Ukraine (UK Relations with Russia)

Baroness Primarolo Excerpts

Thursday 11th December 2014 Commons Chamber

[Mr Whittingdale]

rose—

[Madam Deputy Speaker (Dame Dawn Primarolo)]

Order. Before the hon. Gentleman continues, I gently remind him that opening remarks in a Back-Bench debate are supposed to be for 10 to 15 minutes. He has now been speaking for 25 minutes, although I realise he has been pulled into different areas by interventions. Members who wish to speak and would not like to be under a time limit should bear it in mind that the debate will have to end promptly at 5 o’clock. I hope he will concentrate on making his points and concluding his speech.

[Mr Whittingdale]

I am grateful, Madam Deputy Speaker. I have been tempted by my hon. Friends. As you point out, the debate runs until 5 o’clock, so I hope there will be time for everyone to speak.

Moving on rapidly, I want to talk about the economic challenges facing Ukraine, which is an area where I think we can do a lot more. The challenges are considerable. There has been a massive currency depreciation, the economy is likely to shrink for the third year in a row, and about 20% of production capacity in eastern Ukraine has essentially been lost. The immediate challenge is the winter. It is now 0° in Kiev; a few days ago, it was minus 15°, and obviously demand for energy will be high. Ukrainians are prepared to accept sacrifices—they told me, “We will take cold showers”—but it is important that the energy supply is there, and I am reassured that gas reserves have been increased and that the gas supply has now been reversed from Europe back into Ukraine.

What Ukraine needs, however, is investment. Yesterday, I chaired a session of the Adam Smith Ukrainian investment conference where we heard from business men that they wished to invest but needed the confidence to do so. There is still concern about the level of corruption, which is one of the greatest challenges facing the country. I want to make two, related suggestions that I hope the Government will consider. The first comes from the British-Ukrainian chamber of commerce, which is pressing for a political risk insurance scheme to be established. The World Bank already has the Multilateral Investment Guarantee Agency, but it is limited in what support it can offer Ukraine, so the chamber of commerce has suggested that there be a special fund to provide political and conflict risk insurance.

Related to that, the Federation of Employers of Ukraine is assembling a private guarantee fund, and there are calls for a new Marshall plan for Ukraine, which I understand is getting support from the European Bank for Reconstruction and Development, the French Government and America. So there are things we could be doing to increase the confidence of western investors that it is safe to invest in Ukraine.