Month: March 2022

The government’s forecaster expects the economy to grow by 3.8% this year, well below its previous forecast of 6.0%.

It is “too early to know the full impact of the Ukraine war” on the UK, the Office for Budget Responsibility (OBR) said.

Mr Sunak told MPs that the prospect of lower growth had not damaged the country’s “strong jobs performance”.

In his Spring Statement, Chancellor Rishi Sunak said the OBR’s “initial view, combined with high global inflation and continuing supply chain pressures”, means it is now forecasting growth of 3.8% in 2022, followed by 1.8% in 2023, then 2.1%, 1.8% and 1.75% in the following three years.

The OBR publishes its Economic and Fiscal Outlook twice a year. In October, prior to Russia’s invasion of Ukraine, it forecast growth of 2.1% in 2023, 1.3% in 2024 and 1.6% in 2025.

GDP or Gross Domestic Product is one of the most important ways of showing how well, or badly, an economy is doing.

It is a measure – or an attempt to measure – all the activity of companies, governments and individuals in an economy.

GDP allows businesses to judge when to expand and hire more people, and for government to work out how much to tax and spend.

In its report, the OBR said Russia’s invasion of Ukraine had “major repercussions for the global economy, whose recovery from the worst of the pandemic was already being buffeted by Omicron, supply bottlenecks, and rising inflation”.

The jump in oil and gas prices brought about by the conflict would “weigh heavily on a UK economy that has only just recovered its pre-pandemic level”, it added.

Petrol prices had already risen by 20% since the OBR’s previous forecast, and household energy bills are set to increase by 54% in April.

The OBR said that if wholesale energy prices remained as high as expected, then energy bills would rise by another 40% in October, pushing inflation to a 40-year high of 8.7% in the final three months of the year.

With inflation at these levels, real incomes and consumption would be eroded the OBR said, hence the dramatically lower GDP forecast.

As a result, “real living standards are set to fall by 2.2% in 2022-23 – their largest financial year fall on record – and not recover their pre-pandemic level until 2024-25”, the OBR said.

State media Xinhua said soil at the crash site had absorbed a lot of water, adding “uncertainty” to the rescue.

No survivors have so far been found from China Eastern flight MU5735 which had 132 passengers when it crashed in the hills in southern China.

Investigators don’t know why the plane plummeted out of the sky on Monday.

There has been an outpouring of grief in China, where families of passengers and crew are still waiting for news.

Hundreds of responders have been scouring the steeply forested slopes in Wuzhou where debris from the plane was strewn after it broke apart and set fire to the hillside.

There had been no official word on casualties until China’s Civil Aviation Administration held its news briefing on Tuesday evening, some 36 hours after the disaster.

“Up to now, search and rescue work has not found any survivors,” Zhu Tao, aviation safety office director at the CAA, told reporters. “Given the information currently available, we still do not have a clear assessment of the cause for the crash.”

Air controllers had repeatedly called the aircraft during its descent but had received no response, he added.

Rescuers have so far found parts of the 737’s burnt wreckage. State broadcasters showed images of the charred remains of letters, bags, wallets and identity cards belonging to those on board.

I wish Ukrainians could say the same. After a month reporting from their country, I have just left a nation under brutal attack and I have no idea when it will end.

It’s not like I didn’t know what Vladimir Putin was capable of. I reported on the annexation of Crimea in 2014 and then the war in eastern Ukraine that was whipped up by Russia’s proxies and propaganda.

I also reported for many years from Russia itself, covering the murder and poisoning of opposition figures, wars in Chechnya and Georgia and horrors like the Beslan school siege, until I was expelled last summer as a “security threat”.

Still, I arrived in the capital Kyiv last month convinced that Russia’s president would not launch all-out war on Ukraine. The very idea seemed ludicrous, irrational, disastrous – and everyone I spoke to in both countries agreed.

But on 24 February I was woken by the thud of an explosion that proved us all wrong.

