I turn to the committee’s report. Possibly one of the most crucial observations in the recommendations is in paragraph 168, which states that,

“the EU and Member States face a strategic question of whether Europe can be secure and prosperous if Russia continues to be governed as it is today”.

It goes on to say that Russia has created a,

“geopolitical competition in the neighbourhood”,


“The EU’s capacity to influence the internal politics of Russia is limited, and Member States have not demonstrated an appetite to make the attempt. Therefore, if influencing Russia’s future governance is not on the agenda, Member States instead need to devise a robust and proactive policy to manage competition with Russia in the shared neighbourhood”.

The report goes on:

“The first step is … to distinguish between the legitimate and the illegitimate security interests of Russia”,

stating that Russia,

“has a right not to be excluded from the eastern neighbourhood. However, it does not have the right to deny or threaten the sovereign rights of its neighbours”.

That should very much be the starting point of one’s approach.

As to the subsequent steps, I find myself in agreement with the noble Lords, Lord Jopling and Lord Kerr: the first priority is to deter future aggression. We were hoping for a ceasefire in Ukraine and hope that there will be no further action, but it is hugely important that we deter, and put sufficient resources in key places to deter. It is interesting that we are discussing this having heard a Statement about the Falkland Islands, one element of which concerned making sure that there is effective deterrence there. I had jotted down the Baltics and the Balkans as places we should prepare to deter Putin from. I had not thought that the Falklands would come into the frame so quickly and we will no doubt hear more about that. However, in the Baltic states, and possibly in the Balkans, we need sufficient forces on the ground to up the bar for Putin so much that he is deterred from aggression.

The question will arise about the nature of the support that we give to Ukraine, which is very much the position that the noble Lord, Lord Kerr, spelled out. Clearly, we need to give it substantial economic and financial support. We should do what we can to turn it into a stable and prosperous state. The EU does that quite well and it ought to make it its priority in this case, whereas deterrence is clearly the priority for NATO action. However, in addition to improving the economy, that will be extremely difficult if Russia continues with its programme of destabilisation.

The question then arises of what further support we give. Here I disagree with the noble Lord, Lord Anderson, about supplying various degrees of military support. That has to be looked at and done carefully, but there is no reason to believe that it cannot be done effectively. The noble Lord, Lord Anderson, commented on the capacity of the Ukrainian forces to handle that.

24 Mar 2015 : Column 1346

Not so long ago, I heard a person with considerable military experience refer to some of the assistance that the US has already given to Ukraine. In particular, it has given a radar system that will detect the use of mortars, so that the Ukrainians can work out exactly where the mortars are being fired from and adjust accordingly. This military gentleman praised the skill with which the Ukrainian forces had used it, but they do not yet have a counter-battery capacity, which would return fire at the mortars. That is possibly the next step to consider, but I leave that to others, particularly in view of the hour.

Finally, we have heard a lot of nuclear sabre-rattling from the Russians. They have done this consistently over the last year or two, dropping hints and reminders of their nuclear capability. It even happened yesterday, with some threats directed towards Denmark and the Danish navy. This very much worries me, because it is the sort of thing where mistakes can happen. If the Russians keep talking about their nuclear capability, they might talk themselves into doing something foolish. Deterrence there is of the normal form, but I very much hope that we find other ways of getting through to the Russians the message that this is a step that should never be taken.

5.32 pm

Lord Maclennan of Rogart (LD): I begin by congratulating my colleague and noble friend Lord Oxford and Asquith on a most penetrating speech. It was very helpful that he brought his own experience and knowledge to this debate. I hope that we will hear more from him as these problems develop. I cannot think that they will go away immediately. I also want to express the sense of privilege that I had to serve on Sub-Committee C in preparing this report. I thank the clerk, the policy adviser and, above all, our chairman for his very persistent work in producing what I think is one of the best reports that has emerged from the European Union Select Committee.

The crisis that we face in the deterioration of relations between the EU and Russia has to be acknowledged and acted on. It is not entirely due to Russia. In my opinion it has overreacted to issues that we have given rise to. We heard evidence—it was reported most knowledgably by Rory Stewart MP—that the Foreign Office has downgraded its capacity in Moscow, and indeed in the Foreign and Commonwealth Office itself. We also heard that that had happened with the EU representatives in Moscow. It seems that we have blundered into this mess through failure to recognise what was happening in Russia.

The breakdown of the Soviet Union was enormously humiliating to the political class in Russia, but also to the citizenry. The citizenry has been appealed to by the political leaders. We have seen the troubles in Abkhazia, South Ossetia, Georgia, Transnistria, and Nagorno-Karabakh and have not reacted strongly enough to them. It is not suitable now to neglect the Crimea as something that has been achieved or set back. My daughter, who is a film-maker, was in Ukraine three months before the balloon went up. She made a film about Ukraine and the Crimea that was, in some sense, a documentary. It demonstrated the great love the Russians have for the Crimea and how, over the

24 Mar 2015 : Column 1347

generations, they have built up their connections in stone. It was shown at the British Film Institute after the explosion and I think it was very observant.

We do not seem to have had a sufficiently coherent response to what has been going on in Russia. One of the pieces of evidence that we gained when we were in Brussels was how the trade department had not kept the political departments fully aware of the development of the association agreement with Ukraine; the AA took the observers by surprise in Europe. That was a failure of the European Union’s structure. It is also clear that Russia has been very concerned about its security.

It seems to me that we should have been engaging in constant dialogue with Russia about those matters in which we share an interest. The partnership and co-operation agreement has, of course, been suspended now, which is a great misfortune. The involvement of Russia with our interests is clearer. In 2013 the natural gas imports from Russia to the European Union were 39% of its requirements. We should have had more engagement with the setting up of the Eurasian union and we should have got to grips more with the Eastern Partnership and the six countries of the former Soviet Union. We have been too slow to reappraise our relationship and that, I think, is well brought out by the report.

How can we get back into dialogue? I agree with those who say that we cannot abandon sanctions or the pressure that we are putting on Russia so long as it is prepared to split up sovereign nations. However, there are many matters in which we could engage. We can develop a sense that we have a common interest in a security architecture and in resolving the economic problems that are afflicting both the eurozone and Russia. Because of our and its membership of the Council of Europe, we can discuss the European Convention on Human Rights. We can pick up Putin’s assertion in 2010 that he wanted to see an economic space from Lisbon to Vladivostok. I think he actually meant that co-operation was to be thought about. We must also remember that culture, education and science are things that we have in common, and we must appeal to the citizenry of Russia in continuing to cement our dialogue. We do not want Russia to feel drawn increasingly to the East and out of contact with the West. That, it seems to me, is the priority that we have to face now.

5.42 pm

The Earl of Sandwich (CB): My Lords, we must all deplore the tragic loss of life caused by Russia’s invasion of Crimea and its infiltration into eastern Ukraine and, before that, Transnistria and two areas of Georgia, flouting international law. Nothing that is said today about mistakes by the EU or ourselves can take away from the brutal actions of the present Russian Government. Many, many Russians have opposed the latest invasion—some were parents of fallen soldiers—but they have been silenced by oppression and propaganda. That is why I welcome this debate, having served on the committee, and I warmly thank the noble Lord, Lord Tugendhat, for his patient chairmanship.

This debate could be called Russia’s nimby because the essence of it is the extent to which Europeans should intrude—or, to put it more politely, be invited—into

24 Mar 2015 : Column 1348

Russia’s back yard. Historically, we Europeans should perhaps have learnt our lessons and realised that the great bear was bound to growl and lash out the moment any smarter, smaller animals approached him. But of course there is also a clash of civilisations. We in the European Union are naturally proud of ours. We think that we have got the human condition about right and that the Copenhagen criteria of justice and the rule of law should eventually suit everyone in the world. What else, we say, are the Universal Declaration of Human Rights or the European convention for if they are not statements of global faith? Universality for many liberal-minded people now is not even debatable.

However, we have to acknowledge that there are degrees of awareness and belief. There are Europeans in Russia and Russians in Europe, all with very different standpoints. Mrs Thatcher’s simple test was to ask whom one could do business with. If we are selling our house to an oligarch, presumably we are not in the least concerned about his attitude to human rights, but if he proposes marriage to one of our family then we begin to be concerned about his motives. I believe that we should make much more effort to understand Russia’s point of view. The Russians say that the EU has been treating Russia as though it was a prospective EU candidate—I quote from the evidence—

“prepared to sacrifice its interests and sovereign rights for the sake of future membership”.

I think the committee accepted that there is some truth in that.

At the end of the Cold War, there were genuine overtures on both sides and discussions of Russia’s future—if not within the EU, at least in harmony with what the EU was doing. The noble Lord, Lord Judd, described that era. Then, after Yeltsin in 2000, the scene changed again and this is where we say that the EU and its member states were “sleep-walking”. I stand by that phrase.

The importance of the new Commission’s review of its neighbourhood policy, coming up in May, is that it inevitably includes countries such as Ukraine which are already within the Russian sphere of influence. As the heroes of the Maidan in Kiev argued a year ago, the EU brings potential economic and social benefits, depending on the reforms that must pave the way. In Ukraine, especially, alongside Russia’s influence there are equally powerful religious beliefs and cultural traditions which come down from Poland and Austria and which are entirely European, as there are, it can be argued, with French and other influences within Russia, so on that score the nimby theory breaks down very quickly.

Time should be a healer, but how rapidly we seem to move on from our universal belief. We are already forgetting about Crimea. The OSCE has just cancelled a photographic exhibition in Vienna marking the anniversary of the Crimean invasion. The Ukrainians cannot believe that the West, having condemned Russia’s military action so recently, should now even disown the photographer.

The situation in Georgia, seven years after the war with Russia, remains very serious. There is considerable uncertainty in Abkhazia and South Ossetia over the borders, visas, the use of language, Russian subsidies

24 Mar 2015 : Column 1349

and many other critical issues. I visited Georgia last July just after the signing of the new association agreement. I know that the agreement still promises economic and trading advantages, but trade has stagnated, tourism is still suffering and the political scene is fragile following the reshuffle of Ministers.

In our report we said that we should look forward to renewed EU dialogue with Russia, and this is now being bravely led by Chancellor Merkel. We should build upon our mutual interests in foreign policy, such as the nuclear negotiations with Iran and possible ways forward in Syria. We should recognise our strong cultural ties and the value of educational exchanges. The right reverend Prelate mentioned the importance of churches and non-governmental organisations. All these must be rebuilt. We should also take part at some level in the 70th anniversary commemorations in May. I hope that the Minister will clarify what will be happening then.

It is conventional to say that we have been well served by the staff. However, more than that, we have depended on the skills and expertise of our clerks, Roshani Palamakumbura, Sarah Jones and, before her, Julia Labeta, and our adviser Dr Samuel Greene. To all of them we owe a debt alongside the gratitude that we owe to our chairman.

5.49 pm

Lord Lamont of Lerwick (Con): My Lords, as a member of Sub-Committee C, I join with colleagues in thanking the noble Lord, Lord Tugendhat, for his great skill as a chairman and his patience in guiding us to our conclusions. It was not always easy as there was a certain amount of division in the committee. I also pay tribute to our policy advisers, Sarah Jones and Roshani Palamakumbura, and our adviser Sam Greene.

I join in the general condemnation of Russia’s and Mr Putin’s actions. He runs a paranoid regime, where his opponents are imprisoned and critics harassed or worse. The annexation of Crimea was illegal and an explicit denial of Russia’s promise to respect its neighbour’s territorial integrity. It is obvious, too, that Mr Putin, in exchanges, has not acknowledged or told the truth about his country’s involvement in eastern Ukraine. However, having said that, the actions of a state—even an authoritarian state—are rarely the consequences of one person, and, in the few minutes that I have, I would like to explore precisely why Russia has reacted as it has done.

Lord Salisbury, the great Victorian Prime Minister, once remarked that the first evil in diplomacy was war and the second evil was an obvious diplomatic triumph. He presumably meant that the latter often sows the seeds of the former. People often quote Mr Putin’s remark that the dissolution of the Soviet Union was the greatest disaster of the 20th century, as though that in itself was a sinister observation. I suspect that many people in Russia share that sentiment, not because of any great attachment to communism but because of the economic pain and the chaos that followed.

Robert Gates, the US Defence Secretary under George W Bush and also under President Obama, said:

24 Mar 2015 : Column 1350

“When Russia was weak in the 1990s and beyond, we did not take Russian interests seriously. We did a poor job of seeing the world from their point of view, and of managing the relationship for the long term”.

While we were taking evidence in our committee, we heard much argument over whether assurances were or were not given to Russia in the past about the expansion of NATO. Sir Rodric Braithwaite, the former UK ambassador to Russia, was quite emphatic that such assurances were given. He provided the dates and the names of the people who were present, including himself, and said that these assurances were confirmed in Foreign Office documents. Whether these assurances were given or whether a different interpretation can now be placed on them because circumstances have changed, it is clear that the Russians were deeply unnerved by the expansion of NATO.

This was not a view expressed only by President Putin: it goes back to President Yeltsin, who, in 1995, at the time of NATO’s bombing of Serbia said:

“This is the first sign of what could happen when NATO comes right up to the Russian Federation’s borders … The flame of war could burst out across the whole of Europe”.

In 2008, President Putin warned that including Ukraine or Georgia in NATO membership, as had been proposed at a summit in Bucharest, would be perceived as a direct threat to Russia.

Extraordinarily and ironically, George Kennan, the US diplomat and the architect of western containment of the Soviet Union, expressed his anxiety in 2008 after the first round of NATO expansion. He said:

“I think the Russians will gradually react quite adversely, and it will affect their policies … I think it is a tragic mistake. There was no reason for this whatsoever. No one was threatening anybody else”.

We may regard NATO as a defensive alliance, but it was originally aimed against Russia. Security can be a zero-sum game: one person’s security is another person’s insecurity.

Perhaps we do not sufficiently appreciate what a big decision it was when Russia allowed Ukraine to declare its independence. Russia was giving up a territory with which it had the most profound emotional and spiritual links, going back 1,000 years to the time when Kiev was the first Orthodox capital of the country.

We in the West and in the EU say that we do not recognise spheres of influence. Does this really accord with history and the realities of the world today? Try telling that to Cuba, Venezuela, Nicaragua or Bolivia. For Russia, of course, EU associate arrangements were the stepping stone to full EU membership, which it saw in many cases as leading to full NATO membership.

When we were taking evidence, we heard plenty of criticism of the EU’s handling of the proposed association agreement and comprehensive free trade agreement with Ukraine. Insufficient consideration appears to have been given by the Commission to the tension between the free trade agreement and Mr Putin’s proposed Eurasian Customs Union. Some officials who appeared before us admitted that almost no thought had been given to Russia and the effect on the Russian economy, and that there had been little contact with Russia even though the impact on the Russian economy was potentially considerable.

24 Mar 2015 : Column 1351

We may not like Moscow’s position, but it is not difficult to understand the logic. Ukraine is a huge expanse of flat land that Napoleon and the Nazis crossed in order to invade Russia. Ukraine is seen by Russia as a buffer state of enormous strategic importance. After President Yanukovych was removed, proposals were put forward in the Ukrainian Parliament to cancel the Russian lease on the naval base in Crimea. Russia would have lost access to the warm waters of the Mediterranean, and it allowed President Putin to speculate about having a western base in Crimea.

