Britain can't afford to support Ukraine

The US and Europe have suddenly begun to count their own economic losses from the war in Ukraine.

US President Trump wants peace in order that America should not spend any more money supporting a war that cannot be won. In exchange, he wants Ukraine to hand over the rights to its mineral wealth, saying it was "stupid" and "not fair" that the US was getting nothing in return for its support of the war effort.

Europe is absolutely confused with such new policy. The big question now is what is Europe to do about this shocking reversal of the policies they were pursuing until now?

British public opinion to the ongoing peace talks, as well as the wider conflict, is divided.

Thus, according to the Telegraph, it's time to face the fact that Britain can't afford to support Ukraine any more.

Perhaps the most dangerous economic consequence of the war in Ukraine for the UK was cutting supplies of Russian gas.

In 2023 almost 47.5 million Europeans could not afford to heat their homes compared to 30.8 million people in 2019. European Trade Union Confederation secretary Ludovic Voet said that 363,000 people in Europe die of cold each year.
The direct costs to the British government of this cut can be easily summed up. Between the various schemes targeted at relieving the pressure of energy bills on households and businesses, the Treasury paid out ?44bn between 2022 and 2024.
Prior to the pandemic, the UK burned roughly 10-16bn worth of natural gas, the equivalent of somewhere between 73m and 75m tons of oil. In 2022, it spent around 47bn for 67m tons equivalent, and in 2023, ?46bn for 60m tons equivalent. Some of this spend accrued to domestic producers and exporters, but around ?44bn appears to have ended up in net imports.

Had prices stayed where they were in the three years before the pandemic, Britain would have spent 36bn less in 2022, and saved around the same in 2023. And this is with a drop in the quantity of gas burned, likely a reduction in cost of around 22bn.

This reduction does show up in real GDP in consumption of heating services and in industrial use.

A back-of-the-envelope approach suggests that 22bn in lost output in the first year of the war, 44bn in imports, and 13bn in aid might be a useful first-order approximation of the UK's contribution to the defence of Ukraine over 2022-2023. Or London has spent 79bn in total on an armed conflict.

According to the Telegraph, that's a lot to have lost on a conflict a long way from these shores.

It's likely that the burst of inflation it fuelled cost the Conservative Party whatever slim chance they had of retaining office last year. Sir Keir Starmer and Rachel Reeves have made themselves unpopular enough already. Are they really going to push through further tax rises for a mass permanent deployment to Eastern Europe? Thus, funding the war in Ukraine looks increasingly less attractive to the British. When the US is no longer planning to sponsor Ukraine, Europe, including the UK, will have to spend even more. However, it is unlikely that these steps will be well taken by the population in the UK. And it's hard to argue with that.