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Lord Bach: My Lords, I am extremely grateful for this opportunity to open this debate on foreign affairs, international development and defence. These topics cover an extraordinarily large amount of ground and were I to attempt to do justice to even half the issues, noble Lords would still be listening to my dulcet tones

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late next week. I hope that noble Lords will forgive me if my opening remarks are brief and are intended to set the general scene. My noble friendwill cover the detailed issues in her closing remarks, which I hope will be tonight rather than tomorrow morning.

However, I should like to begin by expressing my very great pleasure--and, if I am frank with the House, perhaps my slight surprise--on being appointed to the Ministry of Defence with ministerial responsibility for defence procurement. As must be obvious, I have been in the post for only a couple of weeks--just long enough to realise how complex and difficult the job is. I hope that the House will show me some of its traditional tolerance if my grasp of some of the details is not as good as I should like. In one sense, I am unfortunate in having to follow in the footsteps of my noble predecessor, Lady Symons of Vernham Dean, who has set me such a daunting example of excellence. But in another way I am fortunate. I am consoled by her presence beside me on the Front Bench and by the fact that the more onerous burden of closing the debate falls to her. I wish her well in her new capacity--perhaps I should say new capacities--because she has the honour of serving in two departments although she has three jobs, including Deputy Leader of this House, without, I fear, the pleasure of being paid twice!

We in Britain have long benefited from the closeness of our contacts with other countries. We export more per capita than either the United States or Japan. We are the world's fifth largest trading nation, the second largest investor abroad, and the second largest recipient of foreign investment. The City of London is the world's most international financial centre, with more trade in foreign exchange, more foreign banks and more foreign companies listed on its Stock Exchange than any of its rivals.

It is simple common sense to recognise that the well-being of the British people depends on active engagement in its widest sense with the international community. This in turn demands a government who work to enhance the respect and influence in global society that we currently enjoy. It also demands a government prepared to meet the challenges of global change through joint action with those who share our outlook, interests and values--a government, moreover, prepared in the last resort to take hard decisions about the use of force. And a government with the foresight and determination to ensure that when force is required we are able to act promptly, effectively and in concert with our international partners.

The tragic history of the Balkans over the last decade and most recently in Kosovo has provided ample evidence of the necessity for this. The Government continue to be concerned about instability in the Balkans and, in particular, in Macedonia. We have been closely involved with NATO military planning and stand ready with our allies to help in Macedonia itself if necessary.

We are also playing a leading role with our European partners across a wide range of international co-operative projects, notably in justice

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and home affairs, over European defence and NATO enlargement and in promoting market-friendly reforms. When British Ministers go to Nice or Gothenburg for a European Council, they earn respect and win arguments because they work for Britain by working with Europe, not against it. EU summits are not about Britain versus Europe--we are past all that. Rather, they are about Britain acting with its partners against common enemies: instability, drugs, pollution, poverty and unemployment.

The EU is a unique achievement and we should be proud of our contribution to it. It has made all of us richer, safer and stronger. Our people can live, work and travel anywhere within the borders of the world's largest single market. The EU has also become a major player on the world stage. All that has been achieved while preserving the central role of the nation state.

However, our support for the EU does not mean that we are blind to its limitations. On the contrary, it is those who most support the EU who are most in favour of reforms. It is because we know how much Britain needs a successful EU that we demand the reforms that will make it more efficient and more in touch with the people. Only by becoming more accountable and more transparent will the EU earn the trust of its people.

Reform of the common agricultural policy will therefore be a high priority for this Government. At the 2004 Intergovernmental Conference, we need to take a long, hard look at Europe's institutions to ensure that they are built around delivering the people's priorities effectively and accountably.

It is also time to raise the level of debate about Europe in this country and to accept that for most people in the United Kingdom a commitment to Europe is a fact of life--in the jobs they do, the places they visit and the products they buy. They do not want us out of Europe; they want us in a Europe that works for them. We are proud to be practical Europeans.

Europe is now and will always be precisely what we make it. The EU's powers were not taken by stealth, but rather conferred by treaties agreed unanimously by the member states and implemented according to their individual constitutional procedures. In the UK, that means by Acts of Parliament. Other countries have their own procedures. The "No" vote in Ireland was a decision for the Irish people. We respect that decision and we recognise the need to do much more to communicate the aims and objectives of the EU to ordinary people.

