UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 495-iii

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

FOREIGN AFFAIRS COMMITTEE

 

 

GLOBAL SECURITY: RUSSIA

 

 

Wednesday 18 July 2007

JIM MURPHY, MICHAEL DAVENPORT and DAMIAN THWAITES

Evidence heard in Public Questions 94 - 168

 

 

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Oral Evidence

Taken before the Foreign Affairs Committee

on Wednesday 18 July 2007

Members present:

Mike Gapes (Chairman)

Mr. Fabian Hamilton

Rt hon. Mr. David Heathcoat-Amory

Mr. Eric Illsley

Andrew Mackinlay

Mr. Malcolm Moss

Sandra Osborne

Mr. Ken Purchase

________________

Examination of Witnesses

 

Witnesses: Mr. Jim Murphy MP, Minister for Europe, Michael Davenport, Director, Russia, South Caucasus and Central Asia Directorate, and Damian Thwaites, Deputy Head, Russia Section, Foreign and Commonwealth Office, gave evidence.

 

Q94 Chairman: Good afternoon everybody. May I ask members of the public to please switch off their mobile phones? Thank you.

Mr. Murphy, welcome to you and your colleagues, Mr. Thwaites and Mr. Davenport. As the new Minister for Europe, you have obviously come to your post at a particularly interesting time, and we would like to welcome you to your first appearance before the Committee. As you know, we have for some months been carrying out an inquiry into Russia and Britain's relations with Russia. Clearly, this is a rather difficult week for our bilateral relations. Can I ask you, in the light of recent events, how you would characterise our relationship with Russia at this time?

Mr. Murphy: Thank you, Chairman, for the opportunity to appear before you today to give evidence as part of your ongoing consideration of our relations with Russia. In direct response to your point, I think our relationships with Russia are strong and have been for some time for a number of reasons. First, in terms of the mutual benefit of economic co-operation, there is the fact that, in 2005, UK exports to Russia were £3 billion. In 2006, the UK was the single biggest investor for the first three quarters of the year. There is really substantial UK investment in Russia. Additionally, of course, there are economic interests in the City of London, in terms of Russian investors. So there is a clear economic benefit to a positive and strong relationship with Russia.

We also have shared interests in a number of international issues, not least Iran, the Middle East peace process and the future of Kosovo. So our relationship is a strong one, but it is one, as you rightly say, Mr. Chairman, that has been under quite proper scrutiny over the past week. Put simply, it is the UK Government's very strong view that the murder of one of our citizens on the streets of our capital city is a dreadful crime. It led to one of our citizens dying a horrible and painful slow death, to many hundreds of others being tested for poisoning and to the citizens of 18 other European Union member states also being tested. Again put simply, we do not believe, despite the efforts of our independent judicial process to achieve the extradition of one individual, that the Russians took our concerns with the seriousness that they deserved, and they did not co-operate sufficiently, and have not co-operated sufficiently, in this crucial process. As a consequence, we have taken what we think are proportionate measures. We have no ambitions towards a macho response. We have taken a considered, measured response, which we think is appropriate in these circumstances.

Q95 Chairman: May I ask you about that response? The Foreign Secretary made a statement saying that we would expel four Russian diplomats, review the extent our co-operation with Russia and suspend visa facilitation negotiations. May I ask you about that review of future co-operation? What areas would it cover?

Mr. Murphy: Primarily, in addition to the expulsion of the individuals, it is, as you rightly say, Mr. Chairman, about visa regulations. We were in the process of discussing improvements in the administration of visas, which would primarily have affected officials initially. That has been put into suspension. We have also put our position in respect a similar set of arrangements for visas that Moscow already applies to the United Kingdom.

Perhaps it would be helpful to say that the UK receives more than 120,000 applications for visas through Moscow, the vast majority of which are successful. However, this suspension of co-operation is not about the regular travellers-the visitors, tourists and business people-but about applications made by Russia's Government authorities. That is the suspension that has been put in place.

Q96 Chairman: Will the review affect some other areas? For example, the Committee was in Moscow about four weeks ago, and I visited a facility where the Global Partnership is funding improved security around a civil nuclear reactor. Can you assure us that areas of co-operation such as on that or on climate change or co-operation on common efforts against terrorism will not be damaged by this response?

Mr. Murphy: The Foreign Secretary said in his statement to the House that this is a precise response to the failure to co-operate on a serious crime. Our response is intended to be measured, and I think that it is largely accepted as being measured. Our European Union partners acknowledge it as such, and it is intended to say to the Russians how seriously we take this matter.

I can say additionally that it is not our intention for it to affect the type of issues that you have commented on, which I am sure we will touch on later in our proceedings. However, specifically on counter-terrorism co-operation, we work strategically and operationally with the Russians, and will continue to do so when it is clearly in the UK's national interest and our wider interests. For example, we will continue to work together at the United Nations on the Counter-terrorism Committee, and at the UN on the Sanctions Committee on the Taliban and al-Qaeda. That is very important work, which we will continue. As I say, this is a precise and measured response to a very serious crime and the lack of Russian co-operation and it addresses how seriously we take this issue.

Q97 Mr. Hamilton: Minister, are you prepared for possible retaliatory non-co-operation by Russia in response?

Mr. Murphy: The proper response from the Russians is the extradition of the individual identified by independent UK authorities as the suspect in this dreadful murder. That is the proper response. In fact, if that had been the response to the initial request, perhaps we would not be having this conversation today.

Q98 Mr. Hamilton: But the Russians have made it clear that they are not prepared to do that, so are you prepared for them simply to retaliate in any other way?

Mr. Murphy: We still believe that the Russians should extradite. In terms of what the Russians do next, clearly, they have indicated their attitude through spokespersons both in Moscow and in London. It is certainly our intention, through this process, to emphasise that we still see Russia as a strong ally on important issues, and a country with which we have important bilateral and multilateral arrangements. It is our certainly our intention, as we go through this process, to conclude it. That remains the case.

In terms of speculation about the Russian response, I do not think that it would be helpful for me or the Committee to enter into that, but we are clear that the action that we have taken is the absolutely appropriate action, and many other member states in the European Union have acknowledged that over the last 24 hours.

Q99 Mr. Hamilton: You have made it clear what you want the Russians to do and I am sure many would agree with you. But do you want to see disengagement by UK business and UK investors, in respect of investing in Russia, to put further pressure on the Russian authorities? Or are you content simply with putting pressure on Russian officials?

Mr. Murphy: I do not think that would be helpful at all. The UK's national and strategic interest is served by continued UK investment in Russia and, indeed, Russian investment in the United Kingdom. So it is not in the UK's interests for that to happen. It is not an initiative and not a process that we would seek to initiate at all. As I say, our approach is tightly focused around the measures that we have announced and we would not wish, nor seek to, extend it to the issues raised by the Chairman or yourself.

Q100 Mr. Hamilton: The Chairman mentioned earlier that, when we were in Moscow-I was part of the visit-we went to an organisation that was helped considerably by the Global Partnership. That scheme is due to expire in 2012. In the light of what has been happening, do you think that the Foreign and Commonwealth Office will renew the scheme?

Mr. Murphy: In terms of individual decisions on funding renewal, we continue to keep those things very carefully under review in a detailed way. But as a consequence of events over recent months-more precisely, this week-we have made, as a UK Government, a targeted, specific, measured, detailed response to Russian failure to co-operate. What we have announced in this process is really where our intention is in containing it. We have no ambition to go wider and no ambition to go into the types of fields that you and the Chairman have spoken about today.

Q101 Mr. Heathcoat-Amory: Would you consider trying a suspect in a court outside the United Kingdom, but not in Russia?

Mr. Murphy: No.

