Address in Reply to Her Majesty's Most Gracious Speech

HL Deb 17 November 1994 vol 559 cc26-140

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

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

3.4 p.m.

The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey)

My Lords, it is an honour to open your Lordships' debate on the gracious Speech. We look forward very much to the maiden speeches of my noble friends Lord Blaker and Lady Rawlings.

This will be a wide-ranging debate. I shall say a little about the European Union, NATO, Russia, Bosnia, Rwanda and Britain's aid effort. My noble friend Lord Henley will concentrate on defence and security policy.

Each is an area in which Britain plays a crucial part. This reflects the global nature of British interests. Exports are about a quarter of Britain's GDP. We are the third largest providers of direct investment overseas; the sixth largest aid donor. We have major political responsibilities as a permanent member of the United Nations Security Council. We are the fourth largest troop contributor to UN peacekeeping efforts.

These matters have a direct bearing on our political interests and economic wellbeing. I shall start by looking at two building blocks of our international role, the European Union and NATO. One of this Government's highest priorities is to see the new freedoms in central and eastern Europe underpinned by the kind of stability and prosperity western Europe has enjoyed. The European Union has to look outwards, and spread eastwards. This is a year of real progress on both counts. The Swedish vote means we shall welcome three new members to the EU next year; hopefully, Norway will make it four.

The path for the accession in central Europe is also mapped out. Poland, Hungary, the Czech Republic, Slovakia, Bulgaria and Romania are taking good advantage of opportunities to deepen their familiarity with the way the Union works. These are opportunities the Government have actively promoted.

In Poland last week, I heard how they want Britain to go on championing enlargement, and helping them prepare for membership. With enlargement the Union must change. Policies for nine, or for 12, will not work for 16, or for 20, or more. Reform—in agricultural policies above all —will be essential.

This Government want to see tangible results from the 1996 IGC. We must keep up the momentum of enlargement; entrench the principle of subsidiarity; enhance the flexibility of the Union's structures; and ensure we have effective mechanisms for fighting fraud and keeping financial discipline. These are the ingredients of a Europe which brings real benefits to its citizens.

The North Atlantic alliance has to face new demands too. They are much more varied than the ones the alliance was founded to meet. There will be operations in which some allies take part, but others do not. That requires a versatile, adaptable alliance. The NATO Summit in January emphatically reaffirmed the transatlantic link as the bedrock of the alliance. Allies also recognised that a clearer European security and defence identity would strengthen the alliance. But NATO is not an island fortress. Like the European Union, NATO is looking outwards, working to extend its benefits more widely.

Partnership for peace agreements have been launched with 23 countries. The aim is to build trust and to build the habits of working together in the interests of security. Among those 23 partners there are, I have no doubt, future members of the alliance. We welcome that. We must ensure that NATO enlarges without impairing the cohesion and effectiveness of the alliance itself, or the security and stability of Europe.

One of those 23 new NATO partners for peace is Russia. The opportunities for close practical work with Russia are multiplying: the partnership and co-operation agreement signed with the EU this year; Russia's role in the Bosnia contact group, and in discussions with G7 countries. The Government have worked hard to set these new relationships to work. President Yeltsin's visit in September, and Her Majesty the Queen's visit to Russia, showed just how well we have replaced mistrust by friendship, confidence, and co-operation. There are still uncertainties ahead. But the past year has seen welcome gains in political and economic stability in Russia.

We are working closely with Russia over Bosnia. The news from the field is grim; all the more so because, for a while, large areas of Bosnia began to relearn the habits of peace. War has returned to Bihac. Fear of shells and the sniper's bullet haunt the people of Sarajevo.

For months Britain in the contact group has toiled to put together a blueprint for peace. The elements of a solution are on the table; not the perfect solution but a realistic one—one to which all, except the Bosnian Serbs, are prepared to agree. The means of peace are in the hands of the parties in Belgrade, in Zagreb, in Sarajevo, in Pale. Yet still there are calls to lift the embargo and supply the means of war.

It is a sombre prospect; one which we and our troops in UNPROFOR view with deep unease. Throughout the conflict, and throughout the truces, they have worked alongside ODA staff with energy and dedication: bringing food, electricity and water; opening roads, rebuilding bridges.

Our commitment to the relief of suffering in Bosnia has been second to none: over £170 million of assistance; 1,400 convoys delivering 106,000 tonnes of supplies; 31,015 tonnes flown direct into Sarajevo. This could not continue in war. If the risks become unacceptable, then we would be ready to pull our people out.

The Rwanda crisis has tested to the limits the capacity of the international community—and the United Nations—to respond. It is no good blaming the United Nations. The UN is only as effective as its members' own energy and commitment allow. I visited the area around Rwanda twice this year. In all my years of providing help to the sick, the starving, and the dying, I have never seen anything as bad as Goma.

The UK has provided over £60 million for Rwandan displaced persons and refugees in neighbouring countries since April. We have provided aircraft cargo-offloading teams; water-tanker teams to deliver to the refugee camps; support to human rights monitors, provided transmission equipment and technical services for a UN radio station. I know your Lordships join me in paying tribute to all those who have done such excellent work from our forces, the ODA and the non-governmental organisations.

We must learn the lessons from Rwanda. The need for quicker, better responses to humanitarian disasters in Africa has never been clearer: nor has the need for more effective action to prevent or contain conflict.

In September my right honourable friend the Foreign Secretary told the United Nations General Assembly of our ideas for a more coherent and effective conflict prevention approach for Africa: from early warning and preventive diplomacy through to humanitarian and peacekeeping deployment on the ground. We are discussing these with our friends in Africa, our partners in Europe and elsewhere, and with the United Nations.

We need to work fast. In too many places, conflict and instability continue. As a result people will be denied the prospect of a more prosperous future. They may even lose their lives. The emergency aid we provide to Bosnia, Rwanda and elsewhere accounts for about 15 per cent. of our total British aid programme. However, it gains around 95 per cent. of the publicity. Sadly, emergency aid often obscures the vital work of supporting long-term development: of providing long-term investment to help prevent future Rwandas—work that is the main business of our overseas aid programme.

The Crown Agents deserve great praise for their work in emergency as well as development aid. I should like to draw your Lordships' attention to the proposals in the Queen's Speech to bring forward legislation on the status of the Crown Agents. They have played a significant but largely unsung part this year in Bosnia and Rwanda.

The proposed Bill to transfer them to a new, independent foundation will enable them to extend their services to their international clients, while maintaining the highest standards of integrity and impartiality. This will assist the Crown Agents to continue and improve their services into the 21st century.

There has been much comment on the Pergau dam project, following the court's decision last week. The Foreign Secretary and I stand by the evidence which we gave to the Select Committee. The Select Committee inquiry went wider than the court judgment. It examined the events of 1988 and the political and commercial background. The court did none of that. The court was not asked to enter, and did not enter, into the question of arms sales. I understand that the judgment has nothing to say on that point. The court has now, for the first time, interpreted the 1980 Act and has decided that the Pergau project falls outside it. We do not yet have the court's written judgment. When we do we shall study it and decide whether to appeal.

We have to consider the implications of the judgment for the aid programme as a whole. That applies in particular to the aid and trade provision which was designed by a Labour Government in 1977 to benefit British industry as well as the recipient country. Subject to any appeal we will of course comply with the court's judgment.

Meanwhile, we have asked our officials to review carefully all the projects and activities they fund to see whether there are any others approved under our previous understanding of the Overseas Development and Cooperation Act 1980 which may also fall outside the interpretation of the Act given for the first time last week.

The Pergau project is now 75 per cent. complete and involves over 200 British companies. The judgment does not affect this Government's contractual obligations towards the banks financing the project. What it would mean, if we decide not to appeal, is that the project should not henceforth be financed from funds voted under the Overseas Development and Cooperation Act 1980.

Until we receive and study the written judgment and decide for or against an appeal, we cannot decide on the implications for the aid programme of the money already spent on the Pergau project or on the funds likely to be required from this year to the year 2006. Your Lordships will be informed of the decision when it is taken.

Some critics have tried to use statistics to prove a link between aid and defence sales to several overseas countries. There is simply no truth in these allegations. Of our 10 biggest aid recipients, seven are low income countries in sub-Saharan Africa; three are poor countries in Asia. Nearly 80 per cent. of Britain's bilateral aid to developing countries goes to the poorest countries. The OECD's recent review of the aid programme recognises this focus. This shows that any accusations that our aid flows are determined by defence sales prospects are wholly unfounded.

I recognise public concern about the defence spending in some developing countries. My department works continuously with the IMF and the World Bank to encourage sensible public spending in aid-recipient countries. We take account of excessive military expenditure before we decide aid allocations. In some places, our aid helps turn soldiers into civilians and removes land mines from fields waiting to be tilled. The UN Charter, however, recognises that all, even poor countries, have legitimate defence needs. There is no reason to penalise poor countries because they buy competitive UK defence goods.

Some critics have made particular allegations about Indonesia. OECD classifies Indonesia as a poor country. Its GNP is £440 per head per year. It has a large population at over 180 million, but the Indonesian economy is growing fast on the back of sounder policies. Poverty is being reduced and population growth is falling.

There is a strong economic and social case for Britain to have a substantial aid programme in Indonesia. Other major donors take the same view. Our programme is targeted on human resource development, the environment, good government and transportation. We have repeatedly expressed our concern about Indonesia's human rights record. The Indonesian Government recognise the need for improvement, and we take every opportunity to remind them of that. At no stage has there been any linkage between our aid programme to Indonesia and defence sales.

We must keep the Pergau controversy in perspective. The aid and trade provision as a whole accounts for about 5 per cent. of our total aid of over £2.2 billion. We provide bilateral aid to around 150 countries. Aid is a substantial element in Britain's overseas presence. It also makes a vital contribution to the international effort to promote sustainable development. In our bilateral programme we concentrate 70 per cent. of our aid on Commonwealth countries, many of which are gradually doing better and better.

Aid has to respond to a changing international environment. There has been a rise in the number of countries we assist due to the need to support the transition in eastern and central Europe and the former Soviet Union. British know-how is being demanded more and more right across the world.

We also see very rapid economic growth in some countries as they increase their ability to earn their own way through trade and the attraction of private investment. One welcome feature has been the dramatic growth in private investment in developing countries in recent years which is now higher than the total of official aid flows. This means tighter focusing of our aid. In the middle-income countries, we focus on providing know-how and advice, thereby filling crucial skills gaps. But the bulk of our aid goes to the poorest countries. Here we provide both the expertise and the finance to help them to stand on their own feet.

Some say that we do not do enough to relieve poverty. Some think that the reduction of poverty is just one of a number of targets of the aid programme. Let me make it clear: all our work in the poorest countries is aimed at lasting poverty reduction. Targeted projects which directly raise the living standards of the poor are essential, as are public services projects which benefit the poor—better education, health and family planning, reforms which help the poor to earn more in agriculture, manufacturing and trade, and reforms which make the whole economy healthier and faster growing. Targeting programmes will fail if the policies are wrong and institutions are weak. That is why UK aid helps them to get this right.

Some ill-informed critics snipe at infrastructure projects. These also yield benefits for the poor. In Bangladesh, as a result of our electricity distribution project workshops and factories in textiles and metal-working sprang up to use the newly available electricity. A quarter of a million jobs were created, primarily for poor women.

The other change in our programme is the growing proportion of our aid—now amounting to over 40 per cent.—that flows through multilateral channels.

In this job I am accustomed to receiving brickbats about the size of our aid programme. My concern is not only that; it is also that all our aid should be of the best possible quality. The OECD review earlier this year recognised the high quality of our aid. If more resources become available for the bilateral programme, they would be well spent.

We must also ensure that multilateral aid is of similar high quality. In my speech at the Overseas Development Institute in June this year, I explained that approach. We owe it both to developing countries and to British taxpayers to ensure that multilateral aid is used to the best effect possible.

At home I often hear cynicism, self-doubt and questioning of Britain's role in the world. But when I am abroad, I hear a very different message. It is that Britain matters. British views are taken seriously. British institutions and know-how are respected as among the best in the world.

I suggest that as a nation we must raise our sights. We must recognise that we have real interests and assets worldwide. We must pursue and protect them. This can only be done with an active foreign policy tailored to Britain's needs as we move towards the 21st century. The world, and Britain, deserve nothing less.

3.25p.m.

Baroness Blackstone

My Lords, I look forward to the maiden speeches of the noble Lord, Lord Blaker, and the noble Baroness, Lady Rawlings. Looking back over the past 12 months since we last debated the Address, it is difficult to feel optimistic about the prospects for peace in the world. The civil wars in the former Yugoslavia, in Angola, in the Sudan and in Somalia have continued. The conflicts between India and Pakistan over Kashmir, between Armenia and Azerbaijan over Nagorno-Karabakh, and between Greece and Turkey over Cyprus have continued. The position of the Kurds in Turkey, in Iran and in Iraq remains unresolved. Minorities continue to suffer from oppression—sometimes on a ruthless scale as in East Timor where up to 200,000 people have been killed over the past two decades. In the Gulf, the Iraqi Government continue to be a threat to peace in the region. And in the course of the past year, a new civil war, leading to unspeakable suffering and terrible slaughter, has broken out in Rwanda.

Eric Hobsbawm, Professor Emeritus of History at Birkbeck College, one of the great historians of modern times, has called his new book on the 20th century, The Age of Extremes. It is an apt title for a century in which not far short of 200 million people have been killed in wars all over the world. Can we hope for something better in the last five years of this century? On the evidence of the 1990s, the prospects do not look good.

We do, however, live in an unpredictable era, in an age of uncertainty, and there are events which have taken place in the international arena over the past year which give rise to hope and optimism. Who, for example, would have predicted the peaceful, successful transformation to a multi-racial democratically elected government in South Africa? Only last year in the debate on the Address when the Minister and I spoke about developments in South Africa, we both expressed concern about the unacceptable levels of violence in the pre-election period. At the time neither of us was wholly confident that the elections there would be peacefully concluded and that stable government would follow. Miraculously, there is now stability and growth in South Africa. We greatly welcome its return to the Commonwealth and the reference in the gracious Speech to continuing support for the government of South Africa under its remarkable leader, President Mandela—a leader whom we, on these Benches, have supported and greatly admired through his many years of imprisonment by the apartheid regime in South Africa, as well as since his release when he has continued to demonstrate to the world the meaning of courage, of forgiveness, of leadership. I am delighted that Her Majesty the Queen will be visiting South Africa in March.

In the Middle East, the excitement generated by the original breakthrough made by the Palestinians and the Israelis in their search for peace has been dampened by the continuing violence perpetrated by extremists on both sides and the rather slow progress made in the peace process. It is, however, to the great credit of both the Labour Government in Israel and Mr. Arafat that they have refused to be deflected by terrorist violence from continuing the search for long-term peace. We also welcome the recent agreement between Israel and Jordan and hope that a solution can soon be found to the remaining difficulties concerning the withdrawal of Israel from the Golan Heights and a peace agreement with Syria.

We regret, however, the very limited support the international community has so far given to help the Palestinians towards successful self-government in the Gaza Strip and Jericho. May I ask the Minister whether she agrees that more needs to be done and what part the UK Government have been playing in pressing the international community, through its international financial institutions, to do more? It is also vital that further progress should be made in the Israeli withdrawal from the remaining occupied territories, including the West Bank. The closure of the West Bank is a serious obstacle to peace, and continues to sap Palestinian morale and dash their hopes for the future.

Another cause for optimism is that democracy is being maintained in Cambodia, but it is a terribly fragile democracy, and one that is faced with the daunting task of rebuilding Cambodian society. As in the case of the Palestinians, the international community should be doing more to help them in that task. May I also ask the Minister what representations have been made to the Thai Government about illegal contacts between the Thai armed services and the Khmer Rouge? The Khmer Rouge, which was responsible, as we all remember, for killing about 1 million people in the late 1970s, is still a serious threat to peace in Cambodia.

The recent return to Haiti of its elected president is another piece of good news. The fact that that was achieved without serious bloodshed is due in no small part to former President Carter and his successful negotiations with the illegal regime in Haiti. But, as in Cambodia, if democracy is to be re-established on a permanent basis, extensive financial support must be provided by the international community. Haiti is the poorest country in the western hemisphere, and it desperately needs extensive economic aid to support the democratic process. Do the UK Government intend to leave that entirely to the USA? What, if any, help is the EDF promising to give Haiti?

The poverty and deprivation suffered by the people of Haiti are just one example of the worldwide problems of preventable disease, poor nutrition, illiteracy and lack of material welfare. Though we have seen dramatic increases in prosperity in the developed countries of the North, in many of the nations of the South there has been little progress. One recent estimate claimed that about two-thirds of the world's population has not benefited from economic growth in the 20th century. The terrible disparities between wealth and poverty around the world are a potent symbol of the failures of our civilisation. Poverty and a shortage of resources can lead to armed conflict, but armed conflict is in itself a cause of poverty as people are displaced and crops and buildings destroyed. I shall leave my noble friend Lord Judd to discuss the effects of the arms trade in some parts of the third world. I wish only to express the deep concern of the Labour Party on two matters. The first is that scarce funding set aside for aid and development purposes should be used, as happened in the case of the Pergau dam, to lubricate arms deals is entirely unacceptable.

Baroness Chalker of Wallasey

No, no!

Baroness Blackstone

My Lords, we note the decision reached in the courts last week which confirms what the Labour Party has said since this sorry story became public: that the Government acted illegally in that matter. We do not accept the lame excuses of the Minister's right honourable friend the Foreign Secretary that, "It wasn't me, guv", and that he had no choice but to proceed. Subject to any appeal which the Minister has mentioned, perhaps she will confirm that the aid budget will be made up, even if she is unable to tell us how at this stage.

I listened with interest to the Minister's comments on claims made in the Observer newspaper last Sunday that a major arms deal with Indonesia is in the offing, with further lubricants from the aid budget. I was glad to have her reassurances on that matter.

On the second matter I wish to raise, perhaps I may once again express regret from these Benches that the proportion of our GNP spent upon aid has fallen to such a lamentably low level. My noble friend Lord Judd will say more about that later.

I welcome the reference in the loyal Address to the UN. As a permanent member of the Security Council, the UK has an important part to play in its reform. The 50th anniversary next year of the founding of the UN is an opportune time to review its role. While the Secretary of State for Foreign Affairs and the noble Baroness the Minister have spoken recently of the need for clarity on where and how to intervene in conflicts, as yet the Government have given no indication of their intentions to establish a framework or set of principles to guide such intervention. There is now clearly an urgent need to establish criteria for British intervention and to develop a multi-national approach to creating such a framework. The ad hoc way in which intra-state conflict in particular has been handled is unsatisfactory. It leads to belated action and muddled mandates, as we have seen in turn in Bosnia, in Somalia and in Rwanda. It would, I hope the Minister will agree, be timely to have an early debate on those questions as well as on such matters as how to improve the quality of UN preventive diplomacy, to which she referred, and what we should do to create a more efficient peacekeeping apparatus which is ready to be deployed when needed. The debacle in Rwanda was the most spectacular failure of the present system. I was glad to hear the Minister accept that we must learn the lessons from that.

The Labour Party supports strongly the new initiative the UN has been taking to develop standby arrangements in which member states agree in advance to provide specific force components as building blocks for UN operations. Will the Minister tell the House what position the Government take on standby forces, and will the Minister who is to reply indicate the troops and logistical support that the UK would be willing to make available under those arrangements? Clearly, because of the increasing complexity of UN peacekeeping operations, more than just allocations of troops are needed and specialist units, equipment, logistics and support services, and command and control staff and systems are also needed.

Of course the cost of such commitments are a constraint, and I accept that. However, it is worth pointing out that during 1993–94 the UK's total assessed contributions to UN peacekeeping operations was £119 million out of a total defence budget of £23 billion. There are currently nearly 4,000 service personnel involved in UN peacekeeping operations out of a total of 241,000. In the new world order it is legitimate to ask whether there should not be a greater shift in our defence spending towards UN peacekeeping.

I fear that we shall see a thought-through shift of that kind only when the Government accept the need for a proper defence review. The final debate before the Summer Recess was on the Defence Estimates and I do not want to go over the same ground again, although I know that my noble friend winding up for the Opposition wishes to raise some questions about particular aspects of our defence policy, including the handling of non-proliferation. At this stage I want only to reiterate what my noble friend Lord Williams of Elvel said in the debate at the end of July. The Government are torn in two in their attempts to satisfy two conflicting strands in Tory Party thinking. On the one hand, they wish to cut spending on defence in order to allow for the tax cuts they keep promising are to come; on the other hand, they wish to satisfy traditionalists in the Conservative Party determined to retain the illusion of ultimate defence self-sufficiency in which Britain pretends it is still a great power. They cannot do both.

Turning to Europe, the gracious Speech looked forward to enlargement of the EU. The Labour Party greatly welcomes the accession of Austria, Finland and Sweden, and hopes that Norway will be joining after the referendum there. We particularly welcome the fact that they, like us, believe that Europe should have a strong social dimension as well as a strong economic one. I welcome what the Minister said about eastern Europe. The Labour Party is also committed to supporting further enlargement of the EU towards the east. In that context we can only express our profound disappointment at the continuing failure on the part of the UK to build our trade with the countries of central and east Europe in comparison with the much greater success of Germany, and the out-performance of the UK by France and Italy.

The Minister said that we must reform the CAP and she will no doubt agree that until and unless we do so we not only prevent the countries of eastern Europe from having access to our markets for their agricultural products and thereby limit their economic progress, but we also make it far more difficult for these countries to join the EU without imposing huge strains on the existing system. One of the biggest failures of the Government in Europe is that they have not succeeded in winning any battles on the reform of the CAP. It continues to take a huge share of the European budget; it has done little to foster more efficient farming; it is open to fraud; and it has done little to encourage the protection of the environment. I accept that the Government share these views. But they have been in power for more than 15 years and must take some of the blame for the totally unsatisfactory situation which still prevails. Were they not so busy opting out of the central elements of the strategy for continuing integration in the EU they might carry more weight on such issues as the CAP.

That brings me to the central question of where the British Government now stand on the future of Europe. During the previous British presidency the Prime Minister announced that there would be no fast track, no slow track, no one left behind. By the time we reached the Euro-elections this year he had done an enormous U-turn, saying that what is needed is an approach which varies when it needs to—multi-track, multi-speed, multi-layered. That does not appear to have pleased the British electorate much. The Tories did disastrously in those elections and Labour, with 62 MEPs, became the biggest group in the European Parliament. The Prime Minister's problem is that he is not fully in charge of his party. As a result, he is constantly ducking and weaving as he tries to placate first one group in the Conservative Party and then another. It is high time that he and his Government started to determine their policies on Europe in terms of what is right for Britain rather than what is right for the Conservative Party.

Many crucial decisions have to be taken in the Intergovernmental conference in 1996 on the future direction of Europe. On present form, it is hard to imagine that the Government will be in a fit shape to participate constructively in these decisions. In-fighting in the Tory Party rather than rational analysis of how the European Union can best move forward looks likely to dominate the agenda. In contrast, the Labour Party looks forward to playing a positive central role in the shaping of Europe after the next election. We shall, of course, fight for British interests, but we shall do so from a position of strength inside the Union rather than the position of weakness into which the Government have now put us in Europe.

We look forward to seeing the Bill on the EU budget referred to in the Address. We note also the recently published report of the Court of Auditors, with its serious criticism of fraud and inefficiency in the Union. We believe that there should now be urgent and vigorous action to root out fraud and improve efficiency. When we have seen the Bill on the EU budget we shall decide whether we need to put down any amendments. We note with interest that the Prime Minister has had to resort to threatening his Back-Benchers with a general election if they do not vote for the Bill in all its essentials. Desperate tactics, but we shall be ready for the general election whenever it occurs. Perhaps the Minister in his reply will tell us what parts of this Bill are essential and what parts are unessential.

I end on the subject of Europe with a question for the Minister. Since the events of Black Wednesday when, with the help of Mr. Soros, Mr. Lamont took us out of the ERM and in so doing devalued the pound, it now looks as though convergence may be reached much sooner than anticipated. It may even be as early as 1997. If that is the case, what line do the Government intend to take on monetary union? Will the opt-out continue while the so-called hard core nations go ahead? I hope that the Minster will do the House the courtesy of not being evasive on this matter.

The Minister raised a number of issues which I do not have time to cover. The Labour Party shares the Government's wish to find a peaceful solution to the many conflicts in Africa. We too are concerned about the threat to democracy in a number of African countries. We endorse continuing support for political and economic reform in Russia and other parts of the Soviet Union. I was a little surprised that the Minister made no reference to the recent decision of the United States to abandon the arms embargo for the Bosnian Moslems. We believe that that is a serious mistake and that the Government share our view.

Foreign policy is an area on which we can sometimes agree and we shall say so when we do. However, there are also a number of areas of disagreement and during the coming Session we shall campaign vigorously for our views to be heard. It is, however, in all our interests to work for a safer, fairer world in which bloodshed and hunger no longer afflict so many of our fellow human beings. That must be our shared goal.

3.45 p.m.

Lord Mayhew

My Lords, the two previous speeches were extremely informative and well received. However, they illustrate the extraordinary difficulty of discussing foreign affairs, overseas aid and defence in a single debate. It is like asking two tennis players to play against each other on different courts; there are plenty of serves but no rallies. The give and take of a debate is its most valuable feature.

I do not know where to begin to comment on the many important subjects that have been raised. The gracious Speech contains an unusual number of foreign and defence policies and policies on overseas aid. I find it hard to object to any of its statements of objectives. However, we on these Benches believe that in some cases the Government are not pursuing those aims in the best way and with sufficient zeal. Of course, that does not apply to the search for peace in Northern Ireland. The Prime Minister and Sir Patrick Mayhew continually show exemplary persistence and good sense. Nor can the Prime Minister be accused of lack of zeal as regards our contribution to the European Community budget. He looks likely to succeed in his aim, but it is significant that it needed a hammer to crack so few nutheads in the process. It is with the greatest interest that we look forward to seeing developments on that front. We hope that the Bill is passed.

We on these Benches were most sympathetic to the comments made by the noble Baroness, Lady Blackstone, about the Middle East. We are sorry that the Minister did not touch on this important, topical and worrying issue. Things are not going well in Palestine. On both sides, the forces against peace are strong and terrorism has not been suppressed. Perhaps the noble Baroness, Lady Blackstone, will agree that there are two possible approaches in the present situation. On the one hand, there is the approach associated with the Israeli Prime Minister, Mr. Rabin, that the speed of implementing the peace process must be regulated by the success of the PLO in suppressing terrorism. On the other hand, there is the approach that is often associated with the Israeli Foreign Minister, Mr. Peres, that to slow down the peace process is a way of increasing the enemies of peace and of making it more difficult for the PLO to maintain law and order. In the gracious Speech the Government state that they support the peace process. I take that to associate them with the views of Mr. Peres, which seem to represent the best possible hope for the future.

Of course we agree with the noble Baroness on many of the points that she has made about the need for extending and increasing membership of the European Union and with regard to NATO reaching out to the East. That is certainly part of our thinking in that respect.

We were glad that the gracious Speech gave prominence to the question of nuclear non-proliferation, on which I hope the noble Lord, Lord Henley, will say something in his reply. We are all apt to congratulate ourselves on the fact that today, for the first time for a century and a half or more, there is no credible threat to the security of the United Kingdom. But will that always be so when every day nuclear weapons become easier to make, fissile material becomes easier to acquire and, as Iraq showed, the process is infernally difficult to detect and prevent?

The Government are right to insist on the extension of the non-proliferation treaty and to pressure non-members to join. They are right also with regard to the need for a more powerful and intrusive inspection system. But it is open to doubt whether the Government are aware of the changes needed in their own nuclear policy if they are to make a positive rather than a defensive impact on the conference.

Perhaps I may speak a little about that in the hope that the noble Lord will reply. The fact is that there are 160 signatories to the non-proliferation treaty and of those, only five—Britain is one—are accepted nuclear powers. The reasons for Britain's privileged position are historical and they no longer apply. We are likely to be challenged at that conference. Voices will be raised to say that we should set an example and abandon our nuclear deterrent. That is not the view held on these Benches, but we wish the Government to understand that if they are to be of any use at all at that conference, they must take certain steps in advance otherwise they will be simply defending themselves during the proceedings.

First, they should reduce the fire power of the British deterrent to a genuine minimum; that is, the minimum needed to inflict unacceptable damage on any adversary. In the old days when Moscow was the nerve centre of the Soviet empire and when it had effective ABM defences, that was thought to be a considerable number of warheads in the Polaris fleet. But times have changed. Today it is surely impossible to conceive of any country in the world contemplating accepting damage of perhaps 12 warheads. I cannot see that at all. And yet the Government's view, as most recently stated, is that Trident will not deploy more than 288 warheads. That figure is too high and must be brought down, especially before the opening of the non-proliferation conference. The new figure of warheads must also be openly acknowledged. The Americans tell us what is the number of their warheads, as do the Russians. Why do the British not do so?

When I raised that point during our last debate on defence, the noble Lord, Lord Henley, courteously sent me a reply which stated: It seems entirely reasonable that the United Kingdom, deploying only a minimum deterrent, should be more reticent about revealing precise dealings of its capability than Russia and the United States…I cannot accept the connection you make between our position on this issue and the inspection regime associated with the nuclear non-proliferation treaty". But the fact is that that connection will be made by the delegates at that conference. They will say to themselves, "Here are the British demanding that we expose ourselves to powerful and intrusive inspection of our civil nuclear industry and yet they are keeping secret about the number of nuclear weapons which they have". The Government will be put on the defensive on that issue and rightly so, especially as transparency with regard to the number of nuclear weapons is essential if there is to be disarmament. I advise the Government to support the German-led demand to establish a nuclear weapons register. They should accept that and show a willingness to comply.

Finally, in advance of the conference, the Government should state more clearly than they have ever done before that the one and only reason for our deterrent is to deter nuclear attack on ourselves or on our allies; that it will never be used against a non-nuclear country; that it will never be used against a non-military target; and that it will never be used first. I believe that that should be made clear if the Government are to succeed at the conference.

While on the subject of weapons of mass destruction, why is there no reference in the gracious Speech to legislation for ratifying the chemical weapons convention? That is a straightforward question. The British have a splendid record in that field. We renounced chemical weapons and took the lead as regards that convention. The Foreign Office and the Ministry of Defence have done splendidly. But now the matter seems to be stuck with the Department of Trade and Industry and rumours have it that Mr. Heseltine does not wish to bother the chemical industry with requirements. I should like an answer because other countries are also asking that question.

On these Benches, we have far fewer reservations about the statement of the noble Baroness on Bosnia. We echo the tribute that she paid to our troops there and I add also a tribute to General Rose who continues to carry out the most important, difficult and delicate task with exemplary wisdom.

