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House of Lords

Tuesday, 24 March 2015.

2.30 pm

Prayers—read by the Lord Bishop of Peterborough.

Economy: Public Finances


2.36 pm

Asked by Lord Vinson

To ask Her Majesty’s Government, further to the Written Answer by Lord Deighton on 13 February (HL 4675), what plans they have to reduce the deficit and to make the public more aware of the effect on living standards of the United Kingdom’s debt servicing costs, which are currently £766 per annum per person or £1,841 per household.

Lord Newby (LD): My Lords, the Office for Budget Responsibility forecasts that this year the Government will cut the deficit in half as a percentage of GDP from its post-war peak in 2009-10. It is forecast to fall every following year, reaching a surplus in 2018-19. The Government set out in the Budget document that reducing debt as a share of GDP will help to control debt interest and reduce the burden of these costs on future generations.

Lord Vinson (Con): I thank the Minister for his very sagacious reply. Does he agree that, if the public were more aware of our huge national indebtedness, they would be more receptive to the need to put it right? So when he is a Minister in the next Government, will he ensure that every effort is made to encourage the nation to save more, export more, import less and reduce subsidies generally, not least the £14 billion a year net that we give to the European Union, which should be treated as overseas aid?

Lord Newby: My Lords, I thank the noble Lord for his optimism about my future career prospects. I agree with what he says about savings in particular. That is why the Chancellor announced at the Budget a new personal savings allowance of up to £1,000 for basic rate taxpayers, more flexibility in the operation of ISAs and a new Help to Buy ISA for first-time homebuyers.

Lord Davies of Oldham (Lab): My Lords, is the Minister aware that Labour has today made a clear pledge to the British people that in government we will not raise the rate of VAT nor extend its coverage? Will the Minister, close as he is to the Chancellor, give a similar pledge to my party; or will the coalition parties follow the pattern of 2010, with the Liberals warning of a VAT tax bombshell and the Tories staying silent—and, in the weeks after, in coalition, increasing VAT from 17.5% to 20%?

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Lord Newby: My Lords, any commitment by the Labour Party would have a lot more credibility if we had even the vaguest clue as to how it was going to get the deficit down.

Lord Bilimoria (CB): Would the Minister agree that one reason for the credit crunch and the financial crisis seven years ago was the prolonged low rate of interest of 5% a year? Now that the Government have extortionate debt servicing costs at a 0.5% base rate, what plans do they have when interest rates go up, as they will? How will they service those costs, and at what rate are they borrowing for long-term debt at the moment?

Lord Newby: My Lords, one of the main reasons why we need to get debt under control is that the long-term borrowing costs are very significant. Whatever the interest rate, even with current low rates of interest, we are spending 2.5% of GDP per annum on servicing it, significantly more than we spend on the aid budget. Because interest rates are low and because we have a very credible economic policy, we have been able to borrow long term at low interest rates—but none the less we need to get the debt down because we want to get the borrowing costs down.

Lord Deben (Con): Does my noble friend accept that the Government’s change of heart, which has meant that every taxpayer now has a proper breakdown of where their tax goes, is an enormous advantage? If you read it carefully, you see that the cost of our membership of the European Union is extremely small, very good value and that is where we should stay.

Lord Newby: I completely agree with the noble Lord.

Lord Grocott (Lab): In the interests of clarity, when the Minister refers to the Budget, is he referring to the George Osborne Budget or the Danny Alexander Budget?

Lord Newby: My Lords, I was referring to the Government’s Budget.

The Earl of Listowel (CB): My Lords, does the Minister agree that the public should also keep in mind the fact that nearly half of local government spending is on adult social care and the care of children, and that includes 14.63% on children? While local government has risen to the challenges to its funding over recent years, there is real concern that it cannot take much more.

Lord Newby: My Lords, the way in which we ensure that local government and all other aspects of government are funded effectively and appropriately is by having a very strong, thriving, sustainable economy. The fact that our growth rate is the highest among the G7, unemployment is down and employment is up, is the biggest long-term guarantor of a sustainable funding basis for local government and, indeed, all other forms of government expenditure.

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Lord Lea of Crondall (Lab): My Lords, the noble Lord, Lord Vinson, mentioned exports as if they were doing rather well. I do not think that they were mentioned in the Budget but does the Minister agree that our trade balance is a disaster, as is our productivity, which has not grown at all since 2010? Would not the Government be better served by looking at these fundamental factors in the real economy?

Lord Newby: My Lords, last month’s trade figures were the best for 15 years. No doubt the noble Lord would say that that is not good enough. However, we have spent more money more effectively through UKTI in building up our trade with less traditional countries such as China. Further support was given to that in the Budget.

Lord McFall of Alcluith (Lab): My Lords, in 2010 the Government inherited £786 billion of debt. Five years later that figure is now £1,540 billion—almost double. The Chancellor in his Budget said that the Government were paying the debt down. Was he telling the truth?

Lord Newby: My Lords, it is no secret that this Government have borrowed over half a trillion pounds as we have slowly got to grips with the mess we inherited. Debt has come down by about 1% of GDP for each year we have been in government—the level of consolidation that the IMF says is most appropriate in these sorts of circumstances.

Arts: Concert Hall for London


2.44 pm

Asked by Lord Campbell-Savours

To ask Her Majesty’s Government what discussions they have had with those involved in the planning of the proposed new concert hall for London.

Lord Bourne of Aberystwyth (Con): My Lords, the Government have spoken to a range of interested parties about the proposed new concert hall, including the Greater London Authority. The Chancellor recently announced £1 million of funding to support a feasibility study into the new concert hall, which will report back in the autumn. Work on the study is already under way.

Lord Campbell-Savours (Lab): With Crossrail opening in 2018, thereby making access to central London far faster than on much of the London Tube network, instead of the Government sponsoring a feasibility study into yet another concert hall in London, why not build a new international concert hall on a site on the Crossrail route that is accessible to Heathrow and on land that is far cheaper than in central London? May I suggest building it in the Royal Borough of Windsor and Maidenhead? Surely, the Home Counties deserve their share of major projects, following upon Crossrail?

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Lord Bourne of Aberystwyth: My Lords, every major city in the world has a concert hall within the centre of the city. London and the United Kingdom are in need of a new concert hall in the capital city. The acoustics here are poorer than in all our competitors, and that is why the new hall is likely to be in central London.

Lord Naseby (Con): Is my noble friend aware that the last five years have been halcyon years for music in London? One can look at who has been put forward for the Young Musician of the Year, the social policy of the Royal Opera House and all the events taking place in the parks of London. Are the Government not right to look at their policy and prepare properly to ensure that we have one of the best international concert halls in the world?

Lord Bourne of Aberystwyth: My noble friend is of course absolutely right. We need a concert hall that is comparable to those in Berlin, Vienna and Paris. The only way to get that is by re-examining this issue, which we are doing, along with Sir Simon Rattle, the GLA, the Barbican and the London Symphony Orchestra, so that we have a concert hall of international standing.

Lord Thomas of Gresford (LD): My Lords, I have some experience of superb acoustics, having sung in Australia’s most iconic building—the world heritage Sydney Opera House. I was a top tenor in the Hong Kong Welsh Male Voice Choir at the time. Might I invite the Minister to consider a joint project for a concert hall on the £18 billion Nine Elms Lane development around the American embassy and Battersea Power Station? There are plans for shopping malls and two new Tube stations, but the area risks being a cultural desert—although the developers claim that there will be a modest theatre and Damien Hirst is threatening the site with an art gallery. I declare an interest as a resident of Nine Elms Lane.

Lord Bourne of Aberystwyth: My Lords, I am sorry to have missed my noble friend’s performance in Sydney. They are still talking about it down under. One reason why the site being looked at is in the City is the strong possibility of City sponsorship, which should not be ignored. However, I am sure that the feasibility study will look at matters in the round and consider my noble friend’s remarks.

Lord Aberdare (CB): My Lords, I welcome the prospect of a new, state-of-the-art, large concert hall in London, not least because I went to a concert at the magnificent new Philharmonie in Paris last month. However, I question whether this is the best way to spend hundreds of millions of pounds promoting our musical culture. Will the Minister seek to ensure that the funding for any such hall comes primarily from private sources, and that public funds are focused on national initiatives such as the Government’s laudable national plan for music education, benefiting students and schools right across the country?

Lord Bourne of Aberystwyth: The noble Lord is right to say that this is not an either/or question; it is important that we focus money on music education as well. We have been doing that with the music hubs,

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and that is an important part of the equation. Clearly, the feasibility study will look at all aspects but that will certainly include trying to lever in a significant amount of private money. However, I repeat that we need somewhere of national significance.

Lord Winston (Lab): My Lords, I declare an interest as chairman of the Royal College of Music. The Minister did not mention concert halls a bit closer to home in Birmingham and Manchester, which are world-class. It must surely be sensible to have an equivalent concert hall in the centre of London. At this stage of proceedings, it would be very helpful if he could give an indication of the likely cost of such a concert hall.

Lord Bourne of Aberystwyth: The noble Lord is quite right: there are concert halls of great standing outside London. He mentioned two; there is also, of course, the Sage in Gateshead. That is why we need somewhere in the capital city that is comparable to those great centres. The feasibility study is, of course, to look at the cost; I am not in a position at this stage to give any indication of what that will be.

Lord Brooke of Sutton Mandeville (Con): My Lords, is my noble friend aware that when Prince Albert died, Queen Victoria asked Sir Henry Cole to handle the building of a memorial in a concert hall? He appointed a captain in the Royal Engineers, whose previous design achievement had been the creation of a portable bath for use on active service. When the captain died, Sir Henry asked the Queen whether she would be satisfied if he replaced the captain with another officer. The Queen said she was perfectly happy, but she thought perhaps it might be wiser if the rank was a major.

Lord Bourne of Aberystwyth: I was not aware of that, noble Lords will be surprised to hear. I thought my noble friend was going to talk about the Royal Albert Hall, in which case I would have said that we need to recapture that breadth of vision.

Baroness Thornton (Lab): My Lords, I wonder whether the Minister might have sympathy with the view that has been expressed that there is not much point building a new, expensive concert hall in London if cuts mean that poor children cannot afford either music lessons or instruments. I would also like to ask the Minister whether the feasibility study will take into account the views of London’s many orchestras, including the several BBC orchestras, and not just the LSO.

Lord Bourne of Aberystwyth: The noble Baroness is right to mention the importance of catering for disadvantaged children, which was raised by the noble Lord, Lord Aberdare, as well. The point is that the music hubs are catering for disadvantaged children. If noble Lords look at Manchester and Coventry, that is exactly what is happening. I absolutely agree that we need to ensure that that is the case.

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Defence: UK Territorial Waters


2.52 pm

Asked by Lord Trefgarne

To ask Her Majesty’s Government whether they are satisfied with the present arrangements for detecting and shadowing non-NATO naval units which may enter the United Kingdom’s territorial waters without prior authority.

The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever) (Con): My Lords, this Government take security of our maritime boundaries very seriously. Our Armed Forces have a multilayered submarine detection capability, using highly effective assets including frigates, submarines and anti-submarine helicopters, and maritime patrol aircraft support from NATO allies. We, in turn, often support them when they have capability shortfalls. It is routine for NATO allies to support each other in this way and demonstrates one of the benefits to the UK of NATO membership.

Lord Trefgarne (Con): My Lords, I am grateful to my noble friend for that reply. Is he really satisfied, though, with the maritime patrol aircraft arrangements that he described? Are those arrangements permanent, or does he have some better plans for the future?

Lord Astor of Hever: My Lords, we have a robust range of measures for detecting and shadowing non-NATO vessels that may seek to enter our territorial waters without authority. We continue to develop new detection capabilities to maintain our operational advantage. SDSR 2015 will allow us to review the full spectrum of submarine detection capability, including maritime patrol aircraft. Meanwhile, RAF air crew are flying in allied MPA to retain the skills to regenerate the capability, should we decide to do so.

Lord West of Spithead (Lab): My Lords, the Minister will be aware that the National Maritime Information Centre, established by the last Government but funded since then by the current Government, gives very good situational awareness of our waters, but we need assets to track and monitor things. Normally we have three offshore patrol vessels; one is in the West Indies, filling in because we do not have enough destroyers and frigates. We have only one frigate in UK waters, acting as the fleet ready escort—only one, in a great maritime nation such as ours. That shortage of assets is bad.

My question, though, relates to the helicopters that he talked about. I asked two years ago, a year ago, and I ask again now: has the Merlin Mk2 incorporated fully the ASW capabilities of the MRA4 Nimrod? Each of the previous times the Minister said, “Yes we’re doing it, yes we’re doing it”. Have we done it?

Lord Astor of Hever: My Lords, on the first part of his question, I agree with the noble Lord about the National Maritime Information Centre, but he will know that I cannot answer the second part of his question.

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Lord Boyce (CB): My Lords, I agree with the noble Lord, Lord West, about the numbers of destroyers and frigates. The fact is that the size of our destroyer and frigate force is inadequate to meet all the tasks demanded of it both by NATO and nationally. Indeed, a number of important tasks have been gapped over the years, including the Article 5 operation in the eastern Mediterranean, and of course we have increasing threats as we speak. What are the Government doing, and what will they do, to ensure that the current inadequate number of destroyers and frigates does not drop below 19 and that the destroyer/frigate force actually increases in size?

