The following Statement was made in the House of Commons on Thursday 22 June.
“With permission, Mr Deputy Speaker, I would like to update the House on the Ukraine Recovery Conference, which the UK is proud to be co-hosting with Ukraine in London.
Yesterday, the Prime Minister opened the conference, together with President Zelensky live from Kyiv, and the conference will conclude this afternoon. As my right honourable friend the Prime Minister said, the conference is planting the seeds of Ukraine’s future. From the speeches from Ukraine’s international partners to conversations with business leaders and civil society representatives, the message that echoes from the conference is one of hope and belief in the tremendous potential of Ukraine’s economy.
Before this terrible war, Ukraine’s economy was becoming a huge investment opportunity. Ukraine was the breadbasket of Europe, a top five exporter of iron ore and steel, a leader in energy and a start-up nation with a thriving tech sector. That opportunity is still there today. The international community has come together to support Ukraine’s recovery and economic future—one that is modern, open, green and resilient. By helping Ukraine’s recovery and economic transformation, we will unlock the potential of the country and its people, help defeat Russia’s aggression and benefit global security, prosperity and the rule of law.
Putin’s unjustified and unprovoked invasion of Ukraine has caused untold misery. Thousands of Ukrainians have been killed, and millions have been displaced, including children. Schools, hospitals and critical infrastructure have suffered damage in Russia’s indiscriminate air strikes. Ukraine must and will succeed as a free, independent, sovereign and democratic state within its internationally recognised borders. That is essential for the people of Ukraine and the Euro-Atlantic region, and for global peace and prosperity. We remain committed to a just and lasting peace based on respect for the UN charter and Ukraine’s sovereignty and territorial integrity.
The conference has delivered funding to meet Ukraine’s immediate recovery needs, help it to stay in the fight and lay the foundations for future growth. Ukraine’s partners announced continued support for Ukraine’s budgetary needs for the years ahead, including a new €50 billion EU facility dedicated to supporting Ukraine’s recovery, reconstruction and modernisation. The UK is playing its part. The Prime Minister announced yesterday that, over the next three years, we will provide loan guarantees worth $3 billion.
Nearly 500 businesses globally from 42 countries, worth more than $5.2 trillion, pledged to back Ukraine’s recovery and reconstruction in the wake of Russia’s illegal invasion. Big businesses that can work with Ukraine to deliver a more modern, open economy have pledged their support. Virgin, Sanofi, Philips, Hyundai Engineering and Citi are among the companies involved.
Development finance institutions announced mechanisms to provide the seed capital to support private sector-led growth. The European Bank for Reconstruction and Development announced its intention to raise between €3 billion and €5 billion of new capital from shareholders. This could provide at least four times the amount in new investment in Ukraine for years to come, including in critical infrastructure. G7 and European development finance institutions launched a new Ukraine investment platform that will promote co-financing to maximise the impact of their support.
The Government of Ukraine and their partners responded to businesses’ demand to extend commercial insurance coverage in Ukraine. The conference launched the London conference war risk insurance framework, which will be backed by G7 members. The framework outlines support for immediate de-risking measures to increase investor confidence, and it will guide efforts in working with the commercial insurance markets to unlock private investment to meet Ukraine’s long-term reconstruction needs. The UK is already delivering on the framework by releasing up to £20 million of funding for the Multilateral Investment Guarantee Agency to provide guarantees and insurance for reconstruction projects now, while the conflict is ongoing.
As the Prime Minister made clear in his speech yesterday, Russia must pay for the destruction that it has inflicted, so we are working with allies to explore lawful routes to use frozen and immobilised Russian assets to fund Ukrainian reconstruction. On Monday, we laid new legislation to enable us to keep sanctions in place until Russia pays to repair the country it has so recklessly attacked. After the sacrifices and suffering of the war, Ukrainians are hoping for a better future. It is in the interests of Europe and the world that the country they rebuild should be stronger than ever, integrated into western markets and self-reliant. The Government announced a major commitment of up to £250 million of new capital for the UK’s development finance institution, British International Investment.
The true legacy of this terrible war will be a Ukraine that is more modern, innovative, resilient and green. To support this, G7 Governments committed to developing a new clean energy partnership with Ukraine to accelerate the transition to a green energy system that is secure, sustainable, resilient and integrated with Europe, and the conference launched the Innovate Ukraine green energy challenge fund to accelerate low-carbon, affordable energy innovation. Ukraine’s partners announced a new tech partnership to help realise the amazing potential of Ukraine’s burgeoning tech ecosystem. With Ukraine we announced a new tech bridge to facilitate investment and support talent between the British and Ukrainian tech sectors. In the interest of encouraging private sector investment, President Zelensky reaffirmed his commitment to the reform path and towards EU membership, which was welcomed by Ukraine’s partners at the conference.