When the war began, Nika was so terrified that she sat at her piano and played crashing chords as loud as she could, yelling at the top of her voice. The 15-year-old couldn’t stand the sound of the bombs.

Nika is from Kharkiv, Ukraine’s second city, but we met in a small-town motel filled with families who had fled and were living in the dark, scared of being spotted by Russian fighter jets.

When we arrived, the receptionist rushed us to the canteen urging us to eat quickly as the staff had to get home before curfew. Anyone out after nightfall risked getting shot.

“Don’t turn on any lights and don’t use too much hot water,” she instructed. When we asked about the nearest bomb shelter, she signalled to somewhere behind the kitchen.

Nika had been there a couple of nights but was hardly sleeping. The teenager said her first thought each morning was: “Thank God I’m alive.”

She spoke in English, and the directness of her language was disarming.

“We were in panic because we had to hide as our life was in danger,” Nika said, describing how she had spent the first week of the war in her aunt’s cellar.

“It was cold and small. We didn’t have lots of food. This was a very traumatising period,” she said. “Now I’m scared of every sound. If someone claps, I think I will cry. I start shaking.”

By torchlight, the teenager scrolled through pictures on her phone of life before the war – smiling poses with friends, in the park, at her home.

“We just want to go back,” she said. “We want to know our families will be alive tomorrow. We want peace.”

Kharkiv is just 40km from the Russian border. Most people there speak Russian as a first language, not Ukrainian, and have friends and relatives on the other side. That’s presumably why Vladimir Putin thought his troops could roll into Kharkiv and take over – or into Mariupol, Sumy or Kherson. But he misjudged the mood.

The firm has also denied that it broke the law when it sacked the workers without warning last week.

However, unions said the compensation package being offered was “pure blackmail and threats”.

Ministers had questioned whether the move was legal – but P&O said those affected were employed outside the UK.

The company said some employees are set to get 91 weeks’ pay and the chance of new employment, and no employee would receive less than £15,000.

The video message in which the company sacked workers last Thursday prompted widespread outrage, with unions claiming some staff would be replaced by Indian seafarers on £1.81 an hour.

Ministers had threatened the firm with “unlimited fines” but in a letter to Business Secretary Kwasi Kwarteng, its chief executive Peter Hebblethwaite said the 786 sacked workers were employed by three Jersey-based arms of P&O Ferries.

The eight ships they worked on, which service routes including Dover-Calais and Larne-Ciarnryan, are all registered in Cyprus, the Bahamas or Bermuda.

Sacked staff had told the BBC about their experience of being “treated like criminals” – but in the letter Mr Hebblethwaite denied “rumours” that security staff who boarded vessels to manage the situation wore balaclavas or were directed to use handcuffs or force.

“The teams accompanying the seafarers off our vessels were totally professional in handling this difficult task,” he said.

The company said its settlement with its workers is believed to be “the largest compensation package in the British marine sector,” and more than 40 staff would get severance packages of more than £100,000 each.

The transport and freight company said 575 seafarers affected were in discussions to progress with the severance offers.

However, the RMT union, which has been organising protests over the redundancies said “the pay in lieu of notice is not compensation”.

“If staff do not sign up and give away their jobs and their legal right to take the company to an employment tribunal they will receive a fraction of the amount put to them,” general secretary Mick Lynch said.

P&O Ferries had until Tuesday at 17:00 to respond to the letter from Mr Kwarteng – in which he said that P&O Ferries “appears to have failed” to follow the correct process for making large-scale redundancies, by not consulting with unions and notifying the government in time.

Mr Kwarteng pointed out that failure to notify is “a criminal offence and can lead to an unlimited fine”.

Government officials will now review Mr Hebblethwaite’s latest response.

Separately, Business Minister Paul Scully said the government was reviewing all of its contracts with P&O ferries and its owner DP World, including a £25 million subsidy to DP World to help develop London Gateway as a freeport.

Things were calm in her home town, Bila Tserkva, a historic city on a winding river 80km (50 miles) south of Kyiv.

