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).
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.
My Lords, I will repeat some of what the noble Lord, Lord Ricketts, said. He has been a first-class, excellent chairman of the committee. If I repeat his points, it is only to reinforce them.
It is now nearly a year since the committee published its report, and any hopes that the war might have come to an end by now have been dashed. At the weekend, Russia launched a devastating drone and missile attack on Ukraine’s energy grid, affecting many parts of the country and resulting in the need for a nationwide rationing of energy. There are currently no signs of de-escalation, nor any prospects for peace in the near future.
There is a need for close co-operation between the UK and the EU on support for Ukraine in the contexts of both growing Russian aggression and the recent election of Donald Trump. It is still unclear what he will do when he becomes President, but the threat to reduce greatly or even to end the supply of arms to Ukraine must be taken seriously. The committee’s inquiry had, as a backdrop, the possibility of a change of political leadership in the USA and cautioned that a reduction of US support for Ukraine would have implications for both the UK and the EU. It is surely now vital that they plan for this contingency.
The Foreign Secretary’s participation last week in the EU’s Foreign Affairs Council is welcome. In the Statement on Ukraine he made in another place on Tuesday, he listed a number of initiatives that the Government are currently taking, including “non-military support”—for example, boosting the economy of Ukraine in various ways and protecting its power grid. Can the Minister tell the House whether lifting the ban on the deployment of UK-designed Storm Shadow missiles, which have some US components, was discussed with our European allies when the Foreign Secretary met them on Tuesday?
This use becomes possible following President Biden’s decision earlier this week to lift the US ban, apparently influenced by Russian escalation and the use of North Korean troops in the Kursk region. When asked yesterday, the Government said that they would neither confirm nor deny allowing Ukrainian firepower and the launching of long-range missiles into Russia. All the evidence suggests that they were used yesterday, so would it not be better for the Government to clarify this, without necessarily specifying precisely where they were used? The danger of possible Russian retaliation must also be acknowledged.
My Lords, unlike the noble Baroness, I was not a member of the committee, so I begin by congratulating the noble Lord, Lord Ricketts, and the other members of the committee on the report they have produced. It has been 10 years since I chaired a committee—the EU External Affairs Sub-committee of the old European Union Committee—that produced a report on Ukraine, and I know what is involved in this matter. I congratulate the members of the committee on the outcome.
I must also say that, as an outsider, I found the committee’s report rather encouraging. It shows the extent to which, when faced with a common threat, the UK, the EU and its member states are able to work together in formulating policy and determining objectives. Of course, the implementation has perhaps not been quite as good as the willingness to co-operate. The spirit is willing but the flesh has been weak so far as sanctions are concerned, although I was struck by what the noble Lord, Lord Ricketts, and the report had to say about the greater success in military co-operation.
However, there are clear limits to what is possible. The noble Lord, Lord Ricketts, mentioned the third-party rules arising out of our non-membership of the European Defence Fund. This is not only serious in itself; as I will point out in a moment, it provides a warning of problems to come. Of course, there is a long history of British reluctance to get involved in European initiatives within NATO, and of European reluctance to see outsiders participating in European projects. But, as the report says, what we have at the moment amounts to protectionism. The committee says:
“Protectionism is not the way to build an efficient defence”
alliance, and nor is it the best way to keep the newly elected President Trump involved in European affairs. What he wants is European countries to operate more effectively, as well as to spend more. It is essential that this obstacle to which the committee refers be overcome.
My Lords, I too would like to congratulate the noble Lord, Lord Ricketts, on his excellent introduction to this important and highly relevant report. I would also like to congratulate the Secretariat and members of the European Affairs Committee. It was a pleasure to follow the noble Lord, Lord Tugendhat. I served on the EU sub-committee under his chairmanship when the report he referred to was produced several years ago.
The report we are debating today is highly relevant and topical, and we do so against a backdrop of increased tension and an increasingly bleak situation in Ukraine. Like the noble Baroness, Lady Blackstone, I welcome the Foreign Secretary’s Statement this week on Ukraine. Ukraine needs to know that the UK remains a firm and steadfast ally and friend at this time. After more than a thousand days of this truly awful war—and, I should add, it is 4,000 days since the first invasion of Ukraine in 2014—we are now moving into probably the most dangerous time we have seen since the first month of the war, February 2022.