Q102 Mr. Heathcoat-Amory: You are ruling that out unconditionally?

Mr. Murphy: We are ruling that out because it does not suit our purposes and does not suit the stated purposes and concerns of the Russians, in terms of their constitutional bar and the extradition. So it does not suit either nation's purposes in terms of the idea of a third country.

Q103 Mr. Heathcoat-Amory: Are you, therefore, prepared to escalate this dispute? It is certain that Russia would take retaliatory action. We will then be in a position of having to either escalate or call a ceasefire, as it were. Are you determined to get the only possible resolution, as you have just said, which is to get the suspect extradited and try him here? Is that your absolute aim and no other?

Mr. Murphy: That is our aim. In terms of how we respond to any Russian response, I do not think it would be helpful-I am sure you would agree-for us to speculate today.

Q104 Andrew Mackinlay: On the expulsion of these four Russians, perhaps Mr. Thwaites or Mr. Davenport can help us. To measure this, we need to know precisely how many diplomats they were allowed to have. In the category we are talking about, what amount-not necessarily in London-was agreed with the Foreign Office before the announcement and after it?

Mr. Murphy: The Russian complement of staff is 77.

Q105 Andrew Mackinlay: So it is now 73.

Mr. Murphy: Minus four equals 73.

Q106 Andrew Mackinlay: So in six months or a year, when I ask you what the numbers are, the numbers should tally-should they? You look anxious about that, Mr. Davenport. You understand what I am getting at.

Mr. Murphy: Mr. Mackinlay, I look forward to your asking the question and I look forward to the answer. But it would not be helpful for me to speculate today as to what the number would be. We have taken the measures-

Q107 Andrew Mackinlay: It was 77, but it is now down to 73.

Mr. Murphy: Yes.

Q108 Andrew Mackinlay: And that is people who are accredited.

Mr. Murphy: Yes, absolutely.

Q109 Andrew Mackinlay: They can put in Joe Bloggs, but that-

Mr. Murphy: Mr. Mackinlay, you may find this helpful: it is broadly similar to the numbers that we would have in Russia.

Q110 Andrew Mackinlay: My second point is that, for the reasons the Secretary of State has outlined, you have got sanctions on visas, which you have outlined. Will those stay in perpetuity, unless and until the Russian Federation extradites Mr. Lugovoi?

Mr. Murphy: We suspended this process-

Q111 Andrew Mackinlay: Yes, but will the suspension endure?

Mr. Murphy: It would be wrong-I think you would accept-only three days into announcing the suspension, to speculate as to when it will be lifted. It is certainly our intention that the suspension is conditions-based, rather than time-based.

Q112 Andrew Mackinlay: Let me be candid with you. I think you rushed into this, and when you put things on, there comes a day when you have to put them off and let people back. I want to know when I can measure that as a parliamentarian. When will I know? Will you come to Parliament, make a written statement and announce when there will be a variation? You can couple it with a statement saying, "We have had great advances for x, y, z reason." There was great trumpeting this week about the announcement; I want to know when there will be erosion of that robust statement. Will you be telling Parliament and the people?

Mr. Murphy: I do not think it is a fair assessment to claim that there was trumpeting of the announcement. It was a decision taken, and an announcement made, with deep regret and after an awful lot of consideration.

Q113 Andrew Mackinlay: I do not want to argue over the word; use whatever words you like.

Mr. Murphy: Of course, Mr. Mackinlay, but they were your words, not mine. There was no trumpeting; we did not seek to trumpet at any point in the process. We do not seek to tub-thump, trumpet or to be belligerent. I know you accept that we now find ourselves in a very serious situation.

Andrew Mackinlay: Absolutely.

Mr. Murphy: In response to your specific question, I will undertake to confirm to this Committee and to the House any change in the position in future.

Andrew Mackinlay: I am a very happy man.

Q114 Mr. Purchase: I would like to go further to try and discover the aims of the policy and what the end game may be. You mentioned that it is a terrible crime on the streets of London; equally terrible are the drive-by shootings in London, Birmingham and Manchester. In terms of terribleness, I do not know whether Litvinenko's death is any worse than that of two young women in Birmingham. It is a bad thing, it is dreadful, but it is not as though it is uncommon in Britain. I really want to know what you are aiming to do. I wonder why there is such a carry-on, and such a performance about it.

I also mention Berezovsky. Why do we not send him back to Russia? He is calling for the overthrow of the Russian Government. This is a man who should be subject to the new laws we made in the late 1990s to try to prevent that kind of activity. Have we tried a more diplomatic approach, saying, "Okay, you can have him, if we can have him," and going down the usual channels. Just what is your end game? What do you want to achieve?

Mr. Murphy: I do not think it would be helpful for us to get into a process of "You can have him, if we can have him," to use your colloquial expression. The processes are not connected in that way, Mr. Purchase, as you know. In terms of the comparison with drive-by shootings in Birmingham or in any of our cities, there is a clear difference. Without going into the evidence and the nature of the extradition requests from the Crown Prosecution Service to the Russian Government, a substantial amount of detail has been compiled by independent UK authorities, which led them to believe that a Russian national had a case to answer for the murder of a British national in Britain. It is entirely appropriate that the CPS, after coming to that assessment independently, makes that independent application to the Russian authorities. That is what they have done; that is why it is significantly different from the type of scenario that you spoke about.

In the case of Berezovsky and others, there is a similar independent process in the UK in which the CPS carries out an assessment of comments or actions of individuals who live in the United Kingdom, under whatever status, as to whether they would legitimately have a case to answer. Sometimes that does not translate directly into the Russian understanding.

Q115 Mr. Purchase: With respect, Minister, I am not any closer. If you want to say this is our process, it is clearly in the Russian constitution that they cannot allow extradition. It is also clear that we have held Babar Ahmad for three years, against the Americans wanting him to be extradited, on very similar grounds of creating terrorist websites. We cannot have fish of one and fowl of another. Either we have consistency or we begin to look a little foolish, and I am still pressing you to tell me what the end game will be. Where will it all finish and what is its great purpose?

Mr. Murphy: The end game for us is Russian co-operation with the independent judicial process of the United Kingdom, and the extradition of one individual against whom substantial evidence has been compiled to legitimise the request for extradition. On the matter of the Russian constitution, there is an acknowledgement that other countries have been in a similar situation but have found a way of co-operating on extradition that the Russians have seemed entirely unwilling to seek. That is the important point for us-the Russians have failed to co-operate or to register the severity with which we consider the matter. The Germans, for example, had certain constitutional issues with regard to extradition, but they found a way of co-operating with their independent judicial process. The Russians not only failed to do that but failed to attempt to do so.

Q116 Mr. Purchase: I shall leave it there, but what are we doing about Berezovsky? Are we going to prosecute him for doing something that is against British law-plotting sedition against a foreign Government on British soil?

Mr. Murphy: I am sure that you and I agree that it is not for a UK Minister or a UK Member of Parliament to set the threshold as to whether an individual has a case to answer in the case of allegations against that person. That is an issue for the Crown Prosecution Service. The CPS continues to analyse and assess comments and alleged comments by individuals in the United Kingdom, and if it feels that their comments or activities are above the established threshold for a case to answer, it follows them up. No such conclusion has been drawn by the independent CPS.

It is important to emphasise the independent nature of the CPS process-not for the purpose of our conversation, but for others who might be listening elsewhere.

Q117 Chairman: May I raise a related issue? A large number of Russians live in the UK. Some are here to study, some are here working and others are here, it seems, because they are very wealthy and they find this country a favourable environment in which to live. Has the Foreign Office ever raised with the Treasury the foreign policy implications of the availability of our tax regime to certain non-UK citizens, which has the result that some people have chosen to live in London rather than in other countries?