Then the explosions began.

Svetlana and her husband dragged their mattresses into the corridor of their apartment building and huddled there with their three children. The noise of the sirens was constant and they didn’t sleep for days.

Thousands of miles away in Australia, Emma Micallif was frantically messaging. The two women are intimately connected because Svetlana is pregnant with Emma’s second child. As rockets fell on Bila Tserkva Emma felt angry and helpless.

For six months the two mums had chatted back and forth using a translation app. They shared pictures of their children, discussed the things they liked to bake with their kids or moaned about the stress of pandemic home-schooling.

Now they were trying to co-ordinate an evacuation.

“I thought having cancer was stressful or having a baby while having treatment was stressful or having round after round of IVF and it not working was stressful,” Emma says. “But it just does not compare.”

With the help of the surrogacy agency, Emma got in touch with two other parents who had surrogates in Ukraine. They found a bus that would take the three women and their 10 children on an 18-hour trip to the Moldovan border.

When they finally got to the Moldovan capital they were crammed into a small apartment. Emma was horrified when she heard that there weren’t enough beds. “Our lovely, pregnant Svetlana was sleeping on the floor,” she says.

But Svetlana was too devastated to care. She had left her husband behind in Ukraine and her mother had fled to Germany. When her mother calls she just cries down the phone.

“It hurts so much that this war is tearing families apart,” she told me. “I feel safe in Moldova but my heart is in Ukraine.”

More than 2,000 children are born through surrogacy every year in Ukraine, the majority to foreign couples. The country has around 50 reproductive clinics and many agencies and middle-men who match couples – known as “intended parents” – to surrogates.

Ukraine is a popular choice because of the way its laws on surrogacy are written. In many European countries, including the UK, when a surrogate gives birth she is listed as the mother on the birth certificate. If she is married, her husband will be listed as the father. In Ukraine the intended parents are listed as mother and father. That means getting the baby a passport and bringing them home is much simpler.

The agency that Emma and Svetlana are using is small – it is currently managing nine surrogacies – but Ukraine’s biggest agency currently has 500 surrogates at different stages of pregnancy.

Forty-one babies in its care are stranded in Kyiv, because their intended parents, from all over the world, have been prevented from collecting them by the war. Many of these children are being cared for in a basement nursery in Kyiv as Russian forces sit outside the city and shell it.

Every day more children are born, but since the invasion only nine sets of parents have risked the journey to Kyiv to pick up their babies. Another five have arranged remote pick-ups. “If nothing changes in the near future, we may have 100 babies under our care,” says Denys Herman, the agency’s legal adviser.

The company has been grappling with whether to move the babies out of Kyiv to a safer location in western Ukraine, but transporting them in a war zone also carries risks.

It’s not just Denys Herman who has a problem with stranded babies.

Nastya was saving up to buy a house in Kharkiv, where she lives with her two young boys, and coming to the end of her second surrogate pregnancy. When the war broke out she was only weeks from her due date and went into labour to give birth to twins a few days later.

“We spent the entire time in the hospital in a bomb shelter,” she says. Kharkiv was under heavy bombardment and the hospital’s basement was packed from wall to wall with mattresses and baby cribs. She camped out in a storage room with her two children, sleeping on sofa cushions on the floor, underneath shelves piled high with files and paperwork.

“But the doctors were wonderful, I am very grateful to them,” she says. She gave birth to two healthy boys.

A week later she left the hospital. Kharkiv was still under attack and the foreign parents couldn’t get there to collect the twins.

So, together with some staff from her agency, Nastya, her two sons and the new-born twins travelled across Ukraine. She cared for the babies while delivering them to their parents at the border. That was more than a week ago, and she hasn’t heard from them since.

When Emma envisages the family she wants, she thinks of the drive from her home in Canberra to her parent’s place in Sydney. She imagines looking into the back seat and seeing a gaggle of children. Instead, she has one. “It just feels like a hole in my life,” she says.