The Government of Ukraine are committed to working in partnership with Ukrainian and international businesses, local government, civil society and the international community to deliver long-term sustainable recovery and development. The multiagency donor co-ordination platform for Ukraine, whose steering committee met in London yesterday, will continue to help deliver prioritised, co-ordinated recovery efforts. We now hand over the conference to Germany, which will host the Ukraine Recovery Conference next year and build on the outcomes of Lugano and London.
This conference demonstrates that we and our allies are steadfast in our resolve to support Ukraine not just in the here and now but for the long term. With Ukraine and international partners, we are planting the seeds of Ukraine’s future. Together with our allies, we will maintain support for Ukraine’s defence and for the counteroffensive, and we will stand with Ukraine for as long as it takes as it continues to win this war. Putin cannot hope to outlast our resolve or the spirit of the Ukrainian people. I commend this Statement to the House.”
My Lords, with the leave of the House, I shall now repeat a Statement made in the other place by my right honourable friend the Foreign Secretary on the situation in Russia. The Statement is as follows:
“The long-running feud, played out in public, between Yevgeny Prigozhin, with his Wagner Group, and the leaders of the Russian armed forces reached a peak over the weekend. On 10 June, Russia’s deputy Defence Minister said that ‘volunteers’ fighting for Russia must sign contracts with the Russian Ministry of Defence by 1 July. Prigozhin announced immediately that his personnel would refuse to do so.
We—along with many Members of this House, no doubt—had been following closely the open escalation of rhetoric from Prigozhin. Last Friday, he denounced Russia’s military leadership, accusing them of bringing ‘evil’ on the country and of invading Ukraine for their own personal benefit. He drove a coach and horses through President Putin’s case for war, saying: ‘The war was needed for Shoigu to receive a hero star … The oligarchic clan that rules Russia needed the war’. Prigozhin added, and I stress that I quote him directly: ‘The mentally ill scumbags decided: “It’s OK, we’ll throw in a few thousand more Russian men as cannon fodder. They’ll die under artillery fire, but we’ll get what we want”’.
In the early hours of Saturday, Wagner forces entered the city of Rostov-on-Don in southern Russia and Prigozhin announced that he would march on Moscow. This finally drew a response from Putin, who accused Prigozhin of an ‘armed rebellion’ and promised ‘tough’ action and punishment. Wagner troops promptly advanced more than 500 miles northwards towards Moscow, before Prigozhin abruptly called off his operation and announced that Wagner would return to its bases. Having condemned him as a traitor in the morning, Putin pardoned Prigozhin in the afternoon, when a Kremlin spokesman announced that no charges would be brought.
My Lords, I thank the Minister for repeating that Statement and for including the previous Statement on the recovery conference. As my right honourable friend David Lammy said this afternoon in the other place, we should reiterate to Ukraine that all sides in Parliament are in for the long haul and that the UK will always support it in its fight for democracy over tyranny.
I commend the Foreign Secretary for hosting the Ukraine Recovery Conference in London last week, as a vital part of that process of the fight for democracy. In the Common’s debate on the recovery conference Statement, my honourable friend Stephen Doughty referred to the extra funding for British International Investment, and noted that neither the BII nor its predecessor, the CDC, has had any recent experience of working in Ukraine. Can the Minister tell us exactly what the BII’s role will be in Ukraine and when it will be expected to begin operations? What additional support and guidance will it be given in this vital work?
Since at least last October, the Government have indicated that they are in principle supportive of seizing Russian state assets to fund Ukraine’s reconstruction. However, in the months since, no specific proposals have been forthcoming. Tomorrow, Labour will be strongly urging the Government to use the Summer Recess to draft legislation to repurpose sanctioned Russian state assets for Ukraine’s reconstruction. Across the world, Governments are coming forward with legal proposals to use Russian state assets for this reconstruction. Last week, EU Commission President Ursula von der Leyen said the proceeds from the over €200 billion belonging to the central bank of Russia frozen in the EU will be used to pay for Ukraine’s reconstruction, with a proposal arriving before the summer break. We have seen similar action in the US, with a bipartisan group of senators launching a Bill to seize and transfer Russian assets to Ukraine. I know that the Minister will not give a clear commitment, but I hope he can say that the statements made before will be followed up with action and that we will be following our allies in this regard.
