Putin's invasion of Ukraine will 'impact' cost of living, Grant Shapps warns

9 March 2022, 09:04 | Updated: 9 March 2022, 11:06

By Asher McShane

Transport Secretary Grant Shapps has acknowledged that British people will face a worsening impact in the cost of living crisis because of Putin's invasion of Ukraine.

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Transport Secretary Grant Shapps said the British people understand that Vladimir Putin's actions "do have an impact and on our cost of living, unfortunately".

He said there would be a "global impact" due to the war in Ukraine.

Mr Shapps told Nick Ferrari at Breakfast on LBC this morning: "We are not, fortunately for us, in a position of having air raids and seeing - literally - our children die on the street, the terrible pictures we are seeing in Ukraine.

Read more: Nick Ferrari demands foreign aid budget becomes the Ukrainian aid budget

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Mr Shapps acknowledged people will see a financial 'impact' as a result of Russia's invasion
Mr Shapps acknowledged people will see a financial 'impact' as a result of Russia's invasion. Picture: Alamy/LBC

"Everyone wants to help, we need to stem the flow of Putin's gas and oil blood money from funding his war machine so I think it's right to cut off their oil.

"But there is an impact, it's a global impact. We have already seen very high price rises.

"The Government, of course, has already knocked about £15 per tank for an average family car off the cost of fuel by freezing fuel duty for all of these years and for home energy announced a package which amounts to some £20 billion of different types of support for cost of living issues."

Experts have already issued warnings of the impact new sanctions on Russian oil and gas imports could have on the cost of living.

Business Secretary Kwasi Kwarteng announced on Tuesday the UK will phase out the import of Russian oil and oil products by the end of the year in a move matched by US President Joe Biden.

The moves were praised by Ukrainian President Volodymyr Zelensky who said they sent a "powerful signal".

But the RAC Foundation has warned petrol prices could rise to £1.60 a litre this week in the UK and £1.65 soon after.

Nathan Piper, an analyst at Investec, said EU's decision to reduce its reliance on Russian gas could impact the UK.

Boris Johnson suggested diesel prices could rise further in Britain after the announcement, with prices at the pumps already having soared following Moscow's attack on Kyiv.

But the Prime Minister said the UK was "less exposed" than some European nations when it came to restricting Russian oil - the European Union imports more than a quarter of its oil from Russia.

Speaking to broadcasters in London, Mr Johnson accepted the decision to target Moscow's oil would not hit the Kremlin's regime immediately, with Ukraine continuing to face assault, but said it would add to the "extreme" sanctions already levied.

The UK imported goods from Russia worth a total of £10.3 billion in 2021, according to the Office for National Statistics.

This was the equivalent of 2% of the total value of all imported goods from around the world.

No UK petrol demand comes from Russia, nor heating or fuel oil but 18% of the total demand for diesel comes from Russia, according to the Department for Business, Energy and Industrial Strategy.

Ministers were considering steps that could lead to a fracking rethink in the UK after committing to phasing out imports of Russian oil by the end of the year.

Amid concerns over soaring energy costs, it was understood two Cuadrilla sites in Lancashire may be handed over to the Royal Geographical Society rather than being concreted over.

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