Five years ago while she was pregnant with her son, she was diagnosed with cervical cancer. The tumour was growing at an alarming rate, helped along by the hormones she produced in pregnancy. It was a rare medical event and when her son was born doctors crowded into the delivery room to observe.

“He came out perfect, he didn’t have to go into the neonatal ICU, so I felt very lucky,” she says. When her son was only five weeks old, she started intense radiation and chemotherapy which damaged her reproductive organs.

“I went into early menopause at 29. So that was delightful,” she says wryly.

In the five years since her cancer diagnosis, Emma’s every waking moment has been consumed by thoughts of how to conceive her second child. She and her husband went through 13 cycles of IVF which were traumatic and expensive, but none of the embryos would ultimately take. “Surrogacy is never anyone’s first pick but it comes as a result of a deep loss beforehand,” she says.

Emma and her husband, Alex, struggled to find a surrogate in Australia where only altruistic surrogacy is allowed. When they first heard about the option of Ukraine they were hesitant but they were reassured by other Australians who’d had a good experience.

With their first surrogate, two attempts at pregnancy didn’t take, causing further heartbreak. When they were matched with Svetlana and she got pregnant right away it felt like the battle was finally over.

“It was such a relief that we could stop fighting. We’d been in a state of fight or flight, as husband and wife, for so long.”

Before the war, the whole family had planned to travel to Ukraine. Emma had hoped to spend time with Svetlana so that she could tell her new child about her birth mother. With the baby due in a month that’s unlikely to happen now.

But for some intended parents the war is making the relationship with their surrogates even closer.

Christine (not her real name) woke up on the day of the invasion and felt sick. Her surrogate was in Zaporizhzhia, in the south-east of Ukraine, which would make headlines a few days later when its nuclear power plant, the largest in Europe, was attacked by Russian forces.

Her surrogate, Tatiana (also not her real name) left for Poland that day with her six-year-old son. Christine marvels at her strength.

When she asked Tatiana if she was interested in coming to England Christine wasn’t sure how she would react. But she was delighted. “We can come next week,” she said. She is one of only four or five women applying for a bespoke visa created by the Home Office for surrogate mothers.

“The past few days have been unbearably traumatic in what’s already been a traumatic year,” Christine says.

Last January she and her husband lost a child, a daughter who was born prematurely and died at five weeks old. At one point during the delivery her husband was told he might have to choose between Christine and the baby. She was advised not to try again but she did and miscarried again. “Because I was impatient and grieving and wanting it now, we looked abroad.”

They found out Tatiana was pregnant in January this year. “It was kind of too good to be true,” she says.

On Sunday Christine flew to Poland to meet Tatiana for the first time. Both were nervous, but relaxed when a Polish doctor said the results of the first scan were good.

Now they are working hard to get to know each other, using Google translate. “Yesterday, we had a discussion about our spiritual beliefs, whether we believe in clairvoyance and all those things. It’s not just all about pregnancy,” she says.

The visa will last three years and Christine and her husband have invited Tatiana to stay with them for as long as she wants to, beyond the birth of their child.

Surrogacy is legal in the UK, but under English law the surrogate’s name will be on the birth certificate, along with Christine’s husband’s. Legal parenthood will then have to be transferred from Tatiana to Christine.

If the baby is born in a third country there are even more legal complications. And that’s left Svetlana, Emma and Alex with a dilemma.

Surrogacy is not permitted in Moldova. If the baby is born there, Svetlana will be its legal guardian. She could place it for adoption but then it could be years before Emma and Alex are allowed to take their child home.

So together they have come up with a plan for Svetlana to deliver the baby in a city close to the border.

Svetlana has mixed feelings about going back to Ukraine. “There’s shooting everywhere, homes are being reduced to rubble and the Russians are shelling maternity hospitals, kindergartens and schools,” she says.

On the other hand, she is desperate to see her husband, who can’t leave the country under the terms of Ukraine’s martial law.

