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Lord Hylton: My Lords, Serbia is important to Europe but may easily be forgotten. I shall try to sketch a two-way deal that would be excellent for all. Serbia should be persuaded to bring war criminals to justice, to help prevent trafficking in persons, drugs and weapons, and to co-operate in destroying and controlling small arms. It would assist in implementing the Dayton agreement, especially in Republika Srpska. It would help to determine the future of the Serb minority in Kosovo, and might grant a long lease of most of Kosovo to an Albanian authority.

In return, Serbia would gain substantially, by guarantees of reasonable access to its historic sites in Kosovo; by receiving aid and assistance, particularly for policing and civil and criminal justice. It should be compensated for damage from wartime bombing. Above all, it should receive major inward investment, with the ultimate prospect of NATO and EU membership. Such a deal would lead Serbia towards democratic prosperity, to the benefit of the West and the next-door neighbours. It is worth devoting much diplomatic effort to gain such a prize.

What has bedevilled international relations and generated terrorism, and threatens to antagonise Islam and the West, is the future of Israel, Palestine and their Arab neighbours. There can be no more urgent priority. We have to recognise that the Palestinian economy is destroyed. Two thirds of the people live in poverty and half depend on food aid. Israel also suffers, with its tourism almost gone and young people leaving for better prospects elsewhere.

One cannot doubt that the current Sharon plan for Gaza is not for withdrawal but for disengagement. It would leave two blocks of settlements, one in the north and another in the south. All fences would stay in place, with a one kilometre wide military strip around the perimeter. A million Palestinians would be left in an open-air prison, disconnected from the West Bank.

Similarly, Palestinians fear that the completed wall and fence will split the West Bank into separate pieces, cut off from the Jordan and the Dead Sea. Israeli settlements, by contrast, would be linked by secure roads to the rest of their country. The Palestinian areas, like Qalqilya at present, would become enclosed ghettoes. This is a plan for military containment, not for peace.
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Israel needs our help to end the occupation—at a stroke that would revive the Palestinian economy and allow elections to take place, which all the Palestinians I have talked to, including some elected members of their Parliament and distinguished medical professionals, want to see happening. They want to revive their democracy. Such elections could produce a valid partner for negotiating a two-state solution.

For too long, the richer nations have paid to maintain millions of refugees and have also prevented total destitution among Palestinians. The developed world should now invest in military observers, and if necessary in military forces, to end 37 years of occupation. Israel has a reasonable fear of terrorists and cannot disengage by itself. Therefore, I urge Her Majesty's Government to devote their whole diplomatic strength to create a situation from which peace can emerge.

Lord Wallace of Saltaire: My Lords, this has been a debate on strategic priorities for foreign policy that has demonstrated how difficult it is to set such priorities. I was extremely glad to listen to the maiden speech of the noble Lord, Lord Robertson of Port Ellen. I have suggested to him since then that he should form an all-party group for the study of Islay and that I am willing at any time to make a visit to that island for a detailed study of it and its major products.

The noble Lord, Lord Wright of Richmond, in his opening speech, suggested that we should separate discussion of the external role of the Foreign Office from that of defence and international development. I have to say that, on listening to the debate, I strongly disagree with him. What we need in Britain is the careful co-ordination of all instruments of foreign policy and it is evident from what has been said that international development as an instrument of foreign policy, defence, diplomacy, nation-building and state reconstruction are all part of the way in which Britain has to relate to the rest of the world. I am glad that in this country the Foreign Office and the Ministry of Defence work very well and closely together—unlike in some other states of which we are painfully aware at the moment—and both work well with the Department for International Development, both here and abroad.

We have a global commitment, but we have to recognise, we do recognise and the excellent paper produced last December by the Foreign Office recognises, that Britain cannot meet the challenges without close co-operation with others. For example, I notice that we have 153 posts in member states of the United Nations. There are now 192 members of the UN. We, like the French, have now accepted that we cannot manage to maintain representation in every state around the world. There are virtues, for example, in the proposal currently under discussion among Foreign Ministers for a European Union external action service in which we and our fellow members would share posts in some of the smaller countries that might blow up to become problems in four or five years' time, but might not.
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There is an excellent statement in the paper, which talks about Britain's,

with our EU partners. I echo that and do not see that as a threat to British sovereignty. I see that as entirely appropriate in furthering British national interests.

The key elements to British foreign policy are, first, western co-operation with the United States and our European partners. I agree strongly with the comments of the noble Lord, Lord Parekh, that it is unhealthy to have one state dominating the global economy and the world political system. Secondly, we need to have a more balanced relationship, which again means a stronger European Union and a partnership between Europe and the United States. The paper rightly talks about having a "partnership" rather than Britain pursuing a dependent relationship between us alone and the United States. I am deeply unhappy about the image of Britain as a bridge between Europe and the United States. Bridges are what people walk over, whereas we need a dialogue with the US. The third element is our commitment to multilateral institutions and international law, through which medium-range powers like ourselves can operate effectively.

