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Lord Williams of Mostyn: My Lords, I could be wrong, because I have not taken part in the negotiations and I am only doing the best I can with the material I have. It is not to my knowledge that the FBU has disclaimed, discarded or withdrawn its 40 per cent claim. In a context of 2 per cent inflation, without being properly funded it would not be responsible for a government to accept 16 per cent.

Lord Campbell of Alloway: My Lords, I support the noble and learned Lord's stance that the Government must now take a firm stand. I also support what was said by my noble friend Lord Strathclyde and the noble Baroness, Lady Williams of Crosby, about the problems of restrictive practices in the unions, which is not new. It very much exists in this union today and it must be dealt with. That being so, I ask for assurance, first, that our Armed Forces shall not be asked to cross the picket lines without an emergency Order in Council on the affirmation of both Houses; and, secondly, that in these regrettable circumstances the Government will use their best endeavours to repair their nets with the trades union movement as a whole. Only with its support will the general situation improve. Forget the FBU for a moment; a general situation of far greater importance is looming. Could the Government take the initiative and restore negotiations with the trade union movement?

Lord Williams of Mostyn: My Lords, I am grateful to the noble Lord, Lord Campbell of Alloway. I will consider his first point, which is one of legal technicality as well as having a wider purpose. On his second point about the Government's best endeavours to have amicable relations with the trade union movement, that is exactly what we wanted. The Prime Minister demonstrated that; the former president of the Trades Union Council was asked to sit on the Bain inquiry. No one could be more generous than that. He and I have the previous convictions of being members of probably the best organised closed shop that the world has ever known, of which we are still members. I was chairman of it, so I know. It is called the Bar Council—perhaps I should not utter those two words.

Immediately before the last election, and immediately after the 1997 election, the Prime Minister said that we would treat our fellow citizens in the unions fairly but without favouritism. That is a good star to be guided by. I hope I do not trespass on your Lordships' tolerance, but one needs to remember that every wage increase that cannot be justified is a burden on all other citizens in this country. I pay tribute to the public services; my parents were both teachers and my first full-time job was as a teacher. Nobody needs me to pay tribute to the quality of public servants. We must all change, particularly given that we benefit from the present

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good economic circumstances in this country, or at least we must all have open minds to arguments for change. I say with deep regret that that is what has been lacking. For instance, Mr Prescott approaches the situation with a sad heart because he went into politics to secure the rights, liberties and appropriate privileges of those who work for a living. But that history cannot blind him or anyone else in the Government to our present serious circumstances.

Baroness Hamwee: My Lords, to follow the noble Lord's analogy of it taking two to tango, it seems that three organisations are tangoing in this situation: the union, the Government and the employers. It is perhaps no wonder that there is a little bit of tripping over each other's feet. Can the Lord Privy Seal clarify the role that the Government are playing? Were I a local authority negotiator in this situation, I would find it very hard to know what my negotiating hand might be if the Government were to say, "no we won't give you the funds, but we are not taking a part in the negotiation directly". I am probably not alone in wanting to understand this. It goes beyond the fire fighters' strike but very directly to the points that the Lord Privy Seal made about the health of the economy.

My noble friend Lady Williams talked about the problems of public sector workers with housing and so on, particularly in London and the South East. We all need to ensure that their reasonable claims are satisfied with a view to the health of the whole economy, particularly that of London and the City, without which our economy would crumble just as fast as it would if wage claims spiralled out of control.

Lord Williams of Mostyn: My Lords, there are two points. Part of the Deputy Prime Minister's remit is to address those very problems. He is engaged in securing funds and applying them to the exact problems that the noble Baroness identified, and which were referred to earlier by the noble Baroness, Lady Williams.

The FBU's claim is 40 per cent, and slightly more than 50 per cent for control room staff. To paraphrase the point of the noble Lord, Lord Bradshaw, the local authority negotiators are there to negotiate within their budgets. Very substantial settlements have been given by the Chancellor. But he said time and time again that those are to be used for reform and renewal—not simply to be dissipated and diverted into excessive pay demands. In a negotiation, one needs to be a competent negotiator. The noble Lord, Lord Bradshaw, thinks that the mechanism is not competent. I am not sure whether he applied "incompetent" to the individuals; therefore I shall neither disagree nor agree with him. But the proposed draft offer winging its way to Mr Prescott in the early hours of the morning was uncosted, unfunded and unmonitored.

