Russia: UK Companies

Pat McFadden Excerpts

Wednesday 7th December 2022 Commons Chamber

[James Cartlidge]

I pay tribute to my right hon. Friend for his great expertise on these matters but say to him that we have to differentiate. We have taken explicit and direct action on firms within the sanctions regime—120 entities and 1,200 individuals have been sanctioned and, as I said earlier, £18.4 billion-worth of frozen assets have so far been reported to the UK Government. There has been a clear commitment from a number of important UK and indeed global businesses to divest from Russia—I am not specifically talking about any one—but we must recognise that there is complexity in that. When the Prime Minister was Chancellor back in March, he was very clear about what the Government want in terms of divestment, and we obviously support companies in taking that action, but I am happy to look at what further can be done in this space and to work with colleagues.

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

I thank my right hon. Friend the Member for Barking (Dame Margaret Hodge) for tabling this urgent question.

Right now in Kyiv, the temperature is around freezing. Putin aims to weaken the resolve of the Ukrainian people by freezing them over this winter. But with every Russian missile that falls on energy infrastructure, he does not weaken the resolve of the Ukrainian people—he strengthens it. The resounding answer to the question posed by President Zelensky—without electricity or without you?—should be heard loudly and clearly in Moscow.

To support the efforts of the Ukrainian people, many British companies have ceased their Russian operations and divested themselves of their interests. Those decisions have cost businesses money, orders and jobs, but they have made them because they want to do the right thing. And other businesses are paying higher energy costs as a result of the war. But some companies either continue to operate or have not fully divested themselves of their interests.

The excess profits made by energy companies have rightly been called the windfalls of war. Energy is the central pillar of the Russian economy and the profits from it fuel the Russian war effort. My right hon. Friend the Member for Barking has told the House today that the dividend due to BP as a result of its stake in Rosneft is worth about £580 million. Those funds may be frozen at the moment, but what do the Government believe should happen to those funds when they are eventually released? Do the Government believe that those funds should be used for the welfare and benefit of the people of Ukraine, whose country is being devastated by Russian aggression? How many other British companies are still operating in Russia and why are they still operating? What is the Government’s position on money they could be making there, which could also be described as the windfalls of war?

We are united across this House in our support for Ukraine and for the incredible bravery shown by both its armed forces and its people. The question the House poses today is how will the Government make sure that British companies are not profiting from the appalling Russian aggression we have seen in Ukraine?

[James Cartlidge]

The right hon. Gentleman poses a number of very important questions. On a general point, he talks about strengthening the resolve of the people of Ukraine. This country can be rightly proud of every step it has taken to strengthen that resolve, and, I must say on record, of the leadership of two former Prime Ministers, as well as the current Prime Minister. They have shown extraordinary leadership appearing in Kyiv under huge pressure and supporting President Zelensky, alongside the support we have given to the Ukrainian armed forces and our massive humanitarian aid. I know there is consensus on that, but we should not in any way be defensive about the steps we have taken to support the Ukrainian people.

The right hon. Gentleman talks about companies doing the right thing. He is absolutely right that companies are divesting and exiting from Russia. We welcome that. I explained about the statement made by the Prime Minister when he was Chancellor back in March, which is obviously something we welcome. I think there are some complexities in that process and I will not be drawn on individual firms. That is long-standing Treasury policy for very good reason.

The right hon. Gentleman mentions the windfall tax. We have a windfall on North sea oil and gas which will raise £41.6 billion—an enormous sum of money. Why are we raising that money? It is in part precisely to fund the extraordinary support we are putting in place to help British people and British businesses through this winter. He talked about the impact on companies of Putin’s war and the impact on people. Yes, of course, the harshest impact is on the people of Ukraine, not least the bereaved families, but there is an impact on our people with higher prices, including energy prices, here and throughout Europe and the world. Our windfall tax funds that support so that this winter we are doing everything possible to support our businesses and our people, alongside massive support for the people of Ukraine.