Address in Reply to Her Majesty's Most Gracious Speech

HL Deb 22 November 1993 vol 550 cc28-125

Debate resumed on the Motion moved on Thursday last by Viscount Montgomery of Alamein—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.

2.59 p.m.

Baroness Chalker of Walllasey

My Lords, it is an honour to open today your Lordships' debate on the gracious Speech. I know how much your Lordships look forward to hearing the maiden speeches of my noble friend Lord Chesham and the noble Viscount, Lord Waverley. I know that we shall listen to them on many occasions, and I, particularly, will take careful note of all that they impart to us.

It is impossible, in the short time available, and with so many of your Lordships wishing to speak, to make a truly comprehensive review of foreign policy. Forgive me then, but I shall be selective. I shall concentrate my remarks upon the Middle East, South Africa, Russia, Hong Kong, the former Yugoslavia, and Britain's aid effort, but that is only a small part of it. My noble friend Lord Cranborne will concentrate his remarks upon our defence and security policy.

No Foreign Office Minister can survey the world with boundless optimism. There is too much going on which reinforces Gibbon's view that history is the register of the crimes, follies and misfortunes of mankind, but circumspect optimism has its place. Events this year have made the case against pessimism.

In the Middle East, South Africa, and even in Russia there is much, although not yet enough, from which we may take some real encouragement. In the Middle East, the breakthrough earlier this year in negotiations between Israel and the Palestinians was a dawning of new history. It was a defeat for the pessimists. It has been an encouragement for all involved in the peace process. Progress is now taking place in other talks between Israel and Jordan. Further negotiations between Israel and Syria and Lebanon are in preparation. There is no way in which there can be a complete and durable peace in the region until all aspects of those peace talks are successful.

Having recently visited Cairo, I am well aware of the effort that the Egyptians have been making towards those peace talks. I am also well aware that this is no time for delay; that there is an expectation among the Palestinians which we have to try to satisfy in a short space of time. Therefore, all the nations involved, and all those who would help them, need to seize this opportunity of peace. It was Cardinal Newman who once said: discharge your olive branch as if from a catapult". I am not sure that it is possible to do that, and it might even be dangerous in certain territories, but what I do know is that our involvement is quiet but considerable. We are now stepping it up, and it is being seen more clearly. My right honourable friend the Foreign Secretary was in Syria in October. Mr. Arafat and the Lebanese Foreign Minister are coming to London in December. The Foreign Secretary will visit Israel, Jordan, and the occupied territories in January.

I said a moment ago that I had been struck by the deep commitment of Egypt. I have also been struck by the willingness of many nations around the world to help in the whole of the peace process. It is that which we must manage with care. One of the matters which is clear to me is just how brave the protagonists have been, but that their bravery will be undermined unless the whole international community backs them up in translating the initial peace process into action for the Palestinian people. The European Community already proposes spending 90 million ecu this year. There will be a substantial package of support for the next five years, which has yet to be worked out in detail. The United Kingdom has been contributing through its annual bilateral aid programme some £6 million to the UNRWA. We have our special programmes in the occupied territories. We have just pledged 2 million dollars through the World Bank Trust Fund for technical assistance and feasibility studies for economic development of the occupied territories. I believe that to be a classic example of aid buttressing peace. It is one of the fundamental, long-term ways in which the aid programme facilitates peace.

Much further south, in South Africa, we were all glad to see the multi-party negotiation process reach a successful conclusion with the agreement last week on an interim constitution. I am well aware that there are those in South Africa who were not in agreement, but we hope that they will see the importance of the step which has been taken, because that step paves the way for the establishment of the Transitional Executive Council and the independent commission for the elections which are due to take place on 27th April next year.

The multi-party negotiating process has been a valuable step down the difficult road to non-racial democracy in South Africa. We very much hope that all South Africans will support the process of transition.

We have long argued with the parties concerned and in the international community that the most important thing for all the people of South Africa is that an end should be put to the violence in South Africa. We hope that all South Africans will participate fully in the elections and the democratic life of their country, for any who choose to exclude themselves run the danger of having no proper say in the future.

The European Union has agreed to set up an electoral unit to work closely with the existing EC observer mission to South Africa. The Commonwealth too will be involved in overseeing the April elections. The Organisation of African Unity is also to assist. The United Nations will also be involved in the elections. It was my job last Friday to discuss this matter in New York with the United Nations Secretary General to see how we can best achieve real co-ordination among the many people offering to help in what will be a complicated situation when so many people will be voting for the first time. The British Government wish to do everything that they can to help ensure that the elections are a success by making sure that they are free and fair and that there is full preparation for them, which will begin early in the new year.

The United Kingdom is also giving every support to the process of transition. Right from the earliest days, when we pressed for the release of political prisoners and the unbanning of the ANC, we ensured that we had an open door in London to all the main negotiators. Over the past seven years, we have given training and practical support to South African community leaders. We have initiated the sending of international observers to help curb violence in South Africa. I am always delighted to hear what an excellent job those people have been doing in our name for the people of South Africa. That reflects exceptionally well on all those who have been serving there.

What South Africa needs more than anything else is new investment. It needs it to regenerate the economy, to provide jobs, to open doors and to provide a new beginning to all those who were for so long excluded from a full life in South Africa. That new investment will be vital to the transitional process and for the prosperity of all South Africans. I am glad to note that in the United States all federal bans on investment have now gone and that many of the state bans are being lifted. The IMF and the World Bank are preparing to help South Africa. But, above all, what South Africa needs, like so many other nations, is trade not aid. That is why we must do all that we can to facilitate the trade which is so badly needed for the development and health of the new South Africa.

Whereas the news in South Africa may be good, sadly in just the past week in Nigeria we have seen a significant reversal of the democratic process. We deplore the decision of the military to take back power and to dissolve all the elected institutions. No military dictatorship can solve Nigeria's problems, or anyone else's for that matter. They could have done otherwise. Britain has consistently supported a peaceful transition to democratic civilian government which would be acceptable to the Nigerian people as a whole.

Perhaps I may say that for more than 10 years we have shown considerable patience and understanding towards Nigeria. During that time both the economy and the lot of ordinary Nigerians have sharply deteriorated. That is why we urge General Abacho, who led the military take-back, and his colleagues to move as rapidly as possible to accountable democratic civilian government.

Your Lordships will recall that we took no further steps as regards aid and have done only minimum work with the Nigerians since the former General Babangida annulled the 12th June elections last summer. However, we now see the need to take other steps potentially. That is why we are considering with all our international partners what further steps may be taken in response to the backward step taken last week by General Abacho and his colleagues.

The news from Russia is better, despite the curious logic of some apologists in this country for Rutskoi and Khasbulatov. It is an area which brings encouragement. The British Government have consistently supported Yeltsin as a reformer. It is unreal to believe that a leader with less than his nerve and steel could bring about real change for the better in Russia. There is no doubt we and the rest of the international community are right to support him in his hour of need. But we wait to see what happens to a democratic Russia.

Following President Yeltsin's victory at the White House —I believe that it was a victory for the cause of economic and democratic reform in Russia—he is engaged in the largest democratic consultation that has occurred in Russian history. That is a major undertaking. It is one which undoubtedly he will find exceedingly difficult, as will the Russian people. We must face the fact that elections for the first time to a new bicameral parliament and to some regional assemblies and a referendum on a new constitution would be no easy task for a nation well versed in democratic elections. Therefore, one can easily see how difficult that will be among people who have never participated in their democratic future.

The new draft constitution is by no means a blueprint for despotism. There is a powerful president in Russia. That is a feature of the constitutions of a number of Britain's closest allies. I believe that the process of consultation and its results, which President Yeltsin is driving forward, can produce a post-totalitarian federative, democratic Russia. But the Russians will need help.

Already eight British parliamentarians from another place and 12 other experts have visited Russia and will monitor the December elections. There is a £500,000 British Programme for Democracy to help to support the new institutions to emerge after the elections, especially the parliament. We must realise that Russia has no real experience of democracy as we know it and as many of its people expect to have in Russia as a result of broadcasts from the BBC and other media. We must nurture that democracy. British experts have covered the preparations for the elections and they have recently returned from an advisory visit. They report that there is much indeed to be done. All that is in addition to the Know-How Fund, which, as my right honourable friend the Foreign Secretary described in another place last Friday, is intended to help Russia to get on with the job of modernising and of standing on her own economic feet. But we are well aware that the process, whether economic or political, will take a long time and will require a great deal of patience on the part of the member nations of the international financial institutions.

During the past few years your Lordships have expressed much interest in Hong Kong. There is no doubt that the focus of discussion between the British and Chinese. Governments is about the kind of democracy that should exist there in future. Its elections are of a different kind. We are all well aware that the 1984 Joint Declaration by Britain and China sets out the detail of rights and freedoms which make up Hong Kong's way of life. It provides for that way of life to carry on for 50 years after 1997. I hope it is not necessary to say—but for the record I shall do so—that we want to see the Joint Declaration which was agreed by Britain and China implemented in full. Part of the declaration states that by 1997 Hong Kong's legislature will be elected. China's Basic Law for Hong Kong, which will come into force in 1997, sets out the detail of the gradual development of democracy which has been under way for a decade.

So Britain's talks with China are not about whether to have democratic arrangements—we have already agreed that—but whether the last round of elections to be held under British sovereignty (in 1994 and 1995) will be fair, open and acceptable to the people of Hong Kong. The United Kingdom's approach to talks is persistent but flexible. During the past three months the Foreign Secretary has twice talked to his Chinese colleagues. The Government will redouble their efforts to work for agreement—but not at any price. We must remember the Zen proverb: "What is the sound of one hand clapping?". We need two hands to make a deal.

Your Lordships will understand the importance of arrangements which help to preserve the rule of law and which go with the grain of the people of Hong Kong's wishes. With the people of Hong Kong on side, stability and prosperity will be assured. The Governor will make announcements in a few weeks but at the present time it is absolutely crucial that the Hong Kong people decide their future.

China itself is going through a period of tremendous economic expansion and reform. It is incredible that in economic terms it grew 12.8 per cent. in 1992. This year growth will probably be 13 per cent. I hope that we shall be able to participate in that because British firms have much to offer China. Although there are in the Chinese economy problems of overheating and inflation its government are having some success in addressing them. Whatever the short-term difficulties, China is set to be a major world market, not least for British business.

I turn to perhaps the most difficult of all the territories with which we are dealing; that of the former Yugoslavia. Today the Foreign Secretary is in Luxembourg with his European colleagues considering the situation in the Balkans. I wish to quote from comments that he made approximately one-and-a-quarter hours ago. In speaking about the political side of this morning's debate he said that we had agreed on two main principles in the Council of Foreign Ministers. The first is that at the moment we cannot relax sanctions. However, if the Serbs and the Croats made the necessary territorial concessions to the Bosnian presidency, to the Moslems in Bosnia, some form of suspension of sanctions might be envisaged. But we are not there yet. He said, secondly, that there should be these territorial concessions, that it is reasonable for the Moslems to ask for such concessions, and we encourage the noble Lord, Lord Owen, and Mr. Stoltenberg, to negotiate such concessions with the Serbs and if necessary the Croats so that there may be in the future a possible suspension of sanctions. But there is a need first for the territorial concessions.

We are all well aware—in particular in my department—of the prospect of a very bitter winter in Yugoslavia. Without doubt it will be much worse than last year and hundreds of thousands of lives will be at risk. There are already 2.7 million Bosnians depending on international humanitarian help and more and more become dependent upon us daily as the temperature drops and the winds rise.

Our present efforts are extremely vulnerable. It takes too long to get along the mountain roads over the hills because we cannot use main routes. There is a process of almost unending negotiations with the local militia. That is extremely frustrating and not always successful. But the fact is that there must be co-operation on all sides of the civil war in order to get assistance through.

Over 1,500 convoys have been escorted by British troops and 70,000 tonnes of aid have got through in that way. The RAF Hercules airlift to Sarajevo brought in another nearly 12,000 tonnes. Over £150 million in British aid has been spent; half directly and half through the European Community. We have looked in particular at sustaining key supply routes and opening new ones, if possible including the use of Tuzla airport. But that is extraordinarily difficult and dangerous work. Nevertheless, it remains the best way of saving lives. I pay tribute to all the civilian and military personnel working in that field.

If there is not a breakthrough in the discussions, which I understand will take place in Geneva next Monday, and if the lack of co-operation persists, parties must understand that the humanitarian commitment from the world at large will not continue indefinitely. That is why I emphasise that the onus is now on the Serbs to make those further territorial concessions, of which my right honourable friend the Foreign Secretary spoke, to meet the Moslem demands in the Geneva talks next Monday.

The Bosnian Serbs are being pressed hard. They understand that if they resume the strangulation of Sarajevo, they face the prospect of air strikes. Sanctions on Serbia mean that Belgrade, as well as the Moslem community in central Bosnia, faces a bleak winter.

No quick progress can be promised. We can merely promise to continue to help those who greatly need our assistance throughout the winter. We shall do that. But above all, we continue to support efforts towards the political settlement which is so urgently needed.

I said that I would say a few words about the aid programme. Most visibly, ex-Yugoslavia is at the centre of our response to humanitarian emergencies but we cannot keep helping in emergencies without underpinning our work to long-term development aid. The changes which we face in many different parts of the world are difficult to cope with but we have now developed what I believe to be a more flexible aid system to help those in the greatest need and to help nations to stand on their own feet and to trade because that is what they would wish to do.

Most clearly, in central Europe and the former Soviet Union we have contributed to the process of transition to market economies and plural democracy through the multilateral agencies, and particularly through the British Know How Funds. Those efforts have met with real success.

I have already mentioned aid in respect of the Middle East and South Africa. But as I said a few moments ago, our main business is long-term help to enable poorer developing countries to stand on their own two feet.

I could not enter this debate without saying that the United Kingdom Government will continue to support the negotiators —Sir Leon Brittan in the Commission, and others—who are trying to finalise a global balanced outcome for the Uruguay Round of GATT by 15th December because there is no more important single factor for the economic prospects of the developing world, just as much as for the developed world. We shall push with all our energy for that successful conclusion.

The poorest and most indebted countries of the world also need our help in terms of better debt relief. Again, that is an area in which the United Kingdom has taken the lead in pushing for full Trinidad terms. Those countries will need our help by way of concessional financial support and technical assistance to help to reduce poverty, promote economic reform and to achieve better standards of government. I believe that we are right to use our expertise and greater wealth to help to improve the living standards of the people in those countries. It is also very much in Britain's interests to do that.

We are a week away from the Budget Statement and therefore your Lordships will not expect me to say anything about the aid budget. But I am determined to push even harder than before for the best possible value from the aid budget, for good value for British taxpayers and good value for recipients on the ground.

A large and increasing proportion of our aid is passing through the multilateral agencies. Over 20 per cent. of our aid is spent through the European Community. Therefore, we are engaged upon a relentless effort to ensure that all multilateral institutions are as effective as they can be in the interests of the taxpayers and the aid beneficiaries in having the very best value for money.

In conclusion, perhaps I may say in regard to our work in the foreign affairs field that the range of our work and the armies of people out in the field helping Britain's voice never ceases to amaze me. We were at the heart of a successful UN operation in Cambodia. We played a major role in the Commonwealth heads of government meeting in Limassol. We contributed to the UN blockade of Haiti. We have been at the heart of the debate on the future of the new European union. In NATO we are formulating, with our allies, the approach to eastern and central Europeans and former Soviet Union applicants in preparation for the January NATO summit. We seem to become daily more active in the Security Council

Perhaps your Lordships will allow me to pay tribute to the work of those public servants who work in both the diplomatic service and the overseas development administration. I am unfailingly impressed by their dedication and expertise. They do a good job, often under extremely difficult circumstances. We should be duly grateful to them, for Britain is exceptionally well served by those men and women.

There is a massive network of expertise and information. It is in Britain's interests to use its expertise to its best possible effect. We shall seek to do that because Britain will reap the rewards. The Government are committed to that.

3.27 p.m.

Baroness Blackstone

My Lords, in the 18 months since the last debate on the Address, there have been a number of important developments in world affairs. If only it were possible to welcome them all. Regrettably, that is not so. In many respects there has been a deterioration in the prospects for peace and justice in the world. And in many respects, the Government's record in promoting peace and justice is not one of which we can be particularly proud.

Nor have we made enough progress in adjusting our defence and security policies in the light of the dramatic changes that have followed the collapse of the former Soviet Union. I shall return to those matters in discussing our aid policies, the appalling war in Bosnia and in reflecting on both the future role of the United Nations and Britain's current defence strategy.

Before doing that, I wish to sound one or two notes of optimism. Like the Minister, I begin with the Middle East. The most exciting breakthrough in securing peace in an unstable and conflict-stricken part of the world was the Israeli-Palestinian agreement of September this year. For years the prospect of peace in the Middle East had looked hopeless. Now it looks hopeful. At last the extremists and fundamentalists on both sides of the Israeli-Palestinian conflict have been overruled. We should recognise the very considerable courage of both the Labour government in Israel and of the PLO in reaching that accord.

As the noble Baroness said, there is obviously still a long way to go before the implementation of many aspects of the agreement. Nor can a lasting settlement in the Middle East be achieved without the implementation of UN resolutions which embrace all the nations of the region. Further progress must be made to secure agreements between Israel and the Lebanon, Syria and Jordan. I am glad to hear that in the case of Jordan, a good start has already been made. Meanwhile, more must be done by European nations and particularly by the UK (given its historic duty to the Palestinians) to provide economic assistance for the occupied territories, as well as political support. Britain should be taking the lead in the UN and in the European Community to increase aid (both bilateral and multilateral) to the occupied territories. Anyone who has observed, as I and, I am sure, many other Members of your Lordships' House have, the terrible poverty and deprivation and the high levels of unemployment in those areas must surely accept the vital role that such aid would play in undermining the extremists. Despite what the Minister says, regrettably the British contribution has been too small, given our special responsibilities for the Palestinians.

My second topic, as it was the Minister's, although I had not seen her speech beforehand, is South. Africa—a second source of hope in a world where war and poverty seem to dominate. Although I share the Minister's concern about the unacceptable violence that has taken place in South Africa, I nevertheless believe that we can now be more hopeful. In the Labour Party we have for many years argued that sanctions had to be imposed to destroy the evil system of apartheid. That met with opposition from some noble Lords opposite. I believe that our approach has been vindicated by developments in South Africa which culminated in the agreement in July to hold multi-party elections next April.

I welcome very much therefore the reference in the gracious Speech to the Government's support for the construction of a democratic society in South Africa. That will mean far more than the sending of observers, agreed at the European Council in the summer. Indeed, a very substantial presence will be needed to supervise and monitor the election process and to ensure that the many millions of black voters who are illiterate—many of whom live in rural areas—are informed of their democratic rights and are able to exercise, them freely when the time comes. It will also mean the improvements of a longer term kind in trade to which the Minister referred.

The successful elections in neighbouring Namibia and the smooth transition to a working democracy in that country are another success story in the region. Unfortunately, the bordering state of Angola is suffering one of the worst internal conflicts anywhere, with terrible daily slaughter. For far too long the US Government supported Savimbi and in doing so prolonged the civil war. I am glad to say that US policy has since been changed. However, the British Government, along with others, have so far done too little to ensure that UN resolutions on Angola are implemented and that no further assistance reaches Unita from countries that have supported it in the past. Urgent action is needed in a desperate situation.

As a continent, Africa is suffering despite the bright spots such as Eritrea, Uganda and Namibia where the situation is much better than it was. I recognise the concern that the Minister has felt for Africa over many years and her efforts to help African countries. I also welcome the reference in the gracious Speech to the maintenance of a substantial aid programme to promote sustainable development and good government. However, on these Benches we cannot help but feel sceptical about such claims in the light of the Government's deplorable record in spending on aid and development. Since 1979 the proportion of our GNP spent on aid has declined substantially from 0.51 per cent. to 0.31 per cent. in 1992. If the freeze introduced in last year's Budget continues, it is estimated to fall to 0.26 per cent. by 1995. That would be the lowest level since records began. How can the Minister defend that? How can the Government defend those figures when, at the Rio conference on the environment, the Prime Minister spoke of providing "substantial extra resources" and of achieving the UN target of 0.7 per cent. of GNP as soon as possible?

One can only conclude that, as in so many other spheres, this Government fail to keep their promises. They fail to keep their promises on taxation and their promises on spending. Moreover, they neglect the poor in Britain and the poor in the third world. When the Minister replies, I hope that he will not make the excuse that it is a result of economic recession. Plainly, it is not: expenditure on aid fell in real terms in seven of the 10 years of real growth in GNP between 1979 and 1991.

Cuts will hit the bilateral aid programme hardest because of commitments already made (to which the Minister referred) to multilateral programmes. The cuts mean that many of the UK's NGOs, focusing on the poorest countries, will have difficulty sustaining their excellent work. They mean that development assistance with the largest long-term benefits will be hit hardest because the political pressures for immediate help, such as food aid in famine, are greater.

The future is bleak for sub-Saharan Africa without political stability and a sustained economic recovery. To achieve that the World Bank estimates that a 4 per cent. per annum rate of growth is needed in development assistance in the region. Meanwhile, Britain slips further and further away from the UN target of 0.7 per cent. of GNP which it endorses and falls further and further down the table of major donor countries.

I hope that the Minister will convey to her right honourable friend the Foreign Secretary the concern which I suspect is felt by many Members of the House about the tragic consequences for Africa if the World Bank target is not reached. Far too many children have already died; the spectre of millions more dying from the effects of malnutrition hangs over us all. We, in the rich world, must recognise our moral obligations to act before it is too late. I do not know how the Minister and her right honourable friend the Foreign Secretary have done in their battle with the Treasury. We shall have to wait until next week for that. However, I hope that the result will be better than last year. I hope also that some progress can be made on the debt problem, for debt is probably the most important obstacle to recovery for many African countries. The full Trinidad terms must be adopted. Pressure must be exerted by the UK Government, along with other members of the G7, on the Japanese to drop their opposition. And ways must be found to reschedule and, where possible, write off multilateral debt. Of course, in all those matters, the UK Government cannot act alone. I hope, however, that they will take the lead in searching for a humane and, in the longer term, economically beneficial solution.

Much of the suffering of the third world is a consequence of economic failure, but some is a direct consequence of war which breaks up families and forces people to abandon their land. Every major famine in recent years has taken place in a war zone. I am grateful to my noble friend Lord Judd for reminding me of that fact. As he eloquently argued in a recent paper, the international arms trade has played an important role in intensifying and prolonging many conflicts around the world. Even now, new arms are arriving in Somalia to replenish those originally supplied by the United States, the USSR and Libya.

The role played by British Ministers in the arming of Iraq has yet to be fully exposed by the Scott inquiry. What has emerged so far is a squalid story of lies, deceit and hypocrisy. Money spent on arms in many countries goes far beyond what is justified by the external threat and is a major contributor to the debt problem of the third world. It is vital that the world's major arms suppliers co-operate to reduce arm sales: 85 per cent. of the conventional arms trade is accounted for by the permanent members of the Security Council. The UK Government must play a responsible role in finding ways to limit it, such as properly monitored codes of conduct both in the EC and in the UN.

I welcome the reference in the gracious Speech to the Government's wish to play a constructive role in strengthening the UN's capacity to undertake peace-keeping and preventive action. The Labour Party has always believed that support for the UN must be a key component of British foreign policy. But support for the UN does not mean opposition to its reform. On the contrary, as the Leader of the Opposition said in a recent speech, the Labour Party wants to encourage change and reform and to work to improve the efficiency of the UN by cutting out waste and streamlining its administration. But we must remember the UN can only be as effective as its member states allow. If they block reform or refuse to pay their contributions, it will be hard for the UN to respond to the huge challenges it faces.

Those challenges have never been greater. In 1987 there were only five UN peacekeeping missions round the world employing around 10,000 people at a cost of 233 million dollars. Today there are 13, deploying 75,000 troops at a cost of 3 billion dollars. The definition of peacekeeping has widened to embrace a range of activities including the monitoring of elections, the demobilisation of forces, the collection of weapons, the disarming of paramilitaries as well as the supervision of humanitarian aid for refugees and victims of war and disaster. Peacekeeping forces now have to operate in a much less permissive environment than in the past. Peacekeeping is meant to involve the consent of the warring parties; increasingly this is breaking down, blurring the distinction between peacekeeping and military intervention.

At the same time, the expectations of the UN in the post-Cold War era are greater than ever. In the overstretched circumstances in which it is operating, it is hardly surprising that it sometimes fails to meet them. New structures are needed which are more appropriate to the new circumstances. But we must also acknowledge the UN's successes in Cambodia—the Minister referred to that—and in El Salvador, to give two recent examples. However, if the UN is to have further successes, we must create the structures which will both allow it to play its traditional peacekeeping role and to do more active and positive prevention work such as early warning of conflict and pre-emptive diplomacy. At present the UN has neither the financial nor the military resources to take on all these tasks. Voluntary contributions will not do. Moreover member states must be prepared to pay their dues on time—something which the UK has always done and, I hope, always will.

On the military side, there is now increasing backing for the idea of a specially trained volunteer peacekeeping force which could go into areas of conflict at short notice. Further work is needed on the practical details of how it would operate. Meanwhile, Britain and other countries might designate special units in our military to be available for UN operations. There should be a better system of military advice at the UN in New York. I would be grateful if the Minister can tell the House in reply what view the UK Government take of these various suggestions.

Only a strong UN with the power to act swiftly can deal with problems such as the break-up of the former Yugoslavia. It is regrettable that the UK Government have failed to respond to the request of the UN Secretary General for extra personnel. I was shocked to hear the former Minister for Europe claim at a conference recently that our policies in Bosnia have been a success. What is meant by a success? If they are a success, I cannot imagine what failure looks like. Bosnia is a European tragedy—not just because of the terrible suffering of its people, but also because the fundamental principle of civilised society, that people from diverse backgrounds and beliefs should be able to live together in peace, has been thrown to the winds by the horrors of ethnic cleansing.

We on these Benches wish to give unstinting praise to the role that British troops have played in the UN humanitarian aid programme. They have shown courage and professionalism of the highest order. We believe it would be wrong to end the arms embargo. To do so would only prolong the war and increase the atrocities. We have also supported the proposals for a UN administration in Sarajevo and an EC administration in Mostar. But we have been, and remain, deeply critical of the failure to implement sanctions against Serbia effectively. I hope that there will be no suspension of sanctions until we are absolutely sure that concessions on territory—the Minister referred to that matter—have been made. We are also critical of the failure to enforce the no-fly zone and of the reluctance to increase the UN and CSCE presence in Macedonia and Kosovo to ensure the war is contained. Above all, we deplore the way in which aggression on the part of the Serbs and Croats has been rewarded rather than confronted.

While failing to contribute to Dr. Boutros Ghali's request for further personnel, we continue with defence policies which have not adjusted to the dramatic changes since the end of the Cold War. The process of reduction since 1985 could now be accelerated. For example, is it necessary to continue to spend as much as we are now doing on keeping the waters of the North Atlantic open and deploying tank regiments in Germany? What is urgently needed is a proper defence review focusing on a long term strategy. When are the Government going to face up to this? For how much longer are we going to devote a higher proportion of our GNP to defence than the French and the Germans? Why have the Government failed to develop a national diversification policy for the defence industry? Why have we failed to obtain as much funding for diversification under EC schemes as other major European countries?

Will the Minister also explain to the House why the Government are doubling the number of nuclear warheads from 48 on each Polaris submarine to 96 on each Trident submarine? Ministers are saying that total explosive power will not be changed much. What does that mean? A little more precision would help. It is extraordinary that at a time when the USA and Russia are reducing their nuclear warheads we are increasing ours. Why is that necessary for our security?

The Labour Party welcomes the commitment to the Chemical Weapons Convention and to the indefinite and unconditional extension of the Nuclear Non-Proliferation Treaty in the gracious Speech. It would, however, be helpful if the Minister could tell the House whether the Government accept the target date of 1996 for the signing of the comprehensive test ban treaty. The Government's position until now can hardly be described as enthusiastic. Their record on the matter and the decision to increase their nuclear warheads do not set a very good example to those nations with nuclear aspirations. We welcome also the Government's support for NATO along with the recognition that NATO must adapt to the post-Cold War era. Perhaps NATO will be able to adapt a little faster than the Government.

