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In an age of asymmetric struggle, non-state terrorism and low-intensity warfare, are we right to be spending so many billions on vast hardware projects or on military procurement, which appears to be poorly managed in some cases? Are we right to spend such sums on upgrading Trident deluxe style, as the noble Lord, Lord Ramsbotham, asked in the debate and in the letter in the Times? Or are we pushing resources in precisely the wrong direction, leaving our troops inadequately equipped at times and with very low morale, as my noble and learned friend Lord Howe and my noble friend Lord Marlesford pointed out?

Are the international institutions of the 20th century the right ones for the new century? This country always takes great pride in belonging to practically everything. We belong to NATO, the European Union, the UN Security Council and the WTO, but are they the best channels through which to project our aims, to make our contribution and to guard our security today?

A very pertinent question was asked in the debate: are we investing in the Commonwealth as a power network of the future? My noble and learned friend Lord Howe and my noble friend Lady Hooper rightly asked that question. Are we right to invest—here I must tread carefully—so much time and effort in the endless EU institutional debate which we went round and round last summer, as your Lordships will remember? Are we right to put so much of our overseas development effort through the EU machinery? Is the EU defence structure—it is obviously important to have a defence structure—the one on which we should pin all our hopes? Have we grasped the need for a far wider context than just the EU in which to grapple with the financial reforms the world needs and the resolution of the complete imbalance between high-savings Asia and the debt-saturated western world, which was the cause of a lot of the overspending and wild borrowing which has led to the present global crisis? Are we braced in our foreign policy for the next Euro-crisis and the need to bail out, for example, Ireland, Greece, Austria, Hungary and other central European countries? That will come over the horizon in the next few weeks. We may, mercifully in my view, be free of the euro system, but the impact on our already shrinking export markets will be devastating.

A constant issue that came up in this debate was the question: have we adjusted our foreign policy priorities to our new pattern of energy needs? Thanks to the nuclear delay we face a period of immense danger and vulnerability to global gas markets. Will our policies protect us?

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Finally, and most importantly, do we have the right ministerial and administrative systems here in London to adjust flexibly and swiftly to the new conditions? Have we got the balance between DfID and our aid policies and the Foreign and Commonwealth Office and our diplomatic resource right? Or is there a malaise, as my noble friend Lord Hurd, with huge wisdom and experience, suggested—as indeed did my noble and learned friend Lord Howe with equal wisdom and experience? What about the closure of embassies? What about demoralisation? What about the points made by the noble Lord, Lord Wright of Richmond, the former boss of the Foreign Office? Are these issues that we can afford to let drift in these new conditions?

I have to answer a blunt “no” to all those questions. One only has to ponder for a moment on the basic realities that I have described to see how hopelessly inapposite all the policy stances behind these questions have become, as well as the systems that we have to administer them. It is a dispiriting picture. At a time when we should be forging new alliances with the powers that will affect our destiny, when we should be vigorously promoting new and more flexible regional structures for the EU, when we should be building up the Commonwealth as the ideal soft-power network of the future, when we should be massively strengthening and modernising our security forces to meet asymmetric threats, when we should be redirecting our development and aid policies, and when we should be reconstructing our overseas ministries to get a better resource balance and upgrade our whole diplomatic resource, we are doing none of those things.

Instead, we remain locked in old ambiguities in our foreign policy. This is querulous indecision disguised as strategy and adamant for drift. It leads directly to a national loss of purpose, endangers our future, weakens our contribution to international goals and projects an image of defeatism and lost confidence. It also demoralises those very able diplomats and foreign policy practitioners who find themselves wired into the wrong administrative structure travelling along the wrong tracks.

The global context has changed. Within it we need a new foreign policy direction based on a deep and intelligent analysis of the new world conditions, and we need new government machinery to operate it successfully with confidence and vigour. I am hopeful that my right honourable friend, the very able William Hague, will set the movement in that direction. Our country, built on its amazing and dazzling past, is still full of talent and vitality, and it deserves no less.

4.43 pm

Lord Davies of Oldham: My Lords, this is a challenging debate to respond to. When my noble friend Lord Malloch-Brown indicated that he could not be available, my heart sank and it has not risen during the debate, as the complexities of the situation assaulted me on every side. First, however, I congratulate the noble Lord, Lord Marlesford, on his introduction. I shall do something a little different in this speech; I intend to respond at the end to his major points, because in many respects he set a context to which we need to

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respond. I am grateful for the way in which he established the debate, but, inevitably, a whole range of detailed issues have arisen.