My Lords, from these Benches I also thank the Minister and the Foreign Secretary for the Statement he gave in the House of Commons. As the noble Lord, Lord Collins, said, the people of Ukraine will know that there is unanimity across all corners of the Chambers in our Parliament in our continuing support for their steadfastness. I also associate myself with the questions that the noble Lord, Lord Collins, asked regarding the reconstruction and recovery conference.
Notwithstanding the reports that the West’s intelligence services may have known for a number of weeks that a move from the Wagner Group was imminent, or indeed that Russian intelligence services either knew about it and did not tell Putin or did not know about it themselves—we shall no doubt learn—the weekend’s events were extraordinary to observe. As the Minister rightly said, they are at the very least a very significant counternarrative to the Putin regime’s suggested reasons as to why the illegal invasion of Ukraine took place.
Secretary Blinken said yesterday that US officials spoke to their Russian counterparts at the weekend concerning the safety of US nationals. I am glad that the Statement referred to the fact that COBRA had been convened, but will the Minister inform us whether there has been direct communication with Russian officials by British officials to stress the need for the safety of British nationals within Russia? On a number of occasions the Minister has called for awareness by all British nationals within Russia for their own safety and security, but when there is chaos and internal division on the scale that we saw at the weekend this must heighten concern for all those British nationals who are living in Russia.
A strong Putin has clearly been a menace to UK interests; a weakened one is a real danger. Whatever the motive of the terrorist Prigozhin’s actions, Putin’s sovereignty as leader of his country is now doubted and his position is unquestionably weakened. As the noble Lord, Lord Collins, has highlighted, the jarring juxtaposition of his calculation that Ukraine would fall within 48 hours and his now having to operate defences for his own capital draws a stark contrast between the resilience of the Ukrainian people and the weakness of Putin’s regime.
My Lords, once again, I thank the noble Lords, Lord Collins and Lord Purvis, for their strong support of the Government’s position. As my right honourable friend the Foreign Secretary said, this is not something we share just from the Dispatch Box. My right honourable friend and I myself when I have represented the UK Government in our meetings—specifically on reconstruction in the Council of Europe as well as in associate meetings with the European Union—have made it clear in any public demonstration of support for Ukraine that it is across the board, across both Houses and all parties, and we stand as one. That message has been very clearly and warmly received by our Ukrainian allies and partners.
In thanking noble Lords, I shall pick up on some of the key issues and areas that have been raised by them. The noble Lord, Lord Purvis, raised the important issue of transparency and ensuring that parliamentarians in Ukraine are also involved. It is right to have that kind of scrutiny that any Parliament should give to the Executive. In the case of President Zelensky, that was in his mandate. It seems a long time ago now, in 2019, when he took on the mandate as president, and that was one of his key priorities. I am sure that, as the war effort continues and as Ukraine sustains and strengthens its position, and ultimately as we look towards reconstruction, that will be a very valid role for the Ukrainian Parliament.
On the Ukrainian recovery conference, I thank both noble Lords for their strong support of the Government’s efforts. There were more than 1,000 attendees—a mixture of private sector, where the aim was, but also countries at government and Foreign Minister level, and others. There was a broad level of attendance. Both noble Lords often ask me about the importance of civil society, and that was also present. Overall, there was a large sum. Although it was not a pledging conference, once you tot up all the commitments, there was about £60 billion in terms of support. There is the immediate shortfall, which was required. I pay tribute to our colleagues, including those in the European Union. Commissioner von der Leyen made it clear how that gap would be plugged—but that was just for the next 12 months. That shows the immediate need and, of course, the importance of ensuring that we are in it for the medium and long term. I assure the noble Lord, Lord Collins, that that is exactly the message that we are delivering to our Ukrainian friends.
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The Government, of course, consider that this is an internal Russian affair. Of course, the leadership of Russia is a matter exclusively for the Russian people, but everybody should note that one of Putin’s protégés has publicly destroyed his case for the war in Ukraine. Prigozhin said on Friday that ‘there was nothing out of the ordinary before 24 February 2022, the situation was frozen with exchanges of military action and vicious looting’ by the Russian side. He also said that Russia’s defence ministry is ‘trying to deceive both the President and the nation … that there was incredible aggression from the Ukrainian side with NATO support ready to attack Russia’. The Russian Government’s lies have been exposed by one of President Putin’s own henchmen.
