lot of searching and challenging questions that we are committed to considering all possible lawful avenues by which Russia can be made to meet its obligation to pay for the damage it is causing to Ukraine. We continue to work with allies to that end”.”.—[Official Report, Commons, 6/1/25; col. 671.]
Thereafter, the contributions, few that they were in that debate, were supportive of that position, as I am.
It is in the spirit of President Roosevelt that I offer the Bill my unambiguous support. I am proud that we have devoted to Ukraine more assistance than any other single country save the US and Germany, and trust that we will continue our support, conscious that Ukraine is not defending merely itself but the UK and all its European allies and friends.
Baroness Anelay of St Johns (Con)
My Lords, I strongly welcome the Bill. It gives a clear signal of our continuing commitment to the people of Ukraine and our defence of European security. We are reminded every single day of the appalling impact on Ukraine of President Putin’s illegal and unprovoked invasion.
Today, the Minister has given us a very clear and welcome exposition of the purposes of the Bill. It is quite simply to unlock the UK’s contributions to the G7’s extraordinary revenue acceleration scheme by using the extraordinary profits generated on immobilised Russian sovereign assets held in the EU.
I was interested in paragraph 6 of the Government’s Explanatory Notes for the Bill. That makes it clear that the Government consider that the legal basis for this UK action—and I welcome that—is rooted in EU regulation 2024/2773, which was adopted by the European Parliament and Council of the European Union. Paragraph 6 states:
“This provides a legal basis within the EU for the UK to receive repayments from the ULCM, from the extraordinary profits on the immobilised assets, proportionate to the UK’s contribution to the initial funding for Ukraine provided by the G7 as a whole”.
That contribution was $3 billion. I was just thinking about what my noble friend Lord Blencathra said. When I read this, I found it both intriguing and potentially encouraging for future legal action, and I emphasise “legal”.
Paragraph 14 of that European regulation offers two routes by which the UK, as a post-Brexit third country—in EU parlance—can legally make payments to assist Ukraine. First, it says:
“It should be possible to support the Mechanism by providing extraordinary revenues stemming from the immobilisation of Russian sovereign assets held in relevant jurisdictions other than the Union. To that end, it should be possible for third countries or other sources to contribute to the mechanism”—
so far, so good indeed. Secondly, it says:
“Furthermore, it should be possible for third countries to directly use extraordinary revenues stemming from the immobilisation of Russian sovereign assets within their jurisdiction to reduce the repayment needs of any respective bilateral loan provided to Ukraine, thereby supporting the Mechanism by reducing the total level of support that would be required for that loan”.
My question, therefore, is: can the Minister confirm today—just for clarity for the House—which of those two avenues has been adopted? I appreciate that we are following an absolutely legal route.
Of course, I welcome the fact, as the Minister explained earlier, that we are using the contribution that we are making for improving even further our contribution to the military needs that Ukraine has to defend itself. I welcome everything he said in that regard. Like my noble friend Lord Blencathra, I am tempted now—and I go beyond temptation—to range a little more widely. I am grateful to the Minister for giving such a very clear explanation and for adding—as was alluded to by the mention of the comments of the Minister in the other place—that the Government were open to other options, subject to genuine conditions about legality. Of course, I hope that if an agreement were to be reached within the G7 in the future that said that the Russian sovereign assets themselves could be seized and used to assist Ukraine, that might provide a legal basis on which we could then fulfil what my noble friend has put down in his amendment to the Motion today.
I recognise what my noble friend on the Front Bench Lady Neville-Rolfe said about how one has to be very careful and look at the consequences. However, I have in mind the response to a Question that I put to my noble friend Lord Cameron of Chipping Norton— I think that my noble friend knows what is coming—when he gave evidence to the European Affairs Committee just over a year ago. In this regard, I asked him how we could go further and what the Government were doing—this was the Conservative Government in December 2023 —to take some really gutsy action. I got a gutsy answer. He said in response:
“We are in a real fight for the sort of security on our continent that we believe in, and extraordinary times require extraordinary measures, so I am instinctively in favour of trying to do this”—
that is, to get agreement with the G7 to go further. I have to ask the Minister whether he is also “instinctively in favour” of trying to go further—within international law. I always agree with that.
To go a little more widely still, UK Governments, both Conservative and now Labour, have been admirably consistent in their imposition of sanctions on those who support the illegal invasion of Ukraine, either directly or indirectly. In relation to that, I will refer very briefly to the unresolved matter of Mr Abramovich’s delaying tactics to avoid fulfilling the commitment that he made way back in March 2022 to use the £2.5 billion of frozen assets arising from his sale of Chelsea Football Club that he promised in support of Ukraine.
For over a year now I have been asking Ministers in both Conservative and Labour Governments during evidence sessions in the European Affairs Committee why we have had to wait so long and still nothing seems to happen. We do not seem to be able to break through Abramovich’s prevarication and obfuscation and hold him to his promise. The response from Ministers in both Governments has been that they are thoroughly determined—they are on the case, and they want to ensure that the long-promised charitable foundation will be established and deliver funds to those in need in Ukraine, both now and during the reconstruction of the devastation caused in Ukraine by Russia. Can the Minister update us? Is there any progress with this negotiation with Mr Abramovich? If the Minister is not in a position to answer my questions today, I will not try to hold up the debate any longer—I just hope that he will write to me.
I look forward to the noble Baroness, Lady Batters, giving her maiden speech, and I look forward to the Bill getting Royal Assent ASAP and the money reaching those who need the extra-military defence in Ukraine.
Lord Beamish (Lab)
My Lords, I join other noble Lords in looking forward to the maiden speech of the noble Baroness, Lady Batters. I represented a rural constituency in the other place for 23 years, I worked with the NFU, and I know the effectiveness of her leadership of that organisation. I am sure that she will bring to this House not only her knowledge of the farming sector but her passion for it.
Next month, we will see the third anniversary of Russia’s illegal and brutal invasion of Ukraine. Few people imagined back in February 2022 that Ukraine would be able to resist its much more powerful neighbour and the brutal way in which it invaded a sovereign state—but it has, which is down to the determination of the Ukrainian people, along with the bravery and innovation shown by its armed forces.
That is why I welcome today’s Bill to help the Ukrainian people to continue to resist aggression and to defend the principle that a sovereign nation’s territory should never be taken by force. That principle was one of the cornerstones of the international rules-based order that came out of the ashes of the Second World War, which is today being defended on the battlefields of Ukraine. Along with the determination of the Ukrainian people, the financial support provided by the UK, US, Europe and international partners has been vital in resisting Russian aggression.
The agreement by the G7 is an example of why our membership of international organisations is so important. That collective effort and endeavour not only keeps us safe but means that our voice is stronger when it is deployed with those who share our values and interests. Three years into the war, this Bill and the efforts of the G7 send a very clear message to Russia that its aggression will continue to be resisted. As a member of the NATO Parliamentary Assembly, I also know from our meetings with Ukrainian parliamentarians that the single voice that is put out by the UK Parliament is very much appreciated by Ukraine. I am pleased to see that, today, that is again echoed in the cross-party support for this Bill.
