Ukraine: Ending Gazprom contract will cost Portsmouth City Council £57,000

Gerald Vernon-Jackson said the council is continuing with plans to use a break clause to end the £5.5m contract in September in response to the Russian invasion of Ukraine.

But, in response to calls for an immediate end to the arrangement, he said it was not possible to act earlier, without government involvement.

‘None of us want to be buying Russian gas,’ he said at last Tuesday's full council meeting. ‘The subsidiary that supplies us is a British company, but it is 100 per cent owned by Gazprom, which has one shareholder: the Russian government.

‘We have asked whether we can get out now. And the simple answer to that is we cannot get out legally. Not only could we be pursued for not paying but they could also stop us getting gas supply.’

Councillor Simon Bosher, the leader of the opposition Conservative group said he had been told at a high-level briefing that ending the contract earlier could leave the council facing a bill 'which runs into the millions'.

The three-year deal with the London-based arm of Gazprom was only signed in October, with the firm responsible for the supply of gas to all council buildings.

Use of the break clause will see the council pay the firm a £45,000 fee as well as £12,000 to the broker that facilitated the deal.

Cllr Vernon-Jackson said he would write to the broker to request that its payment is donated a charity providing support in Ukraine.

Gazprom supplies about 20 per cent of the non-domestic gas market in the UK, including to a number of local authorities and NHS bodies.

But the Russian invasion of Ukraine has prompted efforts to end these ties and the Local Government Association has been advising councils with contracts.

Cllr Vernon-Jackson said government intervention would be the easiest way to allow councils to take action.

'There's a simple route that the government could provide that would mean we would be able to get out of the contract much, much earlier and much simpler and that is for it to remove Gazprom from being a registered supplier,' he said. ‘Government are looking at this, they can do it and I think they should do it.’