The government is investigating 37 UK-linked businesses for potentially breaking Russian oil sanctions – but no fines have been handed out so far, the BBC can reveal.

Financial sanctions on Russia were introduced by the UK and other Western countries following the invasion of Ukraine in 2022.

Conservative shadow foreign office minister Dame Harriett Baldwin said sanctions were designed to “shut down the sources of finance for Russia’s war machine” and “bring this illegal invasion to an end sooner”.

But critics have claimed they are ineffective after the latest figures showed the Russian economy was growing.

The Treasury said it would take action where appropriate, but pointed to the complexity of the cases as a reason they take considerable time.

The sanctions include a cap on the price of Russian oil, designed to ensure that oil can keep flowing without Russia making large profits.

The cap prohibits British businesses from facilitating the transportation of Russian oil sold above $60 a barrel.

Data obtained by the BBC using Freedom of Information laws shows the Treasury has opened investigations into 52 companies with a connection to the UK suspected of breaching the price cap since December 2022.

As of August, 37 of those investigations were live and 15 had concluded, but no fines had been handed out.

The identities of the businesses are unknown but it’s understood some are likely to be maritime insurance firms.

Dame Harriett told the BBC “there is probably more that could be done” by the government and the oil sector itself “because it does appear that UK importers are still bringing in oil that originated in Russia”.

The anti-corruption organisation Global Witness said it was “quite astonishing” that no fines have yet been handed out, and described the oil cap as “a sort of paper tiger” that is failing to crack down on rule breaking.

Louis Wilson, the head of fossil fuel investigations at Global Witness, called for “bold action” to be taken against companies breaching sanctions.

He said if the UK government “prevents British businesses from enabling Putin’s profiteering, then I think you’ll start to see others following that lead”.

Investigations into potential breaches of the oil cap and other financial sanctions are carried out by a Treasury unit called the Office of Financial Sanctions Implementation (OFSI).

OFSI received an extra £50m of funding in March to improve enforcement of the UK’s sanctions regime

But Mr Wilson said companies under investigation find it “pretty easy to come by” a document that gets them out of trouble.

He described the documents as “basically promises, voluntary bits of paper” and said they can be easily obtained even if the company was involved in transporting oil sold above the price cap.

“What’s likely is either these businesses will find the paperwork that they need to get through this process, or we’ll see the UK government drop these cases quietly,” he said.

He claimed the US were reluctant to make the Western sanctions regimes harder “because they’re scared that if they do enforce the rules it will stop the Russian oil trade and that will send oil prices higher”.

Dame Harriett said it was important that when OFSI “find deliberate wrongdoing they are exacting financial penalties”.

A spokesperson for the Treasury said it would take enforcement action “where appropriate” and it was “putting sanction breachers on notice”.

They added that the cap was reducing Russia’s tax revenues from oil, adding that data from the country’s own finance ministry showed a 30% drop last year compared to 2022.

The former chair of Parliament’s Treasury Select Committee launched an inquiry into the effectiveness of sanctions on Russia in February.

Dame Harriett said she “received evidence that the oil price cap is being evaded by refining Russian oil in refineries based in third countries and then the oil is being exported into the UK.”

Earlier this year the BBC reported on claims about how much oil this so-called “loophole” is allowing into the UK.

But parliamentary committees are disbanded once an election is called and the findings of the Treasury committee inquiry were never published.

It’s understood no decision has yet been made as to whether the new Treasury Select Committee will recommence the work.

OFSI issued its first Russia-related penalty last month, when it fined a concierge company £15,000 for having a sanctioned individual on its client list.

London-based firm Integral Concierge Services was found to have made or received 26 payments that involved a person whose assets have been frozen as part of the Russia sanctions.

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Executives have stepped up sales of their shares in UK-listed companies ahead of this month’s Budget, as chancellor Rachel Reeves considers increasing capital gains tax in a bid to bolster public finances.

Since Britain’s July 4 election, directors of listed companies have sold shares at an average rate of £31mn a week, more than double the £14mn pace of the previous six months, regulatory filings show.

The total value of disposals since election day has reached around £440mn, according to the figures compiled by investment platform AJ Bell.

Government insiders have confirmed Reeves is weighing a CGT increase as part of a multibillion-pound effort to fill a hole in the public finances.

Some business owners are also speeding up plans to offload their companies altogether to avoid the potential CGT rise, according to a survey by wealth manager Evelyn Partners.

At present CGT rates on share disposals or the sales of businesses tend to range between 10 per cent and 20 per cent.

The chancellor said in an interview with the Financial Times last week that she would not do anything that might hit growth. “We are approaching it in a responsible way and we need to make sure we aren’t reducing investment into Britain,” she said.

On Monday, Reeves and Prime Minister Sir Keir Starmer will host a global investment summit in London, insisting that Britain is a great place to do business, but the shadow of a tax-raising Budget hangs over the event.

