Russian hostile activity costs UK up to £2.5bn a year, report warns

The economic impact of Russian hostile activity against Britain totals at least £2bn-£2.5bn annually, according to a new report by the vice-chair of the all-party parliamentary group on rearmament.

The new report, named "The Putin Tax", tallied up the cost of disruption, recovery and investment in resilience that result from Russian hybrid warfare against the UK.

But Labour MP Graeme Downie's research, published on Wednesday, suggested that the true figure was likely to be "vastly higher" than his forecast.

He warned that omissions in data published by the government hampered an accurate calculation of the cost of Moscow-linked hybrid warfare.

The headline figure of £2bn-£2.5bn included £400mn-£500mn in average annual losses, calculated from major attributed incidents since 2022 such as the attacks at Jaguar Land Rover, Royal Mail and NHS suppliers; £1.47bn in losses from Russia-linked cyber attacks, based on industry analysis and threat intelligence; and £250mn-£500mn from damage to subsea communications cables and related infrastructure.

The report also highlighted that the UK lacks a consistent framework for measuring the economic impact of hostile-state activity, and that many major incidents remain uncosted, leaving both MPs and the public "without a clear picture of the financial consequences".

Downie, vice-chair of the APPG on rearmament, said the UK could not "deter Russia or anyone else if we aren't honest with the British people about the threats we face and the cost the 'Putin Tax' is already having on our country".

He said it was "striking" that "this is the first serious attempt to measure its true economic cost to Britain", which includes cyber attacks, infrastructure threats, business losses and wider economic disruption.

Cyber security experts said the growing economic toll reflected the central role of cyber attacks in Russian and other states' efforts to inflict damage while remaining below the threshold of conventional conflict.

Snehal Antani, CEO of Horizon3 AI, a San Francisco-based cyber security company, said cyber attacks against the auto industry, such as the targeting of JLR in August 2025, demonstrate that hybrid warfare is increasingly focused on the cyber domain.

"Cyber is all about 'grey zone warfare'," Antani said. "The role that cyber plays in that realm is super interesting because, up until now, it has always been below the threshold, so the risk of this blowing up to a big conflict is extremely low. But the economic pain is very real."

However, Anders Fogh Rasmussen, former secretary-general of Nato, said he was opposed to the term "hybrid warfare".

"Putin is testing our resolve," Rasmussen said. "I don't like the term hybrid. It's warfare. So why do we call it hybrid warfare as if it's something else?"

Downie's report called on the UK government to publish an annual report for parliament setting out the forecast price tag of all hostile activity by foreign states against Britain "with increased attribution to specific states where possible".

The lack of such reporting on hostile activity -- collating data from government, insurers and businesses -- is an anomaly, given officials publish cost estimates of fraud, economic crime and flooding, the report said.

It also called on the National Cyber Security Centre, an arm of the government's intelligence agency GCHQ, to publish annual assessments of foreign power-linked cyber attacks against the UK, and for officials to launch a public awareness campaign about hostile-state threats, cyber resilience and national preparedness.

The Ministry of Defence should, meanwhile, develop and publish a methodology for assessing physical hostile activity directed at UK people, businesses, infrastructure and interests, the report recommended.

On Tuesday, shadow foreign secretary Tom Tugendhat told the Conservatives' annual conference that Russia and Iran were committing "warlike acts" in the UK, which called for "serious, responsible government".

A government spokesperson said: "We have been clear that Russia's continued hybrid attacks are egregious and wholly unacceptable. This government has taken tough action - expelling Russian intelligence officers, sanctioning the GRU, clamping down on illicit finance networks and ensuring Russia's criminal proxies are disrupted and brought to justice."