I was about to congratulate the noble Lord, Lord Howell, on his speech. For two-thirds of it I was entirely content. Not only that, but I was admiring the dexterity with which he replied to the pointed and single question of noble Lord, Lord McNally, by posing seven questions of his own, none of which will get an answer at this stage, but it was a deft way of turning the problem elsewhere. I agree with a great deal of what he said: we need to think about our foreign policy strategically and about our general policies on overseas issues in the context of a greatly changed environment. I will emphasise those points towards the end of my contribution, but I feel bound to reply to a number of issues that came up in the debate, given that noble Lords have not only spent time preparing and delivering their speeches but sat through getting on for five hours of this debate. They deserve some recognition for their work.

My noble friend Lord Anderson first opened up the issue that the noble Lord, Lord Howell, commented on a moment ago and which other noble Lords emphasised. That flowed from the introductory approach of the noble Lord, Lord Marlesford: what about the issues regarding the strategic priorities? We established a clear Foreign Office strategy in 2008, when we set out a White Paper. We clearly need to develop fresh thinking about the overarching issues against a background in which the world has dramatically changed in certain areas. A great deal of thinking on those issues is going on. It was notable that, in the debate, only glancing references were made to those parts of the problems that confront the whole world and require the international co-operation to which the noble Lord, Lord Marlesford, referred. Those are particular issues, such as climate change.

I heard the noble Lord, Lord Hurd, talk about declining Foreign Office resources; I will come to that in a moment. However, it will be recognised that different problems require different response strategies and that our tackling of climate change necessitates more than foreign representation. There must be much crucial and specific expertise. Britain has taken a leading role on the challenge of climate change and so I hope that this debate will be put into the context that the noble Lord, Lord Marlesford, urged. We appreciate the broad and outstanding challenges that face the world, not all of which fall easily within the framework of more conventional foreign policy. My noble friend Lord Anderson is therefore absolutely right that we need a strategy for priorities. We will, in fact, develop that along the lines that he indicated.

Against that background, my noble friend Baroness Amos and the right reverend Prelate the Bishop of Ripon and Leeds emphasised that we need to make international institutions more representative. As we would expect from my noble friend, her excellent contributions support Africa in all these debates. The noble Lord, Lord Chidgey, spoke about Uganda and the Great Lakes and the noble Lord, Lord Blaker, talked about Zimbabwe. No doubt we all recognise that Africa presents a range of serious challenges.

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Conflict in Africa has reduced significantly in recent years, but that does not make the conflicts that are still being sustained any more bearable for the people involved. Several of those conflicts are as bloody as the world has ever known and cause the most enormous distress to all the victims involved.

The noble Lords, Lord Wallace and Lord McNally, emphasised the European Union as being central to UK foreign policy. The Government entirely agree with that and no doubt the noble Lords drew the sustenance that I did from this Dispatch Box when the noble and learned Lord, Lord Howe, also emphasised those points. We await developments.

I heard about one development that I am not too sure about. I heard as distinguished a contributor as the noble Lord, Lord Ryder, whom I remember in a past life as a Chief Whip, talk about the Government-in-waiting. The last time that I remember that phrase being used more frequently than I would have liked was in 1991. It was used by the Opposition at the time. I happened to be a figure involved in the Opposition’s strategy; I may even have used it myself. I can assure him that we then had similar opinion poll leads as his party has at present. We lived to regret that outrageous term used prematurely. Perhaps the Opposition should mute their position, especially in debates of this kind. We should deal with the powers that be and what the Government are doing at present.

As the noble and learned Lord, Lord Howe, and my noble friend Lord Anderson emphasised, we intend to work to strengthen the capability of the European security and defence policy. It was mentioned that, increasingly, when it comes to international trade and development, the world, especially countries such as China, expects Britain to work within the European framework. In crucial areas, against a background where the pressures on the United States are intense, a European response is increasingly looked for in partnership with the United States. Although we will always enjoy a special relationship with the United States, we will not delude ourselves about the fact that any United States presidency, even one as radical, challenging and, in many ways, encouraging as that of President Obama’s in providing hope for all of us in participating in a better world strategy, will look to Europe—not just the United Kingdom but Europe—for support on the international stage.

If there is one aspect of the debate that did not get the emphasis that it should have had—although the noble Lord, Lord Marlesford, dealt with the issue in suitably optimistic phrases in his introduction—it is that we recognise the point made by the noble and learned Lord, Lord Howe, that the United States is no longer the arbiter of the world with quite the extreme superpower status that it enjoyed alone for several years after the Soviet Union collapsed. America is now operating in a world in which there are several other significant economic reference points. Military power is not the only determinant of great power status.

We must recognise the more muted position of the United States. That does not alter the view that we should look with optimism to the fact that some of the strategies that the United States pursued during the

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past decade are being revised. The President has indicated that he intends to revise those strategies; we should take delight from that and recognise that it is more likely that the way in which the United States pursues its objectives will be more in tune with the predispositions of this country than may have been the case during the past decade.

