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Lord Sewel: What I am advising the Committee--I expect my noble friends to follow that advice--is that we wish to see the Bill remain as it is proposed without any amendment whatsoever, because that is the most straightforward way of dealing with the issue in principle of deciding whether or not the people of Scotland wish to have a parliament with the power to vary taxation. That is the matter of principle. I believe that that is the way in which we ought to proceed.

Lord Simon of Glaisdale: I am most grateful to all those who have taken part in the debate. As I indicated at the outset, the object was to canvass the opinion of this Chamber on this crucial matter in relation to

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devolution and therefore in relation to the referendum. Naturally, I am all the more grateful to those who preferred my draft to the others. I was not surprised that my noble friend Lord Perth preferred his amendment but it is far too late for me to start quarrelling with him.

The speech of the noble Lord, Lord Mackay, seemed to me to be most effective and his points were not answered. My only cavil was that there escaped from him the typical reaction to the Treasury of a former Minister of a high spending department.

Before I come to the words of the Minister, I should like to make two comments. First, from the outset I have, I hope, made plain that I believe that a Scottish parliament should have revenue powers. I entirely agree with what the noble Lord, Lord Ewing, said about that both at Second Reading and today.

Secondly, power to vary income tax is, I believe, manageable. Power to vary other taxes would be quite impossible. The Layfield Report came down on practical grounds against local income tax. But I am assured by great pundits that modern technology has advanced beyond that point and that, indeed, by the summer there would be no difficulty in a local income tax, either local in England or local in Scotland.

The Minister replied plausibly. But, as a supporter of this Bill, I was deeply disappointed and indeed grieved that, on this crucial matter, he did not answer the point put to him by the noble Lord, Lord Strathcona: what is wrong with my amendment? In fact, the noble Lord, Lord Sewel, appeared to concede that that expresses what the Government wanted to do. But what he said concerned quite a different question: tax varying. He did not deal at all with the fact that that is an extremely vague phrase and that it could be--is likely to be--used by those who would go considerably further than the Government. The Minister said: "We are asking you to legislate now. We are asking you to legislate in ignorance of the White Paper, but in the White Paper all will be divulged". Members of the Committee may remember the prospectus for the South Sea Company, where investors--speculators--were invited to invest in a scheme subsequently to be resolved and divulged.

This Chamber has been asked to legislate in this Bill and it is simply not good enough to say that, although the Bill suggests an unlimited power of taxation, when we come to the present summer reading of the White Paper it will all be cut down. That is simply not good enough.

As I say, I am disappointed because on balance I support the Bill and I also believe that there is scope for a system of referendum in our parliamentary democracy. But not this referendum. I agree with the noble Lord, Lord Steel, and the other speakers from the Liberal Democrat Benches that this referendum is entirely unnecessary.

The noble Lord, Lord Sewel, and other noble Lords--including the noble Lord, Lord Williams of Mostyn--said that the electorate made it perfectly plain at the last general election that they wanted a devolved parliament in Scotland and a devolved assembly in Wales. The former is probable; the latter is extremely questionable. Why then do we need this referendum? For two reasons

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only. The first is that the answer to the first question, "Do you want a Scottish parliament", would strengthen the hands of the Government in bullying Parliament on these matters--particularly your Lordships. The second question was added late in the day because, as I suggested, Mr. Blair got into trouble in Scotland.

We really must have an answer in relation to the effect on Scottish finances of even the limited power suggested by my amendment. We were not told that. We were told that if income tax is reduced by 3p then the block grant will also be reduced by an equivalent amount--£450 million. That sounds as though there will be a double shortfall of revenue in Scotland. We were not told what would be the financial effect if a Scottish parliament raised taxation for increased expenditure, say, on education. That too was quite unanswered.

In the end this is at the heart of the matter and I for one, as a supporter of the Bill, am gravely disappointed at the response we received. However, I said at the outset that I would withdraw the amendment, if only to let my noble friend move his. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Whitty: I beg to move that the House do now resume. In moving this Motion I suggest that the Committee stage on this Bill be taken not before 8.45 p.m.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.

