Government set to change law after Merton’s Ukraine plea
The Government has introduced legislation that will allow councils to exit contracts with firms such as the Russian energy giant Gazprom on ethical grounds, a change which Merton Council called for in March.
A spokesman for the Department for Levelling Up, Housing and Communities (DHULC) spokesperson said: “Businesses with links to Putin’s murderous regime should not benefit from taxpayers’ money.
“These measures will allow councils to terminate existing contracts – ensuring public money does not fund these organisations or Putin’s barbaric war machine.”
Merton Council had been due to enter into a £1 million contract with Gazprom, which has extensive links to the Russian state, but was able to cancel the contract before it was set to start at the beginning of April without any legal implications.
The council wrote to Michael Gove, the Secretary of State for DHULC, noting that “in our efforts to withdraw financial support to Putin’s regime we have faced a significant challenge through the procurement rules for local government”, and asked for that key part of the law to be changed.
Cllr Eleanor Stringer, Deputy Leader of Merton Council, said: “We welcome the Government’s move to introduce legislation allowing councils to exit contracts with morally questionable companies, an issue we first highlighted in March.
“Merton was able to escape its deal with Gazprom without incurring any potential legal costs, but other councils were less fortunate.
“Our intention in calling for a change in the law was to safeguard us and other local authorities from similar situations in the future, and we’re happy to see that the Secretary of State has acted on this.”