We all know about Winston Churchill’s speech in 1939 about Russia being a riddle wrapped in a mystery inside an enigma. However, he also said:

“It cannot be in accordance with the interests of the safety of Russia that”,

the West,

“should plant itself on the shores of the Black Sea”.

Churchill would have understood Russian fears—even if they were illusions—about its base in Crimea.

I have concentrated on viewing the situation from a Russian point of view because it needs doing. However, we have to deal with the situation as it is: to understand is not to forgive. I support the imposition of sanctions. I agree that if there is not further progress, sanctions should be increased. I agree that we should stand by our Article 5 commitments. It is important that Minsk 2 should be upheld. This applies to Mr Putin and, equally, to Mr Poroshenko and the Government in Kiev. They should not be allowed to add new conditions to the agreement.

There are other things that we should be doing and encouraging. First, we need to consider devolution—even asymmetric devolution—within Ukraine. Secondly, we need to fashion an economic rescue plan for the country, funded jointly by the EU, the IMF, Russia and the United States. Lastly, and most importantly, the West should agree to Ukraine as a buffer between NATO and Russia, akin to Austria’s position in the Cold War. We should publicly rule out NATO expansion to include either Georgia or Ukraine.

We need a prosperous Ukraine—one that cannot be presented as a threat to Russia and one that will allow the West to repair its relationship with Moscow. We need Russia for many different issues and it is in all our interests to find a solution that enables us once again to have a better relationship with Russia and end this tragic situation.

5.58 pm

Lord Soley (Lab): My Lords, I have congratulated the noble Lord, Lord Tugendhat, his committee and staff before on an excellent report. It should be read in conjunction with the excellent recent report on soft power from the committee chaired by the noble Lord, Lord Howell. The two link up rather well.

I rather take the view, as the noble Lord, Lord Lamont, said, that we need to understand the Russian position, but I also strongly take the view that when you understand bad behaviour and its origins you do not justify it. The noble Lord made that point in a single line. It is very important. It is easy to look back on Russian history in the 20th century and see what a

24 Mar 2015 : Column 1352

disastrous history it was: two world wars, famine, dictatorship, failed revolution, collapse into ignominy in the later part of the century. Russia is not a country you would have wanted to have been born into in the 20th century.

Just as that is true, the other side of the same coin is that you would not have wanted to have been born in one of the eastern European states that were occupied by the Soviet Union or, as those states saw it, by Russia. Indeed, I remember seeing groups of German troops in what was then East Germany, and a large group of armed Russian troops a few hundred yards down the road. That was common throughout, because those countries were held in occupation, and what they remember is not only the occupation but the failed revolutions, whether in Hungary or Czechoslovakia, and the brutality with which they were put down. They also remember, and this is particularly true of Ukraine, the mass famines and deportations that were driven both by the Nazis and by the Russian communists. In other words, there is an appalling history in this belt of countries that makes it easy to understand why they are behaving as they are.

As I say, understanding behaviour is not the same thing as condoning it, so it is also important to recognise that this is an incredibly difficult area for the world to address and one that in my view, as I have said before in the House, is profoundly dangerous precisely because it is difficult to predict how it is going to develop. Several people have said that they think that Mr Putin is a skilled strategist. I do not think he is, but he is extremely good on tactics. I am deeply worried. In what I thought was a rather perceptive speech, the noble Earl, Lord Oxford and Asquith, hinted that the problem of Russia under Putin is that there is not really a strategy that in the long run will be beneficial either to Russia or to the other countries in the region. It is a profoundly dangerous strategy, because at the very least it will blow up into a major conflict in one area or another.

One of the problems driving Russia at the moment, and to which many speakers have referred, is that of nationalism. Mr Putin is a strong nationalist. The problem with nationalism is that if you use your Russian populations in the border areas, as has been done in Ukraine, you cannot necessarily control them. The noble Baroness on the Front Bench who is to respond to the debate for the Government will know that I was saying some years ago that there could be no peace settlement in Syria because Putin would not allow it until Assad was winning. That has turned out to be true. It is not true not because there is necessarily some wickedness in Putin, but because he believes that all this is about the loss of Russian world power and Russian nationalism, which are so important to him. That very nationalism is dangerous. It is also out of kilter with what is happening in the rest of the world.

One thing which the report brings out so well, and which is probably the central message that I would like to re-emphasise, is that the European Union does not have a clear strategy for how to deal with this. In fact, what troubles me, and as the report indicates, there are divisions growing within Europe. People have mentioned Hungary, but I am not sure what is going to happen with Greece at the moment—something that has been

24 Mar 2015 : Column 1353

mentioned outside this House. One can see that there is the danger of a certain fragmentation of a coherent policy within the European Union, and it is obviously in Mr Putin’s interests to play on that. He would like to see greater disintegration, if you like, within the European Union and NATO.

That raises the question: how can we in the European Union make sure that we have a common policy towards Russia? When people say to me, “Oh, at the end of that road there is a common foreign policy and a common defence policy, and that will lead to a European nation state”, perhaps the first thing I would say is that history tends to indicate that a severe external threat often creates a united state in some form. Indeed, we need only look back to the origins of the United Kingdom to see how we created a nation state out of four separate nations in large part because of threats from outside of what were then religious wars. We do not have to go down the road of a common European foreign and defence policy, but my goodness we really do have to have a clear strategy towards what Mr Putin is doing in Russia.

This is not just about the issues in Ukraine; there are issues along several of the boundary areas. It is also about the corruption in Russia. It is about the fact that polonium-210 can be transported from a nuclear reactor somewhere in Russia across to Moscow and then to London, be used to poison a person, and go back again with no action taken by that Government. It is the whole issue of the Russian policy of trying to push at boundaries in a way that is destabilising not just for Europe but for the rest of the world. That is one of the reasons why I rather like the recommendation made in paragraph 282 that we should organise an international conference to help Ukraine not only on economic regeneration but on dealing with the corruption that is inherent within Ukraine itself, because that has been part of the problem. We need to do that not just in the European context but externally. I really do not believe that some of the other emerging great powers—India, China, South Africa, Brazil—think that it is a good idea to have a major power changing borders by force. They certainly do not think that it is a good idea to get a power to give up its nuclear weapons, as Ukraine did in 1994, and then start dismembering that country. What does that do for nuclear disarmament anywhere? It is a profoundly serious problem.

I have great respect for the Russians, but a danger pointed out by the noble Lord, Lord Kerr, with regard to sanctions is that one of the things that drives Putin is his belief that the West is decadent, whereas Russia can suffer bravely and with courage. That is what sanctions do. I do not have an alternative and I think that we have to impose sanctions—I strongly support them at the moment—but we need to recognise how intensely serious this issue is.

To my mind, the problem of how we deal with Mr Putin’s Russia is a greater threat to world peace than what is happening in the Middle East. The Middle East is actually containable; Russia is not containable, and at best this situation has the makings of a new Cold War drifting into the future. It is not easy, but I will say this to the noble Baroness who is going to respond for the Government: please can we start doing

24 Mar 2015 : Column 1354

all we can within the European Union to get a clear and coherent strategy on our foreign policy reaction to Russia and to the dangers in the border areas? There are answers; they are far too complex to deal with in my final minute, but they are there and they need to be developed in full.

6.07 pm

Lord Owen (Ind SD): My Lords, I have an important interest to declare, which is that I have been involved in business in Russia since 1995. I started that in the belief, which I still hold, that it is through commercial interchange that eventually we will restore some of the optimism about Russia’s future that many in this House have had for a number of years, although we have certainly found ourselves and our judgment somewhat questioned by the experiences in Ukraine.

We have heard two outstanding speeches. The maiden speech of the noble Earl, Lord Oxford and Asquith, was quite remarkable and I find myself agreeing with almost all of his analysis. I have watched his career with great interest for some decades. He certainly does great service to the memory of his great-grandfather, whom I have been writing about with interest in The Military Conversations of 1906-1914. We look forward to hearing much more from the noble Earl. The other speech that I found myself agreeing with—we do not always agree on these matters—was that of the noble Lord, Lord Kerr. His words on sanctions are well worth careful scrutiny. We often embark on sanctions with the best of wishes and intentions, but unfortunately they can yield poor results and they often produce the very effects that we do not want, particularly in the country that is most affected by them. In this case, a great many countries are affected.

All the members of the committee deserve to be congratulated on the report and on the tone that they have brought to this discussion. It is very different from the tone of discussion, I dare say, in another place and particularly in the newspapers of this country. We have to change that. We have to develop a much greater understanding of the complexity of the issues and we must do so fairly urgently.

What is Britain’s role? Paragraph 82 of the recommendations and conclusions says:

“As one of the four signatories of the Budapest Memorandum (1994), which pledged to respect Ukraine’s territorial integrity, the UK had a particular responsibility when the crisis erupted. The Government has not been as active or as visible on this issue as it could have been”.

That is a matter of great regret. During the crisis inside Ukraine and in Kiev, the French, German and Polish Foreign Ministers went into negotiations. In the light of the fact that, no sooner was the ink dry on that agreement, it was effectively torn up in front of everybody’s eyes, it may have been quite a good thing that we were not involved in that rather deplorable example of EU negotiations, but staying out of that particular involvement carried with it our then acquiescing in what I think was the brave and necessary involvement of the President of France and the Chancellor of Germany in direct negotiations with Ukraine and Russia.

This country has a responsibility to try to find a way of dealing, in international law, with the annexation of Crimea. This will not be changed, probably for a

24 Mar 2015 : Column 1355

number of years, but we need to lead the discussion, because eventually it will have to be changed. Of course, if Ukraine and Russia can reach an agreement, it will be settled in international law. That is probably the most desirable outcome and it eventually will have to be part of such an agreement. But to help that process we should point to the necessity of a wider discussion—widening it means that it is always easier to reach agreement—and indicate that one area that could be brought into that discussion is the question of Moldova and Transnistria. Putting that into the international discussions over the annexation of Crimea would be sensible. There is a lot to be said for widening this to all the disputed areas and boundaries in and around Europe and central Asia, which will come back to haunt us if we do not settle them.

Among the other aspects that have been raised in this debate, a great deal has been said about this whole issue of why Russia feels encircled. History shows us exactly the same: if you look to the origins of the 1914 war, there is no question but that encirclement was a big factor. It was felt not just by Russia at various stages but by Germany and by other countries. We need to respect that in international affairs.

One person who does not carry much weight these days in Russia is Mikhail Gorbachev. There is no doubt, in my judgment, that he can fairly claim that, with the full might of the Soviet Union behind him, he could have clamped down and there would have been no unification of East and West Germany. There has been some correspondence recently in the Guardian, on 6 and 9 March, with a NATO spokesman claiming, unwisely I think, to interpret Mikhail Gorbachev’s actual position. Gorbachev was under no illusion during the negotiations that went on following the fall of the Berlin Wall and throughout that period that his sensitivities on behalf of Russia—historic sensitivities—were going to be respected. Reference has been made to Ambassador Braithwaite’s assessment, which I value and trust greatly. More importantly, one should go to the text of the main spokesman for the West, President George Bush Senior, who made important statements and conducted one of wisest pieces of diplomacy in relation to the United States and Russia that we have seen for 50 years. His Secretary of State, James Baker, also made commitments. You cannot tear these up or ignore them, although they are not an excuse. Gorbachev said about the present crisis:

“One of its causes, though not the only one”—

an important reservation—

“is the unwillingness of our western partners to take account of Russia’s point of view, legitimate interests and security. Verbally, they applauded Russia, especially during the Yeltsin years, but in deeds they took no account of it. I am thinking mainly of Nato’s enlargement, the plans to deploy a missile shield, and the west’s actions in areas important to Russia (Yugoslavia, Iraq, Georgia, Ukraine). They literally told us: it’s not your business. As a result an abscess built up, and burst”.

We must return to this area to try to find our way through these difficult questions.

The contribution of those who have said that Russia has to be part of the solution is also important. The economic strength of Ukraine has to be built up, but it will not be built up just by relying on EU disbursals, the IMF or anybody else. Russia has an interest in Ukraine: it will invest there and will need to become a

24 Mar 2015 : Column 1356

partner in investment. It is not going to be easy; it will be very difficult to break down the hatreds, almost, that have emerged in the last few years between people in Ukraine and Russia who previously worked evenly and well together. It will take time.

I suggest that Britain’s role is strategic. At the time, I was not keen on the decision at the NATO summit in Chicago to continue with dual-capable aircraft. In retrospect, I believe that it was a wise decision. I agree with those who have said that there is no case for these aircraft to be deployed now to new NATO members, but I believe that Britain should take a very active part in the whole of that issue and discussion. We may have a role to play. That whole aspect of NATO’s strategy has to be looked at again, but we should not consider deploying such aircraft in sensitive areas. These are issues to which we will return.

6.16 pm

Baroness Neville-Jones (Con): My Lords, I join other noble Lords in congratulating the committee on an excellent report and add my voice to those who have paid tribute to the first-class contribution to our debate from the noble Earl, Lord Oxford and Asquith.

Recent contributors to this debate have emphasised that Russia has legitimate interests. There is no argument about that, but the question in my mind is whether President Putin is a respectable and representative bearer of those interests and whether he deserves the kind of co-operation and regard that I think all of us would like to give to the Russian state. My reluctant conclusion—the evidence seems to me to bear this out—is that it is very difficult to deal with this man on terms that one would regard as honest and straight- forward. He has a track record of oppressing his neighbours. There is no good reason, and no provocation from the West, that could justify what happened in Georgia and the proclamation of the so-called independence of the enclaves of Abkhazia and South Ossetia, for which, I might say, we simply gave him a rap on the knuckles.

He has developed, not just in theory but in action, doctrines of spheres of influence. You can argue about their legitimacy, but the fact is that he has used them to oppress his neighbours and to override the sovereign rights of inhabitants of other countries. He has arrogated to himself the right to protect Russian-speakers irrespective of their citizenship. He has a track record of fairly aggressive activity.

At home, he has shown himself to be a very revisionist authoritarian. He has suppressed domestic opposition, built up military force and drummed up a nationalist agenda which now provides the background against which he can maintain his domestic popularity. He has not concealed this. I do not disagree with those who say that we should nevertheless have regard to Russian interests, but we must do something more effective than we have done so far about his preferred methodology of pursuing his agenda: propaganda, subversive activity in neighbouring countries and skilfully devised irregular military action which is carefully calibrated not to trigger any specific article of the Washington treaty. As a result, we have found it very difficult to deal with him.

24 Mar 2015 : Column 1357

He has obviously been encouraged by the inability of NATO Governments to devise a credible response. I say to those who think that the wise thing to do would be now to rule out NATO membership for either Georgia or Ukraine that they should think of two things: first, the destabilising effect that that statement would have in those countries, which also have interests in the matter; secondly, would Putin really regard this as fair dealing? I think he would regard it as an immense prize, enabling him to gobble up these countries even more effectively. I would be against any such declaration. It is a separate issue whether we pursue actively their membership of NATO and I would certainly not be in favour of that in the present circumstances.