Several executives who have sold shares told the FT they took the decision due to fears about the October 30 Budget. They cited worries that a move to raise CGT could lead to further investor outflows.

“My sale was purely down to concerns about the CGT changes,” said one executive at a London-listed firm who sold shares in September. “The chancellor’s approach of leaving the whole economy in limbo over potential changes is not at all helpful.”

Another executive at a company quoted on London’s junior Aim market who also made disposals last month said they were worried changes in CGT could deter future investors. “People will be more reluctant to risk their capital,” they said.

The FTSE Aim All-Share index is down 3.5 per cent so far this year.

CGT, which raised £14.4bn in 2022-2023, is paid by about 350,000 people but just 12,000 of them account for two-thirds of the total intake.

The survey by Evelyn Partners also found that nearly a third of the 500 business owners who had fast-tracked their exit plans over the past year had done so because of concerns about a possible rise in CGT.

A fifth of the businesses said they were looking to accelerate an exit due to a potential cut in inheritance tax relief, which meant it could be more expensive to pass on a company to the next generation.

“People are running out of time to make these decisions ahead of the Budget and the risk is that they panic,” said Chris Etherington, partner at accounting firm RSM UK. “Everyone has October 29 as a hard deadline.”

Independent research published on Friday by the Centre for the Analysis of Taxation suggested a CGT overhaul could raise up to £14bn a year for the government.

The study looked at the possible effects of a comprehensive reform package that broadens the tax base and brings CGT rates into line with income tax.

Anna Leach, chief economist at the Institute of Directors, said businesses were concerned they would bear the brunt of tax changes after Labour ruled out rises for working people. “They have ruled out everybody else,” she said.

“Ambiguity around tax increases is hitting confidence and all the doom and gloom from government is making businesses ask whether the pain is worth it,” she added.

Portfolio managers and tax planners said that Labour’s silence ahead of a crunch fiscal event that will set the tone of the administration was leading clients to “fill the void”.

Laura Foll, a fund manager at Janus Henderson, added that the “information gap” about Labour’s plans, together with the government’s negative tone about public finances, had led investors to plan for a “worst-case scenario”.

The government says it needs to fill a £22bn “black hole” left by the previous Conservative administration.

In response to questions about the share sales, the Treasury said it was committed to encouraging companies to grow and list in the UK.

“The chancellor makes decisions on tax policy at fiscal events,” it added. “We do not comment on speculation around tax.”

Additional reporting by George Parker and Sam Fleming

A VILLAGE in Cornwall is considered one of the most magical places to visit at Christmas.

Mousehole, just less than three miles south of Penzance, is transformed into a festive spectacle come beginning of December.

3

3

Advertisement

Its annual Christmas lights adorn the harbour, usually from mid December.

But there’s not just a couple of lights – there’s an estimated 7,000 bulbs that light up every evening.

The lights, that illuminate the village until early January, started in 1963, and made Timeout’s list of best Christmas towns to visit this year.

They’ve now become a famous attraction., with around 30,000 people visiting them each year.

There are Christmas puddings, reindeer and even Santa’s sleigh.

The display also includes a 150-foot-long ‘Merry Christmas’ sign and a festive serpent.

People who have visited Mousehole for the lights have labelled them “iconic”.

One person took to Tripadvisor and wrote: “Lived in Cornwall for some years now, but never made it to the lights for various reasons!

“Today we did and giving braved the queues we park back on the road and walked in. Lights are very pretty and impressive with a very good duo singing next to the harbour. Very worthwhile put us in the Christmas mood for sure.”

Alongside the Christmas lights, there’s an annual festival on December 23rd called Tom Bawcock’s Eve.

It’s a yearly celebration that commemorates a local fisherman who risked his life to save his community from starvation.

According to the story, Tom Bawcock braved a Winter storm to fish and return to Mousehole with seven different types of fish. 

The villagers were so grateful that they baked a large pie with the fish, eggs, and potatoes, and the fish heads and tails stuck out of the top. 

The same pie, now known as ‘Stargazy Pie’, is still made today and eaten on December 23rd.

The pie is served at the only pub in Mousehole, The Ship Inn, once a year.

Other Christmas attractions near Mousehole include the Marazion to Mousehole coastal walk, a walk that offers views of some of West Cornwall’s best Christmas light displays.

The Eden Project is also not too far away and puts on a Christmas show with lights, lanterns, ice skating, and a Christmas fair.

3

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

The writer is founding partner of Gavekal Dragonomics

Chinese equity markets have had a wild ride. Major indices surged by more than 30 per cent in the two weeks following Beijing’s September 24 economic stimulus announcement. They then fell back on fears that the stimulus might fall short.

Most likely, the markets will regain momentum once the Ministry of Finance reveals details of new fiscal spending at a press briefing on Saturday. Which sentiment is closer to the truth: euphoria or despair?