For Emma, the idea of Svetlana returning to a war zone is hard to take. “If you’d asked me a year ago, I’d say ‘No, I wouldn’t do that.’ Because it’s just not what we should be doing. It’s not what should be happening,” she says.

One possible snag is that it could take weeks for the baby’s birth certificate to be issued. If that happens Emma and Alex are not sure what they will do.

The war has left thousands of surrogates and intended parents in equally terrible positions.

Cyrille, who is French, struggled to get in touch with his surrogate in Kharkiv for two weeks after the invasion. When eventually he did, he helped her to come to Paris where he hopes she will stay until she gives birth in August. But she has left her children in western Ukraine with their father, who didn’t want them to leave.

Natasha, a surrogate in Cherkasy is 10 weeks pregnant with the baby of a couple in the US. She is tormented by sirens, shelling and morning sickness. “This is not life, it’s a nightmare,” she says.

Just a few days before the war, I spoke to another surrogate who is pregnant with a baby girl for a couple in Spain. Maryna lived close to Svetlana in the town of Uzyn. When we spoke she was getting ready to move to Kyiv for the last two months of her pregnancy.

“Kyiv is always going to be a safe place because it’s so far from the Donbas,” she said.

Even after Russia invaded she struggled to imagine how bad things could get. “I really hope that a brain will appear in Putin’s head and he will start to withdraw his troops. Because Ukrainian and Russian mothers didn’t give birth to children so that they would fight.”

Just after Svetlana arrived safely in Moldova, Emma felt a moment of bittersweet relief.

“She sent me a photo of her youngest daughter with a soft-serve ice cream from McDonalds and a balloon and the biggest smile on her face. And I just completely broke down,” Emma says.

It reminded her of what every child should be doing, enjoying her life safely, with her family.

Each of the vessels cost more than $500m and are among a number tracked by Lloyd’s List Intelligence. The shipping data experts have been monitoring on-board tracking devices and have shared this information exclusively with the BBC, enabling the journeys of these and other vessels linked to sanctioned Russians to be plotted.

A boatload of young Ukrainians tried to stop the superyacht MY Solaris docking in Bodrum in Turkey. The other Abramovich-linked yacht Eclipse sailed to Marmaris.

The UK, US and EU have said they will target superyachts, and at least eight have been seized so far. More remain at large – some are on the move, others are moored in places that are currently safe from sanctions, including the Maldives.

Many superyachts are linked to Russian billionaires but ownership is shrouded in secrecy – boats are often registered through a series of offshore companies.

The team at Lloyd’s List sifted through registration papers, credit reports and other records to determine who they believe is linked to each superyacht.

MY Solaris, which is estimated to have cost $600m, boasts a pool and a helipad. It has a crew of up to 60 and can accommodate more than 30 guests.

It left Barcelona on 8 March where it was undergoing repairs.

It docked off Tivat in Montenegro days after Mr Abramovich was sanctioned by the UK. Tivat, in the mountain-fringed Bay of Kotor, is a hub for superyachts and boasts a large marina.

MY Solaris left Tivat and was sailing off the Greek west coast when the EU sanctioned Mr Abramovich on 15 March.

After this date, the yacht’s tracking data shows it was steering clear of Greek territorial waters (Greece is in the EU) and sailing in international waters, where it cannot be seized.

On 21 March, it arrived in the Turkish resort of Bodrum, which has a modern marina and can accommodate superyachts up to 140m in length.

But its path was blocked by a small dinghy carrying eight children from a Ukrainian junior sailing team and their coach, waving Ukrainian flags.

Coach Paulo Donstov told the BBC they were there to compete in a sailing championship and were tipped off about the arrival of MY Solaris.

“We want the world to know that Ukraine wants freedom and peace,” said Mr Donstov, whose family are still in the Ukrainian port city of Odesa.

Turkey has said it has “no intention” of joining EU sanctions on Russians and, unlike most European countries, it is still allowing direct flights from Russia.

