The UK business community stands by Ukraine's side

Everyone in my organisation is looking with alarm at the situation in Ukraine. The outrageous invasion by Russia; the terrible consequences for the Ukrainian people; the fear of others in the region as well as diaspora communities the world over. The consequences for those affected are shocking and the consequences for the world in terms of tolerating this behaviour are clear.

I’ve been talking to firms every day now about what they think. It’s pretty clear that this is a war unlike those past where we – the UK and other NATO powers – are engaged in economic warfare rather than military. This means the costs to the UK will not be measured in defence spending but in firms’ supply chains, in trade, as well as in rising energy prices for companies and soon for individuals too. The Prime Minister and Foreign Secretary have to their credit been unambiguous – there is an economic sacrifice involved in stopping Putin.

This morning I met with Yorkshire firms in Leeds from many sectors. Last night I met firms in the Humber from energy and manufacturing. It struck me that almost all backed the actions in place to stop Russia, despite the economic impact. Not just on the merits of this case, but more broadly against military aggression of this kind that in turn undermines democracy and global economic cooperation.

And there are very real impacts to consider. Many UK firms use raw materials from Russia in their products. Others export to Russia everyday essential items for Russian people. Many large businesses who have Russian interests are divesting – a decision I support and praise. For others it’s hard to claim they should stop production immediately if they use or make products that contain Russian commodities.

Energy prices are front of mind for obvious reasons. While the UK buys a minority of gas from Russia, we do buy from elsewhere on global prices. Those prices are shooting up. This affects business energy costs right now and could in turn lead to yet further price increases for consumers from October.

At this stage, the CBI stance is as follows. First, we unequivocally stand against Putin’s aggression. Second, we are deeply concerned at the humanitarian consequences for Ukrainian citizens, and we are helping our member companies that want to support those efforts to do so. And having been on a call with the Ukrainian Ambassador to the UK with CBI business leaders, I am heartened that firms are so engaged, and responding with urgent corporate commitments.

Third we support the sanctions being deployed, while recognising they have an impact here too. And finally, we are providing a connection between business and UK government; helping firms understand how to comply with sanctions and helping government understand how firms are affected in the short term, whilst informing longer term foreign and domestic policy implications.

We hope that the world succeeds in pushing back Putin and freeing Ukraine. Once complete we will then need to take stock on the undoubted cost to UK economic growth that ensues. But it’s a cost we have to take.