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The Opposition have not made a sensible contribution to this. David Cameron gave another moral lecture. He said that Russia must be excluded from the G8 and proposed the crass notion that one should extend visa restrictions to a much wider range of Russian visitors to this country. He also said, “We must lead, not follow”. What world do these statesmen think that we are living in? Lead whom and with what? Should we lead 3 billion Chinese and Indians, who are, by the way, part of the wider world to which the noble Lord, Lord Crickhowell, referred? It is not just the European world. That wider world does not regard Russia as the main bully; it regards the United States as the main bully. We have much less influence in Europe than we think. Should we lead the United States? These words have little meaning and few things are more ignoble than impotence masquerading as strength.

I agree completely that there is a lot of unfinished business. I endorse what has been said about the undesirability of expanding NATO into the Ukraine and Georgia, for two reasons. First, it is bound to antagonise Russia and make much more difficult all the co-operation that we hope for and should get from Russia, with which we face many common challenges. When the first plan to expand NATO to the Baltic states was mooted, an expert wrote that it would create an irreconcilable, suspicious and hostile atmosphere between Russia and the West that would result in a return to the Cold War. That was a prescient observation. The expansion has made things much more difficult. A further expansion would further sour relations between Russia and the West.

Secondly, an expansion is undesirable because we would be undertaking military guarantees to two of the most unstable regions in the world, whose territorial integrity and limits are unsettled. NATO is a military alliance, not a nice NGO expanding its activities. If we let countries into NATO, we undertake to defend them militarily against aggression. That would be the commitment. The Ukraine and Georgia do not have a right to enter NATO. It was ridiculous for the Foreign Secretary to say, “Well, they asked to join. Of course we will let them in. After all, they are democracies”. By the way, that is not true. We should let countries into NATO only if it is in our interests and if the alliance is prepared to take seriously the military commitments that flow from Article 5.

Georgia is a country that lays claims to territory that has declared its independence, as recognised by Russia. Letting the Ukraine into NATO would risk

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splitting up that country. It is a mad policy to pursue and I hope that it is put in cold storage, which looks likely, because the Ukrainians have not voted on joining NATO and most of them are against it. The Georgians have voted for it. One must distinguish between Georgia and the Ukraine. It would be much more dangerous to let in the Ukraine, but both issues should be put into cold storage. We should think seriously about a new security structure, such as that mentioned by President Medvedev in Evian the other day. Such a structure exists only in shadowy outline. It takes the whole discussion beyond the expansion of NATO into a world in which we could start talking sensibly about the security requirements from the Atlantic to the Pacific.

We often tell the Russians that they should pay more attention to what others think about them and that they should try to imagine how their actions and behaviour strike other people. That is important. Misperception is at the root of many foreign policy disasters. We, too, should think a bit more about how our actions strike not just the Russians but the wider world. We talk about international law, but we are hardly impeccable supporters of it. People can talk about Kosovo and the invasion of Iraq. We talk about not deterring foreign investors. I agree. I read, I think only yesterday, that our Prime Minister said that bankers who have been responsible for excess lending should be punished. What does he mean by that? Should they be punished for legal activities? Does that encourage people to invest in Britain? President Putin attacked Mechel over criminal activities and suggested that it might be punished. We want to punish people who have engaged in activities that have never been suggested to be criminal.

It is the language. What about the charge that we often make that the Russians misuse their law for political purposes? That is perfectly true; they do. They use all kinds of legalities to get their political way. What about the freezing of the assets of the Landsbanki of Iceland under our anti-terrorist legislation? Is that not a good example of using a law for a purpose for which it was not intended? We do all these things ourselves. We do not do them as obviously as the Russians, but many of our actions are subject to the adverse interpretations that we give to the Russian actions.

We must be careful. A huge area of co-operation is available; we have not reached a dead end regarding Georgia and this may be the beginning of a new, more hopeful era. I wholeheartedly commend the report for mapping out those possibilities.

