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Lord Craig of Radley: My Lords, I welcome what the Minister said about the Armed Forces. Does he agree that the Royal Air Force has demonstrated in the many operations that it has undertaken since the end of the Cold War that it has a vital role to play, that there can be no question that the days of that service are numbered or that it has outlived its vital role?

Lord Bach: My Lords, I believe that I know to what the noble and gallant Lord refers. When I had my breakfast this morning and read The Times, I read a letter that surprised me, to say the least. It obviously surprised the noble and gallant Lord. Perhaps I may make it absolutely clear from this Dispatch Box that the answer to the question is, of course, yes, and that the Government believe that the RAF has in the past, is now and will in the future play a crucial role, along with the other services, in defending our country.

I was talking about the gratitude that we owed. But that gratitude is cheap; it does not cost anything. However, it comes with the heavy obligation to support our forces with the right resources and the right equipment. Therefore, I am very pleased that, for the first time in over a decade, there is a sustained, planned real-terms increase in the size of the defence budget--£1.25 billion of new money in real terms over the current three-year period. That allows us to continue our massive programme of investment in new equipment.

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Our programme for the Royal Navy involves building more than 30 new ships over the next 15 to 20 years. It will be the largest shipbuilding programme by this country in decades. As the Secretary of State made clear in the other place last Friday, it includes the construction of two new aircraft carriers, planned to be the largest vessels ever built for the Navy. We are also committed to projects to enhance our strategic airlift capability, to provide our future joint combat aircraft (the JSF) and to improve our amphibious and expeditionary capability. Those projects are the envy of many of our partners. I believe that in this programme, and in the innovative smart acquisition reforms introduced to achieve it, the United Kingdom is setting the best possible example of how to adapt to a complex, multi-faceted environment.

Equally, we realise that we cannot, and must not, neglect human factors. That is why we are making such great efforts to reduce the level of operational commitment faced by our Armed Forces. That will continue to be a high priority. This past year has seen continuing recovery from the exceptionally high operational tempo of two years ago--1999. Average intervals between operational tours for units in the principal elements of the Army--the infantry, artillery and armoured corps--are all showing significant improvements. That has been helped by improvements in retention. Outflow from the regular forces decreased in 2000-01 by 6.3 per cent in comparison with the previous year. In the current buoyant economy we are still finding recruitment and retention a serious challenge, but we are working hard to address that matter.

We also continue to improve our support to service personnel and their families. A new £60 million package of welfare support for personnel deployed on operations abroad has been introduced, including better communications, leisure and hygiene facilities. We are also seeking to improve living accommodation for service personnel; our programme has made a good start. New funding amounting to more than £50 million a year has been made available to improve families' accommodation abroad and single living accommodation.

Shortness of time--I have taken more of your Lordships' time than I had planned--forced me to range widely. However, I am sure that many of these points will be debated in greater detail during the next few hours.

4 p.m.

Lord Howell of Guildford: My Lords, I begin by adding to the good wishes that the noble Lord, Lord Bach, received yesterday in this House on his new appointment at the giant Ministry of Defence. I also thank him for his comprehensive speech. If he and other noble Lords will forgive me, I shall leave some of the more detailed defence issues to my noble friend Lord Burnham, who will speak at the end of the evening. I shall concentrate on the broader aspects of foreign and global affairs.

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I also extend my congratulations to the noble Baroness, Lady Symons, who will respond at the end of the evening, on acquiring an amazing triple crown: she is the Deputy Leader of the House, Minister of State at the Department of Trade and Industry and Minister of State at the Foreign and Commonwealth Office. As an ignorant reader of the newspapers it seems to me that she will be involved in massive reforms in all three capacities. I read that the DTI is about to embark on a huge review; the FCO, as we know, has reviews every 20 minutes and is no doubt about to embark on another; and, as all in your Lordships' House grimly know, we are about to be reformed whether we like it or not. Many of those reforms will be in the noble Baroness's hands--and they are very capable hands indeed. Heaven knows how she will manage it all but I am sure that she will. She is also concerned, I gather, with the massive issue of inward investment and foreign direct investment in this country, which, as the noble Lord, Lord Bach, reminded us, is going extremely well. In fact, it has never gone better. To add a provocative note, I believe that it will continue to go extremely well so long as we stay clear of the "euro vortex", but that is another matter.

I briefly take this opportunity to welcome the new Foreign Secretary, Jack Straw, whom I have long very much admired, to his new position. I am glad that he has moved to the Foreign Office and brought his vast abilities to it. I make no comparisons with his predecessor, Mr Cook, who was always extremely courteous to me personally and who displayed great energies in his work. It is no business of mine to comment on moves inside government. However, Mr Cook is a brilliant House of Commons man and his energies will be very well deployed reforming the other place.

All that I want to say on the past period of foreign policy is that it is perhaps time to draw a line under the concept of ethical foreign policy, not because it was badly motivated but because all foreign policy needs to be as ethical as possible. Trying to make a special thing of it very nearly ended of tears. But enough of that.

Having said that I admire Jack Straw, I have to embark straightaway on a curmudgeonly note and say that I found his first speech, which he delivered in the other place last Friday in the debate on the gracious Speech, rather disappointing. It was obsessed--I hope that that is the right phrase--by Europe. Some have accused my own defeated party of having too much concern with Europe, but almost all of the new Foreign Secretary's speech was concerned with Eurocentric considerations and Europe's effect on this country. It was very disappointing that he was not able to go wider. I felt and still feel that I should offer to be his speech writer; I know that I could do a very much better job than the people who put together the speech that he delivered on Friday. However, I expect that my offer will not be accepted.

My hope was and still is that the new Foreign Secretary and his spokesmen will define with much greater clarity and national confidence than hitherto

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this nation's interests. They should do so in a narrower sense, which involves our territorial security--the narrowest sense of all, but still very important--in terms of our commercial advantage, and in relation to our true friends. They should also do so in a broader sense, which involves the best way in which to make a practical and effective contribution to the international order and to global stability through the transgovernmental network.

Unfortunately, the Foreign Secretary said that he had,

    "no time ... for a comprehensive survey of our policies towards the wider world".--[Official Report, Commons, 22/6/01; col. 289.]

I hope that he will soon find time to do so. Most of what he said was about the European Union, to which the noble Lord, Lord Bach, referred several times, and to which I shall turn in a moment.

Before I do so, it is worth noting that the texture of international relations shows that the linkages between countries are no longer confined so much to officialdom and formal relations between foreign ministries. If we are to discuss foreign affairs in your Lordships' House, we need to go wider. Today, international relations consist of a mass of connections between public, semi-public, non-governmental, voluntary and private bodies, all of which combine with their opposite numbers in other countries and at supranational level for various international purposes. All such bodies are usually firmly connected to their home nations and to opinion-calling and account-calling structures within those nations.

That understanding of international relations and the new premium on network relations very much favours organisations such as the Commonwealth. That got a small passing mention from the Foreign Secretary and one small mention from the noble Lord, Lord Bach, but not much else. The truth is that members of the Commonwealth form the perfect intergovernmental and voluntary network of the most modern kind. Under that umbrella literally hundreds of non-governmental bodies and agencies create a web of common purpose that is unequalled anywhere else in the world. Those connections stretch right across the hemispheres into 53 states and into the everyday lives of millions of people and thousands of local communities. I am very glad that there is mention in the gracious Speech of the Queen and the Duke of Edinburgh going to the Commonwealth Heads of Government meeting in October. But--I address this question to the Government, the Foreign Secretary and the noble Lord, Lord Bach--where are the policies and initiatives to exploit that new resource? We have made a little progress over the years but nothing like what we could and should be achieving to adjust to the network potential of the Commonwealth, which is a vast resource.

The second general point that I want to make is that these days foreign policy faces a deepening dilemma. Human beings are co-operating--or trying to do so--on a far larger scale than ever before and in relation to a whole range of issues, to which the noble Lord, Lord Bach, referred. Those issues include human rights, anti-terrorism, drug control, pollution, and curbing

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new weapons of mass destruction and the hideous threat of biological warfare. Such weapons may be in the hands of rogue states or dangerous organisations. To address those global issues requires increasingly lofty international bodies, agencies and fora.

The link or thread between individual people at the grass roots level and the elected and accountable authorities has never been more treasured or more in need of strengthening. That is the dilemma. In my view, liberal democracies will become less tolerant of the usurpation of authority by international bodies. If one wants evidence of that, one simply needs to turn to the grim signs of protest--they were very efficiently "e-enabled" protests--at Gothenburg, Prague, Seattle, the City of London, Washington, Davos and wherever else international authorities have gathered together. We have reached the point at which protest is inevitably and immediately mobilised on an incoherent but nevertheless massive and extremely visible and voluble scale. We shall see much more of such protests. What has happened is only the beginning of a form of protest against present patterns of international order, held by many people, rightly or wrongly, to lack legitimacy and democratic accountability.

Nowhere is that issue of legitimacy and connection more vivid than in the European Union, to which I now turn. We are going to be asked to legislate on the ratification of the Nice Treaty. Indeed, the Bill is to start its passage in the other place very soon. The issue is turning into a bit of a mess. After the Irish referendum, the Gothenburg conclusion was, "No renegotiation. We'll patch it up somehow with the Irish". I wonder whether that is the right approach. It seems to me that in the end there will be a need to recognise some hard truths about the Nice Treaty. It did not carry forward the unity and momentum of the European Union in the way that many people hoped.

I am interested that some commentators and think tanks are beginning to talk about the need for two-tier treaties: one set of treaties to deal with the administrative requirements, in particular, the administrative requirements of enlargement, the reform commission and so on, and the weighting of votes; and another set of treaties to deal with what degree of integration and forward momentum in this direction or that may be required by some countries in the Union.

Certainly, my own party was told very firmly, when it expressed doubts about the Nice Treaty before the recent election, that it was the key to enlargement and that any objection to it would mean that enlargement was impossibly postponed to the great detriment of all the applicant countries. That is what we were told then. Now we are told the opposite. Now we have, with charming innocence, Mr Prodi coming right out with it--the Nice Treaty is not essential to enlargement. Apparently it can go forward anyway. I am not so sure that that is what he was briefed to say but that is what he did say. The Foreign Secretary, in his speech on Friday, appeared to indicate also that it would be possible to go ahead with a treaty of accession, a treaty

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authorising the change in machinery for enlargement, without having to take on board the Nice Treaty with the good bits and the bad bits.

So the situation is not clear, and I wonder whether it makes sense to bring forward the ratification legislation quite so quickly. I gather that your Lordships' House might be required to look at it possibly in the overspill period when we come back in October. It does not really meet the needs of Europe. The needs of Europe and the reform needs of Europe were not addressed, in my view--and it is a view that I hold more strongly than before--by the Nice Treaty. We are not alone on this side of the House in holding that view.

It is not just a question of reforming the common agricultural policy. We are all in favour of that. The noble Lord said he was in favour of that in his opening speech. Forward-thinking and genuine Europeans--in contrast to some of the automatic pilot supporters, the knee-jerk supporters of the Brussels line, of the rather dilapidated euro, of crude centralisation and integration--should now be thinking about new models of governance for Europe and a replacement of the Community method.

Why is that? It is because enlargement changes everything. There are those who say that even to utter such phrases is somehow anti-European. Indeed, the shallow perception is widely trumpeted by the narrower-thinking Europhiles that to criticise the European Union procedures and goals, because we do not like some of them, is somehow anti-European. I must put on record that I regard that as a profound and nauseating insult, especially to those with families who have given their lives and their blood that Europe might be free. There is nothing anti-European about suggesting that European unity can be achieved in better ways than those laid out in the margins and codicils of tedious and massive treaties such as the Treaty of Nice.

I even heard the suggestion that my party treats our European neighbours as enemies. That is pathetic rubbish. We should hear no more of such patronising travesties. As the Minister rightly said, the choice is not and never was between isolation and engagement. It is about how best to tackle the practical tasks of governance in the European region.

We are all very concerned, throughout the whole political scene, about the euro question. I believe that more enlightened and reflective thinkers are right to question whether the rigid monetary union we now have, or that the euro-zone has, is the pattern of the future. At this moment, the euro-zone is haemorrhaging capital. It has done so faster in the past four months than it did this time last year. It is no wonder that the poor euro is ever sagging downwards when all the experts say it should be rising. The City of London is thriving outside the euro-zone, as the Minister has rightly conceded.

The truth is that an enormous amount is happening in the real world, which we must be allowed to debate, at least in this House, to undermine the traditional Community methods, the traditional bloc mentality

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and all the paraphernalia of regulations and directives. Those matters are being replaced by soft legislation. Policy initiatives are moving away from the Commission and going to the Council of Ministers which is still, deplorably, a very secret body. We should certainly be urging that it be opened up. The European Commission is losing its pivotal role, which I personally think is inevitable and even welcome. The reforms which are being pushed through by Commissioner Kinnock, whom I greatly admire and for whom I have a lot of time, are getting nowhere because he is receiving no support from the other Commissioners or from President Prodi at all. The so-called Commission was meant to be--and this was believed by some governments of the European Union--to be a service to the Community. But is not performing its role. It is not a service but a circus and some would cruelly say that President Prodi is its chief clown.

In this country, I urge the Government to put forward detailed proposals to create a more careful and open legislative process in which national parliaments should have an earlier and more initiating role. That is what we should be doing and it should be our priority.

As regards European foreign policy, there, too, I am afraid my heart sinks even when I hear the phrase. Too often it seems to be associated with self-aggrandisement and talk about Europe's destiny. It chills me. The Prime Minister uses the phrase "superpower" which I do not accept at all. The aim seems to be too often to score one up on the Americans. For example, there was the absurd decision to send a delegation to North Korea. There is also the ill judged anti-Bush rhetoric. It is dawning on European leaders--I hope it may not be too late--that anti-missile defence is the new order of things, as Bush painstakingly explained. It is not just a question of dealing with Saddam and the rogue states but beginning to sketch out the basis of an entirely new structure of deterrence and nuclear stability. Clinging to the ABM Treaty is, in my view, out of date. Thinkers in Europe should have spotted that a lot earlier than they did.

My noble friend will say something later about the rapid reaction force. I understand where the Government now stand. They do not want it to be separate from NATO. They do not want separate intelligence links. They do not want a separate command and planning structure. But that is not what was said at the beginning, and other things were said at the beginning. But the Government have changed and changed in a wise way, so I welcome the prodigal. But it has been quite a dangerous episode.

I am slightly reassured by all that because I now sense that even the best generals in France are saying that it will never work on the basis on which it was originally put forward and that the original idea merely got in the way of European co-operation within NATO and Anglo-French co-operation. So I think that reality will prevail although it has been a worrying time. We need to design defence structures in Europe

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to share the burden but aimed at the next crisis and not the last crisis, which is the wont of staff and general planners.

Macedonia is a new disaster unfolding before us. There is a real danger that legitimacy is to be conferred on Albanian rebels who are trying to destroy what is a democratic nation, the democratic nation of Macedonia. I am not convinced that the European Union policy is correct or that Mr Solana has been all that helpful, let alone Mr Leotard with his call yesterday, which I thought was really quite disastrous, for a consensus to be achieved between the Albanian rebels and the Macedonian legitimate government. When we start having a consensus call between the fire and the fire brigade, we know where that leads to. Of course we want to see the killing stopped. But that kind of posture will not stop the killing, only perpetuate it.

I have gone on about Europe, casting some mild criticism on the excellent new Foreign Secretary. But it is a matter that bears on all our considerations. I certainly do not want to go to the opposite extreme and take the advice of some who say, "Stop talking about Europe completely; drop it because it is not popular on the doorstep". That is facile advice, typical of focus-group politics. In your Lordships' House I hope that we are more sensible. We have the opportunity to speak about this great issue and to settle the matter correctly so that we can turn to the wider interests for which, last Friday, the Foreign Secretary found he did not have time.

Those wider interests are large indeed. As the Minister said, vast interests lie outside Europe. Four-fifths of our overseas investment is not in the euro-zone. According to the latest figures, 57 per cent of our trade is not conducted with the rest of the EU; 81 per cent of our exports are not even denominated in euros; and leading economists tell us that the importance of Europe in world trade may have peaked and over the next few years may decline. Of course, Europe is vitally important. We have always been and always will be Europeans, but the activities of the vast world out there are of direct interest to our people. We ignore them at our peril.

I too do not have time to discuss rising Asia; or our best friend, Japan, to whom we never give enough attention. Taiwan, which is a brilliant island, also does not receive enough sympathy from us. Hong Kong, the true gateway to China, was not even mentioned last Friday or today. After America, it is the second destination for all our investments and it is the gateway to the biggest market of the future. We promised that we would not forget the people of Hong Kong. Have we forgotten them? Are we monitoring how they are faring? I doubt it.

I turn to Africa and the situation in Zimbabwe which is going from bad to worse. A journalist has now been thrown out and even Mbeki admits that his policy was ineffectual. Everyone is urging the South African Government to change the policy, if they have one still, and to insist upon a tougher Commonwealth approach. That should help not only the

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Commonwealth and the poor people of Zimbabwe; it may also help to stabilise South Africa which does not appear to be in very good shape at all.

Others will speak about development issues, including my noble friend Lady Rawlings, but a Bill on the subject is to be laid before the House which I hope will help. However, I am more and more convinced that our aid programme is best handled as much as possible by ourselves and as little as possible by the European Union. That view is shared by a number of Ministers in the present Government. I expect that my noble friend Lord Burnham will speak about our brave soldiers and the task, which is not always clear, that they are carrying out in Sierra Leone.

People say that the nation state is finished, it is too large for the regions; and it is too small for global activity. I fully agree that governments have lost power to markets, to regions, in our case to the European Union, to globalisation and to all sorts of other forces. But I also believe that the nation state is coming to the rescue of the international order and that the state remains the principal institutional site of the whole political experience. In my view the more that the new Foreign Secretary remembers that as he weaves through the plethora of international gatherings, summits, councils and so on, the better chance he will have of not going too far wrong.

4.24 p.m.

Lord Wallace of Saltaire: My Lords, I, too, welcome the Ministers to their various new appointments, singular or plural as the case may be. I hope that the fact that a Minister has three responsibilities entitles him to a slightly larger office space within the House of Lords. We shall watch with interest to see what happens.

I also welcome our new Foreign Secretary. I believe that it is particularly desirable to have a Foreign Secretary who, over the past few years as Home Secretary, has dealt with issues such as migration, and the weak states from which migrants come, and the huge demographic explosion in the South. Those are matters that need to be at the heart of foreign policy. On a personal point, for three years I have been chair of one of the European Union Sub-Committees, and dealing with Jack Straw as Home Secretary was a delight. He was one of the most co-operative Ministers that I can imagine and I trust that in his new post he will continue to be so.

I welcome the more relaxed European tone of the Government that we heard in the speeches made last week in the other place and in the speech of the noble Lord, Lord Bach. It is easier for the Government to be a little more relaxed thanks to the absurdly anti-European rhetoric of Conservative spokesmen in the general election campaign and the clear absence of response to that from the public. The Sun did not win that part of the general election.

The key to British foreign policy and to British defence policy is the European context. Without a clear sense of British objectives in relation to our major European partners, no coherent British foreign policy

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is possible. I am sorry that that is a truth that the Conservatives appear to have forgotten over the past 15 or 20 years, although I realise that in saying that I lay myself open to the charge from the noble Lord, Lord Howell, that I am being Eurocentric.

