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In judging the new coalition Government, we might do worse than bear in mind the response of Zhou Enlai, who was once asked whether he thought that the French Revolution of 1789 had been a success. He said that it was far too soon to say. The jury is still out on the coalition Government, of course, and will be for a long time to come, but all of us who have spoken in the debate today have made it clear that we wish the new Administration well. We do not underestimate the sacrifices that both parts of the coalition will need to make if it is to succeed and endure.

I hope that among the priorities that the new Administration will ensure will be the upholding of human rights, including the rights of free speech and religious belief, and I hope that they will become a central characteristic of our international policy. They could do far worse than implement the excellent recommendations of the Conservative Party's Human Rights Commission, including the appointment of a special envoy, with a mandate to uphold the right to freedom of belief that is enshrined in Article 18 of the UN's Universal Declaration of Human Rights.

The Foreign Office, with its vast team of officials, has only one person in its human rights team who is responsible for religious liberties issues. That might explain the unfortunate and shallow remarks made by Foreign Office officials about the forthcoming visit of Pope Benedict XVI. Religious diversity and tolerance should be stable-mates in a democratic and open society. The struggle for religious freedom is concomitant with the struggle for democracy itself. Equally, contempt for religious faith and ignorance of its tenets can, as we know, have calamitous consequences all over the world.

The main part of my remarks follows the penultimate comment by the noble Baroness, Lady Williams, about North Korea. I want to talk particularly about North Korea in the context of our relationship with China. It may be appropriate to mention this issue today-the day on which the new Chinese ambassador has presented his credentials to Her Majesty the Queen. Clearly, engaging China in the struggle for human rights and freedom in countries such as North Korea, Burma and elsewhere will be central. China is well aware that its international reputation suffers when atrocities occur in countries such as Burma and North Korea. It is well

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aware that its reputation suffers when there are demonstrations about the treatment of dissidents, the imprisonment of bishops, or Tibet. Last September, after pressing for some time, I was impressed when the Chinese authorities allowed me to organise a visit to Tibet. I was accompanied by the noble Lord, Lord Steel, and two Members of another place. I hope that the new Ministers will study our recommendations closely. Our initiative had the approval of His Holiness the Dalai Lama. If a political settlement on Tibet is not reached during his lifetime, it could leave a very dangerous vacuum.

Surely most pressing of all in seeking China's involvement is the need to deal with the deteriorating position on the Korean peninsula. The sinking in March of the South Korean naval vessel the "Cheonan", with a loss of 46 lives, was a shocking and tragic development. China is right to have urged restraint, but it needs to be more outspoken and insist that those responsible will be brought to justice. China was right to describe North Korea's decision to test a nuclear weapon as "brazen", but this is of a similar order. Both our countries must stand with the victim and condemn the aggressor. A common front could transform the situation in North Korea and deliver reform and hope for its beleaguered people.

North Korea has experienced enforced disappearances, executions, arbitrary detentions, a lack of religious freedom, a lack of freedom of movement both domestically and internationally, a lack of labour rights, the non-implementation of legal codes, a lack of judicial oversight of detention facilities, the severe mistreatment of repatriated persons, violence against women in detention facilities, a lack of freedom for enterprise especially for farmers and food merchants, the lack of a fair trial, a lack of press freedom and a lack of the right to food for persons in prisons and labour camps. There is a need for economic and health care, a need for more women in public affairs, a need for more access by the World Food Programme, the need for a national human rights commission, and so much more.

Tony Blair recently said:

"The biggest scandal in progressive politics is that you do not have people with placards out in the street on North Korea ... The people are kept in a form of slavery, 23 million of them, and no one protests!".

There are 3 million to 4 million North American Koreans, and there is a small Korean diaspora in the United Kingdom. Just as the Jewish community galvanised international opinion about life in the Soviet Gulags, the Korean diaspora needs to catch our collective imagination and create a worldwide movement for change-a process in which we should assist.

China still refuses to give the United Nations High Commissioner for Refugees access to the border areas, in violation of Article XVI of the 1995 China-UNHCR treaty and in opposition to the recommendations of the UN special rapporteur on North Korea, Professor Vitit Muntarbhorn, who incidentally will address a meeting on 21 June of an all-party group in your Lordships' House which I chair. The harrowing plight of refugees, which Professor Muntarbhorn has regularly raised, is graphically caught in a perceptive and insightful new book called Nothing to Envy by Barbara Demick.

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Demick weaves together a narrative that gets beyond the statistics-the 2 million people who died in the famine during the 1990s, and the 300,000 people who are estimated to be in the Gulags today. Statistics and figures can be numbing, but the personal stories that the statistics represent are of a different order.

