Ukraine and Russia

The Committee consisted of the following Members:

Chair: Mr David Crausby 

† Cunningham, Mr Jim (Coventry South) (Lab) 

† Elphicke, Charlie (Dover) (Con) 

† Gapes, Mike (Ilford South) (Lab/Co-op) 

† Gyimah, Mr Sam (Lord Commissioner of Her Majesty's Treasury)  

† Hilling, Julie (Bolton West) (Lab) 

† Hopkins, Kelvin (Luton North) (Lab) 

† Horwood, Martin (Cheltenham) (LD) 

† Lidington, Mr David (Minister for Europe)  

† Phillips, Stephen (Sleaford and North Hykeham) (Con) 

† Rosindell, Andrew (Romford) (Con) 

Shannon, Jim (Strangford) (DUP) 

† Thomas, Mr Gareth (Harrow West) (Lab/Co-op) 

† Whittingdale, Mr John (Maldon) (Con) 

John-Paul Flaherty, Liz Otto, Committee Clerks

† attended the Committee

The following also attended, pursuant to Standing Order No. 119(6):

Lewell-Buck, Mrs Emma (South Shields) (Lab) 

European Committee B 

Wednesday 2 July 2014  

[David Crausby in the Chair] 

Ukraine and Russia

8.55 am 

The Chair:  I think it is appropriate for Members to remove their jackets if they wish to do so. 

Does a member of the European Scrutiny Committee wish to make a statement? 

Stephen Phillips (Sleaford and North Hykeham) (Con):  It is a pleasure to serve under your chairmanship, Mr Crausby. It may be helpful to the Committee if I give some of the background to the documents and why the European Scrutiny Committee recommended this debate. 

In its response to the unfolding crisis in Ukraine, the first round of European Union restrictive measures—an asset ban and a travel freeze—were imposed in February on 21 Ukrainian citizens in connection with the embezzlement of Ukrainian state funds and their illegal transfer outside Ukraine. Those affected comprise former president Viktor Yanukovych, two of his sons and 15 other former Ministers and members of his Administration. 

The second round responded to the 16 March so-called referendum in Crimea. As such, the list is headed by Sergei Valeryevich Aksyonov, who, in the words of the annexe to the Council regulation, 

“was elected ‘Prime Minister of Crimea’ in the Crimean Verkhovna Rada on 27 February 2014 in the presence of pro-Russian gunmen. His ‘election’ was decreed unconstitutional by Oleksandr Turchynov on 1 March. He actively lobbied for the ‘referendum’ of 16 March 2014.” 

The other 20 individuals comprise seven additional Ukrainians who were also involved in the events in Crimea leading to the referendum, plus, for the first time, 10 Russian parliamentarians and three senior Russian military personnel likewise involved. 

Events continued to move apace. By the time the European Scrutiny Committee came to scrutinise those Council decisions on 26 March, Crimea had been annexed by Russia and, on 21 March, as the Committee will know, the EU had already introduced further restrictive measures against Ukrainian and Russian citizens. They did not, however, include the personal associates of President Putin, listed by the United States. 

In its proceedings on 26 March, the European Scrutiny Committee concluded that it was by now clear that the EU sanctions were not only of great political interest in and of themselves—especially the difference in approach between the US and the EU—but formed part of a wider, highly political discussion about the right reaction to Russian behaviour, which embraced not only key EU domestic policies, above all energy supply, but the interplay between national and EU policy and the role of the western alliance. Given that wider context and the high degree of interest in the House, the European Scrutiny Committee recommended that the restrictive measures should be debated on the Floor of the House as soon as possible. 

In the absence of any response, the European Scrutiny Committee has twice called on the Government, in subsequent Ukraine-related reports, to arrange the debate

as soon as possible. Through the Chairman, it has also written to the Foreign Secretary, saying that it believed that it was plainly reflecting a strong feeling in the House that such a debate was long overdue. 

On 16 June, the Minister for Europe informed the Committee that 

“the structure and additional time given to debates held in Committee, makes a debate in Committee the most appropriate option for scrutinising these measures.” 

In its response of 19 June, the European Scrutiny Committee noted that the Minister had once again rejected our recommendation that a European issue of great controversy be debated on the Floor of the House. Previous instances include last autumn, on the EU response to the Syria crisis, and then earlier this year, on the outcome of last December’s first-for-seven-years European Council on defence and the EU’s common foreign and security policy. 

Against that background, the European Scrutiny Committee was driven inescapably to the conclusion that, through the Minister, the Government were showing disrespect for the scrutiny process. It accordingly invited the Minister to give evidence on this and other scrutiny matters. That evidence session has now been arranged for 16 July. In the meantime, the Government arranged this debate—not, as I have said, on the Floor of the House, where the European Scrutiny Committee continues to believe it properly belongs—but in this august and distinguished Committee. 

8.59 am 

The Minister for Europe (Mr David Lidington):  It is always a pleasure to serve under your chairmanship, Mr Crausby. 

I know that the European Scrutiny Committee wanted to have this debate at an earlier stage. I regret that that was not possible, because of the need for Governments throughout Europe to move quickly to avoid asset flight by people subject to the sanctions. I am grateful to the European Scrutiny Committee for not objecting to my overriding scrutiny in those circumstances. 

The Committee will be aware of the statements that were made in the House by my right hon. Friends the Foreign Secretary, on 4 March and 13 May, and the Prime Minister on 26 April. I want briefly to recapitulate the position in relation to the sanctions that have been imposed. Since 6 March, the European Union has imposed sanctions on two expropriated Crimean companies and 61 individuals. The United States has listed 19 entities and 53 individuals, the last seven individuals being pro-Russian separatist leaders in eastern Ukraine who were added to the list on 21 June.

I want to focus on the reasons why sanctions were imposed and what they have achieved. Our national objectives remain to support the independence and sovereignty of Ukraine, to avoid any further escalation of the crisis and to uphold international law. Our national interest lies in a democratic, stable and peaceful Ukraine able to make its own decisions in a rules-based international system. By imposing sanctions, and by the threat of further measures, the European Union, the United States and others such as Canada, Australia and Japan have demonstrated a willingness to use economic levers to respond to Russian aggression. Together with strong messages from western leaders, that has raised the cost of Russia’s actions both politically and economically. 

What has been the impact of those sanctions on Russia? We assess that the threat of economic measures has exacerbated existing negative trends in the Russian economy. Russia’s growth forecasts for this year have been reduced from 2% to 2.5% before the crisis to 0% to 0.5% now. There has been significant capital flight since sanctions were imposed. Russia is now effectively locked out of western financial markets, as lenders consider new Russian exposure too risky in the current climate. EU sanctions would not have been achieved without agreement by all 28 member states. This shows that the EU was united on this issue and that it is prepared to take action, but if the European Union is to have credibility about maintaining its pressure on Russia, the threat of additional and more coercive sanctions needs to remain on the table. 

Sanctions are an important tool to deter Russian aggression and therefore to ensure the success of the broader diplomatic effort, which continues. The function of sanctions has been important alongside the other costs Russia has had to bear because of its actions. The illegal annexation of Crimea will prove an expensive venture and economic burden for Russia, and the status of that annexation will never be recognised by the United Kingdom or our international partners. The legal consequences of annexation are still being worked through by the European Commission. We strongly support that work and will ensure that those consequences are given effect through our national policies. 

In addition, Russia has found itself increasingly isolated in the international system. Its membership of the G8 has been suspended. The European Council has cancelled the next EU-Russia summit and EU member states agreed not to hold their regular bilateral summit with Russia for the time being. Votes in the United Nations Security Council and in the UN General Assembly in March also clearly demonstrated Russia’s international isolation. Furthermore, Russia’s accession process to the OECD was suspended, as were the Russian delegation’s credentials to the Parliamentary Assembly of the Council of Europe. 

The European Union, the G7 and other countries have been working closely together to co-ordinate their strategy, efforts and messaging. A consistent and tough set of messages has been deployed by our Government and others over the past few months. Most recently, at its meeting on 26 and 27 June, the European Council expressed support for President Poroshenko’s peace plan but regretted that the ceasefire, while respected by the Ukrainian authorities, had not led to the full cessation of military hostilities. The European Council called upon all parties to commit themselves genuinely to the implementation of that peace plan and to cement the cessation of military action. It also recalled the preparatory work on targeted measures, permitting further steps to be taken without delay.

