Chelsea FC: Releasing Funds from Sale

Lord Pitt-Watson Excerpts

Wednesday 11th November 2026 Lords Chamber

[Baroness D’Souza]

To ask His Majesty’s Government what discussions are being held at Cabinet level about the use of funds resulting from the sale of the Chelsea Football Club to support survivors in Ukraine.

[The Parliamentary Secretary, HM Treasury (Lord Pitt-Watson) (Lab)]

My Lords, Ministers continue to engage across government on this issue. The Government have provided a clear legal route for the proceeds to be transferred for humanitarian purposes in Ukraine. Our priority is ensuring that they reach Ukraine as soon as possible. The door remains open for Mr Abramovich to act, but the Government are fully prepared to go to court if necessary to enforce the commitment he made when Chelsea Football Club was sold.

[Lord Shamash (Lab)]

My Lords—

[Baroness D’Souza (CB)]

My Lords, I thank the Minister for his response. Despite what he says, even though the Government promised there would be court action in the event of non-settlement of the issue with Mr Abramovich, that court action has not taken place. I would really like the Minister to answer on that. Furthermore, the fact remains that a considerable amount of money intended to alleviate suffering in Ukraine remains in limbo. There must be other steps that the Government could take to end this four-year impasse between Abramovich and the Government on how the funds might be used. One suggestion might be to facilitate the charitable registration and work of the foundation that was established to manage the funds, which already been granted an initial government licence for distribution of aid in Ukraine.

[Lord Pitt-Watson (Lab)]

Let me be clear about this. On 17 December last year, the Government issued a licence creating a clear legal route for the transfer of £2.5 billion of Chelsea FC sale proceeds. Those funds have not yet been released. I imagine the noble Baroness is referring to the Foundation for the Victims of Conflict? I see she is nodding. It is for the Charity Commission to review that application. We have written to the application sponsor, Mike Penrose, and are awaiting his reply. If that charity is approved, the Government’s licence is clear that any money from the sale must go to humanitarian purposes in Ukraine. However, noble Lords will understand that because of the legal procedures that might take place, I am limited in what I should say publicly to your Lordships’ House.

[Lord Shamash (Lab)]

My Lords, I am sorry about my earlier enthusiasm: it was not brilliantly timed. What steps are the Government taking, along with our European partners, to arrange for the release of the £240 billion of frozen Russian assets in European and British banks to fund the Ukraine war effort?

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[Lord Pitt-Watson (Lab)]

The Government’s support for Ukraine now amounts to £25 billion, of which £16 billion is military support. Some £4.3 billion of that was paid this year. The Russian assets remain frozen for the purposes of support to Ukraine.

[Lord Bellingham (Con)]

My Lords, is the Minister aware that Roman Abramovich has, through his representatives, suggested that against the £2.6 billion there is £1.4 billion in loans from offshore companies? What can he do to stop this money being set against the principal sum?

[Lord Pitt-Watson (Lab)]

The Government’s position is that Mr Abramovich gave a deed of undertaking when Chelsea was sold that, for the sale to take place, he would meet conditions under European law that the full sale proceeds would go to humanitarian purposes in the Ukraine. That remains the position.

[Baroness Kramer (LD)]

My Lords, do the Government understand that this legal warfare and paralysis is playing right into Putin’s hands by failing to deliver moneys that should be going to humanitarian causes in Ukraine because of constant delays. I am very concerned that £1.4 billion is not transferred to companies owned by Abramovich that claim they made loans to the entity and therefore have first rights. Can the Minister give us the Government’s assurance on that issue?

This is turning into Jarndyce v Jarndyce. How much is being consumed in legal fees and how much will that deplete the money that goes to the very worthy causes for which it is intended?

[Lord Pitt-Watson (Lab)]

As I said, the Government have laid out a clear legal route for the transfer of the money and are fully prepared to go to court if necessary to enforce the commitment that was made when Chelsea was sold. But, as the noble Baroness would expect, it would be ill advised for the Government to publicly discuss any potential litigation strategy.

[Lord Ricketts (CB)]

My Lords, almost three years ago in a report on Ukraine, your Lordships’ European Affairs Committee concluded that we found it incomprehensible that the Government had not yet resolved this problem. That was three years ago. Now, with the winter coming on in Ukraine and signs of European willingness to fund Ukraine faltering, surely if there is a legal route we should now drive down it. Does the Minister agree?

[Lord Pitt-Watson (Lab)]

We fully agree with that position, but, as I have said, it would be ill advised for the Government to publicly discuss any potential future strategy.

[Baroness Neville-Rolfe (Con)]

My Lords, more than four years after the sale of Chelsea Football Club, these funds remain frozen, no doubt accruing interest, while the humanitarian need in Ukraine continues to grow, as we have heard. I am keen to know why the delay is so long. Is this partly related to a tax dispute, given the huge increase in value of the club during Mr Abramovich’s tenure?

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[Lord Pitt-Watson (Lab)]

It would be ill advised for the Government publicly to discuss potential future strategies. Possibly, the noble Baroness’s question needs to be addressed to Mr Abramovich. There is a clear legal route that has been presented to him to allow him to fulfil his deed of undertaking.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, the frozen Russian assets in the UK are well beyond the £2.5 billion of the Abramovich money. Each nation seems to be unwilling to take the initiative to unfreeze the assets, whether here, in Europe, in Canada or elsewhere, because they are worried about the reputation of their financial sector. The Canadians have now suggested an initiative in which they would lead, along with the United Kingdom, and then others would join in, so that all the frozen assets could be unfrozen together. Will the United Kingdom Government join with the Canadians in taking this initiative?

[Lord Pitt-Watson (Lab)]

The Government are committed to making Russia pay for the damage that it is causing in Ukraine and we will work with all international partners to consider all lawful routes to ensure that Russia does pay and that Ukraine gets the funding it needs. The UK and the wider G7 have absolutely committed to ensuring that Russian sovereign assets remain immobilised across our jurisdictions until Russia ceases its war of aggression and pays for the damage it has caused.

[Lord Alton of Liverpool (CB)]

My Lords, the Minister has referred to the Treasury licence and to the subsequent deed of undertaking. It would help your Lordships if he would agree to place copies of those in the Library for us to see. On the wider £185 billion of frozen Russian assets held in Belgium by Euroclear, referred to by the noble Lord, Lord Foulkes, a few moments ago, will the Government support the derisking and removal of those funds to a special purpose fund, removing Belgium and Euroclear from the crosshairs and enabling interest of around £5 billion annually to be urgently repurposed into the defence of the people of Ukraine, and indeed the defence of the wider community of Europe as well?

[Lord Pitt-Watson (Lab)]

I will ask my officials what can be made public in all of this. In terms of where we want to get to, I do not think there is much dispute in this House, but I do not want to be pushed to publicly discuss potential routes forward for making sure that the money that has been promised to Ukraine is given to Ukraine, and for proper purposes.