China knows that if the North Korean regime went into free fall, there would be an enormous influx of refugees. China might well decide to intervene militarily, with potentially disastrous consequences for the Korean peninsula. There has always been an assumption in North Korea that it would be the Americans, with perhaps as many as 28,500 troops on the peninsula, who would intervene militarily, but in reality it is China that has the most to lose from North Korea and it is losing patience. There is even open talk of the annexation of North Korea by China.

Some circumstances are unique to North Korea, but the underlying Helsinki principles of critical engagement, dialogue and the insistence of respect for human rights should be paramount. I hope that the Minister will tell us this evening whether the Government will place the sinking of the "Cheonan" before the United Nations Security Council, whether they will call for the establishment of a United Nations commission of inquiry to investigate crimes against humanity, whether they will press for an evaluation of the egregious violations of human rights in North Korea, and whether they are in direct discussions with China and Japan on these matters. As I end my remarks, it is worth reminding your Lordships' House that it is 60 years this year since the beginning of the 1950-53 war on the Korean peninsula. Two million to 3 million people died in that war, including 1,000 British servicemen. We all have a great stake in ensuring that history does not repeat itself.

6.38 pm

Viscount Trenchard: My Lords, I join other noble Lords in congratulating my noble friends Lord Howell of Guildford and Lord Astor of Hever on their very welcome appointments. I also congratulate my noble friend Lord Ferrers and my new noble friend Lady Falkner of Margravine on their excellent speeches yesterday in moving an humble Address.

Not only here but across the developed world, markets are extremely fragile and confidence is shattered. In these circumstances, it is surely a good thing that my right honourable friend David Cameron and my new right honourable friend Nick Clegg have so quickly been able to agree a common programme to tackle the extremely serious structural budget deficit and spiralling national debt that was built up over 13 years of Labour government. I had not realised that my new noble friends on the Liberal Democrat Benches had also recognised that government has become much too large and overarching and must urgently be slimmed down, thereby releasing scarce resources for investment in what we all hope will be a resurgent private sector.

I do not believe that the manifesto of any of the three main political parties adequately recognises the severity of the public sector cuts that will have to be made. Now that the election is behind us, I am confident

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that our new coalition Government will face up to the Herculean task that they face. I am heartened that the noble Baroness, Lady Royall, said yesterday that the Opposition will, where appropriate, seek to co-operate, help and support. We shall see.

I must declare an interest: I am employed by Mizuho International plc, a subsidiary of the Mizuho Financial Group of Japan. I am thus doubly unpopular, being both a banker and a politician. But I believe that politicians are trying to pin too much of the blame for the financial crisis on the banks. I understand that the taxpayer is already in the money as far as the shareholding in RBS is concerned and that, if investors can recover a modicum of confidence in the stock market, the prospects are that Lloyds Banking Group will also show a healthy profit.

Corporation tax revenues from the City of London alone have in the past covered our defence budget by 150 per cent. Of course, we need to create the conditions where our manufacturing industry can also thrive, but this will not be assisted by the adoption of policies intended to rebalance our economy away from financial services. There is already evidence that the new powers recently given to the FSA are excessive and harmful. I believe that it is essential that the FSA should show more restraint in the use of those powers. I hope that the Government will review them and consider whether they are appropriate or not as they prepare the draft legislation to reform financial services regulation. I am happy that the FSA has been reprieved and that it must submit to oversight by the Bank of England in respect of micro-prudential regulation.

Much more serious than the question of how far the FSA is subordinated to the Bank of England is the shocking realisation of the fact that it no longer has any power to make any new regulation. Our regulators are, or will shortly be, the European Banking Authority and the other two EU-level regulators. It is also shocking to realise that EU Finance Ministers and the European Parliament have both adopted versions of the alternative investment fund managers directive demonstrating that they now have the power to regulate our alternative fund management industry, which includes UK investment trusts and property funds-indeed, everything which is not a UCITS. That has serious negative ramifications for the City's future prosperity and I trust that the Government will not let matters rest there.

It is my privilege, utterly unmeritorious, to enjoy the appointment of honorary Air Commodore of 600 (City of London) Squadron Royal Auxiliary Air Force. In the past, I served in the Territorial Army for 10 years. The Reserve Forces provide excellent value for money. I hope that the forthcoming Strategic Defence Review will consider the possibility of increasing further the contribution to our defence effort made by the Reserve Forces. They can also make a tremendous contribution to the Government's intention to create a big society, and to encourage individual and social responsibility.