The $50 billion produced by the agreement by the G7 will provide vital funding for Ukraine to support its military, humanitarian and—as already outlined in the debate—economic recovery. The UK’s £2.6 billion contribution to the ERA fund will be earmarked for military procurement to bolster Ukraine’s self-defence. We can look at the way in which Russia has indiscriminately fired missiles into Ukraine’s civilian population to see why that investment is important. As the Minister said, this is in addition to the £12.8 billion that the UK has already given in support of Ukraine. It is also in addition to the support given by ordinary men and women in this country who opened their doors to Ukrainian refugees in the early stages of the conflict.
The unique nature of this agreement means that the loan will be paid not by Ukraine but from the extraordinary profits made on sanctioned Russian sovereign assets that are held by the EU. As we know, many of those assets, both private and state, will have been stolen from the Russian people to benefit the elites around Putin. The sanctions and asset freezes, as the Minister pointed out in his opening address, have been an important tool in limiting the Russian aggression in Ukraine, not only by the Russian state but, it can be argued, by individuals who are perpetuating the myth that Ukraine is part of sovereign Russia.
More needs to be done, however, whether controlling Russia’s use of its grey tanker fleets to evade oil sections or the export of UK and EU goods through third countries to Russia to avoid sanctions. Sanction-busting exports range from electronic goods that are useful to the Russian military all the way to Rolls-Royce motor cars. What more can be done to clamp down on this circumvention of sanctions, not only through exporting to third countries but through companies in this country whose products are still ending up in Russia?
I do not know whether the Minister saw the article in the latest Sunday Times about the export of Rolls-Royce cars to Russia. In it, Chris Brownridge, Rolls-Royce’s chief executive, commented that there was no evidence of its dealers breaking sanctions. Considering the unmistakeable evidence that Rolls-Royce motor cars are still appearing in showrooms in Moscow, this seemed quite a pathetic response; he clearly does not have a very inquiring mind in asking how they are getting there. Rolls-Royce cars may be one of the more visible signs of sanctions evasion, but we know that components for electronic and other goods are being sent through third countries to Russia to help in the building of components for military equipment, which is then being used in Russia’s war in Ukraine.
I have some sympathy with the amendment tabled by the noble Lord, Lord Blencathra. More needs to be done on how we free up these assets. We also need to look at what else can be done to find assets in this country that have clearly been used and salted away with third parties to avoid sanctions or freezing.
I once again welcome the Bill and the continuing cross-party support for Ukraine in its struggle against Russian aggression. This will be a clear message from both this House and the other House that Russian aggression will be resisted, and that Ukraine has our full, united support.
Lord Banner (Con)
My Lords, I too support this Bill. As has been said, it will enable the payment to Ukraine of the UK’s share of the $50 billion financial assistance package agreed by the G7 in summer 2024. I congratulate the Government on bringing it forward.
However, I also emphatically support my noble friend Lord Blencathra’s regret amendment that the Bill does not also contain a provision allowing the transfer of the circa £30 billion of immobilised Russian state funds located in the UK. As my noble friend said, the noble Baroness, Lady Chapman, stated in response to a Written Question that I tabled before Christmas that the provision of the $50 billion loan, backed by the interest made on the immobilised Russian assets in the EU was
“an important step towards ensuring Russia pays”.
This is right, but it is only the first such step. I find it hard to understand why, having agreed to use the profits from the immobilised Russian funds, the Government are not now taking the opportunity to legislate at least through enabling powers and at least for the possibility of transferring the entire amount of Russian immobilised funds to Ukraine. Again, as my noble friend said, if there is a legal way to transfer the interest, it follows that there is a legal way to transfer the capital. In banking law terms, the interest and the capital are owned by the same person. There is no coherent basis for a legal distinction between the two in this context.
About a year ago, the previous Foreign Secretary, my noble friend Lord Cameron of Chipping Norton, confirmed his view that there is a legal route to seizing and transferring the entire amount—and rightly so. I explained the legal basis when I last spoke on this issue in the House before Christmas. The current Government have told us repeatedly that the issue is being considered—or “actively considered”, as the Minister put it. Will he please confirm how much longer this process of consideration is going to go on before a decision is actually taken?
With respect, there comes a point when protracted consideration may start to be perceived as dithering, and I suggest that we are not far off that point. I hope I am not right to fear that the Government may be disinclined to use the independence that the UK now has following withdrawal from the EU to take a lead on this issue, instead preferring the herd mentality of waiting until Europe finally has a collective position on the subject—if it ever does.
Either way, whether I am right or wrong in that fear, Ukraine cannot afford to wait—that is the important point. The $50 billion loan will provide vital support and is of course to be welcomed, but how long will it provide that support for? The money will literally be used to keep the lights on during the war, but Ukraine’s wartime budget deficit is around $40 billion per year. Even taking into account other sources of financial support, the loan will last through this year and no further.
It will also not fund any military support for Ukraine, an issue that is becoming increasingly pressing in light of the return to the presidency of Donald Trump in the US in a few days. According to the US Government, the US has provided some $93 billion in military support since the start of the full-scale invasion, as my noble friend explained. Should that stop or be reduced, funds will have to be found to plug the gap. It has often been rightly said by the Government, in this House and elsewhere, that it must be for the people of Ukraine alone to choose how much longer the war goes on for. But without the right support, it is not a meaningful choice; these are empty words without the support that Ukraine needs.
I commend and welcome the Minister’s comments that we must support Ukraine for as long as it takes, no matter how much it costs, but those comments need to be translated into actions, and it surely must be Russia and not the British taxpayer footing the bill, as far as we are concerned.
The illegal war in Ukraine is in its third year or, for those from the east of Ukraine or Crimea, its 11th year —it has been going on since 2014. It is now a war of attrition. Only this week, the Financial Times reported that Russia’s war economy is on the edge of collapse, as “a house of cards”. The western sanctions are working. Our task must now be to convince Putin that the Russian economy would not be saved by giving him back the immobilised funds as some sort of prize or reward for ending the war. The only resilient response and future-proof way of ending this war is if Putin knows that unless he stops for good and does not repeat the actions of the last 10 years, he will lose his grip on Russia’s economy completely and, with it, his grip on power.
I urge the Government to catch up with the US and Canada and finally introduce—as they have done—legislation permitting seizure of Russian state funds, if only to send a clear message to Russia that waging a war of aggression does not pay and that there will be serious consequences for the continued flouting of international law. Let us not wait any longer: let us get on with it and show leadership on the global stage on this issue. The Bill is a missed opportunity to do that, and I urge the Government to bring forward the necessary legislation without delay. I now very much look forward to hearing the maiden speech of the noble Baroness, Lady Batters.
