Financial Assistance to Ukraine Bill

Nusrat Ghani Excerpts

2nd reading
Wednesday 20th November 2024 Commons Chamber

[The Chief Secretary to the Treasury (Darren Jones)]

I beg to move, That the Bill be now read a Second time.

I am proud of the unity that this House has shown in its support for Ukraine. This support has been steadfast since the onset of Russia’s illegal full-scale invasion in February 2022, regardless of the party in office, and it remains so today. We in this House recognise that while Ukraine is on the frontline, it is fighting for democracy and security across Europe. I want to make it clear that this Government stand, and will continue to stand, in unwavering support of Ukraine with our G7 allies.

On 22 October, my right hon. Friends the Chancellor of the Exchequer and the Defence Secretary announced that the UK would contribute £2.26 billion to the G7 extraordinary revenue acceleration loans to Ukraine scheme, the ERA. This landmark agreement will provide Ukraine with a total of $50 billion in vital additional funding, allowing it to continue to fight back against Putin’s war machine. Crucially, these funds will be repaid not by Ukraine, but from the extraordinary profits made on sanctioned Russian sovereign assets held in the European Union.

This Bill simply provides the spending authority for the UK to contribute to the ERA scheme, enabling us to begin disbursing funds to Ukraine. It is another important demonstration of the UK’s commitment to backing Ukraine for as long as it takes. It will unlock our £2.26 billion contribution to the ERA, funding which is additional to all previous commitments.

The UK has long been at the forefront of support for Ukraine. Our total military, humanitarian and economic support pledged since February 2022 already stands at £12.8 billion. We have often been the first mover on military support in particular, which ranges from training over 47,000 Ukrainian military personnel to providing a squadron of Challenger 2 main battle tanks. Earlier this year, the Government announced that the UK would continue to provide guaranteed military support of £3 billion per year to Ukraine for as long as it takes.

But while we can be proud of what the UK has already done for Ukraine, Members of the House need no reminding that Ukraine’s military, budgetary and humanitarian needs continue to be grave. Existing support is not enough; we must go further still to ensure that Ukraine wins this war. We must do this alongside our allies. The ERA is an ambitious scheme, and represents a united G7 pledge, with contributions from the United States, the European Union, Canada and Japan. Our £2.26 billion constitutes a fair and proportionate contribution to the scheme based on the UK’s GDP share in the G7 and EU.

Each lender will now negotiate a bilateral loan with Ukraine to govern how the funds are distributed and spent within a collective framework agreed by the G7. Repayments from the profits on immobilised Russian assets will be redistributed to the G7 lenders from the EU in proportion to our contributions. The EU regulation providing for this is already in place.

The Government have assessed that Ukraine’s most pressing need is for military support. The UK’s contribution to the ERA is therefore earmarked for military procurement to bolster Ukraine’s capacity for self-defence. This support will help ensure that Ukraine can continue to withstand Russian aggression and fight back against it. The UK is committed to ensuring value for money for both the UK and Ukraine, including through exploring the use of existing UK-enabled procurement channels for Ukraine to purchase the equipment that it needs. Our funding will be delivered in three tranches over three financial years, with the first tranche intended to be delivered in early 2025.

The Bill has one simple purpose: to unlock the UK’s contribution to the ERA. It consists of one substantive clause, which seeks the authority of Parliament to spend the money on the UK’s contribution and make good on our commitment. The Bill is not intended to be used for any purpose beyond that, and it will not be used to spend above the £2.26 billion figure that has been announced. Our figure has been agreed with the G7 and caps have been built into the scheme at a G7 level through the EU repayment mechanism.

Although slim, this Bill is essential. Royal Assent is required before we can begin disbursing funds to Ukraine, and before we can receive any repayments from the profits being held in the European Union. It is therefore vital that we pass this Bill as quickly as possible, so we can begin disbursement this winter, as Ukraine’s needs are immediate. I hope that I can count on the support of the House to achieve this, and help us get this vital money into Ukraine’s hands as quickly as possible.

The $50 billion collectively delivered through the ERA lays down a marker to show that we will continue to stand with Ukraine for as long as it takes. Collectively, we will pursue every available means of making Russia pay for the damage it has done in Ukraine. I am proud to present the UK’s contribution to the scheme today, which will make an immediate tangible difference to Ukraine’s capacity to defend itself. This Bill facilitates that contribution, and I commend it to the House.

[Madam Deputy Speaker]

I call the shadow Minister.

