HL Deb 07 May 1992 vol 537 cc32-133

Debate resumed on the Motion moved yesterday by the Baroness Carnegy of Lour—namely, That a humble Address be presented to Her Majesty as follows:

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

3.15 p.m.

Baroness Chalker of Wallasey

My Lords, first allow me to thank your Lordships for the very kind and generous welcome you have shown me. It is a very great honour to open your Lordships' debate today on the gracious Speech. However, at the beginning of this debate, on behalf of my noble friend Lord Cranborne and myself, I wonder whether I may say that we are just a little alarmed to find that the significant letter M is absent from your Lordships' list of speakers. We wish to assure you that today we are both maidens.

After 18 years of what one might describe as rough and tumble in the other place it is good to know that there is still a little magic left in the world. It is thanks to this noble House that today I am a maiden once more. As a one time cricketer may I ask your Lordships to use your charms rather than your bouncers if you must try to bowl a maiden over?

It is with genuine modesty that I rise to speak today. I speak with modesty and some pleasure because the debate on this gracious Speech allows me to concentrate on certain issues on which I have been privileged to work. I refer to the European Community, security, aid and Africa. My noble friend Lord Cranborne will seek to cover the specific issues which your Lordships raise in the course of the debate.

At a time of change it is crucially important to keep a firm hold on fundamentals. These do not change. We strive for security, prosperity and stability in a safer and more democratic world. The quest for these aims shapes our response to the new agenda in international affairs.

Our future prosperity depends on a healthy international trading system. To achieve this we work through the European Community. As your Lordships are well aware, the Community's agenda is dominated—I hope only temporarily —by the consequences of Maastricht. In the coming weeks we shall be asking for Parliament's approval to ratify the Treaty of Maastricht. It is worth recalling the background. Last year, while negotiations proceeded in the two inter-governmental conferences, in Britain we held a thorough and open democratic debate about the implications. It was not easy but in our view it was necessary. This domestic debate greatly strengthened the hand of my right honourable friend the Prime Minister at Maastricht. The concerns registered—notably in your Lordships' House—affected the final shape of the treaty. Four main points dominated the British debate.

First I shall deal with economic and monetary union. Stage I is up and running. Portugal is the latest member state to join the exchange rate mechanism. Only Greece remains outside the ERM. For Stage II we have set the rules according to British requirements: monetary policy will remain the preserve of national governments throughout Stage II. Stage III can come about only when strict conditions of economic convergence are met—conditions which Britain, with Germany's help, insisted upon. Crucially, the treaty also gives Parliament the right to decide whether or not the United Kingdom should join Stage III.

Secondly, Maastricht reinforced the rule of law in the Community by ensuring compliance with ECJ judgments, by fines if necessary. That is a UK proposal. Another success is the provision for better auditing of the Community's budget, which is now around £42 billion a year. It is vital that it be both properly and publicly accounted for.

Thirdly, we enshrined the principle of subsidiarity for the first time. The European Community can now concentrate on doing more effectively the things which Europe should do together. As the Community broadens its membership it will be ever more important for decisions to be taken at the right level. That means the national not the Community level, unless there is good reason to do otherwise.

Fourthly, we have established a firm basis for deeper co-operation among the Twelve on foreign policy issues, and on difficult issues such as immigration, asylum and judicial co-operation. Hence the Maastricht treaty's pillared structure. For the first time it has been accepted and set down in treaty form that the Treaty of Rome is not the sole way in which our Community can develop. Instead of extending Community competence and taking power away from member states, Maastricht decided to ensure that the Twelve could work together on an inter-governmental basis, so as to maximise their common power. That is an approach to which I strongly subscribe.

The Treaty of Maastricht provides a sound basis for the functioning of the Community. It is a good treaty. We are happy with it because the final text reflected our key concerns. Soon Parliament will have the opportunity to scrutinise its terms.

Ratification is the key to unlocking the substance of the rest of the EC's agenda. The Community faces three stiff short-term challenges—what my right honourable friend the Foreign Secretary has called the "Siamese triplets" of GATT, CAP reform and future financing.

GATT seeks to open markets, to establish free and fair competition. Open markets allow consumers a greater choice of goods at lower cost. They also provide a competitive spur to business and give opportunities to British exporters, particularly of services. That is the only route to lasting improvements in European prosperity.

A successful GATT result would also help developing countries. They need trade in order to develop their economies. When those begin to function properly their whole society benefits from the extra resources generated. Failure would increase the already growing pressure for protectionism and the creation of inward-looking trade blocs, with catastrophic consequences for the developing world.

An effective GATT agreement must go hand in hand with reform of the CAP. In the CAP negotiations we shall be seeking to reduce costs, to give greater rein to market forces, to give more weight to the environment and to gain a fair outcome for the British farmer. Progress has been made over the years in improving the workings of the CAP, but on its present basis it is unsustainable.

In February, M. Delors launched a review of Community finances. That was presented as a consequence of the decisions taken at Maastricht. His proposal was an opening shot. There will be a detailed debate over the next few months. We shall look at ideas for more spending with a cautious and sceptical eye. There is an argument for higher spending, but the case for savings elsewhere in the budget is no less strong.

GATT, CAP and future financing are the immediate European priorities. Looking ahead to the coming UK Presidency, perhaps I may add two more: completing the single market and enlargement. In 1986, on behalf of the United Kingdom, I signed the Single European Act. The Act set a deadline of 31st December 1992 for completion of the single market. Our aim is that all essential elements of the market should be completed by the end of our Presidency in December.

Preparations for the next stage of enlargement will be a priority for the British Presidency of the EC. The first phase will probably see the accession of several EFTA members; three have already applied. In that way Britain is helping to shape the Community's agenda for the next century. We continue to use our influence to make the EC open and outward-looking, to give priority to the Community's relations with the rest of the world. Perhaps I may add my tribute to the noble Baroness, Lady Serota, for all the work that she has done. It was of great help to me in another place in trying to unravel some of the difficulties with which both Houses of this Parliament have frequently been presented by the European Community.

At Maastricht, the Twelve agreed to establish a common foreign and security policy and to develop the Western European Union as the means to make a greater European contribution to the defence of our continent. But the agreements reached at Maastricht made crystal clear that anything and everything done in the security field has to be compatible with the common defence and security we already have through the Atlantic alliance. As the gracious Speech notes, NATO remains the keystone of collective European security. Only NATO provides a credible, collective defence. Only NATO combines the transatlantic and European dimensions to our security.

However, the alliance is changing. Indeed it has to change. We no longer talk of East-West relations, of confrontation between two blocs, but of an altogether more varied array of links between Europe, East and West. Last year Mr. Gorbachev was swept aside just as his twin creations, glasnost and perestroika, began to transform the Soviet Union. The peoples of the Commonwealth of Independent States are getting used to elections, to differences of opinion, to working towards a market economy. The countries of Eastern Europe have made a decisive choice for democracy.

Although the single massive threat has all but disappeared, risks remain. There are still over 27,000 nuclear warheads in the former Soviet Union. However, there is room for hope, a requirement for change, but no place for complacency. NATO has responded. In Rome last November, the alliance adopted a new strategic concept which addresses the new realities. In parallel, the alliance has started to extend the hand of friendship to its former adversaries to the east through the North Atlantic Co-operation Council.

The tragic events in the former Yugoslavia are a reminder that all is not well in all parts of the new Europe. With our EC partners we are doing what we can to consolidate the new republics, to put pressure on the recalcitrants. We follow the twin strategy of peace-making through the EC, peace-keeping through the United Nations. My noble friend Lord Carrington is fully engaged as chairman of the EC's Peace Conference. On the ground, EC monitors have been joined by UN liaison officers to hold the ring, to build confidence and so to create conditions where the parties can contemplate the necessary political settlement. We were deeply saddened by the death last Saturday of a Belgian monitor, the sixth EC monitor to die. But our commitment is unwavering—a unit of 260 British medical personnel has joined the UN protection force. Despite the difficulties, the international community remains determined to succeed.

We cannot, as Europeans, allow ourselves to focus exclusively on Europe. Some issues are world problems. Others, Britain must address as a direct responsibility.

In Hong Kong, our responsibility and main interest can be expressed simply: to administer Hong Kong justly and efficiently up to 1st July 1997, when China resumes sovereignty; and to achieve a secure and prosperous future for the people of Hong Kong after that date, on the basis set out in the Joint Declaration. We shall continue to work for those key objectives in the interests of Hong Kong under the new Governor, my right honourable friend Mr. Patten. I am sure that your Lordships will join me in wishing him a most successful tenure in one of the most demanding jobs in the British public service. It was my privilege to follow him at the ODA; I can think of no one better suited to guide the changes in Hong Kong.

In Africa, we are trying to help political change come about in a democratic way, in accordance with the rule of law. In much of the continent this change is already well under way. Botswana has been a democracy for over 25 years. Namibia and Zambia have recently held democratic elections. In Nigeria and Ghana plans are well in hand. In Angola, there is a tremulous hope for ending the conflict. For Mozambique the Rome talks are crucial; everything hinges on a successful cease-fire.

In Africa as a whole it is perhaps southern Africa which presents the greatest challenge. In South Africa we must help in the transition to a non-racial, democratic society. The 68 per cent. "yes" vote in the 17th March referendum—a tremendous personal endorsement for President de Klerk's reforms—has opened the way for more rapid constitutional progress. Appalling problems remain; more than 800 people have died in township violence so far this year; population growth exceeds economic growth by more than five times; and now the region must cope with its worst drought in living memory.

The European Community plans a visit by the Troika—the past, present and future presidencies—to South Africa. Britain will of course take part. We and our European partners continue to look for ways to support the constitutional process, assist peace efforts and stimulate economic growth.

Britain is doing a great deal to help African development. In 1990, 46 per cent. of our bilateral aid went there. Together with the funds we channel through the multilateral agencies, our total assistance amounted to some £750 million.

But for many countries in Africa, famine again overshadows any thoughts of sustained development. In both southern Africa and the Horn, the drought has given us advance warning. We all have the chance to save lives before it is too late. That is why last week I announced Britain's bilateral contribution of a further £20 million for emergency relief in southern Africa, in addition to the £10 million committed on 4th March. I am also glad to report to your Lordships that earlier this week, the Community Development Council agreed to send 800,000 tonnes of food aid to drought affected countries, mainly in Africa.

The tasks facing us in helping the developing countries remain enormous, but I do see some hope. As noted in the gracious Speech, almost everywhere governments are trying to encourage economic reform, to make themselves more accountable and to improve their respect for human rights. Where advice or training is needed, we give it. Where the call for reform is not being heeded, we have taken the lead with our European Community partners and others to persuade, cajole and—if there is no other way—to cut development aid in the worst cases. We are beginning to see the benefits; those countries undergoing radical structural adjustment are now clearly doing better than others, not just in Latin America but in Africa too.

In Eastern Europe and the former Soviet Union, we now have an additional role to play. Within the EC, we proposed the association agreements; the first three have now been signed with Czechoslovakia, Hungary and Poland. We contribute 18 per cent. of the aid programme which the Community gives as grants: £595 million has so far been committed for the former Soviet Union, with £720 million in 1992 for Central and Eastern Europe. These programmes already have a positive effect: Hungary ran a balance of payments surplus for the first quarter of this year; there has been no need to renew balance of payments support for Czechoslovakia.

Our know-how funds are also making a distinctive contribution to the huge task of economic reconstruction. The funds used are separate from and additional to those for developing countries. We have taken the lead in supporting privatisation in Poland and Czechoslovakia. We have helped set up a stock exchange in Budapest. One thousand Russians from the financial sector are coming to London for training in a modern market economy. In all these ways we are supporting the work of the reformers. Such is the success of the know-how funds that other donors are now copying this method of assistance.

The peaceful revolution in the East relies, first, on the efforts of the peoples involved. Secondly, it needs outside help. Britain has given the lead in helping Russia, Ukraine and other CIS states in joining the IMF and World Bank—and at unprecedented speed. Likewise, we were the first to call for the establishment of a stabilisation fund to help President Yeltsin and his Ministers underpin their determined reform programmes. Billions of dollars have been made available to Russia and the other states in the form of debt referral, new credits and grants.

There remains much to be done throughout the former Soviet Union, but we have set the course and month by month we see progress. Later this month donors will gather in Lisbon to review progress since the January Washington conference on humanitarian assistance to the region.

The international agenda is formidable and goes much wider than the four areas that I have been able to touch on. We need, for example, to co-operate better in managing the world's scarce resources. My right honourable friend the Prime Minister was the first head of government of the Group of 7 to commit himself to attend the Rio Earth Summit. He will take to that summit Britain's commitment to the target of returning to 1990 levels of carbon dioxide emissions by the year 2000.

Whatever the agenda, one thing is clear: Britain has real influence. We are a permanent member of the UN Security Council, a member of the EC, NATO, G7, OECD and the Commonwealth. We are the only country which is a member of all those key international groups. We make a major and serious input to all of them.

Our resources are not unlimited. So in order to protect and promote British interests we must use them effectively. But where there is a good case, we make strenuous efforts to find the resources. We meet our obligations, whether in the Gulf War, or in Yugoslavia, Namibia, Cambodia or wherever.

In sum, Britain remains a significant power. But your Lordships may be sure that the Government are not complacent. Thirty years ago the late Lord Stockton made his famous "winds of change" speech. There followed a period of sustained and sometimes painful change throughout Africa, guided by one of the most remarkable Secretaries of State for Colonial Affairs, my mentor, the late right honourable fain Macleod. By his wise counsel, Britain helped many countries to gain their independence in the wider world. Today that wind of change is blowing once again, and not simply in Africa. Britain stands alongside the emerging democracies, working with them to achieve the stability, peace and growth so vital for their success.

3.38 p.m.

Lord Cledwyn of Penrhos

My Lords, perhaps I may first very warmly welcome the noble Baroness, Lady Chalker, to her position as foreign affairs Minister in this House. The noble Baroness won a high reputation as Minister for Overseas Development, and in her wide-ranging speech she has set the scene for our debate today. We also welcome the noble Viscount, Lord Cranborne, and look forward to his speech later in the debate.

In the debate on the Address last October I asked whether, against the background of wars and revolution, we should look to the future with hope or despair. I said then that I believed that hope outweighed despair, although we must try to avoid wishful thinking. Our immediate and most important concern must be the development in the old Soviet Union, now the CIS, and the old Warsaw Pact countries referred to by the noble Baroness. To refer to them in these terms is to realise the immense change which has taken place in a short space of time. The single sentence in the gracious Speech is, I regret to say, quite inadequate, and it fails to convey the urgency and the importance of the revolution which has taken place in Eastern Europe. We believe that it is essential that President Yeltsin should succeed in his efforts to avoid the fragmentation of the CIS and to build agreements between the states on the basis of a new constitution. I understand that the proposed new constitution would be democratic and would resemble that of France and the United States of America. That is very encouraging if it can be achieved. But it means settling the division of power between central and local government. We wish President Yeltsin every success in his great task.

Of course he needs the moral and practical support of the West. I was glad to hear what the noble Baroness had to say about this. The latter, I am bound to remind the House, was not quickly forthcoming; but we are glad to know that economic assistance is increasing substantially at the present time. An historic step was taken on 28th April when Russia and 13 other republics were formally received into the International Monetary Fund. The result is that the IMF allocated Russia a first loan of 4 billion dollars which will lead to the creation of a 6 billion dollar special fund to back the power of the convertible rouble. Further, I believe that the CIS will qualify for 25 billion dollars of World Bank loans over the next six years. We warmly welcome the developments referred to by the noble Baroness; but I shall be grateful if the noble Viscount, Lord Cranborne, will let us know whether the Government consider that the measures are adequate to enable the CIS countries to transform their economies. That must be the aim. The last thing we wish to see is further destabilisation in Eastern Europe.

I ask the question because we all know that transition is complex and difficult, mainly because of the inter-republic rivalry and ethnic strife. The troubles in Georgia and Nagorno-Karabakh reflect that, and we hope that the United Nations with the Community and the CSC in Europe can and will combine to help resolve those debilitating problems. NATO and some members of the old Warsaw Pact have asked CSC to help the Russian mediation effort in Nagorno-Karabakh, and we shall be glad to know what progress is being made to bring the fighting to an end.

At this point I feel that I must again pay the warmest tribute to the noble Baroness, Lady Cox, for the tremendous effort she has personally made to help the people of this unfortunate region.

Perhaps I may turn to another subject which deeply concerns the noble Baroness and about which she spoke. Other noble Lords will refer in their speeches to the appalling tragedies which are taking place; namely, the 60 million people who are threatened by famine in Africa. Reports of their suffering are filtering in day by day. It has been said many times in recent months that the reconstruction problems of Eastern Europe are distracting the world's attention from the great hunger crisis in Africa. The dimension of the problem is so huge as to make us turn away in shame and inadequacy. Millions of people are on the verge of dying through starvation. The noble Baroness referred to newly-democratic governments such as Zambia and Namibia which are in danger of destabilisation. Mozambique is a tragic shambles. As the noble Baroness said, a cease-fire there is essential. The noble Baroness's department has published a paper, Famine in Africa, which gives details.

The noble Baroness has done her very best, but I regret to say that the Government's aid budget is still unsatisfactory, with an expenditure of only 0.27 per cent. of GNP on overseas aid in 1990–91. I am sorry to say that this represents the worst recorded level of British aid since OECD began to keep records. I must ask the noble Baroness whether she will be good enough to convey the deep anxiety of this House to the right honourable gentleman the Foreign Secretary. As she said towards the end of her speech, there are limits to what Britain alone can do. This is 1992 not 1892.

Whether or not we like it, our primary role today is as a member of the European Community. What is crucial is that we make the best of it. That means that we must play a constructive and sensible role, and the fact that Britain assumes the presidency of the Community on 1st July gives the Government a greater opportunity to do that.

We appreciate what the noble Baroness said about the Maastricht Treaty. That Bill will be very important and we shall be looking at it carefully in due course. I shall not therefore go into detail now. There is, however, one question that I should like to put. When he replies, will the noble Viscount, Lord Cranborne, outline the steps that the Government are taking to ensure that the European Central Bank is located in London? Will he say whether the Government consider that their insistence on an opt-out clause to EMU supports or hinders our bid to have the bank located in London?

As the House knows, the Community is on the threshold of radical change mainly due to the implications of enlargement. We need a full explanation of those implications. They are broadly two-fold. First, the door in the Community is likely to open to members of EFTA. Secondly, we know that certain of the Eastern European countries are knocking on the same door. Will the noble Viscount tell us the position of Finland, Austria, Sweden, Malta and Cyprus, and whether Norway and Switzerland are serious and urgent applicants to join? What reforms will need to take place in the Community if those seven countries become members? There are vast economic, constitutional and defence issues to be worked out.

I am sure that those matters are being discussed among the Twelve, notably in Bonn and Paris; and it is curious that this critical issue is not mentioned in the gracious Speech. I should like to know the Government's view. There is a summit in Lisbon next month, and a report on enlargement of the Community is now being prepared. What is the Government's contribution to that report? Will the present structure of Council, Parliament and Commission be suitable and effective in a Community of 17 members? Will new members be allowed to preserve their neutrality? There are profound questions to be answered, and it is vital that we should discuss them at the start of a new Parliament.

The Community of 17 or possibly 24 members would not be the Community that we know today. Parliament and the British people therefore must be kept fully informed of the developments and their possible economic and constitutional effects upon the people of this country.

The noble Baroness mentioned a number of other matters of importance. I shall try to touch upon them briefly. She referred to the running conflict in Yugoslavia and currently in Bosnia Herzegovina. I should like to pay a very warm tribute to our colleague the noble Lord, Lord Carrington, for the patient efforts he has made to bring peace to the area as chairman of the EC Conference.

The role of Serbia and its leader in this seemingly endless fighting appears to me personally to be a sinister one. I hope that I am wrong. Cease-fire follows cease-fire. There is no respect for pacts or agreements. We condemn that totally. I shall be grateful if the noble Viscount, Lord Cranborne, will tell us the Government's attitude to the United Nation's intervention and the imposition of sanctions upon Serbia. Do we agree with France, Germany and Poland who have called upon the United Nations to extend its peace-keeping role from Croatia to Bosnia Herzegovina? Mr. Boutros Ghali cannot move without authority, and it is sad and painful to witness the destruction of Sarajevo and other old cities and the death of so many people. Do the Government envisage any initiative through the Security Council? There may be no other alternative. We would be very glad to support the Government in any positive and progressive move in that direction.

This House has also continued to take a close interest in developments in the Middle East. The American Secretary of State has done his level best to make some progress in the talks; and we must pay him the warmest tribute. As we know, the talks have been tortuous, and we recognise that thus far there is no evidence of a breakthrough. The reason is well known; namely, that Mr. Shamir will not countenance Resolution 242 and the principle of "land for peace". The fifth round of bilateral talks is now taking place, and perhaps we can be told how they are proceeding.

The noble Baroness dealt with another area in which this House takes a close and continuing interest; namely, South Africa. It is good to be able to say that the scene there looks brighter. The progress of reform has been strengthened by the result of the recent referendum which gave full backing to President de Klerk's reforms. We must congratulate him upon his handling of a complicated situation. At this stage, we can only say that we hope that the proposals to form an interim government will come to fruition. Given the complexities, Mr. de Klerk and Mr. Nelson Mandela have worked well together, and the final solution must depend on agreement between them.

The gracious Speech mentions the Government playing an active part in South Africa. It would be helpful if we could be told by the noble Viscount precisely what that means. Our aim should be to help find a permanent solution and act and react in concert with our partners in the Community, taking account also of the views of our Commonwealth friends.

Time makes it impossible for me to discuss other issues of great importance which come within the ambit of this debate. No doubt we shall be having separate debates upon them during the Session. The noble Baroness reminded us that Hong Kong is of particular interest and urgency as 1997 will be upon us very quickly now. We wish Mr. Chris Patten well in his post as governor, although I must say that we would have preferred a less convoluted way of making that appointment. He faces very heavy responsibilities, and his political experience will help him to seek a balance between the various interests in Hong Kong. I feel also that his experience of political life will encourage him to support the introduction of democracy into the colony. I am sure that we all look forward to welcoming Lord Wilson, the present governor, into this House in due course.

The continued repression of East Timor and the criminal imprisonment of Aung San Suu Kyi are not forgotten. Events in Afghanistan are also very relevant to our debate. We hope that all-out civil war there can be avoided. We support any initiative through the United Nations to promote and sustain a ceasefire in Afghanistan.

Those international problems—and there are others in Iraq, Cambodia, Cyprus and South America —prompt me to ask once again: what can Britain do to help? There are clearly strict limitations, and the plain fact is that we can be effective only if we act in concert with our allies and friends in the Community and the United Nations. There are some things that we should not do, and I must point to that again, as I did in a debate some moths ago; namely, selling arms or giving aid to predatory and repressive countries. We should have learnt that lesson by now.

In short, our conduct on foreign affairs can be supported only if we get our priorities right. We must of course secure our defences, as the noble Baroness pointed out. However, enlightened self-interest is no longer enough. As an old parliamentary democracy, we must not dismay or disappoint those countries which are struggling to build democracy by operating weak and vacillating policies. Our policies in Britain must be honest, compassionate and strong. That should be our constant and unwavering aim.

3.55 p.m.

Lord Bonham-Carter

My Lords, it is a great pleasure to associate myself with what the noble Lord, Lord Cledwyn of Penrhos, said in welcoming to your Lordships' House the noble Baroness, Lady Chalker. I congratulate her on her maiden speech which lived up to the very high expectations which I, for one, harboured. Her arrival here is a double pleasure. I always find it a pleasure to greet a defeated Tory. It is all the more agreeable when that defeat brings to this House someone of such distinction as the noble Baroness.

I associate myself also with the words spoken by the noble Lord, Lord Cledwyn, about the arrival of the noble Viscount, Lord Cranborne, whose speech we look forward to at the end of this debate, together with the speeches of the other two maiden speakers, the noble Earl, Lord Cromer, and the noble Lord, Lord Prentice.

There are 28 other people who wish to participate in this debate. Therefore, I suspect that the words that I have to pronounce will be all the more welcome if I keep them reasonably brief. I shall attempt to do that partly by telling your Lordships what I shall not speak about; namely, a large number of matters which have already been mentioned. I do not propose to go into detail on the Maastricht Treaty because we shall have an opportunity to discuss that when the Bill is brought before your Lordships. I do not propose to talk about Hong Kong which we have discussed on many occasions and which I hope we shall discuss in the future. I do not propose to speak about overseas development. I know that that is the particular responsibility of the noble Baroness and I shall follow her activities with interest. There are a huge number of issues which have been mentioned but which I shall have to omit from my remarks today.

When I look around the world I see an extension of the political instability which was the consequence—the inevitable consequence—of the revolutions of 1989. Political and economic reform of the countries of Central and Eastern Europe—and indeed those countries which constituted the USSR—is taking its time and is proving more difficult and more lengthy than some foresaw. Nowhere is that more apparent than in the vast problems facing Germany in absorbing what was the GDR into its political and economic life. The difficulty of introducing political and economic reforms simultaneously has been underestimated. It was wrongly assumed in many quarters that the two marched hand in hand and supported each other. In fact, so far as I can see, there is absolutely no evidence that economic reform is a necessary conjuncture of democratic politics.

Indeed, where the market economy has grown, it has nearly always been imposed by authoritarian governments, colonial governments or occupying powers. Very rarely has it been introduced by democratic governments. When it has been introduced, it will be supported, but people will not vote for 20 per cent unemployment, a drop in the standard of living and all the problems facing those countries which are trying that great and new experiment. Nowhere is that more vividly demonstrated than in Poland where the present parliament has not passed one significant piece of legislation, where yet another minister of finance has resigned, where the budget has not been approved and where there is a tug of war between the president and parliament. An area with a more tragic and dangerous form of instability, as already mentioned, is Yugoslavia.

The position of the Community therefore becomes more crucial as the one element of economic and political stability in this part of the world. Even there a different kind of instability is apparent in, for example, the diminished authority of President Mitterrand, the economic problems facing Chancellor Kohl and the constitutional crisis taking place in Italy. That makes the position of our Prime Minister an exceptional one, with this country about to take up the presidency and he the victor of a recent election. He has a free hand and a major role to play. It is to be earnestly hoped, as my noble friend Lord Jenkins of Hillhead has said, that now he is his own man with his own government, he will play that hand in a positive fashion confirming, in the words of a leader in the Financial Times today, that A British Government has at last accepted that it is part of the European entity", and that their aim is to be a leader of that Europe.

The noble Baroness, Lady Chalker, said that there were three challenges to the Community at the moment and added a further three. I too have three challenges which are closer to her second three than to her first three. They are, enlargement; the consequences of enlargement, to which the noble Lord, Lord Cledwyn of Penrhos, rightly referred; and the development of a common foreign and security policy capable of dealing with events such as those in Yugoslavia rather more rapidly and effectively.

The Government's frequently expressed enthusiasm for enlargement requires refinement and a clearer definition of exactly what it means. It has been and can be interpreted by malevolent observers as a means of destroying the homogeneity and political effectiveness of the Community by making it so broad and large that it loses all focus and effectiveness of practical action.

While the addition of all or some of the Eftan countries (as they have become known) to the Community presents neither major political nor economic problems—though it raises some rather interesting questions in relation to neutrality —when we go beyond that group of countries with long democratic traditions and well-based economies to Central and Eastern Europe, we must walk carefully. For example, as has already been mentioned, it is the expressed wish of Poland, Hungary and Czechoslovakia to become members of the Community by the end of the century. That is highly desirable. However, I confess that when one looks at the progress they are making on the political and economic front in their various ways, they have a long way to go. I shall return to that topic in a moment.

We must think even more carefully and cautiously about the digestive capacity of the Community. How much can it actually absorb? How much can it bring within the system, such as it is, that it has created? We must also think about the degree of cultural affinity which is required for membership as well as economic and political convergence. We may well find that we have to develop a series of different relationships with some countries—forms of association which do not demand the full acceptance of the Treaty of Rome and all its developments—if we are to help those countries along without weakening the structure and homogeneity of the Community. The means of association can have varying degrees of intimacy.

Events in the Balkans and the experience of Greece within the Community suggest that those countries have even further to go before they can accept the rules that we demand. But even were we to limit the number of new members of the Community to some or all of the EFTA countries, the institutions of the Community, as the noble Lord, Lord Cledwyn, said, would be placed under almost intolerable strain. I raised that matter in November and December of last year in connection with Maastricht and received no indication that the Government were thinking deeply about it. We now have alarmist articles in the Conservative press and in particular the Sunday Telegraph about M. Delors' plans to transform the Brussels Commission into a "European Government". British officials are reported to be "appalled by the plan". Even the Sunday Telegraph admits that M. Delors is addressing a genuine problem. The Guardian reports that most European Community governments appear to back him.