Baroness Batters (CB) (Maiden Speech)
My Lords, it is a great honour to address this House for the first time, and I thank the Minister and the noble Baroness, Lady Neville-Rolfe, for their kind words.
In March 2022 I had a request to speak with Mariia, director of the Ukrainian Agrarian Forum. I will always remember that first call. Mariia talked of farms, miles away from towns and villages, being individually targeted: poultry sheds and dairies bombed and destroyed; cows and calves left to burn alive; and fields planted with crops that were deliberated mined to destroy the farmers and the harvest. Russia stopped exporting nitrogen fertiliser three months before the illegal invasion of Ukraine, and your Lordships’ House should be under no illusions that the war in Ukraine is as much about food as it is about territory—and this at a time when England was paying farmers not to produce food.
As an ambassador of Farm Africa, I dedicate my maiden speech to the many farmers I have met across the world, and especially the 46,000 members of the National Farmers’ Union that I was privileged to lead. The NFU is an organisation led by farmers for farmers. Its great strength is the professional team of staff that I was fortunate to work alongside, and I am delighted that a few of the London team are in the Gallery today.
I am a fifth-generation tenant farmer on the Longford Estate in Wiltshire. We have a herd of Aberdeen Angus cross suckler cows and grow spring barley and British cut flowers, alongside a wedding barn and holiday cottages. Back in 2010 I became the NFU county chairman of Wiltshire, a role I very nearly did not take on due to my fear of public speaking. I hope the fact that I was elected as the first woman to lead the National Farmers’ Union in 118 years gives hope to others that fear of failure can be overcome.
Having four Prime Ministers—three in one year—was challenging, but for me 2020 was the standout year. In March we left our NFU headquarters in Stoneleigh Park, Warwickshire, to work from home. My twins’ GCSEs were cancelled. Prime Minister Boris Johnson and President Trump planned to conclude a UK-US trade deal by August. There was one point, at the beginning of lockdown, when the Government thought we would run out of food. I remember a text from a Government Minister that read, “You can have as many people and as much money as you want, as long as we don’t run out of food”. For a few days, the reality of being seven meals from anarchy was very real. Farmers were key workers then, and I am enormously proud of the role the NFU played, working with government, to keep the country fed.
Brexit posed the ending of farming under the common agricultural policy. Farmers in England are nearly at the end of the transition into the environmental land management scheme. In this time, we have rewritten primary legislation for farming in England into the Agriculture Act 2020, raising the standards of environmental protection and animal welfare above those of the European Union. It was and remains an unacceptable contradiction to raise standards for farmers here and not for our trading partners.
Our history is littered with either embracement or abandonment of whether producing our own food matters. The Arab spring was the last time that government advisers and scientists gave serious thought to our role in delivering global food security. Post the financial crash of 2007 to 2009, the markets took off. Since then, the line given by officials is that the UK is a wealthy nation and can afford to import its food. The increases in farm taxes proposed in the Budget are a symptom of this all too often desk-based advice to Ministers. On this issue I urge the Government to listen to my successor, Tom Bradshaw, to pause and to consult with the industry. With so much change in the last six years, farming and our food security are at a major crossroads. Much will depend on the Government delivering their manifesto commitment to make food security national security.
I would like to finish with three points. First, the global population is set to rise to 10 billion by 2050. We will need to produce 50% more food with half the water and energy we have now. To achieve this, farmers will need access to the best science and innovation. Government must invest in and incentivise the optimisation of sustainable food production. The UK, with its maritime climate, should be producing much more of its own food. With targets for renewable energy, housing, nature, trees, water and air, it is wrong that we still have no target for food. Instead, we continue to rely on countries such as Spain and north African countries to produce so much of our salads, fruit and vegetables. It is unsustainable, both for them and for us.
Secondly, food and nature must become mutually inclusive. I am opposed to any form of nature bank. Instead, we must enable these vital environmental markets to come to fruition. Nature reserves are the jewels in the crown but they are a minuscule area, less than 8% of land in England. Over 70% of the country is farmed and can deliver food, nature and biodiversity net gain within a farmed landscape, at the scale that is needed.
Finally, I ran a catering business for 25 years. I am passionate about good food and cooking from scratch. Learning how to cook, for every child, should be as fundamental as maths and English in the school curriculum. The principles of a garden city should be applied to every urban area—orchards, allotments and beautiful green spaces for everyone, everywhere.
I conclude by thanking the amazing people who have helped me on this journey: the Defra Minister the noble Baroness, Lady Hayman; former Prime Minister Rishi Sunak; and my supporting Peers, the noble Duke, the Duke of Wellington, and the noble Lord, Lord Soames. And enormous thanks to every single member of staff: Black Rod, the clerks, the Doorkeepers, the security staff and the catering staff, who most certainly do know how important food is to this House. Thank you—you have made me feel so welcome. Finally, my thanks to my family and those who work for me. Like all working mothers, the juggle is real and seldom mentioned. So, to my own mother and my two children: thank you so much for the sacrifices you have made on my behalf.
Baroness Wheatcroft (CB)
My Lords, what an honour it is to follow such a brilliant maiden speech. Clearly, the noble Baroness, Lady Batters, has overcome any fear of public speaking. What she is not afraid of is bringing not just her knowledge and intelligence but her emotion to this Chamber, and we should applaud her for it. It will be an honour for the Chamber to have in its presence a woman who has brought such change to the farming industry, who has been a voice that many of us will have been very familiar with. I feel that I have woken up with Minette Batters over many years, courtesy of Radio 4. Now it is a delight to see her here among us and to listen to her impassioned speech on behalf of an industry to which she has given so much.
We should be aware that the noble Baroness is a co-founder of Ladies in Beef. Even women who are not great meat-eaters may feel that that organisation gives them something to strengthen their resolve in holding their own in what may still, for some, be a bit of a man’s world. I am also intrigued to see that she has chosen to be the noble Baroness, Lady Batters, of Downton. No abbey was mentioned, but perhaps there is a new series in the making—I am sure we will all look forward to it. I also thank the noble Baroness for bringing the attention of the Chamber to the plight of farming in Ukraine, the importance of farming to all of us, and the importance of food security—which, of course, brings me to the Bill.
I welcome the Bill as far as it goes—but how much further it could and should go. The money pledged in it is a fraction of what Ukraine needs. Restricting the funds involved to the income that would be generated by the Russian assets frozen in the EU is simply not enough. Others have already talked about this. Huge Russian assets have been frozen which should be handed to Ukraine as quickly as possible.
The noble Baroness, Lady Neville-Rolfe, voiced concerns about such a move, but even some of her colleagues in the other place have come to this conclusion and have voiced their views not only there but in a letter to the Times on 6 January. They say that there is at least £25 billion in UK accounts which the Government should hand over, and now. The noble Lord, Lord Blencathra, made an eloquent plea for the UK to be braver, and I commend his stance, although, like him, I would not wish to do anything to jeopardise the Bill directing funds to Ukraine as quickly as possible. The noble Baroness, Lady Smith of Newham, raised this issue too.