We have to recognise that Putin has demonstrated determination that Ukraine should not be allowed to move westwards—it is part of the area that he wants to keep under his control and in which he can actively interfere. We have been proposing that the possibility of European Union membership should be available to Ukraine. Not only does Putin oppose Ukraine’s membership of NATO, it is increasingly clear that he does not like the implications of an association agreement or of membership of the European Union. I do not think that we can allow those policies or attitudes to stand. The Ukrainians have a right to fashion their own destiny.

As a result of the present situation, we face some fairly unattractive choices. Obviously, one of them is a result of what has happened in eastern Ukraine—to match force with force. That would be disproportionately risky and I would not support it at all. But I agree with the noble Lord, Lord Kerr, that we should actively consider the sale of weapons that will increase the defensive capability of the Ukrainians. I cannot see why they should be put in a position where they are outgunned and outmanoeuvred by separatist forces in part of the country.

These are all calculated risks. The noble Lord, Lord Kerr, also mentioned something that I very strongly agree with; that is, the consequences of the failure of the Budapest memorandum. That has very wide consequences for those who wish to promote, as I would like to see it, a reduction in nuclear proliferation and, indeed, encouraging countries to go non-nuclear. What conclusions do you draw if the result of giving up your nuclear weapons is to be invaded?

The Kiev Government face a difficult task, politically and psychologically. Ukraine has not been a successful country so far and they are now faced with the extraordinarily difficult task of fulfilling their side of the Minsk agreement, which demands that they do certain things, without having full control over the situation on the ground or much certainty that anything liberalising that they do will actually bear fruit. But they have to make the effort and it should be a high priority of western policy, including of our own country, to help them in this task. The Government’s initiative in proposing a good governance fund is excellent, although it will need resources from other countries and a much wider effort on the part of EU member states, along with international agencies, to accelerate the economic development of Ukraine.

24 Mar 2015 : Column 1358

Finally, what about future policy towards Russia? We do need one, as the noble Lord, Lord Soley, rightly said. We need to keep open the door to a more constructive relationship in a post-Putin world—I fear it is going to be a post-Putin world—and, as far as we can, we should try to prevent the spread of antagonism into other areas of policy. We have a strong interest in not having overspill but we must signal the unacceptability of current Russian policy in Europe. I agree that sanctions are not an end in themselves and will not do the whole job but I do not think that we can do anything but continue to signal our disapproval and they have to stay in place, at least until the fulfilment of the Minsk agreement. I hope this will be on time, although I admit that I am not optimistic.

We need to learn some lessons. We need to work against the Russian hardliners, as was said yesterday, projecting our understanding of the world and our values in a sophisticated and well resourced information strategy, which the European Union ought to engage in. We ought to do something about defence. The decisions taken recently by NATO at the Wales summit are a beginning but they are only a beginning, and it is right that we included cyberattack as coming within the purview of Article 5. We need more rapid implementation than we are getting at the moment and NATO needs to revive its almost defunct military planning capability. We need to look at security in the round.

The most recent UK national security strategy did not have European security as a focus. That has to change. European security and the defence of our dependent territories are surely the meat and potatoes of British defence and foreign policy, and we must not allow other threats to our security—I disagree with the noble Lord, Lord Soley; they are not equally deadly—to distract us from the importance of ensuring the security of our own continent. Of course, there is a wider scope to this in the fringes of our continent, which are also increasingly in flames. The capabilities we need cannot be realised for less than the 2% undertaking to NATO. I hope that the Government will stop messing about on this subject, which damages their credibility and undermines the confidence that our allies have in this country.

6.26 pm

Lord Cromwell (CB): My Lords, I declare my interests in this part of the world as represented in the register, and I join the many people who have already congratulated the noble Earl, Lord Oxford and Asquith, on a speech that was both deft and comprehensive. It covered almost all the points that I wished to make and certainly everything I wished to agree with. I look forward to hearing a great deal more from him. I welcome this report and found much in it to agree with. I managed to find a few points that I would like to add.

First, Mr Putin is a creature of the post-Cold War world and, unwelcome though it may be to hear it, the West carries some responsibility for creating the conditions that brought him to prominence. Much has been said today and elsewhere about how the West mishandled relationships with Russia. I do not propose to rehearse all that again in detail now. In brief, Russia—humiliated,

24 Mar 2015 : Column 1359

isolated and increasingly turbulent, and not least as it experienced a very sudden loss of empire—responded to a person who offered a return to strength and respect. To an extent, he has succeeded. But in doing so he has stifled civil society, established total control of the media that shapes public opinion, suborned the judiciary and the rule of law, and embarked on a series of aggressive external adventures, of which Ukraine is but the latest.

Today President Putin, working through a very small clique, is almost synonymous with Russia. He is unpredictable, antagonistic to the West and at the same time seemingly both in total control and beyond any control or accountability—but also seemingly hugely popular. I wonder if things could have been different. If the West had shown a bit more vision and less triumphalism—which now looks horribly like pure hubris—and thought a bit more about working jointly on the concerns that the West and Russia share, I believe that we would not now be facing what the report calls “outright confrontation and competition”. For example, I remember, in 1991, one man in Russian intelligence telling me that the West and the USSR had actually shared a great deal of intelligence on matters such as Northern Ireland during the Cold War, but this co-operation seems to have been discarded almost overnight. He was baffled that the West did not seem to see the common problem that we were going to have with Islamic fundamentalism to the south of Russia. Subsequent events have, of course, proved how tragically prescient those remarks were.

Secondly, I would like to ask one or two potentially uncomfortable questions about sanctions. I support sanctions; they have been necessary, and they have quite understandably been used to punish Russia for the invasion of Crimea. The people and the economy of Russia and other countries have indeed suffered. From a strategic point of view, however, surely we must recognise that Mr Putin is not going to be in some way “brought to heel”. His whole credo and platform are based on the very opposite of this. The situation in Crimea has not been reversed—indeed, as other noble Lords have said, there seems to be a creeping acceptance of it. Can the Minister tell us what evidence there is that sanctions have had any effect in causing Mr Putin to change his mind or his ways? More strategically, what are the likely outcomes if the Russian economy really does crumple under the sanctions, low oil prices and other economic headwinds that have been referred to? Surely the European Union and the Foreign Office must have thought this through to some sort of end game. Finally, how effective will sanctions be if the oil price should recover?

On Ukraine, the report refers to the West as “sleep-walking” into a crisis. I agree with an earlier speaker who felt that that was perhaps unfair, but there is a hideous civil war in Ukraine that is going to take a very long time to resolve. It has already cost thousands of lives. Mr Putin has a collection of frozen conflicts and it is hard to see how he could now return Crimea to Ukraine without humiliation.

We are where we are, and both the West and Mr Putin have made blunders along the way. The only way forward, as I see it, is for the West to make unoccupied

24 Mar 2015 : Column 1360

Ukraine work economically. That would be hugely expensive—Natalie Jaresko, the Finance Minister from Ukraine, referred to the $40 billion IMF stabilisation bailout as just a first step—and extremely difficult to achieve. But surely it is something that, sooner or later, is going to have to be done. If we fail, Ukraine will remain corrupt and war-torn, a failed state and a basket case on Europe and Russia’s borders. Some would say that that is exactly what Mr Putin wants, but maybe it also holds the germ of an idea for how we could eventually re-engage with Russia on this very difficult issue.

Finally, on Russia itself, we have a good many reasons to criticise Mr Putin and his regime in the strongest terms. However, our difficulty with Russia started much earlier in the missed opportunities of the 1990s. We are now stuck in a cul-de-sac characterised by what this report calls an “adversarial mindset” on both sides. We may never—certainly not while Mr Putin is in charge—see Russia wish to subsume its interests in a wider European community. We cannot ignore Mr Putin’s actions, but we simply cannot allow Russia to become another pariah state and a destabilised and destabilising force. As other speakers have said, we need to base our strategy much more overtly and obviously on three things: a better understanding of how the Russians see themselves; a focus on common areas of interest; and a long-term view that includes the next generation in Russia—it is with them that we are going to find the solution to these problems and not in our own. That approach at least offers some kind of starting point for what I have called before in this House rebooting the relationship with Russia for the long term, whether or not Mr Putin himself remains in the Kremlin in the years ahead.

6.34 pm

Lord Risby (Con): My Lords, I warmly congratulate my noble friend Lord Tugendhat on so effectively presenting this brilliant report—and it is a brilliant report. So many people outside your Lordships’ House have read it and complimented all the work of the committee in producing it. It certainly has been a fantastic read for us all.

For some years, I have been chairman of the British Ukrainian Society, which I now declare. Indeed, one of its directors is my noble friend Lord Oxford, who now brings all his experience and understanding to our deliberations. I warmly congratulate him on such a superb maiden speech.

When the Soviet empire collapsed, the departure and independence of Ukraine was very keenly felt by many Russians. But Ukraine has always aspired to be independent, and that spirit provoked savage reprisals by Stalin. Before the Second World War, Stalin effectively starved to death millions of Ukrainians—the Holodomor. In this Palace of Westminster, we have sought to commemorate this tragedy with artistic and photographic exhibitions. It is certainly an event that has scarred the memories of the people of Ukraine.

Regrettably, since independence, Ukraine has been both ill governed and highly dependent on Russian energy supplies. Russia, in turn, has used energy as a weapon of foreign policy, using differential pricing to influence those whom it favours or dislikes. Therefore,

24 Mar 2015 : Column 1361

Ukraine has been dependent on Russia not only for energy supplies and transmission but as its major export market. Regrettably, a number of those who have led Ukraine politically since independence acquired massive wealth. Former President Yanukovych, now in exile in Russia, apparently built up a fortune of some $70 billion. His effective removal by outraged Ukrainian citizens following the Maidan demonstrations led to the subsequent invasion by Russia, furious at his departure, of Crimea and the Donbass. Ukraine has perennially been in debt to Russia. Indeed, the failure of President Yanukovych to sign the EU Association Agreement was linked to Ukraine’s debt to Russia, which the agreement did not cover. That is because the EU essentially believed, with some degree of understanding, that any money provided would simply be stolen. And so this president turned to Russia.

It was a key policy of the new Ukrainian Government under President Poroshenko to decentralise authority to the regions of this vast country. But this was not spelled out and acted upon sufficiently when they came into office, which might have pre-empted the rise of separatist sentiment. This still needs to happen, but in a way that does not dismember the country, which appears in some respects to be Russia’s objective. Does the Minister agree that the EU must encourage Ukraine to move forward on this decentralisation process as the opportunity presents itself?

The question we all ask ourselves is this: what is Russia’s objective? It seems quite clear to me, somebody who knows Ukraine very well, that it is to make Ukraine ungovernable and drive away any foreign investment to ensure Russia’s continuing dominance and influence.

The British Ukrainian Society is fully part of a process that is now under way in Vienna. The French philosopher Bernard-Henri Lévy, a hero of the Maidan demonstrations, called for a Marshall plan. In an echo of this, a small group of us, including him and my noble friend Lord Oxford, is helping in this process. It has a degree of support from President Hollande. In a remarkable demonstration of unity, but also of clear necessity, Ukrainian federations of employers and employees have come together to underpin this initiative. Work streams are being set up in such diverse areas as trade, health, EU association, anti-corruption and judicial reform, headed by distinguished Europeans, including from this country and including members of your Lordships’ House, who will analyse rigorously what is necessary to provide a wholly different constitutional and economic climate. We hope that in September we will be able to report on this. Depending on the level of stability in Ukraine, our clear intention is to launch a major reconstruction fund embracing private sector investors. Of course, the role of the IMF and others is crucial, but we are hopeful that the huge opportunities in Ukraine, not least in agriculture and in IT, will be attractive. We have been pleasantly surprised in discussions in Washington at the level of interest not least from those in the United States. Such a fund would help disconnect Ukraine from the massive current economic shadow of Russia which impacts it so directly.

24 Mar 2015 : Column 1362

One of the more troubling interplays has been the extent of involvement of politicians there with different business groups which so dominate the economy. I mention this because, in the fullness of time, more competition is crucially needed. However, confiscation, nationalisation or punitive tax rates, advocated by some, are not seen as a wise priority in Kiev in key government circles, although one oligarch in the last day or two, who appears to have had a private army, has challenged the state’s authority in a completely unacceptable way.

As we have heard, the aggressive behaviour of Russia has been well documented. Nevertheless, it is certainly unwise for some to call for NATO membership of Ukraine, which before the current tragedy was never a live issue. That simply gives Russia a self-justifying excuse to continue its aggression.

Ukraine is a European country that deserves much better than it has suffered. As the excellent report of the European Union Committee makes clear, there are potentially practical ways of trying to engage with Russia at a national and EU level while making it absolutely plain that there will be a heavy price if this offer is spurned. Yet for all the huge energy and commitment of the current Ukrainian Government to initiate much needed reforms, ultimately they will have to recognise that, however unpalatable, no country can escape the reality of its geography.

6.42 pm

Lord Davies of Stamford: My Lords, Russia is a country that I know reasonably well. My first job was in the Diplomatic Service. In my 20s, I spent a year learning Russian, and three years as second secretary in Moscow in the 1970s at the height of the Cold War. I have been back more than 20 times since then, including in recent years. I also know reasonably well Ukraine, which I first visited in the days of the Soviet Union and, most recently, about a month ago. I shall be there again from tomorrow morning, visiting, I hope, the front line in Luhansk and Donetsk provinces.

Like, I imagine, most people who have some sense of affinity and affection for Russia, I was particularly disappointed that the end of communism did not mean, as it did in the rest of eastern Europe, the emergence of a successful democracy and of a successful, sustainable and diversified economy, and still less that Russia re-entered, as I had hoped it would, the European family of nations which it had been definitely a part of before 1914—diplomatically, economically, culturally and intellectually. Those were the years of Blok and Yesenin, of Rachmaninoff, the Ballets Russes and Stravinsky; and the years in art of Malevich, Tatlin and the young Kandinsky—an enormous flowering of talent and striking originality.

It is very sad that Russia has gone the way that it has. Some people say that it is the fault of the West. It is arguable that we might have done more to support or be sympathetic to the requirements and difficulties of Yeltsin, but in the Putin era it would have been very different to blame the West for that. The shadow of the Soviet Union, which had shortened, has fallen and ever lengthened over Russia during the past few years. The state, the regime, controls now all the broadcasting

24 Mar 2015 : Column 1363

media and has an effective veto over all the printed media. There is an increasing sense of fear in terms of people’s willingness to express themselves freely. There is a labyrinthine kleptocracy—not a word that is mentioned in the report, unfortunately. The best account of that—I do not need to go into it—is in a remarkable book of which noble Lords may have seen very good reviews in the

Times Literary Supplement


The New York Review of Books

: Karen Dawisha’s

Putin’s Kleptocracy.

Unfortunately, because of legal blackmail or fear that some oligarch, perhaps put up to it by Putin, might spend millions of pounds suing it for some form of libel, the projected British publisher, Cambridge University Press—I am sorry to have to say this about an institution related to one of my own universities—has cravenly decided not to publish here, so anybody who wants that book has to look to the United States, as I did, to get it.