If we do not like the Delors proposals, which have not been formally tabled as yet, what are our proposals? Perhaps when he replies the noble Viscount can tell us what the Government think about the amendment of the institutions of the Community in the light of its imminent enlargement. If we have no proposals, is not that a culpable lack of foresight? A machinery devised for six countries and which is working under considerable strain with 12, will prove unworkable for 15, 16 or 17.

Not unconnected with that is the problem created by Greek behaviour towards Macedonia where Greece vetoed European Community recognition. That led even this country to see the necessity to abandon the unanimity rule on some aspects of foreign policy. Directly one abandons the unanimity rule the whole concept of political co-operation becomes blurred. One has a machinery which makes the national position of some countries subordinate to the majority of wishes. That is not what is normally meant by political co-operation. I believe that by the mere force of events, such as the relatively small one to which I referred, political co-operation will be forced to develop on lines which at present the British Government have refused to admit.

It is a substantial agenda. It is one over which the Prime Minister will have to preside during this country's presidency. Developments of the kind to which I referred seem not only desirable but essential if the Community is to have an effective voice in the counsels of the world. It is only through its economic power and political influence that the forces making for stability in Europe, in the former USSR and in the Middle East, will be tamed and the political instability which is present brought under control and replaced by some degree of political stability and a substantial degree of economic progress. All in all in the next year the Prime Minister has huge responsibilities and a huge opportunity.

4.8 p.m.

Lord Bramall

My Lords, the early mention of security in the gracious Speech emphasises that the world is still an uncertain and dangerous place. It is to be hoped that the collapse of the Warsaw Pact and the melting of the cold war; all those miscellaneous but compelling economic pressures; the improvement and greater openness of worldwide communications and the increased sophistication of international diplomacy will continue to see that the world solves or at least contains its problems without ever again having to resort to conflict on the scale of World War I or World War II.

The potential for more minor but also dangerous and infectious confrontations brought about by ethnic rivalries, the plight of refugees and some still unsolved territorial disputes is still great. Those responsible for our foreign and defence policies will have much to do in the months ahead carefully monitoring those mobile and volatile situations, trying to establish proper and lasting balances of power and, of course, supporting the United Nations which encouragingly the world now seems more prepared to trust with the arbitration and policing of its problems.

Within the context of the gracious Speech, as the noble Baroness the Minister has said, the Government will undoubtedly be trying to establish and sustain a more European foreign policy to which we and others can feel able to subscribe; and hand in hand with that, as we have heard, to strengthen the European pillar of the NATO security alliance which is still the best guarantee of stability in a widening Europe. But I hope that that will be done without encouraging United States isolation in European or indeed in the affairs of the world as a whole because, let us be quite clear, without the structure, resources and logistics provided by America no effective military action under whatever banner would be possible if such action, as proved to be the case in the Gulf, was thought to be the only sensible response.

Therefore I see the WEU, as I believe the noble Baroness has implied, more as a very useful forum for debating defence policy and for the formulation of greater European co-operation in defence rather than as any kind of rival structure to NATO. Above all, we shall want—and our membership of the Security Council puts on us a special obligation to do this—to be able to react positively to United Nations initiatives designed to ease tension, to let warring factions off the hook, and to take part in any disaster relief operations which so continually need the world's attention. Our foreign policy needs to be properly supported by, and synchronised with, our defence policy so that we really can meet our objectives and protect, and if necessary, intervene when the government of the day deem that our national interest and international obligations are unacceptably affected. Sometimes that occurs, if historical precedent is anything to go by, after a most rapid and radical change in hitherto conventional thinking and accepted political parameters. The only certainty in the defence field is the unexpected.

When the urgency and extent of the threat which had so long concerned and preoccupied us had apparently evaporated, it was felt right to carry out a fundamental review of our defence arrangements. No one could possibly argue with that even if some of us felt that the phrase "options for change" turned out to be something of a misnomer; that the pursuit of a largely illusory (in the short term) peace dividend was somewhat premature, and that the pressing financial cart had been put before the properly thought-through strategic horse.

But all that is water under the bridge. In any case the world has moved on in the past two years. The final line up of the former Soviet republics and their control of the Red Army and nuclear weapons are still uncertain. Yugoslavia, at the heart of Europe, has produced persistent bloody conflict. Germany is in a muddle for the first time since the economic miracle. The problems of the Middle East are no nearer being solved. The tragedy of Ireland is ever with us as it has been for four centuries. Therefore it is not surprising that Options for Change, sensible and constructive as it has emerged in parts, has revealed some significant shortcomings particularly in army manpower. There is now scarcely an informed observer who does not believe that without an injection of between 3,000 and 5,000 extra men the army will not be able even to carry out its day-to-day commitments without intolerable overstretch let alone produce support for the Rapid Reaction Corps or be able to meet the invariably unexpected emergencies like the calls of the United Nations which always prove to be very manpower intensive.

Therefore I beseech the new team at the Ministry of Defence to look again at this problem and to think carefully how these extra men can be most effectively reintroduced into the system and how funding to support such an increase can be provided so that the rest of the very tight programme is not affected unacceptably.

In that respect I can see some political attractions in reprieving this or that regiment from the amalgamations and mergers which have caused such dissatisfaction in some parts of the country. I point out to your Lordships that with the present chaotic organisation of our regimental system, with large and small regiments mixed up together and all feeling that they have prior claims to special consideration, the selection of which regiment should be reprieved could cause almost as much ill-feeling as the original decision on which ones to merge. In any case I believe that the first priority must be to ensure that any extra manpower goes to seeing that whatever units are needed and retained in the order of battle—that does not only apply to the infantry —are maintained at a proper and viable strength for their full range of duties and that they do not continue to he overstretched nor, in an emergency, require reinforcing by as much as 30 per cent. to 40 per cent. by a whole hotch-potch of cap badges as had to occur before the Gulf War.

There may also be a case for putting back some extra manpower into the army's training machine which I believe is in danger of making itself a laughing stock, largely through trying to achieve too great manpower savings than an efficient, coherent training organisation will bear or an effective regimental system to which Ministers have committed themselves, deserves. In peacetime training is absolutely everything.

At the same time I urge Ministers to look again at the future organisation of the combat arms, particularly the infantry, and to take account of the advantages which can accrue in terms of flexibility, regimental homes, specialist training, military music and more consistent regimental manning, from a larger grouping of infantry regiments with at least two or three battalions in each group or large regiment and thus avoid the cap-badge traumas which occur every time you need, as from time to time you must, to change the number of units upwards and downwards in the order of battle.

I also suggest that it is high time that the Government looked again at their nuclear policy which was untouched by Options for Change. With the all too vivid experience of the Gulf War and the Lockerbie air disaster, no one in their right mind would want to see this country without some adequate nuclear deterrent or perhaps defence. But the nuclear threat has changed as fundamentally as the conventional one in terms of probable direction, urgency and extent. No one can really imagine that a four-boat Trident force, each with a very large number of multi-warhead missiles designed to deter or strike in a most specific doomsday scenario, would necessarily give the right response in an altogether different situation or indeed constitute a minimum deterrent in a world where these weapons are virtually unusable.

There may be a number of options and I do not want to get involved in them. It may be too late to change direction radically. The important thing is that the whole subject should now be looked at with an open mind because the old attitude of "we're here because we're here because we're here" and anyone who thinks differently is a cissy, is rather irritating and has certainly outlived its usefulness.

Finally, I urge the Government, within the framework of their foreign and defence policy outlined in the gracious Speech, to do everything possible to enhance where necessary our intelligence services. I am sure that the noble Baroness will talk about them later on. They have suddenly achieved enormous publicity and a high profile. The new threats are quite different and a great deal more diverse than the ones against which we were on our guard at the height of the cold war. It is also much more difficult to know how to react to them once they have emerged. There can never have been a time when to be forewarned is to be forearmed and thus give us a considerably more secure and effective response than would otherwise be possible.

In this respect I believe that the Armed Forces, as they become reduced in size, may be able to help by earmarking and seconding suitable young men and women—there must be many of the right calibre—to the intelligence services as was done quite extensively in India and Burma before and during World War II and indeed throughout the latter part of the 19th century and the early part of this century.

I am not asking for a new or fundamental review —and certainly not for one in which the Treasury is allowed to establish yet another and a still more stringent set of ground rules. I am asking that Options for Change is taken out, dusted and revised in the light of the real world as we have now, in the past 18 months, had time to reassess it, and with the new team, not perhaps so bound as its predecessors, to statements made in the past.

We have without doubt the finest Armed Forces in the world, provenly effective over a wide range of situations and much respected by the people of this country. But we will not keep them that way if we consistently underman them, overstretch them and fail to give them any real strategic direction as to what the Government expect them to be able to do in the future. Moreover, I genuinely believe that far from being an anachronism or an intolerable drain on our financial resources highly professional, non-political Armed Forces are, in fact, in this modern but still dangerous world a highly beneficial element in the structure of our national life; a measure and reflection of the kind of influence that we want to exert in international affairs, and an essential insurance policy within a reasonable percentage as regards those assets that we need to protect if we are to go forward from strength to strength in confidence both economically and socially. I hope that the new team at the Ministry of Defence will find this debate useful and, where necessary, will take heed of it.

4.21 p.m.

The Earl of Cromer

My Lords, I well recall the advice that my father gave to me as to when the time comes to make the maiden speech in your Lordships' House. He advised me to choose as arcane a subject as I could in the hope that a smaller audience would alleviate one's natural apprehension. Looking about me today I see that this is one piece of paternal wisdom which I have not followed.

For a few minutes today I would like to take your Lordships to China: a place of astonishing economic success; where there is little unemployment and where the economy has been growing, year in and year out, at an average of 6 per cent. over the past decade, where hunger and dismal poverty used to be the norm and where colour televisions and luxury cars are now common place.

I will talk today on Hong Kong and China, an area where I have lived continuously for the past 20 years. But my perspective will be that of a "China trader" and, as such, I tend to view Hong Kong from China, rather than the other way round.

I view the future for both Hong Kong and China in robust terms. I am encouraged to be optimistic by China's own experiences. Over the past 15 years, China's economy has been completely transformed. The country's leaders made the brave decision to embark on radical reforms—years ahead of Eastern Europe and the former Soviet Union—and the results have amply justified their boldness.

A vital element in the reform programme was the "open door" policy towards the rest of the world. China thus became the first communist nation to welcome foreign investors. Today, there is now as much as £30 billion invested by foreigners in the country. Foreign trade is now over £80 billion and foreign reserves more than £20 billion. It is striking that Hong Kong businessmen now employ directly some 3 million industrial workers in Southern China. The ordinary Chinese citizen has been the principal beneficiary of economic reform. Living standards have risen dramatically, and in Southern China and the coastal areas personal incomes now approach those of some regions of the European Community.

Now that China has made such a success of economic liberalisation, it has come under considerable foreign pressure to make equally bold steps towards political changes. China's leaders resist these pressures for a variety of reasons. One important factor is mistrust of our motives, reflecting China's troubled relations with the outside world over the past 150 years. In addition, when Chinese leaders survey the crises which have tragically overtaken so much of the former Soviet bloc, they naturally conclude that the Chinese Communist Party remains their country's best protection against chaos and economic collapse.

I believe that we should take a more generous view of China's progress over the past 15 years. Over the last 40 years, the Chinese nation has suffered from costly experiments in political extremism. They have put this unhappy past behind them. China possesses a mature culture, based on an ancient civilisation. It would be patronising to the Chinese people to suggest that they require instruction from us about the way in which they ought to determine their own political future. Instead, we should have confidence that, as China adopts increasingly the economic policies and institutions which are the foundations of the world's liberal economies, so personal freedom will increase still further in China itself.

For the people of Hong Kong, the political climate of China is a considerable and very great concern. The territory's 6 million people will become citizens of China in five years' time. These people are understandably anxious about their future: they are to be absorbed into the very system from which they or their forefathers fled. However, as China's economic reforms gather place, the anxieties, very evident in Hong Kong in the late 1980s, are ebbing.

Capital is now flowing into Hong Kong; the brain drain has slowed. In fact, the number of applications for British passports to be issued under the British Nationality (Hong Kong) Act was, to general amazement, actually undersubscribed. There is a new feeling of confidence in the air especially as business, the ruling ethos of Hong Kong, continues to boom —fired largely by economic growth in China itself. China is no longer such a threat; it is, in fact, one of the very reasons for Hong Kong's current financial strength.

There is a greater awareness in China too of the importance of Hong Kong—the two territories are each other's largest trading partners and some 60 per cent. of foreign investment in China comes from Hong Kong. The Chinese Government have assisted this change in Hong Kong attitudes. They have shown themselves able to respond favourably to business sentiment in Hong Kong. More recently, the Chinese authorities have shown an encouraging capacity to listen to Hong Kong's voice on more political issues.

The surging Hong Kong economy and the revival of confidence in its future are based on very solid political and diplomatic foundations. The 1984 Joint Declaration established a framework for Hong Kong's future under Chinese sovereignty which, in retrospect, clearly provided an assurance of economic and social stability that has stood the test of time. The Chinese Government have since translated its broad pledges to preserving Hong Kong's unique characteristics into a detailed Basic Law.

The challenge for Hong Kong is the creation of confidence: confidence inside Hong Kong that the Chinese leadership will continue to honour the Joint Declaration and implement in full the spirit of the Basic Law; and confidence among China's leaders in Peking that the people of Hong Kong will prove loyal, conscientious and valuable members of the Chinese nation after 1997. I believe that this confidence will continue to strengthen with the growth of contacts between the Chinese authorities and the leaders of the Hong Kong community.

It is inevitable that, as 1997 draws close, there will be new tensions between Hong Kong and China, and it is our responsibility, during the remaining five difficult years of British administration, to endeavour to preserve Hong Kong's prosperity and the welfare of its people and to moderate the more extreme expectations on either side. In Hong Kong, we will have left a monument to capitalism in Asia and a lesson in achievement from which it is hoped that the Chinese Government will profit.

I am aware that one of the many strengths of your Lordships' House is the many diverse skills that are found among your members. I would hope that in time my own somewhat unusual first-hand experience in the political and business conditions in what remains of the communist world in Asia may add to this well of knowledge.

4.29 p.m.

Lord John-Mackie

My Lords, it is fine to be able to congratulate a maiden speaker who really knows what he is talking about. The noble Earl avoided any controversy and I am perfectly sure that his tremendous knowledge of Hong Kong and China will be of great help not only to the Government but to noble Lords on all sides of the House. I congratulate him very heartily indeed. I was rather amused by the noble Earl's recreations and the extremes of them. They include mountaineering and deep-sea diving. I hope that the mountaineering is the safer of the two.

I have just two points to make. They are not strictly concerned with foreign affairs though they relate to an international problem. It is a major problem facing the world today and one that is not sufficiently appreciated by most people. I refer to the feeding of the starving. The noble Baroness mentioned the aid that is provided in various ways but the aid that is required is far in excess of anything that the various charities are able to supply. The charities are doing a wonderful job but a look at the figures brings home the seriousness of the problem. The world's population is around 6 billion at the present time. Of that total, around 1,500 million are starving. Of those, 700 million are starving to the extent that they can keep alive but are not strong enough to work. They are just keeping themselves alive. Eight hundred million of the rest actually die every year. Roughly 100 million of those are children and 40 million of those children are under five years of age. That is a tragic situation and cannot be tackled by charities alone. I do not want in any way to deride the charities. My goodness, they do a tremendous job.

In 1982, just after I came into the House, the noble Lord, Lord Renton, who is not in his place at the moment, made a speech on this subject. He quoted some figures and pointed out that there were two problems. The first was to feed those who are starving and the second was to teach them to grow their own food or to grow as much of it as possible. He pointed out that those were both long-term problems. How right he was. That was 10 years ago. I cannot remember the figures he quoted but the figures I have given today show that we have not made any progress in solving these difficulties.

On the question of growing more food, all kinds of objections are made to what might be done. It is said that to give people food destroys the markets of their own farmers. We should make deficiency payments to farmers so that they carry on producing food while at the same time we put as much food as possible into the countries affected. Africa has already been mentioned. The drought in Central Africa will have effects which last longer than one year. The whole of the eastern side of Africa right up to Eritrea and Sudan has tremendous irrigation problems. Some areas in India have similar problems, as do other Far Eastern countries. I am glad that the noble Earl, Lord Cromer, said that China, which used to have a considerable problem, has overcome it. I have never been to China but I have heard that, although the people are not too well fed, they are better fed than they were a few years ago.

What can be done? In Europe today we have taken out of production 1 million acres of agricultural land. We have set that land aside while this starvation problem is going on in the rest of the world. Surely to goodness that is about the most immoral thing we could do. I believe that an international body should be set up to ensure that food is produced and distributed to the starving. It takes time to increase production. Many people think that one can just send an expert agriculturalist with a BSc to the countries in question to give them advice and that the problem can then be solved overnight. In 1930 we were producing between 30 and 35 per cent. of our temperate foods. It was not until 1974 that we were producing 80 per cent. of our requirements. That was a long time and a war took place in the interval which required us to produce as much food as possible. Therefore to teach people all over the world to produce more food is not an easy task.

Another problem is over-population. I do not wish to quote population figures but we all know the rate at which population is rising. In 1982 there were 4.6 billion people in the world. In 1989, seven years later, the figure was 5.2 billion. In this country the population has increased by nearly 1 million since 1982. The problem of population must be tackled somehow. Organisations such as the Marie Stopes organisation are trying to deal with the problem and are doing a very good job indeed. However, charities are trying to do a task which should be shouldered internationally. I have before me a pamphlet from Population Concern, which is a very good name, which shows exactly what is happening in the world. It makes the point at the beginning that the world has bred to death. That is a true point to make because if the population continues to rise at the present rate we shall be breeding ourselves to death. I should like to think that this country and this Government will give a lead, a strong lead, in the matter.

4.38 p.m.

Lord Gladwyn

My Lords, the end of the cold war was, on the face of it, a great victory for the Western Alliance, headed by America. But at the same time the end of the Russian Empire in the East of Europe, and, even more so, the present virtual collapse of Russia itself, have liberated long suppressed and violent emotions in an area ranging from Zagreb to Alma Ata and from Riga to Sofia which may well result in widespread anarchy—a sort of generalised Yugoslavia —unless they are somehow brought under control by the world community as a whole.

What do I mean by the world community? I mean at least the principal sources of power; namely, the United States of America (associated with Canada), the European Community, China, Japan and no doubt India, together—it must be devoutly hoped—with a Russia which has emerged from its present parlous state in some form of association with its previously dependent republics. True, membership of the Security Council of the United Nations, which alone can provide legal authority for any world peace-keeping action, cannot be changed except with the consent of all five permanent members of the council. I am afraid that there is no reason, at present, to suppose that such consent will be forthcoming—it will not be.

The special position of the five permanent members —including Great Britain and France, which are now much less important both numerically and economically than Germany or Japan—can, however, for the time being at any rate, be justified by the fact that as a result of the cold war they are still, with the exception of Israel, the only nuclear powers. But, for this special position to be maintained—that is to say, to ensure that there is no proliferation of nuclear weapons throughout the world—two things, among others, seem to be necessary.

First, they must make it absolutely clear that they are determined to make good their present intention of greatly reducing their own nuclear armaments, beginning with those of America and Russia and then, eventually, turning to those of the other three. Next, they should all, as I think, declare their intention of never using their nuclear (or, indeed, their chemical or biological) weapons on a first strike. For them to do so against another nuclear power would obviously be impossible, for the ensuing retaliation would obviously be worse than defeat. To do so to avoid defeat by a non-nuclear power is, with the end of the cold war, an obvious absurdity. China and Russia have already made such declarations. I can see no reason why, in their own interests, the other three should not also do so.

But—and here is the point—if they make such a declaration, they should also say that any state which may, in spite of the non-proliferation treaty, come into possession of a nuclear weapon, must give a similar undertaking. If it should, in violation of this, employ nuclear weapons in any circumstances whatsoever on a first strike, it would risk the use of such weapons against itself. By such means third states should be deterred from possessing an expensive weapon which, in practice, could never be used and thus the danger of proliferation avoided.

Apart from such action, what can the Security Council do to avoid giving the impression that it is, for the most part, simply the agent of the major industrial powers of the Northern hemisphere intent on imposing their rule upon the rest of the world? It could revive the Military Staff Committee consisting of the military representatives of the five permanent members (dormant since 1946), part of whose duties under Article 97(1) of the charter is to persuade those states which are both willing and able to do so to earmark significant forces to be placed at the disposal of the Security Council on demand. There would be no reason why one or two of the larger powers, who might reasonably expect to be members of the council one day, should not also be members of the committee and indeed sit in with the council itself when its reports are discussed—though, naturally, without a vote. That suggestion is not very far from that made recently by Mr. Gorbachev—indeed, I think it was yesterday—in America.

As an extension of that idea and to prevent the Military Staff Committee becoming too unwieldy, it might be further agreed—no doubt unofficially—that the maintenance of peace in the Americas (that is to say, North, South and Central America) should be left, in practice, to the Organisation of American States. If so, great states like the Argentine, Brazil or Mexico would have small interest in joining the committee or eventually, for that matter, the Security Council itself. It goes without saying that the Military Staff Committee should consider not only the forces "earmarked" by individual states but also those which might be made available, by, for instance, NATO, the Western European Union, or, one day, a European political community.

How, indeed, does "Europe" come into the picture? How far will it be likely to play a significant part in the maintenance of world security? We must not delude ourselves: the end of the cold war, welcome though it is, has resulted, for better or for worse, in a considerable weakening in the drive towards European unity and in the appearance, in almost all the countries concerned, of extreme Right-wing and nationalist movements which we imagined had been finally discredited as a result of the Second World War.

In particular Germany, now united and with the Russians almost back in their own country, has largely lost her old fear of an ancestral enemy and consequently feels instinctively that she now can, to some extent, pursue a policy of her own. Moreover, the necessity of pouring vast resources into East Germany has clearly made her more hesitant about pursuing the aim of a common currency. Indeed, the sheer expense of reunification is perhaps only now dawning on the Germans.

Is, therefore, Maastricht itself in some danger of not being ratified by all the signatories—as it must be before it can come into force? We must get over the Irish difficulty somehow, and I can hardly believe that, in the event, ratification will be rejected in Bonn. But in France the treaty is, from what I hear, becoming increasingly unpopular, and the political situation there is not good. In Italy, too, there is doubt whether the country is capable of producing the real political revolution that will be necessary before it can assume the obligations of monetary union. Even the accession of Spain is not certain, while that of Denmark depends on a referendum, the result of which no one can with certainty predict. And if Maastricht founders how can the European Community as such continue to exist? How can the new democracies of Eastern Europe, already struggling with privatisation, be able to conclude with it those treaties of association and eventual union without which a return to some kind of directed economy would appear to be the only alternative? That is a danger, I suggest.

I should be happy if the Government could assure me that there is nothing in these apprehensions. But, even if they can, I hope they will not neglect the possibility, if things do go wrong, of still working towards some kind of European political union, which alone would then bind Germany to the West, the resulting joint European force, in conjunction with what we must hope will be a continuing North Atlantic Alliance, providing the basis for a revitalised United Nations capable of monitoring world peace. It is anyhow difficult to see how there can otherwise be that great reduction of expenditure on armaments which perhaps alone can free the immense funds that are now necessary if we are somehow to counter the appalling ecological effects on the world of two centuries of Northern hemisphere industrialisation, with a notable poisoning of the atmosphere, the land, the rivers and the sea.

Finally, are we really to tell the ever increasing billions of the impoverished Third World that it is only by following our fatal example that their lot can ever be improved? Ecologically that could only make matters worse. If the pollution of the world is to be stopped, it can hardly be by successfully holding out to all those billions the prospect of owning at least a washing machine, a refrigerator a TV and a car. Some other means must be found for coping with their present woes and our present concerns—to say nothing of halting the present disastrous increase in world population—even if all this should involve some reduction in our northern standard of living.

I like to think that this is not an impossible task over the years—chiefly, no doubt, for America, Europe and Japan. It may be that the predictions of our scientists, however justified, are too apocalyptic. Perhaps we are, to some extent, suffering from the "end of the world" illusions that convulsed Europe a thousand years ago. But one thing is certain; unless, with the end of the cold war, we can construct a new machine for ensuring peace, our ecological problems will be all the more difficult to solve. To this end, where can we look other than to a revitalised United Nations?

4.54 p.m.

The Archbishop of York

My Lords, I must apologise for my late arrival for this debate and what will regrettably be an early departure. I am particularly sorry to have missed the opening speech of the noble Baroness, Lady Chalker of Wallasey. The Archbishop of Canterbury and I are today launching a major report on Church music. I have to attend a press conference and later I shall have to sing for my supper—not literally, fortunately! I was delighted by the reference in the gracious Speech to the promise of further initiatives on arms transfers. The Prime Minister has already made a notable contribution to the control of such transfers by securing the establishment of a United Nations register of arms sales. It seems to me that there is unlikely to be a better time to strengthen such controls still further. The lessons learnt from the Gulf War about the effects of a short-sighted sales policy in the Middle East are still very much in mind. We are conscious of the dangers from former Warsaw Pact countries that arms will fall into the wrong hands. The United Nations is slowly gaining a new authority as a peacekeeper. There are financial indications too that this is the right time to look for further international agreement. Banks will hardly be anxious to finance further arms deals given the number of bad debts they have on their hands. I suggest that it is therefore a moment in history when more strenuous efforts to establish international policies on arms sales are not only needed but stand some chance of being politically attractive.

So what more might be done? I take some suggestions from a report published yesterday under the auspices of a body called the Council on Christian Approaches to Defence and Disarmament. This is an international body of which I am British president. It brings together a wide variety of people of very different opinions, all of them interested in this field, who meet on the sole basis that they are Christians. I believe that the council has a good record of thinking in these matters.

The report published yesterday entitled Profit Without Honour? is a major study from a Christian perspective of the politics and ethics of the arms trade. From among the suggestions in the report I want to make brief mention of four. First, the principle of transparency in arms deals, by which is meant making information about them publicly available, is a vital first step in controlling such deals. However, at the moment, such transparency is one-sided. The United Nations register of sales is concerned only with transfers and not with total production. In consequence, the policy bears most heavily on those countries which are not themselves producers. From their point of view it must be seen as discriminatory and is therefore likely to be resented and possibly evaded.

Furthermore, unless the policy is seen to apply to producers as well as to receivers it surely cannot fulfil one of its main purposes as a confidence-building measure. I realise some of the difficulties in publicising information about production, but I believe that this is a further step which needs to be explored.

A second point concerns the need for multilateral initiatives in this field and in particular the importance of trying to secure European agreement on arms sales policies. This is surely one of the areas in which European co-operation could be taken a step further without raising larger questions about political union, particularly if we are prepared to build on our NATO experience. I believe that an agreed policy on European arms sales could be an important element in our efforts to cope with the growing Eastern European nationalisms as well as with problems in the Middle East.

Thirdly, we need to be even more discriminating in judging recipient countries of arms sales on their human rights records and on their political stability. In particular, we need to avoid the disastrous mistake made more than once by the United States administration in thinking, "My enemy's enemy is my friend." Sometimes, as regards human rights issues, the Churches have local information which is closer to what is happening on the ground than that which comes through official channels. Therefore, I hope that the Foreign and Commonwealth Office will continue to recognise that there is a useful field of co-operation here. Kenya is a good example of a country in which the Churches could have been more active at an earlier stage in drawing attention to what was happening. Judging countries on their human rights records is immensely difficult. Surely, those who must make such judgments need all the help they can get.

Fourthly, the arms trade is an area in which the Government could be more interventionist in preparing the ground for eventual contraction. It is part of the argument contained in our report that arms sales are not like other sales and cannot be judged by purely commercial criteria. We do not allow commercial criteria to operate unchecked at the point of sale. Therefore, it is logical that in the conversion of some of the arms trade to less-threatening purposes there could likewise be government intervention in the form of help. Nobody should be forced to produce unnecessary arms which then have to be sold to inappropriate countries in order to keep workers in employment. But neither can we simply destroy such employment in an industry which is to a large extent dependent on government without effective government action to ease the process of change. I offer those four suggestions—there are more in the report—to those who will be preparing practical measures to implement the promises contained in the gracious Speech.

I wish to add a brief word on another topic mentioned in the gracious Speech. I do so with temerity after hearing the excellent maiden speech made by the noble Earl, Lord Cromer, on the subject of China and Hong Kong. I too wish to say a word about Hong Kong. I do so as the joint author of a report on the area prepared for the British Churches in 1989. We wrote about the huge loss of credibility which Britain had suffered in the eyes of the wide variety of Hong Kong citizens from all walks of life whom we met on our official visit there. Subsequent contacts suggest that, if anything, that loss of credibility has grown worse. The new Governor of Hong Kong, whose appointment I warmly welcome, will have a hard time trying to reverse the process.

