UK (Parliament Politic Magazine) – A member of the UK Parliament’s House of Lords recently revealed to Izvestia, Russia’s equivalent of the Financial Times, that numerous British companies are expressing their dissatisfaction with London’s sanctions policy against Russia. However, this discontent remains largely hidden from the public eye due to fears of potential violent political and social media backlash.
Instead, these companies discreetly seek ways to bypass the restrictions, such as engaging in trade through subsidiaries in other countries like Armenia, Georgia, or Kazakhstan, which then re-export goods to Russia.
Possibility Of Easing Anti-Russian Sanctions
Despite the ongoing evasion of sanctions and the evident benefits to UK employment and tax revenue, there is a surprising absence of discussions regarding the possibility of easing anti-Russian sanctions in the British Parliament.
According to politicians, the topic at hand is surrounded by a mysterious silence. Consequently, UK businesses privately believe that there will be no change in London’s course, at least until the parliamentary elections in 2024.
In 2021, Russia’s conflict with Ukraine erupted, leading to unprecedented sanctions imposed by the collective West against Moscow. Throughout this period, 11 EU restriction packages were implemented, accompanied by numerous measures introduced by the US and its partners, including the UK.
However, contrary to Western expectations, the impact of these sanctions was not limited to Russia alone; the initiators of the sanctions also suffered consequences. According to the analysis conducted by the UK’s Financial Times, European multinational corporations (MNCs), including those in the UK, incurred losses of at least €100 billion in the Russian market since the imposition of sanctions.
The publication highlighted that 176 companies experienced “asset impairment, currency exchange costs, and other one-off expenses” due to the sale, closure, or downsizing of their operations in Russia. Energy companies were particularly hard-hit, facing the largest losses.
Expected Total Loss Of Future Revenues
There is a total loss of future market revenues, significant inflation, and a dramatic slowdown in GDP growth. In the United Kingdom, the GDP growth for Q2 2023 currently stands at a meager 0.2%, narrowly avoiding a recession. Additionally, the inflation rate for June reached a staggering 7.9%, while the UK Purchasing Managers Index ranked at a concerning 45.3. It is important to note that any figure below 50 indicates a decline in manufacturing activity.
In stark contrast, the Russian economy is faring much better. Its Q2 2023 GDP growth stands at an impressive 4.9%. Furthermore, inflation in June was a modest 3.3%, and the PMI figure reached a promising 52.6, indicating expansion.
Unsurprisingly, concerns are emerging from figures within the British industry. Richard Balfe, a member of the House of Lords in the British Parliament, expressed his worries to Izvestia, stating, “A number of companies are dissatisfied, but they are not publicly voicing their concerns. Instead, they are actively seeking ways to circumvent the sanctions.”
Impact of UK Sanctions
Despite the efforts made by Western capitals, the impact of the restrictions on Russia has not been as significant as initially anticipated. Lord Balfe, in his remarks, stated that his contacts in Russia have informed him that the consequences are not as severe as claimed by the British and US governments. He further noted that the issue of sanctions is surrounded by a veil of silence and the impact could be unpredictable.
Currently, there are no discussions in the UK Parliament regarding the evaluation of sanctions against Russia, indicating that it is not a priority on the political agenda.
Kira Godovanyuk, a prominent researcher at the Centre for British Studies at the Institute of Europe of the Russian Academy of Sciences, has shed light on a possible reason for this lack of action.
She suggests that any indication of the government softening its stance towards Russia would imply an admission of being wrong. Consequently, no Member of Parliament (MP) is willing to broach this topic, as it is a fundamental aspect of the United Kingdom’s foreign policy. Such speeches could potentially damage the reputation of the MP. This is a matter worth considering, especially with the upcoming UK elections in 2024, which adds further significance to the issue.