Lords Sitting of 5 February 1992

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Newcastle.

Psychiatric Patients: Care Programme
Lord Mottistone Lord Mottistone asked Her Majesty's Government:
Whether regional health authorities have been given detailed advice on monitoring arrangements since 1st April 1991 of the care programme approach for patients considered for discharge from psychiatric hospitals and for new patients accepted by specialist psychiatric services.
Baroness Denton of Wakefield: My Lords, the health authorities were given very well defined instructions in setting up the care programmes. In July 1991 the chief executive of the National Health Service Management Executive wrote to regional general managers saying that he would be asking them for evaluations of the care programme approach for 1992–93. A copy of the executive letter, EL(91)103, is available in the Library. Regions will be notified in due course of the form those evaluations should take.
Lord Mottistone: My Lords, I thank my noble friend for her very full Answer. May I understand from that reply that the assessment of what is being done is already well under way and that there will be no delay in April this year in obtaining a composite picture of what is being achieved in the way of care?
Baroness Denton of Wakefield: My Lords, submissions received by the RHAs and the National Health Service Executive indicate that districts are making progress with the implementation of the programme. The monitoring will be followed up, as the noble Lord would wish. I should add that a social science research organisation has been commissioned to examine the implementation of the care programme on a qualitative basis. That research will also be available.
Lord Thurlow: My Lords, we warmly welcome what the Minister has told us, but is she aware that as recently as November a body which I believe to be authoritative, the Reed Committee, reported that many NHS agencies still believed that the Government's intention was to go ahead with reductions in the number of beds available in hospitals without regard to the availability of alternative services in the community? Can the Minister assure the House that as a result of the monitoring procedure the Department of Health will at long last have a comprehensive and complete picture?
Baroness Denton of Wakefield: My Lords, I can assure the House that the issue was well seen. The executive letter states very clearly that the health authorities will need to ensure that any reduction in
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the number of hospital beds does not outpace the development of alternative community services. The people responsible for managing the care programme will have the information with which to measure it.
Lord Winstanley: My Lords, does the noble Baroness yet know whether the evaluation carried out thus far has revealed shortcomings in the care programme approach? Do we know, for example, whether the net has been drawn too widely and whether any patients ought to come within the care programme approach are not doing so because they do not qualify? That ought to be revealed early in the monitoring which is being carried out. Do we yet know?
Baroness Denton of Wakefield: My Lords, these are very early days in the programme. The authorities have been asked to set up the programme. There are no indications that people are slipping outside the guidelines, which were very closely drawn up.
Baroness Faithful: My Lords, will the social service departments throughout the country which are involved in the implementation of the Mental Health Acts also be monitored, because I am assured that there are insufficient resources and social workers to carry out the community work under the Acts?
Baroness Denton of Wakefield: My Lords, as my noble friend indicated, it is important to the success of the programme that the integrated part of it involving the social services and health authorities works. Monitoring will be undertaken by the Social Services Inspectorate and those anxieties will be borne in mind.
Baroness Hilton of Eggardon: My Lords, in some parts of London, in Harrow for example, 30 per cent. of patients are discharged without community care programmes. Therefore, does it surprise the Minister that half of those sleeping on the streets of London and 20 per cent. of people in our prisons have a history of severe mental illness?
Baroness Denton of Wakefield: My Lords, we are all very concerned that even one person with a history of mental illness should be on the streets. However, there is no evidence that there are large numbers of homeless mentally ill people on the streets. The closure of mental hospitals has not led to those large numbers. Such evidence as exists suggests that they are mainly people who have never had any contact with psychiatric services or who were offered treatment in the community following discharge from hospital but arrangements have broken down despite the valiant efforts of the people involved.
The Earl of Halsbury: My Lords, may I remind your Lordships that we on these Cross-Benches have no collective opinion? My noble friend used the first person plural. We have no collective opinion.
Earl Haig: My Lords, as the care programme is needed throughout the United Kingdom, will my noble friend the Minister give an assurance that it will be extended to cover Scotland as well?
Baroness Denton of Wakefield: My Lords, I am sure that the concern is such that the care programme where needed will be examined and implemented as fast as possible.
Lord Carter: My Lords, is the Minister aware that full implementation of all parts of the 1986 Disabled Persons (Services, Consultation and Representation) Act gives mentally ill people the right to an assessment of their needs and the right to an advocate to speak on their behalf? Does she agree that the Government's refusal to implement the relevant parts of that Act means that mentally ill people are denied the representation and advocacy which would be of enormous help in identifying their problems and helping to plan the care programme that they need?
Baroness Denton of Wakefield: My Lords, the great value of the care programme is that it extends care to one-to-one. There is a key worker for every individual coming out and there is one person responsible for another person. It is also important that the programme should involve the families of the people concerned.

Wheal Jane Tin Mine: Pollution
2.45 p.m.
Baroness Nicol Baroness Nicol asked Her Majesty's Government:
What progress has been made in controlling pollution from the Wheal Jane tin mine, near Truro, Cornwall.
The Minister of State, Department of the Environment (Baroness Blatch): My Lords, the National Rivers Authority and the mine's owners developed contingency plans for treating discharges from the mine. Since it closed last spring they have been closely monitoring the situation. The contingency plans were put into effect when the mine started discharging last November. The owners decided, on 4th January, that pumping and treatment had to be suspended for safety reasons. There was a discharge of untreated water as a result of an unexpected underground collapse on 13th January. Pumping and treatment operations have resumed. The NRA is working hard to develop medium and long-term arrangements for treating the discharge.
Baroness Nicol: My Lords, I thank the Minister for that Answer. I am encouraged to hear that action is again being taken. However, since the law is clear about the responsibility in the case of nationalised mines—namely, that the Government have to deal with any pollution and make the mines environmentally safe—does she agree that it is evident that questions must now be raised about what happens in the case of privately owned mines? Should there not be advance financial provision to deal with it? Would that not be a sensible way to proceed? Does she feel that it would be helpful to have a public inquiry so that all those aspects could be aired and used in future cases?
Baroness Blatch: My Lords, the noble Baroness makes an important point. First, we recognise that
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there can be difficulties in the case of abandoned mines. The difficulties are more practical than legal. The present owners of land will often have no connection at all with mining and may not even have the resources to meet the costs of dealing with discharges on their land. That makes it difficult to apply the polluter pays principle. Nevertheless, the polluter pays principle is very much still in place.
We are familiar with the issues raised by this case. They are not new. An inquiry specifically for the Wheal Jane mine would not be appropriate; but the NRA is working out short, medium and long-term plans for abandoned mines. My own department is currently investigating the policy side of how to deal with abandoned mines.
Lord Mottistone: My Lords, does my noble friend agree that the Frogmat about which I wrote to her would be very applicable to controlling the pollution that these mines have created?
Baroness Blatch: My Lords, my noble friend makes an important point. There is also another technology —reed beds—which can "gobble up" pollution in a way that is most effective. Certainly some of the larger chemical industries are using it. We believe that it has an application in this case and that is being investigated.
Earl Grey: My Lords, will the Minister confirm that when the mine was closed the Department of Trade and Industry decided that an investigation into the possibility of future hazards and pollution was not necessary? If that is the case, may I ask why?
Baroness Blatch: My Lords, the noble Lord is not quite right. It is not necessarily a responsibility for the DTI, which would be concerned about the company. The company has been funded to the tune of £23.4 million in relation to protecting jobs. In fact, the National Rivers Authority investigated the impact of the closing of that mine. It has continually monitored the position and moved in very quickly when there was a problem. It has also to be said that this is a tin mining area. There are high levels of metal in all the river courses in this area. It is a very large problem. The NRA is seized of it and is doing what it can to address the short, medium and long-term problems.
Lord Campbell of Alloway: My Lords, I must declare a professional interest in that I advised the Transport and General Workers Union about this mine some years ago. Is there any prospect of it ever being worked again?
Baroness Blatch: My Lords, my understanding is that the mine will not be worked again.
Lord Norrie: My Lords, can the Minister tell the House whether, in the case of an abandoned mine, the Mines and Quarries Act exempts the owners from liability?
Baroness Blatch: My Lords, my noble friend puts me on the spot with that question. I am not sure about whether disused and abandoned mines are caught under the auspices of that Act. I shall investigate and write to my noble friend.
Baroness David: My Lords, will the Minister say who will compensate for the inevitable losses to the fishermen and the tourist industry in Cornwall? We gather that the oyster beds at King Harry ferry and also, I presume, the oyster beds in the Helford River will be affected and the losses to the fishermen and a great many other people will be very considerable. Cornwall already has quite a lot of pollution to put up with.
Baroness Blatch: My Lords, the noble Baroness has information that is slightly different from mine. There has been continuous testing of the waters. The Ministry of Agriculture and Fisheries and the Department of Health have advised that the estuary where shellfish are mainly found has been declared safe. The position continues to be monitored and that particular problem does not at present arise.
Baroness Nicol: My Lords, will the noble Baroness clarify one point? I believe she said that in general the polluter pays principle applies. However, I understand that at present the Carnon Consolidated Company, which owns the mine, is still pumping the mine, or doing some work. Yet the National Rivers Authority has already spent £100,000 on work that it has had to do. How did the division of expenditure come about, and will it continue?
Baroness Blatch: My Lords, it is partly the principle being applied. The National Rivers Authority is predominantly funding the work but the Carnon company is doing the work. Carnon, in a responsible way, is shouldering some of the responsibility for having been the owners of the mine. However, the predominant funding comes from the NRA.

Kuwaitis Held in Iraq
2.51 p.m.
Lord Molloy Lord Molloy asked Her Majesty's Government:
What representations they have made to the United Nations regarding civilians abducted from Kuwait and still held in Iraq.
The Minister of State, Foreign and Commonwealth Office (The Earl of Caithness): My Lords, we raised the question of the whereabouts of the missing Kuwaiti citizens during the fifth review of sanctions against Iraq which began on 28th January.
Lord Molloy: My Lords, I thank the noble Earl for that somewhat encouraging reply. I hope that they have success. Does he agree that the endeavour which resulted in the magnificent achievements of the allied forces in driving out the invader from Kuwait and restoring Kuwait to its proper people raised the status of the United Nations? None of those achievements will bring complete happiness until the thousands of people who have been vilely abducted from Kuwait are returned. I hope that our country will give a lead in the United Nations to ensure that that is achieved.
The Earl of Caithness: My Lords, I agree with the noble Lord. We are giving that lead in the United Nations. We shall continue to do so. There are a
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number of other issues on which the Iraqi Government have not performed as requested by the United Nations.
Viscount Mountgarret: My Lords, does my noble friend agree that the happiness to which the noble Lord, Lord Molloy, referred is hardly likely to be achieved until that tyrant, Saddam Hussein, is brought to book and made to answer to the world, in justice, for the appalling atrocities that he has perpetrated? Will my noble friend say whether or not that will be possible?
The Earl of Caithness: My Lords, there are two aspects to my noble friend's question. One is Iraq's compliance with United Nations Security Council resolutions. That can be separated from the removal of Saddam Hussein as head of the Iraqi Government. We would not shed a tear if he were to go today.
Lord Cledwyn of Penrhos: My Lords, we welcome the action taken by the Government, which the noble Earl described. Precisely how many Kuwaitis and other nationals are still in captivity in Iraq? Does he agree that the Iraqi Government's conduct is in contravention to United Nations Resolution 686? What action is now being taken to pursue that resolution?
The Earl of Caithness: My Lords, as my noble friend Lord Cavendish of Furness said in reply to the Unstarred Question by the noble Lord, Lord Molloy, last night, the Kuwaiti Government have provided details of about 2,000 Kuwaiti citizens whom they believe to have been in Iraq. A number of approaches have been made, most particularly through the International Committee of the Red Cross. Regrettably, Iraq has not responded to any of the approaches. That is why we continue to maintain the pressure.
Lord Molloy: My Lords, is the noble Earl aware that debates that take place in this British Parliament at Question Time and at other times give great encouragement to the people of Kuwait whose husbands, daughters and wives are still in Iraq? Does he agree that we should make every endeavour to continue such encouragement? We say that we shall struggle. One day we shall be victorious in that effort. That by itself brings some degree of hope to the people of Kuwait.
The Earl of Caithness: My Lords, I agree with the noble Lord. We shall continue to pursue the matter.

Manufacturing: Employment Statistics
2.55 p.m.
Lord Dean of Beswick Lord Dean of Beswick asked Her Majesty's Government:
How many people were employed in manufacturing industry in the calendar years 1989, 1990 and 1991.
The Parliamentary Under-Secretary of State, Department of Employment (Viscount Ullswater): My Lords, the number of employees in employment in

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manufacturing industries in the United Kingdom was 5,215,000 in September 1989, 5,147,000 in September 1990 and 4,795,000 in September 1991.
Lord Dean of Beswick: My Lords, I am grateful to the Minister for those detailed figures. They update information that I received from him in answer to a Question on the subject before Christmas. Is the Minister aware that those detailed figures indicate that between November 1989 and November 1990 there was a loss of 94,000 jobs in manufacturing, and that between November 1990 and November 1991 the figure was 354,000? That is an increase in job losses of a quarter of a million on the previous 12 months. In percentage terms, it is an acceleration of 400 per cent. in 12 months. The Minister will be aware that the CBI issued a report last week which indicated that it expects another 70,000 jobs to be lost in the first quarter of this year. Can the Minister give us any hope as to when this damaging and disappointing trend in job losses in our most vital sector will end and the tide will turn the other way to the advantage of all?
Viscount Ullswater: My Lords, I entirely agree with the noble Lord that it is a vital sector of the economy. However, I have also said to him in the past that the decline in manufacturing employment is a long established trend. The employment peaked as far back as 1966. In my past replies, I have also indicated that the fall is exaggerated by reclassification of some of the jobs into the service sector. As I have said to the noble Lord before, the most important factor is that since 1981 manufacturing has consistently accounted for just under one quarter of total output, the same as in other developed countries such as France and the United States.
Baroness Turner of Camden: My Lords, what steps do the Government intend to take to ensure that the highly skilled workforce currently employed in the defence industries will have alternative employment as the industries gradually run down, or will those people simply join the statistics of others formerly employed in manufacturing industry who are now unemployed?
Viscount Ullswater: My Lords, history will relate that those who have the skills —and those coming out of the defence industries are highly skilled—have not found it difficult to find other jobs in industry. However, the employment service is in place. The Government have a great many opportunities for reskilling people, and assisting people back into the job market when the upturn in the economy comes.
Viscount Caldecote: My Lords, does my noble friend agree that the first priority is increased output in the manufacturing industry through higher productivity? Only in that way will more jobs be created in the supporting industries.
Viscount Ullswater: My Lords, yes. I am happy to agree with my noble friend. Manufacturing productivity growth in the United Kingdom since 1979 has been very impressive. It has grown by an average of 3.6 per
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cent. a year. That is the fastest of the major industrialised countries. In the 1960s and 1970s the United Kingdom was bottom of the league table.
Lord Bruce of Donington: My Lords, does the noble Viscount agree that the figures that he has given today and the observations that he has made ought to be considered within the context of the Government's record, not since 1981, but since 1979? Is he aware that unemployment in the manufacturing industry during that period of time to date has increased by 2.5 million? Over the period that the Conservative Party has been in office, that works out on average at 34 more unemployed every hour.
Viscount Ullswater: My Lords, the noble Lord appears to be indicating that the jobs lost in manufacturing have not been replaced elsewhere. He is wrong. I understand that he was active in the previous Labour Government. Therefore he should remember then that output in manufacturing fell, that there was no increase in profitability and that there was no growth in exports. I am glad to say that during this Government's tenure there has been an increase in output, an increase in productivity and a massive increase in manufactured exports.
Lord Morris: My Lords, does my noble friend agree that we should rejoice in these figures because they demonstrate clearly that progress in the modernisation of the manufacturing process is indicated by the fact that it now has a higher per capita cost rather than being labour intensive?
Viscount Ullswater: My Lords, yes, I agree with my noble friend to a certain extent. Obviously we are all concerned to find work for those who have lost jobs in the manufacturing industries. It is important for manufacturing to take account of the level of the increase in earnings. At the moment it is high in the league table, at some 8 per cent. in November, whereas for our major competitors in the United States and Japan it is at about 3 per cent. However, unit wage costs are rising less fast than those of our major competitors.
Lord Molloy: My Lords, is the Minister really saying that the Government find satisfaction each time that the unemployment figures increase by half a million because that might help to reduce inflation and therefore it is good?
Viscount Ullswater: My Lords, no, of course I was not saying that. I was indicating to the noble Lord's noble friend and to my noble friend that the fall in the number of jobs in manufacturing should not be seen in isolation. Compared with France and Italy, two countries which have relatively the same number of people working, this country has more people in the production and construction industries.
Lord Marsh: My Lords, does the Minister agree that if governments had not tried unsuccessfully to distort the market, the rundown in some of the traditional smokestack industries might well have

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been less damaging to the economy and more humane to the labour force because it would have been a consistent contraction?
Viscount Ullswater: My Lords, I believe that is the theory and perhaps I should not comment upon it. However, I believe that our regional policy has been immensely successful in replacing industry in the North which has come to the end of its life. That has been demonstrated by the unemployment figures, which have risen not nearly as fast in the North as in the South.
Lord Stoddart of Swindon: My Lords, the Minister has painted a pretty picture of the economy in his replies. However, is it not a fact that last year industrial production and gross domestic product fell by 2.5 per cent.? Surely he will agree that that is not exactly a rosy picture. Is he aware that one of the reasons for the lack of further large investment in manufacturing industry is that real interest rates are at an all time high? When will the Government act to lower interest rates at an early date?
Viscount Ullswater: My Lords, the Government will act to lower interest rates at the earliest possible minute. The noble Lord is trying to deny that the United Kingdom's share of world trade, for instance, will have grown for the third year in succession. That is a great success. During the year to the final quarter of last year the volume of exports grew by 4 per cent. and were at their highest level in December. There are many highlights in the United Kingdom's trade performance; for instance, we are now a net exporter of television sets and the deficit in passenger motor cars has fallen from £5 billion in 1989 to just below £1.5 billion in 1991. Having listened to the investment plans of the Japanese manufacturers such as Nissan, Honda and Toyota, I expect great improvements to be made in the 1990s.
Lord Dean of Beswick: My Lords, the Government's figures for the latest complete month, November, showed a job loss of 21,000. That monthly loss equates with the predictions of the CBI report that I mentioned—that in the foreseeable future just over 20,000 jobs a month will be lost. In its report the CBI makes no reference whatever to different categories. It is talking about hard-nosed engineering, manufacturing and chemical jobs. It is not talking about redesignation. Is the Minister not relying too much on the fact that some jobs have been reclassified in order to justify what I call disappointing figures?
Viscount Ullswater: My Lords, no. I am demonstrating only that the manufacturing sector remains at just below one quarter of total output and has remained so for 10 years.

Business
The Earl of Strathmore and Kinghorne: My Lords, with the leave of the House, I should like to say a word about the length of speeches in today's debate standing in the name of the noble Lord, Lord Cledwyn
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of Penrhos, to which your Lordships have agreed to apply a five-hour time limit. On the principle that the mover is allowed 20 minutes and that the Minister should rise to reply not less than 25 minutes before the scheduled end of the debate, all other speeches should not exceed 11 minutes. If any noble Lord should speak at greater length he would be doing so at the expense of other speakers in the debate.