It appears to me that if we look at the long-term prospects of the area it will be enormously important to us as well as to Hong Kong to retain the good will of its people, even at the cost of not persisting in the hopeless business of trying to meet China's more unreasonable demands. Hong Kong, with its new airport and its vital role in China's economy, has excellent prospects of survival, which is more than can be said of communism even in China.

The exclusion of Hong Kong citizens from British citizenship still rankles. I believe that previous debate about the issue was fatally confused by the false supposition that those who wish to retain British citizenship do so primarily because they want the right of abode in Britain. I do not believe that that is the case. I believe that what they want is a continuing link with Britain through that citizenship, even after 1997 and despite all the difficulties. I realise that politically it is now probably too late to do anything. The next sensitive moment will come when the Asylum Bill returns to Parliament. If the new Bill is seen as making it unlikely that refugees from Hong Kong will find acceptance here, supposing that the worst happens, it will do further damage to already damaged relationships.

Apart from being sensitive on such points, I believe that the single most important thing that the Government can do for Hong Kong during the next five years will be to strengthen its democratic structures. If we leave behind us a community which still looks and feels more like a colony than a democracy we shall have failed the people there. We shall have failed to live up to our own ideals of government and we shall have lost what can still be a valuable partner in whatever the future holds for South-East Asia. I hope that the new Governor will seize that point and I wish him well. I hope too that the Government will do all that they can to restore the confidence of the people of Hong Kong in British integrity.

5.6 p.m.

Lord Prentice

My Lords, it is almost 35 years since I made my maiden speech in another place. By a strange coincidence I was then, as today, the third maiden speaker to be called in the debate. However, that occasion was worse because the debate had been delayed for a long time as a result of an emergency debate instigated by Mr. Tony Benn.

Another difference is that today I have been greatly encouraged by the maiden speeches of my noble friends Lady Chalker and Lord Cromer. It is good to be able to congratulate them before making my own effort. I believe that every friend of the aid programme is greatly relieved by the fact that the departure of my noble friend Lady Chalker from another place has not meant her departure from the ODA. I speak as one of her predecessors—indeed, I believe that she has four predecessors in this House. She brings to the job a unique combination of compassion and brisk common sense. That has made her work in the department greatly respected in this country and throughout the world.

I wish to speak about the work of the ODA. In doing so I hope that I shall not trespass too much on the conventions of a maiden speech. I realise that there are noble Lords—I have previously engaged in public debate with one or two —who are totally against the concept of development aid. However, most noble Lords support the programme. If there is controversy it is not between parties; there may be different individual views.

I believe that an aid programme is a moral imperative. Development aid—I underline the word "development"—is an essential part of a modern and civilised relationship between the developed countries and poorer countries. Clearly it is not the whole relationship; the gracious Speech refers to other aspects and in particular to the determination of the Government to complete the Uruguay Round. That has considerable relevance to the developing world, as the noble Baroness pointed out.

I do not care greatly for the kind of argument which suggests that trade or private investment is better than aid. I believe that the developing world needs more of all three; perhaps in different proportions, country by country. Broadly speaking, there is scope for much more of all three.

More important still are the efforts made by developing countries themselves, which must be conducive to their development. I was glad to read the paragraph in the gracious Speech which speaks of the aid programme in these terms: Its objectives will include promoting good government, sensible economic policies and respect for human rights". I suggest that those objectives are not only clearly worthwhile in themselves but are also conducive to development. If those criteria are followed, then, pound for pound, dollar for dollar, mark for mark, in terms of aid programmes there will be greater developmental effect.

Inevitably, we frequently consider these matters in terms of deprivation and suffering. That includes at the moment the latest news out of Africa, to which both Front Bench speakers referred, as did the noble Lord, Lord John-Mackie, in a moving speech. The appalling drought—the worst in living memory—has been superimposed on countries many of which already suffer considerable problems. In a brief visit to the region a few months ago, I saw parched fields in South Africa where the maize crop had completely failed. That is an unmitigated disaster there and perhaps a greater disaster in poorer countries further north, such as Mozambique.

I am sure that the Government were absolutely right to increase the aid commitment a week ago and to work, as they did, within the European Community for a bigger European effort. However, I wish there were more media coverage and public awareness in this country of the success stories of the development programme. It is the bad news that makes news: the good news is equally remarkable and I often feel that people would be interested in it. Newspapers, radio and television underestimate the potential interest of their readers, listeners and viewers, who would like to learn more of human progress in many parts of the world. For example, the green revolution in tropical agriculture over the past quarter century has had a tremendous impact on the production of wheat, rice and other crops, particularly in Asia. India, which was suffering dreadful recurrent famines until the middle of the 1960s, is now self-sufficient in basic grains. It has even been an exporter in some years.

Take the manufacturing achievements of some of the developing countries. One thinks first, but not exclusively, of countries in East Asia. In 1960 some countries on the list of the developing world produced about 4 per cent. of the world's export trade in manufactured goods. They now produce about 19 per cent. Let us take the enormous achievements of the World Health Organisation: the eradication of smallpox, the defeat of other killing diseases in many countries. Take the figures for adult literacy in the developing world, which have increased considerably over the past 20 years in almost all countries of the developing world. The life expectancy figures have increased, those of infant mortality have decreased.

That progress is mostly due to the efforts of developing countries themselves, but what we and other aid donors can claim is that we have helped them to help themselves by aid programmes which have become more practical, sophisticated and efficient as a result of the process of learning from experience over the years.

Of course, some progress aggravates problems; the health improvements make the world population explosion even greater. But this is surely not a reason for turning our backs on the problems with a kind of Malthusian despair. It is simply a case of saying, "We must rethink some of our priorities". Clearly, no development plan these days makes much sense without a population policy.

Perhaps I may finish on this note. The one thing wrong with our aid programme is that it is not big enough; it ought to be larger. I shall not engage in the numbers game, I do not believe that there is any magic about a particular percentage of gross domestic product, but the programme should be larger. So, in the main, should the programmes of other aid donors. The programme has been increasing modestly in recent years and, in the Autumn Statement by the Chancellor of the Exchequer, further increases were set out for the current three-year period. Compared with the previous period, there would be an increase of 17 per cent. in cash terms or about 3 per cent. in real terms. But there will be no increase in the proportion of our national product. In other words, the programme will grow slowly with the national product, as it has been doing. It will not increase as a proportion. I believe that it should, and this applies to other countries as well. I underline the point that Japan and the United States, the two richest countries of all, have proportionally a much worse record than we have.

If I am told that this is not fashionable, and that what is to happen shortly is to be a further discipline on public spending in the next public spending round, I am not against that general proposition. However, I should like Ministers —particularly Treasury Ministers—to consider the editorial in last week's edition of The Economist: This is not just a matter of saying no when others ask for money. To give his government a sense of reforming purpose, Mr. Major must look anew at everything the state does, and dare to change its shape". I believe that that indicates a selective increase in some programmes, which should include the aid programme. It is in the long-term interest of our country, and most of all we should do it because it is right.

5.17 p.m.

Lord Bruce of Donington

My Lords, it is my pleasure on behalf of the House to offer our felicitations to the noble Lord, Lord Prentice, on having so successfully got his maiden speech in this place behind him. I never had the privilege of knowing him well because unfortunately, by the harsh arbitrament of arithmetic, I was dismissed from the constituency of Portsmouth North in 1950 at the same time as he arrived as a Labour Member of Parliament for East Ham North. So I never really got to know him well.

The noble Lord's speech today carried powerful overtones of the time he spent as Minister for Overseas Development in 1975–76. He has had a distinguished career. He served with the Royal Artillery from 1942 until the end of the war in both Italy and Austria. He attained office under a Labour Government and held successive high offices of state until the 1979 election. In the interim, he acquired a certain flexibility of political attitude which enabled him successfully to depart from the party to which I have the honour to belong and join the party opposite. Even there, once again he has had a most distinguished career. We all wish him well and hope to hear from him many times in future debates in your Lordships' House.

At the same time, I willingly associate myself with the remarks which have fallen from the lips of my noble friend Lord John-Mackie on the speech of the noble Earl, Lord Cromer, whom I congratulate.

Now that we have a friendly atmosphere, I also wish to congratulate the noble Baroness, Lady Chalker, to whom I have already expressed my personal pleasure at seeing her on the Benches opposite. We welcome her again this afternoon. I hope she will forgive me for saying that she reminds me, in many of her characteristics, of a European commissioner whom I knew very well, a Mr. Gundelach, who until his death was the leader of Directorate 6—of the agricultural division. Unlike many others in all parts of the world he never tried to duck a question. That is not the case with many people, even as regards Members of this House and of another place. Mr. Gundelach used to meet each question head on. He would never try to hedge, come what may. I believe and hope the noble Baroness will place herself in that category. I am sure she will.

This afternoon the noble Baroness confirmed what the Prime Minister said yesterday when she said that the Maastricht Treaty would soon be presented for ratification in your Lordships' House, together with the enabling Bill. The purpose of my opening remarks is to suggest that we ought to allow far more time for the consideration of that measure than is apparently envisaged at the present time. The declaration which is part of the Treaty of Maastricht—that is, a solemn declaration signed by all the governments concerned —states that, the governments of the Member States will ensure, inter alia, that national parliaments receive Commission proposals … in good time"— I underline the words "in good time"— for information or possible examination". There are hundreds of proposals emanating from the Commission every year. If they are all subject to such consideration, surely that same consideration must apply to the treaty itself.

Under the guidance of my noble friend Lady Serota we were always quite sure that all proposals had to pass her personal scrutiny, let alone that of her staff. I wish to pay tribute to the diligence with which she applied herself to that task. However, I return to the words "in good time." What is meant by those words? I have been engaged recently in examining in detail the 355-page text of the treaty, printed on pale yellow paper, as signed on 7th February last. Incidentally the Foreign Secretary is reported as saying that he has not read that document. Members of his department may have read it, and I sincerely trust they have. Perhaps the Minister was joking when he said he had not read the document.

I have examined the signed treaty that contains Mr. Hurd's signature and I have to report there are significant differences between the treaty as signed and the version that was given to us as the draft treaty on 10th December last. Today we have been issued with a further version. That printed document was available at two o'clock this afternoon. On the basis of past precedents we shall have to check through that document also to see whether it confirms what is printed in the pale yellow document through which I have waded. There is now a fourth document issued by the Commission itself. The document issued this afternoon by Her Majesty's Government contains the usual plain honest stuff and is priced at £13.30. However, we do not have to pay that.

The version issued today by the Commission entitled Treaty on European Union—a real glossy document—is priced at £6.50. I am interested in the differences in price of the different documents. One wonders what hidden subsidy, undetected in the Commission's budget—that budget is rarely examined in detail by Ministers—accounts for that discrepancy.

I return now to the treaty itself. As I said, it differs significantly from the version of 10th December in many respects, after one has allowed for drafting errors and clarifications. Moreover, it makes significant alterations to the Treaty of Rome itself. I wonder how many Ministers have read the document. If asked to put up their hands, I doubt whether I should see a sea of palms. If one searches through the document, one discovers it is a shambles. Its use of numerical cross references makes reading it a complete nightmare if one tries to refer back to the previous version and to the Treaty of Rome. The document contains ambiguities, generalities and inferences. The document's authors do not even bother to define some of the more contentious terms and new office inventions which are incorporated within it.

In this House there are distinguished Law Lords and many members of the Bar and the solicitor's profession. I very much doubt whether any self-respecting lawyer, let alone accountant, would wish to associate himself with the document. It is quite clear that we must examine the document in far greater detail and that we must conduct a far more searching inquiry into the implications of the treaty not only as regards the system of government but also as regards this House, the legal system as a whole and the people of this country. Otherwise, on the basis of the dull doctrine of inevitability—I do not accept that doctrine and I hope many other noble Lords do not accept it—the enabling Bill and the ratification of the treaty stand in danger of going through on the nod. I believe that that would be a tragedy for the country as a whole because only later, when it is too late, will we discover the treaty's practical implications on our lives.

Lord Stoddart of Swindon

My Lords, I am obliged to my noble friend for giving way. I am sure my noble friend is aware that the Bill has now been published. It is a two-clause Bill. I understand that it will be unamendable. Bearing that in mind, is my noble friend satisfied with the assurances that were given by the noble Baroness, as regards holding full and proper discussion on the measure, that a proper discussion will be possible? Is my noble friend confident that the Bill will not be guillotined in the House of Commons, as was the Bill on the Single European Act?

Lord Bruce of Donington

My Lords, I am most grateful for my noble friend's intervention. I do not wish to question in any way the more general assurances that I have been given so far and which have been communicated to the House. However, I am bound to say that I share the anxieties of my noble friend. I therefore demand that proper time be allowed for Members of Parliament, both in the other place and in your Lordships' House, to study the matter thoroughly and for the question to be raised in the media.

There seems to be no reason why the discussion and presentation of the treaty for ratification should not be delayed for some time. I shall explain why. As may not be generally known, in June there are to be financial discussions, once again initiated by the Commission which is never backward in putting forward such proposals. It is proposed that increased funds should he provided for what are described by Monsieur Delors and the commissioners as the means "to match our ambitions". That will involve an increase in the VAT base applicable to own resources. It may involve the British taxpayer in paying an additional £1 billion to £2 billion per year in support of the proposals put forward in that document. Your Lordships will recall that I had to reprove Monsieur Delors for being quite rude to our own Foreign Secretary in connection with the doubts which he expressed on that matter. I reiterate that reproof now.

What is not generally known is that the abatement of Britain's contribution to Community funds which, to her eternal credit, Mrs. Margaret Thatcher secured at Fontainebleau, is in danger and the Commission will argue for its abolition. According to the Government's own figures, published in their periodic review of the activities of the Community, that rebate in itself is worth between £2 billion and £3 billion.

Like my late right honourable friend Aneurin Bevan, I do not believe in going naked into the council chamber. Therefore, why does the Prime Minister not wait until the conclusion of those financial negotiations which, as I say, involve a potential loss of between £2 billion and £4 billion to the British taxpayer? Why does he not say, "I am not going to ask Parliament to ratify this new treaty unless we get satisfaction on this particular issue"? There is nothing to be gained by agreeing prior to those discussions everything that is demanded of us. I therefore plead with the Government to take that view into account, bearing in mind that even since that time, flushed with his apparent success, Monsieur Delors has now gone further and proposed that the President of the Commission should become the president of Europe.

That is the new concept: all effective power should be taken away from the Council of Ministers. Indeed, one gained some inkling of that from the report which appeared recently in the Financial Times that Monsieur Delors, President of the Commission, accompanied by the President of Portugal, was scheduled to have an interview with Mr. Bush, President of the United States. One gathers the esteem in which the present President of the Commission holds himself in relation to world affairs.

I shall not go into further detail in relation to the Maastricht Treaty. However, there is a matter which I wish to put seriously to your Lordships. One of the greatest battles in the world is the battle against poverty. The rich nations are becoming richer and the poor nations are becoming poorer. That problem still has to be solved. However, superimposed on that problem there is now a further problem, which is evidenced throughout Europe. It is the battle of democracy against bureaucracy.

Bureaucracy can be of two kinds. There is armed bureaucracy represented by armed forces, which happily in most developed countries are under political control. In the eastern states the battle has been one of democracy against bureaucracy. In Europe the battle is not yet joined.

The Council of Ministers is composed of Ministers who have full-time responsibilities in their own countries. I am sure that they work diligently, as Ministers do here. They cannot have the time to examine matters in great detail. So it was that the Council of Ministers itself established under Article 151 an organisation called COREPER, the Committee of Permanent Representatives. It comprises the ambassadors, their deputies and sometimes their subordinate staff. It is that body, which is always attended by the Commission, which sets the agenda for the next Council meeting. It does more than that. It specifies which items are up for discussion and decision by the Council. There is a further list which details those items which can be signed on the nod without even discussion or being read.

There is exactly the same kind of bureaucracy in the Commission itself. That Commission was recently before the European Court for not even having bothered to sign, the orders which it issued, in accordance with Article 12 of its own procedures. I wonder how many pieces of legislation have been received by Her Majesty's Government over the past year which have not been properly drawn up and authenticated by a Commission which is so convinced of its own powers that it does not even bother to do so.

That is the battle of democracy against bureaucracy. I want desperately to be satisfied that both the Government and members of my own party have taken that on board. I hope that they are not prepared, for the sake of the aura which may surround them as a result of being pro-European and idealistically disposed towards a federal concept, to bask in a sense of apparent idealistic purpose. I hope that they will consider that it is their duty to make sure that the frontiers of bureaucracy are rolled back, not only in Europe but throughout the world. It is to that task that many of my friends and I will dedicate ourselves for so long as we are able.

5.37 p.m.

Lord MacLehose of Beoch

My Lords, I thought that the subject of Hong Kong offered too broad and specialised a field to cover adequately in a speech appropriate to such a wide-ranging debate as today's. However, the noble Earl, Lord Cromer, did so extremely well, and I congratulate him on his maiden speech. We used to know each other in Hong Kong. I am delighted to see him here and to hear him in such good voice and talking such good sense. I hope that we hear from him often. Nevertheless, Hong Kong is of great and steadily increasing importance to us. As I understand that a short debate concentrating on Hong Kong may he possible next month, I shall be extremely brief this evening.

On the economic front, in both Hong Kong and China—and, as the noble Earl said, the two are virtually indissoluble now—broadly the picture is one of remarkable success in the present and confidence in the future. Indeed, the vibrancy of the southern Chinese cities reminds me very much of what one experienced in Hong Kong say 20 years ago. The success is due on the one hand to Hong Kong's capital management and commercial expertise; but on the other—do not let us forget—to the Chinese policy of "opening to the world", with all the local economic relaxations that are involved.

In those two areas of Hong Kong and southern China the opportunities for British exports seem vast. On the political front of Hong Kong differences about how the Joint Declaration should be implemented were considerably eased by the Prime Minister's visit to Peking last year. That was a great help. However, much detail is involved in many large fields. There is a residue of mutual suspicion. Progress is slow and time is getting short. There seems to be room for more diplomacy and possibly even, on both sides, some rethinking.

On the domestic political front in Hong Kong itself, the direct election of 18 members of the Legislative Council last September greatly changed the character of that council, at any rate for the time being. The implications for government of that change have not yet been fully absorbed or thought out. Meanwhile, the next elections are as near as 1995. On them will depend whether a legislature will be in place that will conform sufficiently with the Chinese Basic Law, so that it can be relied on to support sound government in Hong Kong through the transition period, as we all very much hope. However, for that to be possible, substantial change looks necessary.

As I said, the enormous economic success of Hong Kong has been due in no small part to the policies of the Chinese Government. The difficulties on the political side are due in part to the official and unofficial relationship with China. For my part, I fully believe that the policies relating to economic success are of much greater substance than the details over which political differences have arisen. I should add at once that I have the greatest admiration for the way in which the noble Lord, Lord Wilson, and this Government have managed to maintain progress over the past three years in circumstances of unexpected difficulty and complication, and under many conflicting pressures. There will now be a fresh look. In any case, any change in governor will produce that.

Again, Mr. Patten—and please do not misunderstand me, my Lords—is a different kind of governor from his predecessors. That wholly coincides with the likelihood of a new look. Like other noble Lords, I wholly applaud his imaginative appointment. No doubt Mr. Patten will wish to examine on the ground in Hong Kong the problems that are so well publicised here in the press. I am sure it will be helpful to do so before he settles himself into the saddle for the large number of hurdles that lie ahead.

Meanwhile, I entirely agree with the optimistic thrust of the noble Earl's speech. Most of the ingredients are already there in Hong Kong and China for the increasing welfare of Hong Kong people, for the success of the last spell of British rule and for the SAR to follow. Mr. Patten should have a notable governorship. I am sure that he will find it as fascinating and rewarding as his predecessors have done.

5.43 p.m.

Lord Cockfield

My Lords, in such a wide-ranging debate covering the full spectrum of foreign affairs and defence, it is perhaps not surprising that I do not directly follow up what the noble Lord, Lord MacLehose, said, though clearly his remarks were greatly appreciated by the House and were, I believe, supported by the great majority of noble Lords.

Instead, I propose to revert to the subject of the European Community, about which the noble Lord, Lord Bruce of Donington, made some comments. He made one point which had some merit; namely, the plea that we should have a consolidated edition of the treaties as amended at Maastricht. The noble Lord will remember the attempts that we made in the last Parliament to ensure that copies of consolidated treaties of that kind were made available to your Lordships. This is an outstanding example of where that should be done.

It is an immense advantage to have my noble friend Lady Chalker to answer on behalf of Her Majesty's Government on both foreign affairs and the European Community. I hope that it will not be misunderstood if I say how much we appreciate having somebody who has actual first-hand experience of these matters, which she can talk about with authority and conviction.

From that I pass to making a more general comment. In this country we face a real problem in dealing with the European Community. The English Channel is a psychological as well as a physical barrier. For something like 1,000 years now we have fought our wars, or participated in wars, on other people's territory. It has been their countries and their lands which have been devastated. It has been their cities which have been destroyed. It has been their populations which have been decimated and at times reduced to servitude. At the end of the war—whatever war it happened to be—we retreated to our island fortress, pulled up the drawbridge and in effect said, "A plague upon all your houses".

In those circumstances, it is not surprising that we have not entirely participated in the development of political thought and philosophy on the Continent of Europe. If we fail to understand them in just the same way as they fail to understand us, it is in part at any rate a product of our very different history. As we enter a new Parliament, we have to ask ourselves what can be done about that situation. The noble Lord wishes to intervene.

Lord Bruce of Donington

My Lords, I am grateful to the noble Lord. He referred to the British habit of pulling up the drawbridge and separating ourselves from Europe. Does he regard the rescue of Europe across the Channel with our own forces as pulling up the drawbridge?

Lord Cockfield

The fact of the matter is that after nearly every war we have retreated to our own territory. It may be within the noble Lord's knowledge (at least it is within his lifetime) that we failed to participate in the original Community, the Iron and Steel Community; we did not participate in the Messina conference and we were not original members of the European Community. That is something which I greatly regret and I am glad to see that the noble Lord equally seems to regret it.

I return to the point that I was making; namely, that in a new Parliament, with a new or at least a reconstructed Government, we have to ask ourselves what we can do about that situation. It is a different question from the one that we would have asked in the Thatcher years. Then the question would have been: what should we or need we do about the situation? That at least has changed. We now regard ourselves as members of the European Community and committed to it. We have to see to what extent we can develop our philosophy, thoughts and policies in this country in a way which is consistent with membership of the European Community.

Perhaps I may illustrate that. I, and possibly other people, have some difficulty in seeing how one can be at the heart of Europe if at the same time one opts out of the two most important developments in Europe at the present time. In case that is thought to be a party political criticism, perhaps I may say that if it ever came to action—which is highly unlikely—I doubt very much whether the other parties would take a more active interest in European affairs. At the moment all we have is rhetoric unmatched by deed. I strongly suspect that if it ever came to the point the parties opposite would be just as anxious as the Conservative Party to defend what they conceive to be Britain's interests, whether they were right or wrong in that respect and in their judgment.

However, that leads me inevitably to ask: what are Britain's interests in this matter? First, I believe that it is the function of governments to lead and not just to follow and to mould public opinion, not simply to reflect it, still less to pander to and reinforce popular prejudices. I shall therefore start by stating that what really matters are Britain's long-term interests. Our policies should reflect those long-term interests and not be side tracked by pressures exerted by groups or lobbies with political, financial or other sectoral interests, often of a short-term nature.

We have to start by recognising that as latecomers to the Community, we have neither the prospect of changing nor the moral right to change its fundamental characteristics. It is not, and never was, simply a free trade area. We wished it were and that is why we never joined at the outset. But we lost that argument 30 years ago and it is no good thinking that that decision can now be changed. The Community was from the outset designed as a community with wide economic, social and political objectives. We can help fashion those objectives. We can possibly ensure that they will be better than they would have been without our contribution, but we cannot stand aside from them. If we try to do so, we shall be crying in the wind and our words will be swept away unheard.

The fundamental question is a simple one. Are we likely to be better off in economic and political terms if we form part of a Community of 300 million or 400 million people which we have actively helped to shape; or as a fully independent and free standing sovereign state of only 50 million people? The answer to that is clear: "sovereignity", in the sense that the question implies, no longer exists in the modern world. There is no such thing as "independence", the real situation in the world as it exists is one of interdependence. Nor, regrettably, have we shown any great competence in the management of our own economic affairs. History does not suggest that we would, or could, on our own do any better in the future than in the past. And just as, first, the Americans, and then the Japanese, have run our automobile industry for us, and we have taken great satisfaction in their achievement, possibly we would not be the losers if our monetary policy were largely determined by a European central bank guided by the philosophy and skill of the Bundesbank supported by the other central bankers of the Community.

Even if we were to look at the Community simply as a trading operation, as governments in this country are still apt to do, the simple truth is that we have nowhere else to go. The old Commonwealth was increasingly drifting away from us long before we joined the Community. The new Commonwealth has given us no great joy; and the United States, valuable market though it is, is beset with protectionism.

On the monetary front, sterling has long since lost its place as the reserve currency of the world. It is no longer the classical "store of value" that it was in Victorian times. In the past 25 years it has fallen in value compared with the deutschmark from 10 deutschmarks to the pound to 2.95 deutschmarks today. If that is the kind of achievement in which the noble Lord, Lord Bruce of Donington, takes great pride and pleasure, it is an achievement that has brought great pain and anguish on the British people, let alone others elsewhere. Unless we wish to join the dollar zone or the yen zone, our only sure refuge and hope for the future lies in a European currency.

On the political front we were once a great power. Today on our own—and the words "on our own" are critical—we are little more than President Bush's closest and ever present ally when he finds himself in trouble. Our true hope for the future must be in a powerful, integrated Europe in which we play a leading role.

But there is one thing that we have to accept. It is one of the facts of life and it exists whether or not we wish to accept it. One cannot pick and choose. One is either a member of the Community and accepts its full panoply of policies in the political as well as in the economic field, in the social field as well as the industrial field, or one will find oneself increasingly marginalised and ultimately confined to the stony wasteland by the roadside. And, my Lords, do not be misled by reports in the media about dissensions in other member states. Most of the arguments are negotiating ploys, internal political bickering, or attempts to gain an advantage. None calls into question the fundamental objectives of the Community. While we hold the presidency it is our duty to ensure the ratification of the Maastricht Treaty and to make every effort to help member states to resolve the difficulties that they face.

Perhaps I may take up the point raised by the noble Lord, Lord Bruce of Donington, about the Fontainebleau Summit at which the British budget contribution was finally agreed. Of course the issue goes back much beyond 1984. The success of the Fontainebleau Summit depended on the fact that President Mitterrand, who was then in the chair, was prepared to put the interests of Europe as a whole in front of the interests of France in particular. It has always been the honourable tradition of the presidency that it subordinates its own national interest to the interests of the Community as a whole. I hope that we in fact follow that tradition when we hold the presidency in less than two months' time.

I want to leave those general matters and comment for a moment on the Delors II package. It is likely to prove the Community's most immediate and important business this year and particularly during the British presidency. We have important points to make and it may be that some of the figures proposed are too large. However, I hope that we shall approach the negotiations in a constructive spirit and with the realisation that much of the Community's future development is at stake. It is a misconception to think of the Delors package simply as a financial operation. It is described in that way but in truth, the money is simply the financial expression of the underlying policies. If we have accepted the policies and even more so, if we are promoting them, as we are in the case of enlargement, we cannot stand aside from the financial consequences that they involve.

The Government's rhetoric on enlargement has been somewhat diminished over the past few months. It started with the "Urals to the Atlantic". In the Queen's Speech, it has almost come down to EFTA on its own with a mild nod towards the other countries. However, I am bound to ask the Government whether they have made a serious attempt to assess the financial consequences of enlargement of the Community to include the countries of Central and Eastern Europe.

The EFTA countries pose no problem. They are relatively wealthy countries and they have advanced economies. However, when one starts looking at Poland, Czechoslovakia, Hungary, Romania and Bulgaria, the position is entirely different. The Community is still paying the cost of the enlargement which brought in Spain, Portugal, Greece and, indeed, Ireland. We have objected to the continuing cost involved in those enlargements. Do we really know what it will cost to bring in those countries of Eastern Europe? One looks at what has happened in Eastern Germany and the tremendous burdens that the extended Federal Republic is now carrying. The cost of those countries on the European Community will be immense, if not astronomical. The Government must come to terms with the fact that if they are promoting those policies, it is not unreasonable that they should be asked to pay the cost or to contribute towards the costs of the policies that they promote.

Coming back to Delors II in general, in the end our attitude to that will reflect also our attitude to the Community. It will show whether a new Parliament, and in many respects a new government, have at long last come to terms with the world in which we must live.

6.3 p.m.

Lord Judd

My Lords, it was good to hear the powerful maiden speech by my old political boss, the noble Lord, Lord Prentice, this afternoon. How strongly I endorse what he said about the media and the positive stories to be told! The maiden speech of the noble Earl, Lord Cromer, was also telling as a voice of wisdom and experience.