Lord Astor of Hever: My Lords, I assure the noble and gallant Lord that this will be a matter that SDSR 15 looks at very closely.

Lord Lee of Trafford (LD): My Lords, I realise that this is a very sensitive area, but I do think that the public and Parliament are entitled to a little more information in this area and that the Minister and the MoD should not shelter behind generalisations. Specifically, how does Russian submarine activity off our shores compare with activity off the shores of our allies? Secondly, is the Russian activity increasing and, thirdly, is it very much focused on Faslane and our deterrent capability?

Lord Astor of Hever: My Lords, I am sure my noble friend will appreciate that for reasons of national security I cannot discuss the detail of such events, as to do so could allow conclusions to be drawn on the UK’s capabilities. However, I can reassure the noble Lord, Lord West, and my noble friend that we take the security of our maritime boundaries very seriously.

Lord Soley (Lab): My Lords, I appreciate the sensitivity of this, but can the noble Lord go a bit further and tell us whether we have an estimate of activity around the waters of Scotland and whether the Scottish Government are aware of any problems of this nature? Although it is not a matter for them, it is a matter of interest to the people of Scotland.

Lord Astor of Hever: My Lords, again, I am sorry to disappoint the noble Lord; I cannot discuss this issue, but I can tell him that defence is a reserved issue and is not the business of the Scottish Government. We will not compromise on the defence of the United Kingdom.

Lord Bilimoria (CB): My Lords, the Minister mentioned the SDSR. Under SDSR 2010, brutal cuts were made and Nimrods were physically destroyed. Would he now say that the Government regret the decision to destroy that amazing capability, which we could use right now?

Lord Astor of Hever: My Lords, the severe pressure on the public finances in 2010 and the urgent need to bring the defence programme into balance meant that we could not retain all our existing programmes and that we had to prioritise between capabilities. The aircraft’s

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future high support costs were a clear factor in that decision. It is also well known that the MRA4 project suffered from repeated delays and cost overruns, and was still suffering from technical problems in 2010.

Lord Foulkes of Cumnock (Lab): My Lords, further to the Minister’s answer to my noble friend Lord Soley, we all understand that defence is a reserved matter, but would it not be sensible to let the First Minister of Scotland know the threats from Russia so that we get a more sensible policy in relation to the Trident nuclear deterrent?

Lord Astor of Hever: My Lords, the noble Lord makes a very good point and I will make sure that my department passes that on to the Scotland Office.

Air Quality: London


2.58 pm

Asked by Lord Dubs

To ask Her Majesty’s Government what action they are taking in conjunction with the Mayor of London to tackle air quality in London.

Baroness Garden of Frognal (LD): My Lords, the mayor is responsible for working towards air quality objectives in London. Nationally, the Government have committed £2 billion since 2011 to address air pollution. As part of this, the Government work closely with the mayor, the GLA and London boroughs to improve air quality, including providing support via our air quality grant fund for a range of projects.

Lord Dubs (Lab): My Lords, will the Minister confirm that last week the Mayor of London issued a warning that pollution in London had reached a dangerous level? That level was so dangerous that advice had to be given to thousands of Londoners—people with certain health conditions, young and old—that they should not go outside and should not take strenuous exercise. Is it not a disgrace that our capital city does not have decent air quality?

Baroness Garden of Frognal: My Lords, the poor air quality event last week was due to pollution brought in via winds from continental Europe—

Noble Lords: Oh!

Baroness Garden of Frognal: It was not the fault of the European Union. This was combined with particulate matter from a number of local sources. The Government provided information to the public, including health advice on UK-AIR, the Government’s air quality website. However, I agree that more needs to be done to clean London’s air.

Lord Krebs (CB): My Lords, the Minister will be aware that the European Court of Justice ruled last November that in 40 out of 43 urban areas in this country the legal limits for nitrogen oxides were exceeded.

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She will also be aware that Public Health England estimates that 28,000 people a year in this country die prematurely as a result of air pollution. Given these figures and facts, is it not time for the Government to take stronger action to tackle urban air pollution, not only in London but in many other cities in this country?

Baroness Garden of Frognal: My Lords, air quality has improved significantly in recent years. Average roadside concentrations of NO2 levels have fallen by 15% since 2010. However, I entirely agree with the noble Lord that more needs to be done, and a great deal is being done. For example, we are using the tax system on vehicles and cars to encourage the purchase of cars with low CO2 emissions regardless of whether they are petrol, diesel or other fuel types. A great deal is going on with buses and other forms of public transport to ensure that their emissions are as low as we can make them.

Baroness Gardner of Parkes (Con): My Lords, I live in the most polluted part of the UK—central London—and I am still, fortunately, surviving. However, is the Minister aware that when traffic calming measures were introduced—I received this answer in your Lordships’ House—they resulted in greater air pollution? They slowed down the traffic so much in places such as the road through Hyde Park that it created a conflict: how do you deal with both of these issues so that you can slow traffic but not increase pollution?

Baroness Garden of Frognal: My noble friend is right: there is work to be done on road design, road junctions, local planning and the design of buildings, all of which can have an impact on air pollution. Certainly traffic calming measures sometimes cause pollution to rise, but that is part of the constant review to find different ways of cleaning the air.

Lord Brooke of Alverthorpe (Lab): My Lords, given that the mayor is now worried about air pollution in London, has the Minister had any conversations with him about whether his decision not to proceed with introducing congestion charging in west London has helped to improve the health of people in London or make it worse?

Baroness Garden of Frognal: My Lords, I have not had a conversation with the mayor. That answers the first of the noble Lord’s questions. Congestion charging has had some effect, but not a great deal, on air pollution. We use a combination of factors such as encouraging people to use bicycles, to walk or to drive vehicles which do not use the worst kinds of fuels—all play a part. We need to use a combination of factors.

Baroness Jones of Moulsecoomb (GP): My Lords, does the Minister agree that, rather than asking people to stay indoors during high pollution episodes, it would be better to give that advice to drivers of highly polluting vehicles and for them to stay at home?

Baroness Garden of Frognal: The noble Baroness makes a very important point.

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Lord Teverson (LD): My Lords, it is well understood that poor quality air produces many incidences of cardiovascular and respiratory diseases, as well as cancer. Does it not make sense for this to be a core area of health policy and a positive way to close the gap of £30 billion which is expected in the NHS budget by 2021?

Baroness Garden of Frognal: My noble friend makes an important point. Defra works closely with the Department of Health and Public Health England and its advisers, as well as the Committee on the Medical Effects of Air Pollutants. We have daily air quality forecasts which provide accompanying health messages because a combined cross-departmental effort is required to tackle this problem.

Baroness Corston (Lab): My Lords, in her response to the question put by my noble friend Lord Dubs, the noble Baroness referred to an expenditure of £2 billion to improve air quality. Is that £2 billion a national figure or is that the money to be spent just in London?

Baroness Garden of Frognal: The sum of £2 billion is predominantly for London because I am answering questions on London and the mayor of London’s programme. Defra has an air quality grant programme of £1 million and there are various other programmes. In this context, however, we are talking about what is being done to improve London’s air.

Lord Dykes (LD): Can the Minister say whether we have any way of measuring the pollution produced by construction and building sites in and around London, of which there is now a larger number than we have seen for many years?

Baroness Garden of Frognal: Construction would be a contributory factor, but it is up to local government to take note of the pollution that is being caused by building sites in their areas.

Lord Lea of Crondall (Lab): My Lords, taking asthma as an example, is it not a fact that the trade-off in terms of extra costs to the health service would be as great as the cost of reducing air pollution? How does that arithmetic work out?

Baroness Garden of Frognal: I am not entirely sure how that arithmetic is worked out, but I know that the departments are in constant dialogue with each other to try to ensure that the best case is made for improving air quality and for tackling the health problems that go with poor air quality.

Lord Borwick (Con): My Lords, I declare my interests as set out in the register. Does my noble friend agree that we need more internet-connected air quality meters in London in order to tell people quite how bad the air is?

Baroness Garden of Frognal: It is all very well telling people how bad the air is, but you then need to tackle the problem itself. All these methods of communication help if they alert people to when it is

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safe to go out or when they should stay at home and not drive their cars. I think that that may well be one method to be pursued.

Privileges and Conduct Committee

Motion to Agree

3.07 pm

Moved by The Chairman of Committees

That the 3rd Report from the Select Committee (Amendments to the Code of Conduct and the Guide to the Code; Redaction of written evidence to defunct select committees) (HL Paper 143) be agreed to.

The Chairman of Committees (Lord Sewel): My Lords, I beg to move the Motion standing in my name on the Order Paper. The third report from the Committee for Privileges and Conduct recommends various amendments to the Code of Conduct and the guide to the code, and one other change. If these amendments are agreed, the code and the guide will be republished for the new Parliament.

The first proposal is to allow the Committee for Privileges and Conduct to consider the suitability of a sanction recommended by the Sub-Committee on Lords’ Conduct in the absence of an appeal by the Member who has been found in breach of the code. Should the committee decide that a recommended sanction requires further consideration, it will give the Member concerned the opportunity to make representations before deciding whether to alter the sanction.

The second proposal is for this House to follow the House of Commons practice of keeping all terminated interests in the Register of Lords’ Interests for one year after the Member gives them up. At the moment, hospitality and gifts remain in the register for a year, but other interests are deleted as soon as they are given up.

The third proposal is that the Registrar of Lords’ Interests should no longer send an annual reminder to Members inviting them to check and update their entry in the Register of Lords’ Interests. This practice is potentially confusing as it might be taken to imply that Members have to revise their entries only once a year, whereas the code requires the register to be amended within one month of a change in a Member’s interests. Instead of the annual reminder there will be regular reminders through other means.

The fourth proposal clarifies the definition of a personal client as it is used in relation to the provision of public affairs advice in paragraph 57 of the guide.

The fifth proposal is that the requirement to register interests should apply to Members whose leave of absence lapses at the end of a Parliament from the date that they take the oath in the new Parliament. The committee also recommends that the Code of Conduct for Staff of Members of the House of Lords should apply to Members’ staff with a parliamentary email account but no photo-pass.

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Finally, the report recommends that the Committee for Privileges and Conduct should have the power to respond to requests to redact personal details given in written evidence to a defunct Select Committee, such as an ad hoc committee that has been disbanded. I beg to move.

Lord Richard (Lab): My Lords, I should like to ask the Chairman of Committees a question on the first of the proposals in relation to the committee considering sanctions against Members. Paragraph 2 of the report states:

“We believe that in rare circumstances it may be appropriate for the Committee for Privileges and Conduct to consider whether a sanction recommended by the sub-committee is appropriate even in the absence of an appeal”.

On the following page, sub-paragraph (iii) sets out the proposal that the committee should have the power to look at any recommendations that come up from the sub-committee and can take its own decision as to whether they are appropriate. Indeed, it can increase the sanction as well as reduce it. However, it does not say anything about that being in rare circumstances. What is the intention of the Chairman of Committees on this? Should it be an exceptional step for the committee to take or should it be considered, so to speak, pro forma, in which case you do not really need the sub-committee’s decision in the first place? I should be grateful for his views on that.

The Chairman of Committees: I am very grateful to the noble Lord for raising that issue. It is important to clarify this matter. The committee saw this as being in exceptionally rare circumstances. It would be a very occasional route to take in very specific circumstances. I have been Chairman of Committees for more than three years now and I can think of only one example that would come anywhere near this. It is certainly not meant to be as part of a routine consideration of a sanction.

Lord Richard: I am sorry to follow this up, but in that case should something not be said in the actual amendment to that effect?

The Chairman of Committees: I hope that my clarification today will be sufficient, but we will look at it to see whether it would help to put it in the amendment.

Motion agreed.

Emissions Performance Standard Regulations 2015

Energy Efficiency (Domestic Private Rented Property) Order 2015

Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015

Contracts for Difference (Allocation) (Amendment) Regulations 2015

Motions to Approve

24 Mar 2015 : Column 1311

3.13 pm

Moved by Baroness Verma

That the draft regulations and draft order laid before the House on 2 and 25 February be approved.

Relevant documents: 22nd, 23rd and 25th Reports from the Joint Committee on Statutory Instruments, 27th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 17 and 19 March.

Motions agreed.

Mortgage Credit Directive Order 2015

Bank of England Act 1998 (Macro-prudential Measures) Order 2015

Bank of England Act 1998 (Macro-prudential Measures) (No. 2) Order 2015

Motions to Approve

3.13 pm

Moved by Lord Newby

That the draft orders laid before the House on 26 January and 2 February be approved.

Relevant documents: 23rd and 24th Reports from the Joint Committee on Statutory Instruments. Considered in Grand Committee on 19 March.

Motions agreed.

Rural Payments Agency: Basic Payment Scheme


3.13 pm

Baroness Garden of Frognal (LD): My Lords, with the leave of the House, I shall now repeat in the form of a Statement the Answer given to an Urgent Question in another place. The Statement is as follows.

“This is the first year of the new basic payment scheme. Because the new common agricultural policy is so complex, we needed to invest in a new computer system to administer claims. The existing SPS computer system would not have been able to cope. The core of the new rural payments system is working well, based on systems in other countries with portal to register and map. To date, over 80% of farm businesses in England have registered successfully on it so they can submit a BPS claim, and we continue to encourage all farm businesses to register online as soon as possible.