Each winter since Putin launched his illegal invasion of Ukraine, the Ukrainian people have faced new and almost unimaginable challenges. But this winter threatens to be the most severe, with the cynical targeting of power stations leaving so many Ukrainians once again with no power or heating in the freezing winter in the months ahead.
I know that several Ukrainian friends—especially those with young children—are facing the deeply difficult dilemma of whether to stay or leave Ukraine this winter. The psychological impact on young children of constant air raid sirens, drone attacks and periods of no power or heating, as well as the impact on their education, cannot be underestimated. Most Ukrainians feel that it is their patriotic duty to stay, but it is incredibly and increasingly hard for them.
The European Affairs Committee report rightly welcomes that—at least until now—the EU, UK and US have been aligned on sanctions. But the report raises concerns that it has been possible for Russia to circumvent these sanctions, particularly, as was said by the noble Lord, Lord Ricketts, and others, in the energy sector and through the use of shadow tankers. In previous debates on Ukraine, I raised concerns that the sanctions regime has not done enough to damage the Putin war economy. As a Russian acquaintance said to me earlier this year, what the war in Ukraine has shown him is that “Russia does not need Europe”. He said this with some regret but said that in terms of his own business, he had just had to switch to looking towards China.
My Lords, I too am grateful to the noble Lord, Lord Ricketts, for affording us the opportunity to discuss the committee’s report of last January. I too welcome this nuanced piece of work, which invalidates the idea that Brexit consigned the UK to a peripheral role in the security of Europe.
I was struck by the report’s implicit and explicit references to the enduring UK influence in the affairs of the continent, long after our departure from the EU. To me at least, this report is an important recognition that Europe is not the EU and the EU is not Europe. Indeed, some years ago I had the pleasure of reviewing the book of the noble Lord, Lord Ricketts, Hard Choices: What Britain Does Next, in the New Statesman—published, of course, before the Russian invasion of Ukraine. I am glad in the context of this report that some of his darkest fears in that book have not been vindicated subsequently. The subtitle is What Britain Does Next; Britain has done a great deal since 2022 in this regard, and it is a good thing that the report that the noble Lord and his fellow committee members have produced has acknowledged that.
Indeed, there are two stories to tell here about the UK’s involvement in Europe since February 2022. Alongside that of UK-EU co-operation, there is also the UK’s hyperactive—there is no other word for it—European policy before and after the Russian invasion. We should note that the UK-Ukraine-Poland trilateral, which provided Kyiv with military aid and training right before the invasion, and we also of course recall the rapid response of the UK-led Joint Expeditionary Force, which convened a leaders’ summit only just before that Russian invasion. That is a record to be proud of.
I also note in chapter 2, paragraph 41, it observes that the UK is
“nimbler and swifter in imposing sanctions”
by virtue of not being tethered to the EU’s unanimity requirement for action. In chapter 2, paragraph 33, one witness concludes that two years of trial and error have left us with a
My Lords, I declare an interest as back in the mists of time, when this report, so excellently introduced by my noble friend Lord Ricketts, was published, I was a member of the European Affairs Committee. On this occasion, the delay inadvertently makes the report even more topical, as the impending change of Administration in the US brings us ever closer to important decisions that will crucially affect Ukraine’s and our own future security and prosperity. These are decisions over which we must always remember that we in the UK do not have a determinant say.
The self-image in this country and in this House of our role in backing Ukraine since Russia’s 2022 invasion is rightly positive, and successive Governments, up to and including the present one, rightly get credit for that, but it is not the whole story. In 2014, when Russia seized the Crimea and parts the Donbas by force, we were not so forthright. By standing aside from the Normandy group—France, Germany, Russia and Ukraine—which shaped the two ill-fated and ill-conceived Minsk agreements, which Russia then ignored and trashed, we committed an error of judgment in my view, and we must not repeat that error.
While I am in the process of mentioning sins of omission, the committee’s report dealt with the issue of sanctions in detail, and I found the previous Government’s response to that report pretty unconvincing, frankly. The concerns have been considerably increased by recent reporting in the press of ways in which the overseas territories of the UK are being used as loopholes for evading sanctions. I hope that when the Minister replies to this debate she will give us an account of how the meetings this week with the leaders of the overseas territories have done something—a lot, I hope—to close those loopholes.
