The Guardian: British companies and envoys feel Russian backlash

Litvinenko affair is just latest in series of clashes with Putin

Julian Borger, diplomatic editor
Tuesday July 17, 2007

Britain’s relations with Russia went into freefall yesterday, sinking to their lowest point since the cold war, but they have been on a downward trajectory for years.

The continuing crisis is not simply a bilateral one. Moscow’s relations with the US and Europe have been affected by Vladimir Putin’s increasingly authoritarian rule at home and vigorous assertion of Russian interests abroad. But British ties have perhaps fared worst of all.

The last time Britain and Russia conducted tit-for-tat expulsions, in 1996, the incident represented a blip amid a rapport that had been improving since John Major became the first western leader to invite his Russian counterpart to a G7 meeting five years earlier.

This time round, all the indicators on the state of the relationship are negative. British companies have been shouldered out of joint ventures in Russia. Embassy and British Council staff have been harassed by a pro-Putin youth movement, Britain has emerged as a haven for wealthy Russian dissidents, and the Litvinenko affair, involving a horrific assassination and the dispersal of lethally radioactive material around London, is in itself far more than a spy scandal.

“In terms of the UK-Russia relationship, this is the worst situation since the 1970s,” James Nixey, a Russian specialist at the Chatham House thinktank, said. “There are a lot more issues at play here than in ’96, which makes it much more serious.”

The downturn did not begin with the rise of Mr Putin in 1999 but four years later when the president felt strong enough to take on his most powerful rivals, the business oligarchs. One of them, Mikhail Khodorkovsky, was jailed after attempting to play kingmaker in Russian politics, while another, Boris Berezovsky, was granted asylum in Britain.

British courts ruled that Russia failed to make its case for extradition, but in Moscow’s eyes the judgment represented British backing for an enemy of the state. Mr Berezovsky himself encouraged Moscow’s perception that he is plotting President Putin’s overthrow, telling the Guardian in April: “We need to use force to change this regime.”

The civil war inside the Russian state had spread to Britain.

The Litvinenko affair was just one battle in the war against the oligarchs. The former Russian spy claimed he had been commissioned by the FSB security service to assassinate Mr Berezovsky, and came under his wing when he took refuge in Britain himself.

The emergence of Britain as apparent headquarters for President Putin’s enemies contributed to an anti-British backlash across Russian society, from economics to culture.

Last year, the Anglo-Dutch company Royal Dutch Shell was obliged to hand over its controlling share in the huge Sakhalin II oil and gas field to the state-owned energy group Gazprom. TNK-BP, BP’s Russian subsidiary, was also pressured into selling its interest in the Kovykta gas field. It was also swallowed by Gazprom.

Moscow has foiled European attempts to build alternative routes for the transmission of oil and gas to Europe from central Asia, ensuring that all pipelines lead to Russia.

David Miliband, the foreign secretary, said yesterday Britain would seek a common European front towards Russia, but Moscow has been strikingly successful in dividing Europe, making separate pipeline deals with Germany and the Czech Republic, and last week granting French energy company Total a 25% stake in developing a massive gas field in the Arctic.

That deal appeared to be a Bastille Day present to the new president, Nicolas Sarkozy, after speculation that he might take a tough line with Russia.

Britain’s least-favoured-nation status in Moscow also reflects its closeness with the US. The conflicts in Serbia and Iraq, both Russian clients, were seen as hostile acts. So too was the proposed extension of the US missile defence system to Poland and the Czech Republic, with apparently enthusiastic British support. Russia’s formal withdrawal over the weekend from the post-cold war treaty restricting the deployment of forces in Europe was a response to the missile scheme.

There was an overture to the current crisis last year, when the FSB accused four British diplomats of spying and covertly funding non-government organisations. Russian television showed alleged British agents collecting electronic information from a transmitter hidden in a fake rock in a Moscow park. But no one was expelled.

When Alexander Litvinenko met Andrei Lugovoi and another former KGB agent, Dmitri Kovtun, for tea at Mayfair’s Millennium Hotel last November, the political backdrop to the encounter was already poisoned.

As the case gathered momentum with the British extradition request for Mr Lugovoi and its rejection last week by Russia, UK officials in Moscow have borne the brunt of a deteriorating relationship.

The pro-Kremlin youth group Nashi has waged a campaign of intimidation against the British ambassador, Tony Brenton, while the British Council offices were raided by tax police dressed in balaclavas. With a steady flow of invective emerging from the Kremlin against British “stupidity and arrogance”, British diplomats in Russia are braced for worse.

Mikhail Gorbachev yesterday sounded a cold war note, blaming the west for the crisis. “Eventually, both Britain and the US will understand that this isn’t the right method,” the former Soviet leader told the Russian news agency Interfax.

When Margaret Thatcher declared that she could “do business” with Mr Gorbachev, it seemed to mark a breakthrough in Anglo-Russian relations. More than 20 years later, there is a growing impression the relationship has come full circle.

http://business.guardian.co.uk/story/0,,2128232,00.html

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