11.10 am

Lord Anderson of Swansea: My Lords, I am a member of Sub-Committee C. I pay tribute to the noble Lord, Lord Roper, for his excellent synopsis and wise observations today and, together with the staff and our adviser, for steering the committee to consensual and realistic conclusions. The question is whether, following the events in Georgia in August—since when an amendment has been moved—we are now in a different age that justifies a supplementary report. Certainly, as has been said, in its immediate response

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to the invasion, the European Council decided to conduct a comprehensive review of EU-Russian relations, which will continue until the EU-Russia summit in Nice on 14 November, and has suspended negotiations on a new EU-Russia partnership and co-operation agreement.

There were of course already major changes in Russia’s attitude to the West, probably dating from 2002-03, when internal reforms in Russia were frozen and there was a tidal wave of new gas and oil money. As the noble Lord, Lord Skidelsky, said so well, relations with the United Kingdom had already been bad over the previous four years, with visits frozen—one thinks of TNK-BP and the British Council, which the Russians conceded had been singled out for political reasons.

Correspondingly, there had been a sea change in the West’s attitude to Russia. In the 1990s, we had attempted to recreate Russia in our own image and had welcomed it into organisations such as the Council of Europe as if the country were on the road to a western-style liberal democracy. We had ignored the long history of authoritarianism, of western rivalry with Russia at its borders from the great game of the 19th century to the near abroad of today, the Russian fears of encirclement and anger in Russia at the depredations of the oligarchs who had stolen so many of the state assets. Russia had of course been invaded by Napoleon and Hitler. We had underestimated Russia’s deep humiliation at its loss of world status and given insufficient weight to the warning of President Putin two years ago that Russia also had the right to be self-interested.

The truth is that Russia is not and never has been a western-style democracy. We should end the illusions of the 1990s and build a new relationship. We should recognise that sovereign democracy, as defined by the Russians, is a world away from democracy in the western style and closer to the authoritarianism of both the tsars and the Soviets. We should build a relationship with Russia based on a new realism, robustly defending our interests as Europeans but also building areas of co-operation where possible, with our eyes fixed on our medium-term and longer-term interests.

To what extent has the invasion of Georgia changed the analysis in our report of last May? What lessons should we draw? What action should we take? The starting point is of course that it is quite unacceptable to change the frontiers of Europe by force. There may have been a miscalculation by the President of Georgia but there was an immediate and disproportionate response by Russia. Russia has allowed the ethnic cleansing of South Ossetia and recognised the independence of the breakaway provinces—potentially, at least, in respect of South Ossetia, on the way to Russian annexation—wholly contrary to international law and recent UN Security Council resolutions, such as that in April, to which Russia was a party. Its attempts to draw parallels with Kosovo are little more than debating points. Nevertheless, my judgment is that the key conclusions of the report are probably still valid and our concerns justified.

Should a price be paid for the invasion? Certainly Georgia has paid a price—the probably permanent loss of territory, the deaths of its citizens, internally

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displaced persons and the damaged infrastructure. Russia, too, will and should pay a price. Today, the stock market has been closed—of course, there was a whole series of other reasons for that—and there have also been important private sanctions. In the six weeks after the invasion, foreign investors withdrew US$56.7 billion from Russia; they perceived that it was not a stable business environment.

Russia has isolated itself politically, being joined in its recognition of the breakaway provinces only by Nicaragua. The international community will have a new suspicion of Russian intentions and abandon much of the wishful thinking, which gave Russia the benefit of many doubts. There will be a lack of trust and good will. Increasingly the G7 will meet as the G7 and not the G8.