Mr. Murphy: You are right that there has been a remarkable increase in the number of Russian visitors to the United Kingdom. We very much welcome that. Of course, there has also been an increase in UK citizens going to Russia, and that can only be positive as well. There was a 23% increase in visa applications last year on the year before. As to the taxation system of the United Kingdom, that is not an issue for the Foreign and Commonwealth Office; it remains an issue for the Treasury, and we have not raised it.

Q118 Chairman: But I hope that you would accept that many people come to this country from other countries because they are attracted for financial or economic reasons. One of the consequences of that might be that we have people who choose to live in the UK but who are still influential in their home countries.

Mr. Murphy: Of course, many people from almost every nation in the world live in London; that is one of its attractions. The Government's view is that in general that is a positive recent development, and one that we should welcome. The tax arrangements for such individuals are and will remain an issue for the Treasury.

In advance of coming here, I anticipated upsetting a number of organisations and individuals. Her Majesty's Revenue and Customs is not going to be one of them; I am not going to tread on its territory.

Chairman: Perhaps this Committee will pursue it through other routes. Let me bring in Sandra Osborne.

Q119 Sandra Osborne: May I ask some questions on democracy and human rights? The FCO's human rights report cites Russia as a country of concern in relation, for example, to the treatment of non-governmental organisations in civil society, police and judicial reform, in addition to worries about torture and impunity in Chechnya. How do you assess current trends in Russia regarding democracy and human rights?

Mr. Murphy: My frank assessment is that Russia has not made the progress for which many of us had hoped in the mid to late 1990s. There are all sorts of assessments about why that is so, whether it is measured in the context of media freedom and multiplicity of political parties, and what generates it in terms of democratic space. As for NGOs, they can be a remarkable power for progress in Russia. Last year, about 15 Government Ministers visited Russia, five of whom went specifically to meet Russian NGOs. That certifies how important we consider they are and how much we value their work.

We also fund important NGO and agency projects. For example, an important project is a public prison inspection process, as is working with the equivalent of the Russian NUJ in defence of press freedom. NGOs are a crucial part of a force for good, democracy and human rights in Russia in the context of a relative closing of that space in recent years.

Q120 Sandra Osborne: If not as much progress has been made with regard to UK policy as perhaps we would like to see-we have taken evidence during the current inquiry that Russia does not take particularly kindly to public criticism from foreign countries of its human rights record-is that because the UK is publicly criticising the Russian authorities too much, or not enough?

Mr. Murphy: The UK has a choice about how we influence events in Russia. It is either to acknowledge what is happening there and stay silent-the certain way for a voice not to be heard and to be devoid of any influence in the evolution of Russian democracy-or we can offer frank assessment. Members of the Committee have done so in the past. As you rightly say, the UK Government did so in the FCO annual report of last year. The EU has done so, as have other organisations. Our approach is to be frank and honest in our assessment of where we think there have been failings.

In the past, I have listened to conversations about what we are doing trying to foist UK perceptions of democracy on Russia. The issue is not about UK values; it is about international standards. That is what we have been trying to do over recent years.

Q121 Sandra Osborne: Can domestic political behaviour of the Russian authorities be influenced seriously by foreign countries? If so, what effect will the current stand-off between the UK and Russia have on any influence that we may bring to bear?

Mr. Murphy: I was alluding to the fact that our influence is stronger if we are frank from a position of having very strong co-operation in a multiplicity of other areas. Our influence is certainly much more significant if we offer our advice and assessment rather than remain silent.

As for how we can continue to influence things, at a bilateral, ministerial and official level there were 15 visits last year by Government Ministers. We have a bilateral human rights forum, which helped to enable a meeting earlier this year with our colleague Ian McCartney. We are working on issues concerning Russia's approach to the European Court of Human Rights. We continue to seek other multilateral ways of exerting a positive influence to encourage international standards of human rights and democracy through the OSCE, the Council of Europe and the EU. This is not an issue that the UK alone has concerns about or that the UK alone can assist in resolving.

Q122 Sandra Osborne: You referred to the European convention on human rights. What steps is the UK taking to encourage Russia to ratify protocol 14?

Mr. Murphy: As I understand it, that is currently blocked by the Duma. An issue of fundamental importance is the ability to streamline European Court of Human Rights processes to work much more effectively. I think that I am right in saying that there are currently 19,000 Russian citizens with cases awaiting a hearing from the court. That is not a satisfactory situation.

Q123 Andrew Mackinlay: Nineteen thousand?

Mr. Murphy: It is not a satisfactory situation. Part of the solution is a more effective European Court of Human Rights, and the ratification of protocol 14 is an important part of that. It is my understanding that Russia is the only member state of the Council of Europe that has not ratified it. That is an important block, particularly when you see the scale of the cases pending for Russian citizens, which is on an upward trajectory. I do not have the figures with me, but you should certainly be aware that there is an upward trajectory in the number of cases from Russian citizens.

Q124 Chairman: Perhaps you could send us a note of the up-to-date figures.

Mr. Murphy: Of course.

Chairman: We now have some questions about energy security.

Q125 Mr. Heathcoat-Amory: We have heard that Russia is not a country where the rule of law features particularly prominently, nor is it a market economy. We saw from our visit to Moscow last month that the Russian Government are prepared to use the energy weapon as part of their foreign policy, because they have colossal reserves of gas and oil which they partly export. We in this country are at the end of the pipeline. There is a big implication for security if they are an unreliable supplier. How do you see that situation? Are the Russian Government and oil exporters reliable partners in that respect?

Mr. Murphy: We have made it clear through the G8-with Russian support-and through the EU that in terms of its energy supply, Russia has to be sustainable, transparent and predictable. That is in the declaration of St. Petersburg, which the Russians agreed to. That is an important set of principles if we can ensure that the conversation remains within the context of those agreements on principle.

An awful lot is quite rightly said about our relationship, the EU's relationship and international relationships with Russia on energy supply. The Committee may already be aware of this analysis, but it is helpful. The UK is a 12% net importer of gas, whereas the rest of the EU is a 50% net importer of gas. Half the EU's import of gas comes from Russia. The expectation is that by 2030, on current trends, the EU's dependency on imports of gas will be between 65 and 85%. There is certainly a trend there. In the contexts of sustainability, transparency, predictability and security, one issue among others is the diversity of supply routes, which takes us into the issue of the Caspian and the Caucasus. However, the significance is that Russia has signed up to those principles. If those principles can permanently be the basis of the EU energy action plan, we will have made progress.

Q126 Mr. Heathcoat-Amory: But Russia has not ratified the energy charter treaty. We have seen-certainly in the case of Ukraine-how Russia is prepared to turn off the taps in the event of any dispute. I ask you again therefore: are we not vulnerable in this area, if not now then in the foreseeable future? What are the Government doing collectively to look ahead and either seek other partners with whom to diversify, perhaps in other parts of the former Soviet Union, or do more in Russia to secure long-term contracts that we believe the Russians will adhere to?

Mr. Murphy: That is one of the key issues facing us. There are two issues on diversity: diversity of source and diversity of supply routes. Supply route diversity will enable us to have multiple export routes. On source, you are right to say that in places such as Turkmenistan, Norway, Latin America and North Africa there are reserves that we think can form an important part of a UK energy mix that gives the diversity that is an important part of security.

We are working on assessment of those reserves in relationships with those countries and with private sector co-operation there. Nevertheless, we still have to resolve the issue of Russia's capacity to meet domestic and international demand, and of Russian supply. We work closely, both bilaterally and internationally, to do that-through the G8 and the EU. We will continue to do so, because you are right that the issue is crucial.