The principle is not new. After all, British history has been shaped by relations with France, the Netherlands, Spain, Germany and Denmark and by the interaction between the nations in these isles and our continental neighbours. I remember some years ago the then Mrs Thatcher asking for a new study into how to teach British history in British schools. The first report of that inquiry concluded that one could not teach British history, as opposed to English history, without putting it into its European context because the historical relationship between Scotland and England and between Ireland and England cannot be explained without bringing in France, Spain, the Netherlands, Denmark and Germany.

An excellent new study about Britain in Europe has been carried out by the Irish Institute of European Affairs--by Garret Fitzgerald and others--with an explicit concern that the emergence of a Eurosceptic government, resting on an English majority, would threaten a breach with a more Euro-friendly Scotland, which in turn may destabilise the delicate politics of Ireland, North and South. Those matters that Conservatives in England appear not to see are perhaps seen a little more clearly from Dublin.

The European continent of which we are a part is now clearly changing fast. From next January the euro will be in use and it will also start to circulate as a second currency within Britain. It will become steadily harder for Her Majesty's Government to avoid the issue of British membership, or for them to continue drifting for a further two to four years of indecision. On these Benches, we shall not wait for the Government. We intend to campaign vigorously for British membership and British interests.

The enlargement of the European Union and NATO is very much on the agenda. Next year it is likely, both in NATO and in the European Union, that major decisions will be taken on potential enlargement of both organisations in 2004. That means that the British Government and other European governments, as well as the United States, have to consider the impact of that enlargement on relations with the neighbours who will not come in this time: Russia, Ukraine, Turkey and the dependent countries of the southern Mediterranean.

NATO enlargement must not be seen as an anti-Russian device. It has to be negotiated as spreading European security eastwards, not as a hostile act towards Russia. That means that we have to reconsider the purpose of the Atlantic alliance in a post-Cold War world. No longer will it be an alliance in the old-fashioned military sense, nor I hope simply a vehicle for the projection of American power, but a framework for US/European partnership and a European security organisation which thus rationally ought to have a close relationship with Russia as well. I welcome the attention that the European Union has

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paid in that context to how we manage our common frontier with Russia and how we manage the problem of Kaliningrad. They are practical problems that we need to discuss.

I am less happy about the amount of attention paid to relations with Turkey. Turkey is going through a delicate process of economic and political reform. In an ill-thought-out set of decisions, tactically taken by the British Government and others in Helsinki, it was promised that it would become a candidate for membership without any idea of how fast that would move. The issue of Cyprus is drifting. While EU negotiations are moving ahead rapidly, there is no progress whatever on a settlement between the Greek-Cypriot and Turkish-Cypriot communities. I urge the Government to give that matter higher level political attention. They should pay more attention to relations with Ankara and for a short time less attention to relations with Moscow. This is not for Britain alone; it is an area in which Britain with other leading western governments has a major responsibility.

The Treaty of Nice was a messy treaty. Like the Treaty of Amsterdam, it was an unsatisfactory compromise which we nevertheless must accept. But we should learn from the failings of recent intergovernmental conferences in preparing for the next. I was pleased to hear the noble Lord, Lord Bach, say that it was time to raise the level of debate on this matter in Britain. It is high time that we should do so and we look forward to hearing from the Government--that is, in Britain and not merely in occasional prime ministerial speeches in Warsaw--that they are intending to educate the British public about the choices. Perhaps the noble Baroness the Minister will tell us when we might expect a Green or White Paper which will raise the level of the British debate.

We are also moving on the European security and defence policy about which I shall say more in a moment. I want first to touch on the trans-Atlantic relationship. We on these Benches believe that it is extremely important but must be seen within a European context. The United States remains a European power and we all very much want to maintain the American commitment to Europe. However, we must recognise that in Washington it is much more difficult to defend the depth of the American commitment to Europe. If I were a senator from a mid-western state, I would not defend the continued commitment of 120,000 US troops to Europe; I would say that the Europeans can pay for them themselves. That is part of the dialogue which we must continue to have about the European contribution to NATO and the American contribution to European security in the widest sense.

America has other concerns and priorities, so European governments must be even more active in Washington. The divisions within the Washington debate and the number of reasonable and responsible people engaged in the current US foreign policy debate, alongside some, frankly, "wild" men, gives us an additional incentive for getting actively involved.

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All of those changes argue the case for stronger European capabilities, not out of any soft-headed European idealism but in pursuit of hard British interests. That also extends to North Korea and to China and we need strongly to argue against the undertone in Washington which wants to present China as an enemy. Gestures towards closer relations with China and help with the Korean situation are part of that.

The appointment of Mr Solana and his staff, now with continuing EU special envoys, is a useful step forward, but it is also evident that the division of functions between Mr Solana and Commissioner Patten does not work well, despite their good personal relationships. The six-monthly rotation of the Council presidency is a severe weakness in foreign policy. We shall need some stronger institutions in Brussels in order to cope with the foreign policy needs of an enlarged European Union. British foreign policy should be pursued through active partnership with other European governments. Britain's voice in Washington is strongest when it is heard in harmony with those of our European partners, not attempting to sing a solo on our own.

As regards defence, we see ESDP the necessary and sensible context for British defence planning, given that it is unlikely in the extreme that we shall find ourselves undertaking any major operations outside Britain on our own. It was extraordinary that last November, two years after the St Malo declaration, there was sudden hysteria on the Conservative Benches and in the press over ESDP, as if they had suddenly discovered that something was happening. I want to remind the Conservatives here and in the party that the origins of ESDP lie under the previous Conservative government in the Franco-British defence dialogue initiated by Michael Portillo when he was Secretary of State for Defence. The logic which pushed Michael Portillo in that direction is the same logic which has pushed this Government further down the road to closer European co-operation.

There are choices for British defence spending. If we are to maintain a worthwhile capability, we can either increase substantially the amount we pay, or we can go faster down the road towards sharing within a European framework. I say that for hard-headed British interests, not for any starry-eyed Euro-idealism. I heard Iain Duncan Smith being asked whether he was willing to pledge the additional 0.5 to 1 per cent of GDP needed to maintain an effective British defence capability autonomously; he refused to answer. If that is the case, closer co-operation is the logical way forward. I suggest a joint fleet for long-range air transport and, incidentally, why not a joint fleet for long-range aircraft refuelling, which is not at present planned by the Government?

Furthermore, are we seriously planning to procure two aircraft carriers, and when we need a fleet of three, without consulting more closely with our partners over complementarities of effort and of equipment? There is further usefully to go in gaining more effective power projection through closer co-operation. While we are talking about defence, will the Government consider

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trying to explain to the British people why it is worth while? There has been no effort to explain the position to the British public. President de Gaulle and President Adenauer did a huge amount to change public perceptions in France and Germany by joint military parades; by symbolising the change in their relationship. Why cannot we have members of the British-Dutch amphibious force on guard outside Buckingham Palace? Why cannot we have a British Guards regiment marching down the Champs Elysee on 14th July? It happened on 14th July 1938. Could it not happen on 14th July 2002 or 2003?

My noble friend Lord Redesdale will talk more about missile defence, but I want to say a little about the treaty and the idea that the ABM Treaty can be torn up because it no longer fits. The ABM Treaty is 23 years younger than the NATO Treaty. The NATO Treaty is also a Cold War treaty but it nevertheless continues to serve a useful purpose. Treaties are to be observed pacta sunt servanda, not to be torn up when one side believes that they no longer serve a useful purpose. Within the right wing of the United States there is a very worrying tendency to argue that America's special responsibilities entitle the United States to have a special opt-out from the international legal obligations which other states must observe. We must resist that argument.

Furthermore as regards defence, it is time that the UK-USA agreement, a child of the earliest stages of the Cold War and one of the most extensive intrusions into British sovereignty which we have yet accepted with foreign military personnel operating autonomously on British soil, ought now to be reported to Parliament. Twelve years after the end of the Cold War, we are entitled to a little more transparency. We may not accept everything that the European Parliament has stated in the Echelon report about what is alleged to be heard from eavesdropping stations in this country, but some more respect to Parliament about the operations of US listening stations in this country is, I suggest, strongly desirable and necessary.

Then there is the wider world about which the noble Lord, Lord Bach, spoke usefully. We on these Benches welcome the transformation of the Department for International Development into a very active department of government. We also welcome its excellent globalisation White Paper, a model in terms of educating Parliament and the public.

We see the need to strengthen international institutions, above all the United Nations but certainly also bodies like the World Trade Organisation; the UN High Commission for Refugees, which at the moment suffers badly from a shortage of funds, including funding from the British Government; the World Health Organisation, in terms of global co-operation to fight disease; and the developing international regime to limit climate change.

We in Britain and in Europe are more concerned about the weak states than the "rogue states" with which the Americans are over-preoccupied. Weak states cause problems as violence, organised crime and

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migration spill over on to their neighbours and beyond. The underlying problems of the South are poverty, corruption and the threat of disorder. I refer, for example, to Nigeria, Zimbabwe, Congo and Sierra Leone, where we are already engaged. None of those problems can be solved by Britain alone, but we can make a useful contribution in co-operation with our partners and neighbours: first, within Europe, because we are a European country; secondly, across the Atlantic; and, thirdly, within the wider English-speaking Commonwealth and with our many friends across the world.

4.41 p.m.

The Lord Bishop of Oxford: My Lords, first I must give my apologies to the House and the Minister. Due to a special church service this evening I am, sadly, unable to stay to the end of the debate. My justification for wanting, nevertheless, to contribute is that the subject of development is of crucial concern to the Church of England and to all Christian Churches. It is very good to know that in the gracious Speech there are three references to development and I should like to focus on just one: the Government's commitment to,

    "work for an early and comprehensive world trade round which will benefit industrialised and developing countries alike".

I shall also make a brief comment on arms exports.

The debate on trade--free trade as opposed to various forms of protectionism--has gone on for centuries. The assumption behind the Government's White Paper on globalisation and poverty is that free trade and the removal of tariffs and other barriers will benefit the poorest countries in the world. While it is true that the majority of the 18 poor countries which have benefited most from the liberalisation of trade are those in south east Asia, it is also good that countries such as Bangladesh and Uganda also appear on that list. Therefore, clearly the liberalisation of trade can help the poorest countries in the world.

One important feature of the Government's White Paper is that it frankly acknowledges the difficulties. First, it admits:

    "There are substantial inequalities in the existing international trading system".

It also acknowledges that the World Trade Organisation, as a product of the post-World War II agreement and GATT, is still heavily dominated by northern industrialised states.

There are many excellent features of the White Paper. It recognises not only the current state of affairs but also the goals which need to be achieved and the Government's intention to achieve them. All that said, it is important to highlight some of the difficulties. First, while liberalisation of trade might bring long-term benefits to the poorest countries of the world, in the short and medium term this can have a detrimental effect upon them. The evidence that the Church encounters at a local level in its day-to-day ministry within the Anglican communion of 70 million members world-wide suggests that globalisation is

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often associated with a reduction in welfare expenditure, inequality, social fragmentation, poverty and a widening gap between countries.

The public perception is that at the moment globalisation produces losers as well as winners. According to the World Bank's development report for 2000-01, the average income in the richest 20 countries is 37 times that in the poorest 20. That gap has doubled in the past 20 years. Furthermore, although poor countries as a whole have shared in the increasing prosperity brought about by globalisation, that is on average. Where there is an average, inevitably there are those who do better and those who do worse. Some countries have done a great deal worse than the average.

All in all, the Churches and the aid agencies are less optimistic than the Government about the benefits offered to poor people by greater trade liberalisation. It is, therefore, important that a fairer trade system goes together with other policies associated with development and an awareness of the underlying economic and political realities which sometimes make countries and the elite within them resistant to change--for it by no means follows that if a poor country gets a fairer share of the international cake all those benefits will flow to those within that country who are most in need.

It is good that the Government are committed to strengthening the role of the WTO in relation to developing countries. Although more countries have been brought into its councils in recent years, and more help is being offered them, supported by Her Majesty's Government, to make their voice heard, their view is still unequally represented. At Seattle, for example, there were more American lawyers present than lawyers from all the developing world put together.

If we are serious about this subject we need to recognise that inevitably there are always vested interests, both countries and companies, which press to protect their present advantageous position. This means that we must be vigilant and uncompromising on behalf of those who are least able to stand up for their own concerns. Politics is of course the art of the possible and compromise is part of that art. But the Churches, aid agencies and many other people on all sides of this House are concerned that those compromises should not always be made at the expense of the poorest.

Recently we have had the European Commission's Everything But Arms proposal. Under it all exports from least developed countries, except those associated with the arms trade, would be allowed into the European Union duty free. However, there has been extensive lobbying from certain quarters so that the original proposals are severely watered down. For the moment, three sensitive products--sugar, rice and bananas--have been exempted. The amended proposals have disappointed those pushing for greater access for least developed countries to the European Union's markets and have led some to dub the proposals "Everything But Farms".

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The Churches consider that the proposal to extend market free access to least developed countries in the European Union without equivocation or dilution was a modest one that would have carried relatively small costs to European Union countries while having the potential to bring significant benefits to some of the poorest countries in the world. While the final agreement is undoubtedly a step in the right direction, delays in the elimination of duties and quotas for least developed countries' exports of bananas, rice and sugar show that the European Union still has a long way to go to ensure that rhetoric matches reality in making globalisation work for the poor.

Another example of diversity of interest and the difficulty of reaching a fair agreement concerns negotiations between the European Union and South Africa over port, sherry, ouzo and grappa. It has been said that,

    "these negotiations showed clearly the gulf between the supportive rhetoric and the harsh realities of the actual negotiating process".

The Government readily acknowledge that liberalisation of trade is a necessary, but not a sufficient, condition for development. We might also wonder whether it is really relevant to some of the world's poorest communities. There is a very interesting table in the Government's White Paper which relates poverty to remoteness. For example, nearly 50 per cent of the population of sub-Saharan Africa lives on less than 1 dollar a day, and that is related to the fact that 80 per cent of the population lives more than 100 kilometres from a coast or ocean-navigable river.

The White Paper calls for better routes, rural transport and more modern docks. One is inclined to say: yes, but what about the effect on the environment, pollution and so on? Communities may need to explore other routes out of poverty for they may never have much to export and there will always be transport costs which do not make their exports economically viable.

Issues of trade as they impact on developing countries cannot but include control of the export of arms and technology. As is now widely accepted, the victims of conflict are predominantly civilians who may represent anything up to 80 per cent of casualties. The Government are to be congratulated on their role in securing a UN conference on the illicit use of trade in small arms next month.

The right reverend Prelate the Bishop of London had intended to take part in today's debate on these very points but regrettably is unable to be here. He has indicated to me his gratitude to the Government for their proposals on arms export controls, foreshadowed in their draft Bill at the end of March, and their commitment to legislation in the Queen's Speech. He and I welcome very much, as have many of the non-governmental organisations most closely involved with this issue, the complete overhaul that the Government have proposed for the statutory framework controlling the export of arms and dual-use technology. The draft Bill promises major improvements in that area.

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However, as the noble Baroness will be aware, there remain a number of concerns shared by some of us in the Church of England and by NGOs. We hope that the noble Baroness, Lady Symons, and her colleagues will take on board proposals for ensuring that controls are extended to shippers as well as agents, and to consider the proposals made by the Quadripartite Committee of Defence, Foreign Affairs, International Development and Trade and Industry in another place for prior scrutiny of some licence applications. There is also the proposal for the extension of extraterritorial jurisdiction in this area of UK brokers operating wholly abroad. As the noble Baroness is aware, there are precedents for extraterritorial jurisdiction.

To sum up, the Church of England welcomes warmly the Government's commitment to try to ensure that under trade liberalisation the poorest countries of the world really will benefit and that this action will be a reality and not just rhetoric. It is particularly important to welcome this decision with regard to the relationship between the European Union and its trading partners. Also to be welcomed is the commitment to make the World Trade Organisation a more effective voice which will really serve the concerns of the poor. But, in order to ensure these highly worth-while goals, it will be necessary for everyone who has a concern about the issues to be vigilant, persevering and uncompromising in standing up for those who are least able to work the system for themselves.

4.51 p.m.

Lord Sewel: My Lords, I first express my gratitude to those who arrange matters for placing my name so early on the list. We all know that in debates such as these there is a danger that by the time one comes to speak everything that could be said has been said; although that does not necessarily deter Members of your Lordships' House. So my commiseration to those who will speak later.

I want to speak briefly and generally about NATO and EU enlargement. No one would pretend that these are anything but difficult and complex issues. But behind them stands the simple objective of realising a secure pluralist democratic Europe. That is a prize that is worth pursuing.

Anyone who has been following the debate on the process of NATO enlargement particularly would wish to pay tribute to the work--I was going to say "my noble friend", but as he sits on the Cross Benches he is not technically my noble friend, although he is both noble and an old friend of mine--of the noble Lord, Lord Robertson of Port Ellen. I believe that it is generally recognised that he has brought considerable energy, skill and, above all, authority to the task. I can think of no one better who could do that.

My concern is that if momentum is lost on enlargement, in the context both of NATO and the European Union, there is a real risk that a dangerous degree of disillusionment will develop. That will cause unpredictable political consequences.

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It is difficult for those of us who became politically active in the 1960s--particularly as student politicians and activists--to appreciate the importance that the governments of so many central European countries attach to achieving membership of NATO. All those years ago I would have thought it extremely unlikely that I would ever be confronted by a demonstration in favour of NATO membership, yet that was the case recently on a visit to Lithuania where people were demonstrating under the banner "Molotov-Ribbentrop must be buried". That may seem arcane, but in a way that slogan encapsulates the old Europe that we want to--and must--leave behind.

The countries of central Europe see NATO membership as not only providing security in a changing world--important as that is--but as a means by which democratic institutions become embedded in their political systems, and, just as importantly, as a badge of legitimacy of respectability which encourages foreign investors to invest and help develop the economies of those countries. That is an outcome that is devoutly to be wished.

Decisions on NATO enlargement will, according to the timetable, be taken at Prague next year. The real question is not so much whether there will be enlargement but how far it will go. I believe that it is widely recognised that extending membership to Slovenia and Slovakia will not raise any new issues. There are no fundamental issues of policy raised by extending membership of NATO to those two countries. If enlargement is limited to Slovenia and Slovakia, that will be a profoundly disappointing minimalist outcome.

In this context, it is not possible to ignore the question of the Baltic states. We all recognise the difficulties that arise from their recent history and their geography and especially the special problem of Kaliningrad. It is not absolutely clear what signals are coming from Russia and from the comments of President Putin. One of my more depressing recent experiences was a meeting with members of the Russian Duma where ultra-nationalists, in talking about the Baltic countries, reminded me of a rather ineffective and irritable school teacher who was just about to lose control of a wayward class. I do not believe that the reaction from Russia is sufficient reason to turn away from the problems of the Baltic states. I hope and trust that, despite their difficulties, the government will not shy away from the challenge of mapping a way forward for the Baltic countries.

If next year Prague is to see some resolution of NATO membership, EU enlargement, on the other hand, is proving a long process. Given the distance that needed to be travelled, perhaps that is understandable. But we need to recognise that many of the governments and the peoples of central Europe have paid and are paying a heavy economic price in preparing for EU membership.

The heady days when EU membership was seen as a panacea, almost a "get rich quick" fix, are over. But, given the price that has been paid, there is a real danger that prolonged delay will result in a cynicism and

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disillusionment that may have unpredictable and dangerous political consequences. I say this in as gentle and understated a way as possible, but I believe that we need to look at history and recognise that many central European countries have in their recent political past characteristics of an unattractive form of extreme right-wing nationalism. It would be a tragedy if a failure to move forward on enlargement because of a squabble over issues such as structural funds, labour mobility and the common agricultural policy--although anything that brings about a radical reform of it is something devoutly to be wished--were to lead not only to a missed opportunity to help to build a new Europe, but actually gave rise to extreme political movements borne out of frustration in those countries.

