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Defeating Putin: the development, implementation and impact of economic sanctions on Russia
- However, Dr Sen told us that “On subsidising households [ … ] The cost is anywhere between £25 billion and £50 billion to £60 billion. If we are talking about the poorer households, those kinds of subsidies will have to be given and announced”.[1]
- Given his concerns about business confidence described earlier, Mr Danker
recommended the following:
- The Chancellor should consider extending the tools used during the onset of the Covid-19 crisis e.g. the business interruption loan schemes, to support UK businesses in the current climate;
- The Government should institute measures to unlock more business investment, including building skills incentives and improving business confidence;[2] and
- In relation to energy, the Government should “double down on renewable and clean energy solutions”[3], take advantage of the UK’s success in offshore wind and unlock private sector investment in renewable energy.[4]
- On the cost of these proposals, Dr Sen told us that “On Tony [Danker’s] point about renewables, we think we need at least $20 billion a year in investment in renewables. Again, that can lift business confidence, and at least helps mitigate the impact on the economy”.[5]
- There will be a cost to the UK economy of the economic sanctions imposed on Russia. It is not possible yet to quantify that cost. But we believe that, on the information currently available, it is most definitely a cost worth bearing in order to aid Ukraine in opposing Russian aggression. However, that cost, combined with the already present pressures in the UK on the cost of living, will impact the whole country, and will be felt particularly by low income households.
- As the Government moves forward with its sanctions strategy, it must take further action to support UK households, in particular those on lower incomes, to manage the subsequent rise in energy and other costs.
- Business confidence has wavered in response to Russia’s invasion of Ukraine. The Government should consider what steps can be taken to boost business investment and growth and specifically how it can help firms which have been directly affected by the economic sanctions against Russia. The Government should also look to accelerate the UK’s transition to a more secure energy supply whilst also reaffirming their commitment to net zero and a just transition.