Q127 Mr. Heathcoat-Amory: May I ask about the mechanics of British Government? Are there cross-departmental efforts to secure energy supplies or look for autonomous energy production or electricity generation here? Please feel free to consult your officials, who might be part of that process. I understand that the matter is not simply a Foreign Office matter: other Departments are involved. I would like to think that it is a matter that is being considered collectively, because it is one of those cross-cutting issues that should not simply be left to one Department. Can you help us on that?

Mr. Murphy: You are absolutely right, which is why in answer to Ms Osborne's question I mentioned that 15 different Ministers have visited Russia in the past year, from a range of different Departments. It has not been asked for, but if it would be helpful, Mr. Chairman, I would be happy when appropriate to provide a list of those Ministers, unless there is a security issue. I cannot imagine that there would be.

The issue is one that is being handled across the UK Government, and the Foreign Secretary and the Secretary of State at the Department of Trade and Industry were involved in bilateral conversations with their Russian counterparts. You are right to emphasise it, and-with your encouragement-Damian Thwaites will correct me if I am wrong. It is an issue of such importance that there is Government-wide involvement based on bilateral visits and constant bilateral communication. Parties outside of Government are involved too. From a UK perspective, the decisions are taken on commercial grounds. Private sector companies make vast investments, and significant profits too. It is important to recognise, as I am sure you do, that the issue is not just one for Government. I do not know whether Mr. Thwaites would like to add anything.

Damian Thwaites: As you point out, Mr. Heathcoat-Amory, the issue is fundamental and is one of cross-cutting interest in Whitehall. Speaking in my position as a Whitehall official, I have daily contact with colleagues in the DTI-now the Department for Business, Enterprise and Regulatory Reform-on the issues. There are a lot of official contacts by way of ad hoc meetings and work under the aegis of the Cabinet Office. Those are very strongly co-ordinated. A lot of collective Whitehall work went into producing the energy White Paper in which the FCO actively participated.

Q128 Mr. Illsley: Is not Russian energy supply an area where there is a real need for greater co-operation among European Union member states? I am thinking in particular of Lithuania and Estonia, which have both had their energy supplies affected. Ukraine was affected a couple of years ago, although it is not in the EU. Yet at the same time, Germany signed a deal on their own with Russia for a pipeline, which upset Poland because it basically bypassed them. Do we not need to sort out our energy policy with Russia collectively, rather than allowing countries like Germany to draw up a pipeline deal on their own?

Mr. Murphy: I do not think, Mr. Illsley, that you would thank me for becoming involved in a conversation about wider EU co-operation and treaties today. That is perhaps for another time. Mr. Heathcoat-Amory and I, and perhaps one or two others, have already had an outing on that in recent weeks. In terms of the specific point, you are right. The UK Government believe that there is a strong case for much more collective interaction with all our energy suppliers, not just Russia, rather than, as you have correctly alluded to, an ad hoc series of bilateral agreements between EU member states and different suppliers. It is our intention that the EU energy action plan will help us to achieve that, so that we can have a common understanding.

Q129 Chairman: We have had evidence over a number of weeks from different people about Russia and energy. One of the issues that has been raised is that there is insufficient investment going into Russia's energy resources, so that as its economy grows it will not be able to meet its domestic consumption demands and maintain its exports. You referred to Turkmenistan earlier, but there could be other countries. It is relying increasingly on central Asian supplies for its domestic market which are at less than world prices. Then it is selling on its domestic production at world prices and getting the revenue from that.

Clearly at some point some of the central Asian countries might decide that they do not want to be run by Gazprom and they would rather have their own mechanisms and outlets elsewhere. We were in Azerbaijan recently and so we are aware of some of the related issues in terms of the Caspian and everything else. Can I put it to you that there is potentially a problem of the reliability of Russian supplies for the future, not just in terms of the current situation but clearly long term? The UK is in a better position than some other EU countries, but other countries, and Germany has just been mentioned by my colleague Eric Illsley, are very reliant on Russian supplies. Is there any assessment of whether and how long Russia can maintain its exports at the current level?

Mr. Murphy: Mr. Chairman, you said that this is a long-term issue. Without seeking to strike a discordant note, I do not think that it is a long-term issue. It has a much closer horizon than that. Looking at the evidence and notwithstanding your accurate comments about its diversity and security of supply, it is not clear how Russia can meet its domestic demand and its expected international demand, based on its current level of investment and its current exploitation of its reserves by 2010. There is a real need for clarity, based on the St. Petersburg agreement, about predictability and sustainability of supply, and there is a need for certainty about Russia's ability to meet domestic and international demand within that time scale. That is something that we are working on.

Q130 Chairman: You are saying that there could be a problem within the next three years?

Mr. Murphy: I am saying that there is not transparency on the issue of how Russia will meet its multiplicity of domestic and international commitments in the next three years.

Q131 Mr. Moss: You remarked on Russia's problems in meeting domestic supply and providing enough gas under its contracts to serve western Europe. Do you think that those problems have prompted them to annex huge tracts of the Arctic ocean, under which we believe that there are huge deposits of oil and gas? I read that that is contrary to international law. Have the Government responded to that yet? How would they respond?

Mr. Murphy: As I alluded to in my answer to the Chairman, the UK Government do not have a clear understanding of how Russia will meet the different demands on its supply to 2010. Clearly, the Russian Government are in a much better position to know about that. To some degree, Russia's actions can be judged in the context of the pressures that it feels on its capacity to meet domestic and international supply.

On the specifics, I have not been involved in the Government's response. If Mr. Thwaites has been involved, he might wish to update the Committee on the facts of it. It is clear that Russia, for a variety of important economic reasons, which are perhaps also political to some extent, wishes not only to diversify its own supply, but to get involved in a process that reduces the international market's capacity to exploit multiple export routes out of that part of the world. That is something that we continue to discuss bilaterally and internationally.

Damian Thwaites: A project of enormous importance, of which I am sure the Committee will be aware because it is a long-standing issue under discussion, is the development of the Shtokman field in the Barents sea north of Russia. It is a massive deposit. For the Russian Government, it can potentially make a huge contribution to meeting energy supply requirements. Exploitation rights and roles are primarily commercial matters, but from HMG's point of view, we would welcome clarity from the Russian Government about how they wish to take that forward. We will point out, as we have done, that Gazprom would benefit significantly from the kind of technical expertise that foreign investors, including those based in the UK, can provide.

Q132 Chairman: Before I bring in Mr. Hamilton, can I ask whether you might be concerned that the Russian reaction to the recent events might be to make it more difficult for British companies operating in the Russian oil and gas sector?

Mr. Murphy: Again, without rewinding and repeating exactly earlier comments, I cannot speculate on the likely shape of any Russian response, other than that which we think appropriate, which is the extradition of the named individual. We do not detect in the comments thus far a desire to become involved in a diplomatic process with the type of impact to which you have alluded.

The Committee will be aware, from the evidence that it has received and from its conversations with UK business, that some UK businesses have found it difficult at times to operate within the norms that it would expect to operate within in the United Kingdom. We hear that comment from UK businesses operating in Russia.

Q133 Mr. Purchase: I will just follow on from that. We return again to extradition. While we were in Russia, we heard about the very difficult circumstances for British business there. Some British businesses were saying "It's tough, we have to play by their rules but there is good business". With regard to the extradition, what is currently going on is this. We cannot hide-if that is the word-behind our own judicial system that says on the one hand, "I don't think we should be sending this man back," and then on the other hand tells the Russians that because they have some kind of constitutional issue, the matter should be disregarded. We cannot go on like this, pretending that we have one set of cast-iron rules that cannot be moved or varied, but that another country is just being damned awkward. It will not work. We will have real problems with businesses and in other relationships if that continues in the present mode.