In negotiations of this kind, and in European negotiations generally, altruism is not always evident. Those who have attended meetings of the Council of Ministers know and appreciate that to their cost. Nevertheless, in previous rounds of enlargement, political considerations with regard to underpinning democratic institutions have been as important as economic considerations. Surely, in this period of debate, that should be a primary consideration as well.

There is as much danger in being too cautious as there is in taking the informed risk that significant enlargement involves. The prize of a secure, democratic, pluralist Europe is now within our grasp. I hope that the Government will argue strongly for major enlargement, both in the context of NATO and of the European Union. I suspect that that may serve our interests because I believe that the type of EU the candidate countries wish to see is perhaps closer to the model that Her Majesty's Government wish to see than is the case today.

5.2 p.m.

Baroness Park of Monmouth: My Lords, I warmly welcome the new Minister, and I am sure that the noble Baroness will wear her triple hat with panache.

That Britain is valued by the European Union and respected as an ally by the US is chiefly due to its admirable and professional Armed Forces. Yet the Government continue to fail to relate resources to commitments. Our Armed Forces are being used as a political tool with little regard to the consequences for their central task of defending the realm. The Government call their policy "an expeditionary strategy", and their peacekeeping and conflict management in the context of the Petersberg tasks, as the then Minister, the noble Baroness, Lady Symons, said in the House on 22nd November last year,

    "imply a greater degree of engagement in conflict than mere peacekeeping".--[Official Report, 22/11//00; col. 863.]

Indeed, one of the four Petersberg tasks is defined by the MoD as,

    "separation of parties by force".

That is relevant to the Common Position on Africa, which was signed by the Government in May with no possible chance of scrutiny by this House.

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We are still very much present in Bosnia, Kosovo and in the Gulf, and the Secretary of State has recently spoken of a possible sizeable commitment of troops to Macedonia. All these are open-ended commitments. None relates to the defence of the realm. All are making it increasingly difficult for the services to find the time, men and money to train and exercise for that central task and to retain their people. In the summer of 1999, as I believe the Minister himself said, 47 per cent of the Army was committed to operations. Meanwhile Northern Ireland is beginning once again to become a problem.

What are the resources allocated to defence? What other department of state is required to pay 3 per cent efficiency savings on its total budget back to the Treasury each year when it is already seriously underfunded for the tasks it has to do? The Government argue, with truth, that they are putting money into procurement--we had some good news today--but that takes years. Shall we still have the skilled and experienced men to use that equipment at the cutting edge or will they all have turned into a virtual force of peacekeepers?

My second concern is the growing deficit in accountability, transparency and scrutiny which is apparent in defence issues in the EU. The Common Position on Africa was considered and agreed by the General Council on 14th May and signed by the Minister for Europe. The letter forwarding the draft to the committees of this House had been dated 4th May and could not have reached the House before 8th May because there was a bank holiday on 7th May and the House rose on 10th May. There had been no possible chance of scrutiny. Article 5 of the Common Position says that the EU will consider deploying its own operational means for conflict prevention and crisis management in Africa, taking into account the scope of capability developed under the European headline goals. Article 1 speaks of the prevention, management and resolution of violent conflict in Africa, Article 2 of EU action to cover addressing acute failures of conflict and supporting initiatives for containing violent conflict. Is that not our old friend separation of parties by force?

The EU will analyse how best to co-ordinate member states' efforts in areas of training, equipment and exercises and will take into consideration the Brahimi report on UN peace operations, including inter-operability of troops and command and control structures. Does that sound like drawing on NATO's planning and training capacities? Is it something that should have been signed off without scrutiny?

We shall be reminded by the noble Baroness the Minister that on matters of defence we have a veto. However, under Article 24(3) of the Treaty of Nice,

    "when the agreement is envisaged in order to implement a joint action or common position, the Council shall act by a Qualified Majority in accordance with Article 23(2)".

I remind the House that we and the French will necessarily always be required to provide the largest contingent. For instance, even the admirable Norwegians envisaged a contribution of only 1,400 men to the Petersberg tasks. As Africa is, I believe,

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outside the scope of normal NATO operations, we shall presumably also have to provide the strategic lift and the sea power.

It may be relevant that according to the FCO the budget for the UN force in Sierra Leone, UNAMSIL, for 1st July 2000 to 30th June 2001, based on the cost of a force of 13,000, was £504,400,000 and now that the force is to be increased to 17,500 the cost will go up by a further 30 per cent. So far it has achieved absolutely nothing, unlike our own tiny force. Should the EU therefore decide to intervene in a similarly sized conflict in Africa, the cost would hardly be less.

The Belgian presidency, secure in the belief that according to "a recent Euro barometer" public opinion favours a further development of Europe's own defence identity, has said that it wishes to bring about a greater involvement of the EU in the peace process in central Africa and the region of the Great Lakes and will produce an action plan. Let us hope that this relates solely to economic aid, but as it has said it in the context of its views on EU defence we cannot be sure of that. It has of course also said at another time, in discussing the capability goals, that it would not envisage supplying troops for more than six months--a very helpful basis for operations. The Belgian presidency also says that the EU conference of December 2001 must declare the EU operational in terms of crisis management. I hope that refers only to the structure of committees.

Reverting to costs, the explanatory memorandum from the FCO claims that the Common Position on Africa will have no financial costs. It states:

    "It will however open the way to EU partners agreeing joint action that will have financial costs. Any joint action will be submitted individually for parliamentary scrutiny".

It would be useful to know how that squares will the inter-institutional agreement between the European Parliament, the Council and the Commission on provision regarding the financing of the CFSP, an agreement attached to the Treaty of Amsterdam though not part of the treaty. It was finalised in July 1997 and its provisions are now in force. At what point would national parliaments be consulted, I wonder. Mr Solana, in his confidential report to the Council on common strategies, is fully aware of the need to identify the budgetary means of implementing them.

We must watch the gradual, uncontrolled, often unperceived transfer of power from national parliaments to the EU in the fields of foreign policy and defence. We really have to take a grip and make things work better. The whole process is as slippery as a jellyfish and as difficult to grasp. Javier Solana reminded the Council that the treaty,

    "requires common strategies to set out their objectives, duration and the means to be made available to the Union and member states",

commenting that this gives them,

    "an operational nature going well beyond declarations of policy. The Common strategy",

he reminds us,

    "provides automatically for adoption by Qualified Majority of any implementing Act".

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Thus we would have no choice if the EU decided, for instance, to intervene in an active war in Africa. Can noble Lords imagine the Government saying at that point that we would rather opt out? They would deem that politically impossible, whatever the demands it would make on our already over-committed forces. We should never forget that although the Government are accountable to Parliament for decisions to deploy UK forces in EU-led operations, that accountability is retrospective.

The common position on Africa is an example of an EU decision taken by QMV and never submitted to scrutiny which could have important consequences in terms of defence and of costs. What was the point of securing a six-week interval for scrutiny in the Amsterdam Treaty if we are not to insist that it operates? It is evident that Ministers are not prepared to fight this issue and Parliament should ensure that they do.

I am equally concerned about transparency and the degree of control, if any, that we can exercise on the continuing exchanges between the EU and Russia under the common strategy on Russia. This is a critical time in our relations with the United States for it is important to do all we can to prevent the Russians driving a wedge between us. The EU has so far developed its common strategy on Russia that Mr Solana and the troika have for some time been talking about regularly, not only about Russia's possible contribution to future Petersberg tasks, which is reasonable, but about defence and security, including a Russian NMR-type proposal which is mysteriously respectable whereas the US proposal is not. According to Moscow, the Russians have proposed a European system of missile defence which could be raised with the EU as soon as European countries are ready to pool their efforts in favour of Mr Putin's initiative.

As I told the House on 2nd May, the EU now has specific consultations within the CFSP framework with Russia on security and defence matters, including disarmament, arms control and non-proliferation--and this is the country which is selling weapons of mass destruction to rogue states and still has not destroyed its 40 tonnes of chemical weapons.

Three or four years ago we set up the NATO Founding Act on Mutual Relations, Co-operation and Security between NATO and Russia precisely to discuss such issues. It is surely vital that such exchanges, in which the US is deeply concerned, should continue on the NATO net. But the EU has deliberately embarked on the same agenda while agreeing with Russia that it deplores NMR. The Russians have said that they believe that,

    "the EU can become a more promising partner than NATO"--

(not surprisingly, perhaps, since apparently they expect to take part in equipping the EU defence forces) and although in February, Ivanov said that agreement had been reached that military issues would be discussed in a Russia/NATO dialogue, while political ones would be discussed primarily with the EU, both the Stockholm presidency and the EU/Russia summit in May continued to discuss security with Russia.

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The Americans have accepted our assurances that the CFSP's object, through the capability goals, is to increase Europe's contribution to its own defence and that it is not there to rival or to diminish NATO, but to add value. That hardly squares with what is in fact happening. The interesting thing is that there has never been any publicity about this. It is not mentioned, apart from one sentence, in the presidential report on the Nice Treaty. The proceedings at the EU/Russia summit, despite the importance of their contents, are confined to minor press communiques.

I am all for close relations between the EU and Russia on everything but defence, and one cannot blame the Russians for using the relationship to their own advantage. But relations on defence should be conducted either through NATO or bilaterally. This is a subject too important to leave to Mr Solana. We do not know what commitments are being made in our name. We have many years' experience of negotiating with the Russians, as do the Americans. I am not convinced that the Brussels hierarchy has that experience and I do not forget that there is a common strategy on Russia within which any implementation of decisions will be under the treaty by QMV. We shall not be able to exercise our veto. I retain an old-fashioned prejudice in favour of defence decisions in particular being taken by the Government so that they reflect our national interest. That is particularly the case since our national contribution will be among the largest and it is our men who will be taking the risks.

5.14 p.m.

Lord Craig of Radley: My Lords, it gives me great pleasure to add my congratulations to the noble Lord, Lord Bach, on his position as the new Minister for defence in this House, and to welcome the noble Baroness, Lady Symons, to her new portfolio. I congratulate her on her well-deserved elevation. She has moved away from defence topics. Today, so shall I, but I hope that I may still engage her interest in what I shall say in response to the gracious Speech.

Last Thursday, I attended a meeting hosted at the Malaysian High Commission at which His Excellency Professor George Kirya, the Ugandan High Commissioner, and a number of other High Commissioners were present. The purpose of the meeting was to discuss, together with key private sector individuals, preparations for the Commonwealth Partnership for Technology Management (CPTM) Dialogue to be hosted in Kampala by President Museveni of Uganda in August.

This will be the latest in a series of such dialogues which have been held successfully by CPTM in Malaysia, Barbados, Botswana, Namibia, Zimbabwe and Mozambique over the past six years. I have been privileged to attend three such gatherings, in Langkawi, Maputo and at Victoria Falls. I have now accepted President Museveni's personal invitation to join him at the Kampala Dialogue in August--I am a Fellow (unremunerated) of CPTM.

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Each event attracts 250-300 participants from government, private sector businesses, labour, academia and the media from around the Commonwealth and beyond. Attending for the three or four days of all these dialogues are as many as a dozen heads of state or government from Africa, Asia and the Caribbean. Such high-level and enthusiastic commitment, over a period of several years, underlines the importance and value that is derived by the busy attendees who very actively support and participate in these meetings.

At each and every dialogue, all participants have an opportunity to mix and take part, formally and informally. A variety of themes and issues affecting the interests and business activities in the region and further afield are highlighted and discussed. Over the years, CPTM has developed a remarkable networking and "smart partnership" approach to tackling common concerns and problems, in particular in the emerging economies of the Commonwealth. The aim has been to create a climate of co-operation rather than confrontation between the various groups, a willingness to resolve problems together and collectively, rather than alone.

CPTM itself was launched by CHOGM in Auckland in 1995 as a not-for-profit company limited by guarantee. It has received positive endorsement at CHOGM 1997 and again at CHOGM 1999 in Durban. Over the past six years, CPTM has evolved a rich variety of ways of disseminating best practice in technology and related management issues. It has successfully promoted its unique "smart partnership" concept of working co-operatively as "smart partners" to achieve common goals. CPTM itself has a mandate to,

    "enhance national capabilities for the creation of, and participation in, global wealth through sound management of technology, using public/private sector partnerships".

Its operations are controlled through a small central headquarters or "hub" in London, interacting with other hubs in the Caribbean, southern Africa and South-East Asia.

One of CPTM's unique strengths is the quality and ability of its networkers, who come from both the public and the private sectors. They freely offer knowledge, experience, flexibility and a willingness to adapt rapidly to changing circumstances. Although CPTM's paid staff is very small, by acting as a catalyst or triggering mechanism, CPTM achieves a multiplying effect far in excess of the resources put in. One of the main attractions of CPTM, both to governments and to the private sector in the emerging economies, is exposure to and membership of a world-wide "best practice club"--a club through which, both individually and collectively, representatives can explore and capitalise on the experience of others, dealing with complex global issues, like WTO rounds and the explosive impact of electronic and other technologies on all our lives.

Examples of CPTM's efforts leading to positive and practical results are growing apace. Outcomes include a quality management network in 10 islands of the

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Caribbean. One organisation has completed the requirements of ISO 9000 certification and is now certified. Two others are well on the way.

The ICT strategy in Grenada is being developed with the assistance of a CPTM-organised team. In Ghana, the Council for Scientific and Industrial Research has brought in private sector involvement so that joint public/private sector SMEs have improved access to technology know-how.

In Malaysia, the highly acclaimed MIGHT formation also brings together the public and private sectors of the Malaysian industry. It spearheads new joint public/private sector ventures--for example, the Electroplating Park, Malaysia, which co-locates several small companies involved in metal finishing industries so that all their highly polluting effluents can be properly treated and decontaminated in one place before safe release in the environment.

In Mauritius, its Research Council and its Vision 2020--a long-term perspective document for strategic guidance--have been adopted by its government and will be used for organising present and future investments. In Zimbabwe, a Scientific and Industrial Research and Development Council has been established, with effective research facilities, charged to bring public and private sectors together in new R&D ventures.

CPTM Fellows and staff have had a hand in all of these developments. They have also recently been advising the Shell corporation, at its request, on Shell's approach to identifying future global challenges for the company.

By no means is this an exhaustive list, but it helps to demonstrate the global width and variety of CPTM's contributions to tackling the complex modern problems that face governments and the private sector in many parts of the developing world.

At the meeting last Thursday with the Ugandan High Commissioner, we were briefed by Tan Sri Kamarul Ariffin, the executive chairman of the best known media and news group in Malaysia, on one of the latest and novel developments called Smart Partners News Network, another initiative derived from discussions at the CPTM dialogues in Maputo and Langkawi. This network, which owes a great deal to the drive and imagination of Tan Sri Kamarul, will be available on the world wide web. It is to be launched formally at the forthcoming dialogue in Kampala. It will combine in one website,, articles and factual reports on technology, management and other related topics from the subscriber countries. These already include Malaysia, South Africa, Namibia, Mozambique, Lesotho and Zimbabwe, and more are preparing to participate.

One of the understandable feelings aired at several of the CPTM dialogues, particularly when considering the issues of global trade and activities, is that media coverage is often dominated by reports coming from developed countries underlining their global economy approach. These may not always fully reflect the issues as viewed from within the developing nations;

28 Jun 2001 : Column 516 will give a regional perception. This is a further example of a practical CPTM encouraged product.

The remarkable thing about CPTM is that it has so quickly established itself as a most valuable, even indispensable, group within the Commonwealth. It has, uniquely, also pioneered ways of spreading sound management and best practice even more widely, to friendly countries and businesses beyond the Commonwealth itself. That it has continued to attract such sustained and dedicated personal support from heads of states and governments over a period of years is itself a most favourable endorsement of its value.

It has developed a very special niche within the Commonwealth family and deserves to be enabled to continue its excellent work. CPTM's only source of income is from government grants and some money from private sector organisations. It seems to be able to achieve a great deal for less than £750,000 a year, but its recent income is nowhere near to reaching even this relatively modest sum. Not all of the more developed Commonwealth countries now give it their support. Its future will depend greatly on the view taken at the Brisbane CHOGM and by the High Level Review Group.

A number of heads of state and government who will be attending Brisbane have already written to the Australian Prime Minister to express their desire that CPTM and its future will be specifically discussed during his chairmanship of CHOGM at Brisbane. Dr Mahathir, the Malaysian Prime Minister and a key founding figure and Fellow of CPTM, wrote to Mr Tony Blair only last month to express his views about the future for CPTM and drawing attention to the dwindling support that some of the older Commonwealth countries are giving to CPTM. I expect that there will be a further report and message about CPTM sent to CHOGM by CPTM Fellows following the dialogue in Kampala.

If CPTM is to continue its work for good, it needs to have a firmer financial standing than it has enjoyed thus far. Now that its performance and value can be judged, it is time to give CPTM the right backing. I urge Her Majesty's Government to set the example and to be as forthcoming as they were when they first came to office in 1997 with practical and increased financial support.

The DTI is the sponsor for our Government's contribution. If ever there was a candidate for joined-up inter-departmental support, CPTM is it. I am therefore particularly pleased that the noble Baroness is to respond. Her new trans-departmental responsibilities make her uniquely well placed to consider all that CPTM has achieved and can achieve in the years ahead. I am more than willing to brief her further. I urge Her Majesty's Government to give positive and practical support to CPTM, and to respond to the points that will be raised at Brisbane.

The theme for Brisbane is to reinvigorate the Commonwealth. CPTM has developed unique skills and methods that can assist in vitalising life for many Commonwealth people. It is a force for good in the

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Commonwealth. It deserves a boost to its financial fortunes to allow it to continue its really excellent work.

5.27 p.m.

Lord Shore of Stepney: My Lords, it is a pleasure to find that I am following a serious and valuable speech on the subject of the Commonwealth, which I have come to see as the most neglected asset available to this country's influence and diplomacy in the world. If Ministers were able to positively respond and work out an agenda for the CHOGM taking place in Australia later this year, they would be doing a great service, both to this country and to the 50 or so countries in all parts of the world which are members of that great association.

Having said that, I am very conscious that today's debate is the first in this new Parliament. With a new Parliament, a new team of Ministers--one of whom I see is not exactly a new member of the team, but we are very glad that she is still here--and a massively changing world situation, I hope that the Government can begin to think, creatively and deeply, about the future in a way that has not been obvious for many years past.

I welcome very much--I hope that this will not do him any damage--the excellent speech of the noble Lord who spoke from the Opposition Front Bench. It deserves serious study.

I wish the new team well, obviously. I am glad to see that in the Queen's Speech--and, indeed, in the manifesto from which the Queen's Speech was drawn--there are indications that matters such as development, world poverty, international defence and security have not escaped the Government's notice. Nevertheless, the Government, I am afraid, are still overshadowed by the European connection in all that they do and think. I shall devote most of my remarks to that issue with a sense of regret. There are massive concerns that we in this country should have with the rest of the world, but they are reduced, as it were, by this almost obsession that we have with things European.