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NATO Summit, Prague

4.57 p.m.

Lord Williams of Mostyn: My Lords, with the leave of the House, I shall repeat a Statement made by my right honourable friend the Prime Minister on the NATO summit. The Statement is as follows:

    "With permission, Mr Speaker, I shall make a Statement on the NATO summit in Prague on 20th-22nd November. With my right honourable friends the Foreign Secretary and Defence Secretary, I represented the United Kingdom at the North Atlantic Council, the special meeting of the North Atlantic Council with the seven new countries invited to become new members, and the Euro Atlantic Partnership Council. At the outset, may I pay tribute to President Havel and our Czech hosts, and to the skilful chairmanship of the NATO Secretary-General, George Robertson, who has been widely and rightly praised for his leadership in this role.

    "The summit reflected the extraordinary changes in the global security environment in which all nations now operate.

    "NATO itself has changed. We decided on seven new members. I congratulate Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia and Slovenia on their invitations. They are well deserved. They reflect the progress in reform that all seven countries have made since the end of the Cold War. All are on course to be in the alliance by the next summit in 18 months time and to be contributors to European security. This enlargement will strengthen NATO and make the whole continent of Europe more secure.

    "These invitations will not be the last. The United Kingdom will help those who want to join, and who meet the criteria, to succeed in the future.

    "Secondly, NATO continues to build new relationships outside its formal membership. Most importantly, the relationship with Russia has been transformed this past year. We now work with Russia as an equal partner, co-operating in a wide range of areas. A good example is the Balkans, where NATO and Russia are together making an immense contribution towards our goal of a peaceful and stable Balkans playing a full part in the European family. One of NATO's greatest benefits has been the forum it has provided for its European and transatlantic members to deal with security challenges together. My great hope is that we are now beginning to include the new Russia as a real partner in meeting the new threats we face. There was a useful meeting in Prague of the NATO-Russia Council at Foreign Minister level.

    "NATO is also pursuing its practical co-operation with the Ukraine, and strengthening its wider partnerships with the Mediterranean, central Asia and the Caucasus. NATO is building a close and effective relationship with the EU on crisis management, for example in the Balkans. At Prague, we decided to maintain a NATO presence in

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    Macedonia for a further limited period. Once the EU-NATO links are in place, I am keen to see an ESDP operation in Macedonia to show that Europe can play its part in bringing security and stability to this part of our continent.

    "Thirdly, NATO needs to develop new capabilities. The Cold War is over. There are new missions and new threats. The key is flexibility of response, adaptability of military forces and modernisation of defence capabilities.

    "The Prague summit agreed on three new instruments to help meet these challenges: a new NATO response force will provide NATO with effective forces available at short notice; all allies have committed to improve their capabilities in specific ways to support and equip forces that are flexible and deployable; and we agreed on a revised, reduced and refocused command structure.

    "Above all, the summit was a profound demonstration of unity in the face of the new threats that confront us. Every nation spoke of the menace of international terrorism and weapons of mass destruction. We all recognised that there is no place to hide from them. The terrorists do not distinguish between the 'soft' or 'hard' nations on terrorism. Every European country knows that it is under threat, whether known as strong supporters of US policy or not. Every nation talked of the cells of Al'Qaeda or related groups within them, ready to strike at innocent people.

    "This is not a war which we can avoid. There is no appeasing these fanatics. They will not go more lightly on us if we are less outspoken in our condemnation of them. Their enemy is anyone who is not them and they feel as strongly, sometimes more so, against the moderate Muslim as they do against the Christian or Jew or Hindu.

    "The NATO summit affirmed that simple truth. It was a remarkable statement of defiance. And it linked very clearly and rightly terrorism and weapons of mass destruction. The threat from weapons of mass destruction in the hands of rogue unstable states is not part of some different danger. It, too, represents savage indifference to human life. It, too, crosses national boundaries without discrimination. It, too, cannot be negotiated with or appeased, only defeated utterly.