However, there have been some performance issues with the online interface that enables farmers to input the data directly. We have been working to address these issues since February. Our priority has always been to ensure that farmers can submit their claims by the deadline. That is why we have acted and made

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some adjustments to our plans. The RPA is now offering farmers and their agents the option of using existing paper-based forms to finalise their claims. Information from these forms will then be input by the RPA on to the system.

There are two new ways that farmers can complete their claims. Farm businesses with little change to their land will be fast-tracked by the RPA, particularly those that have permanent pasture. They will receive an email in April that summarises the land and entitlement information already held, together with simple instructions on completing their claim by email. The RPA has identified approximately 39,000 farmers in this category. Secondly, farm businesses that need to map new features can use blank existing forms to prepare their claims before they are sent a pre-populated form in early April. They can submit their claim by email or post or through an RPA drop-in centre, 50 of which have been established. Separately, all agents will have received maps of their clients’ land from the RPA by the end of next week. Those dealing with the most complex cases will be offered additional support. The RPA is also working to give agents direct access to the system so that they can make applications quickly.

This is a pragmatic response which applies to the application process in 2015. It means that we will be able to make payments to farmers from when the payment window opens in December 2015. All data entered so far on the rural payments scheme system have been saved and will be used by the RPA to complete farmers’ claims this year.

A number of EU member states have faced implementation difficulties in implementing a new CAP. In parallel, the Commission has offered an option for member states to extend the deadline for basic payment scheme—BPS—applications to 15 June. This was discussed in Council on 16 March and confirmed by the Commission on 19 March.

In conclusion, the core of the new system works and we are not abandoning anything. We will continue to use it. It will enable claims to be processed efficiently this year and will be the basis for service improvements in future years. The action we announced last week to provide paper-based assistance will ensure that applications can be submitted on time, and this has been welcomed by stakeholders. Given the imminent general election, we are keen to keep up communications across the House”.

3.17 pm

Lord Grantchester (Lab): I thank the Minister for repeating the response to the Urgent Question. How foolhardy of a Conservative-led coalition to insist on 100% online submissions in a year that sees the introduction of the new basic payment scheme. I declare my interest as a farmer in receipt of EU funds.

Many farmers will depend on this scheme, as they have on the previous systems, to be able to remain in business—how vital it is to them that the RPA can function constructively, honestly and professionally in a timely fashion. However, registering for a claim is not the same as completing that claim. Is the process now a twin-track approach of new information being submitted on paper while existing information is held

24 Mar 2015 : Column 1313

online? What information will the RPA give to farmers to reassure them regarding claim reconciliations that the RPA may do, as the Statement said, without imposing penalties?

It has previously been stated that the new scheme is too complex for paper. Now that farmers are reverting to paper, is there an increased risk of errors that once again may result in penalties being levied or disallowance being imposed from Europe? Why did Ministers in the department not insist on and implement contingencies earlier to save farmers time and expense at this very busy time of year? Most importantly, can the Minister say whether the mapping functionality in the RPA can be made to work or will it need to be replaced completely?

Baroness Garden of Frognal: My Lords, the complexity of the CAP is not what we would have chosen, and in the implementation we have tried to find the simplest option. I suppose that, in essence, in answer to the noble Lord’s questions, the RPA does whatever it can to help farmers meet the deadlines and fill in the forms. There are 50 RPA drop-in centres, which I mentioned; there is a helpline; and there are mobile units to help reach the most isolated and vulnerable farmers. In addition, handbooks have been sent to all farmers to try to help ensure that all farmers manage to get the claims that they need when they need them.

Lord Plumb (Con): My Lords, I thank the Minister for the statement she made. Equally, we should thank Defra for trying to deal with the most complicated system that I have experienced since 1972. I declare an interest as a farmer, and one who has dealt with the various changes over the years to the common agricultural policy system.

The only people who have gained this year are those who are advising farmers—an army of people—on how to fill out the forms and deal with this. Of course, we have seen this coming for some considerable time, and the way that it has been dealt with obviously proved that the computer system that exists was totally incapable of dealing with this complex system. I hope, therefore, that the response will be as sound as it can be. I am well aware that farmers are coping as well as they can, but I am equally well aware that they are spending an awful lot of time dealing with this problem at a time when they should be farming rather than filling in forms.

Baroness Garden of Frognal: My noble friend Lord Plumb speaks with a great deal of experience in these matters gained over many years. It is a complex issue and Defra is fully aware that we need to get all the help that we can to farmers, particularly at this time of year. As I outlined, there are many ways in which the RPA is there to help and assist, and we hope that the transfer will happen as straightforwardly as we can possibly make it.

The Earl of Erroll (CB): My Lords, I declare a serious interest as I do all the paperwork online for my wife, who farms and is trustee of a second place, so I will be trying to file for two estates. We were a quarter

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of the way through when the computer system went down at the weekend with no notice. It then kept saying that it would give us access as soon as possible but was offline for another week. Eventually, the latest announcement that we were going to paper was made. Trying to map the scale of complexity that we have on bits of paper that are blank is ridiculous. The whole place was mapped and inspected a few months ago, and the Rural Land Register has completely accurate maps in place. Why are those not being used? They show the deductions and the only things that need to be added are cropping and greening.

Also, the single payment system was up and running perfectly well but is about to be taken down in a few days’ time. Why not use that as the basis, because it has all the maps and has done for the last 10 years? All that has to be added to it are the crops, as opposed to just simple crop codes, and then a greening percentage. It is not that difficult. Maybe someone practical who understands IT should be involved. I have been doing this for 12 years, since IACS was going online. Maybe someone who actually understands how the system works at the sharp end could advise on how this can be sorted out. Trying to do it on paper is going to be a disaster; it will be like back in 2005 when the students tried to put it online and the mapping errors took a year or more to sort out.

Baroness Garden of Frognal: I hear what the noble Earl says. The paper exercise is designed for people who are unable to access a computer. Any data that is already on the computer have been saved. The RPA has written to all those who may have broadband problems, if that is an issue. The data should not need to be re-entered if it is already on the system.

Lord Davies of Stamford (Lab): My Lords, I declare an interest as a recipient of payments under the basic payment scheme since, I think, its origin. I commend the Government and the European Commission on having responded to the great difficulties that many people have had in re-registering this year. I spent two and a half hours over the weekend trying to register myself online and was entirely thwarted because you have to start off by verifying your identity. Although I tried two channels—the Experian and the Post Office channels that were available—both resisted steadfastly the notion of my existence. I felt like saying, “Cogito ergo sum”. I think it is a good idea when public administration responds to technical difficulties like this that have been experienced by many members of the public. I hope that, going forward, the Government continue to be sympathetic in this way to the problems of farmers, who are great experts in farming but not often in IT. Will the Minister explain whether it is the intention of Her Majesty’s Government to accept the offer of the European Commission to delay the final payment until 15 June? We have been told that that was suggested by the Commission but that it is up to member states to decide whether to take it up.

Baroness Garden of Frognal: I am sorry that the noble Lord has had such problems proving his identity. On the difficulty of registration, more than 80% of

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farm businesses have successfully managed to do it, but, of course, one needs to concentrate on those who have not. The Government are considering extension of the deadline to 15 June, and it will be a matter of seeing how we progress with the online registrations as they go.

Lord Glentoran (Con): My Lords, I am a farmer in Northern Ireland. The problem that we all have there is that, even if we fill in the forms correctly, the Government will not pay. They just put it off and put it off. Sums of money they owed to me and neighbours were more than six months overdue. We run with bank accounts that are frequently overdrawn at certain times of the year. If the Government do not pay, the banks get on our backs and where do we go? If we ring government Ministers, they do not know.

Baroness Garden of Frognal: My Lords, my understanding is that this is a devolved matter. The Statement that I repeated covers only England. I apologise if that sounds like a cop-out, but it is probably better if I do not stray into Northern Ireland farming problems.

Baroness O'Cathain (Con): My Lords, perhaps I may ask the Minister a very simple question. Is every single farmer IT literate? Does every single farmer have a computer? In other words, is every single farmer online?

Baroness Garden of Frognal: Increasingly that is the case, but the RPA has written to all farmers, who may not all be online, and equally to all those who may have broadband problems in the areas where broadband is not completely rolled out. By way of the helpline, the mobile units and so on, the RPA is trying to make sure that those who are not online get help.

Lord Lloyd of Berwick (CB): My Lords, my particular problem is that I believe that I may have registered, but I cannot now find out whether I have registered or not. It seems to be impossible to discover.

Baroness Garden of Frognal: My Lords, I am very sorry about that. Perhaps the noble and learned Lord needs to phone the RPA helpline and, like the noble Lord, Lord Davies, discover whether he exists. I wish him luck. The helpline and the contacts are there to try to iron out those initial problems.

Falkland Islands Defence Review


3.28 pm

The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever) (Con): My Lords, with permission, I shall repeat a Statement on the Falkland Islands defence review. The Statement is as follows:

“Safeguarding our citizens and their way of life remains the most important responsibility of government and of defence. In March 2013, the Falkland Islands

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referendum reaffirmed the islanders’ overwhelming wish to remain British. Of the 92% who voted, 99.8% voted in favour of maintaining their political status as an overseas territory of the United Kingdom.

We will always defend the right of the Falkland Islanders to determine their own political future. The Ministry of Defence retains responsibility for the external defence and security of British interests in the south Atlantic, and to that end undertakes regular assessments to ensure that we have in place the appropriate defensive capability.

In autumn 2013, my predecessor asked officials to undertake a thorough review of the forces that we hold on the Falkland Islands and our contingency plans for their defence. The objective was to ensure that our enduring commitment to the defence of the islands is sustained effectively. That review has now been completed.

The review’s conclusions remain operationally sensitive in the light of potential threats, and I hope that the House will understand that I cannot disclose much of the detail.

However, I can tell the House that we have updated our assessment of any threat to the islands. This includes a consideration of the changes that may arise from the islanders’ plans to develop their economy, including the potential for development of an oil and gas industry. We continue to discuss these issues with the Falkland Islands Government.

I have endorsed the assessment of the Chief of the Defence Staff and the Commander of Joint Forces Command that the current military presence is broadly proportionate to the threats and the risks that we face. Our forces in the south Atlantic are entirely defensive, and are at the level required to ensure the defence of the Falkland Islands against any potential threat.

However, I have also agreed a number of measures designed to ensure our resilience for the short, medium and longer term. I can tell the House that these measures will include the return of military support helicopters, which were removed in 2006 to support operations in Afghanistan. On current plans, this will involve the deployment of two Chinooks, which will be operational by mid-2016. This is a significant capability, which will provide reactive, 24/7 tactical mobility in order to allow a swift and decisive response to any emerging incidents. The helicopters will also bring a heavy lift capability and will enhance the training opportunities available to the resident infantry company.

We also have plans in place to deliver enhanced operational communications for the headquarters at Mount Pleasant to better enable the sharing of real-time operational data, and I can confirm that we will be renewing the ground-based air defence system when Rapier comes out of service around the end of the decade. We will also maintain our commitment to provide a Falkland Islands patrol vessel, currently HMS “Clyde”.

In addition, we intend to carry out a number of projects to replace some of the ageing infrastructure, for example the refurbishment of Mare Harbour and the replacement of the existing power generation systems

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at Mount Pleasant Airfield. A major modernisation of the fuels infrastructure is also under way and is now nearing completion.

In total, we expect to invest up to £180 million in improving and modernising our infrastructure on the islands over the next 10 years. In addition to the operational improvements that I have already mentioned, we are also taking action to improve the quality of life of those who serve in the Falklands, including planned improvements to their accommodation, and a new primary school.

Although there will be some changes in personnel numbers as the Sea King helicopters are withdrawn and the Chinook force stands up, I have decided that for the foreseeable future we will keep our numbers at around their current level of about 1,200 personnel, military and civilian.

I know that the House will want to join me in taking this opportunity to pay tribute to our brave men and women, military and civilian, who leave behind their families and friends for months or years at a time in order to ensure the right of the Falkland Islanders to remain British. We will always remember the bravery of the 255 British servicemen who gave their lives for that cause.

I am aware of the close interest that the Defence Select Committee takes in the Falkland Islands, and of the committee’s most recent visit there earlier this year. I am grateful for its insights, some of which echo the findings of this review. I have written earlier today to the committee chairman.

The review that we have undertaken confirms our commitment to the Falkland Islands. We will continue to defend the right of the islanders to determine their future and maintain their way of life against whatever threats may exist. This review ensures that we will continue to have the right mix of people, equipment and infrastructure to deliver that commitment in the years ahead.

We are not complacent. The Government will continue to remain vigilant, but on the basis of the review and the follow-on measures that I have established I am satisfied that the Government can be confident in their continued ability to defend the south Atlantic islands. I commend this Statement to the House”.

My Lords, that concludes the Statement.

3.34 pm

Lord Rosser (Lab): My Lords, I thank the Minister for repeating the Statement made in the other place by the Secretary of State on what is a busy day for the Ministry of Defence, with one oral ministerial Statement and no fewer than five written ministerial Statements.