In that respect, the Council expected that by Monday 30 June the following steps would have been taken: first, agreement on a verification mechanism, monitored by the Organisation for Security and Co-operation in Europe, for the ceasefire and for the effective control of the border; secondly, return to the Ukrainian authorities of three border checkpoints; thirdly, the release of hostages, including all the OSCE observers; and fourthly, the launch of substantive negotiations on the implementation of President Poroshenko’s peace plan.

The Council said it would assess the situation and, should it be required, adopt necessary decisions. The deadline passed and, with the exception of the eight OSCE hostages being released—a welcome step—insufficient progress had been made on the other matters. Following talks with President Putin, President Hollande and Chancellor Merkel, President Poroshenko announced on the evening of 30 June that he was not extending the ceasefire that had expired at 10 o’clock that evening and that the “anti-terrorist operation” would resume. 

In an address to the Ukrainian people, President Poroshenko said that despite his and his Government’s efforts to pursue the peace plan, the separatists had repeatedly shown they did not want peace, and had broken the ceasefire more than 100 times since it had been declared. He repeated his offer of an amnesty to those who laid down their weapons and expressed his readiness to reinstate the ceasefire when all sides showed their readiness to implement the peace plan. 

Russia has taken some positive steps. We were pleased by the decision of the Federation Council to revoke its decision of 1 March that had allowed Russia to deploy troops into Ukraine. We assess that Russia has brought some influence to bear on the separatists in eastern Ukraine in order to secure the release of the OSCE hostages. It is also positive that Foreign Minister Lavrov has indicated Russia’s willingness to allow Ukrainian and OSCE observers access to checkpoints on the border. However, Russia’s engagement has been a long way short of sufficient. The Government deeply regret that the four conditions set out in the European Council conclusions were not met by the deadline of 30 June. 

The onus is very much on Russia to use its influence to bring an end to the violence and destabilisation in eastern Ukraine, to press the separatists to release the remaining hostages and to return occupied border posts to the legitimate Ukrainian authorities. I welcome the opportunity to debate the subject this morning. 

The Chair:  We now have until 9.55 for questions to the Minister. I remind Members that they should be brief and it is open to a Member, subject to my discretion, to ask related supplementary questions. 

Mike Gapes (Ilford South) (Lab/Co-op):  The Minister referred to a list of 67 individuals with regard to the financial sanctions. He also referred to the United States having a list of 53. Will he clarify why the EU and the US lists are not identical? Is it because we are tougher, or are we targeting different people? 

Secondly, does the Minister believe that the additional and more coercive measures he said might be taken are designed to get Russia simply to stop supporting separatists in eastern Ukraine or to get Russia to return Crimea, in accordance with the terms of the Budapest memorandum, which Russia has broken by its invasion, seizure and annexation of Ukrainian territory? 

Mr Lidington:  Both questions need detailed replies; I will try to be as brief as I can. On the first point, 61 individuals rather than 67 were designated by the EU. The sanctions systems are somewhat different on the two sides of the Atlantic. While there is considerable overlap between the two lists, it is not surprising that there are some differences. 

Perhaps the most important such difference is that the courts in the United States tend to give the Executive more leeway than the European Court of Justice or the courts in European countries in justifying the sanctioning and listing of a particular individual or entity. The United States has wide powers that allow its Government to list any Russian official or anyone providing support to Russian action—the phrasing is that general. Someone designated on this side of the Atlantic in those terms would stand a decent chance of challenging that designation successfully in the courts on the grounds that it did not pass the normal proportionality test required by courts in the European Union. The British Government, and the Prime Minister personally, have been playing an extremely active role in trying to ensure that the United States and EU positions are as closely co-ordinated as possible and that continues to be our objective. 

On the hon. Gentleman’s second question, the immediate concern is to try to stop the current destabilisation of eastern Ukraine and to deter Russia from further adventurism there. Undoubtedly the so-called tier 3 economic sanctions would need to be imposed in the event of an outright Russian invasion of eastern or southern Ukraine. We have quite deliberately not set any defined, automatic trigger points for particular actions, because it is important that we retain flexibility to respond to circumstances that sometimes change very fast indeed. 

While that is the immediate objective, we have not forgotten about Crimea. The European Union is introducing various measures in respect of trade with Crimea and Crimean access to EU programmes. We will have to return to that question in the future, but, for the time being, the overriding priority is to try to bring stability to eastern Ukraine and allow the elected President of Ukraine and his Government to get on with rebuilding their country, both politically and economically. 

Mr John Whittingdale (Maldon) (Con):  The Minister referred to more than 100 incidents during the past 10 days in eastern Ukraine. Is he aware of the latest figures that show that 28 members of the Ukrainian armed forces have been killed, 70 have been wounded and more than 170 are still being held hostage? Does he agree that eastern Ukraine is almost in a de facto state of war? What evidence do we have of continuing Russian support for the separatist organisations, whether financial, military or through the relentless barrage of propaganda? What are the Government doing to counter that and put across the reality of the situation? 

While I fully understand the Minister’s point that a Russian military intervention would trigger tier 3 sanctions, is there not a case for at least some economic sanctions now, as the Ukrainian embassy has asked us to consider, given that Russia is not only doing nothing to meet its obligations under the agreements already signed, but appears to be continuing to destabilise eastern Ukraine and making the situation worse? 

Mr Lidington:  My hon. Friend will understand that I cannot talk openly about all of our information sources about Russian involvement in eastern Ukraine, but I draw the Committee’s attention to the fact that some of the weapons that have got into the separatists’ hands could seem only to have come from Russian sources and

that we know that tanks crossed the border from Russia to Ukraine and appear to have been put at the separatist forces’ disposal. It is utterly implausible to imagine that such an event would have been possible without, at the very least, the connivance of the Russian authorities. The propaganda from the Russian media, to which my hon. Friend drew the Committee’s attention, is, indeed, relentless and is calculated to continue to try to throw doubt on the legitimacy of President Poroshenko. Allegations of fascism or Nazism are still being tossed around—something that the Jewish members of the Government in Kiev find particularly offensive. 

We have been giving strategic communications advice, among other forms of technical assistance, to the Government of Ukraine and we are talking actively to EU colleagues and the United States about what more could be done internationally to help what has to be, ultimately, a Ukrainian-led and Ukrainian-controlled effort to get the truth across. The Government’s National Security Adviser is in Kiev today talking to Ukrainian counterparts and I hope to get to Kiev again in the near future, so we will continue those conversations then. 

Mr Gareth Thomas (Harrow West) (Lab/Co-op):  Thank you Mr Crausby. Let me underline the official Opposition’s continued support for the actions the Government have taken with other EU member states. We will not be seeking to divide the Committee. Nevertheless, I want to ask a series of questions. First, will the Minister give us an assessment of the capacity of the armed groups—the so-called Donetsk people’s army and other forces? Will he give an assessment of what President Putin’s long-term goals are for the conflict, or not, in eastern Ukraine? 

Mr Lidington:  First, I thank the hon. Gentleman for the support that he and the official Opposition have given the Government consistently through the crisis. It has been important that the different democratic political parties in the United Kingdom have shown solidarity for democrats in Ukraine who face this challenge to their national sovereignty and territorial integrity. 

It is difficult to calculate precisely the number of people who might be involved in the separatist movements; not all those who are actively involved are normally resident in Ukraine. I will see if I can get some more precise figures, when I come to the debate, to give to the hon. Gentleman and the Committee, but these are estimates. When the presidential election took place, it was possible to hold a genuine free and fair election throughout most of Ukraine, including most of eastern and southern Ukraine. It was only in parts of Donetsk and Luhansk provinces, particularly in the major cities and towns, that the separatists made it impossible for elections to take place and made a show of burning ballot papers, which indicated their views on democracy. That showed that the popular support for the legitimacy of the electoral process in Ukraine remained overwhelming in the whole country. 

The hon. Gentleman’s other question was about President Putin’s motives. President Putin has talked about his respect for the sovereignty of Ukraine—in recent days he has talked about President Poroshenko using his title, which implies that he recognises the validity of his election—but he has also talked about how the break-up of the Soviet Union was an historic tragedy. He has spoken in the past about how difficult he finds it to think of Russia and Ukraine as separate countries.

