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Mr. Campbell: The word on the street--if one can say that of Whitehall--is that the Treasury wanted £2 billion. The Prime Minister--largely as a result of his visit to Washington in 1998 when, in discussion with President Clinton, he realised the significance of our maintaining military capability in terms of political influence--allied himself with the former Secretary of State for Defence, Lord Robertson, and they were able to beat the Treasury off to the extent of only £500 million. But the price that had to be paid was the so-called 3 per cent. efficiency cut. Cut or saving, the effect is almost inevitably the same.

There will be public pressure for intervention in future, and it is worth reminding ourselves that that pressure will arise in a quite different international environment. Environmental degradation, resource depletion, volatile markets, unequal economic relationships, and even mass immigration will play an important role in the next decades in fostering insecurity. Another important feature of all this is that in modern conflict 90 per cent. of all casualties are likely to be unarmed civilians. The civilian has replaced the soldier as the primary casualty of warfare.

How shall we contain and, I hope--I suppose that it is a pious hope--eliminate such conflicts? That will depend on the negotiation and implementation of treaties imposing tighter obligations on Governments. Conversely, it will also depend on a commitment by Governments to honour such treaty obligations and international procedures to ensure the observance of such obligations and the acceptance that national sovereignty does not give state Governments the right to deprive their citizens of the fundamental human rights set out in the United Nations declaration of human rights. That is a different environment from the one that we have surveyed during the past 50 years or so.

In that new world, not necessarily brave, nor one that has brought its own order, the United States, for the foreseeable future, will be unchallengeable as a military power--the dominant force in maintaining world order.

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But it is not difficult to argue that global dependence on a single dominant state is not healthy for that state, nor for the others. That is why I am unashamedly of the view that the EU must be prepared to take up responsibilities in contributing to international stability and peace.

A particular role that we may be able to fulfil concerns Russia. We should reflect upon and understand that anti-NATO feeling in Russia has never been higher, even among those whom one would regard as liberal moderates in the Duma. For them and for many other Russians, Kosovo was a betrayal of trust; they would say that it was the perfect example of NATO's aggressive intentions which the west has been at pains for so long to deny. Our argument that humanitarian justification permitted intervention has largely fallen on deaf ears. They in turn would say that Kosovo has created a new precedent by which, if there is deadlock in the Security Council, a regional alliance may act alone, intervening in the internal affairs of another state.

In that regard, a European Union with a more assertive role in matters of stability, peace and security, may be able to provide a more effective bridge to NATO than NATO standing alone has been able to in the immediate past.

Mr. Dalyell: Does the right hon. and learned Gentleman agree that, as it happened, the west's proverbial bacon was saved by pressure on Milosevic from Russian military intelligence? The Russian military intelligence establishment in Moscow was the decisive force in bringing Milosevic's actions to an end. Does he further agree that it is becoming clear that Operation Horseshoe was manufactured in the first instance by Bulgarian intelligence?

Mr. Campbell: I am not sure about the hon. Gentleman's second proposition, but I certainly take the view that the intervention of the Russian Foreign Minister, when he went to Belgrade and said that, in the event of a ground attack, Milosevic could not look to Russia to provide any support, was undoubtedly a determining factor in Milosevic's decision effectively to sue for peace.

It is also true that under Mr. Putin, about whom I have publicly expressed some reservations--the alacrity with which he was received in the United Kingdom was quite improper, but I put that to one side--we have had the ratification of the comprehensive test ban treaty by the Duma and the ratification of the second strategic arms reduction treaty. Those are important steps forward.

We should also understand that events in Kosovo and the basis for intervention there was followed closely by China as a permanent member of the Security Council, and also by India. There are those now who argue that some form of defence and foreign policy co-operation between those major regional powers who were most opposed to the intervention cannot necessarily be ruled out in the future--once again, a sign of the changing environment.

Britain accepted a long time ago that we could no longer conduct defence on a wholly independent basis. That was why we became a member of NATO. The logic for Europe collectively making better use of the $160 billion or so which it spends on defence is overwhelming. Whether more needs to be spent or whether what is being spent should be more effectively

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spent is an interesting question. Some studies say that for two thirds of the expenditure we get 10 per cent. of the capability. Most Chancellors of the Exchequer would want to look first at whether better value could be obtained for the money being spent. But if it were necessary to spend more to achieve a level of capability, European Union countries that are members of NATO should not be allowed to shrink from that obligation.