I have said nothing about developments in the European Community. I will leave that to my noble friend Lord Clinton-Davis who will no doubt wish to comment on the deep divisions that remain in the Tory party and the Cabinet. The unpleasant chauvinistic remarks of the Secretary of State for Social Security at the Conservative Party conference are just one manifestation of that. Perhaps these divisions are the reason why the Minister and the noble Viscount are apparently omitting any reference to the European Community in today's debate.

I do not have time to cover other important issues raised by the noble Baroness. However, I should add that the Labour Party shares the Government's hope for a satisfactory end to negotiations between the UK and China on Hong Kong, with an increase in democracy for the Hong Kong people. We also welcome support for political and economic reform in the states of the former Soviet Union. There is, however, a need for a full debate on Russia so that the House can consider what form that help should take after the election there next month.

In conclusion the new world order provides us with many opportunities to work for a better world. We cannot do so alone; we must pursue the goals of peace and justice through the UN, the EC and NATO, in the G7 and the Commonwealth. But as well as new opportunities there are new uncertainties. We must face up to them with courage and conviction and a willingness to think imaginatively and quickly about how to adjust our foreign and security policies to these changes. A small start has been made but there is still a very great deal to be done.

3.49 p.m.

Lord Bonham-Carter

My Lords, I welcome the opportunity to participate in this debate. It presents the usual problems associated with foreign affairs debates. We hold such debates rarely and therefore the number of topics which have to be covered is so great that none of them can be dealt with as intensively as they deserve. The Minister has to give a tour d'horizon covering 30 or 40 different topics. That is unsatisfactory and frustrating.

For my part today I propose not to talk about a great many subjects which probably should be discussed but which I could not deal with adequately if I were to try. For example, we have discussed Hong Kong on several occasions recently. The situation is interesting and difficult but I do not propose to dwell on it. The breakthroughs in South Africa and between the PLO and Israel are remarkable, if precarious, achievements which we can only welcome and which I hope we shall emulate in our own backyard in dealing with the problem of Northern Ireland. We should all back the Prime Minister's initiative and his refusal to allow any party to have a veto in trying to reach a settlement in that difficult, complex and bloody feud.

I shall not discuss the consequences, considerable though they are bound to be, of the NAFTA agreement reached by President Clinton, nor the consequences of the arms trade to which the noble Baroness, Lady Blackstone, quite rightly referred. Nor, indeed, shall I refer to the need to reform the United Nations in the light of the greater and extended responsibilities which the world imposes on it, often without giving it the financial means to carry them out properly. Nor shall I touch upon defence, which my noble friend Lord Mayhew will deal with later.

I should like to dwell on two topics during the course of my relatively brief remarks. The first is Europe and our role in Europe after Maastricht, and the second is the outlook for our bilateral aid programme, to which the noble Baroness, Lady Chalker, referred and for which she has a special responsibility.

In the debate on the Address in another place the Foreign Secretary was noticeably reticent about developments in Europe since the Treaty of Maastricht was signed, except to say that the European Union would be helping to monitor elections in Russia and that the Foreign Ministers would be meeting today to consider the former Yugoslavia, where he said the prospects for a peaceful settlement had receded. It seems therefore that we should discuss that matter when we know more about what the Foreign Ministers decided today. I very much hope that there will be an opportunity in the very near future to debate the situation in the former Yugoslavia more fully than we have recently.

For reasons on which the noble Baroness, Lady Blackstone, touched, it is not difficult to understand why the Foreign Secretary had so little to say about European union. The body of the Government and the Conservative Party remains bruised, tender and sensitive on that issue. The inflammation caused by Maastricht could break out again at any minute, and probably will directly we start to discuss the European budget. On Thursday my noble friend Lord Jenkins observed that a characteristic fault of the Government is a lack of any consistent purpose. (Column 14 of Hansard for 18th November refers.) Nowhere is that lack of consistent purpose more obvious than in defining our role in Europe or, having attempted to define it, in sticking to it. It is no good the Prime Minister declaring it to be his purpose to bring this country into the heart of Europe when neither his actions nor his words, and still less the words of his colleagues, do anything to achieve that admirable ambition.

As we all know, those who opt out diminish their influence on the policies from which they have excluded themselves. How could anyone suppose that, our Government having opted out at Maastricht, the future European Central Bank would be sited in London? Nor can those who still hope to work constructively with this country within the European Union be encouraged by speeches such as that to which the noble Baroness referred, delivered by Mr. Lilley at the Conservative Party Conference. People who believe in the sincerity of the Government's attitude towards Europe should be reminded of what he said: Why do they come and scrounge off us?". "They" are our partners in the Community. I would also point out that 5¾ million of them—from France, Germany and the Netherlands—visited this country in 1992, bringing us valuable currency, trade and tourism. If that is the scrounging to which Mr. Lilley referred, and for which he can produce no figures because no figures are kept, then he should be silent.

Mr. Lilley also said: Je suis un citoyen de 1'Europe. Give me the benefit or I'll take you to the European Court … Où est le Societé de something for nothing?", and so on, and so on. Mr. Lilley must go to Mr. Murdoch's stable for his speech writer.

Is that the Government's policy? Is that the way to influence friends? No wonder his colleague, Mr. Heseltine, speaking to a different audience, at a different conference, at a different time—to the CBI—felt that he had to do something to undo the damage. He said: We will serve ourselves not at all if the language with which we describe our continental partners, the imagery in which we paint them and the insularity with which we attempt to rewrite the history of the past 40 years have the effect of alienating ourselves and our self-interest from the very people upon whom we are most dependent". I believe that it was the Foreign Secretary who accused the leader of my party, with very good humour and some wit, of talking in different languages to different audiences. Nobody can have talked in such different languages to two different audiences in such a short time as Mr. Lilley and Mr. Heseltine.

I am disappointed that neither the Foreign Secretary nor the noble Baroness, Lady Chalker, addressed themselves to the challenge of post-Maastricht Europe. Had they looked at post-Maastricht Europe they would have found a Europe which deserves recognition and which the British people must recognise—an expanding Europe, with highly uncertain borders to the East and South; a German-centred Europe, as in the pre-1914 system and as in the system between the two wars; a Europe which can no longer rely on being led by the United States. Though we should do all that we can to maintain the strongest possible American commitment, we must surely in prudence be ready, should that commitment diminish or should it be highly conditional. We have to make terms with that post-Maastricht Europe. We have to make terms with a Europe which is German centred. It is no use railing against it in xenophobic terms of the Lilley nature. We have to make terms with it, as some of our European colleagues are doing with far more realism than we are, to take the French as one example.

Nor can we opt out of Europe, as I suspect some so-called Euro-sceptics yearn to do. It would never have occurred to Burke, Pitt, Gladstone or Lord Salisbury that Britain was not first and foremost a European power. We are part of the Community-of Europe, and we must do our-duty. as such". I remind the noble Viscount, Lord Cranborne, that those are the words of his great great grandfather speaking in 1888.

If we bear those considerations in mind, the task of British foreign policy is, as it always has been, to secure a European balance. That remains the task today. It means that the key to British foreign policy lies with our relations with France and Germany. It lies with the Monnet idea, which is even more important today after the unification of Germany. The only way in which we can secure that balance, and the only way in which German predominance can be balanced, is through the European Union, which must be radically reshaped in the post-Maastricht era when it will be radically enlarged.

We must ask the Government this. Have they begun to think about those changes and the revision of those institutions? Do they recognise that those institutions have radically to be reshaped? Do they recognise that almost inevitably there will be more qualified majority voting, for example; that the size and powers of the European Parliament will be changed; and that, if we do not already have it, we shall have a two-speed Europe? What are the consequences of that? Those are some, but only some, of the questions which have to be answered.

The prospect of the central European countries competing economically on Community terms with western Europe in the next 10 years seems to me to be remote. But does that exclude some closer degree of political co-operation? How are those countries to be accommodated? How is their security to be guaranteed without unnecessarily offending the USSR?

That is merely part of a huge agenda which has to be handled within a short time. One cannot but wonder whether the Government have yet started to address those problems in view of their total neglect in the Foreign Secretary's address and the noble Baroness's speech.

Finally, I must say a few brief words on overseas aid, and on our bilateral aid which is approaching a crisis. As has already been said, the aid budget has been frozen even without further cuts. As the noble Baroness pointed out, its percentage of the GNP has dropped to an all time low. Given our multilateral commitments, and given that cuts are (I regret to say) likely, any cuts will have a disproportionate impact on the bilateral aid which we provide. In the past the noble Baroness has defended with great ingenuity and some dialectic success the relatively small size of our aid budget by pointing out the efficiency with which it has been deployed. However, I would say to her that there comes a point when a diminishing budget has a drastic impact on the possibility of aid being effective and effectively administered. It is regrettable that the noble Baroness will not answer the debate. However, I hope that she will find an opportunity to tell us how the efficiency of the distribution of British bilateral aid can be maintained if further cuts are imposed upon it, as seems likely.

4.4 p.m.

Lord Cockfield

My Lords, I do not propose to follow my noble friend Lady Chalker of Wallasey in her wide-ranging and, if I may say so, statesmanlike review of the whole of foreign policy extending over many difficult areas in a world in turmoil. It has always been customary to deal with European matters under the somewhat peculiar heading of "Foreign Policy and Defence", and the gracious Speech follows that pattern precisely. The European Community, or the European Union, is sandwiched between the Nuclear Non-Proliferation Treaty and the search for peace in Yugoslavia. I do not know the explanation of that peculiar arrangement.

When I was in Cabinet—it is now customary for previous Members of Cabinet to reveal all that went on, or what they now believe they would have liked to have gone on—I always used to say that one of the aspects we lacked was a psychologist, because there was no other way of understanding many of the views which were expressed, let alone the decisions reached. We need such advice on the way in which European affairs are dealt with.

I say this with some trepidation in view of the heavy representation on the Cross-Benches. But there is a legal maxim that every man is responsible for the natural consequences of his own acts. We can now see the natural consequences of the negative attitude that the Government have taken from time to time on European matters. On any logical basis, the new European Central Bank should have been sited in London. In fact it has gone to Germany, to the city of Frankfurt. It has gone there quite simply because of the policies that we have followed, our attitude to the Community and the rhetoric which from time to time we have employed and which at times verges on the disgraceful. We have no one to blame but ourselves. But the Opposition can take no satisfaction from that because on the whole their behaviour has been even worse. At least the Government have had some excuse for what they do. The Opposition have no excuse whatever.

I do not refer to the cross that the noble Baroness, Lady Blackstone, has to bear in the form of the noble Lords, Lord Bruce of Donington and Lord Stoddart of Swindon. I refer to the fact that the Opposition view Community policy merely as a means of tripping up the Government. I cannot believe that if they were in power we should see a more constructive approach to European matters; in fact it could easily be less constructive.

I always greatly respect the views of the noble Lord, Lord Bonham-Carter. They are expressed with great sincerity and conviction and I agree with much of what he says. However, the simple and uncontroversial fact is that the Liberal Democrat Party has no responsibility for matters. It is unlikely therefore ever to have responsibility for matters; and on that note I shall say no more about the views that have been expressed.

Our failure to secure the site of the European Central Bank is not only a blow to the City of London; it is a blow to the country as a whole. As we see manufacturing industry worldwide—not only in this country but in all the older industrial countries—taking a smaller and smaller share of total economic activity over the years, the emphasis must turn increasingly to the service industries. In the City of London we have what is the brightest star in an otherwise unprepossessing economic performance. To have done the City the damage of allowing the European Central Bank to go to Germany is a matter that we all ought deeply to regret.

However, the implications go further than that. Enlargement is a policy that the Government, very, very properly, have not only espoused but promoted; and I agree with them entirely on this. But if one looks at the countries which are likely to join the Community this century and in the first decade of the next century, they are primarily in central and eastern Europe. They are countries that are not only physically, geographically, closer to Germany: they are countries on the whole whose trading links are primarily with Germany, and they are countries whose financial markets, and sometimes currencies, are linked or associated with Germany. What is more, when they join the Community they are likely to be required—and in fact many of them would want—to join the monetary union. So the effect of enlargement will be to strengthen these tendencies so far as Germany is concerned to the detriment of this country; and the implications of the siting of the Central Bank go very much further than at first sight one might have thought.

The Government have sought to take some comfort in the fact that they have secured the seat of the Medicines Evaluation Agency. Of course that is well worth having but, with all due respect, it is little more than a consolation prize or crumbs from the rich man's table. There was of course a time when we were the rich man, but those times have long since gone—never, I fear, likely to return, and even less likely to return if we ever had another Labour administration.

The Prime Minister has repeatedly referred to our being at the heart of Europe, and my noble friend Lady Chalker used a phrase which is reminiscent of that. I am sure the Prime Minister is entirely sincere in what he says, but one really wonders what is in the back of his mind. The only explanation I can give is this. There was a time when we thought that we were not only at the centre of Europe but at the centre of the universe as well and that the world revolved around us. In the Victorian era this was very largely true, but unfortunately it ceased to be true a very long time ago. This issue is going to come up in the discussions on the GATT, and I shall not go into that now. But the fact of the matter is that we are no longer at the centre of world events and we are no longer at the centre of European events.

This has nothing to do with the Prime Minister and nothing to do with this party or that party: it is one of the facts of life. We are one of 12 member states. Soon we may be one of 16, and in the next century we may be one of 20. We represent 15 per cent. of the population of the Community and soon it will be less than 15 per cent. In terms of wealth per head and production per head we are now poorer than any of the original members of the Community, and we are poorer than Denmark, which joined it at the same time as we did. Tragically—we can take no satisfaction in this, but these are the facts: we are now in the lower half of the Community so far as prosperity is concerned. But I think the talk of our being at the heart of Europe is partly a wish to see again the great days of this country, and it is an entirely commendable ambition. The difficulty is the gap which exists between the ambition and its translation into fact. The noble Lord, Lord Bruce, wishes to intervene.

Lord Bruce of Donington

My Lords, I am grateful to the noble Lord for giving way. Is he aware that the dismal recitation he has given in the past five minutes about this country's position in the world and in Europe is hardly a favourable testimonial of the Government of whom he was such a distinguished member?

Lord Cockfield

My Lords, we did very well in the Government of whom I was a member. The trouble happened after I left the Government.

But if I may revert to the general point that I was making and come back to the question of the European Central Bank, it is a peculiar form of conceit to quote one's own speeches. But perhaps I may be forgiven for doing so on this occasion because precisely four years ago to this day, on 22nd November 1989, and on precisely the same occasion, namely in the debate on the gracious Speech, I said this: if we do not join in the monetary union, what will inevitably happen will be that the financial centre of Europe will shift from London to Frankfurt". I even, if I may so say in parenthesis, got the city right. To go on: If that happens, neither this generation nor future generations will ever forgive us".—[Official Report, 22/11/89; col. 76.] The challenge that we now face is to ensure that we conduct our policy towards the European Community in a way which ensures that that does not become our epitaph.

4.16 p.m.

Lord Cledwyn of Penrhos

My Lords, the noble Baroness, Lady Chalker, and my noble friend Lady Blackstone have set the scene for this debate in their wide-ranging speeches. For over four decades until the end of the 1980s these annual debates were mainly concerned with the tensions of the Cold War and their implications. Then came the merciful end of that era of uncertainty. It came rather sooner than most of us thought possible, but when it did come we all drew a breath of relief and saw the possibilities of a new and a safer world.

The noble Baroness, Lady Chalker, took an optimistic view of future developments in Russia, and I agreed with much of what she said. But the reality is that that historic event created a range of new problems which must be tackled and resolved if the brave new world is to emerge. The crucial objective must be the establishment of democracy and stability in Russia itself and in the former states of the Soviet Union. This will be, I think, a major subject in this debate, with the other complex problems in the Middle East, in Hong Kong and of course in Bosnia and its neighbours.

I do not propose to pursue these great issues in this debate but to concentrate, if I may, on another critical area which also closely concerns the noble Baroness and which follows the first theme of my noble friend Lady Blackstone—namely, the crisis in the African continent south of the Sahara. The truth is that we are witnessing there one of the great tragedies of the 20th century. I do not exaggerate, for what we read about and witness on our television screens is a sub-continent sliding back into the direst poverty, with drought threatening 27 million people and with unforgivable military conflicts sweeping 40 million innocent people from their homes. We have seen 10 years of falling per capita incomes, increasing hunger and terrible ecological damage.

How and why have these terrible tragedies taken place? The House knows the answer. The decline is due to a combination of misguided policies, natural disasters and, not least, the devastation of the wars to which noble Lords have already referred. Population growth, inadequate economic policies and the pressures of mass refugees have accelerated acute human and environmental problems. The result is intolerable poverty, suffering and desperation for millions of people. We have seen on the television screen the faces of dying children, and have turned our heads away. I need say no more about that.

Who is to blame? Upon whom does the responsibility lie? We cannot deny that the onus of responsibility for these problems falls first and foremost on Africans themselves. But the international community must squarely face the reality that it also bears a responsibility for Africa's plight.

Perhaps I may give some figures which will help us to comprehend the problem. The decline in real income in some countries is frightening. In Nigeria, Niger and Liberia for example, the decline in per capita income since 1980 has been calamitous at well over 25 per cent. The World Bank has calculated that the number of poor in Africa is expected to increase from 200 million to 300 million people by the year 2000. At 50 per cent., that is much the largest increase in the developing world.

Then there is the population problem. Both at Question Time and in debates noble Lords have called attention to the fact that rapid population growth severely impedes the poor from improving their health, increasing their income and protecting their natural resources. I recall a speech along those lines made some months ago by the noble Baroness, Lady Seear. The total wealth of the continent has to increase by over 3 per cent. per annum for incomes per person just to stand still. What does that tell us? It means that since 1980, the total economy of Africa would have needed to expand by 40 per cent. for the average income per person to be at the same level as at the start. It is a grim outlook by any standard. It is manifest beyond doubt that family planning must be encouraged and funded if an almost untenable situation is to be tackled effectively. It is sad to think that high child mortality means that the unfortunate poor feel that they must have more and more children in order to ensure family security later on.

The poor, to survive, destroy the land upon which they depend. The scene is one of forest destruction, water pollution and pesticide contamination. Those problems in turn undermine the livelihood of the poor, and limit their future prospects of alleviating poverty. We are looking at millions of people who are facing a desperate future.

Noble Lords will also be aware that that future holds out no hope that those people will enjoy reasonable health. What are their prospects? Our health in these islands depends on many factors. But the basic needs are access to nutritious food, an adequate supply of safe drinking water and some form of reasonable shelter. Perhaps I may give some simple figures from a country which many of us know well and have visited. We recall a time when economic prospects in Zambia were promising, mainly because of its great wealth in copper. But in four years in the 1980s, the death rate in Zambia of children under 14 rose from 27 per cent. to 43 per cent. That rise was the result of malnutrition, which was due to a declining economy there. In Mozambique, only 13 per cent. of the people have access to safe water supplies.

I turn now to another problem. Early this year it was announced that out of 13 million people in the world who are infected with the AIDS virus, 7.3 per cent., or more than half, live in Africa. The calculation by UNICEF is that during the next 10 years 2 million children will die and 10 million children will be orphaned by this dread disease. What a future to contemplate.

I have already referred to the stagnating economies of the countries of the sub-continent. Their condition is due, so we are advised by experts on all sides, to inadequate policies; and in recent years to the effect of the world recession and the fall in the terms of trade. Time does not allow me to go into detail, but I must mention the huge external debt burden of sub-Saharan Africa and all its implications. The problem was mentioned by the noble Baroness in her speech. The debt is greater than the area's total GNP, and three and a half times more than its annual export earnings. I shall say no more on this point, save that Africa cannot possibly achieve economic viability while that debt burden remains.

There is another dreadful factor to be taken into account. The tragic, wicked and unforgivable reality is that the continent as a whole has been spending two and a half times as much on armaments as on its health services. The consequences are frightening. Let us take the refugee problem that the conflicts have created. The continent has one-tenth of the world's population, but it now has one-third (almost 5 million) of the world's officially recognised refugees. Mozambique and Angola are devastated by war. In those two countries the governments have spent about half of their resources on weapons of war. Over the past 10 years, war and destabilisation are estimated to have caused 320,000 deaths, most of which were the result of diseases which could have been cured by simple treatment. We are looking at sheer human misery and the disintegration of order and of services such as health and education. We are looking at autocratic governments; inefficient state corporations; large-scale corruption; unproductive investment of the aid and loans which are received; distortion of prices, markets and exchange rates; and lack of investment in food production. On top of it all, we are looking at war—totally unnecessary, cruel wars which kill innocent children. We think that civilisation has made advances. My Lords, let us think again. So far as I can see, civilisation is dead in Africa.

Finally, what should be done? What can we do, apart from turning our faces to the wall and weeping? One is tempted to do that. But we have a moral responsibility as members of the Convention on Human Rights and with our long, historic relationship with Africa. We cannot remain aloof from the needs of people whose basic human rights to a decent life are being destroyed. The people of this country have already demonstrated their concern, and that they wish to support the welfare of Africa. Notwithstanding the depression, voluntary donations from the public and from charitable trusts actually increased last year by £15.4 million to £339 million, a 1 per cent. increase on the previous year. The noble Baroness dealt with the aid programme and defended the Government's contribution. I regret to say that the Government have not responded as we would wish—although I must pay a personal tribute to the noble Baroness, Lady Chalker, who has shown during her term of office that she is dedicated to helping those stricken regions. But she must acknowledge that, while we were committing 0.5 per cent. of our GNP to overseas development 14 years ago, our contribution today is little more than 0.3 per cent.

Mr. John Major said at the Rio Earth Summit last year that he wanted Britain to achieve the UN target of 0.7 per cent. as soon as possible. Perhaps the noble Viscount will tell the House when he replies when the Prime Minister thinks his target will be reached. The appalling state of Somalia and the other countries that I have mentioned means that there is no time to be lost.

Of course, Britain alone cannot resolve this huge problem. But we can and must work in collaboration with our partners in Europe to ensure that United Nations commitments are observed. The 0.7 per cent. target must be observed by all donors. If it were, it would help to achieve the long-term development projects in the counties that need them. We could also work to put the Trinidad Terms back on the G7 agenda. That point was mentioned by the noble Baroness. I am not clear that it is on the G7 agenda and perhaps, when the noble Viscount replies to the debate, he can tell us whether that is a practical possibility. Should we not support sound policies to create stability for a better investment climate? Of course we should, for those are the policies which reach the neediest and the poorest and benefit those people who most need help.

In the world in which we live, Africa's marginalisation and the poverty and desperation of its people and its youth cannot be contained within the boundaries of the continent itself. It is bound in due course to threaten global prosperity and stability. The growing frustration and resentment must be defused before they explode and damage the whole world.

Of course it is Africa that must seize its own destiny. Its people and leaders must tap deep into their human and material resources and come up with the wisdom, strategy and commitment to lift Africa from the Slough of Despond. To help them embark on this difficult road, we and other nations must come to their assistance, not with "handouts" that only increase dependency but in a true spirit of partnership dedicated to helping Africa to stand on its own feet and contribute to the enrichment of human life and the protection of the world's environment. Let us turn that dream into a reality.

4.31 p.m.

Lord Bramall

My Lords, early in the gracious Speech the highest importance which the Government attach to national security was stressed. That is another most worthy intention which, I am afraid, is increasingly not matched by practical realities. Since that also has such a bearing on the effectiveness of our foreign policy, as outlined by the noble Baroness, the problems of defence must continue to be aired in this debate, even though my own contribution will no doubt be interpreted by some as resembling Custer's last stand.

Still hanging over the whole of the defence scene, as many noble Lords know, is the question of exactly how much more from the short-term cash flow of the Ministry of Defence (that is, in the next three years) will be removed in the forthcoming all-embracing Budget—how much more, over and above what has already been obtained from Options for Change and its aftermath, amounting to anything between a 20 per cent. and 38 per cent. cut in men and material and in the area of a 10 per cent. cash reduction in real money terms over the past three years. Many people would say that that is a lavish enough "peace dividend", in the light of the world's instability and uncertainty, which was so graphically portrayed by the noble Lord, Lord Cledwyn.

We have heard rumours that the Ministry of Defence has escaped the worst—whatever the worst was and whatever that may mean. But until I read the small print in the Budget, and we shall not see that until next week, I remain unconvinced. I am convinced that, if significant cuts do in the end materialise in that period, they will not represent just another routine honing-down of the cash available to the Ministry of Defence against expectations which—except for a short time after the Falklands war—has been a fairly regular feature of the past 20 years. It will be a complete sea change for defence and the Armed Forces with (I choose my words with some care) catastrophic effects on the latter's structure, training, motivation and morale and particularly on the greatly overstretched front line and its equipment. It will raise the real spectre of operational failure, which is something that we have not experienced since World War Two. No one should pretend otherwise. However much the Government, egged on by the Treasury, may wish to believe otherwise, in my judgment there are no immediate soft options left. Judging from the heartfelt remarks expressed at Blackpool, that opinion is similar to the views of the right honourable Gentleman the Secretary of State for Defence, as well clearly as the views of the Chiefs of Staff, who are his professional advisers.

The nub of the matter is that the present defence budget is already under totally unacceptable pressure in the light of current commitments. The short-term costings, even allowing for low inflation, call for more not fewer resources properly to cover those commitments and requirements. As noble Lords know well, the Army is grossly overstretched. There are possibly too few units. Certainly those units are too weakly established and manned for the tasks that face them. As I warned noble Lords on the last day before the Summer Recess (and I was not contradicted) we shall soon be in a position where no sustainable operational capability will be possible without resorting to reserves in some shape or form, reserves which themselves are now under considerable threat. That is not a comfortable thought because no one can predict where and when the next crisis will be. It has never been possible to do so. Any Prime Minister who had to admit, when action was demanded, that there was no longer anything that he, could do about it would be in serious trouble. In the same way the Government would undoubtedly have fallen if the Falklands had not been recaptured in an operation of such professional brilliance.

Moreover, with the situation in Northern Ireland unabated and, I am afraid, a long way from a tenable solution, and with outside NATO commitments still high, unaccompanied service still continues to come round every 15 to 16 months instead of an acceptable 24 months. Separation, when one takes account of all the other calls on a soldier's time, is therefore running quite normally at 50 per cent. of the year and in many cases exceeds that figure. All that puts an intolerable strain on service life and service families in particular. To correct these things the Army would need, as I have said on numerous occasions, at least 6,000 more men. That is 3,000 more than even the revised manpower ceiling figure of 119,000, which itself has been guaranteed for only another two to three years. And manpower means money because without the money extra manpower is meaningless.

The other services may have some similar problems; but as the old adage goes, the Army equips men and the Navy and Air Force man equipment, and those problems lie more in the equipment field. Naval and air power, which are so essential for proper flexibility, mobility and protection in any projection of military strength, whether for peace keeping or in a more warlike context, have been continually —many would say dangerously—reduced already, even allowing for the curtailment of the large scale NATO commitments around northern Europe and the eastern Atlantic. Naval frigates have been reduced by 30 per cent.; the RAF's overall combat capability has been cut by one-third and its strike force cut by as much as 38 per cent. All three services have gaps in their equipment programmes which can only be economically filled by early decisions—on which there has been a complete moratorium—and by using to the full the money already earmarked in the equipment programme for that purpose; but now, of course, only at the expense of other desirable, if not essential, parts of the defence programme.

For example, it seems very strange that the right honourable Gentleman the Secretary of State for Defence did not make it clear in his Statement in another place that the cancellation of the stand-off air delivered nuclear weapon —itself a valuable and indeed, in many ways, more flexible weapon than Trident in the sub-strategic field—in any case had to be made because there was not the money in the current defence budget to develop and bring it into service. It in fact was water under the bridge—not a candidate for future budgetary cuts. I suspect that the same applied to what I described as the surplus Trident warheads and I am rather surprised that the Secretary of State had not made the announcement some time before.

Equally, if the Army is now forced to recommend a substantial cut in the Territorial Army when all logic demands that, with regular units so dependent on reinforcement, this most cost-effective reserve—and what I might describe as the valuable umbilical cord from the forces into the nation—should become more and not less important, it can only be because on present funding it has nowhere else to turn to keep within the cash flow already imposed on it.