Of course the Government are right to oppose most strongly the removal of the arms embargo on the Bosnian Moslems. The American position would be bad enough if it were simply in bitter disagreement with its allies, if there were simply disagreement with the unanimous resolutions of the Security Council and NATO—but it is far worse than that. They are taking operational action which undermines the operations of their allies. That is unprecedented and very grave indeed. What will be the value of NATO in future if that is the way in which its members behave?

There could be no stronger argument for pressing forward towards a common European foreign and security policy. The Government committed the country to that when they signed the Maastricht Treaty. We welcome signs that after a period of half-heartedness, they are now proposing to take that commitment more seriously.

On these Benches we have often spelled out the many steps which need to be taken and which can be taken: greater integration of our forces; common procurement; a burden-seeking agreement so that those who contribute most to Europe's security receive financial support from the rest; and closer co-operation also on nuclear weapons' policy with the French. Talks have been going on with the French for years. We are not told about them. Perhaps the noble Lord will enlighten us in his reply. What is the agenda? What progress has been made? What is hoped for as a result of those talks?

There is a further move urgently needed towards a common European security policy. There must be a binding agreement between the European countries to clean up and restrict the sale of arms to the third world. That is essential. Of course it would be better if we could also bring in the non-European countries. Indeed, we should try to do so. But it is no longer enough to argue that if the European countries do not sell those arms then someone else will. It is a profitable trade; but it is wrong to fuel war and oppression in Africa, the Middle East, and in South-East Asia.

It should be laid down, especially with the British Government in mind, that those countries which squander their resources in billion-dollar arms deals do not deserve to receive aid from the rest of the world. It seems to me that the British Government have taken the opposite view in the past; namely, that the more arms one buys the more aid one receives. That is disastrous. Of course that can be debated, but it seems to be clear to me. It is an outrage and must be stopped.

I believe that I have covered enough subjects in my speech, although there are many others that could be discussed. I do not wish to sound too negative or pessimistic. Indeed, I must say that, although we have problems overseas today, I can recall a time of about 48 to 50 years ago when to universal astonishment and alarm I was made a junior Minister in the Foreign Office. The problems facing this country then were infinitely worse. We had Stalin in power sweeping westwards. Moreover, we were genuinely worried about the emergence of Stalinist governments in Paris and in Italy. There was also growing and bitter resistance to our rule in India, as well as British troops fighting in Palestine and Greece and in other places where we, and we alone, were responsible for law and order. Advanced age enables one to take a slightly more relaxed view of the undoubted problems with which we are now faced. As I explained, to the extent that we agree with the Government, they can rely upon us absolutely for support.

4.2 p.m.

Lord Craig of Radley

My Lords, the noble Lord, Lord Mayhew, as always, speaks with conviction and determination on deterrent subjects. I do not propose to cross swords with the noble Lord this afternoon on that topic. Instead, I wish to concentrate upon the United Nations and our membership of the Security Council. However, before doing so, perhaps I may welcome the Minister's words about NATO and the positive approach she outlined. There is a strong need to keep NATO very much at the forefront of our minds. We do not want to weaken it. Any alternative suggestions—and one was muted earlier this week—that there should be a North Atlantic association (about which the Secretary of State for Defence talked) need to be thought through most carefully in relation to NATO.

I turn now to the Security Council. There is much that distinguishes us from the other members of the council. We cannot match the military power of the United States. We are massively outnumbered by the Russians and the Chinese. We are nearest to the French in economic and military terms. But they are a republic, and we have our monarchy. Our centuries of tradition and worldwide involvement give us a uniquely different sort of claim to our place at the table. Unless we are prepared to extol, and show pride in, our unique distinguishing features, our claim to a seat on the Security Council may soon be under serious challenge, or at least sniped at by other aspirants who wish to join or to replace us as a permanent member of the council.

Of course, membership brings obligations and also costly commitment. We must be seen to respond to United Nations calls for peacekeeping and other actions. We are well served by our all-volunteer Armed Forces in meeting those contingencies, even at the very shortest of notice. When the Kuwait crisis flared up last month, Royal Air Force aircraft and personnel were en route within 24 hours of the decision of Her Majesty's Government on 7th October to respond with military force. Speed of response and reach over thousands of miles are key characteristics of air power. They send a strong political (as well as a military) message around the world, always providing that one has the right people in uniform not only in the front line but also in supporting formations. In that crisis too, the Royal Navy and the Army responded with similar alacrity.

I suggest that our membership of the Security Council rests in part on such commitment and military prowess. However, a weakening of the historic transatlantic special relationship and growing federalising tendencies in Europe could leave support for our United Nations position at risk within a very short time. I am sure that the Government are only too aware of that possibility. How should they respond?

Our claim to Security Council membership must never become that of the unimaginative accountant who can tell us the price of everything but the value of nothing. We shall be hard pushed and, indeed, may not be that motivated as a nation to make startling economic growth and success our only goal. We look to other talismans more in tune with our history and the legacies of the past. We have seen much chipping away at some of those valuable legacies: the monarchy, the Church, the judiciary, even the Armed Forces and other professions. I believe that government could do more to counter those attacks on our national fabric. We adopted the unimaginative accountant's approach to "Britannia", the Royal yacht, and the Royal Flight. In the year that Her Majesty—not only our monarch but also head of the Commonwealth—starts to pay sizeable tax demands with obvious benefit to the Treasury, it seems bizarre to be cutting away, in the name of efficiency and value for money, at some of our unique symbols of nationhood. Where should such an approach end?

Big Ben cannot manage to keep time to atomic clock standards. It is now starting to keel over. Tower Bridge is 100 years old and causes all sorts of road traffic chaos every time it is opened. Should we also forgo those much respected symbols in the same search for efficiency at any price? Even the Palace of Westminster, which is difficult to secure, expensive to run, confrontational in the lay-out of its Chambers and outmoded in terms of most of today's democracies, might be eyed with my accountant's misgivings. We seem to have started on the slippery slope. I hope that wise counsels will prevail before we lose the lot along with all sense of national pride and the respect of the rest of the world—a respect which, however intangible its roots, bolsters our United Nations standing. I welcome the Minister's words on that topic.

Against a background of parsimony and of sometimes seeing the smaller picture at the expense of the big, is it any wonder that we are now in our third review of defence spending since Options for Change only four years ago? Whatever the pressures on our economy, I begin to wonder if the Government fully understand the human dimension to each and every review.

Reviews cause great uncertainty in the minds of soldiers, sailors and airmen and their families. A review is not the same as re-ordering the goods on a supermarket shelf, adding a few here, removing a number of unpopular lines elsewhere. You cannot move people about like items on a shelf. They have feelings and aspirations for themselves and their families. As volunteers they are unique in having a commitment to service and to facing personal risk and danger; a commitment which is surely not driven by financial reward alone. Anyone who joins the public service to make his fortune is surely barking up the wrong tree. But that serviceman and woman's commitment becomes sorely tested when repeated promises of stability next year appear to be forgotten in a new chase for defence cost savings. Belief in promises gives way to cynicism.

The troubled housing trust initiative to sell off 69,000 Ministry of Defence married quarters, and Mr. Bett's independent review, are seen by many as ineptly timed and doing further damage to service morale. Service families, many with the father away from home on operational duties for six months or more each year, are very concerned about the future arrangements for married quarters—so much is unresolved and rumours are rife—and for the education of their children. Secondary medical care is also not fully resolved and causes further worry to servicemen and their families. These matters need to be clarified with the greatest of urgency. If the Government are unable to do so quickly, they must be honest enough to tell the servicemen so. We owe it to our volunteer Armed Forces, who act so promptly and bravely to meet political objectives and do so much to sustain our country's claim to a seat on the Security Council, to treat them with the consideration that they so richly deserve.

4.12 p.m.

Lord Howe of Aberavon

My Lords, it is a pleasure to be able to follow the noble and gallant Lord, Lord Craig of Radley and to endorse without qualification the powerful diplomatic case made by a distinguished soldier in support of Britain's role at the United Nations. It is a pleasure also to look forward to the maiden speeches we are to hear from my noble friends Lord Blaker and Lady Rawlings, with each of whom I have had the pleasure of working in political partnership at different times over the years. If I may say so, I welcome the characteristic quality, candour and courage of the speech we heard from the Dispatch Box by my noble friend Lady Chalker. Speaking as one who served with her for many years, I have nothing but admiration for the continued distinction and devotion which she brings to a difficult task in Britain's service around the world.

I welcome and endorse, if I may do so, her remarks about the Pergau dam and the aid programme in that respect. I shall not now be drawn into a detailed analysis of that topic but I shall just add one word. In the whole of that discussion I have heard no credible suggestion that any of the Ministers or officials involved in any of the decisions was ever concerned at any stage with anything other than the promotion of perfectly proper, although sometimes conflicting, British interests. That is something which sometimes tends to be overlooked in that difficult debate.

I welcome too the recognition by the noble Baroness of the importance of the European Union and of Britain's relations with it. I sometimes wonder at the extent to which so much of the debate in this country and in our national press about foreign policy is conducted in terms often of over-simplified hostility to European institutions, even to the European continent itself, as though we could somehow, if we had our way, detach ourselves altogether from this beastly place of which we are inescapably a part. I do not know whether one should be distressed by the over-simplicity of that debate or comforted by the fact that the debate takes place at all. As I am by temperament an optimist, I am on the whole more comforted than dismayed because the scale of our discussion of these European questions shows an awareness of, and on good days a positive reaction to, the responsibilities which we owe to the world in which we live.

Does not the part played, for example, by Her Majesty's forces in Bosnia—I join with noble Lords in paying tribute to that—contrast (I say this without any sense of hostility) with the necessarily more limited perception of American public opinion in relation to some of the issues close to us here in Europe? They are able to enjoy some of the detachment that flows both from their geographical scale and their geographical remoteness. I think that the debate to which I have referred shows a British understanding of the essentially European foundation of any discussion of our role in the world because so many of the hazards and so many of the opportunities that arise do so in and from our continent and from our relations with it.

Consider, for example, the host of problems that have arisen and that continue to arise from the break-up of the former Soviet Union and its bloc. First, within the union itself and within Russia itself people are still struggling with formidable economic problems. It is a comfort and a reassurance to see the way in which, for the moment at least, the balance of economic policy-making seems to have tilted in the direction of sustainable wisdom, even perhaps sustainable development. But secondly, and less often discussed, there are the serious problems of the Ukraine. The noble Baroness, Lady Williams of Crosby, is not in her place today. She and I both serve, rather to our surprise initially I think, as members of the Economic Advisory Council of the Supreme Rada of that country. We serve with a gallery of distinguished colleagues—we do not often meet as such—which include Messrs. Biedenkopf, Barre, Brzezinski and others and we are led by the chairmanship of Bohdan Hawrylyshyn.

I hope I may say a little more about that matter. The problems of that country were well analysed by our distinguished ambassador there, Simon Hemans, in a talk that he gave to RUSI on the 20th of last month which amounts to the following. It is three years since the Ukraine achieved its independence but it did so at such a time and in such a fashion that at the moment of independence there was consensus on almost only one matter; namely, independence itself. The people in the Ukraine found themselves confronting a range of problems such as those which confronted the United States in 1776, 1861 and 1931 simultaneously without any kind of preparation for that task, with no governmental machinery that was appropriate for handling that task, with no people—I say this with respect—really qualified to run the government in such circumstances, and with no consensus on the kind of nation that they wanted to be. It is little wonder that they found themselves floundering more than most. However, I think the House will agree that the Ukraine is too big, too important, too strategic and too central in our European affairs for decisions about her future to be left entirely in the hands of fate. If to no one else, it is to Europeans a matter of huge importance what happens to that country, and to Britain too. However, it is certainly not a problem that Britain can tackle alone.

Happily, in the Ukraine today consensus is now much closer than it has ever been before. Their early understandable instinct to renounce nuclear status has been reconfirmed by their Parliament, and the delivery for dismantlement of their weapons is going ahead as scheduled. There is now consensus as well on a programme of market directed economic reform, presented to their Parliament by President Kuchma on 11th October, which was very positively endorsed by that Parliament. They accepted most recently a programme for price liberalisation. Of course the key decisions for that country—and they are tough ones—have to be taken largely in Kiev and in the Ukraine itself. But help from the West, and guidance from the West, is of crucial importance—and "The West" means to a very large extent European guidance. Therefore, the need for the European Union to agree on the effective, prompt delivery of that help, as promised to the Ukraine, is of enormous importance.

Bohdan Hawrylyshyn, the chairman of the Advisory Council, said this in a letter to me the other day: I genuinely believe that if Western help was forthcoming as promised to Ukraine, the country could really move ahead with economic reforms and thus stabilise both economically and politically, which … would be very much in the interest of Europe and, possibly, of the whole world". I hope very much that the Government will be able to give a positive response to that plea.

That is just one graphic, compact example of the problems which have arisen from the disintegration of the Russian empire. Another much closer, more long-lasting and formidable problem is that which rages in Bosnia. If we need any reminding that that is an essentially European problem then surely we have secured that reminder with the gravely disturbing effect of the latest shift in the position of the United States. The suspension of the arms embargo will not help the promotion of peace in Bosnia. It will not help the cause of partnership in NATO. It will not help the cause of co-operation in the United Nations Security Council. I say that with the utmost regret.

I say, too, that we Europeans have failed in earlier days to do what was right in relation to the Bosnian problem. But it is surely impossible now to argue the case against the development, even at this eleventh hour, of a more effective common European response to that problem. Balkanisation, whose hugely destructive potential we see all too clearly, is not a disease that we can regard as safely and for ever confined to the Balkans. Balkanisation is historically a classic European disease: the disease of conflicting nationalisms, the disease against which the very process of European Union was originally mobilised, the disease against which the European Union has achieved so much and still needs to achieve more.

I cherish, of course, the transatlantic alliance and its historical importance. American concern for Europe is of importance to European security. But we have to be realistic about the reliability of its value from day to day, and not least about the constancy of that commitment in days of democratic turbulence. I think not only of the Bosnian question but also, if we seek a different example, of the current risks in the American reaction to the ratification of the GATT agreement. How is Britain's voice best to be heard effectively on that crucially important economic question?

It is no longer sensible to rely, however much emotionally we should like to do so, on the special relationship on which we have all said so much over the years. Noble Lords may have noticed the remark made in one of the last speeches made in this country by Ambassador Raymond Seitz in April of this year. He said: America's transatlantic policy is European in scope. It is not a series of individual or compartmentalised bilateral policies. It is the policy of one continent to another. There is a simple observation that if Britain's voice is less influential in Paris or Bonn, it is likely to be less influential in Washington". In saying that he echoed almost word for word what Harold Macmillan said in 1962 when he set out the case for his application for this country to join the European Community.

That is a consequence of geopolitical reality. Britain, our country, is a great nation, but it is not a great power. If we need to shape the future destiny of our people, that is best done, if indeed it can be done at all, in partnership with our neighbours within the Union which we have helped to shape and can still do more to shape. As the noble Baroness, Lady Blackstone, pointed out, much needs to be done to make it more effective. I would join with many Euro-sceptics, were it not for their style, in expressing my anxiety about the need to weld an effective common security policy, the need to stamp out fraud, the need to move more effectively for the elimination of subsidies, and above all the need to achieve effective reform of the common agricultural policy. As the noble Baroness pointed out, that is essential for the effective enlargement of the Union.

Above all, I want to prevent the damaging exclusion of this country from an inner core of Europe, if such should come to exist. I want to see this country helping to shape the nature of a common single currency, if there is to be such —and I cannot fail myself to see some wisdom in that prospect.

If we are to succeed in that we should not make every comment about the Union or our partners in it with a sneer or a snarl, or a contorted mixture of both at the same time. We need to convince our partners beyond doubt of our commitment to that enterprise and to the obligations and opportunities which it opens up to us. That is why I welcome so warmly the firmness of the Prime Minister's commitment in another place to the early enactment of the European Communities finance Bill. Far from being a craven surrender of British sovereignty, I regard that as a confident assertion of our determination to use that sovereignty effectively in partnership with our neighbours to the best advantage of the people of this country and of the wider world.

4.26 p.m.

Lord Cledwyn of Penrhos

My Lords, I am grateful to the noble Baroness and to my noble friend Lady Blackstone for their wide-ranging speeches, which have set the scene for this debate. As they said, we are looking at vast areas afflicted by complex problems. When I read about the appalling poverty and the dreadful consequences of unnecessary wars in so many countries I ask myself what we in Britain can do.

When I was at school in Anglesey there was a big map on the wall on which the British Empire was coloured red. We were taught that Britain ruled the waves. Some find it difficult today to accept the reality that all that is gone, swept into the history books side by side with the history of Rome and other defunct empires. I believe that the British Empire did far more good than harm, but it no longer exists. Some people take the view that we can now sit back and let events take their course. But that is totally unacceptable. Britain must do its utmost to help resolve the difficulties which are now a blight on humanity.

When the Cold War ended we breathed a huge sigh of relief. It certainly gave the world new opportunities and provided a new framework for international security. For example, it became possible to define strategic interests within limited spheres of influence. It was inevitably a fairly fragile arrangement. The United States concentrates on the Caribbean and Central America while Europe is concerned with the European CIS, the Balkans and the North Africa buffer. In his important speech the noble and learned Lord, Lord Howe of Aberavon, made clear that there are acute problems in Georgia and the Balkans which have to be resolved. However, there are other areas in central and south Asia and parts of Africa which are not on anyone's map. That is serious.

Thus far the security framework is failing to meet the challenges presented by the spread of national and regional conflicts. It does not begin to respond effectively to what is called "the phenomenon of the failed states". Those are the 12 to 15 countries which are unable to provide for internal peace and security and which are divided by different warring groups. They are plunged into what seems unending violence. Let me name some of those countries: Armenia, Bosnia, Somalia, Rwanda, Liberia, Angola, Zaire, Sudan, Burundi, Cambodia, Afghanistan and some CIS states. I note with interest what the noble Baroness said about the need for more effective action in Rwanda. I thoroughly agree with her. Since the Berlin Wall came down, conflicts in the world have escalated to about 152. Across the globe there are over 40 million refugees, most of whom have fled war and civil unrest in their own countries.

As the House will know, other countries are on the borderline of "failed states". Their communities are tense and unstable. They contain poverty-stricken areas and are beset with ethnic and religious strife. States which spend their limited resources on armaments when their people are starving is one of the greater evils of our time. I shall return to that in a moment.

It is a grim situation that has led to a new domino effect —the further expansion of insecurity encouraged by armaments, poverty, religious and ethnic tensions, and the failure of an international will to intervene in conflicts which do not affect the availability of oil. That is sad, but I regret to say that it is true.

The question that I must put to the Government in this important debate is: what will the international community do about the countries which have failed to govern effectively? I have to confess that I have no ready answer to the question. We can talk about reducing the level of our armaments. We can talk about organising consistent peacekeeping and assisting in the alleviation of the dreadful poverty in all such countries. It is easy to say those things, but achieving the objective is another matter. The sad reality is that some other countries are on the road to disaster. Detecting the countries at risk and working to prevent their ultimate failure is obviously an urgent responsibility which should rest primarily with the United Nations.

The simple point is this. Worldwide tension and instability are increasing dramatically, and very little constructive attention on a world scale is being given to that at present. Perhaps I may put some urgent questions to the Government. First, what will the world community do about this developing calamity? What well-thought-out plans, if any, have the Government to put to the Security Council and to the United Nations about the crisis? Secondly, what organisations in the world arena are in a position to respond effectively to the challenge? Thirdly, how effective are other strong nations in wishing, and working, to resolve the international conflicts which many see as being beyond their immediate strategic interests? Finally, what prospects other than silent and human suffering is the world to offer to the poor, the displaced and the destitute at this time?

Against that background, I find myself distressed and frustrated when I see people who call themselves Christians, Moslems and members of other religions arguing fighting and killing each other over issues which pale into insignificance when compared with the problems that I have sought to address in the debate. The leaders of those countries should pray for forgiveness.

I pay a tribute to the noble Baroness, Lady Chalker. She works hard and conscientiously and has a genuine commitment to overseas aid. We admire her for that. However, the objectives of her department have not been helped by some of the Government's policies. Those have already been referred to. I do not wish to go into the Pergau dam affair in any detail, but it is a classic example of how foreign affairs should not be conducted. Where, for example, did the money donated by Britain to build that dam—a project which has been condemned as unsound—come from? It came from the overseas development budget. That was in plain contravention of the Overseas Development and Co-operation Act 1980. Such unscrupulous manipulation of the aid budget was, in my opinion, a disgrace. The Government must now reimburse the aid budget. We hope that the noble Lord, Lord Henley, will confirm that that has been done and that there are no obstacles from the direction of the Treasury. When we think of the suffering of the people in the countries to which I have referred, the story is almost unbelievable.

I read an important leader in The Times of 11th November. It gives a reasonably independent, detached view. I shall read one paragraph. The Government is now legally obliged to reimburse the aid budget for the money already disbursed, and to draw on it no further for Pergau. This means that in order to meet its contractual obligations to Malaysia, as it rightly insists that it must, it will have to fund the balance from reserves. Mr. Hurd's lawyers told the court that it did not follow that the overseas aid budget would benefit. That would depend, he said, on 'the well-publicised constraints on public spending'. To penalise ODA to compensate for the expenditure the contingency funds incur would be a shabby ending to an already sordid affair. It would exploit the fungibility of all public spending to the detriment of the budget wrongly raided in the first place. Enough damage has already been done. The aid budget should not be a casualty of ministerial casuistry". I believe that the Government should consider the implications of that leader carefully.

Finally, perhaps I may draw the House's attention to a meeting of the very first importance to be held in January next year. It is a meeting of the United Nations Security Council at summit level—the second time that this has happened in the history of the United Nations. It is being called to discuss the very matters with which we are concerned in today's debate. A heavy burden of responsibility rests on the Government and with the other countries which will be represented there. I hope that when the noble Lord, Lord Henley, replies, he will say that the Government have positive, constructive proposals to put to the Council. It must be more than a talking shop. There is an opportunity to change the course of history for the better. The meeting must launch a policy to analyse potential conflicts and recommend policies to the Security Council to prevent violence. It must propose the setting up of small monitoring groups which will automatically debate a crisis. Conflicts should be avoided by mediation, fact-finding missions, confidence-building measures and the application of political and economic measures.

I know, of course, that Britain alone cannot resolve these problems. But we can at least be a driving force in the right direction with those qualities and background described by the noble and gallant Lord, Lord Craig, in his excellent speech.

I am glad to hear that the Church of England has produced a report which deals in some detail with the problems and makes important recommendations. I understand that the Synod is to consider the report within a matter of a few days. I hope that the Government, and especially the Prime Minister and the Foreign Secretary, will study the report carefully. The time has come for Britain's foreign policy to be analysed carefully again so that it may include and reflect the principles in which the people of this country believe.

4.39 p.m.

Lord Hooson

My Lords, unlike previous speakers, I wish to concentrate solely on that part of the gracious Speech which deals with the Government's European policy. In particular I wish to say something about the words in the speech that: They will seek to ensure that the principle of subsidiarity is applied to European legislation. They will promote budgetary discipline in the Union and combat fraud". Essentially, it seems to me that subsidiarity is at its worst a hope and at its best a guidance. If we remember the words that the noble Baroness used in introducing the debate today, she referred to the need to entrench the principle of subsidiarity. She is then saying that we must go further than having guidance; we must have that principle entrenched. That means that she is really advocating the principle of federalism, with which I happen entirely to agree. It seems to me that the two are, from a different direction, approaching the problem in a way that will converge at a certain point.

Many of the problems of the European Community, such as the widespread fraud, arise surely from the neo-functionalism of the Community's development, with heavy reliance on bureaucratic methods and corporate structures, which are a poor and inadequate alternative to a development based clearly on federal principles. When I say "federal principles", I believe that a federal Europe is a long way away, but eventually it is the direction in which we will go.

Although I very much disagree with the view of Euro-sceptics who continue to fight the battles of 25 and 30 years ago, I have considerable understanding for and sympathy with their exasperation at the way the Government have presented such things, for example, as the outcome of the Maastricht Treaty in so obviously misleading ways, to try to assuage anti-European views. Is it too much to hope that in this Session of Parliament the Government's public attitude towards the development of a united Europe will be positive and not of the dissembling nature which has characterised it in the past?

I have always believed in the goal of a united Europe, but I also believed that the most likely route to it was through the pressure of a threat to our security from a hostile USSR and the communist bloc. The advent of Mr. Gorbachev in his epoch-ending changes within that bloc altered all that. Now that the immediate threat from the Soviet bloc has disappeared, the progress towards European integration has slowed down. It would speed up again immediately if the threat, or something similar to it, reappeared. As my noble friend Lord Mayhew indicated, that could easily happen. However, its disappearance has advantages: we can proceed with a more measured sense of purpose because it is clearly important to take the people of Europe with us and to ensure a sense of allegiance to a European union.

It was the very distinguished American human geographer, Professor Meinig, who said of the United States federation that it was, an expedient developed under duress". That constitution has been amazingly successful, but nevertheless it has its shortcomings, many born of the circumstances in which it came into existence.

Such shortcomings are more avoidable in Europe and our continent is in itself a much more complicated scenario for integration than was the infant United States of America. Essentially, we have faced, and are still facing now, the sacrifice that has faced people over many centuries as our civilisation evolved, from the time when tribe fought tribe in England, Wales, Scotland and elsewhere in Europe. At one stage or another every tribe, every region, was faced with the loss of a certain amount of sovereignty in a greater interest and we face exactly the same problem today. In this century, after two terrible European wars in which tens of millions were killed and so much misery was caused, I believe that people in the post-war period 20, 30 and 40 years ago came to the conclusion that one must make a sacrifice of some measure of sovereignty, of local independence, in order to guarantee a realistic chance of survival, well-being and progress in the modern world.

For the Government to pretend, as they have over the years, that we have not surrendered a measure of sovereignty at Maastricht, and other places, in the Single European Act in actually joining the EEC is clearly nonsense. Of course we have. The integration of Europe is going on all around us, but with inadequate control and direction. Anyone in business knows that that is taking place. Anyone in the law knows that it is taking place. It is taking place all around us and it seems to me that only the Government deny it.

Take the situation revealed by your Lordships' European Communities Committee with its very fine report on Financial Control and Fraud in the Community (HL Paper 75). That paper was discussed in a fascinating debate in your Lordships' House on 31st October this year, in which I did not take part. The following conclusion was expressed by the noble Lord, Lord Hunt of Tanworth, its chairman: Inadequate … control is at the heart of the problem".—[Official Report, 31/10/94; col. 698.] Despite all the functional expedients suggested by others, and by that committee, to improve the situation problems will remain until there is totally clear legal responsibility, established by law, between the European Community and its member states. The only way of achieving that is to proceed along federal principles.

On 3rd November this year—the last day for Questions in your Lordships' House in the last Session—one Question requested the Government to give a definition of "federalism". It was the noble Baroness who replied and, uncharacteristically, her replies were, to put it mildly, obscure. There have been many definitions of "federalism", some formulated in the United Kingdom. With our history of presenting Canada, Australia, South Africa and other Commonwealth countries with federal constitutions, we have long realised the value of federalism. But, of course, in our history we were presenting federalism from the top down. In Europe, we are faced with the problem of federalism from the bottom up. However, federalism is a means of binding together a number of entities while preserving the basic integrity of those entities. In other words, it is a device for being united without necessarily becoming unitary. By its very nature, it must allow for the co-existence of dual allegiances and we are slowly getting used to that idea.

In Europe, one of the problems is the Brussels directives which have an obscure legal position. In some countries they are enforced dramatically by embodying them in law or by administrative action. In other countries, they are regarded as mere guidance. It seems to me that only the United Kingdom, and possibly Germany, treat them always as though they were actually laws as opposed to guidance. Through them, the European Commission in Brussels behaves as though Europe is a unitary authority, which it clearly is not. Furthermore, our officials receive the directives as though accepting that we are part of a unitary authority.

Eventually, if a federal constitution is to be achieved in Europe, then, given its history, it will only be achieved by the existing so-called sovereign states—I call them "so-called" because truly none are so now—giving up some of their authority formally to Brussels while retaining the maximum relevant amount of power possible in their own hands. But we are in the midst of a process which we must recognise of partially controlled and partially uncontrolled integration in Europe. None of the antics of the so-called "Euro-sceptics" will prevent it. It is far too late for that, even if it were desirable. I say that as I was the only Liberal in another place who voted against our entry into Europe. I have often reflected on that, but I thought at the time that I was right. I was in favour of going into Europe at the very outset. I felt that we should have waited until an optimum time for this country before we entered.

What do people now think would happen to the UK if it left the Common Market—a stupid suggestion made by an ex-Chancellor of the Exchequer—when over 60 per cent. of our trade is now with Europe? The rest of Europe would simply not allow us to have the benefits of a free trade area while taking on none of the responsibilities that are implicit in a developing and united Europe. What do they think would happen with huge inward investment from such countries as the United States, Japan and so on, simply because Britain is regarded as the most congenial base for their European activities? A research paper from the House of Commons dated 25th October 1994, which is in your Lordships' Library, gives details of that inward investment. One can see what a high proportion of it goes to this country simply because Britain is regarded as a good base for development of foreign investment into Europe.

It therefore seems to me that subsidiarity is in essence another word for describing the guiding principle in the share-out of responsibilities that are inherent in federalism. There has to be a reduction in the authority of the overall centre, Brussels, to its bare minimum. Other decisions must be taken democratically, at the level nearest to people that is sensibly and humanly possible. That therefore surely means that there has to be subsidiarity not only to the former sovereign states within Europe, but within the sovereign states themselves. For the UK it means real devolution to Scotland, Wales and Northern Ireland, and indeed probably to the regions of England. That whole process is essential for our survival and well-being if we are to have the overall umbrella of the Continent of Europe, which is daily becoming less remote and increasingly economically integrated.

The basic problem is therefore the question of the allocation of power between the European government, or centre, and its constituent units, whatever those will eventually be. I can well imagine that in the longer term, following the example of the German constitution in the post-war period and the developments that we see, for example, in Spain, we shall eventually end up with a Europe of the regions. But that is a long process and it is far off at the moment.

For the purposes of this decade, the only powers that are needed at the centre are surely those to ensure: (a) the workings of a common economic market with delegation of all grants to member states to administer, so that we do not have a great clash of interests in administration; (b) the achievement of a single European currency; (c) the creation of a common security policy by building firmly the long overdue European pillar of the Atlantic alliance—and I entirely agree with the remarks made, I believe yesterday, on this problem by Mr. Rifkind and with what was said today by my noble friend Lord Mayhew about the importance of developing the European side of the alliance; (d) a common foreign policy together with, let us face it, the gradual development of a common foreign diplomatic representation for Europe; and (e) to ensure progress towards a commonly accepted European code of law.