    "The strength of the NATO summit statement on Iraq was testimony to that belief. There was complete unanimity round the table that the choice for war or peace lies with Saddam, and that if he breached the will of the UN, the UN would have to act. There was strong support for multilateralism and for the decision of President Bush to go through the UN but equally strong insistence that multilateralism and the UN be seen to work. And some of the most powerful expressions of these sentiments on terrorism and weapons of mass destruction came not from the old but from the new members of the NATO alliance.

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    "President Havel was a prisoner of the old communist regime; he was witness to the dissolution of the Warsaw Pact; he has now presided over NATO's largest gathering. The president of Lithuania, who has seen his country raped and destroyed by war and totalitarian oppression, and who lived for 50 years in Chicago as an exile from his homeland, is now back as its president. The president of Latvia, for years a professor in Montreal, spoke in the most moving terms of her country's long dark years, struggle for freedom and pride in becoming part of NATO.

    "Each representative has a story to tell and all have the same theme: they know the value of the fight for freedom, for democracy, for the rule of law and the struggle to break free of totalitarian intolerance and fanaticism. And they know the meaning of terrorism and weapons of mass destruction in the hands of brutal and repressive states. They know that extremism has just taken a new form for the 21st century. And they were complete in their determination that these new threats had to be faced, conquered and confined to history just like the scourges of the twentieth century. They had much to tell us about the values we believe in. Sometimes we can be complacent about them. They were not. They know their worth. And the ultimate message from the NATO summit was far more powerful than discussion of capabilities or formal structures. It was that if we care about these values of freedom, democracy and the rule of law, we should not flinch from the fight in defending them and I know this country, Britain, will defend them with courage and certainty".

My Lords, that concludes the Statement.

5.4 p.m.

Lord Strathclyde: My Lords, I thank the noble and learned Lord for repeating this important Statement. In view of the fact that the House has not yet started the main business of the day, I shall keep my remarks fairly brief.

There will be few noble Lords who do not welcome the extension of the NATO family to bring in more of the nations of eastern Europe. The fracturing of Europe into east and west was one of the underlying historical tragedies of the whole of the last millennium. It has been a source of far too much strife and suffering over the centuries, underscored in the post-war era by the brutal enslavement of eastern Europe under left-wing totalitarianism.

Does the noble and learned Lord agree that the existence of the NATO alliance was a primary reason for the breaking of the tyranny of the socialist bloc? There were many who marched and campaigned against NATO. However, it can now be seen that NATO has been the most successful alliance of modern times. Can he confirm that it remains the core principle of the Government's international security policy to maintain and strengthen that alliance?

The Prague commitment to transform NATO with new members, new capabilities and new relationships with our partners is a step in the right direction. But

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have all the key issues been resolved? When will European members of NATO start increasing, instead of cutting, defence spending? The Prague statement is long on commitments and short on targets. How can we be sure that our NATO allies will deliver on the Prague commitments?

Before the summit there were many gloomy predictions. Many repeated the old line that Russia would be alienated from Europe and the US if the alliance were extended. Instead, President Putin himself said that he had no problems with the outcome of the summit. Is not the reality that Russia has as much to gain from a circle of security and peace on its western borders as we have to gain from improving relations with a Russia that President Bush historically described as a "friend" of the United States? In that context, were the situations in Moldova and Georgia discussed at Prague? If so, were there any conclusions?

Mention of President Bush calls to mind another set of dire predictions before the summit from so-called progressive commentators. It was said that there was a growing US-European division. It was said that President Bush was a unilateralist who was pushing a divisive agenda. Does the noble and learned Lord agree that the outcome of the summit spectacularly disproved that view? Would he agree that President Bush acted as a major unifying force before and during the summit?

We welcome the commitment to the new NATO response force, which is vital to enable NATO countries to contribute effectively to the war against terrorism. Can the noble and learned Lord confirm that NATO commitments rather than EU commitments will always have priority in all NATO member states? There are dangers of incoherence in this context. There is potential confusion for our troops who are asked to wear two or three defence hats at one time.

Finally, will the noble and learned Lord confirm that the Government stand by their commitment that no EU operation should take place until permanent arrangements between NATO and the EU are securely in place? This was an historic summit. Let us hope that NATO is further strengthened in the long term by it.

5.8 p.m.