So, my Lords, hard choices and most unsatisfactory decisions are having to be taken now, with every vote holder under insane exhortations to do the same—sometimes even better —on vastly decreased budgets, with inevitable repercussions on training standards, operational efficiency and sustainability. Further cuts in the next two to three years, with their inevitable "knock-on effect" for the next 10, would only make everything infinitely worse, curtail our ability to support a positive and honourable foreign policy and go a long way to wrecking without sufficient justification a priceless asset, one of the few great institutions in this nation with its reputation untarnished. The Government would bear a heavy responsibility for any future lack of preparedness and professional performance.

But even discounting the stories emanating from who knows where about the scope for still more efficiency savings and reductions in admirals, generals and now, no doubt, air marshalls, all of which are frankly as irrelevant in the context of significant budget cuts as they are misleading, I certainly would not want noble Lords to get the impression that there is nothing the Armed Forces can do to adapt themselves still further to a changing world and to future challenges.

The Royal Navy may well be able to run on a few older frigates a bit longer and even dispense with the fourth Trident submarine. It certainly should not have to pay for two dockyards it does not need. The Infantry badly needs to reorganise its regimental system to produce more viable units with a more flexible method of roulement and thus decreased training and movement costs; and there may indeed be some scope for the RAF to reduce its ratio of manpower to front line aircraft. There should certainly be an opportunity, as my noble and gallant friend Lord Carver has pointed out repeatedly, to rationalise and scale down the top-heavy NATO command structure.

Finally, efficiency studies should, naturally, continue to be looked at as, to my certain knowledge, they have been for the past 30 years, including, I hope, looking carefully at the hamstringing of Treasury rules which often ensure that the Ministry of Defence has to bear the cost of things which are actually not related to defence needs. Also, when we look at these efficiency studies, we must do so in the full knowledge that, not being a superstore or a commercial firm, cutting costs and people in the Armed Forces does not always bring greater efficiency and that a great deal more than tight cost accounting is needed if the members of the forces are to continue to produce that exceptionally dedicated professionalism and willingness to take dangerous risks so essential for victory in any conflict worthy of the name. I thought that the Chief of the Air Staff made that point extremely well.

In any case, few of these changes would produce savings in the period of concern. In the absence of a defence review which would give guidance about the future, any cash flow cuts would only increase salami-slicing right across the board and would hinder, not enhance, sensible and economical development.

To those who would hanker after reducing defence expenditure but who, like me, take the greatest exception to the Treasury making any more arbitrary and immediate cuts and may therefore feel that a comprehensive defence review is the right answer—particularly if, as my noble and gallant friend Lord Carver has suggested in print, it is done right across the board, which is how the Options for Change exercise should have been done in the first place—I would say only this. It may well be a great deal better than any further arbitrary salami-slicing, but it is not the holding of a review which matters but rather what input the Government would have the wisdom, and in some cases the courage, to incorporate in that review.

The last White Paper made it clear that the Government wanted to maintain our ability to pursue our legitimate interests at home and abroad; and indeed that we must provide both the demands of any current operation as well as what is appropriate to meet the range of challenges in the future. Nor, presumably, will they want to volunteer to give up the United Kingdom seat on the Security Council (an offer which incidentally would be pretty quickly accepted) or abandon our highly experienced and expert contribution to peace-keeping and humanitarian operations, which so manifestly we do better than anyone, and even, on occasions, to military intervention, when that has been properly agreed and authorised by the Security Council in the interests of international order and stability.

With the traumatic memories of the 1920s and 1930s and the risks that were taken then—when only 15 years after everyone thought (as some do now) that the risk of any kind of conflict was negligible we were fighting for our lives and it was almost too late to recover—the Government will not relish the tag of "paper tiger", which in 1939–40 was so true when our forces were not capable of taking on any foe who was properly and professionally equipped.

So what would the Government be likely to say in a defence review that we do not know already? Because if they are so desperate to obtain at any price a still larger "peace dividend" they must be prepared to assess fundamentally the direction of our defence and foreign policy. Then, and only then, could sizable reductions in expenditure be properly made. But would the Government be prepared to say, for instance, that we should give up our presence in Cyprus, or on the continent of Europe, disbanding all the units involved—for no money would be saved by just redeploying them to the United Kingdom? Would they be prepared to cut our amphibious capability, which is so in accord with our historical strategic role, or abandon completely our nuclear capability when there are mavericks like Saddam Hussein on the world stage? Or, there again, would they be prepared to give up certain technologies in our industrial base when it may not be prudent to rely on foreign sources? All these things, so intricately interwoven, would affect our ability to be forewarned to deal with the unexpected, to operate effectively on the world stage against an adequately armed foe, and therefore would ultimately affect the security of the country. But if that is what they want—and only by removing a capability like that can the kind of cuts being threatened of £1 billion to £1.5 billion be properly obtained—then it must be clearly stated; otherwise the defence review exercise would be meaningless and would merely act as a launching pad for a further round of death by a thousand Treasury cuts.

So to those who would say, "But surely defence must make a contribution to the Government's financial difficulties", I would say that, unlike other departments, it has already played its part to a point beyond which it cannot reasonably effectively do what it has to do now. The country has had its "peace dividend" and "enough is enough". To absorb any more would affect the front line, which the Government say they so want to protect, and would seriously curtail our foreign policy. I hope, even at this late hour, that the Government will think very carefully about the consequences of such action.

4.48 p.m.

Baroness Young

My Lords, already we have had an interesting debate covering all the great issues of both foreign affairs and defence. I start by congratulating my noble friend Lady Chalker on her very statesmanlike speech covering both those areas of the world where we have good news—it is worth reminding ourselves that there is good news—as well as taking us clearly through some of the trouble spots of the world. I follow two quite different but important speakers. My noble friend Lord Cockfield made, I thought, a rather apocalyptic speech about the future of Europe, and the noble and gallant Lord, Lord Bramall, set out clearly his concerns about defence.

I should like to tread a very different path. It may be helpful to my noble friend if I say that I wish to speak on only one country—Cuba. It is true that it does not come into the gracious Speech but there is always a danger that the Caribbean, a part of the world that I have come to know well, will be even more marginalised. Cuba offers an opportunity. Britain is already making an impact but could, I believe, do more.

I was fortunate enough to have the opportunity to lead a British trade delegation to Cuba organised by the Caribbean trade advisory group of the British Overseas Trade Board, last June. The group consisted of a number of major British companies with an interest in joint ventures and direct investments in all aspects of the Cuban economy—that is to say, agriculture, tourism, energy, telecommunications, biotechnology and many other sectors.

Time does not allow me to say all that I could on all aspects of these matters. As a frequent visitor to the Caribbean, I was struck by the contrast between Cuba and other Caribbean countries. When I set out, I was not sure quite what I expected to find. I knew that Cuba was a communist state and that it had not, so far as I was aware, gone through the immense changes of the former Soviet Union and Eastern Europe. I can only say that of all the places I have visited, either as a Foreign Office Minister, or since then, I have never found anywhere politically so very interesting.

I say that because Cuba is in a process of rapid change. This was evident last June. It showed itself in the very free and frank discussions that I had with Ministers and officials alike, including two hours of talks with President Castro himself. The discussions gave me the opportunity to talk about political issues, Cuba having taken its first very tentative steps towards democracy, but, equally important, the opportunity to understand the far more startling economic changes now under way. The position has continued since then. I should add that the businessmen who accompanied me were impressed both by the changes and by the rapidity with which their specific talks progressed. In all of this we were most grateful for the help and advice of our ambassador in Havana.

In my report to the Foreign and Commonwealth Office following the visit, I was able to indicate the significance of the changes and to point to a number of major decisions, not, I believe, widely understood in the West, which would indicate that Cuba intends to move first to being a socialist market economy. When questioned, the model that all Cubans suggested to me was Vietnam, and, interestingly, not China. From this model they would move on to becoming a mixed economy fully integrated with the free market economies of the Caribbean and Latin America.

Since last June, many of the reforms that we heard about have either been introduced or publicly announced. They form a very long list and I shall not go into detail on all of them. Among them are the legalisation of the holding of foreign currency by any Cuban; moves to establish a freely convertible currency and an independent banking system; plans to reduce dramatically the bureaucracy by reducing the number of ministries and state enterprises; the establishment of autonomous enterprises (that is, those not state controlled) in all areas of the economy; the encouragement of joint ventures with overseas participation, in some cases of up to 100 per cent., and with leases on land of 99 years and more; the establishment of free zones for manufacturing; and on the political front, the development of committees within the National Assembly able to review and to be openly critical of the Government's economic plans. Most important of all was the agreement to allow Cubans to establish independently-owned enterprises on a co-operative basis in almost all industries, including the sugar industry, with the possibility of their being managed independently on very long leases and with profits being shared among the workers involved after the payment of taxes under a new tax system.

I was pleased to have the opportunity to meet the Vice Foreign Minister of Cuba, Senora Isabelle Allende, earlier this month when she visited London and told me of many of the changes. It was a programme she set out again when speaking to the sixth European/Caribbean conference in Santo Domingo, held as recently as 10th November.

I do not wish in any sense to be critical, but I believe that the United Kingdom Government have been slow to understand what the private sector already knows—that is to say, that the process of change in Cuba will be unstoppable if we give it support. After all, it is a process which we should be able to recognise from our experience of the former Soviet Union and Eastern Europe. Through active participation in the restructuring process, we can prove that free enterprise is the only viable way forward. We can help the Cuban people move towards a mixed economy and genuine political pluralism. I believe that the United Kingdom, by itself and as a member of the European Community, has an important role to play. During my visit, many Cubans described to me how they saw their past history—domination by the United States followed by domination by the Soviet Union. Not surprisingly, they wish to be themselves in an independent nation. In achieving that they look for support from both ourselves and the Community.

There is no doubt that many of the great changes I have described have been brought on by the economic difficulties Cuba has suffered following the abrupt ending of Soviet Union support. It is political and economic reality, and the Cubans should not be blamed for facing up to difficult facts. They are not following an easy path; many are having a difficult time. Cuban Ministers were at pains to explain to me that they continue to give priority to the two services to which they attach the most importance and of which they are justly proud; namely, health and education. Nevertheless many Cubans are facing great hardship. In such a situation, time is by no means necessarily on the side of the reformers.

I regret that there is not much sign that the United States recognises the changes. I hope that I am wrong. Surely, what both the United States and the European Community want to see at the end of this great process of change is a soft landing, with a newly-established democracy and private enterprise. We cannot be sure, even with help, that that will be the outcome.

The alternative is chaos and, almost certainly, violence. We have had considerable experience of the problems inherent in change in both the Soviet Union and Eastern Europe. The instability that this could bring to the whole Caribbean where Cuba, the largest island geographically and also with the largest population—some 10 million people—should not be under-estimated. There would be destabilisation in the Caribbean, possibly spreading to Latin America, and with it the increased problem of drugs.

I wish to conclude with a request to the British Government. Next May or June CARITAG will again take a mission to Cuba to explore further opportunities in a number of sectors of the economy and the role that we in Britain may have in helping to reorganise that economy. I believe that the time is right for a trade Minister to accompany such a visit. It would be an opportunity for the Government to hear at first hand about the extraordinary reforms and, equally important, to ensure that Britain's role in the process is not eclipsed by that of its partners in Europe. Such a visit could, I believe, have a positive outcome. It would be entirely in line with what we are doing in Eastern Europe and in the former Soviet Union. If it is right for us to support reform in those countries, why not do so in Cuba as well? The effect would be to achieve a limited but very important objective. I hope very much that we shall not miss the opportunity.

4.59 p.m.

Lord Kennet

My Lords, may I start by congratulating the noble Baroness, Lady Young, on her extremely interesting speech: it was the fruit not only of direct experience, but of independent thought, and that is always interesting.

The speech from the Throne promised, help for political and economic reform in the states of the former Soviet Union". Now it seems to me that Western policy towards Russia is flawed. The attitudes of our Government and those of the United States and of most West European countries do not square either with ascertainable fact or with knowledgeable opinion in their own countries, but seem rather a combination of IMF economic certainties and current Kremlin politics. We say to Russia, "Democracy will make you free; private enterprise will make you rich; and President Yeltsin is the man".

But only the first of those propositions is clearly true. It is probably the case that after 20 or 30 years a carefully and calmly phased introduction of private enterprise and competition will do good, but it is certainly the case that President Yeltsin's current policy of continuous "shock therapy", as he calls it, will continue to produce nothing but chaos and corruption. The social effects have been appalling, and, without care, will be enduring. The last two milestones on the long road of inflation have been the withdrawal of the currency in July and the collapse of the rouble zone in early November, when the Russian Central Bank apparently tried to force impossible conditions on the ex-Soviet Union states. You cannot sell bankrupt industrial assets and polluted land to bankrupt and ailing people. You can sell them to rich foreigners all right, but not too many of those who are now inclined to buy smell sweet. At present, 95 per cent. of Russian exports are raw materials. This is not the way to civilised prosperity.

As to Mr. Yeltsin being the man, let us consider for a moment what he has actually done to bring freedom and democracy to Russia. When he was elected, he had the keen support of the Parliament. It had been elected before the Communist Party was dissolved, but it had been freely elected. His Vice President he had himself chosen as his running mate. But he disliked opposition, however reasonable, and preferred this "shock therapy". When opposed, he set up rival "advisory bodies", "congresses" and "constitutional" conferences; deprived the Parliament of its staff; cut what he called its "privileges" and those of the Vice President and of the Constitutional Court; empowered his own private office; empowered his own appointees in all the "information", "intelligence" and "security" departments, sacked them if they began to disagree with him, and finally sacked the Vice President whose democratic mandate was the very same as his own.

In March Mr. Yeltsin attempted to abolish Parliament and to establish government by decree, but was called to order by the Constitutional Court, and backed down. There was a referendum in April which by no means showed overwhelming support for him—only for the continuation of "reform", which is rather different. The myth of a democratic Yeltsin opposed only by Communist "hardliners" was nonsense. In May he used force to disperse a peaceful demonstration. In September he dismissed Vice President Rutskoi, suspended the Constitutional Court and abolished the Parliament—"the cockroach races" as his press secretary called them. But the Parliament being a real one, like our own in the 1640s, refused to go. So last month he ringed it with tanks and bombarded it, seized its members as they fled and flung them into prison, also flinging into prison his elected Vice President; imposed press censorship; banned certain newspapers and political parties, and withdraw an earlier undertaking to submit himself to early re-election. His power is now assured by the army—and by an army which is not too happy with him.

Now this is a fairly typical schedule for the making of a dictator. We have seen events like these unfolding over and over again in the past century and a half all over the world. But what do the British Government say? They hurry to give Mr. Yeltsin their support at every turn—so do the governments of most of the other democracies. There are now to be new parliamentary elections and needless to say we are sending the Princess of Wales to Moscow during the campaign, and the European Union has invited President Yeltsin to Brussels. I shall return to the wisdom of all this in a moment.

But perhaps the new constitution, which is to be laid before the peoples of Russia on the same day as the parliamentary election, will make everything all right? Perhaps even such a record as Mr. Yeltsin's could be redeemed by the introduction of real constitutional democracy? Well yes, I think it could. But this constitution is not a satisfyingly democratic one. Let us remember first that we are talking of the country where for the past 60 years an abominable tyranny subsisted despite a constitution which was a perfect model of enlightened propriety. Stalin's constitution was just not observed. So any new Russian constitution ought, one would hope, to contain reinforced-concrete guarantees of democracy.

Unfortunately, the Yeltsin constitution is less perfect than the Stalin one, not more. Much of it is fine: free elections, fixed terms, American-type Senate, German-type duma, and so on. It is really touchingly good on individual human rights, and even promises one or two manifest economic impossibilities, such as a guaranteed minimum wage. But Article 91 vitiates the lot: The president of the Russian Federation enjoys immunity. This means immunity from process of law; he is above the law. It is true that there is a provision of a sort for his removal: if he were guilty of treason or some other grave crime, he could be removed by a two-thirds vote of both Houses, supported by the Constitutional Court. But since he can constitutionally dissolve the Parliament if it rejects his candidate for the Prime Ministership, this does not really mean much. It only has a two-year term anyhow—hardly time to learn the ropes. Moreover, defence and foreign affairs are no business of the Parliament: they are the president's business, and that's that too. All the armed forces, the security forces, etcetera, are under his direct and unfettered control.

Now, in the "transition" between the last constitution and the next, Mr. Yeltsin has "decreed" both the privatisation of land and the new Military Doctrine. The latter is actually a secret, but we know from the "authorised comment" on it that one of its main purposes is to prevent the ex-Warsaw Pact and CIS countries from dreaming about joining NATO, which many of them do dream about. The new nuclear doctrine says that if those countries joined a nuclear alliance they would put themselves in the way of Russian nuclear weapons. The undertaking made by the old Soviet Union never to use nuclear weapons first, Mr. Yeltsin has cancelled. So, I think this is the first great-power nuclear threat since he Soviet nuclear threat to China in 1968. The current baby-talk idea in the West is of "partnerships for peace" between NATO on the one hand and single ex-Warsaw Pact and ex-Soviet countries on the other hand, both in Europe and presumably also in ex-Soviet Asia. These mean nothing unless they mean guarantees against Russia, but apparently that is exactly what they do not mean.

There are 30,000 nuclear warheads in the former Soviet Union. The pay of the Russian armed forces has been virtually abolished in the course of the IMF's determination to bring down inflation and introduce free market forces. The government owe vast sums to the forces and the defence industries. The CIS security arrangement is a dead letter, and the commander-in-chief of the CIS has been turned into the commander-in-chief of Russia. The Russian foreign minister says that Ukraine's warheads are unsafe and should go to Russia. It would be interesting if we could work out who now controls those warheads.

Such is the possible future of Russia that one may think of a parallel with Versailles, and so with Weimar. Keynes pointed out at that time that insistence upon the total economic depletion of Germany would cause trouble, and it did. An insistence upon social chaos in Russia today is even more self-evidently dangerous than it was in Germany then, because of the nuclear weapons.

Prime Minister Chernomyrdin—imposed upon Mr. Yeltsin by the Parliament in place of "shock therapy" Gaydar—has worked out long-term market policies that bear much more resemblance to those that eventually succeeded so well within the defeated and destroyed Germany and Japan of 1945. We worried about their democratisation then—we certainly did—but did we worry about the doctrinal purity of their laissez-faire economic policies? I think not. We transferred wealth to them to use as they thought best in rebuilding themselves under democracy.

Chernomyrdin is a truly interesting man, the very opposite of Mr. Yeltsin—experienced, thoughtful, reliable, and, above all, constant of purpose. How he has survived, God knows! HMG would do well to listen to him and, above all, they would do well to start treating Russia, in one all important respect, like all other countries; that is, by not having a favoured candidate for president. What entitles us to treat the Russians in a more patronising way than we treat the Americans, the Germans or the Indians? Did we rescue the Russians from their tyrants? Have we secured their prosperity in recent years? Do we extend defence guarantees to them? What is this gross claim to know best? Let us give them all the help that we can afford and all the advice for which they ask, but never more than the advice for which they ask. But above let us stop telling them how to vote. That will be better both for them and for us.

5.13 p.m.

Lord Chesham

My Lords, I should like to ask your Lordships to take your minds back to a day in June 1993. It was a lovely summer's day. I well remember watching on television one of the early rounds of the ladies' singles matches at Wimbledon, where one of the contestants was losing 0–6, 0–5. A commentator mentioned that he had no doubt that she wished that the ground would open up and swallow her. I feel much that way.

I should like to preface my remarks by advising your Lordships that I have spent most of the past 23 years in Australia, having been involved in the financial markets there. I therefore believe that I can speak with some experience of those markets. These are turbulent times for trade in the Asia Pacific region, with many developing countries rapidly expanding their production capacity and seeking new markets for their products. In developing those strategies, those countries have started with a very protectionist base to build up their local production. In the meantime, Australia, as with a number of Latin American countries, has been maintaining a unilateral liberalisation policy. It is possible that new geographical groupings such as NAFTA and APEC may eventually bring some stability to trade in the region. But that could also work in reverse.

That brings me to the main thrust of my comments: the paramount importance to this region of the current Uruguay Round of the GATT talks. Many people think of the GATT negotiations purely in terms of trade today or in the near future, whereas there is another side to the equation which should be considered. It is that of investment. A country such as Australia has to import capital for investment for growth in competition with other countries in the area. Developing countries are competing with Australian companies for export markets and are threatening to take a share of the Australian market. Their protected home markets allow products to be sold in Australia at a marginal price, and Australia cannot compete for investment dollars with economies that have rapidly growing highly protected domestic markets; for example, in paper, pulp and printing, where Australia's tariffs are at 10 per cent. compared with Malaysia's 16 per cent., the Philippines' 33 per cent., Thailand's 17 per cent., Taiwan's 19 per cent. and China's 80 per cent. Equally, in the area of chemicals, rubber and plastics, tariffs in Australia are in the order of 13 per cent; in Malaysia they are 20 per cent; the Philippines 25 per cent; Thailand 27 per cent; Taiwan 26 per cent; and China 38 per cent.

As Australia has been following its own programme of tariff reductions during the Uruguay Round as part of its industrial policy, it is not expected, as a general rule, that there will be a requirement further to reduce tariffs beyond levels already announced should the GATT negotiations prove successful. Those statistics demonstrate the importance of the GATT talks to Australia and many other countries in the Asia Pacific region. They also demonstrate the need to welcome additional countries such as Russia and China under the GATT umbrella to enable them to become part of the market access procedures.

I should like to address my remarks now to the role of the Cairns Group of countries in relation to the GATT talks and to the importance of agriculture to countries outside the EC and the US. The Cairns Group is an association of agricultural trading nations promoting an improved world agricultural trading system through lower protection and reduced subsidy practice. The group accounts for about one-fifth of the world's agricultural exports and represents the same number of people as the combined populations of the EC and the US. The group's attitude was made plain in the communiquéissued after the ministerial meeting held in Geneva on 17th and 18th October which emphasised the fact that: The Uruguay Round will bring major benefits to the world economy, failure will entail great economic and political costs. The round must be concluded on the basis of a multilaterally agreed balanced global package. The Cairns Group rejects, as it has since 1986, the notion that agriculture could be set aside in order to conclude interim or partial agreements. The negotiations on agriculture cannot be completed without the full involvement of the Cairns Group and all parties concerned. As major stakeholders in world agricultural trade, the group insists that agriculture is not merely a transatlantic affair. The Cairns Group, of course, was not party to the Blair House accord, which weakens the draft final act disciplines on agriculture". The communiquéwent on to say: The group can only take a final position on the Blair House accord in appropriate multilateral negotiations when it has been tabled and all of the market access outcomes are known and can thus be evaluated". I wonder whether due consideration has been given to the consequences of the GATT talks being unsuccessful. One may take a line through what has been happening this year in the wheat trade in North Africa. Indeed, it has occurred during the past two months. Egypt has been a traditional buyer of Australian wheat for many years. Between 24th September and 12th October this year the US sold 480,000 tonnes of soft wheat to Egypt under its export enhancement programme at a price of 75 dollars per tonne. On 30th September the US sold 37,300 tonnes to the Yemen at a price of 127.60 dollars per tonne. That was wheat of similar quality and shipping terms but was not subject to the current EEP arrangements. In the event of the Uruguay Round not being successfully negotiated, this type of market deformity may become rife, to the detriment of all trading nations or blocs.

I come now to the final portion of my act, with great relief. After an extensive study of the speeches made in your Lordships' House on the Second Reading of what has become known as the Maastricht Bill, I was somewhat disheartened to find only 14 references to the Commonwealth among all the many speeches in those many hours of debate. Any references to trade with the Commonwealth were made in an historical context. I was delighted to read the very strong and supportive statement issued after the Commonwealth Heads of Government meeting in Limassol on 22nd October. It stressed the importance of and the urgent need for a successful and substantial outcome to the Uruguay Round and, given the importance of agriculture to both developing and developed countries, the need for an outcome which liberalises market access and reduces domestic support and export subsidies. I feel that that was a very strong statement from the Commonwealth leaders, who represent a wide range of developed and developing countries. I was delighted to see it.

That indicates that the Commonwealth has shown that it has a role to play, even if certain cricketers and rugby players are not showing much compassion at the present time.

5.22 p.m.

Lord Chalfont

My Lords, I am sure that the House will agree that there was no need whatever for the noble Lord, Lord Chesham, to be apprehensive in rising to make his maiden speech. The lady who was six/five down at Wimbledon went on to lose. The noble Lord did not; he scored a notable success. His speech was constructive and thoughtful, and it is indeed a pleasure to follow it. On my behalf, and I am sure on behalf of other noble Lords, I congratulate him most warmly on an excellent maiden speech.

I sometimes gain the impression that some of your Lordships may feel that some of us go on a bit too much about defence. We hear from time to time disobliging remarks about "the military industrial establishment" and "the defence lobby", and I shall not be surprised to hear before long that battered old cliché "merchants of death" coming back into the vocabulary. And, indeed, in that context I should, as usual, declare an interest as chairman of a major defence manufacturing company.

Today, however, I shall not be advocating any policy which has a direct bearing on my interests. Even if I were to do so, I should still believe it my duty to speak on this subject because I believe that this country's defences and their ability to support an effective foreign policy are on the verge of collapse. That may seem to some of your Lordships to be strong language; but it is necessary to use language of that kind if we are to understand precisely what is at stake.

Perhaps in parenthesis I may remind your Lordships, if you need reminding, that they are the Armed Forces of the Crown. They are not a government department, a city business or an industrial concern; they are the Crown's Armed Forces. In recent weeks the debate has shown signs of descending into trivialities as the process of interdepartmental briefings continues. In addition, there is the infighting which is inseparable from the process of the public expenditure round and the Budget. Some curiously bizarre comments have been made.

As the noble and gallant Lord, Lord Bramall, pointed out, the argument about whether the Armed Forces have too many admirals, generals and air marshals, and whether the Israeli defence forces organise these things better, is totally irrelevant to the real debate about British defence policy. The national security problems of this country are entirely different from those of Israel. Our security is affected by a much wider range of issues. To state, as was done in a briefing which remains non-attributable and anonymous, that the Israelis do these things much better than we do is about as fatuous as comparing the foreign policy of Luxembourg with that of the United States.

In any case, this endless whingeing about the number of senior officers in the Armed Forces betrays a total lack of understanding of the real nature of the problem. As the noble and gallant Lord said, it may be arguable that a little more surgery in the upper ranks would improve matters. It may contribute to what modern management consultants call the "cost-effectiveness" of the services. But, as I suggested, the Armed Forces are not like a merchant bank or Marks and Spencer. They cannot be reduced or expanded to react to the immediate demands of cash flows and market forces. They have special problems. One of them—a minor problem but worth mentioning—is that the junior ranks in the Army need the incentive provided by the possibility of reaching the highest echelons of their profession. If the number of senior officers is disproportionately reduced, the pyramid of promotion becomes distorted and the opportunities for advancement are correspondingly reduced.

But that is not the measure of the irrelevance of that kind of argument. A wholesale purge of the top brass of the services—which has crept into the defence debate at some levels—would have virtually no effect on the defence budget at all. If every general, admiral and air marshal were given his notice tomorrow, the reduction in defence spending would be derisory. The only real economies to be made are by substantial reductions either in overall manpower—that is, cutting the size of the Armed Forces altogether and not nibbling away at the upper ranks—or by the abandonment of large and expensive equipment programmes. The noble and gallant Lord made a good point in that respect. It is armoured divisions, submarines and aircraft which cost money, not a handful of senior officers. And the fact is that we have already gone much too far in cutting the manpower and equipment of the Armed Forces.

Since 1980 the strength of our regular forces has been cut from 320,000 to 275,000. That will go down further to fewer than 250,000 next year. That represents an overall reduction of more than 20 per cent. during that period. As a percentage of GNP, the defence budget was cut during the same period from just under 5 per cent. to a little over 4 per cent. It is interesting to note that during the same time expenditure on the health service has gone up from 5 per cent. to nearly 5.5 per cent. of GNP, and we now spend twice as much on health and education as we spend on defence. That would be a matter of great satisfaction in an ideal world, where there were no potential enemies, no terrorists, no racial hatreds, ethnic rivalries or unstable political systems. But the world is not like that.