There is a huge mutual interest throughout Western Europe, and indeed well beyond, in achieving what will in reality be a form of state which has probably never existed in the world as it is today. We have moved on a long way from the 19th century. We have moved on from the German Federation of which we were very largely the architects in the post-war period. We face different problems today, and different forms of government can emerge. At the same time, the political units, the races of Europe, with their diverse cultures, social habits and so on, are so rooted in time and place that it would be not only just but also sensible and far-seeing to retain the maximum amount of decision-making as close to the people as possible.

How close to the people do this Government think that decisions affecting local and regional matters should be taken? Is it at national government level, at regional level, or at local level? It is a very important point. I am very tempted to put down a Question to the noble Baroness asking not for a definition of "federalism" but for a definition of "subsidiarity". All I hope is that the signs in the Queen's Speech of a much more positive approach towards Europe by the Government will be fulfilled during this Session.

4.55 p.m.

Lord Bishop of Worcester

My Lords, I have great sympathy with the noble Lord, Lord Cledwyn of Penrhos, in seeing the dark side of the picture as we look at the world at the present time. Nevertheless, there must be enormous gratitude that since the last gracious Speech from the Throne better news has come out of South Africa and the Middle East—though, as the noble Lord, Lord Mayhew, wisely pointed out, it is but fragile—and also (though it be not foreign affairs) better news from Northern Ireland. The discovery of massive fraud in the European Union must, however, dim the European ideal.

It is sad that we so often see Europe solely in terms of a market for over 300 million people. It is something far more than a market. I wish that people would see it as an ideal which enables us to rally behind the assets that are humanitarian, cultural and spiritual in Europe. I hope and pray that the Churches, if they would only repent of their own divisions, could help Europe to find its soul. To that end I hope that we shall look for co-operation in the fields that I have mentioned.

We need very much to recover the statement that was well known in the 19th century that what is morally wrong can never be politically right. I hope that we as a nation shall play our part in the shaping of Europe, and in shaping it not just as a market. Markets are important; and mercantile countries have always done much for culture and indeed for religion. But we must see beyond mere economic and financial prosperity.

I want to introduce into this debate the question of overseas aid to the poorest people in the world—the issue has already been spoken of, and I want to speak of it again —and the ramifications of the policies of the World Bank and the International Monetary Fund. From this country and from Europe we desperately need to send signals of hope to the poor people and poor nations of the world. After all, the European Union is the world's largest trading bloc. It accounts for 19 per cent. of world trade. In that Union, the United Kingdom should use its influence and leadership to see that we address the poverty of the developing countries, and in the best possible way. The worst thing that can happen is the death of hope. And the worst thing that can happen to young people is for them to be cut off from their future.

It is not in the interests of any of us for the world to be destabilised by poverty and for political extremists, whether in eastern Europe or in the countries of the Southern Hemisphere, to climb to power on the back of despair. At this moment I ought to apologise if I am not here for the summing up. It depends on the length of noble Lords' speeches. Tomorrow morning at 8 a.m. I have a commitment in Worcester, so I shall have to catch the last train from Paddington. But I shall read the summing up in Hansard to see what volume of aid is going to the former Soviet empire. I shall want to know how far we have got in reaching the 0.7 per cent. of gross national product which was the recommendation of the Pearson Commission so many years ago.

The World Bank and the International Monetary Fund celebrate their 50th anniversary this year. They were founded at Bretton Woods, and Lewis Preston, the president of the World Bank, has rightly expressed certain pride in their achievements. He speaks of 50 years of achievement in helping to reduce poverty and improve living standards through sustainable growth and investment in people. But I must say that 11 of the main aid charities are of a different opinion. While acknowledging the heritage of Bretton Woods, they believe that, 50 years on, we should re-examine the policies and impact of the World Bank and the International Monetary Fund.

The "structural adjustment programmes", which are required of developing nations when seeking funds, have shown themselves to be detrimental to the poor and to make them poorer. Concern over the detrimental effect of structural adaptation was expressed in the World Bank's internal report. The Secretary-General of the United Nations has warned about the effects of structural adjustment programmes. In Zimbabwe, Nicaragua, Sri Lanka and other countries the required adjustments have led to cutbacks in education, hospital and health care and food, making those countries poorer now than they were 20 years ago.

Obviously, economic adjustments and deflationary measures are necessary. But they have been too stringent for weak economies. A Zimbabwean farmer, Betty Mozira, said: "People who had cattle do not have them any more; bread and maize are very expensive; structural adjustments are killing us". Indeed, in Africa as a whole, where more than 30 countries have embraced structural adjustments, average incomes fell by 20 per cent. during the 1980s, and they were very low to begin with. Unemployment has quadrupled to 100 million. In short, the medicine given by the World Bank and the International Monetary Fund has been too strong. The prescription needs changing.

There is a further criticism. The World Bank is unaccountable to citizens and governments in the developing world. They do not participate in the formulation of policies. Moreover, there has been a call for parliamentary scrutiny of the International Monetary Fund and the World Bank. The average Briton contributes £10 a year to the World Bank. It takes 10 per cent. of our bilateral aid. Cannot there be an annual report to Parliament, giving information to MPs in as transparent a way as possible? Cannot there be an annual debate on that report? Should not there also be Select Committee hearings on the operations of the World Bank and the International Monetary Fund and the work of the United Kingdom executive director, in which the Overseas Development Administration should be involved?

With regard to democratisation of the World Bank, it should be remembered that so far back as 1979 in the Brandt Report, there was a call for bargaining between countries of the southern and northern hemispheres to be done on a more equal basis and for the sharing of power between the givers and receivers of aid. I should like to know how far that has gone.

In the light of the Pergau judgment, it would seem hardly necessary to make the plea that aid be kept strictly separate from arms deals. I should be grateful if it could be confirmed or denied that that particular deal ended in a 400 per cent. payback in defence contracts. I know that a Foreign Office spokesman was reported as saying that we give aid and sell arms but there is no connection between the two. But can we be told whether it is true or false that aid to Indonesia has increased in the past 18 months? Does that have anything to do with the fact that there is the possibility of a very large deal in the offing?

I return to my first plea. The world desperately needs to be seen as a single interlocking whole. There cannot be peace unless there is justice for all. I know that that is accepted by Her Majesty's Government. There is no one to whom I should want to pay greater tribute than the noble Baroness, Lady Chalker, for all that she has done. Indeed, in adopting this theme for my speech I know that I am on fairly difficult ground as she is one of the greatest experts on the whole subject of overseas aid.

As your Lordships' House will wholly agree, we cannot be content that one billion of our fellow human beings are constantly struggling below the poverty line, their children —as I said—cut off from their future. Nor is it in anyone's self-interest for that to continue. So often our own self-interest dictates that which justice demands.

I hope that this speech has been chiefly about what the gracious Speech from the Throne called "a substantial aid programme"—so be it— to promote sustainable development and good government".

5.6 p.m.

Lord Blaker

My Lords, having been born in Hong Kong, where members of my family lived and worked for some 60 years, and having received my letters patent on 10th October, a date which has great resonance in the history of China, I hope that the House will allow me to speak for a few minutes about Hong Kong. I read the Official Report of your Lordships' debate on 18th May this year. It is clear that your Lordships already have much information and many statistics about the territory. I hope that I can give some new statistics, or some which may be familiar at least to some noble Lords.

Six million people living in a territory only twice the size of the Isle of Wight have created a society which is a miracle of success. Forty-nine years ago Hong Kong emerged stricken from Japanese occupation, its economy in a state of collapse. Now it is the world's seventh largest trading community and accounts for nearly one quarter of China's GDP. The 1994 World Competitiveness Report shows that it is fourth among the world's major economies, ahead of every European country. It has the world's biggest container port. At present employed in Hong Kong is 40 per cent. of the world's dredger fleet, engaged in preparatory work for the airport and related projects. It has a smaller public sector than any other advanced economy and public spending is consistently below 20 per cent. Unemployment is 1.5 per cent. It has a stable and free political system and a free press. It has enjoyed great achievements in housing, education and health. This year crime has fallen for the third year running. It is relatively free from corruption.

We must ask whether that success and way of life can continue beyond 1997. I believe that it can and will do so. First, it is very much in China's interests that it should do so. Hong Kong is China's largest trading partner. It is the biggest investor in China and China is the biggest investor in Hong Kong. Mr. Lu Ping, head of the Hong Kong and Macau office in Peking, said, in a speech which was quoted in your Lordships' House in the debate to which I referred, that China needs: a bridge to carry us to the western world and for the western world to come to the China market. Hong Kong has been playing this role all along, and China wants it to continue to do so by retaining its capitalistic characteristic". I believe that Hong Kong will continue to be as important to China in that context as it has been in the past.

The second main reason why I believe Hong Kong will continue to thrive, as representatives of the Government of China are very clearly aware, is that Hong Kong is an example to Taiwan. There have been changes in Taiwan but this factor has not lost its force in the minds of the rulers in Peking. If Hong Kong is successful after 1997, the prospects for reunification between Taiwan and the mainland are improved.

I believe that there are probably only two situations which could destroy Hong Kong's way of life. The first would be chaos in China comparable to the chaos which existed between the two world wars. That would be to nobody's advantage and I believe it is unlikely. The other situation would be if the Government of China concluded that Hong Kong was being used as a base for the subversion of China. The Chinese, not surprisingly, value stability. They do not want to see Hong Kong used to introduce Western democracy into China. They have a strong sense of history and they must be conscious of the fact that Sun Yat Sen, who was the main author of the successful revolution of 1911 which overthrew the Manchu dynasty, spent a significant part of his early years in Hong Kong. As Mr. Lu Ping said in the same speech from which I have quoted: There are some who believe that only when China turns capitalist, that Hong Kong's capitalism can be guaranteed. This is an entirely wrong concept … Chinese leaders are determined to build a strong socialist China. Any movement or action to change this direction may cause chaos and disruption to the Chinese economy. Hence, any foreign government or Hong Kong people trying to exert pressure on the Chinese Government will not succeed. China would not want itself to be rampant with chaos". I am not saying anything about the case for a gradual move towards democracy in Hong Kong, though I note—this is not often remarked on—that the Basic Law says that the ultimate aim is the election of all the members of the Legislative Council by universal suffrage. What I am suggesting is that the people of Hong Kong, for whom I have a great admiration, would be wise to draw a distinction between democracy in Hong Kong and democracy in China. The Joint Declaration and the principle of "one country, two systems" involve Hong Kong people running Hong Kong except in foreign affairs and defence. But I believe that there is an implied bargain. The bargain must be that if China is not to interfere in Hong Kong, Hong Kong should not interfere in the running of China. I am not calling for legislation to restrict free speech in Hong Kong, but I am suggesting that it is wise for the people of Hong Kong to exercise sensible self-restraint by leaving the way China is run to the people who live in China. It is not necessary for China to be democratic for Hong Kong to flourish.

Much is to be done in co-operation with China. I welcome the remarks about Hong Kong in the gracious Speech and the emphasis put there on co-operation with China. Much has been done by the Joint Liaison Group but it is urgent to speed up its work. Both the British and the Hong Kong Government have made clear their wish to see that achieved. Progress has recently been made in relation to the financing of the airport. But even there, two further financial agreements are required before the package is sewn up. There are many other areas for the Joint Liaison Group: air services, the right of abode and the localisation and adaptation of laws. It will be hard going to resolve all those matters before July 1997. A formidable programme of work exists.

In a recent policy statement the Governor emphasised that he and his government would do everything they can to prepare the way for a smooth transfer of government in 1997; they would help the preparatory committee when it is established in 1996; they would give every possible support to the future Chief Executive, when chosen, in preparing to take up his or her responsibilities; they would help the people designated as future members of the Executive Council and principal officers of the future SAR. I welcome this wise attitude and I hope that it will help to dispel suspicion on the part of the Government of China. It is also helpful that the Governor has recently repeated that the fiscal reserves to be handed over in 1997 are still forecast to be 120 billion dollars.

I know from my time as a Minister responsible for Hong Kong in the Foreign and Commonwealth Office, and more recently as chairman of the All Party British-Hong Kong Parliamentary Group, that the United Kingdom and Hong Kong Governments over the years have had three things in mind: first, a determination to observe the Joint Declaration; secondly, a desire to maintain good working relations with the Government of China, which itself is very much in the interests of Hong Kong; thirdly, a firm resolve to do our best for the people of Hong Kong, to whom we have what the Governor has described as "a debt of honour" which we are determined to fulfil. We face a task without precedent. I believe it is possible to carry it through to success.

5.16 p.m.

Lord Kennet

My Lords, by custom, and to my pleasure, it falls to me to congratulate the noble Lord, Lord Blaker, on his maiden speech on behalf of the whole House. He and I have quite a lot in common. We both started life, more or less, in the Foreign Office and I see from the invaluable pages of Who's Who that we are both sailing people. I know that this House will benefit as much from his clarity and realism as the House of Commons has over so many years.

I shall take up a thread where the noble and learned Lord, Lord Howe, left it. We sometimes forget that the UN Bosnia operation has been working. There has been a rough peace, and justice is more likely to emerge from even an unjust peace than it is from a resumed war. To us that is clear. But in the United States, labouring under its eighteenth century constitution, in another continent, with little awareness of Balkan history, and little care for other peoples' body bags, the plight of the Bosnian Moslems has touched a national nerve.

For some time now the United States has been inviting the Moslem countries of the world to help the Bosnian Moslems. The Moslem countries—Iran, Saudi Arabia, and so on—send the money or the weapons to Croatia, which keeps half and passes the rest along to the Bosnian Government. The United States itself has made many overflights and airdrops into Bosnia which were not requested by the UN and not accounted for afterwards. Most recently it has sent military missions directly into Bosnia, the latest one being led by General Galvin, a former Supreme Allied Commander Europe and former Chairman of the US Chiefs of Staff. Bosnia seems in fact to be now more or less run by the Americans.

Now, we have to face the US decision to break the UN embargo on direct arms supplies, and thus revive the war. This poses no problems for the Moslem countries which have troops there—Turkey, Bangladesh and Malaysia—but for us in Europe, and especially those of us in the contact group—France, Germany, Russia and this country—it poses the sharpest dilemma we have faced for years.

What are we to do now that the United States has explicitly disregarded a Security Council resolution? The question is: can we keep the contact group in existence at all, and NATO, and even the Security Council itself, come to that? We also have to bear the horrible unease that a people must always feel when we see our soldiers out in front, vulnerable, and put at risk by someone else's politics. I heard what the noble Baroness, Lady Chalker, had to say about pulling out. It cannot be otherwise. There is much more trouble to come in former Yugoslavia, and there is perhaps some obscure consolation in the fact that an office still exists in Vienna which is winding up the affairs of the Austro-Hungarian Empire.

Two new and quite amateurish proposals are being pressed on us Europeans. One is an enlargement of membership of NATO eastwards. It is not appropriate for a country outside this continent to presume to lead us in this matter. We Europeans must work out for ourselves the relationship we want between NATO and the European Union, and between both and CSCE, as part of the whole Maastricht security think-through. Until we have made up our minds, there should be no disconnected political developments in NATO. We must remember that the new Russia cannot even keep the lights on in Siberia. Nine hundred thousand people have evidently simply fled south again, undoing two centuries of history. We will better protect the central Europeans and Baits by ensuring good relations with this weak Russia than by pushing a military alliance, which we formed against it all those decades ago, right up to its frontier.

The second amateurish proposal is the one year-old Defense Counter Proliferation Initiative. This is a Pentagon wheeze to persuade us all to spend gigantic sums on developing and buying a new two-pronged force. Prong one: anti-missile missiles that US space-based computers would activate for us when they, the computers, decided that some country—for example, Libya—was launching an attack on us. Prong two: earth-penetrating weaponry with which to destroy other countries' weaponry before it is launched, when that is deemed "proliferation" according to some preset criterion by American equipment in space.

NATO has been persuaded to examine these proposals and is doing so in a committee co-chaired by the United States and France. That committee is to report next month. How comes it that the Government have allowed this thing to go so far without telling Parliament anything about it? I said "a Pentagon wheeze", but perhaps that is too simple. It might be more accurate to say that it is a wheeze of civilian techno-strategists in the Pentagon with powerful defence industry backing. It is in the bad old tradition of Star Wars and the multilateral force. I trust that the Government are very well informed about whether the US military and intelligence people really believe in it.

What would be far wiser would be to consider the possible proliferation of the niftier kinds of weapons of mass destruction into the hands of small groups and even of individuals. That is not an unreal nightmare. The most harmful arms race in the world, in my opinion, is now that between Massachusetts and Texas. In one of these states they build the missiles which might attack another country, and in the other state they build the anti-missile missiles which could shoot down such missiles. From time to time one of them gains the advantage over the other, and so obviously the other has to have a new generation of development.

Let us have a debate on this Counter Proliferation Initiative on the basis of a proper and frank government statement. Meanwhile all sane people must, for once, put their hopes in the Treasury that it will turn this absurd expense down flat, and that the military indecency of putting Europe's security in the brittle hands of American computers in peacetime will make the European chiefs of staff and ministers of defence also turn it down flat. Remember that it was the computers of the United States ship "Vincennes" which shot down the Iranian airbus on a scheduled civilian flight, and that the various "friendly fire" events have been computer-led.

Most of us now know—and I cannot believe that the Government do not—that proliferation today is a political problem, and that military threats do not persuade governments that they do not need weapons of mass destruction, but precisely that they do. How could they not? That is the lesson from Israel, from North Korea in the past year, and of course from Britain in 1945.

So where does our best future lie? Henry Kissinger's great book on Diplomacy has warned the United States of the dangers that it brings on itself by shying away from anything that smacks of a balance of power or of compromise, and by its pursuit of hegemony even where that is impossible. But we still see the repeated threats of unilateral action against North Korea, Iraq, Libya and Haiti and the desire to set up arms depots all over the globe and to fill available space with satellite networks better to oversee the rest of us—and all this without regard to international law or even to the "decent opinions of mankind".

The arrival of a Republican Congress can only make things worse. I wonder whether the United States is not now going to turn—if it is not perhaps already turning—into an isolationist power subject to short bursts of intervention. We have seen Panama and Somalia and so on and so on. We must remember that the major landing on Haiti—the US-only one that did not happen—had been in preparation for 14 months and was to have been the largest airborne assault since Nijmegen in Holland at the end of the Second World War —larger than anything in Vietnam.

If cycles of inertia and convulsion are likely, then we must think quickly. We cannot be honorary Americans. Membership of the North American Free Trade Area is not open to us. We cannot be half-Europeans: Europeans for business, not Europeans for social programmes, environment, national security, and everything else. We could choose to be remote North Sea islanders whose territory and skills others will be glad to use, but on their terms and not ours. That is what will happen if we continue to bicker over the choice down the corridor and in this place. It is in fact already beginning to happen.

Of course we must remain on good terms with our largest friend and historical ally, but it is time to end our present military dependency and rise up from our political deference. Dependence and deference inspire contempt, and that is already happening, too. If we fear the loss of intelligence, let us at last rejoin France and Germany in the European Space Agency. We should be very welcome. At the same time let us explain to the United States—perhaps our Government would be better placed than any other in the world to do so—that the post-cold war world does not live happily with American "exceptionalism" any more than it will live happily with any other country's claim to unique leadership status. Great wealth and great armaments do not confer the right to lead. Under the law the United States is one among many.

5.28 p.m.

Lord Bridges

My Lords, most of the speeches from the Back-Benches in this debate will concentrate on some particular aspect of foreign policy or defence. I should like to adopt a different approach and to draw the attention of the House to the contrasts which I notice between the contents of the Government's policy, as explained in the gracious Speech, and the current attitude and mood of the nation as a whole. I find this contrast rather disturbing.

To be effective, the foreign policy of a state must focus on the longer term and engage issues which serve its interests over a lengthy period. Looking at that requirement on a global scale, it is clear that we have witnessed many profound changes over the past few years. Indeed, the landscape has changed in such a fundamental way that we find it hard to comprehend the totality and extent of what has happened.

Since the beginning of this decade in particular we have seen the collapse of the Soviet empire, the disappearance of a menacing military alliance and the fragmentation of the communist world into a number of separate states. Empires do not often fade away so completely or so rapidly as that. We do not yet know the ultimate shape of its successor systems in eastern Europe, the Baltic states, central Asia or the Russian far east. No doubt the noble Baroness, Lady Park of Monmouth, will have some cautionary words for us on that subject a little later. I believe that if we are far-sighted, deliberate and wise, we have an opportunity to influence what happens if we act in conjunction with others.

There are perhaps equally significant changes taking place elsewhere. As other noble Lords have said, in Africa we have witnessed, and in some measure have helped to bring about, the end of the pernicious system of racial intolerance in the republic of South Africa. In the Middle East, there has been a welcome thaw in the relations between Israel and its neighbours although that has been matched by the development of a movement known as "fundamental Islam" which has produced a new atmosphere of apprehension and alarm throughout the region. Indeed, those anxieties have spread to southern Europe where governments in the European Union now call for massive aid projects financed by us, the member states, intended to defuse the rising social tensions in the Maghreb that are caused by "fundamental Islam" and to keep the growing population of North Africa at home rather than emigrating across the Mediterranean.

I am no kind of expert on far eastern affairs, but the pace of Chinese economic change (and its invariable consequence: social upheaval) appear quite extraordinary, even when considered in the context of China's long and tumultuous history. I noted the reassuring words of experience in the skilful maiden speech of the noble Lord, Lord Blaker; but I ask myself whether those processes in China can be carried through without some major acts of repression and violence. That seems to remain an open question.

So it is clear to me at least that in dealing with these problems, and in trying to assess them and to prepare appropriate policies in response, Europe has an essential part to play. Perhaps we have the key role. I notice that our traditional allies and most influential friends in other continents are not at present in a very strong position. The United States—we have to say it—is passing through a difficult period, with the weakest president in office for a good many years. To use their own metaphor, the Americans are in "political gridlock" and seem likely to remain so for the foreseeable future. The country's constitutional arrangements—of 18th century origin, as the noble Lord, Lord Kennet, reminded us— for so long admired around the world seem to be showing their less adequate aspects at present. Japan, the economic superpower, is also undergoing its largest political upheaval in a generation. Japan's political system seems to be changing course although it is taking rather a long time.

All that points clearly to the need for European activity and leadership. Much of the burden will fall on the current German Presidency of the Union, and in the New Year, on its French successor. I have no doubt that those two nations are fully conscious of their responsibilities and that they will exercise them in close collaboration with each other, as always in the recent past.

But in this country, by contrast, it is much more difficult to detect any general awareness of our role in those affairs, or indeed much interest in them among the public at large. As so often in the past when military danger was seen to recede, we react by cutting our defence budget and turning our attention to domestic affairs. That is of course a natural reaction—perhaps particularly so in a society like ours with its strong parliamentary tradition, where our lack of international ambition is so evident and where the belief in national independence is so strong. As some of your Lordships may recall, an extreme example of that occurred in the summer of 1809 when, at a critical stage in our struggle against Napoleon, the Parliament of this country devoted two crucial summer months to debating the matrimonial affairs of the then Duke of York. I hope that we shall be able to learn something from that example of past insularity.

The purpose of those remarks is to draw attention to the dangers that we incur by indulging in parish pump politics on the scale that we have seen lately. The issues which so excite and inflame, whether presented by television or the press, bear little relation to the questions which will determine the future prosperity and peace of our nation. The European issue, which has attracted public attention lately, is that of the pending legislation which would increase the Union's own resources, a matter which was decided in principle by the governments, although not by the parliaments, at the Edinburgh Summit two years ago.

Of much greater importance surely is the result of the recent referendum in Sweden and the accession in the new year of at least three of the four states taking part in the current enlargement of the Union. The future of the Union in Europe will be determined more by its composition and membership than by any other single factor. If we also take into account the likelihood that several other states in central Europe will accede in the next decade, it is clear that the whole scale and range of the European Union and its activities is undergoing a great change. That is a policy for which successive British Governments have striven for so long, and as a policy it is working, but it is odd that so little public notice is taken of that success. It will affect the opportunities that are open to all members of the Union in a fundamental way.

One incidental effect which is much on my mind today is the future of the Irish question. With the United Kingdom and the Republic of Ireland together in the Union as wholehearted partners, that common task is greatly facilitated. Without it, the whole enterprise looks immeasurably more difficult. That is just one example of the way in which our commitment to the Union is so important.

I believe that a conscious effort is needed to put aside, as far as possible, the domestic squabbles in which we indulge at present and to concentrate more on the broader issues of world concern which are basic to our long-term security and prosperity and to the cause of world development, about which a number of us have spoken today. If we fail to meet that challenge, I fear that future historians will point to this period as the moment when the British finally lost their sense of direction and purpose, as so many once great nations have done so often before us.

Of course, the mood of the nation is not something which the Government can or should seek to control. It evolves with its own peculiar, even mysterious, chemistry. But in this House I suggest that we should notice what is happening and use whatever influence we have to recall to the minds of our fellow citizens, and perhaps particularly to those who own, control and edit newspapers and television programmes, the opportunities and responsibilities that we have in a world which is changing so much and so rapidly.

5.40 p.m.

Baroness Rawlings

My Lords, so many of your Lordships have a great experience in foreign affairs that I intervene in this debate with timidity. I hope that your Lordships will show the traditional kindness to one who speaks in the House for the first time. This is a great privilege which I welcome, as I welcome the privilege of following the noble Lord, Lord Bridges, to whom I should like to pay tribute for his excellent speech.

I have been advised by several kind noble Lords that maiden speeches in your Lordships' House should be uncontroversial. So, I hope that your Lordships will bide with me if I speak today on that uncontroversial subject, Europe, as I have spent the past five years as a Member of the European Parliament.

This week we took an important step in line with the rest of Europe. I refer to the start of the National Lottery. Mentioning the National Lottery may seem to stray from this foreign affairs debate, but our heritage and culture are of prime importance to our national identity. Many fear that we are losing that by being members of the European Union.

The National Lottery is expected to provide huge additional resources for our national heritage, the arts, sport and charities. I agree with my noble friend Lord Rothschild who said recently that the National Lottery Act 1993 could easily overtake the National Heritage Act 1980 as being the most important piece of legislation in the heritage field since the Second World War. In boosting our arts, heritage and sport, we are underpinning our culture, which for most of us is the core of our identity and a source of security.

Since the war, institutions, notably NATO and the European Union, have been devised to strengthen nation states and bring them closer together. Economic interdependence and regular contacts, buttressed by modern technology, have led to greater cultural proximity. Yet, differences between cultures will always remain, and so they should.

Europe was horrifically scarred by two world wars in this century alone, so that, understandably, we are wary of petty nationalism. That should not, however, be confused with the wish to preserve our culture and our national identity. The latter is a noble aspiration, perhaps more appropriately called patriotism, a very different sentiment and one, I am sure that noble Lords would all support. But emphasising cultural distinctiveness to the exclusion of everything else is absurd. Galileo made great discoveries on the principles taught by Bacon; and Einstein built on the vision of Newton.

Culture looks beyond boundaries. While applauding the individuality of our own culture, we cannot overlook the fact that Shakespeare took inspiration from the classics and Inigo Jones from Palladio to create great masterpieces. When the Normans conquered England they brought their art of building cathedrals with them. The English, under much influence from France during the following two centuries, developed their own styles, which, in turn, influenced the French and the Italians. For example the finestrone on the western facade of Venice's ducal palace recalls the windows of Ely Cathedral. The cross-influences and yet distinctiveness of Gothic architecture are such that no one nation can call it its own, but each nation can recognise itself in it. Moreover, culture did not stop at the Elbe. Leonard Cox, our 16th century rhetorician and professor at the University of Cracow, wrote: that the Poles breathed Erasmus of Rotterdam". Therefore, on cultural, not just economic and political grounds, it is entirely logical that the European Union should embrace more members.

Enlargement, especially towards eastern and central Europe, is one of our long-standing objectives, as mentioned in the gracious Speech. My noble friend Lady Thatcher said: We have a pressing moral obligation to sustain democracy, and free economies, by bringing these countries into the Community as soon as possible, even though it will require a very long transition period". I share my noble friend's feelings. For that reason, I became deeply involved with one of those countries—Bulgaria. While in the European Parliament I wrote several reports on Bulgaria and the Europe agreement which was concluded during the British presidency.

We are helping the central and eastern European countries along a difficult road, to civic, political and economic reconstruction through major aid programmes and the Europe agreements, primarily for trade liberalisation. That encouragement is vital to keep those countries on course towards the goal of stable democracy and the doubling of the single market. The economic climate is still fragile. The temptation of protectionism is to be resisted. The European Council in Essen must make good progress in preparing the strategy for accession of the associated countries. If those discussions become bogged down in a morass of committees, the Union will fail in one of its central purposes.

To succeed it will be necessary for the Union itself to adapt its policies and institutions to accommodate the new members. None of that should alter the need to preserve national identities.

Those issues will be much debated in the run up to the 1996 intergovernmental conference, as will the controversial issue of a single currency. We are not committed to that; a decision upon it will be made by Parliament. I greatly look forward to the enlightening contributions that your Lordships will make to these complex subjects.

It is imperative that Britain continues to play a major role in that debate, staying right at the heart of Europe, where we are much respected for our integrity and fairness. As William Pitt said: England has saved herself by her exertions, and will, as I trust, save Europe by her example. Enlargement of the Union and the preservation of our national identity are both now central to European affairs. European unity focused originally on reconciling France and Germany. That has been accomplished and we have witnessed an unprecedented period of peace and prosperity in the European Union.

The fall of the Berlin Wall and the subsequent reunification of Germany have raised new problems. We now need to build on what has already been a remarkable achievement. There are great and noble tasks ahead of us.

5.48 p.m.

Lord Redesdale

My Lords, it is with great pleasure that I congratulate the noble Baroness upon her excellent speech and say how fitting it was that she should be given this opportunity to speak for the first time upon a subject about which she knows so much, having so recently been a Member of the European Parliament. I am sure that the House looks forward, as I do, to hearing many more speeches from her.

I was glad that the words "overseas development" were added to the title of today's debate as I do not believe that a debate on global security issues can take place without a discussion on the forms of political stability that exist in developing countries. In the past year a wave of democracy has spread, especially in Africa.

Earlier in the year I had the honour of monitoring the first multi-racial elections in South Africa. From there I went on to monitor the elections in Malawi—the first multi-party elections in 30 years. I have recently returned from monitoring the elections in Mozambique. They were elections which, it is hoped, will lead that country to peace.

However, democratic transition is inevitably a slow and vulnerable process. Angola exemplifies the inherent vulnerability of emerging democracies as political breakdown reversed the progress that had so far been achieved.

Mechanisms for democratic governance have to be encouraged in parallel with sustainable structural adjustment. In many developing countries, the machinery of government needs to be completely rebuilt. Often the funds do not exist for these purposes. Moreover, the political instability of developing countries is not merely a regional or local concern; it is of strategic importance to the developed world since collapse, as 'in the case of Nigeria, threatens international capital markets.

