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Councils have government backing to end contracts with Russian-owned company
Councils that wish to cut ties with a Russian-owned gas company have government backing to do so, the Levelling Up, Housing and Communities (LUHC) Committee was told on Monday.
When asked about Merton and Salford councils, which are both seeking to end contracts with Russian state-owned energy company Gazprom, Jeremy Pocklington, permanent secretary at the Department for Levelling Up, Housing and Communities, told the committee that “we support them in doing that”.
The local authorities are concerned about the legality of ending the contracts prematurely because it is illegal to discriminate against bidders and they are among several social landlords looking to cut ties with Gazprom amid Russia’s invasion of Ukraine.
LUHC Committee chair Clive Betts said there is “widespread support” for taking effective sanctions against Russia and Russian companies and “any who may be contributing towards their resources to wage this appalling act of violence”.
He asked what help Merton and Salford councils could have from the government to end the contracts.
Mr Pocklington said: “We are aware and we’re looking into it very urgently.
“As you say a small number of local authorities do have contracts with Gazprom and are seeking to exit those contracts.
“We support them in doing that – it’s their decision but it’s the right thing to do. I think the country would support them.”
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Merton Council has agreed a one-year £1m contract with Gazprom that is set to begin in April, while Salford Council’s contract with the company is up for renewal in June.
Salford city mayor Paul Dennett wrote to the government last week raising concerns around the law because though the contract is up for renewal, there appears to be nothing to stop Gazprom from bidding for it because of discrimination laws.
Mr Dennett said he does “not wish for public money to be spent towards the income of the Russian state during the present military crisis in Ukraine”.
He said preventing these types of companies from bidding would be in line with the government’s stated intentions to “inflict devastating consequences on President Vladimir Putin and Russia”.
In a statement last week, Mark Allison, leader of Merton Council, said: “The atrocities being carried out by Russia are horrific, and know I speak for everyone associated with Merton Council and the borough when I say we stand steadfastly with the people of Ukraine.
“I am also today writing to the government to ask for urgent changes to the laws around who councils can choose to do business with.”
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