Former Soviet Union: Implications of Change
3.6 p.m.
Lord Cledwyn of Penrhos Lord Cledwyn of Penrhos rose to call attention to the far-reaching changes which are taking place in the former Soviet Union and their implications for this and other countries; and to move for Papers.
The noble Lord said: My Lords, I have couched the Motion in broad terms in order that the House may have a wide-ranging debate on the events in the former Soviet Union and their repercussions in this country and throughout Europe and the world. Ten years ago or even less, few of us thought that so great an upheaval was imminent, that the Soviet Union would be dissolved, that Mr. Gorbachev would no longer be president and that a new union of independent republics (three of them with a nuclear capacity) would emerge. We little thought that the Berlin wall would be demolished, that the Warsaw Pact would cease to exist and that the cold war, which had dominated our foreign policy for more than 40 years, would at last come to an end.
Those are certainly the greatest events since the end of the last war and they must also be seen as one of the watersheds of European history. Should not the aftermath be a time for rejoicing, even for jubilation? Has not the shadow of a nuclear war receded and will not the peace dividend bring new benefits to mankind across the globe? Those are questions that we should be discussing in the debate.
The fact is that the aftermath of the collapse of Soviet communism, although it opened the doors to new possibilities, has presented the world with huge new problems which must be tackled and resolved if mankind is to reap the benefits of peace. Stability can be secured in Russia and in the countries of the new commonwealth only if their governments can overcome their economic and political problems. We believe that they can achieve that only if we, with our allies and partners, are ready to assist on the necessary scale.
I wish to say at once that a great deal of thought has already been given to those problems by this and other countries of the West and that some measure of help has already been forthcoming. The economic crisis must be seen both in the short and in the long term. So far, in the short term, the European Community has sought to make a contribution and, as the House knows, Germany has been in the lead. We are told that difficulties abound, that the aid is insufficient and that the change from the old Soviet system of central planning and fixed-priced goods to a policy of free

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prices and a free market is not easy or quick to achieve. Friday's Security Council meeting in New York and the talks in Camp David left a clear impression that more substantial aid for Russia and the other republics is at hand. President Bush is planning to give help on a larger scale but that has not yet begun to arrive.
Mr. James Baker has said that for two weeks from 10th February cargo planes will start delivering 54 shipments of relief supplies and that American soldiers and officials will receive the supplies and supervise their delivery to hospitals, orphanages and other places in desperate need.
President Bush has also promised an additional £364 million for technical and humanitarian aid to the republics. There are other plans which will involve other countries, and conferences are to be held in Minsk this week and later in Lisbon and possibly in Tokyo to discuss further action. All that is to be welcomed. I mention it to show that the world is awakening to the critical needs of Russia and her neighbours.
Mr. Luzhkov, the head of the new Moscow government, said that in 1991 humanitarian aid was enough to feed the whole USSR for one day only and that so far this year's deliveries would cover two days' consumption. Of course, the EC's aid has gone to only two cities—Moscow and St. Petersburg. The other cities are asking, "What about us?" Incidentally, I am glad that the beef from this country, about which there was so much unnecessary fuss, finally went to Murmansk. We shall appreciate the views of the noble Earl, Lord Caithness, about the current position when he speaks.
I noted too that Russia's Deputy Prime Minister has asked the West to consider the importance of long-term financial support which will be needed to stabilise the rouble and to avert hyperinflation, a subject stressed by President Yeltsin in New York last week. Other noble Lords are expert in that complex field but I assume that Britain and other countries will support Russia's admission to the IMF and to the World Bank. I believe that the Prime Minister has given that undertaking on behalf of this country.
Certain conditions will need to be fulfilled. We have noted the steps taken by Mr. Yeltsin to cut military spending and to abolish costly subsidies. However, he has a hard road to travel. Again, we should value the noble Earl's comments. What is clear beyond doubt is that the economic stability, which is essential if Russia and the republics are to develop into viable and successful democracies, needs substantial practical support without delay.
We know only too well what happens when economic collapse is followed by a military takeover. We do not want to see that happening in any country, especially one which has a nuclear capacity.
That takes me briefly to the question of defence with which my noble friend Lord Williams will deal when he winds up. It seems clear that there is still argument and disagreement between Russia and the
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other countries of the new commonwealth—in particular, the Ukraine—about different aspects of defence.
On the other hand, we were encouraged by President Yeltsin's speech in the Security Council last Friday. It seems that he is genuinely anxious to achieve a new world order. He said that the world had changed dramatically in the course of the past few months. He went on to say:
"Russia considers the United States and the West not as mere partners but rather as allies. I am confident that the world community will find in Russia a firm and steadfast champion of freedom, democracy and humanism".
Those are encouraging words. That has been the tenor of President Yeltsin's speeches in the United States. He was in favour of action by the Security Council and intervention to defend human rights and to head off regional disputes. Those could be the words of a liberal and democratic leader. If they are meaningful and if that attitude can be sustained and built upon in Russia, then the world begins to look a brighter place. The general view is that he must be helped in that direction.
However, there is another side of the coin. We know that President Yeltsin has acute problems at home. At the summit in Minsk a month ago, on 30th December, the 11 leaders of the republics confirmed that the ex-Soviet strategic nuclear forces, including both the weapons themselves and all support services, would remain under a single command.
That means that President Yeltsin will have his finger on the nuclear button, but that the use of the weapons would need the agreement of the other nuclear republics. On another issue at a later meeting they failed to agree to keep a joint conventional force. As noble Lords will have noted, other problems have been discussed at length in the press, notably the possibility that out-of-work nuclear scientists might go to Iraq, Libya or Iran to work. Moscow has said that 20,000 working in nuclear military research will shortly lose their jobs. In his New York speech President Yeltsin said he recognised the problem, but noted that such experts would be provided with social security. On the other hand, the director of Russia's nuclear programme has denied that those scientists will go abroad. It is nevertheless a problem which must be thought over carefully and discussed further at the highest level.
Another development which we welcome but which I shall merely touch on is the admission of all the republics, except Georgia, as members of the Conference on Security and Co-operation in Europe. Some doubt has been expressed about this move and perhaps the noble Earl will let us have the Government's reactions. It seems to me that the more the republics are involved in international organisations, the less likely they are to feel ill-treated and prone to independent adventures.
That leads me finally to the huge political implications of those events. At no other time in history has a vast empire disintegrated so quickly. Yesterday it was the Soviet Union, the superpower, the flagship of communism; today it is the Commonwealth of Independent States, most of which

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have by now abandoned the system of oppressive central control which brought unhappiness and fear to the world.
The objective, the ambition, of President Yeltsin and apparently other leaders appears to be to establish balanced democratic countries. However, although they have many of the skills and all the resources, they are, in terms of government, exploring strange territory, and the transition is fraught with difficulties and dangers. Many are demonstrating, and saying that they will not put up with empty shops for the sake of freedom, although those empty shops are a product of the old discredited system.
There are cynics here and in other countries who say: "Let them get on with it. Why should we help them out of the mess they have made of things over the past 60 or 70 years?" In answer to that I say with all conviction that it will not help posterity if we stand aside. We must show them that democracy does work and that it is the only system in which freedom, compassion and respect for every individual, regardless of race, creed or colour, can flourish.
Nothing is comparable with that, and people from Russia to Kazakhstan and on to the Pacific must be helped to achieve it. Despotism of one kind or another is the old tradition of that vast sub-continent, and President Yeltsin has an immense task ahead of him. As I mentioned earlier, he said in New York that to save democracy, they would need a stabilisation fund to save the rouble. This was referred to in the Prime Minister's Statement on Monday. So far there has been no response to this from President Bush but I understand that the two leaders are to meet again on two occasions this year. Can the noble Earl comment on that? What view do the Government take of that development?
The central question in this debate, therefore, is whether the new commonwealth proves itself able to struggle through this confused, even chaotic, period without falling into total disarray with democracy a vanished hope. That stands at the heart of our debate. I say therefore that the right sort of aid, in the volume to match the crisis is urgently needed now. Britain has given a lead with the know-how fund in Eastern Europe, but that is not enough. We as a country must do much better. Our intentions may be good, but our aid budget has reduced progressively until it is about the lowest in real terms in the industrial world.
Help along the lines of the Marshall Plan has been advocated in some quarters. That plan, a historic gesture, changed the course of European history. What would have been the consequences if Germany, Italy, France and the rest had been left to fend for themselves from 1946 onwards? What would Europe be like today? What will Europe become if the new Commonwealth collapses? That is the question for the leaders of the Community and for President Bush.
We are conscious too that special problems may arise in those southern republics of the Commonwealth which border on Iraq and Iran and which are predominantly Moslem. They will also need practical assistance to rebuild their economies, and I understand that wealthy countries like Saudi Arabia may be willing to help. Anxieties are inevitable about
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these countries if they have nuclear weapons. But President Yeltsin's obvious personal concern to bring these armaments under central control and, of course, to reduce them, gives some encouragement.
Nevertheless, there is a real danger that Kazakhstan may succumb to Islamic fundamentalism and, given the size of that republic and its nuclear capability, it points to a potentially serious development. So far the leaders of the republics have acted sensibly and produced a document which enshrines human rights, the principles of a market economy and strict control of armaments including nuclear weapons. Our fervent hope is that this structure and this spirit will survive, but we must also recognise that the picture is still one of instability and volatility.
We cannot therefore be certain of the developments, but the worst possible scenario was described by Senator Pressler of the United States who visited the area and said afterwards that it was possible that later in the 1990s a belt of Islamic fundamentalist states could stretch from central Asia to Iran as well as parts of Turkey, Afghanistan and Pakistan. Those are powerful arguments in favour of a carefully worked out plan which will direct the republics towards democracy.
The words of the great man have been running through my mind over the past few days:
"There is a tide in the affairs of men
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries".
These are surely days when the tide is at the flood, and we fail to take advantage of it at our peril.
I beg to move for papers.
The Earl of Caithness: My Lords, I am grateful to the noble Lord, Lord Cledwyn of Penrhos, for giving us an opportunity to discuss such an important subject.
In 1462 the nascent Moscow state occupied some 24,000 square kilometres. By 1914 the Russian Empire occupied 13,800,000 square kilometres. On 18th August 1991 the Soviet Union occupied 22,400,000 square kilometres. It was one country, one superpower. It crossed 11 time zones. It had one huge nuclear arsenal. Only 130 days later, on Christmas Day, the red flag over the Kremlin forlornly fluttered down. The Soviet Union had dissolved completely. Instead of one country there were 12 new countries. In addition, the three Baltic states—Estonia, Latvia and Lithuania—had regained their freedom. President Gorbachev had resigned.
Modern history is like the weather—there is a lot of it at the moment! But the abrupt decline and fall of the Soviet empire is in a class of its own. The facts reveal the legacy of communism, and the position is worse than even the most hardened anti-Soviet analysts described. The economic picture is parlous: Marxist central-planning produced high-technology weapons, but at the cost of basic consumer production. The collapse of the old system has, for the moment, made things even worse. Inflation is soaring. Queues are longer.

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Politics are in turmoil. Repressive one-party rule has made it difficult to set up normal party politics and public accountability. Minority and border issues have been aggravated by large-scale forced removals under Stalin. Defence is a massive problem: the Red Army is struggling to hold itself together and feed and house its soldiers. Social conditions are frequently abysmal, with hospitals, clinics and other public services in a pitiful state. Last but not least, the environment has been despoiled on an awesome scale. Reckless industrialisation has poisoned vast tracts of land, and inland lakes and seas. This appalling problem will haunt us for decades to come.
What a record! Is it not perverse that so many people in the West sought to give comfort to the Soviet regime; to puff up its heroic achievements; to treat it as a moral equivalent of the USA? Many of your Lordships will remember the late Richard Crossman's thoughts on the matter, when he said,
"It would be strange indeed for the Labour Party to abandon its belief in the central importance of public ownership at the precise moment when the superiority of socialised economies is being triumphantly vindicated in world affairs".
How wrong can one be?
Given the daunting and numerous problems, I want to tell your Lordships how we are responding to them, because Her Majesty's Government have taken the lead in the EC and the UN in pursuing an imaginative, active and determined policy over the past months. There is a central tenet in our policy. We cannot solve the former Soviet Union's problems for them. What we can do is to help them solve their own problems by supporting their programme and making sure that whatever help we give does not make a difficult situation worse.
Let me summarise our activity under four headings: bilateral relations; economic assistance; human rights and our general approach to the all-important areas of security and non-proliferation. We have rapidly-developing bilateral relations with the 10 former republics we have recognised as independent states—Azerbaijan, Kazakhstan, Uzbekistan, Turkmenistan, Ukraine, Moldavia, Belarus, Armenia, Tadjikistan and Kirghizia. We are pushing ahead with contacts at all levels with them.
We have invited each of those 10 new countries to open full diplomatic relations. A new British Embassy has been opened in Kiev. We also propose to set up resident British representation in Alma-Ata and Minsk. We plan to cover the others by cross-accreditation of Her Majesty's Ambassador in Moscow, at least for the time being. We are discussing with the Germans and other partners options for sharing diplomatic premises and facilities, where this makes practical sense.
We have not recognised Georgia, where confusion still prevails. Nor have we recognised Russia. There is no need because Russia is the continuation of the former Soviet Union enabling her to take over the former Soviet Union's seat at the UN and other international bodies. The personal initiative of my right honourable friend the Prime Minister to
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summon a top-level Un Security Council meeting last week successfully introduced President Yeltsin—and the Russian Federation—to the UN.
On his way to New York, President Yeltsin stopped in London for a short but outstandingly successful visit, which my noble friend the Lord Privy Seal reported to the House on Monday. The spirit of those discussions and the progress made have elevated the UK's relations with Russia to a completely new level. This lays the basis for a formal treaty—the first such substantial treaty since 1776. All this adds up to a determined, vigorous British effort across the board. We face dramatically new circumstances. We are responding accordingly.
Some people argue that the West responded too little too late with economic assistance to those countries. However, the facts do not bear that out. Since July last year many new initiatives have taken place. G7 and EC assistance worth 20 billion dollars has been assembled, covering new credits, debt deferral measures, technical assistance programmes and emergency food aid. Her Majesty's Government's contribution to the EC's efforts has been £300 million. We have pursued bilateral assistance initiatives as well: a £50 million know-how fund; a £20 million emergency feedgrain package for St. Petersburg; and £2 million emergency medical help. We plan to open up 1,000 secondments with British firms from Russians and the new states. Last week we announced new medium-term export credit proposals for this year with £280 million. In parallel with the US emergency airlift and in response to urgent needs, the UK is to send a special airlift of humanitarian assistance to Sverdlovsk. This is a serious effort by any standards and shows the results of new partnerships which I am sure the House will commend.
Meanwhile President Yeltsin has forged ahead in his market reforms, freeing prices, privatising shops and businesses, and liberalising investment rules. He is asking the West to support these bold initiatives.
The all-important next step must be full membership for Russia and Ukraine of the IMF. We are leading the way in supporting their applications. An IMF programme will ensure that their own reforms are co-ordinated and effective. Underpinning that, other international support, such as a currency stabilisation fund, could be considered.
I turn briefly to the Baltic states. We never accepted their illegal annexation into the Soviet Union. We rejoiced when they regained their freedom last August. We are assisting them now in many ways. We support their applications to the IMF. We have pressed the Russian leadership to speed up troop withdrawals from Baltic territory. The know-how fund is very active. Above all, we are solving the problem of Baltic gold. A former Government sold this gold in 1967. This left a stain on Britain's reputation. We are erasing it.
Human rights concerns remain a government priority. Things have changed immensely for the better. Political prisoners have been freed. Censorship has largely disappeared. Political parties contest free elections. All this was unimaginable four or five years ago. These great strides towards a civil society were

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President Gorbachev's towering achievement. Nevertheless, certain problems remain. There are still refuseniks and others who are unable to leave. We continue to lobby hard on their behalf, for these representations do have an effect. For example, Anna and Solomon Smolyar, Asya Samus, and Mikhail Finkelshteyn have been allowed to leave. Felix and Roman Bodner have been released from prison and, after a long battle, Mrs. Gordievsky was reunited with her husband last September.
A disturbing new human rights problem is communal rivalry. The wretched situation in Nagorno-Karabakh, where the conflict has developed into war, with a further 40 lives lost last weekend, is setting a dangerous precedent for other potential conflicts across the former Soviet Union. Your Lordships are particularly well informed on this, thanks to the remarkable personal efforts of my noble friend Lady Cox. I am pleased to inform the House that Armenia and Azerbaijan both signed the CSCE on 30th January and at our initiative a CSCE rapporteur is to report within 21 days.
Finally, very briefly, I turn to the concern about the former Soviet Union's nuclear weapons and its armed forces generally. On nuclear weapons in particular, intense Western co-ordination followed as the former republics moved towards independence. A successful effort took place to bring the republics to offer suitable assurances on this and other questions. My right honourable friends the Prime Minister and the Foreign Secretary discussed this subject with the leaders and representatives of the republics concerned in great detail at every opportunity.
Although the former Soviet nuclear arsenal remains under effective control by Russia, there is no room for complacency. We have agreed to help with the critical technical task of handling surplus nuclear weapons. It is now clear that Ukraine intends to sign the non-proliferation treaty as a non-nuclear weapon state; so does Belarus. Kazakhstan has given us certain assurances but not, so far, the same unequivocal commitment. We and our allies are pressing them hard on this issue.
There will be many further problems over the future of former Soviet armed forces. A massive task lies ahead and we will take matters forward calmly and constructively. Now is not the time to take hasty decisions on basic British defence strategy. We are only at the start of a protracted transitional process. There will be many daunting difficulties. Things may well get worse before they get better. All our international institutions—the UN, NATO, EC, Council of Europe, CSCE—are already having to adjust to new realities; a huge task, but one in which Her Majesty's Government are more than playing their part.
As we build new relationships and contacts we are doing so on a completely new basis of shared hopes. Europe is no longer divided into two hostile camps. This is the new reality. This is why a new era in world history is upon us.
3.34 p.m.
Lord Thomson of Monifieth: My Lords, I begin by thanking the noble Lord, Lord Cledwyn, for initiating this timely debate. From these Benches we readily congratulate the Prime Minister in bringing together the first meeting of the United Nations Security Council at the level of heads of government. It inspires the hope that the United Nations, in the aftermath of the welcome ending of the Cold War and the worrying disintegration of what was the Soviet Union, may be able to fulfil the hopes of the founding fathers of the United Nations, among whom was my noble friend Lord Gladwyn, and play a more effective role in peacekeeping and peace enforcement. It would he interesting to hear further from the Government of what hopes they have in that direction and perhaps of revitalising the rather moribund sections of the United Nations' Charter dealing with the chiefs of staff committee and the possibility of a permanent United Nations peacekeeping force.
The fear of global nuclear holocaust has now gone, but as has been said by both the noble Earl and the noble Lord, Lord Cledwyn, in its place there are now fears of nuclear proliferation. We all listened very carefully to what the noble Earl the Minister had to say about that. I am sure that none of us has any feelings of complacency at the risks of the nuclear situation in what was then the Soviet Union. I hope that the new arrangements will stand and be strengthened, but I am sure that the role of the United Nations, so often in the past paralysed by the Cold War, will be very critical in future in dealing with the problem of nuclear proliferation.
The liberation of the nations in east and central Europe from the external rule of the Soviet Union was a wholly welcome development. The internal disintegration of the Soviet Union so speedily and dramatically, as the noble Earl has just described vividly to us, is a different matter and raises some very disturbing issues. In the case of the Russian Federation itself, as the noble Earl made clear in some of his historical references, it is hardly possible to exaggerate the scale of the change that has taken place. Russia retains all the trappings of a superpower with a nuclear arsenal, a finger on the nuclear trigger and a permanent seat on the United Nations Security Council. But its frontiers have shrunk. I believe that Russia is now smaller than it was under long years of Tsarist rule. In an ideal world political and economic change should go in step, but in what was the Soviet Union they are grotesquely out of step. The political change, personified in the replacement of Mr. Gorbachev by President Yeltsin, has taken place at a galloping pace.
As has been said, there are now a significant number of new, separate nation states. The noble Lord, Lord Cledwyn, and I used to share responsibilities for what was the Commonwealth Office. The noble Lord repeatedly used the term "commonwealth" for the new combination of independent states in what was the Soviet Union. I share his hope that that commonwealth may be a reality, but there are dangerous rivalries and conflicts between these new nations. Under the surface of the

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dramatic and divisive political events, there remains a single continental-scale economy. As the noble Earl said, it is a centralised, inefficient command economy totally anachronistic in the modern world. Modernising that economy is going to be a long, slow and painful process with some mind-boggling political problems for the new national leaders.
In Britain, and in western Europe as a whole, progress from an agrarian economy to a modern industrial economy took place over several generations. For the most part it took place on a fairly limited democratic franchise. It is very different now in the former Soviet Union. Now that the political map has been changed so fundamentally it is, as the noble Lord, Lord Cledwyn, said, very much in the interests of the West to do everything we can to assist in the economic changes that are necessary.
In my remarks I want to concentrate particularly on the educational aspect of that and on the help that we can give through the know-how fund and in other similar ways. There is much talk, which the noble Lord, Lord Cledwyn, mentioned, of a peace dividend from the defence resources released by the ending of the Cold War. In our view, a priority for the use of some of these resources should be helping the countries of the former Soviet empire to create for themselves modern mixed economies. That would be a real peace dividend. It would be the best insurance against instability and the dangers of civil war or of military coups. We therefore welcome the fact that the Prime Minister has taken the lead in proposing Russian membership of the IMF with, I understand, an urgent April deadline. We welcome his support for a stabilisation fund for the rouble.
Perhaps fortunately in terms of costs, the problems of east and central Europe and the former Soviet Union are not just, or even primarily, a matter of material resources. Of course, the humanitarian aid that has already gone is useful and helpful to those who receive it. However, the fundamental problems go much deeper than that. There is a great deal of natural wealth in that part of the world. In certain though limited areas there is a sophisticated technological apparatus and there is an educational apparatus within the East and Central European countries and the Soviet Union of a quite considerable degree of development even if of a rather doctrinaire background.
The supreme requirement, however, is the development of human capital and the provision of management know-how in the running of a pluralistic society and a free economy. The noble Earl mentioned the money that we have made available through the know-how funds for Poland, Hungary and Czechoslovakia. That is very welcome and has done useful work. But very much more is needed and I echo the words of the noble Lord, Lord Cledwyn, in that respect.
I noticed a recent calculation by the European Commission that Russia and the other former states of the USSR now require know-how facilities probably on a scale of tenfold over what has been done for the east and central European countries. The
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noble Earl said that one only has to think of the retraining of the former Soviet Union soldiers who are being demobilised to see the size of the problem that exists.
It is not just a question of bringing people for training in the West. That is of course a useful aspect. But more important is to send those skilled in management training in increasing numbers to the countries of the former Soviet bloc. The Japanese are already extremely competent at this kind of operation. It is therefore in our commercial as well as political interests not to be left behind.
The European Commission has what it calls its Tempus scheme for co-operation in practical fields of higher education in East and Central Europe in which the British Government co-operates. It forms part of an overall programme of community aid for the economic restructuring of those countries. At present it applies to the six countries of Poland, Hungary, Czechoslovakia, Yugoslavia, Rumania and Bulgaria. It is now necessary that this should be extended to the new republics of the commonwealth, of which the Russian federation is a part. An important feature of the European Community Tempus scheme is its openness to the participation of the higher education institutions of the Group of 24, thus giving it the possibility of engendering co-operation practically on a worldwide basis.
I know that the European Commission is perhaps not the favourite institution of Her Majesty's Government, but I hope in this particular field that the British Government will play a very positive and active part, not only bilaterally but through Community schemes.
The noble Lord, Lord Cledwyn, mentioned, as so many people do in this context, the possibility of a Marshall Plan. I should like to plead for—in a sense —an educational Marshall Plan from the West for the former Soviet bloc. Of course, I use the words in a purely metaphorical way. The circumstances are totally different now from what they were at the end of the Second World War, where there was plenty of know-how in Western Europe but a great deal of physical ruin. It is now a different sort of challenge, but it is an appropriate metaphor because we need to generate plans to give relevant assistance to those countries in East and Central Europe and in the former Soviet Union on the same kind of imaginative scale represented by the Marshall Plan. I hope that Britain will take an active part in giving that kind of lead.
3.45 p.m.
The Lord Bishop of Manchester: My Lords, those of us who live in Manchester and Liverpool have just suffered a grievous blow: we have lost our sleeper. That means that I have to apologise to the Minister who will be replying to the debate and say that I may have to make a dash to Euston before the debate finishes. Perhaps that depends on how self-disciplined speakers are, including myself.
I should like to join with other speakers in thanking the noble Lord, Lord Cledwyn, for giving us an opportunity to discuss this immensely important issue