--- Later in debate ---

[Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)]

We are now 1,000 days into the Russian invasion of Ukraine and we are entering a crucial period for Ukraine and its people, with the Kursk offensive and Administration change in the United States. I would first like to praise our Government for their evolving strong support for Ukraine, reflecting the needs on the ground. The United Kingdom was the first responder and supporter of Ukraine. The Government’s participation in implementing President Zelensky’s 10-point victory plan is very welcome. Ensuring that the war does not last indefinitely and ends on fair terms is crucial. MPs of all parties work closely on campaigns around aid, sanctions, seizure of assets and so much more.

There is the potential that Ukraine could lose 50% of its military aid support from its international allies. The UK and other supportive nations struggle to make up the shortfall from our own stores. If this remains the case, Ukraine will slowly lose the ability to defend itself. Russia will increase and intensify its atrocities across the country. Where will Russia stop? The increasing rhetoric from the Kremlin needs a robust response. It has been shown again and again to take advantage of perceived weakness. Now, 1,000 days into the Russian invasion of Ukraine, we can take the first step in unlocking frozen Russian assets to support Ukraine. I welcome today’s Bill, which will ensure that the loans made will be repaid with the Russian state’s assets currently frozen in the UK.

The G7 must act collectively on this. At the start of the war, approximately $300 billion of Russian central bank reserves were frozen in the west. We need a route to mobilise these reserves. We must understand how other states have been able to disclose the amount of Russian central bank reserves they hold. We need to know how many billions of pounds of Russian reserves reside in the City of London. Canada has passed the Special Economic Measures (Russia) Regulations, which collects data on Russian assets, freezes them and publishes the value, which currently stands at 135 billion Canadian dollars frozen in Canada. Can the Government move to disclose the level of Russian assets held here in a similar way?

I also wish to call for the seizure of Russian central bank reserves to pay for the defence of Ukraine. Many Governments are seizing the profit generated from the frozen money and using that to back Ukraine. The US has passed legislation giving the President the power to do that, and I welcome this legislation, which will move us in the same direction. In the UK, we also have £2.5 billion frozen from the sale of Chelsea football club. If unlocked, it could create the second wealthiest charity in Britain, but it remains frozen in a UK bank account. Can the Minister outline what steps he is taking to immediately release this funding, which would provide much-needed humanitarian aid to Ukraine? In Ukraine, winter is not coming; winter is here.

We must decide on a route to mobilise the UK’s seizure of Russian assets. The estimated cost of reconstruction in Ukraine is at least $486 billion over the next decade, and growing every day. We must begin the process of confiscating the Russian central bank reserves in the UK with this Bill. Defending Ukraine’s democracy is defending our democracy. I look forward to the potential of this Bill to be a route to mobilising billions of pounds of Russian central bank reserves. Can the Minister clarify the position on whether the loans in the Bill today will be in the form of a recourse or non-recourse loan?

The Financial Assistance to Ukraine Bill allows the UK to fulfil our commitment made in the June 2024 G7 loan agreement to Ukraine. The UK’s expected contribution under this agreement is approximately £2.26 billion, which Ukraine can decide to utilise for its defence. We have Russian central bank deposits in the Bank of England, as well as Russian bonds that have matured and the funds deposited in UK commercial banks. Can the Minister outline when we will legislate to seize these assets for the defence and reconstruction of Ukraine, as they dwarf the sums we are debating today? I conclude by again thanking Ministers in the Treasury, the Foreign, Commonwealth and Development Office and the Ministry of Defence for their stalwart support of Ukraine. Slava Ukraini!

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Liberal Democrat spokesperson, James MacCleary.

[James MacCleary (Lewes) (LD)]

Yesterday, Ukraine entered its 1,000th day since the start of Russia’s illegal and unprovoked invasion, and it is about to enter its toughest winter yet. This Bill represents a significant and welcome step in providing much-needed financial support to Ukraine as it continues its courageous resistance. It will deliver tangible assistance during this critical phase of the conflict, providing a vital lifeline to our Ukrainian allies.

Before the war, my partner and I had the good fortune to travel in Ukraine, visiting both Kyiv and Odesa. We visited modern cities similar to any other in Europe, so the sight of ordinary Ukrainian families being forced, at the start of the Russian attack, to shelter in the Kyiv underground stations that we had both so recently used for sightseeing in that beautiful city was both shocking and moving for us. It also brought home why the UK’s unwavering support for Ukraine is so essential, not just for the brave people of that nation but for all of us. If liberal democratic nations do not stand together against tyranny and aggression, the tyrants will feel no constraint and the citizens of other European nations, including potentially the UK, might find that they are the ones forced into underground stations looking for shelter.