Perhaps I may remind your Lordships of an observation that was made on the subject just before the end of the Cold War: Once we cut expenditure to the extent where our security is imperilled, we have no houses, we have no schools, we have a heap of cinders". That came not from the military industrial establishment. Those were the words of the noble Lord, Lord Healey, when he was Secretary of State for Defence. They are as true now as when he uttered them.

The defence review known a Options for Change was a premature attempt to cash in the notorious "peace dividend" which was alleged to be available after the collapse of the Warsaw Pact. Although on its own it led to substantial reductions in the defence forces, it has been followed, as the noble and gallant Lord said, by a further series of ad hoc economies which have resulted in a situation in which the Army, Navy and Air Forces are able to fulfil their existing commitments only at a cost of constant stress and strain.

There is a factor which is perhaps not entirely clear to those who are not in or close to the Armed Forces; namely, that there has already been serious damage to the morale of officers, soldiers and their families. Your Lordships will not hear that from the Army, the Navy or the Air Force. They will not make it public. But if anybody is close to the Armed Forces, as I am, it will be seen that the damage to the morale of the troops has already been considerable. Training, especially of brigades and divisions, has been dangerously curtailed.

Again, I follow the noble and gallant Lord in saying that we are reaching a stage at which, if we are not very careful, were we to be faced again with another crisis of the kind that took place in the South Atlantic or the Middle East, there would be an operational failure. We shall commit troops and we shall fail those troops because we will not have given them the equipment with which properly to carry out their tasks.

If we are to believe the various rumours and reports, now it seems that the Treasury is demanding still more severe cuts in defence spending. Senior officers are beginning to say privately—and in the case of one or two courageous spirits, publicly—that enough is enough. My view is that the trouble has been that, since the end of the Cold War, much of the decision-making on the size and shape of our Armed Forces has passed out of the hands of military experts into the hands of Treasury officials. They have begun to tell the Ministry of Defence not only how much money should be spent on defence, which is powerful enough, but how it should be spent. If that process is allowed to continue, the result will be not only a defence establishment unable to meet its current commitments—and I suspect that we are very near to that now—but one which may well be unable to guarantee our minimum national security.

The very last thing we need now is another round of Treasury-led, piecemeal, across-the-board cuts in the Armed Forces; we certainly do not need some efficiency expert telling us how many admirals are needed to run the Royal Navy. If there is to be any further reduction in the defence budget, we need a radical, comprehensive review of external policies; it should not be only defence policy, because that is not enough, but foreign policy as well. The Prime Minister should now take that in hand and call a halt to that somewhat undignified procedure in which the Chief Secretary to the Treasury is perceived as the hatchet man and the Defence Secretary as the brave champion of the Armed Forces. National security is too important a matter to be dealt with in that simplistic adversarial context.

Before any further damage is done to our Armed Forces and our military establishment—enough has been done already—we must ask the Government to answer a number of basic questions. When the noble Viscount replies to the debate, I should be grateful if he would answer each of the questions to the extent to which he can and to the extent to which he has the time. Do the Government intend that this country should continue to play a major role on the world stage commensurate with its history and traditions? Do we wish to remain a permanent member of the Security Council of the United Nations and take an appropriate role in its growing military commitments? The noble Baroness, Lady Blackstone, took the Government to task for not responding to the Secretary General's request for a greater presence in what was formerly Yugoslavia. Are we to take the role in the United Nations as regards its peacekeeping forces and military interventions, which are growing in scope and number, appropriate to that of a permanent member of the Security Council?

Are we still to be effective senior members of the North Atlantic Treaty Organisation and to make an effective contribution to its military structure? Do we intend to fulfil our commitments to our last remaining post-imperial responsibilities? There are not many of them, but the question needs to be answered. Are we serious about defeating terrorism, especially in Northern Ireland? Do we seriously intend to retain an independent capacity to deter any potential enemy from attacking us with weapons of mass destruction?

Before anybody can make a serious attempt at constructing a defence policy, those questions should be answered. If the answer to those questions is yes, as I most firmly believe it should be—and the gracious Speech seemed to suggest that it was—then the nation must be provided with the Armed Forces and the equipment for them necessary to fulfil those commitments, even if it means making greater economies in other areas of government spending. That is not an attractive or popular option, but the Government must face it.

I mentioned health and education a few moments ago. They are extremely important matters. No one would lightly suggest that expenditure on them could be substantially reduced. But there is an area in which I find myself in some difficulty. With the greatest respect and affection for the noble Baroness, Lady Chalker, who is no longer in her place, I must ask whether we have our priorities entirely right when, at a time at which we are being asked to contemplate cutting another billion pounds from our defence spending, we should set a target of £2 billion for overseas aid. It may be, of course, that the Government believe that that is the correct decision to take in spite of the fact that much of that aid goes, as the noble Lord, Lord Cledwyn, pointed out in an interesting speech, to countries which spend twice as much money on armaments as on their health services. It may be that the Government believe that overseas aid makes a better contribution to peace and stability than strong defences. If they do, I disagree with them. But if that is the conclusion of an intelligent review of overseas policy, so be it. But until decisions of that kind are made—global decisions about foreign policy, aid, international terrorism and the defence of the realm—it is impossible, as I have said already, to make any intelligent estimate of the ideal size, shape and equipment of the nation's Armed Forces.

Of course, if the Government are content to play some walk-on or supporting role in the world of the 21st century, with little or no influence on the development of a new world order, we may be able to get away with a cut-price gendarmerie, or perhaps, like Iceland, we could get away with no military forces at all. But that decision should not be made in the Treasury, or even in the Ministry of Defence, where it would be unlikely to be made anyway. Defence and foreign policy are matters for political decision and political leadership at the highest level.

5.38 p.m.

Lord Campbell of Alloway

My Lords, it is a great privilege to be able to follow the noble Lord, Lord Chalfont. Anything that I could say could only serve as an adjunct to the questions that he has asked. For I have always believed and I still believe, as I believed in 1940 and the darkest years of my life, that we are a truly great country with a great destiny. In that, I do not quite follow the line taken by my noble friend Lord Cockfield.

To my mind, to fulfil our destiny as a great nation we must maintain our own national security without which foreign affairs may not be conducted to any advantage. For example, let us look at what happened when we failed to fly the flag in the Mediterranean. Our diplomacy became effete in that area and has never since fully recovered because diplomacy cannot be conducted properly in that part of the world without flying the flag.

We must maintain our national security, not only in our own interests and in the interests of our allies in the free world, but also for the worldwide interests which benefit from our peacekeeping activities to those ends. The noble and gallant Lord, Lord Bramall, said with great authority, and with the vast respect which he commands, that we must—these are perhaps not quite his words, as I paraphrase—relate our defence commitment to guidance for the future and it must be a meaningful exercise.

The spectre of operational failure stalked us, as I well remember, in 1939 and 1940. It is no benign ghost which may be laid by pious words of exorcism. The strains on service life—the gaps, the need for 6,000 more men, the knock-on effects for a decade—all warrant the urgent reappraisal, the urgent understanding and the urgent attention of the Government. They cannot be reduced or expanded at the drop of a budgetary hat. Cuts have already been too deep, as the noble Lord, Lord Chalfont, said.

However, in the gracious Speech, things could seem otherwise. National security takes pride of place on government policy—a matter of highest importance, the absolute priority. But, as has already been pointed out by the noble Lord, Lord Chalfont, is it the absolute priority when twice as much is spent on education and health? In the gracious Speech our commitments are laudably broad: support for NATO in a changing security environment, development of the operational role of the WEU, the maintenance of a minimum, credible, independent nuclear deterrent. That policy involves enhanced burdens, such as strengthening the capacity of the United Nations to undertake peacekeeping and preventive action referred to in the gracious Speech, maintaining the fight against terrorism in the United Kingdom and worldwide (also referred to in the gracious Speech) and increased activity in the Security Council referred to today by my noble friend Lady Chalker.

On the other side, there may, perhaps, be savings as regards maintaining the nuclear deterrent. But the question arises as to the implementation of that policy on which a certain measure of assurance is sought. To what extent has our appraisal of defence commitment as a matter of policy in terms of estimated costs changed since the last reappraisal Options for Change? To what extent will the proposed defence cuts erode the Territorial Army (as mentioned by the noble and gallant Lord, Lord Bramall) as an effective reserve fighting force? To what extent will those cuts damp down on United States initiative and weaken the command structure of NATO? Further, to what extent will they affect our national security, employment in our own country, our balance of trade on exports of military equipment and our economy generally? It is with hesitation, but with no sense of presumption, that an erstwhile subaltern asks those questions to which he knows not the answer.

Whether it is back to basics or back to the drawingboard for a blueprint of commitment in cost, the defence of the realm is the basic of all basics in any language. Appraisal of present and future defence commitments with an estimate of costs is an ongoing process in which account must always be taken of the unexpected. If the fundamental principles of warfare remain much the same, the ultimate in weaponry and technological skills can be all but decisive. Hence the need to develop the ultimate and maximum potential in weaponry as an available source of response and deterrence.

Over the centuries the defence of our island and of our interests has been secured by alliances. It was so secured in two world wars by our "special relationship" with the United States and with the support of the Commonwealth. It is secured today by United States initiative and involvement in NATO, by the operational role of the WEU and by our informal but invaluable relations with France. The EC, subject to enlargement, affords no substitute whatever for those alliances, whether forged by marriage, diplomacy or common interests; it affords no substitute for NATO, which operates worldwide under US command. Attempts to construct an alternative common defence policy within the EC have failed—indeed, they always will fail—and are doomed to failure.

The realities of the situation are that without the support of the United States we dared not risk Suez; we could not have embarked on the Gulf campaign; and, without the AWAC, the Falklands would have been an even more hazardous operation. The nature and extent of our defence commitment is governed by our "special relationship" with the United States and our membership of NATO. But there will always be domestic situations in which NATO may not intervene and in which we have to fend for ourselves.

As to the Territorial Army, some questions arise upon which some assurance may perhaps be given. Is the strength of the TA which serves as a source of recruitment to the SAS to be maintained? Will it have up-to-date equipment? Is that to be threatened by the proposed defence cuts? Is it sufficiently involved in the standardisation of training, procedures and equipment throughout the EC under which forces remain under national command unless integrated for some special operation? Has the process of standardisation proceeded satisfactorily? Is the Territorial Army to remain a reserve force, or is it to be integrated into the Regular Army in much the same way as the Supplementary Reserve in which I once had the privilege to serve? One served then with the Regular Army as a supplementary reserve officer. What structure is proposed in this area? I would be grateful if my noble friend the Minister will let the House know what the future concept of the status and role of the Territorial Army will be.

As to the weakening of NATO command structures, NATO, under the aegis and command of the United States, operates worldwide. It now flies the flag in the Mediterranean—that powder keg for massive conflict. It now maintains the nuclear balance west of Russia, and also elsewhere in the world. Until a test ban treaty, or a total ban treaty, or an agreed extension of the Nuclear Non-Proliferation Treaty has been accepted by the whole international community, with an effective global system of verification which can be enforced, ought we not to continue to develop the ultimate in weaponry with the maximum potential to seek to ensure effective deterrence? This, even if, as has been suggested, the number of Trident carrying Vanguard class submarines about to enter service may be reduced. The two concepts are not mutually exclusive. If the proposed defence cuts shall in any way weaken the United States initiative and involvement in NATO, then we can only ask for how long the minimum credible deterrent will remain credible.

5.52 p.m.

Lord Rea

My Lords, after the two noble Lords who have just spoken, whom I can only compare to heavy dreadnoughts, I intend to take a somewhat more constructive line regarding the current world situation. The noble Lord, Lord Beloff, will not be surprised that I intend to dwell, for part of my speech at least, on overseas aid. The gracious Speech promises that the Government will continue to support a substantial aid programme. Some £2.25 billion is a substantial sum but not, I would point out, large in relation to our gross domestic product, as my noble friend Lady Blackstone has pointed out. A figure of 0.31 per cent. this year, reducing to 0.26 per cent. in 1995–96 will result if the programme develops, or rather does not develop, as planned. As my noble friend pointed out, it does not look as if the United Nations' recommended target of 0.7 per cent. plays very much part in the Government's thinking.

Nor is this sum substantial in relation to our defence budget of £22 billion-odd. This figure is coming down slowly—as the noble Lord, Lord Chalfont, pointed out—in real terms and as a percentage of gross domestic product. But in 1995–96 it will still be 10 times as large as our overseas aid budget. Later I shall consider our defence budget further, but first I wish to look a little more closely at the aid budget itself. The noble Baroness—I am sorry that she will not reply to me because she is the expert on overseas aid, but I hope the noble Viscount will have a stab at answering some of the questions that I will ask—has said that our primary aim is to ensure that our aid budget is well spent and that we get good value for money. In our bilateral programmes—that is, ones in which we ourselves have control and which are government-to-government—and in the joint funding scheme, where we co-operate with non-governmental organisations that have programmes overseas, there are some very good programmes and projects running in a large number of countries. I have seen some of these. They will help to relieve poverty and improve trade prospects. Therefore we shall be repaid in due course, in kind as well as in heaven.

We should congratulate the ODA on these schemes. It is a department full of dedicated and able people who know what they are trying to do, usually within a constrained budget. Not every project is successful, of course, or wise. I have particularly in mind the Pergau hydro-electric project in Malaysia—which is not a poor country—costing some £400 million, of which the United Kingdom is contributing about £300 million over a period of some 10 years. As the noble Baroness and perhaps the noble Viscount know, this project was carefully reviewed by a well-respected senior official of the ODA who found it to be unsuitable and uneconomic and an oil or gas-fired power station would have been much more appropriate and cost beneficial considering that Malaysia is an oil and gas rich country. Nevertheless the Government have insisted on pressing ahead with this scheme, using up valuable ODA funds, against the official's advice because of a deal with the Malaysian Government that had been agreed, possibly, I suggest, involving arms exports. If this is not the case, perhaps the noble Viscount will explain why this uneconomic project is still going ahead. This matter has been raised in another place, but the answers have not been satisfactory.

However, we need to look a little closer at the total ODA budget and not simply at bilateral programmes. If we are lucky, we shall learn next week that it will remain steady in cash terms for the rest of this Parliament, but this means a reduction in real terms. Leaving aside funds for emergency relief and assistance to the former Soviet bloc, £1,900 million are left for assistance to the developing world. This is split between the multilateral agencies, through the United Nations and the EEC, and the bilateral assistance that I have already mentioned. Over the next three years, according to figures provided by the ODA to the Foreign Affairs Select Committee in another place, our overseas aid to developing countries channelled through the EEC will rise from £433 million to £548 million. That is an increase of 27 per cent. The aid given to other multilateral organisations will also increase by some 4 per cent.

Aid to the Soviet bloc will increase by 85 per cent. I am not saying that that is bad. I am sure it is necessary. At the same time the United Kingdom's bilateral aid to the developing world will fall from £1,131 million to £997 million. That is a decrease of 12 per cent. in cash terms. That represents a higher percentage decrease in real terms. This also includes the sums available to the non-governmental organisations which are working in the developing world and which provide particularly good value for money, especially as regards programmes which aim to improve the status of women, through which we are likely to see the most rapid decrease in the rather alarming population increases that are occurring in some countries.

Reading the minutes of the Select Committee of another place, it is clear that both the MPs who were members of the committee and the ODA officials who were interviewed found the transfer of aid from bilateral to multilateral assistance disturbing. Your Lordships' own Select Committee on the European Communities said earlier this year: We were very concerned by the serious potential implications of an increase in the size of the EC Aid Budget if this is going to mean an unacceptable squeeze on the UK's total aid budget and thus its bilateral programme". According to the Foreign Affairs Select Committee, this trend: may contribute to reduce not just the scale but also the priority accorded to the ODA's main purpose, the promotion of development in the world's poorer countries". That is a very serious situation indeed, because, as pointed out by my noble friend Lord Cledwyn, the poorest countries—mainly in Africa—are now effectively outside the world market. It would be very much to our benefit to bring them back in.

The World Bank report of 1989 mentioned by my noble friend Lady Blackstone on the subject of sub-saharan Africa said that official development assistance to Africa must rise in the 1990s by 4 to 5 per cent. annually to attain sustained recovery rather than decline. By freezing, and in fact reducing, our aid budget we are cutting out the very programmes which are most effective. The ODA clearly needs more resources.

In moving the humble Address last Thursday in reply to the gracious Speech, the noble Viscount, Lord Montgomery, said, in relation to foreign policy and defence issues: Surely we need first to address what is the threat. For example, who is the enemy, and where is he? Secondly, perhaps we should consider what are our interests, especially overseas, and our commitments and obligations".—[Official Report, 18/11/93; col. 6.] In fact, his views were not far from the sentiments expressed by the noble Lord, Lord Chalfont, although perhaps the answers which the two noble Lords might give to the questions would be different.

I do not wish to embark on presenting the case for a full defence review, reviewing our world strategy as well as the arms which should be cut. I am not sufficiently expert, and in any case I have already spoken for 10 minutes. However, I suggest that the state of the world today should allow us a wholesale rethink of what our expensive defence budget is achieving. As my noble friend Lady Blackstone said, it is surely not necessary at present to keep a large body of men and heavy equipment in Germany. Despite the ominous picture which has been painted of Yeltsin's Russia by my noble friend Lord Kennet, Mr. Yeltsin and his army are in no position to mount a major land attack on us at the moment. In any case, there is no doubt that we would get plenty of warning in the extremely unlikely circumstance that that was his intention.

Our forces could be re-formed into highly mobile units ready for action, as has been pointed out by a number of other noble Lords, in peace-keeping operations anywhere in the world. There is a strong case for the permanent volunteer UN peace-keeping force mentioned by my noble friend. That would be much more effective than the present ad hoc, rather ill-assorted and sometimes bewildered troops which are gathered together in a hurry to perform United Nations tasks.

As the noble Viscount, Lord Montgomery, said, trade is the very basis of our existence. We cannot have stable trading relationships with countries which are bankrupt or at war with themselves or with others. Sadly, one of our major export industries is the provision of sophisticated weaponry. We are second only to the United States in this. We have found to our cost how dangerous a trade that is, both because the weapons can be turned on us, and because they help to sustain small, medium and large wars which strangle and destroy trade and development. That situation was described very well by my noble friend Lord Cledwyn.

I am very pleased that the gracious Speech included a mention of the need to control the arms trade. Let us hope that action follows those words and that we take the lead internationally in curbing it. As my noble friend said, the Government must play a larger part in helping the defence industry to diversify and convert to peaceful activities, as has been done by other countries in Europe. Without that the industry will seek international markets, risking the disastrous results which we have seen.

Our overseas aid programme should be seen as an essential, far-sighted investment. If we can help impoverished countries to achieve a better life for their people, that will not only help to prevent expensive natural disasters overtaking them (which we then become involved in mopping up) but will enable them to assume their proper role in making the world a better and more prosperous place for all of us.

6.5 p.m.

The Earl of Cork and Orrery

My Lords, I read in the newspapers that the Secretary of State had appointed a special committee to advise him personally on defence policy management. That seems, on the face of it, to be the expedient of a prudent man. I am sure that it has not escaped his notice that the nature of the advice that is likely to flow from that body will depend on the composition of the body itself. As the said composition was presumably decided by my right honourable friend in person, he will by that very act have decided in advance, whether knowingly or not I cannot tell, the kind of advice he is likely to receive. The net result therefore is likely to be the gaining of a little more time in which to make up his mind. If that is his aim, he has my heartfelt sympathy. However, I hope that he will reflect that the shelf life of a Tory defence Minister tends to be less than everlasting, and time is therefore of the essence.

I understand that the informal group—as it has been described—includes Field Marshal Sir Nigel Bagnall, the former Chief of the General Staff. He is quoted in my newspaper as making two startlingly radical statements in the course of a single very short sentence. He says that the group's work is focused on value for money, and, we are not dealing in geopolitics". I hope that geopolitics is the special study of authorities higher than an informal group. But what about the focus on value for money? With that statement we are back at a step in the sometimes acrimonious argument about whether the proposed defence cuts are, or were, Treasury led or Treasury driven. That is an ancient wrangle. It sprang up anew about the time of the publication of Options for Change. There is no need now to ask what it was all about. It was essentially a phoney argument. "Treasury driven" and "Treasury led" are nothing but slightly important sounding synonyms for the saving of public money—a meritorious cause, as most would probably agree. Therefore, why do I use the word "phoney"? For this reason. Except in one circumstance, there is never any good reason except the saving of money for cuts in the defence budget. That circumstance is the outbreak of peace at the end of a war.

When a nation has mobilised for war and the war ends, in victory or defeat, it must demobilise. Any nation which tried to keep its fighting forces intact in peacetime would invite full-scale mutiny and possibly even rebellion. In the so-called Cold War we did not mobilise. Therefore, when the Warsaw Pact collapsed we had no compulsive reason to demobilise. Our armed services were manned exclusively by volunteers putting up no clamour for release, still less for compulsive redundancy. In a time of high and growing unemployment there was no urgent cry for labour, no plea from the Treasury to be allowed to shell out hundreds of millions of pounds in unemployment benefit. What there was was a need and demand for economy. Of course the demand came, as it has to come, from the Treasury, and the bill fell with a sickening thud on the desk of the Secretary of State for Defence. What was he to do?

At this point, the scene cuts to this very Chamber four days ago. We are debating the Queen's Speech. After details of Her Majesty's globe-trotting programme, the very next sentence in that speech had to do exclusively with defence. It is always so. As defence of the realm is the first responsibility of Government, so defence comes first in the gracious Speech.

Who writes the gracious Speech, beginning with the statement of the Government's intentions regarding defence? It is, of course, the Prime Minister. However, if one were to call upon the Prime Minister at No. 10 Downing Street, one would find a brass plate on the front door engraved with the words, "First Lord of the Treasury". I know that the Prime Minister is, in the words of Dod's Parliamentary Companion, not primarily responsible for the day-to-day working of the Treasury. I do not suppose that he is primarily responsible for the day to day working of the Ministry of Agriculture, Fisheries and Food, the National Health Service or any other department of state. However, that does not mean that he is retained only for such ceremonial purposes as writing the Queen's Speech or laying wreaths at the Cenotaph.

Surely, the title of First Lord of the Treasury means more than the privilege of a brass plate. Has he no authority in the place? Does he visit it only by the courtesy of, or invitation from, the Chancellor of the Exchequer? Has he surrendered his portfolio to Portillo as a matter of punctilio? Is he neutral in the struggle between the Ministry of Defence and the Treasury?

I am reminded of the famous Punch cartoon in which the young officer gazes speechlessly at a squad of soldiers marching towards the edge of the cliff while the drill sergeant mutters in his ear, "For God's sake, say something to them, sir, even if it's only 'Goodbye'." As I see it now, the young subaltern has become a field officer. He is no longer a second lieutenant or ensign but a major. And who, or what, I wonder, is the drill sergeant? Of course, I exaggerate. Perhaps, in seeing with my mind's eye, I have gained the wrong sense. Perhaps I should be listening with my mind's ear. If I do so, I fancy that I catch the far away echo of the late John McCormack in one of his songs. In imagination I can almost hear that Irish tenor voice singing plaintively, Then why art thou silent, Kathleen mavourneen". Where does the Prime Minister, or the First Lord of the Treasury, stand in these matters? Why is he silent? I wonder whether the Minister is sufficiently in the confidence of our right honourable friend to give an inkling of the answer.

6.14 p.m.

Viscount Waverley

My Lords, I rise with humility to address the House for the first time. I should like to refer, with your indulgence, to matters concerning Latin America, an area in which, together with Africa, I have lived and worked for 10 years. For clarity, the region is comprised of all countries south of the Rio Grande in Mexico, Cuba and the Dominican Republic.

The United Kingdom's returns with the region are disproportionate to its direct investment programme. We are the second largest investor. However, we secured only 1.7 per cent. of visible trade in 1992 compared with 30 per cent. at the turn of the century. Perhaps of greater concern is the loss of market share over the past 10 years. I should like to see that situation reversed.

The association with Latin America is a strong one historically, beginning with involvement in various wars of independence, followed by large business interests up to the 1920s. However, after the last war, interest waned with our efforts concentrated in the Commonwealth countries.

Your Lordships will be aware, and pleased to hear, that after a series of military juntas, the region is now democratic, with the exception of Cuba. I was most interested to hear what the noble Baroness, Lady Young, had to say about Cuba. Those countries now boast free elections, respect for the rule of law and relative freedom of the press. They are playing an increasingly more dominant international role.

In the past, Latin American governments adopted protectionist policies including nationalisation of multinationals. The 1980s produced default on international lending, including a moratorium. However, the Brady plan developed a solution for state debt stabilisation. I remind noble Lords that in considering the issues it is essential to differentiate between public and private debt.

Those countries now mostly have their house in order. They adhere to IMF proposals, with their markets and those of South East Asia being the only areas to show constant annual GDP growth. Chile, for example, achieved 10.4 per cent. growth in 1992. Those countries have abandoned an economic policy of protectionism and have undertaken free market philosophy.

Old problem areas such as the blocking of assets and remittance of profits, plus access to sufficient hard currency to meet obligations, have now largely been overcome. High monthly inflation figures, where they exist, are not an issue for international commerce, as tenders and payments are made in foreign currency.

The imports of those countries increased at an average of 17 per cent. in 1992, with Argentina increasing imports by 82 per cent. There have been considerable capital inflows amounting to 54 billion US dollars, in the past 12 months alone, Mexico being the main beneficiary. Exports for 1992 reached 126 billion US dollars, of which Brazil, to take an example, registered a 15.7 billion US dollars trade surplus last year.

The opportunities are now more pronounced than ever, with our products and services highly competitive due to the devaluation of sterling against the US dollar and the good will generated by the two-way exchange of visits by high ranking government Ministers.

Market size, with the creation of trading communities, now justifies involvement by the largest of our companies. There are many projects, both large and small, in the pipeline; and we have the knowledge and competitive edge to secure a part of them. Under-subscribed investment programmes exist, with pre-investment facilities available. Two examples of recent involvement are British Petroleum's exploration programme in Colombia and the purchase by British Gas of a major share in Metrogas, the Buenos Aires municipal gas company. I am assured that BP is keen to see UK companies enter the arena on the back of its success.

From your Lordships' House, what can we do to re-awaken more interest so that our industry can capture a section of that large market? We can alleviate fears caused by concern about, or ignorance of, bureaucratic procedures. We can encourage the learning of Spanish and Portuguese. We can explain the essential need to trade in those countries' backyard; we can encourage our senior managers to visit the region regularly. We must persuade the Export Credits Guarantee Department to reconsider rates for the region. Why, for example, are rates as high as 14 per cent. for Argentina when exporters in Germany, Italy, France and the United States obtain similar coverage for 5 per cent. to 8 per cent? That can make all the difference between success and failure.

In addition, it is essential that important issues are understood by both parties, thereby creating a harmonious relationship. On the other side of the Atlantic, the single market is seen as a source of concern. Subsidies, protectionism by industrialised nations, and the Community agricultural policy are considered to have potentially disastrous effects for our Latin friends. We are being looked towards to champion these causes within the European Union.

Our concerns are the need for Latin countries to consolidate in areas as far-ranging as investment in agriculture, health and housing, to education and training. Social problems connected with poverty need to be addressed, with environmental issues also high on the agenda.

I end with the following observation. We must make every effort to trade out of recession, to open our minds to new frontiers and to understand that Latin American markets are open to everybody. If the United Kingdom's percentage share of world invisible exports, currently running at 5.2 per cent., were applied to Latin America, this country would increase its exports by £3.6 billion. That would cut our visible balance of trade deficit from £13.5 billion to around £10 billion.

Our country is held in high esteem, my Lords, and our expertise must now be brought to bear.

6.22 p.m.

Baroness Hooper

My Lords, it is also a "first time" for me today. It is the first time I have had the opportunity to thank and congratulate the maker of a maiden speech on behalf of all your Lordships. I do so with great pleasure, because both in the way the noble Viscount, Lord Waverley, developed his theme and in the manner of putting it across, I believe that he spoke in the best traditions of your Lordships' House. I am sure I speak for you all in saying that we hope we will hear from him, as also from my noble friend Lord Chesham, on many future occasions.

