The Ukraine Effect (European Affairs Committee Report)
(1 month ago)
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Lord Ricketts
That this House takes note of the Report from the European Affairs Committee The Ukraine Effect: The impact of Russia’s invasion of Ukraine on the UK-EU relationship (1st Report, Session 2023-24, HL Paper 48).
Lord Ricketts (CB)
My Lords, I apologise for being a little late. The previous item ran shorter than I expected.
It is a privilege to open this timely debate on an issue of the utmost importance. On 25 October, your Lordships held a wide-ranging debate on the situation in Ukraine. I was not able to participate, but I have read Hansard very carefully, and a lot of important points were made. The situation has of course moved on quite a lot even since then, with the election of Donald Trump, the massive further attacks by Russia on Ukraine’s energy system and the very welcome—although I think still unavowed—decisions in Washington and London to allow Ukraine to use longer-range missiles against legitimate targets in Russia. All that makes our debate today very topical.
Before coming to the business at hand, I want to pay tribute to the noble Lord, Lord Levene, who is due to make his valedictory speech today. I pay tribute to all that he has brought to this House, on the basis of his extraordinary career in the City, including his memorable year as Lord Mayor. I had the honour of working with him when he was Chief of Defence Procurement. I discovered more recently that we also shared an interest in finding the best way of getting to Normandy on a Friday evening. We will greatly miss the noble Lord.
Our focus today is the report published by the European Affairs Committee at the end of January, on the impact of Russia’s invasion of Ukraine on UK-EU relations. The former Government responded to this on 27 March. Reading the report again nine months on, I think it has stood the test of time and has relevant things to say to those who are now making British policy.
I wish to thank, on behalf of the Committee, our clerk, Jarek Wisniewski, our policy analyst, Jack Sheldon, our committee assistant, Tabitha Brown, and our legal counsel, Tim Mitchell. We took evidence from 22 witnesses, including the then Foreign Secretary, the noble Lord, Lord Cameron, and the then Minister for Europe, Leo Docherty. We received a wide range of written submissions. I will set out briefly the main conclusions on the four aspects we considered: co-operation on sanctions, the UK-EU defence relationship, reconstruction of Ukraine, and the implications for longer-term co-operation with the EU in these areas.
The first area we looked at was sanctions policy. We commended the way the EU and the UK had worked together, but we were concerned even then about the growing evidence that Russia was circumventing sanctions through third states and through its use of uninsured shadow tankers. We also received evidence suggesting that the UK was not as effective as it should be at enforcing the sanctions that had been introduced.
We pressed the Government then to explore options for using sanctioned assets—or their proceeds—to support the reconstruction of Ukraine. In that context, we found it incomprehensible that the frozen assets arising from the sale of Chelsea Football Club, which Mr Abramovich had promised would be used for the support of Ukraine, had then not been disbursed. In their response, the Government assured us that UK sanctions were robustly enforced and that potential breaches were investigated and appropriate action taken.
Despite all the good work, there is worrying evidence that Western sanctions are failing to constrain Russia’s capacity to wage the war or significantly weaken the Russian economy. Could the Minister give us the latest assessment of how effective sanctions enforcement is proving? Is it evidence of their effectiveness that Russia is having to rely increasingly on Iranian drones and North Korean missiles? Would the Minister comment specifically on the revelation in yesterday’s Financial Times that companies registered in the British Overseas Territories have exported $134 million of goods to Russia in 2024 alone? The article alleged:
“Russian documents suggest that a large volume of controlled exports”
is being exported by
“opaque entities in the British Virgin Islands, in particular”.
If true, that is surely totally unacceptable and undermines Britain’s capacity to lead internationally on sanctions enforcement.
On the shadow tanker fleet, it is good news that the Government secured agreement among 40 leaders at the Blenheim Palace summit on a call for action, and that the UK is taking national action to sanction 43 oil tankers, but is there any sign that this is reducing the flow of Russian oil and gas to markets such as India?
On the use of the proceeds from frozen Russian assets, the G7 have now given their welcome agreement to the extraordinary revenue acceleration mechanism, yielding $50 billion for Ukraine, of which the UK is providing around $3 billion. Speed of disbursement is now vital. Could the Minister tell us when the UK share of that will reach the Ukraine Government, and perhaps what proportion of the US contribution of $20 billion is going to get to Ukraine before—to pick a date at random—21 January 2025? Finally on sanctions, is there any end in prospect to the saga of the frozen funds from the sale of Chelsea Football Club?
Turning briefly to the implications of Russia’s aggression on EU-UK co-operation on defence, our report concluded that co-operation on military support had been more effective than previous experience would have suggested. We urged the Government to do what they could to overcome the delays in British participation in the PESCO military mobility project. We noted that the EU’s protectionist rules governing third country access to the European Defence Fund created a major obstacle to participation, even when our strategic interests clearly point to the closest co-operation. We recommended seeking an arrangement with the European Defence Agency similar to those which the US and Norway have.
I think it is fair to say that the former Government’s response was cautious. The current Government have announced an ambitious security pact with the EU, covering these issues and a wider set of economic security challenges. Of course, the return of Donald Trump makes it all the more urgent to pursue close co-operation with the EU across the range of defence issues.
Could the Minister confirm that the security pact will cover all the issues I have referred to? Will the Government also seek to persuade the EU to look again at the third country rules, which at present create such an obstacle at a time when it is more important than ever to have all of us in Europe working together on effective arrangements for the manufacture of, for example, missiles and ammunition?
On reconstruction, our report concluded that the horrific scale of the damage inflicted by Russia’s aggression on Ukraine means that a massive programme of international assistance is going to be necessary over a long period. With Donald Trump’s arrival, the likelihood is that a large proportion of that bill will fall to European countries. We welcomed the previous Government’s initiative to join the multi-donor co-operation platform and to host the first Ukraine recovery conference in the UK in 2023. We concluded that the UK should go on playing a major role in preparations for the reconstruction period—something we have great national experience of—including in the fight against corruption, and that we should support Ukraine in the reforms needed for it to join the EU, which would be a very significant stabilising factor in European security.
Clearly, reconstruction will be massively expensive. The $50 billion G7 loan is of course a helpful down payment, but the World Bank estimated in February this year that the total could be as high as $486 billion—and we have had another year of relentless destruction since then. Are the Government thinking about how it will be possible to raise sums of that order? Is the issue of the $300 billion of frozen Russian assets still off the table in that context?
Our fourth theme was the impact of the Russian invasion of Ukraine on longer-term co-operation between the UK and the EU on foreign policy. The committee recommended, as it has in the past, that there should be more structured arrangements for co-operation on security and foreign policy between the UK and the EU in the future. I am glad to see that the Prime Minister has clearly listened to the committee’s recommendation and has now proposed regular summits with the President of the Commission. The Foreign Secretary has begun a regular series of meetings with the EU Foreign Affairs Council, which is very welcome. However, there are also clear signs of impatience on the EU side because the Government have not said precisely what they want to achieve in the security pact. Can the Minister tell us what the Government’s timetable is for concluding the pact, which has become even more urgent with the election of Donald Trump?
I will step outside the immediate issues in the committee’s report to comment on the issues that lie directly ahead for Ukraine. As I have said, I strongly welcome the fact that the Ukrainians are now able to use the UK Storm Shadow missiles alongside the ATACMS supplied by the US. I realise that the Government are not avowing that decision, but, as President Zelensky said, the “missiles speak for themselves”. This gives a powerful signal of support to Kyiv and complicates Russia’s military planning. It will not change the course of the war, but it is an important move. It undermines the narrative that Putin had been trying to establish—that it was fine for Russia to rain down Iranian drones and North Korean missiles on Ukraine, but it was a reckless escalation for Ukraine to use western-supplied weapons against legitimate targets in Russia.
However much we in this House all want the Ukrainians to come out with a clear victory from this terrible war, the hard fact is that, even with continued, wholehearted western support, they do not have the combat power necessary to drive the Russians off every metre of Ukrainian territory. The advent of Trump is likely to mean that 2025 will see a ceasefire negotiation. President Zelensky himself accepted that when he said last week that Ukraine
“must do everything so that this war ends next year, through diplomatic means”.
It would therefore be prudent for western capitals, alongside continuing to give staunch support to Ukraine, to begin to do contingency planning on the key principles that should guide western policy if there is to be a negotiation. They should start a discussion on those issues as soon as possible with those around Trump, to convince him that, if he is to come out of a negotiation looking strong, which is what he normally wants to do, he must ensure that Ukraine’s vital interests are safeguarded.
I suggest three principles as a start to that discussion. First, Ukraine must be a full party to any negotiations about its future. Trying to impose a deal agreed between Washington and Moscow would be calamitous for Ukraine and for European security. Secondly, Ukraine must not be obliged to cede sovereignty over territories that are currently occupied by Russia, assuming that there will be a ceasefire with in-place forces. The long-term status of those territories must be left open, as was the case in Korea and Germany. Thirdly, Ukraine must be left free to decide its own security policy. It should not be left in some neutral zone, suspended between East and West. The West should be free to give Ukraine security guarantees as a prelude to it joining NATO and the EU in the longer term.
Noble Lords may well ask what Putin’s incentive would be to agree to such a deal. Here I suggest that Trump’s famous unpredictability might come to our aid. If he were to set out a deal on the lines I outlined, and Putin rejected it, that would be the end of a beautiful friendship. In those circumstances, Trump might well decide that, to look strong, he would have to back Ukraine to the hilt. Putin would have to factor in that possibility anyway, even if it did not eventually happen.
If a ceasefire deal respecting those three principles could be achieved, it would at least offer the prospect of building a strong and free Ukraine closely tied to western institutions. It would leave Putin with no long-term gain from his murderous gamble. I much look forward to the debate and the Minister’s reply.
Baroness Blackstone (Lab)
My Lords, I will repeat some of what the noble Lord, Lord Ricketts, said. He has been a first-class, excellent chairman of the committee. If I repeat his points, it is only to reinforce them.
It is now nearly a year since the committee published its report, and any hopes that the war might have come to an end by now have been dashed. At the weekend, Russia launched a devastating drone and missile attack on Ukraine’s energy grid, affecting many parts of the country and resulting in the need for a nationwide rationing of energy. There are currently no signs of de-escalation, nor any prospects for peace in the near future.
There is a need for close co-operation between the UK and the EU on support for Ukraine in the contexts of both growing Russian aggression and the recent election of Donald Trump. It is still unclear what he will do when he becomes President, but the threat to reduce greatly or even to end the supply of arms to Ukraine must be taken seriously. The committee’s inquiry had, as a backdrop, the possibility of a change of political leadership in the USA and cautioned that a reduction of US support for Ukraine would have implications for both the UK and the EU. It is surely now vital that they plan for this contingency.
The Foreign Secretary’s participation last week in the EU’s Foreign Affairs Council is welcome. In the Statement on Ukraine he made in another place on Tuesday, he listed a number of initiatives that the Government are currently taking, including “non-military support”—for example, boosting the economy of Ukraine in various ways and protecting its power grid. Can the Minister tell the House whether lifting the ban on the deployment of UK-designed Storm Shadow missiles, which have some US components, was discussed with our European allies when the Foreign Secretary met them on Tuesday?
This use becomes possible following President Biden’s decision earlier this week to lift the US ban, apparently influenced by Russian escalation and the use of North Korean troops in the Kursk region. When asked yesterday, the Government said that they would neither confirm nor deny allowing Ukrainian firepower and the launching of long-range missiles into Russia. All the evidence suggests that they were used yesterday, so would it not be better for the Government to clarify this, without necessarily specifying precisely where they were used? The danger of possible Russian retaliation must also be acknowledged.
Like the noble Lord, Lord Ricketts, I turn now to the issue of sanctions, which was considered at length in the committee’s report and to which the Foreign Secretary referred in yesterday’s Statement. The committee was broadly supportive of the collaboration that had taken place with the EU, identifying what it called “pragmatic cooperation”. It said that any divergence in policies, or on sanctions, would create “gaps and loopholes” that would be exploited and would make them make them far less effective. While there was general agreement with the EU on where sanctions should apply, it argued that these policies need to be reviewed regularly, including on countries besides Russia and Belarus.
In their reply to the report, the Government reassured the committee that this was happening, although they rejected the idea of a memorandum of understanding with the EU on a sanctions policy. While the committee was relatively sanguine about international agreement on the focus of sanctions, it mentioned that witnesses had raised questions about implementation. Experts have more recently claimed that there are indeed serious concerns about implementation, and a weak enforcement regime with widespread evasion. Third countries such as the UAE and Turkey are party to sanctions-busting, out of which a great deal of money is being made. UK companies in areas such as insurance and shipping are apparently trading with Russia with impunity. Can the Minister tell the House how many UK companies have been charged with breaking sanctions? There can be little point in the Government extending sanctions, as was announced in Tuesday’s Statement, if enforcement is weak and there is no leadership in addressing the difficult issues it raises. We have not seen any specific examples of the robust action the committee requested in its report.
The committee also drew attention to the use of frozen sanctioned assets—in particular, frozen central bank assets—for the reconstruction of Ukraine. It recognised the importance of being consistent with international law, but the then Foreign Secretary suggested there was a legal route in doing so. Has that been identified? More particularly, the committee was critical of the failure to address the frozen assets arising from the sale of Chelsea Football Club. The noble Lord, Lord Ricketts, has already referred to that, so I will say no more on it.