There are those who have qualms about the legitimacy of a country not only freezing another’s assets but seizing them. However, that view is based on the concept of sovereign immunity, and I argue that Russia has forgone any right to such immunity. Many will feel that Putin’s outrageous assault on Ukraine is enough to have cost it any immunity. But it is Russia’s behaviour in the UK which surely has eradicated any such rights. Russian operatives have come to the UK with the sole purpose of committing murder. Whether it was the poisoning of Alexander Litvinenko or the Salisbury poisonings, they showed no respect for the sovereignty of this country. Why, then, should we respect sovereign immunity in the case of Putin’s Russia?
If Canada and the US can be braver, as the noble Lord, Lord Blencathra, explained, can the Minister explain why the UK is still only considering its position on whether it can go any further on such a vital issue? It might be one small step towards redressing the unedifying reputation the UK has gained as a hub for dirty money. The “London laundromat” was a popular destination for Russia’s billions, which was often money obtained through dubious means. The former Prime Minister Boris Johnson was praised for his staunch support for Ukraine’s fight, and it is true that he was there at the beginning. But it was also Boris Johnson who, in 2010, as Mayor of London, opened a new department at City Hall devoted entirely to attracting Russian investment to London, and I beg to suggest that not all that investment came from the most respectable of sources. I am not sure that that was top of the list of priorities at the time.
Bill Browder has gained a very big reputation for his bravery in pushing through the Magnitsky Act in many legislatures around the world. He had good reason to do that, as he had fallen victim to the Russian state and his lawyer, Sergei Magnitsky, was murdered in jail in Russia—or at least, he died there, and it was thought not to have been accidental. Because of that, Browder has worked steadfastly to get people alive to exactly what is going on in that country and to take action, rather than just speaking about it.
One of the reasons that he cites, which others have not yet mentioned but which we really should be taking account of, is that, if this war is not won, it will precipitate a refugee crisis that will make the small boats look minuscule in proportion. The refugees will flood not from Ukraine but from all the neighbouring territories that are so fearful of what a powerful Russia might do next. The numbers are put at anything up to 25 million. That is one reason—if only one were required—why urgent action is required to get the money to Ukraine and to get it there quickly, handing over the income from the money that is held in the EU, let alone the UK. However, doing it in three tranches, as this Bill talks about, may be a start, but it is such a small start. Surely, the UK could and should do more.
Lord Balfe (Con)
My Lords, I add my congratulations to the noble Baroness, Lady Batters, on her maiden speech. I came across the NFU many years ago through my very good friend Lord Plumb, who introduced me to this Chamber. He taught me quite a bit about the NFU and mentioned the noble Baroness to me as one of the up and coming stars of the institution. I am surprised that she had difficulty with public speaking, but clearly she has overcome it extremely well. We all look forward to many contributions in this House, given her special knowledge of agriculture, Ukraine, Africa and other subjects.
You can always depend on me when we have a debate on Russia. I am the one who makes the speech no one wants to hear. Today, unfortunately, my two co-religionists, the noble Lords, Lord Skidelsky and Lord Campbell-Savours, are not present, so I am left to do this all on my own. My message has not changed over the years. My message is very simply this. We have all agreed that Russia was wrong to invade Ukraine. It does not take an O-level in geography to recognise that. But what we have not been very good at is looking at the consequences of where we are now and where we are heading to. We need to remember my good friend John Major’s advice: in a hole, stop digging.
We need to look at some perspective. The Minister in the Commons, Darren Jones, said that we were going to carry on until Russia ceases its war of aggression and we win. I will first ask a very simple question. What is “win”? I have seen no evidence of any movement in Crimea to go back into Ukraine. Nor have I seen any evidence from Luhansk or Donetsk to the same effect.
The Ukraine Government made, as I have said many times, a tragic and stupid mistake when it outlawed the Russian language in places where 100% of the people spoke Russian. That alienated the eastern provinces, and the chasing out of Viktor Yanukovych did the rest. We now have to live with the consequences and build for the future.
The extraordinary revenue acceleration is a Group of Seven agreement, but has it been implemented elsewhere? Is this particular programme on the statute book of the US Senate? Will it sustain itself in the face of a President Trump? Is it passed by the Canadian Parliament? Will it sustain itself with a Prime Minister Poilievre, whom Canada is likely to get? Is it on the statue book of the Federal German Republic? Will it survive a new Chancellor in Germany? Has it gone through the French Parliament? That Parliament appears unable to pass any legislation at all at the moment, let alone something like this.
I am unclear as to where we are, apart from the fact that we are passing the Act. What about the rest of the people on the list? What is actually happening? In the case of Italy, Italian support of Ukraine is not at a very high level at the moment. From what I know of Prime Minister Meloni, I wonder what her Government are doing? It would be good to know—not because I will vote against the Bill or try to stop it; it is a government Bill that seems to have the support of everybody in this House apart from me, so it will go through. But we need to know where we are with the Bill.
We also need to know pretty soon where we are with the new United States Administration because, let us face it, they will call the shots; we are not going to. This will be like Afghanistan—the US Administration will decide on a policy, we will be lucky to get a phone call and we certainly will not be able to carry on on our own. We need a European dimension to all this that looks at it from the interests of Europe. Those interests clearly involve the rebuilding of Ukraine but also involve coming to an arrangement with the Russian Federation that will stick. We seem to forget that we expelled Russia from the Council of Europe. “Great”, we said. We expelled 135 million Russians from the protection of the Court of Human Rights. We do not talk about that, though, do we?
We need a reset of our relations with the Russian Federation, with Ukraine and with the riparian countries of eastern Europe that rightly feel alarmed about Russia but also feel a little alarmed about the capacity and willingness of those of us further west to defend them. It is fine to say, “We have Article 5 of the NATO treaty”. I talked not so long ago to a Portuguese admiral —noble Lords will be surprised who I tend to know—who said, “Oh, yes, Article 5 says an attack on one is an attack on all”. It does not say what we have to do about it, though, does it? He said, “Do you honestly think that the people of Portugal would send troops to Ukraine? They would not”.
This is going to be difficult, but it has to be done. We need to think again about European security. We have spent too long behind an American blanket, expecting them to look after us. The fact of the matter is that 80 years after the end of the war, we have to start redesigning a Europe that works for Europe. We cannot continue to rely on the United States.
In building that new unity, we have to get closer to the European Union. I really am on my own on that—in this party, anyway. The European Union and the countries that are closer to us geographically in Europe are our future. I say to both parties that if neither of you can come to terms with Europe, you will lose the youth vote and it is not impossible that we will end up with that little Bench down at the end sitting on that Bench over there, and God knows who sitting on this Bench. Let us think our way through to a brighter future and stop repeating all the shibboleths of the past.