While it is acknowledged that since the end of the Cold War the nature of conflict has shifted from the interstate to the internal, the link between conflict and social and economic inequalities has only begun to be addressed. It is no coincidence that of the 31 wars raging around the world, a large proportion are in the poorest region; that is sub-Saharan Africa. If for no other reason than the need for a co-integrated approach to global security, the UN Secretary-General, Dr. Boutros-Ghali, declared in September: Today we have a deeper understanding of where the sources of troubles lie in our world. We now know that security involves far more than questions of land and weapons. We further realise that the lack of economic, social and political development is the underlying cause of conflict". The jubilee anniversary of the United Nations in 1995 will provide a unique opportunity to address the problems facing United Nations conflict management. The time has come to renew the role of the UN in the light of its failed missions in Somalia and Angola and its inadequate response to Rwanda and Bosnia.

Somalia has shown the damage that mismanaged international operations can inflict on the recipient country. With the imminent removal of all UN forces and the consequent dismantling of the false local economies that it had generated, the country threatens to fall into deeper chaos. As regards Rwanda, in spite of reports of human rights abuse as early as April and May, the world stood by actually withdrawing a substantial number of United Nations troops whose presence could well have functioned as a deterrent to the genocide. Not until a refugee crisis of unprecedented proportions and reports of the scale of genocide were portrayed on our television screens did the international community decide to take belated action.

The need for a framework of international action in response to conflict-related emergencies is paramount. The provision of resources, instruments and institutional capabilities to guarantee that its operations no longer continue on an ad hoc basis depends on political will. The UK Government should take a lead in pushing for the reforms recommended by consortiums of UN delegates, field experts and NGOs. Among these, the development of a global emergency system to anticipate and prevent conflicts, such as an office for preventive diplomacy, which could advise the Security Council of potential conflicts and recommend policies for action; and, secondly, a permanent stand-by UN peacekeeping force available at minimum notice would be welcome steps to reform. Improved co-ordination, accountability and evaluation of UN agencies must be achieved. Greater representativeness of the UN Security Council is important if its military operations are not to be viewed solely as the projects of strategic interest to the west. Above all, the financial resources must be provided to allow the UN to function effectively.

I do not plan to discuss UN reform any further, only to add that the costs of emergency aid would be significantly cut by effective preventive diplomacy. Currently more resources are put into refugee flows than into peacekeeping or preventive strategies. The rise in peacekeeping costs was 3.6 billion US dollars in 1993, the highest ever. It is little next to the defence spending budgets and the profits reaped from arms sales. But the UK is set to reduce contributions to UN specialist agencies such as UNICEF and UNDP between 1994 and 1996 by 7.5 per cent., which is a reduction of £5 million. This does not tally with the speech of the Foreign Minister, Douglas Hurd, to the United Nations on the 28th of September in which he said: We will not be able to build up the UN's operation unless we act now to put the UN finances on a sound and sustainable footing for the long term". There is also a very real concern that donor government contributions to emergency aid is diverting funds away from long-term development programmes. If the Foreign Office is committed to UN conflict management it is imperative that extra funds are found for the ODA contingency reserve for humanitarian emergencies which funds relief work on the ground, such as through NGOs. This will ensure other parts of the aid budget are not robbed for short-term, high profile ODA activities.

At present, current policy means cuts in spending on both conflict situations and post-conflict relief and rehabilitation programmes. It is reprehensible that while global military spending has declined by 3.6 per cent. a year between 1987 and 1991, the resulting peace dividend of 935 billion dollars has not been used to finance the world's social agenda or provide human security, as shown in the 1994 Human Development Report.

Returning to the UN Secretary-General's comment on social and economic hardship as an underlying cause of conflict, I wish to emphasise a demand that has often been made in this House, and which is the sole justification for the aid budget, that aid is poverty-focused.

The disappointing results of ODA project completion reports, which state that a substantial number of projects fail to reach completion, and the low points scored for meeting objective targets, especially projects focusing on women in development, are regrettable. Apart from the shrinking of bilateral aid due to the cuts in the aid budget, the apparent fall in funding to multilateral institutions providing assistance to the poorest developing countries is a cause of serious alarm. In spite of criticisms levied at the Enhanced Structural Adjustment Programme of the IMF, it remains one of its main sources of concessional lending. This year a number of IMF member countries have shown reluctance to replenish the fund to the extent that it has been cut from 6 billion dollars to 4.5 billion dollars. When £35 million-worth of aid has been squandered on the Pergau dam—and further allegations have emerged of uneconomic projects—the priorities of the Government's policy for overseas development are surely crying out for clarification.

The late judgment on the Government's illegal action of spending aid money on economically unviable projects under the Overseas Development and Co-operation Act in the Pergau dam affair was no small victory in the courts. It sets a precedent ensuring that abuse of the aid budget will be open to scrutiny. Already the revelation last week of a British £2 million aid-for-arms deal with Indonesia seems in flagrance of UN condemnation of Indonesia's human rights abuse in East Timor. I hope that the allegations about arms sales and Indonesia are false, as they would further damage the concept of aid in Britain.

An example of questionable projects is the £60 million Samarinda gas power station which was paid for with British aid. It appears to be a wasteful investment because what the thinly populated area of Kalimantan needs is not more electricity (of which it has enough) but transmission lines. Apart from directly enriching the "First Family"—virtually all foreign investment plans are negotiated through the "First Family"—it will incur huge environmental costs by speeding up deforestation and pollution in one of South-East Asia's last remaining rainforests. I hope that the Minister will be able to comment on these allegations. The Minister said that there was no linkage to arms and aid. Can she also explain the increase in aid to Indonesia in 1992–93 to £436 million, which is an increase of 200 per cent? That seems to coincide with the date on which that arms deal would have been agreed. Similarly, why is it that aid to Nigeria leapt from £6.3 million in 1988–89 to £67.7 million in 1989–90 at a time when a £280 million contract for tanks was being signed in 1990?

Britain is the world's fourth largest exporter of arms. Recent reports by the World Development Movement based on figures reported to the United Nations Register of Conventional Arms show that British taxpayers last year subsidised the exportation of weapons to mostly third world regimes to the tune of £2 billion. Again, I should like to know what consideration the Government have given to including a recipient country's military expenditure as part of their good governance criteria?

A matter of particular interest to me is the proliferation of land-mines throughout the third world. I recently visited Mozambique where I monitored an election. I counted 30 people who had lost limbs due to land-mines. Land-mines are the cause of constant civilian casualties in Cambodia, Iraq, Kurdistan, Afghanistan, Mozambique and Angola. Cambodia has 30,000 amputees, 4.2 per thousand of the population, which is the world's highest proportion.

Although France, Belgium, Germany, the Netherlands and now Italy have agreed to stop the production and exportation of land-mines indicating the gradual harmonisation of EU policy, Britain continues to develop and export inhumane weapons. Britain has signed the UN Inhumane Weapons Convention but has failed to ratify it. The export ban declared in July was deliberately misleading. It did not include the prohibition of anti-personnel mines that self-destruct and are self-neutralising. Yet those supposedly safe land-mines have a 10 per cent. failure rate. The Government maintain that land-mines are "legitimate defensive weapons" if "responsibly" used. Is that "responsible" policy on the part of the Government when they have failed to conduct any research of their own to guarantee the reliability of self-destruct mechanisms? Over 150 MPs called for a total ban of anti-personnel mines in the Early Day Motion No. 361 as well as the immediate ratification of the UN convention. Are the Government going to take action in that regard?

Finally, I draw attention to the fact that the Minister said that arms deals and aid are not linked. I hope that she will be able to ratify that over the next few weeks because I believe that the scandal with regard to Indonesia will continue.

6.3 p.m.

Lord Cockfield

My Lords, it used to be just the plain Foreign Office; then it became the Foreign and Colonial Office; and in due time that gave way to the Foreign and Commonwealth Office. But despite the fact that we have been members of the European Community, now the European Union, for more than 21 years, it still remains just the Foreign and Commonwealth Office. That is despite the fact that arguably Europe is much more important than the other two either separately or taken together.

While on that subject, perhaps I may invite my noble friend the Leader of the House to join the 20th century. When he announced the subject matter for this debate yesterday evening—and I prefer to quote his words rather than a mere footnote on the Order Paper—he said that today: the main topics for debate will be foreign affairs, overseas development and defence".—[Official Report, 16/11/94; col. 19.] Suddenly the Government have added overseas development. No doubt the position is that they regard the Pergau dam as more important than the European Union. I have some doubts as to whether that view will be held when the history of this tragic and bloody century comes to be written.

It may be thought that I am talking merely about the use of words, but in fact words very often reveal the thoughts which exist unexpressed in the darkest recesses of the mind. The time has come when not only the Government but perhaps other people also should have a better order of priorities.

I do not propose to follow the noble Lord, Lord Hooson, in what he said about "federal" and "federalism". I merely seek to help my noble friend Lady Chalker by saying that the Government's policy is obviously based on that well-known dictum: When I use a word, it means just what I choose it to mean —neither more nor less". The author of that dictum was Mr. Humpty Dumpty—and I refer to the one in Alice Through the Looking Glass. I am not making any imputations elsewhere. I shall say no more about federalism.

I turn to the question of the Queen's Speech. I propose to pick out two important items in the speech, both of which have been mentioned. But for the great furore which for some unknown reason has erupted in the past few days, I would have thought it unnecessary to refer to the Bill now being introduced to give effect to the decisions taken at the Edinburgh conference on the own resources of the Community. But I start by saying that that was not only a decision that was taken under the British presidency but we need to remember also that the existing level of own resources was 1.2 per cent. of gross national product; the proposition was that that should be increased to 1.35 per cent. by the end of the century. In the end, and largely as a result of pressures from the United Kingdom, from the Prime Minister—I admit with support from Germany and the Netherlands—that figure was reduced to 1.27 per cent. One would have thought that halving the increase proposed was a great achievement in which even the most pessimistic of the Euro-pessimists, or whatever they call themselves, would have taken some satisfaction.

But constitutionally the position is absolutely clear. Here we have an international undertaking entered into not only by the United Kingdom Government but at the instance of the United Kingdom Government. If Parliament was not prepared to pass a Bill giving effect to that undertaking—and it is always open to it not to do so—then it is impossible to see how that Government could survive. There is a maxim of the law that every man is responsible for the natural consequences of his actions. If the Government were to fall, we should know who bore the responsibility for that happening.

Perhaps I may add a few further words. It would be disgraceful if the Government had to rely on the votes of the Opposition in order to validate an undertaking of this kind which had been entered into. In case what I am saying is giving any comfort to the Opposition, I say quite clearly that I have reservations about their conversion to the European cause. It started simply with antipathy to Mrs. Margaret Thatcher and the policies that she was following. Whether that conversion—on the road to Damascus, or what the Opposition may have thought was the road to 10 Downing Street—would ever survive the stresses and pressures of government has not yet been proved and I hope that it never is proved. But so much for that aspect of the gracious Speech in so far as it referred to European affairs.

I turn now to the other matter that I should like to mention; namely, the 1996 intergovernmental conference to which my noble friend Lady Rawlings referred in her most interesting maiden speech. It is a matter of immense importance. I see that the Community has been asked to designate 1996 as the European Year of Lifelong Learning. I hope that the Government will be prepared to enrol in that particular course.

The debate on 1996 has already started. The Social Democratic Party in Germany has published a discussion document, M. Balladur the Prime Minister of France has given a detailed interview to Le Figaro and our own Prime Minister Mr. John Major made a speech of great importance—I do not necessarily agree with it; but it is of great importance—at Leiden. So the debate is now joined. In June of the coming year, what was called in the rather peculiar phraseology of the Corfu Summit "The Reflection Group on 1996" is to start meeting under the Spanish presidency. Therefore, it is time enough now for us in your Lordships' House to be seriously considering what are the prospects for 1996 and what policies should be followed.

I do not propose to go into the matter in any particular detail. However, there is one point that I should like to make. If one looks at the Maastricht Treaty and tries to read it—which, I may say, is not at all easy because it is a perfect example of legislation by reference—it will be seen that what the intergovernmental conference is supposed to consider are not the policies themselves but, the effectiveness of the mechanisms and the institutions of the Community". In fact, that is the effect of Article N2 of the treaty read in conjunction with its reference back to the fifth indent of Article B. Therefore, when I say that it is not all that easy to follow, that fact is well illustrated by what I have just said.

There is also a reference to, a revision of the policies". But it is absolutely clear that that is only to the "extent" that revision may be needed to ensure the "effectiveness" of the "mechanisms and the institutions". That is enormously important because there is no authority under the Maastricht Treaty to pull up all the policies by the roots and examine them again, discarding those that we do not like. Nor, I may say, is there any authority for the launch of new policies.

I believe that we already have sufficient policies in the Community, or the Union, both under the Single European Act and under the Maastricht Treaty to keep us busy until well into the next century. It is important to make a success of those policies and not to start spawning new ones which may not be effective and for which there would be no time to give effect to. That is all I wish to say at this stage about the 1996 review. I hope that we shall return to the matter in your Lordships' House and discuss it in some detail before the Government's policy on such matters is enshrined in blocks of concrete. That is the only plea that I make.

In conclusion, I should like to say that the "hang-ups" in this country—and I can think of no better word, despite its lack of eloquence—over closer ties with Europe are understandable, even if they are wrong. Since 1066 this country has not been seriously invaded. For nearly 1,000 years we have developed a civilisation, a culture, an ethos, and a set of policies all of our own. Over that long period of time we have gradually drifted away from the Continent of Europe. To come back into the Continent of Europe (which essentially is what the European Union means) involves an immense task of re-adaptation. However, it is a task that falls not just on our shoulders; it also falls on the shoulders of all the other members of the Union. In fact, it is a coming together of the peoples. It is not a matter of one country making a massive move and the others standing still and doing nothing. That point should be kept constantly in mind.

We also have another problem which is very peculiar to ourselves. In Victorian times we had the most powerful and successful—though not the largest—army in the world, we had the largest and the most powerful navy in the world and we were the world's most important industrial power. Today, unfortunately, we are none of those things, although so often in the way that we think and talk we still have, so to speak, the remnants of that imperial outlook trailing along behind us. That again makes the problem of adjustment so very much more difficult. It is difficult for the people and it is difficult for the politicians, but it is a process of adjustment which must be made.

If we are to build a secure future for ourselves, for our country and for future generations, if we are to have a real influence in the world and if we are to pull our weight and to make our policies known, it can only be as part of a strong and effective European Union. Therefore, our efforts must be directed to strengthening the Union and not weakening it. We must help it to grow by the admission of like-minded new members; we must make it more effective in the world whether in politics, in security, in defence or in trade; and we must improve its efficiency, reforming its administration and its institutions to enable it to take decisions resolutely and implement them efficiently.

We cannot always have our own way. But if we play a constructive role and are recognised as so doing, we shall exercise an influence far greater than mere numbers alone would command. That is the challenge with which we are faced. That, ultimately, is the challenge of 1996.

6.18 p.m.

Lord Wright of Richmond

My Lords, I should, first, like to commend the Government for the statement in the gracious Speech that they will work with our partners in the European Union to give greater substance to the agreements between the Union and the countries of Central Europe. In that, as in other aspects of our membership of the European Union, it is vital that Britain should continue to play a central, positive and effective role. There seems to be an increasing danger that public opinion, if not the Government themselves, will become distracted from Britain's true place at the heart of Europe by increasing scepticism—much of it, in my view, misguided—about the benefits to Britain of membership of the European Union; by criticism, however justified and understandable, of some of the regulations emerging from Brussels; and by revelations of fraud and mismanagement within the European institutions.

I believe that we should be very careful not to allow such scepticism or criticism, or what the noble and learned Lord, Lord Howe of Aberavon, described as "over-simplified hostility" and what sometimes sounds dangerously like xenophobic insularity, to sideline us in Europe, or to give ourselves and others the impression that we are not committed to maintaining a central place at the heart of the European Union. At a moment when Sweden has just voted to join the Union, and when others from northern, central and eastern Europe are certain to follow, I believe it would be tragic if we were to remove ourselves, or to appear to be removing ourselves, from that central position of influence. In a week when, for the first time, any British citizen with the money to spend on a rail ticket has direct physical access to the continent of Europe, it would be all the more ironic if we were now to appear, or to regard ourselves, as detached Europeans.

Being at the centre of Europe means being at the centre of decision making and meeting our obligations and undertakings as members of the Union. By sniping from the sidelines we shall never use our very considerable potential influence in Europe to the full. More widely, I was also glad to hear the references in the gracious Speech to the Government's intention to continue their efforts to promote a peaceful settlement in the former Yugoslavia; to enhance the capabilities of the United Nations; to support democracy in South Africa and to maintain support for the Middle East peace process—all powerful and welcome signals that the Government propose to maintain a global foreign policy.

There has sometimes been comment, if not criticism, that Britain is still trying to punch above her weight. But if we are to remain permanent members of the Security Council —I agree with the noble and gallant Lord, Lord Craig of Radley, that we must—and continue to exercise a leading, active and positive influence on the world's political and economic fora, such as the United Nations, the Commonwealth, NATO or the Group of Seven, we need to punch with as much weight as we can muster, not sit outside the ring throwing eggs at the boxers.

I also welcome the Government's intention to continue to contribute to NATO's wider role in protecting stability throughout Europe. Recent developments in the United States make it more vital than ever that we continue to play our full part in NATO, and in the security operations conducted under both NATO and United Nations auspices. Our bilateral relationship with the United States, and our long standing intelligence co-operation with the Americans, have come under question in the media in recent weeks. Here again, I think that the image, too often presented in our press, of an Atlanticist Britain somehow hovering on the fringes of the European Union, can only be unhelpful in the context of our relationship with the United States administration and with Congress. If I may continue my earlier metaphor for a moment, and echo the remarks already quoted of the former United States ambassador, Mr. Raymond Seitz, in punching above our weight, we also need to show ourselves as full members of the European boxing team.

The contribution of Britain's Armed Forces and of our diplomatic service in helping to resolve some of the many international crises in the world will not only continue to be invaluable in itself but it can also, I believe, still play a role in persuading the United States to remain committed to the defence of world peace and democracy, and to avoid the sort of sporadic isolationism to which the noble Lord, Lord Kennet, referred. Experience of the past few years, and particularly of the Gulf crisis, has shown that United States commitment to its international and peace-keeping role is still a vital ingredient in the resolution of international conflict.

I make no apologies for adding a word or two about the work of Her Majesty's diplomatic service. I hope that, more than three years after my retirement from that service, my comments will have acquired at least some semblance of objectivity. It has been an extraordinary achievement on the part of my successors to have been able to staff some 25 additional posts, opened mainly in the capitals of the former Soviet Union, in spite of diminishing resources.

In my new, post-retirement involvement with a number of leading British companies I have been able to see—from the other end of the telescope, as it were—the remarkable service which our diplomatic posts are able to provide in helping Britain's exporters and in encouraging inward investment in this country. I was glad to see a well-deserved tribute to the role of the diplomatic service in attracting inward investment to this country by the Minister for Industry and Energy during a debate on the subject in another place at the end of last month. As the Minister pointed out on that occasion, inward investment not only creates jobs, it also makes a major contribution to British exports. The significant role that the diplomatic service fulfils in encouraging exports and attracting inward investment is, in my view, yet another reason why we should continue to maintain a worldwide diplomatic presence, as also do our colleagues among the present and aspiring permanent members of the Security Council.

In conclusion, perhaps I may add that I was sorry not to see any reference in the gracious Speech to the Government's announced intention to ratify the additional protocols of the Geneva Convention in the coming year. It would be sad if we were unable to be listed among the majority of countries who will have completed their ratification by the time of the International Red Cross conference in December next year. I hope that the Minister will be able to give us a reassurance that it is still the Government's intention to move to ratification of both additional protocols at the earliest opportunity.

6.28 p.m.

Baroness Young

My Lords, I wish to start by congratulating my noble friend Lord Blaker and my noble friend Lady Rawlings on their maiden speeches. They both said much of great interest to us all and I hope that we shall hear from them on many occasions in the future. I would like in my remarks today to speak about part of the world which has barely been touched on but in which I take a great interest, and that is the Caribbean. I first became interested in this part of the world because when I was a Minister in the Foreign Office I had responsibility for the area and since leaving office I have maintained my interest as a vice-president of the West India Committee.

The Caribbean is a part of the world which is easily neglected, if not forgotten, while the attention of all is focused on the great events such as the ending of the cold war, the break-up of the Russian Empire and its effects in Russia and the new republics in eastern Europe and Yugoslavia, our great concern about the great economic growth in the Far East and the competition that that will bring for us all, and, as we have heard so much today, the importance of our role in the European Union. Indeed attention focuses on the Caribbean only when there is trouble, as there was in Grenada some years ago and more recently this summer in Haiti. That is the only Caribbean country which has been mentioned today, by the noble Baroness, Lady Blackstone, and the noble Lord, Lord Kennet.

The Caribbean is a part of the world which is also changing following the end of the cold war. The point that I wish to make today is that I believe that British policy towards the Caribbean must also change. Those changes began with the creation of the North America Free Trade Area. We have to look to the ending of Lomé IV in the year 2001 and its possible replacement by some form of regional association arrangement that will be compatible with GATT. There have also been great changes in Cuba. That suggests that it will be commercial rather than political interests which should determine Britain's policy towards the Caribbean and that we in Britain, who still tend to think only of the English-speaking countries of the Caribbean when thinking of the Caribbean at all, must recognise the significance of the Spanish-speaking countries of the Caribbean and Central America.

First, I should like to say a word about our traditional links before looking at the wider Caribbean. Traditionally, Britain's links with the Caribbean have been with the English-speaking countries, with which we have had, and still have, strong ties through the Commonwealth, trade, culture and family, particularly through the thousands of Caribbeans who come to live and work in this country. Above all, we speak the same language.

I believe that now our relationship should be conditioned not only by what has been the case in the past. The larger English-speaking countries of the Caribbean may well, over time, develop new linkages with the non-English-speaking Caribbean countries through the Association of Caribbean States. We must recognise that that new approach shows the way in which Britain's aid, security, commercial and other ties can be enhanced by a British-led European Union policy.

Already we have been deeply involved in the long and protracted negotiations on bananas, a fruit known nowadays more for its skin than anything else. It is a crop on which Jamaica, St. Lucia and Dominica are largely dependent. There is not time to go into the complexities of the negotiations, except to say that they are not yet resolved. Yet, without a permanent solution, the danger is that the economies of those small countries could collapse and that the drug dealers will move in to the vacuum which is left behind. There are similar problems in relation to rum.

Although those issues affect the English-speaking countries in particular, they require today European and American involvement for their solution. In that sense there is a great change. I echo the importance of Britain having a strong voice in the European Union and in the arguments in the debates which we seldom speak of but which are of extreme importance to some countries.

Our other major interest in the Caribbean concerns the five dependent territories. I know that both Ministers and the Foreign and Commonwealth Office have given much thought to the future of those territories, for which we are ultimately responsible. It must be right to have an absolute commitment to good government, law and order, the regulation of such matters as offshore financial activity and the eventual economic self-sufficiency of those small countries. However, I should like to think that our policy should move forward politically. The recent troubles in the BVI should act as an incentive to us to take their concerns more seriously. For example, the decision to create additional tiers of bureaucracy for the Dependent Territories' Secretariat in Barbados to "manage" those small countries has not encouraged a better relationship, however well intentioned.

What I believe is needed is an approach which recognises the growing concerns of chief ministers regarding their relationship with governors, the powers of the elected governments and governors, and the role of London and the secretariat in Barbados. I should like to think that it would be possible to hold a conference in London which would establish, on a negotiated basis, the principles regulating the relationships between London and the Caribbean dependent territories.

I now turn to the other countries of the Caribbean and the directions in which the Caribbean is changing. I have already referred to the Association of Caribbean States. That new association includes Mexico, Venezuela, Colombia, and the Central American republics, as well as Cuba and the traditional islands of the Caribbean. It was formed last summer. Its objects are to promote economic, social and cultural co-operation. The association covers a population of some 200 million and has a collective GDP of 500 billion US dollars. As such it is potentially the world's fourth largest trading bloc. It seeks to define a special free trade relationship both with the NAFTA and with the European Union, where of course there is more than one player.

Against that backdrop we can look, too, at Cuba and see great changes. There is now a far-reaching structural reform programme. I was delighted that my honourable friend Ian Taylor visited Cuba in September and signed an IPPA agreement with that country. My honourable friend has indicated his wish to develop programmes of economic co-operation between London and Havana. It must surely be in our interests to encourage Cuba to move both towards a democratic system of government and a free enterprise society, as we are encouraging the eastern European countries. What is now needed is for Britain to respond quickly to Cuban requests for technical and other forms of assistance.

What can we do to help? I hope that my noble friend may be able to say when replying whether it would be possible to give them something from a know-how fund. I believe that they need advice on how to manage a market economy and training in entrepreneurial skills and the management and regulation of utilities. We in the United Kingdom have considerable experience of all those programmes, particularly of privatisation, and we have much to offer from our experience in eastern Europe. Is there also any prospect of the restoration of ECGD cover? Can, for instance, the Commonwealth Development Corporation look at the wide range of opportunities for investment?

Puerto Rico is a small country, yet it is the third largest market for British exports after Brazil and Mexico. Its population is only 2.5 million, yet we had direct exports to the island of £188 million in 1993, and so far in 1994 our exports have increased by 66 per cent. We are already the largest investor in Puerto Rico after the United States. There are a great number of opportunities for the United Kingdom in a number of infrastructure projects planned for the island, and it would be nice to think that we could take advantage of them. The establishment of a small consular office in Puerto Rico has undoubtedly been of great help in all that activity.

That brings me to the Dominican Republic. Here, too, is a market of growing importance. I am glad to hear that my honourable friend Mr. Tony Baldry will visit the Dominican Republic in December. In this country we have been enormously well served by our honorary consuls, but we now need some form of permanent representation, which would be of immense benefit to our exporters and to our relationship with that country.

I began by saying that I believe that Britain's policy towards the Caribbean should change to take account of the great changes in that part of the world. I recognise the many demands on the diplomatic service, and I was interested to hear what the noble Lord, Lord Wright of Richmond, said on this subject in his remarks. It would be unfortunate if, as resources diminished in that part of the world to take account of the many other calls on the diplomatic service, departments of state responded by simply reducing all the programmes without trying to find alternative ways in which they might be better co-ordinated both in the interests of the region and of Britain and the money which is available better used.

We need to catch the mood of the region, which is now one in which the primary consideration is the commercial interests of those countries. Such consideration will add to their prosperity; and that must be a matter to be welcomed. We should look again at our aid policy, which could well extend over a wider region—for example, I have suggested that it could extend into Cuba. It could be a policy of working more closely both with the private sector in its activities and with non-governmental organisations. I hope therefore that we can look again at our diplomatic and commercial representation in that part of the world. We need to face the fact that that area is changing rapidly. We need to take account of the new political and economic realities.

There are great opportunities for our exporters in the Caribbean and for an increasing and important partnership. That partnership will benefit ourselves, it is true, but also those countries which, although not the poorest in the world, may welcome and need our help and support. Such a partnership would build on a long tradition. It is an opportunity that we ought not to miss in the changes that are coming about, and it is an issue that we need to look to as we approach the 21st century.

6.41 p.m.

Baroness Elles

My Lords, I, too, should like to add my congratulations to my noble friends Lord Blaker and Lady Rawlings on their maiden speeches. They have brought an area of expertise to our debate today which might otherwise have been lacking. We are most grateful for their contributions today and hope to hear from them often in the future.

The outstanding evidence from the gracious Speech is that the United Kingdom is in a unique position in relation to international affairs. The noble Lord, Lord Wright of Richmond, touched on the fact that we are one of the five permanent members of the UN Security Council. We are members of the European Union, NATO, the Western European Union and, importantly, the CSCE. There is reference in the gracious Speech to the visit of the Queen and the Duke of Edinburgh to New Zealand for the Heads of Government Commonwealth meeting. We are members of the Commonwealth. We should welcome most warmly the visit of Her Majesty the Queen to South Africa which has once again re-entered the Commonwealth, a matter that those of us on all sides of the House warmly welcome. We send our warmest wishes to the two leaders, in particular President Mandela, and Mr. de Klerk for his courageous actions in bringing about the current situation in South Africa.

No other country has such responsibility as the United Kingdom in playing a pivotal role in the policy making and development of international relations and in working for the maintenance of peace and political stability. But we must remember that it must be the prime duty of any elected government to look after the interests of their own citizens. They must ensure that the interests of their citizens are protected.

I wish to touch on two or three of the wide range of issues set out in the gracious Speech. I do so not because they are more important but many matters have already been touched upon and I wish to raise these specific issues before your Lordships tonight. First, it has been correctly emphasised that the European Community finance Bill rests on the legal obligation already undertaken in December 1992 at the Edinburgh Summit. There can be no question of reneging on that obligation. It would be devastating to the record of the United Kingdom if that were even to be threatened.

The increases involved are proportionately slight compared with the expenditure programme of the European Union and the tasks before it. That factor is largely due to the successful efforts of my noble friend Lady Thatcher at the Fontainebleau Summit some years ago when she succeeded in fixing the abatement for the contribution of the United Kingdom. That policy has been continued by my right honourable friend the Prime Minister. But there has been a certain amount of political scenery (if one may call it that) because of the timing of the publication from the Court of Auditors; and there is a debate in the European Parliament. The report from the Court of Auditors, regrettably, has been repetitious every year in setting out examples of massive fraud. No one can deny that there is fraud in the European Community and it must be stamped out. I do not intend to go into that in detail now. We have already had a major debate on the excellent report from the sub-committee chaired by the noble Lord, Lord Hunt of Tanworth, on financial control and fraud in the Community. Many recommendations were made and debated in your Lordships' House.

However, as I read the press, I sometimes wonder whether we are not being rather holier than thou. Let us look, for example, at the magnificent record of the Inland Revenue. It has recouped £4.7 billion sterling from underpayments and cheating in income tax returns in this country alone. Already the Department of Social Security—I congratulate the department on its work—has recouped £654 million from fraudulent demands for benefits. There is no doubt from conversations with those responsible that the sums estimated to be fraudulently paid out in this country run to something like 10 per cent. of the total budget on social security and health. That includes fraud, crime and waste. As the total sum for that budgetary element is £83 billion, one can safely estimate that something like £8 billion is being paid out fraudulently or through waste. I do not wish to minimise the estimated £6 billion which is missing from the Community budget, but let us start at home. Those members who claim that they are serving the British taxpayer and their constituents well by tackling so forcefully the European Community could well start by serving their country and taxpayers better by ensuring that those frauds and wastes are properly controlled through parliamentary activity—the Public Accounts Committee, the National Audit Committee and the various other means by which representatives of the people of Britain can look after the interests of their people.

Although fraud exists in the European Community, it exists everywhere. Probably one of the best actions that Britain can take is to indicate what we are doing in this regard—identifying fraud in our own country both from EC funds and within the UK's administration—and in that way encourage other member states to do the same: to ensure that they are controlling and monitoring payments into the various funds of the Community, whether the agricultural, structural or regional funds or payments as regards training. We have many examples of frauds. It is up to the member states to ensure that that fraudulent behaviour and the imposition on all European taxpayers is stopped as speedily as possible.