Nagorno-Karabakh and Azerbaijan

7.45 p.m.

Baroness Cox rose to ask Her Majesty's Government, in view of their commitment to a human rights-based foreign policy, what is their position with regard to the relationship between the principles of self-determination and territorial integrity, with particular reference to the resolution of the conflict between Nagorno Karabakh and Azerbaijan.

The noble Baroness said: My Lords, I am grateful for the opportunity to raise the issue of the conflict between Azerbaijan and the Armenians of Karabakh, which has cost tens of thousands of Armenian and Azeri lives, caused incalculable suffering and destruction and continues to cause misery to thousands of displaced people and instability in the entire region. I am also grateful to all noble Lords who will be speaking and especially delighted that the noble Earl, Lord Powis, has chosen to make his maiden speech tonight.

I shall set the scene by highlighting some historical facts and relating them to the principles of territorial integrity and self-determination, which must be reconciled if a just and lasting peace is to be found. I must first declare an interest--not pecuniary, but personal. I have just returned from my 32nd visit to the region. My first was in May 1991 when I was asked to lead an international delegation from the Andrei

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Sakharov Memorial Congress in Moscow to investigate reports of deportations by Azeri forces of Armenians from their ancient homelands. We went without prejudice. We returned deeply disturbed by the evidence of brutality inflicted on innocent Armenian civilians. We subsequently visited Azerbaijan to hear the Azeri viewpoint and returned even more disturbed by their attitudes and policies.

My position has since become one of advocacy for the Armenians of Karabakh, who have been blockaded, besieged and bombarded with ruthless ferocity by Azerbaijan, intent on an explicit policy of ethnic cleansing. As the then Azeri President Elchibey said in June 1992,

    "If there is a single Armenian left in Karabakh by October of this year, the people of Azerbaijan can hang me in the central square of Baku".

Many Azeris have also been displaced. But the cause of their displacement has not been repeated massacre and attempted genocide. Azerbaijan encourages visits by politicians and the media to see their people suffering and to hear their version of events. But few people, including the politicians whose decisions will shape the future, visit Karabakh to see the suffering of the Armenians and to hear their point of view. Moreover, major aid organisations such as UNHCR have not been present in Karabakh so the Armenians of Karabakh have been denied both aid and advocacy.

Armenians have repeatedly suffered atrocities at the hands of Turks and Azeris, including the murder of 1.5 million Armenians by Turkey in the genocide of 1915; the massacre of 20,000 Armenians in the ancient Armenian city of Shushi in 1920; and massacres in Sumgait and Baku in 1988 and 1990. That history of genocide and massacre explains why the Armenians of Karabakh can never again accept Azeri sovereignty, and the conduct of the war initiated by Azerbaijan confirms that unacceptability beyond doubt.

During this war the 150,000 Armenians who live in Karabakh managed to withstand assaults by 7 million strong Azerbaijan, helped by Turkey with manpower and weapons and by several thousand mujahedeen mercenaries. In any war human rights will be violated by both sides. But there is a systematic asymmetry which proves that Azerbaijan has been the primary aggressor for at least seven reasons.

First, it was Azerbaijan, with Soviet 4th Army troops, which undertook "Operation Ring" in 1991: the brutal policy of systematic deportation of Armenians. Secondly, in October 1991 Azerbaijan announced its intention to annul Karabakh's autonomous status and to rename its capital city Stepanakert with a Turkish name. The Armenians saw that as the beginning of the end and resorted to the only constitutional means available to them. They held a referendum which gave an overwhelming mandate for independence and they elected their first parliament. Azerbaijan responded with full-scale military offensives.

Thirdly, in the ensuing war it was Azerbaijan which first used Grad multiple-missile rocket launchers against civilians. Between January and May 1992 I counted

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400 Grad missiles every day bombarding civilians in Stepanakert. Other towns and villages also suffered sustained bombardment from towns in Azerbaijan proper, which eventually forced the Armenians of Karabakh to occupy those towns as a buffer zone.