It is clear that the United States is far ahead of its European allies in rapid reaction, technology, heavy lift, and--as the right hon. Member for Bridgwater (Mr. King) eloquently pointed out--intelligence. Far too often the debate revolves around questions of institutions and, as the shadow Defence Secretary made clear, the argument about how to give Europe a greater voice in the deployment or use of American assets.

Fundamental in Europe, if the idea is to have anything other than a presence on paper, is that capability must be provided in a form and of a substance that will allow Europe to conduct operations such as that in Kosovo. The Petersberg tasks were for the Western European Union. If the capability is to make any sense whatever, it must be adequate to allow us to conduct operations such as Kosovo.

If we consider Bosnia, we realise with the benefit of hindsight that European countries' reluctance in the early days to deploy armed forces was a major cause of the continuing instability. Early deployment might have prevented much bloodshed and avoided many of the difficulties that took so long to tackle because the international community's reaction was so delayed.

It is right that NATO should retain its primacy. I advocate strongly NATO's right of first refusal. I tell those like the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith), who seemed less than enthusiastic about it, that the need for the capability is driven by the fact, which is becoming increasingly clear, especially on Capitol hill, that we cannot look to the United States to keep pulling European chestnuts out of the fire. We were able to rely on President George Bush in the Gulf, but which of us would be entirely happy to rely on would-be president George W. Bush to do the same in future, or to take the same interest in Bosnia and Kosovo that, with some arm-twisting and much hand-wringing, we were able to persuade President Clinton to show?

Let us consider national missile defence.

Mr. Wilkinson: Before the right hon. and learned Gentleman considers the key issue of ballistic missile defence, will he explain how Europe, without vast additional expenditure, can acquire the required technology--space-based systems, adequate intelligence, heavy lift, a sufficiency of precision-guided munitions and personnel--to undertake an operation such as that in Kosovo? How will that be achieved?

Mr. Campbell: On numbers, there are 2 million men and women under arms in Europe. Many of them are conscripts.

Mr. Wilkinson: Trained people?

Mr. Campbell: One thing at a time. We should try to persuade the Germans to reconsider national service and

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impress upon them the effectiveness, which we have found, of a fully professional army. The French have chosen to go in that direction because their experience in the Gulf convinced them that the capacity of an army based on conscripts to operate in a high-intensity warfare spectrum was substantially limited.

I do not suggest that Europe should try to acquire the same capacity or quality of intelligence gathering as the United States. However, a properly funded, properly capable Europe ought to have been able to undertake an operation such as Kosovo by itself. Europe should pitch its tent and establish its objectives at that level.

I want to consider national missile defence. President Clinton has established four criteria: threat assessment, cost, feasibility and the effect on existing arms control treaties, responsibilities and allies. There are various estimates of the cost and scope of the ultimate proposal. A sharp division of opinion about what is necessary exists between Republicans and Democrats--that is hardly surprising in a presidential election year. However, any of the proposals would require substantial modification to the anti-ballistic missile treaty, against which Russia has currently turned its face.

Some reports suggest that Russia might be willing to make a compromise on changes to the treaty. If that is possible, it is worth examining. However, we must take account of the fact that a growing constituency in the United States rejects a multilateral approach to international security, which is represented by treaties and agreements such as the ABM treaty. That was underlined by the Senate's refusal to ratify the comprehensive test ban treaty.

If threat is so important, we should remind ourselves of the classic definition of threat: capability plus intention. It is not the mere existence of the capability that constitutes the threat, but the intention taken with the capability. We must ask ourselves what motive could North Korea, Iran or Iraq have in launching a nuclear warhead at the United States, in the knowledge of the enormous capacity for retaliation.

Those who argue strenuously for NMD have not tackled to my satisfaction its undermining of the fundamental principle of deterrence. If deterrence is not effective, on what have we based our nuclear policy for the past 40 or 50 years? The threat is far less likely to come from nuclear warheads on Taepo Dong-2s, which may have the range, than from sarin on subway systems, as happened in Tokyo. That is the asymmetric threat to which the right hon. Member for Bridgwater referred. It is a much more acute threat. I should be far more comfortable if the vast energy of the Pentagon and the political anxiety of Capitol hill were directed at dealing with it.

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