We have to judge his objectives by what Russia has done and continues to do in practice, which is to act to destabilise the elected Government in Ukraine and subvert Ukraine’s sovereignty and territorial integrity. That was demonstrated most obviously in the outright annexation of Crimea, which was in flagrant breach of international law and treaties that Russia itself had freely entered into with a sovereign and independent Ukraine. 

My fear is that the motives and objective demonstrated by Russia’s actions are to keep Ukraine weak, divided and compliant. It is important that all countries that want to see a rules-based international system in which states powerful or weak abide by the rule of international law stand by Ukraine when her territorial integrity and sovereignty are threatened in that way. 

Mr Thomas:  I am grateful to the Minister for that answer. What further information is he able to give us about the presence of Russian military units and hardware in the border areas of Russia that are close to eastern Ukraine? Surely, if President Putin wanted to send a signal to the rest of the world and, indeed, to the people of Ukraine that he was no longer giving the support that many of us fear he has been to the separatist groups and that he was drawing back, it would be to shift Russian military assets away from the border with Ukraine. 

Mr Lidington:  The hon. Gentleman is right that Russia continues to deploy significant numbers of troops close to the border with Ukraine and, from time to time, carry out military manoeuvres close to that border. I emphasise to the Committee that this is not simply in those parts of Russia that adjoin the areas of eastern Ukraine where there is currently separatist activity, but parts of Russia that border Ukraine to the north that would be within striking distance of Kiev. All of that comes on top of the intense Russian military build-up in Crimea. It is a posture that appears threatening to people in Ukraine. What we see in parts of Luhansk and Donetsk is not so much large-scale, direct Russian military involvement as it is the Russian security authorities giving direction to people who are perpetrating acts of violence and instability there. Russia appears to be operating through proxies or deniable separatist movements, but we are pretty clear that it is Russia that is giving them direction. Russia has certainly done nothing so far to interdict the flow of arms across the border. 

Mr Thomas:  I want to probe the Minister about the effectiveness of the sanctions that have been imposed. One of the original key motives was to address some of the embezzlement issues concerning the former regime. Can the Minister give us an assessment of the scale of the embezzlement and of the success across the EU in securing the assets of President Yanukovych and of former members of his regime who are on the sanctions list? 

Mr Lidington:  I am not able to give the Committee that information today. What is happening with the first round of sanctions on the former President and his entourage is that the financial institutions know that the asset freeze is in place, and they have a responsibility to report back on what assets they have identified. That work is going on in the financial institutions at the moment. When we have information available, I will be pleased to share it with the House. 

Mr Thomas:  I am grateful to the Minister for that answer. Perhaps later in the debate or by letter afterwards he can give me a sense of the time scale for a first estimate. May I take him on to the question of further sanctions? What discussions have there been with other EU member states about what the next level of sanctions might look like in practice? Have there been discussions with the City of London, which has indicated concerns in the past about the impact of further sanctions? 

Mr Lidington:  I have two points to make in response to that question. First, contingency planning for further sanctions targeting particular sectors of the Russian economy has been the subject of the European Foreign Affairs Council’s discussions, and it has come up in bilateral conversations among European leaders at pretty much every such meeting over the past few months. 

Secondly, the Government have been talking not only to the City of London but to other British sectors and businesses with commercial interests in Russia to understand their view of the situation and the nature of their exposure. Our view is that, in the event of the introduction of tier 3 sanctions, the United Kingdom must be willing to bear its share of the pain, because the challenge to the international order posed by Russia in Ukraine is so grave. It is important, too, that other countries be prepared to accept their share of the burden. 

Mr Thomas:  I very much support and welcome the Minister’s view that, if necessary, Britain must share the pain of imposing further sanctions. Similarly, our allies ought to share the pain. Will the Minister tell us about any discussions he has had with, for example, the French, who are actively in contact with Russia and Germany, and who have two warships near completion for the Russian navy? 

Mr Lidington:  We have certainly talked with France, as we have with Germany, Italy, Poland and other countries, about our approach to Russia and the right European Union approach to sanctions. The French Government have said that they plan to make a final decision about the two Mistral warships in the autumn, but it is clearly a decision that they have to make. For our part, we have stopped export licences to Russia for any equipment for which there was evidence that it might be used directly in Ukraine, including in Crimea. We are reviewing all other defence sales to Russia. The Prime Minister said in the House that he thinks there is a strong case for the suspension of sales of defence matériel to Russia. 

Mr Thomas:  Can the Minister give us a sense of what further diplomatic efforts will be made in the coming days not only to persuade Russia to draw back from the support it has offered up to now, but—crucially—in Ukraine and aimed at persuading the separatists to disarm? Specifically, will he set out the history of the contact group or the Quartet, involving leaders from Russia, Ukraine, Germany and France? Why, for example, is Britain not part of that more intimate discussion? 

Mr Lidington:  We are actively involved, both directly with Ukraine and with American and European partners. There is no doubt that Chancellor Merkel’s fluency in Russian has given her a link into President Putin. He was posted to East Germany, of course, at an important stage in his KGB career, and Chancellor Merkel grew

up in East Germany, so President Putin speaks German and Chancellor Merkel speaks Russian, because that was the compulsory foreign language taught in East German schools. That is a significant link, and it is in all our interests that it is used to the full. 

There is a meeting in Berlin today, involving the Foreign Ministers of France, Germany, Russia and Ukraine. As I said to the Committee earlier, the Prime Minister’s National Security Adviser is in Kiev today for conversations with Ukrainians. I shall be going out to Ukraine again myself very soon, and the Ukrainian Foreign Minister has visited the Foreign Affairs Council in Brussels more than once this year, so those contacts will continue. The UK Government does not have direct contact with the separatists—frankly, it is Russia above all that has the leverage over the separatists. The fact that impartial observers from the OSCE were abducted and illegally detained indicates the problems that we have in dealing with the separatists. There is no doubt that they have been getting—at the very minimum—arms and encouragement from the Russian side of the border, and it is Russia that has the power to make those people desist. 

Mr Thomas:  Although every country in Europe has been concerned about the actions, or lack of action, by Russia, those in eastern Europe have been particularly concerned, given their history. Can the Minister give any further indication of efforts to provide reassurance of British support, NATO support and wider European support for the security concerns that many of those eastern Europe states are now feeling? 

Mr Lidington:  The hon. Gentleman makes an important point. I visited all three of the Baltic republics and Poland in the last three months—I lose track, but I think that is right. On each visit, I have gone out of my way to express very strong United Kingdom support for their independence and territorial integrity. The Baltic republics, for obvious historical and geographical reasons, feel particularly vulnerable at the moment. 

The United Kingdom was, I think, the first European country to agree to commit additional aircraft to the Baltic air patrols and to commit troops to NATO exercises that have taken place in the Baltics in recent weeks. NATO is considering now what its stance should be as regards future commitments in the Baltic region, in the light of what Russia has done. NATO has also suspended its high-level co-operation with Russia. There is still contact at ambassadorial level but meetings of the NATO-Russia Council at ministerial level will not take place until further notice. 

The NATO summit in Cardiff this year will undoubtedly have a greater emphasis on article 5 and the central NATO doctrine of collective defence than perhaps seemed likely six or seven months ago before the Ukraine crisis started. It is very important that NATO continues to demonstrate that its promises are real when it comes to its members. A point that I made in Poland and in the Baltic republics again and again to Ministers, but also publicly in the media in those countries, was that article 5 of the NATO treaty applies in our minds every bit as much to Estonia, Latvia or Poland as it does to the United Kingdom itself. 

Mr Thomas:  Important though those public utterances would have been in the Baltic states and elsewhere, is not the history of the level of NATO activities in the recent past perhaps more important? Some representatives of eastern European Governments have put it to me that there had not been that much by way of NATO exercises in eastern Europe and that they had had some difficulties in getting sustained British interest in what activities had taken place. So any further information that the Minister can give to reassure us about the level of NATO activities in the immediate future would be helpful. 