At the recent European Council in Gothenburg, all the member states agreed that we would stand ready to help the Irish Government address the concerns of their people so that they could win support for ratification. We also agreed that there was no justification for holding up our own ratification process as in other member states. Parliament will decide whether to accept the results that the Government secured for the British people at Nice, including the first ever increase in the UK's voting weight. The UK remains a firm champion of EU enlargement, which we believe will enhance security

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within Europe, allow us to tackle international issues such as crime more effectively and provide greater economic opportunities for all members.

Although relations with the EU are vital to our national interest, it is misleading to represent the debate as a choice between the EU and the United States. It is not a zero-sum game. That is well illustrated by our plans to strengthen Europe's defence capabilities and, crucially, its contribution to NATO. The EU has the resources and skills to engage in the prevention and management of conflict. It is a significant actor on the world stage. It therefore makes perfect sense to capitalise on the additional political will and momentum that the EU can generate by giving it the capability to mobilise a military response. The logic of that was recognised by President Bush during his visit to NATO earlier this month, when he said:

    "It is in NATO's interests for the EU to develop a rapid reaction capability".

Moreover, we must always be aware of the acute need for European states to contribute more to their own security--to be able to carry out the Petersberg tasks--as well as to engage in humanitarian and rescue tasks, peacekeeping tasks and crisis management. That means improvements in military capability, new equipment, better training and enhanced interoperability. It was to secure such improvements in military capability that the Prime Minister launched the European Defence Initiative in 1998.

Since then we have made real progress. The permanent bodies within the EU for managing EU-led crisis management operations have been established. EU member states are working to achieve the headline goal of being able to deploy rapidly and sustain in theatre 50,000 to 60,000 ground troops, with associated naval and air support. However, we recognise that we still have some way to go. That is why the EU will be holding a capability improvements conference in November 2001, at which member states will be invited to make concrete improvements to remedy identified shortcomings on issues such as force restructuring, new equipment, and improved co-operation between partners.

None of us here could fail to be well aware of the serious concerns raised in this House that those proposals weaken NATO by establishing a wasteful, duplicate infrastructure, and even that they threaten to undermine NATO and weaken our relationship with the United States. I should be surprised if we did not hear more on those concerns during today's debate. However, I would like to stress, as my noble friend Lady Symons has done so often in the House, that there is no intention of creating a European Army or of doing anything that threatens the integrity of our intelligence relationship with the US. Rather, we and our European partners are seeking to create and enhance the operational muscles necessary if Europe is to play its proper role in contributing to its own security. Those capabilities will be brought together only when the circumstances demand it and, crucially, when NATO as a whole is not engaged. That will meet

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our objective of strengthening the European pillar of NATO, strengthening the transatlantic link and strengthening NATO as a whole.

I emphasise that NATO remains the cornerstone of European security. We believe that there is no divergence between what Europe and NATO are trying to achieve. To quote the noble Lord, Lord Robertson, the Secretary-General of NATO:

    "The West needs options other than 'NATO or nothing'".

It is also untrue to suggest that by strengthening the EU we are neglecting the reform of NATO. The aims of the headline goal process are closely matched by those of NATO's defence capabilities initiative. The two initiatives are self-reinforcing. In addition, we remain a consistent and strong supporter of NATO enlargement. Correctly handled, it can only contribute to building lasting Euro-Atlantic security.

Nor do our plans threaten the position of the US as our most important ally. Last year, we sold £28 billion of goods there. Britain is the biggest investor in the US, providing 1 million American jobs. Some 5,600 American companies have invested in the UK. It is ridiculous to suggest we can move closer to the United States by moving away from the EU. On the contrary, the stronger we are in Europe, the stronger our voice is in America, just as our influence in the EU is buttressed by our close ties with the US.

It is appropriate at this point to mention missile defence--a subject on which many of your Lordships have strong and differing views. Let me reiterate our position.We have made it clear that we understand the role that such systems might play. As the Prime Minister stated recently, we have to look at all the different ways in which we can deal with a real threat.

We strongly welcome the fact that this month President Bush, the US Secretary of State and the US Secretary of Defense have all come to Europe and discussed the issue. We also welcome the US dialogue with Russia and China, which we hope will eventually produce positive results. The most important thing is that all parties are committed to taking forward a serious debate. We will continue with active and constructive engagement in discussions with the US as close allies with common strategic interests.