In his Statement today, and on the radio this morning, the Secretary of State—in response to a question about a newspaper report that Russia was working on a deal to lease 12 long-range bombers to Argentina—said that he had been reviewing the defence of the Falkland Islands and it was right to do that every so often. He went on to say that we needed to modernise our defences in the Falklands to ensure that we had sufficient troops there and that the islands were properly defended

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in terms of air maintenance and maritime defence. He added that our commitment to the Falkland Islanders having the right to remain British, and to proper protection by our forces, remained absolutely clear. We would certainly endorse that commitment, not least in the context of the outcome of the 2013 referendum when the Falkland Islanders made clear their emphatic wish to remain British. We, too, wish to express our gratitude to our personnel who have served, and continue to serve, in the Falklands, and in particular to our 255 service personnel who made the ultimate sacrifice and the hundreds who were injured in action retaking the Falklands.

Can the Minister say whether the Government regard the threat to the Falkland Islands as having recently increased and whether the Statement today is the response to that? On the radio this morning, the Secretary of State simply said that the threat had not reduced; he did not say that it had increased. Do the Government regard Russian influence in the region as increasing? What, if any, new diplomatic initiatives are taking place with the Argentinian Government and other Governments in South America, as well as with our allies?

In the Statement, reference was made to the refurbishment of the harbour in the Falklands. It would be helpful if the Minister could indicate when that work is likely to be completed. Can he also say how soon the missile system will be upgraded?

We certainly support the measures that the Government have announced today, but I would like to ask where this announcement fits in with the pending strategic defence and security review, since the Government have presumably decided that the announcements today could not wait until the SDSR planned for later this year. On the radio this morning, the Secretary of State said that he had started a review of the defence of the Falkland Islands last year—not, as I think is indicated in the Statement today, that it had begun in 2013. Last year, the Secretary of State said in the other place that he was,

“very clear that the next SDSR is being carried out next year”—[

Official Report

, Commons, 20/10/14; col. 662]—

that is, in 2015; and that the Government had not started on the review in 2014, since “that awaits next year”. Now we know that a review of what is surely one important part of our existing and future defence commitments was in fact already taking place when the Secretary of State made that statement. Can the Minister say what other aspects of our existing and future defence commitments are currently the subject of review at ministerial level? I ask that in the context of the Government’s apparent lack of willingness to engage with the public in general—and key stakeholders in particular—on the 2015 strategic defence and security review, which is now scheduled to be completed in some nine months’ time. Yet we now find that what appear to be key decisions have just been made in respect of the defence of the Falklands, which will surely have implications for the 2015 SDSR, on which very little significant progress, if any, has apparently been made.

Indeed, it appears that a further key strategic defence decision has already been made by this Government since the Secretary of State repeated on the radio this

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morning the statement made by the Prime Minister that there will be no further cuts in the size of the Regular Army, a statement that likewise must have some considerable significance for the direction and content of the SDSR. The Prime Minister’s statement was an interesting one. Does the reference to no further cuts in the size of the Regular Army also extend to no cuts in the future size of our intended 30,000 Army Reserve strength, or was the silence on any commitment in respect of the Army Reserve both deliberate and significant?

Have any other decisions impacting on the 2015 SDSR recently been made before there has apparently been any attempt to involve the public or key stakeholders in consultations on the 2015 SDSR? Finally, while I reiterate our support for the measures that the Government have announced today, do the Government feel that the situation in the Falklands from a defence point of view is such that the decisions could not have been announced later this year as part of, and in the context of, the 2015 SDSR?

Lord Astor of Hever: My Lords, I thank the noble Lord for his broad welcome for our conclusions to the review. I join him from these Benches in paying tribute to those who are currently serving in the Falkland Islands. Like him, we remember those servicemen who were lost in the battle long ago.

The noble Lord asked me a lot of questions; I was not able to write quickly enough to get them all down, but I will undertake to write him a letter with the answers as soon as I possibly can. He mentioned the recent referendum and the democratic right of the Falkland Islanders to remain British. This Statement sends a strong message to the Falkland Islanders.

The noble Lord mentioned the review. We review all our activity routinely. However, in 2013, given the time that had elapsed since the comprehensive review of the Falkland Islands, officials and Commander JFC advised that such a comprehensive review would be appropriate. Ministers agreed with this advice and provided clear direction for that review.

The noble Lord asked whether Russian influence had increased in the region. The Ministry of Defence undertakes regular assessments of potential major threats to the Falkland Islands to ensure that we retain an appropriate level of defence capability to address such threats. He asked if the threat had increased. There is no current evidence of Argentina’s intent or capability to launch a credible military attack on the Falkland Islands, but we are not complacent and the Government remain absolutely committed to the protection of the Falkland Islands and its population.

The noble Lord mentioned the story in the newspaper this morning. I have no idea where that came from; I have asked officials at the MoD and they do not know either.

The noble Lord asked me about the missile system being upgraded. Our current short-range air defence system—Rapier—is due to go out of service at the end of the decade. Due to the age of that system it would be impractical to sustain it in the longer term, and therefore it needs to be replaced if UK forces are to continue to be able to provide defence to our deployed forces against an air threat.

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The noble Lord asked about diplomacy. We have warm relations with most of the South American countries. I meet a number of Foreign and Defence Ministers from these countries, and I assure him that none of them has ever mentioned the Falkland Islands to me. Still, I am sure that these diplomats have noticed the Falkland Islands referendum. We want to have a full and friendly relationship with Argentina as neighbours in the South Atlantic and responsible fellow members of the G20, but we will not negotiate away the rights of the Falkland Islands people against their will or behind their backs.

The noble Lord asked when the harbour is going to be refurbished. It will be done by the end of 2017. I am afraid I could not keep up with all his questions, but he asked me about the 2015 SDSR. As he knows, a lot of background work is being done on that. The decisions on the Falklands Islands announced today are separate from the SDSR, and in all honesty the Statement is not making very big decisions.

3.45 pm

Lord Burnett (LD): As this is probably my noble friend’s last defence Statement as a Minister in this Parliament, I congratulate him on his exemplary service as a Defence Minister over the past five years. I understand that HMS “Clyde” is an off-shore patrol vessel. Does my noble friend agree that we should strengthen the permanent Royal Navy presence in and around the Falkland Islands?

Lord Astor of Hever: My Lords, I thank my noble friend for his very kind, totally undeserved, words. The Falklands Islands patrol vessel capability will be retained when HMS “Clyde” leaves service in 2017. I assure my noble friend that we always have either a Type 45 destroyer or a Type 23 frigate available to reinforce the Falklands Islands.

Lord Davies of Stamford (Lab): I have no idea whether this is the last appearance of the noble Lord at the Dispatch Box—of course, on this side we all hope that the Government are defeated in the forthcoming election—but if it is his last performance in this role, I shall say how much our side have appreciated the courtesy and conscientiousness which he has always shown in fulfilling his roles in this House. The depth of his genuine commitment to our military and to the defence of the nation has never been doubted by anybody.

As the noble Lord knows from many discussions and debates, I have always believed that capability and threat are not independent variables. It is not an accident that since NATO started cutting its defence expenditure Mr Putin has become ever more bold and ever more aggressive. At present, Cristina Fernández is in a very difficult situation and is facing a major scandal and the collapse of the Argentinean economy. She could well be tempted to have a go at some adventure if there was a quick trick to be taken. A strong signal needed to be sent and the Government appear to have done that—that is how I interpret the Statement today. All of us on this side of the House will endorse my noble friend in giving the Government support on that.

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There is one question I want to ask. Everybody who knows the Falklands knows that we cannot go on much longer there unless an effort is made to refurbish and rebuild the barracks which were constructed after 1982 and at that time were due to last for 20 years. They are already in a state of embarrassing disrepair. Are there any plans to replace them or to refurbish them?

Lord Astor of Hever: My Lords, I thank the noble Lord for his very kind words. I understand that the barracks are going to be refurbished. I can write to the noble Lord with specific details on the plans.

Lord King of Bridgwater (Con): My Lords, I welcome the Statement that the Minister has made, and I endorse the comments about his conduct and attention to the House in his time as Defence Minister, which have been admirable. If there is any relevance in the story that appears today, I hope that the Government are making the strongest representations to the Argentinean Government about the unwisdom of becoming involved with Russia at present and what that might mean for the continent of America. The United States of America has previously taken a slightly detached view about the relationships and has viewed the Falklands as a matter between the United Kingdom and Argentina. Were there to be Russian involvement in some way, it would be of keen interest to the United States.

Lord Astor of Hever: My Lords, I thank my noble friend for his very kind words. As regards Russia, the Ministry of Defence undertakes regular assessments of potential military threats to the Falkland Islands to ensure that we retain an appropriate level of defensive capability to address any such threats. We remain vigilant and are committed to the protection of the Falkland islanders.

Lord West of Spithead (Lab): My Lords, I lost 22 of my boys when my ship was sunk in the retaking of the Falklands, so the islands are particularly close to my heart. I am very glad that we are showing a commitment to keep defending them. The Argentineans’ behaviour is consistently extremely bad; for example, they are calling the new class of frigates they are buying from China “Malvinas class”, which is a clear statement of intent, even if currently they do not have the capability to do much about it.

I am concerned that our strategy for the whole South Atlantic has not been cleverly put together as regards things such as the British Antarctic Survey, how we look upon Antarctica, the other islands we are responsible for, the mail steamer that goes from Tristan da Cunha, as well as the defence aspects of the Falklands, all of which should be looked at together. Every time I go to the Falklands I am delighted to see that society there is now wealthy and vibrant, getting wealthier—and, my goodness me, if they get oil, they will be like Kuwait. Are they going to pay a large chunk of that £185 million? We seem to have almost no money, looking forward to our large defence budget, which will plunge to below 2% of GDP.

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Lord Astor of Hever: My Lords, I pay tribute to those brave sailors who went down on the noble Lord’s ship. He asked me about the oil situation. The Falkland Islands Government have said that if the oil exploration is successful they would wish to share some of their revenues with the UK to offset the costs to Her Majesty’s Government of the defence of the islands.

Lord Boyce (CB): My Lords, we on these Benches share in the complimentary comments on the Minister’s contribution to all defence questions—I thank him very much indeed. I hear what the Minister said about there being a destroyer or frigate available to go down and help the patrol ship should the occasion arise, but sometimes these destroyers or frigates can be quite a long way away. Does the Minister agree that the best form of defence for the Falkland Islands is to have a visible, upthreat, maritime presence of significance? A patrol ship does a good job, but it is not a very serious deterrent. Therefore does he agree that the frequency with which the destroyers or frigates can get down to the Falkland Islands and show themselves there from time to time should be increased—and that there should be the odd submarine visit as well? As a corollary to that, we need a destroyer frigate force larger than the 19 we currently have.

Lord Astor of Hever: My Lords, I can assure the noble and gallant Lord that the destroyers and frigates are within a certain number of days’ sailing distance from the Falkland Islands—we are very insistent on that. I think he will agree with me that sometimes an invisible deterrent is as effective.

Lord Craig of Radley (CB): My Lords, the Minister has made an important Statement, but it really says, “We’re continuing as we are, doing some routine maintenance” —which after 30 years is hardly surprising—“and we’re sending a couple of Chinooks there next year”. That seems to beg the question: why has this become an Oral Statement rather than just a Written Statement?

Lord Astor of Hever: My Lords, I understand that it became an Oral Statement because the Opposition asked for that.

Lord Swinfen (Con): My Lords, after the reports in the news today that the Russians are providing the Argentineans with military equipment, will the Government undertake a fresh review?

Lord Astor of Hever: I can tell my noble friend that we will not undertake a fresh review, but we keep the situation under constant and continual review.

EU and Russia (EUC Report)

Motion to Take Note

3.53 pm

Moved by Lord Tugendhat

That this House takes note of the Report of the European Union Committee on The EU and Russia: before and beyond the crisis in Ukraine (6th Report, HL Paper 115).

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Lord Tugendhat (Con): My Lords, I thank my colleagues on the committee for their perseverance and very considerable help. We have had a long journey, which has required a great deal of hard work, mutual understanding and attention to each other’s views, and I am extremely grateful for their support. My only regret is that, under the rotation rule, so many of them will be leaving the committee at the end of this Session. I should also like to offer profound thanks to our two outstanding assistants, the committee clerk, Sarah Jones, and our policy analyst, Roshani Palamakumbura. I speak for all my colleagues in expressing our admiration, as well as our gratitude, for the exceptionally high quality of their contributions. Finally, I thank the usual channels for enabling this report to be debated so soon after its publication and before Parliament winds up for the election. I quite understand that, as a result of the speed with which it is being debated, there cannot be a formal government response, but I hope that the Minister will be able to reply to points made during the debate.

Before turning to my speech, I should say how very much we all look forward to the maiden speech of the noble Earl, Lord Oxford and Asquith. He will speak with great authority as a former diplomat in Moscow and Kiev. Having looked him up on Wikipedia, although it is not always accurate, I believe that he has charitable and business interests in Ukraine. An additional reason for me to listen very carefully to what he has to say is that he was educated at Ampleforth, though a great many years after I was at that school.

Lord Foulkes of Cumnock (Lab): I am not able to speak for other reasons, but I think that all of us who were on the committee would say that the noble Lord, Lord Tugendhat, chaired it with great skill. He was an exemplary chairman and we should thank him very much indeed.