Lastly, I want to raise the general question of the reconstruction that is needed to help the morale of Ukrainians today and to support the functioning of the Ukrainian economy in the future. It cannot until wait war ends, as the committee made clear. Close co-operation with the EU will also be vital if duplication is to be avoided and efficiency maximised. The Government accepted this in their reply. However, if action is not taken to tackle corruption in Ukraine, reconstruction could be damaged by scandals.
In her reply, I hope the Minister will be able to indicate ways in which the UK is addressing how to improve the justice system through UK aid visits, so that the rule of law is enforced in uprooting corruption. There is a need for institution-building in this area, so that the UK private sector can be confident that it can operate effectively in Ukraine in the future.
I end by simply saying that we now have to plan for the possibility that the US will indeed shirk any responsibility to help Ukraine out of its current predicament.
Lord Tugendhat (Con)
My Lords, unlike the noble Baroness, I was not a member of the committee, so I begin by congratulating the noble Lord, Lord Ricketts, and the other members of the committee on the report they have produced. It has been 10 years since I chaired a committee—the EU External Affairs Sub-committee of the old European Union Committee—that produced a report on Ukraine, and I know what is involved in this matter. I congratulate the members of the committee on the outcome.
I must also say that, as an outsider, I found the committee’s report rather encouraging. It shows the extent to which, when faced with a common threat, the UK, the EU and its member states are able to work together in formulating policy and determining objectives. Of course, the implementation has perhaps not been quite as good as the willingness to co-operate. The spirit is willing but the flesh has been weak so far as sanctions are concerned, although I was struck by what the noble Lord, Lord Ricketts, and the report had to say about the greater success in military co-operation.
However, there are clear limits to what is possible. The noble Lord, Lord Ricketts, mentioned the third-party rules arising out of our non-membership of the European Defence Fund. This is not only serious in itself; as I will point out in a moment, it provides a warning of problems to come. Of course, there is a long history of British reluctance to get involved in European initiatives within NATO, and of European reluctance to see outsiders participating in European projects. But, as the report says, what we have at the moment amounts to protectionism. The committee says:
“Protectionism is not the way to build an efficient defence”
alliance, and nor is it the best way to keep the newly elected President Trump involved in European affairs. What he wants is European countries to operate more effectively, as well as to spend more. It is essential that this obstacle to which the committee refers be overcome.
I also fear that, whether or not that is overcome, similar attitudes could be carried through from defence procurement to the reconstruction of Ukraine, notwithstanding United Kingdom participation in the Multi-agency Donor Coordination Platform and our prominent role in the European Bank for Reconstruction and Development. As the report says, the reconstruction of Ukraine will be a colossal task, and it will also be closely linked to Ukraine’s candidacy for membership of the European Union. This means that it will also be closely linked to that most controversial of all issues within the European Union: its budget, for which, many decades ago, I was at one time the responsible commissioner. The danger is that it will be so difficult for the EU member states to reach agreement on programmes and expenditure among themselves that, when they finally do, it will be even more difficult for agreement to be reached with other donor countries. Against that background, the UK Government must ensure not only that the costs of reconstruction are fairly and proportionately divided, but that UK companies receive an appropriate share of the contracts involved.
Finally, I want to say a word about paragraph 222 of the report, which refers to bringing Ukraine into western institutions. Yes, we and the EU do want to bring Ukraine into western institutions, and Ukraine itself wants to be brought into western institutions, but I would suggest that this should not be an exclusive relationship. Looking to the long term—perhaps, but not necessarily, after Putin has gone—Ukraine should also rebuild its economic and personal links at all levels with Russia. To the extent that the Russian people—I emphasise, the Russian people—see Ukraine as the vanguard of western encroachment into their own historic sphere of influence, it will remain a potential casus belli. To the extent that Ukraine has links with Russia as well as with the West, it could provide a bridge to help bring about improvement in relations between Russia and the West. That might sound at present rather idealistic, but it is very important that Ukraine should be facing east as well as west if it is to have a secure position in the West. When one looks at the historic links of the Ukraine economy with that of Russia, it will also be beneficial in the long run if Ukraine is able to rebuild its relationships with Russia, as well as to become embedded in western institutions.
Baroness Suttie (LD)
My Lords, I too would like to congratulate the noble Lord, Lord Ricketts, on his excellent introduction to this important and highly relevant report. I would also like to congratulate the Secretariat and members of the European Affairs Committee. It was a pleasure to follow the noble Lord, Lord Tugendhat. I served on the EU sub-committee under his chairmanship when the report he referred to was produced several years ago.
The report we are debating today is highly relevant and topical, and we do so against a backdrop of increased tension and an increasingly bleak situation in Ukraine. Like the noble Baroness, Lady Blackstone, I welcome the Foreign Secretary’s Statement this week on Ukraine. Ukraine needs to know that the UK remains a firm and steadfast ally and friend at this time. After more than a thousand days of this truly awful war—and, I should add, it is 4,000 days since the first invasion of Ukraine in 2014—we are now moving into probably the most dangerous time we have seen since the first month of the war, February 2022.
Each winter since Putin launched his illegal invasion of Ukraine, the Ukrainian people have faced new and almost unimaginable challenges. But this winter threatens to be the most severe, with the cynical targeting of power stations leaving so many Ukrainians once again with no power or heating in the freezing winter in the months ahead.
I know that several Ukrainian friends—especially those with young children—are facing the deeply difficult dilemma of whether to stay or leave Ukraine this winter. The psychological impact on young children of constant air raid sirens, drone attacks and periods of no power or heating, as well as the impact on their education, cannot be underestimated. Most Ukrainians feel that it is their patriotic duty to stay, but it is incredibly and increasingly hard for them.
The European Affairs Committee report rightly welcomes that—at least until now—the EU, UK and US have been aligned on sanctions. But the report raises concerns that it has been possible for Russia to circumvent these sanctions, particularly, as was said by the noble Lord, Lord Ricketts, and others, in the energy sector and through the use of shadow tankers. In previous debates on Ukraine, I raised concerns that the sanctions regime has not done enough to damage the Putin war economy. As a Russian acquaintance said to me earlier this year, what the war in Ukraine has shown him is that “Russia does not need Europe”. He said this with some regret but said that in terms of his own business, he had just had to switch to looking towards China.
Given the highly probable shift of US policy on sanctions from January, can the Minister say whether the Government plan to review the current sanctions regime with our EU partners to ensure that they have a more direct impact on the levers of power and the Kremlin’s war economy? Like the noble Lord, Lord Ricketts, I ask the Minister what action the Government are taking now to prevent sanction busting via the British Overseas Territories, not least given the Foreign Secretary’s vocal criticism of the previous Government’s inaction on this matter.
Ahead of this debate, I contacted several Ukrainian friends to ask for their views, particularly on the reconstruction of Ukraine—I refer noble Lords to my register of interests and previous work in the Parliament in Kyiv as well as with the John Smith Trust. The report stressed the importance of giving additional assistance now. This is a view shared by many of my contacts in Ukraine, both in terms of economic assistance and capacity building. In particular, they feel that the UK would be extremely well placed to assist with building capacity in public administration and in helping to further reform the legal system in Ukraine to ensure the rule of law. Both would help with anti-corruption measures and in helping Ukraine in its desire to “build back better”. Targeting assistance to a younger generation of Ukrainians could make a big difference, and I would be grateful for a response on this from the Minister in her concluding remarks.
I recently met a delegation from Lviv. They stressed the importance of reopening Lviv airport and of helping now to reconstruct power stations, as well as constructing new, more environmentally friendly ones. Can the Minister give an update on the Government’s approach to assisting with the Ukrainian energy sector this winter and reopening Lviv airport in particular?
None of us has a crystal ball to know exactly what the highly unpredictable President Trump will do in January next year, but all the indications suggest a move away from continued military support for Ukraine. If this happens, the UK is going to have to work ever closer with our European partners in terms of our national security and defence. I hope this country can take a leadership role in this regard, perhaps through convening a summit on Ukraine with our EU and NATO partners.
Of course we must continue to make the case for the importance of continued military support for Ukraine with our American partners too, but it would be unwise, indeed naive, not to prepare for the worst. As the report rightly says,
“any change in the EU’s approach to foreign and security policy will be bound to have implications for UK national security”.
President Putin revels in creating global chaos. The strategists in the Kremlin will be hoping for the double whammy of withdrawal of US support combined with a fracturing of the until now united EU approach towards Kyiv and the war in Ukraine. As one Ukrainian friend put it to me, “Ukraine is not the goal for Russia but a tool to challenge the global order”. I fear he is absolutely right. The war in Ukraine has a direct impact on us all on this continent of Europe, which is why we must maintain our strength and we must remain united.
Our direct influence on EU thinking might have diminished since Brexit, but our bilateral relations, including through our NATO partners, remain strong. We must do all we can to influence our European partners and to stress the importance of maintaining a united front. To add to the excellent set of principles given by the noble Lord, Lord Ricketts, I emphasise that whatever happens in the months ahead, the guiding principle has to be that only Ukraine has the right to decide on Ukraine’s future.
Lord Godson (Con)
My Lords, I too am grateful to the noble Lord, Lord Ricketts, for affording us the opportunity to discuss the committee’s report of last January. I too welcome this nuanced piece of work, which invalidates the idea that Brexit consigned the UK to a peripheral role in the security of Europe.
I was struck by the report’s implicit and explicit references to the enduring UK influence in the affairs of the continent, long after our departure from the EU. To me at least, this report is an important recognition that Europe is not the EU and the EU is not Europe. Indeed, some years ago I had the pleasure of reviewing the book of the noble Lord, Lord Ricketts, Hard Choices: What Britain Does Next, in the New Statesman—published, of course, before the Russian invasion of Ukraine. I am glad in the context of this report that some of his darkest fears in that book have not been vindicated subsequently. The subtitle is What Britain Does Next; Britain has done a great deal since 2022 in this regard, and it is a good thing that the report that the noble Lord and his fellow committee members have produced has acknowledged that.
Indeed, there are two stories to tell here about the UK’s involvement in Europe since February 2022. Alongside that of UK-EU co-operation, there is also the UK’s hyperactive—there is no other word for it—European policy before and after the Russian invasion. We should note that the UK-Ukraine-Poland trilateral, which provided Kyiv with military aid and training right before the invasion, and we also of course recall the rapid response of the UK-led Joint Expeditionary Force, which convened a leaders’ summit only just before that Russian invasion. That is a record to be proud of.
I also note in chapter 2, paragraph 41, it observes that the UK is
“nimbler and swifter in imposing sanctions”
by virtue of not being tethered to the EU’s unanimity requirement for action. In chapter 2, paragraph 33, one witness concludes that two years of trial and error have left us with a
“very well thought-through and effective legal framework for the imposition of sanctions”—
a fact which rather controverts the too often fashionable fear that post-Brexit Britain has somehow become deficient in the rule of law. Chapter 3, paragraph 117, provides a welcome tribute to how the UK has consistently encouraged Kyiv’s allies, in the words of one witness,
“to push out the boundaries of what is possible”.
The report should also be praised for conceding that the EU is often not the most effective multilateral convenor of Ukraine’s “coalition of the willing”—to use a term of art. As the report notes in chapter 3, paragraphs 118-19, the supply of military aid tends to be orchestrated on a bilateral basis or by the US-led Ramstein group of 57 nations.
Nevertheless, it needs to be said that the committee’s own report in some ways does not, for my taste, reflect the full complexity of the picture, for on occasions it privileges the EU above some more effective forums. It proposes a new
“administrative arrangement with the European Defence Agency”,
despite the testimony from the Polish Minister of Foreign Affairs, Radek Sikorski, that the agency has
“not produced anything of value”
in its 20-year history. The committee also does not amplify Sikorski’s noteworthy suggestion—coming also from one other witness—that the EU-US Trade and Technology Council be expanded to include the UK and others, which of course bears more than a family resemblance to the old CoCom of the Cold War era, which proved to be so effective in that epoch.
There is also the broad consideration of the EU’s increasingly protectionist approach to the defence industry. This inclination endangers our transatlantic weapons and munitions productions and thus risks undermining NATO itself. It is not remotely clear to me how the UK stands to benefit from such a development. How might entry into such an insular industrial fortress have impinged on our freedoms to join admirable arrangements such as AUKUS and the GCAP initiatives, which bring our global influence and military heft to bear on our own behalf, and that of Europe and world security interests? In this connection, will the Minister give the House her reflections on how things have changed since the publication of the report in January and what she sees as the enduring limitations of the EU’s role as described in the committee’s report earlier this year?
Indeed, in this connection, one of the things hanging over the deliberations of this House, as has been stated, is how the report’s recommendations stand up in light of the return of Donald Trump to the White House. This is viewed by some as a reason to align more closely with the EU. Of course, as has been noted, the policy of this Administration is not a done deal, and we must not let perhaps some of our darkest fears turn into self-fulfilling prophecies. The policy of this new Administration is a work in progress, and it is surely for the UK to make the case to the next Administration that Ukraine constitutes a perfect opportunity to showcase its peace through strength concept. Indeed, in Marco Rubio and Michael Waltz, the Secretary of State and National Security Adviser designates, Trump has chosen two of the more prominent NATO-friendly figures in the contemporary US Republican national security firmament.