Baroness Goudie (Lab)
My Lords, I congratulate the noble Baroness, Lady Batters, on her speech today. I listened to her many times during Covid on the radio and television, and I was so thrilled to hear she was coming to this House. I look forward to working with her on food and other issues in the future.
This Bill is a welcome example of international co-operation. The additional financial assistance to Ukraine from the United Kingdom and other parts of the G7 is £38.6 billion of loans. These loans will be repaid from immobilised Russian assets held in the EU and will not be repaid by Ukraine. These assets will be divided between the G7 lenders in proportion to their contribution, £2.26 billion in the case of the United Kingdom. A crucial element is that the EU has adopted a regulation that will govern the repayment mechanism. This provides the legal basis within the EU for the UK to receive the repayment.
Like colleagues, I hope that throughout all this there will be no hold-ups, little glitches here and there or amendments. We have to make this happen now. This is an illustration of how vital it is for the UK and the EU to work closely together. This is crucial when the context is supporting Ukraine, helping it to resist and defeat the wicked, illegal and reckless Russian invasion and providing security for Europe as a whole.
The noble Baroness, Lady Wheatcroft, spoke about refugees in countries nearby. I have had calls from people in those countries, in Vilnius and even in Poland, who are worried about what the future holds for them and what the future could be for us and other countries. They are really worried. This Bill is an important aspect of the package of measures in a battle that has been well described as one of the defining issues of our age.
The World Health Organization has reported more than 2,000 attacks on health facilities, further straining Ukraine’s capacity to address mental and physical health needs. In 2024, 14.6 million people in Ukraine were estimated to need humanitarian assistance. This includes access to water, healthcare, shelter and psychological support. In the third quarter of 2024, the share of temporary protection decisions for children increased to 31%. As we know, children are now being taught in the underground during the day. They want to go to school to learn, but are frightened of what they might come back up to. The fighting and air strikes have caused more than 30,000 civilian casualties, including children.
The people of Ukraine are fighting for us all and our freedom. We are sending a message not only to Putin but to autocrats around the world that the international community will always oppose violence against national sovereignty.
Lord Kempsell (Con)
My Lords, I join in the expressions of welcome and praise for the noble Baroness, Lady Batters. I am sure that her excellent, touching maiden speech will have great resonance with working mothers everywhere. I know that the whole House looks forward to her contributions on the importance of British farming and so many other issues.
I welcome the measures in the Bill, which will continue to provide Ukraine with the financial support it so desperately needs. The funds in question are drawn from immobilised Russian sovereign assets, and rightly so. The extraordinary revenue acceleration mechanism is an innovative example of what is possible when the focus of our G7 partners is rightly directed at the aggressor. Russia unleashed this illegal war on the people of Ukraine, and Russia will have to pay. It is heartening that that sentiment has been nearly universally agreed to in your Lordships’ House this afternoon. As President Zelensky said, the measures we are debating are a strong signal that:
“Russia must pay for its brutal war”,
because
“accountability for acts of war is inevitable”.
I hope the Bill will be passed as swiftly as possible. I join others in thanking the Minister for his work on this, which I know has taken much of his engagement and focus.
On the payment timetable and the disbursement of funds, we understand that the G7 has agreed that payment will be in three equal tranches over the next three years. Given the urgency of the matter, and the many questions raised today in your Lordships’ House about the military use of the UK’s contribution to ERA, I ask the Government to consider submitting a speedier timescale than three years. That is what is needed. As we have heard so many times in your Lordships’ House, Ukraine urgently needs all the military equipment it can get, as soon as possible, so military use must be allowed.
To that end, I associate myself with the powerful and cogent arguments of my noble friends Lord Blencathra and Lord Banner about what has been left outside the scope of the Bill. I understand that the Government must seek to pass legislation as soon as they can in this area and the difficulties of designing legislation and drawing its scope, but we have heard here this afternoon some powerful arguments for widening the scope of this measure to the seizure and transfer of Russian sovereign assets in the United Kingdom.
Today’s proceedings raise a more significant issue than the technical details of the Bill. The Bill, though welcome, cannot be a substitute for the Government setting out a clear vision for the future of Ukraine and what they would like to see achieved in this crucial year. It is right that the UK’s financial, military and humanitarian support continues and has been maintained by the new Labour Administration. It is right that Ministers continue to visit Ukraine, although I note that, despite his busy and demanding travel schedule, the Prime Minister is yet to visit the country since he has been in office. I hope that he is able to visit very soon—I am sure he will. But none of that is the same as the Government setting out and articulating a vision for what should actually happen in 2025, because this is a critical moment for Ukraine and for the entire western alliance.
I know that Ministers will not want to risk the UK’s leadership or risk any accusation that the UK Government have turned down the volume on their leadership of big-picture vision for what should happen next. When I spoke in the debate on Ukraine in your Lordships’ House in October, I said I was concerned that the UK was at risk of losing that leadership. I said that because the same anxiety had been expressed in those direct terms by President Zelensky himself. Ministers must communicate to the public what this Government believe Ukraine’s destiny to really be. Ukraine is destined to be a free, sovereign, independent, European state in the western alliance. It is not destined to be part of a revanchist, reinvented Russian empire in any sense.
Ukraine’s future was arguably in contention for decades, but Russia’s illegal war has, ironically, settled the issue, because Ukrainians are now completely clear-eyed about what they want. I have heard it from Ukrainians themselves, including from servicemen injured on the front lines, as I made numerous trips to Ukraine last year. I say this in part to answer the questions posed by my noble friend Lord Balfe about what victory means. Ukrainians want to be inside the NATO security architecture. They want the capabilities and permissions to win the war, militarily, in no uncertain terms and for permanent western security guarantees to be in place. To anybody outside your Lordships’ House who might doubt that position, I suggest that they talk to Ukrainian armed forces service men and women themselves, because they possess the most up-to-date and expert experience available to NATO of fighting Russia.
As my noble friend Lady Neville-Rolfe said, when Russia invaded, former Prime Minister Boris Johnson was the leading voice when it came to giving Ukraine the military, financial and humanitarian support needed. But he also set out a vision. He understood that this is more than a kinetic war; it is a battle of ideas about how the world should be. I am worried that that language is slowly changing nowadays. Standing with Ukraine for as long as it takes and helping it pay for this war as long as it takes is, at face value, a laudable concept, but there are some inside the Russian Government who view that as sign of weakness because it suggests that there is an open-ended timetable for concluding this conflict.
I want to commend and thank the Government for supporting a series of Conservative Administrations while they were in office and for continuing that support for Ukraine on entering government. This Bill rightly develops that, so nothing should stand in its way or be done to slow down its passage. That said, I hope the Government will use this opportunity to set out what they believe to be their agenda to regain international leadership on how this conflict is settled. The UK should lead with moral and strategic clarity, because the denouement of this conflict is important to resolve in the best interests of the free world, including of course, and most pre-eminently, Ukraine.