At the outset of today's debate, my noble friend Lady Chalker referred to the changes and challenges that we face throughout the world. This theme has been reiterated by other speakers. I too am conscious that my more specific remarks should be set in that wider context of a rapidly changing and increasingly interdependent world; moreover, a world in which the speed of communications seems to make us all more aware and perhaps more immediately affected by those changes—sometimes perhaps even overwhelmed by the sheer scale of it all.

It is one thing to consider matters within our historical, cultural and even linguistic perspective, where at least we are familiar with the way in which events develop and institutions evolve. It is quite another to understand what is happening in parts of the world which have for a long time been cut off and are remote and inward-looking. I say this as a preliminary, since I have just returned from a visit to central Asia, where, among the beautiful and ancient buildings of Samarkand and Bukhara and other places, it was evident that change was very much in the air, with the introduction of a new national currency to replace the rouble being just one rather awkward—awkward for me as a visitor—manifestation of that. I hope that the reference of my noble friend Lady Chalker to Russia and the Know How Fund stretches to the newly independent states to the east of Russia.

As another preliminary, but this time closer to home, I welcome those parts of the Queen's speech which outline the Government's intentions in the post-Maastricht phase. I feel strongly about the development of our co-ordinated policies with our European partners, particularly in terms of the enlargement of the European Union, which I feel sure will progress during the coming year with the continuing full support of the British Government. I certainly intend to do my bit, as a member of the parliamentary delegation to the Council of Europe and the Western European Union, to ensure that our activities and relationships in the wider Europe are reinforced and fully appreciated.

However, it is on Latin America that I too wish to concentrate my remarks. Since completing a post-graduate year studying international law and economics in Ecuador, now nearly 30 years ago, I have maintained an ongoing interest and involvement in the region, which has certainly had its share of changes during that period. Latin America comprises 7 per cent. of the world's land mass and 10 per cent. of its population; and the countries of Latin America are poised and ready to look outwards and to participate in world events not only in matters of trade but also in the defence area, fully recognising their commitments in and to the United Nations. I believe that we neglect the vitality of that region at our peril and so I was delighted to hear what the noble Viscount, Lord Waverley, said and to see the way he raised this as a matter high on his personal agenda as well as in our national interest. I was delighted too that my noble friend Lady Young has been able to give us the benefit of her recent experience in Cuba. I hope very much that the Government will respond to the suggestions that she made.

Given the successful visits made by the President of Mexico last year and the Presidents of Uruguay and Colombia earlier this year, together with the renewal of bilateral links in trade and investment that flowed as a result of those visits, I was a little disappointed that the Queen's Speech did not reveal the promise of a visit from another Latin American head of state. But perhaps I fall into error on this, because it does not necessarily preclude a possible official, as opposed to a state, visit. I venture to say in this context, however, that it would certainly give me and I believe many others with a similar interest a great deal of pleasure to see the President of Argentina here, in full recognition of the excellent and warm relations which have been re-established between us after our falling-out over what was referred to by the Argentine Foreign Minister on a recent visit to London as, a certain discrepancy in the South Atlantic". Argentina is a country which in January 1991 had an inflation rate of 767.8 per cent. In January of this year it was down to 15 per cent. and has continued to decrease. That is a remarkable achievement. It has restructured its 29 billion dollar public debt, with the support of the World Bank, the IMF and the Inter-American Development Bank. This, together with similar debt agreements concluded by Chile, Mexico, Bolivia, Costa Rica, Uruguay and Venezuela, is yet another step forward in resolving the developing world's debt crises.

The GDP growth rate in Argentina over the last year was the fastest in a decade, and since Argentina launched its privatisation programme some four years ago it has raised 18 billion dollars by selling off a long list of public enterprises from petrochemical businesses to grain handling and indeed military hardware ventures. British advisers and expertise have been employed in this process—indeed against stiff competition—and many British companies have followed up, making investments and becoming involved in joint ventures and other business and industrial opportunities, some of which were again referred to by the noble Viscount, Lord Waverley. It is extremely encouraging to note that there has been a 47 per cent. rise in British exports to Argentina over the past few years.

I quote Argentina in particular in case any lingering doubts remain about our relationship as a result of that "discrepancy in the South Atlantic"; also, more happily, because I am due to attend the fourth Argentine-British conference to be held in Mendoza next April as part of a delegation to be led by my noble friend Lord Montgomery. As a result I have the problems and successes experienced there very much to the forefront of my mind.

A similar pattern to that presented in Argentina's success story can be seen in most other Latin American countries. It can even be seen in Brazil, in spite of some recent setbacks there. All the countries of Latin America are rich in resources. All have tackled and succeeded (in varying degrees, admittedly) in sorting out their economies. Additionally, there is the development not only of the North American free trade area that has been referred to, but of MERCOSUR, which involves Argentina, Brazil, Paraguay and Uruguay. I believe, as has been said, that the opportunities and confidence that we should feel in doing more in the region must be emphasised again and again. Moreover, democratic forms of government have been established and re-established throughout the continent. I believe the next elections—there seem to be a regular spate of elections throughout Latin America—are due in Venezuela at the end of this year.

It is an interesting and little known fact that the United Kingdom is still the leading European investor in Latin America, although our exports overall have remained fairly static over the past few years. There is indeed room for improvement. There are many therefore who recognise that it is in the interests of us all to foster the stability and prosperity of the region: these include such groups as the All Party Latin American Parliamentary Group, the various bilateral parliamentary groups with contacts with Latin America, the members of Canning House, and the many other bilateral groups which are involved. Not least, there is the Foreign Office. I feel sure that the collective Foreign Office heart is in the right place. Nevertheless, I warmly support my noble friend Lord Montgomery of Alamein who, in moving the humble Address, advocated a review of foreign policy. I do so in the conviction that such a review would highlight the need for us to prioritise and concentrate our efforts on Latin America.

6.33 p.m.

Lord Bridges

My Lords, since our last debate on a similar occasion 18 months ago, the international scene has been extremely active. Many of the events that have taken place can he traced back to the prolonged thaw which has followed the end of the Cold War. Much of what has occurred is undoubtedly beneficial. Some of the favourable developments have already been mentioned in our debate this afternoon: in South Africa, for example; and the agreement between Israel and the PLO. I propose to concentrate on the other side of the coin, on subjects where the outlook is less promising, which demand our careful and urgent attention.

Three issues concern me: first, the stability in the future of the wider Europe; secondly, the next steps in European Union; and thirdly, the work of the humanitarian agencies of the United Nations. I shall say something briefly about each of those.

On European security, I believe that the time has come when we need to consider a wholly different approach. My suggestion is that we should take the initiative in proposing a collective treaty on European security, covering the principal states throughout the continent. Why do we need such a treaty? We need it because there has been a fundamental change in European affairs. The end of the Cold War and the unification of Germany have produced a completely new political situation in Europe. Germany is now the centre. It is larger than France, Britain or Italy in terms of population and power. It is much larger and stronger than its neighbours immediately to the east. German policy is bound to change in recognition of those facts, away from its preoccupation with its relationship with France to a wider and more balanced view of the future. The move of the capital from Bonn to Berlin at the end of this decade will be a part of that process and perhaps its symbol.

Unlike the noble Lord, Lord Cockfield, who spoke earlier on part of this subject, I do not look on this process in a negative way. We have to recognise facts. The reasons for siting the European Monetary Institute in Frankfurt rather than in this country were not only the result of the remarks made in Parliament about our relationship with Germany. They also had to do with the strength of the Bundesbank as an independent central bank and the strength of the German currency over a long period. Also, the democratic institutions of Germany are as solid as any in the western world; they are stronger than some and are an example for us to admire. German ties and trade with its eastern neighbours are growing, and the contribution that Germany makes to their prosperity is already considerable. But to the east there is uncertainty and fluidity. What we need is a treaty framework to accommodate the fundamental changes which are taking place, to encourage the countries of eastern Europe to follow a peaceful path and to provide a partnership which can be mobilised to settle disputes. It is very desirable to provide practical reassurance and friendship to the states of central and eastern Europe, which lack any multilateral framework of their own following the demise of the Warsaw Pact.

Some have suggested that we should refashion NATO for that purpose by using the North Atlantic Co-operation Council. But I do not believe that that will work, the main reason being that NATO was designed as a collective organisation for the defence of the West and the treaty cannot be refashioned so fundamentally. Equally, the European Union is more focused on its own internal and institutional development. Although Maastricht has given us a new foreign policy pillar, that is more likely to be useful in overcoming the traditional neutrality of the EFTA members than it is in providing reassurance to the East. The CSCE is too large and loose to help us much in specific issues affecting the security and sovereignty of states. Perhaps the CSCE has had its day, important though it was.

I suggest therefore that the treaties which exist were written for quite different purposes from those of which I speak and that they point in the wrong direction. Now a fresh course of bricks is needed for the European edifice. The underlying purpose would be to define broad principles in a multilateral treaty: to bury past enmities; to make commitments to peace; to give reassurance to its members; and to provide a framework for the settlement of disputes, the likely ones being about frontiers and arising from rivalries between ethnic minorities. At the moment, we have no effective means of dealing with such disputes. I am thinking of a treaty, not another multilateral body, which would engage the political authority of all its signatories. It would perhaps be open to the United States and Canada to be parties to such a treaty if they so chose.

To judge by what I have read in the press, the Government prefer to use the European Union for that process. I myself do not believe that it will meet the case. There are two reasons. First, the Union's relations with the states of eastern Europe will tend to be bilateral between the Union on the one hand and the individual east European state on the other. I am thinking of a broader multilateral treaty based on principles. The chapter on foreign policy in the Maastricht Treaty does not state principles. Secondly, arrangements made by the Union with each state will inevitably be seen in the context of that country's ultimate ambitions to join the Union. I do not believe that that would make it possible to use the Union effectively as a means of settling urgent political issues where the influence of other European states also needs to be engaged.

The second issue that concerns me is the likely development of the European Union over the next few months. Like many other people, I hoped that the ratification of the Treaty of Maastricht would lead to a calmer atmosphere in western Europe. Unfortunately, the prolonged and acrimonious debate that took place over ratification has made that very unlikely. Some of our partners may now seek to overcome the delay and loss of morale by embarking on a rapid advance towards stage three of economic and monetary union. The dangers are obvious. Once again an economic objective, which is perhaps desirable but difficult to achieve at the best of times, would be pursued for largely political reasons. It would not be surprising if our own Government choose to have no part in such manoeuvres and pour cold water on them, relying on our opt-out clauses in the treaty.

I believe that such a reaction would be perhaps unfortunate and certainly unnecessary in the near future. After all, there is nothing wrong in themselves with the convergence clauses of the treaty in the current stage. Indeed they are a necessary part of the financial restraints of which we ourselves stand in need and about which the Chancellor of the Exchequer will no doubt tell us in a few days' time.

It also concerns me that we should relegate ourselves to the "also rans"—team B in the European Union—by insisting that our opt-out clauses are not merely a safeguard but are positively virtuous. I have always believed that those opt-out clauses carry a clear danger; namely, the creation of a two-tier Community. Self-relegation to the second division is not to my mind a desirable or indeed a safe policy.

The third issue that I wish to mention concerns the humanitarian work of the United Nations. I must declare an interest as chairman of the United Nations Children's Fund in this country. Here too we see the effects of the end of the Cold War. The Security Council was unable to authorise peacemaking operations for 30 years after the end of the Congo crisis in 1960, and the humanitarian agencies of the United Nations were perceived as politically neutral in nearly every country of the world because the United Nations as a whole was non-interventionist in the main. That situation has now changed very much. The more active role of the United Nations in Somalia and Yugoslavia can make the work of those agencies more difficult because the Security Council has authorised the presence and activity of military forces on the ground. We now have the benefit of some painful experience. We should consider rather carefully our motives and objectives in this area in the future.

The results are perplexing. In Somalia remarkable progress has been achieved in terms of ending disease, famine and malnutrition—not that one reads about such matters in the press but such is the case—whereas the political results of the mission have proved an embarrassing failure. So far in Yugoslavia the results have proved quite different. The humanitarian work has accomplished much in the past but may now be less positive because of the more cautious policy of the military contingents of the United Nations on the ground.

I do not wish to suggest that there is some magic formula to resolve the differences. There is not. Nor should we minimise the good work that has been done or the active support that our own Government have provided, which I acknowledge with gratitude. But we need to be as clear as possible about our objectives at the beginning of such operations. I have much sympathy with the Foreign Secretary's remark about the "do something" school of thought. The trouble is that we have done something, in fact more than a little something, in both Somalia and Yugoslavia. We have ended up in two situations which are totally different from our expectation and hope.

I suggest that there is an underlying choice that we often have to make. What is the object of the mission? Is it to save lives or is it to solve a problem? Ideally we should like to do both, but sometimes it is not possible, and if so it may be better to acknowledge it at the outset. After all, saving lives is a worthy mission, even if it is less ambitious in political terms. Perhaps we have yet to realise that we may have to spend a few lives in order to save many.

Those are the three issues that I wish to put before your Lordships. I believe them all to be matters of some importance.

6.46 p.m.

Lord Beloff

My Lords, I should like to use as a brief text some words which come from the gracious Speech: My Government will attach particular importance to implementing the new common foreign and security policy". I can think of no more disastrous prescription. We have before our eyes already—this matter was referred to by the noble Baroness, Lady Chalker, and other speakers—a perfect example of what happens when the so-called European Union has a foreign policy. We have it in Bosnia. We have it in massacre, aggression, rape and starvation. Up to today the European Community has totally failed. The words spoken today in Luxembourg by the Foreign Secretary get us no further. Such a policy has nothing to offer a major part of Europe.

The reason is perfectly simple and everybody knows it. The reason is that national states still exist. They have their own policies and their own priorities. They act upon them and they are likely to continue to do so. Therefore it is incumbent upon Her Majesty's Government to have their own foreign policy. Otherwise, we get into the position, which was not mentioned by the noble Baroness, Lady Chalker, in which we are accused of genocide by the Bosnian Moslems. It is not Britain which has committed genocide in Bosnia; it is the countries of Serbia and Croatia that have been allowed by their friends to pursue such policies, which Britain is in no position to prevent. Nevertheless, because we take responsibility for a European policy, we are picked on by the Bosnian Moslems as the authors of their misfortune. Why should we believe that our policies and those of the French or the Germans should be identical?

Let me offer another illustration of my point, using a less important frame. In this country we are committed to spending a great deal of public money on preserving the life of Mr. Salman Rushdie who is threatened by agents of the Iranian Government and particularly the Iranian intelligence service. The leader of that intelligence service has quite recently been received with honour in the German capital. Germany feels—it may have very good reason—that its good relations with Iran are more important than what happens to a stray scribbler in this country or his publishers in Norway or elsewhere.

Over and over again one can see this. But there are other ways of looking at it. There is, of course, the way which is accepted by the two parties in opposition. The Liberal Democrats are wholly devoted to creating a single European state or united states of Europe. Indeed, their devotion is such that I sometimes feel that they are more like one of these American cults. If M. Delors were to say that the way to forward the cause of Europe is for all Liberal Democrats to commit suicide, they would queue up for hemlock.

The Labour Party is perhaps a little more cautious, but we understand that Mr. John Smith has signed a manifesto for the forthcoming European elections committing the Labour Party to a programme which has been largely dictated externally. It has been said by Mr. Smith's friends in the press that he did not in fact appreciate quite how far that document went into detail—in which case he must be the only Scots lawyer ever to have signed on the dotted line without reading the small print. But my concern is not with parties which are out of office, and indeed, I hope, will never be in office; my concern is with Her Majesty's Government.

What do Her Majesty's Government propose? In the famous or, as it would be styled on the Continent, notorious article by the Prime Minister in the Economist he points to a possible development of a future Europe and perhaps to developments not altogether far from the very interesting ideas for new security treaties, for instance, which were advanced by the noble Lord, Lord Bridges. The only difficulty there is that the proposals he has in mind—the idea of a broader and looser Europe—are wholly incommensurate with the opinion of the other major members of the European Community. Therefore, the question the Government have to answer is not whether they have good policies but whether those policies have any hope of success. Can we talk about being at the heart of Europe when the heart of Europe is a combination between France and Germany? That is what the European Community is all about.

The only way to demonstrate this point is to look at British policy as it is looked at from abroad and from those countries in particular. I would recommend to your Lordships the reading of the recently published diaries of M. Jacques Attali, not relating to his period in the marble halls in the City of London but when he was the principal adviser and aid to President Mitterrand in the first five years of Mitterrand's term as President. He was, to put it one way, the Sarah Hogg of the Elysée at the time. The diaries have the great merit of having also been submitted to President Mitterrand himself—and he did not object to their publication. One must therefore assume that, since they contain long extracts from Mitterrand's conversations with his own domestic political friends and with foreign statesmen, they are roughly faithful to his general outlook, even if he is not obliged to confirm every detail. They include records of President Mitterrand's meetings with the noble Baroness, Lady Thatcher, when she was Prime Minister, with Chancellor Schmidt and with Chancellor Kohl, as well as his meetings with world leaders in the United States, Japan and so forth—the Group of Seven.

What comes out, I think unanswerably—I challenge anyone who has read the diaries not to agree—is that there was no question in the mind of President Mitterrand, still less of Chancellors Schmidt and Kohl, that Britain was an equal partner in such a union. It was clear that Britain was a useful adjunct in some respects but that in the last resort what really counted—they say this quite openly again and again—was the mutual relations of France and Germany. Therefore, to talk about being at the heart of Europe is like saying, "I am going to be a wedding guest at the heart of a wedding". If there is a bride and a bridegroom, where else can one be but at the heart of a wedding?

There is another very important point which is related to a point raised by a number of noble Lords. I refer to the important question of the GATT. I have no doubt that when we come to discuss economics later in the week more will be said on that score. But if one reads M. Attali's diaries—this confirms, after all, evidence from many other sources—it is inconceivable that the French could possibly do anything but object to a system of world-wide free trade when President Mitterrand constantly reaffirms the importance of protection, and goes further and constantly refers to the influence of the United States exercised through a world free trade system as something inimical to the interests of Europe. As we are committed—I believe this still to be true, and it was pointed out in relation to defence by the noble Lord, Lord Campbell of Alloway—to wishing to keep the United States as involved in our affairs as is possible, given the many changes that are going on in that country as well, it is inconceivable that the European Union can form a framework within which we can usefully try to forward a foreign policy.

Finally on that point, there is the question of the newly liberated former members of the Warsaw Pact in eastern Europe, an issue referred to in the very important speech of the noble Lord, Lord Bridges. Anyone who looks at their situation—we have had a great many expert accounts in journals, newspapers and so forth—says that, if they are to flourish, they require not aid, or even know-how, but trade. Bohemia, after all, was a country of civilisation second to none in Europe more than a thousand years ago. They are not third world countries to which we need to give the elements of civilised living. They need to be able to sell their products. They do not wish to be, and rightly do not wish to be, dependent on handouts. What does the European Community do every time one of those countries finds something which it thinks it can usefully sell abroad? It puts up the barriers against it. Would it not be better if we were able to have our own economic relations with those countries and give them the assistance which providing a market would offer?

Lord Bonham-Carter

My Lords, can the noble Lord say why, in that case, those countries are so anxious to join the European Economic Community?

Lord Beloff

My Lords, they are anxious to join because they feel that, if they were allowed in, they would be part of it. Therefore, they would enjoy the comparative freedom of the single market. But as they are being kept out for another decade, they do not wish to starve in the interim, and quite rightly.

Beyond that there is the even greater importance of what happens in the former Soviet Union. That was referred to by the noble Lord, Lord Bridges. I am sorry that, with so much expertise on Latin America, we did not hear a little more about the former Soviet Central Asia from my noble friend Lady Hooper. Ukraine is a large, important and potentially wealthy country, still suffering under virtually unchanged communist rule. Another such is Russia itself. We had a great lecture on Russia from the noble Lord, Lord Kennet, who is not in his place. He has rather a habit of giving us lectures on important and interesting subjects, often fallaciously presented, and then disappearing before one can answer him. I do not know whether Mr. Yeltsin is quite the villain that he was depicted. He sounded to me more like Genghis Khan than anyone else I can think of historically. I believe that the noble Lord may be wrong about that. He may have been taken in a little too easily by the propaganda in favour of the so-called Russian Parliament which Mr. Yeltsin dissolved and which the noble Lord was wrong in assuming was a democratically elected assembly, since it was elected at a time when the Communist Party had a political monopoly.

However, we should concentrate on that, and it is important. Again, I believe that the noble Lord, Lord Bridges, is right. The difficulty is that we shall get a lot more argument about this or that aspect of the European Community and about its failure to fulfil the obligations of the GATT. We shall get all kinds of trivia compared with the great issues on which we need to concentrate and solve, which are the real results of the break-up of the Soviet Union and of what is sometimes referred to, with some degree of illusion, as the end of the Cold War.

7.2 p.m.

Lord Molloy

My Lords, I do not intend to follow too far the submissions of the noble Lord, Lord Beloff, as to whether there should be Her Majesty's Opposition as well as Her Majesty's Government. However, I follow with a degree of sympathy some of his submissions as regards the European Community.

I wish first to congratulate both maiden speakers on the content of their speeches and on the manner in which they submitted them to your Lordships' House. Much of the material which I thought to submit to your Lordships' House has already been given in the speech made by the noble Lord, Lord Chalfont. Very often on matters of foreign affairs our thoughts run similarly and they did so again today.

I was very pleased to hear and I welcome the fact that the Foreign Secretary intends to visit the Middle East. I hope that he will give some attention to the Syrian problem, which must be examined bearing in mind that the Israeli Prime Minister and Yasser Arafat have created a remarkable base. It is a remarkable thing that they have done. With the help of Britain, the United States and the United Nations, I believe that the endeavours of the Israeli Prime Minister and Yasser Arafat can lead to a lasting peace in the Middle East.

I hope too that at some time the Government will look at the problem of Albania. It is going through a pretty tough time. I ask the Government to examine the situation. There are plenty of Members on both sides of this House who can help them in trying to understand the cruel situation in that country.

Foreign affairs and defence must be linked at all times. If we are careless about our defence we may as a result weaken our foreign policy. Our concern for the free world and the British Commonwealth of nations may be threatened. I have always taken the view that there must be no fudging over the defence budget. Of course, the Treasury has an important role. But some of the important newspapers of this country are submitting that there is an argument going on between the Government and the Treasury. The Treasury must not have such power that it can take on any British government. I hope that neither the Treasury nor any other department of state will take any major decisions, because our defence is so vital that all departments and Ministers must work together.

If ever there was an example of us and the United Nations not doing a job properly it is that in the Gulf. That is such an example that one can hardly believe that one of the biggest contributions to winning the Gulf War was made through the remarkable endeavours of our Royal Air Force. Even the Americans concede that argument. But what has it been for? Only a few weeks ago, Saddam Hussein sent troops into Kuwait. He has already murdered hundreds of the prisoners whom he had taken. I beg the House to listen to this: I have been reliably informed that Saddam Hussein has recently caused an Iraqi flag to be flown in Kuwait and therefore the whole atmosphere in that area is very shaky.

The other absolute disgrace as regards the abominable behaviour of this character is the suffering of the Marsh Arabs. I hope that these matters will be taken into consideration as well as the points made by the noble Lord, Lord Beloff, in his references to Bosnia. It seems incredible that about 18 months ago I was, if not howled down, rebuked in this House for saying that we should see to it that the situation in Bosnia was taken over by the United Nations before it was too late.

I remember being a member of a commission which visited Yugoslavia some time ago. The noble Lord, Lord Home of the Hirsel, was another member. I remember him saying to us then as regards the problems in what used to be Yugoslavia that, if we were not careful and if we rushed with democracy, we would find ourselves in a great deal of trouble.

I believe that that is now a very important issue that we have to look at. I believe too that we should have the highest level of military and technical ability which must be maintained throughout all our forces, including the Royal Navy, the Army and the Royal Air Force. I hope that we shall also have intelligent co-operation with the Treasury as regards defence essentials. The Government might consider setting up a specialist committee to look at the defence of our country.

I also believe that we should honour our servicemen and women by maintaining up-to-date weaponry. What are equally important too are decent pay and conditions, for a disgruntled navy and army is something we should wish to avoid and we must avoid. I hope that that aspect of the matter will be looked at by our Government.

Another matter I ask the Government to think about, but which I do not expect them to answer tonight, is the submission made by the Royal British Legion concerning our ex-servicemen. They are asking for some kind of commission to look at some of the problems not of older ex-servicemen such as myself but of younger ex-servicemen and women who, when discharged, come home to discover very many difficulties which they never believed they would have. We should honour our forces and never forget that we should always seek negotiation before we use force. We must remember Winston Churchill's remarkable statement that jaw jaw is better than war war.

I hope too that high level military representatives will work with the specialist industries. That is probably already taking place—I do not know—but I believe that representatives from our three forces should be working in conjunction with—almost hand in hand with—the industries that supply them with what they need to defend this island. I believe that NATO and the United Nations should also give closer consideration to that.

I hope too that we shall consider the positions not only of our people who work in NATO and the United Nations, but of our servicemen whom I have already mentioned. When they return home after serving their country, they should be met not with special treatment but with generous appreciation of the real difficulties that some of them face. I do not have time to go into that, but it is something that we in the Royal British Legion know about because those servicemen come to us. The Legion wishes and believes that our Government will take time out to consider the submission that I am making.

I turn now to nuclear weapons. I have to say this because I feel strongly about them: I wish that there was some way of abolishing nuclear weapons, but, until they can be abolished, I believe that it would be extremely foolhardy if we were to take unilateral action to rid ourselves of our nuclear weapons. We must not take that risk. There is another good reason for not doing that because, as Aneurin Bevan once said, you cannot send a British Foreign Secretary naked into the conference chamber.

Folly is often more cruel in the consequence than is malice in the intent. Our nation has always played and (perhaps with the United States and the Commonwealth) will always play a vital role in defending the free world. We must bear that constantly in mind. It is no good thinking that communism has disappeared because it no longer exists in one part of Europe. It is lingering everywhere to reappear and to challenge freedom and decency. We need first-class forces in case it ever returns to threaten us. In conclusion, therefore, in defending our own country we must at all times also make our contribution to defending a free world. I hope that this country of ours will continue to set an example to all mankind.

7.12 p.m.

Lord Holderness

My Lords, I find my sympathy at this point flowing strongly towards my noble friend Lord Cranborne, who will soon have to answer this debate. Having listened already to 18 splendid speeches on a variety of topics, he now has to endure one from me on another topic and still has to face—although the prospect cannot be anything but pleasant to him—another 11 speeches on a variety of assorted topics. All that is before we shall have the pleasure of listening to his reply, to which I greatly look forward.

Ever since hostilities began in the former Yugoslavia I have believed that there are countless people in this country and all over the world who have longed to do something to lessen in some way the suffering which seems to grow no less as the months go by. Most of the more robust developments which have been suggested and examined, including military intervention, air strikes or the dispatch of arms, seem likely to increase bloodshed and multiply suffering, as well as adding to the hazards of the effort to bring relief, which the United Nations is carrying out with determination and with the splendid and courageous assistance of forces from this country.

A number of people who know about conditions in the former Yugoslavia have persuaded me that we in this country could do much more to help those who have been and who are being injured in the conflict. They have drawn my attention to those who have suffered head and brain injuries. I have no doubt that there is much room for improvement in their care. However, I have become particularly concerned about the problems of those who have lost limbs either as a direct result of the struggle or (particularly in the war zones of Bosnia) in order to avoid the risk of gangrene after relatively minor injuries.

Earlier this year I made an approach to my noble friend Lady Chalker. I was met, as I had expected, with sympathy and understanding, but my noble friend at that time strongly emphasised the need to build on existing prosthetic services in various parts of the former Yugoslavia. I acknowledge the wisdom of that advice because the evacuation of severely wounded people, their rehabilitation in a foreign land and their eventual resettlement in their own country can present many problems which are not hard to understand.

