Address in Reply to Her Majesty's Most Gracious Speech

HL Deb 28 June 2001 vol 626 cc485-618

3.26 p.m.

Debate resumed on the Motion moved on Wednesday last by the Lord Archer of Sandwell—namely, That an Humble Address be presented to Her Majesty as follows:

"Most Gracious Sovereign—We, Your Majesty's most dutiful and loyal subjects, the Lords Spiritual and Temporal in Parliament assembled, beg leave to thank Your Majesty for the most gracious Speech which Your Majesty has addressed to both Houses of Parliament".

Lord Bach

My Lords, I am extremely grateful for this opportunity to open this debate on foreign affairs, international development and defence. These topics cover an extraordinarily large amount of ground and were I to attempt to do justice to even half the issues, noble Lords would still be listening to my dulcet tones late next week. I hope that noble Lords will forgive me if my opening remarks are brief and are intended to set the general scene. My noble friendwill cover the detailed issues in her closing remarks, which I hope will be tonight rather than tomorrow morning.

However, I should like to begin by expressing my very great pleasure—and, if I am frank with the House, perhaps my slight surprise—on being appointed to the Ministry of Defence with ministerial responsibility for defence procurement. As must be obvious, I have been in the post for only a couple of weeks—just long enough to realise how complex and difficult the job is. I hope that the House will show me some of its traditional tolerance if my grasp of some of the details is not as good as I should like. In one sense, I am unfortunate in having to follow in the footsteps of my noble predecessor, Lady Symons of Vernham Dean, who has set me such a daunting example of excellence. But in another way I am fortunate. I am consoled by her presence beside me on the Front Bench and by the fact that the more onerous burden of closing the debate falls to her. I wish her well in her new capacity—perhaps I should say new capacities—because she has the honour of serving in two departments although she has three jobs, including Deputy Leader of this House, without, I fear, the pleasure of being paid twice!

We in Britain have long benefited from the closeness of our contacts with other countries. We export more per capita than either the United States or Japan. We are the world's fifth largest trading nation, the second largest investor abroad, and the second largest recipient of foreign investment. The City of London is the world's most international financial centre, with more trade in foreign exchange, more foreign banks and more foreign companies listed on its Stock Exchange than any of its rivals.

It is simple common sense to recognise that the wellbeing of the British people depends on active engagement in its widest sense with the international community. This in turn demands a government who work to enhance the respect and influence in global society that we currently enjoy. It also demands a government prepared to meet the challenges of global change through joint action with those who share our outlook, interests and values—a government, moreover, prepared in the last resort to take hard decisions about the use of force. And a government with the foresight and determination to ensure that when force is required we are able to act promptly, effectively and in concert with our international partners.

The tragic history of the Balkans over the last decade and most recently in Kosovo has provided ample evidence of the necessity for this. The Government continue to be concerned about instability in the Balkans and, in particular, in Macedonia. We have been closely involved with NATO military planning and stand ready with our allies to help in Macedonia itself if necessary.

We are also playing a leading role with our European partners across a wide range of international co-operative projects, notably in justice and home affairs, over European defence and NATO enlargement and in promoting market-friendly reforms. When British Ministers go to Nice or Gothenburg for a European Council, they earn respect and win arguments because they work for Britain by working with Europe, not against it. EU summits are not about Britain versus Europe—we are past all that. Rather, they are about Britain acting with its partners against common enemies: instability, drugs, pollution, poverty and unemployment.

The EU is a unique achievement and we should be proud of our contribution to it. It has made all of us richer, safer and stronger. Our people can live, work and travel anywhere within the borders of the world's largest single market. The EU has also become a major player on the world stage. All that has been achieved while preserving the central role of the nation state.

However, our support for the EU does not mean that we are blind to its limitations. On the contrary, it is those who most support the EU who are most in favour of reforms. It is because we know how much Britain needs a successful EU that we demand the reforms that will make it more efficient and more in touch with the people. Only by becoming more accountable and more transparent will the EU earn the trust of its people.

Reform of the common agricultural policy will therefore be a high priority for this Government. At the 2004 Intergovernmental Conference, we need to take a long, hard look at Europe's institutions to ensure that they are built around delivering the people's priorities effectively and accountably.

It is also time to raise the level of debate about Europe in this country and to accept that for most people in the United Kingdom a commitment to Europe is a fact of life—in the jobs they do, the places they visit and the products they buy. They do not want us out of Europe; they want us in a Europe that works for them. We are proud to be practical Europeans.

Europe is now and will always be precisely what we make it. The EU's powers were not taken by stealth, but rather conferred by treaties agreed unanimously by the member states and implemented according to their individual constitutional procedures. In the UK, that means by Acts of Parliament. Other countries have their own procedures. The "No" vote in Ireland was a decision for the Irish people. We respect that decision and we recognise the need to do much more to communicate the aims and objectives of the EU to ordinary people.

At the recent European Council in Gothenburg, all the member states agreed that we would stand ready to help the Irish Government address the concerns of their people so that they could win support for ratification. We also agreed that there was no justification for holding up our own ratification process as in other member states. Parliament will decide whether to accept the results that the Government secured for the British people at Nice, including the first ever increase in the UK's voting weight. The UK remains a firm champion of EU enlargement, which we believe will enhance security within Europe, allow us to tackle international issues such as crime more effectively and provide greater economic opportunities for all members.

Although relations with the EU are vital to our national interest, it is misleading to represent the debate as a choice between the EU and the United States. It is not a zero-sum game. That is well illustrated by our plans to strengthen Europe's defence capabilities and, crucially, its contribution to NATO. The EU has the resources and skills to engage in the prevention and management of conflict It is a significant actor on the world stage. It therefore makes perfect sense to capitalise on the additional political will and momentum that the EU can generate by giving it the capability to mobilise a military response. The logic of that was recognised by President Bush during his visit to NATO earlier this month, when he said: It is in NATO's interests for the EU to develop a rapid reaction capability". Moreover, we must always be aware of the acute need for European states to contribute more to their own security—to be able to carry out the Petersberg tasks—as well as to engage in humanitarian and rescue tasks, peacekeeping tasks and crisis management. That means improvements in military capability, new equipment, better training and enhanced interoperability. It was to secure such improvements in military capability that the Prime Minister launched the European Defence Initiative in 1998.

Since then we have made real progress. The permanent bodies within the EU for managing EU-led crisis management operations have been established. EU member states are working to achieve the headline goal of being able to deploy rapidly and sustain in theatre 50,000 to 60,000 ground troops, with associated naval and air support. However, we recognise that we still have some way to go. That is why the EU will be holding a capability improvements conference in November 2001, at which member states will be invited to make concrete improvements to remedy identified shortcomings on issues such as force restructuring, new equipment, and improved co-operation between partners.

None of us here could fail to be well aware of the serious concerns raised in this House that those proposals weaken NATO by establishing a wasteful, duplicate infrastructure, and even that they threaten to undermine NATO and weaken our relationship with the United States. I should be surprised if we did not hear more on those concerns during today's debate. However, I would like to stress, as my noble friend Lady Symons has done so often in the House, that there is no intention of creating a European Army or of doing anything that threatens the integrity of our intelligence relationship with the US. Rather, we and our European partners are seeking to create and enhance the operational muscles necessary if Europe is to play its proper role in contributing to its own security. Those capabilities will be brought together only when the circumstances demand it and, crucially, when NATO as a whole is not engaged. That will meet our objective of strengthening the European pillar of NATO, strengthening the transatlantic link and strengthening NATO as a whole.

I emphasise that NATO remains the cornerstone of European security. We believe that there is no divergence between what Europe and NATO are trying to achieve. To quote the noble Lord, Lord Robertson, the Secretary-General of NATO: The West needs options other than 'NATO or nothing"'. It is also untrue to suggest that by strengthening the EU we are neglecting the reform of NATO. The aims of the headline goal process are closely matched by those of NATO's defence capabilities initiative. The two initiatives are self-reinforcing. In addition, we remain a consistent and strong supporter of NATO enlargement. Correctly handled, it can only contribute to building lasting Euro-Atlantic security.

Nor do our plans threaten the position of the US as our most important ally. Last year, we sold £28 billion of goods there. Britain is the biggest investor in the US, providing 1 million American jobs. Some 5,600 American companies have invested in the UK. It is ridiculous to suggest we can move closer to the United States by moving away from the EU. On the contrary, the stronger we are in Europe, the stronger our voice is in America, just as our influence in the EU is buttressed by our close ties with the US.

It is appropriate at this point to mention missile defence—a subject on which many of your Lordships have strong and differing views. Let me reiterate our position. We have made it clear that we understand the role that such systems might play. As the Prime Minister stated recently, we have to look at all the different ways in which we can deal with a real threat.

We strongly welcome the fact that this month President Bush, the US Secretary of State and the US Secretary of Defense have all come to Europe and discussed the issue. We also welcome the US dialogue with Russia and China, which we hope will eventually produce positive results. The most important thing is that all parties are committed to taking forward a serious debate. We will continue with active and constructive engagement in discussions with the US as close allies with common strategic interests.

However, we need to distinguish between the general debate and specific United States proposals. The Americans have not yet decided what sort of system they will ultimately seek to deploy. We do not know whether it will envisage the use of sites in the United Kingdom, and we have received no requests to that effect. It therefore remains premature to indicate how we would respond to a request when we do not know what form the request might take nor the circumstances in which it might be made.

We live, of course, in a rapidly changing world. It is one in which this country plays a pivotal role, not limited to our relations with the United States or the European Union. History has given our country the benefit of being at the centre of the world's most influential networks—NATO, the United Nations Security Council, the G8 and, of course, the Commonwealth. Our position in each reinforces the influence that we are able to wield in the others. That gives us an inherent weight in world affairs. It is for the government of the day to use that weight as effectively and responsibly as possible.

For the past four years we have used our position to help to confront tyranny, oppression, conflict and human suffering. We shall continue to uphold the common values that underpin our own security and prosperity and that of our allies: justice, human rights and democracy. This is not mere altruism, although it would be worth it on that basis alone. We promote human rights and democracy in every continent not simply because they are morally right but also because that is the best way to preserve those benefits for our people. Globalisation increases our mutual dependence. The more we travel, trade and invest overseas, the more we need stable, secure partners at the other end. Global society is like every other society—if some lose out, we all lose out.

Rhetoric and setting a good example are not enough to nurture those values. It is simply unacceptable that one in five people on this small planet lives in extreme poverty. Our targets remain tightly focused on reaching the millennium goals, particularly on halving by 2015 the proportion of the world's population that lives in abject poverty. In the financial year 1999–2000, expenditure by DfID totalled £2.5 billion—the highest ever level in real terms.

In December last year, we published a second White Paper entitled, Eliminating Global Poverty: Making Globalisation Work for the Poor. This builds on an earlier White Paper and sets out how globalisation can be managed in a way that will accelerate the systematic reduction of global poverty. The paper argues for the involvement of efficient and vibrant private sectors, effective government, and strong and reformed international institutions. It outlines the policy measures that need to be adopted by developing countries, other developed countries, the international institutions, civil society and the private sector in order systematically to reduce poverty.

As a government, we remain committed to the International Development Bill, which fell at the end of the previous Parliament. It was reintroduced in the House of Lords on 21st June and the Second Reading is scheduled for 2nd July. The main purpose of the Bill is to establish in legislation poverty reduction as the central aim of UK development assistance. It will allow the Government to support civil organisations undertaking development awareness activities and to engage more effectively with the private sector by taking shareholdings in companies and using convertible instruments, options and guarantees. Those powers will ensure that the Government can take full advantage of the enormous contribution that civil society and the private sector can make to the reduction of poverty.

Coherence in government policy on all issues affecting developing countries is crucial if we are to make an effective contribution to the reduction of poverty. We shall continue our efforts to ensure that such coherence becomes an everyday reality. In particular, DfID will continue to work closely with the Treasury on the debt relief initiative. We are extremely pleased that under that initiative 22 countries became eligible by the end of last year. Personally, I am convinced that the Government's contribution to the issue of debt relief will come to be regarded as one of their main achievements in their first term in office.

I have at least touched on the main points of the Government's defence, foreign and development policies. I have done no more than that. However, before I sit down, perhaps I may pay a personal tribute to the men and women of our armed services. Sometimes it is too easy to perceive security issues in impersonal terms, as in the acquisition of new equipment or the implementation of a particular strategy initiative. We cannot, and must not, forget that in the final resort it may come down to our servicemen and women putting their lives on the line.

We have repeatedly seen real examples where, sadly, that has been required. Today, United Kingdom forces continue to undertake difficult and often dangerous activities, notably in Bosnia, Kosovo, Sierra Leone and Iraq. The world is a dangerous place and will continue to be so in the foreseeable future. However, I am certain, and I am sure that the House agrees, that it is less dangerous because of the outstanding role played by our Armed Forces. I believe that we can all be justly proud of the dedication, professionalism and sheer excellence shown by our servicemen and women. I am sure that I speak for the House when I express my unreserved gratitude and admiration for their devotion to duty.

Lord Craig of Radley

My Lords, I welcome what the Minister said about the Armed Forces. Does he agree that the Royal Air Force has demonstrated in the many operations that it has undertaken since the end of the Cold War that it has a vital role to play, that there can be no question that the days of that service are numbered or that it has outlived its vital role?

Lord Bach

My Lords, I believe that I know to what the noble and gallant Lord refers. When I had my breakfast this morning and read The Times, I read a letter that surprised me, to say the least. It obviously surprised the noble and gallant Lord. Perhaps I may make it absolutely clear from this Dispatch Box that the answer to the question is, of course, yes, and that the Government believe that the RAF has in the past, is now and will in the future play a crucial role, along with the other services, in defending our country.

I was talking about the gratitude that we owed. But that gratitude is cheap; it does not cost anything. However, it comes with the heavy obligation to support our forces with the right resources and the right equipment. Therefore, I am very pleased that, for the first time in over a decade, there is a sustained, planned real-terms increase in the size of the defence budget—£1.25 billion of new money in real terms over the current three-year period. That allows us to continue our massive programme of investment in new equipment.

Our programme for the Royal Navy involves building more than 30 new ships over the next 15 to 20 years. It will be the largest shipbuilding programme by this country in decades. As the Secretary of State made clear in the other place last Friday, it includes the construction of two new aircraft carriers, planned to be the largest vessels ever built for the Navy. We are also committed to projects to enhance our strategic airlift capability, to provide our future joint combat aircraft (the JSF) and to improve our amphibious and expeditionary capability. Those projects are the envy of many of our partners. I believe that in this programme, and in the innovative smart acquisition reforms introduced to achieve it, the United Kingdom is setting the best possible example of how to adapt to a complex, multi-faceted environment.

Equally, we realise that we cannot, and must not, neglect human factors. That is why we are making such great efforts to reduce the level of operational commitment faced by our Armed Forces. That will continue to be a high priority. This past year has seen continuing recovery from the exceptionally high operational tempo of two years ago—1999. Average intervals between operational tours for units in the principal elements of the Army—the infantry, artillery and armoured corps—are all showing significant improvements. That has been helped by improvements in retention. Outflow from the regular forces decreased in 2000–01 by 6.3 per cent in comparison with the previous year. In the current buoyant economy we are still finding recruitment and retention a serious challenge, but we are working hard to address that matter.

We also continue to improve our support to service personnel and their families. A new £60 million package of welfare support for personnel deployed on operations abroad has been introduced, including better communications, leisure and hygiene facilities. We are also seeking to improve living accommodation for service personnel; our programme has made a good start. New funding amounting to more than £50 million a year has been made available to improve families' accommodation abroad and single living accommodation.

Shortness of time—I have taken more of your Lordships' time than I had planned—forced me to range widely. However, I am sure that many of these points will be debated in greater detail during the next few hours.

4 p.m.

Lord Howell of Guildford

My Lords, I begin by adding to the good wishes that the noble Lord, Lord Bach, received yesterday in this House on his new appointment at the giant Ministry of Defence. I also thank him for his comprehensive speech. If he and other noble Lords will forgive me, I shall leave some of the more detailed defence issues to my noble friend Lord Burnham, who will speak at the end of the evening. I shall concentrate on the broader aspects of foreign and global affairs.

I also extend my congratulations to the noble Baroness, Lady Symons, who will respond at the end of the evening, on acquiring an amazing triple crown: she is the Deputy Leader of the House, Minister of State at the Department of Trade and Industry and Minister of State at the Foreign and Commonwealth Office. As an ignorant reader of the newspapers it seems to me that she will be involved in massive reforms in all three capacities. I read that the DTI is about to embark on a huge review; the FCO, as we know, has reviews every 20 minutes and is no doubt about to embark on another; and, as all in your Lordships' House grimly know, we are about to be reformed whether we like it or not. Many of those reforms will be in the noble Baroness's hands—and they are very capable hands indeed. Heaven knows how she will manage it all but I am sure that she will. She is also concerned, I gather, with the massive issue of inward investment and foreign direct investment in this country, which, as the noble Lord, Lord Bach, reminded us, is going extremely well. In fact, it has never gone better. To add a provocative note, I believe that it will continue to go extremely well so long as we stay clear of the "euro vortex", but that is another matter.

I briefly take this opportunity to welcome the new Foreign Secretary, Jack Straw, whom I have long very much admired, to his new position. I am glad that he has moved to the Foreign Office and brought his vast abilities to it. I make no comparisons with his predecessor, Mr Cook, who was always extremely courteous to me personally and who displayed great energies in his work. It is no business of mine to comment on moves inside government. However, Mr Cook is a brilliant House of Commons man and his energies will be very well deployed reforming the other place.

All that I want to say on the past period of foreign policy is that it is perhaps time to draw a line under the concept of ethical foreign policy, not because it was badly motivated but because all foreign policy needs to be as ethical as possible. Trying to make a special thing of it very nearly ended of tears. But enough of that.

Having said that I admire Jack Straw, I have to embark straightaway on a curmudgeonly note and say that I found his first speech, which he delivered in the other place last Friday in the debate on the gracious Speech, rather disappointing. It was obsessed—I hope that that is the right phrase—by Europe. Some have accused my own defeated party of having too much concern with Europe, but almost all of the new Foreign Secretary's speech was concerned with Eurocentric considerations and Europe's effect on this country. It was very disappointing that he was not able to go wider. I felt and still feel that I should offer to be his speech writer; I know that I could do a very much better job than the people who put together the speech that he delivered on Friday. However, I expect that my offer will not be accepted.

My hope was and still is that the new Foreign Secretary and his spokesmen will define with much greater clarity and national confidence than hitherto this nation's interests. They should do so in a narrower sense, which involves our territorial security—the narrowest sense of all, but still very important—in terms of our commercial advantage, and in relation to our true friends. They should also do so in a broader sense, which involves the best way in which to make a practical and effective contribution to the international order and to global stability through the transgovernmental network.

Unfortunately, the Foreign Secretary said that he had, no time…for a comprehensive survey of our policies towards the wider world".—[Official Report, Commons, 22/6/01; col. 289.] I hope that he will soon find time to do so. Most of what he said was about the European Union, to which the noble Lord, Lord Bach, referred several times, and to which I shall turn in a moment.

Before I do so, it is worth noting that the texture of international relations shows that the linkages between countries are no longer confined so much to officialdom and formal relations between foreign ministries. If we are to discuss foreign affairs in your Lordships' House, we need to go wider. Today, international relations consist of a mass of connections between public, semi-public, non-governmental, voluntary and private bodies, all of which combine with their opposite numbers in other countries and at supranational level for various international purposes. All such bodies are usually firmly connected to their home nations and to opinion-calling and account-calling structures within those nations.

That understanding of international relations and the new premium on network relations very much favours organisations such as the Commonwealth. That got a small passing mention from the Foreign Secretary and one small mention from the noble Lord, Lord Bach, but not much else. The truth is that members of the Commonwealth form the perfect intergovernmental and voluntary network of the most modern kind. Under that umbrella literally hundreds of non-governmental bodies and agencies create a web of common purpose that is unequalled anywhere else in the world. Those connections stretch right across the hemispheres into 53 states and into the everyday lives of millions of people and thousands of local communities. I am very glad that there is mention in the gracious Speech of the Queen and the Duke of Edinburgh going to the Commonwealth Heads of Government meeting in October. But—I address this question to the Government, the Foreign Secretary and the noble Lord, Lord Bach—where are the policies and initiatives to exploit that new resource? We have made a little progress over the years but nothing like what we could and should be achieving to adjust to the network potential of the Commonwealth, which is a vast resource.

The second general point that I want to make is that these days foreign policy faces a deepening dilemma. Human beings are co-operating—or trying to do so—on a far larger scale than ever before and in relation to a whole range of issues, to which the noble Lord, Lord Bach, referred. Those issues include human rights, anti-terrorism, drug control, pollution, and curbing new weapons of mass destruction and the hideous threat of biological warfare. Such weapons may be in the hands of rogue states or dangerous organisations. To address those global issues requires increasingly lofty international bodies, agencies and fora.

The link or thread between individual people at the grass roots level and the elected and accountable authorities has never been more treasured or more in need of strengthening. That is the dilemma. In my view, liberal democracies will become less tolerant of the usurpation of authority by international bodies. If one wants evidence of that, one simply needs to turn to the grim signs of protest—they were very efficiently "e-enabled" protests—at Gothenburg, Prague, Seattle, the City of London, Washington, Davos and wherever else international authorities have gathered together. We have reached the point at which protest is inevitably and immediately mobilised on an incoherent: but nevertheless massive and extremely visible and voluble scale. We shall see much more of such protests. What has happened is only the beginning of a form of protest against present patterns of international order, held by many people, rightly or wrongly, to lack legitimacy and democratic accountability.

Nowhere is that issue of legitimacy and connection more vivid than in the European Union, to which I now turn. We are going to be asked to legislate on the ratification of the Nice Treaty. Indeed, the Bill is to start its passage in the other place very soon. The issue is turning into a bit of a mess. After the Irish referendum, the Gothenburg conclusion was, "No renegotiation. We'll patch it up somehow with the Irish". I wonder whether that is the right approach. It seems to me that in the end there will be a need to recognise some hard truths about the Nice Treaty. It did not carry forward the unity and momentum of the European Union in the way that many people hoped.

I am interested that some commentators and think tanks are beginning to talk about the need for two-tier treaties: one set of treaties to deal with the administrative requirements, in particular, the administrative requirements of enlargement, the reform commission and so on, and the weighting of votes; and another set of treaties to deal with what degree of integration and forward momentum in this direction or that may be required by some countries in the Union.

Certainly, my own party was told very firmly, when it expressed doubts about the Nice Treaty before the recent election, that it was the key to enlargement and that any objection to it would mean that enlargement was impossibly postponed to the great detriment of all the applicant countries. That is what we were told then. Now we are told the opposite. Now we have, with charming innocence, Mr Prodi coming right out with it—the Nice Treaty is not essential to enlargement. Apparently it can go forward anyway. I am not so sure that that is what he was briefed to say but that is what he did say. The Foreign Secretary, in his speech on Friday, appeared to indicate also that it would be possible to go ahead with a treaty of accession, a treaty authorising the change in machinery for enlargement, without having to take on board the Nice Treaty with the good bits and the bad bits.

So the situation is not clear, and I wonder whether it makes sense to bring forward the ratification legislation quite so quickly. I gather that your Lordships' House might be required to look at it possibly in the overspill period when we come back in October. It does not really meet the needs of Europe. The needs of Europe and the reform needs of Europe were not addressed, in my view—and it is a view that I hold more strongly than before—by the Nice Treaty. We are not alone on this side of the House in holding that view.

It is not just a question of reforming the common agricultural policy. We are all in favour of that. The noble Lord said he was in favour of that in his opening speech. Forward-thinking and genuine Europeans—in contrast to some of the automatic pilot supporters, the knee-jerk supporters of the Brussels line, of the rather dilapidated euro, of crude centralisation and integration—should now be thinking about new models of governance for Europe and a replacement of the Community method.

Why is that? It is because enlargement changes everything. There are those who say that even to utter such phrases is somehow anti-European. Indeed, the shallow perception is widely trumpeted by the narrower-thinking Europhiles that to criticise the European Union procedures and goals, because we do not like some of them, is somehow anti-European. I must put on record that I regard that as a profound and nauseating insult, especially to those with families who have given their lives and their blood that Europe might be free. There is nothing anti-European about suggesting that European unity can be achieved in better ways than those laid out in the margins and codicils of tedious and massive treaties such as the Treaty of Nice.

I even heard the suggestion that my party treats our European neighbours as enemies. That is pathetic rubbish. We should hear no more of such patronising travesties. As the Minister rightly said, the choice is not and never was between isolation and engagement. It is about how best to tackle the practical tasks of governance in the European region.

We are all very concerned, throughout the whole political scene, about the euro question. I believe that more enlightened and reflective thinkers are right to question whether the rigid monetary union we now have, or that the euro-zone has, is the pattern of the future. At this moment, the euro-zone is haemorrhaging capital. It has done so faster in the past four months than it did this time last year. It is no wonder that the poor euro is ever sagging downwards when all the experts say it should be rising. The City of London is thriving outside the euro-zone, as the Minister has rightly conceded.

The truth is that an enormous amount is happening in the real world, which we must be allowed to debate, at least in this House, to undermine the traditional Community methods, the traditional bloc mentality and all the paraphernalia of regulations and directives. Those matters are being replaced by soft legislation. Policy initiatives are moving away from the Commission and going to the Council of Ministers which is still, deplorably, a very secret body. We should certainly be urging that it be opened up. The European Commission is losing its pivotal role, which I personally think is inevitable and even welcome. The reforms which are being pushed through by Commissioner Kinnock, whom I greatly admire and for whom I have a lot of time, are getting nowhere because he is receiving no support from the other Commissioners or from President Prodi at all. The so-called Commission was meant to be—and this was believed by some governments of the European Union—to be a service to the Community. But is not performing its role. It is not a service but a circus and some would cruelly say that President Prodi is its chief clown.

In this country, I urge the Government to put forward detailed proposals to create a more careful and open legislative process in which national parliaments should have an earlier and more initiating role. That is what we should be doing and it should be our priority.

As regards European foreign policy, there, too, I am afraid my heart sinks even when I hear the phrase. Too often it seems to be associated with self-aggrandisement and talk about Europe's destiny. It chills me. The Prime Minister uses the phrase "superpower" which I do not accept at all. The aim seems to be too often to score one up on the Americans. For example, there was the absurd decision to send a delegation to North Korea. There is also the ill judged anti-Bush rhetoric. It is dawning on European leaders—I hope it may not be too late—that anti-missile defence is the new order of things, as Bush painstakingly explained. It is not just a question of dealing with Saddam and the rogue states but beginning to sketch out the basis of an entirely new structure of deterrence and nuclear stability. Clinging to the ABM Treaty is, in my view, out of date. Thinkers in Europe should have spotted that a lot earlier than they did.

My noble friend will say something later about the rapid reaction force. I understand where the Government now stand. They do not want it to be separate from NATO. They do not want separate intelligence links. They do not want a separate command and planning structure. But that is not what was said at the beginning, and other things were said at the beginning. But the Government have changed and changed in a wise way, so I welcome the prodigal. But it has been quite a dangerous episode.

I am slightly reassured by all that because I now sense that even the best generals in France are saying that it will never work on the basis on which it was originally put forward and that the original idea merely got in the way of European co-operation within NATO and Anglo-French co-operation. So I think that reality will prevail although it has been a worrying time. We need to design defence structures in Europe to share the burden but aimed at the next crisis and not the last crisis, which is the wont of staff and general planners.

Macedonia is a new disaster unfolding before us. There is a real danger that legitimacy is to be conferred on Albanian rebels who are trying to destroy what is a democratic nation, the democratic nation of Macedonia. I am not convinced that the European Union policy is correct or that Mr Solana has been all that helpful, let alone Mr Léotard with his call yesterday, which I thought was really quite disastrous, for a consensus to be achieved between the Albanian rebels and the Macedonian legitimate government. When we start having a consensus call between the fire and the fire brigade, we know where that leads to. Of course we want to see the killing stopped. But that kind of posture will not stop the killing, only perpetuate it.

I have gone on about Europe, casting some mild criticism on the excellent new Foreign Secretary. But it is a matter that bears on all our considerations. I certainly do not want to go to the opposite extreme and take the advice of some who say, "Stop talking about Europe completely; drop it because it is not popular on the doorstep". That is facile advice, typical of focus-group politics. In your Lordships' House I hope that we are more sensible. We have the opportunity to speak about this great issue and to settle the matter correctly so that we can turn to the wider interests for which, last Friday, the Foreign Secretary found he did not have time.

Those wider interests are large indeed. As the Minister said, vast interests lie outside Europe. Four-fifths of our overseas investment is not in the eurozone. According to the latest figures, 57 per cent of our trade is not conducted with the rest of the EU; 81 per cent of our exports are not even denominated in euros; and leading economists tell us that the importance of Europe in world trade may have peaked and over the next few years may decline. Of course, Europe is vitally important. We have always been and always will be Europeans, but the activities of the vast world out there are of direct interest to our people. We ignore them at our peril.

I too do not have time to discuss rising Asia; or our best friend, Japan, to whom we never give enough attention. Taiwan, which is a brilliant island, also does not receive enough sympathy from us. Hong Kong, the true gateway to China, was not even mentioned last Friday or today. After America, it is the second destination for all our investments and it is the gateway to the biggest market of the future. We promised that we would not forget the people of Hong Kong. Have we forgotten them? Are we monitoring how they are faring? I doubt it.

I turn to Africa and the situation in Zimbabwe which is going from bad to worse. A journalist has now been thrown out and even Mbeki admits that his policy was ineffectual. Everyone is urging the South African Government to change the policy, if they have one still, and to insist upon a tougher Commonwealth approach. That should help not only the Commonwealth and the poor people of Zimbabwe; it may also help to stabilise South Africa which does not appear to be in very good shape at all.

Others will speak about development issues, including my noble friend Lady Rawlings, but a Bill on the subject is to be laid before the House which I hope will help. However, I am more and more convinced that our aid programme is best handled as much as possible by ourselves and as little as possible by the European Union. That view is shared by a number of Ministers in the present Government. I expect that my noble friend Lord Burnham will speak about our brave soldiers and the task, which is not always clear, that they are carrying out in Sierra Leone.

People say that the nation state is finished, it is too large for the regions; and it is too small for global activity. I fully agree that governments have lost power to markets, to regions, in our case to the European Union, to globalisation and to all sorts of other forces. But I also believe that the nation state is coming to the rescue of the international order and that the state remains the principal institutional site of the whole political experience. In my view the more that the new Foreign Secretary remembers that as he weaves through the plethora of international gatherings, summits, councils and so on, the better chance he will have of not going too far wrong.

4.24 p.m.

Lord Wallace of Saltaire

My Lords, I, too, welcome the Ministers to their various new appointments, singular or plural as the case may be. I hope that the fact that a Minister has three responsibilities entitles him to a slightly larger office space within the House of Lords. We shall watch with interest to see what happens.

I also welcome our new Foreign Secretary. I believe that it is particularly desirable to have a Foreign Secretary who, over the past few years as Home Secretary, has dealt with issues such as migration, and the weak states from which migrants come, and the huge demographic explosion in the South. Those are matters that need to be at the heart of foreign policy. On a personal point, for three years I have been chair of one of the European Union Sub-Committees, and dealing with Jack Straw as Home Secretary was a delight. He was one of the most co-operative Ministers that I can imagine and I trust that in his new post he will continue to be so.

I welcome the more relaxed European tone of the Government that we heard in the speeches made last week in the other place and in the speech of the noble Lord, Lord Bach. It is easier for the Government to be a little more relaxed thanks to the absurdly anti-European rhetoric of Conservative spokesmen in the general election campaign and the clear absence of response to that from the public. The Sun did not win that part of the general election.

The key to British foreign policy and to British defence policy is the European context. Without a clear sense of British objectives in relation to our major European partners, no coherent British foreign policy is possible. I am sorry that that is a truth that the Conservatives appear to have forgotten over the past 15 or 20 years, although I realise that in saying that I lay myself open to the charge from the noble Lord, Lord Howell, that I am being Eurocentric.

The principle is not new. After all, British history has been shaped by relations with France, the Netherlands, Spain, Germany and Denmark and by the interaction between the nations in these isles and our continental neighbours. I remember some years ago the then Mrs Thatcher asking for a new study into how to teach British history in British schools. The first report of that inquiry concluded that one could not teach British history, as opposed to English history, without putting it into its European context because the historical relationship between Scotland and England and between Ireland and England cannot be explained without bringing in France, Spain, the Netherlands, Denmark and Germany.

An excellent new study about Britain in Europe has been carried out by the Irish Institute of European Affairs—by Garret Fitzgerald and others—with an explicit concern that the emergence of a Eurosceptic government, resting on an English majority, would threaten a breach with a more Euro-friendly Scotland, which in turn may destabilise the delicate politics of Ireland, North and South. Those matters that Conservatives in England appear not to see are perhaps seen a little more clearly from Dublin.

The European continent of which we are a part is now clearly changing fast. From next January the euro will be in use and it will also start to circulate as a second currency within Britain. It will become steadily harder for Her Majesty's Government to avoid the issue of British membership, or for them to continue drifting for a further two to four years of indecision. On these Benches, we shall not wait for the Government. We intend to campaign vigorously for British membership and British interests.

The enlargement of the European Union and NATO is very much on the agenda. Next year it is likely, both in NATO and in the European Union, that major decisions will be taken on potential enlargement of both organisations in 2004. That means that the British Government and other European governments, as well as the United States, have to consider the impact of that enlargement on relations with the neighbours who will not come in this time: Russia, Ukraine, Turkey and the dependent countries of the southern Mediterranean.

NATO enlargement must not be seen as an anti-Russian device. It has to be negotiated as spreading European security eastwards, not as a hostile act towards Russia. That means that we have to reconsider the purpose of the Atlantic alliance in a post-Cold War world. No longer will it be an alliance in the old-fashioned military sense, nor I hope simply a vehicle for the projection of American power, but a framework for US/European partnership and a European security organisation which thus rationally ought to have a close relationship with Russia as well. I welcome the attention that the European Union has paid in that context to how we manage our common frontier with Russia and how we manage the problem of Kaliningrad. They are practical problems that we need to discuss.

I am less happy about the amount of attention paid to relations with Turkey. Turkey is going through a delicate process of economic and political reform. In an ill-thought-out set of decisions, tactically taken by the British Government and others in Helsinki, it was promised that it would become a candidate for membership without any idea of how fast that would move. The issue of Cyprus is drifting. While EU negotiations are moving ahead rapidly, there is no progress whatever on a settlement between the Greek-Cypriot and Turkish-Cypriot communities. I urge the Government to give that matter higher level political attention. They should pay more attention to relations with Ankara and for a short time less attention to relations with Moscow. This is not for Britain alone; it is an area in which Britain with other leading western governments has a major responsibility.

The Treaty of Nice was a messy treaty. Like the Treaty of Amsterdam, it was an unsatisfactory compromise which we nevertheless must accept. But we should learn from the failings of recent intergovernmental conferences in preparing for the next. I was pleased to hear the noble Lord, Lord Bach, say that it was time to raise the level of debate on this matter in Britain. It is high time that we should do so and we look forward to hearing from the Government—that is, in Britain and not merely in occasional prime ministerial speeches in Warsaw—that they are intending to educate the British public about the choices. Perhaps the noble Baroness the Minister will tell us when we might expect a Green or White Paper which will raise the level of the British debate.

We are also moving on the European security and defence policy about which I shall say more in a moment. I want first to touch on the trans-Atlantic relationship. We on these Benches believe that it is extremely important but must be seen within a European context. The United States remains a European power and we all very much want to maintain the American commitment to Europe. However, we must recognise that in Washington it is much more difficult to defend the depth of the American commitment to Europe. If I were a senator from a mid-western state, I would not defend the continued commitment of 120,000 US troops to Europe; I would say that the Europeans can pay for them themselves. That is part of the dialogue which we must continue to have about the European contribution to NATO and the American contribution to European security in the widest sense.

America has other concerns and priorities, so European governments must be even more active in Washington. The divisions within the Washington debate and the number of reasonable and responsible people engaged in the current US foreign policy debate, alongside some, frankly, "wild" men, gives us an additional incentive for getting actively involved.