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of what is happening in the former Soviet Union. I endorse what he said about the huge problems that remain, some of which, such as the growth of nationalism, are obvious to us all. We are all glad to see the collapse of the crude and brutal regime which was the old Soviet Union and also the old Soviet empire—the Warsaw Pact countries. When we are thinking of this issue we must take those other countries along with it. They were regimes which crushed the human spirit in many ways. Their deficiencies have been graphically outlined by the Minister, as the second speaker in this debate.
None has been more conscious of the deficiencies within the communist states than many of us in the Churches. During those years efforts were made to maintain links with people living in the so-called Iron Curtain countries. I remember in particular a book by the present Dean of Winchester called Discretion and Valour, written when he was working for the British Council of Churches. The book pointed out in its title the difficult situation that faced many Christians in those countries; needing discretion, on the one hand, in order to survive, but also valour in standing up to the evil actions of oppressive regimes. We are grateful that things have changed so profoundly.
In my own diocese we benefited very greatly during those years from links with people in East Germany. It was never easy for them to come here; it was perhaps a little easier for us to send delegations there, through our industrial mission. We learnt a lot of what it meant to live through that period.
I should like to make this point to your Lordships. There was a degree of great idealism under the surface in those countries and in the old Soviet Union before the changes took place—idealism about a better society coming in the future if only communism were to disappear. Now it has disappeared, but major questions still remain about the shape and values of the emerging societies. The most obvious danger is the growth of nationalism. We know what an immensely destructive force that can be. But in regard to the structure of societies in these new states some try to argue that the basic questions have really been answered. Has not the vision of a free society finally triumphed? With the end of the ideological debate, and one which clearly Western capitalism has won, "Is this not the end of history?" to quote the American historian Francis Fukuyama. After initial discomfort for some, will not the free market, the liberalisation of trade and the abolition of all price restrictions bring about better societies all round? That is the way in which the issue is often posed by those who say that if these countries are encouraged to follow the prescriptions of the free market then inevitably better societies will ultimately emerge.
My own fear is that this does not answer the basic questions at all. There is a real struggle of ideas and values in these emerging states and a sense that the shape which they will take in the future has not yet been determined. Reference to history has already been made in our debate. Some have said that the only lesson of history is that we learn nothing from history. hope that that is not so. As we look back in history we should learn not only of the dangers of
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communism and of the awful societies which it produced, with so much human suffering, but also of unrestricted capitalism—something which is now being urged on those societies by people who really ought to know better.
I live in a part of the world where we are still suffering from the effects of the uncontrolled free market system of the 19th century. One can see the effects all around. One can see the effects on people, the descendants of those who went through the greatest suffering. One can also see the effects on the environment. As we look back in history to what happened in the Soviet Union we have the horrifying example of Chernobyl—there are many others—yet here in this country too we cannot claim that unrestricted capitalism in the past did not produce very evil results. Many of us will remember the saying from Sheffield of the steel masters of those days, "Where there's muck there's brass". In other words, one can pollute the environment as much as one likes provided one is making money. Of course, we have learnt a thing or two since those days and things are now much more closely controlled in Western societies. Yet it seems to me sometimes that systems are being urged on the former Soviet Union without the kind of protections for workers' rights and the environment which are so necessary in a free market society.
I believe that we need to join together with those from these countries in real debate on which way all our societies ought to move. None of us can claim perfection in this matter. We need to recognise the clear deficiencies in our own Western societies and to be prepared to confess that in commending to them certain ways forward through the free market we must also take account of the negative lessons of unemployment, poverty and deprivation, of private affluence and much public squalor and the effects of economic growth on the environment. It is only as we come alongside people in these countries and recognise common problems, problems which increasingly affect our whole world, that we will be able to make progress.
We have many questions to face and to wrestle with together. How, for example, do we use the undoubted fruits of modern technology, the astonishing changes that we are seeing in the age of the "chip", so that they benefit all our citizens and not just the few? The same should apply in the former Soviet Union. The lesson is clear that trickle-down theories by themselves simply do not work; that is, the idea that if one creates enough wealth it will somehow inevitably trickle down to the poorest. That works neither on a world scale nor within the boundaries of nations.
I have been encouraged to read the newspapers today and to see reported the fine speech of Prince Charles. It seems to me that what he is reported to have said to the World Economic Forum in Davos is very relevant to the issue which we are discussing this afternoon. He appealed to business leaders not to be preoccupied with short-term profits and instead to take the lead in building a world which addresses more basic human needs than balance sheet totals. He appealed to them to reintroduce a sense of belonging,

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a sense of spirit, into the lives of our bruised communities. He warned that reliance on balance sheets and profits could ignore other features which ought to be on the balance sheet —the deep-seated relationship between mankind, his surroundings and his place in the overall scheme of things.
It was moving to read those words in the papers today. It was also a reminder of what Jesus himself said about human progress:
"Man shall not live by bread alone but by every word which comes from the mouth of God".
We need to recover a sense of the deep spiritual values which should underlie the building of new nations. In the search for economic growth, that profound truth can often be forgotten.
3.54 p.m.
Lord Ardwick: My Lords, I hope that my bronchitis, which is the effect of Manchester pollution in my youth, will not affect my speech too much today. The problems we are left with after the Cold War are greater than those of the Cold War itself. It is not only that they are more complex; they are less rational and less logical. To wage the Cold War we simply had to assume that the Soviet Union would one day attack the West, and so it was essential to construct NATO, a well armed defensive alliance of powers which recognised that an attack on one was an attack on all. Above this was the US nuclear deterrent, supplemented by the smaller British and French nuclear forces. There was one weakness—the unwillingness of some of the powers to provide adequate conventional forces and the need to use tactical nuclear weapons in flexible response. However, it all worked, and for the past 20 years at least the Soviet Union has had neither the resources nor the will to march confidently west.
Today, the Soviet Union is shattered into a dozen pieces and the communism that it practised is bankrupt and disgraced. Even those who were horrified by its denial of freedom, by its cruelty and by its corruption have been surprised by its gross inefficiency.
My old friends and colleagues Alexander Werth and Isaac Deutscher dared to hope that the Soviet Union, which had created an industrial wealth undreamt of in Tsarist days, would one day attain the living standards of the West. If those writers were alive today they might say that they never expected that the Soviet Union would cripple itself by its spending on defence.
In the past year or two the rejection of communism has been much easier than once seemed possible and the transition to democracy much more difficult. Democracy has many enemies other than communism. Famine, chaos of supply, unemployment, soldiers discharged without pay, extreme nationalism and ethnic enmity are all enemies of democracy and advocates of strong authoritarian government.
A year or two ago people spoke as if all that was required to accomplish the desired economic miracle was for the Soviet Union to turn its back on communism and create a free market economy. We now see that such a counter revolution is a mammoth
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undertaking, infinitely complex and difficult. The question we are all asking today is: how can we of the West help Russia and her neighbours in the new commonwealth to attain freedom, internal peace and prosperity?
I think that at last we are saying the right things and even doing the right things, but still too slowly and on a scale below that which is required. We have sent a lot of food, but we have not sent enough in time. Just think of the old people of Leningrad, as we used to call it, who suffered that terrible siege and now, in this bleak mid-winter, face shortages of food and must try to pay prices that make nonsense of their savings and pensions.
There is still a defect of will in the West. There is a shortage of vision. There is a narrowness of the spirit, especially in the G7 countries where the world's rich powers take counsel. I hope that in the end, when the purse is opened, the need for discipline, which is undoubted, will not be left entirely to the hidebound professionals of the IMF who can threaten to wreck governments, as we ourselves found, by their economic purity and political insouciance.
It is of course a tragedy that the former Soviet states' cry for help comes at a time of widespread economic recession. It is doubly tragic that the leader of the West, the United States of America, once the most generous of powers, should find itself a victim of the recession, at a time when it has suddenly realised that the Reagan economic policies were not a success, that its long standing double deficit was a folly and that it has been technically outshone by Japan.
All that weakening of the national self-confidence, which has resulted, has come in a presidential election year—a year, inevitably, of political caution. The failing élan of the United States is a dismaying start to the 1990s. However, I find it hard to believe that the US will not recover.
Of course, we are all concerned not only about our national problems but also about our collective problems. What is the future of NATO? What is its function to be, if any? Is there still a threat to the West? Those are questions which cannot at present be answered. Therefore, we must—for the time being, literally—soldier on, though as economically as we can. What about the European Community and its single currency? If we are later to widen the European Community as the nations of eastern Europe hope, can we really deepen it too? Again, it is a question of keeping right on course now, steadily and determinedly, and of encouraging the others.
But, above all, we must recognise that the former Soviet states will need vast sums of money which we all have to give or lend. Some people feel strongly about spending any kind of peace dividend in that way. They feel that it is a little hard that we should have to beat our swords into ploughshares for them. But we must recognise that the stabilisation of the rouble, is, above all, an urgent need. Without it there can be no hope of internal peace and stability; without it there can be no development of international trade, of the privatisation of industry and of the retail trade. As no one has any store of roubles, privatisation will require much foreign investment.

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Russian membership of the IMF is essential. It is agreed that that should take place no later than April. It would be better if they made it March. But the IMF coffers have to be filled and that will not be easy in these days of universal budgetary constraint. Yet the money must be found, and not just because we are good world citizens but because we have regard for our own enlightened self-interest. For we know that on the peace and stability of Russia and her neighbours, our own may well depend.
4.3 p.m.
Lord Colnbrook: My Lords, we are all very glad that the noble Lord, Lord Cledwyn of Penrhos, chose this subject to debate today. I am especially glad at the way in which he worded the Motion. It refers,
"to the far-reaching changes which are taking place in the former Soviet Union".
They have taken place, they are continuing to take place and I do not think that they are finished yet. That makes it extremely difficult to know how best to approach the problem.
One of the things which makes it even more difficult is the speed with which everything is happening. Last year in your Lordships' House we had two debates in which I took some part and interest. They both dealt with defence matters: one took place in June and the other in October; that is, eight months and four months ago respectively. In both debates speeches were made and much attention was paid to the Soviet Union and to Mr. Gorbachev. That was so little time ago but, since then, the Soviet Union has disappeared and it is, by chance, precisely six weeks since Mr. Gorbachev resigned. Everything is happening so fast that we find it particularly difficult. If I may say so, I believe that the noble Lord, Lord Williams of Elvel, used a good phrase in the second of those two debates. He said that,
"we cannot rely on what we say today being true tomorrow". —[Official Report, 16/10/91; col. 1119.]
He is quite right. Certainly, as at today, the world seems a much safer place than it was a year ago; indeed, it is safer. That was demonstrated at the historic meeting last week where, for the first time, I think, in the history of the United Nations, the leaders of the five countries, known as the five permanent members of the Security Council, sat down under the chairmanship of my right honourable friend the Prime Minister and pledged themselves to collective security. I do not think that that has ever happened before in the 47 years of the history of the United Nations. So, yes, the world is safer and more secure.
What about Mr. Yeltsin? How secure is he? I shall outline to your Lordships one or two factors which worry me very much in this respect. We all know that, economically, Russia and most, if not all, of the countries in the Commonwealth of Independent States are in an appalling mess. Their industries are inefficient—there is no way that they can pay their way in the world—and because their service industries (distribution and the like) are so hopeless, great numbers of their people do not even have enough to eat. Of course it is right that the richer countries of the West should help them and of course it is right to concentrate on the immediate need—avoiding
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starvation. But, in the longer term, it must also be right to concentrate on helping economic development, not just with money but also with expertise, knowledge, advice and material. However, the trouble is that that is bound to take a long time. One cannot modernise an outdated factory in a fortnight and one cannot set up a proper distribution system in a couple of months.
Here is my anxiety. Democracy, which we all take for granted, is a fine thing. Mr. Yeltsin gains great strength from having been elected. But when people exercise their democratic right to choose who shall govern them, they normally choose someone who they believe will make life better for them. At present, for an awful lot of people in Russia and in the CIS, life is not better—it is worse. They will no doubt put up with it for a time, in the hope that the situation will improve. But if improvement takes too long, trouble will almost certainly follow. What happens then?
There are two factors that we must not forget. First, I presume—although I do not know—that the administration of the country (the bureaucracy if you like) is still in the hands of the people who ran it before. It must be so, as no one else is capable of doing it. Under communism, those people had great stature and much power, but now both have been diminished and I do not suppose that they like it very much.
Secondly, there is the army. To our great pleasure and relief, vast numbers of soldiers have been recalled from the countries of eastern Europe. They have returned home where, according to many reports, many of them have to live in tents because there are not enough barracks and they have nothing to do. No doubt presently many will be discharged from the services. They will still have nothing to do and no pay either. I do not suppose that they will be very content.
If, therefore, dissatisfaction with Mr. Yeltsin rises too high, there are two important groups of people who might decide that they could do things better and take over without any reference to a ballot box. In a country unused to democracy, the votes of the people do not count for everything. Moreover, as your Lordships know, we have already seen just such an example with the people of Georgia. They elected a president, Mr. Gamsakhurdia. But when he did not do what the army hoped he would do, it threw him out and Georgia is now a military dictatorship.
I believe that I have painted a rather gloomy picture of what might happen. But I can tell your Lordships that I hope with all my heart that events do not turn out like that. I do not suppose for a moment that we in this country can prevent them; but we can help a certain amount and that, of course, we must do. Some people seem to measure our assistance simply in terms of money; indeed, if I may say so, the noble Lord, Lord Ardwick, spoke mainly about money. Yes, I agree; it is very important. But I believe that we must do other things. For example, we must have as much personal contact with those in charge of affairs in Russia as we possibly can: at government level, from the Prime Minister downwards; in industrial and commercial matters by people going there and, no doubt, seeking to trade, but also helping with their problems; by professional people, also developing and

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improving their contacts with their opposite numbers in Russia, and making available the benefits of their skills and sciences; and, in the other world, in the arts, in science, in sport, in culture and all the other areas, by maintaining and developing our contacts and, above all, by seeing that our aid—as much as we can afford—is directed properly and is given, not with reluctance, but in a real attempt to help them to overcome their problems.
At the same time, I must say that I believe that we would be mad not to keep up our guard. Things may go well. We all hope that they will. They may not. If we were to lower our guard at this stage, when the future is so uncertain, that would be extremely dangerous, because in these days—if one turns a sword into a ploughshare it can be turned back to a sword fairly quickly—with modern weapons one cannot go back. I hope that, until things are much clearer and until, as we hope, matters in Russia and the CIS are more secure, the Government will maintain our guard at a sensible level.
4.11 p.m.
Lord Greenhill of Harrow: My Lords, I share the gratitude other speakers have expressed to the noble Lord the Leader of the Opposition for choosing this subject for debate this afternoon. I pay a special tribute to the noble Lord, Lord Cledwyn, for his penetrating analysis of the far-reaching changes which have been taking place in the former Soviet Union.
I have never been a Kremlinologist, either during the Cold War days or in more recent times. Perhaps it is for that reason I believe that, in this discussion, we are in danger of attempting too much too soon on the basis of unknown facts; but I agree that in the House there are some who are better equipped to look into the future of what was the Soviet Union. Their views will be listened to with great respect. In particular, I look forward to hearing what the noble Lord, Lord Kagan, who follows me, and the noble Baroness, Lady Park, later in the debate will say. Nevertheless, one has only to remember how far Gorbachev was misjudged by the experts in the West; and how conclusions were drawn on the basis of insufficient knowledge, inexperience and wishful thinking.
Are we now running the same risk with President Yeltsin? He has made dramatic proposals, some of which are music to our ears; but who is he speaking for? Do his fellow republics agree with him, and is his own republic based on firm grounds?
President Yeltsin has rivals and critics within and without his territories. He is desperate for funds. He naturally wants to tell potential donors what they want to hear. He has a huge and dissatisfied military force which he must pacify, and democracy has shallow roots in Russia. One cannot learn to be a democracy in a few years. Nevertheless we seem to have put our trust in him; so has President Bush and so have the majority of the leaders of the Western world. But it is not wrong to treat him with care. He is taking great risks—here I find myself in agreement with the noble Lord, Lord Colnbrook—and he is
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asking the countries of the West to do so. The effect of some of his proposals on our friends and ourselves could be very serious indeed.
Alastair Cooke's "Letter from America" on Radio 4 last Sunday described vividly some of the effects on the United States industry of the proposed defence cuts; and the US Defence Secretary echoed that concern. No one can question, in principle, the desirability of arms reductions, but the speed of change must be controlled. I was horrified to read in the press yesterday that President Yeltsin was thinking of putting second-hand arms on the open market.
In my view, the Motion is in many ways too narrow. The changes in the former Soviet countries are not the only momentous events which are likely to affect us internationally in the immediate future. We have to think of China—a change cannot be long postponed there—of events in the Pacific Basin, the Indian sub-continent, the Middle East, with the menace of Islamic fundamentalism and the obstinacy of Israel. We must also consider South Africa where, if events turn out successfully, there will be a tremendous demand for financial help; and then Latin America is, in some places, an unknown quantity. The under-developed world is in competition with President Yeltsin for aid from the G7 countries. The noble Baroness, Lady Ewart-Biggs, and I heard yesterday one of the leading members of the World Bank admit that the demands from the Soviet Union would, in the end, undoubtedly affect the developing countries.
There are still uncertainties in Europe itself. All those areas are in the process of fundamental change, and we must try to prepare for the unexpected. Of course, we have to act with our friends. We are doing so. We have high hopes for a reform of the United Nations and are pursuing that policy. But is there not one area within our own control to which we should give urgent and priority attention? I refer to our own United Kingdom. No one can be satisfied with the state of our affairs. Our condition is surely capable of improvement if we seek, more effectively, some measure of consensus, and not only in international affairs. I know that this is anathema to some, but the recent television series on Winston Churchill must have reminded many how much can be achieved by a truly united country. It is too late to alter the tone of the run-up to our own election, but, whichever party wins, I hope that the new government will dispense with the luxury of mutual abuse and try to lead a truly united effort. Unless we do so we shall be without influence in the face of the unparalleled worldwide developments which will characterise the next decade.
It is unduly optimistic to think that membership of the European union will be a panacea. It may help, but there is no certainty of that. In our own interests more can be done only by the simple expedient of helping ourselves. Can we afford to go on conducting our affairs in the confrontational way that we now do?
4.18 p.m.
Lord Kagan: My Lords, we are grateful to the noble Lord, Lord Cledwyn, for having made it clear that the problems that the successors to the Soviet Union face

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are not just those of credibility, but proof that democracy works. They are not problems where we can afford to stand aside. As someone in Lithuania pointed out to me, "Eventually, if we catch cold, you will sit at home and sneeze, as we did in 1930".
Poland with Lech Walesa was the first country to shake off the Soviet yoke. That seemed to be a pilot experiment. I am saddened to quote Lech Walesa who addressed a conference in Strasbourg yesterday and said:
"The fruits of our actions have gone sour".
Poland was the first; it is now steadily inching towards nationalism and xenophobia. It is accusing the West of more or less having conned it. Although Walesa himself does not say it, he said in Strasbourg yesterday that many people in his country were asking, "What was it all for? It was better before".
Can noble Lords imagine what it would mean to us in the western world if that mood spreads across the whole of the commonwealth of independent states? We desperately need proof that democracy works, but the answer will be, "Well, there are between 250 million and 300 million people in the old Soviet Union. How can we raise their standard of living quickly enough for them to see that democracy works?" If we cannot do it throughout the whole Soviet Union, perhaps we could do it in one little country.
I put to the noble Earl that Lithuania is near to break even point. To effect an improvement in this state would he neither costly nor difficult. There is no imminent starvation, but there is a visible decline in the standard of living because under Stalin and Brezhnev Lithuania was the country with the highest standard of living in Russia. Therefore it was not at the bottom of the pit. However, now, people are watching. They have dismantled the old system but the new one has not taken root yet, apart from the mafia, to which I hope to return later. The country receives very little help but most assistance would not cost very much money. Lithuania could be helped to start up again. The people find themselves almost cut off not only economically but spitefully from Russia because the Russians have not forgiven the country for being one of the first to start the domino movement which broke up the Russian Empire.
What is necessary first is transport. It takes six weeks for a container to go from London to Vilnius or from Vilnius to London. There are no direct ship connections. In order to establish a connection, we do not have to buy ships; all we have to do is to link two ministries, the new infant ministry of transport in Lithuania and the Department of Transport in England, and persuade them to get together. That would not be expensive because a British lorry arriving in Vilnius today can pick up 34 gallons of petrol for one pound sterling. It could even make a profit.
Secondly, it takes almost as long to get to New Zealand as to get by air to Vilnius; normally it is a two-day trip. However, one does not have to buy aeroplanes to try out a direct route, albeit with flights once a week, from London to Vilnius. It could be economical and profitable because Vilnius would be a
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staging post towards Kiev, Minsk and Moscow. The airfield exists: it is an old military airport which used to take Soviet superjets. Instead of servicing costing £8 an hour, as it does at Heathrow, it would possibly cost £1.50 per week. It is a matter of two bureaucracies grinding to a halt.
We hear much about a know-how fund and sympathy. When Landsbergis and Lithuania tried to break away from the Soviet Union, in the beginning he was never off the television screen, now that has all finished. Perhaps I may make a practical suggestion to the noble Earl. Will he approach his friends to see whether they can take measures which do not cost money, only goodwill in cutting through bureaucratic knots? It should be stated that the Lithuanian Government are grateful for the return of the gold which belongs to them. It will go a long way to help them re-establish their currency.
An interesting phenomenon is that in Leningrad there is much humanitarian help in the form of food parcels. Guess who has been appointed to administer that aid? A German general who was highly decorated in Nazi Germany, who knows Russia from having lived there for two and a half years. In order to make distribution more efficient, he is now recruiting officers who served under him. Is that not a wonderful result of the Second World War?
The Germans are the ones who are rolling up the Soviet economy like a carpet. I shall give your Lordships a concrete example. An oil well was working at 18 per cent. of its capacity. The Germans, in collaboration with an East German firm, approached the management and did a deal. They said, "If we can improve the efficiency of that oil well, we will guarantee your 18 per cent., plus half of the increase". The only investment the Germans had to make was to introduce six East German technicians whose second language was Russian which they had known since they were seven years old. They took over the management of the "combinato", the complex. They have achieved 48 per cent. efficiency, which means that the Russians are already 15 per cent. better off, and the surplus which they export to Germany pays for new equipment. They estimate that they will achieve 85 per cent. efficiency. What a wonderful way of managing a business. I do not know whether Bismarck is up in heaven or down below, but he must be full of joy because his dream is coming true: that is, German industry, German know-how, Russian raw materials and Russian labour. So they leave the glory of the humanitarian help to us, and the Germans will end up owning the place.
The right reverend Prelate the Bishop of Manchester hit the nail on the head when he said that if Bolshevism was evil, the view that democracy is perfect is fallacious; it is wrong. As recently as a few weeks ago, when I was in Lithuania, I observed that there is a strong move against the present government, a mood which is reminiscent of 1930. Mr. Landsbergis is an academic, a democrat through and through. There is no doubt about that. But the currents could be felt underneath and if there is a change it will be towards nationalism, xenophobia and fascism.

