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Mr. Hoon: Will the hon. Gentleman give way?

Mr. Duncan Smith: I shall in a minute.

Mr. Cohen added that, if the EU members of the alliance kept cutting their defence spending, they would undermine the alliance instead of building a stronger European defence pillar. I agree with the Secretary of State that it is absolutely clear that the United States wants an improved capability. However, it is clear also that an improved capability is not the primary objective of most of those who are involved in the process. Indeed, it is very low on their list of objectives.

Mr. Hoon: When the United States Defence Secretary was saying that his policy was not in any way diverging from what had gone before, he was making it clear that what had gone before was consistent United States Administration support for the policy of the headline goal. The hon. Gentleman tended to give the House the impression that that might not be the case, but I am sure that he will want to take this opportunity to correct that impression.

Mr. Duncan Smith: Mr. Cohen has made himself absolutely clear: he wants improved NATO capabilities. I agree with that objective. He is also saying, however, that that is not likely to happen. I am simply saying that I do not believe that it is happening. New structures are being developed beyond NATO which, ultimately, will weaken NATO. We cannot build a new building and maintain the old one while taking bricks from it, but that is what is now happening.

Far from our creating improvements in capabilities, defence spending in key European countries is decreasing very quickly. According to Die Welt of 13 October, the lack of defence spending in Germany has resulted in the restructured Bundeswehr being

This year, the International Institute for Strategic Studies has again found that, in most west European countries, military spending remains in decline. In 1999, defence spending in European NATO countries decreased in real terms by 5 per cent. Despite all the Secretary of State's statements and talk of capability, across Europe, budgets for 2000 indicate a further 6 per cent. decrease.

I should like to deal with a rather important development which, if not threatening, certainly creates the type of environment in which United States detachment and NATO debilitation are facilitated. While the Americans have given only a conditional acknowledgement of ESDP, the Russians have wholeheartedly welcomed it. On Tuesday, the Financial Times reported that Russia and the European Union have

The Russians have welcomed the initiative since way back, at St. Malo, and have made it absolutely clear that the initiative would be best if--as they hoped and

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believed it would--it progressively decoupled the United States from Europe. The Financial Times article seems to show that the general trend in both Paris and Moscow is to welcome the EU's military plans as a step towards creating a counterbalance to American hegemony and NATO-centrism.

Mr. Cash: My hon. Friend may not wish to follow me down this route, but he will of course recall that Javier Solana campaigned against NATO for seven years--although he now has the top slot in the European dimension in dealing with the matter--[Interruption.] It is all very well for the Secretary of State to laugh, but he knows that that is true.

Mr. Hoon: It is wrong.

Mr. Cash: As a Minister in Spain, Mr. Solana campaigned against NATO for seven years--[Interruption.]

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. May I urge the hon. Gentleman not to have a debate with the Secretary of State but to come to the point of his intervention?

Mr. Cash: Would my hon. Friend concur that the extremely important article by Robert Fox in The Sunday Telegraph last weekend identified the deep concerns that Washington and the Pentagon now have about this matter? In the article, a Foreign Office official was quoted as saying:

Mr. Duncan Smith: I am grateful to my hon. Friend, whose attempted exchange with the Secretary of State was most interesting. The Secretary of State seems not to know anything at all about history or about the past of people who are meant to be his political colleagues in Europe. It is a matter of fact that Monsieur Solana--[Interruption.] Mr. Solana--[Interruption.] Senor Solana--[Interruption.] I am getting it right. I know who he is and where he came from, which is a great deal more than the Secretary of State knows. I suspect I also know what Mr. Solana is doing, which is more than the Secretary of State does. Mr. Solana's background is beyond question. The Secretary of State should do a little reading before he talks; it might help him to debate.

In conclusion, I want to say why I think the process is so dangerous. There has been a misunderstanding of the alliance's need for development and force projection. Paragraph 206 of the excellent Kosovo report from the Select Committee makes it clear:

The report went on to talk in detail about how NATO must improve and restructure itself and learn the lessons to which the Committee referred. I agree and I look forward to a proper debate on that matter. However, that debate must take place now.

We are seeing a diversion from a concentration on making NATO even better and learning the lessons. We are seeing a progressive sliding away of capabilities and

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other matters that should apply to NATO but which now will apply elsewhere. If the European nations will not spend the sort of money about which the Americans and NATO have been talking for many years, where will the 200,000 men to be nominated for the new European defence force come from? They will simply come from what would have been available on call for NATO. It is not a new force; it is leaching away capability and forces that would have been there before.

It is assumed automatically that there will be a time when the whole of the EU will enjoy a foreign policy agreement that will allow it to deploy force; force that is not agreed with or involving the Americans and is not of any interest to those Europeans who are members of NATO but not members of the EU. There is an assumption that there will be some clear-cut position that will construct walls between our allies within NATO, so that we do not sort out problems and develop projects with them, but do so in isolation. Ultimately, it is about a new sort of new Berlin wall between those who have been reliable and successful allies within NATO.

The most alarming part of the process is that after the 50 or so years of success of NATO, a British Prime Minister should be leading the process. None of the real lessons from that history has been learned, and all the most dangerous aspects are being applied. The Government's European policy is set to drive us away from the US, which would necessarily be bad for them and for us, affecting the cornerstone for security not just in Europe but globally. The policy is also about the setting up of artificial barriers and a smokescreen, behind which far too many European members of NATO will find an excuse to simply lessen their capabilities and get the Americans off their backs. That is why the Government's actions will not increase or improve capability but are more likely to give an excuse to lessen it.

Evidence of that has already been seen in the Government's position, along with that of the French and German Governments, on ballistic missile defence. That is the most critical issue currently testing NATO and the Government's historical role in binding together the alliance on both sides of the Atlantic and keeping it coherent. Here is a clear, growing threat, and I believe that the Ministry of Defence has told the Secretary of State that it is a reality. I think that it believes that over a period of between five and 10 years, such threats, whether made by terrorists or involving ballistic missiles--which are growing in capability--will be delivered. Only the other day, the Iranians tested a missile that was just short of 1,000 miles in capability, yet that has been consistently dismissed by the Government, in the body of the Foreign and Commonwealth Office. These developments are taking place.

The Government have failed to give any lead in Europe for a debate to get together the Americans and the rest of the European allies to discuss how NATO can deal with this growing threat. Instead, there are slanging matches in some of the capitals of Europe, and the Government are sitting on the fence, quietly hoping that the whole thing will go away. It will not.

We are talking about an abrogation of responsibility. The British Government's traditional role is to make sure that we do not allow matters such as these to divide or split the alliance. On two clear counts, the test on the

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ballistic missile issue will do that because the Government have seen fit to hide behind their other allies on continental Europe.

In conclusion, the Government's policy, which rests so heavily on the European agenda, will not only divide NATO but damage the peace, potential and future for the rest of the world in a way which, if they had any honesty or sense of shame, they will come to regret.

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