The full story of this weekend’s events and their long-term effects will take some time to become clear, and it is not helpful to speculate. However, Prigozhin’s rebellion is an unprecedented challenge to President Putin’s authority and it is clear that cracks are emerging in Russian support for the war. I, of course, hold no candle for Prigozhin or his forces; they have committed atrocities in Ukraine and elsewhere. But he has said out loud what we have believed since the start of Russia’s full-scale invasion: that this invasion was both unjustified and unprovoked. The events of this weekend are an unprecedented challenge to Putin’s authority, with an armoured column approaching his own capital city.
As the situation unfolded, the Government monitored and responded to developments carefully. I was briefed on Friday evening and again regularly throughout the weekend by officials. On Saturday, I chaired a COBRA meeting on the situation. We have also been in close touch with our allies. On Saturday, I spoke to Secretary Blinken and my G7 colleagues, and I have been in touch with other regional partners. My right honourable friend the Prime Minister spoke to President Biden, President Macron and Chancellor Scholz on Saturday afternoon.
Despite these internal developments in Russia, Putin’s bloody war in Ukraine continues. The Ukrainians fight for their survival, and our Ukrainian friends are mounting a determined counteroffensive and steadily clawing back their territory. We will not be distracted from our work to support Ukraine’s self-defence and subsequent recovery. This weekend’s events show that it is Ukraine and its partners, not Russia, that have the strategic patience and resolve to prevail. At last week’s Ukraine Recovery Conference, we sent a clear message that we will stand with our Ukrainian friends not only as they resist Putin’s onslaught, but in the subsequent peace. Now that Russia’s leadership cannot justify this war even to each other, the only rightful course is for Putin to withdraw his troops and end this bloodshed now. I commend this Statement to the House.”
My Lords, that concludes the Statement.
The conference Statement also referred to the support of businesses that have contributed monetarily to Ukraine’s recovery and reconstructions. These donations are significant, but it is equally important that these businesses continue to operate and support the economy of Ukraine now. What steps are the Government taking with our allies to encourage global businesses to invest in Ukraine now? I hope the noble Lord can respond on that.
Turning to the events over the weekend and the Statement, we know that Prigozhin has been a long-time and close ally of Putin. His military company, the Wagner Group, started becoming involved in eastern Ukraine in 2014, and this weekend’s developments will have ramifications beyond Ukraine in conflicts around the world where its militia army has been active. Is the FCDO actively monitoring whether there has been any significant change in the activity or location of Wagner militias? As the Minister knows, Labour has long called for its proscription as a terrorist organisation. Again, I know that he will not wish to make any determination tonight, but I hope that the department is very actively engaged in looking at this—again working with our allies.
The Opposition agree that it is not helpful to speculate about where all this will end up in the long term. Events are constantly shifting in size and shape. As Secretary Blinken has said, last February Russian forces were approaching Kyiv thinking that they would be able to capture the capital in just a few days; one year and four months on, Russia has had to defend Moscow from internal rebellion. As the Foreign Secretary said, what happens in Russia is a matter for Russia, but one thing remains completely certain: the security of our continent depends on Ukraine winning the war. I hope that, following discussions with Foreign Ministers, he is confident that Ukraine will get the military, economic, diplomatic and humanitarian support it needs in the coming months. I hope the noble Lord the Minister will also be able to reassure us that we will be reaching out beyond our current allies to ensure that all nations join us in the fight for this democracy and ensure that those who have maintained a neutral stance will see that recent events should change their mind. We must maintain the depth of support for Ukraine from the UK and its allies so that the Ukrainian people get the freedom and justice they deserve.
Given Putin’s positioning on Belarus and the use of President Lukashenko as what an opposition leader has called a postman between him and Prigozhin, and the belligerent language on the position of nuclear weapons, it is even more important to ensure that dialogue restarts on the nuclear states and the posture that they all have.
Can the Minister reassure me that the UK will continue to seek dialogue from all nuclear powers? If a state with such a nuclear arsenal as Russia can be shaken by an internal mutiny of this scale, it must concern the entire world. I agree that there is little to be gained in speculation on what comes next, but as Ed Lucas said on Radio 4 yesterday in a very powerful interview, we must accelerate discussions on what may be a post-Putin scenario, because, as some observers have said, the situation would not necessarily be better. As obvious cracks exist in his leadership, and how deep and far they will go we do not yet know, one thing for certain is that things will not be the same. Prigozhin and Putin consider themselves masters of the dark arts, but they have both miscalculated, which could be a danger not only to Europe but to the wider international community.
