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2.31 pm

Lord Brittan of Spennithorne: My Lords, I shall focus on what our approach should be to what is or should be going on in the European Union in the coming months. My task is rendered much easier by the fact that, as far as my general stance is concerned, I so completely agree with what my noble and learned friend Lord Howe of Aberavon said that I need say no more on that.

I raise, first, the adequacy of the European Union’s response to the current global financial crisis. Eurosceptics who are tempted to carp at that response should realise that their strong insistence that fiscal policy should remain overwhelmingly in the hands of member states inevitably means that a strong, single, common approach is virtually impossible. On the other hand, a co-ordinated policy applied in a flexible way by member states is desirable, feasible and wholly appropriate. That is what has been proposed by the Commission for consideration at next week’s European Council. The question on which this House could perhaps give its views, therefore, is whether Her Majesty’s Government should support that broad approach.

A complex set of measures is proposed, amounting to a substantial fiscal boost. Since the publication of the Pre-Budget Report, the attractions of a give-now,

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repay-later policy have diminished under detailed scrutiny. That is largely because we have spent and borrowed so much in this country that the costs and risks of that type of policy are enormous. Consequently, the scope in this country for a responsible fiscal boost is limited.

However, that is less true for countries which have pursued less profligate policies during the past few years. The attraction of what is proposed for the European Council is that it clearly recognises that what should be done by each member state must reflect the degree to which it has been fiscally responsible in the past. On the other hand, while allowing for that high degree of flexibility, the attractions of a common agreement that there should be a Europe-wide fiscal boost are considerable, and the description of the various instruments that might be used is constructive.

For my part, having been Chief Secretary to the Treasury—working with my noble and learned friend Lord Howe of Aberavon—in the early 1980s, when we did not go down that path and successfully followed a different one, makes me extremely cautious about any fiscal boost. However, the circumstances differ today. First, the global situation is much more serious than in the early 1980s. Secondly, it makes a huge difference if what is done in broad terms, recognising the differences in scale and specific measures between different countries, is done right across Europe, and in the United States and China. It greatly increases the chance of it working and leads me to believe that the Government should next week give broad support to the proposal for a co-ordinated, not a common, European approach to the crisis.

Some have asked whether that means that we should revisit the issue of Britain joining the euro. Most notably, the President of the European Commission, Mr Barroso, has raised this issue. I have always been in favour of Britain’s membership of the euro, but have to accept the political realities. The case for joining the euro certainly looks stronger today than it has in the recent past. One only has to think how Italy and Greece would be faring if they were not in the euro-zone. I suspect that the case will look even stronger in the next year or so, because, unfortunately, the IMF predicts that Britain will suffer a more severe recession than almost any other advanced, substantial-in-size western country. None the less, I do not think that the time is yet ripe to reopen the debate on the euro in this country, although it is getting much closer.

I want to touch on two other European issues. The first relates to the Lisbon treaty, which will be a very actual question in the coming months. I shall not go into the arguments for and against. As I have said in this House, I am in favour of the treaty and do not share the view of my Front Bench. The question now is how to move forward in the face of the Irish vote. All the talk of bullying the Irish is nonsense. The Irish recognise that there is a problem and are seeking to face up to it constructively. Other countries and individuals are perfectly entitled to express their views—that is not bullying. However, it is becoming reasonably clear that what the Irish will suggest, probably next week, as the way forward is a declaration or protocol stating that the treaty does not impinge in any way on their desire to remain neutral, does not lead to any derogation

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from their sovereignty on tax matters and does not involve anything that undermines their position on abortion. All those are easy matters, because, although they were raised during the Irish referendum, none of them was threatened in the treaty. Therefore, to say that nothing in the treaty threatens them is no more than to repeat the obvious, although it was not obvious to the majority of the people in Ireland.

It is also likely that the Irish Government will suggest reversing the decision, as can be done in the treaty, to reduce the number of European commissioners, so that Ireland will always continue to have a commissioner. I must admit that I had not realised when I was appointed to be one of the British commissioners that my presence in Brussels was quite such a precious national asset, but, in Ireland, that seems to be regarded as the case. The case for reducing the number of commissioners is strong and pretty obvious. Some years ago—quite a long time ago—I suggested dealing with the problem by having senior and junior commissioners, which I still think would be the right thing to do ultimately. But that cannot be done quickly. On balance, at least in the short term, the importance of getting the treaty ratified and moving away from consideration of constitutional issues is sufficiently great for it to be right to swallow the pill of leaving every member state with a commissioner if that is what it takes to resolve the logjam.