I join with those who have today welcomed the noble Baroness, Lady Chalker, to her new place here in this House. For those of us who have worked and enjoyed working closely with her in the past, she has established herself personally as second to none in her anxiety about third world issues. She clearly comes from the one-nation element in her party but she stands for more. Her perspective and commitment to the concept of one humanity are badly needed in the counsels of state.

Statistically, still, somewhere in the world every 2.5 seconds of every day a child dies of poverty; and 1.5 billion children, women and men, are still without any health care whatever. There are 45 million refugees and displaced people in the world. Against that demanding background, there is no disposition on these Benches to politic on the backs of the poor. If the Government as a whole demonstrate in this House —and most importantly in the other place—their determination that the UK will fully shoulder its responsibilities in the world, striving to meet the 0.7 per cent. of gross national product UN aid target in the fight against poverty and injustice, on those issues they will certainly enjoy much support from all sides of this House.

As the noble Baroness reminded us, there is yet again a heart-rending and massive humanitarian crisis in Africa. In the Horn, 23 million people are at risk from acute food shortages and are in need of rapid assistance. As the Minister reminded us, in Southern Africa, the worst drought for 50 years has devastated crops in Zambia, Zimbabwe, Malawi, Namibia and South Africa. In Mozambique the ravages of drought are compounded by cruel warfare and consequent corruption.

We naturally welcome the £20 million that the noble Baroness has recently made available as a beginning, and we welcome the decision by the Development Council of the European Community to make available an extra 680,000 tonnes of food aid for Africa, with 120,000 tonnes for other parts of the world in need.

However, as we learnt last year, if famine is to be averted, it is not just a matter of deciding to allocate the food. Can the Government assure us this evening: first, that the extra food will begin to arrive in Southern Africa before the end of June, and that effective plans are already in place for the co-ordinated arrival of the rest in a way that takes account of the port capacity and need? Secondly, that the IMF and World Bank will modify their structural adjustment programmes to reduce food prices in order both to help the poor buy available food and to provide subsidies on vital agricultural inputs to help stimulate food production for next year? Thirdly, that help will be provided for port rehabilitation in Beira, Dar es Salaam, Maputo and Lobito, and for inland transport and transport management. Fourthly, that assistance will be forthcoming for economic and social reconstruction and rehabilitation in Somaliland, Ethiopia, Eritrea, Namibia, Zambia and Angola. Fifthly, that special action will be considered at and by the United Nations to ensure access to those in need in Mogadishu and protection for the large numbers of internally displaced people in and near Khartoum.

As we come to the special United Nations conference on environment and development, eminent scientists on both sides of the Atlantic have predicted that we have barely 30 years in which to get a grip on management of the environment before the crisis threatens to become terminal. It is estimated that the price of correcting the world's environmental problems will be 625 billion dollars per year, with an urgent need for 125 billion dollars of that each year to be transferred from North to South. However, in 1990 the 21 development assistance committee members of the OECD provided little more than 54 billion dollars in official aid to the South.

Apart from the alarming depletion of the ozone layer in heavily populated latitudes of the northern hemisphere, 35 per cent. of the earth's land surface, accommodating one-fifth of the world's population, is in danger of becoming desert. Every year, 7.5 million hectares of tropical forest and 3.8 million hectares of open dry forest are disappearing; and a further 4.3 million hectares are degraded. The number of food-insecure people in Africa alone has risen to 100 million. Global warming, with consequently rising seas, already threatens the poor of places like low-lying Bangladesh, Egypt and the Nigerian river states.

Many of the world's poorest people live in the most fragile of environments. The forests, rivers, lands, grasses, marine resources and rainfall are on what most of the world's people rely to meet their basic needs. It matters immediately to the village farmer in Zambia if the rains fail. It matters immediately to Philippine fishing communities if their seas are over-fished by huge commercial fleets. It matters immediately to the Brazilian forest people if their forest, their food source, their meaning of life, is desecrated. Yet denied access to more productive land or waters, frequently as a result of external economic pressures, poor people are increasingly compelled to eke out a meagre existence in an environment unable to support their growing numbers. For example, desertification is not wholly a natural phenomenon. It is the result of human interaction with the environment.

But the bulk of the environmental problems which confront us do not arise in the poor world. Eighty per cent. of global fossil fuel is used in the North. It is that, coupled with the insatiable consumption–80 per cent. by 25 per cent. of the world's population—and the wanton pollution by the industrialised world which most leads to depletion of the ozone layer and to global warming.

In would-be enlightened circles it is fashionable these days to claim respectability by stating a commitment to sustainable development. But that is not of itself convincing. Sustainable development alone could lead either to an era of unprecedented international tyranny as those who have hang on to what they have—even maximising it—while the majority are held at bay or to an era of unprecedented international anarchy as the poor stand up, begin to march and to demand their rights. Every time we advocate sustainable development, it is essential to understand that environmental degradation both causes and is caused by poverty. Indeed, the environment debate must be rooted in a commitment to social justice for the poor.

To meet all that, there must be a streamlining rationalisation of the United Nations system, strengthening its authority and bringing together its various agencies in long-overdue constructive cooperation. The international financial institutions like the World Bank and the International Monetary Fund need to be made much more accountable than they yet are for the social and environmental consequences of their actions. GATT must address the structural needs of the third world and should undergo a radical overhaul to make it relevant to the strategic priorities for global survival.

Rio cannot be seen as an end in itself. It should be a spur to vital ongoing policies and action at local, national, regional and international level. It has to challenge conventional economic accounting and the omnipotence of inevitably short term market economics, putting the long term social and environmental costs for humanity firmly on the agenda. Clear objectives and targets will have to be established against which progress can be measured.

In the battle against poverty and for the environment we are all players, though I suspect that history will find that difficult to establish in the context of our recent myopic general election. It is by their resolve on international cohesive strategy that the Minister and her Government will be judged. They will have considerable goodwill in this House if they are able to perform convincingly.

6.13 p.m.

Lord Bethell

My Lords, I give a warm welcome to the gracious Speech and in particular to two sections of it. The first is the second paragraph where Her Majesty announces that next Tuesday she will be addressing the European Parliament in Strasbourg. That is an extremely welcome development. For some years Britain has been the only country in the Community whose head of state has not addressed the European Parliament. A certain amount of comment has been caused by that fact and there have been suggestions that it is no coincidence; that it is for political reasons that her advisers were not able to allow her to come to Strasbourg. It is good news that those difficulties have been overcome. I am certain that Her Majesty will receive a warm welcome from members of the European Parliament of all countries and all political persuasions.

I should like also to give my congratulations and a particularly warm welcome to my noble friend Lady Chalker whom we in Strasbourg know well from the time when she was in charge of European affairs for the Foreign Office. The noble Lady was a frequent visitor to us and a guiding hand in our deliberations. In truth, she was our favourite "head girl" for the years that she was there.

Likewise I welcome my noble friend Lord Cranborne. He may be surprised to hear that his speeches on Europe are also well known in Strasbourg, though perhaps for opposite reasons. However, perhaps over the next year or so he will find time to visit us in the European Parliament and discover that we are not as bad as all that.

I am delighted that the gracious Speech makes mention of the forthcoming ratification of the Maastricht agreement which is so far one of the greatest achievements of the Prime Minister in his premiership. It is a tribute to the Government's speed off-the-mark that a copy of the Bill is already available in the Printed Paper Office, short though it may be.

I hope that the ratification will not be the cause of great dissension among your Lordships or in another place. It would send entirely the wrong signals to our partners, to other member states if, at the moment we are about to assume the presidency of the European Community, we are seen to be at loggerheads over the Maastricht agreement. It was a brave and sensible attempt by the Government to reconcile the differing views on Europe held by members of the British Parliament and the views held by other member states. It was a Chinese puzzle put together by the Prime Minister with great skill and courage. One must not forget that it was presented in its present form to the electorate in the Conservative manifesto and therefore the Government have a mandate from the people to implement the Maastricht agreement.

I hope that we will now see a coming together of the British people around the Government's position on Maastricht. After all, we all believe that certain reforms must be made to the European Community's structures. We believe in the fundamental reform of the common agricultural policy, in the further reform of the budgetary procedures and a fair budgetary outcome for all member states including our own. There may be differences between us over the social chapter but even here I venture to suggest that all sections of British public opinion believe in a closer alliance between the workforce and management. If a difference exists between us it is to the extent to which that should be made subject to statute, whether national or European. I hope that that bridge can also be crossed.

I hope that the media will concentrate a little less on the trivia of the European Community during this crucial year for Europe. I hope that they will write less about the European harmonisation of lawnmowers, leeks, tomatoes and bacon-flavoured crisps and perhaps mention from time to time how much we owe to the founding fathers of Europe—Monnet, De Gasperi, Adenauer and Winston Churchill—for the fact that for the past decades war has been avoided largely because the countries of Western Europe have been brought close together. I do not believe that the countries of Central and Eastern Europe would have been freed of communist dictatorship if there were not a beacon of democracy shining towards them from the European Community and beckoning them to choose the democratic path.

Surely, if there is to be peace in Yugoslavia, the European Community has a great part to play in it. Like my noble friend Lady Chalker I should like to pay tribute to the memory of the six European Community monitors who recently lost their lives in Bosnia trying to bring peace to Yugoslavia.

I wish to mention a couple of points where I believe that the Government can take a positive attitude and strengthen their position over the European Community. During the election campaign there was some temptation for Ministers to play the "European card". The dread word "federalism" appeared from time to time in the run up to polling day. I urge the Government not to continue their policy of execrating federalism and damning it as the worst of all unmentionable sins. It is a word that means many different things to many different people. I believe that it was explained to some extent by my noble friend Lady Chalker earlier this afternoon.

To me and I believe also to my colleagues of all nationalities in the European Parliament, federalism does not mean that of the United States of America, Australia or Germany; it does not mean that Britain should be reduced to the position of Nebraska, New South Wales or North Rhine Westphalia. It means an entirely separate relationship based on the principle of that dread word "subsidiarity". It means, as my noble friend Lady Chalker pointed out, that a decision-making power should be passed to the European institutions only if it cannot be properly implemented at national level. On that basis we can have a consensus among the 12 that federalism in that sense is to be approved. My understanding is that that was the gist of the agreement on federalism at Maastricht even though that word was not actually used in the agreement. Certainly all 12 governments approve the principle of subsidiarity.

It makes sense that whole areas of decision-making should, for the foreseeable future, remain within the purview of the national government. For instance, I cannot see the day when matters such as housing, health and education will be passed to the European institution. The vast amount of economic, foreign and defence policy will remain under national control. However, we have to appreciate the fact that we are being urged again and again to get our act together over economic matters and over such vital questions as Yugoslavia.

We cannot have it both ways. For instance, we cannot insist on having 12 different policies as regards Yugoslavia and at the same time have a coherent policy and put monitors into the field in Yugoslavia in a united effort to achieve peace and to bring prosperity to that war-ridden country; it has to be one or the other. For the moment I dare say that it has to be a mixture of the two. If we can achieve consensus in foreign and defence policy then let it be done whenever possible.

In passing, on the question of the pillars, which the Minister also mentioned, I would like to utter a word of caution. If one has too many of these pillars of inter-govermental authority one is providing a hostage to fortune as one is setting up an authority with no permanent civil service to administer the pillar and with no proper democratic control by an elected body over that particular part of the administration. That may be necessary at the moment for foreign affairs, defence matters and questions of immigration, but I am not sure that it is something to be greatly welcomed as a matter of principle.

I wish to conclude with a few words about the European Parliament. I greatly welcome the Government's achievements in bringing about some greater powers for the European Parliament in the Maastricht Treaty. I have no doubt that those provisions will go through although there will be a number of people who will object to them, minimal though they be. Clearly I have not succeeded in persuading Ministers that greater powers can be given to the European Parliament without in any way taking power away from your Lordships or Members of another place. I still believe that greater powers should be given to the European Parliament vis-à-vis the Commission in Brussels. I am not talking about the decision-making process with the Council of Ministers at the end of legislation; I am talking about the administration of the Community in Brussels where at present there is a democratic deficit.

That deficit exists because there is no one keeping the kind of control over the civil servants in Brussels and the bureaucrats which noble Lords and Members of another place do over Whitehall. We may have access to the bureaucrats but we do not supervise them. We do not control them in the way that we should and in the way in which we are entitled and obliged to do under the treaty. To some extent we have responsibility without power. We are allowed to move amendments to laws which are given to us at the initiation of the Brussels civil service. Again, that is a strange way of putting forward laws. The amendments are then subject to the cancellation or approval of the Commission. I wonder how noble Lords would feel if their amendments were subject to cancellation not by another place, which is understandable, but by Whitehall civil servants. I wager that noble Lords would be trying to change the law if that were the case.

Likewise at the moment the European Parliament cannot compel attendance by commissioners or their staff at our committee meetings although some progress has been made towards that. We also have difficulty in obtaining prompt replies to our letters. That situation comes about simply because there is an incorrect balance of power and authority between the Commission and the European Parliament. There has been a great step forward in the Maastricht Treaty in that the European Parliament will be given the power to agree or not to the new commission when it is appointed in the summer or autumn 1994. We shall have something akin to the advise and consent procedure enjoyed by the United States Senate over key appointments.

Sadly, it is a once and for all power. The power given to us is one vote. We either take all the commissioners, president and all, or we reject them all. We take them or reject them as a job lot. I would much prefer it if we were able to approve or not the president of the Commission, the individual commissioners and the members of the Court of Justice, one by one, after, if necessary, interviewing them in committee and finding out their political views, intentions and qualifications. In that way the European Parliament could have some control over the Commission. It would be a much more politically significant body.

Therefore, I advise the Government that a number of my noble friends and I will be moving amendments to the European Community's amendment Act to that effect in order to test the Government's views on the question of giving specific powers for "advise and consent" to the European Parliament over members of the Commission and other key appointees. Whether or not it will be possible to implement that under the Maastricht Treaty will be something that can be borne in mind when another inter-governmental conference takes place in the not too distant future.

6.30 p.m.

Lord Chalfont

My Lords, in my brief contribution to this debate, I shall concentrate on defence matters and it is right that, as usual, I should declare an interest as chairman of Vickers Shipbuilders, although I shall go far wider than that interest this evening. I should like to lend my strongest possible support to the ideas and proposals that have been advanced by the Government and the noble Lord, Lord Bramall.

I urge the Government—and especially, but not only, the new team at the Ministry of Defence—to look again at their defence policy and, particularly, to look again and with a fresh mind at the defence review that we now know as "Options for Change". I shall not follow the noble Lord, Lord Bramall, on the strength of the Army, the number of ships that we need or the size of our reserves or even deal with that most important matter of our intelligence resources, although they are all vital matters; I should like to concentrate on another aspect and problem which, to me, is of more fundamental concern. I refer to what in my view was a sad lack of any radical and rigorous strategic analysis behind the review that is known as Options for Change.

That concern has not been invented by me or even monopolised by me. Serving and retired officers of great distinction have voiced some of the misgivings and concerns that were expressed earlier by the noble Lord, Lord Bramall. Academic experts who have spent the whole of their professional lives studying defence matters have advanced their own criticisms of the process. Members of both Houses of Parliament who have great experience in these matters and who are deeply versed in them have said that they have great concerns about Options for Change. Perhaps most importantly, the Select Committee on Defence in another place, which was then chaired by an honourable gentleman who is now a member of Her Majesty's Government, was scathing—I think that it is right to use that word—when it commented on the defence policy.

As it might be illuminating, perhaps I may remind your Lordships briefly of some of the comments that have been made about the defence policy. The Select Committee on Defence stated: What SDE 91"— that is the paper that promulgated Options for Change— regrettably fails to do, and does not even set out to do, is to argue in any detail the rationale behind the changes proposed, or provide a coherent strategic overview". Those are fairly severe words.

Professor Lawrence Freedman of King's College, London, who is by no means a cold warrior by anybody's standards, has said: The flaw is that it sets in motion a dramatic restructuring of Britain's armed forces without attempting to describe the circumstances in which they will be likely to operate". Again, that seems a sad omission.

David Bolton, the Director of the Royal United Services Institute, in an article on the strategic concept of NATO which evidently lay behind Options for Change, commented with that modesty of expression that is so characteristic of former Royal Air Force officers: Producing a force structure before an overall strategy and agreed concepts of operation is certainly unusual". The report of the House of Commons Select Committee on Defence also noted: a smaller fleet must inevitably mean the abandonment or reduction of some existing peacetime tasks". It also came to the disobliging conclusion that the Government have managed to combine a theoretical preference for a smaller surface fleet with a practical acceptance of a larger one.

The final and, for me, perhaps the most telling comment of all came from the Chesney Gold Medal lecture at the RUSI last year by Correlli Barnett, a distinguished strategist and historian and a disciple of the late, great Captain Liddell Hart, whose theme had the rather provocative title "Total Strategy and the Collapse of British Power". The lecture concluded with the following words about the Government's defence review: despite all the lessons of our history we still do not have a realistic total strategy in which economic policy and resources, foreign policy and defence policy fit together in a coherent whole to serve coherent ends. As is indeed demonstrated by that all too characteristic Whitehall production 'Options for Change' and all that is so far flowing from it". It would be foolish to ignore such comments from a range of experts and senior officers who know what they are talking about. We now need a realistic total strategy. I would go a little further than the noble Lord, Lord Bramall, because I believe—I understood the noble Lord to say that he did not—in a radical review of the whole of our defence policy. That may result in the decision that we should have larger forces than we have now. On the other hand, it may even result in the decision that we need larger cuts than are presently proposed, but at least the decision would have the merit of being coherent and convincing and behind it would be a proper strategic assessment of the role that this country will play in the world at the end of this century and the beginning of the next.

Much will depend on the Government's view of that role. What is this country to be in the future? In the past—throughout most of our history—we have been involved in all the great decisions that have affected our own national security and that of our friends and allies. We have been at the heart of the great strategic geopolitical decisions that have been taken over the years—indeed, over the centuries. We have played a part, not only in the great world wars, but in the settlement of most relatively minor disputes around the world when threats to stability, security or democracy have appeared.

It may well be that that phase has come to an end and that our future destiny is to play some tame or minor role in world affairs. In my view, that would be a tragic decision, but it is for the Government to decide. I beg Her Majesty's Government to approach the business of deciding our future defence policy not as a resource-driven exercise in which we cut our Armed Forces simply to meet the resources that we think that we can apply to the establishment of our military force structure, but to engage in a profound, strategic and geopolitical assessment of where we are going. It will then be for the Government rightly and justifiably to take the decisions that will be needed and to apply the requisite resources to our force structure.

If the Government should decide—I have said that I very much hope that they will not—that in the future we shall play a relatively minor role compared with that which we have fulfilled throughout our history and if, as a result, logically and intelligently they decide upon reductions in our military power and in the strength of our Armed Forces and, therefore, in the size and shape of our defence industries, other consequences will flow from that which will be equally difficult to deal with. I refer to the profound industrial and social consequences and I speak as an employer who has recently had to declare redundant thousands of men and women as a result of Options for Change. That may be necessary; I simply state it as a fact. If Options for Change continues to be implemented in its present form, I shall have to declare redundant thousands more men and women from the defence industry.

As I have said, I readily concede that, if that is the Government's decision about the size of the Armed Forces and defence industries that we need, so be it. But there will be pain and sadness among those who have made their livelihood in those fields. I would advance the proposition that this is not something that the Government can rightly leave to free market forces. I do not believe that the Government can leave the reconstruction consequent on the enormous contraction of the defence industry entirely to market forces.

That is not to suggest government intervention in industry on the classic pattern. It is to suggest, however, that it is a moment, if the Government decide upon a policy of this kind, when they must get together with industry and in collaboration with industry reconstruct the whole of the industrial policy and shape of this country. It cannot be left to industry alone. Those who have made their livelihood and employment in a defence industry which has been partly constructed for commercial purposes but partly in the national interest cannot be left to bear the pain of all this change entirely on their own.

I conclude by saying that in the debate on Options for Change towards the end of the last Parliament there was something of a tendency for the Government to be reluctant to listen to the kind of criticisms that I have been outlining and some of which I have been quoting today. There was a regrettable tendency to say, "My mind is made up. Pray do not confuse me with facts". These are facts and opinions which the Government must take with the utmost seriousness. I hope that when he comes to reply the noble Viscount will be able to tell us that the new team, when it is installed, will be taking some of these criticisms very seriously indeed.

6.42 p.m.

Baroness Park of Monmouth

My Lords, I too most warmly welcome my noble friend Lady Chalker to the House. We are indeed fortunate to have her here. I greatly admired and enjoyed the other two maiden speeches, too. I wish that time had allowed me to speak to her known expertise on Africa, where a tragic situation is now playing itself out and where I spent an important part of my service overseas. But on this occasion I must, as usual, play Cassandra on the political implications of Options for Change, even though the noble and gallant Lord, Lord Bramall, has said so much so expertly, already.

In the gracious Speech, Her Majesty's Government clearly indicate that they intend to work with our allies to adapt NATO to changing risks and to restructure our armed forces to meet these changes. I submit that we can only play our part in all this if we retain sufficient effective strength to meet potential threats, not just our existing commitments. What are these threats?

In Russia and the CIS there exist both short and long term dangers. Secondly, there is the risk posed by expanding Islamic fundamentalism, already actively setting up links with the former central Asian republics, coupled with nuclear proliferation. Fifteen countries will have the bomb by the end of this century. Kazakhstan has just declared its intention to retain its nuclear weapons, which include well over 1,000 strategic nuclear warheads, rather than return them to Russia for destruction. Russia itself is reported to have sold £141 million worth of rocket technology to India, allegedly for the space programme, but capable of being used for developing advanced ballistic missiles. Not least, in recent Russo-German talks Khasbulatov spoke to Herr Genscher of a pan-European infrastructure. Germany is investing extensively in Russia and the CIS countries. Looking far ahead, a Russo-German partnership could become a far more powerful axis than the Franco-German entente and would pose an early threat to both Czechoslovakia and Poland in terms of pressure to redraw frontiers. Here perhaps I may say how vital it is to us to continue to give serious support to the Poles and the Czechs, who are energetically trying to restore democracy in their countries.

Within Russia, as the noble Lord, Lord Cledwyn, pointed out, and in the CIS, the situation remains highly volatile and ethnic tensions are increasing. There are local wars or civil unrest in Checheno-Ingushskaya, North Ossetia, Moldava and Dnester, and in Tadjikistan, and gravest of all, in Nagorno-Karabakh, where the noble Baroness, Lady Cox, has so often risked her life and where GRAD missiles are being used. Meanwhile up to 500,000 Russians, refugees from the former Soviet Union, have flooded into Russia, and many more can be expected.

The threat to the survival of Boris Yeltsin, which is a particular threat for us, now comes with special strength from the nomenklatura of the powerful defence-industrial complex. The conversion programme promised by Gorbachev has proved both costly and politically dangerous. More than 4 million of Russia's most highly skilled, sophisticated and privileged scientific workers, whole secret towns in the defence complex, and the 8 million more men and women who manufacture the weapons, cannot easily be thrown into unemployment, or properly used to make saucepans. The whole defence complex, intricate, autonomous, powerful, is proving virtually impossible to dismantle. Russia's spending on defence in the first quarter of 1992 was 55 per cent. of the budget, twice as much as for the national economy, and expenditure for arms liquidation was expected to equal the cost of their production.

There are also major ecological problems: the dumping of nuclear waste in Novaya Zemlya has left hundreds of seals dying of cancer, and an anthrax outbreak at Sverdlovsk in 1979 is now attributed to the chemical weapons programme. However, Mr. Yeltsin's solution is apparently twofold. In the name of defence sufficiency, he is encouraging the continued output of new weapons for the Russian forces. He promised the continued production of nuclear submarines on a visit to Severodvinsk, the base near Archangel, and he gave similar reassurances to the Federal Atomic Centre at Anzamas-16.

Secondly, he has taken steps to establish Russia as a major seller of arms abroad. A recent presidential decree set up the Armed Forces Management Institute to control all sales of arms abroad. It has allowed the sale of 1,600 military aircraft. Georgia is ready to export SU25 fighter bombers; T72 and T81 tanks are said to be available at a price; and the 15 enterprises forming the Tula arms and shell complex are now licensed to sell arms—AK74s and grenade launchers. This plant was to be converted to civilian production by 1993, and the area is described as an ecological catastrophe because of pollution. But the costs of conversion were too high.

This is the second option. Russia is expected to make 10 billion dollars in 1992 as an arms exporter, according to the chairman of the state committee for conversion. The defence complex is much happier. But should we be? We have apparently chosen to put disarmament before verification, but shall we end with neither? Quite apart from the genuine difficulties of destroying missiles, we should not forget that the Russians have a long record of being economical with the truth on their nuclear holdings. I submit that on the worst scenario—and it is never wise to ignore this in planning—we could end with a Russia as powerful as the former Soviet Union, with a highly professional army possessing the most sophisticated weapons, and a major arms exporter, with inevitable consequences for arms proliferation. If it has formed a Russo-German axis, it will wield very great power. If meanwhile the Islamic fundamentalist powers increase both their strength and their fire-power, and may be fully prepared to use it, we have the makings of a very dangerous international situation. Shall we be facing it with a seriously depleted defence capacity, both industrial and military? At the very least I urge the noble Viscount, Lord Cranborne, whom we welcome most warmly to this House, to represent to the Government the need to wait another year or two before taking any irrevocable steps to reduce our power to act within NATO as a viable military force and to make a valid contribution to the peace-making efforts of the UN.

We need to be able to play our part in a flexible response to UN interventions which may need to range from Cambodia and possibly the Bangladesh-Burma border to Yugoslavia. I believe that our contribution is uniquely valuable in terms of skills. I urge him too to act upon the wise words of the noble and gallant Lord, Lord Bramall, and, in an earlier debate, those of the noble and gallant Lord, Lord Cheshire, in recognising the crucial part which good intelligence plays both in the early identification and assessment of threats, including disinformation, and in countering them. It was good intelligence that prevented the Cuban missile crisis from escalating into war. Good intelligence is the best, and I suspect the cheapest, possible insurance against war.

6.50 p.m.

Lord Jenkins of Putney

My Lords, I have known the noble Baroness, Lady Chalker, for more years than her youthful appearance would seem to make possible. Throughout the whole of that time, I have been surprised by the skill with which she was able to pursue progressive policies within an environment in which that word would seem to be regarded as something less than a compliment. But when the noble Baroness told us today that her mentor was none other than lain Macleod, I began to understand. Macleod was an equal expert in that operation. He defeated me roundly at Enfield West in 1950. I have therefore known of him for longer than I have known the noble Baroness. However, it is interesting to note that in this Chamber, in the course of a remarkably fine introductory speech, the noble Baroness felt able to claim lain Macleod as her mentor. I congratulate her on that fact.

We also heard today another remarkable maiden speech from the noble Earl, Lord Cromer. We can congratulate him on his speech, without the usual hypocrisy, from this side of the House. Indeed, one can speak entirely genuinely of one's appreciation of his speech which I think would have impressed anyone on any side of the House who heard it by the degree of its knowledge and understanding. While talking about speeches, I should like to say how delighted I was to listen to the congratulations and appreciation of the noble Lord, Lord Chalfont, as regards the speech made by the noble and gallant Lord, Lord Bramall. Although Field Marshall Lord Bramall has not condemned Trident in the round terms exercised by his equally distinguished military colleague, the noble and gallant Lord, Lord Carver, he did display a certain lack of enthusiasm for it. The noble Lord, Lord Chalfont, is to be congratulated on his capacity to appreciate the strength of the argument put forward by the noble and gallant Lord, Lord Bramall, despite the fact that he has a certain mild self-interest in the matter which of course he always declares. For that reason, I believe that he is to be congratulated. I see that the noble Lord wishes to intervene. I am happy for him to do so.

Lord Chalfont

My Lords, I am most grateful to the noble Lord. I cannot allow this round of congratulations to pass without introducing a slightly abrasive note. It would of course have been wrong of me, even having declared my interest, to enter into any kind of debate about the future of the Trident submarine force as I am so closely associated with it. However, I can assure the noble Lord that my silence did not imply consent.

Lord Jenkins of Putney

My Lords, I entirely accept that.

The gracious Speech says that, Britain's minimum nuclear deterrent will be maintained". However, it does not say what that means, as I shall, I hope, illustrate in a moment. The gracious Speech also says": My Government will work to strengthen the United Nations. They will require full Iraqi compliance with Security Council Resolutions". But it does not say that Britain will comply with those resolutions, as I shall also illustrate. It is not much good requiring Iraq fully to comply with United Nations resolutions if one is not prepared fully to comply with them when they might appear to interfere with one's own self-interest. I shall also refer to that aspect in a moment.