Nonetheless, rehabilitation in the republics of the former Yugoslavia has problems of its own. First, in Ljubljana, at the best institute in the whole of the country, a shortage of trained prosthetists, who are needed to fit the artificial limbs, has been made acute by the increased demands made upon them. In addition, neither at Zagreb nor elsewhere in Croatia is there satisfactory training for prosthetists and no artificial limbs at all are produced in the whole of that republic. In Sarajevo, both artificial limbs and orthopaedic aids are produced, but there is a long delay in the delivery of the materials that are needed to make them. Finally, in Belgrade, where the aids are turned out in substantial quantities, only a small proportion of the prosthetists needed to fit them are trained to international standards. Leaving the individual centres and looking at the country as a whole, against the figure in a recent report by the United Nations which suggested a total of 4,000 war victims who had lost limbs, the rehabilitation services, especially in Croatia and Bosnia, are sadly in danger of being overwhelmed. I have become convinced that at least a proportion of those patients must be got out and that their treatment abroad can alone save the situation.

Fortunately, many countries have offered hospital places. The same United Nations report recorded an offer by Turkey of 1,000 places; another by Italy of about 450 places, but an offer by Britain of 21. Perhaps that modest offer is not the whole reason for the relatively indifferent performance by this country because one hospital in London, the Royal Masonic in the west of London, made ready to receive six months ago 10 children without limbs. They are still not listed for evacuation.

This leads me to ask my noble friend a number of questions of which I have given him earlier notice and which I hope he will consider with sympathy. First, is it possible to make more use of non-governmental organisations and perhaps entrust to one or two which merit confidence the kind of responsibility that is given to aid agencies in relation to disaster relief? Secondly, can we get on, without delay, and bring small numbers of patients here for treatment, and agree that the costs will be met either by the Department of Health or the ODA, or both? Thirdly, can we open up the possibility for one or more prosthetic companies in Britain to carry out work which will not only increase their expertise but also enhance their ability to meet wider commercial opportunities in the future?

Fourthly, is it possible to arrange transport through the International Organisation for Migration (the IOM) with a return guaranteed to a place of safety as close as possible to the patient's home? Fifthly, are there not ways to involve this country more closely in the urgent task of training more prosthetists and physiotherapists and expanding the facilities for producing artificial limbs? Finally, when patients return after rehabilitation in Britain, is it not important to encourage in various places the development of expert centres to care for the people who need further help and advice?

I have said probably about enough, but there is one project, supported by expert authority in this country, which illustrates the procedural difficulties which I hope my noble friend will use his influence to remove. Once patients have been identified, and invited individually for care in Britain, it is vital in many cases that valuable days and weeks are not lost before treatment begins. So will my noble friend try to ensure that firm procedures are established between, on the one side, the hosts inviting the patients, and, on the other, the IOM in London and Zagreb? Equally important is the development of proper machinery of co-operation among the Foreign Office, the ODA and the Department of Health. I hope sincerely that my noble friend will share my view that the development of that co-operation has become urgently necessary.

7.21 p.m.

Lord Moore of Wolvercote

My Lords, the gracious Speech states: My Government will play an active part in the Commonwealth". That is good news. I should like at this point to congratulate the noble Lord, Lord Chesham, on an interesting maiden speech. I am delighted to see that we apparently have in the House another supporter of the Commonwealth. One of the most important contributions Britain makes to international understanding and co-operation is through that unique body, comprising 50 nations—the Commonwealth. Yet in the seven years that I have been a Member of your Lordships' House, we have debated the Commonwealth just once—for a miserable two and a half hours three years ago. That seemed to show that the British Government are not interested in the Commonwealth. Indeed, the Government's attitude towards the Commonwealth was illustrated starkly in last year's Departmental Report of the Foreign and Commonwealth Office. Your Lordships will note the title.

In its statement of the objectives of British diplomatic policy, the report omitted any reference to the Commonwealth. One began to wonder whether the Government attached any importance at all to the Commonwealth. I am glad to say, however, that there has been evidence recently of what I hope is a change of heart on the part of the Government. There have been a number of encouraging signs. First, there was the speech last month by the Secretary of State for the Foreign and Commonwealth Office to the English Speaking Union. That was a realistic and constructive appraisal of the significance of the Commonwealth for Britain and for the world.

Also last month there appeared a publication by the Foreign and Commonwealth Office entitled Britain and the Commonwealth, a first-class piece of work which will be invaluable for educational purposes in schools and universities. And the Departmental Report of the Foreign and Commonwealth Office for 1993 does now state, as one of the first basic aims of Britain's foreign policy: To maintain and foster the special relationship we share with Commonwealth partners, in an association which can play a constructive and moderating role in world affairs". That is very well put, if I may say so.

I was delighted to see that the Prime Minister played such an important part in the Commonwealth Heads of Government meeting in Cyprus when he insisted that the conference should concentrate on producing constructive initiatives, notably over the GATT and South Africa. I was glad to hear the Minister refer to that matter. It is heartening to see the Commonwealth's great potential for international co-operation being put to such valuable, practical effect.

In the light of that evidence of real interest by the Government in the Commonwealth it was shattering to be told that they intend in two years' time to withdraw entirely their financial support for the Commonwealth Institute. I am sorry that I was unable to be present for the Question about that issue asked by the noble Lord, Lord Alport, but I have to say that I found the Minister's Answer most disappointing. The Commonwealth Institute is by far the most important body in Britain for educating our schoolchildren about the Commonwealth, and the Government's £2.9 million was well spent. So I have to ask myself: why have the Government taken that extraordinary decision? As their main reason, the Government give the reduction in the number of visitors to the Commonwealth Institute, to which I would reply, "Yes, the number of visitors did drop as a result of financial and curriculum restraints on educational visits by schools, but under the excellent new director general, the numbers have begun to rise again, and, in any case, 300,000 visitors a year, including 50,000 school children hardly indicates any lack of interest".

One must remember also that the institute's work is not merely that of receiving visitors. It plays an important role in taking the message about the Commonwealth out to the schools and beyond to the general public. I say to the Government that it is vital that the Commonwealth Institute should not close. I implore them to show that their commitment to the Commonwealth is genuine by reconsidering their decision to withdraw financial support.

7.26 p.m.

Lord Belhaven and Stenton

My Lords, I intend to confine my remarks to the situation in Poland and central Europe and their relationship to the EC and NATO, so I shall not be following, I am afraid, the noble Lord, Lord Moore, but in this debate we rarely follow one another. As I see it, Western Europe is today presented with an opportunity. Some people would call it a window of opportunity, and that is a good expression. Windows of opportunity do not open often. They are liable to be closed quickly if the opportunity is missed. Unfortunately people, especially certain kinds of officials in offices, tend to look the other way when the windows open and the opportunities present themselves. A great deal is lost irreversibly because of that blindness.

Since 1989, Russia has withdrawn from all the areas she occupied for 44 years or more. President Yeltsin has affirmed that he has no intention of subjecting those countries again, but we must look at the present situation in broader terms than by merely accepting the assurances of one man who may not be in power for long. We should look at Russia's history over the past 300 years, because this sort of thing has happened before. We must realise that the possibility exists that Russia will try to regain what she has lost. The process is already observable in the Caucasus, and, as I understand it, Byelorussia is only nominally independent. We should remember that Lenin gave independence to all the nations of the former Russian empire only to reconquer them as part of his new Soviet Union. It might interest your Lordships if I were to quote from a letter written in 1856 shortly after the Crimean War by Lord Stratford who was then British Ambassador in Constantinople. He wrote: Nicholas's Russia is to all appearances on its knees, but the Russia of nature is still in its growth, shorn of its most forward branches but capable of shooting into greater luxuriance at no distant period". "Plus ¢a change, plus c' est la même chose"! Now, more so than in 1918, we have an opportunity to integrate the ancient nations of Europe from the Atlantic to the Bug into a system of collective security. I do not believe that we should miss that.

So, with regard to Russia, I say that if she should consider reoccupying central Europe we should not tolerate it. I do not belittle Russia's concern about her security—or, indeed, the concern of any other country about its security—but I say that Russia ought to look at her own history and realise that for three centuries she has threatened the security of her neighbours.

In that context, I do not know whether my noble friend the Minister has read the will of Peter the Great. If he has not done so I recommend it to him as essential reading and I can supply him with a copy. The Tsarist state and the Communist state adhered closely to Peter's will and it is in my view one of the most revealing and prophetic documents in history.

The notion pedalled by, among others, The Times that "the Russian military has a paranoia about being encircled by its foes" ought to be seen in the light of past Russian imperialism. If we pander to this paranoia we are endangering the security of countries from the Baltic to the Sea of Japan, which have more reason to understand Russia's long-term policies than we have. We are also in danger in western Europe itself because who can tell whether the next wave of Russian advance will stop in central Germany? And if we listen to nonsense about "encirclement" we should remember that that was precisely the word used by Nazi Germany to justify its policy of expansion.

If I were alone in supporting the inclusion of Poland, the Czech republic, Hungary and Slovakia in NATO and in an enlarged EC I should hardly dare to put such a notion to a body of people as experienced and knowledgeable as your Lordships. I was therefore happy to see an article in the Daily Telegraph by Henry Kissinger advocating just that. There was also an article in the Spectator on 6th November written by the director of studies at the Royal United Services institute, Mr. Jonathan Eyal, which I recommend to my noble friend the Minister in addition to the will of Peter the Great.

In the past year I have been in Poland three times and also in the Czech republic and Germany. In spite of obvious problems there is every indication of prosperity and economic growth. Indeed, I read the other day that Poland has the fastest growing economy in Europe, which I can believe. There is also an indication that those countries are coming together in a way never envisaged in the past. People in Poland are going to Germany to shop—and the other way round. I crossed the frontier from Germany to Poland and back again and I also crossed the Polish/Czech border. In spite of the nonsense which one reads in the media, even in newspapers such as the Daily Telegraph, in my experience crossing those borders is quick and easy. Formalities are minimal. The whole of this large area is coming together and only some idiocy by governments can stop the process.

I return to some of our media. All kinds of nonsense is written and implied about the situation in central Europe. Foolish assertions—such as that the Polish border guards carrying Kalashnikovs with which they threaten travellers—are made which have no basis in fact and are mischievous if not downright malicious.

I was told by a friend who ought to have known better that one cannot park a car in Warsaw for five minutes before it is seized and driven off by bandits. When I went to Warsaw in my car last September I was understandably anxious but I noticed that cars were parked on and off the pavement in the city centre and elsewhere. Certainly there is a serious problem of car theft—there is here, too—but the assertion that one cannot leave a car for five minutes is nonsense.

I have said all that because there is a conception that Poland is a kind of "Wild East", which is damaging and untrue. It has problems with rising crime—do not we all —and for obvious reasons its problems are at present rather worse than ours. But it is working very hard to overcome those problems. On my visit last year to Warsaw with the IPU delegation I was impressed by its understanding of the situation.

Poland's biggest problem is the influx of about 8 million people from the former Soviet Union. They go ostensibly as tourists but not all behave like tourists except in one particular—that nearly all return home. But they are creating a problem especially in the centre of Warsaw and other large cities.

I return to my main theme; that Poland and her neighbours in central Europe ought to be brought into NATO or whatever security alliance succeeds or replaces NATO. We have at present the greatest opportunity for European peace and reconciliation this century. We ought to grasp that, remembering that our forebears failed to grasp a similar opportunity in 1918 with results that we still have to live with.

With regard to that, perhaps my noble friend would care to comment on a document which has come into my possession. It is the Joint Declaration of the Foreign Ministers of France, Germany and Poland made in Warsaw this month. The document states that France and Germany will support Poland—and its associated countries of central Europe—in its application to join the EC, the Western European Union and NATO, given certain unspecified conditions. Are Her Majesty's Government aware of that declaration of intent? Do they understand its meaning and concur with its objectives?

It seems to me to be significant that the two major powers in north-western Europe, to which my noble friend Lord Beloff referred in a different context, are working to bring Poland and its central European neighbours into the military security system of western Europe. Those countries—Poland, the Czech republic, Slovakia and Hungary—are literally at the heart of Europe. On many occasions my right honourable friend the Prime Minister has affirmed his intention to bring Britain into the heart of Europe. That intention, which is geographically impossible, must be meant to be understood in a metaphysical or spiritual sense and apply not just to the EC.

I can say without fear of contradiction that Poland does not plan to change its present frontiers. Imperfect though they undoubtedly are, Poland is realistic enough to understand that it must live with them for the foreseeable future. As I have already said in your Lordships' House, there are no frontier disputes in the area of central Europe to which I am referring. There is a Hungarian minority in Slovakia and a German minority in Poland, but I do not believe that they give any cause for great anxiety and would given even less cause were this whole area of central Europe to be brought within the EC/NATO framework. The threat in the East is dormant for the time being and now is the time to act to pre-empt any future threat from that direction. We may not have another opportunity.

I was included in the IPU delegation which visited Poland a year ago. We met many groups of people, both official and unofficial, but the one thing which we all agreed was that the foremost objective of our Polish hosts was that Poland should be in the EC by the year 2000. My noble friend Lord Beloff and the noble Lord, Lord Bonham-Carter, had an exchange on that subject. I was inclined to warn my Polish hosts that perhaps they had not understood the implications of the Maastricht Treaty but I understand that they would rather have that than Russian domination.

Although I have my reservations about the Maastricht Treaty that was the message we received. I have no reason to believe that it has changed during the course of the past year. The desire to be included in the political and cultural area of western Europe is a continuing one in Polish history and one which the West has consistently ignored except in times of great peril, such as the Turkish siege of Vienna and the Battle of Britain.

It is in our interest to have the borders of the new Europe enlarged to contain these nations, whose history is in the western tradition. It is not a threat to Russia to say that we do not want her armies back in Warsaw, Berlin, Budapest and Prague. What were they doing there in the first place? I accept that the present rulers of Russia do not threaten western Europe but history should at least teach us to keep a wary eye on any resurgence of Russian imperial ambitions.

This country, at its best, has a reputation for generosity of spirit. We should conduct our affairs in the spirit of Fox, Pitt, Wellington, Nelson and Churchill and not in the mean-spirited pen-pushing ethos of a nation of bureaucrats. We have opened our arms to large numbers of ethnic minorities in this country with a generosity which is rarely applauded as it should be. Let us also open our arms to our friends in central Europe—our ex-comrades in arms and fellow believers in freedom—who have suffered so much for so long in the common cause of humanity.

7.40 p.m.

Lord St. John of Bletso

My Lords, in my contribution to this evening's debate I wish to focus on Her Majesty's Government's commitment to supporting the construction of a democratic society in South Africa. What has been achieved politically through dialogue and compromise since President de Klerk's speech on 2nd February 1990 has far surpassed most people's expectations. Last Thursday's agreement on the new interim constitution was an astonishing achievement, a great step forward. It was a great step forward in the process of ensuring full democracy in South Africa. It has been hailed by many as the official ending of apartheid, drawing to a close 350 years of minority rule in that country.

The developments unfolding in South Africa have been rather like a delicate chess game or a jigsaw puzzle. However, it is clear that the options for the future will be fraught with danger and could, as in so many other so-called emancipated African countries, turn out to be disastrous.

My premise is that South Africa has just passed phase one of its move to full democracy and the country is now at the end of the beginning of the process, paving the way for the Transitional Executive Council—a multi-racial body—and the Independent Electoral Commission, which will oversee the run-up to the elections on 27th April next year and endeavour to prevent the intimidation of voters, candidates and political parties.

As architects of the new interim constitution, and having been on a rough roller-coaster ride over the past few years of negotiations towards achieving a constitution with checks and balances, I was indeed delighted that President de Klerk and Nelson Mandela were jointly awarded the Nobel Peace Prize this year. It is that challenge of ensuring peace and stability, particularly in the run-up to the elections next year, which will be the essential key factor in the success of constructing a democratic South Africa.

With the Freedom Alliance, the coalition of Right-wing movements, conservative black homeland leaders and the Zulu Inkatha Freedom Party choosing not to involve themselves in the recent multi-party negotiations, the need has become all the more important now to placate their demands, especially following the extremist threats to derail the process by violent actions if their demands are not met.

In the past few days the ANC has had several meetings with leaders of the far Right, in particular the Afrikaner Volksfront, and it is to be hoped that the announcement in the press today of a possible plebiscite among Afrikaners next year on an Afrikaner homeland will thwart a violent backlash to the transitional programme.

What I have found remarkable over the past few years in South Africa has been the development of a culture of negotiation and compromise against a background of racial mistrust, anger and bitterness. The past year will be remembered in South Africa not just as the year when the interim constitution was agreed, when an election date was set, when the ANC officially called for the lifting of economic sanctions and when the good rains in the main broke the drought; it will be remembered also for the assassination of Chris Hani, the death of Oliver Tambo and the ongoing senseless killings in several of the townships, including the massacre of white churchgoers in Kenilworth in Capetown. So far this year more than 2,000 people have died in political violence in South Africa, despite the fact that the peace accord has been working in many areas. This year there will be more violent assaults and rapes per capita in South Africa than in any other country in the world.

One of the contributory factors to the violence has been the enormous number of AK-47 rifles that have been smuggled from Mozambique into South Africa. Added to that, many households are armed to the gunnels. There has been speculation that the United Nations may be proposing a plan to exchange money or food for arms in South Africa. That is one area which will be a major problem for the next government in the years to come: how to control the possession of arms, particularly the illegal possession of arms.

Despite those gloomy statistics, I believe that there is much to be optimistic about as South Africa moves into the next phase of achieving full democracy. The emergence over the past few years of a culture of negotiation and compromise has not just been in the political arena but also in the economic forum. In the past, economic disputes often ended in mass action and conflict. Now, in the main, they are managed and a satisfactory resolution is normally achieved.

There was an excellent article on that subject in the Financial Times last Thursday headed: From Civil War to Consensus". Over recent years many forums have been established to promote and consolidate that culture of negotiation. Those include the National Economic Forum—the tripartite body where business, government and labour seek agreement on economic policy—housing, education and local government forums and, of course, the National Peace Committees.

As I notice that three noble Baronesses are to speak in succession after me, it is worth mentioning that women have played and will be playing a far more prominent role than in the past in the process towards achieving democracy in South Africa. That is not just in the political arena but also in the business community. Women make up 53 per cent. of the population in South Africa, and Nelson Mandela has committed himself to a non-racial, non-sexist South Africa. The National Women's Coalition, established last year, represents 55 women's groups and almost every political persuasion and sector in South Africa. One of its main goals has been and will be to draft a national charter of women's rights. No less than one-third of ANC candidates in the forthcoming elections will be women.

Time precludes me this evening from commenting on the checks and balances and flaws of the recently agreed interim constitution, other than to emphasise that that is a draft interim constitution laying the basis for five years of coalition rule during which time the final constitution will be thrashed out. Clearly, the international community will need to play a major role in the run-up to the elections in its observer capacity and particularly in the preceding days before the elections to ensure that intimidation is not continuing in many of the township areas. The Minister made mention of many international organisations that will be endeavouring to ensure that the elections are free and fair.

Most political parties are now actively involved in voter education programmes. However, one of the major problems facing South Africa is how the new government will be able to meet the expectations of the voters, particularly those previously precluded from the vote. With the unemployment rate, excluding the informal sector, running in excess of 40 per cent. of the potential workforce, and with an estimated 60 per cent. of the population under the age of 23, the prospects for peace and democracy are critically dependent on the performance of the economy. That point was raised by the Minister in her introductory speech.

There have been encouraging signs that the economy has been clawing its way out of recession, and inflation is currently at around 8 per cent. The international community will have a major role to play in encouraging investment with South Africa. As the Minister mentioned, it is not just current investment; it is ongoing international investment which is needed, not just aid.

For job creation, emphasis will need to be focused on improving general education. International initiatives, such as Education Africa, which my noble friend Lord Marsh and the noble Baroness, Lady Perry, are currently promoting, are to be encouraged. The ANC has committed itself to providing free and compulsory education to all for a minimum of 10 years. For there to be sustained and increased international investment in South Africa there will surely need to be a climate of stability and certainly of economic and political policy. There must be certainty in those two fields. There will also need to be co-ordination among government, business, trade unions, the churches, NGOs and community-based organisations.

Against the culture of negotiation rather than confrontation that has been established over the past three years, I believe that those objectives are obtainable. The business community stands to play a vital role in the future of South Africa and could emerge as the most important element of civil society to ensure that the new government are accountable for their actions—particularly in the field of economic and fiscal policy.

Nelson Mandela has committed the ANC to honouring all agreements reached at the multi-party constitutional negotiations and to accommodating all reasonable demands. In his words: We want to build a nation and that means compromise". That conforms with the words and spirit of the opening lines of the Freedom Charter: South Africa belongs to all who live in it—black and white". I believe that there is a common desire for peace, stability and prosperity in South Africa. With the foundations laid, and the ongoing support of Her Majesty's Government, I am confident of sustained democracy in that country.

7.53 p.m.

Baroness Strange

My Lords, at this late hour when everything that needs saying has been most eloquently said, those noble Lords who are still here will be relieved to know that I shall be brief. I shall start, as did my noble friend Lord Montgomery last Thursday, by putting the horse before the cart; as, indeed, the defence White Paper also set out to do last summer.

There has been a change and a thaw with the collapse of the iron curtain and the Cold War, but it is like the global warming effect which has had the interesting (but if you think about it, obvious) result of melting the icebergs in the Arctic and thereby making the seas much colder. With the melting of the Soviet glacier of the Cold War, we are left with many rocks and large lumps of ice which were formerly in the glacier, but which are now all banging about together. Alternatively, to use another metaphor, with the break-up of the iron curtain, the world is full of a lot of rusting old iron. In any event, paradoxically, it is a much less safe place. We, like Hadrian's little white wandering soul, creeping about in the dark, are ever more vulnerable.

My noble friend Lord Carrington has said that in foreign affairs the unexpected always happens. Having been described in the Wall Street Journal this month in a rather pejorative way as a fortune teller and reader of tea leaves, I feel as qualified as anyone to predict what might happen. I should perhaps disclose to your Lordships the fact that I was taught by my grandmother, who was taught by her aunt, who was taught by Madame le Normand, Napoleon's fortune-teller. I hope that the noble Lord, Lord Jenkins of Hillhead (who is not at present in his place), will be reassured to know that I am sitting on the Government Benches.

The world today is an uneasy place. There is not one threat to stability, but many. Nuclear weapons proliferate—China is still testing—despite the welcome decrease here and in the United States and also in Russia. India, Iraq, Iran and Israel are all in the running. Further, what are the dangers of North Korea, the snout of the dragon, as a latter-day Vietnam? Libya certainly has chemical weapons. So we are not geared to an all-out assault from one place. The hurricane is around us and may blow from any direction.

Therefore, let us not sit smugly back and talk about peace dividends in the middle of a whirlpool. We still have the best armed forces in the world—their courage and expertise is second to none. We should not be nibbling at their morale like Treasury mice at the feet of chocolate soldiers.

Marching with the war widows down Whitehall on Armistice Day, some of them old, some young and with children, but all of them proud to be British and proud of the men who died for them; or marching with the 10,000 veterans, the young men lining the streets representative even now of those delivering aid to war-torn Bosnia or standing firm for Britain in the streets of Belfast; the sailors who man our ships in the seas of the world and those who fly our planes in the air, let us not cut our defence spending any further. Let us cherish them and not throw away the flower of our nation and our hopes for the future for an extra one pence in our pocket.

7.57 p.m.

Baroness Gould of Potternewton

My Lords, having just returned from advising political parties in Russia on how to run democratic elections, and having been privileged to be involved in the development of the democratic process in many countries in East and Central Europe and in South Africa, I, like other noble Lords, would welcome a specific debate on the new democracies and their development to full democracy, including the position of women.

However, today I shall concentrate my remarks, as other speakers have done, on aid; that is, not on the financial complexities, as did my noble friend Lord Rea, but on the basic principles and the effects of the decline in the levels of Britain's aid programme. As a rich nation we have a responsibility to work for a new agenda for international economic justice which could release millions of people in the developing world from their lives of debt, disease and poverty, and from not knowing whether they will eat today or whether their children will see tomorrow.

Yet again we have been told and have been assured that the Government will maintain a substantial aid programme to promote sustainable development and good government. But the actions of the Government belie the words. Despite the Minister's words on the importance of aid, I would ask the Government why it is necessary time and time again to call on them to carry out their promises? I make no apology for doing so once more, nor for reminding the Government of those promises. Throughout the 1980s we were told by the Government that their official objective was to reach the UN target of 0.7 per cent. of GNP "when economic circumstances permit".

However, when the economy grew, we were told, that the aid ratio was declining because our GNP was growing so fast". The commitment to honour the Government's pledge was recognised in last year's Tory party manifesto and confirmed yet again by the Prime Minister in Rio. Yet every year Britain has slipped further away from that target. The Prime Minister, on his priorities for public expenditure, stated: Our review of public spending will be careful and thorough. There will be two criteria—are any changes fair, and are vulnerable people protected". Yet once again Britain's aid is under threat. I reiterate that in 1992 the aid budget was frozen at £1,900 million. On that basis Britain's aid as a percentage of gross national product will fall to its lowest level ever at 0.26 per cent. That is a far cry from the target of 0.7 per cent.

Overseas aid should not be a soft target for cutbacks in public expenditure. The very poor abroad should not be penalised. Are they not the vulnerable people that the Prime Minister believes should be protected? Given Britain's growing multilateral commitments, any cuts or continued freeze would not only have a disproportionate effect on our bilateral aid programme but could also mean further cuts in real terms of 10 to 20 per cent. A reduced aid budget means reduced influence.

Britain is cutting aid at a time of-unprecedented need in countries such as Bosnia and the Sudan and at a time of increasing opportunity in Ethiopia, Eritrea and South Africa. The welcome end of conflicts combined with the spread of democracy gives cause for hope. It also provides the opportunity for European co-ordination of the many competing bilateral aid programmes.

However, the diversion of resources from the developing world to Eastern Europe, coupled with growing expenditure on emergencies, means that there is less money for long-term development work. As the noble Baroness indicated in her opening address, there is a great need for long-term development aid. It takes a long time to develop institutions and infrastructure that the poorest countries need and to develop the health and education of their populations. The noble Baroness, Lady Chalker, has said, More prosperous countries, with better educated and healthier people, are better able to cope with the effects of disaster when it does strike". She could have added perhaps that they also make better trading partners. Failure to provide the financial resources for development now could lead to untold costs in emergency and remedial work later. It is cheaper to invest now than to pick up the pieces in the future.

British industry is a beneficiary of our aid programme, particularly the power, construction, mechanical and electrical industries. In terms of Britain's global economy, the aid programme generates economic activity for the UK equal to the value of the aid programme. Action to increase aid and promote trade is essential to development. As has been previously stated, debt is probably the largest single obstacle to recovery for developing countries. Falling commodity prices and rising import costs in the 1970s led many governments to resort to heavy borrowing. As a consequence, over the past 10 to 15 years, the amount of debt owed as a proportion of the value of exports from developing countries has almost doubled.

In his moving speech, my noble friend Lord Cledwyn illustrated the plight of the people of Africa. It cannot be acceptable that Africa spends approximately 30 per cent. of its hard currency earned from exports on debt servicing. That is four times more than it spends on health care. Such hard currency should be ploughed back into fruitful investment projects instead of the debt crisis being allowed to become one more chapter in the history of exploitation and under-development. As my noble friend Lady Blackstone indicated, a sharp reduction in the debt burden must be a priority for the international community.

While welcoming the agreement made by the G7 in July this year to discuss deeper debt relief for the world's poorest nations, it is disappointing that three years after the Prime Minister first proposed the Trinidad Terms, no substantial progress has been made to implement the package that would have helped to reduce the debt of the most indebted low income countries by two-thirds. A timetable is needed for full implementation of the Trinidad Terms as the first phase of a complete write off of debt for those countries. Perhaps the noble Viscount can indicate in his reply whether such a timetable is being considered. It would also be useful to hear that the British Government intend to follow through their initiative and take a lead in convincing their partners in the international community to, at the very least, fully implement the terms. They will be working with the Clinton Administration which has indicated its sympathy for debt reduction measures.

In the past 20 years the proportion of people living in absolute poverty has declined from one in two to one in five. But the number living below the poverty line has increased to an all time high of 1.2 billion people. More than a quarter of the world's people are plagued with premature deaths through insanitary conditions, appalling housing, lack of clean water or starvation. One woman per minute dies during pregnancy or at child birth and these tragic conditions are maintained and exacerbated by the lack of foreign currency to re-invest in essential long-term investment projects. Because of unfair global opportunities these people are unable to trade out of poverty and repay debt.