The worst aspect of all, however, has been the regular murder of critics or supposed enemies of the regime. Some names, such as Politkovskaya, Litvinenko, Magnitsky and, most recently, Nemtsov, are now world renowned—these were deeply brave people who will go down in history—but there are many others whose names are much less well known. It is deeply worrying, and it has objectively not been possible for us to have, even had we wished it, the kind of relationship of confidence, the ability to discuss in a friendly and mutually supportive way the future of the world, which we would like to have had with the Russian leadership. It is not possible to deal with people on that basis who behave in that fashion.

However, deal with them we must. They are there and, as has rightly been said, Putin is now enormously popular and is likely to remain in power for a long time. That is a reality that we have to cope with, so how do we deal with him? The first thing to remember is that we must deal with him in the only currency which he understands, which is that of power realities. There, I slightly disagree with the noble Lord, Lord Kerr. Economics is part of power realities; sanctions are important. I described in the House at the time the reaction of the West to the invasion of Crimea as derisory and said that it would almost certainly encourage Putin to come back for a bigger bite elsewhere. The sanctions that we came up with when he invaded, or took part in the subversion and take-over of, parts of eastern Ukraine have been slightly more robust. That has induced slightly greater hesitation in Putin which is much to be welcomed. But we need to go a great deal further. We need certainly to consider much fiercer sanctions if there are any further breaches. I think that I was the first person to suggest in this House, in November, that we should look at the possibility of denying Russian banks, or certainly those associated with the regime, access to the interbank market—the SWIFT system. I see that that idea has been taken up recently in the United States Congress by John McCain and others and it would be an extremely effective weapon. However, I agree with the noble Lord, Lord Kerr, that we need to do other things as well. We need certainly to make sure that the Ukrainian army is supplied with reasonable, including lethal, defensive weapons. I have raised that point in many different contexts in this House during the past few weeks.

24 Mar 2015 : Column 1364

I certainly agree with him that we need to make much greater progress in ensuring that the European Union gradually weans itself from excessive dependence on Russian natural gas. I support the initiatives in building up a European common energy policy designed, among other things, to achieve that objective. It is enormously important to reinforce our commitment to Article 5. We want to put right out of court, out of anybody’s imagination, in Moscow the idea that they might have a go at a NATO or EU member. For that purpose, the high-readiness reaction force which NATO is now considering is very useful, but the best way of reinforcing the Article 5 commitment would be to put our troops, or NATO/EU troops from elsewhere in the Union and the alliance, in the front line, within 100 kilometres of the frontier, so that if there was trouble, they would be likely to be killed in the first hours of any conflict. There is no greater commitment that you can make than that to support your allies.

If we do those things, we have a reasonable chance of reaching a reasonable accord. I would regard a reasonable accord as one in which there is a genuine election—not at the point of a gun but with proper campaigning, international observers and so forth—in Crimea and in the areas of Donetsk province and Luhansk province that have been occupied to see what the local population really wants. If they want to join the Russian Federation, that is fine—they have a right to do that and it can go ahead—but equally, as a quid pro quo, the rest of the Ukrainian population would also have a right to determine their future, and if they wished to do so, their right to join the EU and to join NATO would be respected by Russia. That is essential. Some people say that that is unrealistic or, as the noble Lord, Lord Lamont, said in a lucid speech with which I mostly disagreed, that we should ourselves exclude that idea. That would be quite wrong. To try to create a separate status for Ukraine that did not allow it to join NATO or the EU would be wrong for two reasons. First, it would be wrong morally. It would be a terrible betrayal. It would amount to saying that the people of Crimea can have a free choice, because they want to join Russia; the people in the rest of Ukraine cannot have a free choice, they are not sovereign. That would be a disgraceful retreat, psychologically damaging and very dangerous, because of course it would encourage Putin to go further. Secondly, it would not work. The Ukrainian population would not accept it, and why would Putin respect it? Russia has already signed a piece of paper from which the noble Lord, Lord Kerr, quoted extensively, the Budapest agreement, under which Russia guaranteed the sovereignty and territorial integrity of Ukraine. That agreement has been breached in just about every respect, and I think that Putin regards it as some sort of joke.

We should be quite clear about our determination to preserve the right of sovereignty, to which we are committed, and therefore the right to self-determination of Ukraine in future. It would be a great mistake for us, in my view, to allow a situation to arise in which there is uncertainty and seen to be something to play for. That is to invest in future instability and attempts by Putin to change facts on the ground. It would also be a great mistake to allow Ukraine to join the EU but not NATO, because that would mean that we had a

24 Mar 2015 : Column 1365

commitment under the Lisbon treaty but the United States did not have a commitment under the Washington treaty to support Ukraine. Again, that would be an area of uncertainty that could be exploited in future, which could be destabilising and which could lead to exactly the sort of nightmares which we all hope to avoid.

6.51 pm

Lord Truscott (Non-Afl): My Lords, I, too, congratulate the noble Earl, Lord Oxford and Asquith, on his excellent maiden speech. According to the Daily Telegraph, he was MI6 station head in Moscow, but I know that he could not possibly comment. I also commend the noble Lord, Lord Tugendhat, and the committee on the excellent report before your Lordships’ House today. I heartily agree with most of it.

I begin by reflecting on the appalling murder of Boris Nemtsov on 27 February, which has just been mentioned. He was a charming and articulate member of the opposition who I met several times during the 1990s when I was a member of the European Parliament’s delegation for relations with the Russian Federation. Nemtsov’s assassination was one of the worst acts of violence against a leading liberal in Russia since the murder of Duma Deputy Galina Starovoitova outside her St Petersburg apartment in November 1998. Almost 20 years on, history seems to repeat itself in Russia.

The report states:

“The EU’s relationship with Russia has for too long been based on the optimistic premise that Russia has been on a trajectory towards becoming a democratic ‘European’ country”.

It also states that there has been a loss of member states’ analytical capacity on Russia and a loss of specialist Russian expertise in the British Foreign and Commonwealth Office. Both statements are sadly very true.

When I wrote my book, Russia First: Breaking with the West, in 1997, the clue was in the title: breaking with the West. I argued then that the West effectively lost Russia in the mid-1990s when, humiliated and marginalised by the West, as the noble Lord, Lord Cromwell, referred to, Russia decided to pursue its own strategic interests and distinct future Eurasian path. Neither meant that Russia would turn into a western-style democracy with a fully fledged market economy. It was obvious then, and it is even more obvious today.

I think that I have met virtually every British ambassador who has served in Moscow since the late 1980s; standing out head and shoulders above the rest, Sir Rodric Braithwaite and Sir Rod Lyne—real Russian/Soviet experts. I do not believe that the FCO is currently capable of reproducing their expertise, experience or analytical capabilities, which is worrying.

The report is also right to identify two evident policy failures in the run-up to the Ukrainian crisis: first, the failure to be aware of Russian hostility to the association agreement referred to by the noble Lord, Lord Lamont; and, secondly, the crucial importance that Moscow attached to preventing Ukraine from joining NATO. Imagine, if you would, the situation back in 1962, to which the noble Lord, Lord Hennessy,

24 Mar 2015 : Column 1366

referred, if Cuba had said that not only was it going to install Soviet ballistic missiles 90 miles from the USA but it would also join the Warsaw Pact. War would have been inevitable. In 1983, the US invaded Grenada, a Commonwealth country, after a coup by a revolutionary group. Incidentally, the UNGA condemned the invasion as a,

“flagrant violation of international law”,

and the only reason why the resolution did not pass was because the US vetoed it in the UN Security Council.

It is also correct that Moscow misjudged the West over Ukraine. With Transnistria, a European country had already had its territory divided by pro-Russian separatists after a war in the early 1990s with little or no reaction from the West, while Georgia, after the 2008 war, remains divided to this day. Russia was genuinely surprised by the strength of the West’s reaction to its role in the Ukrainian crisis.

That brings us to the question of sanctions. Here I disagree somewhat with the report’s conclusions. It states that sanctions are fine in the short term, although there is no evidence that they have shifted President Putin’s stance on the Crimea or Russia’s perceived vital strategic interests. In the long term, the sanctions are adjudged to be,

“detrimental to the EU’s interests as well as to Russia’s”.

I think that the sanctions, apart from making the West feel virtuous in “punishing” Russia—again, a word used by the noble Lord, Lord Cromwell—will be purely counterproductive, as some witnesses to the committee noted. They play into the hands of the nationalists while achieving virtually nothing politically. Economically, Russia is suffering far more from the fall in the price of a barrel of oil than from sanctions, so in that sense OPEC has far more leverage than the West. The EU has 12 to 14 times more trade with Russia than the US, so if anything, sanctions will damage Europe much more than Washington.

Finally, I agree with the report’s emphasis on a greater EU dialogue and engagement with Russia through, for example, reconvened summits and a focus on issues of shared interest. While I am sure that everyone in your Lordships’ House would welcome a diplomatic solution to the Ukrainian crisis based on Minsk II, I hope we can also agree that, as the report says, it would indeed be,

“a failure of imagination and diplomacy if the crisis in Ukraine were to result in a long-lasting era of colder relations”.

6.56 pm

The Earl of Caithness (Con): My Lords, I thank my noble friend Lord Tugendhat and his committee for the excellent work that they have done in producing the report. I congratulate my noble friend Lord Oxford and Asquith on his excellent maiden speech. I say that because the noble Lord, Lord Kerr, who is sadly not now in his place, welcomed him as a fellow member of the Diplomatic Service. I welcome him as another example of the goodness of the hereditary system and the by-election system in bringing people into this House who can make a contribution who might not otherwise be taking part in national politics.

24 Mar 2015 : Column 1367

There are a number of examples of larger countries breaking rules with impunity. We have seen it in the EU itself, with France and Germany making agreements and then breaking them. Some people point the figure at China. Now we have Russia breaking an international agreement. Whatever one thinks of Mr Putin and his actions, I believe that we might have reason to be grateful to him. I say that because he has made us wake up. He has certainly shaken up the former Soviet Union states—some of which are now in the EU, some of which are not—which were perhaps a bit starry eyed about what the West could offer and how much benefit there could be from the West. It has certainly shaken up the West. By the West, I mean the EU and the US. It is one of the sadnesses that this report is inevitably more EU based than internationally based, because the EU policy towards Russia will have to take account of what the US is doing.

I ask my noble friend on the Front Bench what she expects the EU’s reaction to be to the US supplying arms to Kiev. Will there be a united response, or will an American action divide the EU rather than a Russian action?

The report rightly highlights some of the failures of the West and shows as a result what a tricky negotiating partner the EU can be at times. It is striking at paragraph 235 how shocked Mr Putin was that for once the EU was unified and had a strong sense of purpose. The noble Lord, Lord Owen, mentioned the understandings that the US had with Russia, which seem to be broken with fairly good impunity on its side.

My noble friend Lord Jopling said that he hoped that NATO would have full European support, but that is a big if. Can there be full European support? This takes me back to the point that we might be grateful to Mr Putin, because we now have a better chance than there has been to date of having a long-lasting European response to the Russian problem.

When I talked to people in the Czech Republic, particularly the older generation, I was struck by what a generation gap there seems to be. These people were born under the Soviet regime—the noble Lord, Lord Soley, mentioned what a transformation they have had—and they are finding it extremely difficult to adjust to western European standards, which the young seem to pick up fairly quickly. There was certainly a hankering to go back to a more structured, family-orientated way of life that existed in the Soviet Union, much though they disliked the oppression at the time. Mr Putin’s actions have made that older generation think that they were perhaps being slightly misty-eyed about what had happened in the past and that the reality, whatever difficulties that generation gap produces, is a better alternative.

I was also struck by the fact that the Lithuanians who gave evidence to us in Sub-Committee A did not want to talk about the single currency but about defence, because they saw the euro as part of defence. The remark that particularly struck me was that the Russians could attack them much more easily if they had their own currency, but now that they were part of Europe they saw its currency as part of their defence policy and were much more resilient to any difficulties that Russia might cause.

24 Mar 2015 : Column 1368

I want to ask my noble friend about what I read at the end of last week that really thrilled me: that we were going to back to one of Mrs Thatcher’s old policies—giving help to the former Soviet states for good governance. This was a hugely important part of the Foreign Office brief then. If we are to give £20 million a year to the former Soviet countries for good governance and improving their way of life, I hope that my noble friend will be able to tell us more about it.

We must be under no illusion as to what the Government in Russia are up to. I stress again, as some noble Lords have done, that we need to separate out this Government from Russia itself. We are not criticising Russia, because there have been different Governments. We heard before this debate started that Russia is now exploring selling ships to the Argentinians, who are going to call those ships the Malvinas-class destroyers. That is another way of getting at the unity of the EU and separating parts of the West from itself. I hope that as a result of all the damage, horrors and evils that have happened over the last couple of years, we will emerge with a stronger, more united EU and a more sensible regard for some of the sensitivities of Russia and treat it as a more equal partner than in previous years.

7.04 pm

Lord Hannay of Chiswick (CB): My Lords, we owe a considerable debt of gratitude to the noble Lord, Lord Tugendhat, for having introduced such a perceptive and timely report on a topic of major significance for our foreign policy and that of the rest of Europe, and for ensuring that it is debated without the sort of delays to which we are all too accustomed.

I would suggest that there are few more futile efforts than that of a number of commentators who pose—and try to answer—the question of whether Ukraine or the Islamic State should have a higher priority in our foreign and security policy formulation. We do not have the luxury of that choice: both pose a fundamental challenge to the rules-based international order, which it is in our interests to sustain. Both pose threats to democracy, human rights, our security and that of our allies, with the risks of mass migration and the destabilisation of whole regions on Europe’s doorstep. I suggest that both need to be countered effectively if we do not wish to find ourselves having to take more costly decisions further down the track.

I doubt whether anyone would contest one of the report’s main findings: that we and the European Union were ill prepared for, and rather misjudged, President Putin’s reaction to the events in the Maidan and the fall of Yanukovych. I would add only that President Putin seems to have been equally ill informed and ill prepared, and equally to have misjudged the European reaction and the effects of the economic sanctions imposed in response to his illegal actions. I enter a modest plea of not guilty, as I recall a conversation in Vilnius in October 2013 with a Lithuanian parliamentarian who was exuding optimism about the future course of events, to which I replied, “Provided that there is not a Putin surprise”. Well, there was a Putin surprise. Europe’s misjudgment has given rise, as is often the case in democracies, to a rather excessive

24 Mar 2015 : Column 1369

tendency to blame ourselves. Putin’s reaction, as is often the case in authoritarian regimes, consists of blaming absolutely everyone else. Neither of those reactions seen a very useful guide for future policy, so what should our future policy be?

I would certainly argue that any viable European policy needs a clear element of deterrence and containment as part of it. We should be prepared, and make sure we show others that we are prepared, to impose new economic sanctions if Russia does not stick to the letter and spirit of the Minsk agreement. There should be no question of easing sanctions unless every part of Minsk is implemented, in particular the provision for Ukrainian control and international monitoring of the whole Russia-Ukraine border. I would argue that we should also fulfil our 2% of gross national income commitment for defence spending to NATO and press others to do so, too. We should be more active in supporting NATO members closest to Russia and refuse to legitimise Russia’s seizure of the Crimea, from which President Putin has now stripped away the veil of deceit. I feel that it was a pity that Ukraine and Russia never gave any thought to the creation of a sovereign base area for Russia’s Black Sea fleet in Sevastopol. That thought may come forward in some years’ time.