As that old Tory, Doctor Johnson, said, "Example is always more efficacious than precept." That universal truth applies to the Government and it equally applies to Her Majesty's loyal Opposition. When we abandoned unilateral nuclear disarmament in favour of "Me last" we abandoned example and joined the Conservatives in preferring precept. That step does not appear to have been electorally advantageous. Perhaps Dr. Johnson was right. However, it is still possible for this country to set an example on non-proliferation. At present, we are the leading vertical proliferator. Our example denies our precepts. That point is made in greater detail in a brief by the International Security Information Service and not, I may say, by the Campaign for Nuclear Disarmament. However, before I turn to that document, I must stress that the precepts uttered by Mr. Major, as president of the Security Council last January, are not followed by the example given by Mr. Major's Government in this country. I have highlighted a number of things from that speech which indicate appreciation and support for the policies and resolutions of the United Nations. For example: The members of the Council underline the need for all Member States to fulfil their obligations in relation to arms control and disarmament; to prevent the proliferation"— that means vertical as well as horizontal proliferation— in all its aspects of all weapons of mass destruction", and so on. Then we come to the actual policies followed by the Government. That is, perhaps, rather different. The ISIS brief to which I have just referred suggests what changes are needed in government policy so that this Government could fully carry out the resolutions of the United Nations. If their policy is to remain consistent with their treaty obligations, three suggestions are made. First, the Government should announce that they will not deploy any more strategic nuclear warheads on Trident than are presently deployed on Polaris; in other words, they will maintain existing policy of no more than 48 warheads per boat. Secondly, they should agree not to procure a tactical air-to-surface missile (TASM) and to support a global ban on all substrategic nuclear weapons". Thirdly, the Government should, announce a moratorium on all UK nuclear tests and support the resumption of negotiations towards a CTBT [comprehensive test ban treaty]". I have not included in my congratulations the noble Viscount, Lord Cranborne, because he has not yet made his maiden speech. Whether shall be able to congratulate him will depend upon the nature of his reply to the question which I put just now as to whether the Government are prepared to modify their policy. If he were to be the messenger of such a change it would indeed be most welcome. Nevertheless, I may be perfectly prepared to congratulate him on his speech technically, irrespective of what he says. But it would be even more welcome if he showed that the Government are prepared not only to talk peace internationally but also to back peace on their own soil. That is what we really want.

Curbing the spread of nuclear weapons around the world should be a crucial policy objective during this Parliament. In 1995 the non-proliferation treaty will be the subject of an extension conference at which the parties will decide for how long the NPT should continue. All political parties are agreed on the importance of the NPT for our future security. All are agreed that in the light of the clandestine nuclear weapons policy pursued by Iraq, and not only by Iraq, the treaty needs to be strengthened. That will involve having to persuade non-nuclear weapons states to accept far more intrusive inspection of their nuclear facilities than are required at present so as to ensure that they are not developing from civil nuclear energy into nuclear weapons.

Unless the nuclear weapons states, including the United Kingdom, are prepared to take their treaty obligation seriously, especially those under Article 6, and also to allow for greater openness of their own nuclear facilities and stockpiles, the prospects of the necessary improvements to the treaty being accepted will be greatly diminished.

What does Article 6 say? It seems to me that the essential point is this. Each of the parties to the treaty should undertake in good faith to pursue negotiations on effective measures relating to the cessation of the nuclear arms race at an early date, and to nuclear disarmament and on the treaty on general and complete disarmament under strict and effective international control. If the Government do not take that seriously then they can hardly expect anyone else to take the NPT seriously.

These are the matters to which I wanted to draw your Lordships' attention and I shall be most interested to hear the reply of the noble Viscount, Lord Cranborne. If it were not getting so late I should have liked to have said something more about Trident, but your Lordships have heard me for long enough on this subject to know broadly my views. But we are now moving into a situation in which it is possible—and as I said, this is not a brief from CND; it is a brief from an entirely different body—for us to begin to understand each other. If we cannot entirely accept each other's point, we can at least move a little in the direction in which all of us want to go—that is, the preservation of the peace of the world.

7.2 p.m.

Lord Beloff

My Lords, one can at least agree with the last phrase in the speech of the noble Lord who has just addressed us. He will not expect me to take up the rest of his argument. We have crossed swords—if he will permit a military metaphor—on the topic of nuclear disarmament before. He seems to me —and he is not unique in this—to be very much prepared to make the same argument on an international matter, irrespective of the changes in external circumstance. Mutatis mutandis, that speech could have been made by him a decade ago when the former Soviet Union was still a great and formidable superpower. But he is not alone among your Lordships in being stuck in a time warp. It seems to me to be equally true of some speeches that we have heard this afternoon on a quite different topic: the European communities. The noble Lords, Lord Cockfield and Lord Bonham-Carter—and I am sorry that they are not in their places; perhaps they knew that I might have something to say about their stance—seem not to have observed that one consequence of the great upheavals in Eastern Europe to which reference has been made by many speakers has been changes in the perception of the world by the citizens of Western European countries.

Whatever may have been the original achievements —and they were great—of Monnet and others in finding a way of bringing together the late antagonists, the French and the Germans, that period and the institutions to which it gave rise have come to an end. The European Community is not something which can look forward to a period of massive expansion of its activities, or a massive expansion of its resources; but must, on the contrary, consider whether it has by now not exhausted its role.

It does not seem to have occurred to many people who have mentioned the appalling events in Yugoslavia—massacre, deportation, the movement of populations in Europe itself—that the European Community, despite the undoubted diplomatic skills of the noble Lord, Lord Carrington, has failed, and that it is quite likely that future historians will say that the pressure by Germany for the premature recognition of Croatia and Slovenia without the instruments of defending them against the inevitable reaction of Serbian nationalism, was an error. So far from Greece being regarded as contemptible—and I agree that their particular stance on Macedonia could be criticised—for not wishing to go along with the rest and therefore bringing the rule of uniformity into play, it might have been better if Britain and France had been a little firmer in insisting on a uniformity of approach to the problems of Yugoslavia.

However, it is not surprising. After all, Germany is a great country. It has achieved national unity, or reunification, in circumstances which could not have been foreseen even a few years ago. It is bound to be taking a different view of its responsibilities in Europe from the view which it took when it was cut off from part of its own people and territory and was only gradually managing to find some modus vivendi with Eastern and Central Europe. As my noble friend Lady Park reminded us, with its long association with Russia it was bound to be different.

Similarly, the French at one point clearly believed—and it is not clear that they believe this any longer—that by trying to tighten the institutions of a European Community they could somehow subordinate the greater population and greater economic strength to their own desires and intentions. Surely this discovery of national interests is bound to have its effect.

There are forces which are going in the other direction; but these are not, as I think the noble Lord, Lord Cockfield, would argue, pressures from public opinion in Europe. There is no great enthusiasm any longer in any major European country—I leave out the gallant Belgians —for the European idea as existed in the decade after the catastrophe of the Second World War. People are now saying, "What is in it for us?" This explains—and it might well have been foreseen—the reaction following the idea of a single currency. That idea seemed splendid to the Germans when they thought that everybody would use marks, or whatever they call them. However, when they realise they are being asked to give up an important element in the control of their economy—which until the past week or two has been so successful—they suddenly begin to say, "Is this what we really want?"

The noble Lord, Lord Bonham-Carter, quite rightly called our attention to the fact that many of the countries of Europe —and Germany is the most recent—are undergoing considerable political strains. He mentioned Poland. That is important because it is the key country in the eastern central bloc. The noble Lord also mentioned Italy. I suppose that it was not possible for him to mention that one of the reasons for Italy's political instability is the appalling system of proportional representation. That makes it impossible for the country to have a stable government or even to create a government. We now find that even the modified version in Germany is presenting considerable problems as Chancellor Kohl's ministers fall away from him one by one.

Therefore, surely the noble Lord, Lord Cockfield, is wrong in condemning Britain's instinct to look again at its own national interest and ability to run its own affairs. As the noble Lord rightly said, when M. Delors asks for more money it is not merely a question of raiding our pockets as taxpayers; he does so because he sees an expansion of the functions of the body of which he is head. He cannot be blamed for that, as I have said to your Lordships on previous occasions. There is in the air of Brussels a certain virus which produces what the medical profession might call "the commissioner's itch". One cannot become a commissioner in Brussels without wanting to do more and more. If one comes from a small country which does not play a great national role—an instance is Mrs. Papandreou—one will get up to all kinds of tricks in order to keep oneself busy. The fact that that may adversely affect international relations is secondary.

It may be that there is the possibility of a European political union—I hope that there is. However, it will not be a political union composed of the kind of people who have hitherto, without control even from the European Parliament, as was pointed out by my noble friend Lord Bethell, attempted to run the affairs of western Europe. The argument is that if we have expansion we must also have deepening. That appears to me to be patent nonsense. It is important to bring the countries of Eastern Europe into some kind of association with the rest of us because it is the best guarantee of their continued democratic development. What we need are institutions which do not compel them to make the impossible jump towards a level of prosperity equal to that of the rest of western Europe. That cannot be done in measurable time.

The part of central and eastern Europe which appeared to have—and for many reasons should have —the best prospects was East Germany. The problems which Germany now faces arise because that difficulty was obviously wholly underestimated by the German Government. Therefore, the talk of cohesion and of giving money to southern European countries to pull them up is irrelevant because it cannot and will not work. The British taxpayer will not be alone in pointing out that countries and continents can exist with different levels of economic achievement and can co-operate through their own democratically chosen statesmen. In considering the Community we must be prepared not only to consider Maastricht and the other proposals which will come before us but to try to think historically about whether we are looking at something that is here to stay or an important monument to an important but now past moment in Europe's history.

7.15 p.m.

Baroness Elles

My Lords, while I do not agree with what was said by my noble friend Lord Beloff I believe that his speech must make us consider deeply some of the aspects of government policy and the road down which we are going. I do not agree with my noble friend but I believe that some of his remarks were of profound significance and it would be foolish of us to ignore them.

The contents of the gracious Speech indicate the great importance and significance of Britain's wide-ranging role in world affairs and the responsibilities accompanying that role. Within the European Community, while assuming the Presidency in the second half of this year, that does not of itself leave much room for innovation. Nevertheless, it is a key to the decisions to be taken and to the timing of them. Britain's constitution, although it may be far from perfect, has ensured its strong position in relation to other member states. We have a monarch of whom we are justly proud and to whom we are grateful for the immense tasks undertaken on behalf of Britain both within our country and overseas. In addition we have a stable government with a mandate from the people to govern.

As my noble friend Lord Beloff has indicated, of the three other large member states it can be observed that one has no president and only a caretaker government more than a month after a general election. That leads to the conclusion shared by all the major parties of that country that proportional representation as an electoral system has rendered the country ungovernable. They are seeking a formula along British lines. In recent regional elections in another large member state only 20 per cent. of the electorate supported the governing party, again following the same electoral system. Following those elections only two regions were able immediately to form a governing body. The third large member state was referred to by my noble friend. As a result of its electoral system, and in accordance with the agreements between the coalition parties in power, the Chancellor did not have the freedom to choose his own Foreign Secretary. How grateful we are that my right honourable friend the Prime Minister can choose our Foreign Secretary and how grateful and proud we are of that Foreign Secretary. Therefore, Britain with its strong government is pre-eminently in a position to lead its fellow member states in the European Community in both the internal and external issues which face our part of the world and can take into consideration the interests of our own country.

It is particularly to be welcomed that. Her Majesty has been graciously pleased to accept to visit the European Parliament. Like all institutions it is far from perfect but through direct elections it is a genuine attempt to represent the people of the EC. It is the only elected body so to do. In that connection I wish to take the opportunity not only warmly to congratulate my noble friend the Minister on her maiden speech but also to express the gratitude of former and current members of the European Parliament, as did my noble friend Lord Bethell. They benefited very much from the Minister's period in office in charge of European affairs, from her constant visits to the European Parliament and from the concern and assistance that she has given so readily to all British representatives. Indeed, we are most grateful.

Her concern has not been confined to Europe. Having returned from Zambia yesterday it is impossible not to be aware that the result in Wallasey was received with a tremor in southern Africa. Only a couple of days later was there great relief throughout the region because it was announced that my noble friend had been elevated to a peerage and would continue to use her skills and to carry out her former responsibilities. The democratisation process in southern Africa is impressive. However, we know from experience in other parts of the world that the aspirations of people, in particular those gained as a result of the new-found freedom through the democratic process, are difficult to meet in the short term.

It is in that region that the worst drought since the beginning of the century is causing untold hardship and human suffering. It could set back the longer-term social and economic development of the region. Indeed, many noble Lords have referred to the dramatic situation. The United Kingdom has responded positively to the calls for emergency aid by committing some £30 million in drought aid to southern Africa. That is a generous sum. I was pleased to be in that part of the world when the news was announced by my noble friend Lady Chalker and to witness the gratitude expressed by governments.

The unprecedented scale and persistence of the drought indicates that more aid is required in the short term. The European Community has recently pledged £160 million in food aid, amounting to 680,000 tonnes of cereal. To put the short-term requirement into perspective, the Malawi Government have apparently recently estimated their maize requirement for 1992–93 as 600,000 tonnes—almost equal to the total amount committed on 4th May. So it seems that the level of aid will need to be increased and also measures taken to ensure that it is distributed effectively and efficiently to the areas most in need. I understand that considerable work is being done by NGOs in the field and that they have undertaken this responsibility.

As well as the immediate implications of the drought, in the longer term there will be a direct effect on the capacity of individual countries to implement the important structural adjustment programmes prescribed by the World Bank and the IMF, as well as governments' efforts to democratise and open up their political systems. Without considerable support—and this does not necessarily mean money—the long-term prospects for social and economic development could be badly affected.

The need for closer economic co-operation on a regional basis has never been more self-evident. The PTA—the Preferential Trade Area—has been working hard to study and implement such co-operation. We have accumulated much experience over the past 35 years in developing a framework for effective social, political and economic co-operation in Europe, with its problems as well as its solutions.

Although perhaps this is not what noble Lords who are not so keen on the European Community would like to hear, a great deal of study is going on as to the way in which the European Community's economic integration has been taking place. We in Britain can do much to assist southern Africa in facilitating regionalisation. It is a prerequisite if the region is to compete with other growing trading blocs in the world for relatively rare and scarce global capital and skills. However, it is not only European leaders who are responding and helping. Regional leaders also recognise, in the light of political change, that past differences should be eradicated and that it is necessary to build a framework of co-operation on a regional basis.

This, I believe, is an area where Britain can and does assist, through its good offices, by drawing from both our European and our considerable historical experience of the southern African region. I was constantly reminded there of the goodwill and high respect in which Britain is held.

Some noble Lords have mentioned population. The question is: what population policy is to be followed? In my view, the real problem is not the population figures, it is poverty and keeping the peace in the area so that people can stabilise their lives and grow food for their own needs. Although the link between population figures and economic growth has relevance, that is not the fundamental problem. There is no known case in history where there has been economic growth without an increase in population which eventually regulates itself and stabilises at a certain level.

The noble Lord, Lord Prentice, I think, gave a classic example when he referred to India. In the 1960s it suffered great famine because of shortage of food but it has now become self-sufficient in the main grains. I do not have the figures in front of me but I believe that in the 1960s there was a population of 400 million and now it is over 700 million. That goes to prove that one can become self-sufficient in food without necessarily cutting down or controlling the population.

We only have to think in historical terms that 100 years ago there was a far smaller world population but far greater poverty, whether in Europe or in other parts of the world. Eliminating people does not necessarily solve the problem of poverty and starvation. It is a problem which I believe could well be considered far more deeply. We should cease to entertain what I call the politically correct notion that population control will solve many of the world's problems. I do not believe that it will.

The point is also relevant to the southern African region. In Angola, for example, there is a population of about 5 million with a vast area of land which could once again be made fertile if only there were peace in the region. In Zambia there are only 8 million people in an area twice the size of Britain. In Botswana there are 1 million people in an area the size of France. Yet these countries are expected to achieve economic growth and modern infrastructure and develop industries which will sustain their populations. In numerical terms, it is not possible. Surely we in this country, together with other EC members, have just signed an agreement with EFTA in order to increase the size of our economic market and benefit from distributing, manufacturing and marketing our goods. Why should we deprive the southern African region and other parts of the world which do not happen to be in the northern hemisphere of the opportunity to increase their population and increase their growth?

I do not maintain that it is necessary to increase the population in all countries in order to increase economic growth. But I do not accept that it is necessary to control populations in those countries in order to benefit in this part of the world and achieve a higher standard of living. I very much hope that at some stage we shall be able to debate the question in greater depth.

To return to the southern African region, population affects it very much. The time is surely approaching when the issues of regional co-operation and closer integration must be addressed by us jointly with southern African leaders. Southern Africa, with its considerable material and human resources, will then more easily take its rightful place within the international economic community.

7.26 p.m.

Lord Craig of Radley

My Lords, perhaps I may turn our focus again to the North Atlantic Treaty Organisation and its future. I listened with interest to the remarks of the Minister, the noble Baroness, Lady Chalker, to whom I add my words of welcome on her elevation to this House.

The treaty has served us well for the past 40 years and more. It has helped to secure two objectives, in addition to the key one of keeping the former USSR from attacking this country and our vital interests. Those two objectives I would describe thus in shorthand: first, the transatlantic commitment—particularly that of the United States—to Europe; secondly, the avoidance of strife—of war—between us and any other of the member nations which make up the alliance.

It is debatable whether the absence of a North Atlantic alliance would have been instrumental in allowing conflict to break out yet again this century between us and others of our European partners. It is perhaps a little ungallant, if nothing more, even to postulate such a horror. But in truth, the lessons of history do not give comfort on this score. Contemplating events over the past few months in what was once Yugoslavia is to realise that mankind only a few hundred miles from here can still pick a fight with neighbours.

However, all that said, the most important reason for NATO and its framework of security policy and defence strategy, its force structures and military doctrine, has been to provide the level of deterrent and resistance required to see off the once most potent Soviet and Warsaw Pact threat.

So much for the past and what is well understood by noble Lords. But how does it all look as we contemplate the new world orders which are almost daily unfolding before our eyes? The disintegration of the Soviet Union and the current lack of harmony between some of the nations which make up the Commonwealth of Independent States hardly looks like an imminently menacing threat to the western countries of Europe. Of course, between them the Commonwealth nations still control a vast and powerful offensive capability. NATO's latest strategy rightly takes this into account. We cannot lower our guard too far. While things look promising, they could still turn out badly. Those weapons—which include thousands of nuclear weapons—could still be used for blackmail or worse. We are wise not to take human beings' behaviour solely on trust.

But as the weeks and months go by, and if the new arrangements being put in place between the West and the countries of the former Soviet Union prosper and take root, as we must hope that they will, how long will we be able to hold together the defence and other security arrangements which we have built up and restructured over the years?

There are bound to he pressures to release more and more of the expensive resources tied up in our widespread and complex command and deployment arrangements. No matter how good the present housekeeping and belt-tightening in the defence field may be, they will not satisfy the critics. There will be pressure to do even more: to slim down and withdraw to one's own country to avoid the extra costs of overseas deployment. It will be argued that we are not going to have to face some rapid and totally unforeseen deterioration in the security situation in Western Europe, so let us go for home basing and cut costs. We might not like it but we would not be wholly surprised by such pressures.

But where would this leave those other two national NATO objectives of keeping the United States here on the ground and a major player in the defence structures and of the continuing need to safeguard the internal peacefulness between the allied nations? The latter, it may be argued, will be adequately taken care of by the growth in the structures and interdependence of the European Community. But will that be enough and will it continue to attract and retain the interest and commitment of the transatlantic partners? Without their continuing involvement the future of NATO does not seem to me to be based on anything of a lasting and vibrant nature.

Europeans still seem to need the undisputed primus inter pares status of the United States. When the chips are down all are prepared to accept their leading role and position. But without them, we are in danger of not having a clear idea of who is going to take the lead. As we have seen only too embarrassingly in the case of Slovenia and Croatia, the European Community is not an ideal forum—at least not yet —to arrange a common policy. While we may be able to survive that without too much difficulty in peace, it could be quite another thing in a shooting war. Then there is no time to indulge in protracted debate or fudge. Enemy action would have to be countered. Lives of servicemen could be at stake. Clear, unambiguous aims set by political authority must be given to guide the actions of commanders in the field. Until we find more satisfactory answers to these real and difficult issues NATO remains essential to our security. I therefore welcome the Government's commitment to NATO in the gracious Speech.

The present steps to sustain the health of NATO are mainly directed at getting its new post-Warsaw Pact strategy together. However, I wonder whether adjusting the strategy is going to provide NATO with the right kiss of new life. Is not there a need to consider more fully how best to restructure the underlying philosophy of the alliance? As a result of the threat to our security over the past 40 years we have rarely had to think aloud about the other aspects of NATO's contribution to European security; aspects which have been of enormous value to our prosperity and happiness.

In these few remarks I have been trying to do no more than pose a few questions about the way ahead for NATO. I am not confident yet that we have fully identified the best way to carry it forward for the next decade and beyond. Are we sure that the concepts of expansion in terms of membership, let alone in terms of geography, will help sustain its key contributions to our own national security? On the face of it perhaps they should but we seem in danger of putting our money on rather too many runners of similar and expanding shape. The Western European Union, the Conference on Security and Co-operation in Europe, and no doubt other bodies lead to a proliferation of committees and conventions and repetitive bureaucracy. As we seem to be saddled with them, I can only assume that those wiser than I in these matters think that this is the right way to be going. I hope that they are right. I hope that we can afford to pay for it all while still providing ourselves with adequate forces which have a mix of the essential capabilities we will need to handle the inevitable unforeseen events that will mushroom before us in the years, maybe even only months, ahead.

Although both have a part to play I have yet to be convinced that the diplomatic pen is now a substitute for the sword of defence in preserving our peace and prosperity. I hope that Her Majesty's Government will continue to encourage frank debate about how best to sustain all the valuable objectives which we have found in the north Atlantic alliance and how best to contribute to them in the future.

7.35 p.m.

Lord Geddes

My Lords, the gracious Speech made mention of Hong Kong. I warmly welcome what was said. We here must not, and I am sure will not, even give the impression let alone allow it to be fact that the United Kingdom is losing interest in Hong Kong. My noble friend Lady Chalker, and my noble friend Lord Cranborne to whom I give a warm welcome, re-emphasised that point. That, too, was most welcome.

The noble Lord, Lord MacLehose of Beoch, did me the signal honour of inviting me to join him last month on a five-day trip to Fujien and Guangdong Provinces of the People's Republic of China. He and I, together with my noble friend Lord Marlesford, had spent the previous week in Hong Kong. Like the noble Lord, Lord MacLehose and my noble friend Lord Cromer, I intend to give equal weight in these remarks to both Hong Kong and South China, not least in that, geographically, the former is part of the latter and of course will join it politically on 1st July 1997. I congratulate my noble friend Lord Cromer most sincerely on a quite remarkable and outstanding maiden speech. We first met some 16 years ago when I, too, was living in Hong Kong. He was a fount of knowledge and wisdom then and is clearly even more so now.

I found Hong Kong in tremendously good heart. The Vietnamese refugee problem appears close to resolution, with only seven arrivals in the first four months of this year and with agreement with Vietnam very close for the repatriation over the next three years of all 50,000 of those who have been screened out. Hong Kong's economy is flourishing in a way that the Western world, dragging itself out of a deep recession, can hardly comprehend. The Chep Lap Kok Airport project is well under way and today's announcement of the award of the Tsing Yi Bridge contract to an Anglo-Japanese consortium is most welcome.

In typical Hong Kong style its business community, while not forgetting the 1989 horrors in Tiananmen Square, has nevertheless put that disaster behind it and has well and truly got on with the business in hand. Indeed the situation can probably be best summed up by the comment I heard from many in Hong Kong that, from a business viewpoint, 1997 has already come and gone. If there are problems in Hong Kong, they are political ones. During our visit we had meetings and discussions with the full spectrum of the Hong Kong political scene as well as government departments. I came away with three key impressions.

First, the present Governor, Lord Wilson, has kept his hands firmly on the reins and is increasingly widely respected. He has done a quite outstanding job in and for Hong Kong and, as I said in our debate on 29th January, Hong Kong's loss is going to be our gain in this House. However, the job is an increasingly burdensome and exhausting one. The decision for change having been made, I welcome the appointment of a politician to the post and wholeheartedly endorse the appointment of Mr. Christopher Patten to succeed Lord Wilson. I do not exaggerate when I say that his will be an awesome task but he is a man of well proven ability, all of which he will need to lead a successful and prosperous Hong Kong to 1997.

Secondly, one of his tasks will be, I believe, to accelerate the liaison between the most senior individuals in Hong Kong's Government administration and their opposite numbers both in Beijing and in Guangdong. That in itself is no easy task. The business community has had and continues to have such top level contact in Beijing. It is in my opinion vitally necessary for similar governmental liaison to take place in order that each party (and particularly the mainland Chinese) gets an understanding of how the administrative systems in the other's territory function. On the other hand it is equally necessary to avoid giving any impression that Hong Kong must seek approval from the mainland for decisions taken prior to 1997. It is the thinnest of political tightropes but one which must be walked most immediately to alert Beijing to the dangers in continued slow progress in the joint liaison group.

Thirdly, I can see a real potential danger if the activities of some of Hong Kong's emergent political parties, however well meaning they and the individuals promoting them may be, exceed the limit which the mainland can tolerate. In that context I am not condoning the political system in the People's Republic but simply trying to address hard practical political reality. While the power struggle in Beijing is not yet resolved, nevertheless the pragmatism of Mr. Deng Xiaoping is presently prevailing and the very last thing that Hong Kong wants to do is to present political ammunition, to the detriment of all and particularly Hong Kong, to the more hard-line elements in Beijing and thereby reverse the open policy which has prevailed, particularly in South China, over the last 14 years.

Of course the United Kingdom on behalf of Hong Kong (and Hong Kong itself) has to stand up for its rights, and of course the details of the Basic Law must properly reflect all the vitally important provisions contained in the Sino-British joint declaration of 1984. It is therefore both natural and equitable that the views of Hong Kong be given due weight. However, the present Hong Kong political situation is a very curious one, there being various degrees of what might be described as opposition parties but no government party. It may therefore be that the business community of Hong Kong which, as my noble friend Lord Cromer said, has made Hong Kong the great success story that it is, may have against its will to become more overtly political.

As for South China, I can only describe it as mind boggling. Time does not allow me to quote the quite extraordinary statistics of growth over the period of the open policy so perhaps I may just give some fleeting, and at times deliberately facile, examples to make my point. We visited four special economic zones, and here confusion sets in between the present names of those places and the old ones, and I shall give both. We visited Xiamen (previously Amoy), Guangzhou (Canton), Shantou (Swatow) and Shenzhen (Shumshun). All four were bustling, thriving communities of, at this stage, varying degrees of sophistication but all, as the noble Lord, Lord MacLehose, said, emergent replicas of Hong Kong itself. Capitalism is in full swing and encouraged. Vehicular traffic jams exist. Mobile telephones abound. Men and women are well dressed, the women brightly so. I did not see one Mao suit all the time we were there.

The provincial governments have significant and increasing autonomy from Beijing. Those provincial governments are investing huge sums, particularly in transport, infrastructure, telecommunications and power generation. Strong emphasis is being given to education both at secondary level, which is to be compulsory to the age of' 15, and tertiary. We visited the most impressive university at Shantou which is fully funded by Mr. Li Ka-Shing from Hong Kong.

In Guangdong province in particular the standard of hotels was well up to Hong Kong's standards, and that is very high. It was interesting, and perhaps not a little amusing, to be greeted by the general manager of the Shantou International Hotel with, "Good evening, my Lord.- That is not what one expects in mainland China. In that same hotel I watched the whole of the BBC1 nine o'clock news live on the television in my room.

Last but not least in this mini-kaleidoscope of reflections, we visited four quite different examples of joint venture companies—a spinning mill in Guangzhou in which Coates Vyella of the UK has a 50 per cent. interest, the Guangzhou San Miguel Brewery (where interestingly the manager concerned advised me that the municipal water supply was the purest he had come across in the world), a microchip factory in Shantou which was a joint venture with Hong Kong, and a colour television factory in Shenzhen which was a joint venture with Japan. The first three were flourishing but the colour TV factory was, on the manager's own admission, suffering particularly from the desperately slow-moving bureaucracy in Beijing.

In each and every direction that we looked, South China is bubbling. If the Beijing government, in spite of all its domestic preoccupations, can be so successful in the south eastern cities of China surely one can be confident that it will handle Hong Kong sensibly. As for Hong Kong itself, its political problems are relatively small in comparison with the deadlock with China of only a year ago and, to a considerable extent, the Hong Kong people may have to look to themselves for blame if those problems are not sorted out.