All of those changes argue the case for stronger European capabilities, not out of any soft-headed European idealism but in pursuit of hard British interests. That also extends to North Korea and to China and we need strongly to argue against the undertone in Washington which wants to present China as an enemy. Gestures towards closer relations with China and help with the Korean situation are part of that.

The appointment of Mr Solana and his staff, now with continuing EU special envoys, is a useful step forward, but it is also evident that the division of functions between Mr Solana and Commissioner Patten does not work well, despite their good personal relationships. The six-monthly rotation of the Council presidency is a severe weakness in foreign policy. We shall need some stronger institutions in Brussels in order to cope with the foreign policy needs of an enlarged European Union. British foreign policy should be pursued through active partnership with other European governments. Britain's voice in Washington is strongest when it is heard in harmony with those of our European partners, not attempting to sing a solo on our own.

As regards defence, we see ESDP the necessary and sensible context for British defence planning, given that it is unlikely in the extreme that we shall find ourselves undertaking any major operations outside Britain on our own. It was extraordinary that last November, two years after the St Malo declaration, there was sudden hysteria on the Conservative Benches and in the press over ESDP, as if they had suddenly discovered that something was happening. I want to remind the Conservatives here and in the party that the origins of ESDP lie under the previous Conservative government in the Franco-British defence dialogue initiated by Michael Portillo when he was Secretary of State for Defence. The logic which pushed Michael Portillo in that direction is the same logic which has pushed this Government further down the road to closer European co-operation.

There are choices for British defence spending. If we are to maintain a worthwhile capability, we can either increase substantially the amount we pay, or we can go faster down the road towards sharing within a European framework. I say that for hard-headed British interests, not for any starry-eyed Euro-idealism. I heard Iain Duncan Smith being asked whether he was willing to pledge the additional 0.5 to 1 per cent of GDP needed to maintain an effective British defence capability autonomously; he refused to answer. If that is the case, closer co-operation is the logical way forward. I suggest a joint fleet for long-range air transport and, incidentally, why not a joint fleet for long-range aircraft refuelling, which is not at present planned by the Government?

Furthermore, are we seriously planning to procure two aircraft carriers, and when we need a fleet of three, without consulting more closely with our partners over complementarities of effort and of equipment? There is further usefully to go in gaining more effective power projection through closer co-operation. While we are talking about defence, will the Government consider trying to explain to the British people why it is worth while? There has been no effort to explain the position to the British public. President de Gaulle and President Adenauer did a huge amount to change public perceptions in France and Germany by joint military parades; by symbolising the change in their relationship. Why cannot we have members of the British-Dutch amphibious force on guard outside Buckingham Palace? Why cannot we have a British Guards regiment marching down the Champs Elysée on 14th July? It happened on 14th July 1938. Could it not happen on 14th July 2002 or 2003?

My noble friend Lord Redesdale will talk more about missile defence, but I want to say a little about the treaty and the idea that the ABM Treaty can be torn up because it no longer fits. The ABM Treaty is 23 years younger than the NATO Treaty. The NATO Treaty is also a Cold War treaty but it nevertheless continues to serve a useful purpose. Treaties are to be observed pacta sunt servanda,not to be torn up when one side believes that they no longer serve a useful purpose. Within the right wing of the United States there is a very worrying tendency to argue that America's special responsibilities entitle the United States to have a special opt-out from the international legal obligations which other states must observe. We must resist that argument.

Furthermore as regards defence, it is time that the UK-USA agreement, a child of the earliest stages of the Cold War and one of the most extensive intrusions into British sovereignty which we have yet accepted with foreign military personnel operating autonomously on British soil, ought now to be reported to Parliament. Twelve years after the end of the Cold War, we are entitled to a little more transparency. We may not accept everything that the European Parliament has stated in the Echelon report about what is alleged to be heard from eavesdropping stations in this country, but some more respect to Parliament: about the operations of US listening stations in this country is, I suggest, strongly desirable and necessary.

Then there is the wider world about which the noble Lord, Lord Bach, spoke usefully. We on these Benches welcome the transformation of the Department for International Development into a very active department of government. We also welcome its excellent globalisation White Paper, a model in terms of educating Parliament and the public.

We see the need to strengthen international institutions, above all the United Nations but certainly also bodies like the World Trade Organisation; the UN High Commission for Refugees, which at the moment suffers badly from a shortage of funds, including funding from the British Government; the World Health Organisation, in terms of global co-operation to fight disease; and the developing international regime to limit climate change.

We in Britain and in Europe are more concerned about the weak states than the "rogue states" with which the Americans are over-preoccupied. Weak states cause problems as violence, organised crime and migration spill over on to their neighbours and beyond. The underlying problems of the South are poverty, corruption and the threat of disorder. I refer, for example, to Nigeria, Zimbabwe, Congo and Sierra Leone, where we are already engaged. None of those problems can be solved by Britain alone, but we can make a useful contribution in co-operation with our partners and neighbours: first, within Europe, because we are a European country; secondly, across the Atlantic; and, thirdly, within the wide]: English-speaking Commonwealth and with our many friends across the world.

4.41 p.m.

The Lord Bishop of Oxford

My Lords, first I must give my apologies to the House and the Minister. Due to a special church service this evening I am, sadly, unable to stay to the end of the debate. My justification for wanting, nevertheless, to contribute is that the subject of development is of crucial concern to the Church of England and to all Christian Churches. It is very good to know that in the gracious Speech there are three references to development and I should like to focus on just one: the Government's commitment to, work for an early and comprehensive world trade round which will benefit industrialised and developing countries alike". I shall also make a brief comment on arms exports.

The debate on trade—free trade as opposed to various forms of protectionism—has gone on for centuries. The assumption behind the Government's White Paper on globalisation and poverty is that free trade and the removal of tariffs and other barriers will benefit the poorest countries in the world. While it is true that the majority of the 18 poor countries which have benefited most from the liberalisation or trade are those in south east Asia, it is also good that countries such as Bangladesh and Uganda also appear on that list. Therefore, clearly the liberalisation of trade can help the poorest countries in the world.

One important feature of the Government's White Paper is that it frankly acknowledges the difficulties. First, it admits: There are substantial inequalities in the existing international trading system". It also acknowledges that the World Trade Organisation, as a product of the post-World War II agreement and GATT, is still heavily dominated by northern industrialised states.

There are many excellent features of the White Paper. It recognises not only the current state of affairs but also the goals which need to be achieved and the Government's intention to achieve them. All that said, it is important to highlight some of the difficulties. First, while liberalisation of trade might bring long-term benefits to the poorest countries of the world, in the short and medium term this can have a detrimental effect upon them. The evidence that the Church encounters at a local level in its day-to-day ministry within the Anglican communion of 70 million members world-wide suggests that globalisation is often associated with a reduction in welfare expenditure, inequality, social fragmentation, poverty and a widening gap between countries.

The public perception is that at the moment globalisation produces losers as well as winners. According to the World Bank's development report for 2000–01, the average income in the richest 20 countries is 37 times that in the poorest 20. That gap has doubled in the past 20 years. Furthermore, although poor countries as a whole have shared in the increasing prosperity brought about by globalisation, that is on average. Where there is an average, inevitably there are those who do better and those who do worse. Some countries have done a great deal worse than the average.

All in all, the Churches and the aid agencies are less optimistic than the Government about the benefits offered to poor people by greater trade liberalisation. It is, therefore, important that a fairer trade system goes together with other policies associated with development and an awareness of the underlying economic and political realities which sometimes make countries and the elite within them resistant to change—for it by no means follows that if a poor country gets a fairer share of the international cake all those benefits will flow to those within that country who are most in need.

It is good that the Government are committed to strengthening the role of the WTO in relation to developing countries. Although more countries have been brought into its councils in recent years, and more help is being offered them, supported by Her Majesty's Government, to make their voice heard, their view is still unequally represented. At Seattle, for example, there were more American lawyers present than lawyers from all the developing world put together.

If we are serious about this subject we need to recognise that inevitably there are always vested interests, both countries and companies, which press to protect their present advantageous position. This means that we must be vigilant and uncompromising on behalf of those who are least able to stand up for their own concerns. Politics is of course the art of the possible and compromise is part of that art. But the Churches, aid agencies and many other people on all sides of this House are concerned that those compromises should not always be made at the expense of the poorest.

Recently we have had the European Commission's Everything But Arms proposal. Under it all exports from least developed countries, except those associated with the arms trade, would be allowed into the European Union duty free. However, there has been extensive lobbying from certain quarters so that the original proposals are severely watered down. For the moment, three sensitive products—sugar, rice and bananas—have been exempted. The amended proposals have disappointed those pushing for greater access for least developed countries to the European Union's markets and have led some to dub the proposals "Everything But Farms".

The Churches consider that the proposal to extend market free access to least developed countries in the European Union without equivocation or dilution was a modest one that would have carried relatively small costs to European Union countries while having the potential to bring significant benefits to some of the poorest countries in the world. While the final agreement is undoubtedly a step in the right direction, delays in the elimination of duties and quotas for least developed countries' exports of bananas, rice and sugar show that the European Union still has a long way to go to ensure that rhetoric matches reality in making globalisation work for the poor.

Another example of diversity of interest and the difficulty of reaching a fair agreement concerns negotiations between the European Union and South Africa over port, sherry, ouzo and grappa. It has been said that, these negotiations showed clearly the gulf between the supportive rhetoric and the harsh realities of the actual negotiating process". The Government readily acknowledge that liberalisation of trade is a necessary, but not a sufficient, condition for development. We might also wonder whether it is really relevant to some of the world's poorest communities. There is a very interesting table in the Government's White Paper which relates poverty to remoteness. For example, nearly 50 per cent of the population of sub-Saharan Africa lives on less than 1 dollar a day, and that is related to the fact that 80 per cent of the population lives more than 100 kilometres from a coast or ocean-navigable river.

The White Paper calls for better routes, rural transport and more modern docks. One is inclined to say: yes, but what about the effect on the environment, pollution and so on? Communities may need to explore other routes out of poverty for they may never have much to export and there will always be transport costs which do not make their exports economically viable.

Issues of trade as they impact on developing countries cannot but include control of the export of arms and technology. As is now widely accepted, the victims of conflict are predominantly civilians who may represent anything up to 80 per cent of casualties. The Government are to be congratulated on their role in securing a UN conference on the illicit use of trade in small arms next month.

The right reverend Prelate the Bishop of London had intended to take part in today's debate on these very points but regrettably is unable to be here. He has indicated to me his gratitude to the Government for their proposals on arms export controls, foreshadowed in their draft Bill at the end of March, and their commitment to legislation in the Queen's Speech. He and I welcome very much, as have many of the non-governmental organisations most closely involved with this issue, the complete overhaul that the Government have proposed for the statutory framework controlling the export of arms and dual-use technology. The draft Bill promises major improvements in that area.

However, as the noble Baroness will be aware, there remain a number of concerns shared by some of us in the Church of England and by NGOs. We hope that the noble Baroness, Lady Symons, and her colleagues will take on board proposals for ensuring that controls are extended to shippers as well as agents, and to consider the proposals made by the Quadripartite Committee of Defence, Foreign Affairs, International Development and Trade and Industry in another place for prior scrutiny of some licence applications. There is also the proposal for the extension of extraterritorial jurisdiction in this area of UK brokers operating wholly abroad. As the noble Baroness is aware, there are precedents for extraterritorial jurisdiction.

To sum up, the Church of England welcomes warmly the Government's commitment to try to ensure that under trade liberalisation the poorest countries of the world really will benefit and that this action will be a reality and not just rhetoric. It is particularly important to welcome this decision with regard to the relationship between the European Union and its trading partners. Also to be welcomed is the commitment to make the World Trade Organisation a more effective voice which will really serve the concerns of the poor. But, in order to ensure these highly worth-while goals, it will be necessary for everyone who has a concern about the issues to be vigilant, persevering and uncompromising in standing up for those who are least able to work the system for themselves.

4.51 p.m.

Lord Sewel

My Lords, I first express my gratitude to those who arrange matters for placing my name so early on the list. We all know that in debates such as these there is a danger that by the time one comes to speak everything that could be said has been said; although that does not necessarily deter Members of your Lordships' House. So my commiseration to those who will speak later.

I want to speak briefly and generally about NATO and EU enlargement. No one would pretend that these are anything but difficult and complex issues. But behind them stands the simple objective of realising a secure pluralist democratic Europe. That is a prize that is worth pursuing.

Anyone who has been following the debate on the process of NATO enlargement particularly would wish to pay tribute to the work—I was going to say "my noble friend", but as he sits on the Cross Benches he is not technically my noble friend, although he is both noble and an old friend of mine—of the noble Lord, Lord Robertson of Port Ellen. I believe that it is generally recognised that he has brought considerable energy, skill and, above all, authority to the task. I can think of no one better who could do that.

My concern is that if momentum is lost on enlargement, in the context both of NATO and the European Union, there is a real risk that a dangerous degree of disillusionment will develop. That will cause unpredictable political consequences.

It is difficult for those of us who became politically active in the 1960s—particularly as student politicians and activists—to appreciate the importance that the governments of so many central European countries attach to achieving membership of NATO. All those years ago I would have thought it extremely unlikely that I would ever be confronted by a demonstration in favour of NATO membership, yet that was the case recently on a visit to Lithuania where people were demonstrating under the banner " Molotov-Ribbentrop must be buried". That may seem arcane, but in a way that slogan encapsulates the old Europe that we want to—and must—leave behind.

The countries of central Europe see NATO membership as not only providing security in a changing world—important as that is—but as a means by which democratic institutions become embedded in their political systems, and, just as importantly, as a badge of legitimacy of respectability which encourages foreign investors to invest and help develop the economies of those countries. That is an outcome that is devoutly to be wished.

Decisions on NATO enlargement will, according to the timetable, be taken at Prague next year. The real question is not so much whether there will be enlargement but how far it will go. I believe that it is widely recognised that extending membership to Slovenia and Slovakia will not raise any new issues. There are no fundamental issues of policy raised by extending membership of NATO to those two countries. If enlargement is limited to Slovenia and Slovakia, that will be a profoundly disappointing minimalist outcome.

In this context, it is not possible to ignore the question of the Baltic states. We all recognise the difficulties that arise from their recent history and their geography and especially the special problem of Kaliningrad. It is not absolutely clear what signals are coming from Russia and from the comments of President Putin. One of my more depressing recent experiences was a meeting with members of the Russian Duma where ultra-nationalists, in talking about the Baltic countries, reminded me of a rather ineffective and irritable school teacher who was just about to lose control of a wayward class. I do not believe that the reaction from Russia is sufficient reason to turn away from the problems of the Baltic states. I hope and trust that, despite their difficulties, the government will not shy away from the challenge of mapping a way forward for the Baltic countries.

If next year Prague is to see some resolution of NATO membership, EU enlargement, on the other hand, is proving a long process. Given the distance that needed to be travelled, perhaps that is understandable. But we need to recognise that many of the governments and the peoples of central Europe have paid and are paying a heavy economic price in preparing for EU membership.

The heady days when EU membership was seen as a panacea, almost a "get rich quick" fix, are over. But, given the price that has been paid, there is a real danger that prolonged delay will result in a cynicism and disillusionment that may have unpredictable and dangerous political consequences. I say this in as gentle and understated a way as possible, but I believe that we need to look at history and recognise that many central European countries have in their recent political past characteristics of an unattractive form of extreme right-wing nationalism. It would be a tragedy if a failure to move forward on enlargement because of a squabble over issues such as structural funds, labour mobility and the common agricultural policy—although anything that brings about a radical reform of it is something devoutly to be wished—were to lead not only to a missed opportunity to help to build a new Europe, but actually gave rise to extreme political movements borne out of frustration in those countries.

In negotiations of this kind, and in European negotiations generally, altruism is not always evident. Those who have attended meetings of the Council of Ministers know and appreciate that to their cost. Nevertheless, in previous rounds of enlargement, political considerations with regard to underpinning democratic institutions have been as important as economic considerations. Surely, in this period of debate, that should be a primary consideration as well.

There is as much danger in being too cautious as there is in taking the informed risk that significant enlargement involves. The prize of a secure, democratic, pluralist Europe is now within our grasp. I hope that the Government will argue strongly for major enlargement, both in the context of NATO and of the European Union. I suspect that that may serve our interests because I believe that the type of EU the candidate countries wish to see is perhaps closer to the model that Her Majesty's Government wish to see than is the case today.

5.2 p.m.

Baroness Park of Monmouth

My Lords, I warmly welcome the new Minister, and I am sure that the noble Baroness will wear her triple hat with panache.

That Britain is valued by the European Union and respected as an ally by the US is chiefly due to its admirable and professional Armed Forces. Yet the Government continue to fail to relate resources to commitments. Our Armed Forces are being used as a political tool with little regard to the consequences for their central task of defending the realm. The Government call their policy "an expeditionary strategy", and their peacekeeping and conflict management in the context of the Petersberg tasks, as the then Minister, the noble Baroness, Lady Symons, said in the House on 22nd November last year, imply a greater degree of engagement in conflict than mere peacekeeping".—[Official Report, 22/11//00; col. 863] Indeed, one of the four Petersberg tasks is defined by the MoD as, separation of parties by force". That is relevant to the Common Position on Africa, which was signed by the Government in May with no possible chance of scrutiny by this House.

We are still very much present in Bosnia, Kosovo and in the Gulf, and the Secretary of State has recently spoken of a possible sizeable commitment of troops to Macedonia. All these are open-ended commitments. None relates to the defence of the realm. All are making it increasingly difficult for the services to find the time, men and money to train and exercise for that central task and to retain their people. In the summer of 1999, as I believe the Minister himself said, 47 per cent of the Army was committed to operations. Meanwhile Northern Ireland is beginning once again to become a problem.

What are the resources allocated to defence? What other department of state is required to pay 3 per cent efficiency savings on its total budget back to the Treasury each year when it is already seriously underfunded for the tasks it has to do? The Government argue, with truth, that they are putting money into procurement—we had some good news today—but that takes years. Shall we still have the skilled and experienced men to use that equipment at the cutting edge or will they all have turned into a virtual force of peacekeepers?

My second concern is the growing deficit in accountability, transparency and scrutiny which is apparent in defence issues in the EU. The Common Position on Africa was considered and agreed by the General Council on 14th May and signed by the Minister for Europe. The letter forwarding the draft to the committees of this House had been dated 4th May and could not have reached the House before 8th May because there was a bank holiday on 7th May and the House rose on 10th May. There had been no possible chance of scrutiny. Article 5 of the Common Position says that the EU will consider deploying its own operational means for conflict prevention and crisis management in Africa, taking into account the scope of capability developed under the European headline goals. Article 1 speaks of the prevention, management and resolution of violent conflict in Africa, Article 2 of EU action to cover addressing acute failures of conflict and supporting initiatives for containing violent conflict. Is that not our old friend separation of parties by force?

The EU will analyse how best to co-ordinate member states' efforts in areas of training, equipment and exercises and will take into consideration the Brahimi report on UN peace operations, including inter-operability of troops and command and control structures. Does that sound like drawing on NATO's planning and training capacities? Is it something that should have been signed off without scrutiny?

We shall be reminded by the noble Baroness the Minister that on matters of defence we have a veto. However, under Article 24(3) of the Treaty of Nice, when the agreement is envisaged in order to implement a joint action or common position, the Council shall act by a Qualified Majority in accordance with Article 23(2)". I remind the House that we and the French will necessarily always be required to provide the largest contingent. For instance, even the admirable Norwegians envisaged a contribution of only 1,400 men to the Petersberg tasks. As Africa is, I believe, outside the scope of normal NATO operations, we shall presumably also have to provide the strategic lift and the sea power.

It may be relevant that according to the FCO the budget for the UN force in Sierra Leone, UNAMSIL, for 1st July 2000 to 30th June 2001, based on the cost of a force of 13,000, was £504,400,000 and now that the force is to be increased to 17,500 the cost will go up by a further 30 per cent. So far it has achieved absolutely nothing, unlike our own tiny force. Should the EU therefore decide to intervene in a similarly sized conflict in Africa, the cost would hardly be less.

The Belgian presidency, secure in the belief that according to "a recent Euro barometer" public opinion favours a further development of Europe's own defence identity, has said that it wishes to bring about a greater involvement of the EU in the peace process in central Africa and the region of the Great Lakes and will produce an action plan. Let us hope that this relates solely to economic aid, but as it has said it in the context of its views on EU defence we cannot be sure of that. It has of course also said at another time, in discussing the capability goals, that it would not envisage supplying troops for more than six months— very helpful basis for operations. The Belgian presidency also says that the EU conference of December 2001 must declare the EU operational in terms of crisis management. I hope that refers only to the structure of committees.

Reverting to costs, the explanatory memorandum from the FCO claims that the Common Position on Africa will have no financial costs. It states: It will however open the way to EU partners agreeing joint action that will have financial costs. Any joint action will be submitted individually for parliamentary scrutiny". It would be useful to know how that squares will the inter-institutional agreement between the European Parliament, the Council and the Commission on provision regarding the financing of the CFSP, an agreement attached to the Treaty of Amsterdam though not part of the treaty. It was finalised in July 1997 and its provisions are now in force. At what point would national parliaments be consulted, I wonder. Mr Solana, in his confidential report to the Council on common strategies, is fully aware of the need to identify the budgetary means of implementing them.

We must watch the gradual, uncontrolled, often unperceived transfer of power from national parliaments to the EU in the fields of foreign policy and defence. We really have to take a grip and make things work better. The whole process is as slippery as a jellyfish and as difficult to grasp. Javier Solana reminded the Council that the treaty, requires common strategies to set out their objectives, duration and the means to be made available to the Union and member states", commenting that this gives them, an operational nature going well beyond declarations of policy. The Common strategy", he reminds us, provides automatically for adoption by Qualified Majority of any implementing Act". Thus we would have no choice if the EU decided, for instance, to intervene in an active war in Africa. Can noble Lords imagine the Government saying at that point that we would rather opt out? They would deem that politically impossible, whatever the demands it would make on our already over-committed forces. We should never forget that although the Government are accountable to Parliament for decisions to deploy UK forces in EU-led operations, that accountability is retrospective.

The common position on Africa is an example of an EU decision taken by QMV and never submitted to scrutiny which could have important consequences in terms of defence and of costs. What was the point of securing a six-week interval for scrutiny in the Amsterdam Treaty if we are not to insist that it operates? It is evident that Ministers are not prepared to fight this issue and Parliament should ensure that they do.

I am equally concerned about transparency and the degree of control, if any, that we can exercise on the continuing exchanges between the EU and Russia under the common strategy on Russia. This is a critical time in our relations with the United States for it is important to do all we can to prevent the Russians driving a wedge between us. The EU has so far developed its common strategy on Russia that Mr Solana and the troika have for some tine been talking about regularly, not only about Russia's possible contribution to future Petersberg tasks, which is reasonable, but about defence and security, including a Russian NMR-type proposal which is mysteriously respectable whereas the US proposal is not. According to Moscow, the Russians have proposed a European system of missile defence which could be raised with the EU as soon as European countries are ready to pool their efforts in favour of Mr Putin's initiative.

As I told the House on 2nd May, the EU now has specific consultations within the CFSP framework with Russia on security and defence matters. including disarmament, arms control and non-proliferation—and this is the country which is selling weapon:; of mass destruction to rogue states and still has not destroyed its 40 tonnes of chemical weapons.

Three or four years ago we set up the NATO Founding Act on Mutual Relations, Co-operation and Security between NATO and Russia precisely to discuss such issues. It is surely vital that such exchanges, in which the US is deeply concerned, should continue on the NATO net. But the EU has deliberately embarked on the same agenda while agreeing with Russia that it deplores NMR. The Russians have said that they believe that, the EU can become a more promising partner than NATO"— (not surprisingly, perhaps, since apparently they expect to take part in equipping the EU defence forces) and although in February, Ivanov said that agreement had been reached that military issues would he discussed in a Russia/NATO dialogue, while political ones would be discussed primarily with the EU, both the Stockholm presidency and the EU/Russia summit in May continued to discuss security with Russia.

The Americans have accepted our assurances that the CFSP's object, through the capability goals, is to increase Europe's contribution to its own defence and that it is not there to rival or to diminish NATO, but to add value. That hardly squares with what is in fact happening. The interesting thing is that there has never been any publicity about this. It is not mentioned, apart from one sentence, in the presidential report on the Nice Treaty. The proceedings at the EU/Russia summit, despite the importance of their contents, are confined to minor press communiqués.

I am all for close relations between the EU and Russia on everything but defence, and one cannot blame the Russians for using the relationship to their own advantage. But relations on defence should be conducted either through NATO or bilaterally. This is a subject too important to leave to Mr Solana. We do not know what commitments are being made in our name. We have many years' experience of negotiating with the Russians, as do the Americans. I am not convinced that the Brussels hierarchy has that experience and I do not forget that there is a common strategy on Russia within which any implementation of decisions will be under the treaty by QMV. We shall not be able to exercise our veto. I retain an old-fashioned prejudice in favour of defence decisions in particular being taken by the Government so that they reflect our national interest. That is particularly the case since our national contribution will be among the largest and it is our men who will be taking the risks.

5.14 p.m.

Lord Craig of Radley

My Lords, it gives me great pleasure to add my congratulations to the noble Lord, Lord Bach, on his position as the new Minister for defence in this House, and to welcome the noble Baroness, Lady Symons, to her new portfolio. I congratulate her on her well-deserved elevation. She has moved away from defence topics. Today, so shall I, but I hope that I may still engage her interest in what I shall say in response to the gracious Speech.

Last Thursday, I attended a meeting hosted at the Malaysian High Commission at which His Excellency Professor George Kirya, the Ugandan High Commissioner, and a number of other High Commissioners were present. The purpose of the meeting was to discuss, together with key private sector individuals, preparations for the Commonwealth Partnership for Technology Management (CPTM) Dialogue to be hosted in Kampala by President Museveni of Uganda in August.

This will be the latest in a series of such dialogues which have been held successfully by CPTM in Malaysia, Barbados, Botswana, Namibia, Zimbabwe and Mozambique over the past six years. I have been privileged to attend three such gatherings, in Langkawi, Maputo and at Victoria Falls. I have now accepted President Museveni's personal invitation to join him at the Kampala Dialogue in August—I am a Fellow (unremunerated) of CPTM.

Each event attracts 250–300 participants from government, private sector businesses, labour, academia and the media from around the Commonwealth and beyond. Attending for the three or four days of all these dialogues are as many as a dozen heads of state or government from Africa, Asia and the Caribbean. Such high-level and enthusiastic commitment, over a period of several years, underlines the importance and value that is derived by the busy attendees who very actively support and participate in these meetings.

At each and every dialogue, all participants have an opportunity to mix and take part, formally and informally. A variety of themes and issues affecting the interests and business activities in the region and further afield are highlighted and discussed. Over the years, CPTM has developed a remarkable networking and "smart partnership" approach to tackling common concerns and problems, in particular in the emerging economies of the Commonwealth. The aim has been to create a climate of co-operation rather than confrontation between the various groups, a willingness to resolve problems together and collectively, rather than alone.

CPTM itself was launched by CHOGM in Auckland in 1995 as a not-for-profit company limited by guarantee. It has received positive endorsement at CHOGM 1997 and again at CHOGM 1999 in Durban. Over the past six years, CPTM has evolved a rich variety of ways of disseminating best practice in technology and related management issues. It has successfully promoted its unique "smart partnership" concept of working co-operatively as "smart partners" to achieve common goals. CPTM itself has a mandate to, enhance national capabilities for the creation of, and participation in, global wealth through sound management of technology, using public/private sector partnerships". Its operations are controlled through a small central headquarters or "hub" in London, interacting with other hubs in the Caribbean, southern Africa and South-East Asia.

One of CPTM's unique strengths is the quality and ability of its networkers, who come from both the public and the private sectors. They freely offer knowledge, experience, flexibility and a willingness to adapt rapidly to changing circumstances. Although CPTM's paid staff is very small, by acting as a catalyst or triggering mechanism, CPTM achieves a multiplying effect far in excess of the resources put in. One of the main attractions of CPTM, both to governments and to the private sector in the emerging economies, is exposure to and membership of a worldwide "best practice club"—a club through which, both individually and collectively, representatives can explore and capitalise on the experience of others, dealing with complex global issues, like WTO rounds and the explosive impact of electronic and other technologies on all our lives.

Examples of CPTM's efforts leading to positive and practical results are growing apace. Outcomes include a quality management network in 10 islands of the Caribbean. One organisation has completed the requirements of ISO 9000 certification and is now certified. Two others are well on the way.

The ICT strategy in Grenada is being developed with the assistance of a CPTM-organised team. In Ghana, the Council for Scientific and Industrial Research has brought in private sector involvement so that joint public/private sector SMEs have improved access to technology know-how.

In Malaysia, the highly acclaimed MIGHT formation also brings together the public and private sectors of the Malaysian industry. It spearheads new joint public/private sector ventures—for example, the Electroplating Park, Malaysia, which co-locates several small companies involved in metal finishing industries so that all their highly polluting effluents can be properly treated and decontaminated in one place before safe release in the environment.

In Mauritius, its Research Council and its Vision 2020—a long-term perspective document for strategic guidance—have been adopted by its government and will be used for organising present and future investments. In Zimbabwe, a Scientific and Industrial Research and Development Council has been established, with effective research facilities, charged to bring public and private sectors together in new R&D ventures.

CPTM Fellows and staff have had a hand in all of these developments. They have also recently been advising the Shell corporation, at its request, on Shell's approach to identifying future global challenges for the company.

By no means is this an exhaustive list, but it helps to demonstrate the global width and variety of CPTM's contributions to tackling the complex modern problems that face governments and the private sector in many parts of the developing world.

At the meeting last Thursday with the Ugandan High Commissioner, we were briefed by Tan Sri Kamarul Ariffin, the executive chairman of the best known media and news group in Malaysia, on one of the latest and novel developments called Smart Partners News Network, another initiative derived from discussions at the CPTM dialogues in Maputo and Langkawi. This network, which owes a great deal to the drive and imagination of Tan Sri Kamarul, will be available on the world wide web. It is to be launched formally at the forthcoming dialogue in Kampala. It will combine in one website, www.southnewsnetwork.com, articles and factual reports on technology, management and other related topics from the subscriber countries. These already include Malaysia, South Africa, Namibia, Mozambique, Lesotho and Zimbabwe, and more are preparing to participate.

One of the understandable feelings aired at several of the CPTM dialogues, particularly when considering the issues of global trade and activities, is that media coverage is often dominated by reports coming from developed countries underlining their global economy approach. These may not always fully reflect the issues as viewed from within the developing nations; www.southnewsnetwork.com will give a regional perception. This is a further example of a practical CPTM encouraged product.

The remarkable thing about CPTM is that it has so quickly established itself as a most valuable, even indispensable, group within the Commonwealth. It has, uniquely, also pioneered ways of spreading sound management and best practice even more widely, to friendly countries and businesses beyond the Commonwealth itself. That it has continued to attract such sustained and dedicated personal support from heads of states and governments over a period of years is itself a most favourable endorsement of its value.

It has developed a very special niche within the Commonwealth family and deserves to be enabled to continue its excellent work. CPTM's only source of income is from government grants and some money from private sector organisations. It seems to be able to achieve a great deal for less than £750,000 a year, but its recent income is nowhere near to reaching even this relatively modest sum. Not all of the more developed Commonwealth countries now give it their support. Its future will depend greatly on the view taken at the Brisbane CHOGM and by the High Level Review Group.

A number of heads of state and government who will be attending Brisbane have already written to the Australian Prime Minister to express their desire that CPTM and its future will be specifically discussed during his chairmanship of CHOGM at Brisbane. Dr Mahathir, the Malaysian Prime Minister and a key founding figure and Fellow of CPTM, wrote to Mr Tony Blair only last month to express his views about the future for CPTM and drawing attention to the dwindling support that some of the older Commonwealth countries are giving to CPTM. I expect that there will be a further report: and message about CPTM sent to CHOGM by CPTM Fellows following the dialogue in Kampala.

If CPTM is to continue its work for good, it needs to have a firmer financial standing than it has enjoyed thus far. Now that its performance and value can be judged, it is time to give CPTM the right backing. I urge Her Majesty's Government to set the example and to be as forthcoming as they were when they first came to office in 1997 with practical and increased financial support.

The DTI is the sponsor for our Government's contribution. If ever there was a candidate for joined-up inter-departmental support, CPTM is it. I am therefore particularly pleased that the noble Baroness is to respond. Her new trans-departmental responsibilities make her uniquely well placed to consider all that CPTM has achieved and can achieve in the years ahead. I am more than willing to brief her further. I urge Her Majesty's Government to give positive and practical support to CPTM, and to respond to the points that will be raised at Brisbane.

The theme for Brisbane is to reinvigorate the Commonwealth. CPTM has developed unique skills and methods that can assist in vitalising life for many Commonwealth people. It is a force for good in the Commonwealth. It deserves a boost to its financial fortunes to allow it to continue its really excellent work.

5.27 p.m.

Lord Shore of Stepney

My Lords, it is a pleasure to find that I am following a serious and valuable speech on the subject of the Commonwealth, which I have come to see as the most neglected asset available to this country's influence and diplomacy in the world. If Ministers were able to positively respond and work out an agenda for the CHOGM taking place in Australia later this year, they would be doing a great service, both to this country and to the 50 or so countries in all parts of the world which are members of that great association.

Having said that, I am very conscious that today's debate is the first in this new Parliament. With a new Parliament, a new team of Ministers—one of whom I see is not exactly a new member of the team, but we are very glad that she is still here—and a massively changing world situation, I hope that the Government can begin to think, creatively and deeply, about the future in a way that has not been obvious for many years past.

I welcome very much—I hope that this will not do him any damage—the excellent speech of the noble Lord who spoke from the Opposition Front Bench. It deserves serious study.

I wish the new team well, obviously. I am glad to see that in the Queen's Speech—and, indeed, in the manifesto from which the Queen's Speech was drawn—there are indications that matters such as development, world poverty, international defence and security have not escaped the Government's notice. Nevertheless, the Government, I am afraid, are still overshadowed by the European connection in all that they do and think. I shall devote most of my remarks to that issue with a sense of regret. There are massive concerns that we in this country should have with the rest of the world, but they are reduced, as it were, by this almost obsession that we have with things European.

With respect, I say to the Government that it is necessary, first, to get rid of a number of delusions—that is to put it as kindly as I can. One is that the objective of British policy, regardless of whether it is actually in our interest, is to be at the heart of Europe. No one who has undertaken any serious study of the case for joining the euro could fail to reach a negative conclusion. The case is contemptibly weak on economic grounds. It is not contemptibly weak on political grounds; indeed, it is a very serious case. It is that which tempts the Government, although they dare not quite say it, even now—although I note a slight change in the strength of the vocabulary in favour of the euro at the beginning of this new Parliament. Long may that continue. I hope that a "considered and cautious" approach will indeed be pursued. The trouble is that the Government believe that they must be "leading the pack" in Europe, and joining the euro is simply part of that. It leads them to misdirect themselves as to the national interest.

Secondly, perhaps I may offer the Government some advice. They may say that their approach has paid off politically. Intellectually, however, they can no longer go on pretending that the debate is about "inward-looking chauvinism versus sensible Europeanism", people "turning their backs on Europe" and wanting to "huddle into a corner out of touch with reality". That kind of language is fine for the hustings. But the kind of xenophobic noises about which my colleagues on the Front Bench often complain are confined to a very small minority of those who are involved in the debate. No; the real debate is between the "little Europeans"—with whom, I am afraid, the Government are aligning themselves— and those who believe that because we live in a wider world, a genuinely global world, we cannot afford to be absorbed within a regional continental bloc; that we must think and act internationally and retain our freedom of action to do so.

Thirdly, the Government must clear their minds and be more serious about exactly what we are a member of, and what it is trying to become. I have in front of me a quotation from the 1997 Labour manifesto. The key sentence about Europe is this: Our vision of Europe is of an alliance of independent nations choosing to co-operate to achieve goals they cannot achieve alone". That idea is contemptibly far from the reality. My noble friends are far too intelligent to believe such nonsense.