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At this stage I should like to mention a matter which I am sure will be of great interest to the noble Lord, Lord Waddington.
Lord Cavendish of Furness: My Lords, will the noble Lord give way? If he speaks for any longer this will affect the length of the speeches of other noble Lords. I wonder whether he would draw his speech to a close?
Lord Kagan: A few weeks ago the Lithuanian Government passed a law that they would give bravery medals to those Lithuanians who risked their lives to help Jews during the war. That is an indication of what they are like now.
4.31 p.m.
Lord Boyd-Carpenter: My Lords, I will not follow the noble Lord, Lord Kagan, in his deeply knowledgeable analysis of the situation in Lithuania, except perhaps to say to him that, if he is right in his suggestion that there is a remunerative air route between London and Vilnius, it has only to be displayed to the our airlines for several of the enterprising ones to apply for a licence to operate it. Therefore, if he or the Lithuanian authorities think there is a case for that, I suggest that they make it in an area where they will certainly get a vigorous response if they are considered to be right.
I am sure that all of your Lordships are deeply indebted to the noble Lord, Lord Cledwyn of Penrhos, both for his choice of subject for this afternoon's debate, and, if he will allow me to say so, for his wholly admirable speech in opening it. It was noticeable that in that speech there was not a hint of domestic or party politics. It was a broad analysis on an entirely detached basis, wholly free from party political touch. If I may say so, that is more than can be said for the observations of the right reverend Prelate the Bishop of Manchester.
With respect, I would differ from the noble Lord, Lord Cledwyn, only in that he said that the present situation was one for jubilation. I profoundly hope that he is right, but I am not so convinced. The situation in Russia is very doubtful indeed. The Russian people are being exposed to great increases in prices, increases in the cost of living, and difficulties in getting food; and, although for a short while they may accept that that is necessary in order to secure some improvement in their general well-being, I do not think that they will do so for long.
Various factors are operating in Russia which may make the whole situation highly unstable. Above all, there is the question of control of the armed forces. It is far from clear that Mr. Yeltsin has control of the army. I do not believe that he has. The same is almost certainly true of the air force and, as your Lordships know, there is already a dispute over the control of the navy between the Ukraine, which wants control of the Black Sea fleet, and some amorphous body which is to control the larger fleet based on Archangel.
Until it is clear who controls the armed forces of the Soviet Union, there must be a great element of uncertainty in the situation. We cannot rule out the
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possibility—particularly if public discontent builds up as a result of increasing prices—of a military coup establishing a military dictatorship. History does not repeat itself, as Philip Guedalla put it. It is not that history repeats itself but simply that historians repeat one another.
One cannot help looking at the precedent of the French Revolution in which, with enormous joy and vigour, a tyrannical monarchy was overthrown, and after a number of years Napoleon and a military clique emerged in control of the country and plunged Europe into 15 years of war. I do not want to suggest that there will necessarily be a repetition of that, but it is surely a warning to us not to be too optimistic, and to be extremely careful.
I strongly support what was so well said by my noble friend Lord Colnbrook a short while ago to the effect that the situation is not one in which we would be right to lower our guard any degree whatever. I hope that for the time being we shall maintain our defence forces at their present level and, if it seems necessary, make increases in them, particularly in the sensitive area of the proposed reduction in the number of regiments and battalions in the Army.
Another element of great uncertainty in Russia is what will happen to the army even if it does not move to take over. There is an enormous number of troops many of whom have no homes to go to. If they are demobilised they will be unemployed and possibly homeless. On the other hand, the expense of maintaining a huge army such as the present one must be oppressive to the strained finances of the Soviet Union. I shall be interested, as I am sure will all of your Lordships, to see what solution the Russian government seeks to establish.
There is the even more delicate and difficult issue of their enormous nuclear armament. We are told that they will reduce it, as I hope they will, but it is not altogether an easy matter to reduce a large nuclear set-up. Disposing of the material can be difficult, prolonged and dangerous, and it is not easy to do.
Still more important is the question of how they will dispose of the nuclear technicians. I saw quoted the other day that they have some 100,000 well-paid people skilled in producing nuclear explosives and nuclear missiles. What will happen to them? Are they likely to be lured to countries which want to develop nuclear weapons such as Libya, Iraq or Iran? If they are, will they not be a great danger because they are highly skilled and knowledgeable, and perfectly capable of producing nuclear weapons in other countries? We want to know what is proposed to be done about them. Will they be pensioned? Will they be confined to Russian territory, or will they be free to sell their valuable and expensive services in other parts of the world? These are very serious questions which require to be resolved.
I very much hope that the degree of pessimism or degree of caution that I have indicated will prove to be unnecessary. However, I do not think there are many people who believe that Mr. Yeltsin will be there for a very long time, and there are even fewer people who can speculate as to who might be his successor. Of course, we shall need to give what help we can. I

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wholly agree with what was said earlier this afternoon about giving help, but we shall need to be very vigilant as to the developments that are taking place. It is for that reason in particular that it is so good that your Lordships' House has been discussing the matter this afternoon.
The mood is one of cautious and controlled optimism. There is also an awareness that we should make sure that we deal with the delicate questions, particularly the question of what we are to do if a military regime is established in Russia and what we are to do to secure the clearing up—which will take many years—of the enormous nuclear establishment.
4.40 p.m.
Lord Jay: My Lords, there are two points worth making in relation to the economic problems of the ex-Soviet countries. First, I record my support for our own Prime Minister's positive attitude to the calls for help which have come from the ex-Soviet governments and some surprise at the argument recently put forward in a television programme by a representative of the American Treasury, which seems to be the attitude of the American Government, in favour of postponing help until the former Soviet economy has been almost completely transformed.
That latter attitude seems to show a curious misunderstanding of the economic realities involved. What those stricken economies need is not a prize for good behaviour after their economies have been transformed but food in particular and fuel now in order to avoid a worse disaster. When General Marshall offered aid to the Western countries in 1947 he did not say, "we will give you a prize for good behaviour after your economies have been rescued"; he said, "you need help now and here is the aid you need, provided you use it in a sensible fashion". I am reminded also of the period when Roosevelt offered us Lend-Lease during the war. He emphatically did not say that we would have the aid after the war was won. He said that we needed it immediately and made a famous comment about lending one's neighbour a fire extinguisher when his house was on fire.
In the former Soviet countries today people cannot build factories or install machinery, or for that matter grow crops, unless they have food to eat and fuel for transport and other purposes. Some assistance from abroad will have to come from the huge EC supplies of surplus grain. The difficulty there is that that grain has been bought at such a high intervention price that if it is given or even lent to the countries of the former Soviet Union at world prices a huge cost will fall on the EC authorities. There is no solution to that problem other than to pay the cost or to bring down the intervention price.
Basic aid must be forthcoming now. I hope that the IMF and the World Bank will be brought in at an early stage and that the Russian Government will become a member of those institutions, making a possible stabilisation fund easier to set up.
Secondly, in relation to the underlying problem of the former Soviet economies—namely, food supplies, which is still the major problem—it is conventional to suggest that the Russian food shortage is due to faulty
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organisation and bad distribution, made worse at present by the political chaos. That is true enough, but it is only an additional part of a stubborn underlying physical problem which is often ignored. Looking at the map encourages the illusion that there are vast territories in central Asia which could produce food. In fact, in the entire area eastwards from the Ural Mountains to the Great Wall of China there are very few areas, except Sinkiang which is in China, where large quantities of grain can be produced. That is due to purely climatic reasons—there is not enough time between the frost in the spring and the frost in the autumn.
For a number of years in the 1950s Mr. Khrushchev tried hard to produce maize in the virgin lands of what we would call central Asia, using modern resources and a great deal of American technical advice. That effort was largely a failure because of the climatic conditions. Therefore, in the short term at any rate, the bulk of the grain must be grown by the Soviets themselves in the area west of the Urals and south of Moscow.
It is sometimes mentioned that in 1914, under the Tsarist system when the population was only some 120 million, enough wheat could be grown to supply the whole population, at a very low standard of living. Today the population of those areas is almost 290 million. Even though very much more wheat is produced in the former Soviet countries than in the United States—which surprises some people—there is no margin for feeding stuff for animals and therefore there is a chronic shortage of meat and dairy products. Even in 1990 the ex-Soviet countries produced 108 million tonnes of wheat and the United States only 78 million tonnes.
I have never forgotten the experience of standing in a field on a collective farm south of Moscow in 1955 and being surprised to see a herd of cows eating wheat shoots only four to six inches high. When I asked the farmer why he allowed his cows to destroy the young wheat he said that there was nothing else for them to eat. That taught me a great deal about the Soviet economies at that time.
People are puzzled by the fact that the countries of the former Soviet Union produce so much more wheat than the United States and are nevertheless short of food. The reason is that the United States produces huge quantities of feeding stuff, mainly maize, which enables its population to have meat, dairy products and so on and therefore to eat very much less wheat or bread per head than the Soviet people, who have nothing else.
The only way out of that vicious dilemma, at least in the short or medium term, is for the former Soviet countries to import feeding stuffs on a major scale. If feeding stuffs are to be imported on a large scale very soon they will have to be paid for. That should not be impossible because the former Soviet areas are also potentially some of the world's largest producers of oil, gas and gold. If those industries were run efficiently, at least in the medium term, the countries would cease to have chronic food shortages. Surely in the modernisation of those industries the West could give maximum assistance with technical advice,

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capital and equipment. I should have thought that that was a case for the World Bank, which has been involved in enterprises of that kind all over the world. It would be an economic enterprise because it would be investing in potentially very valuable and revenue earning assets.
At the same time the West must accept more readily any other exports which the former Soviet countries and the countries of Eastern Europe can sell to them. It is no good asking them to pay for imports of food if we refuse to accept their exports.
For the past 2,000 years or so Asia has been exporting its population to the West. If that is now barred a great deal of food has to be exported from the West to Asia. In all the ways that we have heard today, and in others, I hope that the West will give maximum support to enable that to happen.
4.50 p.m.
Lord Selsdon: My Lords, when I was preparing for this debate, I suddenly realised that over the past year we have witnessed—some with pleasure, some with glee and some with shame—an event of great sadness. We have seen the destruction of an ideology—one of many views which, when first formed, was probably genuinely held. That ideology, supported by socialist groups throughout the world, led perhaps to the writing by Eugène Pottier of "L'Internationale" or the stirring words of "The Red Flag" by James Connell.
I had wondered, and I was reminded of it when my noble friend the Minister referred to its hauling down, where the red flag came from. Why had it been adopted as a symbol for an ideology that was perhaps ultimately lost and destroyed because of the forcible and undemocratic way in which it was imposed? I had difficulty finding out its origin. It is almost like the Cap of Maintenance; no one seems to know. I am sure that during the course of the debate, noble Lords opposite who have adopted the red flag as their ensign will be able to tell me its origin. I believe that it first came into prominence not in the 1830 revolution in France but in 1848 when an attempt was made to impose it on that country. It was resisted by a poet, Alphonse de Lamartine, who said,
"I shall resist to the death this flag of blood and you should repudiate it more than I, for the red flag you bring has been dragged through the blood of the people".
It is not the blood that was shed in the past that worries me now; it is the blood that may be shed now as fathers turn against sons, brothers against sisters and families against families. As my noble friend said when opening the debate, the former Soviet Union is a vast country where cunning and subtle force may have maintained policies which would long ago have been overthrown if a democratic light had been allowed to prevail.
The worries are not that we are dealing with an uneducated, incapable group of people. I have great admiration for the Russian mind and how, in retaining its power, it moved young men to serve in armies thousands of miles away, though it divided and ruled, denied information and destroyed writers, poets and others who could have spoken out publicly. I am surprised too how suddenly that cunning mind has
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started to open up and how on television, day after day, there are programmes reflecting all shades of political hue that draw attention to the country and its plight.
We are in a very serious and sad situation. The events now taking place are happening during a world recession. It is a time when the level of trade is low, currencies are weak and transport and organisation bad. There is relatively little opportunity for the development of international trade. A further economic depression from the East may drag us down even further. There are, however, signs of hope. I draw only on my own limited personal experience. I have had the privilege of serving consecutively on the East European Trade Council under two former Leaders of your Lordships' House, the noble Lord, Lord Shackleton, and the noble Earl, Lord Jellicoe. I wish that they were on the list of speakers today because of their great knowledge and experience.
The mistake that we may make lies in failing to recognise how advanced in many areas are certain sectors of Russia, if I may use that term to cover all the former Soviet Union. Technology, brains and experience have in general been used within the military sector which is capable of doing more than just manufacture military hardware. They have been used within the sector of the KGB, where two industries—if one may call them such—have been destroyed. There is a surplus of highly skilled technical people who lack only one thing—a private sector environment in which to use their skills and probably a democracy and capital finance to get them under way. The danger is that many of them may be enticed abroad in a monumental brain drain. The noble Lord, Lord Boyd-Carpenter, has already drawn attention to the danger in one particular technology. Those people may leave behind a vacuum which cannot be filled—a professional and, if I dare say so, a middle class virtually wiped out.
I wonder what the future philosophy and politics will be. The right reverend Prelate the Bishop of Manchester drew attention to the dangers of capitalism, but I am not quite sure what is socialism. I understand the policy of my party because that is fairly clearly defined. I am not quite sure what we expect to see in Eastern Europe and Russia. There are dangers that if we are not careful a free-for-all will take place, as is happening at the moment. Although it is apparent that there is no economic activity, large groups of individuals are emerging as private sector entrepreneurs. There are large resources which have been stored under beds for years, a level of hard currency tucked in almost every mattress. For instance, visitors normally pay taxi drivers in dollars which have certainly not been re-exported. I do not know how such initiative can be brought to bear during a recession without resources.
The call for bilateral aid is a natural one. But if the system cannot receive it, as has often happened in the third world, much of it will be wasted. There are opportunities now to consider a whole range of new bilateral rather than multilateral trade initiatives. It is almost as though at the moment the biggest growth in the world is that of the diplomatic corps. There will be

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a need for more ambassadors and officials than ever before. But there are opportunities to institute bilateral trade deals with smaller countries, going back to the old tradition of trade finance. I urge the Government to give special consideration to recognising the significance of good trade in providing political stability. That does not mean bribing people to buy British goods. It means looking practically at new instruments which might be brought in. The second world, if I may so call it, is not decadent and incompetent. The East European banking system was highly regarded by many in the banking world before floating exchange rates and interest rates destroyed the stability of anything one planned.
We need an initiative, which I know that the Government will encourage. I return to the question of policies, politics, flags, flags of convenience or whatever. I do not deny that I am a Tory; I am certainly not a red. I feel a lot happier that my noble friends are on the Front Bench at the moment and that we have a Conservative Government at this time.
4.58 p.m.
Baroness Ewart-Biggs: My Lords, I too should like to say how very much I appreciate the opportunity to debate this afternoon this all-important topic. I am grateful to my noble friend for having given us that opportunity and also for having presented his Motion in such a strong and comprehensive fashion. I cannot endorse the words of the noble Lord, Lord Selsdon, at the end of his speech, with which I obviously cannot agree. However, I entirely agree with both my noble friend Lord Cledwyn and the many speakers who said that it is imperative that the economic stability of the Commonwealth of Independent States must be given support. As my noble friend rightly said, it will not help posterity for the West to stand aside at this moment. It is important to give practical assistance to help rebuild the economies of Russia and the republics.
Many noble Lords have spoken in favour of currency stabilisation. They have described how that would be important in defending the rouble and in preventing runaway inflation. I entirely agree. At the same time, emergency assistance on a large scale is of the utmost importance to help Russia and the republics keep in place social safety nets to prevent economic reform being undermined by mounting poverty and social unrest, as might so easily occur. My noble friend Lord Colnbrook painted a gloomy picture of what would happen if Mr. Yeltsin fails to structure realistic economic programmes and as a result loses his position as the head of Russians to someone much less sympathetic to the West.
It must be right, as well as in the interests of the West, to help to rebuild those shattered economies. My noble friend Lord Jay made out a good case for urgency. He also pointed to the role that the World Bank plays. As the noble Lord, Lord Greenhill, said, we heard yesterday from the president of the World Bank of his intention in that regard.
Many noble Lords have spoken of the value of know-how funds in strategic sectors. The noble Lord, Lord Thomson, spoke of human capital. It is true that
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the wealth of the Commonwealth of Independent States must lie in the ability of its people. The noble Lord, Lord Selsdon, referred to that.
It is essential to assist in training the trainers who have so much responsibility at present. Technical assistance is badly needed to build better roads and railways, and to establish a legal and taxation system, a banking and financial network, and, most urgently, a system for the distribution of food. One cannot believe that there is a shortage of food overall in the CIS, but there clearly is a serious shortage in certain areas. That points to the lack of a distribution system. The system needs to match the fundamental change to a market system and all that it entails. It is surely in the interests of the West to assist in establishing such a system.
The right reverend Prelate the Bishop of Manchester in his interesting speech spoke of the shape and values of the new states and whether we are in a position, standing as we do at the centre of capitalism, to teach them everything. He referred to a speech made by Prince Charles in Davos about profit not being the only factor but the sense of belonging to society being of enormous importance. That is an important factor. With that in mind, I wish to point to one specific field in which I believe that the United Kingdom can provide assistance and advice. It is the establishment of a strong framework for voluntary action in Russia and the republics.
A strong voluntary structure framework in those countries would provide a forum for people not only to help each other, and promote a sense of belonging—the right reverend Prelate spoke of that—but it would also absorb offers of assistance which are coming directly from concerned individuals in western Europe. At present these countries are not in a position to use the generosity which is being offered from around the world.
It is clear that a free economy revolution has brought on a consequent vacuum in social provision which indicates the importance of a vibrant voluntary sector. In this country we have seen how that has taken the place of some of the state welfare systems that we knew. We have a well-established system and are therefore well-placed to assist in that field. Already an agency called Charity Know-How has been set up. It is funded by the Foreign Office, and foundations and trusts. The purpose of the agency is to support local groups in Britain to advise and assist the struggling, re-emerging voluntary sector of central and eastern Europe and the republics of the former Soviet Union.
I give noble Lords one example of how that is done. The Oxford Council for Voluntary Action has established a link with a university town in the Urals called Perm. About two years ago contact was made between an organisation in Perm, the university town, and the Oxfordshire voluntary action group. It is now approaching its second phase. The purpose of the programme will be to continue to develop working relationships between the voluntary sectors in that university town in the Urals and Oxfordshire. Its purpose will be to help the Russians establish a system of voluntary action which will better serve the new

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pluralist society which is emerging. The group will assist with exchanges, secondments, consultancies and seminars. It will provide a strong base, and may establish a pilot system that other voluntary organisations within the country may wish to follow. It may help to set up a vital framework in the Commonwealth of Independent States to fill the social provision vacuum and enable people to help each other.
The scheme will be in keeping with what Mr. Yeltsin said when he was interviewed by Mr. David Dimbleby on television. He was asked whether the people of the former Soviet Union were sensitive about receiving aid from Western Europe. It was a good question. Mr. Yeltsin answered in a sincere way. He said that the people of the former Soviet Union saw help from the West coming from one people to another. That is why I believe that a scheme such as that which the Oxfordshire voluntary action group has set up is of enormous importance, and it needs all the support that it can receive.
5.8 p.m.
Lord Harmar-Nicholls: My Lords, the scope and significance of what has occurred in eastern Europe over the past 12 months cannot be exaggerated. It is significant from every point of view. It beholds every government, in particular those in the West, to ponder deeply when deciding how best they can contribute towards preserving and strengthening the good that has come out of those events while trying to overcome the bad and dangerous developments. Indeed, my view was reflected absolutely in the speech of my noble friend Lord Colnbrook and the noble Lord on the Cross-Benches, Lord Greenhill of Harrow. Their speeches encompassed the aspect of helping the good developments and gave sensible warnings on how to deal with the bad. The bad factors must not be overlooked. It does not flow against the general mood to pay attention to them.
I believe that at this stage the Government's watchword should be "vigilance". They must take into account both aspects of what is likely to flow from what I have called "those happenings". They must recognise that there is a mixture of good and bad in the new circumstances and that the failure to separate those two elements and to deal with them properly could mean danger to our way of life and even to our very existence as individuals.
The good is clear enough and has been referred to many times. The theoretical side of communism attracted, indeed seduced, many able and high-thinking people, in particular those involved in politics. It has now been disclosed that in practice communism has reformed, and that is good. It had many attractive elements and I agree with my noble friend Lord Selsdon that it attracted many people whose standards were of the highest. However, as has been shown by the happenings of the past 12 months, the practical results have removed the blinkers. That can mean only that the people who were perhaps on
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the wrong track for the highest of reasons will now use their endeavours to try to find a more practical solution to future problems.
The disclosure can be good only if those who were wrongly directed and enthusiastic now use their best endeavours to make work what I call mixed democratic capitalism. That is the alternative to what has been proved to have feet of clay. We all have our views on the detailed ingredients which go to make up that democratic capitalism. One sometimes meets members of opposite parties and in discussions says what one means without trying to score points. On such occasions I am always most impressed with how near we are to what we wish to attain and often how near we are to the methods that should be used. If the enthusiasm that, certainly on the home front, has been split in two directions can be channelled into one, that can be only for the good.
I speak as a Back Bencher who has watched the way in which Parliament works, by sitting in it, for 42 years. We must learn and put into practice the fact that it is not a weakness to enter a system of give and take. It is not weak to give nor arrogant to take if whichever choice is made is carried out in a spirit of true belief.
In my view, one of the sad developments in the United Kingdom in parliamentary terms has been the absence of bipartisanship on political and economic issues when all sides should have forgone the exhilaration of unnecessary confrontation. For example, I do not enjoy hearing many of my political friends, whom I admire for their energy and interest in such issues, decrying the leaders of the opposition parties of the moment because they are no longer supporters of CND and are facing up to those problems in a different way. I do not believe that in those circumstances such people should be decried. We should have sufficient confidence in our colleagues' genuine approach to these matters to recognise that there is a considerable effort in changing direction to that extent. Therefore, I do not enjoy seeing my friends clash with people who are part of our parliamentary system—in Government or Opposition—when we are seeking the right answers. Nor did I enjoy hearing that when such subjects were debated in the other place not one Labour Member went into the Lobby in support of the building up of our defences in certain respects. There was no need for that. They were aspects upon which, deep down, we were united.
With that in mind I believe that the best contribution we can make is to work our parliamentary system genuinely. We should not feel that the only way in which one can win is by inflicting grievous bodily harm on some opponent who happens to think differently on detail but who, deep down, has the same feelings of patriotism and the desire to do good. I suggest that anyone who reads this short debate should look with care at the speeches made by my noble friend and the noble Lord on the Cross-Benches. Together they gave the kind of guidance that it would be sensible for us to follow.
In welcoming the good in the happenings of the past 12 months one should bear in mind, for instance,