Baroness Williams of Crosby: My Lords, I, too, thank the Leader of the House for repeating the Statement made in another place. I do not find the Statement quite as acceptable as did the Leader of the Opposition. I believe that it is a rather anodyne Statement, which covers a number of extremely crucial decisions. They are perhaps among the most crucial decisions that the House will be called on to discuss now or in the future. Some of those decisions profoundly require discussion and debate in the House.

I begin by discussing what I believe are the two great achievements of the NATO meeting; I obviously commend them, as other noble Lords have done. The first is that of expansion, which has clearly been done in a way that minimises the fears of Russia. I agree that

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President Putin has accepted that and that so far he sees the expansion of NATO not as a threat but in some ways as a stabilising force. That is good news.

Secondly, it is worth mentioning the agreement reached about Kaliningrad, which has for a long time been a thorn in the whole relationship between Russia and the West. I believe that the proposal made with regard to the movement of people in and out of Kaliningrad through Lithuanian territory is a satisfactory outcome. I had the pleasure two weeks ago of being at a conference in Russia, where Russia-European relations were discussed by a number of senior attenders, including President Putin's main sherpa. They agreed that the Kaliningrad approach, which has now been accepted, was one they would find very calming from their point of view. I have some questions about what I find extremely troubling, not so much about the Statement but as regards what underlies it in terms of the events that occurred at NATO.

My first question relates to the tension between the rapid reaction force and the European rapid reaction force that was proposed and supported by the Prime Minister, among others, only a short time ago. No mention is made in the Statement of that second European force, although it was quite clear that it was intended to work on areas that would not be addressed by the proposed NATO response force; namely, the Petersburg tasks relating to peacekeeping, nation building, and humanitarian aid, which are of particular importance in areas such as the Balkans, Macedonia, Moldova, and Georgia. In the first three cases, the United States has indicated that it regards them primarily as European, not American, responsibilities. How will we address those tasks if we continue to get absolutely nowhere with the European security and defence force? Indeed, we do not appear to be getting anywhere very fast.

Secondly, in the interstices of the NATO summit Mr Hoon, the Secretary of State for Defence, indicated that we now support the idea of a ballistic missile defence system. He said that developing the capacity to defend against the threat of ballistic missile attack is in the interest of the UK, just as much as it is in the interest of the United States. I am delighted to see that the noble Lord, Lord Bach, who speaks on defence in this House, used rather more moderate words when speaking on the subject. He said that there is no essential need at present for Britain to invest in a missile defence system in this country. He added that the Government would agree to this only if the security of the United Kingdom and of NATO would be enhanced.

We have had many debates on the matter, not only in this House but also elsewhere. There has never been a consensus in this country in favour of support for a national—or, for that matter, a non-national—ballistic missile defence. Repeated Questions about Fylingdales were tabled in this House, the answers to which were invariably that no request had been received from the United States. There was never a

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serious debate about whether we should accept the proposal to hand over this base to the United States for the purposes of missile defence.

At least some of us are very unsure about whether the estimated expenditure of 10 billion for this purpose is a sensible use of scarce UK defence money when there are so many requirements for conventional weapons and for improving the equipment of our troops. Parliament should have had an opportunity to debate the matter in detail before the Government, in the shape of the Secretary of State for Defence, simply assumed that we now support it.

Thirdly, I should like to know what kind of command structure exists as regards the proposed NATO response force of 21,000 people. We are informed that the command structure will be American, to which I have no objection. However, we are also informed that the consensual structure of NATO decision making may not apply to the use of this response force. If it is intended that the NATO defence force be an annex to the American military establishment, let it be said straightforwardly that that is what it is all about.

Finally, there is no difference of opinion between these Benches and the government Benches about the absolute necessity to address terrorism. However, I must express profound concern about the way in which the second string of the attack on terrorism is being approached. Noble Lords on these Benches have long argued, as I believed was also the case with the Government, that there was more than one response to terrorism. In other words, there is not only a military but also a non-military response: one that recognises the importance of building up democracy; the importance of peacekeeping activities; and the necessity of addressing poverty and the other underlying evils of our world.