Mr. Murphy: I do not think that it is too much in the Russian business environment for UK companies to expect commercial contracts that are entered into to be upheld and that there is a clear and transparent legal and regulatory framework. Without unintentionally provoking a disagreement, I do not think that there is a parity between this international request for extradition and UK businesses having the opportunity to fulfil in good faith the commercial contracts that they entered into with other UK companies or, of course, with Russian companies or authorities. I would not wish to draw the CBI into the wider issue, but this week the Foreign Secretary met leading UK business leaders to discuss the situation. It has issued a press comment that is publicly available in which it says, "This seems to be a proportionate response to what amounts to a clear lack of co-operation by the Russian authorities in efforts to pursue a serious crime." Those are the CBI's words, not mine.

Q134 Mr. Purchase: This is not about parity or equity. It is about British businesses working in Russia in very difficult circumstances and trying hard to bring some bacon home. They find it extremely difficult, but they can make money. The point is that, if we make it even more difficult, they will not bring the bacon home. You have to bear that right at the forefront of your mind.

Mr. Murphy: The answer to the Chairman's first question, and, I think, the first thing that I talked about before any other issue, was the environment for UK business. We are abundantly aware of the importance of Russia as a market for UK business and we are increasingly aware of the importance of the UK for Russian business. When you look at the context, of course it is difficult. Mr. Purchase, you have first-hand experience of listening to UK businesses over recent times, as do I. But we must look at the fact that we are regularly among the top five private sector international investors in Russia.

During the first three quarters last year, we were the single biggest foreign investor in Russia. Of course, British business is operating in a very difficult environment, but it is doing so very successfully. It could be more successful if the environment were more conducive to contract maintenance and strong regulatory consistency.

Mr. Purchase: I will let you go there.

Chairman: We have to move on.

Q135 Mr. Hamilton: May I bring us to the area of EU-Russia relations? As you know, the 1994 EU partnership and co-operation agreement with Russia, the framework for our dealings with Russia as the European Union, is about to expire. I wonder whether the UK Government regard having a successor agreement in place by November as a key priority.

Mr. Murphy: It is a key priority to have a successor agreement. We are less tied to a specific time scale. It is my understanding-of course, the Chairman and the Committee may have a different understanding-that the previous Finnish President had hoped to initiate that by November last year. So it is a process that the Finnish presidency had hoped to carry out last year, rather than something for the outgoing German presidency or something the incoming Portuguese presidency would seek to do by this November. However, there are clearly some important bilateral stumbling blocks to this new partnership and co-operation agreement. Polish relations with Russia, for example, particularly over food exports, are an important stumbling block on this issue. The UK and, importantly, Russia also see that as significant. President Putin has alluded to it publicly himself. So there is a need for a new partnership and co-operation agreement that takes into account the myriad important bilateral concerns -EU and Russian-that exist.

Chairman: I have been getting signals that there may be a vote imminently, so I say to members of the public that, if there is, we will suspend and continue after the vote. When the bell starts to ring, we will halt at that point.

Q136 Mr. Hamilton: May I move on to something that many people of my age and older never thought would ever happen, which is that some of the old Soviet bloc countries-the Baltic states, Poland, Hungary, the Czech Republic, Slovakia and so on-have joined the European Union? Now that they have been in the EU for quite a while-a few years-what impact has that had on UK relations with Russia and EU relations with Russia? Should we be concerned if there has been deterioration because those countries are no longer within the sphere of Russia?

Mr. Murphy: This is about one of the most significant issues that we face: Russia's role in the world and its perception of the allegiance of its near-abroad-a dreadful phrase-which is increasingly western-facing, increasingly open to EU membership and increasingly aspirant about NATO membership. This issue registers highly among the Russian Government and in the Russian psyche and will continue to do so. However, our assessment is that expansion of the EU has been a positive development-up to 27 states-and we would like to see it go further, in terms of Turkey and others. As possibly the key proponent of EU expansion, I do not detect that the EU, of itself, has had an impact on UK-Russia or Russia-UK relations. But it is a factor in Russia's general posture on a number of issues and will continue to be so.

Q137 Mr. Hamilton: You mentioned earlier the success of British business in Russia and that we are now one of the key investors. Indeed, when we were there last month we saw that for ourselves. We met a number of key British investors first hand and heard what they had to say. How useful do you think that the EU is as a vehicle for UK policy towards Russia or is it not really relevant?

Mr. Murphy: Again, without wishing to provoke Mr. Heathcoat-Amory, the relationship between the EU collectively and Russia is of strategic importance to the United Kingdom on a range of issues, not least the one we spoke about earlier in our conversation today, on which the EU presidency issued a statement that was supportive of the United Kingdom's position. The EU continues to be strong in its support of the United Kingdom's position.

On a variety of issues-energy supply and energy security-there is a clear EU perspective, in terms of the energy action plan. It is certainly the UK Government's belief that, of course, we can be effective bilaterally with Russia on a number of issues, but we can be much more effective if we work, where it is appropriate, collectively through the European Union. The fact that the EU is now made up of 27 states adds greater strength to our relationship.

Q138 Mr. Hamilton: Finally, the European neighbourhood policy has been a cause of some friction between the UK and Russia and the EU and Russia. Do you think that we could have a shared understanding on neighbourhood policy, or is that unrealistic?

Mr. Murphy: We increase our chances of a shared understanding if we continue to have the same level of bilateral engagement that we have had in recent years. However, alluding to my earlier comment, the changing nature of the economics and politics of many of the nations that border Russia impact on its sense of self and status, and on its sense of its role in the world.

The neighbourhood policy is important in terms of spreading a sense of prosperity and stability to the east and south of the EU, and we will continue to invest considerable energy to do that.

Chairman: You have returned from a vote, Mr. Heathcoat-Amory.

Q139 Mr. Heathcoat-Amory: I do not wish to lower you into the detail of the EU, so we shall have a non-aggression pact on that.

It is tempting to communalise problems and hope that they can be solved by doing so, but there are bilateral problems between other member states and Russia. I am thinking of those concerning meat exports from Poland, war memorials in Estonia and energy supplies to Lithuania. Surely we do not want our bilateral relationship with Russia inhibited or caught up in such issues. Given that the Russians like dealing bilaterally with us, if we can put the issue of the alleged attempt to assassinate British citizens in London and get on to an even keel, could we make better progress that way, as we always have, than if we thought that Brussels could do things better on our behalf?

Mr. Murphy: I do not believe that anything about the UK's approach or my comments suggests that we have a default position that says that Brussels can do things better. Equally, I would not think it right to hold the default position that Brussels can never do things better for or with us. On this issue, given the type of conversation that we are having, I think that a constructive engagement with Europe strengthens the UK national interest. Do we want to turn every bilateral issue between Russia and one of the 27 EU member states into a 27-versus-one scenario? Of course not, but it is right that we make comments and act on the serious issues that are of strategic importance to member states and when we believe that Russia has not fulfilled its own stated purpose of being open, flexible and democratic, and positive about the EU.

Q140 Chairman: We can now turn to some security-related issues. Some of us were in Serbia and Kosovo last week. One of the burning issues in international relations is the final status of Kosovo and the Ahtisaari plan. A few months ago, a UN Security Council resolution on the Ahtisaari proposals for the supervised independence of Kosovo was envisaged. As things stand, I believe that we are on to the sixth draft, to which the Russians have indicated they will not agree. They will not agree either to the original version of the Ahtisaari plan or any watered down version. It seems that they are even balking at an extended timetable for further negotiation. Have we underestimated the Russian attitude on these matters and, if so, why?