With respect, I say to the Government that it is necessary, first, to get rid of a number of delusions--that is to put it as kindly as I can. One is that the objective of British policy, regardless of whether it is actually in our interest, is to be at the heart of Europe. No one who has undertaken any serious study of the case for joining the euro could fail to reach a negative conclusion. The case is contemptibly weak on economic grounds. It is not contemptibly weak on political grounds; indeed, it is a very serious case. It is that which tempts the Government, although they dare not quite say it, even now--although I note a slight change in the strength of the vocabulary in favour of the euro at the beginning of this new Parliament. Long may that continue. I hope that a "considered and cautious" approach will indeed be pursued. The trouble is that the Government believe

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that they must be "leading the pack" in Europe, and joining the euro is simply part of that. It leads them to misdirect themselves as to the national interest.

Secondly, perhaps I may offer the Government some advice. They may say that their approach has paid off politically. Intellectually, however, they can no longer go on pretending that the debate is about "inward-looking chauvinism versus sensible Europeanism", people "turning their backs on Europe" and wanting to "huddle into a corner out of touch with reality". That kind of language is fine for the hustings. But the kind of xenophobic noises about which my colleagues on the Front Bench often complain are confined to a very small minority of those who are involved in the debate. No; the real debate is between the "little Europeans"--with whom, I am afraid, the Government are aligning themselves--and those who believe that because we live in a wider world, a genuinely global world, we cannot afford to be absorbed within a regional continental bloc; that we must think and act internationally and retain our freedom of action to do so.

Thirdly, the Government must clear their minds and be more serious about exactly what we are a member of, and what it is trying to become. I have in front of me a quotation from the 1997 Labour manifesto. The key sentence about Europe is this:

    "Our vision of Europe is of an alliance of independent nations choosing to co-operate to achieve goals they cannot achieve alone".

That idea is contemptibly far from the reality. My noble friends are far too intelligent to believe such nonsense.

In the Labour manifesto that was presented to the nation a few weeks ago there was an advance--and we should all cherish this. The belief is no longer merely in an alliance of states, but in,

    "a Europe made up of nation states and offering a unique blend of inter-governmental co-operation where possible and integration where necessary".

Now we are getting a little bit closer to the reality. It is indeed both those things. I believe that my noble friends would like to stress the intergovernmental side of things more than they would the integration side. Nevertheless, the integration side is very powerful. Nothing could be more integrationist than the euro--to abandon separate national currencies and to turn your own national bank into a subsidiary of a European bank in Frankfurt. That is integration.

The other problem with the intergovernmental co-operation side is that, increasingly, such decisions are made by qualified majority voting. So the Government are hemmed in on both sides. There is the side of the supra-national Commission, the European Parliament--legislation, supreme court and all of that; and on the intergovernmental side there is the European Council of Ministers and the great Council of Europe--ever increasingly deciding what to do by qualified majority voting.

To pretend that this is the same kind of relationship as we have with other countries--the treaties that we sign and the obligations that we enter into--is to

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delude ourselves. I very much hope that the new team at the Foreign Office will have the intellectual courage and honesty seriously to address the question of what it is that we have joined, and what it is programmed to become.

I am not absolutely certain about the matter. I agree that there is a question mark as to the final destination. But the recent manifesto dismisses the evidence of that destination with the statement:

    "Together with virtually all other European countries we do not support a United States of Europe".

I say to my noble friends on the Front Bench that they are wrong if they believe that. I do not think that they do believe it. They know that it may fall just a little bit short of a federal state; and they know very well that the whole great debate that will open up over the next four years following the Treaty of Nice is to delimit the federal nature of the European Union and to define clearly the upper federal level which will make those decisions on our behalf and those rights that are left to individual states.

If we cannot face these matters and talk about them honestly, if we merely "rubbish" people who raise "difficult" questions, I fear for this country. But I do not really fear for it. I know that there are people of great intelligence and good will on all sides, and that they will turn their minds to these major problems.

I turn to the area of foreign and defence policy about which my noble friend spoke. I welcome some of the proposals--I refer to the aircraft carriers and the resolve that my colleagues have that NATO will have the first and last word. The trouble is that my noble friends can speak only for Britain. It is not the intention of many of our allies in the European Union that they should subordinate themselves to NATO for a day longer than they can get away with. We know very well that a structure is being built up which will, indeed, duplicate, and--worse--rival NATO in terms of military arrangements. Somehow, no one mentions the sudden militarisation of the whole European Union. Well, it is just "treaty creep"--you have one treaty, followed by another bit and then another bit more. Suddenly you find that a civil enterprise that you joined 25 years ago turns itself into a military pact with a separate foreign policy. The noble Baroness, Lady Park, spoke most seriously and properly about that. Like the noble Lord on the Opposition Front Bench, I believe this to be a great worry.

I am not at all happy that there is great wisdom in the European Council in its dealings in the Balkans, whether it be Kosovo or, more recently, Macedonia. I am not at all sure that its approach is wiser. I am very worried that we going along with the kind of first steps towards qualified majority voting in these areas. I know that that does not quite involve the use of troops, but there are all the other issues to consider. Indeed, I worry about that a great deal. Frankly, I do not trust the Council's judgment when it turns to the Middle East--Israel and the uninhibited championing of the Palestinian cause. I have in mind the lack of balance, sobriety and maturity in its dealings with that matter.

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Do we really want to be locked ever more closely into this area, or do we hope for something better? The idea that we are antagonistic towards Europe is rubbish. We have yet to define the relationship with Europe in a way which is as satisfactory for us with our very different world commitments as it is for the neighbours of Germany--still huddled together by their horrible historical experience--who see the best solution in a fully integrated European state in which their problem, as it were, would be for ever overcome. But we have to think much more about Europe, and especially about the enormous changes that are shortly to take place.

We have an opportunity here, if only we have the imagination and the will to seize it. There are a further 11 countries wishing to join the EU. It is absurd to try to impose upon them the kind of obligations contained in the 31 chapters of the acquis communautaire. They cannot meet them; nor can Europe afford to treat them with the generosity that is required. Cannot we envisage a very different kind of Europe, and work for it? There are many models in this respect. We began with the best of them all--namely, ourselves--when we formed the Council of Europe in 1949. It had the two crucial elements: first, you had to be democratic; and, secondly, you had to obey and observe a minimum charter of human rights. That is good enough for me. Beyond that, there was a forum in which not only could the parliamentarians of European countries meet together but so, also, could their Ministers. In my view, that was a fine beginning. What a pity it is that we now find ourselves with something, which, as a result of treaty creep, is very nearly a European federal state. There is plenty that both we and others could find in common that would allow all of us to live more comfortably with each other. It is one of the great tests of British statesmanship to find a voice and to give a lead in that endeavour.

Finally, let us throw away the kind of self-deprecation, inferiority complex and what we lack according to Commissioner Patten--our sense of identity or the fact that we do not know who we are, and so on. Perhaps I may quote the very last paragraph but one of the speech made by the Secretary of State, Mr Straw, in the House of Commons a few days ago. He sort of summed us up by saying:

    "We export more per capita than the United States or Japan"--

we do, we export more--

    "We are the fourth largest trading nation in the world, the fifth largest economy, the second largest investor abroad and the second largest home for foreign investment".

It does not sound to me like a poor, dependent nation and one that is lacking resource. Mr Straw went on to say:

    "We benefit hugely from belonging to the world's most influential networks: NATO, the United Nations Security Council, the G8, the Commonwealth and the European Union".--[Official Report, Commons, 22/06/01; col. 292.]

Let us be quite clear: we are members of those organisations and we have all those interests and assets. It is a great folly for us to entrap ourselves within a regional, continental bloc.

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5.46 p.m.

Lord Campbell of Alloway: My Lords, perhaps I may endorse the tribute of the noble Lord, Lord Bach, to our Armed Forces, which, unfortunately, as I hope he will understand, is one of the few aspects of his speech that I am able to endorse. I join in the congratulations extended to the noble Baroness who now sports three feathers in her hat--the former emblem of the Prince Regent, now used by the Carlton Club.

At the outset, perhaps I may endorse everything that was said by my noble friend Lord Howell in his speech, which, frankly, I thought was a masterpiece. His erudite appreciation of foreign affairs in context with defence--a sort of tour d'horizon--is wholly supported. The hope is that it shall serve as a blueprint for the defence policy of Her Majesty's Loyal Opposition.

Many of the anxieties expressed by the noble Lord, Lord Shore, who is always a difficult speaker to follow because one's speech is always far less interesting than his, are not imaginary; they are real. Any committed Europhile, such as I have been--indeed, long before accession to the EEC--who values, as I do and have always done, the United States' contribution to the defence and the security not only of our country but also of Europe, would, having read this gracious Speech, suggest that some noble Lords in this House should step on the brake lest this EU bandwagon, driven by the likes of Romano Prodi, Lionel Jospin, and others, including some members of your Lordships' House, should hit the buffers.

I turn to the proposed enlargement of the EU and of NATO. This is the time for diplomacy, as between the member states of the European Union, the United States and Russia. Negotiations between the US and Russia on missile defence, of which there is no reference in the gracious Speech, must be allowed to seek resolution, especially having regard to the security meetings to which my noble friend Lady Park of Monmouth referred between the EU and Russia; and to which the noble Baroness has drawn the attention of the House. Furthermore, rules of engagement on armed combat with regard to the Petersberg tasks have to be settled. Account must be taken of the open-ended commitments to which the noble Baroness referred in the Province, the Balkans, Sierra Leone and many foreseeable armed rescue operations.

Account must also be taken of the fact that control of our Armed Forces remains within the remit of the Crown, albeit exercised by Parliament, which in the exercise of the treaty-making power may conclude alliances and withdraw from alliances without derogation from our residual sovereignty. The peoples of Europe now demand a referendum before ratification of EU alliances such as the Treaty of Nice or the euro. The concept of ever closer union was not related to defence; it was excluded. It is a concept of imprecise aspiration which does not permit the tentacles of Brussels to grab hold of defence. One has to take account of making adequate provision for our

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Armed Forces. That was once the bane of the monarch but is now the burden of our Parliament, but a Parliament which has control of its own budget. Perhaps that is why, wisely in my view, the euro has been put on the back burner by government.

One also has to take account of the fact that the peoples of Europe have no wish to set up a European superstate to challenge the United States or any other state and that in all these circumstances it is not appropriate that we should hasten into unilateral action of any kind but rather that there should be a moratorium on ratification of alliances referred to in the gracious Speech unless and until they are accepted by the peoples of the EU in a referendum.

The gracious Speech affirms that NATO is the cornerstone of our national security. However, it is also the basis of the EU's security, a security which is wholly dependent on United States support. That is not acknowledged in the gracious Speech and, as I understand it--I am subject to correction--is not acknowledged by the Government or the party opposite.

There is no reference to missile defence, upon which the United Kingdom or the EU is also wholly dependent on the United States. The United States' contribution to defence of the United Kingdom and the EU has to be assessed as a whole and settled by diplomacy within the remit of foreign affairs. I believe that the noble Lord, Lord Bach, agrees with that. The independent force outside NATO with its own intelligence gathering arm constitutes, frankly, a bad nightmare and that has now been recognised. But how could it ever have been proposed if the due process of diplomacy had been adopted? It would disturb defence relations between the United States, the United Kingdom and NATO.

An enlarged EU of at least 27 states--it could be more--towards the east will change the whole structure of defence. I agree very much with the analysis of this matter of the noble Lord, Lord Wallace of Saltaire. That enlargement could well involve a complex conflict of interest between the United States and Russia as well as a conflict of interest on missile defence.

It is not in the interests of our nation or of the EU that as regards defence the Government should do other than to tread warily and walk within hand touch of the United States. Is it not manifestly apparent that the future of defence policy lies within the remit of foreign affairs and that pre-emption of diplomacy would be wholly misconceived? Is it not fortunate that the noble Baroness speaks for the Government on both defence and foreign affairs?

As a statement of government defence policy the gracious Speech is neither sound, satisfactory or acceptable. It ignores the findings of Sub-Committee C of your Lordships Select Committee on the EU in paper 101 of 25th July. Those findings were not called in question in the Government's response of October 2000 or in the debate on the committee's report in your Lordships' House, reported in the Official Report of 14th December at cols. 520-564. That debate was

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concerned with the deployment of EU military forces on Petersberg tasks as defined in paragraph 29 of the report which includes armed operations in peacekeeping and peacemaking. There is no reference to that in the gracious Speech.

It was found by the committee that any such force would be wholly dependent upon the United States for intelligence gathering, heavy lift by sea or air, operational logistic support, command control, communications, computers, surveillance and reconnaissance; that no mission should be undertaken without the good will and tacit support of the United States; that NATO should be given the choice to lead any such mission and that a large increase in expenditure of most European states would be requisite in any event.

The noble Lord, Lord Robertson, acknowledged--as stated in the report--that the United States Government had an effective veto over EU operations because of its position in NATO and superior capabilities. The Secretary of State for Defence also stated in the report that he could not foresee a situation in which a major commitment such as the Balkans could be undertaken without the active support of the United States. The sub-committee concluded that it could not express too strongly its anxiety at the danger that the common European defence policy on security and defence could turn into a damp squib and that a consequent serious deterioration of our relations with the United States would ensue.

The sub-committee also found that defence was the responsibility of national governments and parliaments. It added that provision for our armed services lies within the exclusive province of our Parliament.

Field commanders engaged in the armed Petersberg task--the armed operation short of war of an international character in public international law--are concerned that there should be common rules of engagement for those who serve. War crimes under the Geneva Convention applicable to such armed operations as incorporated in Article 8 of the ICC statute warrant clarification and review. A seven year opt-out of Article 8 on ratification of the statute would afford an opportunity to establish such rules of engagement on the Petersberg tasks.

There is also very serious concern about the defence shield against missile attack which was set up by President Reagan in the 1980s. This shield today could be penetrated by an updated Russian Topol M missile which is made to wobble during atmospheric re-entry. And now (as propounded by Professor Gormley in a paper published by our International Institute for Strategic Studies) we face the threat of a new generation of missiles: a modern kit aircraft fitted out with navigational aids and warheads, total cost £70,000, with a guidance system generated by 15 toy Playstation game consoles configured together which guide the missiles to bug the ground flying at about 60 miles per hour. It is difficult to detect and destroy in flight using extant technology. Those are discharged

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from mobile launchers which experience in the Gulf and the Balkans has shown are all but impossible to take out.

The United States is committed to spending £44 billion on its new star wars defence shield project. Unless the United States keeps ahead of the field, in about 10 to 15 years' time there could be an equilibrium of terror akin to that in the Cold War.

In conclusion, of the 40 countries which already possess working cruise missile technology, only 22 are signatories to the missile technology convention. As to that form of defence, we are wholly dependent on the United States. The concerns of this speech were truly not addressed in the gracious Speech or the candy floss election so massively shunned by the electorate. Assuredly they cannot be addressed today, but perhaps some interim measure of assurance may be given pending a full debate on defence and foreign affairs.

6.3 p.m.

Lord Alderdice: My Lords, I, too, congratulate Members of the Government Front Bench on ascending to even higher office than before. I also wish them well because with high office comes an even greater burden of responsibility. In the politics of today there is little time to think and reflect on the decisions that have to be made. There are perhaps no parts of government which require clearer analysis and thoughtful decision-making than those of foreign affairs, defence and international development. Decisions made often continue to have effect for a long period of time. Decisions in the domestic field can be repaired more easily.

The noble Lord, Lord Howell of Guildford, referred to the over-concentration on Europe in the speech by the Secretary of State for Foreign and Commonwealth Affairs. However, the over-concentration in recent times has not been so much on Europe itself--it is an extraordinarily important matter as even those who disagree with the Government nevertheless agree--as on the economic aspects of Europe. Almost all the discussion recently has been about monetary union and the euro. That is important. It is a proper matter for debate and discussion. As a somewhat younger Member of your Lordships' House--despite the increasing number of grey hairs in my beard--I fear that my generation now thinks of Europe in almost nothing but economic terms. For them, we entered the Common Market: the European Economic Community. There is now debate on the euro and European monetary union. That was not the fundamental purpose of European union. Economics were the instrument adopted, but they were not the purpose of the founders of the Union.

On 1st July we come to yet another crisis in Northern Ireland. The 1st July is, and will be, remembered with far greater historic resonances than the events of this weekend. The 1st July is remembered because tens of thousands of young men from the Ulster Division and the Irish Division set aside the debates in your Lordships' House over Home Rule

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and went to fight and die for freedom in Europe--not freedom in Ireland or these islands, but freedom in Europe.

If we go by the old calendar, 1st July was the date of the Battle of the Boyne. In 1690 a Dutch prince fought with an English king backed by French troops on an Irish river. The Dutch prince won and the outcome was celebrated by an Italian pope with a Te Deum in the German-speaking city of Vienna. We have always been Europeans.

It has been a Europe of conflict. During 1,000 years, not a generation passed in which there was not a war between countries which now form the European Union. My generation has begun to forget that the greatest achievement of the European Union is not that we can travel on holidays with less difficulty at the border; the greatest achievement is that my generation has lived without a major war between the European nations. No generation for 100 generations has ever known that. We must not forget that the fundamental purpose of what we do in Europe is to prevent war or conflict.

I have listened carefully to noble Lords who indicate how that might be achieved simply by nation states working together. It is an easy answer. What are the nation states of which we speak? Throughout the whole existence of this Chamber there has been a constant and consistent debate about the boundaries of the British state, particularly as they relate to the island from which I come. The settlement, even at a constitutional level, is one on which we are still working. The European Union helped to settle some of the boundary questions between France and Germany and between Germany and Denmark. If it were not for the European Union, issues in the Basque country might well be creating more difficulty between France and Spain than is currently the case. We have our own little difference with Spain still to resolve in the context of the European Union.

It is not easy to define what a nation state is and where its boundaries are. With one or two possible exceptions, such as Portugal, nation states are not homogenous entities of nations bounded by states. They are historical entities, almost all of which contain minorities, which are often the cause or the subject of conflict and difficulty. The big problem for Europe in the next 10 or 20 years will not be economic issues or the euro, but how we deal with our minorities. That is the opportunity that Europe gives and it is the challenge before us as Europeans in these islands and throughout our continent.

The peace process in Northern Ireland did not start with the talks in 1991, 1992 and 1993; it started on the day in 1973 when the United Kingdom and the Republic of Ireland together joined the European Union. The issue for Northern Ireland began to be less whether we were part of the United Kingdom or of a united Ireland and more whether we were all part of a united Europe and what the configuration of that united Europe might eventually begin to be. That is what brought Ministers from Her Majesty's

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Government personally closer to Ministers of the Government of the Republic of Ireland and built relationships that had been sadly fractured.

I hope that, as well as stopping conflict among its member states, Europe has also begun to heal some conflicts that have been there all along. I do not know whether the Minister can say anything about this, but I harbour the hope that the increasing possibility of Cyprus, and perhaps even Turkey, eventually joining the European Union may begin to bring hope for another divided island. Britain has historically played its part in Cyprus. Perhaps we may also play a part in the future from our experience in helping to resolve the difficulties in Northern Ireland.

There may be a feeling that such problems are insoluble. The differences certainly cannot be resolved to please everyone. Other conflicts may sometimes be thought to have come out of the blue, but they rarely do. When I visited Macedonia two or three years ago, I knew that there would be trouble, because I saw exactly the same things there that I had seen in Northern Ireland in the 1960s.

What happened in Kosovo was also no surprise. Many of my colleagues had been warning for two or three years that what eventually happened there was bound to happen. Why? Because all the ancient rivalries were there and had only ever been held in check by an external structure--the imperial structure of the Ottomans or the socialist structure of Yugoslavia. I believe that only in the solidity of a liberal democratic European structure will it ever be possible to hold those ancient hatreds together. We have a responsibility there.