The answer is, neither. Markets were right to see the stimulus announcement as an inflection point and an opportunity to venture back into oversold Chinese assets. But they misjudged the underlying intent, which is to stabilise the economy rather than generate a major reacceleration. And they underestimated the constraints on stimulus imposed by Xi Jinping’s long-run strategy and by policymakers’ desire not to repeat past errors.

Xi’s strategic aims have not changed. He wants to shift capital from the property sector into technology-intensive manufacturing, which he sees as the basis of China’s future prosperity and power. Long-term economic growth, he believes, is driven by investment in technology, which will eventually generate high-wage jobs and rising incomes. China’s core task is not to maximise GDP growth but to create a self-sufficient, technologically powerful economy immune to efforts by the US to stunt its rise.

This programme is cogent as a national strategy, but unfriendly to financial investors. The emphasis on investment means that supply will always run ahead of demand, leading to deflationary pressure, which is bad for corporate profits. Even the favoured high-tech sectors face intense competition that will erode margins.

Xi has not retreated from this vision, but has accepted a change of tactics. The stimulus decision was driven by poor economic data including a sharp deterioration in manufacturing sales and employment, a chorus of criticism from Chinese economists, and the rising risk of protectionism against China’s exports. Short-run stabilisation is needed in order for the long-run plan to succeed. But measures will be rolled out carefully to avoid what policymakers believe were damaging mistakes in previous stimulus episodes.

One such “mistake” was the big infrastructure programme of 2008-09, which helped China recover quickly from the global financial crisis, but also began the pile-up of local-government debt, which rose from almost nothing 15 years ago to nearly 80 per cent of GDP today, including the liabilities of off-balance sheet financing vehicles. Another was Beijing’s cheerleading of a stock market bubble in 2015, which saw the CSI 300 double in a little over six months and then give up almost all its gains in two months.

Xi’s government is now determined not to overstimulate the real economy, nor to inflate another stock market bubble. The economic aims are to stabilise growth and prevent deflation from tightening its grip. The market goal is to restore enough confidence so that equity prices post steady, moderate rises. This will reopen the window for new listings and enable the stock market to resume its assigned role of financing China’s industrial policy ambitions.

This could work: Chinese policymakers have many tools, and Xi is finally allowing them to be used. But there is no evidence of a shift from the key policies undergirding Xi’s long-term vision: central control of finance and capital allocation, a tight rein on the property market, and prioritisation of investment over consumption.

Direct fiscal stimulus through the issuance of ultra long-term government bonds, if large enough, should boost growth and ward off deflation. But this new debt will refinance some local debt and subsidise households and businesses to trade in old appliances and equipment for new. Its function is to make investment more effective, not to give consumer demand a bigger role.

Similarly, the recapitalisation of the six largest state-owned banks will let them take on more risk despite record-low net interest margins. Yet it will also further entrench central control over the financial system and the allocation of capital. Mortgage deregulation will make it easier for cash-strapped families to buy houses, but does not reverse the basic decision to reduce property’s economic role.

In sum, the economy and financial returns are likely to pick up in the coming months. In the long run, though, China’s vision is unchanged: technology and self-sufficiency matter more than growth and profits.

SHOPPERS are raving as Lidl brings back its USA week with beloved snacks from fried chicken to toaster tarts.

For one week only, the supermarket giant is stocking all things American.

3

3

Advertisement

3

A keen-eyed shopper had spotted the German supermarket stocking the American foods and drinks on Thursday.

They shared the post on Facebook group Newfoodsuk in which hundreds of people commented their enthusiasm for the products.

The limited-time range includes items such as a 750g Fried Chicken Bucket (£5.99) as well as a range of cheap American chocolates and other sweet treats.

It comes as part of Lidl’s Flavour of the Week programme which features foods from a specific world region for just 7 days.

Previous editions have covered the Alps, Iberian Peninsula, and Germany.

For its USA week, the retail is stocking a range of American and American-inspired cuisine.

Shoppers were quick to comment their excitement under the Facebook post.

One said: “Oh wow that all looks amazing.

“Lidl here I come.”

Another added: “Some of the bits look really nice.”

Many also expressed their desire to visit their local store as soon as possible.

Users tagged their friends saying “we are going tomorrow” and “we need to go.”

Lidl has stocked an extensive range of products for the week.

For just £1.99, you can get your hands on a set of nine pizza bagels in either Margherita, Salami, or Cheeseburger Style.

A packet of Chocolate or Nougat American Cookies could be yours for even less at just £1.29.

If you’re feeling in a more breakfast food mood, you can grab Mcennedy’s Pancake Mix (£1.19) and Clarks’ Maple Syrup (£1.99).

The special week also covers drinks with a Chocolate or Cranberry & Cherry Mcennedy Milkshake selling for just 59p.

Getty Images

Make employers pay more national insurance

Change the rules on inheriting pension savings

Getty Images

Tax-free lump sum could be capped

Introducing a single rate of pension tax relief

Getty Images