Mr. Murphy: I do not think that we have, but that is for others to judge. I met with President Ahtisaari this morning in London. We had detailed conversations about the future process. It may be helpful for me to put on record again the UK Government's belief that this process should and will end up with independence for Kosovo, internationally supervised and based on the Ahtisaari proposals. After an enormous amount of work and real effort we believe that that is a balanced package for the future of Kosovo. You rightly say that this is a fluid situation at the United Nations. The intention of the co-sponsors of the resolution, in the dreadful UN phraseology that you will be well aware of, is to put the resolution into blue, and to have further conversations tomorrow in New York.

Sitting suspended for a Division in the House.

On resuming-

 

Q141 Chairman: Minister, you were mid-way through a sentence, I think.

Mr. Murphy: I hope that the record will show that I had come to a full stop.

Q142 Chairman: Do you wish to add anything to your answer?

Mr. Murphy: No, not at the moment.

Q143 Chairman: Clearly, if there is no new Security Council resolution, UN Security Council resolution 1244 remains in existence. Under that resolution, Kosovo is regarded as part of Serbia. Furthermore, the operations of the United Nations Interim Administration in Kosovo and KFOR are currently operating under that resolution. If we are to get the deployment of a European Union police and civil assistance programme into Kosovo, presumably we will need a new Security Council resolution under which that would be possible.

At the same time, if we are to change the status of Kosovo in international law, we will also need a successor resolution to resolution 1244. In the absence of Russian agreement or if there is a Russian veto of any proposal, it is clear to me, having visited Kosovo last week, that there will be an expectation of the unilateral declaration of independence at some point, which people hinted would be a managed unilateral declaration of independence.

Following President Bush's remarks in Tirana and a number of other countries, my assessment is that the United States will then recognise that UDI. At that point, we will be in a difficult position, will we not? On the one hand, resolution 1244 will still be in existence and there will have been no successor resolution, yet on the other, a country-or at least part of a country-will be making a UDI and seeking international recognition. Presumably, it will get that recognition from a number of countries around the world-the Islamic Conference countries and some European countries, if not the whole European Union-as well as the US. What would be our Government's position in those circumstances?

Mr. Murphy: I am sure that we could spend the whole of our hearing on that one question. I spoke to President Ahtisaari this morning, as I mentioned. Our policy is that in terms of conditions on the ground as we speak today, the Kosovar Albanians continue to need to see that there is a process in respect of their continued connection and trust in the international community's responsibility to fulfil its express declarations of the past, and for the Kosovo Serbs.

President Ahtisaari's plans contain significant enough protections and devolution. That can remain the blueprint for our destination. With regard to recognition, we have not given up the determination to achieve this UN resolution. We think that this UN resolution has dealt with the substantial concerns that Russia has about the in-built automaticity of independence at the end of another round of time-limited talks. In that respect, we very much agree with the French Government and President Sarkozy's approach to the time-limited nature of those talks. We think, therefore, that the removal of automaticity at the end of those time-limited talks removes the reasonable concern that Russia may have on that. On that basis, we are determined to try to get that successful process with the UN.

We can speculate on a series of what-ifs. Your general point that it is not for the UN initially to recognise is, of course, accurate, Mr. Chairman. The issue of recognition is a matter for other sovereign states, as is their approach to any potential declaration by Kosovo.

Our plan and approach is to try to do this through the UN as far as possible, and that will continue to be our posture. However, as you have said, Mr. Chairman, we will come to an important decision if the UN process exhausts itself. I do not think that it would be helpful for me to speculate on the what-ifs with regard to the UK's position because that, of course, depends on a different series of circumstances. It is important for us to be clear to our friends in Russia and Serbia that we are clear about the end of this journey and its timetable. I spoke to President Ahtisaari today, and he agrees with our assessment on that.

Q144 Chairman: My assessment is that, whether there is a 120-day or a 120-year delay, there is absolutely no way that you will get an agreement between the Government of Serbia and the Kosovo Albanians on a compromise, because one position claims that the region is part of Serbia and the other wants an independent state. Therefore, if the automaticity is removed, will you not get into a position where, after another 120 days of talks, you still have no agreement and have made no further progress? There were issues raised before the Committee about the status of the UN presence and the KFOR and United Nations Mission in Kosovo operation during this transitional period. I think that we will, as a Committee, no doubt be able to ask questions and take those things further in the future. However, my assessment from last week is that there is no way, however long you delay, that you will come to avoid that crunch question, which is that you have got to make a choice. Do you really expect that the Russians will end their current obstruction of a UN resolution, or are we just going through the motions?

Mr. Murphy: From previous conversations that we have had, I know that you have taken a close interest in that issue over a prolonged period, Mr. Gapes. We believe strongly that the text that has been submitted in New York deals with the stated concerns of the Russians. You are right in saying that if we get to a point at which, despite that and despite the efforts of all the co-sponsors, Russia refuses to co-operate, we will be in very difficult territory. I have to make it clear to the Committee that in our view Kosovo is destined to be an independent sovereign state. Of course, there are difficulties with regard to the internal dynamic. However, in his conversations with Kosovan Serbs, President Ahtisaari, went out of way to allow for sensitivities in relation to the nature of the devolution relationships with Belgrade, and to provide structural protections. We should continue to be grateful for the work that he did in giving us such a coherent package. By any objective measure, it makes great sense.

Q145 Chairman: I do not doubt that it is a coherent package. The problem is that it is not being bought by one community. You have recognised the seriousness of its nature. I shall bring in Mr. Mackinlay in a minute, but may I conclude by asking whether you interpret the Russian objections and the obstruction of the Security Council resolution on Kosovo as part of a wider position? The Russians refer to frozen conflicts, to precedents, to the Helsinki agreement, to international law-they deploy all kinds of arguments. Do you think that that is Serbia-specific, or is it the wider Russian attitude towards solving international issues?

Mr. Murphy: We all know that every international issue is multi-dimensional. It is facile to suggest otherwise. As to the different dimensions at play in Russian attitudes to Kosovo, we can all speculate and we might come to a common conclusion or not. Part of what is in play is Russia's perception of its role and its importance in the world, which I mentioned earlier. Yes, of course Kosovo has an increasingly westward-looking gaze where its future is concerned, but Russia has a different historic perspective, which is partially in play here.

Mr. Chairman, you do not disagree with the Government's analysis that relatively soon the international community will face a really important decision.

Q146 Andrew Mackinlay: I apologise for having been out for a moment.

The position is that if Russia continues to veto the resolution, resolution 1244 endures. Can we have an assurance from you that the United Kingdom will not disregard-however frustrating it is-the Security Council position, if that is where Russia continues to block? If there is a UDI, so it has no Security Council cover because no Security Council resolution has been passed either rescinding or altering resolution 1244 or adopting the Ahtisaari plan of managed independence, will we, in defiance of that, recognise an independent Kosovo?

Mr. Murphy: As I said-

Q147 Andrew Mackinlay: You understand the point?

Mr. Murphy: Of course I understand the point. It is very similar to the point that the Chairman raised when he emphasised the fact that our view as to the end point is Kosovan independence.

Q148 Andrew Mackinlay: I understand that. That is an objective.

Mr. Murphy: That is the end. What is in dispute is the means to achieve that end. I said earlier that I do not think that it would be helpful to speculate, based on our continued intensive efforts in New York, about a series of scenarios about what-ifs. My understanding of resolution 1244 is that Kosovo remains where it is territorially until the end of the process. In the meantime, it is administered internationally. We shall have to look at the detail of the end process in New York.