We and Ukraine now face critical choices, not only on the battlefield and in the supply of weaponry but in geopolitics too in relation to Ukraine’s territorial integrity and sovereignty, which was guaranteed by Russia in the Budapest memorandum when Ukraine gave up its nuclear weapons and was subsequently junked by it, and in relation to Ukraine’s bid for NATO membership and to join the EU. Any geographical settlement based on Ukraine ceding territory and citizens to a neighbour that has seized them by force in disregard of Russia’s international obligations, including the UN charter itself, is necessarily precarious and risks being reopened in the future. Think only of Alsace and Lorraine, where many millions died before a final determination was achieved. Ukraine’s place in NATO could perhaps have been discussed prior to Russia’s aggression, but now, when its permanent exclusion from membership can be achieved only at gunpoint, is that still so? When the hard fact is that any guarantee given by others, ourselves included, will necessarily fall short of the commitment to collective defence in Article 5 of the NATO treaty, there is a lack of credibility there that falls short of what is needed if Russia is to be effectively deterred in the future.
My Lords, it is always a pleasure to follow the noble Lord, Lord Hannay, and I very much look forward to the wise words of the noble Lord, Lord Levene, who is something of an expert of defence. Unbeknown to him, he was just a couple of years behind my husband at the City of London School—it produced at least two fine alumni.
While we meet on the 1,002nd day of war, as my noble friend Lord Spellar said in his maiden speech and as the noble Baroness, Lady Suttie, said today, there have been 10 years of war and of Russian incursion into Ukraine. Sadly, despite regular protests against Israeli attacks on Gaza, the world seems to have forgotten the daily Russian military attacks on Ukraine’s civilian infrastructure and its people.
Two things followed that invasion: it fast-tracked Sweden and Finland into NATO, and it made the EU and UK collaborate on an immediate problem. Neither are things that Putin can have wanted. The EU is now more focused on defence: it has a defence commissioner and a special fund. It knows it will have to do more, despite backtracking from some, such as Slovakia, Hungary and Bulgaria, which will make unanimity difficult.
Since February 2020 the international stage has, of course, changed further: not just in the Middle East, where we have seen Iran flex its muscles—its support for Russia’s war adding another threat to Europe’s security—but, as others have said, with the election of Donald Trump, his tilt at China and his threatened tariffs, and the hostility to the EU that he shares with Putin. All those things challenge our assumptions about trade, Europe and Ukraine.
While the whole world—particularly Ukrainians—desires peace, Zelensky has said on the radio that he wants to do everything so that this war ends next year and ends through diplomatic means. But that does not mean on any terms. It is vital that the EU and UK hold to the view, as the noble Baroness, Lady Suttie, said, that no other country has the authority to negotiate away the territory of Ukraine. That is even more key now because Trump might seek a deal with Russia, even if it means leaving Putin with most of what he gained through aggression—a price that Trump, but not the rest of the allies, might be willing to pay.
My Lords, I unhesitatingly congratulate the European Affairs Committee on so comprehensively exploring the subject matter at hand. Yet events have indeed moved on quickly in the intervening months, and the situation in Ukraine has considerably worsened. Uncertainty around the world and at the strategic outlook of the USA has grown appreciably since the election there. Inevitably, the shape of American defence policy has been pulled towards the western Pacific. But, with Ukraine under serious pressure from the renewed efforts by Russia, aided by China, Iran and North Korea, it is appropriate that we look at the future of UK-EU relations in the overall context of Euro-Atlantic security.
I welcome the improvement in relations between ourselves and the EU, to our mutual benefit. I had the personal pleasure and privilege in the other place of taking through the legislation for the Opposition for the enlargement of the EU. I mention this because, during the passage of that legislation, a remarkable individual, the then Polish ambassador, presciently said to me, several times, that it was most important to give Ukraine a European trajectory: if not, its sizeable neighbour would inevitably interfere. In fairness to the EU, some progress was made, but some in successive Ukrainian Governments did not adequately adjust to the highest standards that the EU, quite rightly, demanded.
