Still open for business. Flickr/Mariano Mantel. Some rights reserved.The House of Lords EU Committee has now joined British political leaders – and even reportedly the heir to the throne – in voicing concern over our alleged “appeasement” of Vladimir Putin. Its report, “The EU and Russia: before and beyond the crisis in Ukraine,” published on February 20, accuses Europe of “sleepwalking” into the crisis, with the Committee Chairman, Lord Tugendhat, criticising “the lack of robust analytical capacity, in both the UK and the EU,” which “effectively led to a catastrophic misreading of the mood in the run-up to the crisis.”
Unsurprisingly, the report has received plenty of media coverage (at home and abroad) and could provide ammunition for those in Washington and elsewhere calling on western countries to escalate the conflict further by selling weapons to Ukraine. Indeed, it seems to have already pushed David Cameron into a pledge of “non-lethal aid” for the Ukrainian military.
Its publication also comes amid a flood of sensational reports in the British press after the RAF scrambled to intercept two Russian military aircraft off the coast of Cornwall on the same day as Michael Fallon’s warning that Russia poses a “real and present danger” to Latvia, Lithuania and Estonia. With the BBC now telling us how to spot Russian aircraft in our skies, and Sir Adrian Bradshaw, second-in-command of NATO’s military forces in Europe, speaking of the possibility of a Blitzkrieg-style Russian assault in Eastern Europe, we could be forgiven for thinking that, after Estonia, we’re next.
Former defence chiefs added to the chorus: “They [the Russians] have got us more or less at their mercy”, claimed Sir Michael Graydon, while former Air Commodore Andrew Lambert told the Mail that “if the Russians turned up the heat, we would struggle badly.” In his opinion, “the modern generation of politicians has grown up in absolute security – they’ve never felt a threat to their existence, safety or security. They’ve taken peace for granted and decimated the Armed Forces. Let’s hope we don’t pay the price.”
Hopefully he will find consolation in the fact that the government still “spends 25 times more on Research & Development (R&D) for the military as it does on R&D for renewable energy”, and continues to maintain the 6th largest military budget in the world (at £37 billion annually) in an era of deep public spending cuts. Nevertheless, it is concerning that despite these continually high levels of spending, the Armed Forces remain ill-prepared for what should be fairly routine tasks. Indeed, the Cornwall incident, and the laboured response to it, is not without precedent.
But it is worth keeping this in perspective: the aircraft never entered British airspace, only our “area of interest”, and – although Russian planes have increased their activity across Europe recently – these incidents don’t quite compare to, say, 2000 NATO troops undertaking military exercises in Eastern Europe, with the explicit purpose of demonstrating “our ability to project power,” and to “plan and conduct complex operations spanning different countries.” Moreover, if we take even a brief look back at our history of “getting tough” with Russia, we can see where our political leaders really stand.
“Not support, for now, trade sanctions … or close London’s financial centre to Russians.”
This statement was photographed on a document being carried into a national security council meeting at Number 10 last year. It clarified what the government meant by “getting tough” on Russia. That is, appear tough, but don’t hurt financial or corporate interests. Russian money is actively invited into the City: tier-one “investor visas” – providing residency in exchange for investments in Britain of at least 1 million pounds – are ideal purchases for wealthy Russians seeking to make money from property or, more likely, avoid paying taxes.
Reuters reported last year that while only two Russian companies were listed on the New York Stock Exchange, companies from Russia and former Soviet states were able to raise “$82.6 billion in London in the past two decades.” Ben Judah of the New York Times put it simply: “This is Britain’s growth business today: laundering oligarchs’ dirty billions, laundering their dirty reputations.”
When the head of the UK National Crime Agency states that “many hundreds of billions of pounds of criminal money is almost certainly laundered through UK banks and their subsidiaries each year,” it is easy to see the attraction for businessmen with plenty of cash and questionable pasts. To be fair, the House of Lords committee put two and two together – big sums of illicit money leaving Russia; big sums flowing through London – and argued for stronger anti-money laundering provisions in Britain (see pages 82-85).
Sanctions were, of course, tightened, but the impact of this is not exactly clear in London. If, for example, you are a student wealthy enough to afford accommodation with Pure Student Living, your new landlords will be “Mikhail Fridman, Russia’s second richest man, worth an estimated £9.3bn; German Khan, said by Forbes magazine to be worth about £6bn; and Alexei Kuzmichev, with a fortune of about £4.5bn.” Your monthly rent will also be up to £2,200 per room.
“We stand by it strategically”
And, then there’s BP, which has a 20% stake in Rosneft, the enormous oil and gas company majority-owned by the Russian government. Between the beginning of 2014 and the downing of MH17 last July, BP “raked in roughly $2.3bn from its links with the Russian company.” No wonder chief executive Bob Dudley, when pressed on his company’s continual involvement in Russia, stated: “we stand by it strategically… Russia is the largest oil and gas producer on the planet and the energy needs of the world are going to increase 40% in the next 20 years so from an investment perspective it makes sense to be there.”
Compare the wording of the document heading into Downing Street – “Not support, for now, trade sanctions” – and this statement from BP: “Further economic sanctions could adversely impact our business and strategic objectives in Russia, the level of our income, production and reserves, our investment in Rosneft and our reputation.”
This is not to claim the existence of a grand conspiracy – BP is now apparently suffering from the declining rouble and the deterioration of the Russian economy. But it’s not as if the company is shy when it comes to exerting influence in Westminster – like when it admitted to successfully pressuring the government into the completion of a faltering prisoner swap with Muammar Gaddafi’s Libya in 2010: “We were aware that this could have a negative impact on UK commercial interests, including the ratification by the Libyan Government of BP’s exploration agreement,” a company statement read. If, however, profits continue to slide, it might be time to arrange a dinner with an MP to avoid falling behind everyone else.
The keys to the City
Finally, we shouldn’t forget the telling image captured in June 2013, when “two prominent Russians with connections to the Kremlin, including Vladimir Putin’s wealthy judo partner, were photographed chatting to David Cameron at the Conservative summer party, held in the City at Old Billingsgate.” Both were employed by a PR firm that advised the Russian government and donated £91,000 to the Conservative Party between 2009 and 2010. One is an honorary freeman of the City of London.
This sums up the reality that is buried beneath the media hysteria and thinly veiled war-mongering: our political class is far more interested in Russian money than they are in us or our "security."