That said—this theme was taken up by a number of speakers—we must recognise that we have a mutuality of interest in a number of key areas, not just in the market for gas and oil. Last year, Russia provided 38 per cent of EU gas imports and 33 per cent of EU oil imports. We also have common interests in areas such as counterterrorism. Russia itself has been a major victim of terrorism in the Caucasus. It provides access for our military and aid effort in Afghanistan. We need its co-operation over non-proliferation policy, the trafficking of nuclear materials and the physical protection of nuclear sites in Russia, as well as, obviously, in other foreign policy areas, such as the Middle East peace process. Given the lack of airlift capacity in the western alliance, it is Russian helicopters that will transport aid and military personnel to Chad. So Russia is showing a serious interest in helping in crisis-management operations.

What should our response be? Obviously, we should seek the greatest possible measure of EU unity. We should prevent the bullying of EU states such as Estonia and Poland and the attempt by Russia to have solely bilateral deals on oil and gas supply. Unfortunately, the pass has already been sold by a number of EU countries in forming long-term energy contracts with Russia. We should have greater care in relation to energy security. It is interesting that the new Government in Germany are seeking a new energy stockpile. We should look at areas such as a European Union grid to prevent shortages in one country going across frontiers.

Clearly, as has been said, we should diversify sources of energy. There should be increased support for the Nabucco project. The brief interruption of the pipeline supply to the West may have meant that Nabucco is now on track for construction between 2010 and 2013. Perhaps my noble friend will indicate whether that is true and what priority status for Nabucco means in practice. We should deal with Gazprom in a more hard-nosed way, insisting on principles of reciprocity, transparency and unbundling, as has been said by a number of commentators, treating Gazprom no differently from Microsoft. There should also be equal investment rights and third-party access to pipelines. As Edward Lucas says in his book The New Cold War, we should avoid the Finlandisation, or what he rather unkindly called the “Schröderisation”, of western Europe.

We need to select areas where our interests clearly coincide, particularly as the weight of China, India and Brazil increases in the world. We need to respond

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to President Medvedev’s call for greater consultation. That is certainly not happening in a number of key and sensitive areas, which has given the Russians a greater argument. We need to work together in a series of non-controversial areas, including—pace the British Council—culture, and realise that not everything is political.

We are aware of the provocations, the needling by Russia in areas such as Zimbabwe and Venezuela. We ourselves should avoid provocations wherever we can, such as the US withdrawal from the ABM treaty. The Russians will criticise the missile defence proposals, but I understand that, privately, they accept the sites in Poland and the Czech Republic. More debatable is the decision taken by the NATO council in April to work towards bringing Georgia and the Ukraine into NATO. I understand the argument that the new democracies should be able to make their own judgments. Perhaps contrary to what the noble Lord, Lord Skidelsky, and others have said, the pass was already sold when the NATO council made its decision to move towards membership action plans in April. Any concession now would be construed as weakness. However, we appear to have ignored proper consultation with Russia and to have given insufficient weight to the traditional NATO concepts: would the accession of these new members add value to security and are we able to enforce an Article 5 guarantee in respect of those countries? We should not make promises on which we cannot deliver. Greater EU involvement, rather than NATO involvement, leading possibly to membership, is far more acceptable and much less threatening and provocative.

There are signs that, after the invasion of Georgia, Russia has recognised its isolation and the damage to its interests and is seeking to build a better relationship with the West. The speech by President Medvedev at Evian this week has already been cited. His proposal for a new European security treaty is not new, but it was warmly welcomed by President Sarkozy. I ask my noble friend whether Sarkozy was speaking on behalf of the presidency and how much consultation there was when he made that immediate response. In that speech, President Medvedev reiterated his concerns about a unipolar world—that is, US domination. Although his theme was broadly conciliatory, he called, first, for a world based on the rule of international law; secondly, he called for the abandonment of war as an instrument of policy; thirdly, he endorsed the central and co-ordinating role of the UN; and, fourthly, he called for respect for the sovereignty, territorial integrity and political independence of states, which sounded astonishingly hollow in light of the invasion of Georgia and Russia ignoring its formal international engagements.