I suggest that we should give no ground to Russia’s demands for a sphere of influence, any more than we ourselves should make any such demands. That includes that we should not be championing the extension of NATO’s membership. However, we also need a positive element to our policy towards Russia to match the deterrence. The report was wise to suggest that the EU should be ready in due course to explore the scope for co-operation with the Eurasian Economic Union. We should take every opportunity to make it clear that the free trade agreements with Ukraine, Moldova and Georgia were not intended to constrain—and will not constrain—or damage those countries’ trade relations with Russia. We need a massive and substantial effort to reform Ukraine’s economy and free it of the cronyism and corruption that has hitherto been its bane. Here I pay tribute to the maiden speech of the noble Earl, who knows so much more about these matters than I do and spoke very interestingly on that aspect.

With regard to Russia itself, we obviously persisted too long in nurturing the illusion that we could somehow or other bring about its transformation into a normal European state and economy just like the others. Still, were we wrong to offer help after the collapse of the Soviet Union? I myself do not think so. Clearly we must now deal with Russia as it is, but surely we do not need to leave our values outside the door when we do so.

Then there are the lessons to be learnt for our own diplomacy, on which the report has some justifiably critical things to say. If we go on squeezing the FCO and the Diplomatic Service resources, there will be more unfortunate consequences down the track. I thought that the report was a little less revealing on how on earth we came to be absent from such a key area of policy. I do not understand how we came not to be represented in the key moments in the Ukraine crisis or how we came to subcontract the main decisions

24 Mar 2015 : Column 1370

to Germany and France. Where was the Foreign Secretary when his colleagues were heading off to Kiev in the crucial period of this crisis? We did not absent ourselves from the Balkans in the 1990s nor from the nuclear negotiations with Iran. As a signatory of the Budapest memorandum, should we not have been playing a more active role?

I am sure that this will not be the last occasion when we debate this range of issues, nor should it be. It is fashionable just now to lament the demise of the post-Cold War settlement in Europe and, more widely, of the overall rules-based structure of our world. However, surely we should not accept that as a given; we should be pushing back against it. To do so, we need to strengthen and increase the credibility of our main international structures of which we are members: the EU, NATO and the UN. I hope very much that the Government who are formed after the election will put that strengthening of those institutions and structures at the heart of their foreign and security policies.

7.12 pm

Lord Selsdon (Con): My Lords, my interest in Ukraine first began when I became secretary to the Parliamentary Space Committee, when I had no real idea of the strength of Ukraine in the space sector. Before that, I had been brought up with a Russian governess and knew that there was food all over the Soviet Union. I remind your Lordships that 25% of the total agricultural output of the former Soviet Union came from Ukraine, and 70% of the sugar from sugar beet. It was the fifth largest exporter of wheat and the third largest exporter of cotton, and had 25% of the workers in the agricultural sector. This information is historical but has become quite important to modern-day Russia.

Ukraine had a state company called Yuzhmash, which used to produce 6,700 tractors a year. It then went into the space business, first by employing German prisoners of war to construct a large military equipment factory at Dnipropetrovsk, which was Ukraine’s fourth largest city, and then developing into a major centre for nuclear arms production and space and ballistic missile design that employed 50,000 people. This interested me as secretary to the Parliamentary Space Committee, and I wanted to look at the missiles. They kindly arranged for me to go down there. I arrived at Kiev and was told that I would have to wait until the next day for a plane. I said, “Can’t I go down now?”. A chap came up—a pilot—and said, “Well, I’m on the way back with my plane. Would you like to come with me? You won’t mind the dog and the puppies”. So that is how I first got to Ukraine.

As I say, Yuzhmash was employing 70,000 people, but the main Soviet missile activity was in Hrunecheva in Russia, where they are now launching or preparing six new rockets, including one proton rocket. As well as that, Ukraine was a great shipbuilder. Being secretary of the House of Lords Yacht Club, that interested me as well, so I asked if I could have a look at the ships. My bank then set up a team to buy ships from Ukraine. The thought was that we would buy product tankers, general purpose vessels and reefers, which could be chartered out into the market and fully financed. I had not realised that before its independence Ukraine

24 Mar 2015 : Column 1371

had supplied 60% to 70% of the Soviet Union’s ships, most of them for Russia. At the end of 1995 some 126 vessels, mainly product tankers, had been built at the Kherson shipyard alone. So Ukraine became a much broader country for me to look at. We asked whether they could build some ships for us. Then I heard about the Know-How Fund, so I wrote to it— I did a packet about how you build a ship and so on. The fund gave me £100,000 so we set out to see what we could do to develop demand for ships that the British marine sector could use. It seemed quite simple to build a ship. They built many ships extraordinarily quickly and very easily. We set up a shipbuilding company with them. We took a team of all our experts from the United Kingdom—we did not build ships anymore, which, as my family comes from the Clyde area, has always upset me—and placed an order for some ships, which were surprisingly cheap and economic. At the end of the day, the project failed for reasons of bureaucracy, but their shipbuilding knowledge was valuable.

Given its strength in the agricultural sector, with its 9,000 tractors, I thought that Yuzhmash would still be in business, but it has been closed down. That seems rather strange when it was a very good operation, but it seems effectively to have been alienated by the Soviet Union. My concern, therefore, is: what is going on? Surely Ukraine’s remarkable agricultural capability and ability to increase production has a cash flow value that could help the world and ourselves. If they can build ships—they still have the facilities there—and we could find orders for those ships, which are needed in the international market, there must be some opportunity.

When I have been to Kiev I have usually got into trouble because I ask too many questions. I wanted to know about religion, for example, and before I knew it I was locked up in some archives or some underground thing with a chap with an enormous long beard with weights on the end. I did not know that this was a very senior man of the church, that it is important that you should have a long beard to be respected and that in order to do that you put weights on the end of your beard to make it grow longer. This was some of the technology. I learnt from them all about how they had hibernated in these caverns during the war. Then, when they had nothing else to do with me, although I am completely tone deaf and have no idea about music—I could not even sing middle C at school—they sent me off to the opera for three or four days running, all as part of some propaganda exercise. Finally, they said, “Look, what can we do together?”. I checked with my colleagues from the bank and found that we could willingly finance things in Ukraine, but the politics were beyond my pay grade.

Ukraine is a country that I love. It was intriguing to be able to ask them questions such as, “Did you really send those rockets to Cuba?”—although maybe I should not be saying these sorts of things. I had been to Cuba quite often as well, and I asked the Cubans if Ukraine had sent the missiles. I never really knew the true story. It was said that the missiles had indeed been sent, but they had not necessarily arrived. So the Ukrainians had to send some more but, as there had been no reaction from the Cubans, the Ukrainians sent some

24 Mar 2015 : Column 1372

photographs of the missiles on the cargo boat. When I went to Cuba, the Cubans said, “Yes of course, we know all about that”.

This lovely world of Ukraine has intrigued me for a long time. To some extent they are European. With those assets and that agriculture production, when we are short of food in the EU, maybe we could invite them to come along. The question is: who do you talk to there now? It seems to me that Putin is gradually concentrating control as much as he can within a small area around Moscow, and countries like Ukraine may be left out in the cold.

Ukraine is a country that I love and respect. If any of your Lordships would like a bit of fun, I would willingly take you down to look at the old missile factory, although it is not producing missiles anymore. The people there are still nice.

7.20 pm

Lord Thomas of Swynnerton (CB): My Lords, I feel very much in the minority since those who have spoken, often very eloquently, know so much about Ukraine, particularly the last speaker. It is a pleasure to take part in a debate to which the noble Earl, Lord Oxford and Asquith, has made such an admirable contribution. We look forward to hearing from him often in future.

At first sight, Russia’s behaviour towards Ukraine is not very different from the sort of conduct that great powers have always offered to smaller powers who are their neighbours, but first sight is practically always a mistaken concept. The present Ukraine crisis is quite different from other crises. First, all intelligent Russians know something of what the noble Lord, Lord Selsdon, drew our attention to; namely, that before the First World War, the export of wheat from Ukraine made a substantial contribution to Russian wealth. The black soil of Ukraine was well known throughout the international agrarian world.

Secondly—this is perhaps more important—all historically minded Russians know very well that Kiev, the capital of Ukraine, was the first centre of Russia at the end of the 10th century. It was the motor of Russian Christianity, as many of us who have the privilege of living in West Kensington recognise every day as we pass the statue of St Volodymyr at the entrance of Holland Park. In those days of the remote past, there was a definite Russian concept in Ukraine. It took a very long time to be superseded by the Grand Duchy of Moscow, which was the centre of Romanov, communist and Putinesque Russia. I think Moscow was first mentioned in the chronicles in 1147.

Ukraine is now formally independent and is recognised as such by the signatories to the Budapest agreement, which include this country and Russia. The noble Lord, Lord Kerr, was quite right to say that we should not forget that; nor should we allow Russia to forget it. A scrap of paper it may be, but it is scraps of paper that make civilisation. In this House, there seems to be a certain reluctance to be proud of the fact that we won the Cold War and to feel that we imposed a humiliating sanction on the new Russia. However, many of us must respect the victory. The average eastern European would be astounded to hear some of the speeches made in this House. Ours was a modest,

24 Mar 2015 : Column 1373

quiet celebration; there was no ceremony in St Paul’s at the end of the Cold War. Can we honestly believe that that was a damaging thing which humiliated Russia? I feel that perhaps we did not do enough. To blame some of our actions for the later evils of Russia seems a false piece of historical writing.

If one is going to be serious, the entry of the Baltic states into NATO must be represented as a triumph. I remember a great friend of mine, Lord St Oswald—other noble Lords may also remember him—who every year used to insist on trying to put the capture of the Baltic states by the Russians on the agenda of the United Nations. He was always very politely told to delay his humanitarian gesture, which he did. He would have been delighted that Riga, Vilnius and Tallinn are now NATO capitals.

All the same, we all hope—this was a point made eloquently by the noble Lord, Lord Jopling—that in the long run we shall be able to recover the possibility of friendship and collaboration with a civilised Russia. The long chain of great Russian novels and plays reminds us that Russia may in time be able to contribute to world civilisation as much as any other western country—indeed, many of us would say more.

There is a certain similarity between the present and the situation in Finland in 1940. We loved the Finns and admired their bravery, but we needed to be the allies of the Soviet Union—of Russia and Uncle Joe—and we made such an alliance, which was such a triumphant part of the last part of the Second World War. For details of the Winter War, as it was called, in 1940 between Russia and Finland, I recommend very strongly, as if I were your Lordships’ history tutor at university, the second volume of Harold Macmillan’s memoirs, The Blast of War, chapter 3 particularly.

There is one more point that we should address. It is frequently said that we do not want to see a repeat of the Cold War. Of course we do not, but that is not very likely because the Cold War was a war of ideologies, not a war of states. The great American ambassador Chip Bohlen said that we would not be able to deal with Russia sensibly until she had ceased to be a cause and had become a state. She has at least become a state and ceased to be a cause, and perhaps in that respect there is reason for optimism in the long run.

7.28 pm

Lord Elton (Con): My Lords, I must begin by congratulating the noble Earl, Lord Oxford and Asquith, on what I can only describe as an impeccable maiden speech. I hope to hear him very often in future. I also thank my noble friend Lord Tugendhat and his team for an outstanding report from which I have learnt a very great deal—and I have learnt a great deal more from the debate that has followed.

I have one regret about it, and it comes pretty early. In paragraph 5 we read:

“The North Atlantic Treaty Organization (NATO), the cornerstone of defence for its EU Members, is outside the scope of this report”.

I understand the reasons for that, and it would have been an unmanageable task to have written that into this report, particularly in the time available, and I dare say that it would have been pretty difficult to

24 Mar 2015 : Column 1374

assimilate, but it has to be said that in Putin’s mind NATO stands as a very important shadow behind everything that is going on in Europe.

This brings me on to sadly familiar ground. I speak really out of a sense of duty because I realise that although here they are more numerous, in the country as a whole the proportion of people who have lived through history since before the Second World War is small. I was fortunate enough to have a highly intelligent historian as my father and guide who had fought through the First World War, and I have read a bit of history myself, and I find what I am hearing and seeing now extraordinarily, sickeningly similar to what happened when I was a child under tuition.

I was born in 1930, and at that time, a nation that felt itself to have been humiliated by recent history threw up a dictator who achieved astronomic popularity by playing on that card and annexing neighbouring territory on the grounds of ethnic appropriateness. He did so with the freedom afforded by neighbouring states being ridiculously underequipped to resist him. The fate of the gallant, brave but tiny British Expeditionary Force underlines what I am saying. What have we now? We have a great European country that considers itself to have been recently humiliated by history, led and dominated by a tyrant who has no respect whatever for human rights—which is another echo—and who is annexing neighbouring countries on the grounds of ethnic similarity. We also have a British Government, as we had in 1937 to 1939, who seek to restrain the policies of that dictator, backed by wholly insufficient military force to give credibility to any threat that might be made.

Clausewitz said, if I remember correctly, that war was diplomacy carried on by other means. If I say that, I suppose people will begin to dismiss what I have to say, thinking that old men who recount the past are trapped in the definitions of the past. However, the Putin era has redefined not diplomacy but war, as we have heard from my noble friend Lord Howell. The equivalent English word is “masquerade”. The word I want is “maskirovka”—my noble friend nods—which is very different until it shades into warfare. The definition is important because NATO, in Article 5—hence my regret that it could not be in this report—has a very clear definition of the infringement of the rights of a country, which is based entirely on the old-fashioned concept of tanks rumbling across the frontier. However, in Ukraine we have what has been—and, I do not doubt, will continue to be—the infiltration of personnel and light equipment across the border. Therefore I see a repetition and I just pray that it does not go the full course, as it did in 1939.

How long does it take to prepare and to be sufficiently credible in one’s armaments? Noble Lords will recall that the turning point in the downward spiral of our fortunes in the 1939 to 1945 conflict was the building of the Supermarine Spitfire. The Air Ministry gave the contract to develop the prototype on 3 January 1935, and 14 months later, on 5 March, the first flight of the prototype took place. The Air Ministry ordered the first 310 Mk1 aeroplanes on 3 June 1936, and 23 months later the first production Spitfire flew for the first time. It was not until August 1939 that No. 19 Squadron

24 Mar 2015 : Column 1375

became the first to receive the Spitfire in bulk. Much less glamorous, in the background, and differently constructed, the Hurricane was statistically far more important in the Battle of Britain. The Spitfire was built of stressed skin, which was the up-to-date method; the Hurricane was built of steel tubing with fabric over it, with a Merlin engine inside, and had four machine-guns.

Despite that time lag, of 1935 to 1939, we are still wondering whether we should stick to 2%. We have to, and there may be costs to that which are not very acceptable. But I, for one, do not want my children to have their children in the middle of another world war. It has to be fought if we are to protect all the values of our society, and world health.

If the right reverend Prelate, who has gone back to his flock, were here, he would perhaps be muttering, “Blessed are the peacemakers”, and saying that we should be beating our swords into ploughshares. But it is beating your swords into ploughshares that precipitates war if the other chap has not done it as well. When the Americans say, “You are not strong enough—you can only be a small unit within our army”, that says to the Russians, “Come on, have a try”. We have to be strong and make the sacrifices necessary to do that now. They will be hugely greater if we do not.