In the Labour manifesto that was presented to the nation a few weeks ago there was an advance—and we should all cherish this. The belief is no longer merely in an alliance of states, but in, a Europe made up of nation states and offering a unique blend of inter-governmental co-operation where possible and integration where necessary". Now we are getting a little bit closer to the reality. It is indeed both those things. I believe that my noble friends would like to stress the intergovernmental side of things more than they would the integration side. Nevertheless, the integration side is very powerful. Nothing could be more integrationist than the euro—to abandon separate national currencies and to turn your own national bank into a subsidiary of a European bank in Frankfurt. That is integration.

The other problem with the intergovernmental co-operation side is that, increasingly, such decisions are made by qualified majority voting. So the Government are hemmed in on both sides. There is the side of the supra-national Commission, the European Parliament—legislation, supreme court and all of that; and on the intergovernmental side there is the European Council of Ministers and the great Council of Europe—ever increasingly deciding what to do by qualified majority voting.

To pretend that this is the same kind of relationship as we have with other countries—the treaties that we sign and the obligations that we enter into—is to delude ourselves. I very much hope that the new team at the Foreign Office will have the intellectual courage and honesty seriously to address the question of what it is that we have joined, and what it is programmed to become.

I am not absolutely certain about the matter. I agree that there is a question mark as to the final destination. But the recent manifesto dismisses the evidence of that destination with the statement: Together with virtually all other European countries we do not support a United States of Europe". I say to my noble friends on the Front Bench that they are wrong if they believe that. I do not think that they do believe it. They know that it may fall just a little bit short of a federal state; and they know very well that the whole great debate that will open up over the next four years following the Treaty of Nice is to delimit the federal nature of the European Union and to define clearly the upper federal level which will make those decisions on our behalf and those rights that are left to individual states.

If we cannot face these matters and talk about them honestly, if we merely "rubbish" people who raise "difficult" questions, I fear for this country. But I do not really fear for it. I know that there are people of great intelligence and good will on all sides, and that they will turn their minds to these major problems.

I turn to the area of foreign and defence policy about which my noble friend spoke. I welcome some of the proposals—I refer to the aircraft carriers and the resolve that my colleagues have that NATO will have the first and last word. The trouble is that my noble friends can speak only for Britain. It is not the intention of many of our allies in the European Union that they should subordinate themselves to NATO for a clay longer than they can get away with. We know very well that a structure is being built up which will, indeed, duplicate, and—worse—rival NATO in terms of military arrangements. Somehow, no one mentions the sudden militarisation of the whole European Union. Well, it is just "treaty creep"—you have one treaty, followed by another bit and then another bit more. Suddenly you find that a civil enterprise that you joined 25 years ago turns itself into a military pact with a separate foreign policy. The noble Baroness, Lady Park, spoke most seriously and properly about that. Like the noble Lord on the Opposition Front Bench, I believe this to be a great worry.

I am not at all happy that there is great wisdom in the European Council in its dealings in the Balkans, whether it be Kosovo or, more recently, Macedonia. I am not at all sure that its approach is wiser. I am very worried that we going along with the kind of first steps towards qualified majority voting in these areas. I know that that does not quite involve the use of troops, but there are all the other issues to consider. Indeed, I worry about that a great deal. Frankly, I do not trust the Council's judgment when it turns to the Middle East—Israel and the uninhibited championing of the Palestinian cause. I have in mind the lack of balance, sobriety and maturity in its dealings with that matter.

Do we really want to be locked ever more closely into this area, or do we hope for something better? The idea that we are antagonistic towards Europe is rubbish. We have yet to define the relationship with Europe in a way which is as satisfactory for us with our very different world commitments as it for the neighbours of Germany—still huddled together by their horrible historical experience—who see the best solution in a fully integrated European state in which their problem, as it were, would be for ever overcome. But we have to think much more about Europe, and especially about the enormous changes that are shortly to take place.

We have an opportunity here, if only we have the imagination and the will to seize it. There are a further 11 countries wishing to join the EU. It is absurd to try to impose upon them the kind of obligations contained in the 31 chapters of the acquis communautaire. They cannot meet them; nor can Europe afford to great them with the generosity that is required. Cannot we envisage a very different kind of Europe, and work for it? There are many models in this respect. We began with the best of them all—namely, ourselves—when we formed the Council of Europe in 1949. It had the two crucial elements: first, you had to be democratic; and, secondly, you had to obey and observe a minimum charter of human rights. That is good enough for me. Beyond that, there was a forum in which not only could the parliamentarians of European countries meet together but so, also, could their Ministers. In my view, that was a fine beginning. What a pity it is that we now find ourselves with something, which, as a result of treaty creep, is very nearly a European federal state. There is plenty that both we and others could find in common that would allow all of us to live more comfortably with each other. It is one of the great tests of British statesmanship to find a voice and to give a lead in that endeavour.

Finally, let us throw away the kind of self-deprecation, inferiority complex and what we lack according to Commissioner Patten—our sense of identity or the fact that we do not know who we are, and so on. Perhaps I may quote the very last paragraph but one of the speech made by the Secretary of State, Mr Straw, in the House of Commons a few days ago. He sort of summed us up by saying: We export more per capita than the United States or Japan"— we do, we export more— We are the fourth largest trading nation in the world, the fifth largest economy, the second largest investor abroad and the second largest home for foreign investment". It does not sound to me like a poor, dependent nation and one that is lacking resource. Mr Straw went on to say: We benefit hugely from belonging to the world's most influential networks: NATO, the United Nations Security Council, the G8, the Commonwealth and the European Union".—[Official Report, Commons, 22/06/01; col. 292.] Let us be quite clear: we are members of those organisations and we have all those interests and assets. It is a great folly for us to entrap ourselves within a regional, continental bloc.

5.46 p.m.

Lord Campbell of Alloway

My Lords, perhaps I may endorse the tribute of the noble Lord, Lord Bach, to our Armed Forces, which, unfortunately, as I hope he will understand, is one of the few aspects of his speech that I am able to endorse. I join in the congratulations extended to the noble Baroness who now sports three feathers in her hat—the former emblem of the Prince Regent, now used by the Carlton Club.

At the outset, perhaps I may endorse everything that was said by my noble friend Lord Howell in his speech, which, frankly, I thought was a masterpiece. His erudite appreciation of foreign affairs in context with defence—a sort of tour d'horizon—is wholly supported. The hope is that it shall serve as a blueprint for the defence policy of Her Majesty's Loyal Opposition.

Many of the anxieties expressed by the noble Lord, Lord Shore, who is always a difficult speaker to follow because one's speech is always far less interesting than his, are not imaginary; they are real. Any committed Europhile, such as I have been—indeed, long before accession to the EEC—who values, as I do and have always done, the United States' contribution to the defence and the security not only of our country but also of Europe, would, having read this gracious Speech, suggest that some noble Lords in this House should step on the brake lest this EU bandwagon, driven by the likes of Romano Prodi, Lionel Jospin, and others, including some members of your Lordships' House, should hit the buffers.

I turn to the proposed enlargement of the EU and of NATO. This is the time for diplomacy, as between the member states of the European Union, the United States and Russia. Negotiations between the US and Russia on missile defence, of which there is no reference in the gracious Speech, must be allowed to seek resolution, especially having regard to the security meetings to which my noble friend Lady Park of Monmouth referred between the EU and Russia; and to which the noble Baroness has drawn the attention of the House. Furthermore, rules of engagement on armed combat with regard to the Petersberg tasks have to be settled. Account must be taken of the open-ended commitments to which the noble Baroness referred in the Province, the Balkans, Sierra Leone and many foreseeable armed rescue operations.

Account must also be taken of the fact that control of our Armed Forces remains within the remit of the Crown, albeit exercised by Parliament, which in the exercise of the treaty-making power may conclude alliances and withdraw from alliances without derogation from our residual sovereignty. The peoples of Europe now demand a referendum before ratification of EU alliances such as the Treaty of Nice or the euro. The concept of ever closer union was not related to defence; it was excluded. It is a concept of imprecise aspiration which does not permit the tentacles of Brussels to grab hold of defence. One has to take account of making adequate provision for our Armed Forces. That was once the bane of the monarch but is now the burden of our Parliament, but a Parliament which has control of its own budget. Perhaps that is why, wisely in my view, the euro has been put on the back burner by government.

One also has to take account of the fact that the peoples of Europe have no wish to set up a European superstate to challenge the United States or any other state and that in all these circumstances it is not appropriate that we should hasten into unilateral action of any kind but rather that there should be a moratorium on ratification of alliances referred to in the gracious Speech unless and until they are accepted by the peoples of the EU in a referendum.

The gracious Speech affirms that NATO is the cornerstone of our national security. However, it is also the basis of the EU's security, a security which is wholly dependent on United States support. That is not acknowledged in the gracious Speech and, as I understand it—I am subject to correction—is not acknowledged by the Government or the party opposite.

There is no reference to missile defence, upon which the United Kingdom or the EU is also wholly dependent on the United States. The United States' contribution to defence of the United Kingdom and the EU has to be assessed as a whole and settled by diplomacy within the remit of foreign affairs. I believe that the noble Lord, Lord Bach, agrees with that. The independent force outside NATO with its own intelligence gathering arm constitutes, frankly, a bad nightmare and that has now been recognised. But how could it ever have been proposed if the due process of diplomacy had been adopted? It would disturb defence relations between the United States, the United Kingdom and NATO.

An enlarged EU of at least 27 states—it could be more—towards the east will change the whole structure of defence. I agree very much with the analysis of this matter of the noble Lord, Lord Wallace of Saltaire. That enlargement could well involve a complex conflict of interest between the United States and Russia as well as a conflict of interest on missile defence.

It is not in the interests of our nation or of the EU that as regards defence the Government should do other than to tread warily and walk within hand touch of the United States. Is it not manifestly apparent that the future of defence policy lies within the remit of foreign affairs and that pre-emption of diplomacy would be wholly misconceived? Is it not fortunate that the noble Baroness speaks for the Government on both defence and foreign affairs?

As a statement of government defence policy the gracious Speech is neither sound, satisfactory or acceptable. It ignores the findings of Sub-Committee C of your Lordships Select Committee on the EU in paper 101 of 25th July. Those findings were not called in question in the Government's response of October 2000 or in the debate on the committee's report in your Lordships' House, reported in the Official Report of 14th December at cols. 520–564. That debate was concerned with the deployment of EU military forces on Petersberg tasks as defined in paragraph 29 of the report which includes armed operations in peacekeeping and peacemaking. There is no reference to that in the gracious Speech.

It was found by the committee that any such force would be wholly dependent upon the United States for intelligence gathering, heavy lift by sea or air, operational logistic support, command control, communications, computers, surveillance and reconnaissance; that no mission should be undertaken without the good will and tacit support of the United States; that NATO should be given the choice to lead any such mission and that a large increase in expenditure of most European states would be requisite in any event.

The noble Lord, Lord Robertson, acknowledged— as stated in the report—that the United States Government had an effective veto over EU operations because of its position in NATO and superior capabilities. The Secretary of State for Defence also stated in the report that he could not foresee a situation in which a major commitment such as the Balkans could be undertaken without the active support of the United States. The sub-committee concluded that it could not express too strongly its anxiety at the danger that the common European defence policy on security and defence could turn into a damp squib and that a consequent serious deterioration of our relations with the United States would ensue.

The sub-committee also found that defence was the responsibility of national governments and parliaments. It added that provision for our armed services lies within the exclusive province of our Parliament.

Field commanders engaged in the armed Petersberg task—the armed operation short of war of an international character in public international law—are concerned that there should be common rules of engagement for those who serve. War crimes under the Geneva Convention applicable to such armed operations as incorporated in Article 8 of the ICC statute warrant clarification and review. A seven year opt-out of Article 8 on ratification of the statute would afford an opportunity to establish such rules of engagement on the Petersberg tasks.

There is also very serious concern about the defence shield against missile attack which was set up by President Reagan in the 1980s. This shield today could be penetrated by an updated Russian Topol M missile which is made to wobble during atmospheric re-entry. And now (as propounded by Professor Gormley in a paper published by our International Institute for Strategic Studies) we face the threat of a new generation of missiles: a modern kit aircraft fitted out with navigational aids and warheads, total cost £70,000, with a guidance system generated by 15 toy Playstation game consoles configured together which guide the missiles to bug the ground flying at about 60 miles per hour. It is difficult to detect and destroy in flight using extant technology. Those are discharged from mobile launchers which experience in the Gulf and the Balkans has shown are all but impossible to take out.

The United States is committed to spending £44 billion on its new star wars defence shield project. Unless the United States keeps ahead of the field, in about 10 to 15 years' time there could be an equilibrium of terror akin to that in the Cold War.

In conclusion, of the 40 countries which already possess working cruise missile technology, only 22 are signatories to the missile technology convent ion. As to that form of defence, we are wholly dependent on the United States. The concerns of this speech were truly not addressed in the gracious Speech or the candy floss election so massively shunned by the electorate. Assuredly they cannot be addressed today, but perhaps some interim measure of assurance may be given pending a full debate on defence and foreign affairs.

6.3 p.m.

Lord Alderdice

My Lords, I, too, congratulate Members of the Government Front Bench on ascending to even higher office than before. I also wish them well because with high office comes an even greater burden of responsibility. In the politics of today there is little time to think and reflect on the decisions that have to be made. There are perhaps no parts of government which require clearer analysis and thoughtful decision-making than those of foreign affairs, defence and international development. Decisions made often continue to have effect for a long period of time. Decisions in the domestic field can be repaired more easily.

The noble Lord, Lord Howell of Guildford, referred to the over-concentration on Europe in the speech by the Secretary of State for Foreign and Commonwealth Affairs. However, the over-concentration in recent times has not been so much on Europe itself—it is an extraordinarily important matter as even those who disagree with the Government nevertheless agree—as on the economic aspects of Europe. Almost all the discussion recently has been about monetary union and the euro. That is important. It is a proper matter for debate and discussion. As a somewhat younger Member of your Lordships' House—despite the increasing number of grey hairs in my beard—I fear that my generation now thinks of Europe in almost nothing but economic terms. For them, we entered the Common Market: the European Economic Community. There is now debate on the euro and European monetary union. That was not the fundamental purpose of European union. Economics were the instrument adopted, but they were not the purpose of the founders of the Union.

On 1st July we come to yet another crisis in Northern Ireland. The 1st July is, and will be, remembered with far greater historic resonances than the events of this weekend. The 1st July is remembered because tens of thousands of young men from the Ulster Division and the Irish Division set aside the debates in your Lordships' House over Home Rule and went to fight and die for freedom in Europe—not freedom in Ireland or these islands, but freedom in Europe.

If we go by the old calendar, 1st July was the date of the Battle of the Boyne. In 1690 a Dutch prince fought with an English king backed by French troops on an Irish river. The Dutch prince won and the outcome was celebrated by an Italian pope with a Te Deum in the German-speaking city of Vienna. We have always been Europeans.

It has been a Europe of conflict. During 1,000 years, not a generation passed in which there was not a war between countries which now form the European Union. My generation has begun to forget that the greatest achievement of the European Union is not that we can travel on holidays with less difficulty at the border; the greatest achievement is that my generation has lived without a major war between the European nations. No generation for 100 generations has ever known that. We must not forget that the fundamental purpose of what we do in Europe is to prevent war or conflict.

I have listened carefully to noble Lords who indicate how that might be achieved simply by nation states working together. It is an easy answer. What are the nation states of which we speak? Throughout the whole existence of this Chamber there has been a constant and consistent debate about the boundaries of the British state, particularly as they relate to the island from which I come. The settlement, even at a constitutional level, is one on which we are still working. The European Union helped to settle some of the boundary questions between France and Germany and between Germany and Denmark. If it were not for the European Union, issues in the Basque country might well be creating more difficulty between France and Spain than is currently the case. We have our own little difference with Spain still to resolve in the context of the European Union.

It is not easy to define what a nation state is and where its boundaries are. With one or two possible exceptions, such as Portugal, nation states are not homogenous entities of nations bounded by states. They are historical entities, almost all of which contain minorities, which are often the cause or the subject of conflict and difficulty. The big problem for Europe in the next 10 or 20 years will not be economic issues or the euro, but how we deal with our minorities. That is the opportunity that Europe gives and it is the challenge before us as Europeans in these islands and throughout our continent.

The peace process in Northern Ireland did not start with the talks in 1991, 1992 and 1993; it started on the day in 1973 when the United Kingdom and the Republic of Ireland together joined the European Union. The issue for Northern Ireland began to be less whether we were part of the United Kingdom or of a united Ireland and more whether we were all part of a united Europe and what the configuration of that united Europe might eventually begin to be. That is what brought Ministers from Her Majesty's Government personally closer to Ministers of the Government of the Republic of Ireland and built relationships that had been sadly fractured.

I hope that, as well as stopping conflict among its member states, Europe has also begun to heal some conflicts that have been there all along. I do not know whether the Minister can say anything about this, but I harbour the hope that the increasing possibility of Cyprus, and perhaps even Turkey, eventually joining the European Union may begin to bring hope for another divided island. Britain has historically played its part in Cyprus. Perhaps we may also play a part in the future from our experience in helping to resolve the difficulties in Northern Ireland.

There may be a feeling that such problems are insoluble. The differences certainly cannot be resolved to please everyone. Other conflicts may sometimes be thought to have come out of the blue, but they rarely do. When I visited Macedonia two or three years ago, I knew that there would be trouble, because I saw exactly the same things there that I had seen in Northern Ireland in the 1960s.

What happened in Kosovo was also no surprise. Many of my colleagues had been warning for two or three years that what eventually happened there was bound to happen. Why? Because all the ancient rivalries were there and had only ever been held in check by an external structure—the imperial structure of the Ottomans or the socialist structure of Yugoslavia. I believe that only in the solidity of a liberal democratic European structure will it ever be possible to hold those ancient hatreds together. We have a responsibility there.

Given the painful and substantial experience that Her Majesty's Government and their officers have accumulated in the past 20 or 30 years, I hope that there will be a little more reflection on what can be learnt. If I have one criticism of governments and their officials over a number of years, it is that as they live, so they judge their neighbours. That is often said in a reproving way. I say it slightly differently. Those who come from peaceful, democratic countries with a liberal democracy and the rule of law are often naively upbeat about the prospects in areas of conflict. Conflict creates a new dynamic, different ways of thinking, different agendas and a different politics. I often find well meaning, good people from substantially stable societies coming to the wrong conclusions in their attempts to do good in divided and conflict-ridden societies. At times it is important to sit back, listen, reflect and be a little sceptical and a little tough in one's thinking. Sometimes we need to think ill rather than to think well when people are involved in conflict for a long time. Conflict does not continue by accident. It is maintained for reasons—not always good ones.

I hope and trust that the experience that this country and the international community have developed will be reflected on, thought about, used and digested to ensure that over the next 20 or 30 years we address conflicts on the basis of thoughtful reflection, not wishful thinking that things might be better than they are.

I have listened to comments about the enormous wider issues of ballistic missiles and missile defence. There is no doubt about the importance of those issues, but in the past 20 years, the vast majority of conflicts have not been major intercontinental ones, but internal conflicts within countries over minority groups who feel or are grossly abused. I suspect that the same will be true of the next 20 years. If we are to make our contribution, it will be not just on the bigger issues, but on those horrible little wars that cause so much tragedy and despair.

In dealing with those conflicts, we should not just look for new ways and new sets of relationships. I sometimes feel that we forget our old friends who have been able to help us. Europe helped us in Northern Ireland, but so did the United States of America and our Commonwealth friends. We turned to South Africa and Canada, because we speak the same language, we have familiarity with similar kinds of conflicts and we have the same kind of parliamentary structure and democracy. We have had to turn to people such as John de Chastelain and Cyril Ramaphosa. Even the conflict-ridden Northern Ireland Assembly applied to join the Commonwealth Parliamentary Association, because unionists, nationalists, republicans and loyalists all realised how much we had to learn from—and, on occasions, to give to—our Commonwealth friends. As the Foreign Secretary mentioned the Commonwealth in his speech, I hope that we will see evidence of an increasing commitment to it and all that it can give in so many parts of the world.

We should not forget other resources, such as the BBC World Service, which is enormously influential and valuable. I commend the Government on the increase in finance that they have given to the British Council. However, that remarkable organisation, under the leadership of the noble Baroness, Lady Kennedy of The Shaws, will achieve its full and substantial opportunities and possibilities only if Her Majesty's Government continue to increase the resources that it has at its disposal.

I trust that your Lordships will forgive me for concentrating on the issue of conflict, given the background from which I come. However, I believe that it is the most important aspect of foreign policy. While private citizens and private companies can get on with investment, wealth creation, trade and the international economy, it is the responsibility of government to maintain the law at home and abroad, to protect against conflict and its ravages and to promote—as the Government have said is their full intent—human rights and the resolution of conflict throughout our world.

6.19 p.m.

Baroness Whitaker

My Lords, the gracious Speech has much to offer for that span of linked concerns about Britain's place in the world and the nature of our own society, mentioned by the noble Lord, Lord Alderdice, described by my noble and learned friend Lord Archer of Sandwell in his notable speech proposing the Loyal Address, and amplified by my noble friend the Minister earlier today.

There are proposals in the gracious Speech which take the idea of an inclusive society beyond our island boundaries, rather as described this morning by Sir Christopher Patten, for those of us who heard his lecture, acknowledging the world context in which we operate and targeting major obstacles to a fairer and more prosperous world. We shall have the opportunity to debate the International Development Bill next Monday, so I want to make, if I may, three points about other development matters.

The first is to welcome legislation to outlaw the bribery of foreign public officials. I have previously mentioned to your Lordships' House my membership of Transparency International UK's advisory council. This Bill will have wide approval outside your Lordships' House and, indeed, throughout the OECD. The group vice-president of BP, Richard Newton, said: Corruption is the dry rot undermining aid. It destroys development, it frightens away genuine foreign investors, it perverts societies". Consider a country where development aid accounts for 90 per cent of public investment and 30 per cent of recurrent expenditure—not unusual in a sub-Saharan country. Large, unaccounted-for segments of these funds disappear or have no useful outcomes. The effect on public welfare—indeed, on life expectation itself—is deep. The World Bank once asked civil servants from central Europe, Africa and other regions to estimate how much had been lost through corruption in development aid as a percentage of project cost. Their figures ranged from 10 to 15 per cent. On the basis at that time of perhaps £3 billion aid annually for development aid to Africa, I leave your Lordships to work out the telephone number costs of corruption to the world aid budget.

But let us not rest easy on the assumption that corruption is mainly a poor country problem. The bribes which skew public service investment are paid largely by Western contractors. This does not exclude our own companies, slipping down in the index of countries perceived to pay foreign bribes. Effective aid needs a robust anti-corruption framework and it needs it soon. I hope for an early Bill which will improve on the model provided by the Law Commission, splendid for domestic issues, but which could put more beyond doubt the offence of bribing a foreign official.

I hope that the Bill will enable the full gathering of evidence and put a halt to the tax deductibility of bribes. And we might think again about whether prosecution should be only by consent of the Attorney-General, which is rather wide of the OECD framework. The promised money-laundering law is also part of the fight against corruption and is welcome in that connection, as well as in tackling organised crime in general.

The next thing that I particularly welcome in the Government's international work is the initiative planned by my right honourable friends the Chancellor of the Exchequer and the Secretary of State for International Development to tackle serious health problems. These health problems together make up an urgent crisis but one which has systemic causes.

The elements of the urgent crisis are well known. All over the developing world the working population is being decimated by HIV/AIDS, tuberculosis, malaria and other infectious diseases. Millions of people are killed every year by the big three diseases and millions more debilitated and incapacitated. Families are left uncared for and national health budgets are almost entirely swallowed up. The real development gains of the past 50 years are being reversed by the advance of disease.

The systemic causes of the crisis include poverty and poor living conditions, inadequate health delivery systems, governments' refusal to resource effective and explicit campaigns, in part, the Western-fixed price of treatment, often buoyed up by patent rules, and the imbalance in research between spending on the diseases of the few in the developed West and the diseases of the many in the developing world.

No one wants to see the financing of medical research undercut or invention and discovery unprotected and unrewarded. But the scale of the health problem means that new approaches must be taken to enable poor governments to buy treatment, which they then must also deliver effectively.

The Cabinet Office's Performance and Innovation Unit is publishing a report tomorrow, Tackling the Diseases of Poverty. I think it is unusual for a Cabinet Office policy unit to go so far outside our national boundaries, albeit with a major contribution from the Department for International Development; and I applaud this example of joined-up government.

The report recommends (it is already on the Internet) a global health fund—now part of the UN agenda—which can also make an advance purchase commitment to buy new products as they come on to the market as an incentive for research; work to make patent-controlled drugs affordable to developing countries; support for a tiered pricing system which also prevents lower-priced drugs intended for poor countries being reimported to higher-price markets; and support for basic and applied research and harmonised regulations to speed up approval and licensing of new products.

I congratulate my right honourable friends the Chancellor and the Secretary of State for International Development on their rapid implementation of the recommendation for a global drugs fund with a UK pledge of £75 million, which is now being increased to £200 million, and of the recommendation to set up tax breaks as incentives for research. I hope that my noble friend the Minister can say how the Government will implement the rest of the report.

It is now also necessary for the trans-national pharmaceutical companies to play their part, as they have begun to do in South Africa by withdrawing, under pressure from the Socially Responsible Investment movement, from the case brought against them by the Government. And a few weeks ago GlaxoSmithKline bowed to pressure from Oxfam and cut the price of drugs in 63 developing countries.

But the UN discussions on the global health fund are off to a fairly rocky start. Today marks the close of the initial session. What can our Government do to advance a useful agreement? I ask my noble friend the Minister for her assessment of progress, and particularly what form UK participation will take when the global fund is discussed by the G8 in Genoa next month.

The signs from the WTO session last week on drug patent flexibility were not reassuring. Will my noble friend the Minister encourage the Government of the United States to continue the relaxation of patent protection which they have begun with Brazil? And what part is the Commission on Intellectual Property set up by DfID to play?

I hope that the Minister will join me in congratulating Botswana on its progress, with the help of the Bill & Melinda Gates Foundation, in training and treatment to tackle AIDS—in stark contrast to South Africa, which has so many more cases of AIDS.

The last thing I put before your Lordships is that aid to developing countries is hugely supplemented by another source of funding—the remittances from the families of people in developing countries who work abroad. Our immigrants and indeed our citizens whose family origins are in developing countries are good earners. They add to UK tax revenues and they also send out probably at least matching funds to what goes out in official aid. When the IMF last looked at the subject, migrants' remittances exceeded by about 20 billion dollars all official assistance from donor governments. We should not forget these positive links between immigration and development.

In conclusion, some of those voters who seem to be getting turned off politics, particularly younger ones, can take heart from the broad and imaginative sweep that the gracious Speech shows over the leading part that Britain can play in the world context.

6.31 p.m.

Lord Renton of Mount Harry

My Lords, it is a great pleasure to follow the noble Baroness, Lady Whitaker, and the noble Lord, Lord Alderdice, both of whom made extremely interesting speeches. I shall take a slightly different line in this wide-ranging debate.

We are possibly facing a global recession and it is certainly true that there is currently a lack of investor confidence that is quite different from the tune—or mood music—of the past few years. At the same time, this is a strange moment in foreign affairs. There is a new Administration in the United States who are clearly feeling their way. Given the President's antecedents, the Administration are likely to be more isolationist and they will tend to look inwards, southwards towards Latin America and westwards to the Pacific; they are unlikely easily to look eastwards towards Europe.

There is also an as yet unproven Administration in Russia. They are still trying to cope with massive economic weakness and, dangerously, they are trading weapons and nuclear knowledge with rogue states, partly in order to boost their overseas earnings. In China, too, there are huge economic problems and uncertainty about the role it will play in this new century. After all, Jiang Zemin is due to retire next year from the presidency, and it is not clear whether Zhu Rongji, the other leading politician, statesman and economist in China, will seek to replace him. That creates an air of uncertainty in yet another of the world's major countries.

It is right to look at the United Kingdom's position against the background of those uncertainties. We have a new government and we are in a new millennium; where does our future lie? Does it lie exclusively within NATO in defence terms? Should we concentrate on trying to keep our special relationship westward across the Atlantic? Or does there have to be muted acceptance of the fact that the United States will slowly wish to get less involved in Europe, particularly in relation to humanitarian and peacekeeping exercises that western European countries think are necessary? Frankly, such exercises mean little to someone living in Kansas, Nebraska or Dallas, Texas.

The noble Lord, Lord Alderdice, in particular spoke about the Balkans. Unlike him, I have not been to Macedonia. I have twice been to Sarajevo—on one occasion I went there to open a British Council office—and I spent more than a week in Albania last year, where my younger son was working for the BBC World Service. From that I got a tremendous feeling that peace in the Balkans—an ability to make the Serbs live with the Croats or the Bosnians and the Muslims to live with the Orthodox Christians—is every bit as difficult to achieve as peace and harmony in Northern Ireland. One substantial difference is that the conflict in the Balkans goes back at least 600 years whereas that in Ireland goes back only 300 years.

The war after the break-up of the Yugoslav federation, following Tito's death, would not have been solved without the involvement of the Americans. It took American forces and its artillery, tanks and intelligence to bring that conflict to an end. However, the war has not in fact ended. The situation in Kosovo is now, if anything, even more difficult. So long as Milosevic was in power in Serbia, everyone sympathised with Kosovo. Now that Milosevic has gone, many people do not quite know what to do with Kosovo. If it becomes autonomous, clearly the Serbs will object, but if it does not become autonomous and independent, the Albanians will object and—possibly—many of them will leave and go to Macedonia, which, as my noble friend on the Front Bench said, is a tragedy. What will happen in Macedonia now? None of us knows. All that is certain is that there is a rising violence or volume of hatred between the Slavs and the ethnic Albanians, and no one knows how to control it.

I state all that in order to ask: are the Americans really prepared to become more involved in the Balkan situation in future? If not—as I suspect is the case—how effective can a European rapid reaction force be without American weapons, B52s and, above all, American intelligence? That is the real conundrum—the paradox—that faces us. Personally, I am not against a European rapid reaction force but we have to be extremely tactful about the way in which we move the matter forward so that NATO and the rapid reaction force can genuinely be seen to complement each other; that must be accepted.

In that regard, I pay tribute to the noble Lord, Lord Robertson, the Secretary-General of NATO. I have a lot of time for the noble Lord, not least because he was my "pair" in the House of Commons for many years. However, he always made it clear that he was prepared to be paired with me because I had a Scots wife and not for any particular qualities of my own! The noble Lord has shown a great capacity as a "peacemaker" and he has kept the different sides together within NATO. He has tried to carry forward this difficult argument—or discussion—about the rapid reaction force.

In that regard and in relation to the United States, NATO, the EU and the rapid reaction force, it is important for leaders of political parties not to take static, determined positions. We have to be able to rejig situations and treat problems and formulae as being subject to change. The situation is not static, although mutual understanding of each other's needs is absolutely essential.

The anti-ballistic missile shield changes the balance of global defence power. It confirms the United States in this field as the number one—as the numero uno—in a major way. It has yet to be worked out whether that can be acceptable to us in western Europe, to Russia and, in the long run, to China.

I was struck by an article in the Economist of 23rd June. It had a good headline, which asked: Can George Bush and Vladimir Putin agree to disagree constructively?". That is a marvellous oxymoron and it is not yet resolved. So far, it is clear that the Americans and the Russians are no longer enemies, but they have not yet in any way found an entente cordiale on such major issues as security, missiles, knowledge about the nuclear industry or diplomacy.

It is against that background that I place the second half of my remarks. I come to the question of our involvement in the EU.

I say straightaway, as someone who has come to your Lordships' House from the House of Commons and who has always been on the pro-European side of my party, that I find the position of the UK Independence Party reasonably understandable. I do not agree with it at all. However, if you really feel that because it is moving towards a single federal state life in the European Union is intolerable, there is a case for "doing a Norway" and getting out. However, there is not a case for thinking that all the old treaties can be renegotiated because that simply will not happen.

I must say too, with great respect, that I believe that a phrase like "In Europe but not run by Europe" is simply a silly catchphrase. It sounds nice but it means nothing. It is against that background that I have to say that if you wish to be a serious influence in Europe, if you wish to be at the heart of Europe, you cannot indefinitely stand aside from the biggest project and enterprise in which the European Union is involved and by that I mean the European Central Bank, a single Central Bank interest rate and the launch of the euro with coins and notes coming onto the market in just six months' time.

I believe that we could stand aside for a few more years. I do not believe that the negotiating position of the Government up until now has been at all bad, following on from the negotiating position of John Major's government. But our influence is surely bound to diminish as long as we do not finalise our decision as regards whether or not we join the euro.

I believe that after initial difficulties, the issue of euro coins and euro notes will be extremely successful. It will greatly reduce transaction costs throughout the EU countries. There will be a transparency of pricing that will be very significant in a market of 350 million. Even British tourists travelling on the Newhaven to Dieppe back-in-a-day ferry, as I sometimes do to replenish my wine cellar, will find that not losing 10 per cent to Thomas Cook is extremely pleasant. I shall keep some money in euros all the time.

But I accept that the decision as to whether or not we join the single currency is very serious. What is lacking at the moment is a sense of confidence among the British in our approach to that argument.

There were others present this morning, like the noble Baroness, Lady Whitaker, and my noble friend Lord Skidelsky, who heard Chris Patten, the European Commissioner for External Relations, speaking in the Royal Gallery. I should like to quote two passages from his speech. In the first, speaking very wisely, as he does, he said: There is so much to be proud of in Britain that we should have the confidence to share our sovereignty with others in the certain knowledge that that is the best way to preserve real sovereignty rather than the notional kind. We would be able, for example, to lead the present debate in Europe about how to distinguish between what should really be done at the European level and what at the national, and about how to make the institutions which manage policy at the European level more accountable to national electorates. We could make Europe more as we would wish it to be, if only we could treat it as it really is"— I would add, in brackets, not as Christopher Booker treats it— not as we fear it may be, and if we would see our own place in the world more honestly, more clearly. Secondly, he said, Of course, it is true, as Jean Monnet argued in his memoirs, that Britain's greatest contributions to civilisation were respect for liberty, habeas corpus and democratic institutions. Provided we do not assume that we have a monopoly of virtue in this area, our record ensures that others will listen to us in the debate on Europe's future". I am a great friend of my noble friend Lord Howell of Guildford sitting on our Front Bench. He has been a friend of my wife and myself for a very long time. But I take a different attitude from that which he takes. I believe that the European Union can go forward and will go forward and that we should go forward as part of it. The sooner the debate opens up on whether we have a referendum or not, the better.

Finally, I very much hope that when the referendum comes, and the debate before it, leaders of all the main parties—Labour, Conservative and Liberal Democrat—will allow members of their parties, Ministers and shadow Ministers to campaign for and against just as they individually wish. It is far too big an issue to be whipped. We should repeat what Harold Wilson did with bravery in 1975 when he allowed his Ministers to go off and take an opposite line. That is the way in which there can be free and fair discussion about what I accept is an extraordinarily important matter. We should put the issues before the British people fairly, honestly and on an all-party basis without being totally bogged down in party politics.

6.46 p.m.

The Earl of Sandwich

My Lords, I, too, am delighted to welcome the noble Lord, Lord Bach, to international affairs and to wish the noble Baroness well in her new, joined-up dual portfolio, which must be a little like sitting astride a catamaran, but I hope not as bumpy as that. She will have to exercise similar acrobatics when she is winding up this debate.

Perhaps I may briefly express a personal wish on the subject of the reform of our proceedings. It is that we resist the temptation to indulge annually in unlimited discussion of every aspect of the Queen's Speech. The noble Lord, Lord Hunt, mentioned that last night. Either we have timed debates, we limit the subjects or perhaps we even limit ourselves. But with more noble Lords taking an interest, it is simply not possible for us to, for example, link between different days on single themes; for example, UK agriculture and international trade. The formulation of the Queen's Speech requires great care and it would be misleading to interpret every syllable as a foretaste of the Government's intentions like a manifesto. However, as has been said from all sides, it is unfortunate that rural affairs were omitted and it was a disappointment to me that world poverty is left to the very end.

But while there remains some uncertainty about the Government's desire to restore confidence to the farming world, there is no doubt in my mind that the Cabinet is committed to debt relief, poverty reduction and the provision of health and education, if not to the degree that some of us would like.

To that extent, it is a surprise that No. 10 did not give a little more prominence in the gracious Speech to the great international campaign against poverty, as I had expected, for which the Government received a powerful public mandate.