Lord Tugendhat: My Lords, I am very grateful to the noble Lord—or I think I can say my noble friend—Lord Foulkes, after that accolade. It certainly gets my speech off to a good start. I thank him very much.

As the title of our report indicates, our focus is on the events leading up to the current Ukraine crisis and looking beyond it to the future. I should make it clear, as does the report, where we stand on the present situation. Russia has to understand that taking over other people’s territory, whether in eastern Ukraine or Crimea, is unacceptable. Such actions cannot be allowed to stand. For as long as the present conflict lasts, the European Union should maintain sanctions and be ready, if required, to step them up. Therefore, I welcome last week’s European Council decision, which is in line with our approach. Sanctions cannot be an end in themselves; they must be a means to an end. Do Her Majesty’s Government believe that there should be a process whereby progress in resolving the underlying dispute and its causes is linked to a ratcheting down of sanctions? In short, should there be a carrot as well as a stick?

I have another question. In our report, we argued that, while the dispute lasts, other avenues of communication should be kept open, such as cultural links in commemoration of our shared history in

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World War II. Do the Government agree, and have they and other EU Governments yet taken a decision about wreath-laying in Moscow on 9 May, which is of course a particularly difficult day for British Ministers?

I turn to how the EU should proceed in future in relation to Ukraine and other ex-Soviet republics. The committee believes that, while Russia has no right to dictate to sovereign states on its borders, those states and the European Union need to take account of Russian interests and sensitivities. The historic, geographical and current economic links between those states and Russia are such that, if the EU is to play a constructive role in helping them to develop their economies and societies, that cannot be done in the teeth of Russian opposition, as the present crisis shows. This will require big changes of attitude on the part of Russia, and I will say a word about that in a few moments. However, as a committee of the British Parliament, our policy recommendations are directed to the British Government and the European Union.

The first step, I believe, must be to set goals for the EU’s relationship with those countries that take account of how far short of meeting the criteria for EU membership they currently fall and how long it will take them to catch up. We should be prepared to help them close the gap but this will require tough love. In Ukraine and elsewhere, financial, technical, social and expert aid must all be subject to strict political and financial conditionality and accountability. Inevitably, this will create resentment against the donors, but these countries have indicated that they want to draw closer to us and our values, with a view to perhaps one day joining the European Union. We must therefore make it clear that the aid is to help them to do that, not to evade or defer difficult reforms, and certainly not to garner support against Russia.

With Russia, the challenge is of a different order: it is about how two large powers with different political and social systems can work constructively together as equals on common problems in a shared space. This will require sensitivity, mutual respect and an understanding on both sides of different historical perspectives. We on the EU side must try to understand why Russia feels as it does about EU enlargement and NATO. On the evidence that we took, I think we all agreed that President Putin’s views are to a large extent shared by most of the Russian population, and that any foreseeable successor to President Putin would most likely hold the same views. On their side, the Russians must try to grasp the impact that the USSR’s post-World War II expansionism has had on Europe’s collective psyche, and why so many countries on its borders feel as they do about drawing closer to the European Union. It is in this context that the committee believes that co-operation between the European Union and the Eurasian Economic Union might provide a way forward. Let us together explore how far and in what manner the rules and requirements of these two organisations might be aligned. This could provide a useful framework within which to develop closer EU-Russia economic relations and to develop the countries that border on both the European Union and Russia.

Much as we should like to see better EU-Russia relations, there is nothing starry eyed about the committee’s approach. We attach importance to holding Russia to

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the obligations it has freely entered into in respect of the World Trade Organization and the European Convention on Human Rights. We also believe that even if Russia is willing to tolerate corruption and lax business practices, to put it kindly, within its own borders, these must not be allowed to contaminate its dealings with this country or the rest of the EU.

I end with an exhortation. The committee believes that since the end of the Cold War there has been a decline in the Foreign and Commonwealth Office’s analytical and language skills in relation to Russia. Indeed, only last week we were surprised to learn at a seminar that we held that, in recent years, the head of the Russian desk has sometimes turned over on an almost annual basis, and that at least one recent holder of that office did not speak Russian. I do not know whether the Minister will be able to cast light on that. Whether or not she can do that, I hope that she will assure the House that if there is a Conservative Government after the election, they will devote sufficient diplomatic resources to the vital Russian relationship.

Lord Wallace of Saltaire (LD): My Lords, there is a large number of speakers in this debate. I remind noble Lords that the advisory speaking time is eight minutes. If noble Lords keep to that or less, we will finish this debate by 7.30 pm—four and a half hours from its outset—which will allow us to finish by 10 pm.

4.04 pm

Lord Judd (Lab): My Lords, I am sure that I speak for the whole House in congratulating the noble Lord, Lord Tugendhat, and his colleagues on, and thanking them for, a particularly interesting report. Like the noble Lord, I share keenly the anticipation of the maiden speech of the noble Earl, Lord Oxford and Asquith.

The issue of Russia’s identity is not new. Not that long ago, historically speaking, the language of the court in St Petersburg was French. Against this, there has been a long-standing, introspective and profound search by others for the true soul of Russia. The Russians are proud people. The heroism, courage and great human cost of their contribution to World War II should never be forgotten or underestimated. It was crucial to the defeat of the Nazis. The endurance of the Russian people was well demonstrated in how they came through the cruel policies and purges of the Stalin era. For all these reasons, we must beware—whatever our intentions—of perceived triumphalism and of our own self-righteousness. We must, after all, remember the ongoing questions of the implications of the Iraq war.

I have felt for a long time that comparisons can be made with Versailles. I have been surprised to hear some say that the Russians have illusions de grandeur. Now we have a former KGB colonel, Putin, in charge. Of course, in Russia, the KGB is an elite, with its own schools and universities, and to understand Russia, one has to understand that. With it goes arrogance and unacceptable corruption.

I was one of those who had a dream of what might be possible following the end of totalitarian communism and the fall of the Berlin Wall—an exciting

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new Russia, playing an imaginative part in world affairs. That has not happened. We have to ask ourselves for a moment how far we contributed to that reality. Perhaps we cannot discount the prevailing ethos of romantic ideology and grotesquely oversimplified economic doctrines of the age of Reagan and Thatcher, as compared with the collective wisdom and experience of mixed economies, accountable capitalism and liberal democracy in mainland Europe. Are we perhaps reaping some of the rewards of our own misjudgments? The issue was how to build a society, not just an economy, in Russia—how to make the transition from A to B.

I am one of those who longs for wise, visionary and imaginative leadership, aiming at what global society could be, rather than just numbers and territory-mesmerised autocratic managers—a reassertion of strategy, as distinct from tactics. This report is particularly interesting because it faces that challenge and suggests practical, rather than self-defeating and grandiose, means of meeting it. It emphasises the importance of identifying common interests—striving for constructive relationships with the Russian people, rather than just hostile, punitive relationships. But, as the noble Lord so rightly said, that demands tough and forthright relationships as well. What has happened in Ukraine and Crimea; what happens in our territorial waters and our airspace; what happens with the scattering of lethal, radioactive poison across London: all these things demand resolute responses.

There is one issue that illustrates what I am saying very well. I should declare an interest. For nearly four years I was rapporteur to the Council of Europe on the conflict in Chechnya and, inevitably, in the northern Caucasus. We did not take that issue seriously enough. We may have fidgeted with the teaspoons in our conversations and said that there were people in Britain who were rather worried about human rights in that situation, but we did not tackle it head on and say, “You are contributing to future world instability because you are driving people into the hands of militant extremists, and this will strengthen the international dimensions of the jihadist movement”. We did not say that as firmly as we should have—and I cannot really see what has happened more recently in isolation. We should also remember the heroes of Russian society: people such as Anna Politkovskaya, Natalia Estemirova and too many other journalists who have been assassinated because of their stand for truth. All this is a matter not just of Chechnya and the north Caucasus, but of Russia itself.

As the committee argued, our objective certainly must be good, strong relations with Russia. To have these we will have to be firm and unyielding in our stance along the way on issues such as those that I have just mentioned. Above all, the report argues, as I see it, that we should build relations with the Russian people and with civil society, from education, law and cultural exchange, to the demanding issues of media freedom and human rights. After all, that is what we did so outstandingly well in our contribution to the building of a new, post-Nazi Germany. We took people from all parts of British society and put them in to work in the community. If I may make a personal remark, I remember that my own mother

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became very devoted to the work she did in a community in Germany, trying to build up concepts of local democracy.

We should be grateful for this report. It is constructive and balanced, and it makes a good start for our deliberations.

4.13 pm

Baroness Coussins (CB): My Lords, I had the privilege to serve on Sub-Committee C of the EU Select Committee. I thank the noble Lord, Lord Tugendhat, for steering us so skilfully through this complex inquiry, which was so topical that the landscape seemed to change virtually from meeting to meeting. I endorse his thanks to the clerk, the policy analyst and the special adviser for their magnificent policy and technical support.

I will confine my remarks to the two very different points in this report to do with language and language skills. First, one of the report’s conclusions was:

“There has been a decline in Member States’ analytical capacity on Russia. This has weakened their ability to read the political shifts and to offer an authoritative response. Member States need to rebuild their former skills”.

The same deficit was found in our own Foreign Office, as in the member states as a whole, and was thought to have occurred over some time in relation to Russia and the region. Sir Tony Brenton, a former British ambassador to Russia, told us that UK diplomacy has,

“suffered because of a loss of language skills, particularly in the Foreign Office”.

This point is all the stronger for echoing one of the conclusions of another Select Committee report, on soft power, which was debated in your Lordships’ House only two weeks ago.

Language skills and the cultural knowledge and understanding that go with them are a very important part of the analytical capacity that we found wanting. The report recommends that the FCO should review how its diplomats and other officials can regain this expertise. The new FCO language school is a first-class resource that is already making a contribution towards equipping some of the right people with Russian language skills prior to postings. About 10% of the 800 or so civil servants who had been on courses at the language school up to last November were studying Russian. If the recommendation on regaining linguistic and cultural skills is to be implemented on a solid, long-term basis, we need to see some changes much further back in the pipeline and not have to wait until people are already part of the Foreign Office or the Diplomatic Service with access to an intensive Russian course.

As a nation, we need to see a sea-change in our attitude towards language learning and a dramatic improvement in the take-up of languages at school and university. On Russian, I can give the House a very up-to-date picture of what is going on in schools from data published only last week in the 13th annual Language Trends survey. The curious thing about Russian is that at A-level take-up has nearly tripled over the past 20 years to nearly 1,200 in 2014. However, before anyone gets too excited about this apparent progress, it seems that the increase is largely due to increased

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numbers of native Russian-speaking non-UK nationals, mainly at independent schools. By contrast, a tiny proportion of state schools offer Russian—between 1% and 2%.

At university level, over the last 10 years there has been a 51% decline in the number of entrants to Russian and east European studies degree courses. Only 14 of our universities now offer Russian as a single honours degree and only 17 offer degrees in which Russian is a significant component. No universities in either Wales or Northern Ireland offer Russian, and only three in Scotland do—down from six quite recently. Slavonic languages other than Russian have fared very much worse still. I hope that the Minister will agree that the languages pipeline needs urgent attention and that the problems with Russian in particular, in the light of this report, cannot be solved simply by leaving it to the Foreign Office language school. Indeed, even with the benefit of the language school, only 27% of posts in the Diplomatic Service associated with a level of proficiency in Russian are actually filled by someone who meets the required standards.

The second language-related issue that appears in this report concerns not UK nationals but Russian nationals and ethnic Russians whose language rights may have been threatened or undermined by an EU member state. The report observes that the treatment of Russian speakers was one key theme in Russia’s actions in Crimea and eastern Ukraine. A proposal in the Ukrainian Parliament to repeal the 2012 language law allowing Ukraine regions to have Russian as a second official language was seen by many Russian-speaking Ukrainians as an alarming threat, even though it was subsequently withdrawn.

More pertinent still as far as the EU is concerned is that in Estonia and Latvia, two member states, Russian does not have the status of an official language, and in both countries citizenship rights, including the right to vote in national elections, are dependent on a language test in the official language. The result is that ethnic Russians, mainly older people, are denied citizenship and are unable to participate in the political process.

President Putin has, in various public statements, made much of this discrimination against Russian speakers living in EU countries and has accused the EU of double standards. Some of our witnesses thought that the plight of ethnic Russians was simply being used by Putin as a convenient pretext, that their social isolation was perhaps exaggerated, and that in any case in strictly legalistic terms Estonia and Latvia were violating no specific EU standards. Nevertheless, it is more than uncomfortable that any EU member state should make citizenship conditional on these terms and thereby hand Putin a card to play that suggests that the EU does not practise what it preaches.

Lord Davies of Stamford (Lab): I am one of those people who believe that it is perfectly reasonable to state that English would be a requirement for British citizenship, and I have no problem in principle about what happens in Estonia and Latvia. However, does the Baroness not agree that Putin has stated that Latvian and Estonian citizens who take the language test and then apply for and receive local nationality will no longer be allowed into Russia without a visa?

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He is preventing contact between the Russians living in those two countries and Russia, which he is then complaining about.