The squeamishness that we hear about the aspects of the Trump Administration’s apparent approach is not surprising, but we must engage. The Foreign Secretary was perceptive and early money in his outreach to the GOP in the United States, long before the demise of the Biden Administration, and he now states that he long predicted that there would be a Trump victory in the United States. The policy approach should surely be that of the incoming National Security Adviser, who once said, in a different time and a very different context, that it is our job in this country to get up the fundament of the White House—that is not the phrase Jonathan Powell used, but I decline to use the precise words that he used in another place and another time. Geopolitics is not for the squeamish. We yet have an opportunity to help tilt the balance in an Atlanticist direction in the new Washington.
Lord Hannay of Chiswick (CB)
My Lords, I declare an interest as back in the mists of time, when this report, so excellently introduced by my noble friend Lord Ricketts, was published, I was a member of the European Affairs Committee. On this occasion, the delay inadvertently makes the report even more topical, as the impending change of Administration in the US brings us ever closer to important decisions that will crucially affect Ukraine’s and our own future security and prosperity. These are decisions over which we must always remember that we in the UK do not have a determinant say.
The self-image in this country and in this House of our role in backing Ukraine since Russia’s 2022 invasion is rightly positive, and successive Governments, up to and including the present one, rightly get credit for that, but it is not the whole story. In 2014, when Russia seized the Crimea and parts the Donbas by force, we were not so forthright. By standing aside from the Normandy group—France, Germany, Russia and Ukraine—which shaped the two ill-fated and ill-conceived Minsk agreements, which Russia then ignored and trashed, we committed an error of judgment in my view, and we must not repeat that error.
While I am in the process of mentioning sins of omission, the committee’s report dealt with the issue of sanctions in detail, and I found the previous Government’s response to that report pretty unconvincing, frankly. The concerns have been considerably increased by recent reporting in the press of ways in which the overseas territories of the UK are being used as loopholes for evading sanctions. I hope that when the Minister replies to this debate she will give us an account of how the meetings this week with the leaders of the overseas territories have done something—a lot, I hope—to close those loopholes.
We and Ukraine now face critical choices, not only on the battlefield and in the supply of weaponry but in geopolitics too in relation to Ukraine’s territorial integrity and sovereignty, which was guaranteed by Russia in the Budapest memorandum when Ukraine gave up its nuclear weapons and was subsequently junked by it, and in relation to Ukraine’s bid for NATO membership and to join the EU. Any geographical settlement based on Ukraine ceding territory and citizens to a neighbour that has seized them by force in disregard of Russia’s international obligations, including the UN charter itself, is necessarily precarious and risks being reopened in the future. Think only of Alsace and Lorraine, where many millions died before a final determination was achieved. Ukraine’s place in NATO could perhaps have been discussed prior to Russia’s aggression, but now, when its permanent exclusion from membership can be achieved only at gunpoint, is that still so? When the hard fact is that any guarantee given by others, ourselves included, will necessarily fall short of the commitment to collective defence in Article 5 of the NATO treaty, there is a lack of credibility there that falls short of what is needed if Russia is to be effectively deterred in the future.
As to EU membership, as a non-member we no longer have any say over that, but it is surely clear enough that Ukraine’s EU membership is in our national interest too, and I suggest that we should not hesitate to say so. In any case, as a signatory of our trade and co-operation agreement with the European Union, and hopefully the new security pact and reset which the Government aim to achieve, we will be a party to those with Ukraine too. Should we not be travelling with them every step of the way, together with our EU partners?
Speculation about which way the unpredictable President-elect Trump will lean on all these issues is probably fruitless. What is essential is that we discuss in depth with the incoming Administration their thinking as it emerges with the aim of ensuring a strengthened and reinforced overall European contribution.
Baroness Hayter of Kentish Town (Lab)
My Lords, it is always a pleasure to follow the noble Lord, Lord Hannay, and I very much look forward to the wise words of the noble Lord, Lord Levene, who is something of an expert of defence. Unbeknown to him, he was just a couple of years behind my husband at the City of London School—it produced at least two fine alumni.
While we meet on the 1,002nd day of war, as my noble friend Lord Spellar said in his maiden speech and as the noble Baroness, Lady Suttie, said today, there have been 10 years of war and of Russian incursion into Ukraine. Sadly, despite regular protests against Israeli attacks on Gaza, the world seems to have forgotten the daily Russian military attacks on Ukraine’s civilian infrastructure and its people.
Two things followed that invasion: it fast-tracked Sweden and Finland into NATO, and it made the EU and UK collaborate on an immediate problem. Neither are things that Putin can have wanted. The EU is now more focused on defence: it has a defence commissioner and a special fund. It knows it will have to do more, despite backtracking from some, such as Slovakia, Hungary and Bulgaria, which will make unanimity difficult.
Since February 2020 the international stage has, of course, changed further: not just in the Middle East, where we have seen Iran flex its muscles—its support for Russia’s war adding another threat to Europe’s security—but, as others have said, with the election of Donald Trump, his tilt at China and his threatened tariffs, and the hostility to the EU that he shares with Putin. All those things challenge our assumptions about trade, Europe and Ukraine.
While the whole world—particularly Ukrainians—desires peace, Zelensky has said on the radio that he wants to do everything so that this war ends next year and ends through diplomatic means. But that does not mean on any terms. It is vital that the EU and UK hold to the view, as the noble Baroness, Lady Suttie, said, that no other country has the authority to negotiate away the territory of Ukraine. That is even more key now because Trump might seek a deal with Russia, even if it means leaving Putin with most of what he gained through aggression—a price that Trump, but not the rest of the allies, might be willing to pay.
If we take Trump at face value, Europe will have to carry more of the burden of supplying Ukraine. This is challenging at a time when Germany, the single biggest donor after the US, is in full election mode, and with Scholz unwilling to allow the use of Taurus missiles. Trump’s obsession with the US trade imbalance with the EU impacts his attitude to Europe’s approach to Ukraine and has implications for our relationships with the EU well beyond anything imagined at the time of Brexit.
Our Government rightly want to reset our relationship with the EU, and to include defence in that. But this comes at a time when the President-elect’s aides hint at excusing the UK from the tariff war that Trump seems to want to wage. That puts us in a difficult position, given our closeness to the US, its significance as a trading partner and our reliance on it in the nuclear area and through Five Eyes. There is certainly trouble ahead in steering this ship of state.
For the moment, rightly acknowledging that the defence of the UK starts in Ukraine, the Government have continued their welcome support for Ukraine and said that this remains “ironclad”—as indeed has the G7. Its leaders’ communiqué this week reaffirmed their unwavering support for Ukraine as long as it takes, and their contribution to its fight for sovereignty, freedom, independence, territorial integrity and reconstruction.
One immediate task for us is to ensure that our population remains staunchly supportive of our continued role. At the level of parliaments, last month in Budapest, COSAC—the conclave of parliamentary European affairs committees—strongly and unequivocally reiterated its condemnation of Russia’s unprovoked illegal invasion, its war of aggression and its occupation and annexation of parts of Ukraine, which constitute a flagrant violation of the UN Charter. COSAC renewed its full, unwavering support for the independence, sovereignty and territorial integrity of Ukraine within internationally recognised borders, along with military and diplomatic support for as long as it takes and as intensely as needed.
That is great from the parliamentarians, but people, as well as parliamentarians, need to be kept onside and engaged. Even after the war, both our people and the UK, working with the EU, will face another challenge—helping to rebuild that shattered land. That means social provision, education, civil society and its future, which depends on its children. As Coram International points out, Ukraine has particular challenges here, with more children in care than any other European nation, and with many orphans and displaced children spread around Europe. Reintegrating those children will be an enormous challenge. If the war is not to produce another scarred post-conflict generation, we and the EU should work together on programmes aimed at people as well as buildings. The EU did it before, after the fall of the Berlin Wall. This is a time for us to rise to that challenge.
Ukraine never wanted to be the fulcrum in our relations with the EU, but it has shown that this continent cannot be constrained by political structures, assumptions and bureaucracy. It must be fleet of foot, united in purpose and committed to peace, freedom and the rule of law. As we go forward, Europe needs a strengthened common purpose. I trust the UK will play a full role in fulfilling that.
Lord Risby (Con)
My Lords, I unhesitatingly congratulate the European Affairs Committee on so comprehensively exploring the subject matter at hand. Yet events have indeed moved on quickly in the intervening months, and the situation in Ukraine has considerably worsened. Uncertainty around the world and at the strategic outlook of the USA has grown appreciably since the election there. Inevitably, the shape of American defence policy has been pulled towards the western Pacific. But, with Ukraine under serious pressure from the renewed efforts by Russia, aided by China, Iran and North Korea, it is appropriate that we look at the future of UK-EU relations in the overall context of Euro-Atlantic security.
I welcome the improvement in relations between ourselves and the EU, to our mutual benefit. I had the personal pleasure and privilege in the other place of taking through the legislation for the Opposition for the enlargement of the EU. I mention this because, during the passage of that legislation, a remarkable individual, the then Polish ambassador, presciently said to me, several times, that it was most important to give Ukraine a European trajectory: if not, its sizeable neighbour would inevitably interfere. In fairness to the EU, some progress was made, but some in successive Ukrainian Governments did not adequately adjust to the highest standards that the EU, quite rightly, demanded.
In this respect I pay tribute to the noble Lord, Lord Macdonald of River Glaven, who voluntarily wrote a comprehensive report on judicial reform and court structures in Ukraine after a number of visits. The situation is of course different today and I hope that, in due course, the European trajectory will be reoffered as standards improve. One matter in the report that needs firm acknowledgement is the degree to which there have been differences across Europe about help for Ukraine. A very small number of countries have opposed support for Ukraine; others have been erratic or lethargic. It is noteworthy that the newer members of NATO are, in many instances, doing so much to uphold security, influenced by their memory of the grim reality of Kremlin control.
The 1,800-mile line between Norway and the Arctic to Romania and the Black Sea has been established as defence against Russian aggression. Above all, Poland has dramatically increased military spending and capability and has just commenced its 250-mile, $2.5 billion border wall with Russia and Belarus, with systems powered by artificial intelligence. It has also acquired 800 American and South Korean cruise missiles, with a range of up to 560 miles. There are equally new defence arrangements in Lithuania and Finland, among others. These are, of course, EU countries, but we can be grateful that this, in effect, improves our security against an aggressive country so hostile to us.
The report outlines the successes and failures of the sanctions regimes rolled out against Russia, and, although there has been an impressive degree of unity across Europe in co-ordinating the introduction of fresh sanctions packages, this has not been matched by adequate enforcement. Exports from European countries to Russia’s neighbours have greatly increased. We should be in no doubt that this is fuelled by sanctions evasion, which must be closed off as it bolsters the Russian economy.
The very prospect of a new Administration in Washington has spurred on increased defence spending in a number of European countries, yet a country thousands of miles away, particularly preoccupied by the Asia-Pacific region, continues to supply the bulk of NATO’s defence expenditure. That is why we must work with our European partners to increase assistance, directly or indirectly, financially and militarily to Ukraine.
I welcome the report’s recommendations on encouraging private direct finance and investment to aid the recovery of Ukraine, a country with immense economic potential, but we must wield our own financial know-how to unlock that potential, and strong and direct government support demands that. The work of the EBRD and other groups is to be admired, but surely this is the time to advance a clear spread of British initiatives, and indeed Lviv airport offers such a clear possibility. The French Government have promoted investment in Ukraine, offering insurance to French businesses. I invite the Minister to look carefully at that French initiative and examine its efficacy. I also recommend to the Minister examining how key areas can be mapped specifically for investment. Businesses in Ukraine that I have spoken to, even large ones, find it extremely difficult to form partnerships with British companies because of the restrictive response of British banks. This is not currently a virtuous circle.
To conclude, just as we took the lead militarily and diplomatically, we must now lead the charge in preparing for the reconstruction and renewal that may be coming all too soon and persuade our EU partners to do so assertively as well.
Lord Levene of Portsoken (CB) (Valedictory)
My Lords, I am most grateful to the noble Lord, Lord Ricketts, for initiating this debate on the impact of Russia’s invasion of Ukraine, as it emphasises to us the debt that we owe to the gallant men and women of our Armed Forces for keeping us safe from such horrors. It underlines the criticality of ensuring that they are equipped with the very best equipment available.
It is, as always, a great privilege to be able to address your Lordships in this House, particularly today as it is the last opportunity on which I will be able to do so. Having said that, I am aware of the fact that my recent spoken contributions have been few and far between, primarily because of limited mobility. Nevertheless, that has not impaired my ability to offer what advice and assistance I can to the Ministry of Defence on what, should I be a contestant on “Mastermind”, would be my chosen subject of defence procurement.
It is, amazingly, some 40 years since I was approached by the noble Lord, Lord Heseltine, to offer assistance to him as the newly appointed Defence Secretary to endeavour to improve our record in the procurement area. That encompassed what eventually became the successful contractorisation of the royal dockyards, and then far more in the management of defence procurement and other aspects of activities within the Ministry of Defence. Some of that advice may well have hit the right note, since I note with some pride that there are now within the MoD a series of recommendations that have been designated as Levene rules.
Most recently, last year the House of Commons Defence Committee commissioned an inquiry into the UK’s defence procurement system because of wide-ranging concerns as to its efficacy. I gave evidence to that inquiry that is reflected in the committee’s report, which was published in July last year, and I hope that those recommendations will indeed be followed through—something that I am sure will be under consideration by the wider defence review under the chairmanship of the noble Lord, Lord Robertson.