Lord Purvis of Tweed (LD)
My Lords, it is a pleasure to follow the noble Lord with his very considered remarks, most which I agree with entirely. His points reflected the three words that I thought could sum up this debate—the need for urgency and clarity, and at scale. These are the priority areas where we would wish to see the Government continue to move. Notwithstanding, as my noble friend Lady Smith said, that we support the Government’s work on this entirely, those aspects, the next steps on how we are going to be moving at pace, will be of fundamental importance.
We are still technically debating the regret amendment from the noble Lord, Lord Blencathra. As a long-standing former Minister and Chief Whip, he knows that this is a Budget Bill and that he cannot amend it in this place, but, as anybody who has seen the speakers’ list will know, he also knows how to get the last word. I commend him for that, because these Benches agree with the thrust of his argument. If there is anything that we can do to help him persuade his noble friends on the Front Bench to support our positions on seizure, he can count on our support.
The debate also had the outstanding maiden speech by the noble Baroness, Lady Batters. My former constituency was on the north side of the border, so I used to deal with NFU Scotland rather than the NFU. I recall that at my first meeting with NFU Scotland as a brand-new Member of the Scottish Parliament, I thought that I had listened attentively, but it was rather complicated, with lots of very difficult, technical words. I jotted them down, but at the end, I went home and had to ring up the then president of NFU Scotland, who was the noble Baroness’s counterpart. I said, “I’m really sorry. I’ve looked at my notes and can’t now remember what the animal disease or the animal medicine is, because the words are so complicated”. He said, “Jeremy, you don’t need to understand what we say; you just need to understand that you do what we say”. With the clarity of the noble Baroness’s contribution, I hope that Ministers will do what she says in this House, and she is most welcome.
The sober element of this debate was the recognition that the toll on the Ukrainian economy and country has been enormous. We often try to get a picture of what the toll is on the Russian economy; sometimes we get information showing that there is a significant toll on it from our sanctions and from external actions. The news, which I think was from just last week, that one rouble is now worth less than one US cent is one illustration that a toll is being taken, but as my noble friend indicated, there is still too much sanction circumvention and there are still too many areas where the Russian economy is gaining—whether it is the shadow fleet, which we are still seeking to pursue, or other elements of avoiding sanctions. Constant work is of fundamental importance in this area.
I have previously raised something with regard to British Overseas Territories which I hope the Minister will be able to clarify. How are we ensuring that all the actions and all the work that we are doing are consistent across all parts, including the overseas territories?
With regard to the impact on Ukraine, it is now estimated that there has been well beyond £500 billion of war damage. That is just a modest estimate by the World Bank. It is inconceivable that Russia will voluntarily pay compensation, so any thought that if it retrieves assets, they will voluntarily be used for some form of reconstruction in a ceasefire agreement is for the birds. A fundamental question therefore needs to be asked: why would we not use the entirety of the assets for the reconstruction purposes which we know Russia will deny in the future? Given that Ukraine is suffering a budget deficit of well over £10 billion and that, in context, it allocates more than £40 billion—about half of its entire budget—to the defence sector, which shows the scale of what Ukraine is having to do, timing is of fundamental importance, as well as scale.
It is welcome, of course, that there is the G7 consensus on this, but it was agreed in June last year to use the profits on immobilised assets. It was in January last year, when we were in Grand Committee on the Russia (Sanctions) (EU Exit) (Amendment) (No. 4) Regulations, that I called on behalf of these Benches for the equivalent of what the Bill is now. The timing is of importance, but it is also not just about the cost of recovery and contributing to Ukraine now; it is also an argument about accountability.
Our friends in Canada have passed legislation. Given the other debates that we have secured, including in the other place on 6 January this year, as the noble Lord, Lord Browne, and my noble friend indicated, and given the points that my honourable friends in the Commons made in Committee of the whole House on the Bill, the argument is not simply about funding Ukraine’s efforts now for its economy and the war. It is also about ensuring that there is Russian accountability. If part of the argument is that the Putin regime should be held to account for what it is doing, why would it then be able to profit and, in effect, have assets back and be able to use them?
We probably know—the noble Lord, Lord Kempsell, perhaps alluded to this—that there is a distinct incentive for Putin to have some form of ceasefire: to pause, recoup and then string this on. There is therefore no long-term security, and if part of the funds are simply being immobilised so that the profits from them can be used rather than the asset value itself, then unfortunately there is an incentive for Putin not to have a long-term solution. I suspect that that is why there is a last-ditch attempt in the last days of the Biden Administration, as CNN reported yesterday, for them to move towards the seizure aspect. I hope that the Minister might have an opportunity to respond to that.
To help us understand the position—this is where clarity comes in—I hope that the Minister will be able to look kindly on what my honourable friend James MacCleary put forward as an amendment to the Bill. It was to seek government reports: an immediate report but also, for clarity, a report regarding our
“share of the principal loan amount”
and what is able to be seized, if we had the intent to do that. There are ways in which the Government could demonstrate more clarity—as the United States has done, having been asked by Congress, and as Canada has done—as to what the scale of the opportunity is.
Perhaps the Minister could clarify another question for me. How much of what has been committed so far under the G7 programme has been disbursed? My understanding is that, as reported, the US committed £20 billion as a portion to the World Bank in December but that only £1 billion has been disbursed. I wonder what the status is likely to be for when the disbursements will be in place, especially the UK contribution. If the intent of this fund is for the purchase of munitions on a very urgent military operation, it goes without saying that any delay to the disbursement is not to the advantage of our Ukrainian friends and allies.
Let me close by reiterating what my noble friend Lady Smith said at the outset. We believe that it should be the UK’s intent that we move on this, as far as seizure is concerned, and that it is unjustifiable that these assets should be utilisable by Russia in the future. Russia’s actions should not be forgiven by it being able to recoup assets which we have found justifiably should be frozen. Those assets should be seized at pace and at scale and be used for the defence of Ukraine and as part of its reconstruction. That would also show accountability for those terrible crimes that Russia has inflicted on Ukraine.
Lord Livermore (Lab)
My Lords, it is a privilege to respond to this Second Reading of the Financial Assistance to Ukraine Bill, and to the regret amendment tabled by the noble Lord, Lord Blencathra. I join others in congratulating the noble Baroness, Lady Batters, on her incredibly powerful maiden speech. She brings a wealth of experience to your Lordships’ House, particularly on agricultural and rural issues, and is widely respected for her stewardship of the National Farmers’ Union. We might not always agree, but I very much look forward to her further contributions in debates such as this.