I speak especially of the Middle East. The noble Lord, Lord Wright, made his usual thoughtful contribution on that and said that we often have to learn to talk with those whom we have regarded as the outright enemies and almost beyond the pale because of how they have acted. He is right. That is the only way in which, eventually, peace is secured.

We recognise that the United States has a more flexible and constructive attitude to opportunities in the Middle East, which will require it to introduce pressures that have been absent in the past. America has not been prepared to talk with those who can contribute, even though they are often hostile to the values that we all have in the West. They are essential if we are to produce peace in such a desperately troubled area.

One aspect of the debate that I found stimulating and challenging, but to which I have no positive responses to make, is that commented on by the noble Lord, Lord Ramsbotham, the noble and gallant Lord, Lord Bramall, and, to a more muted extent, the noble Lord, Lord King, in discussing the defence resources that we have available. We all know how pressed our military forces are in meeting their obligations. In Afghanistan, we recognise the commitment of the United States to additional support and additional troops in Helmand province, which is an indication of a constructive response on the part of the United States. British troops are doing a wonderful and gallant job in Helmand province, but we all know what the challenges are.

I am grateful to all those noble Lords who discussed Afghanistan—the noble Baroness, Lady D’Souza, began the debate on this area—and the relationship between Afghanistan and areas of Pakistan over which no obvious legal authority obtains. The noble Baroness, Lady Falkner, in particular, emphasised the significant challenge for international diplomacy. Military might may produce the conditions in which it might be possible to win support for the development of Afghanistan, but it will not produce the development itself. We face an international situation in which it is difficult to see where the levers are for effective diplomacy to be deployed. That is why none of us should underestimate the challenges that Afghanistan produces and why I must be responsive to the obvious fact that Afghanistan looks to be a long trail ahead. There is no immediate solution to the Afghanistan problem.

I agree very much with the priorities that have been mentioned and about the way in which they can be developed, as emerged in the constructive contributions to this debate. However, none of us should think that success in Afghanistan is just around the corner, because it is not; it is a long and abiding challenge for our forces, which is why we have to make sure that the resources are there for them to engage successfully.

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I cannot offer to the noble Lords whom I just mentioned support for their view that additional resources might be available for our forces in Afghanistan and elsewhere if we thought again about Trident. The Government’s position on Trident is clear: we intend to replace Trident because we regard nuclear weapons as a necessary element of the capability that we need to deter threats from others. Conventional forces cannot have the same deterrent effect and we all recognise that we live in a nuclear world. I hear what noble Lords have said about the necessity for adequate resources for our conventional forces—those issues have to be addressed, particularly if the obligations on our forces increase—but I disavow the idea that our forces are not currently provided with the necessary resources and I certainly do not think that we could solve the problem of resources for conventional forces by saving money on the renewal of Trident. The Government have made that quite clear.

The noble Lord, Lord Hurd, also introduced into the debate an element that, I have to confess, I had not anticipated. I wish that I had, as I would have briefed myself about it more thoroughly. He raised the question of the relative resources available to the Foreign Office and DfID. My noble friend Lady Amos made the case for DfID needing significant resources in the essential role that it plays, not just in Africa but elsewhere. There is no way of achieving stable government and the prospect of peace if the only things that people face are abject poverty and desperation, because out of poverty and desperation aggression often develops.

Therefore, we have to put a great deal of emphasis on development, and I make no apology for—in fact, I take pride in—the extent to which the Government have devoted resources to DfID in these areas. When one talks to Governments in Africa, they emphasise strongly development support. However, I appreciate the point made by the noble Lord, Lord Hurd, that that must not be at the cost of the Foreign Office not being able to meet its obligations with regard to diplomacy in the wider world when that is such a crucial feature in the challenges that the world presents.

I emphasise that we do not regard this as a matter of competitive resources. We seek to ensure that DfID, the Foreign Office and the Ministry of Defence work together closely with our partners across government to deliver on UK objectives through their respective contributions. One aspect of this co-operation is the public service agreement to prevent and resolve conflict. The FCO, the MoD and DfID work jointly on that objective. I take on board what the noble Lord, Lord Hurd, said, because I respect the positions that he has held in the past and his deep knowledge of foreign affairs. As he indicated, that knowledge goes a long way back, to his first professional role. Of course I respect that, but I hope that he will take it from this Dispatch Box that, so far as concerns our influence in the world, we have no intention of reducing our resources. The noble Lord may not altogether agree with the direction that we pursue, but the Government are clear that, through successful co-operation between the relevant departments, we will meet the objectives that we set ourselves. Those objectives are very wide.