Mr Lidington:  The Russian action in Ukraine has been a wake-up call to the whole of Europe and, frankly, to the United States as well. It had been hoped that Russia wanted to participate more in a rules-based international system and that was demonstrated, for example, by its wish to join organisations like the OECD and the World Trade Organisation. The Ukraine crisis has demonstrated that, sadly, the Russian Government appear to have a narrower, more old-fashioned notion of their interests and priorities. That means that NATO, like other international bodies, needs to reconsider what its approach should be. 

It is, of course, one of the basic elements of the NATO-Russia agreement that was negotiated at about the time that the Baltic republics joined NATO, that NATO forces should not be stationed permanently in countries adjoining the Russian Federation. There are leaders in the Baltic states in particular who argue that Russia’s actions mean that we should disregard those earlier commitments. I think there is much agreement in NATO already, including from the United Kingdom, that NATO has to demonstrate a more public and sustained commitment in the Baltic region than has been thought necessary in recent years. The precise form that that should take is something that NATO allies continue to discuss. As the hon. Gentleman knows, there has to be consensus in NATO in order to reach a common position. 

Mr Thomas:  Many parts of Europe are heavily dependent on energy from Russia. Will the Minister give us his assessment of the implications of the current level of conflict for energy supply not only to the UK, but to other parts of Europe? 

Mr Lidington:  Russia has a track record of being prepared to use energy as a political weapon, but against that has to be set the reality that earnings from energy sales are essential to the Russian economy, and Russia does not have obvious alternative markets to its European customers. Therefore, despite the breakdown of the talks between Russia and Ukraine over the terms under which Russia supplies gas to Ukraine, the Russian authorities and Gazprom have continued to make it clear that they will continue to let supplies flow through Ukraine to European countries further to the west. The degree of dependence on Russian energy among EU countries varies enormously. Some countries, such as Slovakia and Bulgaria, depend very heavily on Russian energy supplies. For others, such as us, it is an insignificant element in our overall energy mix. 

There is EU agreement that a much higher priority needs to be given at European level to energy security. That subject is worth a day’s debate in its own right,

because it touches on things as diverse as a single market in energy; the deployment of structural and cohesion funds to provide better interconnection between countries in central and eastern Europe; encouraging the development of different sources of energy; and supporting projects, such as the BP trans-Anatolian pipeline, that allow energy to be transported from non-Russian sources into the European market. I think that that area of energy security policy will be a very important priority for the EU in the months and years ahead. 

Mr Thomas:  Perhaps if Ministers secure the energy portfolio for the next British commissioner, a full day’s debate on EU energy security policy will be entirely appropriate. Reports in The Times today suggest that that might be the priority for Ministers. I do not know whether the Minister wants to comment on that, but let me ask him specifically about the nature of energy supply from Russia to Ukraine and to other countries on Russia’s border that have entered into association agreements with the EU, such as Georgia, where there has also been a tense and troubled debate about energy with Russia. 

Mr Lidington:  To take the hon. Gentleman’s last question first, Georgia is pretty much independent of Russia as regards energy. Its vulnerability to Russia is more in terms of its export trade in wine and other agricultural produce. Moldova, however—as he rightly suggests—would be very vulnerable to the use of energy as a weapon. We think that it is very important for the stabilisation of the Ukrainian economy that there is agreement on the conditions of gas supply from the Russian Federation to Ukraine, and we support the work that the European Commission is doing to try to facilitate an agreement between the two countries despite all the obvious difficulties that have been manifested in the breakdown of the talks recently. 

Martin Horwood (Cheltenham) (LD):  Does the Minister agree that the credibility of the sanctions that the European Union and others have already imposed is critical to the whole process, that the potential for escalation also has to be credible and that therefore the role of the EU in general in co-ordinating those sanctions and that potential for escalation is critical? The hon. and learned Member for Sleaford and North Hykeham is no longer in his place, but I completely agree with him in his report of the European Scrutiny Committee’s conclusions. This debate really is of such importance that it should be taking place on the Floor of the House. It is unfortunate that something of this importance has taken place only in Committee. 

First, I would like to hear the Minister’s response on the importance of the credibility of future escalations. 

Mr Lidington:  I completely agree with my hon. Friend on that. We know that the sanctions already introduced, coupled with the prospect that tighter sanctions could yet follow, have had an impact on Russia’s ability to access finance and on future inward investment plans of companies looking at Russia as an investment prospect. That helps to explain some of the gestures that the Russian Government have made recently that hinted at a willingness to seek an agreement, even if, in practice, we have not seen a sufficient change on the ground. 

I agree completely with my hon. Friend that the EU’s credibility would suffer enormously were its bluff to be called on the matter and it were not prepared to deliver on the additional sanctions that have been promised in the event of a worsening situation. 

Martin Horwood:  I would be interested to know how the Minister knows about the impact of the sanctions that have been implemented so far. It must be rather difficult to establish why capital has flown from the Russian Federation and why the growth forecasts have been reduced—they may be just the results of the conflict itself and of the destabilisation and general atmosphere of risk that now attaches to Russia, rather than due to the European sanctions. 

There is a possible conclusion that the European sanctions have had precious little impact at all, and that in practice we have done little to affect the situation. The morsels that have been thrown to us by President Putin—remembering that he is a good chess player—sound a little like the pawns that have been sacrificed while his queen is still at large. For instance, his recognition of President Poroshenko’s election was a positive step, but it did not make any practical difference to his support for the so-called people’s republics on the ground, the allowing of tanks to cross borders and the apparent matériel and political support that Russia seems to be giving implicitly to the rebels in the east of Ukraine. What evidence does the Minister have that European sanctions have had any impact whatever so far? 

Mr Lidington:  It is largely anecdotal, but it is based on our assessment from talking to business people with interests in the Russian markets and to Russia experts with many contacts inside the Russian Federation; people who discuss such matters with our embassy staff in Moscow and elsewhere. I would not argue that there is a hard, statistical base on which one could attribute a particular level of outcome to the sanctions, but the anecdotal evidence I have seen certainly suggests that, combined with American and other international sanctions, the EU sanctions have had an impact. 

I think that some of the symbolic measures have also had an impact. There was quite a lot of discussion about whether Russia’s exclusion from the G8, and the cancellation of the Sochi G8 summit, would make any difference. Our assessment is that the Russian Government do not like being isolated and cold shouldered in such a way. They pride themselves on being up there with the big players in the world, seen as equal partners by other leading powers, and it stings when they are excluded in that fashion. 

Martin Horwood:  Having asked about the impact on President Putin, may I also ask about the diplomatic effort and influence on President Poroshenko and his regime? First, after the Quartet discussion on 30 June, was the British Government aware that an almost immediate escalation of Ukrainian military action was to follow? Whether that was right or wrong, that appeared to be an almost immediate failure of the diplomatic process. Secondly, does the Minister know what measures the Poroshenko regime is taking to try to reassure Russian speakers in Ukraine, such as further guarantees of future possible political rights and protection of language rights?

Mr Lidington:  On the first point, I do not have the exact sequence of events by the hour with me, but our embassy in Kiev and our ambassador personally are well plugged into the Ukrainian Government and have extremely good relations with the President’s team and other key Ministries. It is fair to say that the Ukrainian authorities are still trying to rebuild effective, cohesive governance within their system and we are trying to provide them with technical help to do that. 

On my hon. Friend’s second question, acting President Turchynov had already vetoed the rather foolish law passed by the Rada soon after the flight of Yanukovych that sought to downgrade the official status of the Russian language. President Poroshenko has made it clear during his election campaign and since his victory that he sees himself as a President for everyone in Ukraine—whether in the east, west, north or south—and he has committed to respect the importance and status of the Russian language and the various communities living in Ukraine. 

The leaders in Kiev need to work even harder to deliver that message to the Russian-speaking areas of the east and south of their country. That is something that we continue to urge them to do and to give a high priority to doing. 

Kelvin Hopkins (Luton North) (Lab):  Following the question from the hon. Member for Cheltenham, there are Russian-speaking minorities in western Ukraine, but perhaps more vulnerable is the Ukrainian-speaking minority in the east. Both groups may suffer from intimidation and vulnerability. The Minister said what is happening in western Ukraine, but what is being done to try to ensure the safety of that minority of Ukrainian speakers in eastern Ukraine? 