On a point of international law, the acceptance of the United Kingdom to fulfil its legal obligation is important when we reflect on the recent decision of President Clinton to flout a Security Council resolution, to which the US was party, to waive the naval embargo on trade of arms to Bosnia. As Alain Juppé pointed out recently, it was the unanimous decision of NATO that that embargo should remain. It bodes ill for our relationship if deflection from a legal obligation, taken through major bodies of which the United Kingdom is a member, should start in that way. We should perhaps also remember that, to my knowledge, the US has no ground troops in Bosnia, but we, the British and the French, have the largest contribution there in the form of ground staff and UNPROFOR. They will be the recipients of an undoubted escalation of armed conflict in the area. That decision was ill thought out and could have disastrous consequences for the United Kingdom, both for our troops and the French troops serving on behalf of the United Nations. They are not there as members of national military personnel; they are there on behalf of the United Nations. That is an even more harmful aspect of the decision, which is regrettable.

The signal that has come from the president and consequently the US serves as a warning to us to get our own act together in Europe. First, we should strengthen our co-operation through the Western European Union. I believe that the treaty expires in 1998, so we now have an opportunity to study its provisions to see how we should go forward and develop closer relations in the military field.

Secondly, we should make greater use of common interests and concerns through the common foreign and security policy, the CFSP structure available to European Union members. We have seen the success of Her Majesty's Government's foreign policy in pressing for the enlargement of the European Community. The Government should be congratulated that it is one of the planks of their policy within Europe that we should go forward as quickly as possible to unite with other applicants to the Union. I am sure we all welcome them as warmly as both my noble friend Lady Chalker and the noble Baroness, Lady Blackstone, did when they congratulated Austria, Sweden and Finland on joining on 1st January. We very much hope that Norway will also do so.

I consider that it should be an urgent matter to assist the four central and eastern European Visegrad countries to enter at the earliest possible time and not to disappoint the aspirations of those who lived under oppressive regimes and who have sought to turn to democracy and liberal economies. That is a very difficult stage in the transition of any country, as we know only too well and have seen throughout Europe. Those countries seek membership of the European Union to consolidate and stabilise their internal situations.

No foreign policy can be achieved without close alliances not only between the European Union and bordering countries but also within the European Union. Efforts to co-operate closely, for example, with Italy have been made on specific issues and it must surely be in the United Kingdom's interest to co-operate more closely with France. Despite our traditional differences, we share with it the same strategic interests.

As France will take over the presidency in January, we have the opportunity of working more closely together. We now have both the symbolic and the practical example of a close link between our countries through the Channel Tunnel which was referred to by the noble Lord, Lord Wright. With it, we have a practical example of how the citizens of France and other countries on the Continent can come through to our islands as we, the citizens of the United Kingdom, can go through to the Continent, recognising that we do not have to cross what has always been considered the division between us and the rest of the world—the Channel. Thus I hope very much that the Channel Tunnel will be a symbol of the joint efforts in a great masterpiece of engineering which will unite us with the Continent and remove what my noble friend Lord Cockfield so aptly called the "hang up" of the isolationists and turn us into true Europeans.

6.54 p.m.

Viscount Waverley

My Lords, there is international concern regarding Kashmir and noble Lords will be aware of the historical background. Last month marked the 47th anniversary since partition and the onset of a bloody and bitter dispute over the altered status of the state.

I recently visited the region as a member of a parliamentary group and have since spoken to diplomats, parliamentarians, academics and representatives. My contribution today seeks to summarise the complexities and difficulties that make a solution elusive, rather than to judge the merits of any one position over another.

The United Kingdom maintains excellent relations with both India and Pakistan and both are members of the Commonwealth. India and Pakistan have fought two wars over Kashmir, which have left the state physically divided and heavily militarised. To illustrate the magnitude, there are approximately 600,000 opposing troops, including militants, in an area the size of England. By comparison, the British Army totals 120,000 regular troops.

An important development in 1972 was the Simla Agreement signed by both India and Pakistan, under which they, resolved to settle their differences through bilateral negotiations or by any peaceful means mutually agreed between them". The agreement looked forward to, a final settlement of Jammu and Kashmir". It was a confidence-building mechanism, which failed to produce a solution.

A fundamental difficulty derives from the present relevance of UN Security Council resolutions tabled at the time of partition, which offer to Kashmiris the exercise of their right of self-determination by means of a plebiscite. There are three key questions: first, what is each party's position? Secondly, what has prevented early resolution? Thirdly, what mechanisms would break the deadlock and lead to a possible solution? The following brief synopsis might appear bland; but a balanced assessment of such an emotive topic would benefit little from prejudice and rhetoric.

India's perspective focuses on the bilateral nature of a dispute between India and Pakistan; she does not countenance foreign intervention, including that of the United Nations. The need for dialogue under Simla is recognised to resolve, for example, issues of control of the areas west of the ceasefire line. Her position is premised on legal, historical, political, strategic and secular arguments. Kashmir is de facto and de jure an integral part of India. She believes that to concede would signal the eventual break up of the union. India criticises Pakistan for assisting and encouraging terrorism and militancy, as well as for internationalising the issue. Their response to criticism of the military's record on human rights is to point to the improved openness and transparency.

A priority is to prepare for state elections before July 1995 and so comply with the constitution. India calls on friendly democracies like Britain for encouragement in her efforts to hold elections under difficult conditions. Candidates cannot canvass on a separatist platform; indeed, any candidate so doing will be disqualified.

To Pakistan, Kashmir is unfinished business: an international dispute to be settled according to the relevant UN resolutions, through a UN-supervised plebiscite to decide accession either to India or Pakistan, with an independent Kashmir as an unacceptable option. Pakistan admits that the Simla Agreement conforms with the UN charter and the spirit of the resolutions. She sees the UN's presence in Kashmir as a physical testimony to the basic legality of that position. She seeks international action on human rights violations.

To the Kashmiris, this is not simply a dispute between the two sovereign nations, but a conflict among three parties. They insist on their right of self-determination as described in a number of Security Council resolutions. The Simla Agreement is not recognised as they were not party to that accord. To many, independence must be seen as a viable option to be weighed alongside accession to either India or Pakistan.

Their views are represented by the all-party Hurriyet Conference, a joint forum of 34 political parties and other organisations. No consensus of objectives has yet emerged; those who favour independence have not been swayed by those who want to join Pakistan. In their view, the proposed election process in the state of Jammu and Kashmir will not be representative. The Hurriyet Conference therefore is determined not only to boycott, but indeed prevent the entire process.

The positions of the United Kingdom, the United States and the European Union are broadly similar. It is widely held that the most practical method of resolving the dispute is through peaceful bilateral negotiations in the spirit of the Simla accord. The holding of a plebiscite to determine the future is not precluded providing all sides agree to that modality and are willing to employ pragmatism and realism rather than history and hindsight. All human rights abuses and any outside assistance, be it from governments or private organisations, to militant groups which commit acts of terrorism are strongly condemned. All combatants in the conflict are urged to cease hostilities and begin immediate negotiations in good faith aimed at resolving this dispute.

The United States perspective differs in the detail. It considers the entire pre-1947 princely state of Jammu and Kashmir to be disputed territory, and reiterates that the views of the Kashmiri people should be taken into account when deciding its future status. Further, it believes that the political processes in Kashmir must be transparent, thereby ensuring that local, state and national levels of government are accountable to the people.

What role is there for the world community? Certainly, the UN resolutions are still on the table, and as such should take a proactive role. The broader situation in the sub-continent must give rise to grave concern. Extremes of poverty, over-population and resource-depletion, appearing cheek by jowl with allegations of human rights abuses, terrorism and nuclear capability, expose dangerous fault lines for explosive potential regional conflicts. The futility of armed intervention must be exposed, with the usefulness of constructive dialogue emphasised and concretely supported. A mechanism must somehow be devised to facilitate that.

It may be that the UN resolutions relating to Kashmir and the Simla accord send conflicting messages. The world community recognises both instruments and, naively perhaps, expects a solution to be forthcoming. It may be helpful to recall the text from an important Security Council resolution, Resolution 122, on 24th January 1957, wherein the governments of India and Pakistan were both reminded of the, principle embodied in its resolutions … that the final disposition of the State of Jammu and Kashmir will be made in accordance with the will of the people expressed through the democratic method of a free and impartial plebiscite conducted under the auspices of the United Nations". The United Kingdom voted in favour; no country voted against. That position was reaffirmed in December 1957 in Resolution 126. Again, the UK voted in favour and no country voted against.

It may be pertinent for noble Lords to ascertain HMG's view, as a member of the Security Council, of the status of the existing UN resolutions and their compatibility with the spirit of Simla and bilateralism and with any right of the Kashmiri people to self-determination.

In urging dialogue, I submit the following steps as possible confidence-building measures that might be broadly acceptable. First, Pakistan's position could be amended to allow for alternatives to the current bifold version of plebiscite; secondly, India's position could be amended to eliminate any claim to sovereignty over that part of Kashmir currently in Pakistan's control; thirdly, intra-Kashmiri dialogue could be encouraged, possibly in London, with representatives from both sides of the line of control; fourthly, Pakistan and India could negotiate a swift and complete withdrawal of armed forces from the Siachen Glacier; fifthly, during the period of dialogue and negotiations, a truce, strictly observed by the international community could be effected between the various Kashmiri militants and the Indian army; sixthly, cross-border support could be immediately halted, monitored by neutral observers; seventhly, the International Red Cross could be allowed entry into all areas of Kashmir; and eighthly, unofficial observers could be allowed to attend Jammu and Kashmir elections.

We should do well to be reminded of the statement by the French president of the Security Council on 18th May 1964 while summarising the conclusions of the debate on Kashmir. The members of the Council expressed their concern with respect to two great countries which have everything to gain from re-establishing good relations with each other and whose disputes, particularly that centering upon Jammu and Kashmir, should be settled amicably in the interest of world peace". A solution is possible, with strong leadership, patience and a modicum of good will, combined with quiet diplomacy. The dividend is lasting peace and well-deserved prosperity for two vital bedrock members of the Commonwealth, the Non-aligned Movement and the United Nations.

7.7 p.m.

Lord Selsdon

My Lords, it is 50 years on, and I suppose it is fair to say that the demolition of the British Empire is nigh on complete. In those 50 years the demolition of the British economy, the wiping out of the ruling classes, the middle classes and all classes is nigh on complete due to taxation and inflation. In that period of 50 years, there has been one thing for which we shall be eternally thankful—peace. In my view, that peace has been largely due to the development of the EC—the common market—and the beginnings of the reunification of Europe. That unification is well under way; and I dismiss it entirely as being of no interest, old hat and a matter entirely for the bureaucrats to advance.

What of ourselves? We are no longer hated. We are no longer feared. Those lovely little anecdotes, such as that the sun never set on the British Empire because the natives did not trust the British after dark, are long gone. But we have to think of 50 years hence. I take as my text the words of my noble friend Lady Chalker, who referred to, an active foreign policy tailored to Britain's needs". The words "active" and "Britain" are good. Her tailoring today is also excellent. The colours are very similar to those of my own tribe and I therefore know that we shall share the same views.

But what is "an active foreign policy tailored to Britain's needs"? It is surely not consensus politics. It is surely not mandarinism. I recall reading, and I cannot remember where, that parliamentary mandarins are ineffably shocked by the impiety of an independent radical. I shall try to be slightly radical but slightly British—being British is not being radical. I have dismissed the common market because it is a market. It is next door and adventures are not necessarily into neighbouring countries. But it is also at once the haven of our culture and the haven of our commercial and industrial competitiveness.

Like the noble Lord, Lord Kennet, I turn towards the United States. If the demolition of the British Empire is nigh on complete, the peak of the United States is certainly past. What of America? Does it have a foreign policy? Does it need a foreign policy? Is it of any significance to us at all? I shall use the words of a fairly well-known American politician with whom I had the privilege of lunching many years ago, though I shall refrain from naming him. He asked me why, in order to be pro-European, was it necessary to be anti-American. I replied by asking why, in order to be pro-British, was it necessary to be pro-American. What is American foreign policy? He explained it to me thus: "In the United States we do not have any elephants. American foreign policy is like a great she-elephant on heat, going through the jungle. You can hear it, see it and sometimes even smell it, but you do not know what it will do next; nor does it." I do not believe that we should rely upon American foreign policy.

The noble Lord, Lord Wright of Richmond, and I share a love of the phrase "above our weight". He used the word "punch"; I prefer the word "box" because "box" implies more cunning. Again, perhaps I may offer the House an anecdote which I hear from time to time in the Middle East. To the question: "What is wrong with the Middle East?" comes the answer, "Four things really: hashish, baksheesh, malish and Briteesh, and Briteesh is the worst because they invented all the other three".

We were once cunning. We were devious. Our mandarins wore long sleeves from which the money came to corrupt and bribe. I think we need the term "mandarinism" again, but of a new sort. If we are unable to box above our weight, we must take on more weight quickly. In planning that, we need—as in all things—a tripod: three legs so that we cannot be knocked over. First, we must pretend to everybody that we have continental Europe in our hands and that we have more influence over it than does any other single nation. That could well be true. Secondly, we must pretend to others that we have more influence over the United States than does any other single nation. I believe that that is true; the countries to which I go surely believe it. Thirdly, we must not forget the British element: the Commonwealth, which has 40 seats in the United Nations. Through Her Majesty the Queen, effectively we are head of the Commonwealth.

Those three branches, or legs, provide us with the most powerful platform upon which to go forth and add weight. Commercially, we are probably in better shape than we have been for a while. But we could look at the past 50 years and ask ourselves what has happened and how we measure our economic decline—for such it has been. Fifty years ago the £1 stood at 17 Swiss francs; today it is worth 2 francs. That is a decline of 90 per cent. Then the pound was worth 4.2 US dollars; now it is worth 1.57 dollars. That is a decline of about 60 per cent. In the meantime, the currencies of Japan and Germany have strengthened. It seems that you must always lose a war and never win it.

We have world peace, apart from little incidents. We must look for new markets and new opportunities. Continental Europe is on our doorstep. I do not know what we shall call it—if we drop the "U" from EU it will simply become Europe again. We know about the United States and about Latin America, which is a growth area. We left behind the Caribbean; perhaps we can steal the Cuban market before the Americans get in there. But let us go forth into another area that I rather like. There is a patch where Europe ends and something else begins; it continues before you get to India and South East Asia. That is the country of the new "great game". That is a vast area to which those who understand British history of a hundred years ago and remember Kipling must go forth. In that area, which runs from the Bosporus and includes Moldova, going north and south, bringing in the Arab world and including Pakistan, are some 734 million people and 33 countries which have 75 per cent. of the oil reserves of the world, 66 per cent. of its gas reserves and a good chunk of its minerals. Let us add the relationship in South Africa as well and inevitably we must return to the belief that for a nation to be rich and great it is necessary to have large, secure supplies of oil, wood, minerals and food.

The development of those economies and working together with them will give us some great opportunities. They have a need for the things that we have which they do not make or produce themselves. They have things which we need, we ourselves not being able to have a totally independent economy. Those areas are fascinating and interesting. I have to declare an interest because I have been there looking at opportunities. In Baghdad, I have been pretty forthright with the Iraqis about what they should do next. I have talked with the Libyans. I have been in Iran dealing with other people and trying to persuade them to think differently. Little things come out now. No longer are people accused of being involved in the financing of terrorism in Northern Ireland. I did not realise that the Irish situation could apply or be of interest to people worldwide.

I believe that universally we are not hated or feared. We were very nearly on the point of being pitied but now we are respected as honourable men. Looking at the territories that are open to us and the need to develop our resources—as I think was said in Omar Khayyam: 'Tis all a chequer-board of nights and days Where Destiny with Men for pieces plays". There is a big world to play in. We must have an active British foreign policy. I should like to know what it is.

7.17 p.m.

Lord Avebury

My Lords, the noble Lord said that he had just been in Teheran and does not believe that the Iranians are any longer involved in active support for the IRA. But very recently the Foreign Secretary had to make a public statement calling attention to the activities of the Iranian régime in regard to the IRA. Recently there were bomb attacks instigated by the Iranians on Jewish buildings in London. There have been bomb attacks on Jewish buildings in Buenos Aires, also instigated by the Iranians. The Iranians have done their best to disrupt the Middle East peace process. I hope that in his discussions with the Iranians —if he returns there—he will make it clear that the policies that the current Islamic régime follows are utterly abhorrent to the British people and will have to be changed if the relationships between our two countries are to be improved.

As chairman of the Parliamentary Human Rights Group, I should like to begin by thanking Ministers at the Foreign Office, including the noble Baroness, Lady Chalker, for the unfailing courtesy and attention that they always gave to the matters that we raised with them during the last year and indeed before that. They have always been receptive to the requests that we made to come to see them.

For example, my colleagues, Anthony Coombes and Emma Nicholson asked this morning to discuss Nigeria, following a meeting that I had with the head of region, Mr. Robin Goodenough, to discuss the same problem. We are very grateful to them for the attention that they give to these matters. I must also thank particularly Mr. Tony Baldry, who recently invited a number of Members, not solely from the Parliamentary Human Rights Group, to have a discussion with him before he set off on a visit to Bangladesh and Sri Lanka. We were able to talk to him about some of our concerns, and that is a precedent that might be followed. Indeed, we have invited Mr. Douglas Hogg to come and speak to the group about his regions and interests, which cover the Middle East, the Near East and North Africa. Among other problems we shall be discussing with him Iran, as well as other places which the noble Lord, Lord Selsdon, has visited, including Baghdad and Tripoli. We are also grateful to the Foreign Office for the unfailing courtesy and helpfulness of its officials, including the head of the human rights office, and the many desk officers we ring up to ask for information.

This week, we had a visit from the Bosnian Prime Minister, which was one of the outcomes of a fruitful relationship we have been developing with the Congressional Human Rights Foundation in Washington. As a result of this initiative and many others, there is a better communication of human rights concerns from Members of Parliament to colleagues elsewhere and very valuable co-operation between members of democratic legislatures throughout the world. This should enable us to exert even more pressure than we do already on our governments to put human rights higher up on their agendas. The Global Democracy Network is the developing tool which enables us to link with colleagues in other legislatures through the Internet, and from the information super-highway, as the press like to call it, we can download important human rights documents from the United Nations, such as the resolutions of the General Assembly and the Security Council, which will enable us to do our work far better.

Reverting to the visit of the Prime Minister of Bosnia, I am sure that the Minister is aware of the views that he was expressing about the partition of his country and the injustice of denying a sovereign state the means of self-defence to which it is entitled under the United Nations Charter. The Minister also knows of the concern which has been expressed about the major offensives launched by the MPLA government in Angola, at the very moment when the peace accords were supposed to be signed. I know that the Americans have tried to persuade Luanda to halt those operations, but their requests fell on deaf ears. It would be interesting to know from the Minister, when he comes to reply, whether we also—the European Union—made any appeal to the Government in Luanda to halt their military operations so that peace can be given a chance with the signing in Lusaka.

In Rwanda, the perpetrators of the genocide that killed a million people are now re-grouping. They are hijacking the food and medical supplies intended for the weak and poor in the refugee camps so as to build themselves up for another attempt. I agreed completely with the Minister about the need for a more coherent and effective conflict resolution mechanism than we have. In the case of Rwanda, what is obviously needed is a determined effort to disarm the Interahamwe, who are re-grouping in, the refugee camps. That could save us a lot of trouble later on.

In Armenia, people are freezing as the winter sets in, and there is extreme suffering as a result of the winter blockade. Even though there has been a ceasefire, we cannot afford to continue to ignore the conflict in the hope that it will go away. In East Timor, the people have been demonstrating their opposition to the forcible occupation of their country, 19 years after it was invaded by Indonesia. In Sudan, 1.2 million people have been killed since the war in the south erupted in 1983. Millions more have been internally displaced, according to the rapporteur, Dr. Caspar Biro, and hundreds of thousands have fled to neighbouring countries. The noble Viscount, Lord Waverley, has just spoken about the problem of Kashmir, a conflict which has been continuing for 47 years and which has caused immense loss of life.

All these examples demonstrate that the attempts by the international community to settle the conflicts which are the cause of so many of the violations of human rights and to redress the wrongs that are done to the victims are pitifully inadequate. I agree with the noble Lord, Lord Cledwyn, who said that we are facing a collective lack of political will. I would add to that the rather hypocritical pretence that, because we draft a plethora of international instruments which purport to confer rights on individuals and groups, and because we devote large sums of money to international meetings at which the violations of those rights are discussed, though never with the imposition of any penalties on the perpetrators, we have somehow implemented those resolutions in spirit as well as in letter. A good example of that is the CSCE's Human Dimension meeting which is being held in, Budapest at the moment. Representatives of all the CSCE states are gathering for a whole two months, culminating in a summit in early December, but it is quite impossible to find out what is being said there, or to have any real influence on the proceedings. I should like to ask the noble Lord who is to reply this question: what hope is there that there will be any concrete results from the CSCE meeting which has taken up so much time and resources?

In Bosnia, ethnic cleansing has been going on. As the noble Baroness reminded us, the citizens of Sarajevo and other towns are being subjected to bombardment and sniping—the district of Bihac is under threat—while the international community has devised a scheme for splitting up the country into ethnic cantons, like the former Bantustans in South Africa. I do not believe that we are going to find a solution. The Foreign Secretary has said—this is part of the most recent Security Council resolution of September 1994—that at the end of the conflict people will have to be enabled to return to their homes. I cannot see how that can be possible if some kind of apartheid is enforced on Bosnia. We should have enabled the Bosnians to defend themselves against aggression and to maintain a multi-ethnic, multi-national structure that was at one time a model for the rest of Europe. Instead, we are admitting, by our solution, that people of different languages, religions and cultures are not able to live side by side. That may have serious implications for the rest of Europe. Mr. Malcolm Rifkind was very scathing last night on ITV about the Congressmen who had not been in Bosnia themselves. But I think that Dr. Silajdzic has spent rather more time in Bosnia than Mr. Rifkind. It is no good for the Government to vote for Security Council resolutions which deplore ethnic cleansing and at the same time refuse the Bosnian Government the means of stopping this loathsome practice.

Bosnia is not the only place where ethnic cleansing is going on unpunished within the CSCE region. In Turkey also there is ethnic cleansing in full swing, but there Western countries are eager to support the criminals rather than to prosecute them. The CSCE has done nothing as 1,500 villages have been wiped off the map and 2 million people have been forcibly evicted from their homes by the Turkish armed forces. The state-sponsored death squads have killed hundreds of people, including writers, journalists, politicians, newsboys, human rights activists, lawyers and businessmen. Thousands of people have been arrested and tortured. Turkey has the largest entry of any country in the six-monthly case list of the Writers in Prison Committee and in the US State Department's Country Reports on Human Rights for 1993. The state, after murdering one of the members of parliament of the Democracy Party, has put eight others on trial on charges of undermining the indivisible integrity of the Turkish state, a crime which carries the death penalty. One of the allegations—a typical allegation—against the deputies is that, when asked what foreign languages they spoke for the purposes of their parliamentary biographies, they replied "Turkish". That is supposed to be a criminal offence, justifying the death penalty.

The gracious Speech refers to enhancement of the CSCE's conflict resolution and prevention mechanisms. The question is how the CSCE is able to have any influence on a situation where the state concerned refuses to admit it. There is in the Moscow mechanism a procedure which allows a mission of experts to be sent compulsorily to a state which refuses to invite it voluntarily. But in the case of Turkey, as a Minister remarked to me on one occasion, it would never get past Ankara airport. What does one do when one has an intransigent state such as Turkey which refuses to listen to the advice given by the CSCE or to make the slightest effort to remedy the human rights abuses, which are probably the worst in the whole region?

At the same time the Turkish armed forces have no difficulty in acquiring huge quantities of weapons for their offensives against the Kurdish people. They buy tanks, armoured cars, helicopters, heavy artillery, rockets and mortar bombs and they are spending 6 billion dollars a year on the dirty war and beggaring their own economy. Britain, of course, is not a large supplier of weapons to Turkey, but that is probably not for want of trying. We make up for it elsewhere. For instance, in Nigeria a large tank deal happened to coincide with a substantial increase in aid to the Babangida regime.

I have to accept the statements made by the noble Baroness in her speech at the beginning of the debate that there has not been any tie-up between the sale of weapons to any country and the use of the aid budget to lubricate those sales. But it is a remarkable coincidence that Malaysia was not the only case in point of large aid budgets being accompanied by the sales of weapons. I believe that there is something to explain there. Incidentally, the tanks which we sold to the Nigerians are alleged to be still in their crates at the docks because the army does not have transporters to carry them to the armoured division's base.

As has already been mentioned, we sold several hundred million dollars' worth of weaponry to Indonesia, which is in violation of two resolutions of the Security Council and eight of the General Assembly, all of which called on Indonesia to withdraw its armed forces from occupied East Timor. As has been mentioned already, according to the Observer, we are planning to sell them another 2 billion dollars' worth of arms. That is another of the sleazy deals which is alleged to be lubricated with scarce aid money and which, according to the Observer, is going partly towards a project in which General Suharto's daughter has an interest.

The Observer says that the Indonesian shopping list includes armoured personnel carriers, medium-range ballistic and air defence missiles and naval patrol vessels, together with the construction of a big new naval base at Bandar Lumpung, Sumatra. They are said to be close to signing a contract for up to 140 British-made Scorpion tanks which are suitable for use in rugged terrain.

The point I wish to make about these weapons sales is that they all seem to me to be in contravention of the sets of principles governing conventional arms transfers to which the United Kingdom is a party, and in particular the CSCE principles of 23rd November 1993 which say that states will avoid transfers which would be likely to be used for the violation or suppression of human rights and fundamental freedoms. The European Council declaration on non-proliferation and arms exports of 29th June 1991 notes that among the criteria on which arms exports are based is, the respect for human rights in the country of final destination". The five members of the Security Council agreed on 18th October 1991 to avoid transfers which would be likely to, be used other than for the legitimate defence and security needs of the recipient state". It seems to me that the defect in all these instruments is that it is left to the states concerned to decide whether they are complying with the principles. No one state is ever going to accuse another of violations in case the charge should be reciprocated. If the arms control transfer principles are to be applied effectively, what is needed is that NGOs should be able to challenge particular transfers before some independent body which should have the power to veto a sale.

There is one final point about the resources allocated to human rights by the international community. The Human Rights Centre in Geneva is still pitifully under-resourced and should be given the money that is being spent on these huge jamborees which are mounted by the United Nations such as the human rights meeting in Geneva last year. I am not aware of a single positive result from that gathering. One may expect even less from the meeting on women which is to be held in Beijing next September. If all the money spent on those festivals was given to the hard-pressed rapporteurs of the working groups then there would be something to show for it. It is really absurd, for example, that the UN rapporteur on torture, who is supposed to report on cases of torture throughout the world, has one-half of a staff person to help him and that at one time last year he and his colleagues were unable to stir from Geneva because the budget for air fares had been exhausted.

I welcome the commitments in the gracious Speech to promote respect for human rights, but I hope that as one essential component of that policy the Government will ensure that the Centre for Human Rights gets a realistic budget.

Lord Selsdon

My Lords, before the noble Lord sits down, I hope that he will allow me to correct something. The point I was making was a fairly robust one. First, it is pointless and foolish for anyone to try to support terrorism in Ireland. Secondly, unless you tell these people as robustly and forcefully as you can—and I have had the privilege of doing that personally—you do not get anywhere if Ministers are unable to visit them. I have had the privilege of taking the noble Lord's speeches with me and making the points personally. I hope that he will have that privilege himself soon.

Lord Avebury

My Lords, I am very glad to hear that. I am grateful to the noble Lord for raising these matters with the Iranian régime.

7.35 p.m.

Baroness Hooper

My Lords, the scope of this debate is very wide. I have listened with considerable interest to the many experts who have spoken on various topics and about various parts of the world. I intend to concentrate my main remarks on Latin America. But the debate so far provokes me to touch on some other issues as well. First, I certainly agree with my noble friend Lady Rawlings—and I take the opportunity to congratulate her on her excellent maiden speech—that enlargement of the European Union will bring considerable benefits not only to the European Union itself but to the region as a whole.

I also believe that in the context of the enlargement of its membership and the widening role of the European Union into areas such as education and culture, we should be also perhaps now considering the role not only of the European Union—I was a member of the European Parliament myself in the past—but also that of the Council of Europe of which I am currently a member of the Parliamentary Assembly. It seems to me that the time might have come for the convergence of those two institutions which could, in addition to avoiding any possible duplication, take into account a more defined role for national parliaments in scrutinising European legislation. Perhaps that might be the subject for a further specific short debate at some stage.

Secondly, I also wish to underline the good news in the gracious Speech, as constituted by what has been happening in South Africa. I welcome the fact that Her Majesty the Queen will be visiting South Africa next year. I well remember the words of Archbishop Tutu at the very moving ceremony held in Westminster Abbey in July of this year to welcome South Africa back into the Commonwealth. He said that it took the courage of a De Klerk and the forgivingness of a Mandela to achieve the transition that has taken place in South Africa. Both those qualities continue to be needed in abundance to consolidate what has been achieved there and to continue down the path of progress. I very much hope that the British Government will continue to show support to South Africa in all those respects.

I believe it was the noble Lord, Lord Bridges, who first referred to the fact that our empire has fallen away. That reminded me that in the course of the last Session in your Lordships' House we held a debate on the role of the dependent territories. Naturally, we have focused in this House very much on Hong Kong, the Falkland Islands issue and Gibraltar. But that debate also enabled us to think about the Caribbean dependent territories to which my noble friend Lady Young referred today as indeed did my noble friend Lord Selsdon, and to the very tiniest of those dependencies like Anguilla and the Pitcairn Islands. Perhaps that too could be the subject of a further and separate debate at some stage during the Session.

I should like to take this opportunity to record my satisfaction at the fact that the Dependent Territories are themselves forming a voluntary association so that they can work together and share the costs of raising common problems, as well as showing solidarity where there are separate and individual interests at stake. But most importantly, that association of the dependent territories will ensure that they do not run the risk of being the forgotten remnants of the Empire.

Turning to Latin America, my noble friend Lady Young has already referred to Central America, Cuba and the Caribbean, and I know that my noble friend Lord Montgomery of Alamein had also wished to speak on the subject of Latin America but unfortunately he has not been able to stay because of the length of the debate. Like my noble friends, I spoke on Latin America during last year's debate on the Queen's Speech and referred to the fact that pluralistic democracy is in place in virtually each country. I also referred to the curbing of inflation there, to the impressive growth rate of virtually every economy and to the opportunities for trade and investment for the United Kingdom. In the intervening year, there have been changes of presidency in Mexico, Colombia and Brazil, with congressional elections in other countries. All those changes and the way in which they have taken place show that political stability is now a fact of life. The threat of military intervention in any country in Latin America has become remote.