Baroness Coussins: The report acknowledges that point about visas. My point is that it is short-sighted to hand Putin a card to play that enables him to accuse the EU of double standards. The report concluded that there is a prima facie case requiring this historical grievance by ethnic Russians in Estonia and Latvia to be investigated. That is as far as we went. I hope that the UK Government will press for this investigation to be pursued by the EU so that any excuse for any level of Russian interference in these states on these particular grounds can be effectively neutralised and removed.

I look forward to the Minister’s response on this and to my earlier points about language skills.

4.21 pm

Lord Howell of Guildford (Con): My Lords, it is a very interesting report. I am sorry that I was not on the committee because it sounds as though it would have been rather enjoyable under the skilled chairmanship of my noble friend Lord Tugendhat.

I have four points to add. First, in trying to curb Vladimir Putin’s ambitions and mischief making and the general Russian neurosis and paranoia which seems to prevail in its public opinion, the important starting point has to be that what is going on is a world issue and not only a western issue. Nothing will change decisively unless and until China and the Asian powers are as much engaged as the West professes to be. Of course, the sanctions we have applied and are threatening to apply more of can be hurtful to both sides—indeed, they are proving quite damaging to both sides—but as long as China ignores them there will always be an eastern back door through which Russia can escape and trade.

Putin has made it clear that he relies increasingly heavily on the East. He is working hard for new customers for his gas, for allies in the East—particularly China but other countries as well—and for joint development. He and Gazprom have finalised huge future deals for gas supplies to China and he welcomes proposals from Beijing for the new Silk Road, the Beijing-Moscow high-speed rail link and for a general vast development of links between middle Asia, the Pacific and China. Putin sees Russia not as just a European player—he never did—but as a world power straddling Europe and Asia. He wants near neighbours to play that game as well and to give him the respect that he feels he is due. That is the first point I want to make.

My second point concerns energy. There is only a little about it in the report—I understand why there was not an extensive delving into the complexities of energy—but of course it is a central issue to UK-Ukraine relations and to EU-Russia relations. The dependence on Gazprom, which the report mentions, of the eastern Europeans can be reduced by interconnectors from western Europe, and the current energy union ideas from Brussels are aimed at trying to develop that. However, Europe is always going to be an important customer

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of Russia, even after interconnector development, greater efficiency and importing more LNG from other countries, including the United States. In any case, Russia is giving up seeing Ukraine as a major transit route. It has shrugged off the South Stream plan, which was to take gas under the Black Sea, and is now connecting into Europe via Turkey on the Asian side of the Bosphorus. Russia plans to sell its gas into Turkey, and through Turkey into Europe that way. This demonstrates that Russia thinks that the unsettled Ukrainian state will continue for a very long time.

My third point is this. Putin will, in the end, be contained—it will be gradual—by other, bigger forces than sanctions. Russian banks need to borrow, but they can no longer do so at the favourable interest rates they could get when they had access to the West. Russia needs a lot more inward investment and trade than it has. The Russian people are connected with the rest of the world as never before at every level of citizenship, from school children upwards. The rouble has collapsed, the stock market has collapsed, and the price of oil has collapsed. All those things will eventually check him, particularly as the price of oil, contrary to many people’s hopes, will stay very low and will not go back to $100 dollars a barrel for a long time.

All these things will shape and put pressure on Putin, but I am not sure that sabre rattling will do so. That is because Russia is playing a very different game on the military side. It believes in “new methods of conflict”. Incursions are never to be central or openly military—that is the new doctrine. The new technique is known as maskirovka, which is not a conventional battlefield where the results can be defined and clear victories won; it is always something that is not what it seems. Russia will stir up minorities and do deals with individual countries, as it is trying to do now with Hungary in seeking to break up the European Union from within and proposing nuclear power, and of course it will take offence at the slightest provocation, as we have seen in the papers this morning over the VE Day celebrations.

Incidentally, talk of “arms to Kiev”, which some have suggested, also raises some curious maskirovka issues. Ukraine is one of the largest manufacturers and exporters of arms in the entire world. In 2012 it was the fourth largest. Ukraine supplies most of Russia’s helicopter engines and half of its nuclear arsenal is built there. So “arms to Kiev” for those who are urging it—like the US Congress calling this morning for lethal weapons to go to Kiev—means that those arms could end up anywhere. Knowing the area, as experts do, they will probably end up in the wrong hands.

To understand Russia today, we have to position ourselves somewhere midway between Kafka and Tolkien: nothing is what it seems. I did have some personal experience of the Magnitsky case, which involved bogus police, bogus tax authorities, bogus courts, bogus judges and bogus company officials who had stolen the identity of the company of Mr Bill Browder, to whom I was an adviser at the time. He set it all out in his fascinating book, Red Notice. All that indicates that fraud, scam and murder are the norm, as we saw so tragically the other day with the murder of Mr Nemtsov just outside the Kremlin.

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In the long term, as this excellent report sets out, we have to live with Russia, as do all the other Asian powers. That is probably best done on both an EU and a national bilateral basis because we have to work on both tracks. The EU on its present integrationist path is always going to be a discomfort and irritation to Russia, whereas a less centralised, relaxed and, I hope, reformed EU would obviously be less threatening. Each EU state should feel free to build its own type of relationship with the Russian state and the Russian people.

Finally, the report talks about “sleepwalking” into this situation. I am not sure that that is fair. It is good journalism because of course all the newspapers picked up the phrase, but I am not sure that it is a good analysis. All along, there has been a perfectly clear awareness that Russia was on an uncertain and unpredictable course. It was trying to be a great power again and could not understand why it had lost power, but it was not behaving like a great power. Putin changed course completely. I heard him say in his earlier presidency that he wanted to work very closely with Europe and change the political face of Russia, but the Putin who came back in the second presidency was a completely changed man. It was an event that of course surprised, but it was not a surprise that anyone could have sensibly anticipated, however expert they were and however good their knowledge of Russia. Crimea was no surprise at all. Those of us who have been there know that it is a really beautiful place, but its heart was always with Russia. It was always amazed to find itself part of Ukraine and wanted to go back to Russia.

One does not need to be too much of an expert on a country to sense where it is going. In fact, quite often great reams of experts fail to predict things accurately and get things wrong, although I do not think that the blame game is really necessary. I learnt Russian at school but I do not think it helped me understand less or more the mysteries and the total unpredictability of the Russian trajectory.

There are plenty of surprise events ahead. We heard this morning that one may be coming in Argentina, with the decision of the Russians to supply weapons to Mrs Kirchner. I point your Lordships’ eyes in the direction of Kaliningrad—the old Königsberg, of course—where a huge build-up of Russian troops is taking place as they reinforce their vast naval base there. That is an area where we should be prepared for trouble. There are many difficulties ahead, and we have to use the same subtlety as the maskirovka experts will use against us.

4.31 pm

The Earl of Oxford and Asquith (LD) (Maiden Speech): My Lords, I should first like to express my deep appreciation for the assistance and guidance that I have received from all those who work in this building. I know that my experience differs in no way from others who have come before me, but it has been a real encouragement to encounter such courtesy and helpfulness from the officials, staff and doorkeepers on whom the functions of this House depend. It is not just their civility that I wish to pay tribute to but their infinite patience.

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I welcome the committee report which has prompted this debate. I have lived and worked in Russia and Ukraine for over 30 years, and I continue to take a close interest in the region, as detailed in my entry in the register of interests. The report contains a great range of insights and level-headed recommendations, but I shall try to limit myself to a few specific points arising from it. Before I do so, I should like to make some observations on the current situation in eastern Ukraine in particular, which of course post-dates the publication of the report.

It is always rash to make predictions of events in time of war, but in my assessment, Putin has achieved militarily what he wanted to achieve in Donetsk and Lugansk: he has won his battles and humiliated the Ukrainian leadership; he has created an island of instability in eastern Ukraine; and he has destroyed much of Ukraine’s economy—the mines, factories and infrastructure in the region are shattered and people have fled.

Undoubtedly, there will be flare-ups, but for the time being at least, and assuming as an overriding caveat that Kiev observes, or accepts, the ceasefire, in my view the Russian military phase is largely over. Economic pressure, I believe, will characterise the next steps. In the last month, the Russian Government have relieved Russian private banks of their exposure to Ukrainian businesses. Over $50 billion of bank debt will be absorbed by the Russian Government, allowing the Russian commercial banks to restructure their balance sheets and giving surety over Ukrainian assets to the Russian state. I believe that, in the next 12 months or so, there will be a Russian push to buy out distressed Ukrainian assets. To put the policy in perhaps simplified but, I believe, not misleading terms, Russia’s aim will be to become as close to a 100% shareholder of Ukraine as is possible.

In that context, therefore, I want to make just three points. The first relates to the evidence that the report collects on “hard questions of strategy”, integrated foreign policy and diplomatic competences. I believe that one day Russia’s interventions in Ukraine will be seen as a critical mistake. Nevertheless, if we are to attempt to resolve the great instability in eastern Europe, at some stage we will have to negotiate with Putin—with Russia. Who “we” are is another matter—a most important one, indeed—but there has to be a process of negotiation on strategic issues. At the moment there is no process.

Of course, the German Chancellor and the French President have twice now gone to Minsk. They have shown much courage and persistence, but these very necessary negotiations were essentially about a ceasefire and peacekeeping. We know that there is a strategic basis on which Putin will negotiate. There is a specific framework. But we have not yet entered that stage and, until we do, I agree with the report that there will be no real settlement of this conflict.

Secondly—although I say this with regret—part of the problem lies now with the Ukrainian Government. They came into being with much promise of renewal and democratic process, but, as with previous Ukrainian Governments, there is constant constitutional conflict between the Prime Minister and the President. As the

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report recognises, the seeds of this crisis have been sown over 20 years of Ukrainian government mismanagement, but the mismanagement—if that is the right word for it—continues. Even now, and despite Minsk, the Ukrainian leadership says that the constitution should not be altered—that is code for abandoning Donetsk—and it believes that the country should join and be armed by NATO. That reads to me like a suicide note which the Ukrainian nation will not accept. At the same time, with the war receding, deep splits are being exposed in the Ukrainian power elites. These threaten stability and play to the Russian line that the country is sliding into lawlessness.

That leads me to my final point, where I would like to pick up on those parts of the report that allude to an ideal of a Ukraine transformed into an attractive civil society with a people whose energies are released—a model state, dare one say, for the region. Over the past year, the mood of the country has fluctuated through hope and disillusionment, but I see that at most levels of civil, social and economic activity there is now a widespread recognition that the country has missed the turning point that occurred, for example, in Poland some 10 years or so ago, when there was a fundamental change of direction. There are and there have been innumerable reform programmes for Ukraine on the table, but I believe that there is now a recognition that it is time to find the political will to implement some major changes, starting with legal reform—without which, in my view, there is little point attempting others. It is time that genuine mechanisms were devised and enforced so that investment funds reach the real economy.

For Ukrainians, the only incontrovertible answer to Russian pressure is to develop in their country a prosperous climate that will deliver the rule of law and economic success. That is the forward-looking, optimistic scenario on which I should conclude, but not before saying how truly honoured I am that your Lordships have welcomed me to your numbers.

Noble Lords: Hear, hear.

4.39 pm

Lord Hennessy of Nympsfield (CB): My Lords, it is a great honour to be the first to congratulate the noble Earl, Lord Oxford and Asquith, on his very fine maiden speech. Given his deep immersion in the questions before your Lordships this afternoon, it is a tad anxiety-inducing to be the next in line on the speakers list.

The noble Earl carries one of the most lustrous and resonant names in British political history. His great-grandfather, the last Liberal leader to preside over a wholly Liberal Government, has occupied a special place in our shared historical memory since those of us of a certain age first read Roy Jenkins’s excellent biography of HH Asquith in the mid-1960s. The noble Earl’s immensely distinguished Crown service has been rather more in the shadows than that of his great ancestor, but he has done the state some very considerable service in his diplomatic career. Although I know that he is too discreet to mention it, the noble Earl possesses a special place in intelligence history as the officer who spirited that remarkable and brave man, Oleg Gordievsky,

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out of Russia and into Finland in the boot of his car. I am sure that his maiden speech this afternoon is but the first flow of a cataract of wisdom and judgment to come in future debates, which we anticipate with keenness and enthusiasm.

Like so many of your Lordships, I am a child of the Cold War. Born in the late 1940s, ours was the first generation to grow up in the shadow of the bomb. We knew what those mushroom clouds over Japan in the last days of the Second World War meant—an entirely new era in international affairs. We did not need a degree in theoretical physics when we read about the H-bomb tests in the 1950s to understand that these new thermonuclear weapons were over 1,000 times more powerful than the atomic bombs dropped on Hiroshima and Nagasaki. That the Cold War ended without general war and nuclear exchange was and remains the greatest shared boon of our lifetime. Yet here we are, in the spring of 2015, a generation after the Cold War ended, debating Russia’s capabilities and intentions, trying to read the mind of the man in the Kremlin, and worrying about the dangers inherent in escalating tensions and about the condition of the critical Article 5 of the North Atlantic Treaty of 1949, signed for the UK almost exactly 66 years ago by the magnificent Ernest Bevin.