As in relation to Georgia and others, Russia has ignored those international commitments that it made in 2000 at the OSCE to withdraw its troops from areas of the frozen conflicts. There may be some merit in the proposals, but surely one should respond to them with great caution. As a first step, the most appropriate response is to put Russia to the test by seeking confidence-building measures, such as movement on other frozen conflicts in its near abroad area, evidence that the

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president is serious in his call for greater transparency of companies and the removal of barriers to international trade.

Overall, we must recognise, as the noble Lord, Lord Skidelsky, said, that our ability to influence Russia is limited, that talk of Russia as a strategic partner is, at the very least, premature and that Russia is not as strong as we think it is. One thinks of demography, bureaucracy and so on. Also we are not as weak as we Europeans sometimes think we are. We need to respond to invasion in a way that is consistent with our principles and interests but still look for areas of co-operation with Russia on the basis of political realism and avoiding those illusions of the past.

When we look back over 15 to 20 years, we remember that the Berlin Wall, the Soviet Union and communism were still in place. I firmly believe that in, say, another 15 to 20 years—a similar timescale—commentators will note that there was much sound judgment and good analysis in the report.

11.25 am

Lord Hamilton of Epsom: My Lords, I too am privileged to be a member of Sub-Committee C. This is the second report which the committee has produced and it seems to have suffered from rather unfortunate timing. We produced a report on the Arab/Israeli issue, which was filled with recommendations about the Palestinian Authority negotiating with the Israelis. Then we had the outbreak of violence in Gaza and before we knew what was happening, there were two Palestinian authorities. At that stage, I recommended that we did not publish the report—at least we were in a position not to at that point—but I was seriously outvoted. Now we find that our report on Russia has been rather overtaken by events with the aggression of Russia against Georgia.

I believe that my chairman, the noble Lord, Lord Roper, is absolutely right to have this debate because it gives us an opportunity to discuss where things are going with Russia and with the EU. We have to study seriously the whole question of what happens to Russian minorities around Europe. I believe we should look into that.

The noble Lord, Lord Skidelsky, makes the point that we do not want to risk another war—of course, no one does—but I wonder what signal we would send to Russia if we said, “We’re giving up all ideas of any country like the Ukraine belonging to NATO”. Surely, that would send a signal to Russia: “Invade Ukraine as well and you can take over the third of the country which has a Russian population and we will not do anything about it”. I do not think it is quite as simple—the noble Lord, Lord Anderson, alluded to that as well—as just saying that we should recommend that none of those countries joins NATO. We may send a very unfortunate signal if we do that.

The noble Lord, Lord Skidelsky, was also very harsh about the Government, whom I do not often find myself defending, in terms of the freeze on relationships between Russia and the United Kingdom. I thought what started it was the poisoning of Litvinenko, the ex-KGB man, when someone put some nuclear material into his coffee and he died in agony a few

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days later. We asked for the person whom we considered to be guilty of that crime to be extradited from Russia. He was a crony of Putin. He still has not been extradited and it does not look as though he will be. A series of events then took place in Russia which was in retaliation for what I thought was our quite reasonable request. I do not think that we can be accused of instigating a freeze in relationships with Russia. I think it instigated it by murdering a man on British soil in the way that it did.

There were great protests from the West when the invasion of Georgia took place but, as has emerged in this debate, the real reason Russia decided to comply with the treaty and to withdraw was much more to do with the fact that enormous pressure was exerted in the financial world, long before the present financial crisis emerged. The stock market in Russia was collapsing and had to be suspended for a number of days. I suspect that the oligarch friends of Putin were saying, “Come on, we are worth a fraction of what we were a few weeks ago and something has to be done”. I believe that markets had a much stronger influence over what happened in Georgia than outside intervention from the EU or anybody else. The noble Lord, Lord Truscott, referred to the oligarchs getting extremely worried about their financial position.