On the economic front, it is worth remembering that Latin America's collective GDP exceeds those of Africa, excluding South Africa, the Indian subcontinent and South-East Asia combined. It is worth remembering that Brazil and Mexico are among the 10 largest economies in the world. It is worth remembering that the region is the world's leading producer of many raw materials, including copper, lithium and rhenium; that it holds one-third of the world's iron, copper and bauxite, and that it has abundant chemical deposits as well as being rich in oil, coal and gas. It is also worth remembering that the Inter-American Development Bank and the World Bank are pumping some 5 billion dollars a year into the Latin American countries, creating thousands of new projects. It is worth remembering when we discuss European regional organisations that the North American Free Trade Area, which includes Mexico as well as the other North American countries, and MERCOSUR, which includes the southern countries of Argentina, Brazil, Paraguay and Uruguay, are developing as strong, regional free trade areas.

It is small wonder therefore that UK companies, both industrial concerns and those involved in the commercial and other service sectors, are taking an interest and are, I am glad to say, making substantial investment in the region. I am delighted, too, that the Department of Trade and Industry and the Foreign Office are making a concerted effort to establish links and to follow up opportunities with ministerial visits and trade visits.

The noble Lord, Lord Wright of Richmond referred (from his particular experience) to the role played by our ambassadors and embassy personnel in assisting businessmen and industrialists in their efforts to expand their links and contacts all over the world. They are certainly doing an excellent job in Latin America, as are members of our Royal Family. Even now, the Duke of York is in Argentina; Prince Michael of Kent has just returned from Peru, and the Duke of Gloucester has recently been involved in presiding over Latin American events here in London. All that must help to build up confidence that the United Kingdom is interested in that part of the world, as well as in helping to establish contacts and links for the future. I warmly welcome that progress.

Finally, I should like to refer specifically to Argentina, not only because it is a large country and, together with Peru, shows the strongest economic growth in Latin America, but also because of its conflict with this country which still remains in people's minds. I believe that if the average British citizen was asked to name a country in Latin America, Argentina would be the country referred to. That is why I should like to take this opportunity to record the fact that earlier this year, with two other Members of your Lordships' House as well as Members of another place and British industrialists, I attended the fourth Argentine-British conference which was held in Mendoza. We had the opportunity to meet our opposite numbers from the Argentine Congress and Senate, as well as individuals involved in both commerce and industry. We discussed a wide range of topics of mutual interest, including issues relating to energy, the environment and trade.

One very important feature of that conference was that we were accompanied in our discussions by three people from the Falkland Islands—"the islanders" as they were tactfully and generally referred to. That gave us an opportunity to discuss the issue that continues to be a problem between ourselves and Argentina. We had useful and beneficial discussions on which I hope that we can continue to build so that the islanders will continue to be present in future discussions and so that their voices can be heard and listened to with respect. I look forward to hearing from my noble friend the Minister about any further UK initiatives in Latin America.

7.47 p.m.

Baroness Cox

My Lords, I should like to add my own very warm congratulations to those paid by other noble Lords to my noble friends on their immensely interesting and distinctive maiden speeches.

In responding to the gracious Speech, I welcome the Government's unequivocal statement of commitment to promoting respect for human rights. In doing so, I wish to focus on some of the problems that are posed by violations of human rights in conflicts in so many parts of the world today, conflicts which are causing great suffering to those directly involved and posing immense political challenges to the international community.

First, however, because those conflicts often involve the need for humanitarian aid, I should like to express my gratitude to my noble friend Lady Chalker for the support that has been given by the ODA to some of the humanitarian projects with which I am involved. Here I must briefly declare my interests in my work with MERLIN (Medical Emergency Relief International) and CSI (Christian Solidarity International), a human rights organisation which is working for victims of repression, regardless of their creed, colour or nationality. I and my colleagues in those organisations have been enabled to undertake many of our projects, not only by the financial resources of the ODA, but also by the personal help of the staff of the ODA to whom we should like to record our gratitude.

However, as I have said, my overriding concern is with violations of human rights in the myriad conflicts across the globe in which man's inhumanity to man is causing suffering on a massive scale and, in some places, is threatening international security.

In considering those tragedies, I wish to highlight three interrelated issues: first, the problem of access by major aid organisations and by the media to people suffering persecution by repressive regimes; secondly, the clash between the principles of territorial integrity and self-determination, a clash which is the cause of so much bloodshed and which is a hindrance to attempts to achieve peace in many of those conflicts; and, thirdly, the need for more effective conflict prevention and conflict resolution, both within the CSCE, to which reference was made in the gracious Speech and by my noble friend the Minister, and also further afield.

In addressing those three issues, I shall draw, if I may, on recent experience with the Karen people of Burma; the Kurds; the Armenians; and the Sudanese of Southern Sudan and the Nuba Mountains.

The first issue is that of access to minority groups suffering at the hands of repressive regimes. If a sovereign government refuse to give permission, major aid organisations such as UNHCR or UNICEF, or human rights organisations such as Amnesty International, often cannot reach those people suffering repression, because they depend upon invitations from the sovereign government. For example, when I first visited the Armenians of Nagorno-Karabakh in 1992 they were blockaded by Azerbaijan and under constant attack, with many civilian casualties.

I saw patients with injuries such as amputations, burns, glass in eyes, and because of the blockade the doctors had no analgesics or anaesthetics to ease their pain—only vodka. At that time there was no British major aid organisation available to help, and I had to turn to CSI to do what we could. I am pleased to say that since then MERLIN has been established, and has undertaken an excellent programme in Nagorno-Karabakh funded by the ODA. The ICRC and Médecins sans Frontières are now doing valuable work there.

However, the major UN organisations are still absent, and the people of Nagorno-Karabakh are therefore denied not just their resources and expertise but their advocacy. UNHCR can speak effectively on behalf of the Azeris suffering in that war, but have no direct contact with the Armenians of Nagorno-Karabakh. There are many similarities between the predicament of the Armenians of Nagorno-Karabakh and the Karen and Mon people of Burma. Last week, I and colleagues from CSI, heard disturbing first-hand accounts of atrocities perpetrated by the Burmese Government—the infamous SLORC regime. We met people who had had to flee from their villages because SLORC troops had been committing murder, torture, rape and pillage, and taking hostages for forced labour. We saw the evidence of maltreatment on the bodies of those whom we met.

We also received disturbing and, we believe, strong circumstantial evidence suggesting the possibility of the use of germ warfare by the SLORC regime against the Karen people, evidence which raises many questions which need to be answered. But the SLORC regime denies access to human rights authorities and to the media which wish to check the authenticity of the accounts of such atrocities. Similarly, the Sudanese people who live in the SPLA-administered areas of the Nuba Mountains have been subjected to sustained military offences by the regime in Khartoum, and are totally bereft of medical supplies or other necessities; and access to them by humanitarian aid organisations and by the media is denied consistently by that government.

How long can such unscrupulous regimes be allowed to carry out murder behind closed borders, or to perpetrate brutal policies without some more effective form of international pressure or intervention? Here, I regret that I have to express concern over Britain's role in some of those areas. For example, there is meant to be concerted economic pressure by the international community upon the SLORC regime of Myanmar, but earlier this year the British ambassador in Rangoon took a personal initiative to organise a British week to promote trade in which British firms such as Glaxo and Rolls-Royce participated. In Azerbaijan, the recent signing of contracts between BP and the Azeri Government means that hundreds of millions more pounds are now available, with no constraints, for Azerbaijan to use in its war against the Armenians of Nagorno-Karabakh. Although a precarious ceasefire has been holding for several months, there are indications that Azeri forces have been purchasing more tanks and other weapons and have been preparing for possibly the biggest military offensive to date.

Perhaps I may ask my noble friend the Minister what progress is being made to reconcile the differences between the CSCE and the Russian peace proposals—peace proposals which are needed urgently if war is to be prevented. That is a war that could turn into a regional war with possibly incalculable repercussions in that volatile area.

Of course I understand the arguments of commercial interest, but I do not believe that it is in the long-term interests of any country to allow those commercial interests to dominate to such an extent that they override concerns for human rights. Nor do I believe that it is the wish of most of the citizens of this country that British money should be used to bolster regimes which systematically perpetrate atrocities against 'vulnerable minorities.

That leads into the second and third issues that I wish to raise, which are interrelated: the need for greater priority to be given to the principles and practices of conflict prevention and conflict resolution. At present the cost in human terms of man-made conflict is enormous. Rwanda and the former Yugoslavia dominate our television screen; but they are a fraction only of the whole story. The war in Sudan, as the noble Lord, Lord Avebury, said, has seen over 1 million dead, 5 million displaced, and many thousands still dying from starvation or treatable diseases. The Kurds and the Armenians face another bitter winter behind their blockades; and the ethnic minorities in Burma remain trapped in the jungle—stateless people fighting for survival. There are many other conflicts elsewhere throughout the world, largely unreported.

In addition to the cost in human suffering, there is the huge economic cost of humanitarian aid, but that is only first aid. So the real priority must be political solutions which will bring peace and justice. That is where we so often run into the impasse created by the conflict between the principles of territorial integrity and basic human rights. The international community seems to be putting a premium on the principle of territorial integrity at the expense of human rights; and in many cases that concept of territorial integrity has no integrity—for example, many of the borders within the former Soviet Union, including those of Nagorno-Karabakh, were drawn maliciously by Stalin, designed deliberately to divide and rule and to create conflict.

I illustrate that point briefly with reference to the Armenians of Nagorno-Karabakh. For decades, they consistently suffered severe harassment at the hands of Azerbaijan; then, after the dissolution of the Soviet Union, Azerbaijan threatened to dissolve even the limited autonomous status given to Nagorno-Karabakh by the Soviet constitution and to rename its capital city with a Turkish name; in a desperate measure for survival, the Nagorno-Karabakh authorities resorted to the legal procedures of the Soviet constitution and received a mandate for independence. That was the only legal framework available in which they could operate, and it has of course now become an anachronism. They are thus trapped within the borders of a regime whose rulers have frequently made explicit statements of intention to carry out ethnic cleansing—indeed, that term was first recorded officially in relation to Azeri policies for the people of Nagorno-Karabakh.

Similarly, the people of Southern Sudan and the SPLA-administered areas of the Nuba mountains are suffering from the policy of jihad, waged against them by the government in Khartoum. Last year, flying into the region, I saw painted in huge letters in the mountains above Kadugli in the northern Nuba Mountains the spine-chilling words, "Jihad Kadugli". Therefore it is not surprising that the Sudanese people of the South and the Nuba mountains hope earnestly for the opportunity to decide, in a democratic way, the best future for themselves.

It cannot be reasonable to expect the Armenians of Nagorno-Karabakh or the Sudanese of the Southern Sudan and the Nuba mountains to trust regimes which have subjected them, respectively, to attempts at ethnic cleansing or to a jihad. Therefore urgent consideration must be given to a creative alternative; to a new way forward out of the impasse between the self-determination necessary for survival and the international community's commitment to territorial integrity where regimes have used that principle to perpetrate gross violations of human rights against minorities within their territorial boundaries.

There must also be urgent consideration given to finding more effective solutions to the problems caused by repressive regimes which choose to shelter behind the principle of non-interference in internal affairs. I return by way of example to the problems of the Karen and other ethnic minorities in Burma. They are not asking for a change in the territorial boundaries of Myanmar. All they request is some form of democratic federation, with freedom to enjoy fundamental human rights. Instead, they are subjected to the kind of atrocities to which I have already referred, and remain stateless, trapped and helpless. They feel especially saddened by Britain's lack of initiative on their behalf—referring to our role in their history and the way in which many of their soldiers, especially the Karen, fought with great courage alongside British troops.

It is my hope that the Government will continue their valuable and valued work in the field of humanitarian aid, which is widely appreciated throughout the world. It is also my hope that the British Government will fulfil the commitment given in the gracious Speech and take more of a leading role in attempts to stop the kinds of gross violations of human rights which it has been my sad role to witness. I hope, in particular, that the Government will put more pressure on repressive regimes to respect the principles of freedom, justice and democracy. I also hope that Britain will help in the search for new, creative forms of conflict prevention and resolution, especially with regard to those conflicts stemming from the tension between the principles of self-determination and territorial integrity. Until or unless some solution to this problem is found the material cost in humanitarian aid will continue to escalate; but, infinitely more tragically, the cost in human suffering will also escalate.

Many people whom I have been privileged to be with in their dark and difficult days—in Sudan, in Burma, in Armenia and in Nagorno-Karabakh—still look to Britain with a special hope. They believe that we not only have a particular responsibility, stemming from our historic involvement in their nation's development, but that we have a particular understanding of their predicament and consequently we can make a uniquely sensitive and appropriate contribution to the search for peace and justice. I hope that we will not disappoint them in their hour of need.

8 p.m.

Lord Desai

My Lords, we have been debating the Queen's Speech since three o'clock and we have heard some fascinating speeches. We have also heard two excellent maiden speeches. I enjoyed in particular the speech of the noble Baroness, Lady Rawlings, who was able to interconnect issues of heritage, identity and foreign affairs.

Foreign affairs, overseas development and defence are intimately interconnected. They are not separate, as was implied by the noble Lord, Lord Mayhew. Interconnections are sometimes virtuous and sometimes vicious and I wish to point out some examples. In many parts of the world, human rights, humanitarian assistance, development and armaments interconnect either to create or to solve problems. We know that a number of countries have had to ask for humanitarian assistance from the United Nations. Those countries have suffered enormous problems of poverty and discrimination on the grounds of ethnicity or tribal differences. No matter how poor in terms of per capita income, some regimes have found the means to buy large amounts of armaments. Indeed, some of the governments providing humanitarian assistance have also sold them armaments.

Perhaps I may also point out one or two virtues of interconnections. In our recent debate on the defence estimates, it was agreed that one of the welcome aspects of the UK defence policy has been the steady reduction of the share of defence in our budget and GDP. I welcome that; it has been carefully done. However, I should like to see some of the peace dividend directed into overseas aid. We always complain that there is not enough money and that there are other things to do, but in terms of our GDP and the need that exists we give too little to overseas aid. As was urged by the Human Development Report of 1994, it would be desirable to have some of the peace dividend directed to the urgent issues of development.

In that respect, the peace dividend should come not only from the developed countries of the West but from the developing countries. One of the principles that should guide us in giving aid is to ask whether the countries are using their resources successfully. For example, are they spending more money on defence while cutting their social welfare expenditures? We should also ask whether there are more soldiers than teachers in those countries and, if so, why should they receive aid.

The right reverend Prelate the Bishop of Worcester, who is no longer in the Chamber, commented on structural adjustment and the role of the World Bank in that. Many people blame the World Bank, but some structural adjustments have been virtuous and countries have protected their social welfare programmes and adjusted. There have also been structural adjustment programmes for which countries have seen fit to blame the World Bank or the IMF. Those countries have continued in their bad habits and visited the costs of structural adjustments on the poor.

We can no longer take the view that the Third World is passive, exploited and somehow innocent; that all evil comes from here and goes there. We must carefully differentiate within the third world. Some countries are newly industrialising and rapidly developing. Indeed, some are prospering so much that they hold out large potential markets to us. If a large contract is to be given for defence purposes it is easy not only for the UK but for other countries to forget or to suspend the issue of human rights. Indeed, often the left hand does not know what the right hand is doing—it certainly does not admit that it does.

I have the greatest respect for the noble Baroness, Lady Chalker. However, I thought she was a little too casual in denying any connection between our defence sales and development. We must make up our minds about this matter once and for all. We must say either, "Yes, there is a connection. So what! We are creating jobs"; or, if there is no connection, we must be scrupulous in providing full and complete evidence of that. The noble Baroness referred to a lack of pattern and correlation.

A single instance of interconnection between defence and development if it is not intended by us should be censured. In that respect, I recall the previous occasion on which we discussed the Pergau dam, thanks to the efforts of the noble Lord, Lord Redesdale. The noble Lord, Lord Prior, spoke in that debate and declared an interest as being involved with GEC in Malaysia and a former Cabinet Minister. He said: What are the facts? I shall try to give them as I see and know them. First, Malaysia indicated that it wished to place large defence orders with Britain of about £1 billion, which it would pay in cash. In fact, the orders have amounted to about £1.5 billion and the Malaysians have paid in cash. Quite understandably, Malaysia said at the same time, 'If we place this order with you, will you aid us in a major project that we badly need?'. It is not surprising that the Malaysians asked for that and it is not surprising that the British Government said, 'Yes, we'll give you some aid'. If there was a `tangle', to use the Foreign Secretary's words, about whether the two issues were contingent upon each other, it is a perfectly legitimate and reasonable cause for inquiry by the press and Opposition".—[Official Report, 2/3/94; col. 1039.] The inquiry was made. If the noble Lord, Lord Prior, said that he knew that such an interconnection existed, why was something not done about that? When the noble Baroness, Lady Chalker, summed up the debate, she referred to the speech but she did not deny what the noble Lord, Lord Prior, said.

The noble Viscount, Lord Weir, who spoke in the same debate said: Our aid budget is puny compared to the problems of the less-developed world, and there is little chance of it being increased; our balance of trade is horrible; our unemployment is high and much of industry is working below capacity; and, finally, the competition for international business is fierce". He ended by saying: Frankly our economic circumstances today are such that, sadly, I believe we can only really afford such forms of economic aid as give our industry some measure of benefit in return".—[Official Report, 2/3/94; col. 1047.] That is fine. I do not mind that. Let the DTI do that. I am not against giving subsidies to British industry because that may create jobs but let us not pretend that that is being done for some purpose other than giving development aid.

The Government should be clear in their mind, if not in public, as to what is the purpose of the aid. It is no good saying that it is only 10 per cent. of our budget. It is not a question of size but a question of principle and we must be clear about it.

Some noble Lords have mentioned Indonesia. Perhaps there is no connection; who knows? We shall have to wait until another NGO takes a case to the High Court before we find out because there is no other way in which to do so. Whether or not there is a connection, I am concerned about the current human rights violations in Indonesia. I should like to mention in particular the fate of a fellow academic, Dr. Aditjondro, who has been threatened with arrest by the Government because he pointed out that a number of newspapers were suppressed and that a number of NGO workers had been threatened with arrest just before the recent APEC conference in Indonesia. I urge the Government to protest against such human rights violations. Again, there is no quid pro quo. It is a matter of principle. But we must make it extremely clear that human rights violations should not be tolerated.

The question of European integration and the expansion of European markets is not just a problem of European foreign policy; it is a problem of development policy, especially the reform of the common agricultural policy. I agree with the noble Lord, Lord Cockfield, who knows more about that than any of us. It may be that in 1996 we shall not be able to make any new initiatives with regard to policy, but the agricultural policy reform process, which has already started, should be strengthened and accelerated.

The CAP is a great drag on third world agriculture. It not only harms us, it harms the world at large. It was extremely shocking that the GATT negotiations were held up before they were completed in order to gain a concession with regard to the dumping of agricultural exports that France regularly undertakes. In order to accommodate that dumping we had to make special concessions within the common agricultural policy. Such interconnections—what I call the vicious interconnections—between foreign policy development and humanitarian assistance should be warned against.

Finally, I was fascinated by the speech of the noble Viscount, Lord Waverley. I have always thought that I should never speak on Kashmir unless I could speak for at least five hours because it is a vast subject and I know quite a lot about it. I should point out that the problem did not start in 1947. It started long before that and is connected with a rather arcane doctrine of paramountcy which we had during the time of the empire. That made the status of native kingdoms rather peculiar. Of the many native kingdoms which signed up with Pakistan or India, only Kashmir was an exception and that was connected with that problem of paramountcy before and after independence.

I should say to the noble Viscount that, as he pointed out although he did not follow his own advice, it is not helpful to go back over the history of such cases. In such cases history is an obstacle rather than a help to solving the problem. We have had the Irish problem for a long, long time and it is still not solved. When Americans tell us how to solve the problem, we do not like that. I do not believe that India and Pakistan would like somebody from outside telling them how to solve their problem.

I believe that the Kashmir problem will be tackled when the people within India and Pakistan, people in a civilised society, rise up and say, "We do not like our countries doing those things to the people who are, after all, our brother citizens". That is the one hope that I have with regard to Kashmir.

This has been a fascinating debate which I have enjoyed greatly.

Viscount Waverley

My Lords, before the noble Lord sits down, will he accept that there is an effective stalemate in the search for a solution and that we need to find the common ground which exists between all the participants in the dispute in the hope that the deadlock may be broken?

Lord Desai

My Lords, I agree with that without necessarily endorsing all the other things which the noble Viscount said. I agree that at present there is a stalemate. The countries are both nearly nuclear powers and we must do all we can to try to assist. But as in the case of Palestine and Israel, a nation unconnected with the past of the region, rather than Britain, may be more helpful in solving the problem.

8.16 p.m.

Baroness Park of Monmouth

My Lords, I too should like to thank the two maiden speakers for their very different but deeply interesting contributions. We were extremely fortunate and I look forward to hearing from them again.

We are told in the gracious Speech that the Government attach the highest importance to national security. According to the defence statistics published last month, our defence expenditure for 1994–95 is estimated at 3.4 per cent. of GDP, going down to 2.9 per cent. by 1996–97. The Russian defence budget is 5.8 per cent. The Russian draft budget for 1995–96, which has just been published, allocates 21.7 per cent. of total expenditure—0.7 per cent. up on 1994—to defence. The total includes the Ministry of Atomic Energy's spending. Of course that is a draft budget, but Chernomyrdin, the Prime Minister, has already said: In no way shall we squeeze or decrease defence expenditure because it is this country's holy of holies". I thought that the defence of the realm was deemed to be the first duty of the Government in this country too, but the figures and the facts speak for themselves.

Pavel Grachev, the Russian Defence Minister, told the Russian armed forces in the Far East at the end of October that the programme to equip the army and the fleet with new, more modern types of arms would not be wound up but, on the contrary, would continue to be developed. Russia may not have electricity or money to pay the miners but it appears that it will always have money for defence.

The gracious Speech continues by saying that the Government, will work to continue the process of NATO's adaptation to the changing security environment to allow it to play a wider role in protecting stability throughout Europe". But whose will be the agenda? The partnerships for peace are both emasculating NATO and giving Russia, through its CIS partners, full power to observe and influence. There are now 30 Russian military bases in CIS countries and a number of CIS countries have joined the partnership for peace.

Grachev said in May that Russia's entry would make it possible to obtain more information about the military-political intentions, plans and actions of NATO—and to influence them in Russia's interests. He added that Russia is a superpower and, of course, would not toe NATO's line.

Just as the Ukraine and Belarus in earlier times had independent status in the UN, so there will now be a solid bloc and presence within NATO, even if at this stage only peripherally, owing allegiance to one country, Russia. There are no prizes for guessing which way its influence will be exerted should we, for instance, contemplate admitting the Visegrad countries or the Baltic states to NATO membership.

Are we already tacitly accepting the Russian right to veto, and thus acknowledging again a Russian sphere of influence? Kozyrev warned Gebhard von Moltke, the NATO Deputy Secretary General, earlier this month that the nationalists would take advantage of such ill-considered steps as the hasty expansion of NATO membership, and Russian deputies told our own visiting parliamentary delegation recently that the entry of the east European countries into the NATO bloc would be considered a threat to Russia's national interest.

It may, indeed, be premature to consider expansion, and important not to allow Russia to feel threatened. But I hope that we are remembering that the Russians have every interest in encouraging that view and thus exercising, effectively, a veto on almost any NATO course of action.

Could we, too, remember that the Poles, for instance, were our allies and paid dearly for it? By being seen to accept the Russian "right" to veto, and condoning the Russian tactic of destabilising NATO from within, we are also sending alarming signals which can only encourage the old Communists who are returning to political power in Poland and in Hungary and who will thus be more vulnerable to Russian pressure.

The speech goes on to say that we shall seek to enhance the role of the CSCE in Europe in conflict prevention and resolution. The CSCE is no doubt a worthy concept, but it is an emasculated 53-nation version of the UN with all its weaknesses and none of its limited strengths. It has been largely, if not wholly, ineffective both in Nagorno-Karabakh and in the Abkhazian-Georgian conflict. And it is precisely the organisation which the Russians wish to promote because it has no power to enforce.

Kozyrev said in June, after discussing the partnerships for peace with the North Atlantic Co-operation Council: the main aim is to direct every effort towards the formation of a single Europe in which the main role, NATO and Russia were agreed, would go to the CSCE". The CSCE has not yet resolved a conflict and has neither the power nor the muscle to enforce anything. It would indeed suit Russia for the CSCE and not NATO to be given "the main role in Europe", whatever that is.

Russia's whole tactic is, first, to encourage NATO to unravel and to lose its central purpose, which was and is to prevent aggression by being seen to have the power to deter and the united will to use it; and, secondly, to provide us with a reassuring substitute for the CSCE which will keep us all busy and which has the great advantage of constituting no deterrence whatever. Without a serious defence capability, it will be useless for us to have a foreign policy. We shall be seen to be completely toothless.

I am glad to note that the Government will work for the full implementation of the Conventional Armed Forces in Europe Treaty which the Russians are now challenging. It may be relevant that Russia is now to have a fighter base stationed in Armenia. Lastly, we are to maintain our nuclear deterrent. That is just as well. A new and sophisticated atomic submarine, part of Russia's new programme, completed its trials last week and will soon be joining the fleet.

I have concentrated on Russia's defence capacity, the build-up of Russia's power and ambitions and Russian tactics to manoeuvre NATO to her advantage, because our own drastic and premature defence cuts were all predicated on a weak and helpless Soviet Union. The CIS is far stronger. It is scrapping its obsolete weapons in favour of new ones, it has chemical weapons and was still manufacturing biological weapons in 1992, and it remains politically unstable. But the real threat lies in Russia's power in future to hold us all to ransom and to take back her old sphere of influence without the need to go to war, simply because we have relinquished the capacity to deter. It was our clear duty to retain a credible degree of force. We have not done so, and we shall pay the price for our criminal complacency and our refusal to face facts.

8.25 p.m.

Lord St. John of Bletso

My Lords, earlier this year the world looked on in wonder as South Africa was transformed into a new-born democracy. Where many had expected bloody revolution and conflict, there suddenly appeared national reconciliation and, amazingly, peace. A number of noble Lords acted as observers during the April elections. I am sure that they would testify to the remarkable nature of the historic events that culminated in the inauguration of Nelson Mandela as the new state president.

Seven months on, the world's gaze has moved on and massed legions of international media have found new stories. Yet, South Africa's greatest challenge is just beginning—the building of a new nation at the foot of Africa. Ever mindful of the enormous task that lies ahead for President Mandela and his Government of National Unity, I was particularly pleased that Her Majesty's gracious Speech pledged to continue the Government's support for, consolidation of a peaceful and stable democracy in South Africa". Britain retains both a secure interest and a special influence in South Africa's future. British investment in that country currently has an estimated market value of £9 billion to £10 billion, more, in fact, than British investment in the whole of the rest of the African continent.

The most visible expression of those links will certainly be Her Majesty's planned visit to South Africa during March next year. Such an event will bestow a unique seal of approval for the new nation. Certainly the Prime Minister's recent visit was a great success and, following South Africa's recent return to the Commonwealth fold, Her Majesty will be assured of a most warm and enthusiastic welcome.

Clearly President Mandela has an uphill battle on his hands —not only to endeavour to meet the high expectations of many of the peoples in South Africa, but also to upgrade and improve education, training, housing needs, hospitals and, of course, the reduction of poverty through the creation of jobs. Those objectives were, to a large degree, incorporated in the White Paper on the reconstruction and development programme of the Government of National Unity, the so-called RDP programme. Many observers have suggested that the RDP programme is unrealistic. However, I believe that with a concerted international assistance programme, the ambitious targets for housing, employment and living standards can be realised.

The targets have not just been plucked out of the sky. Instead, they have been rigorously assaulted by a wide range of committees, task forces and forums established throughout South Africa to facilitate co-operation and consultation before implementation of the reconstruction and development programme. Of course there have been problems as well. An ambitious housing programme with the aim of building 1 million homes within the next five years has yet to gather steam as the Government carefully weigh up the merits of self-build schemes against fully developed estates. The former are quickly delivered but can easily grow into urban slums, while the latter are more costly but also more likely to meet the public's expectations.

With estimates in South Africa of one-in-four blacks living in squatter camps, with over 40 per cent. having no access to clean water, with about 50 per cent. of all black South Africans being illiterate and about 25 per cent. not being in school, the challenges for Nelson Mandela are immense.

However, a lot of assistance has been and is continuing to come from Her Majesty's Government and the international community. When I was in South Africa recently I read that by the middle of September almost 11 billion rands—that equates to about £2 billion—had been received in foreign aid since the Government of National Unity took office in May. I have always contended, though, that it is not just monetary aid but logistical, practical assistance that is needed in South Africa. I shall give an example.

One of President Mandela's pre-election promises was to provide a meal a day for all black schoolchildren. However, when it came to the logistics of implementing this ambitious scheme in all the provinces and regions, it became an administrative and practical nightmare. It was then that he called on the assistance of one of the largest food manufacturing companies to help out. It consulted many of the education and health authorities throughout South Africa and came up with the solution of a peanut butter sandwich! This group has profited in that not only is it now providing the bread, margarine and peanut butter, but also many jobs have been created in the informal sector in the making and the distribution of these peanut butter sandwiches in all the schools around South Africa. In fact within just four months almost 3½ million black children are receiving their meal a day. This is just one small example of how the Government's objectives can be met through co-operation with the private sector.

What I believe is important to appreciate in South Africa is that for many years the ANC was a protest party and hence had limited practical hands-on political experience when it came to power this year. I feel it is remarkable what it has managed to achieve in just this short amount of time. I welcome the Prime Minister's pledge of £100 million in aid to South Africa over the next three years. The impact of British support has been keenly felt in many areas, not least in the establishment of sound local government, health, agricultural policy, the creation of employment opportunities and the gradual integration of the new defence force, arguably one of the greatest challenges facing the new South Africa today.

The recent establishment, on the instigation of the Minister, the noble Baroness, Lady Chalker, of the British South Africa All Party Parliamentary Group will be furthering the objective of consolidating a peaceful and stable democracy in South Africa. I would have liked to talk on the issues of law and order, more specifically the major problem of violent crime in South Africa, as well as the relationship between the unions (more specifically, COSATU) and the Government, as well as the economic prospects for South Africa, but as the twenty-eighth speaker in today's lengthy debate, I feel it is only right that I curtail my remarks and bring my speech to a close.

Clearly there is, and shall be, no quick fix to the problems and challenges facing the new South Africa. President Mandela and also Vice-President F. W. de Klerk have embarked on a remarkably successful journey of national reconciliation. The threat from the Right-wing that once appeared capable of destabilising the entire population and the entire transition has been defused if not destroyed.