Q149 Andrew Mackinlay: Resolution 1244 also gives the mandate to the police and the soldiers. It has either to be rescinded or it will endure. It is not rocket science. It either has to be repealed or altered by resolution of the Security Council. If it does not, it goes on.

Mr. Murphy: What is clear is that whatever scenario we end up with, in terms of Kosovan independence, there needs to be international authorities on the ground with legal cover.

Q150 Andrew Mackinlay: It was somewhat irritating-although I do not blame you-that in our brief prepared by the Foreign and Commonwealth Office, there was no mention of the Helsinki Final Act. One of the things that we discover when we talk to every interlocutor of every shade of opinion is that that is a material factor, and it is part of the case of the Russian Federation. They say that they have honoured the Helsinki Final Act, which said that there would be no arbitrary variation in the boundaries of the nation states of Europe. We have honoured that since the 1970s. This would be a breach of that. The United Kingdom recognised that it would be a breach, but we say that it is a one-off thing. The Russian Federation say that they disagree. There is Transnistria, for instance There are Russian enclaves in Georgia, Armenia and Azerbaijan. Have they not got a point, rather taking up the Purchase thing? We expect everyone to accept what our reading is. If you came down from Mars and looked at this, it would be clear that Russia has a powerful case. What do you think?

Chairman: We are very short of time.

Q151 Andrew Mackinlay: What do you think?

Mr. Murphy: The end of that question could have been "Discuss", rather than what it was. In terms of precedent, I know that this Committee has looked at these important issues of the frozen conflicts, not least Transnistria, Abkhazia and others, and will rightly continue to do so. However, we do not believe that the process in which we are now engaged in Kosovo establishes a precedent in the way that you are alluding to, in the way that the Russians have said publicly. We do not believe that.

Chairman: ]We must leave this issue now, as we have a few other areas to cover in the next 20 minutes.

Q152 Sandra Osborne: Minister, can I ask you about Russia's attitude to self-defence? At a NATO meeting on 19 April, member states agreed that US missile defence plans might be linked with broader NATO plans in order to protect the whole of NATO territory. However, the Russians continue to oppose the US plans in their current form. Russia has suggested a strategic partnership in the area of missile defence, and to give a greater role to the NATO-Russia partnership. What involvement has the UK had in resolving the two between Russia and the US? Do you believe that there is political mileage in Russia's offer of a strategic partnership in this area?

Mr. Murphy: The Russia-NATO dialogue is the key way of potentially resolving the issue. However, we must also look at a number of other issues in respect of missile defence. First, this is a collection of a couple of agreements between sovereign states. It is not an issue to which the UK is party in terms of the bilateral agreement between the US and the Czech Republic and the US and Poland. How we take this forward is about looking at the capacity and the intention. The capacity of what has happened thus far seems to be accepted by those who know; there may be experts in the Committee but I do not claim to be an expert in the trajectory of missiles or the sites of their interceptions and I am not going to masquerade as such.

The overwhelming assessment appears to be that the location, scale and capacity of what has been deployed thus far could not objectively be seen to be an attempt to rebalance or to affect Russian strategic missile capability. It is clearly based on the number of locations and the capacity of the technology to be aimed at something smaller in scale and perhaps shorter in trajectory. An objective assessment leads us to the clear conclusion that it is rightly aimed at the actions of a third party, a rogue state, in the middle east. That is the declared position of the United States. It is an issue that we should continue to discuss through Russia-NATO dialogue.

In terms of the specific offer by the Russians, let us look and see. Let us have that conversation through the NATO-Russia Council to see whether there is something in it. There is a strong case to be made that by the nature of the Russian offer there is an acceptance of the capacity of the equipment and the intention of its deployment and that is a positive signal.

Q153 Chairman: Can I put it to you, based on a conversation I had earlier this week, that the Russian view may be more to do with the symbolism and their perception that the interceptor and radar system in Poland and the Czech Republic is part of a global system the United States is developing linked to Alaska, California and, potentially, deployment later in Norway. They see it all as part of an overall surrounding of Russia. You said "thus far" there are 10 interceptors planned but their perception is that this is the thin end of the wedge and it foreshadows a changing strategic balance against them. How would you respond to that?

Mr. Murphy: I have three very quick points. First, the conversation has to take place through the NATO-Russia Council. Secondly, you are right--we agree on the assessment that the current detailed plan in respect of all the sites is not intended to address the Russian strategic capacity. On the situation in Poland, you say there are 10 sites; my understanding is that the capacity of those 10 locations would be to target and intercept five missiles. When we look at that in the context of the Russian stockpile and everything else, that clearly would not be affected even if the intention was there, which it is not.

In terms of perception, which of course is important, I think it is significant that NATO members continue to share information with Russia. But ultimately, Russia does not have a veto over decisions entered into by other sovereign states that happen to be members of NATO and that should be very clear.

Q154 Chairman: But Russia has just announced its suspension of the Conventional Forces in Europe treaty. In the light of that, is it your assessment that that is linked to this wider question or is it, to coin a phrase, sui generis? Is it part of the wider breakdown in relations with the United States and the perception that countries in central and eastern Europe have joined the west and that NATO's borders have been expanded to Russia? Or is it linked as a signal to these other questions?

Mr. Murphy: There is no shortage of analysis of this very issue. One way of coming to a conclusion on this, and certainly the way that I have done it, is to ask whether there is a specific dynamic within the Conventional Forces in Europe process that would have led to Russia's suspension. The conclusion that you have to come to there is that there is no specific current dynamic that would lead to this Russian decision. Therefore as there is not a dynamic within the process, the conclusion must be that it is to do with other events. I do not think that we should seek to narrow it down to a specific other event. It is a continuing part of Russia's assessment of itself and its international posture, and its continued, understandable intention to be a world player, across the globe, but more importantly for it, on its borders.

Q155 Chairman: When we were in Moscow a few weeks ago, I was struck by what I regarded as the pre-Gorbachev language that was being used by Members of the Duma and others. Do you suspect, as I do, that these recent moves are in effect a breakdown of the post-cold war architecture? I am not saying that the cold war is coming back but that some of the language being used was reminiscent of the period before Gorbachev over 20 years ago.

Mr. Murphy: There is a body of analysis which pretty accurately says that Russia looks back on its recent past and the period of Yeltsin as a matter of some shame and collective humiliation. I do not know whether that is a fair assessment, but the debate will continue. We are undoubtedly in a period where Russia is more confident. That is understandable in view of the evolution of its market, the strengthening of its economic power, the increased wealth and prosperity of its population. That is a natural evolution. That conference based on material and economic wealth is a positive development. It is a core part of how we would like to see Russia develop. On the wider point of the CFE suspension, NATO would like to sign a new CFE agreement. There are a number of important issues, particularly about the continued siting of Russian forces in specific important locations.

Q156 Chairman: Transnistria, Armenia-

Mr. Murphy: There is also Abkhazia. We have supported a working group on Abkhazia to try to see whether there is a basis of a deal. We think that there is the basis of a deal on Transnistria through the reconfiguration of Russian forces that are in place. That would be an important step forward. I know that the Committee is aware of this. That is the type of change that we need to see as NATO before we would sign up to a revised CFE. But, of course, Russian suspension makes that much more difficult.

Q157 Mr. Moss: Minister, I want to return to the NATO-Russia partnership council.

I think that you said that the proposals to site the missiles and the radar equipment, if that is how it can be described, in Poland and the Czech Republic were bilateral agreements or discussions between the United States and those relevant countries. Does that mean that the United States did not discuss the proposals within NATO, and that the UK was not aware of the proposals before they were broadcast in the media?

Mr. Murphy: First, I apologise for appearing distracted, but the Council of the European Union has made a public declaration about the issues that we spoke about much earlier in the proceedings, in terms of our relations with Russia. Perhaps we will return to it at another point. That will, of course, be available to the Committee.