Regarding European policy, I regret that this Government have been inconsistent, without a clear strategy and without a clear overall concept. Far too often we look over our shoulders at the Murdoch press. A stronger European common foreign policy is in Britain's interest. Britain has led in promoting a European security and defence policy—a hard battle, but one in which we have as many allies among other EU governments as back-sliders.

We have not pushed as hard as we might for a more effective European development policy which would involve substantial further reform of the Commission and its ability to implement such a policy. Above all, there has been a public diplomacy failure to explain British objectives, either at home or abroad. It pains me when I see British Ministers slipping back again into the language of "us versus them" in the negotiations on the Constitutional Treaty, when we are now committed to a referendum which, I assume, Her Majesty's Government hopes to persuade the British public should be passed and as regards which we wish to persuade our friends across the Channel that we are attempting to achieve the same objectives as them.

We should operate our policy towards the United States as a candid friend not as a loyal subordinate, as a number of noble Lords have said. I agree strongly with the comments of the noble Lord, Lord Biffen, about that. There is after all, at the moment, a substantial divergence between British and American assumptions—that is, the assumptions of the current administration and the currently dominant party in Congress about global threats and challenges. In Washington the preoccupation is with hard military power, "shock and awe", quick-in and quick-out "state destruction", as the noble Lord, Lord Biffen, remarked, instead of state reconstruction and nation-building—the sort of things that the British Army does so well.
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The Foreign Office strategy paper talks a good deal about the new threats that we face on climate change, population explosion and global inequality. Sustainable development is one of the eight strategic priorities mentioned. That is not acceptable in the current discourse in Washington, where climate change is still not entirely on the political agenda. The paper underestimates migration as a major issue for us and others in international politics. It notes that the current estimate is that between 130,000 and 150,000 people enter the United Kingdom each year and stay—adding roughly a million people to our population every six to seven years. That will be a major issue, including how we cope with the countries from which those people are being pushed towards the rich world.

The dangers of "the West versus the rest", of slipping into a situation in which the rich world sees the poor world as antagonistic, where there is a clash of civilisations or one in which Islam is seen as—I quote Charles Krauthammer—"the existential enemy", is one that we have the deepest interest in opposing.

I strongly agree with the right reverend Prelate the Bishop of St Albans about the importance of understanding among faiths in this country and outside. Foreign and domestic policy go together. During the past three week-ends, I have spoken to about 1,000 British Muslims and I am conscious of the importance of linking these issues together.

The mood within the American Right had a degree of rage against the outside world. It sees the hosts of Median prowling and prowling around, the forces of evil surrounding them. Happily, we do not share that sense of good versus evil. Therefore, there is a deep need for Her Majesty's Government and for America's other allies to engage within the American debate to explain why we see the world differently from the current conventional discourse. Our Prime Minister will be in the United States in two weeks' time to attend the G8 summit and I hope that he will take the opportunity to state in public some of our reservations about current American policy. He should not lose that opportunity.

On the importance of international law and institutions, we have seen a US Administration which has tried to escape from the constraints of international law and which has tried, deliberately on occasions, to weaken the influence of international institutions. Thankfully, people in Washington now recognise how much it was a mistake to downgrade the Geneva Conventions; to assume that the US need not accept the constraints which the rest of us accept. But there is a real problem that the United Nations could be overloaded by having the problem of Iraq dumped upon it. The UN is most valuable as an international institution, but it is not that strong and we must be careful not to overload it.

We have heard a certain amount about NATO, an important institution to us but also in real danger from the backlash of what has happened during the past three years. Some in Washington have wanted to use NATO as a toolkit in support of US global objectives without listening to their allies and some European
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governments, particularly in Afghanistan, have failed to take their obligations, once agreed in principle, seriously.

On the Middle East, clearly operating through the EU and the UN, through the quartet, must be the way forward. Catching the American global Middle East initiative and transforming it into a broader dialogue about economic, political and social reform in the Arab world are all actions we must take together with our European allies. In Afghanistan, we must sustain engagement and persuade our allies to do that.

In Africa, we must note that the current US Administration does not feel engaged there, but that European interests are directly engaged. Further state collapse in Africa would immediately bring waves of refugees to Britain and other parts of Europe and therefore it is correct for Britain, with its European partners, to be as actively engaged as possible. I welcomed Operation Artemis, the first EU military operation in the eastern Congo last year. I welcome the Prime Minister's commission for Africa. We need to sustain a commitment under difficult circumstances when we are often blocked by corrupt and weak regimes. We have limited resources for our foreign policy and as we pursue it we therefore do best to work with others as well as we can.

I strongly agree with everything said by my noble friend Lord Alderdice about the risks to our reputation over what has been happening in Iraq. Reputation comes from long-term engagement and from explaining our principles and strategy to our domestic public and those abroad; it comes from commitment, consistency, coherence and, as we hope the Prime Minister will explain on his next visit to the United States, occasionally criticism.

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