Finally, I shall say a word on European energy policy. I was recently a member of the Chatham House Commission on Europe after Fifty, which produced the report A British Agenda for Europe, which I can warmly recommend as I did not actually write it. The most far-reaching conclusions in the report relate to energy. I have always taken the totally pragmatic view on what Europe should and should not do collectively. I have suggested that Europe should be ready to hand back competences to the member states when the job has been done and it is no longer needed to act at European level. On the other hand, there are sometimes problems that can be resolved only by collective European action. If that is so, we as a pragmatic nation should not hesitate to favour such action, even if it means further pooling of sovereignty. If ever there was a subject to which that applies, it is the security of the supply of energy.

Valiant efforts to achieve a common European approach on energy have, so far, been embryonic, to put it extremely politely. Third parties, such as Russia, have rather successfully played one European country off against the other. That is why it is worth giving serious consideration to the report’s proposal that:

“Britain should push for a more coordinated European energy strategy in order to be in a position to better handle Russia’s dominant position within European energy markets ... The most important step in this regard is to create a more physically integrated EU energy market which would have the potential to lessen EU member states’ vulnerability to supply disruptions. Interlinked EU energy markets could also deliver significant efficiency gains, principally through greater interconnectivity of national electricity and gas grids and through increased use of gas storage”.

The report goes on to make a strong case for establishing some form of European energy agency to help to implement the policies and, most controversially, says:

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“Urgent consideration should be given to the idea of developing a common external energy policy in which the terms on which Russia and other energy providers secured access to EU markets would be negotiated centrally by the European Commission on a mandate from the member states and treating the EU market as a single whole”.

In other words, that would prevent Russia playing off one country against another.

These are radical ideas, but they are not premature. I hope that they, too, will be given serious consideration in the coming months, as well as the other issues that I raised in my remarks.

2.42 pm

Lord Steel of Aikwood: My Lords, like the noble Lord, Lord Brittan, I believe that in a short space of time it is possible to deal with only one topic, and I propose to follow that example. Tempted though I am to follow the examples of the noble Lord, Lord Howell, and the right reverend Prelate the Bishop of Winchester in lamenting the lack of mention of the Commonwealth or Africa in the Queen’s Speech, I shall set that aside and content myself by wearing the restrained tie of the Royal Commonwealth Society instead.

I turn to something that is actually in the gracious Speech, the sentence:

“My Government will press for a comprehensive peace settlement in the Middle East”.

I wonder how many times a sentence such as that has appeared in the gracious Speech over the years. I hope that it is really meant—and I shall direct my remarks to that end.

As a Liberal in politics, it is not very often that you get criticised for what your party has done in government—an experience common to Conservative and Labour politicians. In the 1966 election, when I sought re-election a year after my by-election, my wife knocked on the door in rural Roxburghshire and was told by the lady who answered that, much as she liked what I had been doing as the local MP, she could not possibly vote Liberal. “Why is that?” my wife asked. “They wouldn’t send help for General Gordon”, the lady answered. So I lost a vote on that account.

I recall that when I became leader of the Liberal Party, a lot of my Arab friends said that the Middle East situation was entirely my party’s fault. “Why is that?” I said—and was told that it was because of the Balfour declaration in 1917. However, I always defend the Balfour declaration and the creation of the state of Israel. People forget what was actually in it. I quote the essential words, which are,

Those very important words were echoed by that great Israeli statesman Abba Eban after the 1967 war. He was the country’s first UN representative and was then the Foreign Minister. He said, of the situation after 1967:

“The Jewish people fail to understand that there was something contractual in our entry into the world. We promised to share the territory. The present position (that is occupation of the Palestinian territories) is a deviation from our birth. I never knew of a country that could successfully throw its birth certificate away”.

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We need to remember words like that, and the words of the Balfour declaration, when we look at the situation in the Middle East today.

I was very much motivated by interest in that part of the world in my experience as a very new, raw young MP attending a session of the General Assembly of the United Nations at a time, in 1967, when Lord Caradon was successfully negotiating resolution 242. I remember the euphoria in the British delegation at that time, and the great optimism that resolution 242 was the way forward to secure peace in the Middle East. That was 40 years ago, and we are nowhere nearer that peace.

In 1980, I made my first visit of many to the region. I see the noble Lord, Lord Wright, in his place. We arrived in Damascus when he was ambassador there, and he was very kind to this callow, inexperienced politician, blundering around the Middle East for the first time and meeting with Yasser Arafat at a time when nobody would talk to him and it was not allowed to do so. But I, as an opposition politician, could do so, and did frequently over the years. I had the great privilege, too, of meeting over the years two great peacemakers in the Middle East who paid with their lives for what they did—President Sadat of Egypt and Prime Minister Rabin of Israel.