I look forward to the reintroduction of the International Development Bill next week and the establishment of aid for poverty reduction for the first time not just as an add-on or a hand-out but a formally established programme approved by our legislature. For too long, international development has been left to the end, to the whim of political parties. Aid cuts have been an all too frequent recourse of all governments of all colours strapped for cash. Now that the economy is reasonably healthy, despite the global warnings of the noble Lord, Lord Renton, and the aid ministry secure and fully represented at Cabinet level, with firm Treasury backing, those who have fought for a fair deal for the world's poor can look forward to at least four years of secure funding, and probably more.

However, in terms of achieving results in international development, both in reaching the UN GNP figure and meeting the international targets, we are still a long way from where we should be.

Bringing the least developed countries closer to the advantages offered by globalisation and technological change must be the greatest challenge facing governments as a whole, not just departments responsible for aid. I do not need to repeat the statistics of poverty or the ever-widening gap between rich and poor nations which have already been outlined by the right reverend Prelate the Bishop of Oxford. The point is that it is not money for aid programmes which will make a difference so much as enabling those countries to play a part in negotiations affecting their ability to increase revenue from exports, reduce the burden of their debt and thereby apply resources to their development.

In the course of the debate on rural affairs several noble Lords, including the Minister, mentioned the urgency of CAP reform, saying how important it is for us to secure agreement in time for EU enlargement. Today the Countryside Agency has made a strong statement on the subject. There is a potential for consensus—even in Germany which has recently been ambivalent on green issues—on the necessity to switch towards environmental support for all European farmers.

The noble Lord, Lord Bach, said that the CAP was a high priority. However, all we have is words. We have heard them many times before and we are still far from agreement on CAP reform in Brussels. We owe it to our stricken rural population and to the third world farmers, who still face a wall of European subsidies, to get on with the common position that can be negotiated fairly with our trading partners.

The noble Baroness is bound to mention the good things that the EU is doing, like the Cotonou agreement I recognise that Brussels holds the line on much of the portfolio. I hope that during her term of office she will receive tangible good news on fundament al agricultural reform as well.

In the debate on Tuesday, the noble Lord, Lord Plumb, said that we should pay more attention to the role of the WTO, as others have said. As a parliament, and not just as a government, we should be more focused on this supposedly more democratic world body that will have a profound influence on us and the future of poor countries. Public awareness of trade is growing fast, largely as a result of NGO activity, most of which I believe is constructive. As governments prepare for the next WTO meeting in Doha in November, parliaments, even those like ours that benefit from specialised select committees, are in danger of being sidelined.

Three weeks ago the noble Lord, Lord Brett, and I attended an IPU conference in Geneva, the first ever parliamentary conference on trade. We were among 240 members of parliament from all over the world. Of course, we were lectured by our hosts at the WTO on the importance of launching a new trade round. Most noble Lords would agree that it is imperative that the world takes a few bold steps towards compromise if globalisation is not to descend into a Seattle farce again.

Members of parliament from Argentina, Egypt and elsewhere were not so easily persuaded. They listed all the clever tactics of the developed world: agricultural subsidies always come first; labour standards; and tariffs and anti-dumping measures that have kept the world's poorer nations out of the world trading system. They argued that if the northern countries will not budge on such fundamental issues and will not focus on development, how can they expect any agreement? The ghosts of the MAI—the attempted multi-lateral agreement on investment—still haunts the WTO negotiating table. In many parts of the developed world, the current drive towards rules-based globalisation, much as we applaud it here, is still seen as a threat rather than an opportunity. We must take note of that.

An MP from Jordan said that in the popular view globalisation would lead to poverty as surely as smoking leads to cancer and that it is a sickness that can easily suffocate the poorest countries. It is important for rich countries to appreciate that perception of world trade negotiations: a table dominated by the powerful at the expense of the very poor.

Our Government often talk about capacity building and there is a need to help the poorer countries to build up their negotiating skills. However, it is not enough for us to sit beside other countries at the WTO handing out our own solutions and recipes. We also have to appreciate the special position of the poorest countries and to understand that changes in our society and trade concessions in their favour are a means of enabling them to escape poverty so that they can trade on more equal terms. We cannot easily look at the matter in that way, but I believe that we have to.

Through changes to the CAP, that are already forced on us by enlargement, and through fairer trade and commodity agreements, we shall not just be doing a deal for ourselves, but we shall be seizing an opportunity to solve the acute problems of those countries. Ultimately, it will be to our advantage if we have helped to create a stable environment for our investments and the development of new markets for our technology and our products. One also has to consider the jobs that are generated in those countries.

I turn briefly to HIV/AIDS, which has already been well covered by the noble Baroness, Lady Whitaker. I believe that it is a good illustration of the link between poverty and trade. It demonstrates the potential common ground between the needs of the third world and industrialised countries. We have already heard of the examples of South Africa where pharmaceutical companies have backed down on the anti-retrovirals, and most recently of Brazil where US manufacturers have also seen reason and advantage in modifying their patent laws. On intellectual property, as on tax law and certain commodities, the WTO's dispute settlement procedures are being severely tested, as it is right that they should be.

I should declare an interest because Christian Aid, of which I am a trustee, has taken a particular position on the proposed new AIDS fund. It deplores the lack of international commitment to the fund and argues that governments may be missing a unique opportunity through the UN and national AIDS programmes to create a major new programme of preventive healthcare. I know that the Secretary of State has said that she does not appreciate that attitude; nevertheless it is true in terms of that particular fund. Worse, the fund may be biased towards an expensive drugs programme, even allowing for the reduced costs of drugs that have been achieved in countries like India.

In January 1998, after visiting Uganda to see the work of three charities, I initiated a debate on HIV/ AIDS and the huge human toll in its wake. I regret to say that, despite some successes, this pandemic is still gathering pace. Millions have died; over 4 million of them children. UNICEF reports that young people account for half of all new infections and a child is orphaned every 14 seconds. In areas without centralised government there are many appalling violations, like the Congolese woman who was raped in front of her children at successive checkpoints by soldiers carrying the virus. In such conditions there seems to be little hope beyond the care of NGOs and churches.

However, in the majority of countries, such as Uganda, Senegal and Thailand, even in remoter rural areas, the overwhelming evidence is positive. Awareness and education, coupled with sensible family planning and primary healthcare, are by far the most cost-effective forms of prevention. Of course, every country would like the ability to produce low-cost drugs, as Brazil aims to do, but there are still doubts about the cost as well as the effectiveness of drugs even in our developed societies. Too much concentration on treatment will condemn whole communities, which will never have access to anti-retrovirals, to unredeemed poverty and to vulnerability to AIDS in perpetuity.

I understand that DfID is not behind the new shift at the UN away from fundamental poverty reduction, which may be why it is cautious about funding. I hope that the noble Baroness can confirm that that is the reason. A sum of 200 million dollars is not much in the context of the seven billion to ten billion dollars that the Secretary-General says will be required. I believe it is important that that point is answered.

In conclusion, I look forward to further debate on the intractable subjects of Sudan and Zimbabwe. On Sudan, which is a less well covered subject in this House, the people of the southern Sudan are still waiting with infinite patience for this Government to make a contribution to development in areas relatively free from civil war. We have a historic responsibility in that country. I know that our ambassador has been active during the latest initiatives and that there is some hope from the United States at the moment. I hope that the Foreign and Commonwealth Office will reconvene a promised meeting of interested parliamentarians as soon as Macedonia and other issues allow.

7 p.m.

Baroness Ramsay of Cartvale

My Lords, I welcome what is said in the gracious Speech about NATO and the pledge to work to enable the European Union to act where NATO chooses not to do so and to improve the European Union's capacity and capability for humanitarian, peacekeeping and crisis management tasks.

In my maiden speech in this House in November 1996, I said that it gave me no pleasure to have to say that I sometimes despaired of any European issue ever being discussed intelligently, rationally and calmly in this country. But it gives me even less pleasure to have to say, some four and a half years later, that I cannot see that things have got any better!

Nowhere is that more true than in looking at the issues raised with regard to the EU initiatives in the field of security and defence and the interface with NATO. If only the media and commentators would deal with facts rather than myths—and I put on the same level of validity as the hoary old Euromyths of square strawberries and hairnets for fishermen the new Euromyths about setting up a European army, an alternative to NATO, and thereby shattering the trans-Atlantic alliance. Let us, in the name of all that is rational, at least in this House deal with the facts.

The European Union's common foreign and security policy (CFSP) was introduced in 1993 by the Maastricht Treaty. Five fundamental principles lie behind the CFSP: to safeguard the fundamental interests and independence of the Union; to strengthen the security of the Union; to preserve peace and strengthen international security; to promote international co-operation; and to consolidate democracy, the rule of law and respect for human rights.

Since 1993, the Council of Ministers has adopted some 70 common positions on foreign policy issues, ranging from the Balkans to East Timor, from non-proliferation of nuclear weapons to counter-terrorism. During the same period, the Council agreed some 50 common actions, such as demining operations in Africa and elsewhere and sending EU special envoys to crisis areas such as the Balkans and the Middle East.

The Amsterdam Treaty of 1999 improved CFSP decision making and provided for common strategies in areas where members share important interests. It also introduced more focused policy formulation and an early warning mechanism through the creation of a policy unit working for the Council of Ministers. This has been strengthened with the addition of a political and security committee and a parallel military committee to advise governments on crisis management.

The presidency report to the recent Gothenburg European Council on European security and defence policy shows how far the EU has come in its practical development to meet its aims. It is a long and substantial document and I commend it to your Lordships, who will no doubt be relieved to hear that I do not intend to deal with the detail in it at any great length. However, there are some very pertinent points which I wish to draw specially to your attention.

In discussing the European Union's capacity to act, it states clearly that it is where NATO as a whole is not engaged that it will be involved and, This does not involve the establishment of a European army. The commitment of national resources by Member States to such operations will be based on their sovereign decisions". There are detailed paragraphs on co-operation, first and foremost with NATO but also with international organisations, with the non-EU NATO members, with other countries which are candidates for EU accession, and with other potential partners such as Russia and the Ukraine. This is an outward-looking, not an exclusive, exercise.

What is said about the co-operation with NATO is specially worthy of note. It is stated that the development of a permanent and effective relationship with NATO is a critical element of the European security and defence policy. An exchange of letters between the Swedish presidency and the NATO Secretary-General confirmed permanent arrangements for consultation and co-operation between the EU and NATO and the first formal EU/ NATO ministerial meeting took place in Budapest on 30th May. Other meetings at a more technical level have taken place. The EU and NATO have entered into close co-operation on issues of crisis management in the Western Balkans.

Here we should note that, whatever is speculated in the press, the actual position of President Bush on his recent visit to Europe, as reported by Secretary of State Colin Powell to the Senate Foreign Relations Committee, is that the President welcomed the enhanced role for the European Union in providing for the security of Europe, so long as the EU role was properly integrated in NATO—something it very clearly is.

Let us deal here with a topic which arouses much emotion in this area; that is, the Rapid Reaction Force. EU member states have this as a headline goal. It is set out in detail, but it can be summed up in a kind of shorthand as establishing a capability by the year 2003 to deploy rapidly, and within 60 days, a force of up to 15 brigades, or 50,000 to 60,000 persons, which should be able to be deployed for at least one year.

We should note in parenthesis that there are also plans for rapid reaction mechanisms in the impressive EU programme for civilian crisis management, including police and other non-military deployment. While in parenthesis, I should like to say how much I agree with the right reverend Prelate the Bishop of Oxford when he spoke with approval of the EU's "Anything but Arms" project. Just to prove that Eurocrats have a sense of humour, that project is now referred to in Brussels as the "Venus de Milo" project!

As the NATO Secretary-General, the noble Lord, Lord Robertson, has said more than once, the logic of enhancing Europe's role as a security actor is clear. We need to demonstrate to the United States that Europe is willing and able to take a fair share of the security burden. But also Europe needs to be able to react when the US or NATO does not wish to do so. In the post-Cold War world there is simply no guarantee that the US or NATO will want to get involved in every security crisis in Europe. In a speech introducing the debate, my noble friend Lord Bach quoted the noble Lord, Lord Robertson, and it bears repeating, There has to be another option to 'NATO or nothing'". Reading some British commentators one would be forgiven for thinking that we were heading for a breakdown in NATO/EU relationships. However, in recent speeches, the noble Lord, Lord Robertson, has made it clear that the opposite is true. I should like to take this opportunity to agree with the noble Lord, Lord Renton of Mount Harry, in praising the superb work of the noble Lord in this regard. Relationships between the EU and NATO are improving by the day and the proof is seen where it matters—on the ground. The European Union's High Representative, Xavier Solana, and the NATO Secretary-General have co-ordinated their efforts in responding to a variety of security challenges in the Balkans, and are doing so as we speak, in order to try to avert calamity in the former Yugoslav Republic of Macedonia.

I speak as a former chair of the Atlantic Council of the United Kingdom and someone who is deeply committed to NATO and its values: the defence of freedom, human rights and democracy. I am proud of NATO's history and its foundation by great statesmen like Ernest Bevin and of the outstanding service provided by British secretaries-general, such as the noble Lord, Lord Carrington, and my old friend Lord Robertson. I am also proud of NATO's plans for its future—of enlargement and changing its role to meet the new challenges of our time.

There is no contradiction in being a passionate supporter of NATO and also welcoming enthusiastically the EU initiatives in the field of security and defence; the two go hand in hand.

7.10 p.m.

Lord Blaker

My Lords, I listened with great interest to the speech by the noble Baroness, Lady Ramsay of Cartvale. She spoke with great command of her subject. I hope that she will forgive me if I turn to a different topic; namely, the Commonwealth. In his speech last Friday the Foreign Secretary Jack Straw said: We shall use our influence in the world to help confront tyranny, oppression, poverty, conflict and human suffering". All those five scourges exist in Zimbabwe, which I believe is a Commonwealth problem that has not yet been properly understood.

It is exactly a year this week since the ZANU-PF Party won a majority of seats in the parliamentary elections in Zimbabwe. It won those seats by organised murder, rape, intimidation, brutality and corruption. The pretext for that reign of terror was the imbalance in the ownership of farmland between the black and white populations, but it is fairly clear that the reason was the determination of Mr Mugabe to retain power at all costs and his perception that the issue of land was tinder for his purpose.

The situation in Zimbabwe now is probably more shocking than most noble Lords realise. The reign of terror has continued for the past year. Supporters of the opposition party are still being killed. Two million people out of a population of 14 million, obviously most of them black, have fled the country. The turmoil has spread from the countryside to the towns. Urban businesses are being attacked. Further, 300,000 jobs have been lost in the past 18 months. They include 130,000 out of the 350,000 jobs in the countryside. More than 50 per cent of food must now be imported into what should be a food-exporting country. The production of gold has fallen to less than 50 per cent of what it should be. More than 70 per cent of total government revenue is used to service debt, which is an astonishing figure.

Over 50 per cent of adult women who attend antenatal classes are HIV positive, and 10 per cent of the workforce dies annually. Life expectancy falls by one year each year. There is a serious prospect of the country running out of food by Christmas. The price of mealie meal—the staple food of much of the population—has risen by 40 per cent in the past six weeks. Forty per cent of the population is homeless. In spite of the collapse of its economy, Zimbabwe has 16,000 troops fighting in the Congo.

In the face of intimidation the conduct of many judges has been exemplary and courageous. Independent journalists have shown great bravery in the face of threats and even torture. The restraint and self-discipline of the main opposition party, the MDC, including its leader Mr Morgan Tsvangirai, are beyond praise.

What I and many others find surprising is how little has been done by other governments about this situation. All the reports by independent observers of the elections last year declared that they were not free and fair, but nothing of any significance was done. More recently, the International Bar Association sent a high-powered team of judges and barristers from the Commonwealth and the United States to Zimbabwe. It declared that, conduct committed or encouraged by government Ministers has put the rule of law in Zimbabwe in the gravest peril and the very fabric of democracy at risk". It went on to say: This cannot be justified by the need for social justice". Her Majesty's Government and, more recently, the new US Secretary of State and other governments of the European Union have been critical. But, apart from the withdrawal of the British military team, there has not been much action from governments. As far as I am aware, the Secretary-General of the Commonwealth has not said one word of criticism of the Government of Zimbabwe, although recently he has been openly critical of General Musharraf of Pakistan where the situation, albeit unacceptable, appears to be a good deal less serious than in Zimbabwe.

I turn to the question of action. Some weeks ago the Commonwealth Ministerial Action Group decided to send a fact-finding mission to Zimbabwe. I understand that Zimbabwe refused to accept it. The European Union also started an initiative under the Cotonou agreement between the ACP countries and the EU. I do not know whether that came to anything. I have heard very little about it in recent months.

Last week it was reported unofficially that Mr Mugabe had agreed to accept a top-level group of Commonwealth Ministers to help resolve Zimbabwe's worsening economic and political crisis and that that initiative had been discussed between our Prime Minister and Mr Mbeki, President of South Africa, when the latter was here. If there is such an initiative can we be told more about it?

I believe that a resolution of the crisis in Zimbabwe is very important for the future of the Commonwealth. Interestingly, the 1991 Harare declaration of the principles of the Commonwealth, which restated and updated the Singapore declaration of 20 years before, said: We believe in the liberty of the individual under the law, in equal rights for all citizens regardless of gender, race, colour, creed or political belief and in the individual's inalienable right to participate by means of free and democratic political process in framing the society in which he lives". The declaration also refers to the political values of the Commonwealth: democracy, the rule of law, the independence of the judiciary and just and honest government. Yet it is impossible to reconcile the situation in Zimbabwe which I have just described with those principles of the Commonwealth. Zimbabwe has been flagrantly in breach of those principles and values for some time. I believe that if the Commonwealth turns a blind eye it will be a very serious blow to the reputation and worth of that body and the perception of its own members of its value.

I can understand why some African leaders, particularly those in southern Africa, have been cautious about taking action, but if the problem is allowed to continue to fester it will be even more destabilising for that part of the world than it is already. I cannot believe that Commonwealth leaders, especially those from Africa, will be happy to go to the heads of government meeting in October with this problem in its present poisonous state. This is, therefore, the right time for the Commonwealth itself to take action.

The problem is too vast for me to put the questions that I should like the noble Baroness to deal with in her reply. I am delighted that she resumes a role in connection with foreign and commonwealth affairs in addition to her other important responsibilities. However, I should like to put a number of matters.

First, are practical steps being taken now to prepare for the supervision of the presidential elections which take place next March? Such supervision should start at the latest in January for elections in March. It is no good leaving it until the elections occur. The arrangements need to be carefully made and effectively carried out if we are not to see a repeat of the ineffectiveness of the so-called supervision which took place at the time of the parliamentary elections a year ago.

Secondly, are the Government or the Commonwealth doing anything about land reform? That is a key issue. There have been reports recently on the submission of new land reform proposals by the commercial farmers to the Government. If there is scope for movement in connection with land reform, could that be an incentive towards the holding of free and fair elections?

I hope that the noble Baroness will be able to give us some encouragement on these matters, or at least some hope of forward movement. If the world, and the Commonwealth in particular, does not take the Zimbabwe problem seriously soon, we may face another humanitarian catastrophe and the Commonwealth will risk not only a failure but a humiliation.

7.21 p.m.

Lord Avebury

My Lords, I agree absolutely with the noble Lord, Lord Blaker, on the importance of the crisis in Zimbabwe to the future of the Commonwealth and indeed Africa as a whole. I also agree with the suggestion of the noble Lord that the priority in our strategy for coping with this crisis should be to look to the March presidential elections. It is extremely difficult to envisage any concrete measures which could be taken either unilaterally by Great Britain or by the Commonwealth as a whole that would bring about an amelioration of the system in Zimbabwe as long as Mr Mugabe remains in charge. His removal by the electorate is the solution to that crisis.

Furthermore, as the noble Lord, Lord Blaker, said, we must take every possible step to see that on this occasion the elections are held as freely and fairly as possible. Even with the fairly substantial amount of intimidation that has occurred in the by-elections, I believe that the writing is on the wall for the Mugabe regime and that the people will make the decision for themselves that they wish to regain their freedom and restore the democracy which at one time was the envy of many other countries in Africa.

The noble Lord, Lord Blaker, also referred to the speech made by the Foreign Secretary on Friday in which he said that the objective of the Government was to combat tyranny and oppression wherever it is. I refer to the sentence in the gracious Speech which states: My Government will work to encourage universal observance of human rights, including throughout the Commonwealth". I should like to ask the Minister a question. That statement in the gracious Speech is not as far reaching as that which we had in the mission statement a the FCO immediately after the Labour Government came into office in 1997. That stated: We shall work through our international forums and bilateral relationships to spread the values of human rights, civil liberties and democracy which we demand for ourselves". It may be that the formulation of the gracious Speech was intended to be a shortened version of that commitment. However, it would be useful to have it on the record that the Government stand by the terms of the mission statement as originally promulgated. What we demand for ourselves goes much further than the Universal Declaration, which could be all that is meant by the sentence in the gracious Speech. We have elaborate systems in this country for promoting the human rights of individuals and groups and for reconciling them with one another when they seem to be in conflict. So there is a positive obligation on states and public authorities, as we recognised in the last Parliament when we passed the Human Rights Act and the Race Relations (Amendment) Act. The mission statement commits us to spreading those ideas and not merely persuading friendly states to sign up to human rights instruments and holding national elections.

Amnesty International has reservations about the methodology the Government have chosen for pursuing their human rights agenda of "critical engagement", which is sometimes accompanied by human rights dialogues. It says that there is a danger that formal procedures of this kind may be used as a cover for business as usual, and that dialogue can work only where there is willingness to acknowledge that problems exist, and a genuine commitment to addressing them.

As the noble Lord, Lord Blaker, pointed out, that situation is completely absent in the case of Zimbabwe. We do not seem to be making much progress either in the case of China, for example, which thought it was appropriate to mark the UN anti-drugs day by publicly executing 50 alleged drug traffickers sentenced at mass rallies in a number of cities. Another example is the violent repression of the peaceful Falun Gong. At the same time, however, we are keen to start a dialogue with Burma. That regime has been even less amenable to friendly persuasion. We should make some attempt to assess the benefits of dialogue, which we have had with these places in the past, but we should take a long view and persevere even when there is no discernible improvement over a number of years.

The Commonwealth, as is frequently pointed out, is an association of diverse peoples belonging to many different religions, ethnic, linguistic and cultural groups. At the level of Commonwealth institutions and meetings, such as the CHOGM to be held at Brisbane, agreements are reached across all these boundaries for the benefit of member states. But within each of the states there are tensions of varying degrees of severity between the groups. Perhaps I may ask the Minister who is to reply whether the Commonwealth could develop its own expertise in conflict resolution and prevention, and whether it could develop model laws and procedures for the promotion of equality between different groups within member states. If it could do that, would it not be a practical contribution to the work of the UN Year World Conference Against Racism, Racial Discrimination, Xenophobia and Related Intolerance which is to be held at the beginning of September in Durban?

I rather agree with the right honourable Clare Short that these UN jamborees tend to cost a great deal of money for very little in the way of measurable results. These evils of racism and xenophobia need to be attacked, but holding a world conference that siphons off money and human resources that could otherwise be employed in direct action is not particularly sensible. Of course nothing can be done about that at this late stage with the world conference only three months away, but looking ahead to 2002 we have the World Summit on Sustainable Development, the Second World Assembly on Ageing, and the High Level Intergovernmental Event on Financing for Development. These are important subjects, but are they best pursued by collecting people from the four corners of the earth to read papers at each other, or would the money that is devoted to these international jamborees be better devoted to encouraging individual initiatives within member states?

The draft resolution for the Durban meeting recognises that people may experience discrimination on grounds of their gender, age, disability, genetic condition, language, religion, sexual orientation, economic status or social origin. People may suffer multiple discrimination and disadvantage from a combination of those characteristics. I hope that the UK will support an integrated approach to the elimination of discrimination and disadvantage internationally, just as we hope that the Government will adopt a comprehensive approach in attacking all forms of discrimination at home. As was pointed out by my noble friend Lord Alderdice, in many parts of the world there are conflicts which arise from perceived differences between one group of human beings and another. Those conflicts should be seen as extreme manifestations of racism, xenophobia and other forms of intolerance with which we are attempting to grapple.

The problem with the very ambitious Durban programme is that it will cost a great deal of money. Many of the recommendations are addressed to states, but quite a few are directed at agencies of the UN, including the High Commissioner for Human Rights who is directed to undertake research on the use of the Internet for the purpose of preventing inciting racial hatred, for example, and to organise a database containing information about the struggle against racism that states and NGOs can access on the web.

Where are the resources for these additional tasks to come from? In the past few years, the number of mandates assigned to the high commissioner has expanded enormously, with a proliferation of experts on particular territories and thematic issues, most of them concerning economic and cultural rights, watering down the commission's main remit of tackling violations of civil and political rights. In many cases, the work could and should be undertaken by NGOs and universities on behalf of the commission, if they were given the money, helping to build up lasting expertise and capacity in civil society. In others cases, the relevance of the mandate is doubtful, and it may be suspected that some member states are deliberately trying to sabotage the work of the commission by overloading it with inappropriate tasks.

The difficulties of the commission have been compounded in the past few years by the fact that the UN budget has been frozen, presumably because of the refusal of the US to pay its contribution. That means that any increase in the share of expenditure by the OHCHR has to be matched by a decrease in some other area of UN expenditure. Will the Government insist that, if the world conference does impose additional tasks on the high commissioner, a realistic budget is presented by the Secretary-General, and that none of the tasks is undertaken until the money has been found from resources elsewhere in the UN? Otherwise, either the existing mandates are squeezed or additional voluntary contributions will have to be solicited from member states.

Already, the share of OHCHR's expenditure coming from the UN regular budget has fallen from 58 per cent to 29 per cent over the past seven years. The office's spending has been rising over that period, so that voluntary contributions made by member states have increased to cover 70 per cent of the budget. The high commissioner herself is concerned that this is not a secure foundation, and if there is an economic downturn, or there are changes of government in donor states so that they become less sympathetic to the work of the office, there could be serious financial problems.

We have a good record of contributions to the Office of the High Commissioner for Human Rights. Britain is the fourth largest contributor and we are working to identify areas of the UN regular budget in which savings could be made and are looking at a comparison between the UN and other organisations to see whether more efficient systems could be adopted. Those are all valuable initiatives, but they are not enough. Why do we not ask the General Assembly to agree to a levy on member states, in proportion to their contributions to the regular budget, to pay for the whole of the human rights work of the UN? That would eliminate the need to raise voluntary contributions and ensure that every state paid a reasonable amount based on its capacity to pay, and not on its enthusiasm for human rights.

As my noble friend Lord Wallace of Saltaire pointed out, the UNHCR has also had to pass around the begging bowl because of the financial crisis at the UN and is in an even more precarious situation than the OHCHR. Only 50 million dollars of its spending this year comes out of the UN regular budget. It is asking donors for 918 million dollars for 2001. The same principle should apply here. Mandatory contributions should be levied on member states in proportion to their regular payments to the UN.

In his previous incarnation, the Foreign Secretary said that developed countries spend 10 billion dollars a year assessing claims for asylum but only 1 billion dollars on the whole of UNHCR's operations, including protection and humanitarian aid for refugees in their regions of origin. He went on to say that neither the UK alone nor the EU as a whole could redress this balance of effort, and of course we need to deal with the crises that generate refugees collectively. But there ought to be more joined-up thinking within our own Government on the connection between "complex emergencies", as the UN describes the disasters which provoke large displacements of people, and the flow of asylum seekers into the United Kingdom.

The noble Lord, Lord Blaker, said that no one knows how to contain the violence in Macedonia. We have no idea of how to do it in Angola, Sudan, Maluku, Aceh, Kashmir, Sierra Leone, Guinea or the Philippines. But we have to make increasing efforts to deal with those dreadful situations. Not surprisingly, the complex emergencies we see happening in the world generate the flows of refugees into this country. That is why we need the joined-up approach about which I think the Foreign Secretary was talking in his speech to the IPPR.

The number one asylum generator at the moment is Afghanistan. It is also at the top of the list of the UN's complex emergencies. One of the consequences of imposing sanctions on the Taliban last December was that they repudiated the UN's efforts to mediate between them and the United Front of Rabbani and Massoud, while the United Front insisted that the UN had to be present even if some other party such as the government of Uzbekistan were to assume the role of mediator. The net result of that was that the process of mediation fell apart. Now there is intense fighting in the country, leading to more suffering in Afghanistan and more refugees pouring out of the country. The UN Secretary-General's latest report estimates that in the past few months half a million more people have become internally displaced and a further 200,000 have fled across international frontiers, 170,000 of them into Pakistan.

It was not wise in those circumstances to impose sanctions on Afghanistan, when there was a desperate need to increase humanitarian aid, and it was irrational to cut off the funding of NGO activities involving UK nationals at the very time when the need was more acute than ever. There was a change in this policy, in the direction of looking at funding on a case-by-case basis, subject to what were called "appropriate security arrangements", but that still meant bureaucratic obstacles in the way of an increased effort. If Jack Straw's precept had been followed, we would have stepped up humanitarian aid to the populations affected by war and drought, both inside the country and in Afghanistan and Iran. That should not be affected by our natural dislike of the Taliban and their medieval policies.

The sanctions, and the treatment of the Taliban as pariahs by the international community generally, force them even further into their seventh century time capsule, contrary to the long-term interests of this country. Since the sanctions were imposed last December, the Taliban have boycotted UN-sponsored peace negotiations and rejected any idea of mediation for the settlement of the Afghan problem.

Last year we gave £3 million towards helping Afghan refugees in Pakistan and Iran. That is less than £1 a head, and it may be compared with the £14 million spent by Mr Straw, when he was Home Secretary, on trying to keep 32 Afghans out of this country. I hope that in his new role he will see the need for joined-up government in tackling the formidable problem of refugees fleeing conflict and natural disaster, not only in Afghanistan but in all the other complex emergencies listed by the UN throughout the world.

7.38 p.m.

Lord Ponsonby of Shulbrede

My Lords, I shall not follow my noble kinsman in what he was saying to the House. I shall instead return to the issue of the ESDP, which has been a theme of today's debate.

For the past four years I have been a delegate to the Council of Europe and the Western European Union. When I first went on that delegation, I attended a meeting with the then Foreign Secretary, Robin Cook. I asked him whether I was wasting my time in becoming a delegate to those two institutions. His answer was clear. In the case of the Council of Europe he said that it had an important role in building new democracies and international human rights and that parliamentarians could make an important contribution to its work. However, he was equally clear in the case of the Western European Union. He said that I probably was wasting my time. While my right honourable friend was quite right about the Council of Europe, he was only partially right about the work of the Western European Union. I can tell the House that over the past four years I have learnt just as much from that institution as I have through my membership of any other.

I wish to discuss my support for the ESDP in the light of my experiences at the WEU. We know that the Cold War is now 10 years behind us. The world has changed and we now know from experience the nature of the diverse challenges which we face nationally, regionally and globally. Multinational coalitions are changing as well. That means that the UN is changing, NATO is being modernised and, in particular within Europe, a new capability is being developed in order to try to contribute towards security within the European region. A point which has been repeated by the Minister on the Front Bench but one which has been largely ignored by the party opposite is that the ESDP seeks to enable a capacity to carry out so-called Petersberg missions and that those missions are of a low-level, peacekeeping nature.

It is worth reciting to the House what such missions have been. In 1987, a mine clearing operation was carried out in the Gulf, followed by a logistical support operation in 1990. An embargo operation in the Adriatic commenced in 1993 and in the same year a customs operation was set up in the Danube region involving around 250 police officers and customs officials. In 1994, the Mostar police training school was set up using 182 police officers, and in 1997 a police training school was established in Tirana, Albania, using around 150 police officers.

I hope that noble Lords will appreciate that, while such missions are important, they are hardly of a nature that potentially is going to challenge the supremacy of NATO. That is a completely ridiculous assertion. It is worth pointing out that the United Kingdom did not participate in any way in a number of the missions to which I have just referred. Rather, they were coalitions of the willing; other countries taking a lead because they had a more direct interest in the matter at hand. Some missions were not even noticed to any degree by politicians in this country, yet the decision-making process within the WEU is pretty much the same kind of process, using similar staffing levels, as is now proving so controversial within the EU.

But of course those who indulge in the rhetoric about European armies do not question certain fundamental facts. They do not question the fact that Europe should do more to defend itself and should take on more of the burden. So far as I am aware, they do not question the Petersberg missions themselves. Furthermore, they do not question that the Western European Union was an institution which needed radical change if it was to become relevant to the current situation.

No, those who indulge in rhetoric about European armies are more concerned with probing the limits of the ESDP than questioning what will be happening on the ground. That may be a legitimate political tactic, but it does not address the reality of the missions for which Europe rightly should take responsibility. I am sorry to say that I have yet to hear noble Lords opposite address the missions themselves.

I wish to turn to another, separate matter, one with which I know my noble friend on the Front Bench will be familiar; that is, the question of the parliamentary assembly of the Western European Union. The current position is wholly unsatisfactory. National parliaments have a scrutiny role for the CFDP and the ESDP. The European Parliament has no locus in these matters, although the chairman of the EP foreign affairs committee, Mr Brok, is looking to expand his empire in this regard. Furthermore, the WEU Assembly has been so marginalised by recent developments that it retains a role only in scrutinising the provisions of the modified Brussels treaty.

For my part, there are three main arguments in support of an enhanced role for the WEU Assembly. Two of those arguments were advanced by the Prime Minister in Warsaw in October last year. He argued that a second chamber—as he put it for the European Union would reconnect national parliaments and national parliamentarians with Brussels. He went on to argue that a second chamber could provide a solution to the perennial problem of defining the limits of EU competence. But there is a third argument which I would advance: an expanded second chamber established along the lines of the current WEU Assembly could scrutinise the provisions of the ESDP and bring in those countries which are outside the European Union but which have an active and historical interest in Petersberg missions. We should not forget that many of the countries which are active in such missions are not members of the European Union but they have a legitimate interest in those activities.

I have set out a number of concrete arguments with which I know that my noble friend will be familiar. But we must consider another factor which I consider to be equally important. I refer to the general level of information available to parliamentarians. I say in complete honesty that I found the debates on the Balkans and related issues held in the Assembly of the WEU to be of an extremely high quality. That should not be surprising because many of those contributing to the debates come from the countries directly affected or surrounding territories. They have an immediate appreciation of the issues involved. As I have said, it is no surprise that the quality of the debate is so high.

I have to say that the irony is not lost on my parliamentary friends from eastern Europe. At the same time as we are encouraging them to consolidate civilian control of their armed forces, in western Europe we are reducing the effective scrutiny of our own arrangements. Turkey is a particularly unfortunate example. That country is an important member of NATO. It, too, has been active in Petersberg tasks. At present it feels cut out not only from the decision-making process, but also from the scrutiny process within Europe. That is an unfortunate development.

I hope that my noble friend will take this issue seriously. I have raised the matter on a number of occasions and I know that parliamentary colleagues in another place have also raised it. Perhaps I may put a final argument. Just as nature abhors a vacuum, so does parliamentary scrutiny. If national parliamentarians are not given a greater role in scrutinising the ESDP, then Mr Brok and his committee in Brussels will take on that role for themselves, whether or not national governments like it. I have attended meetings where he has made that completely clear. I believe that that development will further alienate our new friends in eastern Europe.

I, too, have made a number of visits to Macedonia and Kosovo where I have had similar experiences to those described by other noble Lords. I make only one observation. If I have learnt only one thing, I know that we are now embarking on a very long-term game. We need to put in place within Europe concrete mechanisms for playing that long-term game. I believe that the ESDP is an extremely important step along that road.

In conclusion, perhaps I may say that I agree with every word that was said by my noble friend Lady Ramsay of Cartvale.

7.49 p.m.

Lord Selsdon

My Lords, noble Lords will be pleased to know that we are now exactly halfway through this great debate and that, if we finish at around midnight, we shall sustain the remarkable image gained by your Lordships' House as the longest-sitting parliament in the world. In the small hours of the morning it attracts, by means of digital television and the new parliamentary channel access, a remarkably wide audience of students encouraged by tutors to view debates such as this and our Wednesday debates, and then to analyse them in full.