Given the painful and substantial experience that Her Majesty's Government and their officers have accumulated in the past 20 or 30 years, I hope that there will be a little more reflection on what can be learnt. If I have one criticism of governments and their officials over a number of years, it is that as they live, so they judge their neighbours. That is often said in a reproving way. I say it slightly differently. Those who come from peaceful, democratic countries with a liberal democracy and the rule of law are often naively upbeat about the prospects in areas of conflict. Conflict creates a new dynamic, different ways of thinking, different agendas and a different politics. I often find well meaning, good people from substantially stable societies coming to the wrong conclusions in their attempts to do good in divided and conflict-ridden societies. At times it is important to sit back, listen, reflect and be a little sceptical and a little tough in one's thinking. Sometimes we need to think ill rather than to think well when people are involved in conflict for a long time. Conflict does not continue by accident. It is maintained for reasons--not always good ones.

I hope and trust that the experience that this country and the international community have developed will be reflected on, thought about, used and digested to ensure that over the next 20 or 30 years we address conflicts on the basis of thoughtful reflection, not wishful thinking that things might be better than they are.

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I have listened to comments about the enormous wider issues of ballistic missiles and missile defence. There is no doubt about the importance of those issues, but in the past 20 years, the vast majority of conflicts have not been major intercontinental ones, but internal conflicts within countries over minority groups who feel or are grossly abused. I suspect that the same will be true of the next 20 years. If we are to make our contribution, it will be not just on the bigger issues, but on those horrible little wars that cause so much tragedy and despair.

In dealing with those conflicts, we should not just look for new ways and new sets of relationships. I sometimes feel that we forget our old friends who have been able to help us. Europe helped us in Northern Ireland, but so did the United States of America and our Commonwealth friends. We turned to South Africa and Canada, because we speak the same language, we have familiarity with similar kinds of conflicts and we have the same kind of parliamentary structure and democracy. We have had to turn to people such as John de Chastelain and Cyril Ramaphosa. Even the conflict-ridden Northern Ireland Assembly applied to join the Commonwealth Parliamentary Association, because unionists, nationalists, republicans and loyalists all realised how much we had to learn from--and, on occasions, to give to--our Commonwealth friends. As the Foreign Secretary mentioned the Commonwealth in his speech, I hope that we will see evidence of an increasing commitment to it and all that it can give in so many parts of the world.

We should not forget other resources, such as the BBC World Service, which is enormously influential and valuable. I commend the Government on the increase in finance that they have given to the British Council. However, that remarkable organisation, under the leadership of the noble Baroness, Lady Kennedy of The Shaws, will achieve its full and substantial opportunities and possibilities only if Her Majesty's Government continue to increase the resources that it has at its disposal.

I trust that your Lordships will forgive me for concentrating on the issue of conflict, given the background from which I come. However, I believe that it is the most important aspect of foreign policy. While private citizens and private companies can get on with investment, wealth creation, trade and the international economy, it is the responsibility of government to maintain the law at home and abroad, to protect against conflict and its ravages and to promote--as the Government have said is their full intent--human rights and the resolution of conflict throughout our world.

6.19 p.m.

Baroness Whitaker: My Lords, the gracious Speech has much to offer for that span of linked concerns about Britain's place in the world and the nature of our own society, mentioned by the noble Lord, Lord Alderdice, described by my noble and learned friend

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Lord Archer of Sandwell in his notable speech proposing the Loyal Address, and amplified by my noble friend the Minister earlier today.

There are proposals in the gracious Speech which take the idea of an inclusive society beyond our island boundaries, rather as described this morning by Sir Christopher Patten, for those of us who heard his lecture, acknowledging the world context in which we operate and targeting major obstacles to a fairer and more prosperous world. We shall have the opportunity to debate the International Development Bill next Monday, so I want to make, if I may, three points about other development matters.

The first is to welcome legislation to outlaw the bribery of foreign public officials. I have previously mentioned to your Lordships' House my membership of Transparency International UK's advisory council. This Bill will have wide approval outside your Lordships' House and, indeed, throughout the OECD. The group vice-president of BP, Richard Newton, said:

    "Corruption is the dry rot undermining aid. It destroys development, it frightens away genuine foreign investors, it perverts societies".

Consider a country where development aid accounts for 90 per cent of public investment and 30 per cent of recurrent expenditure--not unusual in a sub-Saharan country. Large, unaccounted-for segments of these funds disappear or have no useful outcomes. The effect on public welfare--indeed, on life expectation itself--is deep. The World Bank once asked civil servants from central Europe, Africa and other regions to estimate how much had been lost through corruption in development aid as a percentage of project cost. Their figures ranged from 10 to 15 per cent. On the basis at that time of perhaps £3 billion aid annually for development aid to Africa, I leave your Lordships to work out the telephone number costs of corruption to the world aid budget.

But let us not rest easy on the assumption that corruption is mainly a poor country problem. The bribes which skew public service investment are paid largely by Western contractors. This does not exclude our own companies, slipping down in the index of countries perceived to pay foreign bribes. Effective aid needs a robust anti-corruption framework and it needs it soon. I hope for an early Bill which will improve on the model provided by the Law Commission, splendid for domestic issues, but which could put more beyond doubt the offence of bribing a foreign official.

I hope that the Bill will enable the full gathering of evidence and put a halt to the tax deductibility of bribes. And we might think again about whether prosecution should be only by consent of the Attorney-General, which is rather wide of the OECD framework. The promised money-laundering law is also part of the fight against corruption and is welcome in that connection, as well as in tackling organised crime in general.

The next thing that I particularly welcome in the Government's international work is the initiative planned by my right honourable friends the

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Chancellor of the Exchequer and the Secretary of State for International Development to tackle serious health problems. These health problems together make up an urgent crisis but one which has systemic causes.

The elements of the urgent crisis are well known. All over the developing world the working population is being decimated by HIV/AIDS, tuberculosis, malaria and other infectious diseases. Millions of people are killed every year by the big three diseases and millions more debilitated and incapacitated. Families are left uncared for and national health budgets are almost entirely swallowed up. The real development gains of the past 50 years are being reversed by the advance of disease.

The systemic causes of the crisis include poverty and poor living conditions, inadequate health delivery systems, governments' refusal to resource effective and explicit campaigns, in part, the Western-fixed price of treatment, often buoyed up by patent rules, and the imbalance in research between spending on the diseases of the few in the developed West and the diseases of the many in the developing world.

No one wants to see the financing of medical research undercut or invention and discovery unprotected and unrewarded. But the scale of the health problem means that new approaches must be taken to enable poor governments to buy treatment, which they then must also deliver effectively.

The Cabinet Office's Performance and Innovation Unit is publishing a report tomorrow, Tackling the Diseases of Poverty. I think it is unusual for a Cabinet Office policy unit to go so far outside our national boundaries, albeit with a major contribution from the Department for International Development; and I applaud this example of joined-up government.

The report recommends (it is already on the Internet) a global health fund--now part of the UN agenda--which can also make an advance purchase commitment to buy new products as they come on to the market as an incentive for research; work to make patent-controlled drugs affordable to developing countries; support for a tiered pricing system which also prevents lower-priced drugs intended for poor countries being reimported to higher-price markets; and support for basic and applied research and harmonised regulations to speed up approval and licensing of new products.

I congratulate my right honourable friends the Chancellor and the Secretary of State for International Development on their rapid implementation of the recommendation for a global drugs fund with a UK pledge of £75 million, which is now being increased to £200 million, and of the recommendation to set up tax breaks as incentives for research. I hope that my noble friend the Minister can say how the Government will implement the rest of the report.

It is now also necessary for the trans-national pharmaceutical companies to play their part, as they have begun to do in South Africa by withdrawing, under pressure from the Socially Responsible Investment movement, from the case brought against

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them by the Government. And a few weeks ago GlaxoSmithKline bowed to pressure from Oxfam and cut the price of drugs in 63 developing countries.

But the UN discussions on the global health fund are off to a fairly rocky start. Today marks the close of the initial session. What can our Government do to advance a useful agreement? I ask my noble friend the Minister for her assessment of progress, and particularly what form UK participation will take when the global fund is discussed by the G8 in Genoa next month.

The signs from the WTO session last week on drug patent flexibility were not reassuring. Will my noble friend the Minister encourage the Government of the United States to continue the relaxation of patent protection which they have begun with Brazi1? And what part is the Commission on Intellectual Property set up by DfID to play?

I hope that the Minister will join me in congratulating Botswana on its progress, with the help of the Bill & Melinda Gates Foundation, in training and treatment to tackle AIDS--in stark contrast to South Africa, which has so many more cases of AIDS.

The last thing I put before your Lordships is that aid to developing countries is hugely supplemented by another source of funding--the remittances from the families of people in developing countries who work abroad. Our immigrants and indeed our citizens whose family origins are in developing countries are good earners. They add to UK tax revenues and they also send out probably at least matching funds to what goes out in official aid. When the IMF last looked at the subject, migrants' remittances exceeded by about 20 billion dollars all official assistance from donor governments. We should not forget these positive links between immigration and development.

In conclusion, some of those voters who seem to be getting turned off politics, particularly younger ones, can take heart from the broad and imaginative sweep that the gracious Speech shows over the leading part that Britain can play in the world context.

6.31 p.m.

Lord Renton of Mount Harry: My Lords, it is a great pleasure to follow the noble Baroness, Lady Whitaker, and the noble Lord, Lord Alderdice, both of whom made extremely interesting speeches. I shall take a slightly different line in this wide-ranging debate.

We are possibly facing a global recession and it is certainly true that there is currently a lack of investor confidence that is quite different from the tune--or mood music--of the past few years. At the same time, this is a strange moment in foreign affairs. There is a new Administration in the United States who are clearly feeling their way. Given the President's antecedents, the Administration are likely to be more isolationist and they will tend to look inwards, southwards towards Latin America and westwards to the Pacific; they are unlikely easily to look eastwards towards Europe.

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There is also an as yet unproven Administration in Russia. They are still trying to cope with massive economic weakness and, dangerously, they are trading weapons and nuclear knowledge with rogue states, partly in order to boost their overseas earnings. In China, too, there are huge economic problems and uncertainty about the role it will play in this new century. After all, Jiang Zemin is due to retire next year from the presidency, and it is not clear whether Zhu Rongji, the other leading politician, statesman and economist in China, will seek to replace him. That creates an air of uncertainty in yet another of the world's major countries.

It is right to look at the United Kingdom's position against the background of those uncertainties. We have a new government and we are in a new millennium; where does our future lie? Does it lie exclusively within NATO in defence terms? Should we concentrate on trying to keep our special relationship westward across the Atlantic? Or does there have to be muted acceptance of the fact that the United States will slowly wish to get less involved in Europe, particularly in relation to humanitarian and peacekeeping exercises that western European countries think are necessary? Frankly, such exercises mean little to someone living in Kansas, Nebraska or Dallas, Texas.

The noble Lord, Lord Alderdice, in particular spoke about the Balkans. Unlike him, I have not been to Macedonia. I have twice been to Sarajevo--on one occasion I went there to open a British Council office--and I spent more than a week in Albania last year, where my younger son was working for the BBC World Service. From that I got a tremendous feeling that peace in the Balkans--an ability to make the Serbs live with the Croats or the Bosnians and the Muslims to live with the Orthodox Christians--is every bit as difficult to achieve as peace and harmony in Northern Ireland. One substantial difference is that the conflict in the Balkans goes back at least 600 years whereas that in Ireland goes back only 300 years.

The war after the break-up of the Yugoslav federation, following Tito's death, would not have been solved without the involvement of the Americans. It took American forces and its artillery, tanks and intelligence to bring that conflict to an end. However, the war has not in fact ended. The situation in Kosovo is now, if anything, even more difficult. So long as Milosevic was in power in Serbia, everyone sympathised with Kosovo. Now that Milosevic has gone, many people do not quite know what to do with Kosovo. If it becomes autonomous, clearly the Serbs will object, but if it does not become autonomous and independent, the Albanians will object and--possibly--many of them will leave and go to Macedonia, which, as my noble friend on the Front Bench said, is a tragedy. What will happen in Macedonia now? None of us knows. All that is certain is that there is a rising violence or volume of hatred between the Slavs and the ethnic Albanians, and no one knows how to control it.

I state all that in order to ask: are the Americans really prepared to become more involved in the Balkan situation in future? If not--as I suspect is the

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case--how effective can a European rapid reaction force be without American weapons, B52s and, above all, American intelligence? That is the real conundrum--the paradox--that faces us. Personally, I am not against a European rapid reaction force but we have to be extremely tactful about the way in which we move the matter forward so that NATO and the rapid reaction force can genuinely be seen to complement each other; that must be accepted.

In that regard, I pay tribute to the noble Lord, Lord Robertson, the Secretary-General of NATO. I have a lot of time for the noble Lord, not least because he was my "pair" in the House of Commons for many years. However, he always made it clear that he was prepared to be paired with me because I had a Scots wife and not for any particular qualities of my own! The noble Lord has shown a great capacity as a "peacemaker" and he has kept the different sides together within NATO. He has tried to carry forward this difficult argument--or discussion--about the rapid reaction force.

In that regard and in relation to the United States, NATO, the EU and the rapid reaction force, it is important for leaders of political parties not to take static, determined positions. We have to be able to re-jig situations and treat problems and formulae as being subject to change. The situation is not static, although mutual understanding of each other's needs is absolutely essential.

The anti-ballistic missile shield changes the balance of global defence power. It confirms the United States in this field as the number one--as the numero uno--in a major way. It has yet to be worked out whether that can be acceptable to us in western Europe, to Russia and, in the long run, to China.

I was struck by an article in the Economist of 23rd June. It had a good headline, which asked:

    "Can George Bush and Vladimir Putin agree to disagree constructively?".

That is a marvellous oxymoron and it is not yet resolved. So far, it is clear that the Americans and the Russians are no longer enemies, but they have not yet in any way found an entente cordiale on such major issues as security, missiles, knowledge about the nuclear industry or diplomacy.

It is against that background that I place the second half of my remarks. I come to the question of our involvement in the EU.

I say straightaway, as someone who has come to your Lordships' House from the House of Commons and who has always been on the pro-European side of my party, that I find the position of the UK Independence Party reasonably understandable. I do not agree with it at all. However, if you really feel that because it is moving towards a single federal state life in the European Union is intolerable, there is a case for "doing a Norway" and getting out. However, there is not a case for thinking that all the old treaties can be renegotiated because that simply will not happen.

I must say too, with great respect, that I believe that a phrase like "In Europe but not run by Europe" is simply a silly catchphrase. It sounds nice but it means nothing. It is against that background that I have to

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say that if you wish to be a serious influence in Europe, if you wish to be at the heart of Europe, you cannot indefinitely stand aside from the biggest project and enterprise in which the European Union is involved and by that I mean the European Central Bank, a single Central Bank interest rate and the launch of the euro with coins and notes coming onto the market in just six months' time.

I believe that we could stand aside for a few more years. I do not believe that the negotiating position of the Government up until now has been at all bad, following on from the negotiating position of John Major's government. But our influence is surely bound to diminish as long as we do not finalise our decision as regards whether or not we join the euro.

I believe that after initial difficulties, the issue of euro coins and euro notes will be extremely successful. It will greatly reduce transaction costs throughout the EU countries. There will be a transparency of pricing that will be very significant in a market of 350 million. Even British tourists travelling on the Newhaven to Dieppe back-in-a-day ferry, as I sometimes do to replenish my wine cellar, will find that not losing 10 per cent to Thomas Cook is extremely pleasant. I shall keep some money in euros all the time.

But I accept that the decision as to whether or not we join the single currency is very serious. What is lacking at the moment is a sense of confidence among the British in our approach to that argument.

There were others present this morning, like the noble Baroness, Lady Whitaker, and my noble friend Lord Skidelsky, who heard Chris Patten, the European Commissioner for External Relations, speaking in the Royal Gallery. I should like to quote two passages from his speech. In the first, speaking very wisely, as he does, he said:

    "There is so much to be proud of in Britain that we should have the confidence to share our sovereignty with others in the certain knowledge that that is the best way to preserve real sovereignty rather than the notional kind. We would be able, for example, to lead the present debate in Europe about how to distinguish between what should really be done at the European level and what at the national, and about how to make the institutions which manage policy at the European level more accountable to national electorates. We could make Europe more as we would wish it to be, if only we could treat it as it really is"--

I would add, in brackets, not as Christopher Booker treats it--

    "not as we fear it may be, and if we would see our own place in the world more honestly, more clearly."

Secondly, he said,

    "Of course, it is true, as Jean Monnet argued in his memoirs, that Britain's greatest contributions to civilisation were respect for liberty, habeas corpus and democratic institutions. Provided we do not assume that we have a monopoly of virtue in this area, our record ensures that others will listen to us in the debate on Europe's future".

I am a great friend of my noble friend Lord Howell of Guildford sitting on our Front Bench. He has been a friend of my wife and myself for a very long time. But I take a different attitude from that which he takes. I believe that the European Union can go forward and

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will go forward and that we should go forward as part of it. The sooner the debate opens up on whether we have a referendum or not, the better.

Finally, I very much hope that when the referendum comes, and the debate before it, leaders of all the main parties--Labour, Conservative and Liberal Democrat--will allow members of their parties, Ministers and shadow Ministers to campaign for and against just as they individually wish. It is far too big an issue to be whipped. We should repeat what Harold Wilson did with bravery in 1975 when he allowed his Ministers to go off and take an opposite line. That is the way in which there can be free and fair discussion about what I accept is an extraordinarily important matter. We should put the issues before the British people fairly, honestly and on an all-party basis without being totally bogged down in party politics.

6.46 p.m.

The Earl of Sandwich: My Lords, I, too, am delighted to welcome the noble Lord, Lord Bach, to international affairs and to wish the noble Baroness well in her new, joined-up dual portfolio, which must be a little like sitting astride a catamaran, but I hope not as bumpy as that. She will have to exercise similar acrobatics when she is winding up this debate.

Perhaps I may briefly express a personal wish on the subject of the reform of our proceedings. It is that we resist the temptation to indulge annually in unlimited discussion of every aspect of the Queen's Speech. The noble Lord, Lord Hunt, mentioned that last night. Either we have timed debates, we limit the subjects or perhaps we even limit ourselves. But with more noble Lords taking an interest, it is simply not possible for us to, for example, link between different days on single themes; for example, UK agriculture and international trade. The formulation of the Queen's Speech requires great care and it would be misleading to interpret every syllable as a foretaste of the Government's intentions like a manifesto. However, as has been said from all sides, it is unfortunate that rural affairs were omitted and it was a disappointment to me that world poverty is left to the very end.

But while there remains some uncertainty about the Government's desire to restore confidence to the farming world, there is no doubt in my mind that the Cabinet is committed to debt relief, poverty reduction and the provision of health and education, if not to the degree that some of us would like.

To that extent, it is a surprise that No. 10 did not give a little more prominence in the gracious Speech to the great international campaign against poverty, as I had expected, for which the Government received a powerful public mandate.

I look forward to the reintroduction of the International Development Bill next week and the establishment of aid for poverty reduction for the first time not just as an add-on or a hand-out but a formally established programme approved by our legislature. For too long, international development has been left to the end, to the whim of political parties. Aid cuts have been an all too frequent recourse of all

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governments of all colours strapped for cash. Now that the economy is reasonably healthy, despite the global warnings of the noble Lord, Lord Renton, and the aid ministry secure and fully represented at Cabinet level, with firm Treasury backing, those who have fought for a fair deal for the world's poor can look forward to at least four years of secure funding, and probably more.