I was happy to learn that defence programmes have been protected from the £6.2 billion efficiency savings, because the Ministry of Defence has not benefited from the previous Government's profligacy in the way that some other government departments have. We are

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very good at defence and universally recognised as such. It is one of the reasons we punch above our weight as a nation and our economic recovery depends on maintaining our position in our areas of excellence. I warmly welcome the Government's commitment to support fully our excellent Armed Forces-support which they both need and deserve.

I sometimes wonder why so many of our senior FCO mandarins are somewhat deprecating about our ability to continue to exert influence for good around the world through our embassies or acting alone, as well as co-operating with others. I lived in Japan for more than 11 years and have been closely involved in the establishment of financial businesses in China and Korea. In these endeavours I know how greatly I have been helped by the background of the UK's strong bilateral relations with those countries and the effective presence of our high quality diplomats on the ground. I do not agree with those who think that we can exercise influence around the world today only by combining our diplomatic representation with that of our European partners through the EAS. I regret that the FCO's budget is to be severely cut back at the same time as spending by the EU on diplomatic representation is being massively increased. This is unhelpful to the perception of the United Kingdom and the promotion of British interests abroad.

The gracious Speech contained a commitment,

I found this a surprisingly precise commitment compared with other spending cuts. It caused me to wonder why DfID is maintained as a separate department of state. I remember when it was headed by a Minister of State and was operated as a division of the FCO. I notice that it enjoyed an increase of funding in real terms of 12 per cent in 2008-09, whereas the FCO was forced to accept cuts of 11 per cent.

I wholly agree that we should, even in these straitened times, continue to provide development aid to genuinely poor countries, but I would ask Her Majesty's Government to examine what savings could be achieved from downsizing DfID and merging it into the FCO, which should also ensure that its disbursements are more closely aligned with our national interest. If this were done, perhaps we might find that we could afford even more than,

of GDP for international aid.

Finally, I want to refer to the references to constitutional reform in the gracious Speech. I do not think that the people will thank the Government if much time is spent on debating these matters in contrast to the time that Parliament must commit to solving the acute economic and fiscal problems that the country faces. I welcome the sensible decision to reverse the previous Government's misguided decision to carve the hearts out of Devon and Norfolk.

I regret the commitment to a referendum on AV and, in particular, the pressure being applied by my new noble friends to bring forward to 2011 the date for such a referendum. I have not liked the AV system since I was not elected to the executive of the Cambridge University Students' Union in 1972 despite receiving

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more first preference votes than another one, or perhaps two, candidates who were elected. I believe that most people have only a very superficial understanding of the merits and demerits of various different voting systems. I think that matters such as this should rightly be decided by Parliament. It was so much more appropriate that there should have been a referendum on the Lisbon treaty than that there should be one on AV. It is no surprise that the gracious Speech informed us that proposals will be brought forward for a reformed second House that is wholly or mainly elected on the basis of proportional representation.

Japan replaced its partly appointed and partly hereditary second Chamber with a second directly elected House. I believe that it would be a serious mistake if we were to do the same thing. Another place represents the people and we should never compromise its sole right to do so. We in this House are summoned to advise the monarch-that means the Government. Our role is to scrutinise legislation, to use your Lordships' undoubted expertise to improve it and to ask another place to reconsider when we believe that is in the national interest. Ultimately, we must defer to those in another place because they are the people's representatives and we are not.

Lord Wallace of Saltaire: My Lords, perhaps I may remind noble Lords that the recommendation from the Chief Whip at the beginning of the debate was that we should keep to seven minutes. Having myself in the past often spoken one or two minutes longer than I should have done, I say this diffidently. But if we want to finish by 10 o'clock, we need to hit seven minutes or certainly no more than eight minutes.

6.49 pm

Lord Harrison: My Lords, I too have long admired the experience and expertise of the noble Lord, Lord Howell, in the field of foreign affairs. I have also admired his agility over the years in outflanking the right-wing Eurosceptics on his Back Benches, and I hope that he forms a coalition within the coalition with my Liberal Democrat friends to ensure that that is reinforced.

I would have appreciated it if the Minister had been present when the trio of Ministers set off for Afghanistan and fell out within that narrow coalition, such that Dr Fox told us that the British Government were not there to promote women's education as an example of soft power and Mr Mitchell replied that he was. Perhaps the noble Lord, Lord Astor of Hever, whom I also welcome to the Front Bench, could explain what the line is.

I welcome the fact that the international development section of the proposal says that the Government will honour the aid commitments, particularly to live up to the 0.7 per cent gross national income ambition by 2013-a very early date. This is indeed ambitious; the Labour Government achieved a change from 0.28 per cent to 0.52 per cent over the period of their government, and I would like to know what the Minister is planning in order to achieve that. If it is inscribed in legislation as something that has to be done, what happens if there is a failure in such an ambitious plan?