Overall, I was immensely encouraged by what I saw and heard both in Hong Kong itself and particularly in South China. The two areas are rapidly converging economically, which itself bodes very well for 1997 and beyond.

7.46 p.m.

The Earl of Onslow

My Lords, the noble Earl, Lord Cromer, spoke with as much authority on Hong Kong and China as did his great grandfather—or perhaps it was his great great grandfather —on Egypt. Indeed, the comments of my noble friend Lord Geddes on China underline the fascination and success of China's development. The speech of the noble Lord, Lord Prentice, was an excellent example of how to put a case with logic and clarity, for a point of view with which I disagree totally. I hope that both the noble Earl and the noble Lord, Lord Prentice, will speak often and with the same skill.

When I was a small boy one of my father's favourite stories was of a telegram sent to an ancestor of my noble friend Lord Cranborne by the then Lord Salisbury which read: Cranborne Cranborne Salisbury Salisbury 15.15 Salisbury". On those grounds alone I welcome him to this House.

To welcome my noble friend Lady Chalker is a pleasure. To acknowledge her influence and command over the ODA is but natural. What is perhaps more controversial is to query whether she should stay there a moment longer. I do not, of course, question her ability. I hope especially that she will be promoted among Her Majesty's present advisers. What I question is the concept of foreign aid, which can be more accurately described as government to government subventions. I hope that when he comes to reply my noble friend Lord Cranborne will say how long aid is forecast to last.

My noble friend Lady Chalker was right when she said in her opening remarks that common agricultural policy reform and the GATT agreement are vital for world trade. Trade makes men rich; aid impoverishes all. When allied to the CAP's food-dumping policy it does even more damage.

In today's Spectator my noble friend Lady Chalker writes a letter which is in the best tradition of Peterson Sahib, protector of the poor. She defends the existence of her department. She says that Mauritius and Ghana have changed their policies as a result of aid. In so far as they have changed at all I suggest that they would have had to change very much earlier had there been no aid hand-outs. After all, that was the policy which Mrs. Thatcher applied to nationalised British industries. Look at the results. My noble friend Lady Chalker was an enthusiastic supporter of that policy. Why should the position be different overseas? Why should not the Government of Tanzania be as sophisticated as the board of British Airways? To suggest that it could be anything else is nothing other than patronising.

Our PSBR is too large and must be squeezed. The Chancellor of the Exchequer has admitted as much. The aid budget would be a good start.

We always hear quoted Marshall Aid. Marshall Aid lasted but four years. It is held up as the foundation of modern European affluence. That view is certainly challengeable. After all, Weimar Germany of the 1920s received large quantities of foreign currency under various plans such as those of Mr. Dawes or Mr. Kellogg which approached, if they did not exceed, the amount of Marshall Aid. Weimar frittered away and debauched its currency until it was wrenched on to a sound basis by Schacht in the late 1920s and early 1930s. What was the foundation of post-war German economic success? I suggest that it was not Marshall Aid but Ludwig Erhard's currency and trade policies. They were the foundation.

It is noteworthy that the United Kingdom received more Marshall Aid than did Germany. I think we would all agree that there has been a difference in economic performance between Great Britain and Germany since the war.

A discourse on Marshall Aid is a fitting introduction to a discussion on aid to Africa, Asia and Latin America. I think it is time that the whole concept of overseas aid should be examined and not just accepted as "a good thing" in the sense of "1066 and all that".

In recorded time no country or economy has developed by outside government-to-government subvention. Was the rich silk trade between China and Justinian's Byzantium founded on a subvention from the Visigoths of North Africa? Or did it prosper because the merchants had a sound and certain knowledge, a competent bezant, and a secure market for those bales of silk which could take two years on a camel's back to travel from China to Constantinople? Did Theodoric the Goth give start-up aid to Venice to found a spice trade entrepot in some obscure island surrounded by inaccessible and lacustrine marshes? Did Adrian Darby begin iron founding in Shropshire with World Bank funds? Of course not. The Arkwrights and the Stephensons, the cotton and the railways, the coal and steel of 19th century Britain prospered and developed because of human ingenuity, the availability of private risk capital and a sound and light government.

Therefore, when I look down the ODA list of major recipients of largesse from the British taxpayer, I ask: when is it ever going to stop? I do not ask that question because I am a hard man. I ask it because I believe that it is actively harmful for us to continue pursuing such policies and I wonder whether aid is not actually counterproductive, keeping rich tyrants or incompetent governments in power at the expense of the poor taxpayers in rich countries.

India alone now has an army three times as large as ours in 1939, when it comprised the British regiments and the old imperial army. That army had to police a whole subcontinent and hold an empire from Hong Kong to Aden. Today India buys Russian rocket engines. It has at least two aircraft carriers and an oceangoing navy. It is the sixth power to explode an atomic device. It runs a discredited economic policy of 1950 socialist design. Why, therefore, do our taxpayers have to give £88 million a year to subsidise such grandiose plans, especially as India runs a very restrictive trade policy?

The ODA says that aid is targeted. Another word for targeted is hypothecated. We all know what the Treasury thinks of hypothecated aid. Kenya is a recipient of £40 million of our largesse. Last Christmas a friend of mine who runs a help agency for the rich took to Harrods in a suitcase £40,000 in used £1 notes, to buy on commission presents for the friends and children of Mrs. Biwot, the wife of the Kenyan finance Minister. I do not know the Kenyan finance Minister's salary but I bet that it does not cover that kind of largesse or the hiring of an aircraft to take the goodies back to Nairobi. I am equally prepared to place further moneys with the bookmakers that Kenya's exchange control regulations do not allow but probably encourage suitcase-borne hard currency exports.

Ghana, 35 years after independence, remains a large aid recipient. After 80 years of colonial rule the Gold Coast became independent and was left with bulging foreign exchange reserves and a healthy economy. The reverse is now the case. The government of Jerry Rawlings, which seems to arrive in power with monotonous regulatory, normally by shooting their opponents, are in debt to a horrendous amount and the economy is in ruins. In her Spectator letter, my noble friend Lady Chalker says that aid has changed Ghana's economic policy. No aid might have brought it to its senses long ago. Aid has enabled despotic governments—Jerry Rawlings's is certainly one of them—to stay in power, to continue to exploit their subjects and to ruin their countries.

Indonesia gets £17 million of our money—oil rich Indonesia, Pacific rim Indonesia of East Timor fame. Why? Are your Lordships further aware that we give £20 million a year in aid to China? Is it necessary for us to do that? We have heard about its successful development without aid and read about what it got up to in Tiananmen Square. I do not believe that that is a useful purpose for British taxpayers' money.

No prosperity has been built on charity. It has been built on sound money, light government and liberal trade and economic policies. Socialist intervention and import control systems have never produced real prosperity, only corruption and poverty, such as that of oil rich Nigeria. Incidentally, in oil rich Nigeria the northern chiefs decided that they wanted to increase their power so they invented large numbers of people in their provinces. When that was done the income per head of the Nigerians went up by about 15 or 20 per cent. All the United Nations aid policies have been calculated on a gross national product per head of a lot of imaginary people. Nigeria receives £33 million of our aid.

Zimbabwe receives £28 million. It has a problem feeding its population. The drought does not explain all. It just exaggerates the problem. Much of the fault must be set at the door of illiberal trade policies and dirigiste governments which made the situation in both Zimbabwe and Malawi much worse. I suppose that it is tactless to remember that when Mr. Ian Smith's Rhodesia was gripped by sanctions it managed to feed its population. I have one further gem of information for your Lordships. We give rich Singapore £74,000 a year of aid. Why on earth do we give £74,000 to Singapore?

Aid has more accurately been described as indiscriminate government-to-government hand-outs. It has continued for 45 years. Do Her Majesty's Government know for how long it will go on? Can they even guess?

7.57 p.m.

Lord Weidenfeld

My Lords, I wish to associate myself with the words of approval and indeed admiration for the maiden speakers. The noble Earl, Lord Cromer, was instructive and very thought-provoking. I was impressed and touched by the maiden speech of the noble Lord, Lord Prentice. I thought that it reflected the courage and integrity of a long political career and political odyssey with which I sympathise. I am particularly anxious to pay tribute to the noble Baroness, Lady Chalker, for her speech and also because I have first-hand experience of seeing her in action, holding her ground at international conferences. She has a deep insight into both the spheres of overseas aid and European enlargement and development.

It is an irony of history that the inglorious aloofness of successive British Governments before the last World War toward the fate of Eastern Europe should now stand us in good stead in Yugoslavia. We have no axe to grind. We do not share France's lingering passion for Serbia, German and Italian comradely compassion for Croatia, nor Austria's far from dispassionate memories of Bosnia, Sarajevo being a code word for imperial collapse. No, we have no axe to grind.

Therefore it is seemly and proper that the noble Lord, Lord Carrington, should now be Europe's umpire. Though there is none better suited than he to judge that ghoulish scene, his brief is frustrating and limited. Indeed, sometimes it strikes me as being more of a Uriah's letter than an evangelical mission because the carnage continues. It cannot be allowed to last much longer. Has the time not come for a summit peace conference with teeth? We need a proper, credible forum which can make decisions. It should have the combined muscle, power and prestige of Brussels, the Helsinki network, NATO, the Western European Union and the Security Council. It should clearly be seen to be the voice and instrument of the world community. I do not believe that I present an original view. There was today a moving article on Bosnia by the The Times correspondent. It reflects and replicates the views of many other European eye witnesses. It is a terrible situation. The time has come when we put to the parties a choice of either facing the harshest sanctions, indeed even military intervention, or, as a reward for peace, the prospect of concrete plans for rehabilitation.

I do not single out the Serbs as the sole transgressors although their callous intervention on behalf of their allied irregulars counts heavily against them. I do not exonerate the Croat rulers or any of the three parties in Bosnia. But the urgency to find a solution is indisputable. Bosnia Herzegovina is burning today. Macedonia might erupt tomorrow. How many of us trust the apparent truce in Cossovo between the Serbs and the local Albanian majority?

While each and every European country, including Britain, is undergoing some form of economic turbulence with a hundred domestic priorities besieging the public exchequer, it may sound unrealistic or eccentric to ask Her Majesty's Government to take a leading position in regarding the Yugoslav issue as being as urgent, dramatic and relevant as the struggle against Saddam Hussein appeared to be when we loyally supported the United States. This time Britain and Europe face a war on European soil—the first European war in 50 years. We must defuse this dangerous cluster bomb in the Balkans, splinters of which could strike and hit lands of people not only throughout the former communist world but beyond.

The noble Baroness talked about European enlargement. The noble Lord, Lord Bonham-Carter, drew our attention to the disquieting situation in Poland. I am also alarmed about events in Czechoslovakia. The rift between Czechs and Slovaks might culminate in secession. But it is indeed a vicious circle. If they secede the Slovaks will have to face their own insoluble ethnic problems with the Hungarian minority. If they stay and do not change their view towards Prague, they will impede development and make reform more sluggish by a cumbersome constitutional construct of three parliaments and one federal government. It is therefore not a good outlook.

My views are closer to those of the noble Lord, Lord Beloff than of the noble Lords, Lord Cockfield, or Lord Bonham-Carter. I believe that the wider Europe is more important than the deeper Europe. It is not because I do not hold passionately a view that Europe must be consolidated and developed but because where there is a will there are the institutions to implement it. I believe that we should not be too mesmerised by the organisational and institutional problems which the widening of Europe would entail.

Perhaps I may submit the case of a small country that could be rescued ahead of its embattled ex-confederates. I speak of Slovenia, the first country to overturn communism in free elections. Its community of 2 million people is among the oldest and most civilised in Central and South East Europe. It has an advanced standard of living, a functioning democratic system and a degree of economic reform that makes it a worthy applicant for accession. Perhaps the European Community may be persuaded to allow the Slovenes to jump the queue and possibly start negotiation immediately after Austria's and Sweden's applications. Why should a country that has proved itself willing to change have to wait until those components of former Yugoslavia are ready for their entrance examination? Those components may have years of probation to face; they may have to prove that they can deal with ethnic and political minorities and fulfil all norms of a civil society.

Slovenia would certainly not prove more difficult to integrate than Portugal or Greece when they first filed their applications. Her immediate regional neighbours, Austria and Italy, could help her greatly economically. Germany has close ties too. The Slovenes in a short time have produced a good young leadership. For nearly two decades, even at the height of the cold war, there were close contacts between professional and business people, intellectuals and artists, within that region known as Alpe Adria (Alps and Adriatic). There is a great future for intensive cultural and economic symbiosis in that region of Europe. If we can prove that the peace breaker can be called to justice, and a small and peaceful nation rewarded, the message would be heard and, one hopes, heeded throughout the world, but especially in the vast and unsettled lands of the former Soviet Union.

I wish to say a brief word about the know-how fund. I was delighted that the noble Baroness referred to it in her remarkable speech. Perhaps I may urge the noble Baroness and the Government to give particular attention to the extension of the fund, in particular in the field of education throughout the ex-communist world between the Baltic and the Black Sea. It is a subject which needs a special debate in your Lordships' House. The British Government should do all they can to further training schemes in Central and Eastern Europe and, at the highest level, to provide post-graduate facilities for those who might become the future leaders in the professions and the multinational companies of a democratic, civil society. It is to the credit of Britain's institutes of higher learning and private sponsorship that European studies has become a growth subject with Oxford taking the lead. It is through that qualitative service, if developed and extended with government help, that we may extinguish the last flickering of savage tribalism on the soil of the most civilised continent.

8.9 p.m.

Baroness Cox

My Lords, I was pleased to note that in the gracious Speech the Government are pledged to continue their immensely valuable work in encouraging democratic reforms in the former Soviet Union. I should like to support this commitment and in so doing to refer to my recent experience in Nagorno-Karabakh as an illustration of its importance. I am most grateful to the noble Lord, Lord Cledwyn, and my noble friend Lady Park for their most generous words concerning my involvement there.

This small, mountainous, historically Armenian enclave located by Stalin within Azerbaijan may seem remote not only geographically but also in terms of relevance to our responsibilities. But I believe that recent developments in Karabakh have far-reaching implications for us, especially for policies concerning human rights, humanitarian aid and diverse geopolitical issues in the former Soviet Union, including democratic reform.

I have visited Karabakh seven times since last May under the auspices of two independent organisations concerned with human rights and humanitarian aid: the Andrei Sakharov Foundation and Christian Solidarity International. Four of those visits have taken place this year and I grieve to report that the situation has deteriorated catastrophically. On my first visit of this year, in early January, my colleagues and I were appalled at the deterioration since last October. President Yeltsin had removed the former Soviet Ministry of the Interior troops who had, since the coup, been undertaking a peace-keeping role. After their departure, Azeri forces had moved in, using their new vantage points to fire on the capital city—Stepanakert—and towns and villages throughout the region. Azerbaijan has also maintained a tight blockade around Karabakh, cutting off electricity, running water and supplies of food, fuel and medicines. The only lifeline to the Armenians of Karabakh, who comprise 80 per cent. of its 180,000 population, is by hazardous flights from Erevan. Those are frequently attacked and the courageous pilots risk their lives every time they fly.

By January of this year, the twin effects of bombardment and blockade were making life almost intolerable for the Armenians trapped in Karabakh and especially for the 80,000 still living in Stepanakert in bitter cold, with no heat, no running water and no sanitation. A dearth of medical supplies is forcing surgeons to treat patients suffering from serious wounds, amputation, burns, bullets in spines and glass in eyes with no anaesthetic or pain killing drugs. They are having to rely on vodka to try to alleviate pain.

On my return from that visit, I could not rest easy thinking of that unrelieved suffering. The Home Office, to which I should like to express my gratitude, was extremely helpful in providing an export licence for scheduled drugs. Christian Solidarity International rose to the challenge by providing enough money for me to return in a matter of days with £15,000-worth of morphine and other analgesic and anaesthetic drugs.

The fact that such suffering had been allowed to continue unrelieved by major aid organisations raises, I believe, serious questions to which I shall return. However, I suggest that it should not have been left to two small charities to try to till such a large vacuum of desperate need.

On my return to Karabakh for the second time in January, I was appalled by the escalation of the conflict, for the Azeris had begun to use the fearsome GRAD multiple missile rocket launchers, which can fire 40 rockets in every volley, with a destructive capacity of 12 hectares. Those terrible weapons of destruction have been raining down on the civilian populations of Stepanakert and on towns and villages around the region. For example, when I was again in Karabakh in March, on a single day—which had been agreed as a cease-fire—the Azeris fired 400 GRAD missiles from their stronghold in Shusha, 250 on Stepanakert and 150 on two neighbouring Armenian villages. I visited one of those villages that day—Shosh—and saw human and animal corpses and homes still burning from the attacks.

Most recently, I was in Karabakh three weeks ago with 50 tons of medical supplies and food. The situation is now extremely grave. Stepanakert is a mere carcass of a city. There is hardly a building which is not destroyed or damaged and many outlying towns and villages are similarly devastated. Because of continual attacks by GRAD missiles, civilians spend almost the entire time, day and night, sheltering in basements and cellars which are often unlit, unheated and so overcrowded that it is impossible to move. As the Azeris have still cut off running water, there is no sanitation and there is a risk of epidemic disease as temperatures rise. In Stepanakert, food is limited to one kilogram of flour and one quarter of a kilogram of sugar per adult per month. Dairy products are unobtainable. All the hospitals are destroyed. Casualties are treated in basements under the former communist party headquarters. Maternity cases were being cared for in basements under the parliament building, which had already been shelled. However, I heard last weekend that even those underground facilities have been destroyed by further shelling, with the death of two babies and four adults.

On 12th April my nursing and medical colleagues and I saw the aftermath of a massacre in the north of Karabakh. We were told that the village of Maraghar had been attacked by Azeri forces on 10th April and 45 Armenian villagers had been killed, many with great brutality. With great reluctance and anguish, villagers exhumed bodies to show us the evidence of mutilated, burnt and decapitated corpses. We also saw ransacked and burnt out homes, many still smouldering.

Most recent reports speak of yet further escalation of assaults by the Azeris, with a risk that they may launch an all out attack at any time. The Karabakh authorities have issued urgent pleas to the world for food and medicine, saying that their people are "on the brink of perishing". Those recent developments have not been widely reported in the British media, partly because the blockade makes it extremely difficult and dangerous for journalists to gain access to Karabakh. That is in marked contrast with the ease with which they can visit Azerbaijan to publicise the, Azeri version of events and to witness the suffering of the Azeri people also caught up in that tragic conflict.

That is partly why, so far, I have concentrated primarily on the suffering of the Armenians. Of course, in war, people of both sides suffer and we are also concerned with the plight of the Azeri civilians. We have raised money and prepared consignments of aid for them too. On previous missions we have also visited Baku and Azeri communities in Karabakh and have reported their anxieties.

However, our general assessment is one of asymmetry of aggression and human rights violations. Both sides engaged in the conflict inflict harm and suffer casualties. However, it is the Azeris who have imposed blockades on Karabakh and on Armenia. It is the Azeris who first used GRAD rocket launchers against civilians and undoubtedly the Azeris are superior in numbers and weapons, including military aircraft taken from former Soviet arms bases in Azerbaijan.

Therefore, as I begin to draw to a conclusion, I wish to re-emphasise the gravity of the situation in Karabakh and to raise a few questions concerning human rights, humanitarian aid and the wider geopolitical significance of the conflict.

First, there are serious human rights violations that need urgent attention. Not only is the right to life being violated by the blockades and by attacks on civilian populations, but there is also evidence of gross maltreatment of prisoners and hostages. We have met recently released Armenian hostages whose beaten bodies testified to the torture suffered at Azeri hands. We have interviewed also Azeri prisoners and hostages held by Armenians and have been generally satisfied that those we met are being treated in humane conditions.

However, the most urgent imperative is the need for a ceasefire and the introduction of stabilising measures to maintain peace while a political solution is negotiated. I was disappointed when I visited Washington in February to give evidence to a congressional CSCE briefing when the representative from Azerbaijan refused to accept the possibility of a United Nations peace-making initiative, claiming that Azerbaijan preferred to settle the problem of Karabakh as an internal affair. I believe that those are sinister words.

However, I should like to express my great appreciation of initiatives undertaken by our Government and by the CSCE to try to achieve peaceful solutions. I should like to ask my noble friend when he replies whether there is any news concerning CSCE initiatives currently under way and whether there is hope that those may be implemented before it is too late, before Azerbaijan may take what it may regard as the final military solution.

Secondly, on the issue of humanitarian aid, it is surely disturbing that suffering on the scale, intensity and duration that has been endured in Karabakh should have been allowed to continue unrelieved by the well resourced organisations of the international community and that small charitable organisations such as the Sakharov Foundation and Christian Solidarity International should have had to try, inevitably rather inadequately, to fill that vacuum.

During my last visit I met personnel beginning to arrive from the International Committee of the Red Cross but their advent only came after many months of suffering. I believe that that raises a question which I hope to raise in coming months on the need for us to consider the possibility of a more readily available rapid relief task force which I believe that we in Britain are outstandingly professionally well equipped to provide.

Thirdly and finally I turn to the wider geopolitical significance of Karabakh. On my return from visits to the region I have been privileged to be received twice by Russian Defence Minister Shaposhnikov, who emphasised his anxiety over the potentially far-reaching repercussions of the conflict if it is allowed to escalate—repercussions which could extend beyond Armenia and Azerbaijan and even well beyond the Transcaucasus. The implications of such a conflict highlight the need for any United Kingdom defence policy not to underestimate the volatility of this and many other areas within the former Soviet Union.

I finish on a note of hope. As I indicated, the CSCE has been actively pursuing initiatives to de-escalate the conflict and to try to protect human rights. In that context I believe that Karabakh has a significance far beyond its own borders. For, if principles, policies and procedures can be devised and implemented which could save Karabakh from degenerating into an even worse bloodbath, they could serve also as valuable precedents for the numerous other flashpoints in the former Soviet empire and perhaps prevent their people from comparable suffering.

The political challenges of those areas are formidable, especially the conflicts between the principles of territorial integrity and self-determination. But the priority must be to establish ways in which those can be addressed by discussion and negotiation—not by bullets and rockets. If the CSCE and other intermediaries can transform the conflict in Karabakh into peaceful dialogue, a ray of hope will be ignited in the Transcaucasus which could shed light over a vast and troubled horizon.

I conclude by commending the Government once again on the initiatives they have already taken and expressing hopes that the suffering of the peoples of Karabakh will soon be alleviated; that they will soon be able to live in peace and freedom in their ancient homelands, and that they will feel that their agony has not been in vain.

8.22 p.m.

Lord St. John of Bletso

My Lords, I join in welcoming the Minister, the noble Baroness, Lady Chalker, to your Lordships' House and congratulate her on her maiden speech. The continuing endeavours of the Minister and her re-appointment will be a source of significant comfort to developing countries around the world, and in particular South Africa, where she is well liked and well respected by all parties and has established herself as a key international player in the transitional process. The noble Baroness is known for her straight talk and good advice. Her initiatives to link the granting of British aid through the Overseas Development Association to the concept of good governance within the recipient countries have had an extremely positive effect, particularly in Africa.

I wish to address your Lordships' House tonight on her Majesty's Government's support for the efforts to build a democratic society in South Africa. South Africans often remind themselves of the old Chinese curse, "May you live in interesting times". Indeed, 1992 has not just been an interesting time; it has been a decisive year for the country. Even though I spent the first three months of this year in South Africa it is still difficult for me to keep abreast of the dramatic changes unfolding each week.

Six months ago when the subject of South Africa was last debated in your Lordships' House the key issues revolved around the discussions with the ANC and others on the impediments to negotiation which included the release of political prisoners, the return of exiles from abroad, the lifting of sanctions, the violence in the townships, the political trials and of course the death sentence, and the secret projects of the government. Of those issues, most have now been resolved to a greater or lesser extent with the notable and tragic exception of the violence in the townships. That is the situation despite the signing of the National Peace Accord last year. The problem of violence in South Africa remains difficult and complex and I shall return to this point a little later.

Of most significance in South Africa today has been the establishment in December last year of CODESA —the Convention for a Democratic South Africa—to which all political parties have been invited to negotiate on the process for moving towards a truly democratic South Africa. To say the least, the progress made has been astonishing. CODESA consists of five working groups discussing, first, political participation and the role of the international community; secondly, the constitutional principles and the constitutional-making bodies and processes; thirdly, the transitional interim government arrangements; fourthly, the future of the so-called homelands; and, finally, the timeframe and implementation of the agreements.

Despite the complexities and differing stands on the key issues, the negotiations have been a remarkable success with a high spirit of co-operation and compromise. The outcome of the negotiations will become apparent at the second formal session of CODESA which commences on 15th May. What has so far emerged has been an encouraging measure of agreement in principle on aspects of a new constitution, including a Bill of Rights enforced by an independent judiciary, proportional representation and other checks and balances. Agreement has also apparently been reached—it has not been confirmed —on the principle of the security forces falling under the control of the interim government structure.

The role of the international community in the transitional process appears to have been clarified. A working document has suggested the involvement of the United Nations at various levels in the process. Combined with the most encouraging 68 per cent. majority "Yes" vote achieved by President de Klerk in the recent referendum it seems likely that later this year some form of interim government will come into effect. With significant progress having been achieved on the political challenges facing South Africa, attention now needs to be focused on the socio-economic challenges where clearly political emancipation without an associated tangible economic benefit will surely undermine long-term political stability.

I believe that the international community has a significant role to play not just in the provision of direct financial assistance, but also in educating all parties concerned. Perhaps Her Majesty's Government will give consideration to the possibility of initiating a know-how fund for South and southern Africa to expedite the implementation of sensible economic and social reform.

Among the anxieties of many international investors is the continuing violence in South Africa. The noble Baroness, Lady Chalker, made mention of the fact that over 800 people have died this year in the townships in South Africa through violent actions. The violence can be attributed to a number of variables and these include the factional fighting, the so-called third force which is known to be the extreme right wing and left wing elements who have clearly been trying to derail the reform process. But also, and most importantly in my opinion, are the consequences of chronic unemployment in South Africa. I have made mention in your Lordships' House of some of the demographics of the country where over 60 per cent. of the population are under the age of 23; where 45 per cent. of the economically active population are unemployed—that is excluding the informal sector. As the Minister mentioned earlier, the population growth rate currently exceeds the economic growth rate by five times.

The issue of violence is one of the key issues which CODESA will have to face. That raises the issue of the private armies. The ANC has so far refused to disband its armed wing, Umkhonto Wesizwe. Neither has the Pan African Congress's armed wing, the Azanian People's Liberation Army, been disbanded. And of course there is always the continual threat from the extreme white, Right-wingers, the Afrikaans Weerstand Beweging. While there has been an enormous amount of compromise in the political negotiations there is still the deep-rooted problem of mistrust between the various population groups. Clearly that is an internal problem which the South Africans need to resolve among themselves, but in my opinion a substantial improvement in economic growth would have a profound influence on decreasing violence in South Africa.

I encourage and applaud the efforts made by Her Majesty's Government to ensure that early support is given by international financial institutions such as the International Monetary Fund and the International Bank for Reconstruction and Development. It is undoubtedly the case that access to external long-term capital will be a critical ingredient to ensure not only the economic growth required to redress the chronic unemployment and economic imbalances within South Africa, but also the prospect of sustained future growth.

It is also to be hoped that the ANC will soon ask for the lifting of the remaining economic sanctions once the framework has been agreed for an interim government. A key feature of the South African economy has been the emergence of the informal sector and the establishment of a number of self-help associations such as the National Stokvels Association of South Africa. It is hoped that Her Majesty's Government will encourage and support, both through financial and technical assistance, these initiatives. As the noble Lord, Lord Cledwyn of Penrhos, pointed out, there must surely be scope for Her Majesty's Government to increase their allocation of funds for overseas aid. His reference to the 60 million people affected by the chronic drought in Africa is terrifying.

In conclusion, I wish to congratulate Her Majesty's Government on their resolute and supportive stand in encouraging the reform programme in South Africa over many years against at times a barrage of international criticism. It is hoped that now, with the road wide open leading to a fully democratic South Africa, South Africa will soon join the Commonwealth.

8.32 p.m.

Lord Vivian

My Lords, I have listened with great care and interest to your Lordships today and especially to the speech by the noble and gallant Lord, Lord Bramall. Some months ago I touched on the need to devote sufficient resources to our vital intelligence organisations. Some of your Lordships are aware of my interest in this field. However, this evening I wish to speak on the army and on some of the many problems arising from the third report of the Defence Committee on Options for Change already referred to by the noble Lord, Lord Chalfont. In due course I am sure that all these points will he answered, but I believe that the time is right to bring some of these matters to your Lordships' attention today.

In this debate I would like to focus noble Lords' attention on a vital and most important question arising from a system known in the army as double-hatting roles which may not have been clearly understood by all. Ultimately it concerns the manpower ceiling of the army. That figure has been set at 116,000 men and women providing 104,000 trained soldiers. The question is whether this proposed future army is large enough to ensure the safety and security of the United Kingdom. I believe that the proposed cuts have gone too deep.