Q158 Mr. Moss: Would you like me to repeat the question?

Mr. Murphy: No, I am well aware of the question. I am doing two things at once.

Q159 Mr. Moss: He is multi-tasking. He can chew gum and walk at the same time.

Mr. Murphy: On the specific point about the UK's involvement in those conversations, I know that you will predict the answer, which is that the UK continues to discuss all those issues with NATO partners. Yesterday, the Foreign Secretary and I met the Czech Foreign Minister, and that was one of the issues that was briefly discussed at that wide-ranging meeting. It is something that we continue to discuss bilaterally and multilaterally, and it is right that we should do so.

We made it clear in conversation with our Czech colleagues that we strongly support the deployment in the Czech Republic and will continue to do so. The Czech Foreign Minister-incidentally, unbeknown to me, he is a Green Party nominee-was heartened by our continued support.

Q160 Mr. Moss: Is that support retrospective to a decision that was arrived at bilaterally, or was there a NATO agreement to approach those countries for that purpose?

Mr. Murphy: I do not know if Mr. Davenport wishes to add anything. I understand that there was consultation and discussion within NATO before the agreements between the US and the Czech Republic and Poland took place.

Michael Davenport: That was the point that I was going to make. There was certainly a process of consultation along the way, although, as the Minister pointed out, the agreements between the United States and the two countries concerned are bilateral. It is perhaps worth making the further point that the United States has also been involving Russia in consultations on the issue at various points, and is continuing to do so.

Q161 Mr. Moss: Are the Government in favour of enhancing the role of the partnership council as a key area for relationships with Russia?

Mr. Murphy: I think it is very important; as there is aspiration among some non-NATO members, particularly in Russia's near-abroad, to become more involved and eventually to become members of NATO, it is absolutely essential that the dialogue continues.

Ultimately, I come back to the point that while we will, of course, talk in great detail through that dialogue and the council, Russia will not have a veto over NATO membership of sovereign states. It is for NATO members to decide whether other sovereign states should be allowed to join.

Q162 Mr. Moss: But do the Government now take the view, perhaps in regard to NATO expansion, however one defines it, that greater attention should be given to Russian sensitivities on those issues? To reiterate your words, yes, when we were in Moscow, we did clearly get that view. It was not only of a new assertiveness on the part of Russia but of the shame that you talked about during the so-called revolution and the break up of the Soviet Union. Perhaps President Putin's popularity is largely down to the fact that he has brought the Russian Federation to a position where, to use an analogy, they are batting in the top four of the order again. This small thing seems to have blown out of all proportion. If we had real cognisance of these Russian sensitivities, of where they see themselves, then maybe we would not get into these difficulties.

Mr. Murphy: My response to that would be that where we can we of course have to work through Russian sensitivities; when we spoke a month or two ago about Kosovo, we sought to do in that resolution in New York. But in the context of NATO, through the Russia-NATO council, it is essential that we seek to address Russia's legitimate concerns on detail or in principle. Once we have worked through that process we come to the point where, despite sensitivities and concerns, Russia would not have a veto over the process. The underpinning analysis is that widening the membership of NATO is a force for increased security and stability, and the more nations that combine in the NATO process the better.

Q163 Mr. Hamilton: I move on to international security, and particularly to non-proliferation and Russia's role on Iran and North Korea. In March 2006, the FCO identified Russia as "a key player" on non-proliferation issues. We know that Russia has been reluctant to vote for certain of the UN Security Council resolutions passed in the last year and a half on Iran's nuclear programme, but eventually it did because Moscow felt that a nuclear-armed Iran would be a great threat to its own security. My question is this. Are we satisfied that Russia is co-operating in the attempt to stop Iran becoming nuclear armed? Do we think that Russia's unwillingness to impose sanctions is a problem?

Mr. Murphy: On this, the UK and Russia have common cause. Neither of us wishes to see Iran with an aggressive nuclear capacity and a military nuclear capacity. Although you are underpinning the fact that the assessment by the United Nations of some of Russia's actions may be inaccurate, the fact is that Russia has voted on two separate occasions for greater co-operation, through the UN, between Iran and the International Atomic Energy Agency. That is really very important. We can continue to analyse how we got there, but the fact is that we got there and Russia voted for both of those resolutions-as it did, of course, on the resolution on North Korea.

Q164 Mr. Hamilton: I was just about to ask whether they have been credible on North Korea, and a good partner in non-proliferation?

Mr. Murphy: They have. They have less of a formal role in North Korea, but they played a part in chairing one of the sub-committees and in assisting with financial transfers and other matters, so they have played an important part in North Korea-and, importantly, in Iran as well.

Q165 Mr. Hamilton: But you would agree that they continue to be a very important partner in non-proliferation as a member of the Security Council?

Mr. Murphy: Absolutely, and not just as a member of the Security Council but in terms of their own stockpiles of weapons of mass destruction, biological weapons and so many other things, it is important as a nation state but also internationally. Russia is one of the key players on non-proliferation. But on North Korea and Iran, there has been positive engagement and supportive and effective in the United Nations.

Q166 Chairman: May I ask one final question? I am conscious that we have kept you a long time, for which we are very grateful.

Like the European Union, Russia is part of the Quartet in dealing with the Middle East, and you will be aware that Russia broke with the Quartet's position by having contact with Hamas before the British Government, which related to the Alan Johnston hostage issue. Do you think that Russia could have a more active role in helping with the Middle East peace process and be an important contributor assisting the Middle East envoy and our own efforts through the EU and directly?

Mr. Murphy: I think that we could all be more active. We would all like to be more effective. I do not wish to stray on to the territory of the Minister responsible-

Q167 Chairman: As much as I am tempting you.

Mr. Murphy: I am not going to. As you know from past experience, we both have a keen interest in and, on more than one occasion, a common view on this, and, of course, have been to the Middle East with Mr. Hamilton and Mrs. Osborne in a different capacity. Russia has a crucial role as part of the Quartet and we would like it to do all that it can, as we all must, in supporting Mahmoud Abbas and progressive forces among the Palestinians, who are reasonable and wish to see a two-state solution. Russia, can, should, and I am confident will be a positive influence in that process.

Q168 Chairman: May I thank you, Minister, and your colleagues, Mr. Thwaites and Mr. Davenport? This has been a very useful session. We have covered almost every continent. We also went to the Arctic at one point. This has been your first appearance before the Committee and we have appreciated your contributions and your frankness. We look forward to seeing you in the future, possibly even in the summer. I am sure that we will continue to be engaged in a dialogue with you on this matter and others over the coming months.

Mr. Murphy: Thank you, and I look forward to coming to New York to give evidence to your Committee. I understand that that is where you will be in the summer.

Chairman: No, no, no.

Mr. Murphy: Where will you be?

Chairman: We will be here.

Mr. Murphy: No! I thought that you were off to New York.

Chairman: No, we are going to New York in October to the UN.

Mr. Murphy: Ah well, that is the summer for me still.

Chairman: We have a lot of work to do before then.

 

Mr. Murphy: It might be helpful if I read this statement into the record. It was issued in Brussels on 18 July and it is a declaration by the Presidency, on behalf of the European Union, on the Litvinenko case:

"The Presidency recalls its statement of 1 June on the murder of Alexander Litvinenko, a grave and reckless crime. The EU expresses its disappointment at Russia's failure to co-operate constructively with the UK authorities. The EU underlines the importance of urgent and constructive co-operation by the Russian Federation on this matter. The EU hopes for a satisfactory solution to this matter, which raises important questions of common interest to EU member states."

Chairman: Thank you.