If I tried to summarise those recommendations, I would say that I regard defence procurement as being quintessentially a commercial operation. The more that ability in the commercial sphere is predominant in the thinking of the staff of DE&S, the more successful the outcome is likely to be. I shall explain that, when I held the then position of Chief of Defence Procurement, I was the accounting officer for Vote 2, which is the equipment vote of the Ministry of Defence, and the loss of that direct responsibility by the present chief executive of DE&S represented a critical diminution of his ability to manage. I was therefore pleased to see that the recent report of the HCDC to Parliament recommended that that responsibility should be returned to the chief executive.
I shall comment on the relative interests and responsibilities between the defence industry, the Ministry of Defence and the Armed Forces. There is no doubt in my mind that the defence industry, combined with the gallant members of the Armed Forces and the MoD civilian staff who work with them, both do their very best to obtain the best results. However, this is where we come to the crunch: although they may be working in tandem, their primary drivers will necessarily be on opposite sides of the table. As much as the MoD staff in DE&S are pursuing their role, their opposite numbers in the defence industry may, for obvious reasons, be driven by a different imperative.
When I was in office in the MoD, my watchwords were “competition”—or, as my critics liked to call it, “confrontation”—and “value for money”, which I explained as the golden rule, meaning that those who have the gold make the rules. At the end of my term after six years, these drivers produced a result whereby the verdict of the Public Accounts Committee was that we had fulfilled its remit of value for money. I greatly hope that, with the excellent staff, both military and civilian, who have that responsibility today, we may once again fulfil to the utmost the outcome that we were tasked to achieve, and which was clearly spelled out to me by the Prime Minister, Margaret Thatcher, in her typical forceful manner when she said:
“Your job is to obtain the best possible equipment for the Armed Forces on the best possible terms full stop. PS: Your job is not to keep the UK defence industry in the manner to which it has become accustomed”.
For that reason, I do not believe there is a need for a defence industrial policy. The defence industry in this country is made up of some very successful and resilient companies. They are more than capable of looking after themselves without having someone hold their hand.
On taking my leave from your Lordships in this House, I say again what a privilege it is to have served here. I thank all noble Lords and noble Baronesses, who have always treated me with the greatest kindness and friendship, in the same way as the outstanding staff of this building, in whatever post, to all of whom we owe a great debt of gratitude.
Baroness Helic (Con)
My Lords, it is a privilege to follow the noble Lord’s valedictory speech outlining a remarkable journey from transforming United Scientific to leading Lloyd’s of London and serving in government in such a distinguished way. The noble Lord’s contributions to business, public service and the City of London have been truly exceptional. I hope he will not mind me saying that, when I consulted his biography, I thought I was reading a perfect Hollywood script of a businessman who has done it all. I am grateful to have had the opportunity to follow his words today.
I welcome this debate, the report and its recommendations, and I congratulate the noble Lord, Lord Ricketts, and the members of the committee. More than 30 years ago, crimes against humanity and genocide were committed in the country of my birth, Bosnia-Herzegovina. At the time, and until recently, I hoped it would never happen anywhere else again, not in Europe or elsewhere. Yet today, after more than 1,000 days of the most recent aggression, the unprovoked and illegal full-scale Russian invasion of Ukraine, such horrors are once again unfolding in Europe and beyond, in places like Sudan and Gaza.
Since the invasion, at least 16 children per week have been killed or injured. Sexual violence is once again being used as a weapon of war against Ukrainian women and girls. The risk of another Bucha intensifies with every new report of Russian advances. There are reports of serious challenges with the Ukrainian front line and Russia’s territorial gains. Consistent attacks on critical infrastructure are well-known tactics that Russia has deployed in each and every theatre it has fought in.
This demands a sober response. Unity of and with our friends on the continent and across the Atlantic is essential. I therefore welcome the Foreign Secretary’s clarity that:
“UK security is indivisible from European security”,
and the ironclad support for Ukraine from His Majesty’s Government. But the question we should always ask ourselves is: what more can be done?
First, we should work with the European Union to impose tougher and more extensive sanctions on Russia. With that in mind, does the Minister agree that we should work with the EU to explore further seizures of Russian assets, tighten currency restrictions and not neglect sanction-busting third-party states, which have so successfully supported Russia over the last 1,000 days?
Secondly, we should use this opportunity to genuinely reset our relationship with the European Union. I therefore welcome the calls for co-operation with PESCO, the European defence fund and the European Defence Agency. The lack of an institutional framework and regulatory divergence are fundamental problems, but we have other problems that go beyond that; the loss of trust on both sides is at the heart of the issue. We must work towards rebuilding it.
A wide-ranging and legally binding UK and EU defence pact is a perfect opportunity to fill the gaps and rebuild relations. The only way to prevent another Ukraine and to help this Ukraine is to invest in collective deterrence. Increased and consistent funding for the Armed Forces and Diplomatic Service is not a luxury; it is a necessity. Working together is the only way forward.
Thirdly, I would like to step away from Ukraine for a moment, because there is a region the report sadly did not mention or reflect on: the western Balkans, where Russia has continued its damaging, malign influence and spread of disinformation. The foundation of peace and prosperity is deterrence, not appeasement and neglect. That applies to Ukraine as much as to the western Balkans and vice versa. I therefore welcome His Majesty’s Government’s renewed commitment to the region, but we must go further.
We must build on this by working more closely with the EU and partners—I hope the United States as well—to promote capacity building, engage in joint exercises and conduct training missions across the region. This is in our interest. Were there to be a collapse of security and renewed instability in the western Balkans, the illegal migrant route would be wide open. The noble Lord, Lord Coaker, recently visited Bosnia. Can the noble Baroness the Minister let us know his assessment of the strength and capability of the EUFOR deterrent there and the need for a UK role in strengthening Operation Althea? Additionally, has any thought been given to replicating the Joint Expeditionary Force model, which has been such a success in northern Europe, in the Balkans?
Fourthly, I commend the report for its focus on winning the peace. We must be cautious about a Dayton-style agreement between Ukraine and Russia. Incidentally, today it is 29 years since that agreement was signed. While it brought peace, it also created an unworkable institutional system in Bosnia-Herzegovina, easily exploited by secessionists and their enablers. If so-called autonomous regions were to be established in Ukraine to appease Russia and satisfy secessionists, that would be a complete disaster. To do so would be to reward the aggressor and trust it with the post-war power-sharing arrangements. This would entrench corruption, embolden strongmen and autocrats and encourage adversaries worldwide. It would betray the Ukrainians who have lost their lives for their nation and for their sovereignty.
This is all, of course, up to the Ukrainians. They must never feel pressure from any of their partners, allies or friends to agree to or settle on an unjust peace. We have no right to trade in their territory, and I hope that we never see that. Ukraine will outlive Putin and anyone else who comes after him. But its cities, schools and hospitals will need to be rebuilt. The people of Ukraine, who have been fighting so admirably and valiantly, will need to know that this scenario will not be repeated in the future. They need to feel secure and safe.
Much can be learned from the past and from other theatres. The international community must come together to foster reconciliation and prevent another outbreak of violence. The use of tribunals and commissions must be introduced to hold perpetrators accountable. This method worked elsewhere; it should work in Ukraine too.
Finally, as the second Trump Administration approaches, we ought to be cautious but not despondent. We ought to embrace the return of peace through strength by raising our own defence spending and our overall capabilities. I hope, therefore, that we can use this moment to rebuild our relationship with our friends and partners on the continent and strengthen it with the United States across the Atlantic, as we stand with Ukraine in her finest and most difficult hour.
Lord Alderdice (LD)
My Lords, I start my comments by identifying with the tribute and appreciation paid by the noble Baroness, Lady Helic, to the noble Lord, Lord Levene of Portsoken. He has been a great public servant, and that is the best that can be said of any of us in your Lordships’ House. I also congratulate the noble Lord, Lord Ricketts, and his impressively experienced committee and welcome this report as a thoughtful and informed contribution to a crucial conversation about relations with our nearest neighbours in the context of the Russia-Ukraine war. However, as he and others have rightly said, the situation has moved on considerably since the completion of the report, and even in the past couple of days.
I am not sanguine about sanctions, the defence capacity of the EU and a geopolitical transition that is disadvantageous for the UK. Paragraph 86 of the report says that that one of the witnesses noted
“that sanctions are a coercive measure, and their primary aim is to change behaviour”.
In paragraph 104, the Foreign Secretary of the time, the noble Lord, Lord Cameron of Chipping Norton, is noted as having suggested
“that the arrangements for cooperation between the UK, the EU and other allies on sanctions … have been effective in responding to the crisis in Ukraine”.
One measure of effectiveness is how well the UK and the EU have co-operated on developing a sanctions regime. There has been some progress, although in response to the acute crisis of a war it seems to go at a rather sluggish pace more suited to a time of peace. A different measure of effectiveness would be how far it has modified Russian behaviour. If the purpose was to bring the war to an end in Ukraine’s favour, it seems that sanctions have not been very effective, but they have deepened the global division between the G7 and our other allies and the growing community of BRICS and their allies. The global economic landscape has shifted dramatically in recent years. In 1992 the G7 accounted for some 45% of global GDP against the BRICS countries’ less than 17%. However, by 2023, the BRICS bloc accounted for 37% of global GDP, compared to the G7’s 29%. This is not a development likely to impact President Putin’s behaviour in ways that are helpful to us and Ukraine.
On the more immediate defence issues, the picture is perhaps even more troubling. As noted in paragraph 117, we can take some pride that the UK has been important in
“normalising the provision of certain weapons systems early on”,
pushing out
“the boundaries of what is possible”
and providing
“some leadership in allowing a debate to be had about particular weapons systems”.
While eventually and belatedly President Biden has permitted ATACMS to be used directly in Russian territory against Russian aggression, our German friends remain resistant to provide the Taurus missiles that could make a significant difference.
The report points out that the EU, with its population and resources, ought to have the potential to produce and sustain a substantial defence against Russian aggression. However, even after years of our US ally—and some of us in this House—warning of the imperative for Europe to shoulder the burden of its own defence, there is an almost universal recognition that the EU is not a sufficient defence pillar, as evidenced by the PESCO initiative, for example, being so slow to get up and running despite having been on the agenda for years.
In truth, our defence at this point remains dependent not on our EU relations but on NATO. Without an enthusiastically committed US pillar to NATO, we would not be able to sustain the resourcing for Ukraine and, as the report says, Europe is
“lagging behind Russia’s ongoing efforts to prepare and provide for the long war that is probably ahead of us”.
Concerns about the incoming Trump presidency and a likely
“dramatic change of US policy”
have resulted in many meetings and press column inches in Europe, but they do not yet seem to have galvanised the EU into sufficient production and action, and while the UK has taken the lead in some senses, recent reports about £0.5 billion of savings being demanded by the Treasury send the wrong signal to Russia and her allies. It all seems to show a lack of appreciation of the gravity of the situation we face, quite possibly for much of the lifetime of those participating in this debate. I ask the Minister to clarify for us as much as she can what the situation is with these reports of cuts.
I have not said anything about reconstruction because I cannot see how Governments, never mind the private sector, can be persuaded to espouse in practice the injunction in paragraph 192 of the report that:
“Reconstruction cannot wait until the war has finished”.
Many will take the view that it is unwise to spend resources on reconstruction that will be destroyed, rather than on the weapons needed to bring the war to a satisfactory end. In addition, as noted in paragraph 215, reconstruction is expected to be linked closely to Ukraine’s candidacy for EU membership, and it is difficult to see how this country is able to do much to facilitate this long-term ambition for Ukraine when we have so recently departed the EU ourselves and are not at the table. Perhaps even more significantly, our departure hardly makes us the best people to recommend and facilitate Ukraine’s entry into the EU.
In any case, as the report says, NATO is the critical actor in providing Ukraine with long-term security, not so much the EU, and that should perhaps be our focus from a security and indeed a foreign policy perspective. NATO membership is more likely to be the solution to the defence of Ukraine and will ultimately provide the context for its reconstruction, as the EU remains divided over aspects of its response to the conflict, not least the impact of the decisions of Hungary and Slovakia.
More widely, the EU’s problems in establishing a clear agreed geopolitical role, whether in response to the conflict in Israel, Gaza and the wider Middle East or relations with China, reflect additional divisions between EU member states compared to their response to the Russian invasion of Ukraine. At this stage in the Russia-Ukraine war, one could have hoped for and expected a more impressive and impactful response from our relationship with the EU. I am disappointed that we still seem to await such a development and I look to the Minister to give us some encouragement that we can expect more in the upcoming year.
Lord Balfe (Con)
My Lords, I thank the noble Lord, Lord Ricketts, for this report and the noble Lord, Lord Levene, for his valedictory speech. I am sure that he has contributed much to the House and will continue after he leaves us to make a distinguished contribution to public life.
I have reminded this House on many occasions that you can rewrite your history but you cannot do much about your geography. That is part of the problem here. The fact of the matter is that this Parliament on all sides has been very silent about what we are actually doing. We have not said, as we should have said, to the pensioners of Britain, that their winter fuel payment is exactly the same sum of money that we are sending to the Ukraine. We have not levelled with the British population at all.