In the third report on Options for Change the Ministry of Defence has stated that this force of 116,000 is large enough to meet our present and future commitments without undue strain on those forces. The logic behind those assurances is that our forces earmarked for the NATO Allied Rapid Reaction Corps are double-hatted and could be withdrawn from NATO and redeployed in the event of national or international crises outside the NATO area.

What would happen if NATO denied the United Kingdom the request to redeploy a force from the Rapid Reaction Corps in the interests of our own national defence which was under threat in some other part of the world? I can think of at least one occasion within the past few years, and there may well be more, when NATO would not have allowed us to withdraw a force from BAOR. In these most uncertain times we can with confidence only expect the unexpected as has been said many times before. The likelihood of tensions rising in Eastern Europe within the Commonwealth of Independent States or the Balkans would give occasion for NATO to reject any application to redeploy our assets to face an unexpected threat to our own British interests.

If that should happen—and it is perfectly feasible —under the existing options for change there would be no viable force to meet another situation threatening the interests of the United Kingdom. In these circumstances the regular army would have no armoured regiments, no armoured reconnaisance regiments, and only four infantry battalions with three Royal Marine Commandos to deploy to counter such an emergency. There is a real need for more infantry battalions even for low intensity operations.

I agree that it is expensive to have troops purely earmarked for individual scenarios and it is much more cost effective for forces to be double-hatted whenever possible; but not when there are or could be clearly conflicting interests, least of all if it should place the security of our own country in jeopardy. A statement from a 1980 Defence Estimates paper which is still very much relevant today states: Without the national security, which defence capability provides, plans to control inflation, restore incentives, secure economic growth, improve our health care and our children's education rest on sand; for, the national life in which these objectives can be pursued in peace and freedom may disappear beyond recall". Of course our defence forces should be reduced and restructured as a result of a diminishing threat from the East, but not to such an extent that we are gambling that a threat to NATO and to British interests in some other part of the world would not happen at the same time. The solution to this contingency is to increase the army manning level from 116,000 personnel to include a strategic reserve division or some similar force which would not be earmarked for NATO. We would have to pay a higher premium, but in return the risk diminishes.

I would now like to cover some other relevant and important subjects concerning the army. Great steps have and are being taken to provide simulated training for our soldiers which, once bought and installed, would considerably reduce the cost of training. These systems, which are very much welcome, improve aspects of individual training such as tank gunnery, missile firing and vehicle driving, but cannot replace the stress and strain of operating in armoured vehicles, nor crew fatigue, nor the extremes of climate and weather, nor the essential experience of living in the field. Low level troop, squadron and regimental training are the key to our highly skilled and professional army today. It has been noted that battle groups are likely to go to training areas in Canada every other year, but with the Soltau training area in Germany due to be closed in 1994 and with many other restrictions being imposed by the Germans, where will the annual low level training be carried out in future for those troops in Germany?

Next, I would like to make your Lordships aware of the overstretch which will continue to exist within the new proposed armoured regiments. Not content with reducing the Royal Armoured Corps regiments from 20 to 12, eight of which will be equipped with tanks and only two of which will be armoured reconnaissance regiments, the number of tanks for each armoured regiment has been reduced from 57 to 50 and yet there is still an agreed deficiency of 37 crewmen to the establishment of the armoured regiment. How can that be seen to be "smaller but better"? The reduction of the number of tanks and a continuing deficiency of crewmen can only lead to overstretch, low morale and inefficiency. The Defence Committee report states: the reductions in the Royal Armoured Corps have been disproportionately heavy". It has been noted that an increment of 220 men has been proposed to help the Guards Division with its public duties. Surely it should be possible to allow an add-back of 37 crewmen for the remaining light armoured regiments to ensure that they are fully effective in the future. That requires an urgent review, with the proposed manpower ceiling of 116,000 being increased accordingly. If that cannot be done, I suggest that there is Treasury influence in Options for Change after all.

I have mentioned that proposals have been made to reduce the number of armoured reconnaissance regiments from five to two. But it is likely that the United Kingdom may play a greater part in United Nations' peace-keeping roles in the future and the ideal units for those peace-keeping roles would be those with reconnaissance and communication skills —the armoured reconnaissance regiment. On current planning, the only two remaining armoured reconnaissance regiments are committed to NATO. Furthermore, because there will be only two of those regiments, the Rapid Reaction Corps Regiment has to be found from the Territorial Army. I have served alongside the Yeomanry and a more enthusiastic and keener body of men would be hard to find—and they make good reconnaissance soldiers—but no TA regiment should be committed to a potential war theatre without an intensive period of at least six months' battle training—and presumably time will not allow for that. It illustrates well the point that without a third regular reconnaissance regiment we neither have a regular reconnaissance regiment for the Rapid Reaction Corps itself nor for a non-aligned strategic reserve force as discussed previously.

The report of the Select Committee on Defence has concluded: We are concerned less the armoured reconnaissance strength envisaged in Britain's Army for the 90s, reduced from five to two regular regiments, proves too small even in relation to peacetime requirements, including international peace keeping operations, and may lead to difficulties in ensuring the maintenance of armoured reconnaissance skills. We consider that the outcome of the proposals for the way in which peacetime armoured reconnaissance commitments are met should be kept under close review and that the possibility of finding a further armoured reconnaissance regiment should not be ruled out at this stage. It has rightly been agreed that the regimental system should continue. There are many pillars to this system, founded on the relationship that exists between officers and men nurtured by advancing their careers together in the same regiment and by mutual respect for each other within this special family. A recent paper recommends the removal of cavalry bands, one of the pillars of the regimental system. These bandsmen are not only musicians, but also medical orderlies and stretcher bearers in times of conflict. They are very much part of the regimental system. If those pillars continue to be removed, the regimental system will collapse and we shall bitterly regret that day. Cavalry bands should be retained as part of the regiment.

If there is no review of the proposed 116,000 manpower ceiling for the army, there will be a large number of redundancies. The main problem areas will be finding jobs and housing for those ex-servicemen. The Ministry of Defence has appointed a Major-General to oversee the resettlement process for personnel leaving the army, but more effort must be made and greater links must be forged with industry to try to find employment for those redundant servicemen. That is a particularly difficult task in times of considerable unemployment, but I encourage the Government to make a temporary appointment to link the Ministry of Defence resettlement organisation with the other key Ministries to provide a better and fairer chance for all our redundant servicemen.

The problem is exacerbated by the fact that 1.2 million units of rentable accommodation have been wisely purchased by those living in them and are now not available on the housing market. The Ministry of Defence has started a housing task force and is doing all it can to help. It has allowed more military personnel to become technically illegal occupants of quarters. However, about 3,000 ex-servicemen are already living in the equivalent of bed-and-breakfast accommodation. On top of that, it has been estimated that an additional 20,000 servicemen will leave the Armed Forces annually over the foreseeable future. Surely these people deserve fair treatment for their past contribution. They, with their great efforts and personal sacrifices, have made a major contribution to one of the longest periods of peace that this country has known in recent years, and they should be properly rewarded for what they have done. The dole queue and bed-and-breakfast accommodation is no reward for those who have served their country so loyally.

I do not have time to discuss the many aspects of the restructuring and reorganisation of the army. However, I should like to commend two aspects that should be studied if they have not been already. The first is whether it is necessary to retain the divisional level of tactical command. The second is that the Royal Armoured Corps may be reduced to only 12 regiments. As the roles of tank destruction and reconnaissance are common to both the Royal Armoured Corps and the Army Air Corps, perhaps the latter should be merged with the former to establish one corps, which would presumably produce substantial administrative and staff savings.

In conclusion, I believe that double-hatting our proposed strategic reserve divisions with NATO is an unacceptable risk and imperils the security of our nation. There is a clear need for that type of force to be independent of NATO. To man that division, there will be a need for more infantry and armour, and an increase in the ceiling of 116,000. Field training areas in Germany must be found for annual use. The establishments for armoured regiments should be increased by 37 men and serious consideration should be given to whether there is a need for a third armoured reconnaissance regiment. Cavalry bands should be retained within regiments. Greater help should be given by the Government to finding jobs and housing for redundant servicemen. Studies should be carried out to identify whether it is necessary to retain the divisional level of tactical command and what financial savings might be made by merging the Army Air Corps with the Royal Armoured Corps.

I congratulate the Select Committee on Defence on its most explicit report on Options for Change and, like many of your Lordships, will be most interested to hear the answers to the many questions that are raised in that report, some of which I have touched on today.

8.46 p.m.

Lord Marlesford

My Lords, I found myself in certain sympathy with the noble Lord, Lord Cledwyn of Penrhos, when he referred to what he saw as the somewhat inadequate reference in the gracious Speech to the contribution that Her Majesty's Government will make to the former Soviet Union and Eastern Europe. History will probably judge that that is the most important challenge and the greatest potential crisis that we shall face this decade. I would have hoped that the words "economic progress" might have been added to the words "support democratic reform" in the gracious Speech.

I should like to take a few moments to say something about what I believe needs to happen in Russia, but should like first to put this in a somewhat broader context. For nearly five years we have been watching with wonder the two mighty and benevolent forces that have burst upon the communist world. Let us use those now familiar Russian words glasnost and perestroika. Glasnost brings the daylight under which the plants of totalitarian communism shed their leaves and, one hopes, die. Perestroika is that restructuring of the economy that must involve the dismantling of the bureaucratic centralism of the socialist system into something with the vitality that comes from the forces of a market system.

In this, there has been much difference between China and the former Soviet Union. The Chinese leadership is not too keen on glasnost, but there has been a remarkable amount of perestroika—much of it on a small scale with a dramatic improvement in Chinese agriculture and a significant volume of direct investment, especially in southern China, by entrepreneurs—many of them small—from Hong Kong. My noble friend Lord Geddes gave some fascinating examples of the sort of thing that is happening in southern China. The issue of how far perestroika can go without glasnost would in itself form the subject of a worthwhile debate. In his interesting maiden speech, my noble friend Lord Cromer gave some of his views on that subject. I believe that glasnost without perestroika can lead only to disappointment and then the dangers that come from disillusion.

The problem in the Soviet Union was precisely that —much glasnost and little perestroika. The reason is obvious. The cost of glasnost is low; the cost of perestroika, especially to the nomenklatura, is high. That is why they have opposed it and are still doing so. In this, Marx was right; a privileged class is inclined to oppose change which is to its disadvantage. We in the West have to beware that our capital is not used to keep the former Soviet nomenklatura in the style to which they were accustomed.

The initial result—and I think it is probably to be welcomed—has been the break-up of the Soviet Union. But it carries with it great political dangers. For disillusion could lead to anarchy and thence to counter-revolution and the re-establishment of an equally odious form of dictatorship. My noble friend Lady Park raised a chilling spectre of what this might mean; and my noble friend certainly knows what she is talking about.

This is realised in the West and that is why there has been much talk of massive international economic aid to the former Soviet Union. My noble friend Lady Chalker, in her notable maiden speech, expanded on that. But I believe that it is the micro-economy of Russia on which we need to focus our advice and our help. It is not just a matter of billions of dollars of credit, debt remissions or subsidies from the IMF to the governments of the former Soviet Union such as Russia. It is the sowing of the tiny seeds of market capitalism in Russian soil which can lead to sustainable development.

Two weeks ago I had the opportunity of a brief visit to Russia. It was in strange, almost surrealistic circumstances. I was invited by the French Champagne company, Louis Roederer, to travel with a group of some 90 journalists from the USA, Japan and seven European countries to St. Petersburg. The objective of the French company was to promote its up-market brand of "Roederer Cristal" which was introduced as a special champagne for the Tsar in 1875. Hence the surrealism. But I do not suppose that the company expects to sell this champagne, delicious though it is, to the Russians now or in the near future. St. Petersburg was merely a backdrop. I was struck by several points on my visit which may, I think, indicate how the Russians are helping themselves and how they can be helped.

One arrives at St. Petersburg airport, by any standards a third world airport, but none the worse for that. What matters is that the security and customs officials who examine one's passport and baggage are now welcoming instead of glowering. There is little traffic on the streets except for buses, trucks and a few taxis. That is no bad thing either. But surprisingly there are no bicycles. Everyone seems to walk. Your Lordships who know China will realise what a real contribution the bicycle can make to personal transport in cities. I, of course, as some of your Lordships may know, believe that it should be used a great deal more in our own capital city. Why the Russians do not have bicycles I do not know. But it suggests that there is some scope for perhaps small-scale foreign investment in a joint venture to manufacture cheap and cheerful bikes. Perhaps a Hong Kong entrepreneur could help.

The streets of St. Petersburg are remarkably clean and put to shame many of the streets in the centre of our own capital. We stayed in a remarkable hotel, the five star Grand Hotel Europe. It is an ancient hotel, beautifully refurbished by, and managed by, Swedes. The staff are Russian, none of them—a deliberate choice of the Swedish managers—having had any previous hotel experience. I am told that the Swedes took them on a hotel boat for six months to give them intensive training before the hotel opened. The hotel now employs 250 young Russians who are paid partly in dollars. As noble Lords will know, a dollar is worth a great deal more there than anywhere else. After 70 years of sullen and suspicious service to foreigners by hotel staffs throughout the Soviet Union, it was a joy to be there. The prices were comparable with those of other five star hotels around the world. It was a small centre of excellence in St. Petersburg.

Most exciting perhaps were the signs of enterprise culture at the grass roots level; that is, a mass of hawkers on the streets. That to foreigners they are selling redundant KGB uniforms and caviar of doubtful freshness, and to each other dried fish, cheap watches and books, matters not at all. What is important is that they are there and in large numbers. Those of us who know Hong Kong will remember that many of the refugees from communist China in the three decades which followed the Chinese revolution started their business lives as street hawkers. They were the embryonic entrepreneurs who built today's prosperity in today's Hong Kong.

There is no doubt—and this I gathered from the organisers of our visit—that most of the established managers and administrators in Russia are still lead weights of bureaucracy. Seventy years of socialism and nearly half a century of brutal repression take some putting right. I believe a way forward is to separate enterprises from state control as much as possible. Let me take as an example the wonderful Hermitage Museum in St. Petersburg. Roederer has given it 50,000 dollars to replenish its library and to clean and restore some of its pictures. It would be good if someone would also help it to label properly all those wonderful collections. The Hermitage is probably quite a good example of the kind of structural changes necessary in Russia. I should like to see the Hermitage separate itself completely from the Russian state, for financial purposes at least. It has 3.5 million visitors each year. Half a million of them are from overseas. A decent foreign currency entrance fee could yield a five million dollar annual revenue.

The Hermitage has huge reserve collections which are never shown. At present the staff are most averse to the idea of selling any pictures. They reminded me that Stalin had done so in the 1920s and that the proceeds had gone straight into the state coffers. I suggest that the Hermitage could set up an inalienable capital trust with funds from the sale of pictures. The trust funds would be held overseas and professionally managed. Would that not make the sale of such works of art a more attractive proposition? The fund could perhaps help to provide the cash to make the Hermitage a wonderful centre of artistic and scholastic excellence.

How can our Government help the Russian micro-economy? First, I believe that they should spread our diplomatic representation more widely over the country. At present the embassy staff are almost all in Moscow. There is one first secretary living out of a hotel bedroom who is trying to set up a consulate in St. Petersburg. The Germans and the French are way ahead of us. I had a most interesting talk with Mr. Eberhard Von Puttkamer, the German Consul General in St. Petersburg. He already has a staff of 45. The French have their Service de l'expansion Economique for Russia, and a substantial Consulate General in St. Petersburg. I hope that we can get some more of our people on the ground soon. After all, we have the know-how fund of £50 million over the next three years for the former Soviet Union which was set up by the Chancellor of the Exchequer. The noble Baroness, Lady Chalker, justifiably referred to this with some pride. Half of that amount is destined for Russia. I believe that £1 million used sensibly through the know-how fund is probably worth about £100 million of IMF credits to the state government.

There are opportunities. If we take them it will be good for Britain economically and in terms of influence. But more important it will help to achieve the Government's objective of democratic reform referred to in the gracious Speech and my hope of economic progress for the Russians. That is crucial if the fall of the Berlin Wall is to have ushered in an era of peace.

8.59 p.m.

Lord Bridges

My Lords, I should begin with an apology for an apparently unscheduled intervention at this stage. For some reason my name seems to have dropped off the speakers' list. That explains why I speak now. This has some advantages for me if not for your Lordships because the subject I wish to address particularly is our relationship with the European Community.

I have the advantage of having listened to a number of excellent speeches this afternoon and this evening, beginning with the admirable maiden speech of the noble Baroness, Lady Chalker. Having listened to those speeches I can conclude that we are in some agreement at least upon the significant issues which need to be decided in London about our policy towards the European Community in the near future. I would describe them as four main issues, beginning first with the ratification of the Maastricht Treaty. Secondly, there is the enlargement of the Community to admit new members; thirdly, changes to the common agriculture policy; and, fourthly, a review of the Community's institutions and finances and a possible increase in own resources. All those subjects are on the agenda. Very important decisions will have to be taken on those essential items of business.

In addition, we are involved in what I call three continuing processes which are already in train. The first is the position of sterling in the exchange rate mechanism and the effect which it has on our national economy. The second is the completion of the Community's own internal market which, as we have been reminded, is due to be completed by the end of this year. The third, and perhaps the most difficult and the most immediate in our minds, is the application of a common foreign policy to the war in Yugoslavia or, perhaps more accurately, the attempt to apply it.

It is clear to me that 1992 is a year of very great importance for the European Community and for our role and influence in it. The immediate issue, as the gracious Speech says, is the ratification of the Treaty of Maastricht. I note that a great deal has happened since the House last debated the subject on 18th December. The prospects of ratification have become rather less certain than seemed likely at that time. In Ireland, and in Denmark, the decision to ratify or not will depend on the outcome of popular referenda, an unpredictable process. In France the Conseil d'Etat has ruled that the constitution needs amendment as a result of the treaty, and the complex procedure to bring that about is under way. Meanwhile, in Germany, public opinion has shown much anxiety about the effect of the treaty and of economic and monetary union on the stability of the deutschmark. All those developments are new, mostly unexpected and render ratification uncertain. I leave out of account any ambushes that may be prepared in another place which I suppose are also possible.

Meanwhile, in Britain, we have heard very little about those matters since the election campaign began. Indeed, European issues, which are so central to the future of our country, were hardly mentioned in the campaigns conducted by the two main parties. That is strange when we recall the political furore on those matters less than six months ago. If an election is intended to be, in some measure at least, a public consultation on the main issues of the day, it is a pity that so little was done to inform the electorate of what was at stake in the immediate future. It is very relevant to the jobs and prosperity of the whole people.

After ratification, the second large issue concerns the enlargement of the Community. Decisions reached on that question will be just as significant and far-reaching as ratification of the treaty itself; arguably, they are perhaps even more important. I believe that the House may expect a report on the subject from the Select Committee on the European Communities when it has been reconstituted. No doubt there will be an opportunity to debate the subject of enlargement in due course. But I should like to suggest the following considerations to your Lordships.

The first is that it would accord with our general interests if as many of the EFTA states as wish to join, and which can accept the provisions of the treaties, should be enabled to do so. Secondly, there should be no ambiguity on the issue of political neutrality. The Community should be able to develop its policies in the field of political security. New members now acceding should not be able to invoke their past attachment to neutrality to prevent that from happening. Thirdly, we should take care to avoid the creation of a Community of two or more tiers or, to use expressions which have been common in that context, a Community of variable speeds or of different geometry.

I must admit that I am somewhat concerned by the last danger which I believe to have been made more real by the compromises the Government reached at Maastricht. By opting out of the social provisions and reserving for our own decision in Parliament movement to Stage III of economic and monetary union, Britain has set a precedent which others may seek to follow when acceding to the Community.

Personally, I do not consider that a Community à la carte would be a satisfactory route for Europe to follow. The Community would be a much weakened institution if we followed that course. It would be less useful and less influential in world affairs.

Of course, a two-tier Community—formal, in the sense that I described—would be a quite different matter from a Community which sets long transitional periods for new members states to enable them to make fundamental changes to their economy and thus avoid undue social disruption over a period of years. Agriculture in the Nordic countries seems to me to be such a case in point.

The third big issue is changes to the agriculture policy. Mr. MacSharry's proposals are still on the table, although somewhat altered perhaps. The focus is once again on direct negotiations between the Commission and Washington in the GATT context. We all hope that those negotiations will succeed and that real improvements to the CAP will follow. That is a very high priority for the United Kingdom. It is most unsatisfactory that we, as the second largest contributor to the Community's budget and as a large importer of foodstuffs from our Continental neighbours, should suffer more heavily on our own farms than any other member state. That, at least, is my personal impression.

Finally, and inevitably linked to the issues of enlargement of agriculture, there is the whole matter of the Community's budget and possible further changes to the Community's institutions.

According to reports which we have all read in the press and which have already been cited here today, President Delors is looking for a big increase in the Community's budget by 30 per cent. or more. It is also reported that he wishes to see further changes to the Community's institutions so as to enlarge the authority of the Commission—and I suppose of its president—and to diminish the role of the Council of Ministers. I agree with those speakers in the debate who find these ambitions are excessive and do not accord with the spirit of the times. If the president of the Commission has it in mind to propose substantial new fiscal burdens on member states he is liable to be rebuffed, and that would not help anybody. In particular, a confrontation might well occur with Germany where anxieties about public finance are now so widely expressed.

Also, more broadly, I do not agree with the underlying assumption that more institutional changes should precede enlargement. This was just the argument used before Maastricht—that the Community should take a further step towards more centralised authority so as to link Germany more firmly with it. That thesis is neither fair to Germany nor capable of producing the desired result.

I do not believe that alterations to the Community's institutions can have much effect on the significant changes of political direction now under way in Central Europe. After all, the political process is a living and organic affair and does not respond in that kind of mechanical way, although Cartesians would have us think otherwise. As to enlargement, let us examine what changes and improvements to our institutions we judge to be necessary when we know which other member-states are going to join, and when we can assess the consequences and needs more exactly.

Finally, I come back to the question of a two-tier Community. As I have said, it is this aspect of the Maastricht Treaty which causes me some anxiety, and I trust that we shall not go further down this road. In the past, we have steadily declined suggestions, mostly emanating from France, that a two-speed, or two-tier Community is the answer to everybody's problems. But we now seem to have created this animal for ourselves of our own volition. I can see the tactical and short term advantages of this, and indeed much ingenuity was displayed in working out the treaty of Maastricht; but all the same, I cannot find much satisfaction at the birth of this creature. Nor do I believe it to be really necessary. The main justification for opting out concerned the final stage of transition to the Economic and Monetary Union. But it now seems quite possible that Germany may in the process of ratifying the treaty in Bonn introduce a Bundestag resolution on the process of ratification which would have very much the same effect as those which we have done by inserting it in the treaty.

The opinions now being voiced in Germany are rather similar to those heard in another place a few months ago. So perhaps this may offer at a future date a route back to the single-tier Community. I certainly hope so as I believe that it would serve our long-term interests better.

In conclusion, I believe that these European Community issues call for big decisions on matters of lasting importance in the near future. A newly-elected government are in a good position to take measured judgments and a long term view. I trust that this is what will happen.

9.12 p.m.

Lord Mayhew

My Lords, with a new Parliament, we have a new team of Defence Ministers, and in particular a new Defence Minister in this House; and we warmly welcome the noble Viscount, Lord Cranborne. Over the years his family has produced one or two Conservatives of a rather better type than the general run, and we have high hopes that this will be observed by the noble Viscount.

Certainly the new team of Defence Ministers will not find it difficult to improve on the record of the old team. This particularly applies to nuclear weapons policy. That is the point at which I shall begin because during this Parliament we shall raise this matter again and again. The old team grossly exaggerated the level of nuclear weaponry needed by this country. For example—and we shall return to this—they propose not only to have Trident—I shall come to that later —but to add to Trident a totally new airborne nuclear missile system. In the last Parliament when we asked them why, they gave a series of different and wholly unconvincing answers. The first answer was, "There's a NATO requirement for a British sub-strategic nuclear weapons system". The assumption behind that is that there is some aggressor who might not be deterred by the strategic deterrents of the United States, France and Britain, plus the sub-strategic deterrents of France and the United States, but who might be deterred if, in addition, there was a British sub-strategic nuclear weapons system. That was such a stupid assumption that the Government have now abandoned it. They no longer say that there is a NATO requirement for the weapon, and I predict that they will not say that in the future.

The Government then went on to a different argument. They said, "But we might have to face a nuclear threat independently of our allies from some minor nuclear power which might not be deterred by Trident, such an immense deterrent, but might be deterred by a smaller, sub-strategic deterrent". Equally, that is nonsense. The Government do not explain how that appalling scenario takes place, and what disasters in foreign policy have landed us in such a position. They do not say why Trident could not, if required, be deployed in the sub-strategic role. Trident can fire a single warhead with much greater accuracy than any airborne missile system—indeed, with pinpoint accuracy at great range. The Government do not explain why Trident cannot do the job.

Now they have abandoned that argument and we now come to their third excuse. Noble Lords may not recall it, but it appears in Hansard. The excuse is that Trident is too vulnerable for the job. It is ridiculous to say that an airborne missile system which requires airfields and aircraft, which is easily detectable and whose position is known, is less vulnerable than Trident, which is under water and undetectable. I warn the noble Viscount that we shall return to the matter again and again until the Government abandon such a ridiculous idea. Until we hear new explanations, we shall assume that the demand for TASM is less a considered response to a genuine threat than a means of finding a new role for the RAF when the free-fall bombs become obsolete. That will remain my provisional conclusion until I hear from the noble Viscount again.

The second error in the Government's nuclear policy is their proposal to acquire excessive numbers of warheads for the Trident fleet. Under pressure from opposition on other Benches and on these Benches, the Government appear to have lessened the number of warheads which they propose to acquire. However, we have not been told by how much nor what the new level will be. Originally the Trident fleet, like Chevaline before it under the Labour Government, was meant to be able to overcome the anti-missile defences of Moscow. That city was then the heart of a vast, centralised, expansionist empire. Do the Government still regard as an operational requirement the ability to destroy Moscow as it now is? Surely not. If not, why do we need more warheads than Polaris? Indeed, why do we need as many warheads as Polaris? We shall press the Government for an answer to those questions during this Parliament.

The gracious Speech pledged the Government to work to prevent the proliferation of weapons of mass destruction. Of course, TASM and those warheads are proliferation in itself; they are a form of vertical proliferation. How do the Government believe that they will encourage the negotiations which are to take place for the renewal of the non-proliferation treaty in 1995 if they go to the conference proliferating in nuclear weapons, possibly being the only country to do so? Why now of all time do the Government consider it possible to increase Britain's nuclear capability absolutely and in relation to the rest of the world? That is a fantastic error and we shall return to it during this Parliament.

The old team of Government Ministers were also seriously at fault in their decisions on our conventional Armed Forces. That was a major error as was stressed today by noble Lords who take a different line on what the Government's defence policy should be. We all agree that the Government made a grave mistake in taking decisions about reductions in conventional forces before conducting a comprehensive review of our strategic requirements. We on these Benches have said that for many years. However, I concede to the noble Viscount that when in doubt it is a time-honoured habit of opposition defence spokesmen to call for a comprehensive defence review. In that way we can declare that radical changes are needed without committing ourselves to explaining exactly which changes they might be. I concede that and it might apply to a number of us here today. However, at the moment the position is extraordinary and unprecedented. Today the threats to our security, taken together, are not of the same magnitude as the threat by the Soviet Union of conventional attack on the West, which has suddenly disappeared.

That means that the need for an overall strategic defence review is of unprecedented importance. The Government must begin asking the big questions. After a slow start in the last Parliament, they began by adjusting their defence policy to the new realities of power. They recommended some reductions. Immediately, they ran into difficulties with their Back-Benchers for whom almost any reduction in arms, of whatever kind, is anathema, as the noble Viscount will soon find. Indeed, listening to the debate tonight, he may well have found it.

I forbear to quote the repeated grim warnings we have received from Back-Benchers opposite about the continuation of Soviet military power, of its ever increasing military budget, of the burgeoning and menacing submarine fleet, and so on. We heard a little of it again this afternoon. Alternatively, we were given grim warnings, sometimes in the same speech, about the total bankruptcy and chaos in the Soviet Union. That too was put forward as a reason for not reducing British arms.

I am sure that Ministers hope that in this Parliament their Back-Benchers will make a better showing on defence than they did in the last Parliament. We certainly hope so. But the fact is that the Government need to convince their Back-Benchers that the collapse of the Soviet Union has made it possible to make radical changes and radical reductions in our armed forces without in any way weakening the security of the nation. I hope that the Government will convince their Back-Benchers of this at last and also those persuasive and entirely honourable noble Lords who have declared an interest in the defence industries.