Mr Lidington:  The hon. Gentleman makes a good point. The big problem in the areas in eastern Ukraine under the effective control of the separatist militias is that observers or inspectors from international organisations cannot access them. The OSCE monitoring team could have carried out that function, but, as the abductions demonstrated, those OSCE observers exposed themselves to a very dangerous situation by venturing into Donetsk and Luhansk. 

We face the same problem in Crimea, where the de facto authorities still refuse to allow international human rights organisations access to talk to the Tatars or the Ukrainian minority. Throughout the crisis we have heard strident allegations from Russia that there was a threat to Russian speakers inside Ukrainian territory. That has never been supported with concrete evidence, nor have people such as the OSCE’s representative on national minorities— 

The Chair:  Order. The hour allotted for questions is almost over, but it appears there are still Members who wish to ask questions. Under the provisions of Standing Order No. 119(9), I am extending the question time to allow the remaining questions to be asked. We shall move on to the debate after no more than half an hour, and extra time given for questions will be deducted from the total time for debate. We shall finish at no later than 11.25 am. I would appreciate some brevity in further questions and answers. 

Mr Lidington:  I will just finish what I was saying. People such as the OSCE’s representative on national minorities have not reported any such threat to Russian speakers inside Ukraine. We would dearly like proper access to be given to those areas of eastern Ukraine so that they can talk to the minorities as the hon. Gentleman wishes. 

Kelvin Hopkins:  I thank the Minister for his answer. One would hope that at least some pressure would be put on Russia to use its influence to ensure there is no persecution of minorities. 

There is an added layer of complexity in the west’s relations with Russia because Russia has been very helpful in getting the Assad regime to get rid of its chemical weapons—a significant advance. More recently, it has provided some help to the Iraqi Government in their fight against ISIS. Obviously, the west would seem to be working with Russia on those occasions rather than against it. Would the Minister care to comment on our complex relationship with Russia? 

Mr Lidington:  Doing business and having some contact and engagement with Russia are unavoidable if we want to secure progress on a number of significant international issues. The hon. Gentleman refers to the crisis in Iraq; he could equally have mentioned the negotiations with Iran over its nuclear programme, where we continue to talk to Russia routinely. We could talk about global initiatives against the narcotics trade and terrorism or, indeed, the future of Afghanistan at the end of the international security assistance force mission. It is, indeed, a difficult and complex relationship and we do not think it is right to aim for complete isolation of Russia from all international conflict. We are trying to continue to engage with Russia, including on Ukraine and Russia’s actions there, while making it very clear in our words and actions that we cannot possibly accept what it has done and is doing in Ukraine. 

Mr Whittingdale:  I welcome the strong support that the British Government have always shown for Ukraine’s signing the association agreement with the European Union. The Minister will be aware of the final outcome, with the association agreement signed just a few days ago on 27 June. Does he agree that one of the strongest messages we could send to demonstrate our support for Ukraine would be ratifying that agreement as soon as possible? Will he give any indication of when the UK can move to ratify the association agreement? 

Mr Lidington:  I do not yet have a date for that. That will obviously have to be placed before Parliament but I share my hon. Friend’s wish to see that done as quickly as possible. 

Mr Whittingdale:  Is the Minister aware of the situation with Oleg Sentsov, the Ukrainian film director who was arrested in Simferopol and transferred to Moscow in May? Many of the world’s greatest film directors—Pedro Almodovar, Wim Wenders, Andrzej Wajda and, in this country, Ken Loach and Mike Leigh—have written to President Putin, appealing for him to release Mr Sentsov. Is he aware of that case and are the British Government doing anything to raise our concern about it with the Russian Government? 

Mr Lidington:  I am not briefed on that particular case this morning. Having heard my hon. Friend, I will look into it as a matter of urgency and ensure that we are making appropriate representations.

The Chair:  Order. If there are no further questions, we will proceed to the debate on the motion. 

Motion made, and Question proposed,  

That the Committee takes note of European Union Documents, Council Decision 2014/145/CFSP of 17 March 2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, and Council Regulation (EU) No. 269/2014 of 17 March 2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine; and welcomes the Government's support for the measures proposed by the European Commission to enable a swift response, if needed, to continuing efforts by the Russian Federation to threaten the sovereignty and territorial integrity of Ukraine.—( Mr Lidington .)  

10 am 

Mr Thomas:  It is a pleasure to serve under your chairmanship, Mr Crausby. 

I will begin by dwelling a little on the approach taken by the European Scrutiny Committee. The hon. and learned Member for Sleaford and North Hykeham appeared, on behalf of that Committee, to be a little frustrated with the Government for not taking this debate on the Floor of the House, and the apparent tardiness in responding to the aspiration of the Committee for the debate. 

It would be fair to suggest that the ESC has become more assertive of late. Perhaps the hon. and learned Gentleman is one reason for that. I am sure my hon. Friend the Member for Luton North is another reason, notwithstanding the Chair of the ESC himself. I am sure the House is better informed about EU affairs as a result. I hope that the ESC, along with the Opposition, will continue to press the Government for more clarity about their intentions concerning the UK’s potential EU commissioner posts. 

Why is that relevant to this debate on Ukraine? If the Government were interested in the trade or the energy portfolios, or in continuing to hold the role of High Representative, there would be a direct Ukraine brief. Given that it appears that the Government have given up on holding a more substantial economic brief, it would help if the European Scrutiny Committee pushed a little on that issue. 

It would also help if that Committee probed, in the light of continuing concern across the House about Ukraine, what other countries might go for the crucial briefs of energy security or High Rep, so that the House can ascertain whether there will be a shared sense of continuing pressure on Russia over Ukraine. For example, the Italians are very publicly interested in the High Rep position. It would be good to hear a little more from the Minister about how the debate is going across the EU about the future relationship with Russia. It would be particularly good to hear, given the interest of the Italians in the High Rep position, whether they continue to take the same strong line that the UK has taken so far. 

We are discussing this issue as a result of the ESC’s strong interest in and support for the sanctions that were imposed in response to Russia’s actions in Crimea

and the level of embezzlement by former President Yanukovych and members of his regime. Clearly, events have moved on substantially since the Committee did its work in this area. To be fair to both the Minister and the Foreign Secretary, they have kept the House updated through statements on the Floor of the House about the situation in Ukraine. I hesitate to say that it would be appropriate to have another such statement soon. Nevertheless, I ask the Minister to give us further assurance that he will keep the House informed about the situation in Ukraine, given the considerable concern about the level of fighting there, the number of hostages being held in eastern Ukraine by the separatists and, more generally, the relationship between the EU and Russia. 

As I indicated, we will not divide the Committee. We support the steps the Government are taking with our EU allies. The Minister will have a sense of the official Opposition’s concerns about the need for NATO to continue to look at the issue of military exercises, because it reassures our friends in eastern Europe. I hope the Government are still friends with Poland after the comments of its Foreign Minister about the Prime Minister’s lack of success with Mr Juncker and, more generally, his relationship with eurosceptics in the Conservative party. Poland deserves our support, as do the Baltic states and other countries in eastern Europe, on this and many other issues. 

It would be good to hear a little more from the Minister about the impact of the sanctions. I welcome his assurance that he will give us more information during or after the debate about how many of the former President Yanukovych’s regime’s assets that were in Europe have been seized. Similarly, it would be good to hear whether he has any information about the assets that have been frozen in the US, although I appreciate that may be more difficult. It would also be good to hear more information about the discussions that have been had with other EU member states, the City of London and other key economic players in the UK about the impact of any further escalation of sanctions. 

I welcome the information the Minister has given about the French warships. It would be helpful if he could give more detail about the nature of the British involvement, or not, in the Quartet—or contact group—of the French, the Germans, Mr Poroshenko’s regime and the Russian Government. The hon. Member for Cheltenham probed the Minister on the extent to which we knew the ceasefire was going to be unilaterally withdrawn by the Government of Ukraine, and the extent to which the UK Administration supported President Poroshenko’s decision. I know there were allegations of repeated violations of the ceasefire, but it would be good to have a reassurance about how much contact there is with French and German colleagues on the issue of Ukraine. 