My most recent visit was earlier this year, in a group of European politicians. We met Prime Minister Olmert and President Abbas, and I came away feeling slightly optimistic. I thought that they were two people, certainly in private discussion, who recognised that they would have to make compromises on both sides if peace was going to be achieved, and they both appeared determined. Yet nothing has happened. The one ray of light in all this is that the people of Israel seem to be well ahead of their politicians, as every opinion poll shows that they are desperate to see a peace settlement with the two-state solution that has long been advocated.

I hope very much therefore that the sentence in the gracious Speech is meaningful, real and will be pursued with real purpose. The truth of the matter is that at present the Government of Israel are flouting international law in many respects, with the continued building of the settlements and the route of the wall. Of course, we accept that any nation has the right to create a wall to defend itself; 1,000 Israeli citizens have been killed in recent years by terrorist attacks and rocket launches from terrorist organisations. But the fact is that the route of the wall is illegal, not only in the eyes of international law but as specified by the Supreme Court in Israel itself. Its judgment says:

“Only a separation fence built on the tenets of justice will afford security”.

It also said that the security wall caused “unjustified hardship” to thousands of Palestinians. That is undeniably true. The Government in Israel are operating against both international law and the decision of their Supreme Court.

As for the situation in Gaza, that is an absolute disgrace. I am glad that the noble Lord, Lord Ahmed, who has been there recently, filled out in some detail what he found, because it saves me having to repeat what is happening, particularly in the hospitals, with the deaths resulting from cutting off electricity. The

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blockage of UN food supply trucks and fuel supplies for electricity generation is an absolute scandal. Indeed, the sewage treatment works are breaking down, with, as a result, poor quality drinking water and raw sewage spilling out into the Mediterranean. It gets worse than that; only two Sundays ago, the Papal Nuncio—the Archbishop of Jerusalem—who was going to Gaza to conduct Advent mass for the Christian community there, was stopped at the Gaza checkpoint for three hours and then turned away. The small Christian community there was deprived of its mass. These sorts of petty vindictive actions by the Israeli Government really should be denounced firmly by Governments. It is important that we operate collectively with our European partners. After all, we have an international trade association agreement with Israel which benefits that country. It is time that we said to it, “That international agreement is dependent on you sustaining international law”, and that the collective punishment being meted out on Gaza is quite unacceptable.

The same disproportionate response was obvious when I visited Lebanon also earlier this year and saw the results of the Israeli invasion. The scale of destruction in Beirut was simply unbelievable. Apart from the loss of life, the wanton destruction of road bridges throughout the country seemed absolutely extraordinary, and we allow a country to get away with this time after time.

Is there a chance of the peace initiative working? I applaud the recent visit to Syria of the Foreign Secretary; I hope that that was part of the process, but the Arab peace initiative of 2002 has not been followed up properly. Here for the first time was a statement by 57 Arab and Muslim countries, which said that they would establish full diplomatic and normal relations with Israel in return for a comprehensive peace agreement and the ending of the occupation. Surely it is time that we used all our collective strength to bring about that peace agreement. It is no use relying simply on the United States, although I hope that the new President will have a more sensible policy, but the countries with a real historic interest in the region are the United Kingdom and France.

We should be using our muscle power in Europe to bring about that peace agreement. If we do not, apart from the hardship to the Palestinian people, of which the noble Lord, Lord Ahmed, has spoken, there are two other consequences of the failure to reach an agreement. One is the continued spread of international terror. I am not one of those who is naive and believes that if we could solve the Palestinian problem international terror would cease, but there is no doubt in my mind that all the fundamentalists, whether they be Islamic fundamentalists, Zionist fundamentalists or the Christian fundamentalists in the United States, feed on the terrible situation in the Middle East. As long as we fail to settle that, fundamentalism will continue to draw new recruits. The second consequence, of course, is the spread of a vile kind of anti-Semitism which we had hoped not to see in this country.

The right reverend Prelate the Bishop of Bath and Wells quoted the Chief Rabbi, one of the great spiritual leaders of our country. He has said, even before the present blockade of Gaza, that things are happening on a daily basis in Israel which make him “uncomfortable

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as a Jew”. It is important that those of us who sign up as friends of Israel should be candid friends of Israel, and Governments who are friends of that country should be not just candid friends, but forceful friends.