I am grateful to all noble Lords for their contributions and for the unity the House has shown in supporting Ukraine. I am very grateful in particular to the noble Baronesses, Lady Neville-Rolfe and Lady Smith of Newnham, for their support for the Bill. Many noble Lords have spoken movingly about the ongoing plight of the Ukrainian people in the face of Russia’s illegal invasion. It is important that we keep them in our minds today as Ukraine endures a third winter at war. The consequences of Putin’s war are profound: thousands dead and wounded, families torn apart, and enormous damage wrought to Ukraine’s infrastructure and economy that will take many years to rebuild. Despite the carnage that the Russian war machine has wreaked, including scores of innocent civilians killed and thousands of communities devastated right across the front line, the spirit of the Ukrainian people endures, and their resolve to defeat Putin’s army remains undiminished.
In case it needs saying, I profoundly disagree with the contribution from the noble Lord, Lord Balfe. I am heartened by the fact that there has otherwise been near uniform support across your Lordships’ House. The Government’s position remains resolute: Putin must fail, and we must stand with Ukraine for however long it takes, including by working with our G7 allies as part of this scheme. The Government will continue to stand with Ukraine as it wages this fight for freedom. That is why, to date, the Government have provided £12.8 billion in combined military, humanitarian and economic support to Ukraine. The UK has also introduced the most wide-ranging sanctions regime ever imposed on a major economy, depriving Putin of vital finance for his war machine.
My noble friend Lord Beamish asked about circumvention of sanctions, which the noble Lord, Lord Purvis of Tweed, also mentioned. The Government are assessing and enhancing the UK’s sanctions enforcement. This includes working with international partners to build capacity and technical expertise within our own systems and to improve sanctions compliance in their private sectors, as well as deploying increased UK sanctions resources across our overseas network. This is a fight not only for Ukraine’s territorial integrity and the safety of its people but for the future of Europe’s collective security and prosperity. That is why the Prime Minister has committed to providing £3 billion annually to support Ukraine for as long as it takes.
Maintaining international pressure on Putin also requires working in close partnership with G7 allies. The Bill before your Lordships’ House does just that. It would unlock £2.26 billion of new funding for Ukraine, backed by profits generated from immobilised Russian assets as part of the G7’s extraordinary revenue acceleration loans to Ukraine scheme. The scheme demonstrates our shared commitment and solidarity in the face of Russian aggression and will provide approximately $50 billion of additional funding overall to Ukraine, taking account of the combined contributions of our G7 allies.
The noble Baroness, Lady Smith of Newnham, asked whether the Chancellor of the Exchequer raised Ukraine with her counterparts during her recent visit to China. In China last week the Chancellor was clear that, although we must co-operate in areas of mutual interest, we will confidently raise concerns where we disagree. She expressed her real economic and trade concerns with the Chinese, including on economic security. We have secured China’s commitment to improving existing channels so that we can openly discuss sensitive issues and our economy. If we do not engage with China, we cannot express our very real concerns.
The noble Lord, Lord Banner, suggested that we are not meeting or matching our words with actions, a sentiment echoed by the noble Baroness, Lady Wheatcroft. The UK has already provided £12.8 billion of military, humanitarian and economic support to Ukraine since the war began. We are committed to providing a further £3 billion of military aid each year for as long as it takes. This is a significant investment. The new spending the Government are committing as part of the G7 scheme is in addition to these existing commitments and is proportionate to our GDP share within the G7 and the EU.
The noble Baronesses, Lady Smith of Newnham and Lady Wheatcroft, and the noble Lords, Lord Banner, Lord Purvis of Tweed and Lord Kempsell, asked why the Government have not gone further by seizing Russian sovereign assets in the UK. This is also the focus of the regret amendment tabled by the noble Lord, Lord Blencathra. I fully understand that strong views exist on this issue, and I assure noble Lords that we will continue to actively consider all possible lawful avenues by which Russia can be made to meet its obligations to Ukraine under international law. I of course agree that Russia must pay for the damage it has caused in Ukraine. However, the Government believe that any action taken should only be in tandem with the G7. It is in this spirit of collaboration that we have agreed the extraordinary revenue acceleration loans to Ukraine scheme, and we continue to work closely with our G7 partners. Our focus now is on delivering this scheme rapidly to provide the immediate support that Ukraine requires.
The noble Baroness, Lady Anelay of St Johns, asked whether I am instinctively in favour of going further. I can only say that I am in favour of considering all legal routes. She also asked about those legal routes that we have taken. Due to Euroclear’s unique business model as an international central securities depository, it is able to generate extraordinary profits on the holdings of these assets, which legally accrue to Euroclear rather than to Russia. We do not believe the specific circumstances that provide profits generated in this way can be emulated in the UK as we do not believe that any UK-based financial institutions employ this business model. The UK is not required by the Ukraine loan co-operation mechanism to provide any extraordinary profits made from assets held in the UK; we are simply providing a financial contribution to that scheme.
The noble Baroness, Lady Neville-Rolfe, asked whether the UK’s contribution to this scheme will count towards the NATO target of spending 2.5% of GDP on defence. The UK’s contribution will be provided to the Government of Ukraine as a loan from the UK Government to spend on military procurement; it is not direct UK defence spending. The £2.26 billion loan will therefore not count as NATO-qualifying UK defence spending; it will be in addition to current NATO- qualifying UK defence spending. The noble Baroness also asked when the Government will meet this target, as did the noble Baroness, Lady Smith of Newnham. The Government have made a clear commitment to spend 2.5% of our GDP on defence, and this commitment has not changed. We will set out the pathway to 2.5% at a future fiscal event.
I will touch briefly on the nature of the UK’s contribution to this G7 scheme. The funding we are providing will be used for budgetary support earmarked for military procurement, bolstering Ukraine’s capacity for self-defence and providing vital equipment and support to the front line. As my noble friend Lord Beamish said, this funding is additional to the £3 billion of bilateral military support which the Government have committed to providing for as long as it takes. The Bill’s sole purpose is to provide the Government with the spending authority to deliver our contribution to this scheme, or any subsequent arrangements that supplement or modify it. It is not designed to facilitate any other spending on Ukraine or spending for any other purpose. The Bill enables the Government to sign the loan agreement with Ukraine and begin disbursing funds to it.
The noble Baroness, Lady Neville-Rolfe, asked specific questions about how disbursals from the fund will work—a point also raised by noble Lord, Lord Kempsell. The Government intend to begin disbursals early this year to ensure the funding supports our Ukrainian allies as soon as possible. We intend to disburse the UK’s £2.26 billion loan in three equal tranches over three financial years, starting in 2024-25. The G7 has agreed that all funds from this scheme will be disbursed by the end of 2027, although we plan to begin disbursals much sooner.
To further address the points raised by the noble Baroness, Lady Neville-Rolfe, this is a bilateral loan whose parties are His Majesty’s Treasury and the Ministry of Finance of Ukraine. The Government have begun talks with their Ukrainian allies to agree the terms of the provision of this funding. We do not intend for there to be geographical restrictions on where funds may be spent, and are instead ensuring that the purchase of much-needed vital military equipment is prioritised. There will be opportunities for the UK defence industry to benefit where this provides good value for money for the UK and for Ukraine. The Government are aware of the corruption risk in Ukraine and we are taking steps in our loan negotiations to mitigate it. I cannot comment on these negotiations in detail as they are still ongoing.
