The Ukraine Effect (European Affairs Committee Report)

Lord Ricketts Excerpts

Thursday 21st November 2024 Lords Chamber

Moved by

[Lord Ricketts]

That this House takes note of the Report from the European Affairs Committee The Ukraine Effect: The impact of Russia’s invasion of Ukraine on the UK-EU relationship (1st Report, Session 2023-24, HL Paper 48).

[Lord Ricketts (CB)]

My Lords, I apologise for being a little late. The previous item ran shorter than I expected.

It is a privilege to open this timely debate on an issue of the utmost importance. On 25 October, your Lordships held a wide-ranging debate on the situation in Ukraine. I was not able to participate, but I have read Hansard very carefully, and a lot of important points were made. The situation has of course moved on quite a lot even since then, with the election of Donald Trump, the massive further attacks by Russia on Ukraine’s energy system and the very welcome—although I think still unavowed—decisions in Washington and London to allow Ukraine to use longer-range missiles against legitimate targets in Russia. All that makes our debate today very topical.

Before coming to the business at hand, I want to pay tribute to the noble Lord, Lord Levene, who is due to make his valedictory speech today. I pay tribute to all that he has brought to this House, on the basis of his extraordinary career in the City, including his memorable year as Lord Mayor. I had the honour of working with him when he was Chief of Defence Procurement. I discovered more recently that we also shared an interest in finding the best way of getting to Normandy on a Friday evening. We will greatly miss the noble Lord.

Our focus today is the report published by the European Affairs Committee at the end of January, on the impact of Russia’s invasion of Ukraine on UK-EU relations. The former Government responded to this on 27 March. Reading the report again nine months on, I think it has stood the test of time and has relevant things to say to those who are now making British policy.

I wish to thank, on behalf of the Committee, our clerk, Jarek Wisniewski, our policy analyst, Jack Sheldon, our committee assistant, Tabitha Brown, and our legal counsel, Tim Mitchell. We took evidence from 22 witnesses, including the then Foreign Secretary, the noble Lord, Lord Cameron, and the then Minister for Europe, Leo Docherty. We received a wide range of written submissions. I will set out briefly the main conclusions on the four aspects we considered: co-operation on sanctions, the UK-EU defence relationship, reconstruction of Ukraine, and the implications for longer-term co-operation with the EU in these areas.

The first area we looked at was sanctions policy. We commended the way the EU and the UK had worked together, but we were concerned even then about the growing evidence that Russia was circumventing sanctions through third states and through its use of uninsured shadow tankers. We also received evidence suggesting that the UK was not as effective as it should be at enforcing the sanctions that had been introduced.

We pressed the Government then to explore options for using sanctioned assets—or their proceeds—to support the reconstruction of Ukraine. In that context, we found it incomprehensible that the frozen assets arising from the sale of Chelsea Football Club, which Mr Abramovich had promised would be used for the support of Ukraine, had then not been disbursed. In their response, the Government assured us that UK sanctions were robustly enforced and that potential breaches were investigated and appropriate action taken.

Despite all the good work, there is worrying evidence that Western sanctions are failing to constrain Russia’s capacity to wage the war or significantly weaken the Russian economy. Could the Minister give us the latest assessment of how effective sanctions enforcement is proving? Is it evidence of their effectiveness that Russia is having to rely increasingly on Iranian drones and North Korean missiles? Would the Minister comment specifically on the revelation in yesterday’s Financial Times that companies registered in the British Overseas Territories have exported $134 million of goods to Russia in 2024 alone? The article alleged:

“Russian documents suggest that a large volume of controlled exports”


is being exported by

“opaque entities in the British Virgin Islands, in particular”.

If true, that is surely totally unacceptable and undermines Britain’s capacity to lead internationally on sanctions enforcement.

On the shadow tanker fleet, it is good news that the Government secured agreement among 40 leaders at the Blenheim Palace summit on a call for action, and that the UK is taking national action to sanction 43 oil tankers, but is there any sign that this is reducing the flow of Russian oil and gas to markets such as India?

On the use of the proceeds from frozen Russian assets, the G7 have now given their welcome agreement to the extraordinary revenue acceleration mechanism, yielding $50 billion for Ukraine, of which the UK is providing around $3 billion. Speed of disbursement is now vital. Could the Minister tell us when the UK share of that will reach the Ukraine Government, and perhaps what proportion of the US contribution of $20 billion is going to get to Ukraine before—to pick a date at random—21 January 2025? Finally on sanctions, is there any end in prospect to the saga of the frozen funds from the sale of Chelsea Football Club?

Turning briefly to the implications of Russia’s aggression on EU-UK co-operation on defence, our report concluded that co-operation on military support had been more effective than previous experience would have suggested. We urged the Government to do what they could to overcome the delays in British participation in the PESCO military mobility project. We noted that the EU’s protectionist rules governing third country access to the European Defence Fund created a major obstacle to participation, even when our strategic interests clearly point to the closest co-operation. We recommended seeking an arrangement with the European Defence Agency similar to those which the US and Norway have.

I think it is fair to say that the former Government’s response was cautious. The current Government have announced an ambitious security pact with the EU, covering these issues and a wider set of economic security challenges. Of course, the return of Donald Trump makes it all the more urgent to pursue close co-operation with the EU across the range of defence issues.

Could the Minister confirm that the security pact will cover all the issues I have referred to? Will the Government also seek to persuade the EU to look again at the third country rules, which at present create such an obstacle at a time when it is more important than ever to have all of us in Europe working together on effective arrangements for the manufacture of, for example, missiles and ammunition?