However, in terms of achieving results in international development, both in reaching the UN GNP figure and meeting the international targets, we are still a long way from where we should be.

Bringing the least developed countries closer to the advantages offered by globalisation and technological change must be the greatest challenge facing governments as a whole, not just departments responsible for aid. I do not need to repeat the statistics of poverty or the ever-widening gap between rich and poor nations which have already been outlined by the right reverend Prelate the Bishop of Oxford. The point is that it is not money for aid programmes which will make a difference so much as enabling those countries to play a part in negotiations affecting their ability to increase revenue from exports, reduce the burden of their debt and thereby apply resources to their development.

In the course of the debate on rural affairs several noble Lords, including the Minister, mentioned the urgency of CAP reform, saying how important it is for us to secure agreement in time for EU enlargement. Today the Countryside Agency has made a strong statement on the subject. There is a potential for consensus--even in Germany which has recently been ambivalent on green issues--on the necessity to switch towards environmental support for all European farmers.

The noble Lord, Lord Bach, said that the CAP was a high priority. However, all we have is words. We have heard them many times before and we are still far from agreement on CAP reform in Brussels. We owe it to our stricken rural population and to the third world farmers, who still face a wall of European subsidies, to get on with the common position that can be negotiated fairly with our trading partners.

The noble Baroness is bound to mention the good things that the EU is doing, like the Cotonou agreement. I recognise that Brussels holds the line on much of the portfolio. I hope that during her term of office she will receive tangible good news on fundamental agricultural reform as well.

In the debate on Tuesday, the noble Lord, Lord Plumb, said that we should pay more attention to the role of the WTO, as others have said. As a parliament, and not just as a government, we should be more focused on this supposedly more democratic world body that will have a profound influence on us and the future of poor countries. Public awareness of trade is growing fast, largely as a result of NGO activity, most of which I believe is constructive. As governments prepare for the next WTO meeting in Doha in November, parliaments, even those like ours that benefit from specialised select committees, are in danger of being sidelined.

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Three weeks ago the noble Lord, Lord Brett, and I attended an IPU conference in Geneva, the first ever parliamentary conference on trade. We were among 240 members of parliament from all over the world. Of course, we were lectured by our hosts at the WTO on the importance of launching a new trade round. Most noble Lords would agree that it is imperative that the world takes a few bold steps towards compromise if globalisation is not to descend into a Seattle farce again.

Members of parliament from Argentina, Egypt and elsewhere were not so easily persuaded. They listed all the clever tactics of the developed world: agricultural subsidies always come first; labour standards; and tariffs and anti-dumping measures that have kept the world's poorer nations out of the world trading system. They argued that if the northern countries will not budge on such fundamental issues and will not focus on development, how can they expect any agreement? The ghosts of the MAI--the attempted multi-lateral agreement on investment--still haunts the WTO negotiating table. In many parts of the developed world, the current drive towards rules-based globalisation, much as we applaud it here, is still seen as a threat rather than an opportunity. We must take note of that.

An MP from Jordan said that in the popular view globalisation would lead to poverty as surely as smoking leads to cancer and that it is a sickness that can easily suffocate the poorest countries. It is important for rich countries to appreciate that perception of world trade negotiations: a table dominated by the powerful at the expense of the very poor.

Our Government often talk about capacity building and there is a need to help the poorer countries to build up their negotiating skills. However, it is not enough for us to sit beside other countries at the WTO handing out our own solutions and recipes. We also have to appreciate the special position of the poorest countries and to understand that changes in our society and trade concessions in their favour are a means of enabling them to escape poverty so that they can trade on more equal terms. We cannot easily look at the matter in that way, but I believe that we have to.

Through changes to the CAP, that are already forced on us by enlargement, and through fairer trade and commodity agreements, we shall not just be doing a deal for ourselves, but we shall be seizing an opportunity to solve the acute problems of those countries. Ultimately, it will be to our advantage if we have helped to create a stable environment for our investments and the development of new markets for our technology and our products. One also has to consider the jobs that are generated in those countries.

I turn briefly to HIV/AIDS, which has already been well covered by the noble Baroness, Lady Whitaker. I believe that it is a good illustration of the link between poverty and trade. It demonstrates the potential common ground between the needs of the third world and industrialised countries. We have already heard of the examples of South Africa where

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pharmaceutical companies have backed down on the anti-retrovirals, and most recently of Brazil where US manufacturers have also seen reason and advantage in modifying their patent laws. On intellectual property, as on tax law and certain commodities, the WTO's dispute settlement procedures are being severely tested, as it is right that they should be.

I should declare an interest because Christian Aid, of which I am a trustee, has taken a particular position on the proposed new AIDS fund. It deplores the lack of international commitment to the fund and argues that governments may be missing a unique opportunity through the UN and national AIDS programmes to create a major new programme of preventive healthcare. I know that the Secretary of State has said that she does not appreciate that attitude; nevertheless it is true in terms of that particular fund. Worse, the fund may be biased towards an expensive drugs programme, even allowing for the reduced costs of drugs that have been achieved in countries like India.

In January 1998, after visiting Uganda to see the work of three charities, I initiated a debate on HIV/AIDS and the huge human toll in its wake. I regret to say that, despite some successes, this pandemic is still gathering pace. Millions have died; over 4 million of them children. UNICEF reports that young people account for half of all new infections and a child is orphaned every 14 seconds. In areas without centralised government there are many appalling violations, like the Congolese woman who was raped in front of her children at successive checkpoints by soldiers carrying the virus. In such conditions there seems to be little hope beyond the care of NGOs and churches.

However, in the majority of countries, such as Uganda, Senegal and Thailand, even in remoter rural areas, the overwhelming evidence is positive. Awareness and education, coupled with sensible family planning and primary healthcare, are by far the most cost-effective forms of prevention. Of course, every country would like the ability to produce low-cost drugs, as Brazil aims to do, but there are still doubts about the cost as well as the effectiveness of drugs even in our developed societies. Too much concentration on treatment will condemn whole communities, which will never have access to anti-retrovirals, to unredeemed poverty and to vulnerability to AIDS in perpetuity.

I understand that DfID is not behind the new shift at the UN away from fundamental poverty reduction, which may be why it is cautious about funding. I hope that the noble Baroness can confirm that that is the reason. A sum of 200 million dollars is not much in the context of the seven billion to ten billion dollars that the Secretary-General says will be required. I believe it is important that that point is answered.

In conclusion, I look forward to further debate on the intractable subjects of Sudan and Zimbabwe. On Sudan, which is a less well covered subject in this House, the people of the southern Sudan are still waiting with infinite patience for this Government to

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make a contribution to development in areas relatively free from civil war. We have a historic responsibility in that country. I know that our ambassador has been active during the latest initiatives and that there is some hope from the United States at the moment. I hope that the Foreign and Commonwealth Office will reconvene a promised meeting of interested parliamentarians as soon as Macedonia and other issues allow.

7 p.m.

Baroness Ramsay of Cartvale: My Lords, I welcome what is said in the gracious Speech about NATO and the pledge to work to enable the European Union to act where NATO chooses not to do so and to improve the European Union's capacity and capability for humanitarian, peacekeeping and crisis management tasks.

In my maiden speech in this House in November 1996, I said that it gave me no pleasure to have to say that I sometimes despaired of any European issue ever being discussed intelligently, rationally and calmly in this country. But it gives me even less pleasure to have to say, some four and a half years later, that I cannot see that things have got any better!

Nowhere is that more true than in looking at the issues raised with regard to the EU initiatives in the field of security and defence and the interface with NATO. If only the media and commentators would deal with facts rather than myths--and I put on the same level of validity as the hoary old Euromyths of square strawberries and hairnets for fishermen the new Euromyths about setting up a European army, an alternative to NATO, and thereby shattering the trans-Atlantic alliance. Let us, in the name of all that is rational, at least in this House deal with the facts.

The European Union's common foreign and security policy (CFSP) was introduced in 1993 by the Maastricht Treaty. Five fundamental principles lie behind the CFSP: to safeguard the fundamental interests and independence of the Union; to strengthen the security of the Union; to preserve peace and strengthen international security; to promote international co-operation; and to consolidate democracy, the rule of law and respect for human rights.

Since 1993, the Council of Ministers has adopted some 70 common positions on foreign policy issues, ranging from the Balkans to East Timor, from non-proliferation of nuclear weapons to counter-terrorism. During the same period, the Council agreed some 50 common actions, such as demining operations in Africa and elsewhere and sending EU special envoys to crisis areas such as the Balkans and the Middle East.

The Amsterdam Treaty of 1999 improved CFSP decision making and provided for common strategies in areas where members share important interests. It also introduced more focused policy formulation and an early warning mechanism through the creation of a policy unit working for the Council of Ministers. This has been strengthened with the addition of a political

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and security committee and a parallel military committee to advise governments on crisis management.

The presidency report to the recent Gothenburg European Council on European security and defence policy shows how far the EU has come in its practical development to meet its aims. It is a long and substantial document and I commend it to your Lordships, who will no doubt be relieved to hear that I do not intend to deal with the detail in it at any great length. However, there are some very pertinent points which I wish to draw specially to your attention.

In discussing the European Union's capacity to act, it states clearly that it is where NATO as a whole is not engaged that it will be involved and,

    "This does not involve the establishment of a European army. The commitment of national resources by Member States to such operations will be based on their sovereign decisions".

There are detailed paragraphs on co-operation, first and foremost with NATO but also with international organisations, with the non-EU NATO members, with other countries which are candidates for EU accession, and with other potential partners such as Russia and the Ukraine. This is an outward-looking, not an exclusive, exercise.

What is said about the co-operation with NATO is specially worthy of note. It is stated that the development of a permanent and effective relationship with NATO is a critical element of the European security and defence policy. An exchange of letters between the Swedish presidency and the NATO Secretary-General confirmed permanent arrangements for consultation and co-operation between the EU and NATO and the first formal EU/NATO ministerial meeting took place in Budapest on 30th May. Other meetings at a more technical level have taken place. The EU and NATO have entered into close co-operation on issues of crisis management in the Western Balkans.

Here we should note that, whatever is speculated in the press, the actual position of President Bush on his recent visit to Europe, as reported by Secretary of State Colin Powell to the Senate Foreign Relations Committee, is that the President welcomed the enhanced role for the European Union in providing for the security of Europe, so long as the EU role was properly integrated in NATO--something it very clearly is.

Let us deal here with a topic which arouses much emotion in this area; that is, the Rapid Reaction Force. EU member states have this as a headline goal. It is set out in detail, but it can be summed up in a kind of shorthand as establishing a capability by the year 2003 to deploy rapidly, and within 60 days, a force of up to 15 brigades, or 50,000 to 60,000 persons, which should be able to be deployed for at least one year.

We should note in parenthesis that there are also plans for rapid reaction mechanisms in the impressive EU programme for civilian crisis management, including police and other non-military deployment. While in parenthesis, I should like to say how much I agree with the right reverend Prelate the Bishop of

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Oxford when he spoke with approval of the EU's "Anything but Arms" project. Just to prove that Eurocrats have a sense of humour, that project is now referred to in Brussels as the "Venus de Milo" project!

As the NATO Secretary-General, the noble Lord, Lord Robertson, has said more than once, the logic of enhancing Europe's role as a security actor is clear. We need to demonstrate to the United States that Europe is willing and able to take a fair share of the security burden. But also Europe needs to be able to react when the US or NATO does not wish to do so. In the post-Cold War world there is simply no guarantee that the US or NATO will want to get involved in every security crisis in Europe. In a speech introducing the debate, my noble friend Lord Bach quoted the noble Lord, Lord Robertson, and it bears repeating,

    "There has to be another option to 'NATO or nothing'".

Reading some British commentators one would be forgiven for thinking that we were heading for a breakdown in NATO/EU relationships. However, in recent speeches, the noble Lord, Lord Robertson, has made it clear that the opposite is true. I should like to take this opportunity to agree with the noble Lord, Lord Renton of Mount Harry, in praising the superb work of the noble Lord in this regard. Relationships between the EU and NATO are improving by the day and the proof is seen where it matters--on the ground. The European Union's High Representative, Xavier Solana, and the NATO Secretary-General have co-ordinated their efforts in responding to a variety of security challenges in the Balkans, and are doing so as we speak, in order to try to avert calamity in the former Yugoslav Republic of Macedonia.

I speak as a former chair of the Atlantic Council of the United Kingdom and someone who is deeply committed to NATO and its values: the defence of freedom, human rights and democracy. I am proud of NATO's history and its foundation by great statesmen like Ernest Bevin and of the outstanding service provided by British secretaries-general, such as the noble Lord, Lord Carrington, and my old friend Lord Robertson. I am also proud of NATO's plans for its future--of enlargement and changing its role to meet the new challenges of our time.

There is no contradiction in being a passionate supporter of NATO and also welcoming enthusiastically the EU initiatives in the field of security and defence; the two go hand in hand.

7.10 p.m.

Lord Blaker: My Lords, I listened with great interest to the speech by the noble Baroness, Lady Ramsay of Cartvale. She spoke with great command of her subject. I hope that she will forgive me if I turn to a different topic; namely, the Commonwealth. In his speech last Friday the Foreign Secretary Jack Straw said:

    "We shall use our influence in the world to help confront tyranny, oppression, poverty, conflict and human suffering".

All those five scourges exist in Zimbabwe, which I believe is a Commonwealth problem that has not yet been properly understood.

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It is exactly a year this week since the ZANU-PF Party won a majority of seats in the parliamentary elections in Zimbabwe. It won those seats by organised murder, rape, intimidation, brutality and corruption. The pretext for that reign of terror was the imbalance in the ownership of farmland between the black and white populations, but it is fairly clear that the reason was the determination of Mr Mugabe to retain power at all costs and his perception that the issue of land was tinder for his purpose.

The situation in Zimbabwe now is probably more shocking than most noble Lords realise. The reign of terror has continued for the past year. Supporters of the opposition party are still being killed. Two million people out of a population of 14 million, obviously most of them black, have fled the country. The turmoil has spread from the countryside to the towns. Urban businesses are being attacked. Further, 300,000 jobs have been lost in the past 18 months. They include 130,000 out of the 350,000 jobs in the countryside. More than 50 per cent of food must now be imported into what should be a food-exporting country. The production of gold has fallen to less than 50 per cent of what it should be. More than 70 per cent of total government revenue is used to service debt, which is an astonishing figure.

Over 50 per cent of adult women who attend antenatal classes are HIV positive, and 10 per cent of the workforce dies annually. Life expectancy falls by one year each year. There is a serious prospect of the country running out of food by Christmas. The price of mealie meal--the staple food of much of the population--has risen by 40 per cent in the past six weeks. Forty per cent of the population is homeless. In spite of the collapse of its economy, Zimbabwe has 16,000 troops fighting in the Congo.

In the face of intimidation the conduct of many judges has been exemplary and courageous. Independent journalists have shown great bravery in the face of threats and even torture. The restraint and self-discipline of the main opposition party, the MDC, including its leader Mr Morgan Tsvangirai, are beyond praise.

What I and many others find surprising is how little has been done by other governments about this situation. All the reports by independent observers of the elections last year declared that they were not free and fair, but nothing of any significance was done. More recently, the International Bar Association sent a high-powered team of judges and barristers from the Commonwealth and the United States to Zimbabwe. It declared that,

    "conduct committed or encouraged by government Ministers has put the rule of law in Zimbabwe in the gravest peril and the very fabric of democracy at risk".

It went on to say:

    "This cannot be justified by the need for social justice".

Her Majesty's Government and, more recently, the new US Secretary of State and other governments of the European Union have been critical. But, apart from the withdrawal of the British military team, there

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has not been much action from governments. As far as I am aware, the Secretary-General of the Commonwealth has not said one word of criticism of the Government of Zimbabwe, although recently he has been openly critical of General Musharraf of Pakistan where the situation, albeit unacceptable, appears to be a good deal less serious than in Zimbabwe.

I turn to the question of action. Some weeks ago the Commonwealth Ministerial Action Group decided to send a fact-finding mission to Zimbabwe. I understand that Zimbabwe refused to accept it. The European Union also started an initiative under the Cotonou agreement between the ACP countries and the EU. I do not know whether that came to anything. I have heard very little about it in recent months.

Last week it was reported unofficially that Mr Mugabe had agreed to accept a top-level group of Commonwealth Ministers to help resolve Zimbabwe's worsening economic and political crisis and that that initiative had been discussed between our Prime Minister and Mr Mbeki, President of South Africa, when the latter was here. If there is such an initiative can we be told more about it?

I believe that a resolution of the crisis in Zimbabwe is very important for the future of the Commonwealth. Interestingly, the 1991 Harare declaration of the principles of the Commonwealth, which restated and updated the Singapore declaration of 20 years before, said:

    "We believe in the liberty of the individual under the law, in equal rights for all citizens regardless of gender, race, colour, creed or political belief and in the individual's inalienable right to participate by means of free and democratic political process in framing the society in which he lives".

The declaration also refers to the political values of the Commonwealth: democracy, the rule of law, the independence of the judiciary and just and honest government. Yet it is impossible to reconcile the situation in Zimbabwe which I have just described with those principles of the Commonwealth. Zimbabwe has been flagrantly in breach of those principles and values for some time. I believe that if the Commonwealth turns a blind eye it will be a very serious blow to the reputation and worth of that body and the perception of its own members of its value.

I can understand why some African leaders, particularly those in southern Africa, have been cautious about taking action, but if the problem is allowed to continue to fester it will be even more destabilising for that part of the world than it is already. I cannot believe that Commonwealth leaders, especially those from Africa, will be happy to go to the heads of government meeting in October with this problem in its present poisonous state. This is, therefore, the right time for the Commonwealth itself to take action.

The problem is too vast for me to put the questions that I should like the noble Baroness to deal with in her reply. I am delighted that she resumes a role in connection with foreign and commonwealth affairs in addition to her other important responsibilities. However, I should like to put a number of matters.

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First, are practical steps being taken now to prepare for the supervision of the presidential elections which take place next March? Such supervision should start at the latest in January for elections in March. It is no good leaving it until the elections occur. The arrangements need to be carefully made and effectively carried out if we are not to see a repeat of the ineffectiveness of the so-called supervision which took place at the time of the parliamentary elections a year ago.

Secondly, are the Government or the Commonwealth doing anything about land reform? That is a key issue. There have been reports recently on the submission of new land reform proposals by the commercial farmers to the Government. If there is scope for movement in connection with land reform, could that be an incentive towards the holding of free and fair elections?

I hope that the noble Baroness will be able to give us some encouragement on these matters, or at least some hope of forward movement. If the world, and the Commonwealth in particular, does not take the Zimbabwe problem seriously soon, we may face another humanitarian catastrophe and the Commonwealth will risk not only a failure but a humiliation.

7.21 p.m.

Lord Avebury: My Lords, I agree absolutely with the noble Lord, Lord Blaker, on the importance of the crisis in Zimbabwe to the future of the Commonwealth and indeed Africa as a whole. I also agree with the suggestion of the noble Lord that the priority in our strategy for coping with this crisis should be to look to the March presidential elections. It is extremely difficult to envisage any concrete measures which could be taken either unilaterally by Great Britain or by the Commonwealth as a whole that would bring about an amelioration of the system in Zimbabwe as long as Mr Mugabe remains in charge. His removal by the electorate is the solution to that crisis.