I find also that, for the first time, I am confronted today by an overwhelming superiority among the female of the species, who have always shown more tolerance, more patience and more understanding than their male colleagues—in particular the noble Baroness, Lady Symons, whom I have always regarded as the Gatling gun of the Labour Party.

In my contribution today I wish to refer to three aspects of the gracious Speech: first, economic stability and investment; secondly, the desire to make Europe the most competitive information-based economy in the world; and, thirdly, the need to encourage the EU to be more flexible and more active in crisis management, peacekeeping and so on.

My life has been in trade, industry and finance. This has inevitably led to the international politics of trade and matters of that kind that border on defence. Although the noble Lord, Lord Bach, made a very positive, encouraging and moderate speech—which could have been delivered by Ministers from any party who have sat on those Benches over the past 15 years— there are certain points that I need to raise.

My first point relates to economic stability, which is now a cornerstone rather than a linchpin. We seem to have moved away from linchpins, which could be pulled out and the wheels would fall off, to cornerstones, which are always the last thing to be knocked down. We do have a stable economy—one of the most stable economies in the world—which has been gained over many years at considerable pain to numerous people and numerous sectors.

One of the sadnesses of this lies in the fact that investment has not been made in some of the most important aspects of the economy. Your Lordships will know that we now have the most expensive transport costs per kilometre, or per mile, in the developed world because of under-investment. I shall not comment further on that, but it is a pity because once we had almost the best transport infrastructure in the world. We now have, so I am advised, probably the worst health service in the EU—and yet we had some of the great ideals and thoughts that encouraged others to follow us. In other sectors—in education, for example—we find ourselves behind many.

And what do we do? We say that this is no longer the role of government but the role of something beginning with "P", which always used to remind me of those awful phrases such as "poll tax" and others; we say that it is up to the private sector. Many aspects of our lives cannot be run by the private sector, but the private sector, if so it is called, will willingly do what government asks it to do provided the framework is right.

I am worried that I may have to spend half of my speech declaring my interests. I am involved as a non-executive director with a contractor. We carry out PFI's in hospitals, schools and transport. I could advise many people as to how this could be better achieved.

The decline in the sectors that I have referred to is matched by the sad decline in manufacturing industry and the way that we moved only 10 years ago from having a permanent surplus in the export of visibles or manufactures to a permanent deficit. Now we have an overall deficit on trade. What are we left with? I suppose we are left with agriculture, which is now in the worst situation it has been for centuries. The average wage in the agriculture sector of £7,500 a year is the lowest for 25 years.

What are we left with? I return to when I was a member of a Select Committee chaired by Lord Aldington. We looked at what would happen when oil ran out. One of the people who came to give evidence to the Select Committee said that he supposed it would be all right; we could rely on tourism and all become Beefeaters. But look what happens to tourism when one sector of the economy fails; it disappears. We are then left with that strange ethereal thing known as dot.com, whatever that may be.

I query what is the base of our economy, which leads me to the second area of information-based technology. We made a decision—it started with the white heat of technology years ago under the Labour Party—that we would switch from heavy industry. With the collapse of the steel industry, the collapse of the textile industry, the collapse of the mining industry, the collapse of the shipbuilding industry and the collapse of industry across the board, we decided that we would move into higher quality, and that fathers would want their children to be white collar workers and not blue collar workers. That has worked surprisingly well. But now we have to look to some extent, into the future and to that information-based technology—where we are, and have been, in the forefront in many fields—and to how that is linked to other sectors.

I move now, within that information phrase, to defence. In our industrial economy it was always defence-led contracts that led to the production of greater technology. That technology from a defence basis was spread throughout industry and enabled us to compete. The noble Lord, Lord Bach, may now have a problem in defence procurement in that he may not be able to procure what he would like to procure from the United Kingdom because the capability— or a large amount of it—has all gone and we may have to outsource or source elsewhere. This leads me to the shift to rapid reaction forces and to the role that has now to be played by information and knowledge in defence matters.

I move now to a slightly higher level—as befits me standing head and shoulders above everyone at the moment—to the issue of space and, effectively, the future of communication. I shall, if I may, return to a kind of hereditary speech since it was my grandfather who gave the BBC its charter and introduced television with the Selsdon report. I move on to this world of communication, which we should not ignore. It is not only important in the defence and foreign affairs worlds but it is important for humanity, for man as a whole, whose access to knowledge is greater than at any time in history and is growing at an exponential rate.

In the defence field, I have often wondered why it is, when we are so modern, we start to attack cardboard or fibreboard models of tanks; why it is, when we are told how accurate we are, we seem to miss targets; why it is that we seem not to know where people are when they get lost. I return to the importance of space. I shall be asking the Minister shortly who is responsible for space. Who owns space? Where does space begin? It starts, I believe, at the equivalent of the distance from London to Paris.

In this field, this country of ours, which intends to be in the forefront of information-based technology, makes an investment in space of approximately £150 million per year, which is exactly half of that of Italy, one-third of that of Germany, and one-seventh of that of France. Europe together invests about 10 per cent of that of the United States.

Once more I find myself having to declare an interest in this field. I have recently returned from a parliamentary space committee trip to France, where we met with the European Space Agency (ESA), which takes half the UK's space budget. We met with EUTELSAT, which is partly owned by British Telecom and is about to go private. It has 950 television stations, manages 18 satellites and has some excellent British people there. They have been talking to me about what is "Open Skies", which starts at the end of the year; about how a soldier serving in a far-flung land may be able to see on his television screen his family going to bed in the evening and say "Goodnight" to them. This will happen when satellites replace land-linked or telephone-linked communications. This advance in technology is quite incredible.

In the world of space we have, so I am told, 500 active satellites. The satellites go into high-earth orbit, middle-earth orbit and lower-earth orbit. The lower-earth orbit ones, apparently, are the spy satellites that go hurtling around the world, taking photographs of everyone. We do not know how many there are of them, but I am told that there are 500 active satellites up at the moment and another 500 that have gone to graveyards. That is 1,000 satellites.

I wanted to know how important these might be in the worlds of communication and defence. Everyone said they are very important. It will not be long before the media arrive the day before an army lands and welcome the soldiers coming up the beaches, as they did in Ethiopia or Somalia.

What I am trying to emphasis is this. Do we have a space policy? Yes, we do. Do we have a space Minister? Yes, we do. But what happens if we move in this direction and we cease to have access to that particular kind of technology. I am advised that it is possible to disable almost all of these satellites. I thought they would be shot down from space, but there are methods of disabling them. As we rely more and more upon this macro information concept, which I find quite difficult to understand, I should like to know how seriously the Government are treating it. Are we going to have to rely on the United States for ever in such matters as global positioning systems? Are we in the forefront of that technology? If so, and if that is our wish, why are we investing so much less than our competitors?

Our industry has declined, but there have been some successes within the European framework which we probably did not anticipate and in which we were reluctant to participate. I think in particular of Airbus. I declare an interest, having been involved in the financing of Airbus in the early days. It was extraordinarily difficult to persuade British industry to become involved. But recently, 111 aircraft were sold, and we find that we can compete on a European basis with American aircraft. There are many sectors of industry where that is taking place naturally, due to mergers, cross-investments or globalisation. However, to a certain extent we are falling behind. I hope that, in our European thinking, we may recognise that it was economics and business that drove us in the beginning to participate in the European Union. Politics is also an important aspect. I believe that if government give the right and proper lead, industry will follow.

In conclusion, in view of the fact that the noble Lord, Lord Bach, is answering the debate for the first time in his new role, I crave a particular European boon. I travel an enormous amount. Often, when I try to obtain visas, I cannot get my passport back in time. So I have been experimenting in travelling with my House of Lords identity card, as I choose to call it. I have had discussions with Black Rod and with immigration authorities in many countries. I have even produced a letter confirming who I am. Perhaps it would be possible for the noble Lord to consult with his international colleagues and ask whether Members of this House, as a gesture in recognition of the great amount of time that they devote—more than members of any other parliament in the world—might be able to travel using their identity card. I should regard that as a very great favour indeed.

8.2 p.m.

Lord Weidenfeld

My Lords, the reference to human rights in the gracious Speech and the increasingly urgent call for Europe and Britain to play a more active part in the current Middle East crisis prompt me to draw attention to what I believe is a grave issue and one on which Her Majesty's Government might form a serious view and even consider initiating action. It is the issue of certain Middle Eastern states promoting and prescribing schoolbooks which incite racial hatred, religious intolerance and, worse, outright genocide. I refer especially to the educational system of Syria where, from the head of state down to the most junior teacher of fourth to eleventh grade children and young adults, the notion of peace and reconciliation with the Jewish enemy is regarded as treason and crime, where children are exhorted to fight and kill and to seek voluntary death with the promise of both material reward for their families and eternal happiness in paradise. But these school texts for different age groups now go further. They advocate ultimate extermination of the whole Jewish people—in other words, genocide.

A Washington based Middle East academic media research institute—MEMRI—recently issued an astounding up-to-date study of the Syrian school system. Whereas in most Arab countries similar hostile sentiments are expressed daily in various media and in all kinds of learning materials, the Syria of the Ba'ath party is a highly centralised authoritarian regime, and such teachings are obligatory. It is strange, even ghoulish, that during a week in which Slobodan Milosevic is heading towards the war crimes tribunal and in which the Pope is praying at the scene of one of the Second World War's most horrible massacres in the Ukraine, hundreds of thousands, even millions, of young people should be exposed to the teachings of such evil doctrines.

But the real reason why this issue is so relevant now, and why closer study of the evidence is so important, is that it opens our eyes to the underlying problems of resolving the conflict between Israel and her neighbours. When two generations of Syrian citizens are told that peace is treason and that the enemy must be liquidated, the very idea of compromise and legitimisation of Israel endangers and possibly entails the collapse of the ideological essence of the Syrian state. Perhaps that is the reason why the whole peace process, including the American brokered negotiations between Syria and Israel, seem to be nowhere mentioned in the literature.

The more you delve into this school literature, with its numerous case studies, short stories, rhapsodic poems and garish illustrations, the more you will find that all systematically lead young and uninformed minds, through fanning indelible hatred, to accepting the extermination of the Jewish enemy root and branch as the final solution. This also explains the children's part in the intifada, the deliberate and calculated involvement of boys and girls in every form of violent action.

Syria's Ba'ath party was originally a nationalist pan-Arab secular movement. In fact, the late President Assad crushed the ultra-religious Muslim brotherhood and killed around 20,000 people in the city of Hamma in his most notorious raid. But since the mid-80s, Syrian ideologues have adopted the slogans of fundamentalist Islam—mind you, not of the main line orthodoxy, for Islam as a faith has no truck with inhumanity. Today, Damascus is still the headquarters for a dozen extremist organisations and the turnstile for terrorists with links in Iran, Afghanistan and the Sudan. Recent redeployments of Syrian troops in Lebanon have not yet furnished convincing proof that Syria's hold on that country is being loosened.

When the issues of incitement and hate in the media of the region and other transgressions against human rights were discussed previously in this House, I am afraid that the tendency of noble Lords answering for the Government was to deplore them as unfortunate excesses or flowery rhetoric, staple propaganda de-fanged by numbing repetition. They are more serious than that, much more "action orientated".

It is true that a great deal of the hostility and bitterness in the Arab camp is due to Israeli transgressions against the Palestinians or its Arab citizens within the Green Line. The Jewish settlements near Gaza and the West Bank are thorns in the eye of every Arab. But when it comes to criticising and castigating Israel's omissions and transgressions, there are no better sources than the Israeli media; for Israel is a democracy, vibrant, strident, soul-searching, ruthlessly self-critical. There have been unpardonable outbursts from bigoted Jewish clerics against Islam, crimes perpetuated by individuals in and out of uniform. Yet they have all been condemned by a large section of Israeli public opinion. But no Israeli leader has sunk so low as to utter aggressive obscenities in the presence of the Pope, on a mission of charity and peace, against another religion, a whole people and a whole world community of linked destiny.

The Secretary-General of the United Nations, Mr Kofi Annan, was recently asked if he would take up the case of the Syrian schoolbooks, which I hope he may now do. I cannot believe that a member state of the United Nations, a candidate for a seat in the Security Council, should be left unchallenged if it advocates genocide.

I said that this is a timely issue: for if we have any hope of resuming talks between Israel and the Palestinians, Syria or Syria-controlled Lebanon, we must face the fact that we are here dealing with a rigid state of mind and that the failure of the Oslo peace process has not been so much the result of this or that negotiator's tactics or timing, or of the wrong chemistry between Mr Clinton and Assad or between Barak and Arafat; nor has it been a question of a near miss and a trifling difference of 300 metres of the shoreline of Lake Galilee. It goes much deeper. The genocidal strain in this kind of fundamentalist rejectionism is older than the settlements, older than the state of Israel. It reflects the spirit of the Grand Mufti of Jerusalem who, in the middle of the war, fled to Berlin, blessing the arms of the Muslim SS and begging Himmler to let him handle his own version of the final solution in Palestine against the Jewish settlers in Haifa, Jaffa and Tel Aviv.

What lessons should we now draw from all this? To defer or desist from a resumption of peace talks? Not at all. We should try to bring the parties together, once again. Chairman Arafat says that he wants to negotiate. General Sharon is also bent on resuming talks. President Bush and Prime Minister Blair have acknowledged his policy of restraint. But it is understandable that Sharon feels that if there is a lesson to be drawn from the intifada, the inflammatory media and class-room jihad, it is that only iron-clad safeguards for security can be accepted by a responsible government of Israel. The first and last watchword for future negotiations must be security on the ground and barriers to terrorist attack. These can only be lightened or lifted when all states in the neighbourhood agree to recognise each other's legitimate right to exist and to live. The most confidence-building proof would be an instant and thorough reform of school books and the spreading of new messages of real tolerance and compassion.

8.10 p.m.

Lord Grenfell

My Lords, I begin by offering my congratulations to my two noble friends sitting on the Government Front Bench who have recently taken up new and very important responsibilities. I wish my noble friends Lady Symons and Lord Bach every success in their new offices. If I may say so, the assumption of these offices by my two noble friends imbues me with profound pleasure and great confidence.

As the gracious Speech informs us, Her Majesty's Government will work for rapid progress on the enlargement of the European Union, and will introduce legislation to enable the United Kingdom to ratify the Nice Treaty. I very much welcome those commitments. As some noble Lords have already noted, it is a matter of great concern that Ireland's voters, on a turn-out of barely 30 per cent, refused by almost 54 per cent to 46 per cent to incorporate the Nice Treaty into the Irish constitution. This is neither the time nor the place to pick over the perceived reasons for that decision. However, it is worth noting that a week before the referendum more than 50 per cent of citizens polled said that they did not understand the treaty, or know even vaguely what it was about. That is not just an Irish phenomenon, as the Irish Taoiseach, Bertie Ahern, quite rightly pointed out to his European partners; it is Europe-wide problem, and it relates not only to the Treaty of Nice. The Irish rejection, though rooted in many respects to concerns particular to Ireland, was symptomatic of the general failure of Europe's leaders to communicate sufficiently with their citizens on the development of the European project.

The European project is becoming more and more complex. The lack of adequate communication leaves citizens feeling more confused and remote than ever. What, they ask, has the European Union become, and where is it going? If it is not Jean Monnet's "United States of Europe", neither is it Charles de Gaulle's "Europe of Nation States"; it is a blend of the two. For example, the single currency—let us be clear about this—is leading to a partially federal Europe, and, in my view, correctly so. At the same time, the emergence of a European defence capability is a triumph for intergovernmentalism.

So Europe must, for the time being at least, live with what Dominique Moisi of the French Institute of International Relations (IFRI) has aptly called "this hybrid reality". For a continent drawing strength from its diversity, that may be no bad thing, but political leaders seem almost afraid to try to explain to their citizens what they would like Europe to be because the challenge of getting there is so fraught with complexities. They should have more faith in their citizens. That is the warning that the Irish "no" voters and stay-at-homes gave to their leaders, and one hopes that it has been heard clearly right across the Union. If it has not, the yawning gulf that currently divides civil society from the institutions of the Union will certainly grow wider. Perhaps I may add, at the more parochial level, that a government who procrastinate on the leading of a countrywide debate on both the political and economic arguments for Britain embracing the single currency should also have more faith in their citizens and a greater awareness of their innate desire to be informed and, more importantly, to be heard.

As Chris Patten told us this morning after his remarkable British Council-Independent lecture when responding to a question from my noble friend Lord Shore of Stepney, the governments of Europe must more clearly define what it is that we are trying to create in Europe. He regretted, in particular, that those who had encouraged and convinced us to enter the European Union had underplayed the political consequences of our membership.

That brings me to the Treaty of Nice itself. When the European Communities (Amendment) Bill to ratify the treaty comes before your Lordships, there will be plenty enough opportunity to debate the treaty's merits and demerits. There are plenty of both, but this evening I want to remind noble Lords of one of the demerits that raises legitimate questions about the acceptability of the treaty; namely, the reform of the Council's voting procedures, due to take effect in 2005. This reform has served only to make the qualified majority system even more complicated than it already is, and has been described as a formula for deadlock once the Union is enlarged.

When your Lordships' Select Committee on the European Union reported to the House last July on the preparations for the IGC which eventually gave birth to the Treaty of Nice, we emphasised the need for a system of Council voting that was transparent and easily understood. We strongly recommended a system of double majorities. The Government, however, preferred a simple reweighting.

What we eventually got—and this is one point that I can concede to the noble Lord, Lord Howell—was a bit of a mess. But the Government seem to be satisfied with it, inter alia on the grounds that it secured a substantial increase in the strength of Britain's vote in the Council, the first increase for us since we joined the EU. That is an undeniable fact, but perhaps I may take the Government mildly to task in their celebration of this victory. The issue should not be how much added power our Government can wrest from such negotiations, but how well we are, together with our European partners, collectively enhancing the EU's ability to serve all of Europe's citizens.

Therefore, for a less subjective assessment of what this treaty has wrought, I strongly recommend a report by the Centre for Economic Policy Research in its "Monitoring European Integration Series", in which a group of distinguished European economists analyses the Nice Treaty and discusses whether or not it should be ratified. Its criticism of the reform of Council voting is particularly harsh and, to me, highly persuasive. I shall not go into the details of it, but in closing it poses the question of whether the EU leaders knew what they were doing at 4.30 a.m. on the morning of Monday 11th December. One not implausible view was that the leaders simply did not realise, at that ungodly hour, the strong inefficiency consequences of their actions.

Another, less prosaic, view was that they got exactly what they bargained for—a crippled legislative process that makes it very difficult to pass anything in an enlarged Council, effectively stripping the old Community approach of its viability, and leaving future European integration to be guided by intergovernmental initiatives, often using the enhanced co-operation route with the large members inevitably playing a role more commensurate with their economic and demographic importance. There is hybrid reality for you, but with the scales now tipped more heavily towards intergovernmentalism.

Whether it was oversight that set the Council on the course of deadlock, or wilful stratagem, time can certainly tell us. If it was oversight, then, as the CEPR report suggests, there is time to do some emergency repairs before 2005. The IGC in 2004 provides the perfect opportunity. If it was wilful, there is nothing to be done until an enlarged EU runs into a high-profile decision-making crisis or two, such as deadlock over the CAP and structural funds reform, or on the 2006 negotiations on the next financial perspective, which could leave the Union without a budget. But why must we wait for time to tell us? It is up to governments, now, to explain to the people what they have done in their name.

In light of such shortcomings, one might well ask why the treaty should be ratified. However, for the purposes of enlargement, its ratification is absolutely essential. There are those who claim that the treaty is not necessary for enlargement. In a strict legal sense, that is so. Those parts of the Treaty of Nice that are required for enlargement could, it is suggested, be inserted in the accession treaties to be negotiated with each candidate country. Politically, however, that is a non-starter. All member states are agreed that the treaty, with the institutional reforms which it enshrines, is an absolute political pre-condition for enlargement. That is why the Göteborg Summit's final statement contains the following words: The ratification process for the Treaty of Nice will continue so that the Union is in a position to welcome new member states from the end of 2002". It is also clear that a renegotiation of the treaty is excluded by all, including the Irish Government. We must now presumably await a second Irish referendum in anticipation of which every effort will be made to find the ways and means of allaying the fears of the Irish voters. I am glad that my noble friend Lord Bach referred to the determination of the 15 member states as a group to try to help Ireland to resolve that dilemma.

I am an admirer of Commission President Romano Prodi and was dismayed that he appeared to dismiss the Irish vote as of no consequence to the enlargement process. Of course it is of consequence, and happily—although I am afraid the noble Lord, Lord Howell, failed to mention this—he subsequently atoned for that lapse of tact with a reassuring clarification. But the angry reaction on all sides to the original gaffe was, I hope, an indication of a growing determination to narrow the gulf between Europe's citizens and the Union's institutions.

I hope that Her Majesty's Government, in light of the political imperative of enlargement, will firmly pursue the "ratify and repair" route. To my mind that is certainly the proper and practical sequencing. This historic enlargement is on course. The Göteborg Council decided that the best prepared countries should be able to complete negotiations by the end of 2002 with the objective of participating in the European Parliament's elections in 2004 as fully fledged members. That was an impressive result for the Swedish Presidency which did not waver in the face of an initial French and persistent German reluctance to sign up to a firm timetable. It is also very good news that the enlargement talks yesterday, led by the Swedish Presidency, reportedly succeeded in swelling the group of front runners to include Slovakia, Latvia and Lithuania.

I think that noble Lords know where I stand on the European Union. I am a strong, although by no means uncritical supporter and a profound believer in our membership of it and our ability to contribute to its successful development. I hope that my criticism of it will always be constructive.

The noble Lord, Lord Howell, who is one of my oldest friends, made an interesting speech which was delivered with his customary eloquence and clarity. But I hope that he will forgive me if I say that, with regard to the European Union, for me it epitomised the curious contradiction that grips those who seek to convince us that they are not against Europe but lose no single opportunity to rubbish it. Their unwillingness to put forward constructive solutions for the faults they perceive in the European Union suggests that they see the Union as beyond redemption. I find that negative approach profoundly depressing. But it cannot and will not deter or deflect those of us who believe in the Union from giving it our full support, tempered where we feel it necessary with constructive criticism.

But what really counts is the Government's continuing and, I hope, expanding, constructive engagement. I am confident that they will meet our high expectations and I hope that they will match that endeavour with an expanding effort to engage the citizens of this country in real dialogue on where we want the Union to go and how we are going to get there.

Lord Selsdon

My Lords, before the noble Lord sits down I remind him that the party he supports flatly refused to send any Members to the European Parliament in the early days and therefore rejected it at that time. The turnaround is healthy and the open debate is desirable.

Lord Grenfell

My Lords, I thank the noble Lord for those comments. I am glad that he included the words "in the early days" which we are now beyond. The delegation we now have in the European Parliament, particularly those who represent the party of which I am proud to be a member, comprises extremely hardworking and effective Members, fully engaged in the business of the Parliament.

Lord Howell of Guildford

My Lords, before the noble Lord sits down, I forgive him his comment but reassert that there is a vast range of proposals for furthering European unity built on the European Union which some of us have sought to bring forward but have obviously not communicated effectively yet. But to imply that there are no possible alternatives to the path on which the European Union is stuck, and was stuck at Nice, is to close one's mind to real possibilities for genuine European advance.

Lord Grenfell

My Lords, I agree with the noble Lord that there must be alternatives. The point I was making is that it is difficult to know what those alternatives are if one relies on the party which he represents to tell us what they are because we do not hear from them on that.

8.24 p.m.

Baroness Hooper

My Lords, I fear that everyone is taking the opportunity to stretch their legs by hopping up in that altercation as this is a long debate. I admire the fortitude of the noble Baroness, Lady Symons, and her colleagues in sitting it out.

As a former member—and one of the first directly elected members—of the European Parliament representing the Conservative Party, I should have liked to discuss the European Union and its future and in particular the enlargement issue which I have always supported. I welcome the Government's positive approach to that matter.

I also have an interest in the Overseas Territories. I deplored the omission of a Bill to rectify the citizenship anomaly in the previous gracious Speech last December. I am therefore delighted that I can now welcome a Bill on the subject. Its Second Reading next week will give us an opportunity to consider its provisions further and raise any questions with the noble Baroness, Lady Amos.

However, once again I shall concentrate my remarks on British interests in Latin America, largely because I do not think that anyone else will. I have listened like a hawk to the debate so far. I believe that I am the 21st or 22nd speaker. With the exception of a passing reference of the noble Earl, Lord Sandwich, to Argentina, not a single person has mentioned this vital part of the world. I find it dispiriting that in this country there appears to be so little interest in improving and enhancing our relations with a part of the world which has a present and a future unrivalled in global terms.

Your Lordships may remember that we had a splendid debate on Latin America and the Caribbean on 28th February this year. Therefore, I do not propose to repeat all the facts and figures that emerged in the course of that debate. Suffice to say that we are talking about countries with a combined population of some 450 million people; that the economies of Brazil and Mexico are among the top 10 in the world; that these countries are rich in resources such as petrol, coal, gold, silver, copper, precious stones and, most important of all, human resources; and that there is tremendous goodwill towards the United Kingdom based on our historic links.

We are also talking about countries with established pluralistic democracies and countries which by and large have overcome the problems of hyperinflation and have turned their economies around. The noble Lord, Lord Bach, in opening the debate, said that as a country we export more than the United States and Japan and that we are the fifth largest trading nation in the world and the second largest investor abroad. Why is it, therefore, that we have a trade imbalance with Latin America of some £1.2 billion and that the United Kingdom's exports have deteriorated in recent years?

I fear that this country is becoming so inward looking, self-absorbed and, dare I say, quarrelsome over Europe and our position in Europe that we seem to forget that we became a country of world significance only because we were outward looking.

I realise that having a particular enthusiasm for Latin America myself—I declare an interest as president of the Hispanic and Luso Brazilian Council and of Canning House and as a non-executive director of a Latin American investment trust—I find it hard to believe that there appears to be so little interest in Latin America. I wonder how we can do more in Parliament, in Canning House, in our universities and in the special Latin American institutes to change that position. I am slightly worried by the feeling that the powers-that-be see Latin America as America's backyard. Perhaps they have made some secret deal to leave the United States to it so that we can have preferred status in some other part of the world. I hope and believe that that is not the case. I believe that it is more a question of apathy and inertia. I mention as an example of that lack of interest a visit made to Parliament yesterday by 10 members of the Argentine Congress who were in England to attend a seminar on the regulation of utilities.

A notice of a round table discussion with those visitors was circulated in last week's all-party notices to 659 MPs and to all Peers—I think that there are about 680 at present. I wrote personally to a few dozen people I knew would be interested. Admittedly, certain Members of Parliament who would normally have attended, including the new Father of the House, Tam Dalyell, found it impossible to be present for very good reasons. But apart from myself, there was the noble Lord, Lord Lea of Crondall, my noble friend Lady Gardner of Parkes and a former Member of Parliament, Jacques Arnold. Clearly no one reads the all-party notices. I did not expect dozens of people but half a dozen out of so many would have been nice.

We had an interesting and useful discussion but it was disappointing. Where were all the people who go on IPU visits to Latin America? The IPU makes every effort—I hope that it will increase its efforts—to improve contacts between parliamentarians and it does an excellent job. But I find it hard to accept that there can be so little interest in following up those visits and meetings.

Perhaps I may refer to the British Council as another example of this apparent lack of focused interest. Mention has already been made of the British Council. As I have stated on many occasions in your Lordships' House, I have great admiration for the work of the British Council. I, too, attended this morning the inaugural independent lecture in the Royal Gallery. But in the British Council's strategy document for 2001–05 the only specific reference to Latin America is the fact that it intends, to remove their physical presence from Ecuador". If, as the strategy document states, the British Council's role as a cultural relations agency is central to the United Kingdom's diplomatic effort, independent agency as it may be it still works closely with the Foreign and Commonwealth Office. If the new strategy is, to shift resources to countries undergoing fundamental economic and social change where the British Council can achieve significant impact for the United Kingdom", and if, the use of self-financing services such as English language teaching is a key feature", why is it proposed to close down the British Council centre in Quito, Ecuador, which was just becoming self sufficient? The centre in Guayaquil on the coast had already been closed.

The new ambassador from Ecuador to the United Kingdom is the distinguished former president, Sixto Duran. I feel sure that he will not object to my quoting him. Ambassador Duran is a former British Council scholar who learned his English and about England via the British Council. He told me that he very nearly declined the appointment to London when he heard of the proposed closure of the Quito centre. Many others have also contacted me. Many have written to the noble Baroness, Lady Kennedy of The Shaws. It seems a particularly unfortunate moment to take this decision. Ecuador is going through a sticky patch in its democratic institutions and its economy.

If the British Council has such limited resources that it is forced into this type of cheeseparing decision, and if the British economy is in such an excellent state as we were led to believe during the recent election campaign, why is the Foreign Office—perhaps I should say the Treasury—so stingy in its support of the British Council? In saying that, I realise that the grant in aid has been increased but it is still not enough to continue the important role played by the British Council.

Funding is also a pain in the neck for smaller organisations such as Canning House and the various regional and bilateral chambers of commerce which do great work in arranging trade missions and other trade enhancement activities to Latin America. But such modest financial support as they formerly received is being reduced. That means that even fewer small and medium-sized businesses will be exposed to the opportunities that exist. They will be following the fate of the manufacturing industry to which my noble friend Lord Selsdon referred.

Perhaps I may take the opportunity to ask this question again. When will the Prime Minister visit this important part of the world? We have had state visits and official visits from the presidents of several Latin American countries in the past four years but no reciprocity at the same level or at Foreign Secretary level. In that respect I have high hopes for the new Foreign Secretary. But that situation is not good enough. Unless the Government want to see opportunities for our health and education services, our financial institutions and other areas being lost to our competitors, they must not only say fair words but do fair deeds.

It is not a party political issue. Too many people are playing politics who are not interested in being statesmanlike or in considering our role in this rapidly changing world of global economy. We talk a great deal about the virtues of free trade. Yet we do not always take the opportunity to take action. We moan about the common agricultural policy. If we are serious about reforming the common agricultural policy, why do we not take advantage of the negotiations between the European Union and Mercosur, the European Union and the Chile bilateral agreement or the European Union and the Mexico agreement? Those countries are primary agricultural producers. When they raise questions about the European Union's failure to comply with world trade order rules, surely that gives up the opportunity to press for the reforms to the common agricultural policy that we want. I have said before—I shall not go over the ground again—that we have a role to play in the European Union and its relationship with the countries of Latin America.

My remarks seem rather a lament. However, I am not totally discouraged. I believe that there is a glimmer of hope in the fact that large numbers of our young people are studying or spending a gap year in Latin America. The numbers of young people from Latin America who choose to do the same in the UK are increasing. That is a signal for hope in the future. My other hope for the future lies in the interesting new job of the noble Baroness, Lady Symons. I hope that we shall hear more from her about the way in which she expects her role to develop, embracing as it does the overseas trade aspects of the Foreign Office and the DTI—in effect being British Trade International. I trust that the Minister will accept and respond to my remarks in the spirit in which I make them.

8.39 p.m.

Lord Desai

My Lords, in congratulating my noble friends on their new offices, let me also commiserate with them. It may be difficult to believe, but dawn will come after a long night. The debate will end—perhaps not before the favourite restaurant to which my noble friend Lord Bach and I often retire; I think that it will have shut by then—but at some time.

The Government made a commitment in the gracious Speech to support, a more modern and representative Security Council, and work to make conflict prevention and peacekeeping more effective". I shall start with that point because I have not heard anyone mention it so far. I apologise if some noble Lord talked about it when I was not here. Making the Security Council a more effective body—and right now it is not effective—is very important for peacekeeping and conflict prevention. I have said before that I would like the Government to press for a qualified majority voting system for the Security Council. I recognise the criticism made by my noble friend Lord Grenfell of the revision of the QMV weighting at Nice, but the principle of qualified majority voting—with safeguards, but not a veto, for the permanent members—would be a very good thing. A coalition of at least two permanent members should be needed to block a motion. It is important that the Security Council moves on by expanding its membership, downgrading the role of the permanent members and replacing the veto with some form of qualified majority voting.

The gracious Speech raises other related issues, which I shall deal with quickly. There was a notable absence of any discussion on foreign affairs during the election campaign, apart from the crazy discussion on the euro, and there was no mention of international development issues. That was very sad. The Department for International Development has been a success story of the 1997–2001 Labour administration. My right honourable friend Clare Short has done an excellent job in establishing a philosophy for international development that combines a recognition of the benefits of globalisation with an understanding of the problems that it may cause. That balanced approach has been very useful.

I was also pleased to notice my right honourable friend's robust remarks during the HIV/AIDS conference at the UN the day before yesterday. She was quoted in the Guardian as saying: It is my strongly held view that we waste too much time and energy in UN conferences and special sessions … We use up enormous energy in arguing at great length over texts that provide few, if any, follow-up mechanisms or assurances that governments and UN agencies will carry forward the declarations that are agreed". The problem affects the whole UN, not just the Security Council. Equipping the UN with an effective implementation mechanism and a quick decision-making mechanism should be a major task for the Government as they seek to play their role on the world stage.

The Government have already done a very good job in bringing the theme of debt cancellation permanently into public debate, including at G8 level. They are to be congratulated on that, although more progress has to be made. I also welcome their commitment to poverty eradication, which was reiterated in the gracious Speech.

My noble friend Lord Grenfell graphically illustrated the problems of the institutions of the European Union and the G8. There is a great distance between global society and the leadership meetings. The G8 is an ad hoc arrangement with no legitimacy. It is simply a group of powerful countries that have decided to meet together. Their meetings and decisions are outside the UN framework.

People have a right to feel that they have no way of influencing G8 decisions. It was remarkable that at Gothenburg not one political leader thought it proper to address the crowd. It was not full of anarchists. There were many people who were interested in reform of the global system, or at least a discussion of it. It is wrong to characterise them all as anarchists and to expect a police or army response to what is only a minor riot. I confess that in my youth I took part in the 1968 Grosvenor Square demonstrations. Demonstrations can be quite fun and very creative. I mention parenthetically that women in this country would not have got the vote without the suffragettes' extremely violent campaign. There is a lot to be said for riots—but I digress.

However, there is a problem, because the leadership in the G8 and the councils of the European Union are shying away from confronting the people where they are, reasoning with them and arguing the benefits of globalisation, if they are so confident that globalisation is beneficial, as I believe it to be. Running away from the people is not the right response. Rather than running away and meeting on the high seas or behind closed doors with an army barrier, they should make arrangements to have a dialogue with the people on the streets, as happened at the Prague meeting of the IMF and the World Bank. That is very important.

That leads to the related problem of the democratic deficit in the European Union, which was mentioned by my noble friend Lord Grenfell, and no doubt by other noble Lords. In his Warsaw speech some time ago, the Prime Minister raised the issue of a second chamber for the European Parliament. Leaders in other European countries have also advanced that notion. It is worth exploring the possibility of having an assembly of national parliaments as a second Chamber in Brussels so that national parliaments do not feel so cut off from the European Parliament and European political procedures. Regardless of whether people want a federal solution, we must have another tier of representation in Europe so that people do not feel that there is a large democratic deficit.

I should like to respond to the comments in the excellent speech of the right reverend Prelate the Bishop of Oxford about the benefits of the World Trade Organisation. He rightly pointed out that, although a number of third-world countries had felt the benefits of free trade, those benefits had not spread universally. The power of some corporations and the inequitable distribution of wealth within and between countries have caused problems.

No doubt the right reverend Prelate was very encouraged, as I was, by the outcome of the legal action taken by the pharmaceutical industries against the South African Government over their legislation. There were various factors involved. First, civil society protested strongly that, whatever the legal rights under the intellectual property rights legislation, they did not like what was happening and wanted to challenge it.

Another issue, which has not been noticed, is evident in the comments of an Indian manufacturer, who said that, if competition were opened up, it could manufacture the drugs at one tenth of the price charged by the big pharmaceutical companies. An element of open competition is an important part of the WTO process. We should do everything possible to reinforce the idea that, in as much as the WTO process guarantees intellectual property rights, we will not deflect from the need for a very strong competitive environment. The result has been that drugs for the treatment of AIDS are now being sold at one-tenth of their former price. That has come about from a combination of the power of society and the market. That is the type of solution that I hope the Government will seek and advance.

8.50 p.m.