Fourthly, only Azerbaijan used aerial bombardment of civilians, dropping 500 kg bombs from low-flying aircraft on to women and children. Fifthly, only Azerbaijan used ground-to-air missiles, detonated to explode over civilian targets. With no advance warning, people could not take cover. Missiles exploded and razor-sharp shrapnel shredded anyone in the fall-out area. Sixthly, Azerbaijan and Turkey still maintain the infamous blockade of Armenia. Even after the earthquake in 1988 Azerbaijan would not allow the passage of humanitarian aid to the affected areas. Seventhly, in Armenia just a few weeks ago I met young Armenian soldiers abducted during the ceasefire and saw on their bodies the evidence of torture inflicted by their Azeri captors. That is why it is a travesty of the truth for so many media to label Armenians as the aggressors.

To come briefly to the present, despite the precarious ceasefire, which has held for over three years, people on both sides continue to suffer. Many Azeri refugees are still kept in harsh conditions in camps in Azerbaijan, and visitors are taken to see them. By contrast, Armenia, with comparable numbers of people made homeless by earthquake and war, and suffering from the continuing blockade, has found accommodation for all its displaced people. Visitors to Azerbaijan might ask what Azerbaijan has done with UNHCR money and why it has not been as successful as Armenia, with all its problems, in providing for its displaced people.

Current demands by Azerbaijan for the return of Shushi and Lachin to Azeri control indicate a lack of serious willingness by the Azeris to achieve a positive outcome to negotiations. The taking of the Lachin corridor and the town of Shushi by the Armenians of Karabakh were essential for their survival. That corridor is a vital lifeline for supplies, and Shushi, on a hill above Stepanakert, was a base for firing 400 Grad rockets a day on to the capital city. It is the equivalent of a Golan Heights.

Armenians cannot ignore the continuing build-up by Azerbaijan of its armed forces and weapons. Recent reports of Russian sales of weapons to Armenia fail to mention the massive purchases of arms by Azerbaijan by countries such as Ukraine, including Smerch and Uregan long-range missiles and fighter aircraft. If further conflict were to break out, and Azerbaijan attempts another genocide or ethnic cleansing, Armenia cannot stand passively by. If Armenia were to engage, this could trigger a regional war, which would cause incalculable suffering and destabilise the entire region, militarily, politically and economically.

It is thus of the utmost importance that the international community prevails on Azerbaijan to desist from further military offensives and to seek a political solution which takes into realistic account the deeply-rooted fears of Armenians, based on long experience of Azeri repression, which prevents them from ever again being able to accept Azeri sovereignty.

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Such a political solution must give comparable weight to the principles of self-determination and territorial integrity, recognised in the foundation of the OSCE. It was very unfortunate that the OSCE chairman's statement at the Lisbon Summit prejudged the outcome of the Minsk deliberations, giving unwarranted preference to the principle of territorial integrity at the expense of self-determination. That is totally inappropriate, as those borders have no moral or legal integrity. Karabakh had never been part of Azerbaijan until Stalin's autocratic decision in the 1920s. There is no legitimate justification for Karabakh as part of Azerbaijan.

The UN recognises that no people should be required to live under the rule of a state which has attempted their genocide. The Armenians of Karabakh genuinely desire peace and are willing to discuss political solutions, such as a horizontal relationship with Azerbaijan, but they cannot accept subjugation to Azerbaijan. The credibility of the OSCE is at stake; it cannot be in its long-term interests to try to inflict a political solution which flouts the principles of justice and demonstrates the truth of Churchill's comment that the tragedy of the Armenian people is that blood is lighter than oil.

I therefore ask the Minister whether he can give an undertaking that any contribution made by Britain to the OSCE deliberations will respect both the principles of self-determination and territorial integrity.

Your Lordships will remember Hitler's cynical question before embarking on the genocide of Polish Jews: "Who now speaks of the Armenians?" This debate shows that there are people who still speak of the Armenians. If the international community betrays their just cause and relegates them to an unjust subjugation to Azeri Turks who have already attempted their genocide, we will continue to speak of them; and those who consign them to this fate, in the interests of economic gain or political expediency, will be criticised by us, and, I dare to venture, condemned by history.

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