Furthermore, as the noble Lord, Lord Blaker, said, we must take every possible step to see that on this occasion the elections are held as freely and fairly as possible. Even with the fairly substantial amount of intimidation that has occurred in the by-elections, I believe that the writing is on the wall for the Mugabe regime and that the people will make the decision for themselves that they wish to regain their freedom and restore the democracy which at one time was the envy of many other countries in Africa.

The noble Lord, Lord Blaker, also referred to the speech made by the Foreign Secretary on Friday in which he said that the objective of the Government was to combat tyranny and oppression wherever it is. I refer to the sentence in the gracious Speech which states:

    "My Government will work to encourage universal observance of human rights, including throughout the Commonwealth".

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I should like to ask the Minister a question. That statement in the gracious Speech is not as far reaching as that which we had in the mission statement of the FCO immediately after the Labour Government came into office in 1997. That stated:

    "We shall work through our international forums and bilateral relationships to spread the values of human rights, civil liberties and democracy which we demand for ourselves".

It may be that the formulation of the gracious Speech was intended to be a shortened version of that commitment. However, it would be useful to have it on the record that the Government stand by the terms of the mission statement as originally promulgated. What we demand for ourselves goes much further than the Universal Declaration, which could be all that is meant by the sentence in the gracious Speech. We have elaborate systems in this country for promoting the human rights of individuals and groups and for reconciling them with one another when they seem to be in conflict. So there is a positive obligation on states and public authorities, as we recognised in the last Parliament when we passed the Human Rights Act and the Race Relations (Amendment) Act. The mission statement commits us to spreading those ideas and not merely persuading friendly states to sign up to human rights instruments and holding national elections.

Amnesty International has reservations about the methodology the Government have chosen for pursuing their human rights agenda of "critical engagement", which is sometimes accompanied by human rights dialogues. It says that there is a danger that formal procedures of this kind may be used as a cover for business as usual, and that dialogue can work only where there is willingness to acknowledge that problems exist, and a genuine commitment to addressing them.

As the noble Lord, Lord Blaker, pointed out, that situation is completely absent in the case of Zimbabwe. We do not seem to be making much progress either in the case of China, for example, which thought it was appropriate to mark the UN anti-drugs day by publicly executing 50 alleged drug traffickers sentenced at mass rallies in a number of cities. Another example is the violent repression of the peaceful Falun Gong. At the same time, however, we are keen to start a dialogue with Burma. That regime has been even less amenable to friendly persuasion. We should make some attempt to assess the benefits of dialogue, which we have had with these places in the past, but we should take a long view and persevere even when there is no discernible improvement over a number of years.

The Commonwealth, as is frequently pointed out, is an association of diverse peoples belonging to many different religions, ethnic, linguistic and cultural groups. At the level of Commonwealth institutions and meetings, such as the CHOGM to be held at Brisbane, agreements are reached across all these boundaries for the benefit of member states. But within each of the states there are tensions of varying degrees of severity between the groups. Perhaps I may ask the Minister who is to reply whether the Commonwealth could develop its own expertise in

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conflict resolution and prevention, and whether it could develop model laws and procedures for the promotion of equality between different groups within member states. If it could do that, would it not be a practical contribution to the work of the UN Year World Conference Against Racism, Racial Discrimination, Xenophobia and Related Intolerance which is to be held at the beginning of September in Durban?

I rather agree with the right honourable Clare Short that these UN jamborees tend to cost a great deal of money for very little in the way of measurable results. These evils of racism and xenophobia need to be attacked, but holding a world conference that siphons off money and human resources that could otherwise be employed in direct action is not particularly sensible. Of course nothing can be done about that at this late stage with the world conference only three months away, but looking ahead to 2002 we have the World Summit on Sustainable Development, the Second World Assembly on Ageing, and the High Level Intergovernmental Event on Financing for Development. These are important subjects, but are they best pursued by collecting people from the four corners of the earth to read papers at each other, or would the money that is devoted to these international jamborees be better devoted to encouraging individual initiatives within member states?

The draft resolution for the Durban meeting recognises that people may experience discrimination on grounds of their gender, age, disability, genetic condition, language, religion, sexual orientation, economic status or social origin. People may suffer multiple discrimination and disadvantage from a combination of those characteristics. I hope that the UK will support an integrated approach to the elimination of discrimination and disadvantage internationally, just as we hope that the Government will adopt a comprehensive approach in attacking all forms of discrimination at home. As was pointed out by my noble friend Lord Alderdice, in many parts of the world there are conflicts which arise from perceived differences between one group of human beings and another. Those conflicts should be seen as extreme manifestations of racism, xenophobia and other forms of intolerance with which we are attempting to grapple.

The problem with the very ambitious Durban programme is that it will cost a great deal of money. Many of the recommendations are addressed to states, but quite a few are directed at agencies of the UN, including the High Commissioner for Human Rights who is directed to undertake research on the use of the Internet for the purpose of preventing inciting racial hatred, for example, and to organise a database containing information about the struggle against racism that states and NGOs can access on the web.

Where are the resources for these additional tasks to come from? In the past few years, the number of mandates assigned to the high commissioner has expanded enormously, with a proliferation of experts on particular territories and thematic issues, most of

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them concerning economic and cultural rights, watering down the commission's main remit of tackling violations of civil and political rights. In many cases, the work could and should be undertaken by NGOs and universities on behalf of the commission, if they were given the money, helping to build up lasting expertise and capacity in civil society. In others cases, the relevance of the mandate is doubtful, and it may be suspected that some member states are deliberately trying to sabotage the work of the commission by overloading it with inappropriate tasks.

The difficulties of the commission have been compounded in the past few years by the fact that the UN budget has been frozen, presumably because of the refusal of the US to pay its contribution. That means that any increase in the share of expenditure by the OHCHR has to be matched by a decrease in some other area of UN expenditure. Will the Government insist that, if the world conference does impose additional tasks on the high commissioner, a realistic budget is presented by the Secretary-General, and that none of the tasks is undertaken until the money has been found from resources elsewhere in the UN? Otherwise, either the existing mandates are squeezed or additional voluntary contributions will have to be solicited from member states.

Already, the share of OHCHR's expenditure coming from the UN regular budget has fallen from 58 per cent to 29 per cent over the past seven years. The office's spending has been rising over that period, so that voluntary contributions made by member states have increased to cover 70 per cent of the budget. The high commissioner herself is concerned that this is not a secure foundation, and if there is an economic downturn, or there are changes of government in donor states so that they become less sympathetic to the work of the office, there could be serious financial problems.

We have a good record of contributions to the Office of the High Commissioner for Human Rights. Britain is the fourth largest contributor and we are working to identify areas of the UN regular budget in which savings could be made and are looking at a comparison between the UN and other organisations to see whether more efficient systems could be adopted. Those are all valuable initiatives, but they are not enough. Why do we not ask the General Assembly to agree to a levy on member states, in proportion to their contributions to the regular budget, to pay for the whole of the human rights work of the UN? That would eliminate the need to raise voluntary contributions and ensure that every state paid a reasonable amount based on its capacity to pay, and not on its enthusiasm for human rights.

As my noble friend Lord Wallace of Saltaire pointed out, the UNHCR has also had to pass around the begging bowl because of the financial crisis at the UN and is in an even more precarious situation than the OHCHR. Only 50 million dollars of its spending this year comes out of the UN regular budget. It is asking donors for 918 million dollars for 2001. The same

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principle should apply here. Mandatory contributions should be levied on member states in proportion to their regular payments to the UN.

In his previous incarnation, the Foreign Secretary said that developed countries spend 10 billion dollars a year assessing claims for asylum but only 1 billion dollars on the whole of UNHCR's operations, including protection and humanitarian aid for refugees in their regions of origin. He went on to say that neither the UK alone nor the EU as a whole could redress this balance of effort, and of course we need to deal with the crises that generate refugees collectively. But there ought to be more joined-up thinking within our own Government on the connection between "complex emergencies", as the UN describes the disasters which provoke large displacements of people, and the flow of asylum seekers into the United Kingdom.

The noble Lord, Lord Blaker, said that no one knows how to contain the violence in Macedonia. We have no idea of how to do it in Angola, Sudan, Maluku, Aceh, Kashmir, Sierra Leone, Guinea or the Philippines. But we have to make increasing efforts to deal with those dreadful situations. Not surprisingly, the complex emergencies we see happening in the world generate the flows of refugees into this country. That is why we need the joined-up approach about which I think the Foreign Secretary was talking in his speech to the IPPR.

The number one asylum generator at the moment is Afghanistan. It is also at the top of the list of the UN's complex emergencies. One of the consequences of imposing sanctions on the Taliban last December was that they repudiated the UN's efforts to mediate between them and the United Front of Rabbani and Massoud, while the United Front insisted that the UN had to be present even if some other party such as the government of Uzbekistan were to assume the role of mediator. The net result of that was that the process of mediation fell apart. Now there is intense fighting in the country, leading to more suffering in Afghanistan and more refugees pouring out of the country. The UN Secretary-General's latest report estimates that in the past few months half a million more people have become internally displaced and a further 200,000 have fled across international frontiers, 170,000 of them into Pakistan.

It was not wise in those circumstances to impose sanctions on Afghanistan, when there was a desperate need to increase humanitarian aid, and it was irrational to cut off the funding of NGO activities involving UK nationals at the very time when the need was more acute than ever. There was a change in this policy, in the direction of looking at funding on a case-by-case basis, subject to what were called "appropriate security arrangements", but that still meant bureaucratic obstacles in the way of an increased effort. If Jack Straw's precept had been followed, we would have stepped up humanitarian aid to the populations affected by war and drought, both inside the country and in Afghanistan and Iran. That should not be affected by our natural dislike of the Taliban and their medieval policies.

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The sanctions, and the treatment of the Taliban as pariahs by the international community generally, force them even further into their seventh century time capsule, contrary to the long-term interests of this country. Since the sanctions were imposed last December, the Taliban have boycotted UN-sponsored peace negotiations and rejected any idea of mediation for the settlement of the Afghan problem.

Last year we gave £3 million towards helping Afghan refugees in Pakistan and Iran. That is less than £1 a head, and it may be compared with the £14 million spent by Mr Straw, when he was Home Secretary, on trying to keep 32 Afghans out of this country. I hope that in his new role he will see the need for joined-up government in tackling the formidable problem of refugees fleeing conflict and natural disaster, not only in Afghanistan but in all the other complex emergencies listed by the UN throughout the world.

7.38 p.m.

Lord Ponsonby of Shulbrede: My Lords, I shall not follow my noble kinsman in what he was saying to the House. I shall instead return to the issue of the ESDP, which has been a theme of today's debate.

For the past four years I have been a delegate to the Council of Europe and the Western European Union. When I first went on that delegation, I attended a meeting with the then Foreign Secretary, Robin Cook. I asked him whether I was wasting my time in becoming a delegate to those two institutions. His answer was clear. In the case of the Council of Europe he said that it had an important role in building new democracies and international human rights and that parliamentarians could make an important contribution to its work. However, he was equally clear in the case of the Western European Union. He said that I probably was wasting my time. While my right honourable friend was quite right about the Council of Europe, he was only partially right about the work of the Western European Union. I can tell the House that over the past four years I have learnt just as much from that institution as I have through my membership of any other.

I wish to discuss my support for the ESDP in the light of my experiences at the WEU. We know that the Cold War is now 10 years behind us. The world has changed and we now know from experience the nature of the diverse challenges which we face nationally, regionally and globally. Multinational coalitions are changing as well. That means that the UN is changing, NATO is being modernised and, in particular within Europe, a new capability is being developed in order to try to contribute towards security within the European region. A point which has been repeated by the Minister on the Front Bench but one which has been largely ignored by the party opposite is that the ESDP seeks to enable a capacity to carry out so-called Petersberg missions and that those missions are of a low-level, peacekeeping nature.

It is worth reciting to the House what such missions have been. In 1987, a mine clearing operation was carried out in the Gulf, followed by a logistical support

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operation in 1990. An embargo operation in the Adriatic commenced in 1993 and in the same year a customs operation was set up in the Danube region involving around 250 police officers and customs officials. In 1994, the Mostar police training school was set up using 182 police officers, and in 1997 a police training school was established in Tirana, Albania, using around 150 police officers.

I hope that noble Lords will appreciate that, while such missions are important, they are hardly of a nature that potentially is going to challenge the supremacy of NATO. That is a completely ridiculous assertion. It is worth pointing out that the United Kingdom did not participate in any way in a number of the missions to which I have just referred. Rather, they were coalitions of the willing; other countries taking a lead because they had a more direct interest in the matter at hand. Some missions were not even noticed to any degree by politicians in this country, yet the decision-making process within the WEU is pretty much the same kind of process, using similar staffing levels, as is now proving so controversial within the EU.

But of course those who indulge in the rhetoric about European armies do not question certain fundamental facts. They do not question the fact that Europe should do more to defend itself and should take on more of the burden. So far as I am aware, they do not question the Petersberg missions themselves. Furthermore, they do not question that the Western European Union was an institution which needed radical change if it was to become relevant to the current situation.

No, those who indulge in rhetoric about European armies are more concerned with probing the limits of the ESDP than questioning what will be happening on the ground. That may be a legitimate political tactic, but it does not address the reality of the missions for which Europe rightly should take responsibility. I am sorry to say that I have yet to hear noble Lords opposite address the missions themselves.

I wish to turn to another, separate matter, one with which I know my noble friend on the Front Bench will be familiar; that is, the question of the parliamentary assembly of the Western European Union. The current position is wholly unsatisfactory. National parliaments have a scrutiny role for the CFDP and the ESDP. The European Parliament has no locus in these matters, although the chairman of the EP foreign affairs committee, Mr Brok, is looking to expand his empire in this regard. Furthermore, the WEU Assembly has been so marginalised by recent developments that it retains a role only in scrutinising the provisions of the modified Brussels treaty.

For my part, there are three main arguments in support of an enhanced role for the WEU Assembly. Two of those arguments were advanced by the Prime Minister in Warsaw in October last year. He argued that a second chamber--as he put it--for the European Union would reconnect national parliaments and national parliamentarians with Brussels. He went on to argue that a second chamber

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could provide a solution to the perennial problem of defining the limits of EU competence. But there is a third argument which I would advance: an expanded second chamber established along the lines of the current WEU Assembly could scrutinise the provisions of the ESDP and bring in those countries which are outside the European Union but which have an active and historical interest in Petersberg missions. We should not forget that many of the countries which are active in such missions are not members of the European Union but they have a legitimate interest in those activities.

I have set out a number of concrete arguments with which I know that my noble friend will be familiar. But we must consider another factor which I consider to be equally important. I refer to the general level of information available to parliamentarians. I say in complete honesty that I found the debates on the Balkans and related issues held in the Assembly of the WEU to be of an extremely high quality. That should not be surprising because many of those contributing to the debates come from the countries directly affected or surrounding territories. They have an immediate appreciation of the issues involved. As I have said, it is no surprise that the quality of the debate is so high.

I have to say that the irony is not lost on my parliamentary friends from eastern Europe. At the same time as we are encouraging them to consolidate civilian control of their armed forces, in western Europe we are reducing the effective scrutiny of our own arrangements. Turkey is a particularly unfortunate example. That country is an important member of NATO. It, too, has been active in Petersberg tasks. At present it feels cut out not only from the decision-making process, but also from the scrutiny process within Europe. That is an unfortunate development.

I hope that my noble friend will take this issue seriously. I have raised the matter on a number of occasions and I know that parliamentary colleagues in another place have also raised it. Perhaps I may put a final argument. Just as nature abhors a vacuum, so does parliamentary scrutiny. If national parliamentarians are not given a greater role in scrutinising the ESDP, then Mr Brok and his committee in Brussels will take on that role for themselves, whether or not national governments like it. I have attended meetings where he has made that completely clear. I believe that that development will further alienate our new friends in eastern Europe.

I, too, have made a number of visits to Macedonia and Kosovo where I have had similar experiences to those described by other noble Lords. I make only one observation. If I have learnt only one thing, I know that we are now embarking on a very long-term game. We need to put in place within Europe concrete mechanisms for playing that long-term game. I believe that the ESDP is an extremely important step along that road.

In conclusion, perhaps I may say that I agree with every word that was said by my noble friend Lady Ramsay of Cartvale.

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7.49 p.m.

Lord Selsdon: My Lords, noble Lords will be pleased to know that we are now exactly halfway through this great debate and that, if we finish at around midnight, we shall sustain the remarkable image gained by your Lordships' House as the longest-sitting parliament in the world. In the small hours of the morning it attracts, by means of digital television and the new parliamentary channel access, a remarkably wide audience of students encouraged by tutors to view debates such as this and our Wednesday debates, and then to analyse them in full.

I find also that, for the first time, I am confronted today by an overwhelming superiority among the female of the species, who have always shown more tolerance, more patience and more understanding than their male colleagues--in particular the noble Baroness, Lady Symons, whom I have always regarded as the Gatling gun of the Labour Party.

In my contribution today I wish to refer to three aspects of the gracious Speech: first, economic stability and investment; secondly, the desire to make Europe the most competitive information-based economy in the world; and, thirdly, the need to encourage the EU to be more flexible and more active in crisis management, peacekeeping and so on.

My life has been in trade, industry and finance. This has inevitably led to the international politics of trade and matters of that kind that border on defence. Although the noble Lord, Lord Bach, made a very positive, encouraging and moderate speech--which could have been delivered by Ministers from any party who have sat on those Benches over the past 15 years--there are certain points that I need to raise.

My first point relates to economic stability, which is now a cornerstone rather than a linchpin. We seem to have moved away from linchpins, which could be pulled out and the wheels would fall off, to cornerstones, which are always the last thing to be knocked down. We do have a stable economy--one of the most stable economies in the world--which has been gained over many years at considerable pain to numerous people and numerous sectors.

One of the sadnesses of this lies in the fact that investment has not been made in some of the most important aspects of the economy. Your Lordships will know that we now have the most expensive transport costs per kilometre, or per mile, in the developed world because of under-investment. I shall not comment further on that, but it is a pity because once we had almost the best transport infrastructure in the world. We now have, so I am advised, probably the worst health service in the EU--and yet we had some of the great ideals and thoughts that encouraged others to follow us. In other sectors--in education, for example--we find ourselves behind many.

And what do we do? We say that this is no longer the role of government but the role of something beginning with "P", which always used to remind me of those awful phrases such as "poll tax" and others; we say that it is up to the private sector. Many aspects of our lives cannot be run by the private sector, but the

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private sector, if so it is called, will willingly do what government asks it to do provided the framework is right.

I am worried that I may have to spend half of my speech declaring my interests. I am involved as a non-executive director with a contractor. We carry out PFI's in hospitals, schools and transport. I could advise many people as to how this could be better achieved.

The decline in the sectors that I have referred to is matched by the sad decline in manufacturing industry and the way that we moved only 10 years ago from having a permanent surplus in the export of visibles or manufactures to a permanent deficit. Now we have an overall deficit on trade. What are we left with? I suppose we are left with agriculture, which is now in the worst situation it has been for centuries. The average wage in the agriculture sector of £7,500 a year is the lowest for 25 years.

What are we left with? I return to when I was a member of a Select Committee chaired by Lord Aldington. We looked at what would happen when oil ran out. One of the people who came to give evidence to the Select Committee said that he supposed it would be all right; we could rely on tourism and all become Beefeaters. But look what happens to tourism when one sector of the economy fails; it disappears. We are then left with that strange ethereal thing known as, whatever that may be.