7.36 pm

Baroness Morgan of Ely (Lab): My Lords, I thank the committee, and the noble Lord, Lord Tugendhat, in particular, for the excellent analysis in this report. I know it has been widely read and appreciated, not just in this House but across the whole continent, and I thank them for their work.

There have been some excellent contributions this afternoon; it has been great to listen to so many people who understand this part of the world. In particular I express my appreciation for the maiden speech of the noble Earl, Lord Oxford and Asquith, which gave a particularly insightful view of the situation in the area, and which was a very good analysis of what is going on today. The most shocking fact I heard this afternoon was that the noble Lord, Lord Kerr, served in the FCO in Russia 50 years ago—so he must have been about 15 years old at the time.

At the outset I underline that the Labour Party stands as one with the Government as regards their response to events in Ukraine, although it should be underlined that we were disappointed that the UK was not more involved and engaged in drawing up the Minsk agreements. The report looks at how the situation was arrived at and at where we go from here. Whether the situation in the Crimea could have been averted is a moot point. It seems that very few analysts saw the annexation coming and that, to a large extent, events on the ground ran ahead of diplomatic and political control.

One issue highlighted in the report is the decline in Russian expertise in the FCO. It seems as if certain elements within the coalition Government seemed to have taken Fukuyama’s “end of history” to heart, believing in the triumph of western liberal democracy—a point that the noble Earl, Lord Sandwich, emphasised. Perhaps they were lulled into a false sense of security

24 Mar 2015 : Column 1376

by the release of Mikhail Khodorkovsky and Pussy Riot just before the Sochi Olympic Games began. How wrong could they have been? Politics and international political tension is on the increase rather than decreasing, as was predicted, and we need to ensure that we have an adequate diplomatic and political response to the changing situation, as regards not just Russia but further afield in the world.

The lack of Russian speakers in the FCO is underlined in the report, as the noble Baroness, Lady Coussins, emphasised. The report also suggests that there might have been some misreading of Russia which could have been avoided if more experts had been in place in the EU, who would have been able to flag up the fact that, among other things, Russia was becoming increasingly upset—and felt “humiliated” and “encircled” —by the rapprochement of Ukraine to the EU.

We have learnt that it was a grave mistake to take our eyes off Russia, and that we misunderstood the character of Putin. When it comes to Russia, we do not need generalists but experts who are there consistently and who have built up a rapport with Russian diplomats. It is worth noting that China has been far more successful in its relationship with Russia through careful handling of where Chinese and Russian interests overlap. Can the Minister inform the House whether there has been a beefing up of the Russian department at the FCO and if there are any Ukrainian speakers on the staff? I wondered also whether the Minister would be open to using and engaging with think tanks that have a degree of expertise on Russia to help with advising on Russian affairs.

Russia’s foreign policy must be interpreted frequently as a tool of domestic policy in a country which prides the “strong man” standing up for his country. Russia still contests that many of the states which surround it geographically are its own sphere of influence. The speed of the Ukraine-European Union Association Agreement, according to the report, took the Russians by surprise, and it is clear that Russia often conflated the EU with NATO. It saw the association agreement as a direct threat to its own ambitions to develop further its own trade partnership, the Eurasian Economic Union. It seems that, at EU level, there was very little or no effort to reassure Russia that the association agreement was not a zero-sum game whereby Ukraine would have to curtail trade with Russia. But none of this excuses the fact that, for the first time since 1945, an invading army has redrawn the borders of a country in Europe through force and, in the process, has broken a whole raft of international agreements to which we and the Russians have signed up. The united condemnation of Russia and the imposition of sanctions was absolutely the correct response, and it is essential that the EU remains united in its dealings with Russia. As the report suggests, we need to be willing if necessary to step up sanctions.

It is vital that the Minsk agreement is implemented in full. We were pleased to note that in the European Council last week a commitment was made to the effect that EU sanctions on Russia should be eased only in the event of the full implementation of that agreement, despite misgivings in some quarters, as alluded to by the noble Lord, Lord Anderson. It is

24 Mar 2015 : Column 1377

clear that the security dimension of the EU is becoming more and more important. This demands common action, resolve, and a clear commitment to our continuing place in the European Union, on which, of course, it is very difficult for this Government to deliver.

There is without question a vast array of corruption in Ukraine, which must be halted. Ukrainian Assistant Defence Minister Yury Biryukov estimated that 20% to 25% of the money allocated to the military budget is stolen. But as the report clearly states, Ukraine is in an extremely precarious situation economically and it would be in nobody’s interest to see the country implode. There is a humanitarian crisis, as the right reverend Prelate the Bishop of St Albans said. It would be in nobody’s interest to see the country go backwards, so let us support Ukraine, but let us do it with our eyes wide open—with tough love, as suggested by the noble Lord, Lord Tugendhat.

So what will happen next? Russia is undoubtedly feeling the pain of the sanctions, but more prominently perhaps the collapse in the price of oil. That is already having a real impact on the economy of the country, but there is no reason to believe that Putin’s attitude will change. Putin likes to play by Putin’s rules and nobody else’s. He is, as we are aware, enjoying popularity ratings of 80% in the polls, due in no small part to his so-called victory in Crimea. His support on this issue comes even from Russians who might be seen traditionally on the liberal wing.

The trust between Russia and the West has gone. Even Putin himself has admitted since the publication of this report that it was he who initiated the annexation of Crimea for the Russians. Russia seems to be determined to goad the West and the UK in particular—for example, through honouring Lugovoi, the “alleged poisoner” of Litvinenko, during the recent hearing in London. There does not seem to be much point in playing Mr Nice Guy with Putin; he does not respond to that kind of treatment, and we must respond directly to provocative action from Russia. Beyond this, however, we need to understand that we must do everything possible to avoid a direct military confrontation with Russia; we must learn to live with each other, because we live in the same neighbourhood—we have no other option. Therefore, we need to elaborate a better understanding of the concerns of Russia, but, I should underline, without acting as if we are apologists for or appeasers of Russian aggression. We need to simultaneously show strength when necessary—a strength understood by Putin—and stop talking past the Russians in conversation. We need to develop a clear strategy, together with the rest of the EU, towards Russia, as my noble friend Lord Soley said. We need to be clear that we have absolutely no idea of what would replace Putin if he were to go, so let us make sure that we do not jump out of the frying pan and into the fire. The collapse of Russia is in no one’s interests.

Finally, we were slightly disappointed by Britain’s failure to take a leading role in responding to the events unfolding in the Ukraine, despite being a signatory to the 1994 Budapest memorandum on security assurances. Is this a symptom of Britain moving away from its traditional leadership role in EU affairs?

24 Mar 2015 : Column 1378

This is certainly the last time that I shall be speaking during this parliamentary Session from the Front Bench, so I thank the committee for its work over the Session and the noble Baroness, Lady Anelay, for her work on the Foreign Affairs team—and, in particular, for the much appreciated initiative of the regular briefings that she has held with the FCO.

7.47 pm

The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con): My Lords, this has been an important debate, covering one of the most crucial foreign policy issues that we face today. As my noble friend Lord Tugendhat said, it has taken place under slightly unusual circumstances, coming as it does before the Government have had the opportunity to issue their formal response to the committee’s report. That response will be coming within the usual timeframe. But I perfectly well understand why the committee wished to go ahead at this early stage. There has been a clearly expressed view around the House on more than one occasion that we should have a full debate on the situation with regard to Russia and Ukraine. We have debated it in the past but, apart from the debate about the association agreements, not within the past month or so. We are, of course, running out of time to have this kind of debate. As Dissolution faces us next Monday, it was perfectly understandable that noble Lords wished to go ahead now with the debate.

When I attended the Human Rights Council in Geneva earlier this month, I had a bilateral meeting with the Deputy Foreign Minister of Ukraine. I reaffirmed the UK Government’s support for Ukraine and assured him that we would continue to raise awareness of the crisis there. The committee has assisted me in carrying out that commitment by holding this debate today.

I thank the committee for its detailed and far-reaching work on this critical issue and I pay tribute to my noble friend Lord Tugendhat for his expert chairmanship. The Government agree with a great deal of the committee’s findings, but there are also a number of conclusions with which we must disagree. Today I will seek to address some of the main themes.

It is important to consider the roots of this crisis, as so many noble Lords have done. They lie in Russia’s rejection of the rights of the people of Ukraine to choose their own future, free from external interference. Since 2007, Ukraine had been working towards an association agreement with the European Union. It was not a secret, it was not rushed, it was not a surprise to Russia—it was an open and transparent process between a sovereign state and the European Union. But when Russia decided that it did not like the path that its sovereign neighbour was following, it responded in the worst of ways. Under pressure from Moscow, Ukrainian President Yanukovych cancelled negotiations with the European Union. When the people of Ukraine took to the Maidan to protest and to express their democratic right to demand a new course for their country’s future, they were met with threats, intimidation and violence. Protesters were shot and killed by security forces acting on behalf of the Yanukovych Government. President Yanukovych then fled to Russia.

24 Mar 2015 : Column 1379

The events that then followed are well known. On 18 March 2014, Russia illegally annexed Crimea. I assure the right reverend Prelate and others that we do not forget Crimea. I will return to the matter of sanctions raised by the noble Lord, Lord Davies of Stamford, in a little while. Within weeks, Russian troops and weapons started crossing the border to support separatist proxies in fighting Ukrainian forces in Donbass. In July, 298 civilians lost their lives in the downing of Malaysia Airlines flight MH17, by a missile from an area controlled by Russian-backed separatists.

Moscow’s actions in ignoring sovereign borders, illegally annexing territory and using military force in order to preserve what it sees as Russia’s sphere of influence constitute the biggest threat to European security since the fall of the Iron Curtain. Today we heard important analyses from around the House from noble Lords who lived through the Cold War and practised diplomacy during that era and beyond. It was important to hear their perspective because it is in that way that we learn. Perhaps one of the most moving testimonies was from my noble friend Lord Elton, to whom I am grateful.

I turn to analysis. Russia has proved itself an unpredictable and dangerous actor, willing to risk international security and its own economic stability to satisfy its geopolitical aim of preventing Ukraine leaving its sphere of influence and forming a closer association with the EU. We reject the claim that the UK or EU together “sleepwalked” into the current crisis. The UK and EU were well aware of Russia’s hostility towards the EU-Ukraine Association Agreement, particularly in the run-up to the Vilnius Summit in November 2013. Of course, Russian military action was considered as a possible response, but at the extreme end of its available options. However, no one could have predicted the scale of the unjustifiable and illegal Russian intervention in eastern Ukraine. As noble Lords have remarked, the proximate cause of the crisis was the sudden collapse of the Yanukovych regime in Ukraine the following February after weeks of street protests in Kiev. As President Putin has now publicly confirmed, it was this event that triggered the decision by the Russian leadership to annex Crimea—an unprecedented action that tore up all the rules of security in Europe. The associated decision-making process was therefore days, not weeks. The blame for what has followed in the Donbass lies squarely with the pro-Russian separatists, backed by the Russian authorities, not with a benign association agreement between the EU and Ukraine which had been under negotiation for more than seven years. I should say at this point that I was grateful to the noble Lord, Lord Bach, for his support when we discussed the association agreements for Ukraine, Moldova and Georgia and I am grateful today for the support for the wider policy on Ukraine expressed by the noble Baroness, Lady Morgan of Ely.

A criticism throughout the committee’s report is that the Foreign Office and the EU lacked sufficient analytical capacity on Russia and an understanding of Russian goals. The noble Baroness, Lady Coussins, has a lot of experience of the teaching of languages and their use and she argued that we lacked capacity with regard to language skills in this area. This House

24 Mar 2015 : Column 1380

is an example of the importance of expert knowledge and the value of long-standing experience. We recognise that there is always more that we can do to build knowledge and insight. It is certainly true, simply due to the passage of time, that there are very few officials in any government department or agency with direct professional experience of working with the old Soviet Union before it collapsed. My noble friend Lord Tugendhat and the noble Baroness, Lady Morgan of Ely, referred to the high turnover of staff in our Russian department and the nature of our capability. It is true that as a response to the Ukraine crisis we upgraded the position of Director Eastern Europe and Central Asia as well as adding a new additional director and new deputy directors, which meant that the staff necessarily changed. However, that occurred because we were trying to improve our response and our staffing ratio. It is, of course, not true that none of those incumbents spoke Russian; some did. However, we do not employ our directors primarily for their language skills; rather it is their leadership and policy skills that come to the fore in London, where they work. However, when we speak to the Russian embassy in London, we expect to speak in English. That is because when they speak to us in Moscow, they expect to speak to us in Russian, and that is where the language expertise should lie.

Through necessity we have increased resource and analytical focus on other parts of the world in recent years—for example, the Middle East, Afghanistan and Africa. However, that does not mean that we have taken our eyes off Russia. I have just explained the upgrade that has taken place in that regard. Since 2010, the Foreign Office has increased from 43 to 56 the number of Russian speakers posted to Russia and the former Soviet Union. This week, the Foreign Office will launch an eastern Europe and central Asia cadre of experts, already counting 400 members, designed to pool experience and ensure that officials working on this region have the support and skills to lead first-class foreign policy towards Russia and the region.

I also cannot accept wholesale the report’s claim of a decline in the EU’s Russia expertise. In the past 11 years, the EU as a whole has absorbed lifetimes of experience of officials working with Russia and the Soviet Union through the accession of the Baltic states, the Visegrad four, and Black Sea states. The EU’s response to the crisis has always been in support of one clear goal—the restoration of the sovereignty and territorial integrity of Ukraine.

The noble Lord, Lord Kerr of Kinlochard, asked what action was being taken on the basis of the Budapest memorandum and thinks that we were absent from that. We were not. As I said back in October, we have tried to engage in discussions on this but the Russians simply refused on that particular point. Throughout the whole period, the Prime Minister spoke to President Putin eight times in 2014. They met most recently at the G20 in Brisbane on 15 November. The Foreign Secretary—both the current and the former one—spoke to Foreign Minister Lavrov five times in 2014, most recently in a phone call on 9 August, and the UK is playing a key role in resolving the crisis in Ukraine through the EU, UN and NATO. That goes also with regard to comments by some noble Lords

24 Mar 2015 : Column 1381

about what appears to be our taking a back seat over Minsk. That is by no means the case. We have led all the way throughout on negotiations and sanctions. It is only because of the imposition of sanctions, as I will repeat in a moment, that President Putin came to the table and we got Minsk I and what some call Minsk II.

The committee’s report notes the remarkable degree of unity seen in Brussels over the course of the crisis. I will give way but I am aware of the time.

Lord Davies of Stamford: I am most grateful to the Minister for giving way. She raised the Minsk I and Minsk II agreements. An important issue arises which I tried to raise yesterday in questions on the Statement. However, I received no satisfactory answer from the Leader of the House. Yesterday’s Statement on the Council said that the sanctions would not be eased until the Minsk agreements were fully implemented. I think that I have cited that correctly. The implication there is that if the Minsk agreements are fully implemented, sanctions will be eased. However, as the noble Baroness knows, the Minsk agreements do not mention Crimea. The prospect therefore arises under the terms of the EU Council Statement yesterday that sanctions could be eased, or indeed removed, while Ukraine remained occupied by Russia. Am I reading the situation correctly? What actually is the policy of the Government and the EU in relation to sanctions and Crimea aside from sanctions and the rest of Ukraine which is dealt with in the Minsk agreements?