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that under the old regime that perhaps we were glad to see go for one reason or another, a law was implemented banning nuclear scientists from leaving the country until five years after finishing their work. I wonder whether that law will remain. After being told that Iraq was within 12 months of building a nuclear bomb I do not want that knowledge to be scattered.
I hope that we shall be able to find a way through the sorting out of what is good and bad and support it in the proper proportions. Because I believe that we in the West are able to do so, I welcome the initiative of the noble Lord, Lord Cledwyn, in giving us the opportunity to let all those who care to read the debate know how this House, the House of Peers, feels about these matters.
5.17 p.m.
Lord Cocks of Hartcliffe: My Lords, I was pleased to hear the noble Lord, Lord Harmar-Nicholls, denounce the offence of political grievous bodily harm. However, I did not hear him say how many previous offences he asked to be taken into consideration. I supported his comments that our debate about the position in the former Soviet Union is important and timely. I am sure that we are grateful to my noble friend Lord Cledwyn for the way in which he introduced the debate.
I have spoken previously in this House about what I consider to be an obsession with the State of Israel. It is the size only of Wales and has a population of some 5 million. I thought that today we should be free of any reference to Israel. I was, quite frankly, astonished that the noble Lord, Lord Greenhill, managed to work into his remarks the phrase "the obstinacy of Israel". I would much rather he had mentioned the fact that some three-quarters of a million Jews have now managed to leave the Soviet Union to settle in Israel, although thousands still have difficulty in leaving.
It was said earlier today that democracy works. However, we should remind ourselves that our democracy has evolved over a long period of time. When one looks at The Times handbooks for the general elections held before 1929 one sees that the electorate was split into men and women. That was because it was not until 1929 that every adult in this country over the age of 21 had the vote. We should remember therefore that that happened only comparatively recently.
When I was Government Chief Whip in another place I once drove on to the M.4 leaving Bristol. I gave a lift to a young man who unfortunately recognised me. He spent the entire journey to London denouncing the police and saying how corrupt were politicians, councillors and the whole works. When I dropped him off in Parliament Square, I said, "When you have finished your anarchist board meeting", because he was on the editorial board of an anarchist newspaper, "you might just think to yourself in how many countries of the world you could travel with a senior government Minister for over two hours, denounce every established instrument in society and
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he drops you off and does not even ask you your name and address". We have something very valuable in this country which we should appreciate.
Much has been said about the former Soviet Union but we should remind ourselves that things were not so hot when the tsars were in control. I am sure we all know of the sufferings of the Russian peasants and serfs and the appalling conditions of people who were dragooned into constructing buildings such as the Hermitage Palace. There is a certain stereotype about that. In fact, the noble Lord, Lord Selsdon, was an extremely good audio-visual aid for your Lordships in putting forward some rather prejudiced views. I take this occasion to remind the noble Lord that when he was but some two years old, the Conservative Government of which he is such a strong supporter, under Prime Minister Neville Chamberlain, wanted to take this country to war with the Soviet Union over its invasion of the Karelian isthmus to get some room to protect Leningrad. At the same time, we were at war with Hitler. That would have been an extremely notable double. Fortunately, we were saved from that situation by the good sense of the Scandinavians who denied us access over their territories or waters.
I grew up during the war and I followed closely the fighting on the Russian front. Names like Smolensk, Kursk and Kharkov still mean a great deal to me. When one considers the heroic efforts of the Red Army and, indeed, the entire Russian population at that time—quite recently we have seen details on television about the siege of Leningrad and the appalling suffering which took place—there was something about that country which made its people fight in the most extraordinary way.
When one looks at demographic projections, the estimates about how many Soviet citizens lost their lives during the last war vary between 15 million and 30 million. Therefore, it was not entirely a write off, however much we may decry the system which organised the country.
We are faced with a dangerous situation with the disintegration of the former Soviet Union. To my mind, because there are so many variables and different situations, it probably poses a larger threat to world peace than during the comparatively stable conditions of what was termed the Cold War. As the various republics become independent, so they are riddled with all kinds of problems which threaten the stability of the whole situation.
The tensions which are developing between Russia and the Ukraine have already been referred to. The question of who is in control of the massive stockpile of nuclear weapons is extremely serious, as are the recent reports which we have seen about the sale of arms in order to raise money for essential supplies. We read in the newspapers that tanks are being sold by weight. I believe that the going rate is 10,000 dollars per tonne of tank. That is a really dreadful situation when we consider the way in which we have tried to control the sale of arms to unstable or undesirable regimes in the past. Therefore, the situation is fraught with danger.
People are not rallying to the new commonwealth as one would have hoped. They still pledge allegiance

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to the old republics. One can understand that when one looks at the history of this country. That has evolved over a long period of time and yet we still have problems in Northern Ireland; the Scottish devolution opinion poll results have recently caused comment; and I believe that there is even a vestigial attempt to stir interest in devolution in Wales, although that will probably not come to much. However, those matters are all indicative of the strains which will arise once that superimposed authority has been removed.
The noble Lord, Lord Boyd-Carpenter, referred to the problems between the Ukraine and Russia and the problems of the Black Sea fleet. Those appalling problems must be faced. One can only offer sympathy because there is no question of any influence other than by offering advice. We are obviously in no position to offer any solution.
Violence is erupting in places like Georgia. Sometimes one wonders whether there is any part of the world where one will not switch on the television and see some kind of scene of disorder and public disturbance. Some people in the West are pleased to take credit for the demise of the Soviet Union—what is termed the fall of communism. However, if we have played any part in pushing that forward, possibly by example, at the same time we carry an extremely heavy responsibility to make sure that in the end the results are beneficial, not only for ourselves and the rest of the world but for people who are following our example.
We must understand that, while we take our democracy for granted, it is a very delicate plant. It has been nurtured over a long period of time. We must be careful that simply because people can go and cast a vote, they do not think that that is democracy which entails, automatically, a whole swathe of benefits in personal, commercial and financial terms. Those other matters follow from that. The greatest danger which we now face is rising expectations. People believe that because they have embraced the system, everything else will automatically follow. That situation must be dealt with with the utmost delicacy and sympathy and, wherever possible, practical assistance.
5.28 p.m.
Lord Pearson of Rannoch: My Lords, I join other noble Lords in thanking the noble Lord, Lord Cledwyn, for tabling this Motion. I must apologise to the House that I may not be here at the end of the debate because I have a long-standing commitment.
In the time available, I feel that I should concentrate on what is perhaps the Soviet Union's most tragic aftermath; that is, the continued aggression by Azerbaijan against the Armenian enclave of Nagorno-Karabakh. That situation is not just very tragic but has wider and more dangerous implications, as I hope I shall be able to show.
It is my noble friend Lady Cox who has taken much of the international lead in exposing Azerbaijan's behaviour. It is regrettable that she cannot be with us today to speak to your Lordships in person. She has asked me to apologise for her absence, and to say that she is in Washington with leaders of the Armenian
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community in Nagorno-Karabakh, briefing United States political leaders on the present situation in the Trans-Caucasus.
My noble friend Lady Cox has led no fewer than five international delegations to the area in the past eight months under the auspices of the Sakharov Foundation in Moscow and Christian Solidarity International. Her absence today encourages me to pay tribute to her for the high personal courage that she and her delegations have shown, especially on her last two visits in January of this year. For example, on her penultimate visit from 3rd to 8th January, given the state of the conflict, she and her delegation had to walk the last seven kilometres through the snow to reach Stepanakert, the Armenian capital of Nagorno-Karabakh, carrying some 10,000 dollars worth of medical supplies. They found Stepanakert under siege from Azerbaijan, which had cut off its water supplies, electricity and communication with the outside world. Amputations were being performed without anaesthetic, which had run out long ago.
Despite statements on Azerbaijani radio that it regarded my noble friend Lady Cox as an undesirable alien, warning her not to overfly Azerbaijani air space, she flew back by helicopter into Stepanakert with £10,000 worth of morphine and cocaine during the week of 15th to 23rd January. Her reports of those visits make it clear that the population of the town is undergoing massive suffering and cannot hold out much longer. Indeed, one cannot help wondering where the International Red Cross is in all this. It is certainly not in Stepanakert, although I understand that it claims to be negotiating with the Azerbaijanis in Baku. I wonder whether my noble friend the Minister could look into the situation with a view to our Government applying what pressure they can in Geneva for the International Red Cross to do what is clearly its duty and get into Stepanakert fast with all the relief that it alone can bring. It should not be leaving such action to courageous individuals such as my noble friend Lady Cox.
I hope that gives the House some of the flavour of what is going on on the ground in Nagorno-Karabakh. Turning to the wider implications, perhaps I should mention that I had the privilege of accompanying my noble friend Lady Cox on one of her missions to Nagorno-Karabakh last July, while President Gorbachev was in London. I only mention that because the Moslem Azerbaijanis are trying to represent my noble friend's reports of their aggression towards the Christian Armenian community in Nagorno-Karabakh as biased Christian propaganda. Even if Azerbaijan can rightly accuse my noble friend Lady Cox of being a good Christian, alas they cannot say the same of me. Indeed, I have many good friends in the Moslem world, as of course has my noble friend Lady Cox, and I have even argued the case in your Lordships' House for grant-maintained Moslem schools in our state system of education, provided they follow the national curriculum. I hope therefore that I cannot be regarded as a biased witness, whatever the Azerbaijanis may be saying about my noble friend.

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From my own experience in July I can assure the House that my noble friend's reports are no Christian propaganda. Together with other members of the delegation from Japan and the United States I flew to parts of Nagorno-Karabakh where no foreigner had been for 70 years. I saw with my own eyes the massive asymmetry of forces ranged against the wretched Armenian villagers whom the Azerbaijanis were then deporting in large numbers. In this work they were at the time clearly assisted by Soviet interior ministry troops. Although that assistance is no longer available, I am sure that Azerbaijan still has vastly superior forces to Armenia. And so the possible wider implications of that tragic conflict become very dangerous for all of us. Moslem Azerbaijani aggression against the Christian Armenian villagers and the capital of Nagorno-Karabakh appears to be inspired by not much more than the need to create a diversion from troubles at home. But ethnic hatred on both sides rises as the fighting continues and grows more widespread. What if Azerbaijan crushes Stepanakert completely in the next few days or weeks; or what if Azerbaijan cannot then contain its victorious forces from moving on against nearby Armenia itself? It would of course have to defend itself to the best of its ability.
I understand that that would be a situation which the wider community, particularly Russia, could not tolerate, for it would hold out the possibility of a fundamentalist Moslem belt from Turkey to Azerbaijan and Iran, completely closing off the Southern Trans-Caucasus. Indeed, General Shaposhnikov, the chief of Russia's armed forces, confirmed to my noble friend Lady Cox on 8th January this year, that that is a prospect which Russia could not tolerate. He agreed that Russia would be bound to intervene to defend Armenia. Who knows where the conflict might go from there?
It is against that dangerous prospect that I have to congratulate my noble friend Lord Caithness and Her Majesty's Government for their actions so far. I should also like to thank them on behalf of my noble friend Lady Cox for the serious attention they have given to her reports and for the credibility that they have rightly placed upon them. I understand that it was thanks to pressure from Her Majesty's Government that the European Community issued a démarche to Azerbaijan and Armenia on 20th January, and that it was thanks to skilful pressure from my honourable friend Mr. Douglas Hogg, the Minister of State, at the CSCE meeting in Prague on Friday last, 31st January, that the CSCE agreed to send a rapporteur mission to Nagorno-Karabakh as soon as possible. For the people of Stepanakert I can but hope that that will be very soon indeed, and that it will lead to the kind of international assistance which they so clearly deserve and which, I believe, would be in the interests of us all.
I am no expert on these matters, but I should have thought that the situation in Stepanakert merited some form of United Nations peacekeeping force. Indeed, President Yeltsin said in New York last Friday that he would welcome that. I am sure that
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Armenia would welcome it too, although I would be somewhat more doubtful about the reaction of Azerbaijan.
I shall be most grateful to my noble friend Lord Arran, the Minister for the Armed Forces, if he would care to comment on that suggestion when he comes to sum-up. In the meantime, I can but repeat my thanks and congratulations, and those of my noble friend Lady Cox, for the action my noble friend Lord Caithness and his colleagues in Government have taken so far in this tragic and dangerous situation.
5.35 p.m.
Lord Kennet: My Lords, I should like to congratulate the noble Lord, Lord Pearson, on the clear and vigorous account of affairs in Nagorno-Karabakh which he has just given the House, and also for his deserved tribute to the part played by our colleague the noble Baroness, Lady Cox.
During last week's foreign affairs debate the noble Earl, Lord Caithness, accused me of "riding a hobby-horse of USA-bashing". That was how it sounded to him. But my hobby-horse is not the USA; it is illegality. It is an unfortunate fact that the US has not been observing international law as steadily as it should and, since for decades we have chosen to adopt the role of principal adjutant to the United States, that fact must be on the top of our minds as we try to work out what to do about the disappearance of the Soviet Union.
Let me quote something from one of the great American presidents—Eisenhower—which shows that the spirit of international legality is not alien to the US, or was not. It comes from his farewell address of 1961 to the American people. He said,
"Despite these holocausts [the two world wars] America is today the strongest, the most influential and most productive nation in the world",
and its role and purposes are to keep the peace. He went on,
"A vital element in keeping the peace is our military establishment. Our arms must be mighty, ready for instant action, so that no potential aggressor may be tempted to risk his own destruction".
That deterrent strength was indeed successfully deployed and we must be thankful for that.
President Eisenhower then came to his main point:
"This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence—economic, political, even spiritual—is felt in every city, every State house, every office of the Federal government. In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex".
He concluded:
"America knows that this world of ours, ever growing smaller, must avoid becoming a community of dreadful fear and hate, and be, instead, a confederation of mutual trust and respect. Disarmament, with mutual honour and confidence, is a continuing imperative. Together we must learn how to compose our differences, not with arms, but with intellect and decent purpose".
That speech by a great Republican president is the origin of all the warnings which ever since have echoed round the world about the military-industrial complex —warnings which have been ignored by virtually every government. My plea today is that in this time

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of hideously over-armed chaos and truly fearful danger, we should listen to that grand American voice from the past: here is the right New World Order.
The break-up of the Soviet Union has three causes. It is the disappearance of the last of the European empires, nearly as old as the Spanish and older than the British. That was always bound to come. How could the last of the 11 empires not break up like the others, and for the same reasons? For decades I have been among those who predicted it. Even now the break-up is not complete. The break-up of the Russian Federation—half in Europe and half in Asia, containing God knows how many regional non-Russian majorities—is bound to follow.
The second reason for the break-up of the Soviet Union was economic failure on a grand scale. That is an obvious fact. The third reason lies behind that. It was the prolonged and obsessive imposition of Marxist central control of supply and demand. That will be discussed in the coming years. Laissez-faire capitalism has presided over its share of economic ruin, too. It is at least possible to suspect that the failures of both ideologies have been mostly due to the dogmatic immobility with which, in different times and places, they have been applied.
Outside the Commonwealth of Independent States the very last stage in post-war decolonisation is now on us. Germany and Japan emerge from the stigma of defeat, and historic Europe reappears from under the false monochromes of the Cold War. How can that old Europe be dissuaded from returning to the attitudes and convictions that brought it to grief in 1914 and 1939? Surely the greatest danger is that our continent may once more become blinded by "dreadful fear and hate", to repeat Eisenhower's words, and mired in weapons. In both West and East, weapon-making was the Keynesianism of the time. We dug holes and filled them up again. Worldwide political problems became insoluble because of the weapons being poured into them: officially, unofficially, commercially, criminally. Economically, the global arms industries and trades are now said to be second only to the drugs trade. That is the world background.
Inside the Commonwealth of Independent States Mr. Kravchuk has been trying to eat his signature to the Minsk agreements, and suggests that only strategic forces were intended. He now wants not the unitary commonwealth armed forces in those agreements, but his own armed forces of 220,000. He wants half of the Black Sea fleet. He said himself that he cared for Mr. Yeltsin's big officers' meeting no more than he cared for an "eclipse of the moon". Marshal Shaposhnikov, the first commander-in-chief of the commonwealth forces, rejects the help of the United States in the transport of nuclear weapons into Russia from the other states on the ground of military secrecy.
It is clear that Mr. Yeltsin himself is unfamiliar with military and arms control matters. His promise to retarget his nuclear missiles is already being described by those in charge of them as "political and not technical". In other words, it is just a statement; the missiles are not being retargeted at all. Last month
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Yeltsin had already decreed that military districts and armies might "go commercial", meaning that they could sell their equipment for hard currency to build houses on the one-tenth of a hectare of land which each officer will get on retirement. Of course, that is one way to dissolve the ex-Soviet Union, but it is also a way to inflame every regional arms race in the world.
President Yeltsin's disarmament proposals are Gorbachev and soda. He still has a way to go. When he came to London he believed that we carried our nuclear weapons in V-bombers. He apparently accepted that, despite Trident being a MIRV system and therefore not a suitable minimum deterrent, British nuclear weapons need not matter, while on the same day he wrote a letter to the Secretary General of the United Nations saying,
"The other nuclear powers (China, Britain and France) should not remain outside the American-Soviet disarmament processes and uncontrollably build up their offensive nuclear arsenals".
That is a total contradiction.
Through all this chaos what voice do we hear from the United States? We hear the State of the Union message from Mr. Bush last week. He intends to show how,
"by the grace of God, America won the Cold War;"
Since, he has said,
"a world once divided into two camps now recognises one sole and pre-eminent power: the United States of America".
The world needs imagination, not boasts.
Let us lead the United States to understand the need—the world's need—for a rouble stabilisation fund. Let us attend not only to the impetuous voices of Yeltsin and Kravchuk, but also to the calmer ones of Nazarbayev and perhaps Gaydar. Last week I suggested that all the spare nuclear engineers should join the International Atomic Energy Agency. Let us go further; I suggest now that we should take those Soviet weapons in exchange for the food we send, and destroy them on the spot. Let us have the food paid for in publicly destroyed weapons.
Since I have 30 seconds left perhaps I may add a linguistic footnote. The new entity over there is called the Commonwealth of Independent States. "Commonwealth" is not a literal translation of the Russian word "Zadruzhestvo". That is based on the word "friend"; it is a friendship entity; an entity of friendly states. The fact that the Russian leaders, in English, have departed from a direct translation and used the English word "commonwealth" refers directly to the existence of the British Commonwealth of Nations, which is now the Commonwealth of Nations. They adopt the British political concept in preference to a translation of their own word. I suggest that that may give us some confidence in our dealings with them
5.46 p.m.
Baroness Park of Monmouth: My Lords, I am grateful to the noble Lord, Lord Cledwyn of Penrhos, for initiating this important debate. Many noble Lords have spoken of the general impact on the stability of the world to which the internal instability of the former Soviet Union must give rise. I should like to examine more closely some of the features of

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that instability, and draw some conclusions as to what should be our policy towards Russia and the CIS; towards the Baltic states and the only too-newly liberated and now hard-pressed countries of Poland, Hungary and Czechoslovakia.
I believe that we are in danger of forgetting the threat of neo-fascism as a result of disillusion and of being mesmerised by Mr. Yeltsin's familiar Soviet tactic "if you do not help us on our terms, then there will be a coup; a return to dictatorship and a return to the arms race". We do need to help them; these are real dangers even though they are used to manipulate us. But there must be priorities and conditions. They must, in the end, help themselves. Russia's treatment of the Baltic states is an example. Perhaps I may pay tribute here to the honourable and entirely proper behaviour of our Government in restoring the gold deposited with us by the Baltic states.
The Russians are pirating Baltic fishing grounds; steadily cutting the oil supplies in Lithuania and demanding hard currency or food in exchange for medicines. They are equally failing to supply enough energy to Latvia and attempting to force them to build housing for the Russian troops who are supposed to be withdrawing. As one deputy said, after negotiating,
"It is a Soviet attitude. The new representatives of the Russian authorities are being guided in their thinking by Soviet stereotypes. It will be difficult to overcome them because the Soviet Union's nomenklatura was such a tired nomenklatura, and this new one is very active, very resolute, and it will be very difficult to talk to them".
But what is happening in the CIS? We hear a good deal about Moscow and St. Petersburg, the Armenian-Azerbaijan conflict and Georgia. The chairman of the Supreme Soviet parliamentary sub-committee on the Crimean question complained that deputies were never looking at economic questions. The terrible problem of the moment was how people could lead a normal life.
So what are the conditions in the more remote republics? The Tadzhik president (Tadzhik is a uranium-rich republic) speaking on 24th January, said that in the two weeks of the newly freed prices the state had to give special help to students, children and army and other pensioners, because of need; the republic had little or no oil or gas. Other republics were selling only for hard currency. They were negotiating with the Turkmen to lower the price slightly. Their own oil production had fallen from 300,000 tonnes in 1980 to 90,000 tonnes in 1991. The president said:
"It is our own fault, but the Rogun hydro-electric power station is still not working".
The tunnel was delayed for years for lack of five kilometres of road. The aluminium plant was not getting raw material and ore; that meant unemployment. He had persuaded the Kazakh president and they would now get 270,000 tonnes of ore. In other words, they are living from hand to mouth in terms of employment.
Lastly, there was no money for wages. He had had to appeal to Boris Yeltsin, who sent 400 million roubles in cash. In the same month 320 million roubles were sent to Georgia, also for wages. All over what used to be the Soviet Union the over-centralised bureaucracy which has stifled initiative all these years is having the same disastrous effect. There is a severe
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electricity shortage in the Chita Oblast. Thousands have been laid off and enterprises closed down, all because three neighbouring oblasts refuse to supply electricity. The Supreme Soviet is having to fly in a commission to look at this. In the Dombas the mines are on the verge of shutting down. Eighteen thousand miners are idle and 96,000 are people without support, all because there are no pit props.
Stories of the paralysis of action are endemic all over the country. They are only symptoms of the lack of people willing and able to execute new policies. If the individual republics cannot cut themselves free there will be a sadly promising climate for anarchy and rebellion against the new governments. It is hardly reassuring that the two weapons factories in Tula have been authorised to sell their 240,000 Kalashnikov rifles directly to consumers, thus dispersing the vast quantities of weapons that have piled up in the warehouses. It is also pointed out that it will be financially satisfactory for the workers. Nor is it a happy thing that some of the most powerful political positions in the republics are being taken by former KGB chiefs.
So much for some of the realities of life for the Soviet citizen. It may be only a matter of time before Mr. Yeltsin—who, like Mr. Gorbachev, is now heavily involved in international rather than national issues—is at risk. We shall not know until mid-February whether the army will be able to accept the long-term solution proposed for strategic forces. If it does not there could be serious trouble, as there must be when large numbers become unemployed in the defence industry.
As the noble Lord, Lord Kennet, pointed out, it is noticeable that whereas Mr. Yeltsin has welcomed British, French, US and even Japanese help both in transporting nuclear weapons from the other republics to Russia and in the elimination of some which he said would save Russia a lot of expense, General Shaposhnikov rejects this as unacceptable and says:
"Extensive Western involvement in the dismantling of the Soviet nuclear complex would compromise military secrets".
In any case, Yeltsin said at the UN that all nuclear weapons had already been withdrawn from Kazakhstan and Belarus and would be withdrawn from the Ukraine by mid-July. Kozyrev told the Canadians that the process of elimination had begun already. We must always remember that words are not deeds, and I for one would welcome a stricter system of verification or at least the application of the existing verification agreements.
Meanwhile, it is too early to lower our guard or to indulge in any premature and irrevocable action to reduce our defence capacity. We have also to face the whole issue of the nuclear threat to health in the environment in the former Soviet Union, where there are Chernobyls to fear.
A recent official statement said that the ecological situation amounted to a national catastrophe with no accurate data on radiation. The reactor from the Lenin icebreaker, for instance, was simply thrown into