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My noble friend Lady Gibson, the noble Baroness, Lady Hooper, and the noble Viscount, Lord Montgomery of Alamein—I thank him for his sympathy about winding up in this debate as I flounder even more in coping with all the contributions—all raised issues concerning Latin America. Our representation in Latin America remains strong for the obvious reason that there is enormous potential for economic growth in that area. The noble Baroness, Lady Hooper, emphasised the business opportunities and growth in Brazil, which is rapidly becoming one of the world’s significant economies. We have a broad, deep and sustained relationship with that country. It is a key partner of the UK on a wide range of global issues from climate change and combating drug trafficking to promoting an expanding global economy. Brazil is playing a full part in the G20 process and will, without doubt, make a significant contribution in April.

My noble friend Lady Gibson also raised the question of visas and the visa waiver test. We made an announcement a few days ago in the other place about how the global visa waiver test will work. I hope that my noble friend will realise that, because we place such importance on our bilateral relationships with these countries, we will of course maintain flows of tourists and others who need to take advantage of a visa regime between our countries. We will be careful to safeguard the interests of Bolivia and other countries in Latin America. She will also know that there are attendant problems that we have to address, which were part of that announcement on 9 February. Within that framework, we will seek to meet the objectives that she has suggested we should pursue.

Issues were raised with regard to Russia by the noble Lord, Lord Ryder, and the noble Lord, Lord Weidenfeld, who also mentioned Ukraine. Of course, Russia is an important player on the international stage and we take great satisfaction from the United States indicating that it wants to look afresh at its relationship with Russia. There were comments in the debate to the effect that the West had not handled the immediate post-Soviet position and the new Russia with the greatest delicacy and insight. The noble Lord, Lord Weidenfeld, made that point quite strongly. We need to learn lessons from that. Russia has a crucial role to play. This means that, when we look at European or NATO expansion in relation to Ukraine or Georgia, we must tread with considerable care. We know why Russia is deeply anxious about such developments and we ought to take some satisfaction from the fact that the United States obviously thinks that it needs to reset the button in its relationship with Russia. We will play any part that we can in facilitating such developments.

I turn now to what I regard as the most important part of this debate, which is the context that the noble Lord, Lord Marlesford, established. He said that this debate was about the challenges of foreign policy. All foreign policy is challenging. There is not an aspect of it that does not pose difficulties. That is why we need the resources that we have to approach foreign policy issues. What I think the noble Lord was driving at is that this is a changed world. Indeed it is. It is a world so significantly changed that we have to recognise that we will need to recast our foreign policy priorities.

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When one thinks back, there are never absolute parallels. I am very rusty on history. Someone asked me the other day whether I agreed with a quotation from Henry Ford. I thought that he was going to say, “History is bunk”, but he did not. Of course, history is not bunk; history is an important source of understanding about human relationships. We understand from the 1930s that when countries chose protectionism and nationalism and tried to solve these acute and grievous economic issues on their own, they could scarcely produce a solution, unless it was a solution of the absolute extremes. One of these was the national socialism of the Hitlerian regime. That produced an economic solution, but only by creating a state of war and the nightmare represented by that fascist regime. In economic terms, the situation is not that different from the 1930s. The nature of the crisis that has developed comes from different sources, but the impact is being felt around the world in the drop in standards of living and the fact that the gross national product of many countries is plummeting. The challenges faced by all countries, both advanced and developing, are so acute that they can be solved only by international co-operation. The other solution is one that would produce disaster for the world.

Therefore, if we are going to respond in terms of an international solution, we have to respond to the point that the noble Lord, Lord Marlesford, made. This is a new and challenging environment and one that the world economy has not faced for more than 70 years, so scarcely anyone active in our economies today is mature enough to appreciate the depth of the crisis. For all of us, this is a new learning experience and all nations will have to reassess their roles and priorities. As the noble Lord accurately identified, Congress and certainly the Senate in America looked at one stage as if they would impose an element of protectionism on the fiscal stimulus that the President was concerned to develop. However, President Obama eventually triumphed and has produced a strategy of openness with regard to investment in the economy. We have to follow suit, as does Europe and the rest of the world, including those economies that have been given due credence today, such as those of China, India and even Brazil, which are so much more important than they were just a decade ago.

We need international co-operation, which is why the build-up to the G20 on 2 April is very important. Although I greatly regret that my noble friend Lord Malloch-Brown, who usually responds to these debates in such a masterly fashion, is not present today, the reason why he is not here is that he is involved in the crucial process of establishing the framework to ensure that the G20 conference in London is a success. The task before us is enormous and no one should underestimate it. We have to restructure and strengthen the broader global financial and economic system. We have to restore confidence and build up trust in a reformed system. My noble friend Lord Joffe said that that will be a challenging task but one that is absolutely essential, because we will not earn the respect and get the contributions of the wider world unless all our institutions build up that confidence. That may be reflected in increased representation, but if representation is not possible at the G20, given its

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restricted terms, countries must know that their influence is being felt on the deliberations of the conference.

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