There is a school of thought that the Cold War did not die, rather that it went dormant for a time. There is something in this argument. For example, the Queen’s most secret servants will tell you that the Russian intelligence service has exactly the same number of officers operating under diplomatic cover in London as it did in the mid-1980s; around 34 the last time I looked. With its deep and traditional faith in human intelligence, the Russians also keep a string of “illegals” living under deep cover in our islands, who are fiendishly difficult to detect unless they make a slip. The Queen’s underwater servants in the Royal Navy Submarine Service will tell you that the deep Cold War never really ceased and has picked up noticeably over the last few years. Indeed, I experienced a whiff of it myself in the Atlantic off Florida when witnessing a test launch of one of the Royal Navy’s Trident D5 missiles following the mid-life refit of HMS “Vigilant”. I was on board the survey surface vessel, just two and a half miles from where the missile would burst from the ocean. Another three miles beyond me, a huge Russian spy vessel dripping with electronics could be seen trying to get into the test area and being prevented from doing so by the US Coastguard. When it was all over, the captain of the Russian spy vessel came across the open channel to congratulate all of us, in a perfect Oskar Homolka English accent.

The finely judged and carefully calibrated report on the EU and Russia before us today stimulated a range of deeper memories for me and aroused one particular current anxiety. My most vivid memory is of a study of unintended East-West escalation produced by the Cabinet Office’s Joint Intelligence Committee in the weeks following the Cuban missile crisis of 1962, when we truly neared the nuclear rim in a crisis that pretty well came out of the blue—Berlin rather than Havana being the place where we thought the greatest tensions would be played out. In November 1962, the JIC defined “escalation” as,

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“the process by which any hostilities, once started, might expand in scope and intensity, with or without the consent of Governments”.

There followed a passage in that JIC assessment, which the report before us today summoned from my memory. It read like this:

“Once any hostilities had started agreement on a cease-fire would involve one side or the other accepting a tactical defeat or both sides a stalemate on what must be a highly important issue. The chances of such an agreement would be better if the attacking side realised that it had miscalculated the importance to the other side of the interests involved or the will and ability of the other side to resist”.

This is exactly what happened after Mr Khrushchev covertly placed his intermediate-range ballistic nuclear missiles on Cuba.

I am not a “history repeats itself” man, but I am with Mark Twain when he said that history may not repeat itself but sometimes it rhymes. In the context of Russia, Ukraine, the EU and NATO, I think that it is the possibility of unintended escalation—of a misreading of minds, intentions and possible responses—that most worries us. In Bevin’s time, Article 5 of the NATO treaty was as powerful as it was simple. It says:

“The Parties agree that an armed attack against one or more of them in Europe or North America shall be considered an attack against them all”,

and that the parties individually and in concert will take,

“such action as it deems necessary, including the use of armed force, to restore and maintain the security of the North Atlantic area”.

It was that clarity and simplicity that helped keep the Cold War cold.

The framers of that treaty almost exactly 66 years ago could not have foreseen the end of the Cold War, Poland and the Baltic states as full members of NATO, and a range of unimaginable new instruments at the disposal of the Kremlin. Stalin may have possessed what we thought were 175 divisions and, from August 1949, an atomic weapon, but Putin has a gas tap and he has cyber. What kind of attack and what magnitude of damage inflicted on a near-neighbour Article 5 country would be deemed to have activated Article 5 in current circumstances?

We live in an age of what is called “ambiguous warfare”. Mr Putin is a skilled player of this; it is what he does best. His currency may be falling, his GDP shrinking and the hydrocarbon clock may be ticking long term against his oil and gas position, but this is an activity at which he excels, and it is, I suspect, a near-constant temptation for him. Yet Mr Putin, too, is a child of the Cold War. He, too, grew up in the shadow of the bomb. He knows full well what a serious Article 5 incursion would mean.

Nerves need to hold within the NATO alliance. A new containment strategy needs to be pursued for as long as is necessary. I share the Select Committee’s conclusion that firmness combined with a pursuit of a new, more co-operative relationship with Russia when possible is the way forward to prevent current anxieties and crises,

“deteriorating into something resembling the Cold War”.

It might be fraught; it will not be edifying; it will not be swift; but it is what has to be done.

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4.47 pm

The Lord Bishop of St Albans: My Lords, I add my congratulations on the maiden speech of the noble Earl, Lord Oxford and Asquith, and I thank the noble Lord, Lord Tugendhat, for securing this debate, which provides a valuable space in which to explore the multifaceted and fast-changing situation in the region. The EU Committee’s report has opened a welcome opportunity to reassess the UK’s relationship with both Russia and Ukraine on a bilateral level and as part of the EU.

I wish to cast my remarks in the light of the recent visit of a delegation from the World Council of Churches to Ukraine. The delegates’ visit to the Monastery of the Caves in Kiev served as a reminder of the very complex relationship of church and state power on which Rus’ was built centuries ago. Ukraine and Russia share this history. It is impossible to unravel national identities that intertwined through the polities of Kiev, Novgorod and Muscovy, and on to the present day.

With this complex interplay of identities in mind, there is a clear need for an EU strategy towards the region that extends beyond united action on sanctions. The urgency of the situation in the region is compounded by the pending association agreements with Moldova and Georgia, which could render these states vulnerable to further Russian aggression. Further, as the committee report notes:

“The historical grievance of the rights of ethnic Russians in Estonia and Latvia offers the Russian government a convenient pretext which could be used to justify further destabilising actions in those states”.

I echo the report’s call for more steps to be taken to facilitate access to citizenship for ethnic Russians who have long-established residency in those states but who may have limited ability in the official language. We must act now to heal fissures in society that could otherwise be exploited.

Among those whose political identity cannot be neatly delineated are the too often forgotten non-Russians who remain in Crimea. While the immediate priority for the region must be the cessation of fighting, the international community must not allow the annexation of Crimea to become tacitly legitimate. It is imperative that we continue to challenge the validity of last March’s referendum, persevering in our insistence that representatives from the OSCE be allowed into the territory.

I strongly commend the EU Committee’s attention to the importance of holding Russia to its human rights commitment. It states in recommendation 55:

“The EU and Member States must continue to raise the human rights situation in Russia in international forums and to press Russia on human rights violations in their bilateral relations. It is not sufficient for Member States to delegate this to the EU institutions”.

This commitment to ensuring equal treatment for all must also encompass a renewed effort to tackle corruption, which has already been referred to by other noble Lords and which blights the opportunities of so many. As the report states:

“Combating corruption should be an essential part of the EU-Russia relationship. Only in this way will the EU be able to prevent the theft of assets from the Russian people”.

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In pressing for the observance of human rights commitments in Ukraine and Russia, the UK must look with care to the integrity of our own position. I am glad that the report presses this point by stating:

“If the UK is to retain its credibility in its criticisms of Russia on human rights, then its position would be undermined if it sought to weaken its own commitment to the Convention. Such a move would resonate in Russia in a very significant way and would be a powerful tool of propaganda for the Russian government”.

The remainder of my remarks will pertain to the report’s recommendation on continuing dialogue and exchange with Russia to avoid the entrenchment of the current conflict. As well as the importance of various cultural exchanges—the arts, language skills and other soft power—faith groups and civil society groups have a key role to play in facilitating cultural and educational co-operation.

The Ukrainian Orthodox Church of the Moscow Patriarchate in particular is uniquely positioned to show leadership in working for communication, peace, unity and reconciliation. As the majority church in Ukraine, with congregations in all parts of the country and on both sides of the lines of conflict, and having officially declared and reiterated its commitment to the territorial integrity and unity of Ukraine, the UOC has a special capacity and leadership responsibility to be a bridge over the opposing political divisions throughout the territory of Ukraine.

The All-Ukrainian Council of Churches and Religious Organizations also has a key role to play as a facilitator of peaceful ecumenical and interfaith relations, encompassing as it does almost every church tradition represented in Ukraine, as well as the Muslim and Jewish communities. The council has remained impressively united despite all the difficulties facing Ukraine at the moment.

The various denominations and faiths hold different perspectives on the origins of the conflict, but still there is great potential for the churches and faith communities of Ukraine to play a lead role in transcending the competing nationalisms that can feed conflict, by addressing the social, economic and humanitarian needs that have been compounded by the fighting. This moral leadership is backed up with civil society action, with the central role being played by churches in meeting humanitarian needs in the affected regions. It was significant that during the violence in spring 2014, St Michael’s cathedral was used as a field hospital.

The unmet need remains very great. It is important that in the midst of our debate, as people are talking about the long-term strategy in the region, we do not forget the reality of daily life for tens of thousands of Ukrainians. Many are displaced from their homes and living in shelters and temporary accommodation. With even basic infrastructure destroyed, the battle to rebuild their lives is very difficult. We need a more adequate humanitarian response to the human suffering resulting from the conflict, and to support and strengthen the efforts of the churches and faith communities of Ukraine for justice and peace.

4.54 pm

Lord Jopling (Con): My Lords, since I came to your Lordships’ House almost 18 years ago, I have had the great good fortune for eight of those years to sit as a

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member of Sub-Committee C. Those years have been among the most interesting that I have had among my colleagues here but now that most of us will be rotated under the rules from the committee, I want to say how grateful I feel to the staff and advisers who we have had in putting this report together, as well as for the quite outstanding leadership of my noble friend Lord Tugendhat.

The background to this report is of course the intolerable and outrageous behaviour by Russia in recent times. This report should be seen as a wake-up call, principally to the European Union. Our criticisms in the report are directed principally at Brussels, but also at member states’ capitals. Whatever failings we may have suggested with regard to the United Kingdom, they are overshadowed by its leadership over the years in international affairs in Europe, which is of course exemplified by our defence budget being 2% of our GDP—the largest in Europe and the fifth largest in the world.

First, I want to draw attention to Russia as it is today. In 2014, according to the most recent figures by the International Institute of Strategic Studies, the Russian defence budget was only around 12% greater than that of the United Kingdom. It has increased substantially in recent years, particularly with its nuclear capacity, which Mr Putin never fails to remind us about. A lot of that extra money has gone towards the Navy but the ground troops are visibly stretched and not fully equipped. They are not as potent a force as we may think, but they are of course capable of putting substantial numbers into shows of force and intimidating postures at the frontiers of the European Union and NATO.

That is the defence side but, on the economic side, we should not forget the parlous state of the Russian economy today. The collapse in oil prices and the rouble, and the flight of capital overseas, together with the effect of sanctions and the extra cost of the Crimean occupation, could be catastrophic for Russia. The committee heard from Mr Kasyanov, the former Prime Minister of Russia and, of course, an opponent of Putin. At a time when oil prices were around $80 a barrel, he told us that Russia could be in a major crisis in two years’ time. With oil prices now below $60 a barrel, I guess that Mr Putin must be losing quite a lot of sleep over this.

We must recognise that relatively modest conventional military resources and concerns over looming economic problems could cause Mr Putin to be at his most dangerous and unpredictable at this moment, in the difficulties in which he finds himself. So with this background, we must ask what we ought to do about this. I hope that this does not simplify it too much but the reaction of the European Union and NATO should be defined as the iron fist in the velvet glove. Above all, NATO—with, I hope, full European Union support—must make it absolutely clear that the principles of Article 5 and the commitments of NATO members that an attack on one is an attack on all, as the noble Lord, Lord Hennessy, said, are a totally non-negotiable red line. Any incursion, including a cyberattack that we can pin on them, into the Baltic states or on other NATO territories must invoke a positive and immediate reaction, and he should be aware of that at this stage.

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NATO must work immediately to create what was defined in the Welsh summit last autumn as a readiness joint task force. We must work to create this with redoubled urgency.

Having been in Washington in the past few weeks, I would be surprised if the United States did not provide Ukraine with potent defensive equipment in the near future, although I wonder whether Ukrainian troops are capable of handling some of this weaponry. I also believe that anticipation of a crisis is better than reaction to one. So far as I am concerned, I should like to see us move more military assets closer to NATO’s eastern frontier now. We already have fighter aircraft in the Baltic states but I would not be at all averse to seeing more.

So much for the iron fist. What might be the situation with the velvet glove? The European Union’s task must now be to make every effort to convince the Russians that we wish to live in peace and harmony with them. Trying to find relationships between the European Union and the new Eurasian Economic Union is one way that one might go about it, as has been mentioned. However much they irritate us, we must make real and positive efforts to review the past and, if necessary, seek to recognise ways in which we have missed opportunities to recognise Russian interests and susceptibilities.

It is not too late to forge a new, lasting partnership with Russia. The immediate question will be whether all participants, especially in Russia but also in Kiev, will implement the Minsk II agreement. Once that agreement is firmly and permanently implemented, we can start to talk about reducing sanctions and finding ways in which we can live more happily together.

5.02 pm

Lord Anderson of Swansea (Lab): My Lords, I warmly congratulate the noble Earl, Lord Oxford and Asquith. With this debate, we have certainly played into his strong suit. I also congratulate the noble Lord, Lord Tugendhat, and the members of the committee. They stress as a continuing theme the need to understand Russia and Russian civilisation. In our country we have lost much of that expertise, as the noble Baroness, Lady Coussins, mentioned in her contribution. I recall that when we recognised this in the 1960s we set up the Hayter report, as a result of which several new posts were established in our universities. Where are they now? I understand that many of them no longer exist. We need to encourage the study of Russian and Russian civilisation.