The Russians used to take the view—I do not know if they still do—that they are blessed by having this strong man, Putin, at the helm of their country. I think they are cursed by him. He has enormous limitations. He is the KGB man that he was trained to be. He feels extremely comfortable basically fighting the Cold War. He knows all about the ruthless use of power and how to eradicate opponents, but he does not know a lot about how to rebuild his country, which is in desperate need of rebuilding. Breaking up the BT joint venture was a disastrous signal to send to the financial community because Russia needs all the help it can get from the West. Although it has enormous reserves of oil, gas and minerals, it has appalling problems with a massive lack of infrastructure and many industries that need to be not even modernised but probably started from scratch, and it needs skilled workers.

One of the witnesses quoted in our report said that the population of Russia is now 142 million and by 2050, it will be down to 110 million. That is a catastrophic drop in population. Putin has referred to it as one of the biggest problems facing his country. I had been sold the idea that it is to do with Russians having a low birth rate. They do not. The birth rate in Russia is similar to that in other European countries, but young males have an extremely high death rate as a result of alcohol, tobacco and accidents. The population drop will create a vacuum, and vacuums get filled, so Russia will have massive problems with Muslim and Chinese immigration in times to come.

Putin has played to the paranoia which has always been there among Russians. I have to ask whether the West has helped on this. The West has been to enormous lengths to make it clear that it sees no role for Russia in NATO or the EU. I put forward an amendment, which can be found on page 123 of our report. Noble Lords may wonder why it is my amendment because my name is not on it, but if I had been there, which I

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was not, I would have voted in favour of it, although the rest of the committee was against me. I am grateful that the chairman, the noble Lord, Lord Roper, put my amendment to the committee, even though I was not there. It was:

“Whilst we recognise that the Russian government has no current wish to join the EU and is unlikely to want to do so in the near future, we hope that, one day, Russia may consider applying. Russian membership of the EU would be of inestimable value to relations between Russia and Member States of the EU as well as of great benefit to the Russian people”.

I feel strongly that we should not play to the paranoia that Russians may have and should tell them that we consider Russia a European country. Many Russians feel very European. Our committee referred to the fact that in the east, many Russians are Asians, but we must bear in mind that Turkey considers itself to be an extremely suitable and likely candidate to join the EU, and I regard the Russians as more European than the Turks.

Lord Lea of Crondall: My Lords, I hope it is in order for me to intervene; I know that the noble Lord has not finished his speech. I was on the committee in the overlap, and I would have voted for the amendment tabled by the noble Lord, Lord Hamilton.

Lord Hamilton of Epsom: My Lords, that is some of the better news that I have heard for a long time. I am enormously grateful to the noble Lord, Lord Lea, for his intervention and am very glad I gave way. How sad that he left the committee before he could vote on my amendment.

An argument against Russia being in the EU is that it is too big. The land mass of Russia is enormous, but the economy is not that big, even despite the massive oil wealth, and with oil and gas prices coming down, that economy will shrink. I suspect that, in a few years, Turkey, whose population is growing at a massive rate, will probably overtake Russia, whose population is going down. We will not see the population of Russia as that overwhelming.

Nobody is pretending that Russia is a suitable candidate to be in the EU in the near future, but things change. If Yeltsin had survived, if he had not been a drunken, corrupt incompetent who did everything he could to make a complete mess of the Russian economy and if the ideal view of what Russia might have been when Yeltsin took over had happened and it now had a thriving democracy, Russia would be asking to become a member of the EU, and we would be entertaining that idea.

Russia needs a friendly gesture. At the moment, Russia constantly goes on about being surrounded, which actually means having neighbours that it does not control, but that is an absurd concept to go along with. Switzerland is surrounded by two international organisations of which it is not a member—NATO and the European Union—but I do not hear the Swiss complaining that they are surrounded. That is because the Swiss have nothing to fear from the countries around them, and it is irrational for the Russians to go down that road. Before I die, I sincerely hope to see Russia as a member of NATO and the European Union.

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