Financial Assistance to Ukraine Bill

Lord Banner Excerpts

2nd reading & Committee negatived & 3rd reading
Wednesday 15th January 2025 Lords Chamber

[Lord Banner (Con)]

My Lords, I too support this Bill. As has been said, it will enable the payment to Ukraine of the UK’s share of the $50 billion financial assistance package agreed by the G7 in summer 2024. I congratulate the Government on bringing it forward.

However, I also emphatically support my noble friend Lord Blencathra’s regret amendment that the Bill does not also contain a provision allowing the transfer of the circa £30 billion of immobilised Russian state funds located in the UK. As my noble friend said, the noble Baroness, Lady Chapman, stated in response to a Written Question that I tabled before Christmas that the provision of the $50 billion loan, backed by the interest made on the immobilised Russian assets in the EU was

“an important step towards ensuring Russia pays”.

This is right, but it is only the first such step. I find it hard to understand why, having agreed to use the profits from the immobilised Russian funds, the Government are not now taking the opportunity to legislate at least through enabling powers and at least for the possibility of transferring the entire amount of Russian immobilised funds to Ukraine. Again, as my noble friend said, if there is a legal way to transfer the interest, it follows that there is a legal way to transfer the capital. In banking law terms, the interest and the capital are owned by the same person. There is no coherent basis for a legal distinction between the two in this context.

About a year ago, the previous Foreign Secretary, my noble friend Lord Cameron of Chipping Norton, confirmed his view that there is a legal route to seizing and transferring the entire amount—and rightly so. I explained the legal basis when I last spoke on this issue in the House before Christmas. The current Government have told us repeatedly that the issue is being considered—or “actively considered”, as the Minister put it. Will he please confirm how much longer this process of consideration is going to go on before a decision is actually taken?

With respect, there comes a point when protracted consideration may start to be perceived as dithering, and I suggest that we are not far off that point. I hope I am not right to fear that the Government may be disinclined to use the independence that the UK now has following withdrawal from the EU to take a lead on this issue, instead preferring the herd mentality of waiting until Europe finally has a collective position on the subject—if it ever does.

Either way, whether I am right or wrong in that fear, Ukraine cannot afford to wait—that is the important point. The $50 billion loan will provide vital support and is of course to be welcomed, but how long will it provide that support for? The money will literally be used to keep the lights on during the war, but Ukraine’s wartime budget deficit is around $40 billion per year. Even taking into account other sources of financial support, the loan will last through this year and no further.

It will also not fund any military support for Ukraine, an issue that is becoming increasingly pressing in light of the return to the presidency of Donald Trump in the US in a few days. According to the US Government, the US has provided some $93 billion in military support since the start of the full-scale invasion, as my noble friend explained. Should that stop or be reduced, funds will have to be found to plug the gap. It has often been rightly said by the Government, in this House and elsewhere, that it must be for the people of Ukraine alone to choose how much longer the war goes on for. But without the right support, it is not a meaningful choice; these are empty words without the support that Ukraine needs.

I commend and welcome the Minister’s comments that we must support Ukraine for as long as it takes, no matter how much it costs, but those comments need to be translated into actions, and it surely must be Russia and not the British taxpayer footing the bill, as far as we are concerned.

The illegal war in Ukraine is in its third year or, for those from the east of Ukraine or Crimea, its 11th year —it has been going on since 2014. It is now a war of attrition. Only this week, the Financial Times reported that Russia’s war economy is on the edge of collapse, as “a house of cards”. The western sanctions are working. Our task must now be to convince Putin that the Russian economy would not be saved by giving him back the immobilised funds as some sort of prize or reward for ending the war. The only resilient response and future-proof way of ending this war is if Putin knows that unless he stops for good and does not repeat the actions of the last 10 years, he will lose his grip on Russia’s economy completely and, with it, his grip on power.

I urge the Government to catch up with the US and Canada and finally introduce—as they have done—legislation permitting seizure of Russian state funds, if only to send a clear message to Russia that waging a war of aggression does not pay and that there will be serious consequences for the continued flouting of international law. Let us not wait any longer: let us get on with it and show leadership on the global stage on this issue. The Bill is a missed opportunity to do that, and I urge the Government to bring forward the necessary legislation without delay. I now very much look forward to hearing the maiden speech of the noble Baroness, Lady Batters.