I query what is the base of our economy, which leads me to the second area of information-based technology. We made a decision--it started with the white heat of technology years ago under the Labour Party--that we would switch from heavy industry. With the collapse of the steel industry, the collapse of the textile industry, the collapse of the mining industry, the collapse of the shipbuilding industry and the collapse of industry across the board, we decided that we would move into higher quality, and that fathers would want their children to be white collar workers and not blue collar workers. That has worked surprisingly well. But now we have to look, to some extent, into the future and to that information-based technology--where we are, and have been, in the forefront in many fields--and to how that is linked to other sectors.

I move now, within that information phrase, to defence. In our industrial economy it was always defence-led contracts that led to the production of greater technology. That technology from a defence basis was spread throughout industry and enabled us to compete. The noble Lord, Lord Bach, may now have a problem in defence procurement in that he may not be able to procure what he would like to procure from the United Kingdom because the capability--or a large amount of it--has all gone and we may have to outsource or source elsewhere. This leads me to the shift to rapid reaction forces and to the role that has now to be played by information and knowledge in defence matters.

I move now to a slightly higher level--as befits me standing head and shoulders above everyone at the moment--to the issue of space and, effectively, the

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future of communication. I shall, if I may, return to a kind of hereditary speech since it was my grandfather who gave the BBC its charter and introduced television with the Selsdon report. I move on to this world of communication, which we should not ignore. It is not only important in the defence and foreign affairs worlds but it is important for humanity, for man as a whole, whose access to knowledge is greater than at any time in history and is growing at an exponential rate.

In the defence field, I have often wondered why it is, when we are so modern, we start to attack cardboard or fibreboard models of tanks; why it is, when we are told how accurate we are, we seem to miss targets; why it is that we seem not to know where people are when they get lost. I return to the importance of space. I shall be asking the Minister shortly who is responsible for space. Who owns space? Where does space begin? It starts, I believe, at the equivalent of the distance from London to Paris.

In this field, this country of ours, which intends to be in the forefront of information-based technology, makes an investment in space of approximately £150 million per year, which is exactly half of that of Italy, one-third of that of Germany, and one-seventh of that of France. Europe together invests about 10 per cent of that of the United States.

Once more I find myself having to declare an interest in this field. I have recently returned from a parliamentary space committee trip to France, where we met with the European Space Agency (ESA), which takes half the UK's space budget. We met with EUTELSAT, which is partly owned by British Telecom and is about to go private. It has 950 television stations, manages 18 satellites and has some excellent British people there. They have been talking to me about what is "Open Skies", which starts at the end of the year; about how a soldier serving in a far-flung land may be able to see on his television screen his family going to bed in the evening and say "Goodnight" to them. This will happen when satellites replace land-linked or telephone-linked communications. This advance in technology is quite incredible.

In the world of space we have, so I am told, 500 active satellites. The satellites go into high-earth orbit, middle-earth orbit and lower-earth orbit. The lower-earth orbit ones, apparently, are the spy satellites that go hurtling around the world, taking photographs of everyone. We do not know how many there are of them, but I am told that there are 500 active satellites up at the moment and another 500 that have gone to graveyards. That is 1,000 satellites.

I wanted to know how important these might be in the worlds of communication and defence. Everyone said they are very important. It will not be long before the media arrive the day before an army lands and welcome the soldiers coming up the beaches, as they did in Ethiopia or Somalia.

What I am trying to emphasis is this. Do we have a space policy? Yes, we do. Do we have a space Minister? Yes, we do. But what happens if we move in this

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direction and we cease to have access to that particular kind of technology. I am advised that it is possible to disable almost all of these satellites. I thought they would be shot down from space, but there are methods of disabling them. As we rely more and more upon this macro information concept, which I find quite difficult to understand, I should like to know how seriously the Government are treating it. Are we going to have to rely on the United States for ever in such matters as global positioning systems? Are we in the forefront of that technology? If so, and if that is our wish, why are we investing so much less than our competitors?

Our industry has declined, but there have been some successes within the European framework which we probably did not anticipate and in which we were reluctant to participate. I think in particular of Airbus. I declare an interest, having been involved in the financing of Airbus in the early days. It was extraordinarily difficult to persuade British industry to become involved. But recently, 111 aircraft were sold, and we find that we can compete on a European basis with American aircraft. There are many sectors of industry where that is taking place naturally, due to mergers, cross-investments or globalisation. However, to a certain extent we are falling behind. I hope that, in our European thinking, we may recognise that it was economics and business that drove us in the beginning to participate in the European Union. Politics is also an important aspect. I believe that if government give the right and proper lead, industry will follow.

In conclusion, in view of the fact that the noble Lord, Lord Bach, is answering the debate for the first time in his new role, I crave a particular European boon. I travel an enormous amount. Often, when I try to obtain visas, I cannot get my passport back in time. So I have been experimenting in travelling with my House of Lords identity card, as I choose to call it. I have had discussions with Black Rod and with immigration authorities in many countries. I have even produced a letter confirming who I am. Perhaps it would be possible for the noble Lord to consult with his international colleagues and ask whether Members of this House, as a gesture in recognition of the great amount of time that they devote--more than members of any other parliament in the world--might be able to travel using their identity card. I should regard that as a very great favour indeed.

8.2 p.m.

Lord Weidenfeld: My Lords, the reference to human rights in the gracious Speech and the increasingly urgent call for Europe and Britain to play a more active part in the current Middle East crisis prompt me to draw attention to what I believe is a grave issue and one on which Her Majesty's Government might form a serious view and even consider initiating action. It is the issue of certain Middle Eastern states promoting and prescribing schoolbooks which incite racial hatred, religious intolerance and, worse, outright genocide. I refer especially to the educational system of Syria where, from the head of state down to the most junior teacher of fourth to eleventh grade children and young adults, the notion of peace and reconciliation

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with the Jewish enemy is regarded as treason and crime, where children are exhorted to fight and kill and to seek voluntary death with the promise of both material reward for their families and eternal happiness in paradise. But these school texts for different age groups now go further. They advocate ultimate extermination of the whole Jewish people--in other words, genocide.

A Washington based Middle East academic media research institute--MEMRI--recently issued an astounding up-to-date study of the Syrian school system. Whereas in most Arab countries similar hostile sentiments are expressed daily in various media and in all kinds of learning materials, the Syria of the Ba'ath party is a highly centralised authoritarian regime, and such teachings are obligatory. It is strange, even ghoulish, that during a week in which Slobodan Milosevic is heading towards the war crimes tribunal and in which the Pope is praying at the scene of one of the Second World War's most horrible massacres in the Ukraine, hundreds of thousands, even millions, of young people should be exposed to the teachings of such evil doctrines.

But the real reason why this issue is so relevant now, and why closer study of the evidence is so important, is that it opens our eyes to the underlying problems of resolving the conflict between Israel and her neighbours. When two generations of Syrian citizens are told that peace is treason and that the enemy must be liquidated, the very idea of compromise and legitimisation of Israel endangers and possibly entails the collapse of the ideological essence of the Syrian state. Perhaps that is the reason why the whole peace process, including the American brokered negotiations between Syria and Israel, seem to be nowhere mentioned in the literature.

The more you delve into this school literature, with its numerous case studies, short stories, rhapsodic poems and garish illustrations, the more you will find that all systematically lead young and uninformed minds, through fanning indelible hatred, to accepting the extermination of the Jewish enemy root and branch as the final solution. This also explains the children's part in the intifada, the deliberate and calculated involvement of boys and girls in every form of violent action.

Syria's Ba'ath party was originally a nationalist pan-Arab secular movement. In fact, the late President Assad crushed the ultra-religious Muslim brotherhood and killed around 20,000 people in the city of Hamma in his most notorious raid. But since the mid-80s, Syrian ideologues have adopted the slogans of fundamentalist Islam--mind you, not of the main line orthodoxy, for Islam as a faith has no truck with inhumanity. Today, Damascus is still the headquarters for a dozen extremist organisations and the turnstile for terrorists with links in Iran, Afghanistan and the Sudan. Recent redeployments of Syrian troops in Lebanon have not yet furnished convincing proof that Syria's hold on that country is being loosened.

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When the issues of incitement and hate in the media of the region and other transgressions against human rights were discussed previously in this House, I am afraid that the tendency of noble Lords answering for the Government was to deplore them as unfortunate excesses or flowery rhetoric, staple propaganda de-fanged by numbing repetition. They are more serious than that, much more "action orientated".

It is true that a great deal of the hostility and bitterness in the Arab camp is due to Israeli transgressions against the Palestinians or its Arab citizens within the Green Line. The Jewish settlements near Gaza and the West Bank are thorns in the eye of every Arab. But when it comes to criticising and castigating Israel's omissions and transgressions, there are no better sources than the Israeli media; for Israel is a democracy, vibrant, strident, soul-searching, ruthlessly self-critical. There have been unpardonable outbursts from bigoted Jewish clerics against Islam, crimes perpetuated by individuals in and out of uniform. Yet they have all been condemned by a large section of Israeli public opinion. But no Israeli leader has sunk so low as to utter aggressive obscenities in the presence of the Pope, on a mission of charity and peace, against another religion, a whole people and a whole world community of linked destiny.

The Secretary-General of the United Nations, Mr Kofi Annan, was recently asked if he would take up the case of the Syrian schoolbooks, which I hope he may now do. I cannot believe that a member state of the United Nations, a candidate for a seat in the Security Council, should be left unchallenged if it advocates genocide.

I said that this is a timely issue: for if we have any hope of resuming talks between Israel and the Palestinians, Syria or Syria-controlled Lebanon, we must face the fact that we are here dealing with a rigid state of mind and that the failure of the Oslo peace process has not been so much the result of this or that negotiator's tactics or timing, or of the wrong chemistry between Mr Clinton and Assad or between Barak and Arafat; nor has it been a question of a near miss and a trifling difference of 300 metres of the shoreline of Lake Galilee. It goes much deeper. The genocidal strain in this kind of fundamentalist rejectionism is older than the settlements, older than the state of Israel. It reflects the spirit of the Grand Mufti of Jerusalem who, in the middle of the war, fled to Berlin, blessing the arms of the Muslim SS and begging Himmler to let him handle his own version of the final solution in Palestine against the Jewish settlers in Haifa, Jaffa and Tel Aviv.

What lessons should we now draw from all this? To defer or desist from a resumption of peace talks? Not at all. We should try to bring the parties together, once again. Chairman Arafat says that he wants to negotiate. General Sharon is also bent on resuming talks. President Bush and Prime Minister Blair have acknowledged his policy of restraint. But it is understandable that Sharon feels that if there is a lesson to be drawn from the intifada, the inflammatory media and class-room jihad, it is that only iron-clad safeguards for security can be accepted by a

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responsible government of Israel. The first and last watchword for future negotiations must be security on the ground and barriers to terrorist attack. These can only be lightened or lifted when all states in the neighbourhood agree to recognise each other's legitimate right to exist and to live. The most confidence-building proof would be an instant and thorough reform of school books and the spreading of new messages of real tolerance and compassion.

8.10 p.m.

Lord Grenfell: My Lords, I begin by offering my congratulations to my two noble friends sitting on the Government Front Bench who have recently taken up new and very important responsibilities. I wish my noble friends Lady Symons and Lord Bach every success in their new offices. If I may say so, the assumption of these offices by my two noble friends imbues me with profound pleasure and great confidence.

As the gracious Speech informs us, Her Majesty's Government will work for rapid progress on the enlargement of the European Union, and will introduce legislation to enable the United Kingdom to ratify the Nice Treaty. I very much welcome those commitments. As some noble Lords have already noted, it is a matter of great concern that Ireland's voters, on a turn-out of barely 30 per cent, refused by almost 54 per cent to 46 per cent to incorporate the Nice Treaty into the Irish constitution. This is neither the time nor the place to pick over the perceived reasons for that decision. However, it is worth noting that a week before the referendum more than 50 per cent of citizens polled said that they did not understand the treaty, or know even vaguely what it was about. That is not just an Irish phenomenon, as the Irish Taoiseach, Bertie Ahern, quite rightly pointed out to his European partners; it is Europe-wide problem, and it relates not only to the Treaty of Nice. The Irish rejection, though rooted in many respects to concerns particular to Ireland, was symptomatic of the general failure of Europe's leaders to communicate sufficiently with their citizens on the development of the European project.

The European project is becoming more and more complex. The lack of adequate communication leaves citizens feeling more confused and remote than ever. What, they ask, has the European Union become, and where is it going? If it is not Jean Monnet's "United States of Europe", neither is it Charles de Gaulle's "Europe of Nation States"; it is a blend of the two. For example, the single currency--let us be clear about this--is leading to a partially federal Europe, and, in my view, correctly so. At the same time, the emergence of a European defence capability is a triumph for intergovernmentalism.

So Europe must, for the time being at least, live with what Dominique Moisi of the French Institute of International Relations (IFRI) has aptly called "this hybrid reality". For a continent drawing strength from its diversity, that may be no bad thing, but political leaders seem almost afraid to try to explain to their

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citizens what they would like Europe to be because the challenge of getting there is so fraught with complexities. They should have more faith in their citizens. That is the warning that the Irish "no" voters and stay-at-homes gave to their leaders, and one hopes that it has been heard clearly right across the Union. If it has not, the yawning gulf that currently divides civil society from the institutions of the Union will certainly grow wider. Perhaps I may add, at the more parochial level, that a government who procrastinate on the leading of a countrywide debate on both the political and economic arguments for Britain embracing the single currency should also have more faith in their citizens and a greater awareness of their innate desire to be informed and, more importantly, to be heard.

As Chris Patten told us this morning after his remarkable British Council-Independent lecture when responding to a question from my noble friend Lord Shore of Stepney, the governments of Europe must more clearly define what it is that we are trying to create in Europe. He regretted, in particular, that those who had encouraged and convinced us to enter the European Union had underplayed the political consequences of our membership.

That brings me to the Treaty of Nice itself. When the European Communities (Amendment) Bill to ratify the treaty comes before your Lordships, there will be plenty enough opportunity to debate the treaty's merits and demerits. There are plenty of both, but this evening I want to remind noble Lords of one of the demerits that raises legitimate questions about the acceptability of the treaty; namely, the reform of the Council's voting procedures, due to take effect in 2005. This reform has served only to make the qualified majority system even more complicated than it already is, and has been described as a formula for deadlock once the Union is enlarged.

When your Lordships' Select Committee on the European Union reported to the House last July on the preparations for the IGC which eventually gave birth to the Treaty of Nice, we emphasised the need for a system of Council voting that was transparent and easily understood. We strongly recommended a system of double majorities. The Government, however, preferred a simple reweighting.

What we eventually got--and this is one point that I can concede to the noble Lord, Lord Howell--was a bit of a mess. But the Government seem to be satisfied with it, inter alia on the grounds that it secured a substantial increase in the strength of Britain's vote in the Council, the first increase for us since we joined the EU. That is an undeniable fact, but perhaps I may take the Government mildly to task in their celebration of this victory. The issue should not be how much added power our Government can wrest from such negotiations, but how well we are, together with our European partners, collectively enhancing the EU's ability to serve all of Europe's citizens.

Therefore, for a less subjective assessment of what this treaty has wrought, I strongly recommend a report by the Centre for Economic Policy Research in its "Monitoring European Integration Series", in which a

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group of distinguished European economists analyses the Nice Treaty and discusses whether or not it should be ratified. Its criticism of the reform of Council voting is particularly harsh and, to me, highly persuasive. I shall not go into the details of it, but in closing it poses the question of whether the EU leaders knew what they were doing at 4.30 a.m. on the morning of Monday 11th December. One not implausible view was that the leaders simply did not realise, at that ungodly hour, the strong inefficiency consequences of their actions.

Another, less prosaic, view was that they got exactly what they bargained for--a crippled legislative process that makes it very difficult to pass anything in an enlarged Council, effectively stripping the old Community approach of its viability, and leaving future European integration to be guided by intergovernmental initiatives, often using the enhanced co-operation route with the large members inevitably playing a role more commensurate with their economic and demographic importance. There is hybrid reality for you, but with the scales now tipped more heavily towards intergovernmentalism.

Whether it was oversight that set the Council on the course of deadlock, or wilful stratagem, time can certainly tell us. If it was oversight, then, as the CEPR report suggests, there is time to do some emergency repairs before 2005. The IGC in 2004 provides the perfect opportunity. If it was wilful, there is nothing to be done until an enlarged EU runs into a high-profile decision-making crisis or two, such as deadlock over the CAP and structural funds reform, or on the 2006 negotiations on the next financial perspective, which could leave the Union without a budget. But why must we wait for time to tell us? It is up to governments, now, to explain to the people what they have done in their name.

In light of such shortcomings, one might well ask why the treaty should be ratified. However, for the purposes of enlargement, its ratification is absolutely essential. There are those who claim that the treaty is not necessary for enlargement. In a strict legal sense, that is so. Those parts of the Treaty of Nice that are required for enlargement could, it is suggested, be inserted in the accession treaties to be negotiated with each candidate country. Politically, however, that is a non-starter. All member states are agreed that the treaty, with the institutional reforms which it enshrines, is an absolute political pre-condition for enlargement. That is why the Goteborg Summit's final statement contains the following words:

    "The ratification process for the Treaty of Nice will continue so that the Union is in a position to welcome new member states from the end of 2002".

It is also clear that a renegotiation of the treaty is excluded by all, including the Irish Government. We must now presumably await a second Irish referendum in anticipation of which every effort will be made to find the ways and means of allaying the fears of the Irish voters. I am glad that my noble friend Lord Bach referred to the determination of the 15 member states as a group to try to help Ireland to resolve that dilemma.

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I am an admirer of Commission President Romano Prodi and was dismayed that he appeared to dismiss the Irish vote as of no consequence to the enlargement process. Of course it is of consequence, and happily--although I am afraid the noble Lord, Lord Howell, failed to mention this--he subsequently atoned for that lapse of tact with a reassuring clarification. But the angry reaction on all sides to the original gaffe was, I hope, an indication of a growing determination to narrow the gulf between Europe's citizens and the Union's institutions.

I hope that Her Majesty's Government, in light of the political imperative of enlargement, will firmly pursue the "ratify and repair" route. To my mind that is certainly the proper and practical sequencing. This historic enlargement is on course. The Goteborg Council decided that the best prepared countries should be able to complete negotiations by the end of 2002 with the objective of participating in the European Parliament's elections in 2004 as fully fledged members. That was an impressive result for the Swedish Presidency which did not waver in the face of an initial French and persistent German reluctance to sign up to a firm timetable. It is also very good news that the enlargement talks yesterday, led by the Swedish Presidency, reportedly succeeded in swelling the group of front runners to include Slovakia, Latvia and Lithuania.

I think that noble Lords know where I stand on the European Union. I am a strong, although by no means uncritical supporter and a profound believer in our membership of it and our ability to contribute to its successful development. I hope that my criticism of it will always be constructive.

The noble Lord, Lord Howell, who is one of my oldest friends, made an interesting speech which was delivered with his customary eloquence and clarity. But I hope that he will forgive me if I say that, with regard to the European Union, for me it epitomised the curious contradiction that grips those who seek to convince us that they are not against Europe but lose no single opportunity to rubbish it. Their unwillingness to put forward constructive solutions for the faults they perceive in the European Union suggests that they see the Union as beyond redemption. I find that negative approach profoundly depressing. But it cannot and will not deter or deflect those of us who believe in the Union from giving it our full support, tempered where we feel it necessary with constructive criticism.

But what really counts is the Government's continuing and, I hope, expanding, constructive engagement. I am confident that they will meet our high expectations and I hope that they will match that endeavour with an expanding effort to engage the citizens of this country in real dialogue on where we want the Union to go and how we are going to get there.

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