I went to the Ukraine many times between about 1998 and 2014. I gave up in 2014, because it was evident to me that Ukraine was then going to fall apart. It was never a single country; it was always the country of the Molotov-Ribbentrop pact, which we should remember was added to western Ukraine and confirmed at the Crimea conference as belonging to Ukraine, which was of course seen as part of the Soviet Union.
It pains me to say so but, if you look back in history, you can see that sanctions have never worked. They did not work in Abyssinia, and they have not worked since. I had an email yesterday—many noble Lords may have had it—from a group called Spotlight on Corruption. It was not about the Ukraine, which is pretty corrupt; it was about Britain. It says:
“Weak enforcement has long been the Achilles’ heel of the UK’s fight against economic crime”.
It says that
“the powers available to UK enforcement authorities are stronger”
but court challenges to UK sanctions have so far failed and criminal and civil enforcement has been weak.
I am not surprised, in a way. If people cast their minds away from the dancing in Samoa to the actual conference in Kazan, and the Russian group, they will see that sanctions are not working. I have Russian friends—not people in high places, but people who live in cities in Russia. They will tell you, “We’ve got round the sanctions. Yes, it’s difficult and we’ve had to make substitutions”. As one of them said, “Ikea has gone, but my uncle has managed to take over the factory, and we now have a Russian Ikea in our family”. One advantage, of course, of the collapse of communism is that capitalism has moved in to fill the gap that sanctions have caused.
We have made no attempt to discover what the real, underlying problems are. I was in Crimea before it was taken over. I was in Donetsk, Luhansk and Mariupol, and it was clear that, when the Ukrainian Government decided to outlaw the Russian language as a means of communication in schools they were going to annoy a lot of people, to put it mildly. Of course, one difficulty with Viktor Orbán is that Transcarpathia, which is part of the Ukraine, used to be part of the Austro-Hungarian empire, and used to have Hungarian schools there—and they were suddenly told that they could no longer use the Hungarian language. That is just glossed over; it is not reported or looked at. I am not in the least surprised that sanctions have not worked.
A new officer in the Trump Administration, Tulsi Gabbard, has said that the United States provoked the Russians in Ukraine. That is undoubtedly true. There was a lady from the State Department, Victoria Nuland, who spent years doing just that. Of course, Ukraine must be fully represented in any peace negotiations, because we do not want a “stab in the back” philosophy to grow up. Ukraine has to be there and has to accept whatever is negotiated.
From time to time, President Zelensky has demonstrated a willingness to do this, but he has been bullied and pushed around, particularly by the United States and to a lesser extent by us. The Ukraine must be part of the negotiation. It must be at the table and accept the outcome, but I am not sure that outcome is exactly what our foreign policy supremos have been driving at for the last few years. We need another look at this.
Lord Liddle (Lab)
My Lords, first, I pay tribute to the noble Lord, Lord Levene, for his decades of very distinguished public service. We all owe him a great deal for what he has done. Secondly, it was a great pleasure to serve on the European Affairs Committee under the chairmanship of the noble Lord, Lord Ricketts. He was a brilliant chairman but greatly assisted by a highly capable team of staff to whom we owe a lot.
We are in a pretty gloomy place at the moment. I often reflect on how different it is from the optimism of the late 1990s, when we thought that democracy was going to spread across the world in a victorious way. My noble friend Lord Robertson of Port Ellen as Secretary-General of NATO was welcoming the Russian top brass into NATO and the accords were agreed for co-operation with Russia. I also remember, when I worked in No. 10, my Prime Minister’s real optimism about the future when Vladimir Putin took over as Russian President and his intense attempts to engage him in co-operation on the challenges facing the world then. It is a very difficult time now. The invasion of Ukraine by Russia was shocking and now we have President Trump again in the White House. To those who think, “Oh, well, it might be all right”, it might be all right, but the fact is that the Republican Party has already contributed to the great weakening of Ukraine’s position by delaying US aid to Ukraine for some six months in Congress. We should not forget that. We are in a bad way.
Let us think about what really matters for the future. First, even if there is some agreement with Putin next year, as long as he or someone else like him is there, he is going to remain a great threat to us in Europe and we have to resist that threat with all the power we can. This will be the big challenge for UK foreign and defence policy in the years ahead. Defence spending is going to have to rise, and that is going to create great difficulties for taxation and public spending, but it must. As part of our resistance to imperial Russia, as I think it now is, we have to get much better at defence, particularly at defence procurement, and we need to have much stronger collaboration with our allies and partners.
We should be open-minded about the European Union’s efforts to make this process more efficient. Wherever possible, we should co-operate. The old argument was that NATO was the thing, and European defence got in the way of NATO. I think that, in this present situation, the argument is the other way around. If we are to save NATO with the Americans, Europe has to act collectively to convince President Trump that he should continue to back us.
I favour a single market in defence equipment, which there is not at the moment. The UK should try to be part of it, even if we are still outside the EU. We have to take more responsibility, which requires a much closer relationship with the EU. I am very encouraged by the way our new Prime Minister Keir Starmer is pursuing a new security deal with the EU. That is absolutely essential and will put us in a good position for the future.
Of course, I think we should treat Donald Trump seriously. We have to work with him and hope that we can influence him—although I think that, too often in the past, Britain has exaggerated its influence in Washington. He wants, apparently, to do a deal with Putin on Ukraine. We have to persuade him that it should be a deal that is fair to Ukraine, and he has to recognise that Ukraine’s central ambition is to be part of the European Union. Its European vocation is driving those soldiers to resist the Russian attacks. I think we can play our best part in this by rediscovering our own European vocation.
Lord Stirrup (CB)
My Lords, I congratulate the noble Lord, Lord Levene of Portsoken, not just on his thoughtful valedictory speech but on his outstanding contribution to your Lordships’ House over so many years, and of course to the defence of the realm for such a long period as well.
The report on the UK-EU relationship that we are debating today is titled The Ukraine Effect but, as we have heard many times this afternoon, it should now perhaps be called “The Ukraine and Trump effect”, since the result of the US presidential election has thrown the issues raised by the report into even sharper relief. The Russian war in Ukraine has finally opened the eyes of many who, for so long, were oblivious or blind to the threat that Putin poses to the wider safety and security of Europe. Now, the imminent return of President Trump to the White House has thrown into doubt the degree of American military power that might be available for the defence of this continent. Even the less contentious members of the future Trump Administration are very much focused on China and are looking to direct an even greater proportion of their national effort towards the Asia-Pacific region. The more contentious nominees regard the European members of NATO as little more than freeloaders.
The obvious—and by no means new—conclusion is that Europe must do much more to deter aggression and, if necessary, to defend itself. We need a far stronger European pillar within NATO, and we need it quickly. In particular, European nations must now look very carefully at how they might provide more of the strategic capabilities for which we have traditionally been overreliant on the US.
President Macron has talked about the need for the EU to achieve strategic autonomy. That seems to me overambitious, at least in the short term, but there are a number of important military capabilities where European nations need to make a greater contribution and where individual national efforts alone are unlikely to be sufficient—where co-operative efforts will be required. These include the exploitation of space; the provision of command, control, communication, intelligence, surveillance and reconnaissance systems; more extensive defensive and offensive capabilities in the cyber domain; and a much more comprehensive approach to cognitive warfare in the round. These are all areas where the UK has considerable expertise and can make a significant contribution to, or even lead, efforts to improve European capabilities.
For example, Scotland is one of the only places in the world which has an end-to-end development chain for small satellites. They can be designed and built there, and launched into polar orbit from SaxaVord spaceport. We also have 53% of Europe’s surveillance UAVs, 42% of its airborne early-warning and control aircraft and 38% of its intelligence aircraft. Our cyber capabilities are extensive and we have the potential to be a force in the developing field of AI. We also have significant capability and expertise in the application of soft power, so we have much to offer.
But if we are to work more co-operatively on such strategic defence programmes within Europe, we must have effective mechanisms for achieving this. We must be able to contribute jointly with partners to the formulation of policies and the development of strategic direction. As the report makes clear, however, existing EU processes and mechanisms make it extremely difficult, if not impossible, for third-party nations to play a leading role in its work or influence its direction in any substantial way. Although we should seek to change this, I rather doubt that the EU would be prepared to make an exception for the UK, in which case one potential solution might be to develop new mechanisms outside the existing systems, where the UK’s participation could be built in from the outset. This might apply particularly to areas where we are trying to develop a new field, rather than expand an existing one: cognitive warfare springs to mind.
Failing that, we would have to look for co-operative arrangements that fall outside the EU entirely. Perhaps a distinct European arrangement under a NATO umbrella might be one way forward. The European Commission tends to be protective of its turf and might not look kindly on such ideas, but the scale and influence of the threat ought to outweigh such bureaucratic considerations. Can the Minister confirm that the Government will explore all avenues and innovative ideas to resolve this issue?
There is, however, another complication. Our Five Eyes intelligence arrangement, our other intelligence programmes with the US and our engagement in projects such as AUKUS could create some tension between the needs of our confidential undertakings with the US and greater European security development. If America is serious about Europe doing more to defend itself, there is surely sufficient incentive to find solutions to such challenges, but none of this will be possible without the necessary funding.
Setting out grand aspirations and developing effective mechanisms without providing the necessary resources would be hollow posturing—just so much hot air. It would certainly not persuade President Trump that we were shouldering our share of the security burden, nor would it do much to deter Putin from his programme of aggression. Given the scale, immediacy and seriousness of the challenge, European nations, including the UK, will need to invest 3% of GDP and upwards in defence if they are to meet the needs of such a changed and perilous international situation.
I see no sign that many Governments within Europe, and I include our own, are prepared to acknowledge this. Given the undoubted economic challenges they face, they are making some very modest increases in defence expenditure and hoping that the problem will go away. Well, it will not. Without the necessary expenditure, the strategic capabilities we need within Europe will not be developed. President Trump will continue to believe that the US defence budget is being used to permit greater European spending on social programmes, and NATO’s capabilities and cohesion will both be threatened. Far from learning the lessons from Ukraine, the EU and the UK will have allowed them to pass over their collective heads. Talk is cheap; effective deterrence is not. It is well past time that political leaders in Europe faced up to their responsibilities in this regard.
Baroness Nicholson of Winterbourne (Con)
My Lords, it is an honour to serve on the European Affairs Committee, particularly under the exceptional chairmanship of the noble Lord, Lord Ricketts. The question on which our committee chose to focus was the rebuilding of the UK’s relationship with the European Union in the wake of the Russian invasion, now just over 1,000 days ago. The answer is, of course, clear: the relationship has steadily improved. We are now firmly and clearly on the same side as the European Union in our unyielding support of Ukraine, despite the enormous suffering that both sides and others have endured. Our relationship, therefore, has improved.
I declare two personal interests on Ukraine, both of which are voluntary. First, I am chair of AMAR International Charitable Foundation, where I have gained first-hand knowledge of the immense destruction by Russia of Ukrainian families. I have worked with some of the children and the mothers, who are destitute and frantic. I also have knowledge of the corruption which I encountered during my chairmanship of the Ukraine Britain Business Council, another voluntary organisation. The corruption has been intensified and deepened by the war because where Russia goes, corruption seems to grow. Noble Lords are therefore stating the obvious when they say that the rebuilding of Ukraine will not be easy at all.
Yet Ukraine has great friendships in its neighbourhood. Romania in particular has been magnificent: in Romania there are perhaps 50,000 or so Ukrainian husbandless mothers and their children. I am glad to say that, in Romania, there are still Ukrainian schools and even Ukrainian universities. The welcome has therefore been enormous. I pay great tribute to Romania, which has refused to put them into so-called refugee camps. Every single Ukrainian has been placed in a family, a monastery or a nunnery. It is absolutely magnificent, but it is not at all easy for those Ukrainian families themselves. The likelihood of them returning to their real homes in Kyiv is negligible, since many were bombed. On top of that, there is Poland, which has been magnificent, and other nations. Ukraine is therefore very fortunate where she is.
One wonders how the UK can help. First, the rebuilding of Ukraine, as has been said, will focus largely on business and industry. We in the Ukraine Britain Business Council already have some of the brightest, best and strongest that the UK can provide rebuilding the nation’s companies. Yet visiting Kyiv with some of those companies, it was painful to see the huge diminution of, and the enormity of the endless assault by Russia on, the capital city of Ukraine—which, of course, Russians believe is the capital city of their own nation. Ukrainians themselves have suffered this massive impact—it is huge—but the UK can help, mainly through our position as a partner member of the Council of Europe. We do not belong to the European Union, and we are a major member of NATO, but we are partners with Ukraine and the other nations mentioned in the Council of Europe. I suggest that, for Ukraine to enter the European Union, which is tough and difficult but is going to happen in perhaps eight or nine years, it will have to be via the classic route of the Copenhagen criteria.
One of the key elements of the Copenhagen criteria’s 10 rules is, of course, the fight against corruption. Despite the comments made by earlier speakers on Britain’s own corruption weak spots, it is nothing like the corruption to be found in Ukraine, which is truly enormous and has been so for a considerable time. We should pick up that as one of our key ways of assisting Ukraine to move closer to the European Union.
The other element is child trafficking. Ukraine, unnoticed by others, has been a major child trafficking country. All our work as a nation, and of the European Union at an integrity level, has been on child trafficking. That brought Romania into the European Union. We have done it once and we could do it again. I highly recommend that: it is in the Copenhagen criteria, and it is another element through which we could help.
