Business and government must work together to starve Putin of resources


The writer is a Cabinet Office minister and head of the prime minister’s policy unit

Napoleon may have observed that an army marches on its stomach but it was one of his biographers, American journalist Ida Tarbell, who identified the true prerequisite for any military adventure. “The first and most imperative necessity in war is money,” she wrote. “Money means everything else — men, guns, ammunition.”

Without the tidal wave of cash that flowed into Russia after the Iron Curtain tumbled, Vladimir Putin would never have been able to cement his grip on power or build the vast war machine that has been unleashed against the people of Ukraine.

And it is by cutting off that most vital of supply lines that the free world will seek to both repel the invasion and demonstrate the high price of waging war against a sovereign state in the 21st century.

As his tanks crossed the border, Putin’s reckless actions sent the rouble plunging to previously uncharted lows, vaporised half the value of Gazprom and wiped a record $250bn off the Russian stock market in just one morning.

And that was before prime minister Boris Johnson unveiled the largest and most severe package of economic sanctions this country has ever imposed. Banks’ assets frozen, companies set to be barred from clearing services, arms manufacturers locked out of global markets and many of Putin’s oligarchs hit where they feel it most: their bulging wallets.

Allies around the world have imposed similar measures, making Putin’s Russia not just a political pariah but an economic one.

As one of the biggest financial centres, the UK is well-placed to take a leading role in sanctioning Russia. On Wednesday, Johnson and John Glen, the economic secretary to the Treasury, sat down with some of the leading city firms, regulators and institutions to discuss how we can work together to make our sanctions bite quickly.

No reputable firm or diligent investor wants to do business, even at the furthest remove, with a regime with blood on its hands. So, in addition to the unprecedented action taken in concert with our global allies, I encourage every relevant UK business and financial institution to go further, faster wherever they can. From lawyers, bankers and accountants to real estate agents and insurance brokers — we all share the responsibility to act.

None of this will be painless for British businesses and consumers. The interconnected nature of the globalised economy that allows us to target Russia so effectively means that the impact of some sanctions will, inevitably, be felt here too.

We can also expect retaliation from Moscow — whether in tit-for-tat sanctions or through hostile acts such as cyber attacks — as Putin lashes out in an attempt to weaken our resolve.

This government will do everything possible to shelter our country, our people and our industries from the impact of such actions, but sometimes, even in business, there is no hiding place or middle ground: you have to pick a side.

Doing the right thing comes at a price — and if our commitment to freedom and democracy are to mean anything, then it is one we must be willing to pay.

The world simply cannot afford for Putin to succeed in Ukraine. If this aggression goes unanswered, he will not be the only despot who is emboldened. Ukraine will not be the only territory threatened and violated. The world will become a less stable, less predictable and less safe place for communities and businesses alike.

But if we are unwavering in our response, we can starve Putin of the resources he craves. We can undermine the circle of oligarchs who have propped up his regime for so many years. And we can send a message to the world that acts of aggression will end in military, political and financial failure.



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