Britain remains a powerful nation with strong influence in the European Union, the United Nations Security Council, the G7, international financial institutions and the Commonwealth. Our membership gives Britain a unique range of responsibilities. We must not shrink from those responsibilities in the fight against world poverty. By failing to meet aid targets the Government are denying their responsibility towards the poorer countries of the world and risking Britain's place at the top table. A frozen or reduced budget has serious implications for the countries in need and for this country's international standing. Britain has a growing economy but is far down the list of OECD donor countries and falling.

Undoubtedly, the Government face difficult economic decisions, but in the long term sustainable developmental progress will bring stability and security. The decision facing the Chancellor next week about the future of UK aid in this year's Budget should be a simple one. My fear is that he will not grasp the opportunity it offers.

8.9 p.m.

Baroness Park of Monmouth

My Lords, I find it a sad irony that when the Secretary of State visited Russia in September, General Grachev, according to Tass, described a letter of intent to re-train Russian officers made redundant from the armed forces as, an example of military co-operation in practice between Britain and Russia". According to Kokoshin, the Deputy Defence Minister, they, exchanged views on defence budgets and how to structure armed forces during sharp personnel cutbacks". The Secretary of State assured him, accurately, that we have experience of such problems. Finally, the Secretary of State noted that: it was difficult for him to imagine Russia not taking part in the North Atlantic alliance's affairs". The Secretary of State was speaking to military leaders in a country where, unlike Britain, the Prime Minister—Chernomyrdin—speaking in the National Security Council on 12th October, said that the council regarded the military doctrine as its top priority, followed by urgent steps to pull the country out of the economic crisis. He said: When we make up our mind on the military doctrine, we will know what to do about other issues". He called for a fresh and frank statement on the needs of the Russian army, including financing. When those needs were known, the Government and the President would see what they could do.

On 15th November Deputy Premier Soskovets said that the state order for the defence industry in 1994 will be preserved at the 1993 level and that new types of weapon and combat hardware will be included in the state order to preserve the defence industry's high scientific and technological potential. No doubt the nine new nuclear submarines a year for the next 10 years will be part of that.

On 17th November President Yeltsin followed that up by announcing to the army commanders that Russia would be adopting a five-year conversion programme in the near future which would take into consideration the need to create the most advanced armaments for the Russian army. He added that a smaller army must be more mobile and that the level of its technical equipment needed to be sustained and enhanced. As Queen Victoria might have said, how different from our own dear Government.

It seems more and more fruitless to argue, as I shall however continue to do, that we are dismantling both skilled forces and defence potential in industry which cannot be replaced and destroying any influence we might have brought to bear in the world when the world is a dangerous place. Russia's military doctrine recognises that, so long as nuclear arsenals have not been eliminated by all states, the possibility of a nuclear war should be planned for. It states that: The objective of the Russian Federation's policy in the field of nuclear weapons is to eliminate the danger of nuclear war and the use of nuclear weapons by deterring the unleashing of aggression against the Russian Federation and its allies". Russia retains the right to make a first nuclear strike. Today we are dealing with a regime in Russia whose actions and intentions are reassuring, but there have been two major crises (in 1991 and 1993) when that regime could have been replaced by something far less friendly.

Russia is on the one hand gradually rebuilding a successor to the USSR in the CIS, and is having to fight a series of brush fires on the borders of the CIS which have already led her to press for a revision of the CFE treaty to allow her to increase her agreed strength. Within Russia there are, according to one of President Yeltsin's advisers, Mikhail Maley: taking account of redundancies, around 5 million people employed in the defence industry and about 1 million in the nuclear industry". Russia continues her drive to find new markets for sophisticated arms, particularly in the Middle and Far East, and especially in China, of which Russia now takes a pragmatic view, and India, which has paid over a further 5 million dollars for deliveries of cryogenic engines and related technologies under the 1991 agreement. No official ban on the continuation of that contract work has yet apparently been implemented, despite an earlier commitment to do so.

Russia is, alas, not the only country to present a potential threat in terms of nuclear security. It is not reassuring that in October 1993 Ukraine was continuing to threaten to retain 46 Soyuz-24 strategic missiles, each with 10 nuclear warheads.

I do not suggest that at present the Russians are planning for more than the capacity to defend and to deter. That, however, is the power that we seek for our own forces. There is no time now to consider the implications of Russia's policy on NATO, which is to join it before or with the eastern European countries (a classic case of neutralisation of the enemy), its policy on Europe, which is again to join it before the eastern European countries, or its policy on peacekeeping, which is to be recognised as the prime peacekeeper in the territories of the former Soviet Union, with UN and CSCE observers making all its actions respectable, and, with luck, UN funds to pay for the operations.

Azerbaijan has rejoined the CIS. Aliyev, its new President, is an old Moscow hand who secured a vote of 98.8 per cent. (quite like old Soviet times), and one must wonder how happy Armenia and Nagorno-Karabakh will be that Russia now aims to be the "honest mediator".

I can only beg my noble friend the Minister to take strategic, not short-sighted tactical, decisions; to recognise, as the Russians do, that a sound defence capacity is a very cheap but effective way of exerting influence and securing respect in the UN, with the US, in Europe, in NATO and in the world generally; and above all to recognise that it is too early to take irreparable steps in terms of defence cuts. I beg him to remember and observe what the gracious Speech said—that this Government attach the highest importance to national security.

8.15 p.m.

Lord Weidenfeld

My Lords, the breakthrough in the Israeli-Palestinian peace efforts, which Her Majesty's Government have pledged to support, was the fruit of direct and secret negotiations. The United States played a pivotal part at the outset and no doubt will play a decisive part in the future. The role of the European Community and of Great Britain is now being seriously discussed and scrutinised in the region. Having just returned from Israel and a short trip to various European countries, I feel that there is room for all the constructive, sensitive and symmetrical help that can be given.

The financial aid promised by the Community for the immediate and medium-term infrastructure needs of the West Bank and Gaza is not only acknowledged by the Palestinians but also welcomed by Israel. The Israelis are aware that only when standards of living and conditions of work for the Palestinians can by upgraded will there be genuine scope for regional co-operation. Mr. Shimon Peres and his close aides who were involved in the Oslo negotiations make it quite clear that for such co-operation to be realistic and eventually to prosper it must not be seen as some form of Israeli economic neo-colonialism.

Prime Minister Rabin, in a robust speech, called on the Community to show its goodwill towards Israel as well as towards its neighbours. The free trade agreement signed between the Community and Israel in 1975 was at that time a breakthrough in Israel's economic and political relations with Europe. The adjustment of that agreement now is a necessary consequence of the many positive developments over the years. Israel welcomes the Commission's decision to endorse the mandate for negotiation of a new agreement and is looking forward to the commencement of those negotiations. However, there are serious anxieties that they might not go far enough. The Israelis feel, quite rightly, that given Israel's considerable volume of trade with the Community, and given the large imbalance of that trade—Israel imports about £6 billion of goods and services from the Community each year and exports less then half that value into the Community—a necessary adjustment should be made and be dealt with as a first priority. Over 75 per cent. of Israel's agricultural exports go to the Community. The very fact that Israel already has a free trade agreement with the Community should enable it to be first among the countries with which the Community is ready to reach preferential agreements in the future.

One of the most encouraging developments is Israel's current rate of economic growth. The economy grows at a rate of 6.5 per cent. per annum. The vitality and quality of Israel's economic effort bodes well for the future. It is in that context that I should like to say a few words about bilateral relations between this country and Israel.

No one doubts this country's manifest interest in advancing peace, but there are still areas where relations can be greatly improved and misgivings allayed. The British arms embargo against Israel is anachronistic. Discrimination against Israel in the context of continuing and massive sales of arms to Arab countries is sending the wrong message both to Israel and to the business community in the United Kingdom. Britain's attitude to the Arab boycott is, rightly or wrongly, regarded by Israelis as lagging behind that of other major European countries so far as concerns legislation or indeed overt and outspoken disapproval. Israel took great risks upon itself in its bold agreement with the PLO. Further steps are expected; and yet the response so far by the Arab states has been to strengthen their overt commitment to the Arab economic boycott against Israel. There is something albsurd about a situation in which a boycott office in Damascus still masterminds and monitors trade restrictions when at the same time world opinion is calling for a huge financial levy in favour of the region.

The Washington Accord has important passages on economic co-operation. Here, Britain, with its influence in the Gulf and Saudi Arabia, should be seen to take a more determined stand. Bilateral economic co-operation must be further stimulated. There is scope for more joint venture and more official encouragement of trade. That would be beneficial for both countries and create more jobs in Britain. I understand that the Secretary of State is planning a visit to Israel shortly. That visit will be very welcome and, it is hoped, may clear up some of those outstanding issues.

However, let us not forget that there are stark and sombre facts which threaten progress. The daily acts of terror causing the deaths of Israelis and Palestinians, and the determined and unscrupulous opposition by Arab rejectionist states, could yet derail the process. That terror must be condemned without reservation. I hope that the British Government will use their influence in convincing Chairman Arafat how important it is that he should be seen to condemn terrorism without reservation. We must not underestimate his task. He has the formidable task of recruiting new forces of law and order. He has the formidable task of converting a resistance movement into an embryonic entity of self-governing administration. However, he must attempt the task; and he must be helped.

Israel is vulnerable because she has a democratic government accountable to an almost inquisitorial Parliament. Israeli opposition is articulate and sometimes violent, but I, for one, believe that the Rabin/Peres Government has matters in hand. However, it needs moral support from all well-wishers of peace. The outside world, Europe and Britain, must prove by compassionate understanding, by deeds and gestures, by rhetorical restraint in report and comment, that it will help the moderate parties on both sides, phase by phase, to carry the negotiations through to that peace that we all so ardently desire.

8.23 p.m.

Lord Vivian

My Lords, it was stated at the beginning of the most gracious Speech that the Government attach the highest importance to national security. Some of your Lordships have already emphasised that point today. The gracious Speech continued by announcing major aspects of the Government's defence policy including our support for NATO, the promotion of the extension of the Nuclear Non-Proliferation Treaty including weapons of mass destruction, the support of the United Nations in undertaking peacekeeping and preventive operations, and the maintenance of the fight against terrorism throughout the United Kingdom.

Those commitments are covered by our three defence roles recently amplified in the Statement on Defence Estimates 1993. I believe that our defence policy is clear and that our armed services are keenly aware of the three roles to which they now contribute and will continue to do in the future. However, undertaking those roles and acting in accordance with Government policy needs strong, superbly trained and well-equipped forces with an adequate manning ceiling below which there can be no reduction. However, I should like to warn your Lordships of some aspects that have already started to weaken the newly proposed force levels and some other aspects which may contribute to causing an eventual loss of credibility in our armed services.

The critical matters affecting the Army and the security of the nation to which I wish to draw your Lordships' attention this evening are the following: the consistent erosion of the quality of the Army; the damage that further reductions dressed up as savings efficiency packages will do to the army force structure; the dangers of any decrease in our military intelligence gathering; and the harmful effects of a lack of funding to our research and development organisations and any significant reduction in the Territorial Army and reserve forces.

I refer first to the consistent erosion of quality of the Army, which results in a decrease of credibility, a lack of self-confidence in officers and men, a reduction in their morale and a loss of faith by those serving in the Army. That in its turn leads them to a belief that no future career structure remains, resulting in departure from their regiments. It is alarming but not perhaps surprising that those now deciding to leave the Army are officers and men of the highest quality and ability. Is it surprising that even more officers and soldiers are considering leaving their regiments when one hears statements that armoured regiments may be further reduced by some 16 tanks and around 64 crewmen? Those possible future reductions would naturally affect the eight remaining in-service armoured regiments, six of which amalgamated during this year involving the loss of about 50 per cent. of their officers and soldiers through necessary redundancies, to form one regiment from two. It is a well-known fact that men and women in the armed services have great pride in themselves and their units. They do not speak of their concerns in public. I keep in touch with the Army and I have never seen morale as low as it is. There is a distinct requirement for the Government to take some constructive and positive action now, otherwise the rapid drain of those leaving will not be stemmed and the replacements, if attracted, may more than likely be of an inferior quality, no longer providing the high qualities of leadership which have traditionally been the hallmark of the regiments of the British Army.

I should now like to turn to a phrase known as "efficiency savings". I do not wish to become involved in commenting on public expenditure statements. I am fully aware that there is approximately a £50 billion deficit in our balance of payments. However, there is a very real danger that some so-called efficiency savings could be harmful to our armed services.

There may well be ways of achieving greater financial savings, but that must not be in the form of cuts to the detriment of our front line troops and their weapon systems. It must be clearly understood that those front line troops are not just the tank crewman and his tank, the infantryman and his rifle, or the gunner and his artillery piece, but all the other close support, logistic and administrative troops which are deployed in the front line area. Those vital support troops are not only within the combat zone but also man the line of re-supply that ensures that all front line troops can function and fight effectively within the combat zones. Front line troops in this context are the teeth arms, the supporting arms and the logistic and administrative troops that produce well balanced brigade groups with an all round military capability structured to fight the battle effectively in high or low intensity operations.

There has already been a considerable degree of what is now known as "hollowing out". Some examples of that have been the eating into reserves of ammunition, the financial saving on training by carrying out less field training, a reduction in the holding of spare parts, and imposed delays in placing orders for new weapon systems and equipment. For instance, when will a decision be made to purchase Challenger II tanks for the remaining eight armoured regiments; or has it been decided that there is to be a mixed tank fleet of Challenger IIs and refurbished Challenger Is, which is an expensive and not particularly cost-effective option? If that hollowing out is not redressed the Army will become, in effect, no more than a paramilitary force, a gendarmerie totally unfit for any high intensity operations and questionable as to its effectiveness for low intensity operations such as fighting terrorism and peacekeeping duties.

I do not wish to be seen to be unduly pessimistic, but unless urgent steps are taken to redress the measures of hollowing out we are heading down the road to becoming an impotent army with no punch at all—a hollow tree with only its bark—the proverbial bark being far worse than the proverbial bite—or, as my right honourable friend the Secretary of State said, "a paper tiger".

Unless there is a reduction in commitments there must not be any further cuts to the army force structure. Our resources are still over-stretched and I am still unable to see when the coveted goal of 24 months between unaccompanied infantry tours will be achieved: probably not for at least another seven years, even taking into consideration our forthcoming withdrawals from Belize and Hong Kong. To illustrate that, since November 1991 one infantry battalion has had seven months accompanied in Germany, then six months unaccompanied in Northern Ireland, then 10 months accompanied back in Germany; and now this same battalion has recently started a six-month unaccompanied tour in Yugoslavia. I expect other battalions have experienced, and will continue to experience, similar tours of duty. In fact, it is even possible that our commitments could increase in the future.

I would point out to your Lordships that cutting troop levels, commitments and capabilities are not the only ways of making savings. Savings could be made in a number of other ways by forming more joint headquarters and by merging the Army Air Corps with the Royal Armoured Corps, as both corps have the same roles of reconnaissance and the destruction of armour. Further savings could be made from the sale of barracks, housing estates and small and unrealistic training areas. In essence, if the Army is to be seen to be a credible and powerful force there should be no further cuts to the current force structure, and contract support should not be envisaged for front line units.

In my remaining minutes I should like to touch on intelligence, our reserve forces and research and development. First, intelligence. In such an uncertain and unstable world it is essential that the flow of military intelligence continues to provide the Government with information from which assessments, future plans and policy can be made. In this context there should be no cut in the funding of our essential intelligence facilities and our assessment capabilities. There should be no relaxation in our special relationship with the United States of America and no reduction in the number of military attaches deployed with our embassies abroad, who contribute so much not only in their reports but also to defence sales.

Secondly, our Territorial Army and our reserve forces welcome the proposals made in the reserve forces paper, which was recently published. Your Lordships are well aware of the keenness and efficiency of the Territorial Army and the reserves. They are well respected by local government and in many towns are the focal point of community life. They provide a footprint of discipline and organisation which is of significant value across the whole of the United Kingdom. They provide that vital back-up to the regular forces in time of tension. Future legislation may make it easier to call out reserves rapidly and should enable them to reinforce and serve with regular units on, peace-keeping and operational deployments. With the Regular Army being reduced to 119,000, there is a need for a strong Territorial Army and reserve forces to bring the Regular Army up to war establishment. Any significant cut to the establishment of our reserves would undermine the fighting efficiency of the regular forces, which have been reduced too much already.

Lastly, I should like to mention research and development in the context of the time it takes our defence manufacturing base to produce weapon systems and the cost of running weapon programmes. The costs are high, but it will be necessary to continue with research and development although it may not be necessary to implement the costly production stage. It is essential that with 10 to 15 year lead-times the Government keep pace with sophisticated technological weapons being manufactured in other countries.

Our defence forces will not be seen by the rest of the world to be credible unless we possess weapon systems which are as sophisticated, if not more so, than those of any potential enemy. Statements such as "the forces of Russia have deteriorated to the point where they pose little threat to Western Europe" are unrealistic and irresponsible. Research and development in Russia continues at a fast pace, and a central part of their recent strategic doctrine is that Russia seeks to maintain the former Soviet Union and Warsaw Pact countries as their sphere of influence.

In conclusion, in these unpredictable and dangerous times we cannot afford to be complacent about our defence forces. They must be strong, recruited to establishment, equipped with the most modern, sophisticated weaponry and superbly trained. We need an army of 125,000 with our present commitments. This will provide our country with credible defence forces to back up our foreign policy. The high price of freedom and peace has to be paid, so let us ensure that we pay enough. A few days ago we were commemorating all those who gave their lives in the supreme sacrifice. Surely now is not the time to betray those valiant people, our proud traditions and our history for the sake of a billion pounds or more. I pay great tribute to our armed services, and without strong defence forces we place the security of the United Kingdom at peril.

8.36 p.m.

Lord Mayhew

My Lords, new decisions on defence will no doubt be announced next week in connection with the Budget. That means that our debate is perhaps a little more speculative and a little less important than it otherwise would be. I have a feeling that a further debate on defence may well follow the Budget, but we on these Benches will await the Budget decisions and judge them on their merits. A number of speakers tonight have not waited for the announcements but have declared in advance that they will oppose any further cuts in defence expenditure. That applies, I think, to the service chiefs.

There is some danger in these "knee jerk" reactions of opposition to defence cuts of any kind. When Options for Change was published we on these Benches criticised it on certain issues and criticised it particularly for the disproportionate cuts made in the British Army. We discussed the overall size of the cuts and declared that in current circumstances, with respect to the noble Baroness, Lady Park, the overall cuts were modest. That reaction was, I believe, more appropriate than the savage condemnation of the overall scale of the cuts made in Options for Change heard from a number of noble Lords opposite and some on the Cross Benches. Those spokesmen have evidently reloaded their guns in anticipation of the Budget next week but they lack credibility for not sniping at the obvious individual follies of the Government's defence policy and instead subjecting it to indiscriminate bombardment.

We have heard, particularly from the noble and gallant Lord, Lord Bramall, and from the noble Lord, Lord Chalfont, very powerful attacks on the inadequacy, as they see it, of the provision for our armed forces. Almost everything that they said, and every criticism that they made, was wholly justified on the assumption that, behind their speeches (and this goes for other speeches made by noble Lords opposite) we must somehow maintain our traditional global peacekeeping role. The noble Lord, Lord Chalfont, used a very good phrase in his first question to the noble Viscount. He asked whether the Government would undertake to maintain our global role in its historical tradition. If that is our aim and our obligation, of course our armed forces are inadequate. No one can doubt that. But how far is that assumption true? That is the key point of the debate. I shall be interested to hear the noble Viscount respond to that question. I hope that he will not evade it; I hope that he will tell us what the Government's position is.

No one denies that our forces have a unique skill and experience in peacekeeping. Let us compare Bosnia and Somalia. One could not have a better illustration. We all pay tribute to the marvellous work of our forces, to be seen also in Northern Ireland, in this particularly testing role. But that does not mean that we can maintain our traditional global peacekeeping role. Far from it. It is far beyond our economic, political and military power. That is nothing to be ashamed about. It is not as though we were in absolute terms any less rich or powerful militarily than we were. On the contrary, we are richer and more powerful militarily than we have ever been before. But that is not to say that our traditional role can be maintained.

We had our industrial revolution first; and we became the most powerful industrial country in the world. We maintained a traditional global peacekeeping role, and we did it extremely well. We should be proud of that. We should be prouder of it than most British people are. But what happened then? Other countries had their industrial revolutions. Other countries passed us. Today we have slipped in the pecking list. We may regret that. It is not our fault. But we have to adjust to it.

My complaint is that so many speakers opposite, in this and in previous defence debates, have not adjusted to Britain's different position in the world today. All kinds of appalling things will happen unless we face reality and make the best of our current position, abilities and power. Otherwise, as was illustrated by a number of speakers, we shall have ambitions far beyond our military capability.

Lord Campbell of Alloway

My Lords, is the noble Lord saying in terms that it is the policy of his party that we should no longer retain the peacekeeping role? Is the answer yes or no?

Lord Mayhew

My Lords, if the noble Lord refers to an individual peacekeeping role, I would say no. We have to share with our allies. We have to act with the United Nations. That is precisely the point I am making. The traditional peacekeeping role is something that we exercised with great skill and some success; we can no longer exercise it. The longer it takes noble Lords to understand that reality and adjust to it, the greater is the danger that we shall find ourselves involved in operations worldwide which we do not have the political, economic or military power to sustain.

I see that the noble Baroness, Lady Chalker, has returned to her place. I remind her that in our last defence debate I expressed the hope that she would be the United Kingdom delegate to the non-proliferation conference. I expressed the view that she would be best qualified for it. But I added a warning; namely, that before she took on that distinguished job, she should insist on certain changes in Britain's nuclear weapons policy. I said that she should insist that the Government cancel their project for a sub-strategic air-based nuclear missile. I said that she should insist on reducing the firepower of the nuclear deterrent. I insisted that Britain should agree to support a comprehensive test ban treaty. All those points are essential. To go to the non-proliferation conference without doing any of those things would be to expose the British delegate to the most humiliating opposition from the scores of non-nuclear signatories to the treaty who are very sensitive and suspicious about Britain's nuclear role. They would ask: why Britain and not us? And why has Britain not fulfilled its obligations under the treaty in relation to disarmament, testing and so on?

I invite the House to consider what has happened since I gave that friendly warning to the noble Baroness. She has persuaded the Ministry of Defence on all three points. TASM has been abandoned; the firepower of the Trident submarine has been cut; and now we support a comprehensive test ban treaty. We should all like to congratulate the noble Baroness for the masterful handling of the Ministry of Defence that she has displayed. I hope that she will not take it amiss (she may think that I am ungrateful) if I now suggest to her five further changes in Britain's nuclear weapons policy, which, if she carries them out as she carried out the other three, will ensure that she leaves the great conference not merely without humiliation, but with considerable credit.

Very briefly, these are the three points. The non-nuclear signatories will ask: why are there at this moment four or more nuclear missile submarines, French, British and American, patrolling the high seas, confronting the Soviet Union in the old Cold War manner? She will be asked that question. What is the answer? Is the threat of Soviet nuclear attack so imminent that to deter it those submarines must be kept at sea and not in port? Will that be the answer? It makes no sense at all. The noble Baroness will be asked: why four or more submarines when one submarine can inflict unacceptable damage on the Soviet Union? My first suggestion to the noble Baroness is that before the non-proliferation treaty conference she should consult with her allies and end this absurd over-insurance in nuclear missile submarines and patrols.

My second point is: let the Government speed up the current British-French consultations on nuclear weapons policy. They have been going on for a year now, and nothing seems to have come out of them. Both countries have the same deterrent aim. Why should they not share the task? And why should the noble Baroness not be able to go to the conference with a decision on reducing the joint capability of the two countries? That is another, I hope, constructive suggestion.

Thirdly, why do the Government go on saying that the sub-strategic nuclear weapon, the WE 177, the free-fall bomb, will remain in service until the year 2005? We know now that the Government have taken the advice they were given from these Benches and have cancelled TASM. They have also taken our advice and decided to equip the Trident submarine in the sub-strategic role. But there is no case whatever for duplicating that role by equipping the Tridents and continuing with the free-fall bombs. Why therefore, before the non-proliferation treaty, do not the Government agree to phase out the WE 177 within the next few years? That is my third constructive suggestion.

Fourth, the non-nuclear signatories intensely dislike secrecy in nuclear weapons policy. Why do not the Government do as the Americans and the Russians do? Why do they not reveal, not just the firepower ceiling of the deterrent, but the actual firepower that they propose? Why do they not also reveal the form of verification that they propose for that reduction? Unless there is verification, under the START regulations the reduction is invalid.

Finally, what about the comprehensive test ban treaty? We welcome the statement in the gracious Speech that the Government now favour serious negotiations and will support a test ban. But what about a moratorium? The French, the Russians and the Americans have declared a moratorium. Before the non-proliferation conference, why do not the British Government declare their own moratorium? Admittedly they cannot test anyway, because the Americans will not allow it. But that should not detract from the simple point of principle that we too should be in favour of a moratorium. Those are five points which will enable the noble Baroness to emerge with the utmost credit from the conference. I warmly recommend them to the Government.

Finally, perhaps I may say one word about conventional weapons policy. We are very encouraged to note in the gracious Speech that the Government, will work to secure NATO's adaptation to the changing security environment, and to continue developing the operational role of the Western European Union". I wonder whether the noble Viscount can spell out a little what is meant by those words.

It is widely believed, except possibly by the noble Baroness, Lady Park, that the threat of Soviet conventional attack in Europe has become even more remote today. A war scenario in which the rapid reaction corps plays an essential part as a unit is becoming more and more difficult to imagine. Do the Government have in mind that WEU may earmark from the rapid reaction corps joint task forces for United Nations work outside the NATO area? If so, it seems to me—I believe that my noble friends will agree—to be a constructive idea. Such joint task forces would be better equipped for low intensity warfare, would be more transportable and above all, being under WEU, would have full French participation. If that is what is in the Government's mind we shall warmly support it from these Benches. It would also make specialisation easier and allow a fairer distribution of the manpower burden, which would be of great value to this country and ease our defence budget.

I have tried to make some constructive suggestions to the Government. I hope that the Government will carry them out. If they do, they will not only find support on these Benches; they will make a considerable contribution to the future peace.

8.54 p.m.

Lord Clinton-Davis

My Lords, this has been a fascinating debate. It has necessarily been somewhat diffuse, dealing as it does with a mass of foreign policy issues and also defence. We have had the advantage of hearing two excellent maiden speeches from the noble Lord, Lord Chesham, and the noble Viscount, Lord Waverley, both of whom—and a clear common denominator appeared in their speeches—spoke with vast experience of the need to enhance British trade. One spoke of trade with Latin America and the other vis-à-vis the Cairns Group generally. The Government would do well to heed their excellent advice. Perhaps I may also say that the noble Lord, Lord Mayhew, posed a number of salient questions which I hope that the Government will answer. He spares me the task of having to repeat rather similar questions on the defence issue.

One of the more remarkable speeches came from the noble Baroness, Lady Young, who took a somewhat idiosyncratic view on Cuba, which we are somewhat unused to hearing from noble Lords opposite. It was all the more interesting in that it came not only from a government supporter but a very important government supporter.

I want to dwell first on certain foreign policy issues and then move on to defence and security. Essentially I shall deal with some of the omissions in the Government's position so far as the speech of the noble Baroness who initiated the debate is concerned. First of all, all sides of the House are delighted with the progress that has been made in South Africa, with democracy now well in sight. The speech of the noble Lord, Lord St. John of Bletso, who speaks with particular experience in these matters, was particularly refreshing.

However, I want to start with certain questions affecting the Middle East. Everyone who has spoken said how much they rejoiced in the courage displayed by the Labour Government of Israel and by Mr. Arafat. But we have to recognise that the present position is far from easy. It is a very fragile peace. Not only do the efforts of the Government of Israel and Mr. Arafat need to be buttressed, but also the support that has been given by the Government of Egypt, the significance of the recent election results in Jordan and the moves that have been made by the Government of Morocco to sustain the peace process all need to be nourished. I hope that the future will reveal a somewhat more helpful and realistic attitude on the part of the Government of Syria.