Russia herself, the aggressor, has been drastically weakened and tragically harmed. Her relationship with her neighbourhood has almost shrivelled into nothing, including with Kazakhstan next door. A few of us recall that Russia had an enormously good tertiary education system: hundreds of thousands of students from different nations, both next door and as far away as Morocco, were having a much cheaper, high-level university education in Russia than they could obtain in western Europe. All those students had to be thrown out—they had to leave, it has all stopped—with the invasion. They poured over the border into Kazakhstan, for example. Some of our universities did their best to help, but with nothing like the enormity of the education they were gaining in Russia.
Inside Russia, supply chains are breaking. With Azerbaijan, for example, there are enormous difficulties in recovering and recreating supply chains for simple things such as fertiliser, which has made agricultural movement so difficult. So Russia herself is desperately damaged and we need to think ahead about how we can help her recover her economy later on.
The invasion was not unexpected—we should have been expecting it for a very long time. In Moldova, Russia took over Transnistria in 1991; then Georgia; and now Ukraine. There is a common denominator of moving ahead. The first Duma visit to Strasbourg took place in 1999. I chaired a dinner and asked them how they were getting on with the new world of democracy—to which they replied that the world had seen the destruction of the greatest empire ever known and that they were steadily rebuilding it. That we have been so slow to pick this up is distressing and disturbing. Above all else, this report should remind us of the need to remain vigilant and work to recover those former territories.
I thank the committee very much for allowing us to make this report and I look forward to the next steps.
Lord Teverson (LD)
My Lords, I will start with a couple of bits of good news. As Members of the House may have heard, last year, for the first time, the European side of NATO collectively spent 2% of its GDP on defence. Eight nations did not, but at least we got to that threshold. As other noble Lords, including the noble and gallant Lord, Lord Stirrup, have said, it will certainly not be enough for the future, but that progress perhaps shows a seriousness of intent, not least in Germany. The other particularly positive thing was the attendance of our Foreign Secretary, David Lammy, at the EU Foreign Affairs Council last month. I hope that will continue on some sort of basis. I would be interested to hear the Minister’s comments on that.
One of the biggest obscenities in the Ukrainian-Russian war is that, in Putin’s vainglorious intent, he has already sacrificed at least 70,000 to 80,000 of his citizens, who have been documented as killed in action. Realistically, we can probably double that to 140,000. Something like 400,000 Russian citizens and others involved in the war on the Russian side have been permanently injured or killed in action. Sacrificing his citizens through propaganda and war for his own purposes is an obscenity in Putin’s leadership. The damage in Ukraine has been equal to and even worse than that, but we should take note of those human statistics in this war.
I chaired the EU security sub-committee in the term before the noble Lord, Lord Tugendhat. I was really surprised that, particularly in the UK, we look so suspiciously between the EU and NATO when it comes to defence areas. It is ironic that I, like many other noble Lords, used to visit Brussels fairly regularly, where we had two headquarters in the same city that seemed so far removed from each other in many ways. However, it was very clear at that time—pre the Ukrainian war—that the EU did not see itself in terms of territorial defence; it saw NATO as that, and it still does. It saw itself in terms of the Petersberg tasks from the 1990s, and was very clear about its involvement in defence security training and mixed civilian/military areas. In fact, it even had the Berlin Plus arrangement in 2002, under which it would agree to share resources between the EU and NATO where NATO did not want to intervene. All that was able to happen even then, although Turkey often got in the way of the process.
Of course, when we get to 2014 and then 2022, all that started to change—I think quite rightly. The one thing that was never understood by Governments in the UK, particularly perhaps Conservative Governments, was that it was not about having different resources for EU defence and NATO defence. They were the same platforms and personnel, so it was not a question of having to divide the budgets; it was one area of defence that could be applied to either of them. All that did change in the European Union, where we now have PESCO, the European Compass and all those areas where the EU has started to get involved. As has been said already, we are about to have a defence commissioner as well, focused very much on the defence industry.
I find it somewhat ironic that Members here have—maybe quite rightly—talked about the protectionist area of the EU and the defence industry, but I rather look at that as us having decided to get outside the tent, then looking back and saying, “That’s not fair”. I think that, if it heard that message from us, the European Union would look upon us rather sarcastically. We should welcome a robust European defence industry—and, sure, we should try to be a part of that and participate, although I understand that might be difficult.
We now move on, post Ukraine, into a different situation entirely with the Trump Administration. I rather agree with the commentator Phillips O’Brien that Trump is probably not anti-NATO, he just does not see it as very important. Rather, he sees it as an encumbrance on the United States where it spends money unnecessarily and the Europeans should look after themselves. I do not see the Trump Administration coming out of NATO, but the corrosive effect is that they will make it very clear that, in terms of Article 5, they cannot be relied upon any more. That is, if you like, the killer of that side.
We should also be aware of the European side of NATO. We have President Macron being proved wrong over NATO being brain-dead, but we often forget that France only became part of the military structure of NATO in 2009 and, if we have a Marine Le Pen presidency in France, will we be at risk of having a withdrawal again?
In my final seven seconds, what I want to say is that we have to be practical. The reality is that we should make sure those fuzzed boundaries between EU and NATO come closer together, and work in reality.
The fact is that—in terms of European Union defence—heads of government, heads of state and heads of defence departments meet far more regularly in the EU than they do in NATO. It means that, practically, we need to be a part of that working together.
The report did not talk about the European Political Community in any way. I would be interested to understand how the Minister sees that playing a role in this defence mosaic as well.
Lastly—I know I have gone over time—my noble friend Lady Suttie was absolutely right that Ukraine must have the final decision on everything that is decided. We cannot go through Munich a second time in a second century.
Lord Banner (Con)
I start by congratulating His Majesty’s Government on their work to enable Ukraine finally to fire Storm Shadow missiles at military targets in Russia yesterday. I have already spoken in this House about just how important this is, not just to defend Ukraine from existential threat, but to defend us from the war which will not stop there if Putin is allowed to win.
I also congratulate the noble Lord, Lord Ricketts, and his committee on an excellent report. I agree with all its recommendations and shall make observations about two of them. I start with the imperative to fill any funding or weapons gap left by a change in US foreign policy by the incoming Administration. The report calls for UK-EU co-operation on this, and rightly so. If America pulls back, it is in the interest of all Europeans, including us, to step up, not give up.
International agencies in Kyiv reckon privately that if the heating and power grid in Ukraine were to fail in winter, Europe would face an influx of 5 million new refugees. If Ukraine falls, I am told that the figure may be several times that. The small boats crisis will pale into insignificance in comparison with the unprecedented humanitarian disaster that this would involve. It would be likely to become the single largest humanitarian crisis Europe has seen since the Second World War. Are Europe and the UK ready for this? It would be the price of inaction, indeed the price of insufficient action, at this critical moment for Ukraine.
The fall of Ukraine would moreover not be the end of Russia’s assault on European freedom and democracy; it would only be the beginning. In every respect, therefore, the long-term cost of letting Putin win is greater than the short-term cost of stopping him, even if we have to pay more in light of a change in US foreign policy. Can the Minister therefore confirm what work has been done, whether domestically or in conjunction with EU partners, to price the cost of filling any funding or weapons gap left by a change in US foreign policy, including consideration of how that might be apportioned across the EU and its European allies, such as us? Has any calculation been made of the possible countervailing cost of the humanitarian crisis that will be facing our country and the rest of our continent should Russia prevail?
It is also vital, I suggest, for European Governments to communicate with and persuade their electorates of why this is a justified investment, not just for Ukraine’s sake but for our and their sakes too. If, as a well-placed source suggested to me earlier this week, the UK’s pro-rata contribution were to come down to the cost of a cup of coffee per taxpayer per month—even if it were, frankly, a cup of coffee per day—should we not be explaining it in such clear terms to our electorate, and ditto our European neighbours? Few, surely, would doubt that this or anything like it is a price worth paying to secure freedom and democracy on our continent.
I turn now to the report’s recommendations relating to the reconstruction of Ukraine. The report makes a number of important points in this respect. I would like to draw particular attention to two: first, the need to authorise the use of frozen Russian state assets towards financing the rebuilding of Ukraine. Paragraph 83 of the report records the previous Foreign Secretary, my noble friend Lord Cameron of Chipping Norton, as acknowledging that there is, in his words, a “legal route” to this. I agree.
The legal position is set out comprehensively and convincingly in an article in the May 2024 edition of the Journal of International Banking and Financial Law, by Tetyana Nesterchuk of Fountain Court Chambers. In short, it would amount to a lawful off-setting, or advance payment, of Russia’s international law obligation to pay the cost of cleaning up after itself. I must make a full and frank disclosure: I am married to the article’s author. She always was the smartest lawyer in our house.
Do the new Government also accept, like my noble friend Lord Cameron, that using frozen Russian state assets in this way would be lawful? If so, will they commit to doing so without delay? Could this be done, for example, by amending the current Financial Assistance to Ukraine Bill, allowing not only interest from frozen assets but the underlying assets themselves to be deployed to repay loans to Ukraine? Unshackled by EU membership, with no obligation to wait while the ECB continues to dither, there is a golden opportunity for the UK to show global leadership on this issue and set an example for others to follow.
Secondly, there is the importance of the EU and the UK working together now to plan the rebuilding of Ukraine. As the committee rightly observes, this cannot wait until the final bullet is fired; it must happen now. In keeping with my earlier comments, a central consideration is the need to appreciate that investing in the reconstruction of Ukraine is not simply a one-way exercise in charity; there is something—in fact, quite a lot—in it for us, too. There are substantial long-term opportunities for the UK with trade, investment and natural resources if we take a lead in partnering with Ukraine to help it rebuild. If we do not, someone else will—China, for example, was already leasing swathes of Ukrainian agricultural land before the war started—and their gain will be our loss.
Here, too, it is right to collaborate with the EU, but we can take advantage of no longer being obliged rigidly to co-ordinate with it and take the opportunity to go further and faster. British businesses should be given greater fiscal incentives to invest in Ukraine. The built environment sector, in which I practise as a lawyer—architects, master planners, surveyors, engineers and the like—should be encouraged to train a new generation of Ukrainian apprentices, who can deploy the skills they learn in the decades-long rebuilding exercise ahead.
Some pioneers are already doing that off their own steam, such as NJL Consulting in Manchester, which is funding a Ukrainian student through a master’s degree in planning at the University of Manchester, followed by a placement with its planning consultancy, giving her the hardwiring to play her part in planning the restoration of Ukraine’s shattered cities. That kind of initiative should be more widespread. A range of levers is available to the Government to make it happen. I encourage them to consider how they may do that and to take advantage of their independence from the EU to shine the path for other member states to follow, rather than waiting for them to take the lead.
The Lord Bishop of Chichester
My Lords, it is a privilege not only to speak in this debate, which touches on a matter of such great importance, but to be reminded, in the valedictory speech of the noble Lord, Lord Levene, of what a resource of wise experience and courtesy exists in this House.
I am very grateful for the work of the European Affairs Committee in its report, and to the noble Lord, Lord Ricketts, for this debate. I am glad to follow the noble Lord, Lord Banner, and the positive statements he made about reconstruction. It is on that subject that I will focus my contribution. Reconstruction must look at economy, buildings, infrastructure and the fabric of society, but I hope it will also look at something distinctive about Ukraine, which is the place of the church. In talking about people and not parliamentarians, the noble Baroness, Lady Hayter, already reminded us of that. The noble Baroness, Lady Nicholson, made similar comments about the neighbours of Ukraine who have given assistance. In large part, monasteries and nunneries will also be an extension of the familiarity of a Christian tradition that is so important in Ukraine.
The United States Institute of Peace notes that,
“high levels of religiosity in Ukraine make religion a central element of legal, cultural and political affairs. The close relationship between the institution of the Orthodox Church, state authority and national identity mean that religion is inseparable from all contemporary events. It is therefore of utmost relevance to the ongoing war in Ukraine”.
I hope that the Minister and the European Affairs Committee would want to make space for the consideration of what contributions the Church might be invited to make to the reconstruction of life in Ukraine.
However, the issue is complex. Following the war there, there is fracture in the church. The Russian Ukrainian Orthodox Church, under the Moscow patriarchate, has been a sign of Moscow imperialism, and so there is now the emergence of the Orthodox Church of Ukraine, alongside the Ukrainian Orthodox Greek Catholic Church and the Roman Catholic Church. However, between these bodies, there is already very little considerable co-operation. In the Church of England, we have been in contact with the Ukrainian Christian churches council, through the work of the Archbishop of Canterbury at Lambeth Palace, which we believe reflects the majority of Christian churches in Ukraine and seeks to provide a forum for restoration of relationships between those jurisdictions. The fracture of those jurisdictions has had international consequences in terms of relationships not just across churches but also across some national boundaries as well. A letter from Patriarch Sviatoslav to Ukrainians dispersed in exile and also in Ukraine writes that, if peace,
“does not develop and establish social justice upon the … principles of human dignity, the sanctity and inviolability of human life, the common good, and solidarity, humanity will end up in societies where the concept of law is replaced by the concept of interests, be they of particular individuals or maleficent groups”.
I hope that the churches can be an important part in building the peace in Ukraine which has been spoken about so powerfully this afternoon.
Baroness Ludford (LD)
My Lords, the Foreign Secretary said in his recent Statement on Ukraine marking 1,000 days since Russia invaded:
“Ukraine’s cause is a just one. … We need Ukraine to stay strong, and … they need us to stay strong by their side”.
