UK to boost Ukraine funding using £2bn from seized Russian assets

The UK government will give an extra £2.26bn ($2.93bn) to Ukraine, using the profits from seized Russian assets held in Europe.

It forms Britain’s contribution to a £38bn ($50bn) fund announced in June by members of the G7 group of leading economies.

Defence Secretary John Healey said the new money will help Ukraine bolster its frontline military equipment. He described it as “turning the proceeds of Putin’s own corrupt regime against him, by putting it into the hands of Ukraine”.

Chancellor Rachel Reeves said the aim was to release the money as quickly as possible.

The funds will be made in the form of a loan – with the UK recouping the cost from profits of seized Russian assets – “within the correct legal framework”.

Reeves made it clear that the UK was not confiscating sovereign Russian assets in Europe, but using the profits and interest accrued from them.

Other G7 countries have pledged to do the same and are expected to finalise their contributions in the coming weeks.

The payments to Ukraine are expected to be made in tranches, rather than all at once. Some nations expect some of the money to go towards Ukraine’s reconstruction.

But the UK government has said it is up to Kyiv on how it spends the UK’s contribution.

Healey said the money announced would allow Ukraine to purchase crucial military equipment, such as air defences and ammunition.

The £2.26bn is a one off payment. But it is an addition to £3bn already pledged by the government to fund Ukraine’s war effort.

So far, the UK has given more than £12bn in military aid and has promised to match that level of support in the future.

The chancellor and defence secretary briefed reporters on the announcement sitting side by side. Reeves said it showed the UK’s support for Ukraine was “unwavering and will remain for as long as it takes”.

Their appearance together might also signal a positive relationship ahead of next week’s Budget, when the government will outline its spending plans on public services such as health, schools and police.

Reeves was asked about defence spending and repeated that the government had committed to spending 2.5% of GDP – though without a timetable. The chancellor said she was not going to discuss details of the forthcoming budget.