Extracts from Lords debate on Ukraine: Nord Stream 2 - Feb 25

The Minister of State, Ministry of Defence (Baroness Goldie) (Con):...First, as announced by the Prime Minister yesterday, we are introducing a massive package of sanctions designed to constrict the Russian economy. We will end Europe’s collective dependence on Russian energy. German Chancellor Scholz’s decision to stop Nord Stream 2 was a brave and welcome first step. He is absolutely right. We will also be maximising, in tandem with our US and European allies, economic pressure on Russia. Yesterday, the Prime Minister set out some of the steps that we are taking to limit its ability to do business. These include imposing a full asset freeze on state-owned Russian bank VTB, bringing in powers to exclude all Russian banks from the UK financial system and stopping them accessing sterling and clearing payments through the UK...

Lord Robathan (Con):...The second thing is further, very real, economic sanctions: no buying of oil and gas from Russia and no dodgy shell companies in British Overseas Territories. It will be pain for us and all of our allies; we will feel it all. At the very least, we will have higher energy prices and power cuts. I congratulate Germany on stopping the Nord Stream 2 pipeline—late—but it must go further. It will hurt us, but perhaps it will undermine Putin with his crooked cronies and with the Russian people...

Lord Alton of Liverpool (CB):...Then there is the question of self-defence. I was shocked by reports that Estonia was stopped by Germany from sending munitions to Ukraine over its territory. Notwithstanding its welcome decision on Nord Stream 2  when one NATO country stops another NATO country from assisting in self-defence and upholding liberty and democracy, what does that say about our unity and shared values as an alliance? As the noble Lord, Lord Campbell, said, NATO has kept the peace and is not an instrument for territorial conquest. Putin, not NATO, is the aggressor, and Ukraine shows that NATO must be recalibrated and united for these dangerous times...

Lord Anderson of Swansea (Lab):...What should be the response? Yes, sanctions could make Putin pay a price. There has been approval of the brave decision of Germany in respect of Nord Stream 2  The Ukrainian people have responded well thus far. I was at a conference in Odessa two months ago as the only UK parliamentarian and was most impressed by the morale of the people. There will be much greater resistance than Putin so far assumes...

Lord Adonis (Lab):...On the crisis we now face, every speaker in this debate has agreed that sanctions must be for real. As the noble Lord, Lord Sedwill, said in his extremely able and powerful speech, for sanctions to work, they have to be far bigger and more immediate than Putin is expecting. Chancellor Scholz showed commendable leadership when he announced on the day of the invasion that Nord Stream 2 will be cancelled, but the fact that, four days later, Europe’s leaders cannot even agree to exclude Russia from SWIFT and other international payments systems, as we did Iran years ago, is a bad sign. This should happen immediately as part of a Russian trade embargo, which, as the noble Lord, Lord Newby, said, obviously must include Gazprom.

Our Government have a particular responsibility to promote financial sanctions because so many of them apply to transactions and investments in London. Thousands of Putin’s cronies should have their UK assets frozen or seized. The operation in the United Kingdom of all Russian banks, financial institutions and state companies—not just a handful—should be disabled. If we could stop Napoleon trading with and through Britain, we can certainly stop Putin.

It is all the more important that we in the UK take the lead on these financial measures—at the price of real pain, as the noble Lord, Lord Tugendhat, said—because our continental European partners need to do the same in respect of their energy dependence on Russia, although, with our own oil and gas reserves in the North Sea, we have a vital part to play here, too. Nord Stream 2 is only the start of the change that is needed to prevent Putin holding Europe to ransom; it has to start now...

Lord Alderdice (LD):...Thankfully, Germany has put a hold on Nord Stream 2  but it is not even operational so does not have an immediate impact on current supplies of gas. On the other hand, when we call for a blockade on Russia’s access to SWIFT, what is the immediate impact when Germany cannot use that mechanism, as it currently does, to pay for its current gas supplies? Given that our people have been suffering from high energy prices—there has been much debate on it in recent weeks—it seems to me that we need to explain to our people that, in rightly going down this road, we are engaging in an inevitable tit-for-tat conflict in which we will have to accept considerable pain not for a year or two, as with Covid, but potentially for many years, for this conflict with Russia will last...

Lord Balfe (Con):...I would like to correct or clarify one point. A number of people have referred to Nord Stream 2  The Germans have not cancelled it; they have interrupted its approval procedure, which is quite different. If they cancelled it they would be liable for a very large sum of money, so at the moment it is just paused...

Viscount Stansgate (Lab):...This brings me on to sanctions. The House is united in its support for the sanctions that have been announced, and the leader of my party has made that very clear. But we know that, while they must be applied and sustained by the widest possible range of countries, on their own they will not be enough to stop what is currently happening. We must also be honest about the consequences of those sanctions. Yes, we want them to work—we want to cut Russia out of the western financial system, because that would be a severe penalty—but sanctions will also hurt us, and millions of people will realise this as the price of gas rises, both here and in Europe. When the Minister, at the beginning of her speech, referred to the decision of the Germans on Nord Stream 2  there were perceptible cries of “Hear, hear!” across the House, because we all recognise that this decision involves a sacrifice for Germany. The decision it took is credible, and we too must face up to the need to make our sanctions credible. Here I must say, frankly, that the UK’s credibility on sanctions, especially financial sanctions, is undermined by the reputation of London as the laundromat for Russian money...

Baroness Smith of Newnham (LD):...We have heard much about Russian money in this country. When we were looking for European sanctions at the time of the Crimea crisis in 2014, one of the issues was that the French were perhaps a little reluctant to stop arms sales to Russia, Germany was a little reluctant to stop Nord Stream 2  and the United Kingdom was perhaps too reluctant to stop Russian money in the City of London. As my noble friend Lady Kramer pointed out, we are seen as the London laundromat. Can that stop immediately? How quickly can this be done? We cannot let these sanctions drag on and worry about whether certain individuals might have deep pockets for lawyers. We need to make sure that assets are frozen as soon as possible, so what are the Government doing to ensure that this can be done very swiftly?

The Minister of State, Foreign, Commonwealth and Development Office (Lord Ahmad of Wimbledon) (Con):...We are also currently looking at energy, which was referred to by my noble friend Lord Howell, among others. We welcome the statements made recently by the German Chancellor on Nord Stream 2  At the G7 meeting yesterday, the UK agreed to work in unity to maximise the economic price that Mr Putin will pay for his aggression. I agree with noble Lords that this must include ending Europeans’ collective dependence on Russian oil and gas. Ours is circa 3%. We are moving to other sustainable sources. Nevertheless, it is important that we work together with our European colleagues and friends...

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