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One of the purposes of aid has been demonstrated by the commitments given by Prime Ministers Blair and Brown, especially about Africa in the Gleneagles agreement. This week we have had a report from the One Campaign, headed by Bono and Bob Geldof, to demonstrate that Africa is changing because aid has been put in and more democracies have appeared. That is very welcome, and let us see what happens in future. As the Government are proposing that Africa has a seat on the United Nations Security Council, perhaps the Minister will give us some ideas about how the representative might be chosen.

I welcome the commitment to the Commonwealth, strengthened as a focus for promoting democratic values and development. That is good, but what are the new ideas and what are some of the challenges ahead? One such challenge is that in time the Queen will no longer be with us, much to our regret, but it is not true that Prince Charles will inherit the position of head of the Commonwealth. What is the coalition's thinking about that?

In terms of new ideas, I would like it recognised that this House is very much the House of the Commonwealth. We have many representatives of those who have been brought up or lived their lives in the Commonwealth and have great engagement with it. Does the coalition agree with that? Can we strengthen some of those ties? Let us be a bit imaginative. Could we invite members of other Parliaments elsewhere in the Commonwealth to attend here on an occasional basis?

Added to that, I caution colleagues opposite in the coalition that if they are to reform the House of Lords in the way that they describe: please do not lose the baby with the bathwater. We have enormous expertise in this House regarding not just the Commonwealth and foreign affairs but Europe. I give as an example the late Lord Dahrendorf; he was a German commissioner in the European Community of those days and ended up as a distinguished Member of this House who enormously improved what we could do. Please do not lose that.

What plans does the coalition have about appointing Peers? I thought that it was an excellent innovation by our Labour Government to appoint some excellent Members to the peerage to represent us on the Front Bench. I give just one example: the noble Lord, Lord Malloch-Brown, brought in from the United Nations. That was very good.

The Commonwealth is also represented here by the Commonwealth Parliamentary Association. I hope that the coalition can try to deal with some of the scepticism found in the British media and press. I give the example of the CPA visit here to witness the elections. A very dusty and sceptical interview took place on the "Today" programme. Sad as I was that we made mistakes during the election in terms of not having sufficient ballot papers and not enabling people to vote, it showed that we have things to learn from the Commonwealth-it is not just a one-way matter.

I bring to the attention of colleagues opposite the fact that I recently attended the British Islands and Mediterranean conference as a regional executive of

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the CPA. There is much to learn from the smaller and the new Administrations that are represented there. They, like small businesses, often have the ability to innovate, change and think afresh. I was pleased when I visited our Dutch friends last year-I hope that this too will be copied-that our then Foreign Secretary David Miliband had visited them and that his visit had gone down very well. We must take care of the smaller countries within the European Union as well.

Represented at this conference on the Isle of Man were of course the Channel Islands, Malta, the Isle of Man and Cyprus. The Minister will know that today the Cyprus talks have been reconvened, with the Turkish Cypriots in the north no longer represented by President Talat, for whom I have great sympathy, but by Mr Eroglu. I hope that we do whatever we can. Here is an opportunity for the new coalition to try to help the restarted talks and see whether some initiatives can be made there.

I was sorry to see that in the document produced by the coalition there was no mention of the single European market and its completion, or at least its further deepening. This to me is a classic example of where we could coalesce as a House of Lords by promoting the lodestone, in my view, of the European Union: to create that open and free market, which would be of enormous benefit to all those who work within it.

I am sorry to say that I have not been able to make remarks on the growth of the Members of the European Parliament. I hope that we are better engaged with those. I praise our own spokesman, my noble friend Lady Kinnock, who is a distinguished former Member of the European Parliament, as now are members of the coalition Government, such as Nick Clegg and other colleagues. We should re-engage with the European Parliament. I hope that the Conservatives will rethink their allying themselves with some of their stranger bedfellows on the European continent.

6.57 pm

Lord Hylton: My Lords, I welcome the new coalition. I suppose that I may, being descended on one side from Disraeli's long-serving Chief Whip and on the other from Prime Minister Asquith.

Today I draw attention to the importance of religious factors in foreign and defence policy. Ministers and advisers, used to our secular and scientific culture, can find this very difficult. They sometimes think that religion and faith are important only to children and old women. They are quite wrong, and show ignorance in much of today's world. An extreme example was in 2003, when some very senior people in the United States simply did not know about the important differences between Sunni and Shia Muslims.

I have spoken before in this House about the folly of the so-called "war on terrorism". One can sometimes fight terrorists but it is madness to try, using military means, to fight against an "ism". It is usually a case of winning hearts and minds, as many wise military men know. At home, I urge those reviewing the previous Government's Prevent Terrorism programme to keep this clearly in mind.

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