The Liberal Democrats support this Bill and its intent, but we are disappointed that it has taken so long to come to the House. My noble Friend Lord Purvis of Tweed raised this issue back in January, some 10 months ago, but now the Bill is finally here, we are pleased to see that it demonstrates a commitment to ensuring that those responsible for Ukraine’s devastation—Russia and its oligarch elites—should, at the very least, contribute financially to Ukraine’s recovery. However, we believe the Bill does not go far enough.

The UK should consider seizing all frozen Russian assets, not just their profits, and redirect them to aid Ukraine. With around £22 billion-worth of such assets currently held in the UK alone, the Government are missing a significant opportunity to amplify their support. Distinguished international lawyers have made a strong case for this step.

Although some economists have expressed concern about repercussions in the financial markets, we believe that, given the very specific circumstances of this conflict, the justification and the benefits far outweigh those concerns. Such action would provide an immediate and substantial financial boost to President Zelensky’s forces and Ukraine’s reconstruction efforts, while sending a clear message to the Kremlin that aggression against sovereign nations will have severe and lasting consequences. We therefore also back the calls for a special tribunal to prosecute those responsible for Russia’s war of aggression and to ensure accountability for the heinous crimes committed.

The Liberal Democrats have consistently called for the UK to lead by example in supporting Ukraine, extending it beyond financial assistance to include military, diplomatic and humanitarian measures. The provision of advanced weaponry, including longer-range precision arms, is critical to Ukraine’s success. We must also bolster British arms and ammunition supplies, work closely with our allies to replenish stockpiles, and maintain Ukraine’s defensive capabilities. It is essential that we co-ordinate effectively with NATO and the European Union to maximize collective impact, which is why I urge the Government to be bolder in their efforts to rebuild our relationship with the EU, including by deepening our security and military co-operation.

We urge the Government to build an international consensus for the proscription of the Wagner Group, whose activities represent a grave threat to international security. The UK must also take a strong stance against Russia’s continuing human rights violations and support anti-war activists within Russia, many of whom face persecution for their bravery. Offering asylum to such individuals and raising their cases in international forums is not only a moral imperative but a strategic means of undermining the Kremlin’s control.

It is vital to recognise that supporting Ukraine financially and militarily should not come at the expense of other nations in need. Restoring the 0.7% gross national income target for international development spending is a crucial step towards ensuring that humanitarian aid to Ukraine does not result in the neglect of our wider global responsibilities. The Government’s failure to meet this target undermines Britain’s reputation as a global leader in development and humanitarian support.

The Liberal Democrats also urge the Government to take robust action to close the loopholes in economic crime legislation that have allowed Putin’s allies to funnel dirty money through the UK for far too long. A Financial Times investigation published yesterday revealed that companies in British overseas territories exported $134 million-worth of goods to Russia in 2024, potentially breaching UK sanctions aimed at restricting access to military and high-tech supplies. I call on the Minister to give an undertaking that the Government will look to address these violations and close these loopholes.

The National Crime Agency must be properly resourced to tackle economic crime effectively, and Magnitsky sanctions should be used to target relatives and associates who attempt to evade existing measures. This is about far more than financial probity; it is about standing up for the rule of law and ensuring that our financial system cannot be used to bankroll aggression.

This Bill comes at a moment of uncertainty. The possibility of diminished US support for Ukraine, following the recent election and the imminent return of Donald Trump to the presidency, is deeply concerning. Should the United States falter in its support, Europe must step up. This should serve as a wake-up call for the UK Government to lead in Europe by seizing frozen Russian assets, reversing damaging cuts to our armed forces and strengthening co-operation with both NATO and the European Union on security and foreign policy.

With a hard winter ahead, time is of the essence. The UK must not waver in its commitment to Ukraine. This is about more than financial assistance; it is about justice, accountability and the preservation of international law. This Bill is a vital step forward, but it must not be the final word.

We must demonstrate bold leadership by acting decisively to ensure that Ukraine not only survives but prevails, and that the principles of sovereignty, freedom and democracy endure. Let this Bill be the beginning of a renewed and united effort to support Ukraine. By seizing frozen Russian assets, providing advanced military support and working closely with our allies, we can help Ukraine to secure a lasting victory and ensure a future of peace, stability and justice for Europe and beyond. Let us rise to this challenge for Ukraine, for Europe and for the values we hold dear.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call Linsey Farnsworth to make her maiden speech.

--- Later in debate ---

[Mark Ferguson (Gateshead Central and Whickham) (Lab)]

I wish to associate myself with the comments of many other Members who congratulated my hon. Friend the Member for Amber Valley (Linsey Farnsworth) on her wonderful maiden speech. She spoke particularly movingly about the impact that being in this place has on our families. I am sure that all of us will be thinking of our friends and family as we think back on that speech.