Lord Bruce of Donington

My Lords, it is, as ever, a very great pleasure to follow my noble friend Lord Desai. He always gives me considerable grounds for thought. My thoughts this evening are first directed to congratulating my noble friends on their presence on the Front Bench in a comprehensive variety of functions. I wish them well.

I do not imagine that I am alone in believing that over the past two years time for the opportunities afforded not only to Members of the other place but also to Members here for discussing in informed detail the affairs of the European Union, or European Community—by whatever title it is from time to time known—has diminished. Of course, we have good Select Committees here, particularly on European matters. But curiously enough, the Government, who are responsible for the allocation of time, for some strange reason always ensure that the occasions on which we discuss European matters in any great detail are a Friday morning or perhaps a Thursday afternoon—the fag-end of our meetings. That does not make for any continuity of study of what is going on in Europe or of the Government's latest thoughts.

Similar observations apply to the other place. Over the past two years, I have noticed that informed discussion by the full membership of another place on European questions is diminishing rapidly. Particularly in view of the fact that out of the British Exchequer we contribute some £3 billion to £4 billion every year towards the European Union, one would have thought that there would be some interest in the European budget. Two years ago some perfunctory notice was taken of it, but this year the other place has not even bothered to discuss the European budget. A whole series of laws which are binding upon us seem to go through both Houses of Parliament without any great examination, discussion or criticism by a Parliament which, I believe, is widely acknowledged as one of the oldest parliamentary democracies in the world.

Why is that? There must be a reason why the Government are so modest about these matters. I shall suggest to your Lordships that there is a reason and that it concerns congestion. The Government and their members, in common with ordinary Members of Parliament, have less and less time in which to think, less and less time in which they can develop argument, and less and less time in which to engage in the more detailed aspects of policy which it is possible for parliamentary democracy to undertake.

I regard that as unfortunate. But there is a reason for it. One reason, of course, is that the British Parliament, particularly in its relations with the remainder of the European Union, is so deluged with legislation proposed by the European Commission in particular that it does not have time even to think about it. Last year 3,000 regulations of one kind or another were sent here from the Commission. It is quite impossible for Ministers to read them. They may find themselves initialled in the Ministers' Red Boxes at night, but I doubt whether they have time to read them. I am a fairly assiduous reader of most material that comes out of Europe, but I, even full-time, cannot cope with it, let alone a Minister.

There must be something wrong here. I do not believe that anyone in their right mind disputes the necessity for an association to develop between countries, whether on this side of the Channel or the other. Pollution is no respecter of boundaries, and it is quite clear that close co-operation among member states is desirable for that purpose. There is a whole series of matters which it is common sense to assert should be the subject of closer and closer collaboration, whatever form that may take, between members of the European Community. No one is in dispute about that.

However, the quantity of regulations now begins to make the mind boggle. I am not suggesting that one should have wicked suspicions in the matter, but it is not entirely unknown for bureaucracies to get their way simply by swamping people with legislation in the hope that they will throw up their hands and allow it through with the minimum of scrutiny. Certainly that applies in our relationship with the European Union.

Our scrutiny committees, particularly in the House of Lords, are extremely efficiently conducted, as are those in another place. However, there are limits to the information that can be elicited and the conclusions that can be drawn from a round-the-table routine of interrogating witnesses. That is not always the best way. However, that is what I believe is happening and we must do something about it.

If Her Majesty's Government feel that a closer association with Europe is desirable and, indeed, vital to the nation's interests, surely they should pay some attention to the institutions of the Community and, in particular, to the Commission. We all know that the Commission rigidly insists on holding a monopoly of the formulating proposals for submission to the Council of Ministers. It repeatedly assert that monopoly. Why should it have that monopoly? What divine wisdom is disposed among the gentlemen and ladies who are appointed to the Commission that puts them above all ordinary mortals? They are selected; they are not elected at all. Yet they seem to be able to rule the roost.

I suggest to Her Majesty's Government that if they are intent on making Europe work together as a unit under the law, they should take control themselves. Responsibility for the initiation of legislation should not be left to the Commission. What particular qualities does it have? It should rest with the Council of Ministers, who derive their democratic power from the people who elected them, first, as Members of Parliament. Those people, who are at the apex of parliamentary government, should propose laws for their colleagues, and the Commission should be their executive instrument. That is the only correct approach. What objection could there possibly be to it?

What currently happens is this. We get sheaf after sheaf of papers, which are listed in publications that are available to us all. Documents, which can appear as proposals, recommendations, draft decisions or draft directives, come from the Commission and they are distributed down to the relevant Ministers. The Ministers concerned cannot possibly read them—they have not got the time. Such documents come up for discussion at Council level and the Ministers who are delegated the task of dealing with them at meetings in Brussels probably first see the proposals when they are sitting in the plane with their papers in front of them. It is not entirely unknown for Ministers to be so tired when they arrive, after having had the refreshments to which they are entitled, that they leave the committee work under the presidency-in-office in a condition that does not make any consideration worth while. In fact, many of them are merely informed, after a meeting with their delegated officials has taken place, of what has already been decided. Some of them do not even bother to read the documents. It is not entirely unknown for Ministers of the Crown not to read the treaties that they have signed—there have already been two or three examples of that. That cannot be right.

We should take seriously the job of being in Europe. The first thing to do is to divest the Commission of its monopoly over making proposals for the Council of Ministers. That will obviously mean the appointment of more Ministers, but why not do that? What is wrong with having more people in office who believe in the construction of Europe and its purposes? They would have their own civil servants who work and think in their own way and, if the Commission were merely the executive instrument, they would have the time to think. Such an approach should be considered.

There is currently a pretence that there are all kinds of legal difficulties with enlargement. Enlargement will be difficult because of the acquis communautaire, with which every new state is required to comply. We had to do so after the Heath negotiations. The morning after we signed up—this is recorded in the official history—we received 30 volumes of the acquis communautaire, with which we thereafter had to comply in order to be a member. Various member states and our Government are troubled by the fact that the main question in this context involves negotiating not about various points of principle—although they need to be discussed—but about the acquis communautaire that each new member state has to accept. Mind you, there are hardly cases in which that could be circumvented.

One of the ways in which the Commission succeeds in getting its way is by postponing the operation of a particular directive. In order to get agreement, it says, "This provision need not come into force for another six years". The politicians who are there want to get home to sleep, and they say, "Well, that is all right". However, six years later, we suddenly find—this happened with the metric system—that we agreed to the proposal six years previously.

If we are serious, all of that will have to change. There are compelling reasons for examining the whole structure of the European committee system and we have to make changes. We should also bear in mind the results of the investigation by the wise men into the affairs of Europe following financial scandals. We should remind ourselves that they did not get a clean bill of health. If there is any doubt about that, one simply has to read the speech that the Prime Minister made after the matter was discussed—it is sufficiently damning.

We have to think again. We have to think radically and we have to get a democratic institution at the top. We should not accept the dictatorship of a Commission which is not elected by anyone—but which is appointed according to one kind of merit or another, with which we are not always fully acquainted.

9.7 p.m.

Lord Vivian

My Lords, I congratulate the noble Lord, Lord Bach, on his appointment as a Parliamentary Under-Secretary of State at the Ministry of Defence. I also thank the noble Baroness, Lady Symons, for the courtesy she has shown me when dealing with all of the defence matters that I have raised.

The armed services have been deployed operationally on no fewer than six different occasions during the previous Parliament. On each occasion, they excelled in their missions. The Sierra Leone operation and the deployment of the SAS will be recorded as one of the most successful operations that the armed services have undertaken.

Those combat operations are not achieved without hard, tough training and excellent leadership by all ranks. It is essential that they continue to train for the more traditional types of combat which involve killing the enemy and, regrettably, on some occasions, the death of some of our own servicemen.

It is the duty of Parliament to ensure that nothing damages the combat effectiveness of the armed services. To ensure combat effectiveness, the basic principles of the Armed Forces must not be interfered with by the Government. Political correctness, the scourge of the services, which I shall come to in more detail in a moment, should not be implemented into service life and much that has already been incorporated should be eradicated forthwith.

Political correctness threatens combat effectiveness and that has come about by a mass of new legislation. The Human Rights Act, health and safety, the working time directive, equal opportunities and sexual discrimination have all had their parts to play in weakening the military ethos, morale and service of the Armed Forces, which are all major factors on their own relating to combat effectiveness. That legislation has enabled servicemen and women to sue the MoD over many matters, which has cost the taxpayer enormous sums of money which could have been spent on new equipment, training or improved conditions of service. There are many occasions when team spirit comes above the needs of the individual if training and operations are to be successful. I am convinced that some elements of that recent legislation have already damaged the Armed Forces.

There is also a subject known as risk aversion, which has stemmed from that political correctness. That could totally destroy the combat effectiveness of the Armed Forces by breeding cautious leaders who may not make courageous decisions for fear of being pursued through the courts afterwards. For example, will an officer or an NCO be prosecuted in the courts when he orders a soldier to continue with a patrol, knowing that he may be killed? Is it possible that orders issued in the heat of battle, when under enemy fire, in retrospect may not turn out to have been the best orders and will the officer who issued those orders find himself being prosecuted in the courts? That is an intolerable stress and strain to place on our Armed Forces and I am convinced that a way must be found to remove that culture of damaging political correctness from them.

It is wrong to impose political correctness from civilian life on our Armed Forces as the military way of life differs from the way of life of civilian counterparts and it can only weaken that essential combat effectiveness.

I turn now to the European Defence and Security Initiative. I have found statements about that force made in the press and by the Government both confusing and sometimes contradictory. I read very carefully the official translation of the French Presidency Report to the Nice Council, which was placed in the Library on 26th January.

The first sentence of the first paragraph of that report states: The aim of the efforts made at the Cologne, Helsinki and Feira Councils is to give the European Union the means of playing its role fully on the international stage and of assuming its responsibilities in the face of crises by adding to the range of instruments already at its disposal an autonomous capacity to take decisions and action in the security and defence field". I believe that it is those three words—"an autonomous capacity"—which have provoked such disagreement between, on the one side, many of us and the USA and on the other, the European Union. It is agreed by all that NATO is the foundation for the defence of Europe and must remain so. It is agreed that nothing must weaken or undermine NATO. NATO, the USA and the European Union are all agreed that Europeans should do much more to increase their defence capability, but not at the expense of the cohesion of NATO.

It was shaming to Europe that the USA had to fly about four-fifths of the missions during the Kosovo air campaign because the Europeans did not have the technical ability to do so. And it was shameful to the rest of Europe that it was unable to supply the intelligence, the transport, the command and control and the radar jamming and much else, which all had to be provided by the USA.

The mechanisms by which NATO has the first right of refusal to become involved in any threats to Europe still have to be resolved. It has also been stated by President Bush that the European Defence Force must be properly integrated into NATO. But it is not properly integrated yet. It has recently been agreed that there is a need for the European Defence Force to have access to NATO's planning capabilities, ensuring that the force is firmly linked to NATO.

So why has the European Union set up on its own initiative a policy and security committee, a military committee and a military staff organisation, duplicating much which exists in NATO itself, damaging the relationship with the USA and wasting public money?

The European Defence Force will not be credible for at least 10 years. Why should that be the case? First, European defence spending must increase significantly now and for the foreseeable future and a real, rather than a rhetorical, commitment to defence spending needs to be demonstrated. European defence budgets continue to fall by five per cent a year in real terms, and that defence spending has dropped to 110 billion in 1997 to a predicted figure of about 99 billion this year, despite the claims by NATO that defence budgets have stabilised.

The recent spectacular cut in Germany's defence budget and the announcement that it cannot afford to buy the 73 transport aircraft to which it was committed are alarming and may set an example to the other European Union countries that there is no real need to increase defence spending.

Without increased spending by European countries the European defence force cannot be effective. Another problem to grasp is that the European Defence Force cannot be effective until the quality and the quantity of the troops, with the exception of those of the United Kingdom, are dramatically improved. Currently, the USA provides 80 per cent of the manpower and the European Union only 20 per cent.

The only two countries within NATO that are capable of fighting wars are the United Kingdom and the USA. Forces allocated must be properly trained to fight wars and it will take many years to train the other European countries to similar standards as those of the United Kingdom and the USA.

There are other important aspects without which the European Defence Force will be unable to function. They are the lack of command, control, communications, computerised systems, battlefield surveillance and reconnaissance assets; intelligence facilities without which it would be impossible to make the correct decisions in a crisis management situation; the need for a reduction in the deployment time for the force from 60 days to around 14; the requirement for a minimum of 180,000 troops; the need for interoperability within the force; the need for more transport aircraft to include heavy lift, and more ships; and the force itself must be sustainable. For those reasons, even if European defence budgets were dramatically increased now, which is highly unlikely given the recent example by Germany, it would take at least 10 years before there would be anything approaching a realistic force.

The European Defence Force should be subordinate to NATO, as it does not have sufficient capabilities of its own. It could use NATO planning facilities and if the force is ever deployed it should come under the command of the Deputy Supreme Allied Commander Europe. That would avoid duplication, avoid upsetting the USA and would cease to be seen to undermine NATO.

I now turn briefly to the situation in Northern Ireland. As your Lordships are aware, the political situation is grave, with the extremist parties Sinn Fein/IRA and the DUP confronting each other. The Belfast agreement hangs by a thread; violence has escalated between the two extreme factions; and there is a possibility that direct rule may be imposed once again. There is little chance of any decommissioning of weapons, as in IRA terms that means surrender. Unless Sinn Fein/IRA fully decommission their weapons there is every likelihood that Mr Trimble will resign as First Minister.

The threat to the security forces is high and too often our Armed Forces in Northern Ireland are forgotten because I have the impression that there is a misguided feeling on the British mainland that little happens over there. In fact, that is far from the case, as we have seen in the past two weeks, when once again the Armed Forces have been in high profile. Throughout June there has been public disorder and rioting in North Belfast and Portadown, and in the past three months there have been five murders, 41 bombings, 40 shootings, 27 assaults and 164 RUC casualties.

The marching season, which is soon to start, will require careful action by the Army and the RUC in monitoring and dealing with situations. The Armed Forces make a very large contribution with the Army providing three brigades with some 15,000 troops, the Royal Air Force providing about 1,000 personnel controlling a large joint helicopter force found from the Royal Air Force and the Army Air Corps, and the Royal Navy providing around 170 people with a number of Hunter class patrol craft and rigid raiders.

Our Armed Forces in Northern Ireland had nearly become a forgotten army as far as the general public and some politicians have been concerned. It is wrong that that should be so as they face more danger than those in the Balkans. They are particularly well trained and commanded and are highly successful in all their many different operations.

I now turn to the Defence Medical Services, which are in a critical state. In order to illustrate how serious the situation is, perhaps I may point out that at December last year there were shortfalls of 55 per cent general surgeons; 61 per cent orthopaedic surgeons; 59 per cent general physicians; and 77 per cent anaesthetists. Such is the shortfall of trained doctors and nurses that currently only one and a half of the three field hospitals could be operationally deployed using regular personnel. To make that up to the three field hospitals required by the Strategic Defence Review reservists and ex-service personnel with recall liability would have to be called up. If further capability were required, TA field hospitals would have to be mobilised, which was being planned for Kosovo.

The Army is some 8,000 troops below strength, but there were a further 9,000 servicemen and women who were fit only for light duties and could not be committed to operations until they had been medically upgraded. That is a disgraceful state of affairs, reducing the deployable strength of the Army by about 17,000 personnel. That situation must be put right as soon as possible.

Perhaps the Minister would write to me on the three issues I raised in the debate on the National Health Service last May. First, I asked what had happened to the need for the fast-tracking of servicemen and women requiring hospital treatment and operations. Secondly, I pointed out that the removal of service families from waiting lists every time they are posted to new stations within the UK caused frustrating delays. Thirdly, I pointed to the immediate need for instant physiotherapy when Armed Forces personnel damage limbs in training and sport.

Finally, I want to pay tribute to the men and women of the Armed Forces of the Crown. They are highly professional and exceptionally well trained. They are determined to achieve success and to protect our liberty and freedom. They are brave and courageous and they are always prepared to make the supreme sacrifice. It is our parliamentary duty to look after these men and women, who are such an outstanding example of loyalty to their country and dedication to duty.

9.22 p.m.

Lord Bramall

My Lords, it will not have escaped notice that defence and the Armed Forces scarcely received a mention during the whole of the election campaign and certainly not by any of the party leaders. The gracious Speech, apart from a brief mention of NATO and the European capability, shows similar reticence.

Many noble Lords will recall that not long ago defence was considered to be one of the primary responsibilities of government, the Secretary of State of a great department of state usually ranking fifth or sixth in Cabinet precedence, instead of 15th as he is today. I wonder what the men and women in the Armed Forces make of that.

But of course times have changed. This country is not for the moment under any direct threat. However, as has been made clear, the importance—indeed, the indispensability—of the Armed Forces both in supporting the Government's foreign policy and in acting after natural disasters in areas as diverse as the Falklands, the Gulf, the Balkans and West Africa, to say nothing of Cumbria and Devon, must be obvious for all to see. Therefore, this jewel in the Crown still needs constantly to be nurtured and supported if the quality, efficiency and effectiveness of the Armed Forces are to continue to be taken for granted. And, for obvious reasons, support and funding cannot be turned on and off as crises come and go.

The noble Lord, Lord Bach, paid the Armed Forces a handsome compliment, as much appreciated as I believe your Lordships will agree it was deserved. But it is by action, not by words, that the Government will in the end be judged. The Government, as I and many other noble Lords have frequently said, have made a very good start with a soundly based Strategic Defence Review.

However, those of us who are comparatively wise in, and certainly wary of, the ways of Whitehall have few illusions about what is likely to happen with the election safely out of the way. Even discounting the persistent rumours, the whole government emphasis on the delivery of better public services—sometimes conveniently forgetting that reliable Armed Forces may be one of the most important public services that a country can have—will require a great deal more money from a reluctant Treasury. It is not difficult to guess where its eyes are likely to alight to recoup resources. This is an area not covered by any specific election promises and unlikely to cause a ripple on the electoral pond.

Should that happen, it will no longer be possible to fudge the issue by sheltering behind claims of better value for money or efficiency savings. We have been round that buoy not once but umpteen times in the past 15 years or so. No, if there are to be cuts in the promised marginal real term increase in defence spending over the next three years, albeit from a very low baseline—as so much of the programme is already under-funded—it is bound to affect the already seriously depleted and fragmented Territorial Army, the only reliable reserve now left to us, and the longer-term equipment programme on which the whole future effectiveness of the Armed Forces depends. It will also affect the accommodation programme, some of which is in a disgraceful state, and the number of cap badge units, which would both seriously increase overstretch and strike a body blow to the regimental system on which the morale, recruitment and retention in the Army depend.

I sincerely hope that I am wrong. The best start that the new Parliamentary Under-Secretary of State, the noble Lord, Lord Bach, whom I also warmly welcome to his new post, could have made would have been to give a categoric assurance that what I have outlined will not happen and that, as in other areas, the Government intended to deliver the Strategic Defence Review in full, with the necessary funds to make that implementation possible. But it seems that the noble Baroness, Lady Symons, is to wind up. I am delighted about that because it means that our sadness at her departure to her bewildering, varied, new and important jobs will be assuaged just a little longer. Of course, the noble Baroness knows the whole background intimately. I only hope that I can persuade her to try to reassure your Lordships' House on some of the matters that I have raised. If not, I fear that overstretch and manning will get worse training will become further restricted and things will start to go wrong so that for the first time for many years the British people will discover that they can no longer take the effectiveness of the Armed Forces for granted when new crises emerge, as they are bound to, particularly in the vital Middle East and, as I he noble Lord, Lord Vivian, said, perhaps, sadly, much nearer home. But by then it may well be too late and too expensive to put things right, as has occurred in relation to medical services, a situation which the Government inherited from an earlier administration.

The effectiveness and future of the Armed Forces must depend on getting the right people to join, giving them the right equipment, training them properly for real combat and, most important, achieving a proper balance between operational commitments and time with their families. It is on these matters that defence expenditure should be both based and justified, not merely (in the current Whitehall jargon) on whether the Armed Forces can be said to be contributing to the national agenda and pan-government initiatives and showing greater media agility for the benefit of the image of the Ministry of Defence. These may be a bonus but they are certainly not the be-all and end- all.

As to the one thing in the defence field on which the gracious Speech did touch—taking steps to enable the European Union to act when NATO chooses not to—the Government have only themselves to blame that it attracts criticism both in Parliament and the country. The language in the gracious Speech is unexceptional enough. Perhaps less so than other noble Lords, I can find no objection to it at all. However, knowing how the French see the initiative as an alternative or even a counter to NATO, the Government must come clean and make clear exactly how they see this desirable improved European capability being integrated into NATO's overall political command and staff structure without undue and unnecessary duplication; what size additional headquarters within the NATO umbrella they foresee as necessary to command European forces, should that be necessary; and, most importantly, what extra funds they propose European countries, including this country, should be contributing towards making this concept a reality?

As was pointed out by the noble Lord, Lord Vivian, without such additional funding a force's exclusive capability will be so deficient of so many things as to make it virtually unusable. All that will happen is that the United States may have been made suspicious and NATO somewhat destabilised without having anything to show for it at the end. Perhaps the noble Baroness can show some light on those points. Otherwise suspicion will persist, and it will be the French plan that will be adopted.

I believe that your Lordships' House is looking for reassurance that, for reasons of political expediency and the omnipotency of the Treasury, the Government will not be diverted from full implementation of the Strategic Defence Review which, only a very short time ago, they thought essential in the national interest.

Finally, there is one aspect of the Government's handling of defence on which the noble Baroness will be pleased to know I can find no reason to criticise or even harbour suspicion; that is strategic missile defence. If ever a subject cried out to be kicked into the long grass until we can be sure that we are enhancing rather than damaging strategic stability, that is it. Clearly, a great deal of work needs to be done first on East/West co-operation before the matter is taken further.

On the other hand, the shorter range, more tactical missile defence, such as was needed in an earlier generation form in the Gulf War, is a much more urgent matter to which I hope the Ministry of Defence is giving some consideration.

9.32 p.m.

Lord Inglewood

My Lords, in the recent debate in your Lordships' House about its composition and its future, a number of references were made to the fact that "of course this is a part-time House". As a number of your Lordships know, I, as a hereditary peer, have the slightly surprising outside job of being an elected Member of the European Parliament. There I represent a number of noble Lords on the Front Bench and the Benches opposite. Indeed, the right honourable Member for Blackburn is one of my constituents.

Ten days ago, as part of my work in the European Parliament, I went with the delegation of the Legal Affairs Committee to Poland to talk to the administration there and the Sejm—the Polish House of Commons—about preparations for and progress towards Poland's joining of the European Union. Clearly, everyone recognises that there is a very big mountain to be climbed before it does, but the Poles were buoyed up by the conclusions of the Gothenburg Summit and encouraged by progress in recent months over the accession negotiations. Of course they recognise how much more is to be done. Equally, there was recognition on both sides of the negotiations that perhaps the best way to reach a satisfactory outcome in certain circumstances is to go right up to the wire. If one looks at the progress in enlargement generally over the past few months, one sees that progress has been made.

On a previous occasion I explained to your Lordships' House that I consider the enlargement of the European Union to the East to be the most important geo-political project we are currently engaged on. Moreover, it was so well described by Commissioner Patten just before lunch no distance from here in the Royal Gallery that I do not think that I could put the matter any better myself.

Given its importance, what is it that we need to do? First, we have to complete the pre-accession negotiations; secondly, a number of European Community and Union policies need to be reformed; and, thirdly, we need to see changes in the system of Europe's governance.

I have already touched on the matter of the accession negotiations. As far as concerns policies, the most obvious policy that needs to be addressed for all kinds of reasons is the common agricultural policy. It is important that when new member states join, they become full members right across the board and that they themselves become integrated into the common agricultural policy, whatever it may be at that time. Reform will be expensive, but, as we all know, pressures are building up all around Europe—the outbreak of foot and mouth disease in this country and the political ramifications of BSE in Germany—which mean that the time is probably better for reform than it has been for a very long time.

Equally, there is real poverty in a number of the applicant countries, which inevitably means that money that channels through the various instruments of regional policy to this country and to other countries like it will be directed elsewhere.

Europe is not principally about money. Indeed, I do not believe that the European Union and Community requires a large budget at all. For my part—it is a purely personal observation—I should like to see the rebate obtained by my noble friend Lady Thatcher for this country at Fontainebleau applied equally to all member states.

Everyone recognises that the common agricultural policy is ripe for reform. It is an almost unbelievable policy. It is bad for farmers, bad for the environment, bad for taxpayers and bad for consumers. The only saving grace is that if one were to reform it, one would almost certainly find some money to redeploy. In the event, we are seeing increasing development of policy within national envelopes and we shall see more co-financing. Indeed, as the situation develops, perhaps we shall see even 100 per cent national financing for agricultural projects. As for regional policy, if less money comes to this country, I hope that we shall see a complete recasting of state aid rules, which will enable national policies for regional aid to be developed in a different way from how they have been developed in recent years. It will cost money, but stability, whether economic, political or military, on our eastern borders is worth paying for.

I turn to systems of governance. The rationale behind the Treaty of Nice was that it was necessary to replace the systems designed for a Europe of one dozen member states with systems that would work for a Europe of two dozen. Now that we have a treaty, I am not sure I have heard of anyone, with the possible exception of Jacques Chirac—I am not even sure that I believe him—who is positively happy with the outcome. In an ideal world, I should like to see it changed and improved in a number of respects. But it should be remembered that the pre-Nice debate and the Nice conference set the limits of what may be politically possible. If one wants enlargement, one has to create the necessary conditions in which enlargement can be carried out.

In his remarks, the noble Lord, Lord Bach, commented on the outcome of the Irish referendum. I am not quite sure of its significance. It can be seen—probably rightly seen—as proof of certain aspects of democratic shortcomings in the way Europe works. It also suggests that intergovernmentalism is flawed, because the great argument for intergovernmentalism is that one can strike a deal and then be relied on. The one thing we cannot do in progressing Europe is to have a system under which deals are made and then cannot be delivered. I am increasingly coming to the view, which I suppose is obvious if one thinks about it, that the Treaty of Nice, the Treaty of Amsterdam before it, and the post-Nice agenda are part of the same single process, which is to bring Europe into the third millennium and to double the number of member states it contains. That will require a very great deal of work and, just as the whole basis of this enterprise is the interdependence of the member states, so the nature of the way in which decisions are taken means that national political parties themselves will require an equal interdependence in determining outlook and future policy.

That is the reason why I and my Conservative MEP colleagues sit with allies from other countries in the Union, in a European political group which, by its nature, is a much looser organisation and grouping than is the case for domestic political parties. It is my view both as a Conservative and as a citizen of this country that we are absolutely right to be doing that. I say that not only because the EPP/ED group in the European Parliament—of which I am a member while it may not have an overall majority is nevertheless the largest political grouping and, as such, is the principal player in that arena. Thus I find myself in the slightly unusual circumstance where, in this Chamber I sit on the Opposition Benches, but when I attend the European Parliament, I am a part of the dominant team.

Although no one should harbour any illusions—the European Parliament is an organisation nothing like as important as the Council of Ministers in the overall scheme of things—it is nonetheless a place which is important for both legislating and forming policy at the European level.

I do not believe that the institutions of Europe are perfect; far from it. However, that is also the case for the institutions in this country. Very little in this world, in one way or another, is incapable of improvement. What we need to try to do—I use the pronoun "we" in a very general sense—is to develop ways of doing things at the European level which relate and are complementary to the ways in which things are done here and, I hasten to add, to the way things are clone in other European member states. We will then become comfortable with what is going on, as will all the others affected.

It is self-evident that that will not be easy to achieve. A great deal of lateral thinking and imagination will be required to bring it about. But it is no good simply paying lip service to the European Union and then complaining that it is not working as it should, if one is adopting an approach to change which is perceived as not being delivered in good faith. It follows, therefore, that noble Lords on these Benches must do more than simply adopt the traditional United Kingdom opposition perspective on these matters. We need to tackle the task from a set of premises and with a set of policies which our allies in other member states will find consistent with our commitment to the underlying project. If we do that, we may find that we shall lose the battle in Westminster, but that that opens the possibility of winning the war in Brussels. I believe that to be a very considerable challenge.

Not only will that be a challenge under ordinary circumstances but if, as I believe, we have to proceed speedily with the task of enlargement, that will make it so much more difficult. We should remember a comment made to me by a Pole during my visit to Poland 10 days ago, "There is only a certain amount of time that you can keep the bride waiting at the altar. If you leave her there for too long, she will go off with someone else".

9.43 p.m.

Baroness Turner of Camden

My Lords, I welcome the opportunity to speak in this important debate on foreign affairs. I should also like to take the opportunity to congratulate my noble friends Lord Bach and Lady Symons on their new positions. Furthermore, perhaps I may express my admiration for their fortitude in sitting through this lengthy debate.

I am particularly glad to learn that the Government have not departed from the aim of pursuing an ethical foreign policy. Unlike the noble Lord, Lord Howell of Guildford, I think that it is quite important to restate that commitment. Apparently, legislation is to be introduced—perhaps more far-reaching and radical than any since the Second World War—seeking to ban the export of weapons to areas where there could be human rights abuses. There is to be a ban on the sale of torture equipment and on the sale of landmines; increases in the penalties for offenders; and, apparently, there is to be an annual report on strategic export controls. I should like to see cluster bombs and weapons containing depleted uranium added to the list as both threaten civilian lives and health.

Britain is responsible for a quarter of global weapon sales and British companies are leaders in the field. It therefore requires some courage to embark on such a policy, which could mean job losses. However, the policy is right and the Government are to be commended on their stance.

We heard little about foreign policy from any of the major parties during the election. The media informed us that the electorate was concerned only with public services; with health, education, transport and welfare. Except for the emphasis by one party on the euro, the important role of Britain in world affairs received little attention. Many of the comments about the euro appeared to go beyond that issue and to challenge our continued membership of the EU. This was particularly the case with some members of the main opposition party, although not, I am glad to say, of its leaders.

Years ago I was inclined to Euroscepticism myself; so were many trade unionists then—but no longer. Many of us began to realise that, in the EU, trade unions are social partners rather than the "enemy within". Moreover, many directives in regard to working conditions, non-discrimination and the like have been of benefit to working people. My noble friend Lord Lea of Crondall, in an excellent speech last Monday, spelt out just how beneficial the directives received have been. I know that some of my noble friends may not agree with me, but I believe what I have just said to be the majority view of the trade union movement. No doubt reforms are necessary, but I believe that the Government understand that and I am sure that they will pursue the issue.

The European social model appeals a great deal more to me than the American one. Moreover, it would appear to be more in line with the electorate's view, with its concern about public services. The United States model, with its individualistic, entrepreneurial culture, results in prosperity for some people but also produces a large, resentful and sometimes dangerous underclass, and a large prison population. That is not the road for us.

Then, of course, there is the matter of EU enlargement, to which the noble Lord, Lord Inglewood, referred in an interesting speech. The Government are keen on this, as are other governments in the EU, and, apparently, the governments of eastern European countries which were formerly under communist rule. No doubt the process of enlargement will continue despite the problems arising from the results of the Irish referendum.

There are, however, aspects which should concern us. In these eastern European countries there has been a rapid transition from centralised, state-owned monopolies to privatised, free-market economies. This has been at the instance of the West, notably the IMF. The results have often been dire. A few people have got very rich, but the bulk of the population has become increasingly impoverished. A recent poll in Romania indicated that more than 60 per cent of people believed themselves to have been better off under Ceausescu. Bulgaria appears to be similarly situated, with high unemployment and no adequate welfare net to protect the vulnerable.

Similar situations exist in other countries which have emerged from communism and have been encouraged down the path of privatisation and the free market. Why reform should always mean massive unemployment I really do not understand. In such circumstances, it is hardly surprising that the more adventurous individuals in such societies believe that they should try to join the tide of economic migrants, taking enormous risks to get into EU countries, including Britain.

So these countries joining the EU will need help, but so far the emphasis seems to be very much on the free market and privatisation, as though these were the hallmarks of democracy. But the human rights of citizens, which include the right to basic living standards, are surely most important. That also is a part of an ethical approach to foreign policy.

Perhaps I may return to a more contentious issue. Before the House rose prior to the general election, I and several other noble Lords raised the matter of sanctions and the bombing of Iraq. My noble friend Lady Symons was kind enough to write to me at length and to place a copy of the letter in the Library. I am grateful to her for setting out in some detail the background to government policy.

I want to make it clear, however, that my intervention was not prompted by Iraqi propaganda, which I have not seen. I am concerned about bombing. I am old enough to remember what prolonged aerial bombardment is like. It is just not possible to drop thousands of tonnes of high explosive from a great height on populated areas and not kill and injure civilians.

It is clear from the Minister's letter that the Government have no idea of the number of civilian casualties. It is said that the bombing campaign is necessary for the protection of Kurds—although Kurds are, regrettably, repressed not only in Iraq. Saddam Hussein—now demonised, no doubt justly—was yesterday's man with whom the Americans "could do business". He was encouraged and covertly armed in the long and disgraceful war with Iran, merely because at that time it happened to suit United States foreign policy.

Similarly with Milosevic, he was the "OK guy" when he was needed for the Dayton accord but is now regarded as responsible for all the Balkan ills—a ridiculous assertion. The Serbs have also been demonised, but others were responsible too, particularly the Croats and the Bosnian Muslims to some degree.

Despite the Minister's helpful letter, I really do feel that it might be appropriate to review our policy on Iraq. It clearly does not command full support among our EU partners, and it is possible that the new President of the United States might be willing to look at it all again, particularly in the light of recent changes in the Senate. I should also like to hear from the Minister a little more about the so-called "smart sanctions". A recent report suggests that if they were implemented, it could give Jordan some economic problems. Since Jordan is a friendly country, one would not want that to happen.

As to the Balkans, I opposed the bombing of Kosovo and Serbia—and I still believe that it was wrong. It now seems that we shall have to commit forces to remain in Bosnia, in Kosovo and perhaps in Macedonia for a very long time. Ethnic wars are not simply a matter of leaders. It would be much easier if they were. The bitterness that is engendered lasts, and there are no quick fixes. In Macedonia, the Albanian rebels—probably funded from abroad and apparently amply supplied with weaponry—appear to be making demands that the Slav government find difficult to accept. NATO assistance has been sought by both sides. But it appears that large numbers of Slays regard NATO as taking too favourable an approach to the Albanians. However, NATO's policy appears to be to attempt to negotiate a peaceful settlement, and we should all support that approach. Intervention carries with it considerable risks and does not always produce the hoped-for result.

Yes, the world is a more dangerous place than most of us would like. But I question whether the missile defence project—"son of star wars"—is an appropriate response. It is not widely popular even in the United States and it would appear that our partners in the EU are not particularly keen on it either. Russia is hostile, and it may have the effect of driving Russia closer to China in a defensive bloc. The rogue states to which President Bush refers are scarcely in a position to challenge the world's only remaining superpower; and the abandonment of the ABM Treaty is bound to be regarded as hostile by the present Russian Government.

We should advise President Bush against this course. In particular, we should not make Fylingdales available. Why should we give our fellow citizens who live around it the impression that they are expendable; that President Bush regards them as the USA's first line of defence? It is unacceptable, and we should say so.

I am reminded by some of my noble friends who were there at the time that during the Vietnam War Harold Wilson was pressurised by the then United States President to send a force—even a token British force—to Vietnam in support of US forces. He absolutely refused to do so. He was right. Yet the special relationship continued. We have nothing to gain by supporting this latest US project and possibly a great deal to lose.

9.55 p.m.

Lord St John of Bletso

My Lords, I was pleased that the gracious Speech focused on the need for a more effective global effort to reduce poverty, as well as on crime prevention. Certainly in Africa, where I have spent most of my life, the battle against poverty is the new byword in the fight against AIDS.

With so many speakers and such a broad spectrum in tonight's debate, I do not envy the task of the Minister in winding up our deliberations. Like other noble Lords, I should like to take this opportunity to congratulate the noble Baroness, in the words of the noble Lord, Lord Howell, on her "triple crown". I should also like to congratulate the noble Lord, Lord Bach, on his well-deserved appointment.