In that respect, I salute the yellow and blue outfit of the noble Baroness, Lady Hayter, which sends that very signal—she is always a sharp dresser, but particularly today—and I also welcome her excellent speech.
David Lammy also said in his Statement this week, quite rightly:
“This war matters greatly for Britain and the global order … When we support Ukraine, we are not just aiding its fight for freedom; we are also contributing to our fight for our freedom”.—[Official Report, Commons, 19/11/24; cols. 162-63.]
Arguably, it is even more than that. While it is a welcome decision by President Biden, followed by Britain and France, to grant the Ukrainians the discretion that they have long pleaded for to use the long-range weapons supplied by allies to strike targets inside Russia, let us not underestimate the peril which not just Ukraine but we in the West are in.
I am delighted that this debate has benefited from the valedictory speech from the noble Lord, Lord Levene. I was never in the Ministry of Defence, but I was an EU adviser to Lloyd’s of London, albeit a long time before his chairmanship.
Edward Luce, the Financial Times’ chief US commentator, has written in the FT this week regarding President-elect Trump’s nomination of Tulsi Gabbard as Director of National Intelligence to oversee the 18 US intelligence agencies that:
“Given Gabbard’s close affinity to Vladimir Putin’s Russia, she would be unlikely to get a low-level security clearance in normal times. Now she will be custodian to America’s most classified secrets. Should Gabbard be confirmed as director of national intelligence, America’s allies will surely re-evaluate the wisdom of sharing secrets”.
That was pretty up front as a statement, but it shows how the debate we are having today about the report from our European Affairs Committee, so ably led by the noble Lord, Lord Ricketts, is even more pertinent and urgent that when the report was published 10 months ago.
With uncertainty and trepidation hanging over our expectations from Washington, it is even more important that the European end of the transatlantic partnership gets its act together on both security and defence, as the noble Lord, Lord Liddle, said. My noble friend Lord Teverson spoke of how much EU-NATO complementarity has progressed, although deeper co-operative structures are needed, and that is what I mainly want to speak about.
I believe that neither the UK nor the EU can afford to be too precious in the search for the ties that bind when it comes to political, diplomatic, security and defence co-operation. I am not being so unrealistic as to ignore Brexit—if only I could—but we need to push for solutions which, while respecting some rules and limits, are hard-headed in keeping in view the tough reality of what challenges we jointly face and the substance of the goal we must reach.
We have reason to feel encouraged, because in its recent general election manifesto the Labour Party pledged to seek
“an improved and ambitious relationship with our European partners”,
and that, as part of that, a Labour Government would seek
“a new security agreement with the EU”.
We already have the promise of regular EU-UK summits, and the Foreign Secretary has participated in the Foreign Affairs Council. He has argued that:
“UK security is indivisible from European Security”,
and he has agreed with the EU high representative to establish a six-monthly strategic dialogue, with the first meeting early next year.
Let us not forget that Norway is ahead of us, having signed a security and defence partnership with the EU in May of this year. According to the EU press release,
“It covers existing areas of cooperation such as our common continued support to Ukraine, Norway’s participation in EU CSDP missions and operations, and its involvement in EU defence initiatives”.
Can the Minister confirm whether the UK Government are looking closely at this model? Of course, the difference is that Norway is an EEA, and therefore single market, member—that is perhaps a hint of what advantages such membership carries.
As the noble and gallant Lord, Lord Stirrup, said, ideas for European defence co-operation are nothing new. Efforts to put some kind of order into the NATO-EU overlap and to fortify the European pillar have been going on for decades. In the 1950s, there was an attempt to set up a European defence community, but it was killed off by a vote in the French Assemblée Nationale just over 70 years ago, such that Europe then left security to NATO while it focused on economics. That knowledgeable and astute commentator Timothy Garton Ash recalled in an article earlier this year, just after our report was published, that the then French Prime Minister, Pierre Mendès France, explained the reasons his Parliament rejected the European defence community as
“too much integration and too little England”.
Mr Garton Ash mused:
“Might there also be a lesson there?”
He pointed out:
“Today, a European defence project would not be a single, clear, unified institution of the EU. That was the road not taken 70 years ago. Rather, it would be a European defence community with a lowercase d and c, connecting European, bilateral and national capabilities to the existing military operational core in Nato”.
So, the good news is that there is no longer any need to have these theological arguments.
During the NATO summit in Washington in July, our new Defence Secretary suggested that the UK could join EU defence initiatives even before a more formal pact is agreed. Can the Minister decipher this for us? Has the EU indicated any flexibility on this score?
Other speakers have covered the issue of sanctions, and I do not have the time to do that. They pointed out that the major challenge seems to be one of enforcement. There is a worrying story today about how some parts produced in the UK have somehow ended up in Russian drones. Both the noble Lord, Lord Ricketts, and my noble friend Lady Suttie also spoke about the involvement of companies in British Overseas Territories in sanctions busting. This is a matter my noble friend Lord Purvis of Tweed has been taking up. So, obviously, we need to know a bit more about what is being done on that.
The Labour manifesto in July committed to working with allies to enable the
“seizure and repurposing of frozen Russian state assets to support Ukraine”.
That meant seizing the principal—the $300 billion—not just using the interest under the G7 initiative. Our report noted that the last Foreign Secretary, the noble Lord, Lord Cameron, had suggested to us that there is a legal route to achieve that. Can the Minister tell us what this Labour Government are doing to implement their manifesto pledge to overcome the claimed legal obstacle, including any discussions they have had with the EU and other partners?
I am grateful to the wife of the noble Lord, Lord Banner, for the article, which I will read when I have tracked it down. There are suspicions that these frozen assets are being stored up to use as a bargaining chip in negotiations. I was not sure whether this is what the former Estonian Prime Minister and future EU High Representative Kaja Kallas meant when she told the Financial Times in February that:
“This is economic pressure we can place on the Russian economy to hasten the breaking point of this war”.
That was slightly ambivalent language; I hope I do not cause offence when I say that, but I was not clear. Finally, do the Government agree that the best idea is to let Ukraine use those assets now? Can they perhaps pitch to President-elect Trump that Ukraine would likely use perhaps half of the $300 billion to buy arms from US defence manufacturers, which is perhaps a temptation?
Lord Callanan (Con)
My Lords, it is indeed a particular pleasure to participate in another debate on Ukraine and to see almost complete unanimity yet again across the House on the findings of the European Affairs Committee’s report on the Ukraine effect, examining the profound impacts of Russia’s invasion of Ukraine on UK-EU relations. I join in thanking the noble Lord, Lord Ricketts, for chairing this committee, and all noble Lords who participated in the production of this report and in today’s debate. Special mention should go to the noble Lord, Lord Levene, for such a splendid valedictory speech. We will miss his contributions to the House. An extra-special mention goes to the noble Baroness, Lady Hayter, who has turned up so stylishly attired in the colours of Ukraine. I miss our exchanges across the Dispatch Box during the Brexit years.
As we mark the 1,000th day of war in Ukraine, most noble Lords taking part in this debate have agreed that the war is indeed taking on a concerning and deadly new angle. I think we all agree that we have a moral and political duty to stand up for Ukraine. We have seen troops from North Korea arriving in Russia and videos of them training in Russian fatigues, and we also know that Russia has procured multiple weapons from North Korea and Iran to aid in, frankly, the murder of Ukrainian citizens. Yesterday, it was reported that Russia even launched an ICBM at Ukraine. Yet, also yesterday, I watched with open-mouthed astonishment the Russian Foreign Minister gazing at the camera and solemnly complaining about the West apparently escalating the war. The unbelievable hypocrisy of the current Russian leadership would indeed be laughable if the issue were not so profoundly serious.
As many speakers have observed, we are all waiting, perhaps with some trepidation, to see what the new US Administration will do on Ukraine. I hope and expect that the Government will do all they can to ensure the continuation of the vital military and financial support. I do not often agree with the noble Lord, Lord Liddle, but he was right to call out some members of the GOP for delaying the much-needed support that Ukraine needed in Congress earlier this year.
I am extremely proud of the fact that the previous Conservative Government were instrumental in supporting Ukraine in holding the Russian war machine to account. We implemented an unprecedented number of sanctions on Russia, with the EU closely following and aligning with us, as outlined in the report, and I am delighted to see that the current Government are continuing with that excellent work.
The report states that
“the imposition of sanctions since the Russian invasion of Ukraine has been effective overall”,
but we should always look to do more. I was particularly pleased that we established the OFSI—a vital part of the process—but it is of some concern that the OFSI has yet to fine any single individual or entity for sanctions evasions. I would be grateful if the Minister gave an update on what current enforcement action is foreseen, because we all know that widespread sanctions evasion is taking place.
To take one example, I saw yesterday that the exiled Russian opposition leader, Mikhail Khodorkovsky, highlighted how one Indian company, Shreya Life Sciences, exported to Russia over $300 million-worth of high-end Dell AI computer servers, sourced from Malaysia, earlier this year. These servers are restricted under both US and EU sanctions targeting military technology, and they can be used to power Russia’s electronic warfare systems. It deserves saying that the company is probably acting legally under Indian and Malaysian law, but I strongly believe that it is about time we started sanctioning some of these many companies—often Indian, Chinese, and perhaps some from the British Overseas Territories—that are making huge sums of money supplying Putin’s war machine in Ukraine.
As my noble friend Lord Godson observed, it is also clear from the report that leaving the EU has not in fact hindered our ability to work alongside the EU and to be swift and firm in sanctioning Russia. The report says:
“Without the need for agreement on unanimity, the UK can be nimbler and swifter in imposing sanctions”,
which, of course, it would not have been able to do if we were still in the EU.
This conflict starkly underscores the importance of close co-ordination between all like-minded nations—both those within and those without the EU. It has reunited the UK’s leadership on European security and reaffirmed the strategic value of NATO, where we must continue to champion that important collective defence. However, the report also highlights some underexplored areas of our post-Brexit relationship. Perhaps the Minister will able to say more about this in her reply. The report’s note that
“persuasive evidence that sanctions are most effective when they are enforced by as wide a coalition of countries as possible”
is indeed true.
Perhaps the Minister could update the House on how the Government are working with international partners to ensure that our sanctions regime is working in coalition with our many esteemed international partners. Does she know of any loopholes in the sanctions regime in the context of gaps between our regimes and our international partners’ regimes? Reinvigorating these ties enhances our strategic autonomy and bolsters resilience against the many authoritarian threats we now face.
The report also notes:
“The UK’s expertise in developing and implementing sanctions regimes is an asset which should be used more actively to support the capabilities of other countries, both EU and non-EU”.
The aim of sharing the UK’s experience should be to ensure a more effective implementation of sanctions by a wider range of countries. Again, I am interested to hear the Minister’s comments on that.
We on these Benches welcome the recent moves by His Majesty’s Government to sanction Russia’s shadow fleet by way of statutory instrument. The report goes on to claim that sanctions enforcement is a big issue, noting that
“REDRESS’s assessment of the UK’s performance as ‘weak’ and Spotlight on Corruption’s evidence that investigation of sanctions evasion had experienced ‘serious setbacks’”.
We all know that these issues are difficult. The previous Government struggled and I am sure the current Government will struggle. Things will never be perfect but we really should redouble our efforts to ensure that sanctions are as widely observed as possible. As many noble Lords have observed, effective sanctions regimes rely completely and solely on effective enforcement. Can the Minister address this concern in her response and perhaps share some specific examples of the robust action being taken by the Government and their agencies to enforce UK sanctions regimes?
In conclusion, it has been gratifying to see so much cross-party support across the House, across the Benches and political parties, for the Government’s actions on Ukraine. It is great that we are not suffering some of the political difficulties some other European countries are seeing in standing by Ukraine in its hour of need. I look forward to hearing the Minister’s response.
The Parliamentary Under-Secretary of State, Foreign, Commonwealth and Development Office (Baroness Chapman of Darlington) (Lab)
My Lords, I thank the noble Lord, Lord Callanan, for his speech and for the way the Opposition are approaching this important issue. It is vital that we maintain the bipartisan approach towards Ukraine, and we continue to appreciate his words and sentiments and the way in which the noble Lord puts his points across.
I thank the noble Lord, Lord Ricketts, and all noble Lords on the European Affairs Committee for the valuable insights in the report. Normally I complain about the length of time it takes for us to get to examine these reports, but on this occasion I do not think it has been a problem. It may even have been a benefit that some months have passed.
I particularly thank the noble Lord, Lord Levene, for his valedictory speech and for his years of service. As the noble Baroness, Lady Helic, said, he has done so much and brought a lot of experience to bear, and I shall remember his golden rules.
Earlier this week we passed a grim milestone, as the Foreign Secretary said in the other place. Not only is it 1,000 days since Putin’s full-scale invasion stunned the world and brought turmoil, violence and bloodshed to millions, including the Russian people, but 1,000 days of Ukrainian bravery has inspired the world to stand with Ukraine.
Russia’s illegal and unprovoked invasion of Ukraine poses a direct threat to European and Euro-Atlantic security. It struck at the heart of the international rules-based system on which our shared global security and prosperity depend, and that is why supporting Ukraine to defend itself against Russian aggression is this Government’s foreign and defence priority.