Everybody recognises the risks that are being taken by Mr. Arafat and the PLO and the Government of Israel. There are risks so far as their own people are concerned. There are risks that those who have a vested interest in seeing the talks break down—there are rather too many such people—should not in fact have their views sustained. There are grave risks; and so far as concerns the PLO, it is right that the European Community should have responded with a five-year programme of support—500 million ecu—in order to build up the infrastructure in the areas that will be controlled by the PLO. That is certainly a priority. But I do not see any kind of movement on the part of the European Community as a whole or on the part of the Government here to recognise that the boycott—inimical to the purposes of the Treaty of Rome without any shadow of doubt, discriminatory and indeed I would say illegal—is wholly incompatible with the peace process.

The opportunity is now here for the European Community and its member states to ensure that the whole Middle East will be able to benefit from the increased trading opportunities which the ending of the boycott would certainly provide. The peace process will mean great opportunities for companies in Europe operating in joint ventures with countries throughout the Middle East. It will open up great benefits as those countries expand their trading potential. Why cannot the British Government and the European Community now say, using their considerable influence on Arab states which still insist on operating a boycott, enough is enough?

I should now like to turn to certain matters affecting the European Union. We heard another good speech in many ways from the noble Lord, Lord Cockfield, a former colleague of mine. I am glad to say that we worked fruitfully together when we were in the Commission. He was right to point out that the opportunities that were there for this country to have the central bank located in London have been lost because of the purblind position adopted by the United Kingdom Government in the negotiations at Maastricht. To think that this was "game, set and match", as the Prime Minister described it, is a little fanciful. We have seen the first result and it is a sad reflection on those negotiations that the central bank is to be situated in Frankfurt. As the noble Lord said, the Government have themselves to blame. I thought he spoilt everything, or nearly everything, with a somewhat misplaced and irrelevant attack on the Opposition. It saddened me personally, but I suppose that it was a somewhat unavailing attempt on his part to persuade his Conservative colleagues to take him seriously, as they should; but unavailing, I fear, it will be.

The noble Lord was right to reflect on the fact that we are now in the lower half of the European Union in terms of prosperity. Indeed, the myth about the economic miracle was shown to be quite absurd when over the past two years Britain received 40 per cent. of Objective 2 funding. That does not speak well of the economic management of this country by the Conservative Government. But there was also the other opt-out. I shall not go into it in any detail because we have had many debates about the opt-out over the social chapter. The Government say in the gracious Speech that they look forward to the accession of Austria, Finland, Norway and Sweden to the European Union. What on earth do they think those four countries are going to say about the social chapter? They will not side with this Government about it—that is for certain. The four of them will reinforce the view of the other 11 that the social chapter is critically important in the building of a Community, a point we have made over and over again. It is high time, as my noble friend Lady Blackstone said in her remarkable opening speech, that the plea of Howard Davies of the CBI and many industrialists should be observed by the Government. There has to be an end to the deplorable rhetoric in which certain Ministers engage in order to gain cheap standing ovations at the Conservative Party Conference and which do nothing to bring us to the heart of Europe. It is hugely damaging and it deters British industry from successfully using European Community law and institutions both as a sword to attack abusive behaviour from others and as a shield to defend its own interests. If it is constantly told that this is a faceless bureaucracy with overwhelming numbers and that it will not be listened to, why on earth should it go to seek advice and support from the European Commission?

Remarkable speeches were made on the aid budget by my noble friend Lord Cledwyn—a most moving speech, if I may say so—and by my noble friends Lord Rea and Lady Gould. The aid budget has been constantly and deliberately eroded, notwithstanding anything that the noble Baroness may say. I fear that what she was in fact arguing today simply represented a euphemism for further cuts in overseas aid in next week's Budget. It is also idle to say that one of the criteria for granting aid has to be economic liberalism, to cite what the Foreign Secretary had to say only the other day. What they are arguing is hopelessly inconsistent with protestations from the Prime Minister at the Earth Summit and in their own manifesto that the Government would implement the United Nations target of 0.7 per cent. of gross national product.

I wish to say a few words about Cyprus. The Government have been pusillanimous in the extreme about the Turkish occupation of Cyprus. They have failed to denounce a continuous violation of human rights and the persecution of the Kurdish people. Why is that the case? Why can they not stand up for those human rights? They have failed to do it significantly over the years. With regard to the former Yugoslavia, we have had recently frightening posturing by the leaders of Croatia. The president himself has welcomed the achievements of the Croatian administration under the Nazi hegemony. Why are we so mealy-mouthed about the abuses that are constantly committed by the Croatian Government? We are right in condemning Serbia, but we should not be selective in our condemnation.

So far as concerns the United Nations, it can only function properly if there is a greater commitment of purpose. That commitment of purpose must also be reflected in ensuring that political dues are paid promptly. The Government should use their influence, if they have any, with the United States to ensure that the serious arrears which have accrued there are put at an end. Why are the Government not now responding to the need to support UNESCO? This issue has been raised in the House by my noble friend Lord Judd and myself, and I must say that the response, or non-response, from. the Government was rather alarming. UNESCO has put its house in order. It demands support.

I turn from that to certain defence and security issues, although several salient points have already been raised by my noble friend Lady Blackstone and by the noble Lord, Lord Mayhew. I want to turn first to the statement in the gracious Speech about the reforms which are to be made as regards the secret and intelligence services and GCHQ.

The gracious Speech states: My Government will introduce legislation to place [both of these] on a statutory basis; and to make further provisions for the oversight and accountability of them and the Security Service".—[Official Report, 18/11/93; col. 3.] Why have they waited so long? Of course the oversight and accountability of these organisations are right in principle. We have learned from bitter experience with this Government that high-sounding principles from them can be denuded of virtually all meaning when the legislation arrives. So we shall examine that legislation with the utmost care. Why have they taken so long in remedying an appalling wrong done to those employed at GCHQ so that they can enjoy the democratic right of belonging to the trade union of their choice? Is it contemplated that that is now what will happen and that they will have that right? Certainly they are entitled to it.

As regards the comprehensive test ban and the non-proliferation treaties, the Government have pledged themselves to encourage international responsibility in conventional arms transfers. How are they to go about encouraging that noble purpose when we have in the background the evidence of total irresponsibility and deceit which have been practised by the supply of arms to Iraq as revealed in the evidence given to the Scott Inquiry and the conflict of evidence between civil servants and Ministers who were determined only in their resolve to mislead Parliament? How can we expect any credibility to be lent to this purpose by such a Government?

The noble Lord, Lord Mayhew, has spoken about the need to have a total ban on all nuclear testing. He asked why the Government are so shy about responding to that when in fact other governments have been far more forthcoming.

The question of Russia is a matter where again the Government have shown far less commitment in practical terms than have the government of the United States, for example. The United Kingdom has recognised that there is a need to deal with the unsafe storage of nuclear weapons. It has committed £30 million to help in that purpose. The United States Government are providing £1,000 million in order to deal with that problem in Russia alone. It is a clear threat to all of us and it needs a more positive response from the Government than has been witnessed so far. By 1997, 4,000 nuclear weapons are due to be destroyed under START I. So far progress has been limited, to say the least. Can we expect the Government to make a more positive contribution in that regard?

When my noble friend Lady Blackstone opened this debate she adverted to the need for a defence review, which has been echoed on all sides of the House. It is a suggestion which has been supported by large segments of the military community and by many in the Conservative Party, as well as by Opposition parties. Why is it so strenuously resisted by the Government? After all, defence policy is but an arm of foreign policy, because that is what it is all about. It is because the objectives of British foreign policy are so obscure that the Government's defence policy makes so little sense.

We hear about all sorts of things from the Government in their reflections on defence, from medals to weapons. We even heard the other day from the Minister of State for the Armed Forces about gender-free testing. That is not contributing very much to the wisdom of the nation about their purposes in defence policy. What we do not hear is what our Armed Forces are supposed to be doing. We cannot know unless foreign policy is formed on a less ad hoc basis than is currently the position. What specialisation should Britain adopt in conjunction with our NATO partners, or do the Government reject specialisation altogether? What is wrong with the idea of a common procurement policy through NATO?

We must recognise that our resources are very limited and that they and our forces have to be matched against the risks and responsibilities that we assume. It is not enough to go on paying tributes—justified though they are—to the resolve and often heroism of people in the Armed Forces. But sometimes I feel that they all too often presage further cuts—a bromide for each brigade which has to go. We live in a dangerous world, and if we cut our defence expenditure there needs to be a basis for some rational explanation of those cuts. They should not simply be dictated by Treasury-oriented cuts. We need a full and detailed review of our commitments and resources. They must be brought into conjunction.

It is critical to our defence and trade effort that we have a viable merchant marine. The Minister in another place was asked about this the other day and said that he was satisfied that our response from the merchant marine would be sufficient in time of emergency. That was based on a survey carried out by the Department of Transport. I do not believe that that is the case. I have been involved in matters affecting merchant shipping for many years now, and it is not only my view but the view of the industry, the trade unions and of virtually all experts that the Government are misleading the House about this issue. We do not have the resources in this field. Our merchant marine has got into a sorry plight and it has had no help whatsoever from this Government on any substantive basis. What the Government are saying in that regard simply does not stand up.

Finally, I should like to deal with the question of defence diversification. A great deal of progress has been made by local authorities, trade unions and progressive defence companies on defence diversification work, but they cannot do it on their own. We need a defence diversification agency. That view was expressed pretty strongly by Mr. George Walden, MP, on 18th October. In response, the Secretary of State said, "We leave these matters to market forces". That is utterly absurd. One hundred thousand or more jobs have been lost in the defence industry. Some of those jobs could have been diversified into other purposes. The United States has a defence conversion commission, easing and helping defence workers into civilian occupations. These are important questions. They have been raised repeatedly by my colleagues in another place, by my noble friends in this place, by members of the Liberal Democrat Party and by a number of Conservative Members of Parliament. However, in two hours 12 minutes of ministerial speeches on the defence review, neither the Secretary of State nor Mr. Hanley could say anything more about defence diversification than the words to which I have already referred. It is quite scandalous.

This debate has depicted the proximity of foreign policy and defence policy, yet that proximity is simply not matched in the perceptions of these issues which have been enunciated by Ministers. There are, of course, a number of issues on which the House is at one and I am pleased that that should be so. However, there are also significant differences, and it is right that we should explore how those differences might be reduced. That has been the benefit of this debate today.

9.17 p.m.

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

My Lords, this has been a long debate and the hour is late. A great many of your Lordships have spoken and of course, as one would expect in a debate in your Lordships' House, a great deal of importance and interest has been said. I hope that your Lordships will not expect me to cover every point that has been made with such force and eloquence. If your Lordships will forgive me, I will simply try to answer as many as I can in a relatively short time, and perhaps my noble friend Lady Chalker and I can be allowed to write to those noble Lords whose observations I fail to address.

Before I tackle a number of the points that noble Lords have made during the course of the evening, I wonder whether your Lordships will allow me to add my congratulations to the two noble Lords whose distinguished maiden speeches we have heard today. Having heard them today, we can be sure that we can look forward to their future contributions in your Lordships' House. I was particularly interested in the obvious knowledge which the noble Viscount, Lord Waverley, displayed on the important question of Latin American trade, especially when one considers the long history of British investment in Latin America during the 19th century in particular. I was interested also in the observations of my noble friend Lord Chesham on the GATT round. He made an extremely valuable contribution.

I had been going to say that my noble friend Lady Chalker concentrated, on foreign affairs in her speech and I was going to skip over the enormous vistas of foreign policy which she so ably encapsulated for us this afternoon, but I have been dissuaded, to a degree, from doing so because many of your Lordships have raised matters, especially on aid, which it would be remiss of me not to attempt to answer at least briefly.

I was interested in the speech of my noble friend Lady Young. I was aware of her initiative in leading a delegation of British businessmen to Cuba earlier this year. Every noble Lord will agree with her about Cuba's potential, especially if, like me, noble Lords are fond of the odd Cuban cigar. She will know at first hand of the measures being taken in Cuba to open the door, at least partially, to foreign trade and investment. She will be aware, far more than am I, of the considerable problems that still exist in Cuba. I hope that she will be able to address those questions in your Lordships' debates as time goes on.

The noble Baronesses, Lady Blackstone and Lady Gould, and the noble Lords, Lord Bonham-Carter, Lord Cledwyn, Lord Rea, and others unleashed attacks on this country's aid budget which struck me as being more in sorrow than in anger. Far be it from me to talk with great authority on this important and complicated subject, especially with my noble friend Lady Chalker sitting on the Front Bench beside me, but noble Lords should be aware—I believe that they ignored the fundamental points—that we are still an important aid donor. We are the sixth biggest donor in the world. That shows considerable dedication, and, when compared with other countries, could be defined as at least punching our weight on that important matter.

We have taken a number of initiatives. The increase in the aid budget in real terms has been 10 per cent. since 1987–88. I agreed with the noble Lord, Lord Rea, when he said that aid was an investment. I am certain that noble Lords who have experience of investments, whether purely commercial or with political payoffs, as aid assuredly does, will recognise that a foolish lack of control of investment can have a most debilitating effect on the people whom the investor is trying to help or support. Therefore, I make no apology for my noble friend's sensible focus on ensuring that the money she gives out in her aid programme is spent in the most efficient way and on those most in need.

Figures related merely to a country's GNP are not necessarily the only sensible way to measure aid. Cash aid of 0.7 per cent. of GNP is still the target. That was a question asked by one or two noble Lords. But there are other devices which are at least as helpful. Some noble Lords and noble Baronesses referred, rightly, to the debt burden from which a number of developing countries have suffered for decades. That is why I am pleased to be able to remind your Lordships that this country has forgiven over £1 billion of debt to a number of countries. Indeed, my right honourable friend the Prime Minister's Trinidad initiative, which is in the course of negotiation at the moment, envisages a further forgiving by the international community of 1.75 billion American dollars of debt. That must be a sensible way to approach such matters.

Baroness Blackstone

My Lords, before the Minister completes his response in respect of aid, will he tell the House from where he obtained the figure showing that the UK comes sixth in terms of aid to the third world? The figures that I have examined indicate that we were eighth but have fallen to thirteenth place in the league table of aid to third world countries.

Viscount Cranborne

My Lords, I understand that no less a body than the DAC Committee of the OECD is the source of that assertion. I am sure that the noble Baroness will consider that that body is at least respectable enough for her to be able to accept the figure that I have given.

Perhaps I may pursue a number of your Lordships' remarks on foreign policy. I was touched in particular by the speech of my noble friend Lord Holderness, whose knowledge of matters affecting the disabled is well known to your Lordships. I am also grateful to him for giving me notice of his comments. Her Majesty's Government, like the rest of this country, have immense sympathy for those who suffered injury as a result of war, in particular the savage conflict in what used to be Yugoslavia. Your Lordships will appreciate that the programme of evacuations is co-ordinated by the UNHCR. At the request of Mrs. Ogata this country received 68 evacuees last year. I am delighted to be able to tell my noble friend that we have offered to receive up to 1,000 more evacuees plus their dependants this year. We shall arrange appropriate treatment through the NHS. I hope that my noble friend will therefore feel that we are doing our bit, although in view of the size of the tragedy no doubt it never seems enough.

I wish to make one further remark to the noble Lord, Lord Moore of Wolvercote, who asked about the funding of the Commonwealth Institute. For a number of years the institute has been highly dependent on the UK Government for finance. Indeed, its buildings have suffered extensive deterioration. There has been a significant downturn in the number of children visiting the institute, but I am delighted to say that that downturn has been arrested by the policies of the excellent new director-general. That individual is working on some good new ideas for developing the Commonwealth Institute as a more commercially self-sufficient institution. We need to improve the current funding in a number of ways, in particular as regards a greater and better use of the site. My noble friend is greatly encouraged by the ideas of the new director-general. We are equally determined that the Commonwealth Institute should not close. Work is going on to find alternative means of financing a more up-to-date institute which will be more in tune with the Commonwealth of the later 1990s and the next century.

I turn to defence matters. I feel that I have perhaps too frequently wearied your Lordships with the Government's views about the new strategic circumstances in which we find ourselves as a result of the fall of the Soviet empire. Therefore, with your Lordships' permission, I shall not attempt to repeat myself, especially as our geostrategic analysis has not altered materially. Nevertheless, I wish to emphasise that our reliance on NATO—a point that I have been careful to make in a number of debates in this House—is, as ever, the key to our strategic approach. Certainly we regard the transatlantic connection as the key to European and Western stability.

I wholly agree with a number of noble Lords who observed that the situation has changed and, therefore, NATO must adapt itself. I was interested in particular in the remarks made by my noble friends Lord Belhaven and Stenton and Lord Campbell of Alloway, and I was delighted to find that the noble Lord, Lord Bonham-Carter, also expressed an interest in that subject.

As noble Lords will know, there is a proposed summit meeting in Brussels early next year in which the future of NATO will be discussed. Therefore, it is particularly timely that our American allies have made their proposal for what they call a partnership for peace. That is an interesting initiative. It provides a useful and interesting contribution to debates on NATO.

The noble Lord, Lord Mayhew, and, to a lesser extent, the noble Lord, Lord Clinton-Davis, mentioned the question of the WEU. There is a clear danger as regards the independent development of the WEU in that unless it is developed with some care it could undermine what is to us the key transatlantic connection which makes NATO such an important cornerstone in our defence policy. Nevertheless, it is clear that the WEU can and should have an important role, partly as the European pillar of NATO but, at the same time, we should also examine—and we are doing so—the development of the WEU's operational role. As noble Lords will know, the guidelines for that were laid down in the Petersburg Declaration of 1992.

Military tasks have been identified which are appropriate to the European forces acting under the authority of the WEU council. I should say to the noble Lord, Lord Mayhew, that those include humanitarian and rescue tasks, peacekeeping, and tasks for combat forces in crisis management.

I must resist the little trip down memory lane, along the path of ancestor worship, with which the noble Lord, Lord Bonham-Carter, tempted me during the course of his remarks. I should say only that the great Lord Salisbury was entirely convinced that this country was a European power. I am not entirely sure that he would feel that there should be an over-arching power in Europe with a highly taxed, high social cost economy which is beginning to threaten the competitiveness of Western Europe in view of what is happening in America and the Pacific Rim. Therefore, as a man who was keen to make sure that the balance of power in Europe was preserved, I doubt that he would see the kind of things which were negotiated away at Maastricht necessarily in the same way as did the noble Lord, Lord Bonham-Carter. Perhaps the noble Lord will forgive me if I say that that argument perhaps belongs more outside the Chamber than inside it.

It has become a truism to say that the world today is a complex place. If we are to take the measures that seem to flow from our changed circumstances, we must do so with immense care. That is perhaps especially so if they imply a reduction in the military power that we have available to us.

Nowhere is that more true than in the field of nuclear policy, as my noble friend Lord Campbell of Alloway observed. Noble Lords will be aware that we regard our nuclear deterrent as the cornerstone of this country's ultimate security. In previous debates I have tended to make a bald assertion. Perhaps your Lordships will allow me this evening to elaborate just a little because it is clearly a matter of some interest notably to the two Front Bench speakers who have just sat down.

Noble Lords will be aware that we have already reduced our ground-launched, tactical nuclear forces to zero in the past three years and have announced a substantial reduction in our air-delivered, nuclear bombs. We have also made an important change to our sub-strategic capability in the longer term by communicating to your Lordships our decision not to replace the WE177 free-fall bomb when it comes to the end of its natural life. As a result of that decision, the Trident system (whose inherent flexibility is a great bonus both operationally and in budgetary terms) will take on the sub-strategic role after the WE177 is eventually withdrawn from service. I see that the noble Lord, Lord Mayhew, wishes to intervene. I give way.

Lord Mayhew

My Lords, I am much obliged. The equipping of Trident will be a very quick affair; indeed, it will take perhaps a year or two. Therefore, why do we need to continue with the WE177 as long as that? Why do we need to duplicate the business? Surely it would be much cheaper and quicker to go over to Trident.

Viscount Cranborne

My Lords, perhaps I may send the noble Lord the timetable for the delivery of the remaining three Trident boats. I am sure that he is already aware that it is more than a matter of a year or two. We already have a vanguard delivered, but there are three more boats and their delivery will be spread over the next decade. I believe that it is more than a year or two. Therefore, that tends to coincide quite nicely with the expected life of the WE177 bomb.

We are happy that the changed international situation justifies that decision. However, as many of your Lordships observed—notably the noble and gallant Lord, Lord Bramall —the world is an unpredictable place. I believe that it would be extremely foolish to close our sub-strategic options for ever. I must tell the noble Lord, Lord Mayhew, that we must, therefore, preserve our capability to design, develop and produce nuclear weapons in the future. We shall keep our sub-strategic policy under review, safe in the knowledge that, should the international situation change, our policy will also be able to change.

Our sub-strategic policy is important. However, equally important is our strategic deterrent and the Trident system upon which we have spent so much taxpayers' money over the past few years. Your Lordships will be aware that last week my right honourable friend the Secretary of State for Defence made an important speech in which he discussed our nuclear policy. It enabled him to make a consequential announcement about the level of nuclear capability that we will deploy on the four new Trident submarines. Incidentally, I should tell the noble Lord, Lord Mayhew, that if we need one nuclear submarine on station at all times, then we need, four to be certain of that and, therefore, to be able to provide the deterrent that we believe to be so important.

Your Lordships will, rightly, expect me to take this opportunity to repeat my right honourable friend's conclusion in this House. I should like briefly to explain the reasons for it. We believe that, just as nuclear deterrence ultimately ensured our victory in the Cold War, deterrence remains our ultimate guarantee of security in the unpredictable world of today. My noble friends Lord Belhaven and Stenton and Lady Park of Monmouth have already observed that Russia will remain the pre-eminent military power in Europe, with very large nuclear as well as conventional forces.

I submit that we would be very negligent indeed if we ignored that fact, although we would be equally remiss if we failed to take advantage of the increasing openness of Russia by trying simultaneously to forge a new relationship with that country designed to remove the mistrust and antagonism between us. I was especially interested by the remarks in that context made by the noble Lord, Lord Cledwyn of Penrhos, and the noble Lord, Lord Clinton-Davis. Perhaps the only remark that I can make in response to the noble Lord, Lord Clinton-Davis, is to say that perhaps he underestimates the extent of what we are doing in Russia and the extent of our contact on matters such as resettlement. It is a skill which we have developed with remarkable effectiveness over the past few years. I think it is worth pointing out to your Lordships that over 75 per cent. of those who leave the services find jobs within three months of leaving and there is a very much higher proportion after six months.

Today, just as before the Wall came down, the basis and the reasoning for the existence of the deterrent and our determination to maintain it remain the same. The idea that nuclear weapons are uniquely able to prevent major war is at the heart of our policy. We undermine that idea at our peril and it is for this reason that a declaration of no first use of nuclear weapons would undermine the basis of our policy. We cannot allow the impression that a major conventional war in Europe is a safe option for an aggressor.

I sometimes wonder, when I listen to the noble Lord, Lord Mayhew, as he sounds triumphant at the various suggestions which he says have been made to us over the years and which we have adopted, whether he will not rest until he has finally got rid of every element of our nuclear arsenal over the next year or two. I hope I am wrong about that but I must say I am beginning to have my doubts.

We have striven to establish an effective framework to introduce international stability in nuclear matters and the non-proliferation treaty must play a pivotal role in those efforts. I would say to the noble Baroness, Lady Blackstone, that it is for this reason that we shall indeed seek an indefinite extension of the treaty in 1995 and that we shall endeavour to achieve universal membership as well as trying to strengthen the associated safeguards regime. I would further say to the noble Baroness and to the noble Lord, Lord Mayhew—I must say that once in a while I find that his unqualified support worries me rather more than it should—that there are other measures that could contribute towards halting the spread of nuclear weapons. For instance, we are ready to take part in negotiations aimed at a verifiable comprehensive test ban. We are hopeful about the prospects for a verified cut-off in the production of fissile material for explosive purposes and we will continue to discourage and help to resolve the many disputes worldwide that encourage nations to develop and buy nuclear weapons.

There is certainly instability and uncertainty. However, as a number of noble Lords have said this evening, there is also hope. There can be no doubt that this country is safer today from direct attack than for many decades. I would say to the noble Lord, Lord Mayhew, that we have always made it clear that our deterrent is a minimum deterrent and that remains the case. What the word "minimum" means in this context has always been and remains ultimately a matter of judgment. I would remind your Lordships that uncertainty matters as part of the force for the ideology of deterrence. It is for that reason that we are reluctant to make the kind of declarations on moratoriums that the noble Lords, Lord Mayhew and Lord Clinton-Davis, have suggested that we should.

My right honourable friend has exercised that judgment and, as the noble Lord, Lord Mayhew, said, he has quite rightly taken due care, and therefore time, before announcing that each Trident submarine will deploy with no more than 96 warheads, and indeed may carry fewer than that. However, I must stress that it remains our policy not to specify precisely how many warheads the boats will actually carry.

I am conscious of the time and I apologise, first, for the hoarseness of my voice and, secondly, for the length of time I have taken to address myself to what I feel is an extremely important subject. I know, however, that nuclear matters have long interested your Lordships and your Lordships' House. That is an interest I greatly welcome and I hope your Lordships will forgive me for taking a little trouble over this important subject.

A number of other important questions have been raised during the course of this afternoon and I had hoped that I would be able to address myself a little to them. I merely finish by saying that I shall write to noble Lords on a number of points, notably the question of reserves. Noble Lords will be aware that on 12th October we published a consultative document entitled Britain's Reserve Forces: A Framework for the Future. This provides what we believe to be an effective framework for reserves. However, I must emphasise that the document does not address the question of numbers. I must tell my noble friend Lord Campbell of Alloway that he will have to wait a little longer until I am ready to make an announcement to your Lordships.

As I have said, your Lordships addressed themselves to a number of other questions, notably the eternal old chestnut of the defence review. I would say to the noble Lords, Lord Chalfont, Lord Clinton-Davis and Lord Mayhew, and others, that this is a tempting thing for everybody in the Ministry of Defence to indulge in. I say to your Lordships merely that a defence review takes time. The speed of events worldwide is great. Rather than reviewing what we are able to do in the defence field in a static manner I hope that we can introduce a rather more flexible and adaptable system, which will effectively be the management of change which, as noble Lords will know, is a fashionable concept in management circles these days.

Of course I pay my tribute to our forces. Everybody who does so in your Lordships' House can be relied upon to admire the quality of the forces we have at our disposal in this country. Yet often in the same breath those who admire them and the way they are led accuse the forces of being extravagant, bureaucratic and sybaritic. Am I alone in detecting an inconsistency here? Of course no organisation is perfect. The noble and gallant Lord, Lord Bramall, accepted that, and my noble friend Lord Vivian made some interesting suggestions in that regard. The services are the first to admit that there is always room for improvement, and improvement in cost-effectiveness and efficiency has never been at a higher premium than today.

I hope that when we examine the question of the number of civil servants in the MoD our critics are aware that a civilian is cheaper to employ than a man in uniform and that a civilian who fills a job in the tail releases a serviceman for the front line. If our critics are aware of that they have a peculiar way of showing it. I should like to pay a particular tribute to our civilians, many of whom are extraordinarily able and very hardworking. They have improved their efficiency dramatically of late in the face of smaller budgets and the consequent incessant turbulence and uncertainty. An acknowledgment of that fact would at least be equitable and would do at least as much to encourage them to redouble their efforts as uninformed criticism.

Finally, it is right that we should have discussed defence and foreign policy together. That was a point made by the noble and gallant Lord, Lord Bramall, and also by the noble Lord, Lord Clinton-Davis. One policy cannot be coherent without the other and I look forward to many more debates in the context of both. Like the noble Lord, I expect that after the Budget, when we are able to discuss the expenditure plans for the Ministry of Defence, we shall have other opportunities to return to this important matter.

Viscount St. Davids

My Lords, on behalf of my noble and learned friend the Lord Chancellor, I beg to move that this debate be now adjourned until tomorrow.

Moved, That the debate be now adjourned until tomorrow.—(Viscount St. Davids.)

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