On the UK being repaid for this loan, as my noble friend Lady Goudie said, under the terms of the scheme the UK will be repaid by the extraordinary profits generated from immobilised Russian sovereign assets in the EU on a six-monthly basis as they accrue. The EU has already enacted the necessary regulation, known as the Ukraine loan co-operation mechanism, which will distribute the profits. This came into effect on 29 October 2024.
My noble friend Lord Browne of Ladyton spoke about international support for Ukraine, and the noble Baroness, Lady Neville-Rolfe, asked about the United States’s contribution to the scheme and the approach that will be taken by the incoming Administration. Although it would be wrong to speculate on any policy decisions that the incoming Administration may make, the UK Government have welcomed sustained bipartisan US support for Ukraine, which has been key in the international effort.
In answer to the noble Lords, Lord Balfe and Lord Purvis of Tweed, the US has already dispersed its $20 billion contribution to our financial intermediary fund at the World Bank. The EU has already passed and implemented its legislation, which covers all the European countries listed by the noble Lord, Lord Balfe.
Lord Purvis of Tweed (LD)
My point was less about the US providing $20 billion to the World Bank; my question related to how much Ukraine has actually received.
Lord Livermore (Lab)
I do not have that information to hand, but I will happily check for the noble Lord.
The noble Baroness, Lady Neville-Rolfe, asked whether the UK’s contribution to the scheme would increase if the United States or another participant chose to withdraw. I can confirm to noble Lords that this would not affect the UK’s contribution, which will remain at £2.26 billion. We are clear that that is the right and balanced approach, reflecting our fiscal pressures and Ukraine’s needs. The £2.26 billion figure is also proportionate to our GDP share within the G7 and the EU. We will of course continue to co-ordinate with G7 partners on the scheme going forward.
The noble Baroness, Lady Anelay of St Johns, asked for an update on the proceeds from the sale of Chelsea Football Club. The Government are working hard to ensure the proceeds from the sale reach humanitarian causes in Ukraine as quickly as possible. The proceeds are currently frozen in a UK bank account while a new independent foundation is established to manage and distribute the money. Creating an organisation of this scale is complex and officials continue to hold discussions with relevant parties to reach a resolution. As you would expect, we must review the details of any such arrangement to maintain the integrity of our sanctions regime.
In conclusion, we must ensure that Putin has no path to military victory in Ukraine. That means continuing to provide military and economic support to enable Ukraine to defeat Putin’s war machine. The combined $50 billion of new funding, delivered together with our allies in the G7 and backed by profits from immobilised Russian assets, will provide a crucial boost to Ukraine as it continues its third winter at war. It represents an investment not only in Ukraine’s future but in the security and prosperity of Europe more widely, and it demonstrates the shared resolve of the international community in the face of ongoing Russian aggression. I welcome the fact that noble Lords from all sides of the House have been united in saying that we must stand with Ukraine for as long as it takes. This Bill will allow us to honour that commitment.
Baroness Neville-Rolfe (Con)
Before the noble Lord sits down, there was one question about the announcement on the 2.5% of GDP. The noble Lord helpfully clarified that the money in this Bill was extra, which is good news, but I think several of us were concerned to know when decisions would be taken on the timing of the 2.5%.
Lord Livermore (Lab)
I answered that exact question from the noble Baroness. As we have said all along, we will set out a path to 2.5% at a future fiscal event.
Lord Blencathra (Con)
My Lords, I begin by congratulating the noble Baroness, Lady Batters, on a superb maiden speech, which impressed everyone in this House. I particularly liked her remarks on food and nature. British farmers can grow more food and we can also do nature recovery; the two are not mutually exclusive. I may be one of the few in the House who is not surprised at the noble Baroness’s powerful speech- making because, for the last six years, I was the deputy chairman of Natural England, and at times I felt that her powerful rhetoric was targeted against us as we sought to implement some of the ELM schemes. Nevertheless, she made a very powerful contribution to this House and she will be an excellent replacement for the late Henry Plumb in my opinion.
I am very grateful to all noble Lords who have supported, in various ways, the amendment I put before the House. In particular, there was powerful support from the noble Baroness, Lady Wheatcroft. I thank her and my noble friends Lord Banner and Lord Kempsell for their very strong support. I have now had to change my opinion on a matter. I always believed that no one under 50 could make any worthwhile contribution in this House, but the two noble young Turks behind me have proved me utterly wrong.
I am also grateful to those who gave some sympathetic support, including the noble Lord, Lord Beamish, and my noble friend Lady Anelay of St Johns. Please do not tell my noble friend Lord Forsyth of Drumlean, but I have to praise the two Lib Dem spokespersons who gave qualified support; they support the concept of what I was trying to do.
I must say to my noble friend Lord Balfe that of course, like many others, I profoundly disagree with what he said. But I admire and respect the fact that he said it in this House. While we may disagree with him, we respect his right to speak. It is something that other institutions outside this building could take note of—to let people speak their minds, even if we profoundly disagree with them.
I will pick up on just two points he made. First, he said that the Council of Europe, of which I was a member, expelled Russia. I voted for that to happen, but I was agonising about it. I like Churchill’s expression that jaw-jaw is better than war-war. I thought that maybe if we kept the Russians inside, we could communicate with them. But what they did in Ukraine was so evil that I voted to have them expelled. The noble Lord also made the point that by expelling Russia we deprived 135 million Russians of the right to go to the European Court of Human Rights. That is true, but a fat lot of good it did them when they did have the chance to go, because Russia never implemented any of the decisions of the court.
Secondly—I am coming to my conclusion—the noble Lord asked who was calling the shots. Well, it will be President Trump calling the shots on how much money the United States gives in military aid to Ukraine. He will call the shots on what non-military aid the US gives to Ukraine. But he will not be calling the shots on the immobilised Russian assets, because America has hardly any of them. Over 90% of those assets are held by the EU and United Kingdom. So, while he might dictate other measures, he cannot stop the EU and the United Kingdom taking this permissive power to spend that money.
I will not breach the conventions of the House by regurgitating the points I have made, but I just want to clarify one thing. My amendment is not calling for us to immediately confiscate those assets and start spending them in Ukraine. We cannot do that in any case because the Council of Europe—I think it is the Government’s policy as well—wants to see an independent fund. When the assets are confiscated, they will be transferred to that independent fund to then be given to Ukraine and spent on reconstruction.
We do not have that fund yet. My amendment is simply calling for us to take the permissive power so that, when the time comes, in conjunction with our allies—I am not asking us to confiscate that money tomorrow—we will not have to pass any new law; we will have the permissive power to use that money in the defence of Ukraine. That is the only point I wanted to stress and clarify. As I said at the beginning, I am not in the business of delaying this Bill any further. I beg leave to withdraw my amendment.