I shall repeat what I have done every month since last February—to call for the proscription of the Wagner Group—but in the context of what seems to be now a clear approach to absorb Wagner into the Russian military, this is inevitably going to be much harder. What is the Government’s assessment of the Wagner Group, whether it is now formally part of the Russian state and how it will operate in Africa? The Russian Foreign Minister said today, in perhaps classic threatening terms, that it will continue its role in Africa as “instructors”. Can the Minister give an update with regards to our assessment from working with other partners in Africa on the likely implications of the impact of the Wagner Group?
Finally, I commend the Minister for his work, and that of Foreign Office officials working with our partners, in continuing discussions on the full-scale recovery and reconstruction of Ukraine, which will be necessary for the long term. Can he reassure the House that oversight, accountability and scrutiny in respect of some of the eye-watering sums that will be required for reconstruction are necessary, and that the Ukrainian Parliament, the Verkhovna Rada, representing its people, will be at the centre of ensuring that this reconstruction will be delivered in an accountable, transparent and efficient manner? If anything is clear, it is the unity of the Ukrainian people, led now by an increasingly transparent and efficient Government. That cannot be put at risk, because it is the clearest contrast with the instability and lack of consistency in the Russian forces. I hope that that is a lesson that we can learn from the conference, to ensure that the reconstruction is done in a clear and accountable way.
On asset seizures, again, the noble Lord, Lord Collins, and I have talked about this very clearly and consistently. Of course, we are monitoring and working with our partners to ensure that those responsible, which is the Russian Government against the people of Ukraine, are held accountable. It is estimated that currently, because of the various seizures that we have had, circa £18 billion is held just under UK territorial control. We are looking at key options, since it is an important but complex area, to see how those assets can also be utilised—and, of course, we are working with our key partners. There has been new legislation enabling sanctions on Russia to be maintained until Moscow pays compensation to Ukraine. We are looking at the development of a route to allow sanctioned individuals to donate frozen funds to Ukrainian reconstruction and, under the Russia financial sanctions regime, new requirements for sanctioned individuals and entities to disclose assets that they hold in the UK, as well as new requirements for those holding assets in the UK on behalf of the Russian Central Bank, the Russian Ministry of Finance or, indeed, the Russian National Wealth Fund, to disclose them to the Treasury. These are all steps being taken forward to ensure a full assessment of the money that we hold so that that money can also be utilised towards the recovery.
The noble Lord, Lord Collins, asked a specific question about BII and its predecessor. First, I assure him that the level of investment in BII’s core markets, which include Africa, south Asia, south-east Asia and the Caribbean, will not be affected by the Ukrainian mandate. That is important to recognise. However, the BII is working with key partners to ensure that its expertise in investing can also focus on Ukraine as well. BII has recently also signed an MoU with the European Bank for Reconstruction and Development to create the EBRD-G7 DFI-EDFI Ukraine investment platform, which will act as a basis for how we work through the BII.
On the issue of full support for the fight for democracy, noble Lords alluded to the widening of the alliance and ensuring that all the countries beyond the partners are involved. It is encouraging that, well beyond a year into the conflict, we have seen votes at the UN consistent with key countries across north Africa and, indeed, the Middle East, changing their position in support of Ukraine. We very much welcomed from the Middle East the first visit to Kyiv of Foreign Minister Prince Faisal, who also pledged one of the largest donations by any country in humanitarian relief. We will continue, as I did recently through my visit to the UAE, to strengthen and broaden the alliance, ensuring that we are in it for the long term, not just from the United Kingdom, US and European perspective but across the piece.
Undoubtedly, there are challenges being felt. The noble Lord, Lord Purvis, also raised the issue of Africa, which is an important partner. We are talking to them as to how the events over the weekend impacted their operations. We are of course monitoring very closely, and all agencies are on this. Of course, there is a limit to what I can share, but it is notable that, when African leaders were in Kyiv, even then Russia threw a missile at Kyiv. What was that supposed to achieve? The African leaders, including the president of South Africa, saw for themselves what was happening.
Finally, in the closing seconds of responding to Front-Bench contributions, I can say that I spoke to my noble friend Lady Goldie today, and we will look to arrange an appropriate briefing for key Peers from your Lordships’ House. We regard highly the valuable insights that noble Lords bring to this debate.