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the shallow waters of the Kara Sea. I say nothing of the problem of the future of nuclear scientists, for that is a whole new subject.
The lesson to be drawn from all this is that we should maintain our power to defend freedom; we should continue to press for human rights—and I should like to pay tribute here to the noble Baroness, Lady Cox. We should give priority in our aid to the countries who were the original and innocent victims of the former Soviet Union. They need help and they are geared to use it. Let us pay them our hard currency so that they in turn can supply the Russians until we can see a greater degree of ability in Russia to use our aid effectively. Let us use the Comecon structure to the advantage of our friends—the Poles and the Czechs. In Vladivostok, for instance, there are no facilities to handle or store containers, yet 1,500 containers of food, shoes and clothing are piled up there and nothing is being done about it. That would not happen in Poland.
There are many countries, notably Iran and Turkey, establishing useful and productive links with Tadjikstan, Turkmenistan, Azerbaijan, and even the Ukraine. Even the Chinese are helping build new enterprises. These are business relationships. They seem to me the healthiest and most promising forms of aid. I do not, of course, minimise the risk of Islamic fundamentalism. But that, too, is another immense subject. There is, however, at present some hope of practical economic help and co-operation with those countries.
I believe that our help should come in the form of the training of specialists to provide a new infrastructure to replace the heavily compromised nomenklatura. The know-how scheme is just about right and a straightforward business venture. That is the right way to help Mr. Yeltsin. It is indeed in our interest to help, but on our own terms.
5.55 p.m.
Lord Ennals: My Lords, I should also like to thank my noble friend Lord Cledwyn for introducing this debate. His speech was an admirable basis for the wide-ranging debate that we have heard so far. As he said, the speed of change has been almost unbelievable. Eighteen months ago I was in, then Leningrad, now St. Petersburg, at a human rights conference together with the noble Baroness, Lady Cox, to whom I also pay tribute for the work that she has done during the past 18 months.
At that conference a number of things were clear. First, the extent to which ethnic nationalism prevailed in all parts of the USSR, as well as in other parts of Eastern Europe, including Yugoslavia, was never far below the surface in the conference proceedings. Everyone there was proclaiming their own human rights; but they were not listening much to the claims of others for human rights.
It was clear that if the firm hand of Moscow was released—and I am talking about 18 months ago—there would be a succession of conflicts. Of course that is what has happened. Secondly, support for Mr. Gorbachev was waning rapidly. He would not long
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survive. There was a bitterness against him which I found difficult to accept and which I think the people of the West also were finding difficult to accept. I was in Prague at the time when Mr. Gorbachev almost fell. That event, in a sense, contributed to his eventual failure.
Thirdly, the depth of the economic disintegration was all apparent in the streets and in all the evidence that was given. Fourthly, the popularity of Boris Yeltsin was apparent, and also that of other Russian leaders, like the mayor of St. Petersburg, Anatole Subchak—a man of outstanding ability.
In the spring of last year President Landsbergis asked whether I would organise an international conference in London on independence for the Baltic states. I was honoured, and agreed to the request having had some dealings with him and I was delighted when the Royal Institute of International Affairs at Chatham House responded favourably. By June our sub-committee met and we reported on our progress. Then we broke for the summer and we came back in September and the object of the conference, which was to promote the independence of the Baltic states, had already been achieved. That is the speed of the progress. Therefore we changed the basis of the conference to how the Baltic states could be re-integrated within the world community. I praise Chatham House for its vigour and effectiveness in the organisation of the conference.
I was profoundly impressed not only by the vision of the leaders of the Baltic states at that conference, but also by the response from other countries close to the Baltic states —Poland, Russia, Germany and the Scandinavian countries. An outstanding speech was given at that conference by the foreign minister of Denmark. He put forward a clear picture of what would emerge. He said:
"We, the Danes and our neighbours at the Baltic Sea, aim at the establishment of a close co-operation between the industrialised European Community countries and Nordic countries on one side—and with our neighbours in transition to market economy on the other, including: The Baltic countries, Poland and Russia".
He envisaged a new emerging Baltic centre of growth. I thought that was a very imaginative concept. During the course of discussion it became clear that the Baltic Sea area was likely to become competitive in its agriculture, food processing, transportation, light industry, and service sector—especially financial services.
I very much agree with what my noble friend Lord Kagan said about the importance of developing effective transportation. Progress is now being made with regard to the Black Sea, with Russia, the Ukraine, Bulgaria, Turkey, Moldavia, Romania, Armenia, Azerbaijan and Georgia forming what will be called a Black Sea economic co-operative region. I understand that there is to be a meeting late in June at heads of state level at which this concept will be effectively established. We can see that new patterns will emerge. I should very much like to hear from the Minister, when he replies, what is the attitude of the British Government towards the new structures that are likely to emerge out of the chaos of the present situation.

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We may be faced with terrible insecurity. First, violent conflicts may spring from nationalist ambitions which have been suppressed by decades of communism. Secondly, there may be threats to public order because of economic chaos, a desperate shortage of food and a breakdown in the distribution mechanism. Thirdly, the new free market policies will challenge the new leadership and may well be followed by a non-democratic Right-wing backlash unless the present leaders are able to sustain their position. Fourthly, there may be an inability to control the massive supplies of nuclear weapons—a point to which my noble friend Lord Cledwyn and the noble Earl, Lord Caithness, directed their attention. This may happen in spite of the brave leadership of Boris Yeltsin and the proposals that have been made for controlling nuclear weapons. There is the prospect also of a succession of nuclear catastrophes comparable to Chernobyl. We have all read the evidence given in the past two or three days by Mr. Gorbachev's namesake. It is greatly disturbing that those who put the weapons in their place will not be there to dismantle them. The world may be faced with great dangers.
As I think of what needs to be done in response to the dramatic events in what was the USSR, I recall the leadership that was available in the United States and Britain from 1945 to 1950 to tackle a breakdown not in eastern Europe but in western Europe. I look back on the imaginative Marshall plan and on the bold leadership of General Eisenhower, to which my noble friend Lord Kennet referred. There was a vigorous leadership in Britain, with Clement Attlee and Ernest Bevin, great figures in the Labour movement. It is sad that at a time of challenge in the old Soviet Union both Britain and the United States are in a state of economic decline.
What needs to be done? I agree with all the proposals put forward by my noble friend in opening the debate. There need to be clear plans to bring the new republics into a closer association with the European Community. We know that it will take time but the republics must know that that is the direction in which they can look. We need an expansion of the CSCE. I was able to discuss these issues with the CSCE secretary-general in Prague last summer. As my noble friend Lord Cledwyn said, we need a deep involvement of these new countries in the United Nations, and especially in the World Bank and IMF whose help they will urgently need.
We need a positive response to Boris Yeltsin's courageous arms reduction programme. There is a report that it is part of a plan to sell off to other countries the arms that will now be disposed of by the former countries of the USSR. That is a matter of great concern.
We must engage in detailed discussions with Boris Yeltsin on his proposals for nuclear deterrence. I was saddened by the response from the Prime Minister and Mr. Tom King. They more or less said that we must press ahead with our independent nuclear deterrent come what may. We have to be much clearer about the purpose of our nuclear deterrent and be willing to enter into detailed discussions with the former Soviet
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leaders. It is no wonder to me that, though Boris Yeltsin smiled, he was obviously disappointed by the results of his visits to London and Washington. There are question marks about the future of Boris Yeltsin. I agree with what was said by the noble Baroness, Lady Park of Monmouth. It is in our interests that he should remain to provide some kind of leadership.
In making my final point I should like to support what was said by my noble friend Lady Ewart-Biggs. We need to establish positive human links such as the linking of towns. We should encourage voluntary organisations to become involved in relief and development work in what was the Soviet Union. Anything we can do to promote those personal links will probably have as great an effect as any political response. I must say that I also felt a great sense of sickness when I heard the triumphal statement of President George Bush that, "we have won the Cold War". Many in what was the Soviet Union will think that they had some part in ending the Cold War. The concept that we should develop is one of co-operation and willingness to help in any way possible. In no way should there be an expression of our triumph. It is co-operation that we need to promote.
6.7 p.m.
Lord Beloff: My Lords, everyone has thanked the noble Lord, Lord Cledwyn, but I have a particular reason for thanking him of which he is probably unaware. I have been asked to go next month to Canada to give on the peaceful shores of Lake Ontario two lectures about what is happening to our benighted, struggling Europe. I have sat through the entire debate hoping that my lectures would be written for me by noble Lords. What have I learnt? I have learnt, I think, once again that we approach with a minimum of accurate knowledge this appalling problem of how to tackle what is going on in the Soviet Union. We know little bits. We had, on behalf of the noble Baroness, Lady Cox, a valuable account of one of the conflicts. We cannot escape from it because it is already engendering a great deal of human suffering. We heard from the noble Lord, Lord Kagan, about the fate of one of the smaller republics, something to which the noble Lord, Lord Ennals, also referred. Beyond that, have we grasped what is meant by suggesting that the problem can be solved by a massive transformation of what was the Soviet Union into a single market economy?
I sometimes wonder why those who have preached that doctrine, whether in this country or in the United States, send hopeful economists from various seats of learning—if economics is a branch of learning—to the Soviet Union in order to explain that those there have got it all wrong. The difficulty is that we now know that among the old ladies queueing for food in St. Petersburg there are many who say, "It was better under Brezhnev". Until we know why they think it was better under Brezhnev, can we begin to look for a solution to their economic problems? Roughly, what they had in the heyday of the Soviet Union, was what we call a command economy. That was a minimum provision through massive concealed unemployment of minimum standards for the bulk of the population,

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with sufficient of what Marxist economists would no doubt call surplus value extracted to keep both the civil and the military bureaucracy happy.
The inefficiency which is frequently referred to was, in a sense, the substitute for a welfare state; in other words, there was no unemployment pay or the other benefits to which we are accustomed in the West, because employment was guaranteed, whether or not there was anything useful to do. Suddenly, we find that that is removed almost at a stroke. Therefore, anyone who would bet on the survival of Boris Yeltsin would be taking a very considerable risk. I say that because those people who were running the country—and this was referred to by one noble Lord—are still needed to run it. They have very little to thank him for. Indeed, in the case of the military in particular, they are liable to be landed without resources, housing or prospects. We are looking at something which presents a much greater challenge than one kind of economic accounting or another.
The other factor which struck me as unreal—and I am sorry that the noble Baroness, Lady Ewart-Biggs, did not remain in the Chamber for the rest of the debate; but what she said was repeated by her noble friend Lord Ennals—is the importance of personal links. Of course, personal links are the best way of establishing contact between countries and out of such links may come fruitful endeavour. However, it must, or should, be realised that the obstacles are now greater than they were a year ago when the Perm-Oxfordshire incentive was launched. It is not easier now to leave the Soviet Union; it is much more difficult. The visa and passport restrictions have not been lifted—I believe that the noble Lord, Lord Cocks, referred to that in the rather limited but significant case of Jewish would-be immigrants —and, in general, it is no longer very easy to leave.
Moreover, the fact that you cannot travel outside the boundaries of the Soviet Union unless you pay in hard currency for your air fares or railway tickets, means that anyone here who wishes to help to engage in these personal contacts must face a bigger financial problem than seemed to be the case when at least the travel costs were met by those coming to this country. On reflection, it seems to be increasingly clear that it is bringing people to the West rather than sending economic missionaries into those countries which is likely to be the most fruitful way of giving them an idea of what they can do.
What has emerged most constructively from the debate in points raised in quite different contexts by the noble Baroness, Lady Park of Monmouth, and the noble Lord, Lord Ennals, is that we would do better to try to think of the problem in terms of smaller units. It is possible—and here I agree, perhaps for the first time, with the noble Lord, Lord Kennet—that the Russian Federation has probably still to undergo a change. But it may be very difficult to do anything for the federation, except providing emergency foodstuffs, aid, and so on.
However, we have the Baltic states, which have more entrepreneurial spirit, capacity and memory. They also have Scandinavian neighbours close at
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hand. Surely, the main responsibility for bringing forward those countries may reasonably be said to rest with their wealthy northern neighbours. Similarly, although it is a much more dangerous and difficult area, there is likely to be, in any event, a renewal of interest by the other countries bordering on the Black Sea in what is going on in what was the Soviet part of its littoral, and further afield.
One has to ask: what in this scene, as regards the idea of specialisation, should be the major role of the United Kingdom, its allies and its friends in the European Community? There is a great deal to be said, although I know that it is controversial, for concentrating not on the former Soviet Union but on its three immediate western neighbours. What the noble Lord, Lord Kagan, said about the apparent despair of Lech Walesa, what we know about the very grave problems which are now being experienced by President Havel and his advisers, and what we know about Hungary, suggests that an infusion of aid in that area is essential. The economies of those countries and their populations are small enough so that the amount of aid needed to get them over their crises would be much less than would be necessary to help the nearly 300 million people in what was the Soviet Union.
However, that is not to say that happiness and security universally would be restored if those countries were wholly self-sustaining as economies. For that to happen we would need to provide them not only with aid but also, as another noble Lord said, with proper markets for their produce. It would at least give an inkling of what can be done. If we had a few more years, no doubt it would be possible to draw lessons from what is being done in East Germany. But, as regards that area—and it is the only area into which large-scale aid is now being directed by the West Germans—it will be some time before we know how the programme is working out.
On the whole, it would be worth taking the risk of saying, "If we have only a limited amount of resources, let us concentrate them rather than diffuse them; and let us look at the human capacities to absorb them." They are clearly greater outside of what was the Soviet Union if only because the xenophobia of the Russians is not vanishing. That does not apply only to the decommissioning of nuclear weapons. Indeed, the noble Lord, Lord Jay, is quite right; we ought to do something in this respect. It would be very rewarding to do something about the extractive industries—that is, coal and oil—in the Soviet Union. But it would be quite something to persuade them to let western companies into the republics for that purpose.
6.18 p.m.
Lord Judd: My Lords, I am sure that we all wish the noble Lord, Lord Beloff, well with his forthcoming lectures. When he reads the report of the debate in Hansard, he will find a good deal of material to help him in his preparations. I hope that we can send a message of good will from the debate to former President Gorbachev. It was his leadership, his vision and courage which initiated all the change. He had a

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statesmanlike judgment of the immensity of the task. I hope that we shall not come to regret having failed to support him imaginatively enough.
Amid all the uncertainty, I believe that we need to counsel pragmatism and realism. There are no blueprints for moving from a command economy to a market economy. Those involved are literally pioneers. When they commit themselves to monetarism and to liberal economics, is it to be those of Adam Smith or of Keynes? When they speak of markets, is theirs to be the social market of Germany, the managed market of France or Japan, or the romantic market of Mrs. Thatcher? Whatever the answers, it is clear that instant change is just not possible.
Capitalism has developed over generations. It has been the story of the accumulation of capital, paralleled by the accumulation of management experience, expertise, underpinned by the development of sophisticated systems of financial services. We must avoid naivety of macho tests by the standards of text book liberal economic purism. Imaginative and generous arrangements and support for transition will be essential.
We must also take care about the signals that we send on nationalism. It was good to hear the right reverend Prelate the Bishop of Manchester reassert the importance of humanitarian values for the future. People long to belong. They long for a sense of identity. They long for ethnic security. They long for the accountability of government which they can feel; but nationalism, too easily, contains elements of racism and fascism. There are dangers in political parties formed around national movements rather than around social policies. Sadly, already that is illustrated by the ethnic conflicts of the former Soviet Union and by disturbing reports of the resurgence of anti-Semitism and too many restrictions still on Jews who wish to leave the republics.
Some say that the solution is to let go all the ethnic republics that want to go. But what of the ethnic minorities within the republics? What of the 20 republics within Russia? What of the 29.5 million Russians outside Russia? What about all that we are learning about the first reality of life being its total interdependence, economically, environmentally, strategically, and what about the growing nightmare of migration? What is the potential role of the CIS in all that? How can we help to strengthen it? One thing is certain: we need to share our insights into the indispensability of regional and international co-operation.
It is clear that there are disturbing political tensions within the army and between the army and the civil power. The command structures of the army are unclear. The army is not subordinate. We are told that Yeltsin has control of the nuclear button; but the button depends upon military codes. As my noble friend Lord Cledwyn emphasised in his outstanding speech opening the debate, we are now confronted by four nuclear republics. There is a real danger of the leakage of expertise and personnel. There are anxieties that that may have already occurred. The drive for arms sales by Russia is frankly dangerous. All that is
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happening in proximity to the instability of the Gulf and the Middle East. And all that is in the context of increasingly sophisticated international terrorism.
Then there is the question of the Black Sea fleet. What lies behind that dispute? Is it a matter of national prestige? Is it a matter of guaranteeing food supplies? Or is it about sinister territorial designs with perhaps the Crimea central to those designs?
The CIS has not yet proved that it can take on the former international commitments of the Soviet Union and deal effectively with the political differences of member states. The reality is that there are 15 jealously independent states, jostling for position, all anxious about the ambitions and objectives of Russia. The Ukraine, Azerbaijan, Moldava and Georgia are positively distancing themselves from the CIS, while the central Asian republics, Armenia and Belarus are inevitably caught up in co-operation with Russia.
What of Russia itself? Let us consider the draconian, absolute powers of Yeltsin—powers to rule by decree; suspend all elections; and enforce implementation of decrees by appointed regional prefects until December 1992. That, he hopes, will give him time to entrench reforms. But how far is he becoming a prisoner of Russian primacists? How far has he isolated, to his own cost, the more balanced democratic reform movement? If he is not prepared to soften the social consequences of his measures, how far will he be compelled to introduce even more authoritarian methods to implement them?
As the primacists inevitably antagonise national minorities within Russia and the other republics by their determination to protect Russian minorities in those republics, what will be the consequences for Yeltsin and for Russia? Will that lead to Russia's humiliation? Will that, in turn, lead to a greater role for the military? What would be the implications of that for the world?
As for the economic future, what happens in Russia will have a decisive influence on the other republics. Its size and control of energy, communications, transport and currency make that inescapable. It is determined to move fast; but in view of the appalling economic crisis—inflation of 1,000 per cent.—that cannot be carried through in policy terms, let alone without severe social upheaval, unless the IMF and the Group of Seven mobilise a massive stabilisation programme. So far, despite relatively welcome evidence of some moves in the right direction, still far from sufficient indication is available that the response will be on the necessary scale. That could prove disastrous. The immediacy of the challenge cannot be overstated. Entire well-organised, well-educated cities, dependent upon defence expenditure which has been stopped, are already totally without income. Some experts calculate that by the end of this month 90 per cent. of the Russian people will be impoverished, and that the strikes will begin. I believe that my honourable friend Lord Cledwyn was right to call for a Marshall Plan.
In the absence of reserves, the CIS is unable to meet IMF demands for debt rescheduling or deferment. A freeze on debt repayments may then become unavoidable. Whatever the orthodox reservations of