I am proud to speak in support of the Bill. I am proud of the additional money that is being provided for the defence of Ukraine and its people. I am proud that the sum of £2.26 billion, as my hon. Friend the Member for Rushcliffe (James Naish) said, is in addition to the £3 billion that has been committed each year. I am proud, too, that this House stands for Ukraine and democracy, and in opposition to Putin and tyranny. That position is shared almost universally across this House, and certainly universally in this debate.

In my early contributions in this place, I have spent much of my time decrying the legacy of the last Conservative Government. I dare say I will do that a few more times, Madam Deputy Speaker, but I certainly will not be doing that on Ukraine. One area in which the last Government deserve real praise is their support for the Ukrainian people. In their darkest hour, this House and this country stood as one—in defence of Ukraine, in defence of democracy, in defence of freedom.

At a time when the opinion of politics and politicians is low, I think it speaks well of the House that we can come together on issues of such great magnitude. The support for the people of Ukraine under the last Government and under this Government make me proud to be British, and proud to be a Member of this House, because defending Ukraine, its independence and its way of life, is also defending our way of life. It is drawing a line in the sand and saying to those who wish to tear up our democracy and subvert our society that we will not stand idly by. I am sure that I am not the only Member to have stood at his or her local cenotaph on Remembrance Sunday or Armistice Day and thought of those who are fighting right now for their freedom and for their loved ones in Ukraine.

At the same time, we must not think that those who are taking on Russian aggression are solely those on the frontline. This war is being fought with more than just bombs, bullets and missiles. It is fought by the families who keep on living despite the presence of a dictator who wishes to snuff out the existence of their nation. It is fought by those who are willing to say, in this House and anywhere else where speech is free, that Vladimir Putin is an illegitimate tyrant. It is fought by those inside Russia who stand—or seek to stand—in democratic elections, knowing that the elections in which they stand are neither free nor fair, but doing so anyway. It is fought through the dignity and defiance of those nations who also stand on the border of the Russian aggressor state, wishing only to remain free. We must stand with them too.

Across the UK, including in Gateshead and Whickham, people have taken Ukrainian refugees into their homes. They have made them welcome. They too are part of the fight for dignity and democracy. Today we take the next critical step in that fight, at a time when, as has been said, it is more urgent than ever. We do not know when this war will end, but we do know that it must end, and how it must end: with a peace that is just for the Ukrainian. Slava Ukraini: glory to Ukraine.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

We now come to the final Back-Bench contribution.

[Dave Robertson (Lichfield) (Lab)]

Thank you, Madam Deputy Speaker. I sincerely hope to be last but not least.

Let me begin by congratulating my hon. Friend the Member for Amber Valley (Linsey Farnsworth) on her first speech in the Chamber. I too, like many Members who are present today, am relatively new to the House, and I do not think I will ever forget the first time I walked into the Chamber with that real sense of awe that we have when we walk in here. We are faced with the history of this place which stretches back for centuries—the ideas that have been debated, discussed and decided in this room—but we are on the next page. This debate, and the debates that we will have over the coming months and years, are the next step on that journey, the next page of that history, and as we move forward we must continue to remember our place in the story—a story of the importance of democracy and the importance of ordinary people standing up, having their say and ensuring that ideas such as democracy, justice and self-determination are never forgotten, and are always close to the forefront of what happens in this place, in this country and around the world.

We should be proud of the history of this place in defending those ideals, as I am proud of this country’s support for Ukraine. I am also proud of the support from people throughout my constituency, in Lichfield, Burntwood and the villages, who have thrown open their homes to welcome those who have been displaced from Ukraine. It is heartening to see how many people across the country have acted so quickly in saying, “These are our friends—these are people who are in need”, and making sure that there was a place for them to come and to be safe. Let us make no bones about it: the Ukrainians are defending our values. They are Europe’s eastern flank, and Europe’s bulwark against autocracy. The fight in which they are involved, the fierce fighting that is taking place, is not for some nebulous idea; it is not for drawing lines on a map; it is for something as fundamental as the values that we hold dear.

I think it is important for us to remember where we want to be when those next pages of the history of this place are written. What do we want it to say? I know that when I play my part in that, I want it to say that I was on the right side of history—on the side of our values, justice and democracy. That is why I support the Bill, so that we can provide support to Ukraine. More than that, I want to be part of sending a message—a G7 message, a NATO message, a European message—to Washington about the importance of supporting Ukraine, and part of sending a very strong message to Moscow, and its supporters in Tehran, Pyongyang and anywhere else that supports this illegal war in Ukraine, that it has to stop. But it can only stop with a Ukrainian victory. Slava Ukraini.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

We now come to the Front Benchers, starting with the shadow Minister.