I want to focus my remarks on the challenges facing southern Africa—more specifically, the battle against poverty and AIDS and the need for a resolution of the political, economic and social problems that face Zimbabwe. I agree with the noble Lord, Lord Howell, in that the situation in Zimbabwe has had a terrible knock-on effect on the rest of the region. As I initiated a three-hour debate just three months ago on the challenges facing Southern Africa, I shall not regurgitate that speech this evening. However, I should like to touch upon some of the recent developments and immediate challenges facing the region.

Before I do so, I should speak briefly on the WTO. The gracious Speech also referred to the commitment of Her Majesty's Government to work for an early and comprehensive World Trade Round. Clearly, if that is to be achieved, a very firm timetable will need to be set for agreeing the scope and objectives of the round. When the WTO members met just a few days ago, they agreed that further work was needed to clarify the WTO's intellectual property accord. I hope that this can lead to more focus on an integrated policy on pharmaceutical research and distribution which will promote public health and make treatment for AIDS, malaria, tuberculosis and other diseases available to the developing countries at an affordable cost. I certainly agree with the noble Lord, Lord Desai, who said that it was a good idea to promote competition in the pursuit of cheaper drugs. It is encouraging to note that members of the WTO appear determined to ensure that the Trips Agreement is part of the solution, not part of the problem, of meeting the public health crises in poor countries.

The noble Baroness, Lady Whitaker, and my noble friend Lord Sandwich both covered the AIDS crisis in Africa. In addition to the statistics that they listed earlier, I read today the rather startling facts that Sub-Saharan Africa will have 71 million fewer people by the year 2010 because of AIDS; that life expectancy in Zimbabwe will fall to 27 by 2010; and that Tanzania will lose 14,500 teachers, with its share of orphans increasing from 2 per cent to 10 per cent.

While South Africa has an admirable record over the past 10 years in fiscal and economic discipline, the fight against AIDS continues to undermine the country's full potential. President Thabo Mbeki appears to be in a state of total denial of the AIDS crisis that is facing his country. Nkosi Johnson, the orphan with AIDS in South Africa who, sadly, died earlier this month—appropriately on "National Children's Day" in South Africa—gave a child's face and voice to AIDS in Africa when he spoke last year at the World AIDS Conference.

According to a recent report by the Nelson Mandela Children's Fund, many South African children whose parents have died in the AIDS epidemic are neglected, starving and ill, while some are turning to prostitution to survive. Will the Minister, when she winds up today's debate, elaborate on what measures Her Majesty's Government are taking to fight this pandemic, not just in terms of financial contributions but also of practical measures to raise more awareness of this disease in southern Africa?

The noble Lord, Lord Bach, mentioned in his opening remarks the Government's White Paper on eliminating global poverty. I simply want to draw attention to chapter three of that excellent document, which covers the extent to which the Internet revolution could potentially facilitate enormous breakthroughs in providing better education and other vital services to developing countries. In his state of the nation address at the opening of the South African Parliament, President Thabo Mbeki announced an ambitious plan to ensure that South Africa rides the information super-highway and exploits that medium for education, health, commerce and government. I hope that his example will be followed in the rest of the region where there is certainly a digital divide.

Finally, there has been much concern about the deteriorating economic and political situation in Zimbabwe. That matter has been comprehensively covered by the noble Lord, Lord Blaker, all of whose concerns I entirely endorse. While I support as much international pressure as can be brought to bear on Robert Mugabe, I believe that the most constructive chance of a breakthrough will be through pressure from other African Heads of Government. I entirely agree with those noble Lords who have embraced the importance of the Commonwealth as an effective intermediary in conflict resolution.

Whether it be as a result of the ever increasing economic collapse in Zimbabwe or the imminent Commonwealth summit in Brisbane, or even the presidential election in March next year, I was encouraged to note that earlier this month President Mugabe travelled to Kenya and signalled his readiness at long last to co-operate with the Commonwealth initiative to solve the land question. I hope that the planned forthcoming Commonwealth Ministers' meeting with President Mugabe will yield a similar positive response. As one diplomat recently put it, we are dealing with a proud man, who is perhaps a little senile. It is clear that to get to a position of constructive negotiation, we will have to allow Mugabe to appear to have initiated a so-called African solution". I believe that on the whole there need to be African solutions to African problems but I wholeheartedly support Her Majesty's Government's commitment to facilitating and resolving the challenges that face southern Africa and the rest of the continent.

10.3 p.m.

The Earl of Dundee

My Lords, no doubt we are well accustomed to classifying economic and social development as an attractive product and outcome of sustained peace. What might be less obvious, perhaps, is that economic and social development levels should themselves become the means as well as the desired ends of European stability, let alone the key ingredients and instruments for achieving lasting peace in Europe.

Yet that proved to be the case between 1948 and 1989 in terms of the Cold War. The 1949 NATO alliance could not have been formed had it not been preceded by the economic disbursement of Marshall aid in 1948. The Cold War would not have ended as it did in the 1980s had the arms race not come to exert an unacceptable level of pressure upon the economies of the Soviet Union and Warsaw Pact states. Nevertheless, right up to 1989, and in spite of promising signs to the contrary, many of us, including myself, still believed that Soviet communism would remain entrenched for a long time. However, it did not and for that an enormous debt is owed to the forging of the North Atlantic alliance in the first place; to the planning and development of that organisation; and to the balance achieved by its membership in terms of deterrence, diplomacy and economic stability. As we recall, it took much effort and persuasion to form NATO at all.

In that connection, it is fitting to pay tribute, as has the noble Baroness, Lady Ramsay, to Ernest Bevin, who as Foreign Secretary, was chiefly responsible for guiding the Americans towards NATO; and in association with this House I pay tribute to Roger Sherfield, Derek Inshyra and Gladwyn Jebb who as diplomats within the British Foreign Office played a significant part in forming NATO and whom we now remember with gratitude and affection.

There is a striking contrast between the successful handling of the Cold War by 1989 and the inept handling of the former Yugoslavia during the 1990s. The contrast is also paradoxical. The former, although it threatened nuclear world war, produced no major disaster in Europe; while in the latter civil war between non-nuclear armies in south-eastern Europe killed more than 250,000 people and made more than 3 million homeless. With hindsight, the catastrophe could have been avoided if the prescription of July 1991 of the European Union Dutch presidency had been implemented. This prescription was for two expedients: first, an immediate deployment of NATO and United Nations troops to keep the peace following the outbreak of hostilities between Serbs and Croats; and, secondly, the continued deployment of the troops while the European Union presided over an orderly secession of states from the former Yugoslavia. As we know, that proposal was rejected and our western security system remained divided over the former Yugoslavia until the intervention of the Dayton peace plan in October 1995.

Many of us believe that ironically enough this division within western defence security was a product of the very success of the management of the Cold War by NATO states. For 40 years NATO's focus had been the containment of the Soviet Union and the Warsaw Pact states which formed its satellites. The containment of regional instability had thus not been a priority or even a necessity. As a result NATO states, distributed over the European Union and including the United States, were unused to confronting regional instability in the 1990s and were divided over and unsure of the best way to do so with regard to the former Yugoslavia.

Yet although division within western security prevented timely containment, we would all wish to acknowledge that western governments behaved honourably and responsibly, if inadvisedly. The measure of that is the commitment of those states to peacekeeping forces and to the shared cost and burden of reconstruction. During the 1990s wars there has also been the impressive disbursement of humanitarian aid by member states within the United Nations.

In those contexts, therefore, we can be proud of our own British contributions and, as a number of noble Lords have stressed today, in particular the commitment of our servicemen.

So the first theme is that post-Cold War European defence security must depend upon agreed methods for pre-empting and combating regional instability at the outset before it develops and takes hold. It must also depend upon economic and social development not just as the fruits and rewards of peace but also as the best means of engendering stability in the first place.

That leads to my second theme: the present scope to assist, through a variety of expedients, lasting peace and rehabilitation within south-eastern Europe. Can the Minister say what part our own Government are now playing? To which collective actions and remedies do they subscribe in order to end fighting within the minority area including Macedonia and Albania, where that is still threatened, and to consolidate peace within the majority area where violence has now ceased? Within a collective international policy for south-eastern Europe what individual initiatives or forms of leadership of its own do the Government propose to offer?

My third theme is on how lessons learnt from the former Yugoslavia now stand to assist the future handling of any regional and local instability both there and elsewhere in Europe. In that context the simple key considerations must be the prevention of war and the maintenance of peace. Regarding the former, no doubt a rapid reaction force deployed within NATO is desirable and long overdue. However, its concept, let alone its deployment, reflects a welcome recognition from the United States and the European Union countries that instability must be dealt with early on.

However, as the noble Lord, Lord Wallace of Saltaire, reminded us earlier, equally called for is an improved working relationship between the European Union, the United States and Russia over the protection of human rights and the containment of instability in all regions, including eastern Europe. What steps are the Government taking to achieve such co-operation?

There are also lessons for the rest of Europe from the former Yugoslavia about the management and consolidation of peace. Within the Balkans and elsewhere, current endeavours already reveal pragmatic partnerships of all kinds to address social and economic development on different scales. Such joint ventures may include governments, the World Bank, the Council of Europe, the Organisation for Security and Co-operation in Europe and a number of other institutions whose purpose is social and economic development. They should and do also include non-governmental organisations and voluntary and charitable bodies.

The remit of the UK All-Party Parliamentary Group for Social Development in Europe, of which I am the current chairman, is to encourage the growth of partnerships and initiatives to achieve a measure of social development within European regions and communities on a variety of scales. One of the group's methods is to encourage the parliamentarians of the 41 Council of Europe states to embrace that focus and to advocate in their Parliaments the added value of European social development from all kinds of initiatives, some of which may operate convincingly on very small scales.

The potential of and benefit from all such endeavours is to consolidate peace and security within European regions and localities. That in turn emphasises the post-Cold War role of social and economic development as a means towards that end. Its implementation brings together a variety of institutional and less formal expedients.

Following from that is the connection between this varied and flexible approach to assist European regional stability in particular and what should be the Government's broad policy to improve European security in general. Arguably, those two aspects will naturally coincide anyway if, as already contended, social and economic development has become both a means for enhanced European security and an end product in terms of human rights. Nor, of course, within international democracies, is its pursuit in any way in question at all as a necessary means or as a desirable end product. That has become so not least following the end of the Cold War by the late 1980s and the end of the civil wars in the former Yugoslavia by the turn of the century.

Ironically, the more that there may be consensus on that assessment, the more that the Government are presented with a challenge. Do they simply go with the present trend, or do they set out to give leadership? For the task of promoting social and economic development in Europe, will the Government stick to those channels conveniently presented by the European Union, the stability pact and other means, or will they supplement those with additional efforts and projects of their own? Are they also prepared to lead by example rather than through institutionalism?

Proper evidence that the United Kingdom had effectively addressed social problems within its own communities would greatly assist European stability through its example of good practice. However, as we are all well aware, much better practices are called for in this country to improve motivation and opportunities for young people, to deal far more effectively with young people and others who have fallen foul of the law and to reduce the unnecessarily high levels of prison recidivism. At the same time, far greater investment should be made in law and order and the police force to deter crime and protect communities in the first place. Clearly, a combination of those policies will enhance the security and health of our communities. We should demonstrate the evidence of that both in our domestic interest and to contribute by example to improved European security.

Many of us will wish to urge the Government to draw those connections and to be prepared to meet the challenges that they present. If they do, then we in this country may all hope to be able to engender a degree of confidence in a balanced form of security as an agreed priority for Europe, as we can also seek to make a reality that, at least in Europe, peace and stability will become a guaranteed human right for all.

10.15 p.m.

Lord Powell of Bayswater

My Lords, I gladly join other noble Lords in congratulating the noble Baroness, Lady Symons, and the noble Lord, Lord Bach, on their new and demanding appointments and in wishing them every success.

I shall restrict myself to some remarks on transatlantic relations and a very brief comment on China. I should declare that I am a founder member of Atlantic Partnership, a non-profit body dedicated to sustaining public support for good transatlantic relations, and president of the China-Britain Business Council, the government-supported industry body which promotes trade and investment with China.

There are a worrying and unusual number of problems troubling transatlantic relations at present on trade, on the environment and on defence. None is individually insoluble but, taken together, they amount to a burden which should flash some warning lights for the Government. One such issue is the widespread grumbling and opposition among European governments to America's plans for missile defence. I believe—in this I disagree with the noble and gallant Lord, Lord Bramall—that President Bush is absolutely right to commit himself to achieving missile defence. However, I do not want to argue the merits of it on this occasion; I simply want to make four observations.

First, the Americans are now making a much better job of explaining their views to their European allies, as well as to Russia and China, than in the recent past. That is very welcome and I hope that it will continue.

Secondly, European governments need to understand that missile defence will go ahead and they need to adjust their thinking accordingly. Of course, it will take longer than predicted. There will always be technical problems, although America's record of solving engineering difficulties since the Manhattan Project onwards surely means that those problems will be overcome. Decisions still have to be taken about the nature of the system to be adopted. All that will cause delay. But the inescapable fact is that, once an effective system is available and in prospect, the American people, whether they vote Democratic or Republican, will expect their President to provide it. And he will because it would be irresponsible not to do so. European governments which continue to contest the whole concept of missile defence are simply hiding their heads in the sand.

Moreover—my third point—those governments underestimate the very real potential for further sharp reductions in nuclear weapons for which introduction of missile defence opens the way. That simply does not seem to feature in the calculations of these European critics and it should do so.

Fourthly, if I am right that the Americans will go ahead anyway, it must be in the interests of Russia and President Putin to reach an accommodation with them—to reach an agreement to limit the size of a missile defence system so that it does not threaten the viability of Russia's own deterrent. That has to be far better from the Russian point of view than a unilateral decision by the Americans to go ahead. That would leave the Russians both humiliated and facing the unbearable strain of having to expand greatly their own nuclear forces. They cannot want that, and they certainly cannot afford it.

Therefore, my concern is that fractious European opposition to missile defence may encourage some in Russia to believe that they can split NATO and whip up opposition on the scale of the demonstrations against the stationing of cruise missiles in Europe in the 1980s. In other words, gratuitous European criticism of missile defence may simply make it harder for agreement to be reached between America and Russia without in any way changing American plans.

I am glad that our Government have shown a more sophisticated awareness of the merits of missile defence than many others. However, the comments of the noble Lord, Lord Bach, were, to my mind, excessively timid. I hope that the Government will use their influence with the French and Germans in particular to bring home the realities to them. My guess is that the introduction of missile defence will in practice be a gradual process, starting with the upgrading of existing systems and with agreed amendments to the ABM treaty, which has already been modified on three occasions. In the longer term, the ABM treaty will have to go. There is provision for that in the text of the treaty, which permits either side to withdraw from it with six months' notice.

Another current transatlantic issue is Europe's proposed rapid reaction force. The implications of that are being studied by Sub-Committee C of the European Union Committee and I do not want to preempt our conclusions. However, having met some very senior members of the American Administration in recent weeks, I can confirm that there is genuine concern about the risks of dividing NATO and of duplicating well-tried NATO procedures. Those concerns are amplified by ambiguities about the role of the European Union's nascent military staff, small as it is in relation to NATO's.

The single most important issue in American eyes is whether Europe has the will to provide additional defence capabilities. If that can be achieved other concerns become manageable. President Bush's recent statements have indicated that. The worst of all possible worlds would be to create new European structures that would weaken NATO but at the same time fail to provide extra capabilities. However, there is no reason why that should happen. We must in particular resist the sort of thinking associated with France which sees European defence co-operation as a means of turning Europe into a rival centre of power to the United States rather than a partner.

As the main originator of the recent moves forward on European defence, it is for our Government to set an example through defence spending and to do their best to ensure that other European countries also deliver extra capabilities and full integration with NATO. I very much hope that they will succeed. If they do not, they should be ready to walk away from the project altogether rather than involve Britain in a fruitless enterprise that would weaken NATO.

In the interests of time I shall not dwell on Kyoto or some of the trade issues that are currently burdening transatlantic relations. I hope that the Government will maintain close consultation with the United States about the pace of NATO's enlargement. That should proceed as candidate countries prove their democratic credentials: we owe them that. We cannot allow the Russians to dictate which countries can or cannot join NATO. Equally, we have to recognise that enlargement will greatly change the nature of NATO and the European Union. I should go so far as to say that the NATO that we know will, by the end of the process of enlargement, no longer exist. It will be a broader, looser grouping; it will find security in the fact of association but it will do so without the close-knit strategy, integration of forces or credible nuclear guarantee from the United States that hitherto characterised NATO. That evolution is inevitable and we must take account of it.

Lastly—and briefly—I turn to trade with China. British exports reached record levels in each of the past two years and this year they are currently running ahead of even those figures. However, with the economic downturn in the US economy, that may not last. Our success is primarily due to the efforts of exporters, although the dedicated staff of the China-Britain Business Council and of Trade Partners UK also deserve credit.

We in the China-Britain Business Council are grateful for the excellent support we have received from Ministers. We most recently received support from the noble Baroness, Lady Symons, whose first public engagement in her new role was with that council. Relationships at the very top have a vital part to play with regard to doing business with China. I urge the Prime Minister to consider paying a further visit to China before long. That would follow his extremely productive visit with a large business delegation in 1998. Nothing would do more to encourage British exporters and to draw attention to the huge potential of the China market, especially with China on the verge of entering the World Trade Organisation. I hope that the Minister will relay that request to the Prime Minister. Indeed, now that No. 10 Downing Street staff numbers have been still further enlarged, they are now presumably working shifts and the Minister may even be able to get an answer in time for her winding-up speech this evening.

10.24 p.m.

Baroness Rawlings

My Lords, it is always a privilege to follow the noble Lord, Lord Powell of Bayswater, and to hear his wise words.

I welcome the last paragraph of the gracious Speech, which concerned the reintroduction of the International Development Bill. That was discussed by the Minister at the start of this debate—which was a very long time ago!

At this late stage, I shall confine myself to only two areas, both currently urgent concerns: the first was highlighted last week by the distinguished United Nations Secretary-General, Kofi Annan, and is the very serious worldwide problem of HIV/AIDS, as mentioned by the noble Earl, Lord Sandwich. In the Secretary-General's words: HIV/AIDS is the world's biggest public health challenge, and in some countries, the biggest single obstacle to development. Secondly, there has been an extraordinary election held this month, not in this country—which had an unprecedented result—nor the one held in Peru, nor Iran, nor Albania, nor Uganda, all held in June, but one of the most unusual of modern times; that is, the one that was held in Bulgaria. Many will have read the headlines announcing that the former king—the first in recent times—leading a political party formed less than six months ago, had won 120 of the 240 seats, only one short of the majority needed to form a government.

What does that mean? Why, apart from my interest in Bulgaria, do I feel that it is important today to say a few words about that often forgotten European country? King Simeon's victory is a breakthrough in contemporary politics. He will effectively, regardless of whatever position he takes in the future government, be responsible for a country which may find itself forced to play a major role in the very fragile situation which we are tragically witnessing yet again in the Balkans. I refer to the present unrest in Macedonia. I shall not go into the details of that as my noble friend Lord Howell of Guildford has covered the main points concerning Macedonia so clearly in his speech.

I return to the elections. The Bulgarian National Assembly will open on 5th July. People are speculating as to who King Simeon is. He is now addressed as Mr Saxcoburggotski. That is according to his own wish. Who will he recruit into his new government? There are few clear indications as to what will be the priorities of that new government. On the election night, the king said that his main goal would be to fight corruption and to build on the country's economic prosperity. Many people, however, would have liked that to be supported by something rather more specific.

What will Britain's role be? It is quite clear. It will be to encourage the new government, when formed, to build on the foundations built by the UDF, the former government, rather than to make some kind of fresh start. I hope that the Prime Minister will be welcoming President Stoyanov on his visit to this country next month. That could be an important opportunity to urge the UDF to work with the king's new government and to make certain that the achievements of the past four years are not lost; for example, there should be no deliberate undermining of the king's people unless and until there is concrete evidence that they are taking a very different direction.

We have a huge and strategic interest in Bulgaria having a stable and effective government, given the turmoil in Macedonia. That has been timidly eyed already by the Russians. The former Prime Minister, Mr Kostov, has resigned. The new Ministers will probably be announced on 12th July. Mrs Mihailova, the former Foreign Minister, is now the head of the UDF parliamentary party. She has said that, the UDF could consider entering into a coalition only if there were guarantees that foreign policies remain the same". President Stoyanov clearly supports a coalition. There is also mounting speculation that the results of the elections could pave the way to restoration of the monarchy by legal means, even though the king rigorously denies that.

In a recent interview in the Spectator, the King referred to himself as the new Nelson Mandela. However, he is clever enough to know that he has been elected in the hope of a miracle—an 800 day cure—and he will remember what happened in February 1997: that the presumedly passive Bulgarians swept away Zhivkov's successor, Zhan Videnov and his thugs.

Nobody knows whether the King will decide to be prime minister. Some wise people say that he could well follow Ronald Reagan's model, which was to be prime minister but, in practice, with massive delegation of his powers.

Whatever the emotions, the fact remains that the King was legally elected and if Bulgaria is to go forward, it will need the support and understanding of what are habitually called the Great Powers. Bulgaria will have to strive to avoid civil unrest. That can be achieved only through economic measures that cannot materialise without foreign investment. That new government will herald enormous change. We all pray that it will bring progress. A N Whitehead, in Process and Reality, wisely said: The art of progress is to preserve order amid change, and to preserve change amid order". I return to my first point, which is the tragic plight of millions that was recently highlighted by the United Nation's Secretary-General, Kofi Annan. In several recent speeches, from which I draw substantially, he has put the point with great conviction and clarity of thought, far better than anything that I have read on the subject. Twenty years ago few of us had even heard of AIDS; 10 years ago, few of us had any notion of the scale of the disaster; and even two years ago most people in western countries still thought of AIDS as a mainly domestic problem and believed that it was being controlled. But, for much of the international community, the magnitude of the crisis is only now beginning to sink in.

More than 36 million people around the world today are living with HIV/AIDS. The vast majority are in sub-Saharan Africa. However, the pandemic is spreading at an alarming rate in Asia and Eastern Europe. Last year alone 3 million people died from the virus, the highest annual total to date, and 5 million people became infected, which is an average of 13,000 people a day. That is indeed a catastrophe.

We have the power to do something. Around the world there are many people working on ways to combat this public health challenge. The Secretary-General set out five clear objectives that are reasonable and, I hope, acceptable. The first is that prevention has to be the first objective. Anyone who is not infected must know what they need to do to avoid infection. Young people need to have the knowledge and power to protect themselves. They need to be informed, inspired and mobilised through awareness campaigns such as the world has never seen, using the wireless, television and professional marketing techniques as well as the conventional tools of education. Once the knowledge is available, young people will need the means. As Maurice Maeterlinck so wisely wrote: To the sage the road is long that leads from grief to despair. I t is a road untravelled by wisdom". The second objective is family and community support, access to voluntary counselling and testing and, when appropriate, condoms. Thirdly, care and treatment must be put within the reach of everyone. The fourth objective is to deliver scientific breakthroughs to find a cure for HIV/AIDS—which is none of the present drugs—and a vaccine against it. At King's College London we have a highly successful department in that area. I declare an interest as Chairman of Council.

We have succeeded in the past year in recruiting the international HIV expert Professor Michael Malim from the University of Pennsylvania, together with Professor Adrian Hayday, himself recently recruited from Yale, and Professor Philippa Easterbrook. They are undertaking an extensive programme in infection and immunity that demonstrates the determination and commitment of the scientific community in this country to confronting the disease.

Finally, as we all know, money is constantly needed. We all know that, most important of all, money needs to be in the right hands. Too often it goes astray, as we heard in the speech of the noble Baroness, Lady Whitaker. I welcome the Secretary of State's proposals to find more money to help these projects. Even though HIV/AIDS poses a huge economic threat, it is first and foremost a humanitarian imperative.

I hope that the Minister, with her many new important and influential hats, will relay these messages to the powers that be. The role of your Lordships' House has been under much discussion arising from the proposals in the gracious Speech. It still has, however, an important responsibility in the legislative procedure and possibly still a certain influence in society. Therefore, I hope that all the interesting ideas in the many eloquent speeches we have heard in this final debate on the gracious Speech will not just be a charade but will be carefully listened to and carefully read and even acted on.

10.37 p.m.

Lord Dubs

My Lords, I want to speak briefly on European enlargement, but first I want to comment briefly on the situation in Northern Ireland. It is very difficult there at the moment and David Trimble's resignation may take effect within the next two or three days. I understand that the Prime Minister and the Taoiseach have been to Belfast today, so it is not appropriate to say more than a little about the situation there.

I am concerned that with the marching season about to begin a period of political instability, or indeed a political vacuum, could be highly dangerous. We have already seen rioting at interface areas in North Belfast and the situation is clearly dangerous. It always is during the marching season but given the situation relating to the Ulster Unionist Party, it is more so at the present time.

The general election results were bitterly disappointing both for the SDLP and for the Ulster Unionist Party. Clearly, the difficulties David Trimble faces have been exacerbated by the recent election results. Therefore, there is an urgent need for calm. I am well aware that on past precedent Sinn Fein and the IRA do not respond to outside pressures. Even if the Irish Government are leaning heavily on the IRA for decommissioning, I doubt whether anything will happen by 1st July. I do not think it is appropriate to say anything more about the situation there. We must wait to see whether the Prime Minister, together with the Secretary of State and the Taoiseach, has been successful in his endeavours.

I now turn to the Irish referendum which has a direct bearing upon European enlargement. I happened to be in Dublin on the Monday following the referendum. I do not want to stand in your Lordships' House and criticise the Irish Government. They have been most helpful to the peace process in Northern Ireland and we must be careful before we stand and criticise another government's conduct of its own affairs in a referendum. However, on the basis of the "sample polling" one does on a one-day visit—that is, talking to taxi drivers and the like—it seemed to me that people were not clear what the referendum was about. They said that they were well aware of the arguments against but had heard very little about the arguments for.

I cannot make a judgment as to whether that is an accurate statement of how much effort was put into the case for the referendum. All I know is that people were under misapprehensions, which the "anti" campaign engendered, as to the significance of the referendum. For example, it was said that the EU would insist that nuclear power stations could be built in Ireland and that Ireland would be forced to be part of the rapid reaction force, which had nothing whatever to do with the referendum. It was even said that abortion would be allowed in the Republic, which was again a totally erroneous view that had nothing to do with the issue in the referendum.

All of that was exacerbated by what appeared to be a very active campaign by Sinn Fein in the Republic to oppose the referendum. I am not clear why it did so. The only argument I have heard is that Sinn Fein did not believe that, in relation to the argument about the rapid reaction force, Ireland should be part of a military pact. It is a little odd that the IRA and Sinn Fein should be so keen to be part of a demilitarised structure. However, Sinn Fein put a good deal of effort into the campaign in the Republic. That is a matter of concern because it means that it was testing its electoral machine with a view to the forthcoming elections in Ireland. I do not know how the Republic gets out of that dilemma. I do not believe that it is helpful for us to suggest what the Government should do, but clearly that is a matter of major concern to all of us who believe in European enlargement.

I am chair of an all-party group that is concerned with promoting European accession. Therefore, I particularly welcome the Government's support for enlargement which is clearly stated in the gracious Speech and other contributions from government Ministers. It is very clear that for those countries which seek accession this is the most important political issue that they face. As the arguments continue and difficulties emerge, there is a sense that public opinion in some of the enlargement countries is becoming a little uneasy. It must be of concern to all of us if we do not send out proper signals to those populations that we want them to be part of a wider Europe and help them to do so.

I also draw the wider conclusion, which is not based solely on the Irish referendum, although that is part of the evidence, that the European Union must be very careful not to appear to send out the message that it takes ordinary people in Europe for granted. If I had to make a judgment about the Irish referendum, it would be that people felt that they were being taken for granted by Brussels and they did not want that to happen. There needs to be a very strong effort by all EU countries and Brussels to ensure that the ordinary people of Europe are kept fully informed as to the issues and are brought along with the prevailing policy of enlargement so that that becomes acceptable and can go forward smoothly.

Of course there are difficulties about enlargement. At this late hour I do not want to take up time spelling out the difficulties in too much detail, but clearly the problem of the CAP, the European budget and the large agricultural sector in Poland are matters of concern. There are others; for example, what will happen to the countries which now benefit from the regional and structural funds if the emphasis of those funds moves to some of the accession countries? I believe we all agree that we should seek to avoid a large increase in the overall EU budget. I do not believe that either this country or other EU members want that. There must be changes in the CAP which all parties in Britain have wanted for a long time. The Government sought to do that in the discussions in Brussels a couple of years ago but achieved only some of their objectives.

If there are to be transitional arrangements to ease the way for accession countries, it is clear that they must be limited. Accession countries do not want to enter Europe with second-class status for themselves, their industries or any of their industrial sectors.

As part of the arrangements for these countries to join, in terms of environmental standards, we are making strong demands. I have a concern that we are asking for higher standards of the accession countries with regard to that than those which apply to some existing members of the EU. It is important that we are aware of the possible difficulties because there may well be voices in EU countries, including this one, arguing against accession when these issues come more to the fore, which they will do in the not too distant future.

Therefore, I should like to finish by saying that there are a number of important arguments why we should support wholeheartedly the cause of European enlargement. First, most of the countries concerned have suffered enormously under communism and it is right that we who advocated democracy and freedom should want to enable them to be part of a larger European set-up which believes in democracy and freedom. Secondly, there will be a larger market which will provide opportunities for British companies. That will be especially true in the financial services sector where we have a dominant position in Europe and where, if we manage things well, we should be able to increase business enormously for some of the financial services companies that are now in the City.

Of course it is right that a large Europe, of the kind envisaged, is directly in the interests of this country. I believe that the enlargement of the European Union is not only good for Europe but is particularly good for the future of Britain.

10.46 p.m.

Lord Marlesford

My Lords, as tail-end Charlie I shall focus my brief remarks on Russia. I have just returned from Moscow. I was there not in any parliamentary role but as a member of the board of the Baring New Russia Fund. I am rather glad to declare that interest as I believe it underlines the synergy which is desirable for those of us with outside interests in this House. I mention that because I know that next week we shall discuss that matter in greater detail.

I had not been to Russia since October 1997. What a change there has been in those three and a half years. In 1997, Yeltsin had been in charge for five years. That period saw the consequences of the political anarchy that replaced Soviet communism and also the rise of gangsterism, corruption and commercial oligarchy. New Russia was being born. What a painful birth it was.

In August 1998, Russia nearly went up the spout economically and then it would have gone up the spout politically. A market indicator of that was that the 11 per cent Russian dollar Eurobonds, issued at 100 dollars, went down to 20 dollars. That meant that there was a running yield of 60 per cent, and a considerably higher yield, of course, on redemption.

Russia was saved by the increase in the price of oil. In August 1999, Putin, plucked from an obscure KGB past, became Prime Minister. In less than two years he has become master of Russia with 70 per cent public support.

New Russia is as different from old Russia as new Labour is from old Labour. It is, of course, a vast improvement, in both cases. Further major reforms are under way. These reforms are not known well enough. So far as concerns the media they are all too often masked by political news.

Perhaps I may say one or two words about the political issues. Russia is well aware now that it is a minor world power. But it feels it deserves to be a major world power, and in politics, as we all know, perception is reality. But even the old Soviet Union was never really more than a third-world country but with a first world military force. That is why the Russians are so sensitive about the proposed American anti-missile programme. They may indeed genuinely fear it. After all, Friday of last week was the 60th anniversary of Hitler's treacherous invasion of Russia, an event which, to coin a phrase, "will live in the Russian annals of infamy for ever".

I agree with the noble Baroness, Lady Park, that the idea that there could conceivably be a European antimissile shield in which the Russians participated is pure fantasy. It is a pity that Mr Solana appears to have encouraged the belief that it is worth discussing it. Little remains of the former Soviet military. Moscow itself is dotted with boarded-up buildings which previously were occupied by part of a military-industrial complex.

For a while Russia had no parliament worth the name. But now I believe that the Duma is becoming a force to be reckoned with. It is true that President Putin still has the means of controlling it, but it does have influence and is doing much of the nuts and bolts of reform. On Monday I had the opportunity of meeting Alexander Zhukov, who is head of the budget committee of the Duma. He and his colleagues have achieved a lot. The budget was balanced last year. It will be balanced this year, assuming that oil remains at 22 dollars or more a barrel. Budget surpluses are being put into a stabilisation fund. Last year, GDP grew by 7 per cent. This year it is expected to grow by 4.5 per cent.

In spite of a high rate of inflation—it is still about 25 per cent—the rouble, which floats freely, has remained stable against the dollar. That of course means that the competitive advantage which Russian industry had following the collapse of the rouble in 1998 is being eroded. Most senior executives in Russian industry now have their remuneration packages denominated in dollars or, as they are euphemistically known, "relative units". There is still a problem with capital outflows—some 30 billion dollars in the past 12 months. But there is strong inward investment. Those dollar eurobonds are now back to par.

But perhaps most important are the tax reforms passed by the Duma. They have received very little attention. Corporation tax in Russia is now 24 per cent. VAT is 20 per cent on most things and 10 per cent on food. Most remarkable, there is now a standard rate of income tax of 13 per cent. Russia has effectively become a tax haven. Even the communists in the Duma voted for this! As a result taxes are being paid. Mr Zhukov told me that previously under 50 per cent of the tax that should have been paid was collected. The amount is now thought to be running at over 90 per cent.

Huge structural problems remain, particularly in agriculture where land ownership has not yet been tackled. There is a feeling among many Russians in the rural areas that if land were to be bought by foreigners they would revert to being serfs. That is a major limiting factor on their preparedness to accept reform in agriculture. The standard of living of many workers is very low. The average wage in the metal-bashing industries is about £15 a week. But Russia is a huge, relatively underpopulated country with enormous natural resources and a relatively insulated economy. It does indeed have the scope to act to some extent contra-cyclically if a recession does strike America and the EU.

President Putin is, I suspect, no democrat. It is restoring the power of the state that motivates him. By "power" he probably means the old Soviet word vlast, which really means state authority: rather in the Louis XIV sense of "L'état c'est moi". But he is a pragmatist and he is a patriot. I think he recognises that Russia needs closer links with the West. I very much agree with what the noble Lord, Lord Powell, said about the importance of encouraging a proper solution between the Russians and the Americans. That is something that we, too, should encourage.

I am an enthusiast for the European Union, but for the widening rather than the deepening of it. I shall not go into detail, but the economic argument against the early adoption of the euro in place of our national currency is, I believe, overwhelming. At the most basic level, we shall retain the freedom of economic management that goes with the ability to use exchange rates to adjust the differences between the economies of different countries. But I hope that enlargement as envisaged at Nice will go ahead and that, by the end of the decade, we may see the possibility of Russia as a candidate entrant.

10.55 p.m.

Lord Redesdale

My Lords, I should like to welcome the gracious Speech. I believe that at this point it is traditional to remark that we have had a wide-ranging debate, moving from the detailed remarks of my noble friend Lord Avebury on Afghanistan through to the noble Baroness, Lady Hooper, on Latin America. Europe was mentioned by almost every noble Lord. Finally, I touch on The Hague, which is in the news at the moment. As we speak, news reports have announced that former President Milosevic is being delivered to be indicted as a war criminal, which perhaps should have happened some time ago.

The gracious Speech has set out the Government's plans. Noble Lords on these Benches are overjoyed to see certain Bills reintroduced and new legislation being brought before Parliament. We are especially pleased to see that the International Development Bill has returned. We would have supported that measure had it gone through during the wash-up period of the last Session, but now we shall have an opportunity to look at it again.

Another Bill which is to come before us shortly is the British Overseas Territories Bill. I have one or two questions to put to the noble Baroness, Lady Amos, on that measure, but first I should like to congratulate her on her new position. In the round of congratulations I felt that the noble Baroness was rather left out. International development should have been first on the list of subjects covered in our debate, but it appears to have been sandwiched in the middle.

I shall raise two issues on Second Reading of the British Overseas Territories Bill. The first is the question of uniforms. It seems amazing that, just as a Bill which has been so eagerly anticipated and will do so much good for the dependent territories is brought forward, the Foreign Office has picked this week to release a story that the dependent territories are to be asked to pay for their own uniforms. It may not represent a massive financial expenditure, but the timing of such a statement might be questioned. I understand that the Government are seeking to institute a cost-cutting exercise which might well backfire. I have read a report from the well-known tailor, Gieves and Hawkes, which in financial terms will be badly affected by this. The company has stated that it would be inappropriate to stand underneath the Union Jack in a suit.