I welcome the fact that the Minister has not only been to Ukraine but plans to return to Kiev, which is a demonstrable sign of Britain’s commitment to the people of Ukraine at this difficult time. As I indicated, we support the Government’s stance thus far, and I have no intention of dividing the Committee. 

10.10 am 

Mr Whittingdale:  I do not want to detain the Committee for too long as we have covered quite a lot of ground, but it is worth reflecting that the original trigger for the

sanctions we are discussing this morning was the secession and then annexation by Russia of Crimea. Crimea remains in that state and there is a real danger that it will join those other Russian enclaves such as South Ossetia, Abkhazia and Transnistria in being Russian dominated within the territory of another sovereign nation. I hope the Minister will confirm that, although attention is understandably moving to eastern Ukraine where there is much more severe violence and bloodshed, we will not simply accept the annexation of Crimea as a reality and that we will continue to argue strongly that it is illegal and that sanctions will and must remain in place for as long as Russia continues to occupy Crimea illegally. 

We obviously have the list of 61 individuals, and the Minister said that the threat of further sanctions has already had an effect in things like the flight of capital and reduced growth forecasts. Russia has done nothing to reduce its presence in Crimea or to in any way recognise the illegality of what has happened there, but instead has increased pressure in eastern Ukraine, which demonstrates that the sanctions we have imposed so far have had little effect. I hope the Minister will consider what measures we can now take on top of that to deliver the economic threat. It is all very well having a threat of sanctions, but if that threat is not delivered at some future date, the consequences my right hon. Friend described may not necessarily last. 

The Ukrainian Government have so far shown remarkable restraint. The peace plan that was put forward by President Poroshenko was entirely sensible. It is very similar to the measures that were called for by the European Council. The Opposition spokesman referred to the fact that the ceasefire had been withdrawn. When it became apparent that not a single element of that peace plan had been accepted and that there had been no moves by the separatists even to enter into proper negotiation, let alone deliver on some of the undertakings such as the release of hostages, it was inevitable that the ceasefire would have to be brought to an end. The Ukrainian Government will have to consider further measures to reassert the rule of law within those territories currently occupied by the separatist movement. 

I remain concerned about the extent to which the separatists are being backed by Russia. I quite understand that the Minister cannot give too many details about the information we have, but there is quite a lot in the public domain already about the extent to which there has been military and financial support. He referred, as I did in my earlier question, to the propaganda, which is having a damaging effect. It is causing considerable concern to people living in Ukraine and, indeed, influencing western coverage of events there, but it is also having a damaging effect in Russia. 

Russia and Ukraine have a long and complex history together. Many Ukrainians have relatives in Russia—there has been marriage—and they have always regarded each other as close friends. Yet as a result principally of the propaganda of the last few months, the latest opinion surveys show that 80% of Russians agreed with the annexation of Crimea. More seriously, Katya Gorchinskaya, a journalist from Kyiv Post who was talking in this room not so long ago, said that the latest poll had shown that while 80% of Russians regard the

west as their enemy, 30% of Russians now regard Ukraine as an enemy as well. These two countries have been very close historically, geographically and culturally, yet now there is a breakdown of relations between them. I fear that that is encouraging President Putin in the actions he is pursuing. We need to continue to give all the support we can to Ukraine. I understand what the Minister says about the need to go through the usual parliamentary scrutiny of the ratification process, but ratifying the association agreement as soon as possible would be a powerful step. We need to consider further measures beyond those that would be taken fairly soon. 

My one concern is that on the list of individuals subject to sanctions, there are quite a few members of the Duma who have been included because of their pronouncements in support of Russian action in Crimea. Although I am extremely critical of Russia, my right hon. Friend will know that I am not just chairman of the British-Ukraine group in Parliament, but the vice-chairman of the Russia group. That is because I strongly believe that we have to go on talking. Dialogue is essential. My concern is that putting members of the Duma on the sanctions list will lead to retaliation and a refusal to enter into talks with Members of our Parliament. The message I have received is that there is a perception that an attack has been made on the Russian Parliament, which will lead to retaliation. 

It would be damaging if the exchanges that take place at parliamentary level can no longer occur. One of the values of all-party parliamentary groups is that it is possible to build up relationships and try to increase understanding at parliamentary level, even when things have become rather more tense at ministerial level. That is my only concern. It is essential that we continue to demonstrate that the actions Russia has already taken are wholly unacceptable and that the actions it continues to take in eastern Ukraine cannot go unpunished. 

10.17 am 

Mr Jim Cunningham (Coventry South) (Lab):  I will not take too long. Basically, I support the Government on the issue. Did this present problem not start five or six years ago with the issue between Russia and Georgia over the defensive shield to be imposed by the Bush Administration in Poland? We should be well aware that there are Russian troops still in Georgia; they have not moved. History tells us that there are going to be big difficulties getting the Russians to withdraw from Crimea. It is important to maintain the sovereignty of Ukraine, but I am sure the Minister knows as well as I do that there has always been an issue between Russia and Poland over Ukraine. History tells us that. 

I am not convinced that there is unity in Europe concerning the sanctions. About 30% of Europe’s energy comes from Russia, and I notice that the Germans have been very quiet. They have not gone over the top on this issue, or made any major statements on where they stand. If we are going to make any progress, the route is through the Germans. 

Going back to a point that was made earlier, we need Russia to try to sort out some of the problems in the middle east. I agree with the Minister that Russia’s stance in the world is a very complex issue, but I have always thought that the problem with Russia may lie in the G7 summit in, I think, 1991. Russia needed aid and

it did not get it from the west, although it was egged on down the road of openness, glasnost and democracy. Russia was humiliated, and there is Russian pride—there may well be Russian imperialism too—involved in the situation now. It is saying to the west, “You aren’t going to shove us around anymore.” We have to be careful that we do not get ourselves into a difficult situation with Russia because we need Russia, not least to get a settlement with Ukraine. Does the Minister know whether there have been discussions between Georgia, Poland and Russia about the situation in Georgia and the relationship between Poland and Russia? There is a key there, somewhere. That is as much as I want to contribute, but we need more convincing on the sanctions issue. 

10.20 am 

Martin Horwood:  I shall start by repeating something I said earlier for the benefit of my hon. and learned Friend the Member for Sleaford and North Hykeham , who I think had popped out briefly, which is that I agree with the European Scrutiny Committee’s complaint that the debate should have taken place on the Floor of the House. That would have been absolutely appropriate; with all due respect, it is too major an issue and piece of policy to have been left to a European Committee. 

At the beginning, the Minister set out that the objectives of the Government were to maintain the independence and sovereignty of Ukraine in a democratic, stable and peaceful state and under a rules-based international system. That is a good and laudable aim, and I am sure that it is correct but the Government also need to focus clearly on the risks that the Ukrainian situation poses for Europe and the international community in general. 

The first is the real risk of war in Ukraine. We seem to think that these things will always work themselves out, but that has not always been the experience in other parts of the Russian hinterland, and Russia’s position is still belligerent. It uses belligerent language, and has had a belligerent attitude to energy supply and to the mobilisation of its troops. It is allowing things such as the three tanks crossing the border into eastern Ukraine on 12 June, which could be seen as testing the water in military terms. There is still is the obvious implication that Russia is arming and supporting the two rebel people’s republics and some militaristic supporters in the east. The risk of the situation escalating into a full-scale war is still pretty real and the diplomatic effort needs to be focused on trying to avert that risk. 

The second risk is of a Georgian or Moldovan future for Ukraine, where a huge swathe of its territory becomes, in effect, a de facto independent state, as in the case of Moldova, where Transnistria has been carved out. It is recognised by almost nobody internationally, but is still lost to the sovereign state. That is already the de facto position in the east of Ukraine. The European Union has not imposed massive sanctions in response to that situation so it is difficult to see quite how we avoid it continuing. It will take some other great efforts to try to resolve it. That risk is obviously real and needs to be focused on. 

The third risk, even if those positions are resolved—no war breaks out, the rebel republics get wound down and those areas are brought back into the full and proper government of Ukraine—is of what, in the cold war, was called Finlandisation where, in effect, the intimidation

of the sovereign Government of Ukraine has been so great that in every energy, foreign policy and domestic decision they take they are constantly looking over their shoulder at the threat from Russia. In a sense, that might be one of President Putin’s more desired outcomes—to manage to avoid the worst opprobrium of the international community by not having to do any further territorial grabs or things that offend the international rule of law but, nevertheless, to acquire a level of influence over Ukraine that is virtually tantamount to direct political control in some respects. 