The Government have begun the lengthy and potentially divisive task of thrashing out a final constitution for the country. All over the country the transformation is quietly continuing with residents of white suburbs and black suburbs finding ways to co-operate in local government and integrating state schools and hospitals. The miracle is continuing quietly in South Africa. My conclusion is, better a steady start than a false start in this exciting new era for South Africa.

8.34 p.m.

Lord Vivian

My Lords, the gracious Speech gave great importance to our national security. The recent announcement made by Her Majesty's Government that they are not contemplating any further cuts to ships, regiments and aircraft has been warmly welcomed by all the armed services. It will allow a period of stability for consolidation and reorganisation which is essential after all the changes that have been implemented so recently.

The threats and risks that face our country are very real nor have they faded away as some would wish us to believe, as noble Lords have just heard in an excellent speech by my noble friend Lady Park. However, the threats to the United Kingdom that have to be faced require a strong and well trained Navy, Army and Air Force equipped with the latest weapons systems and with an Army of around 130,000, an additional 10,000 troops on the present ceiling of 120,000. That would allow current Army regimental establishments to be increased ensuring that there are sufficient numbers available to carry out their tasks and operational commitments. From this increase infantry battalions could be given back their fourth rifle company thus allowing battalions to carry out operational tasks without resorting to having to borrow a company from another battalion which creates turmoil in the lending battalion when it is earmarked for an operational tour. It would also assist the Foot Guards with their public duty commitments in London and prevent non-Foot Guard battalions from having to do public duties which, in its turn, takes those battalions away from their primary roles.

Our defence against any threat to the United Kingdom must be strongly based on our commitment to NATO, as stated in the gracious Speech. Our earmarking of troops from the central multinational division and from our amphibious forces to the Western European Union is important. We have been informed that the United Kingdom is playing a full part in the Western European Union's operational capabilities; and that the WEU planning cell is working on plans for possible missions and is drawing up lists of forces which could be made available by nations to the WEU. But who and what will be the delegated command and control authority for combined joint task forces working for the WEU? Or, put another way, is there a combined and integrated military staff to act as the WEU command and control authority? Perhaps my noble friend could provide some additional information on this point.

This brings me to one of the aspects of the defence costs study—namely; that of the defence intelligence staff—which was not due to report until the end of July and received little attention in the defence debate in the other place last month. It concerns reductions in the DIS. Perhaps I should declare an interest here as I worked in that organisation in the early 1980s.

With the depleted armed services that our country relies on there is an even greater need to have more time to analyse, assess and identify any potential aggressor to this country. This measurement of time cannot just be in years but is more likely to be in decades if we are to construct the necessary weapons systems for our defence. The DIS is a frontline unit and I ask my noble friend to take note of this. It is vital to the country's interests in peacetime. Strategic and tactical intelligence are critical to the service chiefs and without accurate, reliable and timely intelligence the wrong planning may be implemented and disasters may well follow. Can my noble friend give an assurance that the service chiefs and the Foreign and Commonwealth Office have no objection to the proposed changes that have been recommended by this separate defence costs study report?

Field training for the Army, even with the introduction of simulation, is still a key part of its training, and the availability of areas on which the armed services can train is essential if their skills are to be kept at the highest level. A low standard of training may bring us defeat in battle, and I feel that I should draw your Lordships' attention to the fact that some of the Army standards are not as high as they used to be. In particular, I would point to all arms training and higher formation training, little of which has been carried out in the past three or four years with the full complement of troops. For instance, during the recent First Brigade exercise on Salisbury Plain one of the three infantry battalions of the brigade was in Bosnia, another in Northern Ireland, and one of the tank squadrons of the Armoured Regiment was similarly absent.

Even battle group training at BATUS in Canada has been denied its integral infantry companies due to overstretch caused by the additional burdens of Bosnia and Kuwait. For instance, in 1993 only five of the 12 required infantry companies were available, and armoured regiments exercised without infantry. I hope that the figures for this year will prove to be better, because if battle groups do not train as a complete all-arms group with all their infantry, tank squadrons, artillery, engineers and supporting forces their skills and drills will only deteriorate.

I have corresponded with my noble friend on the difficult matter of field training areas in Germany. He wrote me a most helpful letter on 30th September. He informed me that no military training could be permitted in the east of Germany until the Russians had completed their withdrawal last August. Can my noble friend now inform the House what negotiations have taken place, which areas in the east of Germany have been selected, and whether the Letzlingen Heide training area is one of them? It is, quite clear that the Hohne/Bergen dry training area is too small for realistic battle group training.

Turning to military training areas in the United Kingdom, it is clear that greater use will be required of the existing areas and that some of them may have to be enlarged. In this respect I am aware that improvements are being made to Salisbury Plain for more use by tracked vehicles and greater use of Otterburn for the artillery. What use is being made of Castle Martin, and does the German Army really need that area when it now owns large training areas in the east of Germany? Should we not fly our troops back for tank firing on the Castle Martin ranges, thereby saving the £4 million spent annually on the Hohne/Bergen ranges in Germany?

The country will not have an Army of the appropriate standard unless it is given the right areas to train on. The Army is highly conscious of the need for conservation, and in some areas, because of restrictions on the public, flora and fauna abound more on military training areas than elsewhere. The MoD is a good landlord and surely it would be easier to enlarge existing training areas if necessary than to try and find new ones.

The defence debate in another place last month laid great emphasis on the replacement for the Hercules aircraft. I do not intend to cover any of that ground again. However, it is essential that a decision is made on the number of Apache attack helicopters, EH101 and Chinook helicopters, which are all urgently required.

The defence costs study introduced the concept of a permanent joint headquarters. Although on paper I can see the logic of that proposal, in reality is it really so necessary? Can it be afforded? The Royal Navy conducted the Falklands campaign from Northwood with excellence; the Royal Air Force, from High Wycombe, conducted the Gulf campaign with equal excellence; and the Army is now conducting the Bosnian operation from Wilton with the same excellence. The adaptation of Northwood, with all the additional necessary construction and communications equipment, will be exceptionally expensive. It may well be that there is a need for a permanent joint headquarters, but it needs further examination. And do the service chiefs agree to those new headquarters? Are Her Majesty's Government sure that the number of crises during the past 10 years or so justify an expensive and separate new organisation?

I do not intend to cover the topic of Northern Ireland in detail as it was fully debated in your Lordships' Chamber last month. However, like many of your Lordships, I too should like to sound a word of warning. The terrorists in Northern Ireland continue with their intelligence collecting activities. There is no agreement by the terrorist organisations to hand in their arsenals of weapons and explosives. The severe beatings-up and kidnappings by the IRA continue. We must continue our intelligence collection, continue to ensure that we have sufficient trained troops in Northern Ireland to support the Royal Ulster Constabulary, and continue our policy of caution when reviewing the next steps to take.

The gracious Speech referred to the United Nations. For the past few years, and I suspect for many years to come, this country has been making military contributions to the UN. Our Armed Forces have now been reduced so much that it will be difficult to agree to provide support for the UN in response to every request, especially as we are already committed in Cyprus and Bosnia. It would be particularly wasteful to have standby forces available only for UN deployment. Other countries should take on more of these burdens, but that is not feasible until they have been trained in UN duties.

A private study is about to be undertaken with a view to determining how the military and humanitarian organisations can have a better understanding of each other. One of the conclusions from that study may be to recommend the formation of a United Nations training school for instructors in the United Kingdom to enable other countries to send their instructors to be trained in the UK before returning to train troops in their own countries. The United Kingdom is held in the greatest respect by other countries for its knowledge of UN matters. The country would once again be seen to be taking the lead in helping the United Nations, which ultimately should assist us in that we would not be called upon so frequently to provide military forces to support UN operations.

I should like to draw your Lordships' attention to the future defence medical services. In February 1993 the future requirements for secondary medical care in the Armed Forces were announced. A review was carried out based on a fundamental reassessment of the potential for conflict in the world and the consequent changes in defence policy and the new structure and size of the Armed Forces. It concluded that there was a need for about 1,200 beds to be found in three military hospitals, with three or four military district hospital units inside National Health Service hospitals, and with the National Health Service sharing the Army facilities at the Catterick military hospital.

About 18 months later the defence costs study announced that there was now a requirement for only some 700 to 800 beds in the United Kingdom rather than the 1,200 previously postulated. It further announced that the planned four military district hospital units would remain but in future there would be only one service hospital—Haslar at Portsmouth—with a requirement for only 375 beds. With only one service hospital it will be impossible to retain and train the 1,500 doctors and dentists and the 7,000 nurses and supporting staff, even though it has been agreed that those numbers should be reduced by 20 per cent. If that situation is allowed to happen the unique specialty of operational military medicine will not be forthcoming as service hospitals in the United Kingdom represent the only peacetime environment in which the various command, clinical, administrative and logistic skills can be brought together, exercised, maintained and evolved. Without that training the mix of doctor, nurse, technician and paramedical skills essential to the war task would not be met. These further cuts and reorganisations announced in the defence costs study need further examination and more detailed justification. I ask my noble friend if this matter can be re-examined.

In conclusion, our Armed Forces are the finest in the world and we all owe them a great debt of gratitude for preserving our freedom. It is our duty to ensure that they have sufficient resources for training and are given all the support they need to enable them to execute their tasks in the highly professional and successful manner to which our country has become so accustomed.

8.50 p.m.

Lord McNair

My Lords, I regret that I was not able to get together with the noble Baroness, Lady Cox, before the debate since we both visited the Sudan this year; the noble Baroness was able to do so more extensively than I did during my stay there. In what I shall say about the Sudan, I do not mean to deny, or necessarily contradict, all that she said about that country. Your Lordships know only too well her dedication to and support for oppressed and persecuted people everywhere. What I shall say is in addition to what she said. I travelled in September from Kadugli to Dilling by night in a convoy of three vehicles. The only security presence that we saw was a few simple checkpoints at the roadside. It may be that we did not travel through the area where the situation that the noble Baroness described exists. However, that was my experience.

I shall be speaking about two areas of the world, each geographically distinct; but the issues at which I wish to look are connected. They concern the new fracture line in international affairs and its implications for human rights and world harmony. The areas on which I wish to focus are the Sudan and Germany.

With the end of the Cold War—I bear in mind the remarks of the noble Baroness, Lady Park—and the reduction in the reach and power of the countries making up the former Soviet Union, a more real division has opened up as the ice floes of the Cold War break up and realign.

It is clear that the most important international question concerning and confronting the West is the resurgence and increasing self confidence of the many different nations where Islam is the dominant religion and culture. Coupled with that is the increase in migration which followed the colonial era resulting in significant racial and religious minority populations in many of the industrialised countries irrespective of whether or not they were significant colonial powers.

Islamic countries vary enormously in their political institutions, social customs and outlook on the world. Historically, from the time of the Crusades, through the 19th century to the present day there has been conflict and misunderstanding between the Moslem and the Christian cultures. As the world of Islam reasserts its right to order its societies according to its own precepts, the western world is becoming increasingly nervous about where that may lead. Primary western concerns are, as always, oil supplies and export markets.

It is true that Iran, for example, operates a foreign policy that is actively hostile to the West. Other countries such as Egypt and Saudi Arabia have set their face against Islamic resurgence and have been well rewarded by the West for so doing.

It is particularly important that the West should realise that for Moslems the Sharia is a way of life that prescribes both personal conduct and the system of justice which operates in the courts and judicial system. I visited the Sudan recently as a guest of the Sudanese Government. While there I asked one highly placed official how he would define Sharia. He thought for a moment and then told me, "Sharia is a path to God". There seem to be as many interpretations of Sharia as there are Islamic nations. In some it seems to be used as an instrument of state repression. In others, the draconian punishments often cited are rarely used. Whichever is the case in a particular country, it is important to realise the extreme sensitivity with which the Sharia is regarded by Moslems. I am not saying that this sensitivity should override fundamental human rights issues. But what I am saying is that since according to the teachings of Islam the Sharia is the word of God, the West would do well to take that into account in public pronouncements.

An example is the comment of the United Nations special rapporteur on the Sudan, Gaspar Biro, when he referred to the Sharia in critical terms by saying "…whoever the author". I can well understand that there may be genuine human rights considerations about some aspects of the Sharia and the way in which it is applied. But that reference had the equivalent impact on a Moslem that a non-Christian questioning the Virgin Birth and the Resurrection in the same sentence, and then some, would have on a devout Christian.

The nations of the Islamic world are watching us see how we live up to the principles that we seek to impose on them and how we confront the playing out of religious and racial diversity in post-colonial societies. Remember also, my Lords, that in many countries there are now significant Moslem minorities. Since it is a fact that most Moslems are not white caucasians, those living in western countries may be in double jeopardy on account of their religion and their race. In a violent world, which is the greater evil—to be stabbed to death at a bus-stop because you are black; or to suffer the amputation of a hand following established judicial procedures? I make no judgment. I only ask the question.

It pains me that the West's attitude to human rights observance too often tends to be distorted by perceived foreign policy interests. For example, the human rights records of Egypt and Saudi Arabia are rather bad. Egypt is said by Amnesty International to have 20,000 political prisoners and the Egyptian Government admit to 12,000. I do not think that anyone is suggesting that the Sudan currently has more than a relative few by comparison. Yet Her Majesty's Government, the USA and some other European countries have decided to make an example of the Sudan. Because it stayed neutral in the Gulf War, the USA has added the Sudan to its list of states sponsoring terrorism. However, despite repeated requests for specifics by the Sudan, the American Government have failed to supply any evidence.

That policy may well be counter productive. The Sudan is well regarded in much of Africa for standing up to what is seen as bullying by the West. It is also taking a regional leadership role and exporting its culture to neighbouring countries. The West seems to be having difficulty in coming to terms with the fact that certain countries are ordering their societies on the basis of religious or spiritual values. That is seen as something dangerously unpredictable and radical.

The attitude of the British Government to the Government of the Sudan has echoes of the old colonial mentality. I was quite appalled at the arrogance and insensitivity which I witnessed and heard about and not at all convinced that in September when I visited the Sudan the human rights situation was as bad as was made out. For example, a member of the Government was perfectly at liberty to go to the British embassy and complain about the Government of which he was a member. That seemed to me to be quite remarkable.

It is true that political parties are banned. However, the feeling in the Sudan is that those parties have not served the country well in the past and that the country needs to break out of the cycle of multi-party government followed by military dictatorship with the pattern repeating over and again. The International Commission of Jurists and Amnesty International have both arranged to visit the Sudan this month by agreement with the Sudanese Government. I look forward to reading their reports.

The two themes which were emphasised most often when I was in that country were development and religious tolerance. It was a Friday when we visited the women's prison at Omdurman and prayers were in progress—one was a Christian meeting, the other a Moslem one. Both seemed fairly well attended. The women were free to attend whichever meeting they chose. Presbyterians were running the Christian meeting on that day. As well as religious subjects, such topics as hygiene and childcare were covered. The missionaries present told us that on different days an Episcopalian minister and a Catholic sister also visited the prison. I understand that at the beginning of October all the women, except six who had been sentenced for murder, were released under an amnesty. However, that was in Khartoum, in the Moslem north.

One of our two hosts for the visit was a Christian evangelist member of the Transitional National Assembly who had given up travelling the world to spread the Gospel and is now working with the Government. In the two southern states that we visited we found a spirit of co-operation between religions with members of all faiths represented in the state governments. It will be interesting to see the make up of the new state administrations after the elections which, I believe, are planned for March 1995.

I turn now to Germany. It is clear that recent events there give great cause for concern. In Germany under Chancellor Kohl there are chilling echoes of the Nazi era. Incidents of racial violence are increasing exponentially with the police seemingly powerless, or unwilling, to do much about them. The figures and some examples speak for themselves. In the year of unification, incidents of extremist violence totalled 375. The following year they totalled 1,275. In 1992 the total was 2,285.

Once again, Jews are the victims. In March this year a synagogue was firebombed; the first such attack since the war. That is not an isolated incident. The hate letters and death threats received by Jews in Germany are now signed, whereas in recent years they were anonymous. That shows the increasing acceptability of overtly racist behaviour and the confidence that the authorities will do nothing to help the victims.

Recently, a mob of Right-wing extremists attacked a group of five black Africans and destroyed a local restaurant owned by Turks. Of the 50 rioters arrested in broad daylight, the police released 49 immediately. However, they detained a Turkish waiter who had stabbed a rioter in defence of the African men.

Skinheads, however, are not the only perpetrators of violence. Despite the attempts of the German Government to convince the world that teenage skinheads are the sole perpetrators of violence, investigations by human rights groups have uncovered brutal treatment of minorities by the German authorities. Gunther Grass, Germany's leading novelist, said: The most dangerous thing is we have skins in the government. They are nicely dressed with beautiful hair, educated. They speak well. But they think the same way as the young kids who shave their heads and carry swastikas and demonstrate. They encourage these ideas and these brutal actions". A typical incident reported by Amnesty International concerned a Sri Lankan who was stopped by two plain-clothes police officers while cycling to work. He was accused of stealing the bicycle for which he had a receipt; he was handcuffed so roughly that his wrist was broken and he was imprisoned until the police realised that there was nothing with which they could charge him.

One entire law enforcement unit was disbanded when it was learnt that the members had been equipping themselves with wooden clubs which would deliver more punishing blows than the standard issue rubber truncheons. Twenty-seven police officers were recently suspended in one Hamburg precinct for beating gaoled foreigners, and the authorities announced that they would reopen investigations into 127 brutality complaints. The top law and order figure for Hamburg, the Interior Minister, Werner Hackman, was forced to resign following a public backlash against widespread police brutality.

Rather than confront the reality of Germany in the 1990s, the Kohl regime has chosen to sponsor an exhibition in Washington which puffs up the myth of German resistance to neutralise the media coverage in the United States which has focused on the rising violence and injustice in Germany. Chancellor Kohl and his colleagues perceive the reporting as unfavourable to Germany's carefully groomed public image.

The supporting literature for that exhibition abbreviates Jewish resistance to the Nazis to a single page and downgrades the Warsaw ghetto—that heroic symbol of World War II resistance—to one sentence. The Washington Post commented: The intended audience seems not to be the casual visitor, but history itself—the version that will be passed on through teachers and textbooks. That's why it was so important to the Germans to place the exhibit in Washington". Chancellor Kohl is still making excuses for the past rather than facing up to the present reality. It is quite clear that he lives in a fantasy world. That state of affairs is extremely dangerous. Just because my father's generation—and in fact many of your Lordships also—saw the horror and said, "Never again", it does not follow that the past will not be repeated in the not-too-distant future.

The familiar process, however, is beginning to unfold: first, a group is identified, targeted and stigmatised. That makes it acceptable to carry out acts of violence and to deny members of that group normal civil rights. The next stage is the economic strangulation and then the ghetto. I do not need to spell out the rest.

One tragic aspect of that situation is that Kohl has allowed his agenda to be dictated by a relatively few neo-Nazis. It is clear that most Germans are horrified by the slide into racial violence which is now hardly even reported in the German press. Racial violence has become so commonplace that in Germany today it is not even news. The neo-Nazis are driving down their ordinary, decent countrymen into apathetic acquiescence.

I urge Her Majesty's Government to confront what is really going on in Germany and to stand four-square with the great majority of the German people, firm and resolute against the destabilising momentum of far Right extremism.

9.4 p.m.

Lord Butterworth

My Lords, one is aware that in Britain today the essence of the Union or the Community is often considered to be the single market, in some places still referred to as the Common Market. However, the founders of the Union and most of the member states would go much further. They are convinced that by economic and monetary union and by political convergence a new realité politique will emerge, the "ever closer union" referred to in the original Treaty of Rome, gradually being elaborated and concretised through the Declaration of Strasbourg, the Single European Act and the Maastricht Treaty, a continuous evolution which will no doubt be pursued a stage further in the intergovernmental conference in 1996.

In considering what the United Kingdom's position ought to be in that field, I submit that we should take into account a change that has begun to occur. It began in the middle of the 1980s and has gathered pace. At this late hour that is the only point that I wish to make.

Britain's trade with Europe has constantly been expanding and the general expectation has been that our trade with Europe would continue to expand and that the bulk of our overseas investment would be attracted to the European market. In fact, while Europe has remained central to our economic strategy, the reality has worked out somewhat differently. Maybe because of Britain's imperial and colonial tradition, UK companies have a marked preference for a geographical spread of activities throughout the whole world to a much higher degree than is the practice in many other countries. Our direct overseas investment is not overtly influenced by geographic proximity. But United Kingdom companies, when choosing where to site their plants —whether, say, in Europe or the Pacific Rim—go for the site that promises the fastest economic growth, wherever it may be.

In considering Europe, labour costs are high, as are the burdens that flow from employment and social security legislation. Our industry and commerce look for lower production costs, especially labour costs. They also look for technological skills, freedom from regulation and red tape and a culture which encourages financial personal responsibility and the work ethic. It is the case that emerging market economies often fill the bill very much better than the Union.

In 1993, emerging markets attracted £62 billion, almost one-third of the total equity cross-border investment flow; whereas the Union attracted £23 billion, or 23 per cent. In world markets emerging markets now rank third after the United States and Japan; and in spite of the greater risks and the reduced liquidity of these markets, there is a widely held conviction that emerging markets will continue to grow. Some estimate that by 2010 no less than two-thirds of global output will come from these countries; whereas in the Union, as we have heard this afternoon, unemployment and fraud are unchecked. I have to add that the Union is losing market share not only in overall world trade but even, and particularly, in high-technology goods. Our Government are right to call upon the Union to reduce direct and indirect labour costs and to improve competitiveness.

If we look at the position in Britain in this area, our direct and portfolio investment overseas is now so considerable that it may well in the future influence both the character and the composition of our economy. United Kingdom direct investment overseas has a market value of £300 million. That is direct investment. When one adds the overseas portfolio investment, the total approaches £700 billion. That is equivalent to the total valuation of UK companies quoted on the Stock Exchange.

It began to happen in the mid-1980s. From that time onwards, the flow of inward and outward foreign direct investments has become so pronounced that it must raise the question of whether government and their departments adequately reflect the new balance which our industry and commerce are introducing in our whole relationship with the global economy. Europe must remain crucially important to us. But one must ask whether our present emphasis on European affairs is causing us to play down this important relationship with the rest of the world. Does it accurately reflect this country's role as a leading global trader?

Perhaps I may give one final, and slightly different, example. Mr. Jamieson, the deputy City editor of the Sunday Telegraph, has suggested that, because of all that is happening, the remit of the DTI should be expanded to ensure that the invisible sector of the economy is properly represented by government. In fact, he suggests that it should become the Department of Industry, Trade and Investment. Certainly, the balance of our economy is changing. Inward and outward foreign direct investment flows are becoming increasingly important. Maybe vis-à-vis Europe our role should be not only to be a loyal and active member of the Union but to be a bridge between the Union and the rest of the world.

That brings me back to the point at which I began. Britain can only influence the future of the Union if it is clear about what the structure should be to achieve ever closer union and about the speed at which it should be developed. That is an issue that is likely to be high on the agenda at the inter-governmental conference in 1996.

9.14 p.m.

Earl Attlee

My Lords, perhaps I should start by declaring my interest. I am a serving officer in the REME TA, as is my wife who commands a REME recovery company. I listened with interest to the speech of the noble Baroness, Lady Park, and I shall study Hansard carefully. I am not qualified to say that she is right, but I hope that she is wrong.

I echo the concerns of the noble Lord, Lord Vivian, particularly the requirement for higher level training FTXs at divisional level, and his comments regarding the need for training specific to UN operations. Having been protected by the British battalion group in Bosnia, I can confirm that our forces operate to the very highest standards. While protected by BRITBAT, I was never in fear for my own safety. I wish that I could say that for some of the other forces. I do not advise any British NGO to operate in Bosnia without the protection of BRITBAT in theatre.

The plans and legislation of the 1950s allowed for either total mobilisation of the TA for general war or very limited use of the TA. In other words, it was all or nothing. The requirement now is for much smaller numbers to be able to be called up at any one time. It is possible to call up individuals of the TA where their specific skills are required, but the procedure is complex. It is easier to remove a regular soldier with the required skills, if available, rather than get bogged down in staff work trying to use the TA. As a result, the MoD does not receive all the benefit that it could from the TA, and the regular units suffer from their soldiers or even sub-units being poached for special duties. That was referred to by the noble Lord, Lord Vivian. The TA suffers from the loss of opportunities and the perception that it is not effective. The Government are well aware of the difficulties and have in preparation an entirely new reserve forces Bill. They have consulted widely and the TA looks forward to the new legislation.

During the SDE debate last year, the Minister, the noble Viscount, Lord Cranborne, on 28th July (Official Report, col. 1364), confirmed the Government's intention to introduce legislation that would take effect in 1995. All members of the reserve forces will be very disappointed when they hear that there was no mention of any such Bill in the gracious Speech. I accept that there is great pressure on the parliamentary timetable. But can the Minister assure me that, if the Government's business managers were to offer him a slot next week for the Bill, he would have the Bill ready to present to Parliament? I look forward to hearing his answer.

The restructuring of the TA is to be announced shortly. It is understood that the size of the TA will be around 59,000. In other words, it will be a reserve of approximately 50 per cent. of the size of the regular Army. That is very welcome. There are some difficult decisions to be made against the background of a policy that all TA infantry battalions will be the same. Unfortunately, it is a levelling down exercise as some TA battalions had an Allied Rapid Reaction Corps role and had heavy support weapons, while others were purely for home defence. Now none will have its own support weapons. The TA parachute battalions are arguing the case to retain their own support weapons as their role is so specialised. They claim that a standard support weapons company could not effectively be parachute trained. I am inclined to believe that.

The London Regiment has only recently been formed from four London-based regiments. It has been very successful at adapting to its new order of battle. The proposal is that all TA infantry battalions should have only three rifle companies. Your Lordships will be well aware of the special significance of a regiment based on the capital but may not be aware of how damaging downsizing this regiment to three companies would be. Can the Minister assure the House that he will give very careful consideration before allowing this so recently formed regiment to be modified again and instead give a longer period of stability?

I also understand that there is a review in progress concerning the decorations available for reserve officers. I remind your Lordships that I do have an interest and I already have my TEM—Territorial Efficiency Medal—for my non-commissioned service. But the TEM is a medal and not a decoration and so post-nominals are not available. I am therefore envious of the many noble Lords who already have their TD. The current rules provide me and many other officers with a great deal of motivation to continue serving to the best of our ability and to earn our TD. As I understand it, the proposal is to downgrade the current reserve decorations, the RD, the TD and the AE, to one tri-service medal without post-nominals.

Is the Minister aware that any such scheme will cause serious damage to the morale of the TA? Is he further aware that there is already a shortage of experienced TA officers and that such a scheme would only make matters worse? I have served many years in the ranks and for the past few years I have been commissioned but I have never detected any discontent regarding the entitlement rules for the TEM or the TD. The Minister would be well advised to leave the current arrangements as they are.

In conclusion, I am disappointed that there is to be no reserve forces Bill, but I look forward to taking part in the business of the House during the next 12 months. I shall now sit down and enjoy listening to the noble Lord, Lord Beloff.

9.22 p.m.

Lord Beloff

My Lords, one can hardly open a newspaper nowadays without seeing an advertisement from the Nolan Commission on standards in public life inviting one to suggest evidence. At this late hour, when people's ears have been assailed from various quarters by good and bad news and views, I thought that I might as well use the occasion to give my evidence, as it were, in public. It seems to me that if one looked for a measure of standards in public life the most important would be truthfulness. Everything pales beside the necessity for those in public life to tell the truth as they see it. By this standard the Nolan Commission will have a task well outside the petty peccadilloes which led to its being set up.

It is my view—I do not think noble Lords who have heard me before will be surprised—that the two principal political parties in this country and the successive governments they have manned for the past quarter of a century have engaged, I am not sure whether wholly consciously, in misleading the British electorate—Parliament and, through Parliament, the electorate—as to the nature of what has been going on in continental Europe. They have constantly reiterated, ever since they brought this country into what we used to call the Common Market, the fact that there is a British view as to the way in which Europe might be organised in peace both politically and economically; that this view was prevailing, and would prevail; and that we could dismiss from our minds any alternative.

So we were told from the very beginning that the common agricultural policy, which was regarded as inimical to our interests and those of the third world, would undoubtedly be revised. Twenty-five years on the common agricultural policy is still with us, still distorts the patterns of production and consumption of foodstuffs and, as we have been reminded, still gives unparalleled opportunities for fraud. We have been told equally that there was of course some democratic deficit and that there was too little popular parliamentary control but that all of that would be put right by the European Parliament when we agreed to direct elections to that assembly.

I should not like to upset my noble friend Lady Rawlings, whose maiden speech—as indeed in the case of the noble Lord, Lord Blaker—we listened to with rapt attention and admiration, but I must point out that she is making a delicate transition from a simulacrum of a parliament to a real parliament and I hope that she comes to enjoy her new role.

From time to time one thinks about the European Parliament. The report of the Court of Auditors has been referred to several times in the course of this debate. It was actually presented to the European Parliament by its author. Those of us who saw the clip on television news will have realised that practically no one was there. When we debated the very important and parallel report of our own House of Lords committee on the same subject 70 Peers took part, and that is quite a high proportion for a Monday at the tail end of a Session. I believe that there were fewer than 70 Members of the European Parliament present at what we were told was the body that was going to take charge of this important lacuna in the provisions of the Community.

When I think of the European Parliament, it reminds me chiefly of that body of people who occupied our thoughts a great deal during the passage of the Criminal Justice and Public Order Bill in the last Session. I believe that they are known as New Age travellers. There they are, this shabby caravan, going from Brussels to Luxembourg, from Luxembourg to Strasbourg, from Strasbourg back to Luxembourg, back to Brussels, and of course at the same time receiving sustenance from the public purse, I hasten to say, on a more lavish scale than the DSS provides for the unfortunate New Age travellers. Why do they do that? We all know why, just as we know why totally unnecessary and lavish new buildings are being put up for them. It is part of the continual bargains which the Government of France extracts from the European communities.

My complaint about Her Majesty's Government, and indeed about their predecessors under the noble Lords, Lord Wilson and Lord Callaghan, is that they are not very good at extracting what Britain requires because they have not learnt the art of diplomacy in this new environment. But that is perhaps a secondary matter.

Much more important is the consistent denial that what has been happening has been the absorption of the United Kingdom as the junior province in a federal government. I know that the Minister and I do not agree on this subject. If the noble Baroness, Lady Chalker, had had the advantage of attending the classes on federalism that I taught for many years in the University of Oxford in company with the late authority on that subject, Sir Kenneth Wheare, she would know that there is only one definition of "federalism", and it is a definition which the European communities in part fulfilled from the very beginning and which they intend to fulfil totally after the intergovernmental conference in 1996.