In this respect I pay tribute to the noble Lord, Lord Macdonald of River Glaven, who voluntarily wrote a comprehensive report on judicial reform and court structures in Ukraine after a number of visits. The situation is of course different today and I hope that, in due course, the European trajectory will be reoffered as standards improve. One matter in the report that needs firm acknowledgement is the degree to which there have been differences across Europe about help for Ukraine. A very small number of countries have opposed support for Ukraine; others have been erratic or lethargic. It is noteworthy that the newer members of NATO are, in many instances, doing so much to uphold security, influenced by their memory of the grim reality of Kremlin control.
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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.
Like the noble Lord, Lord Ricketts, I turn now to the issue of sanctions, which was considered at length in the committee’s report and to which the Foreign Secretary referred in yesterday’s Statement. The committee was broadly supportive of the collaboration that had taken place with the EU, identifying what it called “pragmatic cooperation”. It said that any divergence in policies, or on sanctions, would create “gaps and loopholes” that would be exploited and would make them make them far less effective. While there was general agreement with the EU on where sanctions should apply, it argued that these policies need to be reviewed regularly, including on countries besides Russia and Belarus.
In their reply to the report, the Government reassured the committee that this was happening, although they rejected the idea of a memorandum of understanding with the EU on a sanctions policy. While the committee was relatively sanguine about international agreement on the focus of sanctions, it mentioned that witnesses had raised questions about implementation. Experts have more recently claimed that there are indeed serious concerns about implementation, and a weak enforcement regime with widespread evasion. Third countries such as the UAE and Turkey are party to sanctions-busting, out of which a great deal of money is being made. UK companies in areas such as insurance and shipping are apparently trading with Russia with impunity. Can the Minister tell the House how many UK companies have been charged with breaking sanctions? There can be little point in the Government extending sanctions, as was announced in Tuesday’s Statement, if enforcement is weak and there is no leadership in addressing the difficult issues it raises. We have not seen any specific examples of the robust action the committee requested in its report.
The committee also drew attention to the use of frozen sanctioned assets—in particular, frozen central bank assets—for the reconstruction of Ukraine. It recognised the importance of being consistent with international law, but the then Foreign Secretary suggested there was a legal route in doing so. Has that been identified? More particularly, the committee was critical of the failure to address the frozen assets arising from the sale of Chelsea Football Club. The noble Lord, Lord Ricketts, has already referred to that, so I will say no more on it.
Lastly, I want to raise the general question of the reconstruction that is needed to help the morale of Ukrainians today and to support the functioning of the Ukrainian economy in the future. It cannot until wait war ends, as the committee made clear. Close co-operation with the EU will also be vital if duplication is to be avoided and efficiency maximised. The Government accepted this in their reply. However, if action is not taken to tackle corruption in Ukraine, reconstruction could be damaged by scandals.
In her reply, I hope the Minister will be able to indicate ways in which the UK is addressing how to improve the justice system through UK aid visits, so that the rule of law is enforced in uprooting corruption. There is a need for institution-building in this area, so that the UK private sector can be confident that it can operate effectively in Ukraine in the future.
I end by simply saying that we now have to plan for the possibility that the US will indeed shirk any responsibility to help Ukraine out of its current predicament.
I also fear that, whether or not that is overcome, similar attitudes could be carried through from defence procurement to the reconstruction of Ukraine, notwithstanding United Kingdom participation in the Multi-agency Donor Coordination Platform and our prominent role in the European Bank for Reconstruction and Development. As the report says, the reconstruction of Ukraine will be a colossal task, and it will also be closely linked to Ukraine’s candidacy for membership of the European Union. This means that it will also be closely linked to that most controversial of all issues within the European Union: its budget, for which, many decades ago, I was at one time the responsible commissioner. The danger is that it will be so difficult for the EU member states to reach agreement on programmes and expenditure among themselves that, when they finally do, it will be even more difficult for agreement to be reached with other donor countries. Against that background, the UK Government must ensure not only that the costs of reconstruction are fairly and proportionately divided, but that UK companies receive an appropriate share of the contracts involved.
