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5.45 pm
Mr. David Heath (Somerton and Frome): It is a pleasure to follow the hon. Member for Doncaster, Central (Ms Winterton), who gave us a charming view of the local perspective of Europe in her constituency. As an inveterate supporter of Somerset county cricket club, hon. Members may imagine my dismay at hearing Yorkshire people falling out among themselves as to their objectives.
This is a useful and important opportunity to air concerns before the European Council. I recall the similar debate before the Vienna Council six months ago, when some of the perspectives were rather different. For example, not one speech went by without a mention of Oskar Lafontaine, who seems to have virtually disappeared from our radar screens.
Some issues are still current. Tax harmonisation and its discussion has been touched on today. It is important to reiterate the view that however much tax harmonisation may be advocated from those on some Benches in the case of lorry fuel duty, it is not something that we Liberal Democrats advocate. We believe that that is the one area of flexibility available to national Governments within the
strict financial controls of the Maastricht treaty. It is an area in which subsidiarity is important and decisions are best made at the national level. We think that tax competition is a beneficial device in determining national economic performance and policies.
For all those reasons, we dismiss the view that tax regularisation should never be discussed. That is nonsense. It may well be in the British interests to consider ways in which we can come to a similar view about taxation levels. At the same time, using the veto where it is necessary to protect British interests is also an important issue. We shall study carefully the decisions taken at the Economic and Finance Council. I hope that the Chancellor will be able to make a statement at a later date about precisely what has been decided.
The Minister of State, Foreign and Commonwealth Office (Ms Joyce Quin):
I am grateful to the hon. Gentleman for giving way because that allows me to put on record that the withholding tax was not agreed today in ECOFIN. The council agreed to submit a report to the Cologne Council, highlighting our concerns about the eurobond market. Indeed, the Chancellor has promised ECOFIN a report in June on our position and difficulties with aspects of the proposed directive.
Mr. Heath:
I am most grateful to the right hon. Lady for assisting us with that information. No doubt, those are the rather amorphous clauses to which one hon. Member referred. We must look in detail at that decision.
Kosovo was an afterthought in my comments of 3 December, but it is at the forefront of our discussions today. I am grateful to the Foreign Secretary for what he told us about the present situation, although the House may have to be further informed before the break for our recess on the rapidly changing situation, which involves the accumulation of troops. As the right hon. Gentleman would expect, Liberal Democrat Members very much welcome the fact that a decision appears to have been taken at least to provide the option of a peacemaking rather than a peacekeeping force through the accumulation of troops. The window for that to take place was narrow. If that option is what the Foreign Secretary has brought back from Washington, I welcome it.
I must repeat the question that I put to the Foreign Secretary at last week's sitting of the Select Committee on Foreign Affairs, which he was good enough to attend. A stark choice faces NATO in the execution of the war. Two options would remove the need for that choice. The first is the capitulation of Milosevic, which is devoutly to be wished and of which there are some signs in the information emerging from Serbia about a weakening of his position, both politically and militarily. However, that is by no means definite. The second is that we make an open-ended commitment to an attritional bombing campaign. I do not believe that that is acceptable or sustainable. If we set aside those options, the choice boils down to two alternatives. First, we could use ground troops effectively in sufficient numbers to finish the job that we have started. I do not dismiss for one moment the substantial logistical and strategic problems with that course. Secondly, we could maintain the line that NATO appears to have adopted hitherto, that we will not use ground troops except in an entirely permissive situation. The natural corollary of that is that we accept a negotiated settlement.
I ask the Minister to confirm again the point that I made to the Foreign Secretary. If there were a negotiated settlement as part of the endgame, apart from the conditions that are already clearly laid down as the objectives of the campaign, will the territorial integrity of Kosovo be maintained? By that I mean that there will be no partition by negotiation and no de facto partition arising from a partial withdrawal of Serbian forces or a zonal deployment of international forces that created a Slavic zone in the Kosovo province. Will she confirm that there can be no question of immunity for Milosevic orthe key players in Serbia from prosecution by the International War Crimes Tribunal? Will she confirm that whatever solution emerges must be, because it would be a failure if it were not, acceptable to the refugees congregating in the front-line states?
I hope that there will be an opportunity at Cologne to consider further the support that this country and the European Union can give to the front-line states. I have often reiterated my concern about the position in Montenegro. I welcome the fact that the Foreign Secretary is due to meet Mr. Djukanovic tomorrow.
Mr. Robin Cook:
Today, and in about five minutes.
Mr. Heath:
In that case, I must make my point quickly. The position adopted by the Government of Montenegro has been heroic. They have a very large number of refugees on their soil without the obvious means of support that have been provided to other countries. We must do all that we can to ensure the protection of Montenegro's Government and people, and when the war is over, we must provide them with the support that they need to rebuild their economy. The same applies to Albania, Macedonia and to that most unlikely recipient of refugees, Bosnia-Herzegovina. It has not been much reported that the Bosnians have 21,500 refugees on their soil. Few European countries can be less able to meet that economic burden.
A major objective of our diplomatic effort in the near future must be to provide support for all the Balkan countries to create stability. The Royaumont process is one way of doing that but we need to go much further with a stability pact. We also need to consider the countries of the Caucasus and central Asia, which have taken a positive view of what NATO has done and put vital pressure on Russia.
In considering the consequences of the Kosovan situation, we must re-examine the European defence and security dimension. As might be expected, I agree with my right hon. Friend the Member for Yeovil (Mr. Ashdown) when he says that the European Union is a political heavyweight but a military lightweight. The Cologne summit may be the first opportunity to make the point forcefully to our European partners that they must share to a greater extent the burden of European security and make the contribution that is essential if the European dimension is to be a reality.
That does not mean a common European army, and I do not see why it should be interpreted as meaning that. It means that a European dimension must be firmly embedded in NATO. That is what every member of NATO, including America, wishes, but we must act to make the early steps taken at St. Malo a reality. That might include a Europe-wide defence review. It certainly must mean closer
co-operation on procurement and development, and--something dear to the Foreign Office--stronger controls on arms sales.
If development of a common foreign and security policy is coupled with the enlarged European Union, which I think is critical to the future security of the European continent, that, by its nature, redefines the relationship with Russia. No hon. Member needs reminding that Russia has gone through a difficult political period, not least in the past few weeks. There was a risk that Russia would be rudderless this week. Happily, that is not the case. There is still a President, Government and Duma.
Dr. Godman:
Is the hon. Gentleman aware of the lively debates on a European defence review in the neutral states, such as Sweden, Finland and the Irish Republic? I think that the Taoiseach and the Government of the Irish Republic are anxious to sign up for the "Partnership for Peace" initiative, and similar debates are taking place in the other two neutral states.
Mr. Heath:
The hon. Gentleman is right. It is interesting that from several different directions there is a view that we must get the principle of European security right and that we cannot simply rely on the Americans, although we welcome and depend on our friendship and alliance with them and the other transatlantic forces. The CFSP will be effective only if it engages positively and carefully with Russia. We must recognise that as an EU priority in the months ahead. That should include not only Russia but Ukraine, which is often forgotten, and, if possible, Belarus.
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