Baroness Anelay of St Johns: My Lords, I assured the noble Lord that I would be answering his question later but he is so eager that perhaps, with the leave of the House, I will jump about a bit. I hope I will not confuse the rest of the House too much but at least I may perhaps enlighten the noble Lord, Lord Davies of Stamford, and the noble Lord, Lord Kerr of Kinlochard, who asked pertinent questions on this matter.

Will the sanctions relating to Crimea be lifted if Minsk is implemented? A moment ago, I had a quick read of yesterday’s Hansard while we were continuing the debate. No, we do not, and will not, recognise the illegal annexation of Crimea by Russia. The change of borders by force is a direct challenge to international security. Sanctions relating to Crimea will remain in place until Russia returns it to Ukraine. This was made clear most recently in a statement by all 28 EU member states at this month’s Foreign Affairs Council, predating last week’s meeting. The agreement reached at the March European Council was to make clear that the tier 3 sectoral sanctions adopted in response to Russia’s actions in Donbass, not Crimea, will be lifted only once the Minsk agreement has been implemented in full. I appreciate that for some there has been conflation of the two types of sanctions. That is as far as one can go. I intend to speak about Minsk. Perhaps I may leave it at that point.

Lord Davies of Stamford: My Lords—

Baroness Anelay of St Johns: My Lords, I have gone as far as I can in elucidating the matter and ought to return to the major issues around this.

24 Mar 2015 : Column 1382

We have unified in the EU around a strategy of three pillars to restore Ukrainian sovereignty. First, we are supporting Ukraine through reform assistance, emergency funds, military training and ensuring that its vital energy needs are met. We are giving Ukraine a basis on which to resist Russian pressure and succeed as a sovereign country. My noble friend Lord Risby, in particular, asked whether the UK should push Ukraine towards decentralisation. We need to continue to support Ukraine, particularly on its political commitments, such as setting out modalities for local elections on constitutional reform and reaching out to the east through national dialogue. That is part of the implementation of Minsk.

The second pillar is the diplomatic track. We are clear that this crisis will be resolved diplomatically only in a way that secures Ukraine’s sovereignty, independence and territorial integrity in the face of Russian-backed aggression. Russia and its separatist proxies must abide by the commitments they made at Minsk.

The third pillar is pressure on Russia, primarily through sanctions. The UK has led the EU in ensuring that it agrees robust sanctions that, in concert with the fall in oil prices—to which noble Lords referred—and Russia’s own structural problems, deliver real economic pressure on Russia. In answer to the noble Lord, Lord Cromwell, that is why we have seen Mr Putin willing to come to the table to discuss agreements made at Minsk last September and last month. Until Russia meets the entirety of its commitments made under the Minsk agreements of September and March, we are clear that the full pressure of sanctions must remain. I am referring to Minsk, not Crimea. To do anything else would simply reward continued Russian aggression.

Lord Davies of Stamford: My Lords—

Baroness Anelay of St Johns: My Lords, if I go further, I will test the patience of the House myself. I should return to this matter; I am already going to run over what on this length of debate would be a 25-minute speech. I am hoping not to reach that.

The European Council agreed last week to link clearly the duration of sanctions against Russia,

“to the complete implementation of the Minsk agreements, bearing in mind that this is only foreseen by 31 December 2015”.

This is a clear demonstration of the political will of the EU to maintain the pressure on Russia for as long as is necessary. My noble friend Lord Howell made a skilful analysis of the Russian perspective of the geopolitical world, as did other noble Lords.

While we have focused on Ukraine, it is clear to the Government that we do not have a Ukraine crisis but a Russia crisis, of which Ukraine is the unfortunate victim. We need only look elsewhere to what Moscow terms its “near-abroad”—a term that other noble Lords have used—to see how the ripples of the Russia problem are disturbing others. Georgia’s 2008 conflict with Russia showed the international community the dangers of appeasing Moscow. The fundamental truth behind all the incidents in the eastern neighbourhood is that they reflect Russia’s world view—a world of great powers and vassal states, and a world in which

24 Mar 2015 : Column 1383

the EU and Russia are strategic competitors, not strategic partners. I am grateful to the committee for so clearly identifying the true nature of this relationship. The Government are in full agreement.

How we respond to our recast relationship with Russia is a key priority, and I must respectfully disagree with the committee’s claim that the UK has no Russia strategy. On the contrary, we have a clear strategy that recognises many of the same risks and opportunities that the committee brings out in its report, and which will form the basis of how the UK interacts with Russia in the coming years. Fundamentally, we must recognise that Russia can no longer be considered a partner. Both our attempts to forge a modern and mature political relationship have, sadly, failed. None the less, we agree that we must continue to engage with Russia where it is in our interests to do so. After all, Russia is a permanent member of the United Nations Security Council and we must continue to co-operate on the key global challenges we all face. We all want to continue to trade with Russia. The report is correct in its assertion that Russia must not simply be ignored in Europe’s eastern neighbourhood. We agree. We must also do more to support civil society in Russia and to forge closer people-to-people links between us.

At the same time, we must also do more to protect ourselves, our allies and our eastern partners from Russian manoeuvring. Many noble Lords made reference to NATO. I will not repeat the excellent guidance we received from my noble friend Lord Jopling about the new, high-readiness joint task force. I will merely add an elucidation to the noble Lord, Lord Kerr, and others with regard to Article 5. We agree that what Article 5 means is clear. I can say also to the noble Lord, Lord Davies of Stamford, that we confirm our commitment to the intent of Article 5. However, I have to say that we have always made it clear that there is not a military solution to the crisis in Ukraine.

Further, the EU and UK must support those countries in our neighbourhood that want to benefit from closer association with our way of life. That is where I am brought to talk about the Good Governance Fund, which was referred to by my noble friends Lord Caithness and Lady Neville-Jones. My right honourable friend the Prime Minister announced at the March European Council last week a new UK technical assistance programme to support reforms in countries in the eastern neighbourhood and western Balkans. In the first year, the fund will provide expert advice, training and assistance to the Governments of Ukraine, Georgia, Moldova, Serbia, and Bosnia and Herzegovina. There will be options to extend the fund to other countries in further years. We expect the work to be up and running this summer. The initial £20 million will come from DfID in the next financial year, but this will be a cross-government department fund. Future funding will therefore be confirmed in due course.

I add my congratulations to those of other noble Lords to my noble friend Lord Oxford and Asquith on his remarkable and informed maiden speech. It is one of those occasions where one might say one expected nothing less. He set the bar high with his experience before he came here and he proved that he will be a most valuable Member of this House. He and the noble Lord, Lord Hannay, raised the importance

24 Mar 2015 : Column 1384

of strengthening the rule of law and democratic accountability, as well as reforming the police and, in particular, the justice system. I agree. We must also have anti-corruption measure to help improve transparency and encourage effective management of public finances—and to strengthen independent media to ensure balanced and accurate news and public affairs reporting. All those matters will be the subject of spending that can be achieved from this new fund. That is what it is for—to give support on those matters.

I was also interested to hear from my noble friend Lord Howell and others, such as the noble Lord, Lord Kerr, about the crucial matter of energy and energy supply. I accept that the EU needs to reduce its dependence—or at least its perceived dependence—on Russian energy.

I have reached the closing part of my speech. I know that I am at 22 minutes, but I am going to test the patience of the House because I have been intervened on. I know that in a timed debate of this length I could be allowed 25 minutes, so I will rush on.

I reiterate my appreciation for the committee’s work and for the high-quality debate that we have had today. We strongly welcome the fact that the committee’s report includes a wealth of evidence, taken from a wide range of sources. However, I place on record my concern at the prominence given in some parts of the report to unjustified claims. In particular, there are assertions made by Alexander Yakovenko, Russia’s ambassador to the UK, that the committee should regard with the utmost scepticism, as I did when I met him in November and challenged his version of events. For example, he said that the EU was not ready to discuss with Russia its concerns regarding the association agreements—it was. He said that the Maidan protests were dominated by neo-Nazi and other extremist groupings. He said that the Maidan protests were supported by the EU and the US and were part of a deliberate plot against Russia. These are key elements in a deceptive Russian narrative, in which the West is to blame for Russia’s problems, and in which NATO seeks to encircle and threaten Russia. That is not the real picture. We do not see the world in such terms. We reject the charge that we have trampled over Russia’s legitimate concerns.

I can assure the committee that this Government have no intention of allowing the current crisis to break all links between Russia and the West. Diplomacy in all its forms, including all the cultural channels, is the route to better EU-Russia relations. It is right that we should follow that route: diplomacy suffers when dialogue ends.

My noble friend Lord Tugendhat asked a particular question: will the UK be represented at the 9 May Victory Day commemorations in Moscow? Yes: the UK has close historical ties with Russia, based on the sacrifices that we made in the Second World War. We have a responsibility to honour the sacrifice of our own service men and women during that conflict and pay our respects to those who died fighting for a shared cause. We will therefore be represented there on 9 May. That is the spirit in which our relationship with Russia must continue: one of continued negotiation and business, but not one of business as usual until Russia respects the sovereignty of Ukraine.

24 Mar 2015 : Column 1385

8.12 pm

Lord Tugendhat: My Lords, I thank all who contributed to this debate and who made it such a notable occasion. I think that my colleagues on the committee and I have been greatly encouraged by the degree of support that the report has received. I also add my voice to those who congratulated my noble friend Lord Oxford and Asquith on his outstanding speech, with all the knowledge and insights that he brought to bear. Finally, I thank my noble friend the Minister for her comprehensive response and for the frankness with which she dealt with those issues on which the Government and the committee are not entirely in accord. I cannot pretend that she entirely convinced me, but she did convince me that, if she is still in post after the election, the Foreign Office will be in very good hands.

Motion agreed.

Oil Palm Plantations

Question for Short Debate

8.13 pm

Asked by Lord Eden of Winton

To ask Her Majesty’s Government what is their assessment of the impact of oil palm plantations on world-wide climate and on the existence of indigenous animal species.

Lord Eden of Winton (Con): My Lords, I tabled this Question because I want to know the Government’s assessment of the current extent of tropical rainforest destruction. I have sought information about this in the past and I would be grateful if the Minister could bring the facts up to date in her reply. Allied to that is the very real problem of oil palm plantations. So many of these massive plantations grow in areas that were once thriving, multispecies forests. What is the Government’s view on palm oil? What action are they taking to alert producers, manufacturers and consumers to the damaging impact that these plantations have on both our climate and the abundant life that used to thrive in the former forest environment?

Over recent years, there have been a number of attempts to get international agreement on how to regulate and control the logging of rainforests. As a result of these various meetings, there must now surely be greater understanding of how vital to our survival these forests are. Yet the destruction continues. Just a few weeks ago, the Guardian reported that companies are planning to clear more than 23,000 hectares of primary rainforest in the northern Amazon region of Peru. In total, as many as 1.5 million hectares have been identified as forest areas suitable for exploitation. Palm oil is now seen as one of the biggest threats to the Peruvian Amazon and is also now threatening the security of the great tropical forests in Gabon and the Congo basin region. Sound land management laws and plans are urgently needed to stop the indiscriminate felling of these forests.

It almost beggars belief, when so much is known about the value of rainforests, that Governments can still connive in their destruction. I am well aware that important meetings are to take place in coming months

24 Mar 2015 : Column 1386

in this connection. The UN Secretary-General is personally giving huge emphasis to the need for concerted action on sustainable development goals. There is going to be a meeting in New York in September, and I very much hope that our Prime Minister will be present and participate in it. There will also be the vital intergovernmental climate change negotiations in Paris in December, at which I hope the future of the world’s tropical forests takes centre stage. That meeting must, this time, herald real action.

In the few moments left to me, I will focus on the spread of oil palm plantations and the devastating impact that it can have on human, plant and animal life. Palm oil is now found in 50% to 60% of all packaged foods, and the demand for it has been growing rapidly. According to one source, when compared with the level of demand in 2000, consumption of palm oil is predicted to double by 2030 and to triple by 2050.

Indonesia and Malaysia are the countries principally engaged in the conversion of rainforest to oil palms. They account for something like 86% of global palm oil production. When natural forests and peat-lands, which store very large stocks of carbon, are converted to oil palm plantations, carbon dioxide is released into the atmosphere, and that has a serious effect on climatic conditions. The logging and burning also destroy the homes and habitat of forest-dwelling people and wildlife. Most people would, I am sure, be horrified to learn that as consumers of products containing palm oil we are engaging in the slaughter of a long list of plant, insect and animal life.

A major tragedy is the destruction of so much of the primary forest cover in Borneo and Sumatra. Some 300,000 different animal species are affected as a result. The Sumatran tiger and rhinoceros, the sun bear and pygmy elephant, the clouded leopard and proboscis monkey are all threatened. The Sumatran tiger could become extinct in three years. Perhaps the most iconic creature of all is the orangutan. These wonderful, intelligent and sensitive animals share 97% of their DNA with humans. They play a vital role in maintaining the health of the forest ecosystem. In two decades, at least 50,000 of these animals have died as a direct result of forest clearance in response to the growing demand for palm oil. Orangutans are being mercilessly killed and their young captured and sold as pets for human entertainment. Unless something is done now, they could become extinct in the wild in five to 10 years.

So what is to be done to stop this slaughter and desecration? There are steps that can be taken, but they need to be driven by determined political will. First, of course, we must engage with the Governments of the producer countries. We have to accept that the production of palm oil is increasingly important to their economies. To what extent is international financial support being provided under the auspices of the REDD+ scheme? Who is monitoring and checking what happens to the funds being distributed?

Most urgently, there should be an immediate halt to the development of oil palm plantations on peat-land. This usually involves burning and results in substantial greenhouse gas emissions. It is also important that there is active shareholder and customer pressure on

24 Mar 2015 : Column 1387

companies using palm oil to be open about what they are doing. Transparency is essential. Referring to “vegetable oil” on the label is simply not good enough. If manufacturers use palm oil, that should be declared. Consumers could then make an informed choice about whether to continue using the product.

The Roundtable on Sustainable Palm Oil offers some hope of international action. Founded in 2004 and now widely supported, one of its targets is to ensure that all palm oil used in the UK comes from sustainable sources by the end of this year. However, we have to recognise that acquiring certificates of sustainability could very likely involve the clearance of secondary or degraded forest land. Partially logged primary forest can sometimes be retrieved and restored for the benefit of wildlife and humans. There are in fact loopholes, quickly exploited by the unscrupulous. We need to be more precise, for example, in the definitions of tropical rainforests the better to guarantee their protection.

To sum up, the logging of rainforests is a real threat to the survival of life on this planet. To go on conspiring in their destruction is selfish, senseless stupidity. We must wake up to our own responsibilities for what is happening. Great forests are being felled; whole populations of forest-dwelling people are being cast aside; thousands of mammals, birds, insects and plants are being crushed; and our climate is being polluted and changed—all this so that we can enjoy palm oil in products such as crackers, crisps, cream cheese and chocolate. It really is madness. It has to be stopped and stopped now before it is too late.