Finally, I want to say a word about paragraph 222 of the report, which refers to bringing Ukraine into western institutions. Yes, we and the EU do want to bring Ukraine into western institutions, and Ukraine itself wants to be brought into western institutions, but I would suggest that this should not be an exclusive relationship. Looking to the long term—perhaps, but not necessarily, after Putin has gone—Ukraine should also rebuild its economic and personal links at all levels with Russia. To the extent that the Russian people—I emphasise, the Russian people—see Ukraine as the vanguard of western encroachment into their own historic sphere of influence, it will remain a potential casus belli. To the extent that Ukraine has links with Russia as well as with the West, it could provide a bridge to help bring about improvement in relations between Russia and the West. That might sound at present rather idealistic, but it is very important that Ukraine should be facing east as well as west if it is to have a secure position in the West. When one looks at the historic links of the Ukraine economy with that of Russia, it will also be beneficial in the long run if Ukraine is able to rebuild its relationships with Russia, as well as to become embedded in western institutions.
Given the highly probable shift of US policy on sanctions from January, can the Minister say whether the Government plan to review the current sanctions regime with our EU partners to ensure that they have a more direct impact on the levers of power and the Kremlin’s war economy? Like the noble Lord, Lord Ricketts, I ask the Minister what action the Government are taking now to prevent sanction busting via the British Overseas Territories, not least given the Foreign Secretary’s vocal criticism of the previous Government’s inaction on this matter.
Ahead of this debate, I contacted several Ukrainian friends to ask for their views, particularly on the reconstruction of Ukraine—I refer noble Lords to my register of interests and previous work in the Parliament in Kyiv as well as with the John Smith Trust. The report stressed the importance of giving additional assistance now. This is a view shared by many of my contacts in Ukraine, both in terms of economic assistance and capacity building. In particular, they feel that the UK would be extremely well placed to assist with building capacity in public administration and in helping to further reform the legal system in Ukraine to ensure the rule of law. Both would help with anti-corruption measures and in helping Ukraine in its desire to “build back better”. Targeting assistance to a younger generation of Ukrainians could make a big difference, and I would be grateful for a response on this from the Minister in her concluding remarks.
I recently met a delegation from Lviv. They stressed the importance of reopening Lviv airport and of helping now to reconstruct power stations, as well as constructing new, more environmentally friendly ones. Can the Minister give an update on the Government’s approach to assisting with the Ukrainian energy sector this winter and reopening Lviv airport in particular?
None of us has a crystal ball to know exactly what the highly unpredictable President Trump will do in January next year, but all the indications suggest a move away from continued military support for Ukraine. If this happens, the UK is going to have to work ever closer with our European partners in terms of our national security and defence. I hope this country can take a leadership role in this regard, perhaps through convening a summit on Ukraine with our EU and NATO partners.
Of course we must continue to make the case for the importance of continued military support for Ukraine with our American partners too, but it would be unwise, indeed naive, not to prepare for the worst. As the report rightly says,
“any change in the EU’s approach to foreign and security policy will be bound to have implications for UK national security”.
President Putin revels in creating global chaos. The strategists in the Kremlin will be hoping for the double whammy of withdrawal of US support combined with a fracturing of the until now united EU approach towards Kyiv and the war in Ukraine. As one Ukrainian friend put it to me, “Ukraine is not the goal for Russia but a tool to challenge the global order”. I fear he is absolutely right. The war in Ukraine has a direct impact on us all on this continent of Europe, which is why we must maintain our strength and we must remain united.
Our direct influence on EU thinking might have diminished since Brexit, but our bilateral relations, including through our NATO partners, remain strong. We must do all we can to influence our European partners and to stress the importance of maintaining a united front. To add to the excellent set of principles given by the noble Lord, Lord Ricketts, I emphasise that whatever happens in the months ahead, the guiding principle has to be that only Ukraine has the right to decide on Ukraine’s future.
“very well thought-through and effective legal framework for the imposition of sanctions”—
a fact which rather controverts the too often fashionable fear that post-Brexit Britain has somehow become deficient in the rule of law. Chapter 3, paragraph 117, provides a welcome tribute to how the UK has consistently encouraged Kyiv’s allies, in the words of one witness,
“to push out the boundaries of what is possible”.