The Foreign Secretary has made it his personal mission to do all we can to constrain the Kremlin. Earlier this week he announced more sanctions in response to Iran’s transfer of ballistic missiles to Russia, including on Iran Air, and measures against the monsters who forcibly deported Ukrainian children for attempted indoctrination by the Kremlin.
All this builds on the sanctions that we have ramped up, sanctioning almost 40 vessels in Putin’s shadow fleet of oil tankers, leaving many of them idling or at anchor since sanctions were imposed; sanctioning cybercriminals from the aptly named Evil Corp; sanctioning Russian troops who used chemical weapons on the battlefield and mercenaries responsible for destabilising Africa; and sanctioning firms that supply Russia’s military-industrial complex, including Chinese firms, sending critical components for weapons including drones. Indeed, the cost of components has risen by 30% for the Russian defence sector, and Russia’s military exports have fallen to levels not seen since the Soviet Union’s collapse.
The UK’s military, economic, political and diplomatic support for Ukraine remains ironclad as we have made clear to the world just what is at stake. The vivid description by the noble Lord, Lord Banner, of the cost of allowing Ukraine to fall is vital. We work alongside our European partners to rally international support. The noble Baroness, Lady Ludford, encouraged the deepening of our defence and security co-operation, and she is right to do that.
Since taking office, the Foreign Secretary has visited Ukraine with US Secretary of State Tony Blinken, the first such joint visit to any country for more than a decade. He discussed Ukraine with the EU Foreign Affairs Council in October, the first appearance by a Foreign Secretary at a regular council meeting since our exit from the EU, and in recent days he chaired a meeting of the United Nations Security Council on Ukraine before joining a meeting of close European allies to discuss how to bolster our support for Ukraine.
In our very first week in office, my right honourable friend the Prime Minister confirmed that we would provide £3 billion a year in military aid this year, next year and every year that it is needed. That includes my right honourable friend the Defence Secretary’s announcement earlier this week of more funding for Ukraine’s navy and for drones, and the extension of Operation Interflex, which has trained more than 50,000 Ukrainian troops to date.
We have increased non-military support for Ukraine this financial year. We will give at least £250 million in bilateral assistance for work such as protecting the Ukrainian power grid, which this weekend suffered one of Russia’s biggest aerial assaults since August, involving 120 missiles and 90 drones, causing an emergency blackout in several regions across the country just as the Ukrainian people head into winter, when temperatures can drop to minus 20 degrees.
Crucially, with the realism so eloquently expressed by the noble Lord, Lord Liddle, our bilateral support, both military and non-military, will be higher this financial year than in any previous financial year since the war began. As many noble Lords are urging, we are finding creative ways to strengthen the Ukrainian economy. We have brought the UK-Ukraine digital trade deal into force, so that Ukraine benefits from cheaper and quicker trade. UK Export Finance has provided more than £500 million in loan guarantees, including for Ukraine’s own defence industry.
British International Investment is working with the European Bank for Reconstruction and Development to support Ukrainian trade. By the end of this year, we will have deployed a further $484 million in World Bank loan guarantees. Colleagues have now begun debating a Bill confirming a new £2.6 billion loan to Ukraine as part of a G7 package of $50 billion to sustain Ukraine’s fight, all paid for by the profits from frozen Russian assets primarily held in the EU.
It is profoundly in our interests and those of the UK’s European partners to make sure that Ukraine is able to restore its sovereignty and territorial integrity and the integrity of international law, including the UN charter. Just as Russia’s full-scale invasion of Ukraine has made NATO stronger, it has brought about intensified foreign policy co-operation between the UK and the EU.
We are working together closely on a wide range of issues, from sanctions against Russia and making sure Ukraine gets the resources it needs to sustain its military campaign and grow its economy, to training Ukrainian soldiers, recovery and reconstruction. This Government are committed to continuing and strengthening this co-operation.
I was asked to comment on Storm Shadow, but I do not think it would be wise to go any further than the Defence Secretary did this morning. I do not have anything in addition to say—just that, as the Prime Minister has said, it is important that we double down and ensure that Ukraine gets the support it needs.
The noble Baroness, Lady Nicholson, rightly praised the support of many of Ukraine’s neighbours and welcomed the work across Europe to help Ukraine. We welcome the progress that Ukraine is making. She was talking about accession to the EU. We welcome the progress that has been made on its path to Euro-Atlantic integration, and we welcome the EU’s continued commitment to Ukraine.
The noble Lord, Lord Alderdice, and the noble Baroness, Lady Helic, asked about talks on UK participation in Permanent Structured Cooperation, PESCO. The UK will continue to progress our application to join the PESCO military mobility project. We will explore the opportunity to engage with other projects that align with UK interests on a project-by-project basis, and we continue to review the progress of other PESCO projects.
I note the speech of the noble Lord, Lord Ricketts, and how the UK can be a force in cybersecurity, AI and soft power. I think that point might actually have been made by the noble and gallant Lord, Lord Stirrup—if it was, he will have to forgive me. His point was that projects are very good but that strategic leadership and integration are far better. His encouragement of fresh thinking and creativity on this is very welcome.
Noble Lords including the noble Baroness, Lady Helic, and the noble Lord, Lord Callanan, asked about EU-UK sanctions co-operation, and this is important. We continue to prioritise co-ordination with international partners including the EU to enhance the impact of our collective sanctions and share information more seamlessly. We have frequent engagement with EU institutions and member states at all levels. We hold quarterly consultations with the EU to enable strategic co-ordination and co-operation on sanctions.
We will continue to work closely with the EU to jointly engage with countries where we are seeing spikes in trade of sanctioned goods with Russia, as many noble Lords mentioned. This has included the central Asia region and the UAE. In early September the UK sanctions director, the EU sanctions envoy and the US sanctions co-ordinator jointly visited Malaysia to discuss growing trade and maritime circumvention risks in the south-east Asia region. Together we are developing our collective offer of capacity building and technical assistance to third countries to support improved sanctions compliance and enforcement, and to offer assistance to both government and the private sector.
The noble Lords, Lord Alderdice and Lord Ricketts, and the noble Baroness, Lady Suttie, asked about the impact of sanctions on Russia. Sanctions have deprived Russia of over $400 billion since February 2022. By one estimate, that is equivalent to four more years of funding for Putin’s invasion of Ukraine. The UK has sanctioned over 2,100 individuals and entities under the Russia sanctions regime, over 1,900 of which have been sanctioned since Putin’s full-scale invasion. Over £22 billion of Russian assets have been frozen because of UK financial sanctions.
Putin thought that he could take Kyiv in three days; two and a half years on, his military is turning to North Korea and Iran for supplies. Sanctions are putting grit in the system; they are increasing costs and delays and reducing equipment quality. Russia has managed only to stabilise supplies, not increase them, and at a cost. Russia has been forced to pay over 135% more for microelectronics; over 320% more for advanced machine tools, procured by China and Turkey; and over 210% more to import critical US-origin items through third countries.
By the end of the first two years of the war, Russia had lost about 3,000 tanks and 5,000 other armoured vehicles. The difficulty in getting components is hampering Russia’s ability to build new tanks and infantry vehicles, as well as to refurbish old ones. A “new” Russian T-90M tank captured by Ukraine last year was found to have a gun made in 1992. Since the imposition of the oil price cap, data from the Russian Ministry of Finance showed a 30% reduction in tax revenues from oil in 2023, compared to the year before.
Thanks to the efforts of the UK and our allies, Putin faces extreme costs from the conflict. According to Putin himself, sanctions are causing a colossal number of difficulties. Of course, sanctions are only one lever and when people say, “Are sanctions working?”, that is probably the wrong way to look at this. They are one tool that we can use.
I was asked about Chelsea Football Club. I am afraid I am no further forward than when I was last asked about this. The funds remain frozen while a new foundation is established. We continue to hold talks with Mr Abramovich. All I can do, I suppose, is to promise to redouble our efforts and try to reach a solution as quickly as possible.
The noble Lords, Lord Callanan and Lord Risby, and the noble Baronesses, Lady Blackstone and Lady Suttie, among others, asked about sanctions enforcement. The idea of sanctions is that they work well as a deterrent, and we are working to make sure that businesses know how to comply with our sanctions regime. However, we accept that they have given rise to some challenges, which is why the Minister for Europe, who has responsibility for sanctions, is reviewing how they work, as you would expect of a new Government.
The noble Baroness, Lady Ludford, the noble Lord, Lord Hannay, and others asked about the overseas territories. I can confirm that these issues were raised at this week’s JMC with the OTs. We are committed to working with them to investigate and act on any evidence of breaches. For noble Lords’ information, a communique will be issued at the end of the conference, and I expect sanctions to feature in it.
The noble Lord, Lord Ricketts, asked about the shadow fleet. The shadow fleet undermines our sanctions and poses serious maritime security and environmental risks. We are working closely with partners to tackle the risks posed by these vessels. Since July, the Government have sanctioned 39 vessels under the Russia regime that were transporting oil originating in Russia to a third country, leaving many of them idling or at anchor since the sanctions were imposed. The Government have also sanctioned nine LNG carriers and six vessels involved in the transporting of military goods, and another four oil tankers and two military goods transport vessels were sanctioned under the previous Administration. In July, the UK hosted the European Political Community at Blenheim Palace, as noble Lords will know, and launched a call to action to tackle Russia’s shadow fleet. It was signed by 40-plus countries and has since been endorsed by the US and Canada.
The noble Baronesses, Lady Blackstone and Lady Suttie, and the noble Lord, Lord Tugendhat, asked about the recovery and reconstruction of Ukraine. This is an important issue, and I can assure noble Lords that we are working closely with a range of international partners—including the EU and EU member states such as Germany, France, Italy, Poland, Sweden, Denmark and the Netherlands—to deliver reforms and economic support for Ukraine’s recovery and reconstruction through the Ukraine donor platform and bilaterally.
The noble Lord, Lord Risby, invited me to explore the French insurance scheme, and I am happy to do that. The right reverend Prelate the Bishop of Chichester reminded us, too, of the value of faith-based organisations. It was good to hear about the work the Church is doing in Ukraine.
Like the noble Baroness, Lady Suttie, I, too, met the delegation from Lviv recently, and we discussed the psychological, societal and physical reconstruction that is needed. The noble Baroness, Lady Hayter, spoke movingly about these issues in her speech. We were asked about the airport. The UK specialists are in close contact with Ukraine about the airport, and we are providing technical assistance to get it open safely.
On the issue of reconstruction, the noble Lord, Lord Banner, was inspiring in his vision. It is vital that we keep the hope that he expressed. I think I remember that last time, he read us a note from his niece. I take this opportunity to wish her and the rest of his family well in Ukraine.
I thank the noble Lord, Lord Teverson, for noting that, on the issue of UK-EU security co-operation, on 14 October the Foreign Secretary attended the EU Foreign Affairs Council. I hope the noble Lord will welcome the fact that we agreed to work towards a security partnership and have committed to six-monthly foreign policy dialogues, starting in early 2025. We are engaging with the External Action Service to explore options for a new security partnership, focused on foreign policy and defence co-operation. In particular, we want to work closely to address wider global challenges, including economic headwinds, geopolitical competition, irregular migration, climate change and energy prices, which pose fundamental challenges to the shared values of the UK and EU.
I listened carefully to the noble Lord, Lord Godson, and I would just say that no one wants to spend years reopening old divides. This is not about renegotiating or relitigating Brexit; it is about looking forward and realising the potential of the UK-EU relationship as it stands today. He spoke about his frustrations at the EU’s treatment of third countries. We get it, but clearly, the EU is free to make its own choices. We are no longer members, so of course, our influence is not what it was; but the relationship is improving now, and we see this as being very much in the UK’s interests.
I end by echoing the Foreign Secretary in recent days and weeks. He said:
“UK security is indivisible from European security. This government is determined to reset our relationships and deepen ties with our European partners in order to make us all safer”.
We are working with our international partners, including our European colleagues, because we are always stronger when we work with others, for the freedom of all states the world over to choose their own future. That includes brave Ukrainians, who need not just words but actions. This Government have not wavered, ramping up the pressure on Russia, stepping up support to Ukraine and rallying the international community. We can all be proud of the unity we have shown as this country proves that Britain will remain Ukraine’s staunchest friend throughout this war and in the peace that follows.
Lord Ricketts (CB)
My Lords, I am grateful to all the speakers who have taken part in this debate, including a number of distinguished former members as well as current members of the European Affairs Committee, and also to the Minister for a very comprehensive response to all the many points that were raised. It was a privilege to listen to the valedictory speech of the noble Lord, Lord Levene, which was characteristically reflective and substantive; we will miss him a lot in this House.
This has been a thoughtful, wide-ranging and constructive debate under the shadow of the impending Trump presidency, with all the implications that has for Ukraine and for European security. Once again, this House has sent out a strong, powerful and unanimous message of continuing support for the courageous people of Ukraine.
We have heard widespread concern about the need for rigorous enforcement of the quite elaborate sanctions regime now in place. I take away a strong message from many speakers that European countries are going to have to take greater responsibility for their own defence and for the support of Ukraine in the years ahead. For many, that underlines the need for closer EU-UK co-operation on all the issues we have been talking about.
There was also the thought that, however this conflict ends, we are going to be sharing the same continent with a hostile Russia for the foreseeable future. That has far-reaching implications for our foreign policy, defence spending and much else. But those are issues for another day. With renewed thanks to all the participants in this debate, I beg to move.
Motion agreed.