The starting point of a review must be an assessment of the threats, actual and potential, and the resulting commitments. They will be commitments we shall share with friends and allies in NATO, Europe and the United Nations. On these Benches, we look forward to the day when all our defence commitments will be shared by allies. We look forward to a common defence policy in Europe; to common procurement; to a common defence budget and integrated forces. However, this defence review must ask: are there any commitments that we share with our allies which we do not really now need? It must ask, for example: do we still need to earmark huge naval forces to protect American reinforcements crossing the Atlantic in the event of a protracted war in Western Europe? Do we need to earmark amphibious forces for the defence of Norway against the Soviet Union, when Russia today controls only a minute fraction of the Baltic coast?

What about the role of the RAF? Does it require a role in nuclear weapons delivery? What is its role in home defence? Against whom is it defending us? As for the infantry, the review must ask whether the rapid reaction corps establishment of 100,000 men, to which we contribute disproportionately, is too generous, and also, how a British contingent there can be made more easily available and better trained for service in Northern Ireland. These are the questions that the Government will have to ask. They must avoid the trouble they caused last time by not asking these big questions first before reaching decisions on smaller questions.

The review must not be Treasury-led. I agree with a number of spokesmen who have made that point. Therefore there must be no attempt by the Treasury—backed no doubt by home spending departments—to impose a ceiling on defence expenditure until the MoD and the Foreign Office have assessed all the actual and potential threats and have assessed what is necessary to provide against them.

However, that does not mean that the Treasury does not have a role in the defence review. It is a measure of the loyalty of servicemen of all ranks and of their rightful pride in their accomplishments and their capability that they should resist cuts in defence expenditure. That is true also of retired senior members of the defence forces. It is entirely right that they should take the line they do; but it is only one side of the argument. There are other arguments, and qualified people should not hesitate to put them forward in conjunction with the defence review.

As I have said, it was a major mistake of the Government in Options for Change not to ask and then answer the big questions which face us before taking decisions on the lesser ones. In this Parliament we on these Benches will do our utmost to prevent the Government from making the same mistake again.

9.26 p.m.

Lord Richard

My Lords, I shall start by making what I hope are a few pleasant comments about one or two pleasant people. I welcome the noble Baroness who is with us for the first time today. I listened to her speech with a great deal of interest. It was a powerful speech. It was a tour d'horizon as regards the Government's policies in all kinds of areas. She made the Government's policies all sound very attractive and perhaps a little over simple. However, we look forward very much indeed to hearing her speak again.

I also wish to welcome the noble friend of the noble Baroness. I have not had the pleasure of hearing her noble friend speak but I look forward to doing so in a few moments. While I am in a congratulating mood I hope I may say a few words about the two maiden speeches we have heard tonight. We can genuinely say that both were maiden speeches of quality. They both had something to say and they were both delivered with fluency and confidence. The noble Earl, Lord Cromer, gave us an original speech when he gave a view of the Hong Kong/China relationship and sets of problems. I personally find that relationship quite fascinating and thought provoking. The noble Earl's speech was well informed and he spoke clearly from his personal experience. His speech was refreshingly new and I congratulate him wholeheartedly on it and look forward to hearing him speak again.

The maiden speech of the noble Lord, Lord Prentice, was for me something of a novelty. Given his previous position in politics and my previous position in politics, it is the first time I have listened to him speak from a full frontal position, so to speak. Usually the noble Lord was standing up at a Dispatch Box and all I could see was the back of his head. It is a pleasure to see the noble Lord as well as to listen to him. The speech he gave us tonight was clearly tinged with his own experiences at the ministry of overseas development. We look forward to his being in a position to make sure that his noble friend on the Front Bench, who now occupies the Ministerial place that he once occupied in a Labour government, will live up to the ideas that he expressed this afternoon. At any rate we welcome the noble Lord and look forward to hearing him speak again.

In our debates on foreign affairs and defence matters it is interesting to note what issues seem to be fashionable and what issues seem to have dropped out of fashion. I have observed that today little has been said about the Middle East. I hope noble Lords will allow me to say that tonight we have heard refreshingly little about the Arab/Israeli dispute. I believe Saddam Hussein's name has been mentioned only once in the course of the debate. We have heard a speech on southern Africa from the noble Lord, Lord St. John of Bletso. I was not able to listen to that speech myself and I apologise for that. However, that issue is not one that has been at the centre of our debate.

Four or five issues have concerned the House in today's debate. First, there was the question of aid, particularly to third world countries. I am very pleased to see the noble Earl, Lord Onslow, going to his place because I may have something to say about his contribution to the debate in a moment. Secondly, there were the issues connected with Maastricht and particularly those concerned with enlargement. Thirdly, the House was interested in the issues surrounding Hong Kong and 1997. There was also the defence package, about which we heard so eloquently from the noble and gallant Lord, Lord Bramall, the noble Lord, Lord Chalfont, and most recently from the noble Lord, Lord Mayhew, speaking from the Liberal Benches.

I should like to say a few words on all those issues. I shall start with aid. The House will understand if I single out the contribution of the noble Earl, Lord Onslow, as the opposite extreme to what I would characterise as the moderate view on aid. I have rarely heard a speech which was both so eccentric and so revealing. I am grateful to him for his speech, for he managed to highlight for the rest of us in this House the desirability of our foreign aid programme being aimed at countries which are clearly in need.

If the noble Earl asks why we on these Benches believe in aid I have to say that it is simply because if people are starving we think that it is our duty to help them. If countries are undeveloped we think that it is probably our duty to do our best to help them. If countries or regions are in need, again we think that, collectively, living as we do in a particularly privileged country in a privileged part of the world, it is part of our duty to try to do something to help them. I listened to the noble Earl with great interest, and with amazement rather than amusement because what he said was not funny. He certainly made a significant contribution to our debate.

The Earl of Onslow

My Lords, does that great paean in praise of aid include the £74,000-worth of aid for Singapore? Is Singapore regarded as poor and undeveloped? That is an ODA figure and not my figure.

Lord Richard

My Lords, I have no idea why £74,000 goes to Singapore. I have no doubt that at some stage somebody in the bowels of the Overseas Development Agency will discover why and write to the noble Earl. If they would like to write to me at the same time, I should be delighted to read the letter. If the noble Earl really thinks that the quality of our aid programme in relation to the third world can be judged by one payment of £74,000 to an as yet unknown source in Singapore, he applies strange criteria.

I turn to Hong Kong. There is very little that I want to say about the subject except to congratulate not only the noble Earl, Lord Cromer, which I have already done, but also the noble Lord, Lord Geddes, upon his interesting contribution and the new perceptions which he brought to the subject. It is good to hear that southern China is beginning to do well economically and that Hong Kong seems to be booming economically. As my noble friend Lord Cledwyn of Penrhos, the Leader of the Opposition, said earlier, we on this side of the House welcome the appointment of Mr. Patten as Governor. We wish him well. He has an immense and difficult task and we hope that he performs it successfully.

In view of the nature of the difficulties and the part of the world concerned there are bound to be immense problems between now and 1997. I have long believed that, if the economic circumstances of Hong Kong and southern China as they come closer together are favourable and improving, the transition to 1997 will be eased to a considerable extent. I am delighted to know that that seems to be happening.

Perhaps I may say a few words about defence. The noble and gallant Lord, Lord Bramall, the noble Lord, Lord Chalfont, and the noble Lord, Lord Mayhew, in effect criticised Government policy and Options for Change. The same theme ran through their speeches—namely, that commitments and forces have got out of balance. In other words, there has not been a sufficiently exact and precise assessment of the commitments that we have to fulfil to enable any government to take sensible decisions as to what level, mix and balance of forces may be needed to fulfil those commitments. I am bound to say that that is a criticism which has some force attached to it. It is a criticism that I share and one that I have expressed before in this House. Whatever the reasons for Options for Change and the Government's policy in the last Parliament, I hope that there is now a fresh opportunity for a major look at what Britain's commitments are currently, what they are likely to be in the future and what mix of forces—nuclear, non-nuclear and conventional forces—will be needed in order to fulfil those commitments.

I hope that the new government will say that they will look seriously at this matter and when they have done so come back to Parliament with proposals. The proposals may be the same; they may be new; they may be better or worse proposals. But at least there ought to be a better balance between the commitments and the level of the forces that are supposed to be necessary in order to fulfil them.

I turn to the Community and two issues in particular on which I wish to comment: enlargement and the relationship of the Western European Union to the Community defence and security policy as it emerges from the Maastricht treaty. The noble Lord, Lord Beloff, has obviously returned from the Recess refreshed and bubbling over with ideas. He asked some formidable questions. In effect, he asked whether we have run our course so far as concerns the Community. Has the great political and economic adventure which was launched by Jean Monnet so many years ago via the European Coal and Steel Community in order to bring peace and stability to Western Europe come to an end? Are the pressures that are now being put on the Community from outside by other countries and from inside by the electorates of the member states of the Community now such that we can no longer go on with a Community broadly of the structure that we have at present?

As I said, they are formidable questions. I have no doubt in my own mind that, if there were an attempt —a crude and perhaps over-speedy attempt—to enlarge the Community to perhaps 20 or 25 members with the existing institutions in their present state, I suspect that the Community would almost certainly find taking in that number at one gulp indigestible. I do not believe that the institutions could survive an abrupt enlargement of that kind.

However, I do not think that anybody is talking about abrupt enlargements of that kind. At least I hope not. Like any sensible eater approaching a banquet, one should take it slowly, course by course —if it is not perhaps too patronising an analogy to compare the applicant countries with plates on a table. I should have thought that, with perhaps minimal amendment, the existing institutions would be able to cope with the absorption of the EFTA members, not immediately but over a reasonable period of time.

So far as concerns the East European countries, frankly I do not believe that at this stage it makes any sense at all to try to work out in advance—as the noble Lord, Lord Bridges, said—the kind of changes that may be necessary to the institutional structure of the Community if and when we reach the stage of considering the membership of Poland, Hungary, Czechoslovakia, the Lithuanian countries and perhaps even Romania. That is so far down the road that at this stage to lose faith in the institutions and structure that we have—which, even on the admission of the noble Lord, Lord Beloff, have created a great deal, and in European terms have mattered a great deal, over the past 40 years—because of the possibility of geopolitical indigestion in 10 years' time seems to me to be a doctrine of despair, which I am bound to say I would not follow.

After all, what was the objective of the Community? It was not merely to produce a free trade area in which we could all trade. The objective of the Community as I have always understood it was to produce a greater degree of political unity in Europe, so that our countrymen could stand up in the world on a basis of equality with other areas of the world which, if we were not capable of influencing them, might indeed produce policies inimical to us. That impetus for a greater degree of unity in Europe still exists. It has not gone merely because at this stage we may find future difficulties with a process of enlargement.

Finally let me turn to one point regarding the treaty that I wish to deal with specifically. I gave the Minister notice that I would refer to it. It is the relationship of the WEU to NATO and to the other parts of the treaty. I have looked at the treaty; I have pondered over it. I have had my red pencil out, underlined, and put my markings on the treaty. I do not understand it any more now than when I started.

Perhaps I may give an indication of the parts where I do not follow what the Government intend. In Title V, Article J, at page 80 of the authorised version one finds this. It is the version in a blue cover of which my noble friend Lord Bruce approves; the one in yellow he does not approve. The treaty states: A common foreign and security policy is hereby established which shall be governed by the following provisions". I understand that, I think. Then there is set out an obligation on the member states to inform and consult each other. It is stated that, The common foreign and security policy shall include all questions related to the security of the Union, including the eventual framing of a common defence policy, which might in time lead to a common defence". I follow that. The document then states: The Union requests the WEU, which is an integral part of the development of the Union, to elaborate and implement decisions and actions of the Union which have defence implications". I follow that. The mainspring, the origin, of action in the defence, security and foreign affairs field, so far as concerns this article, seems to lie with the Council of Ministers. The Council of Ministers says that it is necessary to do this and that we shall then get WEU to implement it. My Lords, so far so good. That I understood.

The problem is that, if one then turns to the declaration made by the members of the WEU, it seems to give the WEU a far greater initiating power in relation to a common European and defence policy than appears to me to have been envisaged in the earlier articles of the treaty. I do not wish to spend too much time quoting chunks of the document at this hour of night but perhaps I may quote one paragraph, which states: WEU will be developed as the defence component of the European Union and as a means to strengthen the European pillar of the Atlantic Alliance". I follow that. It continues: To this end it"— the WEU— will formulate common European defence policy". It does not refer to the Council of Ministers but to the WEU. For the purpose of this argument, I do not mind which formulates it, but I believe that there is a confusion, in my mind at least, between the role that the declaration seems to give to the WEU and the role that the treaty seems to give to the WEU.

If one reads further, one finds that in the operational role of the WEU it is envisaged that there shall be military units answerable to WEU, to be used in what timescale and in what circumstances I know not, under whose direct control I know not, and in order to deal with what particular foreign policy issue I know not. My confusion becomes worse confounded. I do not raise that point in a spirit of confrontation with the Government. However, since the gracious Speech yesterday stated specifically that the Government were aiming to develop the Western European Union it is a legitimate question that we are entitled to ask.

It has been a lengthy but an interesting debate. I found the injection of the elegant pessimism of the noble Lord, Lord Beloff, in the debate a slight surprise but, as so often with the contributions of the noble Lord, Lord Beloff, it added spice to the proceedings.

9.45 p.m.

The Parliamentary Under-Secretary of State, Ministry of Defence (Viscount Cranborne)

My Lords, I rise with what I now realise is purely conventional trepidation to address your Lordships for the first time but nevertheless, certainly in my case, it is very real.

If I may be particular, in one respect that trepidation is extended and made all the deeper by my experience in another place. When I embarked there upon my maiden speech I was all too conscious of the fact that I delivered it in the wake of what was, by common consent, one of the greatest maiden speeches since the war delivered by no less a figure than the present parliamentary sketch writer to The Times. Your Lordships may think that I am a glutton for punishment because not only did I manage to select an important debate on that occasion on which to open my batting in another place, but rather I seem to have done the same again in your Lordships' House. Not only that, but I seem to have selected a debate in which there have been not one but three brilliant maiden speeches which I somehow must try to live up to. Perhaps I may say that that is a very realistic and sensible cause for feeling trepidation in your Lordships' House.

The second cause for anxiety is perhaps not so particular but is more generally felt by noble Lords who embark on their maiden voyage in your Lordships' House; that is, that we are all extraordinarily conscious of the great depth of experience and knowledge which is contained in this Chamber. There is perhaps a very good example of that experience and knowledge which is before us in this debate today because I am sure that your Lordships will have observed, as indeed I have, that your Lordships' House is the only one which has shown the good sense to debate defence at all in its consideration of the gracious Speech. Certainly in view of my new responsibilities, there can be no doubt at all where one of the main priorities of any Government must lie. Once again, it falls for your Lordships' House to remedy some of the more obvious defects of another place.

The hour is late. This has been an extremely long and certainly from my point of view a most interesting debate. I am sure that your Lordships, like me, will believe that at this hour of night there are certain matters which are more important than politics. One of them is a large dinner and another is a comfortable bed. Therefore, if your Lordships will allow me and will accord me that indulgence which is traditional on occasions of this kind, in trying to answer this debate I should like to address myself in particular to the matters for which I am now at least partly responsible to your Lordships' House in the Ministry of Defence. If I feel that I have time and have not bored your Lordships too much, I shall endeavour in particular to address some of the questions asked of me by the noble Lord, Lord Cledwyn, in his opening address.

Before I turn to those matters, if your Lordships will allow me—and indeed if it is allowed in your Lordships' House for one maiden speaker to commend another—I should like to add my congratulations to the three wonderful maiden speakers to whom we have listened this evening. I hope that my noble friend Lady Chalker will agree with me that we are old friends and colleagues. It is no surprise to me whatever that she acquitted herself as well as she did. I believe I need say no more.

However, perhaps I may address myself to a former school fellow of mine who I have not seen, to my certain knowledge, for 30 years. I was not surprised but gratified to find that my noble friend Lord Cromer returned from abroad not only more fluent but considerably better informed than I remembered him on the playing fields of Eton. As one who has spent a little bit of time travelling in Hong Kong and parts of southern China I was impressed and agree wholly with his analysis, which was delivered with such aplomb and considerable knowledge.

I have one other tribute to pay, if your Lordships will allow me, to my noble friend Lord Prentice. He also is a former colleague in another place. Indeed, I remember well the distinction with which he fulfilled his role. I am delighted that this evening at any rate I am also in good company there.

I want to move on and will try not to detain your Lordships for too long. However, this debate reflects the extraordinary reserves of knowledge and experience to be found in your Lordships' House. It has become a truism to say that the world has changed in the past three years or so. Nevertheless, it is worth emphasising from where we are starting in addressing the future defence policy of our country. As noble Lords from all quarters of the House will have observed, it is no good trying to erect a defence and security policy in vacuo. We must try and address ourselves to the risks and the threats that we perceive; to make a judgment and develop a policy and defence capability accordingly.

Nobody—here I address myself particularly to the noble Lord, Lord Mayhew—would seriously suppose that the threat has done anything other than vastly diminish. That must be common ground between us all. Nobody seriously believes that we are facing the possibility of a heavy armoured attack from the central front in Germany directed by the forces of a defunct Warsaw Pact. That is an absurdity.

However, many noble Lords here are infinitely better historians than I shall ever be. I refer specifically to my noble friend Lord Beloff whose speech I especially enjoyed, particularly in the light of the somewhat tendentious comments about my own record delivered from the same Bench by my noble friend Lord Bethell in an earlier intervention. Those who are better historians than I will realise, as I certainly contend, that the fall of great empires is never—and it is as erroneous in historical terms as it is in political terms to say "never"—followed by periods of great stability. I suspect that the fall of the Soviet empire is certainly showing us the truth of that general observation. We are living in a world where the threat is lower but where stability has in many ways decreased.

None of us liked the idea of the balance of terror. It was what the French call a pis-aller. But it brought in its wake an element of dreadful stability in which there was a kind of quadrille dance by both sides. The balance of terror made it perfectly clear that that quadrille, with a bit of luck, would not transgress the bounds of security. That is no longer so. There is no doubt that some of the reaction that I observed in some parts of your Lordships' House to the address of my noble friend Lady Park, was wholly unwarranted. Anybody of my noble friend's great knowledge and experience, which is universally recognised in this House, will realise that when she speaks of possibilities and threats, particularly in the countries that were covered by the former Soviet Union, there can be no doubt that your Lordships, and certainly I for one, should listen with the greatest of care to what she says.

There is also no doubt (is there?) that Russia, for all her troubles, economic and otherwise, so eloquently referred to in particular by my noble friend—I forget his name now; I knew him under another incarnation and I hope that he will forgive me—is still the largest military power in Europe and the very instability there makes its own actions all the more unpredictable.

Therefore, when we are addressing ourselves to a new strategic and defence policy, it is all very well, as the noble Lords, Lord Chalfont and Lord Mayhew suggested, that we should identify the threat and that we should use and draw on distinguished academic names to which the noble Lord, Lord Chalfont, referred, in order to be able to predict with absolute certainty where the threat is coming from. I suggest that the noble Lord, Lord Chalfont, might have been nearer the mark if he had delivered his remarks at a time when the threat was rather more easily distinguished.

That is no longer the case. The difficulty of formulating a strategic and security policy these days is the unpredictability of the world situation. It is for that reason that the overwhelming characteristic of the world situation today can be encapsulated in one word: unpredictability. It is the fact of the unpredictability of the world that induced my predecessors and their military advisers, when they were assessing how we should react to the events in the former Soviet Union, to come to the conclusions that they did in that much reviled document, Options for Change. Let us be clear. Defence is, we hope, an insurance policy which we will never have to cash in. It is important that it should be there. But certainly in this new world the sort of civil mechanisms to which my noble friend Lady Chalker referred in her opening remarks, should be, and should continue to be, the front line of our attack in the establishment of stability in the world.

Perhaps I may add to what my noble friend said. She described a number of civil institutions. The noble Lord, Lord Bridges, expressed some surprise, I believe, that there were so many of them. If noble Lords will allow me, I shall not comment immediately on his remark with which I have a considerable amount of instinctive sympathy. I believe that those civil institutions will gain enormously in credibility because that credibility will derive in very large part from the existence, among those who establish and guarantee those institutions, of a strong military capacity as an insurance policy. Whether we seek to stabilise Eastern Europe by the means which many of your Lordships have referred to this evening as being possibilities or we seek to stem the proliferation of nuclear weapons or we wish to prevent the spread of terrorism, I believe that our defence capacity and its nature are even more of an integral part of our foreign and security policy than perhaps they were before.

If we are to maintain that credibility I cannot emphasise too strongly the key role that a joint military alliance policy must play just as a joint policy plays a role in what I might term the civil institutions to which my noble friend referred in her opening remarks. In this connection, perhaps I may say how delighted I was to hear the comments made by the noble Lord, Lord Craig of Radley, in his most interesting speech. NATO is the vehicle for the partnership to which I have referred. After all, we are extremely fortunate that NATO is in place; that it works and that it is based on long experience and on a long period of operation. It is interesting that NATO has increasingly shown itself to be flexible and to be able to adapt to changing circumstances, and even to circumstances that have changed as rapidly as has happened in the past two or three years. Perhaps the most important point about NATO—I hope that your Lordships will forgive me if there is an element of trying to teach one's grandmother to suck eggs in what I am saying—is that the United States of America is committed to it.

It is perfectly clear to Her Majesty's Government and, I am sure, to almost all of your Lordships, that just as my noble friend's civil institutions are unlikely to work unless they are based on a partnership between the United States and Western Europe, so security and defence institutions must be predicated on exactly the same premise. That is why in a previous incarnation I was delighted to be able to listen to the distinguished lecture that was given at the International Institute for Strategic Studies by General Colin Powell a little earlier this year in London, when he said: I hope there is no doubt in the mind of anyone here tonight that notwithstanding all the changes we see in the world the Atlantic Alliance is still the essential glue holding together the Western Community. The alliance is essential not because it connects armies, navies and parliaments and peoples, it is essential because it connects the values and principles that underlie them. The general then went on to make a clear and uncompromising commitment to NATO on behalf of the present American Government and defence establishment.

The noble Lord, Lord Richard, asked a question which, in all frankness, rather stumped me. There is no doubt that the Western European Union has a very important part to play in the transatlantic basis of our future security arrangements. That part was enhanced by the Maastricht agreement which, if properly interpreted, will undoubtedly be good for Europe and for NATO. It will enable a stronger European defence effort to be developed. As long as that is developed and is compatible with NATO, it can do nothing except strengthen the basis of our security. Work to develop the WEU's operational role is already under way. The aim is to create a sensible structure that is compatible with NATO. It should draw on as wide a range of European forces as possible, including, of course, the Franco-German force, and those of other partners.

Returning to the question asked by the noble Lord, Lord Richard, about "Who formulates policy—Ministers or the WEU itself?", I must tell the noble Lord in all frankness—and this is not a very good start in your Lordships' House —that I do not know the answer to that question, but I hope that it will be "Ministers" because that is where the decision belongs.

I have talked in general terms about the basis of our approach. Perhaps your Lordships will allow me briefly to make one or two remarks about the specifics arising out of Options for Change. I listened with keen attention, as I hope that I always will, to the keen remarks of the noble and gallant Lord, Lord Bramall and the noble Lord, Lord Vivian, both of whose speeches made a deep impression on me. Nothing at the moment has persuaded the Government that the basis for Options for Change should be reassessed. Nevertheless, it is important that we should at least remain true to the basic factor of unpredictability and unforeseen circumstances in world affairs, a matter referred to very often during the course of this evening's debate.

Options for Change will deliver the capability that is needed. Nevertheless, I shall continue to listen with keen attention to noble Lords, particularly the noble Lords, Lord Bramall and Lord Vivian, and others who take the same view and have the same experience. I certainly do not wish to give any indication that I am not open to argument or, more importantly, that my more senior colleagues are not either. I am well aware that your Lordships' House is based not only on courtesy but on the force of what is said here. I should like to make sure that any response I give is as reasoned as the comments that we have heard this evening.

I know that there has been a great deal of unhappiness, particularly in the Army, about some of the implications of Options for Change. If your Lordships will allow me a personal note, with three Grenadier brothers and a Grenadier father, who is, I am sure, looking rather balefully at what I say this evening, how could I be anything else but firmly conscious of the extraordinary contribution that the regimental system and regimental loyalties make to the effectiveness of the British Army? They may be intangible but they have won more battles than I ever shall. I am also well aware that the Brigade of Guards —if noble Lords will allow a family special pleading —are not just ceremonial soldiers; and if they are to remain the effective fighting force they are today, that has to be taken into account. I hope in particular that my noble father will not press me further this evening if only on the grounds that he, perhaps more than all noble Lords, would like to get home to bed.

A number of points have been made on other matters during the course of the debate. I shall not address myself very much further to what the noble Lord, Lord Mayhew, said about the nuclear deterrent. Suffice it to say that Her Majesty's Government are wholly convinced of the need for a strategic nuclear deterrent. I am sure the noble Lord knows as much by heart as I do the arguments that we have deployed before. On the question of sub-strategic capability, I notice that the noble Lord has tabled a Question for next week. The hour is late. Will he allow me to wait until next week? I am not running away. The Government always hold these questions under review. On the other hand, there is no doubt that, so far as concerns the Government's nuclear and deterrent policy, we are convinced that there remains a case for a sub-strategic capability, whatever form it might eventually take.

The noble Lord, Lord Cledwyn, asked me a number of questions. He asked in particular about sanctions against Serbia. We certainly accept that there is a need to keep up pressure on Serbia and on the Yugoslavian national army. We also have to ensure, as I am sure the noble Lord will agree, that any measures are effective. We must not be tempted to go for measures that would not bite just to salve our own consciences. The noble Lord will know that more than any other noble Lord. Sanctions which would seriously affect the Serbian economy need to be agreed by the United Nations. Our current assessment is that it would be difficult to get a resolution in the council. I have to say to the noble Lord that we have not, in a developing situation, ruled out anything yet.

Very rapidly I should like also to refer to what the noble Lord and the noble Lord, Lord Weidenfeld, said about the importance of the success of President Yeltsin. We most strongly agree with that point of view. It is extremely important to help the reforms and nearly $50 billion of assistance to the former Soviet Union, including $24 billion from the Group of Seven, is already agreed or in place. I should say that, as with aid matters, it is equally important not only that we should give aid in the right way but that it should be effective. Those of us who have spent much time over the past few years travelling in the former Soviet Union will know that that applies in that country as much as in any other.

The noble Lord, Lord Cledwyn, also asked what steps we were taking to get the European Central Bank into London. He knows, as I know, that the City of London is Europe's leading financial centre and that it intends to remain so. The City itself is making the case for putting the European monetary institute and the European Central Bank within its confines. Ministers support that case enthusiastically. Immediately after Maastricht, my right honourable friend the Prime Minister made it clear that the EMU protocol would make no difference to London's claim. I hope that my right honourable friend, and others, will be able to keep the noble Lord fully abreast of developments as they occur.

A number of other points were raised by the noble Lord, Lord Cledwyn. I wonder whether he would forgive me, as my eye is very much on the clock and as I was told by experienced performers that 20 minutes was the maximum that is even tolerated by your Lordships, if I wrote to him about the question of expansion of the European Community. It is an extremely important point and one to which other noble Lords addressed themselves, especially my noble friend Lord Cockfield and also the noble Lord, Lord Bonham-Carter, whose experience and knowledge of Poland in particular is one of which I have had personal experience—he will not remember that, but I do. If I may, I should like to address myself to those points or ask my noble friend to do the same by letter.

That is really all that I wanted to say to your Lordships this evening. However, I have one further point to make in conclusion by way of wrapping up the debate. I am very conscious that defence is something that we only grumble about when it goes wrong. When a country such as ours has to address a major change in its defence stance, if those who are responsible for it get it wrong they will never be forgiven. I am conscious that I am a small cog in a very large MoD machine. But I know that my ministerial colleagues are well aware of the magnitude of the risks that they take if they do get it wrong. I should like to close my reply by giving an illustration to show how easy it is to get it wrong. It was said many decades ago in 1914 that, "War is too foolish to fight, too fantastic to be thought of in the 20th century. Civilisation has climbed above such perils. The interdependence of nations, Christian charity, the sense of public law, liberal principles and common sense have rendered such nightmares impossible". "Are you quite sure?" the individual concerned asked, "It would be a pity to be wrong". My Lords, that, perhaps, is the sentiment that should inform us when we address ourselves to questions of defence in this House.

10.14 p.m.

Viscount Astor

My Lords, on behalf of my noble friend Lord Caithness I beg to move that this debate be now adjourned until Monday next.

Moved, That the debate be now adjourned until Monday next.—(Viscount Astor.)

On Question, Motion agreed to, and debate adjourned accordingly.