The report should also be praised for conceding that the EU is often not the most effective multilateral convenor of Ukraine’s “coalition of the willing”—to use a term of art. As the report notes in chapter 3, paragraphs 118-19, the supply of military aid tends to be orchestrated on a bilateral basis or by the US-led Ramstein group of 57 nations.
Nevertheless, it needs to be said that the committee’s own report in some ways does not, for my taste, reflect the full complexity of the picture, for on occasions it privileges the EU above some more effective forums. It proposes a new
“administrative arrangement with the European Defence Agency”,
despite the testimony from the Polish Minister of Foreign Affairs, Radek Sikorski, that the agency has
“not produced anything of value”
in its 20-year history. The committee also does not amplify Sikorski’s noteworthy suggestion—coming also from one other witness—that the EU-US Trade and Technology Council be expanded to include the UK and others, which of course bears more than a family resemblance to the old CoCom of the Cold War era, which proved to be so effective in that epoch.
There is also the broad consideration of the EU’s increasingly protectionist approach to the defence industry. This inclination endangers our transatlantic weapons and munitions productions and thus risks undermining NATO itself. It is not remotely clear to me how the UK stands to benefit from such a development. How might entry into such an insular industrial fortress have impinged on our freedoms to join admirable arrangements such as AUKUS and the GCAP initiatives, which bring our global influence and military heft to bear on our own behalf, and that of Europe and world security interests? In this connection, will the Minister give the House her reflections on how things have changed since the publication of the report in January and what she sees as the enduring limitations of the EU’s role as described in the committee’s report earlier this year?
Indeed, in this connection, one of the things hanging over the deliberations of this House, as has been stated, is how the report’s recommendations stand up in light of the return of Donald Trump to the White House. This is viewed by some as a reason to align more closely with the EU. Of course, as has been noted, the policy of this Administration is not a done deal, and we must not let perhaps some of our darkest fears turn into self-fulfilling prophecies. The policy of this new Administration is a work in progress, and it is surely for the UK to make the case to the next Administration that Ukraine constitutes a perfect opportunity to showcase its peace through strength concept. Indeed, in Marco Rubio and Michael Waltz, the Secretary of State and National Security Adviser designates, Trump has chosen two of the more prominent NATO-friendly figures in the contemporary US Republican national security firmament.
The squeamishness that we hear about the aspects of the Trump Administration’s apparent approach is not surprising, but we must engage. The Foreign Secretary was perceptive and early money in his outreach to the GOP in the United States, long before the demise of the Biden Administration, and he now states that he long predicted that there would be a Trump victory in the United States. The policy approach should surely be that of the incoming National Security Adviser, who once said, in a different time and a very different context, that it is our job in this country to get up the fundament of the White House—that is not the phrase Jonathan Powell used, but I decline to use the precise words that he used in another place and another time. Geopolitics is not for the squeamish. We yet have an opportunity to help tilt the balance in an Atlanticist direction in the new Washington.
As to EU membership, as a non-member we no longer have any say over that, but it is surely clear enough that Ukraine’s EU membership is in our national interest too, and I suggest that we should not hesitate to say so. In any case, as a signatory of our trade and co-operation agreement with the European Union, and hopefully the new security pact and reset which the Government aim to achieve, we will be a party to those with Ukraine too. Should we not be travelling with them every step of the way, together with our EU partners?
Speculation about which way the unpredictable President-elect Trump will lean on all these issues is probably fruitless. What is essential is that we discuss in depth with the incoming Administration their thinking as it emerges with the aim of ensuring a strengthened and reinforced overall European contribution.
If we take Trump at face value, Europe will have to carry more of the burden of supplying Ukraine. This is challenging at a time when Germany, the single biggest donor after the US, is in full election mode, and with Scholz unwilling to allow the use of Taurus missiles. Trump’s obsession with the US trade imbalance with the EU impacts his attitude to Europe’s approach to Ukraine and has implications for our relationships with the EU well beyond anything imagined at the time of Brexit.
Our Government rightly want to reset our relationship with the EU, and to include defence in that. But this comes at a time when the President-elect’s aides hint at excusing the UK from the tariff war that Trump seems to want to wage. That puts us in a difficult position, given our closeness to the US, its significance as a trading partner and our reliance on it in the nuclear area and through Five Eyes. There is certainly trouble ahead in steering this ship of state.
