Frozen Russian Assets: Ukraine

Jeevun Sandher Excerpts

Monday 6th January 2025 Commons Chamber

[Dr Jeevun Sandher (Loughborough) (Lab)]

Across the House, we agree that we must show Putin that we have the resolve and resources to defeat him. If we do not, a great power war more terrible that we can imagine will come. A century ago, politicians on these Benches failed, and what followed was the most destructive war in the history of humankind. Stopping that horror being repeated depends on us winning at war economics, as the motion rightly identifies.

War economics is simple: whichever side can command greater resources and convert them into fighting forces will win. Winning a single battle means nothing if the other side can keep throwing in resources to win the next one. Amateurs talk tactics; professionals talk logistics. Winning at war economics means doing three things. First, we must limit Russia’s earnings and output; secondly, we must limit Russia’s ability to convert its earnings into fighting forces; and thirdly, we must gain and convert our own resources into fighting forces. Seizing the $300 billion will help with the third point only if we convert those resources into fighting forces.

First, on limiting Russia’s output and earnings, Russia’s earnings from oil are still far too high: $150 billion a year. Urals oil is trading at $67 above the price cap. Russia is circumventing that by padding out costs for its shadow fleet in attestation documents. Maximilian Hess, the esteemed foreign policy expert, has shown that we can strengthen our price cap by making London insurance for foreign ports dependent on the proper verification of costs in attestation documents. I am pleased that the Office of Financial Sanctions agreed to look into that when it gave evidence to the Treasury Committee.

Secondly, we must stop Russia converting its output into munitions and materials. Too many of our western components are finding their way to Russian frontlines.

Thirdly, we must do more to convert the resources that we need into fighting forces. That is where our industrial defence strategy comes in. Seizing the $300 billion can help with that. As an economist, I should make clear to the House that seizing those assets would not damage our economy or reduce financial stability. However, we must be clear on the how and the why.

On the how, we cannot seize those assets unilaterally. We hold only about 10% of them here, while around two thirds are held in Europe. We must convince our European allies to do as the Canadians and Americans have done in seizing those assets. On the why, seized assets are useful only if we convert them into defence production. The bit-by-bit approach that has characterised support to Ukraine must end; a large and sustained increase is needed.

Putin wants to rebuild a greater Russia and to swallow his neighbours whole. He will attempt to take more of Europe. Defeating him means defeating our own complacency. The history of nations is a history of war. That history changed only when the calculation of peace changed—through military strength, through sacrosanct borders and through democracy. If we do not show that we have the resolve and resources to defeat Putin, we will make the same mistake that Members made from these Benches almost a century ago. One of our nation’s greatest Prime Ministers stands outside this Chamber, his hands atop his hips. He warned Members in this Chamber and lamented the time wasted without preparing. He spoke of the

“years which the locust hath eaten”—[Official Report, 12 November 1936; Vol. 317, c. 1101.]

but he was ignored. Members on these Benches were too complacent; let us not be complacent. Members on these Benches failed; let us not fail. Members on these Benches saw oceans of blood spilled by the youth of this nation; let us not be the generation that sees oceans of blood wash over this continent once more. Let us be the generation that keeps the peace by showing Putin we have the resolve and resources to defeat him.