Those risks are still present, and the European Union and the international community need to focus on them. The Minister will have gathered from my earlier questions that I am a little sceptical about what impact the sanctions regime imposed so far has had. The important thing is the credibility of the threat of escalation. Some are medium-term threats but those are difficult because we are in a difficult situation with our eastern European partners, which are clearly very anxious but are dependent on Russian energy supplies, trade and so on, so the European Union cannot implement many drastic sanctions. The credible threat must be longer term efforts, for example, to build up energy independence; reduce dependence on trade; provide a credible security arrangement for the eastern NATO countries; and reinforce the fact that, over time, the consequences for Russia will build up and will be serious. 

There are three objectives that I believe the Government should pursue. The first is to de-escalate the immediate risk of war and to keep that diplomatic effort going. The Quartet conversation on 30 June did not seem to have very beneficial effects, so it might be worth redoubling the diplomatic effort on that front. The second objective is to develop those credible long-term economic and political strategies, particularly in relation to energy supply. The third objective has to be to look at the eastern NATO countries and the eastern members of the European Union, particularly Latvia and the other Baltic countries, and—as the Minister described in his opening remarks—ensure that there is a very credible NATO defence posture. 

It seems terrible that we are even discussing things such as this almost exactly 100 years after the escalation of events that led to the first world war, but the truth is that what happened then was a combination of miscalculations in response to aggression and people not believing that other people would respond in the way that they threatened. The communication of our clear defence posture is one important element of the response to this crisis. The Government need to communicate that very clearly. It is very sad to be discussing on this centenary these kinds of geopolitical risks in Europe once again. The events of 100 years ago need to give us real pause for thought. No one expected those to lead to greater conflict; it was miscalculation and underestimation that helped to make that conflict real. The stakes are very high in Ukraine and in the east of Europe. The Government and their European partners, working together, need to focus on the risks and strategies needed to avert them. 

10.27 am 

Mr Lidington:  I am grateful to all members of the Committee who have spoken in the debate and I will try to respond to their points. Let me start with the hon.

Member for Harrow West. I do not want to dwell much on procedure, but I take note of those colleagues on both sides of the Committee who have argued for a debate on the Floor of the House. I point out, though, that although it is true that it is just over three months since we last had a debate on Ukraine on the Floor of the House—that was on 18 March—my right hon. Friend the Foreign Secretary has made no fewer than four oral statements on Ukraine this year, with the most recent on 13 May. At those times, hon. Members have had the opportunity to question the Foreign Secretary in detail. 

My right hon. Friend the Prime Minister has made three statements, on 12 March, 11 June and 30 June, following European Councils at which Ukraine was one of the key topics of discussion, so there were also opportunities on those occasions. The Foreign Secretary gave evidence to the Foreign Affairs Committee in which he covered Ukraine on 18 March. And of course the subject has come up at Foreign Office questions and at Prime Minister’s questions. 

The Foreign Secretary had been looking forward to the opportunity to debate Ukraine again as part of the debate following the Queen’s Speech. He was surprised and disappointed when, for the second year in succession, the Opposition chose not to designate any of the days for a foreign policy debate. The hon. Member for Harrow West might like to take that message back to some of his colleagues, if he is seeking opportunities to debate important foreign policy topics. 

Early in the debate, the hon. Gentleman asked about the separatists and the numbers of people involved. It is difficult to quantify that. The irregular nature of the separatist forces means they cannot be counted in quite the same way as regular forces. There is evidence from media sources and anecdotal reports of languages being spoken that are from areas of the Russian Federation such as the north Caucasian republics, so the separatists do not, in many cases, seem to come from the provinces of Donetsk or Luhansk. As they have shot down a number of Ukrainian Government aircraft, it is clear that they are well equipped, which again suggests that they have been getting arms and matériel from the Russian Federation because there seems to be no other obvious source of such supplies. 

The hon. Gentleman referred to the ceasefire. The ceasefire, which had already been extended once, was due to expire on 30 June, so it is not strictly accurate to say that President Poroshenko took the decision to revoke the ceasefire. He said that he would let the ceasefire lapse at that point, it having been extended already, because there had not been an adequate response from the Russian side. We continue to urge Russia to respond to the Poroshenko peace plan because it seems to be a constructive way forward to try to de-escalate the conflict, which members on both sides of the Committee have said they want. 

Mr Thomas:  Will the Minister set out what discussions he has had with Europe’s High Representative, Baroness Cathy Ashton? As part of her mandate, she has presumably had a series of conversations with President Putin and other key players in Russia. She perhaps has a better sense of what they are thinking. 

Mr Lidington:  The Foreign Secretary has talked to her both at Foreign Affairs Council meetings and bilaterally outside that forum. Although Baroness Ashton has been involved with Ukraine, it has—largely as a result of the way in which President Putin has chosen to play it—been through contact with individual European member states and the United States Administration. We can argue whether President Putin is acting rightly or wrongly, but he takes the view that the EU has been part of the problem. He has a well known objection to the deep and comprehensive free trade agreement, so he does not see the European Union as an acceptable mediator or broker of talks. For that reason, the High Representative has a less prominent role than she played on other foreign policy issues, most notably in the western Balkans. 

The hon. Gentleman also asked about the differences of view in the European Union. Common foreign and security policy positions at EU level exist only if they are agreed unanimously, which is not something I would wish to change, but the absence of majority voting arrangements for CFSP clearly means that it is a tougher task than in other policy areas to get an overall European agreement. It is a matter of record that countries such as Poland and the Baltic republics in particular have taken a pretty harsh line on Russia and the appropriate European response. Other European countries have argued openly that such an approach would be counter-productive and that there needs to be further effort to try to persuade Russia to change policy. 

It is obviously for each European Government, accountable to their own Parliament, to set out their own approach and justification. I comment in passing that I find it astonishing at this particular time that Spain, which is both an EU partner and a NATO ally, should still be welcoming Russian warships on visits to one of its Moroccan enclaves. That has happened only within the last few days and it seems to me to send the completely wrong signal to Moscow at this time. 

Mr Thomas:  I am glad that we are still talking to the Poles, it would appear, but can I ask the Minister about Germany and its stance? There has been some speculation about the extent to which the Germans would be willing and serious about increasing the level of sanctions against Russia. I wonder whether he could give us some clarity on that. 

Mr Lidington:  It is for the German Government to say whatever they want to in public, but I think Chancellor Merkel, in particular, has been very outspoken in making it clear that she regards Russian actions as completely unacceptable and a threat to European security. Germany has been very active. Both Angela Merkel and Frank-Walter Steinmeier have been very active indeed in trying to find a way forward, and it is important and in all our interests that they are successful. There can be no guarantees of that, but I think that Germany clearly wants to find the right mechanism for persuading President Putin to back down and allow for the full restoration of Ukrainian sovereignty. 

My hon. Friend the Member for Maldon asked about Crimea and quite rightly reminded us that we should not forget about the annexation. The proposals that are currently being taken forward at EU level include a ban on the import of products of clear Crimean origin—a step approved by the Foreign Affairs Council on 23 June —the suspension of assistance programmes within Crimea,

except those that support civil society and people-to-people contacts, and a general bilateral commitment by both the EU and Ukraine to talk to each other about how EU-Ukraine agreements should apply in practice, given that for practical purposes, the writ of the Ukrainian Government does not extend into Crimea at the moment. The EU has also formally reminded the Russian Federation that the territorial scope of all EU agreements with Russia refers to the internationally recognised territory of the Russian Federation that excludes both Crimea and Sevastopol. That programme of action is being implemented at the moment. The precise steps that are needed, whether in Brussels or at member state level, vary depending on which element of detail we are talking about. However, I can promise my hon. Friend that we are not simply going to quietly forget about what has happened in Crimea, because the precedent that that annexation set and the threat implicit, too, in the Putin doctrine—that there is an inherent right for the Russian Government to intervene militarily if they think it necessary in support of Russian speakers or ethnic Russians anywhere in the world—are profound challenges to the way of doing business between European and Eurasian countries that we thought had been agreed in the Helsinki final accords and reaffirmed at the time of the break-up of the Soviet Union in the early 1990s. 

