UK-Ukraine Credit Support Agreement

Lord Astor of Hever Excerpts

Wednesday 5th January 2022 Grand Committee

[Lord Astor of Hever (Con)]

My Lords, I congratulate the noble Baroness, Lady Hayter, on initiating this important debate. I welcome this framework credit support agreement and believe that it represents an important part of the support which the UK Government are showing for the continued independence of Ukraine.

I have taken a close interest in Ukraine for many years. I was a Defence Minister in the Lords at the time of Russia’s incursions into the Crimea and Donbass regions of Ukraine in 2014. As I said at that time:

“Support to the Ukrainian armed forces is not new; the UK has been providing advice and training support to Ukraine for some time and has well established relationships.”—[Official Report, 25/2/15; col. 1653.]


The recent increase in the number of Russian troops gathering on Ukraine’s eastern border is extremely concerning, as the noble Baroness said, and has prompted our Government to issue a robust warning to Russia that it will face co-ordinated sanctions from the West if it makes any further incursions. The Foreign Secretary’s comments are in lock-step with President Biden’s assurances that Russia will face severe sanctions if it invades its neighbour.

We are facing a very dangerous flashpoint moment. As with any situation that has the potential to lead to war, there is a real need to de-escalate the situation through engagement in dialogue. Forceful and skilful diplomacy is our only chance of calming Russia’s bellicose rhetoric and switching the mood from one of broken trust between the West and Russia to one of respect for boundaries. We must all work towards a new age of improved communication and co-operation, greater openness and responsibility. In considering the available deterrents, such as blocking the freedom of movement of Russia’s funds through western banking channels and other economic spheres, we should involve as much as possible our European neighbours, notably Germany with regard to Nord Stream 2 as well as the United States.

Solutions can come from different directions and take different forms. Understanding the psychology of the Russian leadership—its ambitions and fears and the risks it is prepared to take—in addition to having an experienced and well-represented negotiating team, will be necessary. However, the UK can make a significant contribution in the context of a wider response from the West to help render an invasion of a stronger and well-supported Ukraine a more complicated and troublesome proposition for Russia.

Britain and Ukraine have enjoyed a close relationship since the latter achieved independence in 1991. We are now an important trading partner. In advance of celebrating the 30th anniversary of independence, the two countries signed the UK-Ukraine strategic partnership agreement in the autumn of 2020, underscoring these years of economic ties and shared defence interests. Credit support, which is to be provided pursuant to the framework agreement on the table for consideration, is a way of ensuring that the benefits reaped by this partnership are not wasted but continue to help Ukraine maintain its right to sovereignty and territorial integrity.

Ukraine is a country rich in history and culture, but it has suffered immeasurably from its past enslavement to communism. Notwithstanding independence, nearly a decade of simmering tensions following the illegal annexation of Crimea, economic hardship and, more recently, Covid have made conditions challenging for the population. We must not fall for Putin’s false assertions of feeling threatened by Kiev’s long-held ambition to be part of NATO and the EU.

Much has been achieved through Operation Orbital, which, since 2015, has enabled us to provide non-lethal training to more than 20,000 members of the Ukrainian armed forces. This has come at the same time as the national implementation of necessary defence reforms covering strategic communications and procurement. Recently, the UK has provided personal protective equipment, winter fuel, medical kits and winter clothing for the Ukrainian troops.

The international Crimea Platform keeps us focused on the ugly reality of human rights violations against a background of forced occupation. Containing the military threat in the Azov-Black Sea region is one critical area of interest for the United Kingdom. The framework credit support agreement will offer the UK and Ukraine an opportunity to combine technical and engineering know-how to develop and enhance Ukraine’s naval defence capabilities—something that will be of benefit to both countries on the R&D and economic fronts, in addition to security.

Ukraine’s Ministry of Strategic Industries, recently set up to oversee and update the country’s defence and aerospace sector, aims to create an environment where joint ventures with foreign companies are the norm. This will increase the potential for mutually beneficial innovative projects and the sharing of critical technologies such as automated control systems, rocket and space technology, unmanned platforms and systems to defend the country from cyberattacks. Additionally, the framework credit support agreement contains commitments from both Governments to tackle corruption in international commercial transactions. A sweeping review of anti-corruption methods will do much to encourage investment in Ukraine, a country rich in talent and resources.

Already, the Ukraine Government have worked to implement a number of reforms to make the climate more appealing to international investors, including the deregulation and privatisation of state-owned enterprises, together with land and capital markets initiatives. The UK is already a significant investor in Ukraine.

Talks are set to take place in Geneva, Brussels and Vienna in the coming weeks. Let us hope that all things will be considered, and nothing and no one will be left out of the negotiations, to de-escalate the current situation and provide a way forward for longer-term co-operation and peace.