However, we need to distinguish between the general debate and specific United States proposals. The Americans have not yet decided what sort of system they will ultimately seek to deploy. We do not know whether it will envisage the use of sites in the United Kingdom, and we have received no requests to that effect. It therefore remains premature to indicate how we would respond to a request when we do not know what form the request might take nor the circumstances in which it might be made.

We live, of course, in a rapidly changing world. It is one in which this country plays a pivotal role, not limited to our relations with the United States or the European Union. History has given our country the benefit of being at the centre of the world's most influential networks--NATO, the United Nations Security Council, the G8 and, of course, the

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Commonwealth. Our position in each reinforces the influence that we are able to wield in the others. That gives us an inherent weight in world affairs. It is for the government of the day to use that weight as effectively and responsibly as possible.

For the past four years we have used our position to help to confront tyranny, oppression, conflict and human suffering. We shall continue to uphold the common values that underpin our own security and prosperity and that of our allies: justice, human rights and democracy. This is not mere altruism, although it would be worth it on that basis alone. We promote human rights and democracy in every continent not simply because they are morally right but also because that is the best way to preserve those benefits for our people. Globalisation increases our mutual dependence. The more we travel, trade and invest overseas, the more we need stable, secure partners at the other end. Global society is like every other society--if some lose out, we all lose out.

Rhetoric and setting a good example are not enough to nurture those values. It is simply unacceptable that one in five people on this small planet lives in extreme poverty. Our targets remain tightly focused on reaching the millennium goals, particularly on halving by 2015 the proportion of the world's population that lives in abject poverty. In the financial year 1999-2000, expenditure by DfID totalled £2.5 billion--the highest ever level in real terms.

In December last year, we published a second White Paper entitled, Eliminating Global Poverty: Making Globalisation Work for the Poor. This builds on an earlier White Paper and sets out how globalisation can be managed in a way that will accelerate the systematic reduction of global poverty. The paper argues for the involvement of efficient and vibrant private sectors, effective government, and strong and reformed international institutions. It outlines the policy measures that need to be adopted by developing countries, other developed countries, the international institutions, civil society and the private sector in order systematically to reduce poverty.

As a government, we remain committed to the International Development Bill, which fell at the end of the previous Parliament. It was reintroduced in the House of Lords on 21st June and the Second Reading is scheduled for 2nd July. The main purpose of the Bill is to establish in legislation poverty reduction as the central aim of UK development assistance. It will allow the Government to support civil organisations undertaking development awareness activities and to engage more effectively with the private sector by taking shareholdings in companies and using convertible instruments, options and guarantees. Those powers will ensure that the Government can take full advantage of the enormous contribution that civil society and the private sector can make to the reduction of poverty.

Coherence in government policy on all issues affecting developing countries is crucial if we are to make an effective contribution to the reduction of poverty. We shall continue our efforts to ensure that

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such coherence becomes an everyday reality. In particular, DfID will continue to work closely with the Treasury on the debt relief initiative. We are extremely pleased that under that initiative 22 countries became eligible by the end of last year. Personally, I am convinced that the Government's contribution to the issue of debt relief will come to be regarded as one of their main achievements in their first term in office.

I have at least touched on the main points of the Government's defence, foreign and development policies. I have done no more than that. However, before I sit down, perhaps I may pay a personal tribute to the men and women of our armed services. Sometimes it is too easy to perceive security issues in impersonal terms, as in the acquisition of new equipment or the implementation of a particular strategy initiative. We cannot, and must not, forget that in the final resort it may come down to our servicemen and women putting their lives on the line.

We have repeatedly seen real examples where, sadly, that has been required. Today, United Kingdom forces continue to undertake difficult and often dangerous activities, notably in Bosnia, Kosovo, Sierra Leone and Iraq. The world is a dangerous place and will continue to be so in the foreseeable future. However, I am certain, and I am sure that the House agrees, that it is less dangerous because of the outstanding role played by our Armed Forces. I believe that we can all be justly proud of the dedication, professionalism and sheer excellence shown by our servicemen and women. I am sure that I speak for the House when I express my unreserved gratitude and admiration for their devotion to duty.

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