I have two preliminary observations. This is of course a fast-moving situation. The report was ordered to be printed on 10 February, two days before the conclusion of the Minsk II agreement. Secondly, the report exposes the effect of the limit of the remit of the House of Lords European Union Committee: we do not have a foreign affairs committee so everything must be looked at through the lens of the European Union, which has meant that the report is not as rounded and comprehensive an analysis as it might have been. Hence, for example, the important NATO dimension is hardly examined in the report but it would have been had there been a foreign affairs committee, as in the other place. To be fair, the report

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mentions the Council of Europe, which has exercised its own sanctions in its Assembly, in that the Russian delegation has withdrawn itself.

Equally, as mentioned by the right reverend Prelate, paragraph 325 of the report contains a postscript on UK government policy on the European Convention on Human Rights. If we were to have a pick-and-choose policy in relation to the convention, that would certainly give the Russians a major precedent to pick and chose, and we would devalue any influence we might otherwise have.

A crisis of this magnitude throws important light on the principal actors in the drama. What does it tell us about Russia? Given its economic weakness, which the noble Lord, Lord Jopling, has just underlined, President Putin has played his cards with consummate skill. We must understand Russia’s fear of encirclement, its desire to end the perceived humiliation after the loss of the Soviet Union and the Soviet empire, the reaction to the anarchy of the 1990s, the search for the restoration of great power status and the pivot to the east to make up for the loss in the west. All this explains the return to traditional themes of authoritarianism, patriotism and the role of the Orthodox Church. It also exposes the weakness of our policy assumption before and after the 1990s that Russia was on a journey to western-style democracy.

On NATO expansion, many serious observers argue that Secretary James Baker gave the clear impression to Russia that, in return for recognising the independence of the Baltic states, NATO would not expand eastwards. The Istanbul summit put an end to that. I understand the Government’s case that Ukraine is a sovereign country which can choose its alliances as it will, but to join NATO would be hugely provocative to Russia. A wise course would be for President Poroshenko to recognise this and for NATO to give a similar undertaking. That is surely necessary if we wish to live in peace with Russia.

What does the crisis tell us about the West? Once military intervention has been ruled out, only sanctions and attempts to isolate Russia remain. So far, there has been a remarkable degree of consensus within the European Union but, as last week’s Council illustrated very clearly, this may well not last as President Putin is seeking to divide and conquer. It is possible that there will not be the required unanimity when we renew the current sanctions, particularly tier 3. As over Georgia, economic interests will prevail. There will be business as usual. For example, last week, we saw Russia’s incremental quasi-annexation of South Ossetia to provide a possible precedent for Donbass.

What does the crisis tell us about the UK’s role? We recall that the UK was one of the four signatories of the Budapest declaration 1994, which has now been massively breached by Russia redrawing national boundaries. The fact that we were not part of the EU team at Minsk can be construed only as a signal of our diminishing status.

How should the West respond? On the economic side, clearly we must mobilise western capital, with conditionality, for Ukraine. We should continue to assist with constitution building with the Venice commission and other groups, and particularly with proposals for decentralisation. Just as Ukraine will

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have to deal with Russia for energy supplies, we should aim to make progress with Russia in areas of policy of common interest. Russia apparently showed a very positive response at the pre-conference on the non-proliferation treaty. Other areas include counterterrorism, ISIL and Iran. We should maintain sanctions but be ready to ratchet down if Russia continues broadly to observe Minsk II. Overall, the trust has disappeared.

Finally, Galbraith said something like, “All foreign policy decisions involve a choice between the disastrous and the unpalatable”. It would be disastrous to provide Ukraine with US arms. Can one imagine the effect when the first Russian soldier was killed by US guns? It would, nevertheless, be unpalatable but realistic if we were to allow some time for monitoring the implementation of Minsk II.

Crimea is not mentioned in Minsk II. Surely, like it or not, it is now permanently part of Russia, symbolised by the fact that Russia is spending €3.5 billion to construct a 19-kilometre bridge that will link Crimea across the straits to what it would call its motherland, to be completed by 2018. A credible referendum held in Crimea now would probably confirm the illegal one. It is absurd for the US to argue that sanctions must remain until Russia gives up Crimea, which would mean indefinitely. Obviously the options with regard to Donbass are very difficult and different; there would have to be negotiations over the autonomy measure. It is also unpalatable to yield to Russian aggression and lies, but we shall have to live with the new, nationalist Russia: keep doors open, but sup with a longer spoon. Almost 70 years after Kennan’s historic article, we should perhaps re-examine the case for containment.

5.11 pm

Lord Kerr of Kinlochard (CB): It is a great pleasure to hear the noble Earl, Lord Oxford and Asquith, demonstrate how viable it can be to this House to have the participation in our debates of an intelligent former member of the Diplomatic Service. It has been a very long wait, I can tell you.

When I served in the embassy in Moscow, nearly 50 years ago, our boss in London, the superintending under-secretary, was a ferocious man who spoke 14 European languages and had spent the war in Moscow and Kuibyshev, where the embassies were moved when Hitler’s army got near Moscow. He demanded quite a high standard of analytical skills from those who worked for or to him, and of course in the embassy it was a sine qua non that everybody spoke Russian. Our ambassador was an extremely lucky man, because he not only spoke brilliant Russian but was lucky enough to be the brother of the noble Baroness, Lady Warnock.

That is a shameless hook on which to hang the fact that I greatly regret the news that the noble Baroness will stand down from our House this week. I speak only for myself, but I think the whole House will agree that the penetration and focus of the intelligence and judgment that she has brought to bear in our debates has been extremely striking. It used to light up both the University of Oxford and the University of Cambridge, it has lit up our debates, and we will miss her very greatly indeed.

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The point in the excellent report by the committee of the noble Lord, Lord Tugendhat, on analytical skills is correct. The Foreign Office has lost a good deal of the expertise that Duncan Wilson and Tom Brimelow had, but it may have something to do with lack of resources; relatively speaking, and absolutely, the Foreign Office is much less well resourced now than it was then.

On the substance of the report, one has to start with Crimea. President Putin has now admitted in a public interview that he decided on 22 February last year to annex Crimea. That was three weeks before the sham referendum on the Crimean peninsula. He made up his mind even before there was any attempt to generate a grievance among the Russian speakers. The OSCE High Commissioner on National Minorities had just confirmed that there was no threat to the Russian-speaking people in Crimea. The whole excuse for annexation was manufactured.

I am not terribly happy with the Minsk agreements for many reasons, but one of them is that they say nothing about Crimea. Moreover, the European Council has, in a way, added to the problem by deciding that the sanctions would terminate in December, when the Minsk programme terminated—if one were to assume, perhaps implausibly, that the Russians carry out the full Minsk programme—so it is entirely related to action pertaining to the Donbass. What about Crimea? Is a policy of non-recognition quite enough as a response to the first major change in the post-war settlement and a breach of all our basic texts, including the Helsinki text and the Paris charter? Is it enough just to look the other way? In particular, is it enough for this country, as a signatory of the Budapest memorandum of 1994? Then, with our partners the Americans, the Ukrainians and the Russians, we committed ourselves to ensuring that the territorial integrity of Ukraine was respected, that no economic pressure was brought on Ukraine and that no violence, or threat of the use of violence, was brought against Ukraine. The Russians have clearly breached all three commitments. What do we do? Do we do nothing at all? It does not add to the credibility of such texts if we do nothing at all. The Ukrainians would not be in the fix that they are in today if they had retained the nuclear weapons that we and the Americans urged them to hand over. They handed them over in exchange for this text, but is it just a bit of paper? It has John Major’s name on it, and John Major is an honourable man. Would it not be dishonourable to do nothing about it now?

I have grave doubts about whether sanctions will do the trick. Sanctions do some damage, but the sanctions that do most damage to the Russian in the street are the counter-sanctions on Russia’s imports of our western consumer goods and foodstuffs. There are shortages in the shops; the Russians see that and they blame NATO—they blame us. It has accentuated the spiral of the narrative of plucky little Russia under threat from the wicked West. I can see that if you tightened sanctions so that they actually affected the Putin inner circle, as the American sanctions do and ours do not, you might achieve more. But, frankly, I do not think that this will be done by sanctions, and it will not be done by a ceasefire, which will probably be honoured no better than it has been in the past.

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We have to raise Putin’s perception of the price to him of carrying on doing what he is doing to Ukraine. We first need to convince him that we would not let Ukraine collapse economically and not let it go completely down the tubes. The report by the committee chaired by the noble Lord, Lord Tugendhat, has an interesting suggestion at paragraph 282 that we call an international conference of potential donors. I do not know about that. I certainly think that it would be very good to know the Government’s view about that. The Finance Minister of Ukraine was in London yesterday seeing the Chancellor of the Exchequer. Did Mr Osborne offer any help? I do not know, but I hope that we are offering help.

On the question of arms, I disagree with the noble Lord, Lord Anderson. I think we need to convince President Putin that we would not let Ukraine’s defence forces collapse. I am not arguing that we should send UK Armed Forces, and neither is President Poroshenko, but he is asking for people to send arms. If we regard Ukraine as an independent country and regard him as its legitimate leader, does he not have a right to self-defence? I have difficulty with the argument that it is provocative to the aggressor to assist the victim, and that appears to be the argument: the Russians would not like it, so let us not do it. I do not buy that argument.

I agree with everything that the noble Lord, Lord Jopling, said about NATO. I think that is exactly right. It needs to be clear that Article 5 means something to us. I entirely agree with that, but I disagree with those in the US Congress who argue that we now need to see tactical nuclear weapons deployed in the Baltic states and in Poland. That seems to me very rash. We should stick to the 1996 NATO position that there is no plan, intention or reason for the forward deployment of tactical nuclear forces.

Conversely, I think that the Americans were wrong as regards the 2008 NATO communiqué and the invitation to Ukraine and Georgia to join the alliance. That was a mistake. It would be good to make it clear to all parties that it is a dead letter, that NATO’s invitation is not currently open, and that the Ukrainian regime is not currently seeking such an invitation. If that could be codified in some way, it might contribute to finding a solution, because I do not think that the solution lies in ceasefires or sanctions but in finding a settlement. One needs to find out what President Putin wants and see to what extent that is compatible with what is right for Ukraine—a judgment for President Poroshenko.

The committee is right to suggest that there is a dialogue to be had between the Eurasian Economic Union and the EU. It is also right to suggest that the President of the European Council, the former Prime Minister of Poland, has a very important part to play in this, not just operationally but given that he is who he is.

There is one last thing for us to do that is really rather important. I apologise to the noble Lord opposite for carrying on, but I did speak about general matters for a moment or two at the start of my speech. Yesterday, I was surprised to note that the Prime Minister’s Statement on the European Council did not mention the first, and for most members of the European

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Council the most important, matter discussed at that Council, which takes up a third of the Council’s conclusions: the plans for energy union. These will be extremely difficult and may well end up much less ambitious than the original Commission plans, but this is the real way to respond to an aggressive Kremlin. We need to reduce the perceived dependence on energy from Russia. Actually, we are not dependent on it; Russia is dependent on us. It needs to sell to us, and that need is greater than our need to buy from it. But in some member states, particularly Austria and Hungary, the pressure of the energy link is working perversely as regards the interests of the European Union and Ukraine, so I would say that one of the most important things to do is to press on with energy interconnection, both electricity and gas, and get as far as we can get, realistically, with an energy union.

5.24 pm

Lord Trimble (Con): My Lords, I have the pleasure of being a member of the sub-committee that produced this report and it is only right that I should start by echoing the praise addressed to the noble Lord, Lord Tugendhat, for his chairmanship of it, and to the staff who helped so much in producing the report.

It is also a pleasure to have been here for the maiden speech of the noble Earl, Lord Oxford and Asquith, who referred to the turning point for Poland many years ago. Going back to the immediate post-Soviet period, Belarus, rural Ukraine and Poland were all much of a muchness in economic prosperity. However, in the years since, Ukraine has not developed much and Belarus has managed a little, but Poland has surged ahead enormously and is now many times more prosperous than those other two countries. That example was instrumental in fuelling the protest in Ukraine that led to the change of regime and the turning point in its orientation between Russia and western Europe. We then saw Putin realising that, against that shift, he had little chance of seeing again an Administration in Kiev that would be malleable from his point of view. He proceeded to try to minimise his losses by being revenged on Ukraine and trying to ensure that it was destabilised—at best, by another frozen conflict; at worst, perhaps by the scenario that the noble Earl, Lord Oxford and Asquith, pointed out. That is very much the background.

Reference was made to the first thing that Putin did, which was the operation in Crimea. The noble Lord, Lord Kerr, reminded us that Putin has confessed that he had planned that long before his Crimean referendum, which has also been rightly criticised in this debate. I remind Members that another referendum took place at the time of the break-up of the Soviet bloc. It was held by the Ukrainian Government, on whether Ukraine should become independent. At that point, the USSR still existed. The referendum was held on 1 December 1991; 84% of the population voted and 90% were in favour of independence. However, the interesting figures were in the Luhansk oblast, where the vote for independence exceeded 83%. In neighbouring Donetsk, it reached almost 77%. Even in Crimea, more than 54% voted in favour of independence. In Sevastopol, the figure was 57%. Those areas have a significant Russian-speaking population

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and, in 1991, when faced with the question of whether Ukraine should leave the USSR and create an independent state, there were clear majorities that were well above the percentage in the Scottish referendum. That is something we need to bear in mind.