2.53 pm

Lord Owen: My Lords, within this present grave global financial crisis, which will, I suspect become ever graver, are harsh and deep lessons which must be learnt and, sadly, relearnt. This is particularly the case for those of us who live within the sophisticated market economies, which some of us have long hoped and aspired would become social market economies. We hear much about the need for greater roles for government and for tougher financial regulation in the light of this disaster. It is worth reminding ourselves that, to her credit, the Federal Chancellor of Germany, Angela Merkel, in a G8 meeting which she chaired only a few years ago, called for many of those measures, but they were sadly brushed aside, particularly by the UK and the US.

We are, however, in danger of ignoring the more fundamental lessons, forgetting the imperative to root out and to curb within our societies at every level—most importantly that of the individual—the greed, avarice, corruption and hubris which has wrought and will wreak so much havoc, not just in our relatively rich countries, but has its impact most unfairly on the poorer, unsophisticated countries. The record in the past few decades of some of our large banks, some of our large companies and some of our democratically elected Governments shows that global problems will not be solved by focusing only on global solutions. The problems are rooted in individual behaviour, and there is no greater example of this than in Zimbabwe.

I urge Condoleezza Rice, the US Secretary of State, and our Foreign Secretary to fly immediately to South Africa to talk to the outgoing President and the, almost certainly, incoming President, Jacob Zuma, about the situation in Zimbabwe, and to visit any surrounding countries which may be helpful in bringing to an end the present Government in Zimbabwe. If it is what is required, the threat of a greatly increasing cholera outbreak, which is growing faster by the day in that country, ought to be the real stimulus to action. If we need a precedent, 30 years ago in the midst of a bitter and bloody civil war, the then US Secretary of State Cyrus Vance and I negotiated directly with the South African Government and many of the other Governments who surrounded the then state of Rhodesia. I truly believe that this is now a moral imperative, that this country has responsibilities, and that with the United States it can act, even during the presidency of President Bush, which is due to expire. It is worth recalling that one of the things that he has done which we can all applaud is to make a substantial financial effort in Africa in the alleviation of HIV/AIDS.

I turn now to the other great crisis that we face, which is, of course, in Afghanistan, which I link inextricably with Pakistan. Many speeches in this House have chronicled the history of the, so far, failed endeavours in Afghanistan. I do not see any point in going back over this. In the next few weeks we hope that General

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Petraeus will be able, soon after 20 January with his new commander-in-chief, President Barack Obama, to come forward with new policies, new energy and new initiatives in Afghanistan—to which the British Government will have to respond, even though we are sorely stretched. We all know how difficult it will be to up our military contribution, but that will not be enough. Nor will it be enough, as I hope the United States will say, that the UN Secretary-General ensures that his representative in Afghanistan, Kai Eide—whom I know and have worked with in Yugoslavia, and have great respect for—is given total responsibility for all the UN agencies that work in Afghanistan. It is intolerable that there is continuing divided authority, when one is dealing in a war zone with the complexity and intricacies of that whole country.

However, we need to go further and look at the diplomatic efforts that need to be conducted. I am not so sure that everything is new in this world. In fact, Afghanistan is a constant reminder of how history repeats itself. Afghanistan historically stands at the axis of central Asia and the Indian subcontinent. That country cannot be helped just by a few countries; it must be helped by a combination of countries. An attempt was made some years ago in the six plus two formula to bring the six countries surrounding Afghanistan, the United States of America and the Russian Federation together. That initiative died a death for many reasons. However, it had one important achievement: it was the forum in which the then US Secretary of State, Madeleine Albright, met directly for the first time the Iranian Foreign Minister. A number of countries were missing from that forum which I believe are essential to cast the negotiating and diplomatic framework wider. It needs the presence of India; it also needs the presence of Kazakhstan; and it was—I do not think it overestimates the British importance—a weakness not to have the United Kingdom represented. We are, by a very large portion, the second largest contributor militarily in Afghanistan. It would be sensible to have all five permanent members of the UN Security Council involved in this overall framework, when France is playing an ever increasing military role—I welcome it very strongly—in Afghanistan. That new grouping is large, but, if it met on a permanent basis, it would provide the framework and the back channels for reinforcing negotiations on all the other complex areas.

The existing dialogue between India and Pakistan over Kashmir needs to be reinforced and re-emphasised. It is worth emphasising the very important statements made by the new President of Pakistan. Since 1947, Pakistan has never been so forthright. It is a surprising but welcome development. I met the President with his wife, who I knew well, some years ago. It may be that this man has the commitment, having watched his wife gunned down, his father-in-law hanged and remembering the extraordinarily close relationship which for a while developed between his wife and Rajiv Ghandi, to turn Pakistan towards the path of a serious dialogue at every level—over nuclear weapons, as he has indicated he is ready to do, over economic trade and industrial co-operation and over the politics of dealing with Islamic extremism.

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