For the moment, rightly acknowledging that the defence of the UK starts in Ukraine, the Government have continued their welcome support for Ukraine and said that this remains “ironclad”—as indeed has the G7. Its leaders’ communiqué this week reaffirmed their unwavering support for Ukraine as long as it takes, and their contribution to its fight for sovereignty, freedom, independence, territorial integrity and reconstruction.
One immediate task for us is to ensure that our population remains staunchly supportive of our continued role. At the level of parliaments, last month in Budapest, COSAC—the conclave of parliamentary European affairs committees—strongly and unequivocally reiterated its condemnation of Russia’s unprovoked illegal invasion, its war of aggression and its occupation and annexation of parts of Ukraine, which constitute a flagrant violation of the UN Charter. COSAC renewed its full, unwavering support for the independence, sovereignty and territorial integrity of Ukraine within internationally recognised borders, along with military and diplomatic support for as long as it takes and as intensely as needed.
That is great from the parliamentarians, but people, as well as parliamentarians, need to be kept onside and engaged. Even after the war, both our people and the UK, working with the EU, will face another challenge—helping to rebuild that shattered land. That means social provision, education, civil society and its future, which depends on its children. As Coram International points out, Ukraine has particular challenges here, with more children in care than any other European nation, and with many orphans and displaced children spread around Europe. Reintegrating those children will be an enormous challenge. If the war is not to produce another scarred post-conflict generation, we and the EU should work together on programmes aimed at people as well as buildings. The EU did it before, after the fall of the Berlin Wall. This is a time for us to rise to that challenge.
Ukraine never wanted to be the fulcrum in our relations with the EU, but it has shown that this continent cannot be constrained by political structures, assumptions and bureaucracy. It must be fleet of foot, united in purpose and committed to peace, freedom and the rule of law. As we go forward, Europe needs a strengthened common purpose. I trust the UK will play a full role in fulfilling that.
The 1,800-mile line between Norway and the Arctic to Romania and the Black Sea has been established as defence against Russian aggression. Above all, Poland has dramatically increased military spending and capability and has just commenced its 250-mile, $2.5 billion border wall with Russia and Belarus, with systems powered by artificial intelligence. It has also acquired 800 American and South Korean cruise missiles, with a range of up to 560 miles. There are equally new defence arrangements in Lithuania and Finland, among others. These are, of course, EU countries, but we can be grateful that this, in effect, improves our security against an aggressive country so hostile to us.
The report outlines the successes and failures of the sanctions regimes rolled out against Russia, and, although there has been an impressive degree of unity across Europe in co-ordinating the introduction of fresh sanctions packages, this has not been matched by adequate enforcement. Exports from European countries to Russia’s neighbours have greatly increased. We should be in no doubt that this is fuelled by sanctions evasion, which must be closed off as it bolsters the Russian economy.
The very prospect of a new Administration in Washington has spurred on increased defence spending in a number of European countries, yet a country thousands of miles away, particularly preoccupied by the Asia-Pacific region, continues to supply the bulk of NATO’s defence expenditure. That is why we must work with our European partners to increase assistance, directly or indirectly, financially and militarily to Ukraine.
I welcome the report’s recommendations on encouraging private direct finance and investment to aid the recovery of Ukraine, a country with immense economic potential, but we must wield our own financial know-how to unlock that potential, and strong and direct government support demands that. The work of the EBRD and other groups is to be admired, but surely this is the time to advance a clear spread of British initiatives, and indeed Lviv airport offers such a clear possibility. The French Government have promoted investment in Ukraine, offering insurance to French businesses. I invite the Minister to look carefully at that French initiative and examine its efficacy. I also recommend to the Minister examining how key areas can be mapped specifically for investment. Businesses in Ukraine that I have spoken to, even large ones, find it extremely difficult to form partnerships with British companies because of the restrictive response of British banks. This is not currently a virtuous circle.
To conclude, just as we took the lead militarily and diplomatically, we must now lead the charge in preparing for the reconstruction and renewal that may be coming all too soon and persuade our EU partners to do so assertively as well.