The captain of one vessel linked to a wealthy Russian, who did not want to be identified, told the BBC that Turkish officials had made it clear that Russian ships are “very welcome and will be treated as any other vessel”.

The Eclipse is one of the world’s largest superyachts. It has nine decks, three helipads and a three-person submarine. It is also rumoured to have a missile-defence system and a laser-directed light system to deter photographers from taking pictures of the boat.

It was docked off the Caribbean island of Sint Maarten – a Dutch overseas territory linked to the EU – but left at the beginning of March. It then sailed east through the Mediterranean, north of Algeria.

On 22 March, the data showed it arriving at Marmaris in Turkey. The resort, a former fishing village, is another popular destination for superyachts. There is a marina, an Ottoman castle and more than 50 diving sites nearby.

Sea Rhapsody has also been on the move. It has been linked to Andrei Kostin, president of the Russian state-owned VTB bank, who has been sanctioned by the US, EU and UK authorities.

Navalny was detained when he returned to Russia last year, after surviving a poisoning he blamed on the Kremlin.

He is already serving three and a half years in jail for breaking bail conditions while in hospital.

A judge has now found him guilty of fraud and contempt of court.

Prosecutors accused him of stealing $4.7m (£3.5m) of donations given to his now banned organisations, including his anti-corruption foundation.

Delivering her verdict, Judge Margarita Kotova said Navalny had carried out “the theft of property by an organised group”.

The new sentence replaces his earlier jail term, so the opposition leader will now have to serve some seven years in a maximum-security prison, with much stricter conditions and far more remote than the jail in Pokrov east of Moscow where he has spent more than a year.

A visibly gaunt Navalny folded his arms and exchanged comments with his lawyer as the ruling was read out.

Accusing the authorities of jamming his “last word” in court, he tweeted that he and his supporters would continue to fight censorship to “bring the truth to the people of Russia”.

The 555 workers won a landmark civil case against the Post Office in 2019, but saw most of their settlements swallowed up by legal fees.

They will now get the same level of compensation as other sub-postmasters who were wrongly convicted.

The announcement comes as a public inquiry into the scandal continues.

Between 2000 and 2014, hundreds of sub-postmasters and mistresses were wrongly accused of theft, fraud and false accounting due to faults in the Horizon computer software being used at branches across the UK.

In 2019, a group of 555 subpostmasters and mistresses successfully challenged the Post Office over the accusations in the High Court.

That case set a legal precedent and paved the way for a series of cases in which 72 people had criminal convictions overturned.

The Post Office opened a historic shortfall scheme to compensate more than 700 wrongfully convicted former branch managers who had personally covered shortfalls in branch accounts caused by the Horizon software.

But the 555 people who won the High Court case could not participate in the scheme, and despite winning nearly £43m in compensation in 2019, the group’s funds were swallowed up due to a “no win, no fee” agreement with Therium, the company which funded the litigation.

The group only got a “small fraction” of the settlement equating to around £20,000 each, the Treasury said.

Therium has agreed to waive its rights to any claim on the new pot of compensation.

Business minister Paul Scully told the BBC’s Today programme that the compensation paid to the 555 people would be “absolutely parallel” to the other Post Office workers who had been compensated through the historic shortfall scheme.

He said the group were “pioneers” and had “broken open” the scandal.

“I want to make sure they get that full compensation,” he said. “It is a massive scandal and it’s something I am absolutely determined to put right.”

Asked if the families of 32 out of the 555 people who have since died would be able to receive the compensation, Mr Scully said he would look into it.

“I’d love to say I’ve got a blank cheque from the Treasury, but that’s clearly not going to happen from this place – but the Treasury know that we need to sort it out.

“I want to make sure that the scheme has the confidence of [sub-postmasters],” he added.

Following the government’s announcement, the Post Office said it welcomed the move.

“Since it came to light through media reports that around £46m of the compensation provided to group litigation claimants was directed to the funders of their case, we have continually urged the government to address this unfairness,” a statement said.