My hon. Friend also asked about sanctions plans. An important point I want to make is that it was agreed all round the EU table that tier 3 sanctions needed to be thoroughly prepared. We all wanted to avoid a situation in which renewed Russian aggression caught Europe on the hop without our having thought through the practical implications of any new sanctions package. We now have a much more carefully prepared set of plans on tier 3 sanctions—a menu of options from which European leaders can choose if they decide further measures must be taken. 

I join my hon. Friend the Member for Maldon in applauding the restraint shown by the Ukrainian Government. It is extraordinary how they have managed to contain their reaction in the face of intense provocation. I also agree with his point about the risks relating to the growth of Russian nationalism. There is no doubt that President Putin has gained significant popularity in Russia through the invasion and annexation of Crimea. To some extent he is now riding a nationalist tiger, and it is perhaps difficult for him to dismount without loss of face. 

It is important and necessary that we continue to make it clear that we think it is right and inevitable that a Government in Kiev will need to have a constructive relationship with a Government in Moscow, for all the reasons of history and geography to which my hon. Friend referred. Of course, President Poroshenko has said that openly. We must also continue to say, in both our public communications and our private conversations with the Russian Federation, that we do not see this as a zero-sum game. It is of course important that the rights of Russian speakers in Ukraine are respected, but it is also in the interests of Russia and its people to have a Ukraine that is more prosperous and politically stable and that has taken effective action against corruption. 

If we go back to the collapse of the iron curtain, the GDP of Poland and Ukraine was very similar. In the years since, we have seen enormous growth in Poland’s wealth and ability to trade with its neighbours, including

Russia, which has benefited directly from the political stability and economic growth we have seen in Poland. The same could be true again: Russia could benefit from political stability and greater prosperity in Ukraine. We must keep explaining to Russia that we see no reason why it should perceive such trends as any kind of threat. 

The hon. Member for Coventry South referred to the 2008 Georgian war. It is extremely important that the international community does not repeat the mistake made after that conflict, when it quietly drifted back to business as usual. I take his point in the spirit that I hope he intended. 

Mr Thomas:  Linking back to the point made by my hon. Friend the Member for Coventry South, the role of NATO will be important in helping to underline to President Putin the fact that things are not simply going to go back to a previous way of doing things. The Minister said that the sanctions regime is being prepared much more carefully now than perhaps it has been to date. Will he tell us some more about the discussions that are taking place in NATO about military exercises and the signal that might be sent? Can he reassure the Committee that cuts in defence spending have not affected our ability to take part in NATO exercises? 

Mr Lidington:  As I said to the Committee earlier, we were recently among the first countries to commit ourselves to taking part in NATO exercises in the Baltic. Clearly, NATO will have to continue to review the scope and frequency of its exercises in the light of what has happened and because of the need to reassure those members of the alliance that feel threatened. That work will continue. This is something that requires NATO consensus and there is very active discussion in Brussels at the moment. I think we will see some outcome from that at the NATO summit in Cardiff. 

The hon. Member for Coventry South also spoke about the importance of not forgetting the significance of Russian national pride. I agree with that and with his analysis that there was a strong feeling in Russia that it had been humiliated in the 1990s, and that there was a certain relish in feeling that it had a strong leader who would stand up for Russia in the face of the world. Of course, we cannot see that sense of Russian national pride or resentment as justifying the creation of a special sphere of Russian influence over the republics that were once part of the Soviet Union. It is important that Ukraine, Moldova, Georgia and the others are treated as sovereign independent countries that are free to take their own decisions about what they do nationally and internationally. 

Mr Cunningham:  I am not an expert on Russia, but the point I was trying to make was that there is a degree of Russian pride involved in these things—and sometimes pride comes before a fall, by the way. They should not let their pride get in the way but it is possible to understand their reactions to some of the events in the world. 

Mr Lidington:  I do not disagree with that. Although I am tempted to explore questions to do with Russia further, it would be straying a bit outside the remit of today’s debate. 

The hon. Gentleman also asked about the relations between Poland and Russia, and Georgia and Russia. Poland continues to talk to Russia. Foreign Minister Sikorski met Foreign Minister Lavrov a few weeks ago, so certainly those contacts continue. As the hon. Gentleman knows, the Kaliningrad enclave borders Poland directly, so that is an unavoidable fact of Polish politics. 

When the current Georgian Government came to office, they made a big effort to try to improve relations with Russia. They had high hopes of that and I think they have been somewhat disappointed at the outcome. The Russians have proved very reluctant to open up to Georgia. As several members of the Committee have commented, we need to be vigilant in the wake of the signature of the association agreements with Georgia and Moldova about the risk of Russia seeking to retaliate against either or both those countries. 

My hon. Friend the Member for Cheltenham spoke about the risks of war in Ukraine. I cannot rule that out but it is important that we do not buy into the Russian language of a civil war going on in Ukraine. There are very determined separatist groups financed, armed and organised from outside Ukrainian territory, who are trying to subvert the legitimate authorities in Ukraine. All available evidence from previous elections and opinion polling in Ukraine is that most people, even those in Donetsk and Luhansk, while wanting respect for themselves and their cultural and linguistic traditions, see themselves as part of an independent Ukraine and do not want to be subsumed into Russia. 

I think the likely motivation for Russia is less to foment all-out warfare than to have another unresolved conflict, along the lines that we have seen in Transnistria, Abkhazia or South Ossetia already. I agree with my hon. Friend about the importance of seeking to de-escalate. That is precisely why we are supporting all initiatives, such as that in Berlin today, to try to find a way forward, why we continue to urge Russia to engage with and implement the Poroshenko peace plan and why we continue to keep channels open to Russia. The Prime Minister has talked to President Putin on numerous occasions during the crisis. Despite our well known rejection of what Russia has done, it is vital that we keep the channels open and hold open the opportunity for Russia to find another way out, rather than press ahead with perhaps worsening armed conflict. 

My hon. Friend the Member for Cheltenham was also right in his references to the need for long-term political and economic strategies. I talked about both what NATO needs to do and the new priority for energy security in the European Union earlier, so I will not repeat what I said then, but an additional important element will need to be a sustained international commitment to support the Ukrainian Government in trying to build an effective, functioning system of

government, in seeking to root out corruption, which frankly is endemic in Ukrainian politics and society, and in strengthening its economy. 

The steps the European Union is taking following agreement on the DCFTA to phase out rapidly EU tariffs on key Ukrainian exports will be an important element in demonstrating to Ukraine that there are real opportunities from that action. The International Monetary Fund’s support package to try to provide macro-economic stability to Ukraine is also an element, as is the European Union’s support package of measures designed to aid reform. 

As I mentioned earlier, we and some other European countries are also providing technical assistance. In our case, to take two examples, both the National Audit Office and the National Crime Agency are giving expert advice to the Ukrainians on how they can better manage public finances and provide transparent, reliable systems of accounting and on how they can tackle the serious problem of organised crime and corruption in their territory. On our part, the Government are strongly committed to ensuring that that work continues. 

I am pleased that there has been such solidarity in the Committee this morning, both in our rejection of aggressive Russian action in Ukraine and in our support of Ukraine as she tries to build a more democratic and prosperous future for all her people. 

Mr Thomas:  I apologise for interrupting the Minister’s flow in his conclusion. He said that, during the debate, he would try to give more clarity on the scale of funds seized. If he cannot do that now, will he undertake to write to us? 

Mr Lidington:  It is not that I do not have the information available for the debate, but that the European Union does not yet have information from the financial institutions that would allow us to give that sort of detail. I undertake to write to the hon. Gentleman and the Committee when that information is available. 

Question put and agreed to.  

Resolved,  

That the Committee takes note of European Union Documents, Council Decision 2014/145/CFSP of 17 March 2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, and Council Regulation (EU) No. 269/2014 of 17 March 2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine; and welcomes the Government's support for the measures proposed by the European Commission to enable a swift response, if needed, to continuing efforts by the Russian Federation to threaten the sovereignty and territorial integrity of Ukraine.  

10.53 am 

Committee rose.