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Germany and Japan, the G7 may have to agree to that. But any IMF package will almost certainly now have to insist upon restructuring. It is probably too late for stabilisation. When in due course policy moves on completely to dismantle the industrial military complex, if it does, and to the ending of protection, still greater multilateral assistance will be essential.
While total starvation may be avoided this winter in the former Soviet Union—indeed the humanitarian needs of too much of the third world remain far more urgent—many people will go hungry. Low income groups will be badly affected. Institutions caring for the handicapped and orphans, dependent upon state aid, could be faced with acute crisis. Out of the estimated 20 million pensioners in the former Soviet Union, 1.5 million are thought to be already in need of urgent assistance. The total number of people in dire circumstances could be as high as 4 million. There is a grave shortage of medicaments and medical supplies, with perhaps only 20 per cent. to 25 per cent. of the requirements available. Transport distribution systems are totally inadequate. That is aggravated by hoarding. But overall it is logistics and distribution which have a higher priority than the need for more food from outside.
But let us not despair. We must be realistic about the issues that face us. Amid all the uncertainty and anxiety, three things are clear. First, the current revolution has two elements. It is against 75 years of hierarchical, repressive, inefficient communism. Let us not underestimate the driving force among the public of the sheer exasperation with inefficiency. It is also against 300 years of imperialism. Secondly, that empire had required large armed services and the concept of a hostile outside world to hold it together. Thirdly, the new situation now—if we face up realistically to the challenge that we have been discussing this afternoon—presents immense potential for peace in the world, and for turning resources from military expenditure to addressing the needs and well-being of the people of the former Soviet Union itself.
6.29 p.m.
Lord Desai: My Lords, as the last speaker from the Back-Benches, my task has been made easier, especially by the two previous speakers. The noble Lord, Lord Beloff, may not like it if I welcome him to the ranks of sound political economists, but that is what he is, like my noble friend Lord Judd.
I shall confine my remarks mainly to the economic problems of the former Soviet Union. When we consider the country, what do we need to think about? We need to take a strategic view of what is going on and what is needed. It is far too easy to believe that the system which the Russians and others have rejected was so inefficient that it was of no benefit to them at all. The noble Lord, Lord Beloff, pointed out that in the middle of the transition to a market economy, many people ask themselves why they hanker after the previous regime. It is right to point out that it was a system of over-full employment. The only way in
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which it could provide people with income was by giving them work. The work was often unproductive or unnecessary, but it was work.
A friend of mine visited Warsaw in late 1989 in order to set up what was to be the unemployment benefit system. Recorded unemployment in the city of Warsaw was four people. In the whole of Poland there were 5,000 people unemployed. The officials knew each person and why that person could not be provided with work under any circumstances.
From that system, Poland has moved to a system where, in order to earn income, one has to engage in productive work. But that can only be provided by people who have the capital resources to provide productive work. Suddenly we find that there is a shortage of capital as well as of agencies to achieve that.
In such a world, we must first understand that the problem of the CIS arises not so much from the tremendous gap between a command economy and a market economy but from a series of organised, almost sabotaging, activities engaged in by people who saw their position threatened as soon as the transition was signalled. Until about 1989, the Soviet economy—such as it was—was able to deliver goods to its people. From then on, once it was clear that perestroika was intended by President Gorbachev but that he was being rather slow about it, people in commanding positions grabbed the distribution channels … diverted goods and disrupted the logistics and the transport system. We now have not so much a shortage of goods or output, but the difficulty of delivering that output to the cities.
We need to remember regarding the breakdown in the economy —something that President Yeltsin has not so far done—that a restoration of the status quo ante in distribution and transport systems is necessary. Again, the oil exports, which formed a major source of foreign exchange for the Soviet economy, have almost ceased because of local problems with the oil wells, problems which could be solved by a little expert advice and timely resources.
We must also remember that in the Soviet Union an interdependent regional economy was created among all the regions. Whatever the political leaders want, the interdependent links of those economies will be difficult to break. Therefore we must not only concentrate on Russia but think of ways in which we can help the people—although they wish to remain politically separate—to realise that their economies which were linked should not be severed from each other or the cost will be even greater in the transition to a market economy than is strictly necessary.
One fact that we have learned in the past two years is that political change is easy, if unstable. It is easy to change governments and to bring down the Berlin Wall. It is very difficult to change economies overnight. Economic change takes a long time; it is costly. It is false to promise instant miracles in the economic sphere.
We must grab continuity in the economic sphere; continuity in transport links, in distribution links and in the pattern of inputs and outputs which flow from one part of the Soviet Union to another. We must see

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whether we can help revive that structure under the new regime while at the same time helping the regions to make the transition to a market economy.
It is important not just to have a stabilisation plan for the rouble, vital though that is. We ought to install a payments union for these countries. If they have to settle their deficits with each other in hard currency, trade will shrink much more than it is already doing.
Many noble Lords have drawn analogies from history. In starting this fruitful debate, my noble friend Lord Cledwyn gave the analogy of what might have happened if, after the Second World War, the countries of Western Europe had been left to fend for themselves. The noble Lord, Lord Boyd-Carpenter, gave the analogy of the French Revolution. I would use the analogy of what happened after the First World War. At that time, countries were left to fend for themselves and results were tragic. Defeat in war or economic chaos can lead to adverse political results, unless we help restoration of the status quo ante as soon as possible. That was done after the Second World War. At that time the transition from war to peace was made much easier in Western Europe because it happened against a background of adequate help as well as the realisation that the first action was to get back to what was previously there and then to advance.
If we form a strategic view—I shall not call it a plan because "plan" happens to be unpopular—of what the economies of the commonwealth need, it is restoration of the previous structure as much as advancement to a higher level, and a sensible system for the settlement of payment deficits among the countries as well as a system for the rescheduling of debts to the Western world over time. We need to do that and further help to train the people who will be needed in the aspects of the economy which are unknown. For example, it came as a surprise to many people in Eastern Europe and the Soviet Union that there was no notion of property ownership. No one knew who owned the property. They all thought that the state owned it. No one knew what would happen if a firm went bankrupt. The notion of bankruptcy was unknown. The principles of bankruptcy, laws on property and commercial law are all needed. Unless we train people in those skills, they will not be able to get even close to a primitive market economy which is badly needed.
We have a good opportunity here. It is not so much that massive amounts of aid are needed; what is needed is intelligent thinking on how those economies should be reconstructed or helped to reconstruct themselves. I believe that if we can show the regions how to help themselves and how to restore their economies economically to their previous status, and how to advance slowly but surely, that is where we can give the utmost help. In the short run, food may be needed; in the long run, what may be needed is expertise in how to manage their own affairs.
6.40 p.m.
Lord Bonham-Carter: My Lords, inevitably this debate has ranged extremely wide. We have heard interesting contributions and additions to our knowledge from the noble Lord, Lord Kagan, on
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Lithuania, the noble Lord, Lord Pearson of Rannoch, on Armenia, and we have heard about the armed forces from the noble Lord, Lord Kennet. If, in the course of my few remarks, I do not refer to some of those matters, to arms control, to nuclear proliferation or to the United Nations, it is not because I do not believe they are important but because I should like to concentrate on the contribution we in the West and we in the United Kingdom can make towards helping to establish stable societies in central and eastern Europe, and even possibly in what was the Soviet Union.
I must confess that when I heard the noble Lord, Lord Judd, describe the gigantic size of the shortages which are to be found in the Soviet Union today, and when I heard the noble Lord, Lord Desai, suggest that we have to restore the status quo ante in transport and distribution, I thought it difficult enough to deliver aid, but to restore the status quo ante seems to be almost impossible. I was rather confirmed in my feeling that I might end my remarks by agreeing with the noble Lord, Lord Beloff, that we may be wise to concentrate our efforts on those areas where we can produce results, and that perhaps the challenge of the Soviet Union was so large and daunting that we may not achieve very much however hard we tried. I say that tentatively.
I start from 1989, the annus mirabilis, the year of revolution, which was a year after the annus mirabilis of the British economic miracle, in 1988. Noble Lords may remember that time. The message sent out was that those countries which had liberated themselves from the Soviet empire should take the fast road and go bald headed at radical political reform and radical economic reform simultaneously. The argument went that those two steps were complementary and that they reinforced each other. The argument went that just as socialism led to tyranny so market forces led to political freedom.
Poland and Czechoslovakia took that advice. Hungary was rather more cautious. It is worth asking now, two years later, whether in fact that advice was good, particularly as we are giving the same advice to Mr. Yeltsin and the USSR.
Recently a poll - a Euro barometer I think it was called—was published in January, which was taken for the Commission, which showed that there is deepening pessimism and dissatisfaction in central and eastern Europe both about the operation of democracy and about the economic condition of those countries. That view is most strongly held in Czechoslovakia, Hungary and Poland, countries where, with one exception, the reforms have gone on longest. In those countries, by a majority of two to one, they are dissatisfied both with the economic position and with political democracy. In European Russia it is even worse. The majority is four to one dissatisfied with both political democracy and with the economic record. Those are alarming figures. They confirm the result of the recent election in Poland in which only 40 per cent. of people bothered to vote at all.
I suppose that that level of dissatisfaction, both with democracy and with the market economy in so

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far as they had it, is hardly surprising given the economic situation in all those countries. As the noble Lord, Lord Desai, said, before the revolution unemployment was virtually zero in those economies. Therefore unemployment of 11 per cent., which is what it is today in Poland and in Slovakia, is very high in their terms. By the same token, if unemployment seems to them very high, GDP went down sharply between 1988 and 1991: in Poland by 20 per cent., and in Czechoslovakia by 14 or 15 per cent. Real wages in Czechoslovakia have gone down by 27 per cent., while prices have gone up by 50 per cent. Those are formidable figures, and inflation in each of those countries, though not the same, is very high indeed, particularly in Poland.
In such circumstances, it is hardly likely that people will feel satisfied. In fact, I can find no evidence in history to support the proposition that political and economic reform walk hand in hand and that economic reform is a way to political reform. In fact, as far as I can see—I stand ready to be corrected—market economies have almost always been introduced into countries not by democracies but by occupying powers, as they were in Germany and Japan, by a colonial power as in Hong Kong, or by authoritarian powers as in Franco's Spain, in Taiwan and Chile. People do not vote twice for a rise in the cost of living, for a rise in inflation, or for a drop in the standard of living. It is not natural to do so, and one cannot expect it.
The danger is that in countries with very little experience of democracy—where the belief in the vote and democratic procedures is shallow—economic hardship, such as the move towards a market economy inevitably imposes, will erode that faith, will erode the belief in political reforms, will be blamed on democracy, will give rise to nationalist movements —such as the split between the Slovaks and the Czechs which is quite a dangerous phenomenon today—and will call for a strong man to take hold of the situation.
Those are the dangers which I believe confront central and eastern Europe today. They make it important for us to do everything in our power to bolster and stabilise those emerging societies which are in a position of crisis at present. The worse the crisis in the Soviet Union, the more fragile and delicate those regimes will be.
If that is true for those countries in central Europe, it is much more true of the USSR which has had 70 years of communism, not 40, and which has no institutional or legal infrastructure whatever on which a market economy depends.
I conclude that if we are to establish stable and democratic regimes, we must move at a more measured pace than we have heretofor; that we tried to rush in too fast; that we must see that the legal and institutional infrastructures grow at the same time as other reforms are introduced; and that those economic reforms are cushioned by aid to diminish the pain which they inevitably bring with them in the short to medium term. In addition to aid, we must give proper opportunities for them to trade. I am far more doubtful whether we can do that for the USSR.
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There is a doom-laden article in the Financial Times today by John Lloyd which is very interesting. He points out an essential difference between the situation in the former USSR and that in central Europe. He points out that in the ex-USSR, or the CIS, or whatever it is becoming—and I agree with the noble Lord, Lord Kennet, that we do not know what it is becoming—not only is there an economic crisis which confronts all those countries, but in addition there is the crisis of states trying to find their own national identities. That makes any settlement of the economic problem even more difficult than it is, say, in Poland where patriotism may help people through the pain of change. In the former USSR, the patriotism of individual states will interfere with the economic reforms which have to be introduced. Competing patriotisms there are a positive hindrance.
Perhaps if we concentrate on creating successful democratic societies, moving towards market economies in central and eastern Europe we will be taking a more constructive step towards building a more peaceful world than if we try to achieve what we may not be able to achieve in the former USSR. There, without a political settlement, I do not see how there can be an economic settlement, and without an economic settlement I do not see how one can solve the political problem.
6.51 p.m.
Lord Williams of Elvel: My Lords, I hope that your Lordships agree that my noble friend Lord Cledwyn not only introduced the Motion very impressively but also did so on a non-party political basis. I welcomed the comments of the noble Lord, Lord Harmar-Nicholls, and others who stressed that this is not a matter which should divide parties on a political basis. We are discussing a matter which is of fundamental importance to the world. I believe that your Lordships appreciated the way in which the debate was opened and the manner in which it has been conducted by noble Lords from all parts of the House.
We are dealing with what is perhaps the most important problem in world politics today. I accept the point made by the noble Lord, Lord Greenhill of Harrow, that there are other important problems—in the Far East and elsewhere. However, if this one goes wrong, we are all in deep trouble. Therefore, it is only right that your Lordships should have had an opportunity today to discuss the matter. The noble Lord, Lord Bonham-Carter, quite rightly said that the debate has ranged both far and wide. That is only natural because the issues range far and wide. That is not just because a mighty empire has broken up, but because the speed and manner in which that empire has broken up has caught us all a little flat-footed. I hope that the noble Lord, Lord Colnbrook, will not think it impertinent of me to say that I thought that his speech was extremely wise and impressive. What he said reminded me of what I had said previously—"What I say today may not be true tomorrow". That is even the case in our debate this afternoon. What we say today may not be true tomorrow.
There are four categories into which the questions your Lordships have raised today fall: the political

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problem; the economic problem; the humanitarian problem; and the military and defence problem. I shall take them in that order.
The first issue is the political problem. I stand ready to be corrected, but politically I do not think that, up until the voluntary dissolution of the British Empire after the Second World War, a major empire had ever been dissolved without a major conflict. The Athenian empire was destroyed by the Peloponnesian war; Rome was destroyed by invasions by the Goths and the Huns; through Napoleonic France and the Spanish empire to the breakup of the Ottoman empire and the Thousand Year Reich; all were destroyed by a major conflict. Here we have an empire which has collapsed, but as yet there has been no major conflict. The precedents for the destruction of dissolution of empires, apart from our own, are not good.
As noble Lords have pointed out, the seeds of possible conflict exist. Localised conflicts have already broken out: in Georgia, Armenia, Azerbaijan and elsewhere. However, as the right reverend Prelate pointed out, idealism has also broken out. People who for 40, 50, 60 or 70 years had to suppress their basic feelings of nationalism and idealism suddenly find themselves able to exercise those ideas. As one noble Lord said, it may be only a matter of time before the Moslem populations in the southern part of the Russian Federation find that their ties with the fundamentalists in the south are stronger than their links to the Christian slays in the north. If that happens the whole of the Russian Federation—including 90 million Moslems—may fall into a camp of Islamic fundamentalism, creating difficulty if not a major conflict. As my noble friend Lord Ennals pointed out, we have to deal with completely new patterns of states as the break-up works towards its conclusion.
Noble Lords may think that I am being pessimistic but I believe in being realistic. There is no point in our being taken by surprise by events. I hate to add to the gloom that I have already spread, but, unfortunately, as noble Lords have said, the whole situation is enormously complicated by the existence of the former Soviet Union's nuclear capability in terms of the stocks of nuclear weapons, the facilities, and as the noble Lord, Lord Boyd-Carpenter, pointed out, the expertise of the people who have worked on those weapons. I shall return to that point when I come to the military problem.
I turn now to the economic problem. As though the dissolution of an empire is not enough, and that is a historic event, in this case it is accompanied by a total change in the economy from a command economy to an economy in which the price mechanism is allowed to operate. The political change and the economic change are meant to go together. The result, inevitably—and it could have been predicted—is disruption. As the noble Lord, Lord Beloff, said, the unemployment which was previously masked has suddenly come out into the open.
The noble Baroness, Lady Park, spoke graphically of the failure of the distribution system. There are hard currency problems and cross-frontier problems. No more engines for trains are being made in the
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former Soviet Union because the parts used to come from East Germany. Therefore people have been laid off and there is no employment for them. The whole economy has broken down, there is inflation which may lead to hyper-inflation, there is scarcity in the shops, the black market operates everywhere, and mafia-style organised gangs now control the supply of goods in many parts of the Soviet Union. As my noble friends Lord Kagan and Lord Jay said, the production of oil and gas is around 16 per cent. to 20 per cent. of what it should be.
There is no reason to be surprised by that. As my noble friend Lord Desai and others have pointed out, the reconstruction of the post Second World War European economy was based on a command system. I am sorry to have to remind noble Lords opposite that we came out of the Second World War with a command system. We had rationing and price controls and all the measures which they regard as ideologically unpleasant. Nevertheless that, together with the Marshall Aid programme, led to a major reconstruction of Europe after the Second World War. It was after the First World War, when there was no such system, that there was a major slump in the late 1920s and the 1930s.
I do not argue that we should attempt to return to a command economy. One cannot put Humpty-Dumpty together again. I am not sure that my noble friend Lord Desai was treated fairly by the noble Lord, Lord Bonham-Carter. He did not ask for the status quo ante in terms of a command economy. The lesson we learnt here after the Second World War was that only gradually can the price mechanism take over from the command economy once a command economy has been established. It is not an easy, quick or satisfactory process.
The third theme is the humanitarian theme. When confronting problems we must remember that they may be grand and political but they are about human beings. Noble Lords are good at remembering that we are dealing with human beings. It is very important. My noble friend Lord Cocks was quite right to remind us of the heroism of many Russian people during the Second World War—many people who were devoted to their mother country. But Russia will now start to run out of basic food supplies within 19 days. That was announced by TASS this morning. I repeat, 19 days and then basic food supplies will run out.
As the noble Baroness, Lady Park of Monmouth, pointed out there is a grave problem of environmental pollution. Much of eastern Europe including the former Soviet Union is an environmental desert. When East Germany was unified with West Germany we saw the problems that were encountered.
There is also the military problem. The analysis is most difficult because there are no precedents. One can argue about what happened after the First and Second World Wars, economically, socially and in humanitarian terms. But the advent of nuclear weapons makes very difficult an analysis of what will happen militarily when the Soviet Union has finally broken up. What will happen physically to the nuclear arsenal?
Only this morning the head of the Soviet nuclear design centre was reported as saying that the problem

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of decommissioning nuclear weapons will soon become insoluble. There are not enough competent technicians. Leaks of radio activity from nuclear weapons being decommissioned were inevitable. He said:
"In the very near future we can expect hundreds of big and small Chernobyls".
Hundreds of them! This is not the time to talk about nuclear proliferation but I recognise the force of the point made by the noble Lord, Lord Boyd-Carpenter, about scientists going here, there, and everywhere and indeed nuclear weapons being sold here, there and everywhere. We shall discuss that matter in a debate next week.
I want to turn to the problem of conventional forces. It is not just who controls the Black Sea fleet (important though it is) that rankles among the republics of the CIS. As many noble Lords pointed out, including the noble Lord, Lord Colnbrook, and the noble Baroness, Lady Park, there is a breakdown in the Red Army. Discipline has collapsed. Nobody quite knows to whom they owe loyalty. Unemployment looms on the horizon and there is disaffection. All these matters will raise political problems in the future, of which we must be aware.
What should we do? The noble Lord, Lord Colnbrook, was right. I do not believe, like the noble Lords, Lord Beloff and Lord Bonham-Carter, that we should give up. We have as our watchword: to hope for the best and fear the worst. In hoping for the best I am sure that we have to endorse what my noble friend Lord Cledwyn said about a Marshall Aid-type programme, IMF membership and rouble stabilisation plans. I was impressed by what my noble friend Lord Desai suggested about a payments union between the different republics so that exchange settlements could be properly managed without having recourse to hard currencies. We must clearly make an investment in know-how and management.
My noble friend Lord Kagan described the Baku deal. That was a simple deal in which a German company was going to make a great deal of money, as indeed was the Russian federation. Everyone was going to benefit. I wish to heaven that it had been a British company. I would like to see that sort of deal multiplied and we could arrive at the position described by my noble friend Lord Jay where oil and gas reserves in the former Soviet union were properly exploited.
Having said that, I agree with the noble Lord, Lord Colnbrook, that we must keep up our guard. This is not the time to lower it. We must be prepared to contribute to the United Nations, the Community or any other organisations that offers military intervention in the event of localised conflicts becoming dangerous for the world in general. We must organise ourselves so that we can do so.
All those points are important but there is one matter, mentioned by my noble friend Lord Cocks, which until now has to some extent been overlooked. It is almost as important as all the rest together. It is the absolute necessity to lower the immediate expectations of those who live in the Soviet Union.
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Propaganda has gone out which says that if such-and-such a system is adopted, tomorrow everyone will have a television set, fridge and car and drive on lovely roads. That propaganda assumes that the mere abolition of the command economy and the introduction of the new system by itself will quickly solve all problems at a stroke. It will not. There are no magic solutions. People used to think that communism was a magic solution. It was not. There are no magic solutions. Even if we can avoid disaster, it will take years and perhaps decades before the countries of the former Soviet Union even start to enjoy the standard of living of the average OECD country. During that period—I agree with the noble Lord, Lord Bonham-Carter—democracy will not and cannot take firm root. That must be said plainly and honestly.
As I said, we must hope for the best. We must also fear the worst. There is a major challenge that we have to face—by "we" I mean not only this country but also the United States. I only hope that the political will is there. The sunlit uplands, if I may use that expression, are in sight. We could have a much more peaceful and freer world but the journey will be long and hard. I only hope that we have the political will to make that journey.
7.7 p.m.
The Parliamentary Under-Secretary of State, Ministry of Defence (The Earl of Arran): My Lords, on 26th November 1956 at a reception in Moscow, the Communist Party Secretary, Nikita Khruschev, warned a group of western diplomats,
"Whether you like it or not, history is on our side. We will bury you".
The idea that Soviet-style socialism was the future that worked, dazzled generations of western intellectuals. But history was not on the side of Marxism-Leninism. Above all, the structures created in its name were fatally inflexible, unable to adapt to take account of personal choice and technological innovation.
My noble friend Lord Caithness, in opening the debate, described the confusion and decay which 70 years of communist rule have bequeathed to Russia and the other former republics. As he made clear, we and our western partners and allies are working very hard indeed to help these new countries through the first stages of their long transition to political and economic freedom. Billions of dollars worth of different forms of assistance and aid have been committed. Enormous amounts of expert time and effort in London and other western capitals are now being devoted to this effort, to ensure that it hits the right targets in the right way.
It was the noble Lord, Lord Cledwyn, who rightly drew attention to the need for western assistance to reach a spread of cities and regions. The United Kingdom's bilateral medical initiative is intended to achieve precisely that. Six cities other than Moscow and St. Petersburg have been selected. We certainly favour a very wide distribution of EC assistance. As my right honourable friend the Foreign Secretary made clear at the recent Washington Assistance Conference, we are approaching this question on the