Secondly, I wish to raise the issue of the British Indian Ocean Territory. The lease on the American air base on Diego Garcia is to come to an end in 2015. The plight of the Ilois, who were forcibly removed from the island to make way for the Americans, is an issue that will be raised in our debates.

I have been given a strict time limit by my noble friend on the Front Bench. He said that I must stick to it because no one else has done so. I shall charge straight into Europe. Noble Lords on these Benches are well known for their Europhile sympathies and therefore it was with great joy that we listened to the remarks of the noble Lord, Lord Bach. His approach to Europe was extremely positive. During the general election I campaigned in London and the North East. Although Europe was not a question I encountered every day on the doorstep, it is on people's minds. I believe that we need to hold a debate. If we are to have a referendum on adoption of the euro—something that these Benches wish to see held as soon as possible—then there has to be a degree of understanding of both sides of the argument.

Perhaps I may indicate just how little this argument has been aired at the detailed, nitty-gritty level. I have asked many noble Lords around the Chamber what is the euro equivalent of the penny? Most people know the euro equivalent of the pound, but I have found only one noble Lord who knows its equivalence in pence. That was the noble Lord, Lord Grenfell. I shall not mention which Minister had a stab at "eurettes", but that is not the correct answer. The importance of the question is that if you have to ask what it is, that perhaps underlines the point about the argument not being expressed properly.

This is important because of the recent situation in Ireland, where local matters affected the result of the referendum. Most people did not understand the issue and were not prepared for the referendum. I believe that it came as a shock to many of the people of Ireland that the referendum was lost, with all the implications that that will have for Ireland, a country which has benefited from much largesse from Europe.

As this is a defence debate, I should perhaps use a phrase that was quoted repeatedly to us at Sandhurst—that is, that failure to prepare is preparing to fail. I believe that those of us who will be on the "yes" side of the campaign need to get our message across.

The issue of turn-out is also raised by the Irish referendum, and similarly by our own general election. As we are about to head down the road of referendums, we should question what level of turnout will give a referendum electoral legitimacy.

I should like to use the euro analogy in regard to national missile defence. The euro has five test criteria; I shall suggest five test criteria that we should look at in terms of how we view missile defence.

Although it is not one of the criteria, I believe that the name "missile defence" gives an indication of the direction the policy will take. It is obviously an American initiative designed to protect the land mass of the United States. However, we have to look at missile defence in a different light.

The first question is whether it is feasible at all. There have been three test firings and interceptions, two of which failed. The first test was successful. However, it was stated in the New York Times that the missile that was intercepted, surprisingly enough, had a global positioning system inserted into the nose cone. Although the Pentagon stated that this had no bearing on the success of the test, it is surprising that a missile that is about to be destroyed should have a GPS in its nose.

The second question is whether it will actually happen. It has been put forward in America that the cost of the system will be between 200 billion and 300 billion US dollars. It is claimed that the system is designed to make the world a safer place. If that 200 billion to 300 billion US dollars was spent on poverty reduction, the world would be a safer place. That, perhaps, is a prime consideration.

The third consideration is whether it will make the world a safer place. Those who are supporters of the NMD programme have drawn comfort from the fact that President Putin did not attack the system with the same vigour that probably would have been the case a few years ago. The simple answer is that Russia is not in a financial position to attack on this issue. Russia is in great financial difficulty and, therefore, had problems in putting forward its case. However, this will do nothing for the feeling in Russia that this system is for its benefit. If the cost is to be 200 to 300 billion US dollars, I very much doubt—although it has been offered—that a significant system would ever be set up in Russia.

Another consideration, of course, is that if America had a working system it would have a first strike capability against Russia and China. This is very worrying indeed. Obviously it will not lead to a feeling of security throughout the world.

The fourth question relates more to these shores. Will such a system make us safer? It will break the antiballistic missile treaty, and that cannot be a good thing. The unilateral destruction of an international treaty is not to be encouraged. Another consideration is that, whether or not the system works against missiles, it works only against ballistic missiles. The delivery of a nuclear warhead does not necessitate the use of a ballistic missile. In fact, a ballistic missile is probably one of the least effective delivery systems. One of the best means of delivery would be to put the warhead in a crate and deliver it by boat to New York. No system is perfect—as was demonstrated when a German flew a light aircraft through one of the most heavily defended anti-aircraft missile corridors and landed it in Red Square.

The fifth criterion is whether national missile defence will be popular in this country. It is an issue that arose on the doorstep during the election campaign. There are those who are very unhappy about the idea that Fylingdales will be used in the make-up of the system.

I have probably gone over the time that I set myself. I should very much like to have gone into the subject of AIDS, addressed by the noble Baroness, Lady Rawlings, and the noble Lord, Lord St John of Bletso. However, I believe that all I should be doing would be to rehearse the Second Reading speeches that we shall hear in the remaining weeks before the recess.

I conclude by highlighting points raised in the fine speech made by my noble friend Lord Alderdice relating to the problem of internal conflict, which is by far the most devastating recent phenomenon; namely, that wars are not fought between states but within states—usually the poorest states. The weapons that are used are not tanks, aircraft or the aircraft carriers that we have heard are to be given the go-ahead; they are the Kalashnikov, the land-mine and, in Africa, the machete. On that basis, anything that reduces the all too prevalent flow of small arms around the world must be a good thing. I particularly welcome the proposed legislation relating to the export of small arms.

11.8 p.m.

Lord Burnham

My Lords, it would be a little grotesque at this stage of the evening for me to congratulate the noble Lord, Lord Bach, on his new post—particularly as I did so yesterday. It would be particularity inappropriate as in a few minutes' time the reply to the debate will be given by the noble Baroness, Lady Symons, who has been pronouncing and explaining defence policy for the past three years. I should like to pay tribute to the noble Baroness for the way in which she has done so, and for the cooperation that we have enjoyed. I believe that I can speak for the Liberal Benches as well. The noble Lord, Lord Bach, accosted me outside the Chamber—guess where!—almost as soon as he was appointed, and I am confident of similar co-operation in the months to come. That is not to say that we shall not make the Government's life difficult on many military issues. I intend to outline some of them in my remarks. However, it can be only an outline because times do not change. As soon as I sit down, the noble Baroness will rise to her feet to respond and to criticise me, just as she has done throughout these years—

Noble Lords

Oh!

Lord Burnham

My Lords, the noble Baroness has dutifully repeated on many occasions that she speaks for the Government as a whole, not for a single department, but so many of my questions relate to defence, which is no longer her business, that I honestly and genuinely do not expect to get an answer to them. The purpose in raising these matters is to set an agenda for a full-scale debate on defence, which I hope that the Government will allocate at the very latest before the end of the year.

It was noted on Tuesday of this week that the gracious Speech contained nothing about agriculture. Indeed, with the exception of one phrase on NATO, there was nothing about defence either. Similarly, until those inter-continental ballistic missiles were mentioned by my noble friend Lord Vivian and the noble and gallant Lord, Lord Bramall, we did not hear very much about defence this evening. However, defence is something that we really must consider most seriously.

Above all, the problems of defence centre on the men and women of the services. The Government will not be able to fulfil their commitments if they do not have the men required. Time and again, we have seen examples of where a battalion has had to borrow men from other units in order to be able to fulfil its commitments. At the present moment, the Army is well down on the 47 per cent who were on operations when the Bosnian crisis was at its height, together with the problems in Northern Ireland. But the omens are not good for the immediate future. We are told that 6,000 members of the Parachute Regiment, and other units, are on their way to Macedonia, and this at a moment when the marching season is about to start in Ulster—an annual event that is bound to require more reinforcements to be sent. This marching season is likely to be more serious than in previous years with the impending possible resignation of David Trimble.

I hope that the Minister will be able to give your Lordships the up-to-date figures on recruiting. More importantly, can she update the House on the number of middle to senior ranks (both commissioned and non-commissioned) leaving the services? I was given the figures earlier in the year in the form of a Written Answer, and should like to see how they have changed. For this is the controlling figure on morale. Free telephone calls, newly painted quarters and home duties have some effect, but they are not what the soldier or sailor, and so on, wants: he wants interesting and productive duties, excitement, a secure future and steady promotion at the appropriate time. He also wants a secure second career when he does decide to leave the service.

We are told that the story, which was widely circulated before the election, that 10 battalions—it said "10 regiments", but I did not understand that bit—are to be disbanded is quite untrue. But it would not be surprising if it were true. The Army is so short of men that it can only fill the battalions that are required for active service by robbing other units. There is no chance of getting up to establishment by 2008. Indeed, my noble friend Lord Vivian says that it will take 10 years from now to do so.

If there is any chance that recruitment and retention will allow the 8,000 men that the Army is short of establishment to come in, will the Government pay for it? We are told that this will cost £1.3 billion more than the current budgetary provision. The Chief Secretary to the Treasury has attacked the Conservative pledge to fill these major gaps. Presumably, he is saying that we do not have the money. Is this so? Can the Minister say whether or not the Government want to get the services up to establishment? That brings me to another point mentioned by my noble friend Lord Vivian; namely, will the people who are recruited be fit to carry out their jobs?

When a man leaves the service he must have a secure future, but it can be a bit too secure. The Secretary of State confirmed in another place that the two aircraft carriers, of which we have heard so much, are definitely to be built at a cost of about £2 billion. Initially, the MoD is expected to award two £25 million risk assessment contracts. Can the Minister tell us from which budget this money is to come? Money apart, when we have the carriers, who is to man the aircraft that are the sole purpose of such vessels? That brings me back to my point about second careers. At present trained and experienced pilots are in such short supply that extreme measures are having to be taken to ensure that they do not leave for civil aviation. Are the Government confident that they will be able to man all their aircraft?

Men apart, where is the money to come from? The Secretary of State has given the assurance that the carriers will be built. But will the defence budget be trimmed elsewhere to make allowance for the carriers? It would be helpful if the noble Baroness could give an assurance on that point. We hear so much about the inability of the services to perform their duties because of a lack of cash, leading, it is alleged, to fuel and ammunition shortages. Is there any truth in those stories? Again, a categorical assurance would be helpful.

There are so many other problems to which we shall return in due course. The hosts of Midian seem to be prowling round the Bowman contract. When will that finally be placed and can the Government now give a categorical assurance that Bowman will be in service by 2004 as has been stated?

How is the DERA contract going? What are the financial benefits first to the Government and, secondly, to the Ministry of Defence budget? We have been given a series of figures, none of which is the same. It would be helpful to be given some rather more accurate figures. Are the boundaries between private DERA and retained DERA clear and are the Americans and our other allies happy about it?

I have a number of other rude words for the Government, among them A400M, Meteor and Type 45. At Le Bourget the defence Ministers signed only a Memorandum of Understanding on A400M rather than a production contract. The Ministry of Defence erroneously claimed that various countries were committed to buy 212 aircraft in a single launch order. The current commitment of these countries is 193 and the economic minimum below which it would not be a viable project is 180. The figure of 193 is awfully close to 180. I ask noble Lords to note that the economic minimum is 180. We are getting close to that figure, and the Germans in particular are likely to buy many fewer than the number to which they are committed. Have the Government a firm date for the conclusion of negotiations? What is the current figure for the A400M?

On Meteor, we again have only a Memorandum of Understanding. Even so, 43 per cent of the programme is unfunded. Can we have a firm deadline for the conclusion of negotiations and what will be the penalty for failure?

I refer to Type 45s. When can we expect the Rand Corporation report to be published or at least completed? It is designed to help to inform decisions with regard to overall value for money in the warship building programme as a whole. Are the Government committed to competitive tendering for the second batch of Type 45s?

Even with all those questions I have not touched on the European rapid reaction force or nuclear missile defence. With the ERRF the Government have embarked on a divisive process that will undoubtedly undermine NATO. All it does, when compared with NATO, is to throw out the United States and Turkey. What is the Government's current thinking on information and headquarters-sharing between the ERRF and NATO?

The noble Lord, Lord Bach, repeated the remark of the noble Lord, Lord Robertson, that there has to be an alternative to NATO or nothing. Why is that? I do not see why we need a third alternative. The noble Lord, Lord Powell, stated that NATO is changing. It will indeed be very different. That is undoubtedly the case. All that has been said makes the case for the ERRF rather more doubtful if we look well into the future. Apart from anything else, we are short enough of friends without disobliging those we have. One of the most cheering events of recent weeks has been the statement of a number of French generals in support of NATO and implicitly against the RRF. We should be pragmatic. We do not need the RRF and we do not have enough men to man it. Let us forget it.

Nuclear missile defence is the big thing world-wide. Many noble Lords have touched on the issue in the course of the debate. We have heard much of the dangers of abandoning the ABM Treaty. But the ABM Treaty was 29 years ago and the world has moved on. Nuclear missile defence will be immensely expensive but it is supremely important. The attitude of Russia to the rather indefinite proposals of the United States seems at present equivocal. I hope that Her Majesty's Government will make their attitude clear and cease to sit on the fence. The Prime Minister will have to make up his mind and the sooner he decides whether to support President Bush's plans the better.

My written note contained 18 question marks. I do not know whether my speech contained more questions or fewer. In reply to my honourable friend Iain Duncan Smith, the Secretary of State complained on Friday that he was entirely negative and had no positive views. I think that that was grossly unfair. I hope that I have not committed that alleged sin. I simply want answers to a great many questions. I say seriously that I do not expect to receive them today. However, I hope that the Minister will pass to her noble friend those questions that she fails to answer for a reply in due course, preferably in a full-scale debate. Your Lordships require and deserve answers to all the questions.

11.22 p.m.

The Minister for Trade (Baroness Symons of Vernham Dean)

My Lords, I warmly welcome the opportunity to wind up not only our debate today on the gracious Speech but also those over the past five days. As the noble Lord, Lord Redesdale, rightly said, our debate has been exceptionally wide ranging. That is a reflection not only of the breadth of the Government's engagement in foreign, defence and development policy but also of the breadth of expertise and experience on these matters in your Lordships' House.

I shall try to answer as many as possible of the questions which have been put to me. However, I hope your Lordships will be kind enough to accept letters where that is not possible.

First, perhaps I may pay tribute to my noble friend Lady Scotland, who has left the Foreign Office for the Lord Chancellor's Department. Her intellect, commitment and sheer talent have been widely admired not only in the Foreign Office but also in your Lordships' House. She is succeeded by my noble friend Lady Amos, whose persuasive talents and considerable flair at the Dispatch Box are well known to your Lordships. She is already making an impressive impact as a Minister in the Foreign Office. I wish both my noble friends well.

I also take the opportunity to say that my noble friend Lord Bach will be an excellent Minister in his new role. He demonstrated in his opening speech how well he has got on top of his brief. He has been able to underline the fundamental importance of the human factor in our defence capabilities. Like the noble Lord, Lord Campbell of Alloway, I echo those sentiments very sincerely.

We owe a tremendous debt to the men and women in our Armed Forces and their families who daily promote Britain's interests around the world. They frequently put their lives on the line and, sadly, sometimes those lives are lost. They are in an exceptional and special position in British public life. I believe that all Ministers would agree with what the noble and gallant Lord. Lord Vivian, said. What matters above everything in combat is operational effectiveness. They take unique risks. Their lives depend on their work as a team. During my time in the MoD I came to recognise clearly what a real force for good our servicemen and women are around the world and how much they are valued in the countries in which they serve.

However, there are many people who deliver practical benefits for us all over the world in different circumstances, not only our ambassadors and diplomats working on high-profile issues, but also the UK and locally based staff in our missions around the world who provide vital services to Britain, be they entry clearance staff, consular officials, development staff, those acting as commercial officers or those staffing the British Council or the BBC World Service. We have a fine diplomatic service that is the envy of most of the world. Its work is key not only in foreign relations, but in trade, defence and international development, as well as in ensuring that Britain's interests are upheld.

The noble Lord, Lord Howell of Guildford, urged the Government to take a wider view on foreign development and defence affairs. We take a wide view. My right honourable friend the Secretary of State spoke in another place last Friday not only about south-east Europe, but about the Middle East and east Africa. We engage in a full and constructive role in the international community. Our global interests require and confer global influence. The people of Britain will benefit from the United Kingdom's pivotal role as a member of the United Nations, the Security Council, NATO, the Commonwealth, the G8 and the EU. However, as we have shown on a number of occasions, overseas engagements require us to ensure that when our vital interests and values are at stake, we can act with force and determination when diplomacy fails.

The noble Lord, Lord Howell, and my noble friend Lord Shore of Stepney urged us to think about the Commonwealth. The high-level group set up at the initiative of the Prime Minister and of which the United Kingdom is a member has made progress on a number of issues concerning reform of the Commonwealth. We are looking forward to presenting the results at CHOGM later this year. The noble Lord, Lord Howell, asked about our priorities. They are better protection and promotion of the Commonwealth's fundamental political values; finding ways to use the Commonwealth network better on issues of global concern such as the environment, education, ICTs, trade and action against money laundering and corruption; a tighter focus on the Commonwealth's range of small-scale development programmes; and better co-operation between official and civil society in Commonwealth countries. That is a formidable list.

The noble Lord, Lord Redesdale, asked about the British Overseas Territories Bill. It confirms the commitment made in the 1999 Overseas Territories White Paper to grant British citizenship to British Dependent Territory citizens in qualifying territories. It also changes the nomenclature of the overseas territories. I know that my noble friend Lady Amos welcomes it as strongly as I do.

The noble and gallant Lord, Lord Craig of Radley, asked about the Commonwealth Partnership for Technology Management. I am aware of the work of the CPTM and of the noble and gallant Lord's active involvement in its dialogue. I am pleased to say that the United Kingdom Government are a contributor to the CPTM and that officials are actively involved in it and are well placed to contribute to its work on best practice.

The noble Lords, Lord Howell and Lord Desai, the right reverend Prelate the Bishop of Oxford and the noble Earl, Lord Sandwich, all raised considerable concerns about the WTO. They were right to do so, because trade has a vital role to play in helping developing countries to boost their economic growth and generate the resources necessary for reducing poverty. Greater trade openness and the promotion of exports are associated with faster economic growth, but if more open trade is to work for the world's poor, we need effective multilateral trade rules made by an institution in which developing countries are properly represented, as the noble Earl said, and one that is capable of enforcing those rules for poor countries and rich countries alike. Liberalisation is what will matter in the forthcoming trade round. That is why we attach such a high priority to the success of the round to be negotiated in Doha in November. We need to be ready to put our political muscle behind our overriding goals, presenting our priorities and, as the noble Earl rightly said, listening to the concerns of fellow WTO members, particularly those of developing countries.

The noble Lords, Lord Shore of Stepney and Lord Howell of Guildford, were concerned about what they saw as a government preoccupation with Europe, although they both spent the larger part of their remarks on Europe. I shall try to reply to some of their points.

The Government's engagement with. Europe has already done much to bring real benefits to the everyday lives of people in this country. Our engagement with Europe has made Britain richer and it has made us safer. As the noble Lord, Lord Alderdice, remarked in what I considered to be a remarkable contribution, it has brought his and my generation to a point at which there has been no war in Europe in our lifetime. We shall bring forward legislation to implement new arrangements for the future financing of the European Union, to ratify the Nice Treaty and to pave the way for successful enlargement of the Union.

I turn to the Nice Treaty. My noble friend Lord Grenfell gave us a pungent analysis, but perhaps I may put to him some of the gains that we hope to make. We have opened the door for enlargement with a bigger single market; we have won more relative power for Britain in the EU through the increase in our weighting of votes; we have also delivered a better and more efficient Commission; we have secured more qualified majority voting where it has been in the UK's interest; and, at the same time, we have preserved our veto where we said we would do so—on tax, social security, defence, our own resources, border controls and treaty change; and we believe that we have secured a more flexible EU.

But of course the noble Earl, Lord Sandwich, the noble Lord, Lord Inglewood, and my noble friend Lord Dubs are right: we must do something about the common agricultural policy, which is unsustainable in its present form. Therefore, the United Kingdom continues to press for further reform, including movement away from production support towards rural development. Others, including France and Germany, are also talking about reform. Therefore, the time is ripe for debate in Europe and we are pressing for change.

My noble friend Lord Shore is always very interesting on matters European and, of course, on the euro in particular. However, perhaps I may say that to describe his opponents' views as "pretence" or as "contemptible" or "not honest" does not help our debate. Ours is an honest argument; it is an honest disagreement. I am happy to debate with anyone with my noble friend, with the noble Lord, Lord Campbell of Alloway, and with my noble friend Lord Bruce of Donington—but I believe that that debate must be held in sensible and well moderated terms.

In principle, as everyone knows, the UK is in favour of UK membership of the EMU. In practice, of course, the economic conditions must be right. The determining factor underpinning any government decision on membership of the single currency is the national economic interest and whether the economic case for joining is clear and unambiguous. If it is, there is no constitutional bar to joining. However, once the Treasury has completed the five tests which the Chancellor spelt out in October 1997, a recommendation will he made to the Cabinet. The Government will then make a decision on UK membership of EMU. If the Government recommend UK entry, it will be put, as has been stated time without number, to a vote in Parliament and then to a referendum of the British people. Therefore, the Government, Parliament and the people must all agree.

I turn to the questions raised by my noble friend Lord Sewel and the noble Lord, Lord Inglewood, and others on the matter of enlargement. My noble friend Lord Dubs also raised them. The pace and intensity of the EU's negotiations with the candidates have increased in the year 2001. Negotiations have also been brought forward on justice and home affairs cooperation and food safety, highlighted under the Belgian presidency. Our own Prime Minister's call in Warsaw last October for what he described as a, breakthrough on enlargement under the Swedish Presidency", has been achieved.

To answer the specific questions of the noble Lords, Lord Wallace of Saltaire and Lord Alderdice, Turkey is indeed a candidate for EU membership. However, unlike other applicants, it does not meet the Copenhagen political criteria. As I am sure both noble Lords know, that is a prerequisite for opening negotiations. The EU agreed on accession partnership for Turkey on 4th December 2000, and that sets out priorities for action on meeting the membership criteria. Therefore, the EU and Turkey have begun preparations for screening, and the EU is doubling pre-accession funding to Turkey to approximately 180 million euros a year. I can tell the noble Lord, Lord Alderdice, that Cyprus has completed negotiations thus far on 22 of the 31 chapters.

I turn to defence. We all know that there were serious lessons to be learnt from the Kosovo campaign. We should not lose sight of the fact that Europeans have subsequently played a leading role in KFOR and currently contribute some 80 per cent of the total redeployment. At the same time, we have to face up to the fact that Europeans flew only one-third of the total number of aircraft sorties during the campaign. That was bound to bring us to the point at which we consider what more has to be done about the European defence capability. That matter was raised by the noble Lord, Lord Howell, the noble Baroness, Lady Park, and, in a rather different way, by the noble Lord, Lord Renton of Mount Harry, and my noble friend Lord Ponsonby of Shulbrede.

European security and defence policy is helping to ensure that European nations can make a stronger contribution to crisis management operations both within NATO and when NATO is not engaged. The Government are absolutely clear about the fact that NATO remains the basis of our collective and territorial defence and the cornerstone of our security policy. The commitment of UK forces for an EU-led operation will always—I stress this—be a decision for the UK Government alone. All EU partners agree that there will be no "Euro army". That has always been the view of Her Majesty's Government, as my noble friend Lady Ramsay of Cartvale made clear. That was explicit from the beginning.

We also enjoy the support of the United States, as President Bush said in his joint statement with Tony Blair at Camp David. They said: The United States welcomes the EU's European Security and Defence Policy intended to make Europe a stronger, more capable partner in deterring and managing crises affecting the security of the Transatlantic community". To answer the point raised by the noble Lord, Lord Vivian, who was worried about duplicate mechanisms, I say that there is a military staff of 135, of whom 13 are expected to be British. They will advise, but they will do so only in relation to strategic options for a political decision. They will not advise on operational capability. Once the political decision has been taken, the operational planning will be done through SHAPE, which has a core staff of some 950, or, for less demanding operations, through national facilities such as our own PJHQ.

To answer the points made by my noble friend Lord Ponsonby of Shulbrede about the WEU—I recognise that it is to some extent the other side of the coin—I say that there are no plans to replace the WEU Assembly, which will continue to act under Article IX of the modified Brussels Treaty as a forum for strategic reflection in Europe. Perhaps I may write to him further about the very interesting questions that he raised. I also thank him for the hard work that he has undertaken in the WEU.

I turn to Macedonia, which was discussed by many noble Lords, including the noble Earl, Lord Dundee, and the noble Baroness, Lady Rawlings. The only way forward is a political settlement in which the two communities agree to live and work together; the way forward is not to impose a military solution. Britain completely supports the work of NATO and the EU and the efforts of Mr Solana and my noble friend Lord Robertson—they will continue to be of huge importance. We will consider contributing to a NATO peacekeeping force in support of a peace settlement but it has to be a political settlement that is being supported.

To answer the point made by the noble Earl, authorities in the Federal Republic of Yugoslavia, the World Bank and the EC are jointly hosting a major donor conference on 29th June in Brussels.

I turn to what is happening at the moment to Mr Milosevic. The noble Lord, Lord Redesdale, suggested that Mr Milosevic had been transferred to the ICTY and out of the Federal Republic of Yugoslavia. That is indeed right. At the request of the Government of Yugoslavia and the International Criminal Court, the United Kingdom Government have this evening provided an aircraft to fly Mr Milosevic to the Netherlands. I understand that the plane has already left Serbia.

Noble Lords

Hear, hear.

Baroness Symons of Vernham Dean

My Lords, this is indeed a defining moment, but it is also a moment of some trouble. We should do well not to comment too heavily on it at this stage. I suspect that there will be great difficulty about this in Belgrade. We can applaud the statesmanship and courage of those who took this decision.

My noble friend Lady Turner of Camden raised questions about Iraq. I hope that she will be pleased to know that on 1st June, the Security Council unanimously adopted the UK-drafted Security Council Resolution 1352 confirming its intention to agree a new way forward on Iraq. Perhaps I may write to my noble friend with details of that as I know she is very interested in it.

Many noble Lords raised questions about NATO enlargement. Of course, the Prague summit in November 2002 will continue the adaptation of NATO. I assure my noble friend Lord Sewel that we shall support invitations to new members able to fulfil the alliance's political, economic and military criteria. The Prime Minister made clear on 13th June, at his meeting with NATO leaders, that we support enlargement when the NATO aspirants are ready and when NATO is ready. We are giving the aspirants the practical support which we are able to give in preparing them for their membership.

At the same time, the other side of that coin is, of course, our relationship with Russia. I assure the noble Lords, Lord Marlesford and Lord Wallace of Saltaire, that the Prime Minister met Mr Putin five times last year. That shows a considerable commitment by this Government to engage positively with Russia. We always discuss NATO in our bilateral talks with Russia. That goes without saying. And as both noble Lords will know, NATO has invested very heavily in its relations with Russia through the adoption of the NATO Russia Foundation Act.

Many noble Lords raised the question of missile defence. I believe that there have been some extremely hasty, in some cases too hasty, moves on the part of some people—I hasten to say none of your Lordships but perhaps elsewhere—to find evidence that the issue has led to splits between Europe and the United States or between the United Kingdom and others. I felt that some of that rush to find those splits has been somewhat unseemly.

I make our position clear. The United Kingdom welcomes President Bush's commitment to consult with the allies, with Russia and with China on that very important issue. We shall continue to act actively and constructively and to engage in the discussions as close allies with a common strategic interest because we understand the concerns of the United States as regards the growing threat posed by the proliferation of missiles and weapons of mass destruction. In dealing with that threat, we need a strategy which includes offensive and defensive systems, rigorous implementation of national and multi-national proliferation controls and continued reductions in nuclear arms. After his meeting with President Bush, President Putin said—and this is a very important point that, differences in our approaches in the very fundamental areas are much less than what unites us". That is an extremely encouraging remark.

The noble Lord, Lord Powell, raised questions about China. The noble Lord's Downing Street connections are impeccable and I am sure that he will be a highly persuasive advocate in putting forward his arguments.

The noble Lord, Lord Howell, raised questions about Japan and Hong Kong. I have extensive briefing on both but the clock is against me. I hope that the noble Lord will forgive me if I write to him on those issues. I agree with the noble Lord that they are very important. Japan is clearly an extremely important economic partner and, of course, our relations with Hong Kong continue to be of great importance too.

I feel that I must move on to the questions raised by the noble Lords, Lord St John of Bletso and Lord Blaker, in relation to Zimbabwe. We welcome any initiative that allows the international community to engage with the Zimbabwe Government on the issues of concern. The noble Lord, Lord Blaker, asked about the Commonwealth initiative. That idea is still evolving but we welcome any initiative which enables the international community to engage in constructive dialogue with the government of Zimbabwe on issues of concern.

But the government of Zimbabwe must, as the noble Lord said, address its economic problems and the continued disregard in that country for the rule of law. Of course, elections must be free and fair and the international community stands ready to ensure that that is so, just as we have said that we in this country are happy to assist with a programme of land reform based on the principles of the 1998 land conference.

The noble Baroness, Lady Park, is always a doughty advocate for the Armed Forces. The recovery from the exceptionally high operational tempo of 1999 continues. The average intervals between operational tours for the units in the infantry, the artillery and the armoured corps have all shortened and there have been significant improvements.

That has also been helped by retention. I am happy to say that the outflow from the regular forces decreased by 6.3 per cent in the year 2000–01, compared with the year before. I shall write to the noble Lord, Lord Burnham, about the specific details which he requested on recruitment.

I assure the noble and gallant Lord, Lord Bramall, that among everything else that they do, the Armed Forces are an effective delivery mechanism. Of course, they were given the excellent opportunity to demonstrate that, possibly in very sad circumstances, in the recent foot and mouth outbreak.

There have been many allegations about Army cuts, but I assure the noble and gallant Lord, Lord Bramall, that the Government remain totally committed to delivering the Strategic Defence Review, about which he asked a specific question. Last July we announced the first sustained increase in real terms in defence budgets for 10 years, as the noble and gallant Lord knows.

I can assure the noble Lord, Lord Burnham, that there are no plans—I repeat no plans—or proposals to cut Army regiments, no plans to reduce the number of brigades in Scotland, and no plans to reduce the size of the Territorial Army. I hope that that is specific enough. The noble Lord asked so many questions about defence procurement that I felt quite woeful about leaving my defence procurement brief for the Foreign Office.

The money for the aircraft carriers is in the budget. The noble Lord knows that they are not due to come into service until 2012 or 2015. The Bowman project will be considered later this year. On a previous occasion I told the House that we want the Bowman in service within two years of signing the contract. There will be a further report on DERA in the autumn and yes, the Americans are now happy with what is proposed. On the A400M, we never expected to sign anything more than a memorandum of understanding at the Paris Air Show.

The noble and gallant Lord, Lord Bramall, asked questions about accommodation and about the Defence Medical Services, as did the noble Lord, Lord Vivian. I hope that both noble Lords will be happy to accept letters from me on those points. They are lengthy matters and I would do justice to them much better in writing to noble Lords.

The globalisation White Paper was raised by the noble Lord, Lord St. John. It is enormously important. If I may, I shall commend my right honourable friend Clare Short, who is acknowledged not only as a world authority on development issues, but also as an indefatigable fighter for poverty eradication.

I agree with the noble Lord, Lord Alderdice, on the points that he made on conflict prevention. The Department for International Development provides technical guidance and advisory support and funding for pilot projects to integrate conflict issues into bilateral country programmes.

I also agree that possibly large international conferences are not the whole answer to some of the questions, as indicated by the noble Lords, Lord Avebury and Lord Desai. However, they have their part to play when discussing the environment, world trade, human rights and arms control. Those matters require global solutions and I do not believe that we should be quite so dismissive as those noble Lords appeared to indicate on those points.

The position was well demonstrated only this week at the international conference on AIDS, which was raised by my noble friend Lady Whitaker and the noble Earl, Lord Sandwich. I shall respond to that briefly. DfID is committed to achieving the HIV/ AIDS international development target and in particular to reducing the impact that. HIV/AIDS has on the life of the poorest. As part of our efforts, we have pledged a substantial amount to the global health fund to address the major communicable diseases of HIV/AIDS, tuberculosis and malaria. I hope that other countries will do the same.

I was also grateful for the remarks of the noble Earl, Lord Sandwich, and the noble Lord, Lord Desai, on debt relief. So far 23 countries have qualified for the enhanced HIPC initiative with more than 500 billion of relief being agreed out of the 41 eligible countries.

The noble Lord, Lord Weidenfeld, raised some worrying points about incitement to genocide. I was very concerned to hear what he said. I have no personal knowledge of the points that he put to the House, but I shall ask our embassy in Damascus to look into the matters that he raised. Perhaps I may write to him when I have done so.

I turn to the interesting points made on Latin America by the noble Baroness, Lady Hooper, whom I see in her place on the Woolsack. There were over 70 ministerial visits to Latin America and the Caribbean in the first term of this Government. I shall write to the noble Baroness with various details, but my noble friend Lord Bach is hoping to go to Latin America at an early date and both he and my noble friend are due to meet the Chilean foreign minister tomorrow. I also say to the noble Baroness that there have been an enormous number of exchanges with the defence department, particularly in relation to the defence export services.

I shall, if I may, write to the noble Lord, Lord Avebury, on the points he raised about Afghanistan. It is a complex and difficult issue and I can do better justice to it in a letter.

The noble Lord, Lord Selsdon, made some interesting points. He said that he had just returned from overseas but at one moment I thought that he had just returned from another planet! Many procurements in the United Kingdom are made directly from United Kingdom defence industries. The noble Lord painted a black picture and perhaps he would like to know that we are second only to the United States in our success in defence exports. They support more than 400,000 jobs in this country. I was interested in his comments on space and perhaps I can write to him about them.

During the past five days your Lordships have discussed an extensive legislative programme set out in the gracious Speech. One hundred and sixty-eight speakers have taken part and I can see by the look on the face of my noble friend the Chief Whip that if I attempt to answer them in any detail shall not get out of the Chamber.

We have discussed a huge number of issues and the discussions will continue into the months which lie ahead. The Government's programme contains many far-reaching points and we know that some will be controversial. Some will be hard to achieve but some, I hope, will be more consensual. However, important though they are, they are not what the legislative programme for the coming Session is primarily about.

The Labour Party has achieved what we have never secured before; re-election to a second full term in Government. And we have done so on the basis of the choice we put before the people of Britain. It was a clear choice for our programme of economic stability, sustained investment and far-reaching reform in our public services. The message from the people of Britain was very clear; they did not want the alternative. They did not want tax cuts; they did not want cuts in public services; and they did not want economic instability.

Therefore, our task in the second term is to build on and develop the foundations we laid in the first. We must sustain economic stability, remembering always that what we will be able to do in our second term is possible only because of the stability we achieved in our first.

What the election showed was that, if anything, support for public services has grown over the past four years. There has been a shift in thinking which many of us—I believe Members on all sides of the House—welcome. It is a shift away from social intolerance and national isolation to greater social inclusion and better understanding of the importance of renewing and reforming our social services and of international co-operation and interdependence. That was also a clear message from our debate today, although expressed in many different ways.

The Government will be putting investment into our schools and hospitals. But investment alone will not deliver the improvement in our public services that people want to see. We have to couple that investment with reform because without reform we will not achieve high quality public services. And without high quality public services we will not be able to move forward to achieving the ambitions we have for our country and for which our people have just voted; that is, genuine opportunity for all.

So the key Bills in the legislative programme are the big reform Bills: the Bills to implement reform in the education system, especially in secondary schools; in health, putting in place the next stage of the NHS plan; in crime, with the biggest reform of the criminal justice system in more than 50 years; and in welfare, with further measures to help pensioners and families with children and to reinforce work as the best route out of poverty.

We shall welcome the debates in the House on all these issues. I hope that those debates will be characterised by what is best in this House; with experience, knowledge, expertise and—dare I say it?—with tolerance and good will, just as our debate on defence and foreign issues has been characterised today.

The Government have a renewed mandate and instructions from the British people. They have set out our instructions and we intend to carry them out. The legislative programme set out in the gracious Speech points the way, and I commend it to the House.

On Question, Motion agreed to nemine dissentiente; the said Address to be presented to Her Majesty by the Lord Chamberlain.

House adjourned at four minutes before midnight.