Financial Assistance to Ukraine Bill

Debate between Nusrat Ghani and Alex Sobel

2nd reading
Wednesday 20th November 2024 Commons Chamber

[Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)]

We are now 1,000 days into the Russian invasion of Ukraine and we are entering a crucial period for Ukraine and its people, with the Kursk offensive and Administration change in the United States. I would first like to praise our Government for their evolving strong support for Ukraine, reflecting the needs on the ground. The United Kingdom was the first responder and supporter of Ukraine. The Government’s participation in implementing President Zelensky’s 10-point victory plan is very welcome. Ensuring that the war does not last indefinitely and ends on fair terms is crucial. MPs of all parties work closely on campaigns around aid, sanctions, seizure of assets and so much more.

There is the potential that Ukraine could lose 50% of its military aid support from its international allies. The UK and other supportive nations struggle to make up the shortfall from our own stores. If this remains the case, Ukraine will slowly lose the ability to defend itself. Russia will increase and intensify its atrocities across the country. Where will Russia stop? The increasing rhetoric from the Kremlin needs a robust response. It has been shown again and again to take advantage of perceived weakness. Now, 1,000 days into the Russian invasion of Ukraine, we can take the first step in unlocking frozen Russian assets to support Ukraine. I welcome today’s Bill, which will ensure that the loans made will be repaid with the Russian state’s assets currently frozen in the UK.

The G7 must act collectively on this. At the start of the war, approximately $300 billion of Russian central bank reserves were frozen in the west. We need a route to mobilise these reserves. We must understand how other states have been able to disclose the amount of Russian central bank reserves they hold. We need to know how many billions of pounds of Russian reserves reside in the City of London. Canada has passed the Special Economic Measures (Russia) Regulations, which collects data on Russian assets, freezes them and publishes the value, which currently stands at 135 billion Canadian dollars frozen in Canada. Can the Government move to disclose the level of Russian assets held here in a similar way?

I also wish to call for the seizure of Russian central bank reserves to pay for the defence of Ukraine. Many Governments are seizing the profit generated from the frozen money and using that to back Ukraine. The US has passed legislation giving the President the power to do that, and I welcome this legislation, which will move us in the same direction. In the UK, we also have £2.5 billion frozen from the sale of Chelsea football club. If unlocked, it could create the second wealthiest charity in Britain, but it remains frozen in a UK bank account. Can the Minister outline what steps he is taking to immediately release this funding, which would provide much-needed humanitarian aid to Ukraine? In Ukraine, winter is not coming; winter is here.

We must decide on a route to mobilise the UK’s seizure of Russian assets. The estimated cost of reconstruction in Ukraine is at least $486 billion over the next decade, and growing every day. We must begin the process of confiscating the Russian central bank reserves in the UK with this Bill. Defending Ukraine’s democracy is defending our democracy. I look forward to the potential of this Bill to be a route to mobilising billions of pounds of Russian central bank reserves. Can the Minister clarify the position on whether the loans in the Bill today will be in the form of a recourse or non-recourse loan?

The Financial Assistance to Ukraine Bill allows the UK to fulfil our commitment made in the June 2024 G7 loan agreement to Ukraine. The UK’s expected contribution under this agreement is approximately £2.26 billion, which Ukraine can decide to utilise for its defence. We have Russian central bank deposits in the Bank of England, as well as Russian bonds that have matured and the funds deposited in UK commercial banks. Can the Minister outline when we will legislate to seize these assets for the defence and reconstruction of Ukraine, as they dwarf the sums we are debating today? I conclude by again thanking Ministers in the Treasury, the Foreign, Commonwealth and Development Office and the Ministry of Defence for their stalwart support of Ukraine. Slava Ukraini!

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Liberal Democrat spokesperson, James MacCleary.