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basis of partnership. It is crucial that our efforts complement those of the former republics themselves, otherwise all our assistance could simply be wasted.
More generally, we firmly believe that the former republics' economic reform programmes will be far more successful if they are pursued by democratic governments and, as it were, the western way of doing things. This is why we favour drawing the former republics into a lively process of dialogue, contact and, as appropriate, new institutional arrangements with existing international groupings.
My noble friend Lord Caithness described our strong support for IMF membership for Russia and Ukraine. No doubt the other new states will follow. Meanwhile they are submitting applications to join the United Nations. All the former republics except Georgia joined the CSCE on 30th January. This welcome development will be a great help in managing sensitive questions of borders and minorities. Council of Europe membership can be considered, although here the new states will need to satisfy the usual membership criteria; namely, fully democratic government and guarantees for fundamental freedoms. Most important will be the development of contacts between the former republics and the EC and NATO.
As far as the European Community is concerned, this will be a whole new area of opportunity and real challenge. The Government intend to get this process moving by making a trade and co-operation agreement with Russia, one of the priorities for our presidency in the second half of this year. The Community is already negotiating these agreements with the Baltic states. We shall look at similar agreements with the other new states on a case-by-case basis.
It would be appropriate if at this particular stage I dealt with some of the points that your Lordships have raised this evening. First, the noble Lord, Lord Thomson of Monifieth, drew our attention to the endless opportunities for training and education in the former Soviet Union. The Chancellor of the Exchequer's new £8 million initiative to provide 1,000 secondments with British firms is intended to tackle precisely that problem.
The right reverend Prelate the Bishop of Manchester rightly drew our attention to the spiritual impoverishment of communism. The transition in Russia to a free market society based on individual freedoms, including freedom of religion, surely represents an enormous gain in that respect. I have to say to the right reverend Prelate that I do not share his attitude about what he considers will be the capitalist attitude towards helping those new, freely-liberated countries.
The noble Lord, Lord Greenhill, rightly observed that there are other areas of the world much worse off than Russia. That is why we stress the importance of Russia mobilising its own considerable resources. This is the sine qua non for economic progress.
We listened with interest to the practical insights into the economic goings-on in Lithuania and Russia to which the noble Lord, Lord Kagan, referred. His remarks reveal that there is certainly scope for
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imaginative entrepreneurship in these countries, and we look for British business to seize these opportunities.
The noble Lord, Lord Jay, made an important point in reminding us that the former Soviet Union produces millions of tonnes of grain. This shows that there is as yet untapped scope for these countries solving their own food problems once they get their basic policies right.
My noble friend Lord Selsdon identified some of the strengths and weaknesses of the former Soviet Union. Our policy must indeed be aimed at building on one and overcoming the other. We agree that trade offers one of the most effective ways of boosting the economy and promoting stability. We have recently decided to make ECGD cover available once it is more subject to certain conditions. However, governments can only create conditions for trade; and that is what we aim to do.
I agree with the noble Baroness, Lady Ewart-Biggs, when she stated that the problems of the former Soviet Union are social as well as economic. But it will certainly take time to develop a social safety net fine enough to prevent the weaker members of Russian society from falling to the ground. As the noble Baroness said, this will give scope to the emerging voluntary sector. Certainly we very much welcome the contacts between the voluntary groups in the former Soviet Union and their counterparts in this country.
I am grateful to my noble friend Lord Beloff for his wise and astute analysis of the economic problems of the former Soviet Union. I agree too that we should continue to help the ex-communist countries of eastern Europe. They can indeed offer a model for development. But we must not assist them to the exclusion of Russia, the Ukraine and the other republics. Even if we could accept the political risks, the human price of turning our backs on these people would be too high.
These new developments are taking place because the Cold War has ended. But the security legacy of the Cold War undoubtedly remains. On one score the communists were efficient. They could not produce food or medicines. They could and did produce weapons, and on a huge scale. At its dissolution the former Soviet Union controlled an army of over 3 million men, 33,000 tanks in active service and 6,000 combat aircraft. An extraordinary conventional force, far exceeding any reasonable defensive purposes. It also possessed some 27,000 nuclear warheads, of which perhaps 13,000 were strategic.
Even the communist system ultimately could not sustain this burden. Now Russia and the 11 other newly-independent states have the unenviable task of achieving a controlled reduction of these forces. They have no choice. They need to mobilise for ordinary civilian purposes the physical and scientific resources involved. This is as it should be. It is not for us in the West to subsidise directly or indirectly this huge army.
However, there are real and serious concerns in the West that the sheer pace of events—to which so many noble Lords have referred—could simply fragment the

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former Soviet armed forces. The ensuing confusion would make this fearsome weaponry available to all and sundry, not least nuclear weapons.
My right honourable friend the Prime Minister stressed the urgency of this question with Presidents Gorbachev and Yeltsin when he visited Moscow on 1st September, immediately after the attempted coup. Intense western co-ordination followed, in a successful effort to persuade the republics to offer suitable assurances on this and other questions as they moved to independence.
My right honourable friend the Foreign Secretary discussed nuclear non-proliferation in great detail with President Nazarbaev of Kazakhstan, President Kravchuk of Ukraine and President Yeltsin during his visit to their countries on 18th to 20th January. My right honourable friend the Prime Minister and President Yeltsin covered it again last Thursday here in London.
Let me indicate in more detail where we now are on some of the key security issues. NATO collectively has thoroughly grasped the need to respond to events in the former Soviet Union and central and eastern Europe. I do not need to rehearse the many changes that have already taken place but what is a very new step is the creation of the North Atlantic Co-operation Council. This is a body which brings together NATO's 16 nations and the countries of the former Warsaw treaty organisation and the Baltic states. It is a consultative forum—a place for dialogue and understanding. In place of confrontation, we have a body where mutual confidence can be built and security issues of concern to all nations represented can be discussed. In this way the NATO Alliance—which remains a pole of stability in an uncertain Europe—reaches out to make contact with its former enemies and future partners.
The co-operation council had its first meeting on 20th December last year in Brussels. Foreign Ministers of 25 nations attended. NATO's 16 nations were represented. The second group comprised the then nine nations of central and eastern Europe: the USSR, the three Baltic states, Poland, Czechoslovakia, Hungary, Romania and Bulgaria. A valuable exchange took place and a start was made on the patterns of future dialogue between NATO and those countries.
Almost on the day of the meeting, though, the Soviet Union was breathing its final breath. Now we have a commonwealth of independent states comprising 11 separate republics, excluding Georgia. The next step will be to make arrangements to include all these republics within the co-operation council. Russia was, in effect, already present on 20th December. The other 10 republics must now be brought fully into the fold.
Countries such as the Ukraine, Belarus and Kazakhstan are important states from a defence aspect, with nuclear weapons upon their territory. The others, to varying degrees, present security questions of close interest to the West.
The United Kingdom nationally is responding fully too. The visit of President Yeltsin last week brought
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with it the presence of Marshal Shaposhnikov, commander-in-chief of the forces of the Commonwealth of Independent States. My right honourable friend the Secretary of State for Defence had significant discussions with the marshal. They then joined the two heads of government for further dialogue. It is clear that there is much that the new authorities in the commonwealth admire about this country's approach to defence matters; in particular about the capability and effectiveness of our armed forces. They are impressed by their professionalism. They know of the long tradition of managing forces within a constitutional democratic framework here.
My right honourable friend the Prime Minister, in his Statement in another place on Monday of this week, confirmed that he had offered to the Russian and CIS authorities advice and dialogue on the restructuring and control and financing of armed forces in a democratic society. He has offered to send a number of officials from the Ministry of Defence to the Russian Ministry of Defence for this purpose. Marshal Shaposhnikov expressed to my right honourable friend the Secretary of State his keen interest in that. Steps will be taken to set it in motion. That is a valuable contribution which this country can make in promoting the democratic and constitutional process which has already begun so strongly in the former Soviet Union—a contribution specific to the defence field.
I turn now to nuclear matters; in particular to the question of the stockpile of some 27,000 nuclear weapons which remain in the former Soviet Union. That is a reality. We need to do what we can to ensure that the process of reducing that stockpile is handled in a safe, secure and rapid way.
The discussions with President Yeltsin and Marshal Shaposhnikov last week covered that in depth. We indicated that there were particular areas where the UK had expertise which might be valuable. These include such areas as the transport and storage of nuclear material. As a result my right honourable friend the Prime Minister offered to send a special mission from the Ministry of Defence to Moscow to assess the immediate needs at first hand. Here is an area in which early progress can, we hope, be made. We hope that the team will depart very shortly.
It is only too evident from our experience in Iraq that there is a market for the kind of nuclear expertise which exists in the old Soviet Union. Russia will inherit the rights and obligations of the former Soviet Union as a nuclear weapon state under the non-proliferation treaty and President Yeltsin too recognises the dangers of proliferation. We warmly welcome his expression of support for the IAEA and the indications that Russia will adopt full-scope safeguards conditions for its nuclear experts, as the UK has already done. In their discussions last week the Prime Minister and President Yeltsin agreed to have further talks on ways in which we can help Russia and the other newly-independent states to use the talents of their nuclear scientists in the cause of peaceful development. The noble Lords, Lord Cledwyn and Lord Judd, and my noble friend Lord Harmar-Nicholls rightly expressed profound anxiety

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about the matter. I hope that they find my comments reassuring. My noble friend Lord Boyd-Carpenter may not be so reassured but I believe that he will acknowledge the determination of this Government to continue to find a solution to the problem.
Perhaps I may now turn to the question of the UK's own strategic deterrent. As my noble friend Lord Caithness indicated, the Government strongly welcome the recent proposals to reduce American and ex-Soviet arsenals. But let us not be under any illusions about the scale of what is involved. I repeat that at this moment the arsenal of the former Soviet Union is some 27,000 warheads. The reductions currently in prospect will take many years—well into the next century—to implement. Even when that has been done it will still have many thousands of nuclear weapons left. Of course we welcome the new relationship that we have with the Russian Government, symbolised by the joint declaration signed last week. But the continuing existence of these thousands of weapons is a fact and, as Aldous Huxley said,
"Facts do not cease to exist because they are ignored".
Let us look at another hard fact. Our own deterrent is a minimum one. When it is updated by the introduction of Trident it will, contrary to the belief of the noble Lord, Lord Kennet, still be a minimum one. We shall have four Trident submarines to make sure that one is on patrol at all times because we are determined that our country shall be protected at every moment of every day. Each Trident boat will carry no more than 128 warheads, as we have often made clear. That is not the same as saying that each boat will carry 128. The figure is a maximum. We shall keep our planning under review. Let us remember, after all, that it will be a few years yet before the Trident force enters service. We are committed to deploy the minimum necessary deterrent and no more.
Let us be clear, too, that our deterrent does not block reductions in the superpower arsenals. The very idea that it does is ridiculous. Even after the latest round of proposals the superpowers will still have up to about 15 times the maximum capability that we will have with Trident. What is happening is the reversal of a superpower nuclear arms race in which Britain was never a participant. But your Lordships need not take my word for it. President Yeltsin said, after his meeting last Thursday with my right honourable friend the Prime Minister:
"Mr. Major has put forward his position which I respect and we shall not blow up this matter out of proportion".
Far from showing any sign of disappointment at the British position, as suggested by the noble Lord, Lord Ennals, President Yeltsin went on to say that he did not consider our deterrent to be at all comparable with the Russian arsenal and therefore not really worth any discussion.
The Lord Bishop of Manchester: My Lords, I thank the Minister for giving way. Will he explain how it is possible for this country to commend the giving up of nuclear deterrents of smaller nations, apart from the superpowers, while we continue to possess our own deterrents of that magnitude?
The Earl of Arran: My Lords, we in this country have always taken the view that this country should have independent nuclear capability but that it should be a minimum deterrent and if necessary allied to our NATO allies if required.
Some noble Lords, looking at the encouraging events of recent days, may ask, "Why bother having even a minimum deterrent?" Perhaps I may give two good reasons. First, we just do not know what kind of states Russia and the other former Soviet republics will become in the years ahead. We do not know who will be in power there, nor what their policies will be. My noble friend Lord Colnbrook asked how secure is Mr. Yeltsin. That is a very good question. My noble friend went on to warn what might happen if things start to get out of control and the army begins to take over. That is not to say that we doubt the sincerity or goodwill of the present Russian Government. We do not; but Britain's defence has to be planned for the decades ahead. It is not good enough to make it up as you go along and hope that it will be all right.
Secondly, we also do not know—although we certainly have some suspicions—which other countries will have acquired nuclear weapons in a few years' time.
Against that background of uncertainty, to which many noble Lords have referred, including the noble Lord, Lord Williams, and, in a most thoughtful speech, the noble Lord, Lord Ardwick, it would be utter folly even to contemplate any weakening of our minimum nuclear deterrent. That would be like throwing away the best insurance policy that we have. We will not be seduced into such folly. We will not gamble with the security of the nation. We will not expose future generations to the risk of nuclear blackmail.
Nuclear weapons are, of course, not the only weapons of mass destruction. We are greatly encouraged by the prospects of agreement on a global, comprehensive and verifiable convention banning chemical weapons this year. Our determination to achieve this was echoed by Russia and all other members of the United Nations Security Council in their final declaration last week.
There will be many further problems over the future of former Soviet armed forces. Recent tension between Russia and the Ukraine over the Black Sea fleet shows how difficult it is to sort out who controls what. My noble friend Lord Boyd-Carpenter was most positive on that point. He was undoubtedly right. The noble Lord, Lord Williams, too was most anxious about the matter.
The CFE treaty provides an immediate focus for discussion about conventional forces. Although the circumstances in which CFE was originally conceived have changed almost beyond recognition the need for the treaty remains. If anything, it would now provide an even more important contribution to stability and security in Europe than previously. The Soviet Union was a signatory to the treaty, but for it now to enter into force requires the eight newly independent states with territory west of the Urals to ratify it. This process was set in hand at a meeting at NATO headquarters on 10th January involving NATO

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members, the Central and Eastern European countries, and the new states. So far the leaderships involved have approached these matters in a responsible manner. This gives grounds for confidence that these sensitive problems will continue to be addressed calmly and sensibly.
This has been an excellent debate on a subject of unparalleled historical importance. We thank the noble Lord, Lord Cledwyn, the Leader of the Opposition, for giving us this opportunity which so many of your Lordships have seized upon with enthusiasm. The sudden dissolution of the Soviet Union at the end of 1991 was as revolutionary an event as the communists' seizure of power in 1917.
It is not only the end of a mighty empire. It is more important than that. It is also the end of a pernicious idea that has blighted this century—the idea that all-embracing state control represents the zenith of human progress. Khrushchev was wrong. Soviet Communism did not bury the West. It buried itself.
Russia and the other states are now starting to rebuild on the basis of a winning idea—the idea of a civil open society. Many noble Lords have made clear the historic challenge which they face. That also offers the West an historic challenge. This Government are rising to that challenge. We are playing a leading role in mobilising Western resources on an unprecedented scale to help Russia and the others on the basis of a new partnership. Rebuilding the former Soviet Union will be a long, hard road as many noble Lords have said. As this debate has demonstrated, we are setting off down that road with generosity, purpose and determination.
7.31 p.m.
Lord Cledwyn of Penrhos: My Lords, I think we can all agree with the noble Earl, Lord Arran, that the House has had a most valuable debate and a series of perceptive and well-informed speeches. I am grateful to the two noble Baronesses, to the right reverend Prelate, and to all noble Lords who took part and to the two Ministers who opened and wound up the debate.
This is the most important subject before the world at present, as my noble friend Lord Williams said. We shall return to it again and again. I beg leave to withdraw the Motion.
Motion, for Papers, by leave, withdrawn.

Employment Protection (Variation of Limits) Order 1992
7.32 p.m.
The Parliamentary Under-Secretary of State, Department of Employment (Viscount Ullswater)The Parliamentary Under-Secretary of State, Department of Employment (Viscount Ullswater) rose to move that the draft order laid before the House on 19th December be approved [8th Report from the Joint Committee].
The noble Viscount said: My Lords, in moving this order, I shall speak also to the Unfair Dismissal (Increase of Limits of Basic and Special Awards) Order 1992.
The draft Employment Protection (Variation of Limits) Order 1992, has been laid in accordance with Section 148 of the Employment Protection (Consolidation) Act 1978. Section 148 requires the Secretary of State to review in each calendar year the upper limit on the amount of a week's pay for calculating redundancy payments, the basic and additional awards for unfair dismissal, and debts that can be paid under the insolvency provisions of the Act. These limits are all subject to annual review.
The legislation also requires the Secretary of State to review the limit on the amount of guarantee pay due to an employee in respect of any day on which he is temporarily laid-off. In carrying out the review the Secretary of State must consider: the general level of earnings in Great Britain at the time of the review; the national economic situation as a whole; and any other matters he considers relevant. Although the legislation does not require him to do so, the Secretary of State has followed the practice of previous years and consulted a wide range of outside organisations about the review. Employers' organisations generally argued that if there was to be any increase it should be no higher than the rate of inflation. Other organisations were in favour of higher increases.
We have taken into account these views as well as economic factors in proposing all the increases before the House. In reaching our conclusions, we had in mind that one of our prime anxieties is to encourage employment by reducing the burdens on businesses; yet at the same time we are committed to safeguarding the essential rights of employees. The proposed increases strike the right balance between the interests of employers and employees. We propose that the limit on the amount of a week's pay should increase from £198 to £205, and the limit on the daily amount of guarantee pay from £13.65 to £14.10.
The Secretary of State is also required to review the limits on the duration of guarantee pay, which is currently limited to five days in any three month period. None of the organisations consulted saw a need for any change in this arrangement, nor do we propose any change. My right honourable friend the Secretary of State for Employment laid a report at the same time as the draft orders, in which he explained why those limits would not be altered.
I now turn to the draft Unfair Dismissal (Increase of Limits of Basic and Special Awards) Order 1992. This has been laid before the House in accordance with Section 73(4B) and Section 75A(7) of the 1978 Act. These limits are not subject to annual review, but may be reviewed from time to time. The awards covered by this order apply to dismissal for trade union membership or activities, or non-membership of a union. These important provisions were introduced in order to protect the individual's right to choose whether or not to join a union.
The awards were raised last year and we consider it right to increase them again, albeit by a modest amount, so that they remain a significant deterrent against employers discriminating against their employees on those grounds, and we propose a modest increase for the forthcoming year. The minimum basic award will be increased from £2,650 to

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£2,700 and the limits which apply to the calculation of the special award will be increased from £13,180, £26,290 and £19,735 to £13,400, £26,800 and £20,100 respectively.
The limits on compensatory payments are not subject to annual review and are normally increased every other year. They were substantially increased in 1991, and we do not propose any further increase this year.
Moved, That the draft order laid before the House on 19th December be approved [8th Report from the Joint Committee]. —(Viscount Ullswater).
Lord Dean of Beswick: My Lords, I am grateful to the Minister for his lucid and detailed explanation of the purpose of the two orders. I do not propose to detain your Lordships' House for long because we welcome the fact that the limits are to be up-rated.
However, the Minister said that there had been consultations with various organisations. I believe there were consultations with the Trades Union Congress, which has an interest in this subject because of its members. It is worried about the limits on one week's pay in the variation of limits order being increased from £198 to £205. That figure is used to calculate both redundancy and unfair dismissal payments. As that is a maximum level, it means that anyone made redundant who was earning more than that limit would receive a maximum of £205. That is to the disadvantage of those on higher earnings.
More importantly, it is pointed out that that could be disadvantageous as regards unfair dismissal. They note the comments made by the noble and learned Lord, Lord Donaldson. At least, I assume that they mean the noble and learned Lord, Lord Donaldson of Lymington, who is the Master of the Rolls. I do not know whether his comments were made in that capacity or in his capacity as chairman of the Industrial Relations Court.
The TUC notes the comments of the noble and learned Lord that, where higher paid employees are involved, the current limits could positively discourage employers from complying with reinstatement orders. An employer may prefer to go to a tribunal on an unfair dismissal case and risk being found guilty, as the usual remedy in such cases is a requirement to pay compensation at only £205 per week.
The TUC notes the Law Society's view that there is no case for retaining the limits on a week's pay and says that that view is persuasive. Alternatively, the Government must ensure a substantial increase in the levels of compensation. The size of the increase on the limits on a week's pay is only 3.5 per cent., which is far below the rate of inflation and the increase in average earnings.
The TUC consistently argues that failure to update the financial limits in line with either average earnings or retail prices has, over a period, undermined the effectiveness of employment rights. On page two of the memorandum from the Department of Employment (Variation of Limits order), it states,
"The reasons for not varying two of the limits relating to the guarantee payments provisions are set out in a report to he laid before both Houses of Parliament simultaneously with this Order".
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I have said as much as I ought on the matter. I have given a couple of points of view that the TUC may like the Minister to dwell on regarding the disadvantages to the amount people would normally expect to earn on a weekly basis in excess of what the provisions state, even when the upgrading is taken into account. Having said that, perhaps the Minister could give us a brief explanation. I accept that because of the uprating we shall support the order and to some extent we welcome it.
Lord Hampton: My Lords, we on these Benches support both the orders.
Viscount Ullswater: My Lords, I am grateful that both the noble Lords, Lord Dean of Beswick and Lord Hampton, welcome the upratings. That is the purpose of moving the orders. I thank the noble Lord, Lord Dean, for explaining some of the problems, albeit small ones, experienced with the level of the uprating.
It is true to say that the Government have consulted fairly widely on the matter. On the employees' side they consulted the Council of Managerial and Professional Staffs, the Federation of Managerial and Professional Associations, the EETPU, the RCN and the TUC. I hope that that satisfies the noble Lord, Lord Dean, that a good broad sweep of union opinion was canvassed. Whereas he reports that they have commented that the upratings should be higher, perhaps I can explain a little why the Government perhaps take a contrary view.
We believe that industrial tribunals have an important role to play in our society and it is right that individuals should have such a means of claiming their employment rights. The Government are firmly committed to that. On the other hand, it is not the Government's intention that there should be an unlimited statutory right to redundancy payments or unfair dismissal awards. The possibility of limitless claims would make employers reluctant to recruit and therefore reduce the number of job opportunities available. That was a point raised by the noble Lord, Lord Dean.
We are aware of our responsibility to promote a climate where business can flourish and continue to grow with the resulting benefits to employers, employees and job seekers. The review of limits must be seen in that wider context. At the end of the day the correct level of increase, and the noble Lord mentioned increases of 3.5 per cent., is a matter of judgment, taking into account the various factors to arrive at a sensible position. In my opening remarks I outlined the criteria by which the Secretary of State has to make a judgment.
We believe that employers should have some protection from these astronomical claims and it is right that the amounts proposed within the orders are the correct ones.
Lord Dean of Beswick: My Lords, before the Minister sits down, perhaps I can express my appreciation for the detailed way in which he dealt with the small points I raised. I have no doubt that those on whose behalf I raised the points will, in the

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next period when the matter is reviewed, put the points during the consultation better than I was able to. Having said that, we welcome the Minister's reply and the two orders.
Viscount Ullswater: My Lords, I commend the order to the House.
On Question, Motion agreed to.

Unfair Dismissal (Increase of Limits of Basic and Special Awards) Order 1992
7.45 p.m.
Viscount Ullswater: My Lords, I beg to move the second Motion standing in my name.
Moved, That the draft order laid before the House on 19th December be approved [8th Report from the Joint Committee].—(Viscount Ullswater.)
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On Question, Motion agreed to.

Taxation of Chargeable Gains Bill [H.L.]
Reported from the Joint Committee with amendments, and re-committed to a Committee of the Whole House.
Radioactive Susbstancees Bill [H.L.]
Reported from the joint committee with amendments, and re-committed to aCommittee of the Whole House

Tribunals and Inquiries Bill [H.L.]
Reported from the Joint Committee with amendments, and re-committed to a Committee of the Whole House.
House adjourned at fourteen minutes before eight o'clock.