On reconstruction, our report concluded that the horrific scale of the damage inflicted by Russia’s aggression on Ukraine means that a massive programme of international assistance is going to be necessary over a long period. With Donald Trump’s arrival, the likelihood is that a large proportion of that bill will fall to European countries. We welcomed the previous Government’s initiative to join the multi-donor co-operation platform and to host the first Ukraine recovery conference in the UK in 2023. We concluded that the UK should go on playing a major role in preparations for the reconstruction period—something we have great national experience of—including in the fight against corruption, and that we should support Ukraine in the reforms needed for it to join the EU, which would be a very significant stabilising factor in European security.

Clearly, reconstruction will be massively expensive. The $50 billion G7 loan is of course a helpful down payment, but the World Bank estimated in February this year that the total could be as high as $486 billion—and we have had another year of relentless destruction since then. Are the Government thinking about how it will be possible to raise sums of that order? Is the issue of the $300 billion of frozen Russian assets still off the table in that context?

Our fourth theme was the impact of the Russian invasion of Ukraine on longer-term co-operation between the UK and the EU on foreign policy. The committee recommended, as it has in the past, that there should be more structured arrangements for co-operation on security and foreign policy between the UK and the EU in the future. I am glad to see that the Prime Minister has clearly listened to the committee’s recommendation and has now proposed regular summits with the President of the Commission. The Foreign Secretary has begun a regular series of meetings with the EU Foreign Affairs Council, which is very welcome. However, there are also clear signs of impatience on the EU side because the Government have not said precisely what they want to achieve in the security pact. Can the Minister tell us what the Government’s timetable is for concluding the pact, which has become even more urgent with the election of Donald Trump?

I will step outside the immediate issues in the committee’s report to comment on the issues that lie directly ahead for Ukraine. As I have said, I strongly welcome the fact that the Ukrainians are now able to use the UK Storm Shadow missiles alongside the ATACMS supplied by the US. I realise that the Government are not avowing that decision, but, as President Zelensky said, the “missiles speak for themselves”. This gives a powerful signal of support to Kyiv and complicates Russia’s military planning. It will not change the course of the war, but it is an important move. It undermines the narrative that Putin had been trying to establish—that it was fine for Russia to rain down Iranian drones and North Korean missiles on Ukraine, but it was a reckless escalation for Ukraine to use western-supplied weapons against legitimate targets in Russia.

However much we in this House all want the Ukrainians to come out with a clear victory from this terrible war, the hard fact is that, even with continued, wholehearted western support, they do not have the combat power necessary to drive the Russians off every metre of Ukrainian territory. The advent of Trump is likely to mean that 2025 will see a ceasefire negotiation. President Zelensky himself accepted that when he said last week that Ukraine

“must do everything so that this war ends next year, through diplomatic means”.

It would therefore be prudent for western capitals, alongside continuing to give staunch support to Ukraine, to begin to do contingency planning on the key principles that should guide western policy if there is to be a negotiation. They should start a discussion on those issues as soon as possible with those around Trump, to convince him that, if he is to come out of a negotiation looking strong, which is what he normally wants to do, he must ensure that Ukraine’s vital interests are safeguarded.

I suggest three principles as a start to that discussion. First, Ukraine must be a full party to any negotiations about its future. Trying to impose a deal agreed between Washington and Moscow would be calamitous for Ukraine and for European security. Secondly, Ukraine must not be obliged to cede sovereignty over territories that are currently occupied by Russia, assuming that there will be a ceasefire with in-place forces. The long-term status of those territories must be left open, as was the case in Korea and Germany. Thirdly, Ukraine must be left free to decide its own security policy. It should not be left in some neutral zone, suspended between East and West. The West should be free to give Ukraine security guarantees as a prelude to it joining NATO and the EU in the longer term.

Noble Lords may well ask what Putin’s incentive would be to agree to such a deal. Here I suggest that Trump’s famous unpredictability might come to our aid. If he were to set out a deal on the lines I outlined, and Putin rejected it, that would be the end of a beautiful friendship. In those circumstances, Trump might well decide that, to look strong, he would have to back Ukraine to the hilt. Putin would have to factor in that possibility anyway, even if it did not eventually happen.

If a ceasefire deal respecting those three principles could be achieved, it would at least offer the prospect of building a strong and free Ukraine closely tied to western institutions. It would leave Putin with no long-term gain from his murderous gamble. I much look forward to the debate and the Minister’s reply.

--- Later in debate ---

[Lord Ricketts (CB)]

My Lords, I am grateful to all the speakers who have taken part in this debate, including a number of distinguished former members as well as current members of the European Affairs Committee, and also to the Minister for a very comprehensive response to all the many points that were raised. It was a privilege to listen to the valedictory speech of the noble Lord, Lord Levene, which was characteristically reflective and substantive; we will miss him a lot in this House.

This has been a thoughtful, wide-ranging and constructive debate under the shadow of the impending Trump presidency, with all the implications that has for Ukraine and for European security. Once again, this House has sent out a strong, powerful and unanimous message of continuing support for the courageous people of Ukraine.

We have heard widespread concern about the need for rigorous enforcement of the quite elaborate sanctions regime now in place. I take away a strong message from many speakers that European countries are going to have to take greater responsibility for their own defence and for the support of Ukraine in the years ahead. For many, that underlines the need for closer EU-UK co-operation on all the issues we have been talking about.

There was also the thought that, however this conflict ends, we are going to be sharing the same continent with a hostile Russia for the foreseeable future. That has far-reaching implications for our foreign policy, defence spending and much else. But those are issues for another day. With renewed thanks to all the participants in this debate, I beg to move.

Motion agreed.