The OSCE was developed with Russian, American, and Canadian membership for such a purpose. I am troubled by the fact that there is no reference in the Statement to these second and vitally importance ways of dealing with terrorism. I believe that much of the position taken by this country, by other European countries, and in the past by the United States, in terms of a multilateral structure of arms control, of addressing weapons of mass destruction, and so on, has simply been disregarded and, essentially, passed by in this Statement. I hope that that is only an omission, not an indication of a new government policy.

5.15 p.m.

Lord Williams of Mostyn: My Lords, I am most grateful to the noble Lord, Lord Strathclyde, for his extremely generous comments on this achievement. I take his point that there is other business on the Order Paper that has been somewhat delayed today. Therefore, I shall try to be brief. I agree with the noble Lord that the breaking of the totalitarian power of the former USSR was significantly brought about by NATO, and the robust stance adopted by United States administrations over the period since 1945. In fact, the difficulty at present is understanding how quickly things have changed.

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I agree with the noble Lord that it is a core principle that we maintain our loyalty to NATO as plainly as we possibly can. Similarly, I agree that Russia has much to gain. It is an extraordinary achievement that Russia should have taken part in the recent NATO-Russian council. The noble Lord asked specifically about Moldova and Georgia. The governments of both those countries were present on the second day of the summit. Georgia has expressed a long-term interest, together with the Ukraine, in the possibility of joining.

The noble Lord asked whether President Bush was a unilateralist or a multilateralist. Although I did not hear his response from him, I heard it from his Secretary of State for Defense. He said that it depends on the circumstances. If it is essential within the United States' interest that they act alone, then they must be prepared to bear the burden of such action. Plainly, in his approach to NATO, and in his recent notable speech to the United Nations Security Council, President Bush has demonstrated himself to be an appropriate multilateralist. I think that the qualifying adjective may be mine.

The noble Lord asked about the position vis-a-vis the European security and defence policy and NATO. We do not regard them as rivals. If an operation is conducted in a NATO or in an EU framework, it depends on the particular circumstances and which countries would wish to be engaged.

The noble Baroness, Lady Williams, took a rather more gloomy view; indeed, she used the word "anodyne" and said that many issues were skated over in the Statement. I cannot accept that description. The outcome of the summit is a remarkable achievement. I accept her implicit proposition that these are only first stages. We are talking about countries that will join, but they will not do so immediately. They have differences in quantity as well as in quality regarding what they can bring to the process.

I noted the noble Baroness's comments on the 10 billion expenditure on missile defence. I shall transmit onwards her suggestion that Parliament, or at least this House of Parliament, should have an opportunity to debate the matter in detail. I am not the master in that respect, but I shall certainly mention that suggestion to the usual channels.

As to the command structure, I can tell the noble Baroness that all such matters will be under the political authority of the North Atlantic Council. She made the very important point with which I wholly agree; namely, that the need to meet the threat of terrorism is not simply military, and not military of one sort. There are reasons, purposes, and motives that drive people towards terrorism and to the destruction of their own lives and communities as well as the destruction of other lives and communities. Simply to think that military action is the answer is a short-sighted approach, and a profoundly mistaken one. I do not believe that that is the view of the United States Administration. It is certainly not the view of this Government.

This Government can demonstrate that quite well in practice. One of the remarkable successes has been the tenure of DfID by Clare Short, who is an absolutely

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doughty champion of precisely the objectives identified by the noble Baroness. But, more importantly, she has also been an effective champion as regards the increase in aid and its proper direction that we have seen take place over the past five years.

5.19 p.m.

Lord Clark of Windermere: My Lords, I have the honour of representing this House on the NATO parliamentary assembly; and, indeed, lead the British delegation. We met in session immediately prior to the meeting in Prague. Perhaps I may confirm to the House that the Russian attitude is just as outlined by my right honourable friend in his Statement. There is a definite change in attitude and in demeanour, which bodes well for future negotiations.

My right honourable friend made the point about NATO's rapid reaction force and the associated command structure. That means that it is a new ball game and a new step-change in our fight against terrorism and other war-fighting capabilities. But can my noble and learned friend assure me that the British Government will use all their powers and that they will give all possible support to the Secretary-General, the noble Lord, Lord Robertson, in his efforts to persuade some of our allies to increase the amount of money that they spend on defence? Unless they do so, we shall not have the capabilities for that rapid reaction force to be as effective as it should be.

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