8.24 pm

The Earl of Dundee (Con): My Lords, in view of government targets for this year, my noble friend Lord Eden is timely in his introduction of this debate. We will all be very grateful to him.

I should like to make a few brief points: on our further actions to achieve the objective that total United Kingdom consumption should come from sustainable resources, on how we monitor these endeavours, on the persuasion of our European partners, and on concerted action internationally.

Recent evidence is certainly encouraging. In 2013 we learn that between 55% and 71% of United Kingdom palm oil products were passed by the body that analyses and certifies derivations, the Roundtable on Sustainable Palm Oil. Many United Kingdom business consumers are thus supportive. These include a high proportion of processors, manufacturers and distributors. Nevertheless, another not insignificant proportion while co-operative remains less than committed. What plans are there to increase commitment, not least that of those now designated for targeting, including small and medium-sized enterprises and the hospital sector?

Can the Minister also say which incentives the Government intend to offer and to what extent mandatory European Union requirements within the renewable energy directive will be implemented?

For the proper monitoring of progress, one continuing problem may be the technical difficulty of segregating and recording quantities that are genuinely those of sustainable palm oil. In view of this, how far does my

24 Mar 2015 : Column 1388

noble friend consider that the current arrangements for analysis and monitoring should be adapted to achieve greater accuracy and transparency?

On European solidarity, a number of states are as concerned as we are, particularly the Netherlands and the Scandinavian countries, while in any case the renewable energy directive obliges all EU members to implement its standards.

However, several other interventions could strengthen both European and international resolve. On this issue there is a case for European states to come together, either formally or informally, whether in small or larger groupings. The United Kingdom might take a lead in that. All the more so would such an initiative serve to persuade European consumers to use sustainable palm oil. If that is worth entertaining in Europe, not least is it also worth considering internationally by forming working groups of states to promote the same purpose. Might the Government, therefore, facilitate such projects, both within and outside Europe?

Then there is the potential impact of Europe’s own good practice upon states elsewhere and its encouragement only to use sustainable resources. This goal is well supported by the EU’s membership, as it is by the Council of Europe’s affiliation of 47 states. Can my noble friend say what plans there may be to deploy European influence accordingly?

So far there is cause to take heart. We can be proud of our own results. Elsewhere, there is evidence of willingness to match these. Yet, as my noble friend Lord Eden reminded us, to the detriment of animals and the environment, far too much unnecessary destruction of the rain forests still occurs. Nationally and internationally, to attain a 100% use of sustainable resources a great deal still has to be done and attention given to combined and co-operative measures to raise commitment.

8.28 pm

Lord Cormack (Con): My Lords, I should like to speak briefly in the gap for two reasons. The first is to endorse most wholeheartedly the powerful, persuasive and utterly convincing speech of my noble friend Lord Eden. He spoke with a controlled passion and a deep knowledge that ought to have a wider audience. I hope that his speech will be drawn to the attention of many people, because he has highlighted a real global threat. When he talked about the possible impending extinction of species such as the orangutan and the Sumatran tiger, there can be no one who would not be extremely concerned and moved by what he said.

However, I speak for one other reason. Noble Lords who have looked at the green pages may have seen that there is a list headed, “Forthcoming retirements”. Although we did not have a valedictory speech—it would be marvellous if we had one during the Queen’s Speech, although none of us knows quite when that is going to happen—we now know that my noble friend Lord Eden is going on 11 June. So if by chance this should indeed prove to be his last speech in your Lordships’ House, and it will certainly be his last QSD, I think he deserves the thanks and approbation of us all, not only for what he has said this evening and for the manner in which he is preparing to depart this House but for what he has done over so many years.

24 Mar 2015 : Column 1389

I have many fond memories of my noble friend, the first of which dates back to 1970 when I, as the young Member of Parliament for Cannock, and he, I think, as the Minister of State for Industry at the time, invited him to come to Cannock. Together we donned our miners’ uniforms, put on our helmets and went down the Littleton Colliery. From that moment on, I always looked upon my noble friend as a good sport and a Minister who was determined to understand the areas for which he was responsible. He has shown noble Lords tonight that although he may have aged—it is not very noticeable, because he looks much the same as he did all those years ago—he has not lost the spark of youth, the determination to tackle important issues, and the ability to draw the attention of your Lordships’ House to their importance.

8.31 pm

Baroness Worthington (Lab): My Lords, I thank the noble Lord, Lord Cormack, for a very eloquent tribute to the wonderful speech of the noble Lord, Lord Eden. Perhaps we ought to start a tradition where provision is made for a valedictory QSD on retirement so that we can discuss topics of great importance. The House has benefited greatly from the distinguished and long career of the noble Lord, Lord Eden, and the passions that he has sustained throughout his time in this place, including his interest in the Rainforest Alliance and the Jane Goodall Institute. It is clear that this is a subject which is dear to his heart and I am grateful to him for his speech. It has given us a comprehensive overview of many of the issues associated with the destruction of rainforests arising from our use of palm oil.

It is obviously true that palm oil is now almost ubiquitous in many of our packaged foods. The statistic is often quoted that 50% of supermarket products contain palm oil. Over the years the profile of this issue has risen and there has been increasing pressure on the supply chain to become more sustainable and to reduce its impact. Indeed, the UK among other countries has signed up to a target of using 100% sustainable palm oil by this year. So my first question for the Minister echoes one that has already been posed by the noble Lord, Lord Eden: how are we doing on that target? Will we reach 100% by the end of this year? It seems that we are making progress because the noble Lord talked about that, as did the noble Earl, Lord Dundee, in relation to the percentage that might be deemed sustainable. However, how we are going to reach the 100% target is the question.

Underlying that is the thorny question of how to prove that the certification process is robust. Since 2004 we have approached this issue on the basis of self-regulation. An NGO-led initiative created the Roundtable on Sustainable Palm Oil production. It is a multi-stakeholder process which seems to have had some success, but the very organisation which formed it, the WWF, stated recently that it is in need of fundamental reform. There are still concerns about whether the certification process is robust enough. Those concerns include the continuing threat of deforestation and logging, the planting of plantations on peat land, the fear that forest fires are being used to

24 Mar 2015 : Column 1390

clear land which is subsequently planted, the use of pesticides and, indeed, the greenhouse gas emissions associated with the intensive agricultural practices used on palm oil plantations. We rely on this certification process, yet there is a fear that it is not robust. We ought to remember that the process is only certifying roughly 18% of global production of palm oil. What of the other 82%?

It is difficult to find the right adjective, but my fear is that the process is not rigorous enough and is self-policing in a way that means it is not being done with enough due diligence and seriousness.

I looked into the RSPO a bit further, as I was interested in the membership of the round table—who the governors are and who sits on the board. It seems to me that the board is predominantly made up of people with vested interests. The largest number of seats goes to the oil palm growers, followed by the palm oil processors, the consumer goods manufacturers and the bankers—that is pretty much everyone, bar two environmental conservation NGOs and two social development NGOs. What seems to be missing is any representation from the scientific community. Indeed, where are the Governments in this?

I am an old-fashioned environmental campaigner and I believe in regulation. I think that we can pursue these issues through voluntarism and encouragement of labelling, but ultimately, if we are serious about avoiding deforestation, there has to be a UN-based international approach to this. We are entering a period where we are gaining ways to gather and process information about our globe and the planet we inhabit. We now know more, more quickly, about what is happening on the planet that we all share. I would have thought, given modern surveillance and everything that we can do with satellite monitoring, there ought to be a more considered approach from the UN as to how we manage the lungs, essentially, of the planet—the forests that keep our planet rich in biodiversity and provide such vital climatic services, such that we cannot afford to lose them.

Of course, it is easy to say that, and at the heart of all of this is a tension between economic development and the need to preserve biodiversity. It is very easy for us in our developed societies in the West to say, “We must discourage the commercial exploitation of these forests and this land because we rely on it”. That almost imperialistic view of how to engage with this problem cannot continue or be sustained. We must find an answer with those producing nations, whereby they can move to more sustainable economic growth patterns and are rewarded for preserving those things to which we attach so much value, such as the biodiversity and climatic services of these forests.

As the noble Lord, Lord Eden, mentioned, we are going to see some sustainable development goals set in New York, and we will then move to Paris, where we will discuss the UNFCCC. I fear that we might be pinning rather too many hopes on to that one meeting in Paris. We already face the challenge of how to control our fossil fuel-based energy emissions. In parallel, we have been discussing the related and very important issue of land-use change and deforestation and trying to create incentives to preserve our forests. Until very

24 Mar 2015 : Column 1391

recently, there was a proposal that we ought to be engaging in some kind of carbon trading, where we would allow polluters to continue polluting in order to preserve forests. I think now it is finally being realised that these two things need to be done separately: we need to price carbon and reduce carbon emissions as well as creating financial incentives to preserve our rainforests and, indeed, the forests all over world that sustain biodiversity and act as a carbon sink. But where will the money come from? That seems to be the nub of many problems to do with these international global issues where there is a high degree of complexity due to equity and sustainable development—who is going to pay whom to do what, and who will oversee it? I do not have the answers and I do not think we will have time to arrive at them this evening, but relying on a self-regulating system that is now over a decade old has been criticised from a number of quarters for lacking teeth. I note that on 9 March, 100 members of the RSPO were suspended due to the failure to report. It feels like this initiative might well be running into the buffers. Perhaps we need to go back to the UN charter and back to Rio, and start to rethink how we deal with these big issues of global land management.

Tonight’s debate has focused on palm oil—quite rightly, because it brings an interesting and unique set of challenges—but it is by far not the only crop that has these associated problems. Soya production is another example—in fact, it is probably an even more widely used product in terms of volume—that we must tackle. There are countless other non-food related crops where you could question the sense of using land for them. I would include in that the global land given up for tobacco production, which also has a deforestation impact.

There are big issues to be looked at but I am not convinced by the voluntary, vested interests-led, stakeholder approach. It feels a little dated and possibly needs to be looked at again in the light of member state co-operation. This has to be sorted out at government level. We probably need to look at some form of international oversight. We thank the RSPO for the work it has been able to do but the time has probably come to acknowledge that it is time to move on.

I have enjoyed this debate very much and again thank the noble Lord, Lord Eden, for his contribution tonight and for his passion for this topic throughout the years. I look forward to the Minister’s response.

8.41 pm

Baroness Garden of Frognal (LD): My Lords, I start by sincerely thanking my noble friend Lord Eden of Winton for raising this very important issue. He became the country’s youngest MP in 1954 and went on to join the Lords in 1983. On his retirement this June, he will have served an incredible 61 years in Parliament. His expertise will be sorely missed. I thank my noble friend Lord Cormack for the tribute that he paid.

I also note that my noble friend Lord Eden was vice-president of the International Tree Foundation for more than 40 years, which brings me back to the subject of today’s debate: the impact of palm oil plantations on our planet’s climate and biodiversity. Needless to say, the Government are fully committed to responding to the challenge of land use change to

24 Mar 2015 : Column 1392

our planet’s climate and biodiversity. Globally, as we have heard, around 13 million hectares of forest were converted to other uses or lost through natural causes each year between 2000 and 2010. More action is needed if we are to meet our objective of halving deforestation by 2020 and ending natural forest loss by 2030.

We have heard from my noble friend Lord Eden and the noble Baroness, Lady Worthington, of all the uses of palm oil, and global demand for palm oil is expected only to grow. Estimates by the Earth Security Group suggest that demand will increase by 32% by 2020. Production of palm oil is already increasing in Colombia, Brazil, Papua New Guinea and areas of west and central Africa. Yet there is growing recognition that unsustainable production of palm oil may increase the destruction of tropical rainforest and drainage of peat-land areas. In turn, this destruction has major impacts on biodiversity, climate change and the land rights of local peoples, as we have heard.

For example, we know that clearing forests and peat-lands releases huge amounts of greenhouse gases; oil palm plantations hold fewer than half as many vertebrate species as primary forests; and conversion of forests to plantations can reduce the number of bird species by at least 60%. The species most at threat are those which rely on habitats that are not found in palm oil plantations: animals as diverse as the Malaysia river frog, the orangutan—as we have heard—and the Borneo elephant.

We recognise the need for a better understanding of these impacts if we are going to respond in the most effective way. That is why Defra and the Joint Nature Conservation Committee, together with the Stockholm Environment Institute, have developed a model to assess the potential impact of UK imports on the environment and biodiversity overseas. A project using this model to evaluate the impact of palm oil plantations on biodiversity in south-east Asia, sub-Saharan Africa and South America is due to report in May, and we look forward to those results. However, this should not delay, and has not delayed, the Government from taking action to promote both the supply and the demand of sustainably produced palm oil.

Efforts have been made to produce palm oil more sustainably, and chief among them, as we know, is the Roundtable on Sustainable Palm Oil. The RSPO is a global, multi-stakeholder organisation where businesses and NGOs have worked together to agree principles and criteria for the sustainable production of palm oil, develop a certification system and bring certified sustainable palm oil to market. However, I hear the concerns that the noble Baroness, Lady Worthington, has when she asks: where is the scientific community and where is the rigour in their inspection? The RSPO has been effective in many areas and is the key international organisation driving the move to sustainable palm oil. Without it, the transition would be extremely difficult. There are still some areas of the RSPO principles and criteria that the Government would like to see tightened, notably the inclusion of a standard on greenhouse gas emissions.

The noble Baroness, Lady Worthington, also wondered about the inclusion of the United Nations. In November 2014, the United Nations environment programme

24 Mar 2015 : Column 1393

and the RSPO signed a memorandum of understanding, which aims to raise global awareness and generate market demand for sustainable palm oil. Moves are in hand on that.

In the UK, we have been working with trade associations, NGOs and others since 2011 to encourage the switch to the sustainable sourcing of palm oil. During the Prime Minister’s visit to Indonesia in April 2012, we announced that we would work with British trade associations and companies to set out a road map to achieving sustainable palm oil use nationwide. In October 2012, we published a joint statement with key palm oil-using sectors, setting out that:

“The United Kingdom is working towards achieving 100% sourcing of credibly certified sustainable palm oil by the end of 2015”.

The noble Baroness, Lady Worthington, talked about this, and we are working towards it. The Government are also a signatory to the statement and fund a support service for businesses to move to sustainable sourcing. We track progress towards this shared ambition through annual palm oil consumption reports. We have also amended the government buying standard for food and catering so that all food and catering products bought by central government must meet sustainability requirements from the end of 2015.

The UK is one of the leading importer countries encouraging the move to sustainable palm oil and the latest figures show that the UK is making progress. Analysis shows that the estimated proportion of UK palm oil imports supported by the Roundtable on Sustainable Palm Oil certification was either 55% or 71% in 2013, depending on the trade data source.

Internationally, we are working with Governments, the private sector, scientists and civil society in a range of countries to incentivise sustainable palm oil production and reduce carbon emissions and habitat loss through combating deforestation.

My noble friend Lord Dundee raised the issue of European co-operation. We are supportive of greater knowledge exchange and co-ordination between national commitments and have already participated in a number of meetings with representatives of other national commitments. More generally, the EU is considering the development of an action plan on deforestation and forest degradation, as outlined in the EU’s seventh environmental action programme. The Government support consideration of an action plan to promote Europe-wide action on the supply and demand of commodities linked to deforestation. We will certainly seek to work with our European neighbours in this respect.