It is not that anything has been concealed from Her Majesty's Government. Other politicians from other countries in the Community are totally open about their aims. Indeed, some of them are open in English. After all, Mr. Flynn, the Commissioner who deals with social matters and the Social Chapter, is an Irishman and speaks quite passable English. He has repeatedly said in public and aloud that it does not matter whether Britain has an opt-out because there is no regulation which the Commission may wish to pass—quite apart from the Social Chapter—for which it could not find some article in the treaties to give it those powers, and it has every intention of proceeding along those lines.

Even more important, since, after all, although it gets a good deal out of the communities, Ireland does not put much into them—that is natural enough because it is a small and poor country which is without any government at the moment—is the position of Germany. It has been translated into English—my German is not all that good—but I do not know whether Ministers have read and digested the paper that was presented to Chancellor Kohl's party by its group on the future of Europe, which I gather is being brought over to London this week by one of Chancellor Kohl's principal assistants, Herr Lamers. That paper makes it quite clear that the intention is to remove those elements which still prevent the European communities from being a full federation. Having been re-elected Chancellor, albeit by one vote, Chancellor Kohl now looks like being in power for some time and he has said that the purpose of his becoming Chancellor again is to complete the process of European integration, by which he means the creation of a United States of Europe.

So, one asks oneself: what is it about our Ministers that make them convinced that they are bringing the Union round to their point of view when everyone else who speaks on these matters takes a different view? Surely it cannot be that those of us who know that all this is going on are unique. There is something within Whitehall which seems to obstruct the communication of information from outside, particularly from foreigners. Having heard the speeches of the noble Lords, Lord Bridges and Lord Wright of Richmond, we know where the obstacle lies. The Foreign Office has been taken over by the advocates of appeasement to a much greater extent than in the 1930s. By "appeasement" I refer to the view that Britain has no possibility of exerting an independent role in the world; that its role will be confined to being a good little boy in Europe, and the wider issues of the economy, upon which I shall not touch, but which the noble Lord, Lord Butterworth—

Lord Bridges

My Lords, I thank the noble Lord for giving way. I find his use of the word "appeasement" a little excessive, particularly in the context in which he used it. If we have made errors of judgment, we have done so honestly. We are not appeasers.

Lord Wright of Richmond

My Lords, I should like to associate myself with the remarks of my noble friend Lord Bridges.

Lord Beloff

I do not regard the word "appeasement" as pejorative.

Lord Wright of Richmond

I do.

Lord Beloff

I am sorry. In that case, there is another difference of opinion about the English language in the House which we shall have to argue on another occasion. "Appeasement" was used in the 1920s by those who wished to achieve a peaceful settlement at the time of Locarno, for instance. It is an honourable word. It means that you think that you cannot resist some external force which is too great and therefore you recommend getting the best deal possible.

Baroness Seear

My Lords, does the noble Lord agree that the word "appeasement", whatever it may have meant in the 1920s, acquired an unfavourable interpretation in 1939?

Lord Beloff

My Lords, that may well be true, but I do not believe that that affects my argument. My argument is, and it has not been denied by either of the noble Lords, that on the whole the Foreign Office is in favour of Britain becoming a part of a united states of Europe and therefore no obstacle is placed in the way of foreigners who are trying to prove to us that that is what will happen.

Baroness Chalker of Wallasey

My Lords, I am most grateful to my noble friend for giving way. Let me say to him here and now—I hope that I do not have to repeat this in a future debate—that policy in the Foreign Office is made by the Foreign Secretary and his Ministers. There is no question of appeasement; there is no question of a united states of Europe; there is a will by the British Government to work with our partners in Europe; to correct what is wrong in the European Union—my noble friend will know that I have never shrunk from saying that—and to try to pursue a European policy that will protect Europe in the future, including bringing membership to the countries of Eastern Europe in a way that we have been unable to do before. That has nothing to do with appeasement; it has everything to do with good common sense and being good Europeans.

Lord Beloff

My Lords, my noble friend has once again given her view that Britain will win this argument. My point is that the evidence from across the Channel is that Britain is not winning the argument. Indeed, the fact that we are told that there must be deepening as well as widening—a favourite phrase in Brussels—proves my point. But I do not wish to prolong the debate or this speech. I wish only to say in conclusion that it may all be academic. I do not think that the European Union will survive.

I know that a few years ago people who said that the Soviet Union would not survive would have been laughed at. There is plenty of evidence in other countries, in France, for instance, that the disadvantages of belonging to a tightly knit federation, ultimately with a single currency and therefore control from a single financial centre, are being looked at again—I believe that they are being looked at again in Italy, for instance, by its new foreign minister—and therefore, although I shall not be here to see my prophecy come true (I do not believe that this will happen before the end of the century, and at my age I do not expect to see it), those noble Lords who are younger than myself will see that, on this occasion at any rate, I was right and the majority of your Lordships were wrong. They may well repeat the well-known words of Lord Melbourne with which I conclude: What all the wise men promised has not happened, and what all the d.…d fools said would happen has come to pass".

Baroness Seear

My Lords, I would not call the noble Lord a damned fool—not normally anyway.

9.40 p.m.

Lord Ashbourne

My Lords, it is getting late and if I am not to weary your Lordships I must get into top gear as quickly as possible.

I was delighted to read that the Government, attach the highest importance to national security". I find it difficult to reconcile that bland statement with the significant rundown of our Armed Forces during the past 12 to 14 years. It is a bland statement, which I welcome, and it is good to see it in black and white.

I am saddened that the gracious Speech contains nothing about plans to replace the present Royal yacht, which is to be decommissioned in 1997. There are not many things that we, the British, do better than anyone else, but one thing that we do do better is ceremonial events and related affairs. Your Lordships will be able to form your own judgment because only yesterday we had the opportunity to witness the State Opening of Parliament. Frankly, we are very good at such things.

In my opinion, the Royal yacht represents an extension of that ceremonial expertise. She sails to a foreign port, often with the Monarch or members of the Royal Family on board. Members of the Royal Marine Band are landed and they put on their pith helmets. They march up and down and play "Rule Britannia" and other martial music. The flag is lowered and the bugler plays. Visitors could be excused for believing that the British Empire had not disappeared.

Those are golden moments and people take out their handkerchiefs to wipe away the tears as they witness such events. It is a terrible shame to propose the decommissioning of the Royal yacht without making an attempt to replace her. I read in the press a suggestion that a commercial buyer who is getting on in years is to make a bid for the yacht and that the Government may lease her back. That is not a real answer to a real problem.

The yacht has no defence capability so why is she funded out of the defence budget? It is true that she has a Royal Navy crew and is currently commanded by a rear-admiral. However, only yesterday I heard that the present rear-admiral will be relieved by a commodore. That is the most remarkable example of spoiling the ship for a ha'p'orth of tar. All that can possibly be saved is the difference between the salary of a rear-admiral and that of a commodore. I am no expert in naval salaries, but I believe that that could be no more than £20,000 at the outside. It is pin money and we are talking about tarnishing a national asset for £20,000. Your Lordships will judge whether that is a sensible and balanced decision.

I have only two constructive suggestions for the Government to consider. First, they should instruct the Ministry of Defence to carry out a feasibility study to discover whether it would be better to refit the present yacht, with her beautiful lines but rusty bottom, or to build a new ship. That would be a simple operation to carry out. Depending on the result, the Government should have designed and built a new ship to carry out the dual function of royal duties and export promotion. Your Lordships will be aware that within the past 18 months the Royal yacht has undertaken a remarkable tour to Malaysia and has built up British exports. If that were the case, the Royal yacht could he funded by the DTI and that would overcome one of the financial problems.

Alternatively, the Government might like to consider having a ship built for royal duties and disaster relief, in which case it could be funded by the Foreign Office. I see that the Minister is taking that on the chin very calmly. I thought there might have been a slight reaction to that.

In all seriousness, I ask the Government to put on their most imaginative hats and to consider ways in which to replace that great national asset. We must not let it slip through our fingers because we cannot find a few million pounds out of a particular pot. Indeed, it is not even the right pot from which we are trying to get that money. Therefore, the situation seems to me to be ripe for change.

9.45 p.m.

Baroness Seear

My Lords, it gives me great pleasure to congratulate the two maiden speakers. The noble Baroness, Lady Rawlings, reminded us—perhaps instructed us, because we are not all aware of it—about how profound, magnificent and old are the cultural traditions of the countries of Europe. That was the case long before there was a European Union and that provides an extremely good foundation on which to build the present Union and the Union of the future.

We are grateful also to the noble Lord, Lord Blaker, for his extremely well-informed and professional discussion on the problems of Hong Kong. It is always one of the great advantages of your Lordships' House that we have people of such knowledge who are able to keep us up to date and to inform us about those problems, which are of the very greatest importance.

The noble Lord gives me the opportunity to ask the Government whether, when they are considering Hong Kong, they will think again about the issue of the Hong Kong Indians, whose case was fought so valiantly by my late colleague Lord Bonham-Carter. Surely it is possible for such a small number of people, who would add so much to this country, to be considered for residence in the United Kingdom. As we have said so often, we are not talking about people who would be a great drain on the social security budget. I suspect that by the time a great many of those Hong Kong Indians had been here for five years, they would be buying up a great many of those Members of your Lordships' House who were up for sale. I beg the noble Baroness not to turn down that request.

In the gracious Speech and in the speech of the noble Baroness, Lady Chalker, there were a number of matters with which we on these Benches can very easily agree. For example, we agree that the extension or the expansion of the European Union is of the greatest importance and that it should take place as soon as possible. Some noble Lords have suggested today that the European Union has a number of serious disadvantages. And yet such hardy people as the Finns, the Swedes and the Austrians are extremely anxious to join that "dubious" organisation.

We know too that others in greater need are also very anxious to join. People may be cynical as to the reasons why they wish to join, but surely the noble Baroness is right to say that the extension and expansion of the Union and admission into it, or at least agreements as a half-way stage for those countries, are of the greatest importance. Of course, it means that we must play fair with them according to the rules of the Union. It means that we must look very carefully at the conditions for trade and what will be the effect on the Union of the admission of those countries, which have low labour costs. That is a price which we must learn to pay. So far, so good; we can go along with that.

We very much support the attitude taken by the noble Baroness and the Government with regard to Bosnia in regretting the attitude now being adopted by the United States. Probably, somewhat reluctantly, President Clinton is being pushed by the Republicans whom, in other matters, I suspect that the noble Baroness would be inclined to support. I see that she shakes her head and that is very reassuring.

I had the good fortune—though, perhaps, I should say, the valuable experience—of visiting Bosnia earlier this year. I visited an NGO working in that country. It was crystal clear to me that, if we were seen to be taking sides and if we were seen to be supporting any of the warring groups militarily, it would be the end of our humanitarian contribution. The ease with which the NGO that I was associated with was able to pass the roadblocks and was let through by the troops stationed there was evidence that they understood that humanitarian aid was non-party and that it did not support any of the warring factions. The minute that that ceased to be true, that would be the end of humanitarian aid. While so many people the world over are critical of what has and what has not been done in Europe in relation to Bosnia, we must keep repeating that there are thousands of people in that country today who are alive but who would be dead if it had not been for that humanitarian aid.

So far so good; we can go along with the noble Baroness. We can also go along very much with the work that she has done and continues to do on overseas development. Many of us on this side of the House would like to think that there could be more. I have no doubt that the noble Baroness also wishes that there could be more. Similarly, I have no doubt that some of the scenes that the noble Baroness has to witness must be heartbreaking. For that, indeed, we thank her. We are grateful that she is able to continue with her work in that way.

Because of the interest that I have in such matters, I am particularly grateful for the Minister's recognition of how important family planning issues are in developing countries. I am also grateful for her recognition and her repeated support for women's issues in those countries. There can be little doubt that the real development of developing countries depends more than anything else on how the women in those countries are able to get education and thereby gain economic independence, thus enabling them to make a full contribution to the development of both the economic and the social life of such countries as they move from undeveloped, to developing, to developed. I know that the Minister gives a great deal of support, which she is able and free to do, to such work.

So far so good. However, this Government are often criticised for being short term. I feel that the gracious Speech is yet another example of short-termism. Here I very much reflect the speech made by the noble Lord, Lord Cledwyn. We talk about the 20th century as having been a bloody, dangerous and, in many ways, a vicious century. But I greatly fear for the 21st century. I shall not be here—at least, not for much of it—and neither will many noble Lords, though there are some who might be. The perils ahead in the 21st century require thinking about and planning for now. What are those perils? They are to be found within the continent of Europe and in the eastern countries that lie beyond Europe.

I believe that the noble and learned Lord, Lord Howe, spoke about the Ukraine. The perils in that area are just one example of the dangers that exist throughout the Middle East and Western Asia, let alone Eastern Asia. I had the opportunity to make a brief visit to Nagorno-Karabakh where, I must say, the noble Baroness, Lady Cox, is regarded as second only to the Virgin Mary. My visit was very short and very insignificant. However, it was blindingly obvious to me that the whole area is a tinderbox. All over those countries there are sources of potential conflict. There are a great many loose cannon in those countries where government is reduced to a minimum, where anarchy is just beneath the surface and where individuals no longer belong anywhere. One prisoner of war, a 19 year-old Russian prisoner that we visited in a prisoner of war camp, had been fighting for the Azerbaijani Army. He said of course that he had not really meant to fight against the Karabakh but that he had been drunk and he had then been recruited and when he came to he found he was a member of the Azerbaijan forces. I understand that that is a pretty standard story. He had the good sense to have fought for only one day and then was taken prisoner and was not doing too badly in the prisoner of war camp. But that is just one case of the rootlessness of people who do not belong anywhere. There are these rootless individuals and an alarming amount of ammunition which is still floating about in those countries in the hands of people who would be only too glad in many cases to sell it for a small amount of money because of the difficulties in which they find themselves.

It is a tinder-box, but what are we doing to ensure that that tinder-box does not burst into flames? When I returned I asked the noble Baroness in a Question in your Lordships' House why it was that in Armenia, at the centre of this tinder-box, with Turkey on one side and Iran and the Ukraine nearby, we do not even have a part-time honorary consul. The noble Baroness told me that Moscow looked after the matter. That is hardly sufficient if one wants to keep one's ear to the ground and to find out what is going on in these countries and to be forewarned and forearmed before it is too late. What are we to do?

So much for Europe and Western Asia; we also have the global problems. A noble Lord talked of some aspects of the problems with regard to development and of the opportunities that exist, because there are opportunities as well as problems in the development of the global economy. However, the world population will probably double by the year 2030 and 95 per cent. of that will occur in developing countries. The gap between the rich and the poor will become so great that there cannot possibly be acceptance of the status quo. That is again a potential volcano with which we have to be prepared to deal but are we really thinking about how we are to cope with this?

Other noble Lords today have talked about the importance of changes in the UN. The UN has tasks piled upon it which it has by no means the strength or the resources to carry but if we are really to face these problems we must have some sort of organisation like the UN which can begin to deal with these problems and anticipate them. There have been a number of proposals put forward in your Lordships' House today. I do not know how many of them are practical or how far we can go but one thing is absolutely certain: the UN at present has neither the organisation nor the resources to begin to deal with the problems that we can see, not looming ahead but all too close to us and which will be certain to make themselves apparent in the 21st century.

Next year is the 50th anniversary of the UN. What kind of reorganisation does it need? What kind of additional powers does it need? How valid is the concept of a peacekeeping force that can be put into being when it is needed? At the moment it is quite plain that the UN is overloaded and does not have the resources to begin to deal with the present problems let alone the problems of the future. I shall not go on as I have talked for too long. However, the matters to which I have referred are the important problems, not the relatively small matters, important though they are, in the gracious Speech. Let us take a good hard look at the frightening problems of the 20th century and get a strategy for dealing with them.

9.59 p.m.

Lord Judd

My Lords, much of this debate has been a useful reflective occasion containing a good deal of wisdom, experience, expertise and indeed, in the remarks of the noble Lord, Lord Beloff, prophecies worthy of an Old Testament prophet. I look forward to going over it all again in Hansard as there is valuable comment to digest, but now I must congratulate the noble Lord, Lord Blaker, and the noble Baroness, Lady Rawlings, on their sparkling maiden speeches. On the evidence of their performance today we shall all look forward to their contributions in the future, even if occasionally we do not altogether agree with their analysis or conclusions.

I must also endorse the observations made by my noble friend Lord Cledwyn in his formidable speech. We all admire the commitment and personal integrity of the noble Baroness, Lady Chalker. If only the Government as a whole listened to her and reflected her standards of compassion, insight and concern, Britain would today be a brighter, happier and more honest place. But sadly the accumulated evidence all too clearly demonstrates that they do not.

Perhaps I may start with a few words on the Crown Agents. In examining the proposed new legislation our sole concerns will be whether the proposed changes enhance or damage the work of the Crown Agents and whether they will better serve the interests and needs of the United Kingdom and the international institutions and overseas nations with which we seek to co-operate. The Government assure us that a wide cross-section of relevant organisations will be included in the new foundation. We shall examine very carefully exactly what that means. What we will not countenance is the transfer of yet another well-tried and proven public service to some less accountable quango packed with Government supporters.

Four years ago this month the Berlin wall came down and people on both sides of the Iron Curtain rejoiced at the prospect of a more secure and stable world. My noble friend Lady Blackstone spoke of the grounds for hope in South Africa, the Middle East, Cambodia and Haiti. I strongly endorse that positive analysis of what can be when the will and leadership to make it happen exist. But still, by contrast, as my noble friend emphasised, for too many millions the dream of 1989, if for them it ever was a dream, has faded with the spread of regional and intra-state conflicts across the world.

During my time as director of Oxfam I became mesmerised by the degree to which conflict diverted us from our commitment to long-term development. When I completed my service less than three years ago more than 50 per cent. of our work worldwide was conflict related. In Africa it was more than 70 per cent. The human and economic cost is sickening. In the Second World War some 50 per cent. of the war-related casualties were civilian; today, the figure is probably in excess of 90 per cent.

The non-governmental think-tank, Saferworld, with which I am glad to work professionally, has today launched a report entitled The True Cost of Conflict. Against the recent background of Rwanda and Somalia, where in orchestrated campaigns of violence up to 1 million men, women and children have been butchered, this report covers seven other case studies.

In former Yugoslavia it records that 200,000 have died and that 20,000 Moslem women have been raped. Over 500,000 refugees have fled to countries in the European Union. The cost of UNPROFOR, including the deployment of 31,000 troops, has reached 1 billion US dollars.

In East Timor 210,000 people of a population of 650,000 have died since the Indonesian invasion in 1975. Child mortality is the world's second highest. Following the invasion, virtually no foreign investment has come to East Timor.

Between 1989 and 1991 Iraq's gross domestic product fell from 66 billion US dollars to a mere 245 million US dollars. The costs of the Gulf War to Saudi Arabia have been at least 62 billion US dollars.

In Mozambique between 10,000 and 15,000 civilians have been killed by landmines. Some 70 per cent. of the schools have been destroyed and two fifths of the population are illiterate. The war has cost Mozambique 15 billion US dollars—four times its 1988 gross domestic product. Between 1981 and 1991 the world had to mobilise 6 billion US dollars of foreign aid for that war-torn country.

In Sudan, since 1983 500,000 people, mostly civilians, have died. Up to 1 million have been wounded and 6 million have been displaced. In 1992 the Sudanese Government spent more than 1 billion US dollars on arms. All infrastructural development has been halted and much has been destroyed. US companies have lost over 1 billion US dollars worth of investment. In Kashmir 3,000 businesses and shops had been destroyed by 1991. Tourism dropped from 700,000 visitors in 1988 to 10,000 in 1992. In Peru, 600,000 people have been displaced. Sendero Luminoso guerrillas have caused some 22 billion US dollars worth of damage. And so the grim story continues across the globe—Angola, Liberia, Afghanistan, the former Soviet Union, and the rest. That is why my noble friend Lady Blackstone was so right to emphasise what a genuine commitment to pre-emptive diplomacy involves.

As the reform of the United Nations is debated, if we in the United Kingdom are to justify our continued place as permanent members of the Security Council we must be in the vanguard of putting pre-emptive diplomacy and conflict resolution to the top of our foreign policy priorities.

The noble Baroness, Lady Chalker, referred to the UN as being no more than the sum total of the commitment of its member states. She is right. But that is why it is to our eternal discredit that as permanent members of the Security Council we were party to the decision to reduce the UN presence in Rwanda at the very time when the Secretary General and others were calling for it to be increased. Many thousands of dead and bereaved today might have been saved had we supported in time a greater presence. If we are serious about a positive as distinct from a reactive foreign policy, it is now that we should have the dangers of renewed conflict in Rwanda, and of new conflict in Burundi, Kenya, Togo, Nigeria and Zaire high on our agenda. The cost of failing to act in time may well otherwise once more prove formidably and bloodily expensive.

Before I leave that theme, I must raise the matter of Gambia. With all the Government's emphasis on democracy, human rights and good governance, exactly what are they doing directly, as well as with others, to restore democracy there? If the international community cannot deal effectively with a little group of misguided military adventurers in that small country, I shall begin to despair for the future of humanity. No responsible discussion of security can ignore the arms trade. Each year the world spends 250 times more on the arms which fuel conflict than on peacekeeping. It is surely a crude paradox that almost 90 per cent. of the arms sold to the third world are sold by the five permanent members of the Security Council. It is surely ironic that the cost to the US alone of Operation Restore Hope in Somalia, which involved rounding up weapons, roughly equalled the value of the arms sold to the Siad Barre regime during the 1980s; and it is bizarre that during the Gulf War allied troops found themselves facing weapons supplied by their own side.

The time has certainly come for the international community to take urgent steps to regulate the arms trade. I suggest three priorities: first, to implement the common guidelines which have been agreed and adopted by member states of the European Union and the CSCE so that the arms exports to countries abusing human rights, or which undermine regional security, are effectively restricted; secondly, to extend the 1991 UN register of arms to include small arms so that trade in that most widely used category of arms will be scrutinised under the glare of an international spotlight—I believe that to be an absolute pre-requisite for effective control; and, thirdly, to take urgent action to deal decisively with the sale, stockpiling and use of increasingly sinister anti-personnel mines with all their truly terrible long-term, as well as short-term, human, agricultural and economic consequences.

In the meantime, notwithstanding the well-intentioned professions by the noble Baroness, Lady Chalker, the Government must respond more convincingly to the growing and deep anxiety so well expressed by my noble friend Lord Desai and others in this debate about the apparent correlation between the deployment of substantial amounts of our aid programme and lucrative arms deals. It is too big a coincidence to swallow. Pergau has been one such story; Indonesia is sadly at least as significant. Thailand, Nigeria and Oman are other disturbing examples. All that, at a time when bilateral aid to poverty-stricken parts of Africa is scheduled to be cut severely over the next three years.

I understand—and the Minister will certainly correct me if I am wrong—that the Ministry of Defence Form 608 (Export Licence and Arms Working Party Applications) states: It is government policy that aid may not be used either for the purchase of military equipment or"— and this is the significant part— to promote such purchase". The Minister for Overseas Development will have the full support of the House in bringing home to her colleagues that we detect an alarming gap between stated policy and practice. But no doubt the Scott inquiry will have much more to tell us about all that.

No one wants to spend more than is necessary on defence—certainly not at the expense of civil, industrial and technological development, economic and social infrastructure, education, health, housing, environmental care, and the rest, which together make a quality of society worth defending. What, above all, is therefore essential is to define the perceived threats, the task, the purpose. If in the post Cold War era uncertainty, volatility, increasingly sophisticated international terrorism—perhaps nuclear, chemical and biological—are the dangers, then those are what our defence system must be geared to meet. If what is required is an ability to contribute effectively to international peacekeeping and international humanitarian operations like those we have seen so courageously, sensitively and committedly undertaken in recent years, then we should gear ourselves convincingly to just that. If analysis demonstrates the indispensability of United Nations standby forces or of a standing UN rapid deployment force backed by first-class UN command structures and intelligence, then that should be a central feature of our defence policy.

In that context, perhaps when the Minister winds up he will tell us more of what is to be discussed with the French in Chartres, I believe tomorrow. What of the reported proposals for a joint Anglo-French command to co-ordinate military operations outside the NATO area? What of the ideas for joint patrols and targeting by nuclear armed submarines and for an African standing force? How does all that relate to our lead responsibility as permanent members of the UN Security Council, as well as to our membership of NATO?

What would be a total waste of taxpayers' money would be to spend vast sums on defence arrangements that were unsuited or inadequate to meet the essential task. In that respect, it has to be said that it is still immensely difficult to see clearly exactly what is the Government's view of the challenges they are endeavouring to meet. It is therefore virtually impossible to establish whether what is being done is right or adequate to meet the Government's own objectives, if they have them. In the absence of this convincing sense of strategic purpose, anxieties are inevitably acute lest we have a piecemeal Treasury, as distinct from defence-led policy—one, incidentally, that naively separates out front line and support services when recent experience establishes the absolute imperative for their integration.

Yet again in this debate I found the thoughts of my noble friend Lord Kennet particularly stimulating. It would be lamentable if, in the post Cold War era, we allowed east and west once more to drift apart. Surely it is vital to bring the former Warsaw Pact countries into NATO as soon as their military and political developments make that possible. How soon do the Government believe that Poland, Hungary, Slovakia and the Czech Republic can be fully integrated? Of course Partnership for Peace is a start; but it must never become an end in itself. It neither provides security guarantees nor makes provision for even associate membership of NATO. It sits uneasily beside the commitment in the gracious Speech to an enlarged European Union, eventually encompassing countries of central Europe.

International security in an unpredictable world demands disarmament. With whole economies and numerous jobs dependent on the arms industry, a serious commitment to disarmament requires a serious commitment to substitution. The US and the European Union with its KONVER programme have made a start. Surely we in the United Kingdom should follow suit, fully using the opportunities that are presented by KONVER to facilitate valuable defence technologies "spinning into", as the term goes, the civilian sector.

Meanwhile, as the noble Lord, Lord Mayhew, pointed out, it is good to see the commitment in the gracious Speech to the extension of the non-proliferation treaty and the nuclear test ban treaty. But, as the noble Lord argued, "do as we do" rather than "do as we say" will be an important leadership role for the United Kingdom.

What therefore remains deeply disturbing is that the Government, while having come down from the ludicrous figure of 500 warheads, still stick to a maximum 384 warheads for Trident, as against the present total of 192. What possible post-war rationale can there be for 96 warheads per submarine with Trident as compared with 48 with Polaris during the Cold War? How does such a commitment help with the non-proliferation treaty and beyond? Indeed, does it not run directly counter to Article 6 of the non-proliferation treaty, which requires signatories to reduce their nuclear arsenals?

By the same token—as has been raised in this debate—I hope that the Minister will be able to reassure us that no weakening of commitment is indicated by the absence from the gracious Speech of any mention of ratification of the chemical weapons convention. For me, the most important message from today's debate has been the concern with pre-emptive diplomacy and conflict resolution.

Let us never forget the underlying causes of conflict. It is all too easy to be simplistic; to characterise, for example, Rwanda as just another ethnic conflict. Rwanda was one of the poorest countries in the world; one of the most densely populated in Africa; one with an enormous debt burden; one whose economy had largely depended on a single commodity subject to wild fluctuations on the world market. All of those were major factors in the crisis. They were factors to which we in the north contributed. If we continue to live in a world where the rich grow richer and the poor grow poorer, where the result of accumulated unpayable debt is to crush the poor still further, we must expect to live in a world where conflict, coupled with international terrorism, increases, making us all poorer and more vulnerable in the end.

It is high time that we redrafted the role of the Security Council to take on board the economic, social and cultural dimensions of security. It is essential to make the Bretton Woods institutions more accountable for their role in world affairs; to bring home to them their responsibility for social justice, peace and security.

At home, the really bitter part of the Pergau saga was how on earth our all-too-limited aid funds—at an all time low as a percentage of gross national product—could be diverted for such a questionable project in relatively prosperous Malaysia when the demands of abject poverty remain so great. Nothing could be more appropriate than to see the £60 million already spent on Pergau put back into the aid programme to make good the projected £60 million cuts in aid to Africa over the next three years.

10.19 p.m.

The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Henley)

My Lords, I would like to join other speakers in congratulating both my noble friends, my noble friend Lord Blaker and my noble friend Lady Rawlings, on their quite excellent maiden speeches. My noble friend Lord Blaker spoke with great expertise and feeling on Hong Kong and China—matters about which he knows a great deal. I have to say to my noble friend that I think he has an advantage on both myself and my noble friend Lady Chalker in that he served in both the Ministry of Defence and the Foreign Office. We have not had such an advantage. Perhaps on later occasions we might persuade him both to open and close a debate such as this!

My noble friend Lady Rawlings spoke with the expertise of a former Member of the European Parliament and made what I am sure we all agree was a wonderful speech in a very uncontroversial manner on what was surely a very uncontroversial subject. I should just like to question one part of her uncontroversial speech. She referred to the cultural links which have existed among all parts of Europe for hundreds of years and mentioned the Norman invasion of 1066. I imagine that to some people at the time that was not the most uncontroversial of actions that might have taken place.

In opening the debate, my noble friend Lady Chalker quite rightly stressed the wide-ranging nature of the debate and the impossibility of making a comprehensive review of all foreign policy matters. One might simply put it in the terms that Nancy Mitford's fictional Uncle Matthew might have put it: there's an awful lot of abroad.

Similarly, in winding up, I am sure that no one will expect me to cover all the points that have been made. I am sure that all noble Lords will bear with me if some of the points are not covered. I can give an assurance that, as always, I or my noble friend will write where appropriate when specific questions have been asked. I join the noble Lord, Lord Judd—this is one point on which I believe we can agree—in saying how much we shall learn from mulling over Hansard tomorrow. I am sure that it will be a very useful exercise for us all. The noble Baroness, Lady Blackstone, called for further debate, particularly on the UN, and other noble Lords made other suggestions for interesting debates. I am sure that these matters will have been noticed by my noble friend the Chief Whip and will be considered by the usual channels as and where appropriate.

For a debate that covers both foreign affairs and defence matters, relatively little, dare I say, was said on defence. I should like to make a couple of fairly brief points on matters relating to my own department.

First, it is right that I bring the House up to date on the main developments of the defence costs study, which was referred to by the noble and gallant Lord, Lord Craig of Radley, and by other noble Lords. Since I addressed the House in late July there have been certain developments in the debate about defence. I shall not go over all the background again except to re-emphasise that none of the proposals emerging will in any way reduce the operational effectiveness of our forces. Indeed, many will facilitate improvements in capability. I ask my noble friend Lady Park to look at the effective capability of our Armed Forces rather than the simple figures in terms of what we spend.

Since July we have been involved in a period of formal consultation on the Front Line First report with trade unions and others with particular interest in the various proposals. Obviously, because of the comprehensive nature of that report, we allowed an extended period of three months for the consultation, which came to an end last month. As well as consulting on the Front Line First report itself, we have also issued a number of consultative documents giving details of individual proposals. As and when consultation on particular proposals comes to an end, we shall consider with the greatest care all the comments received before taking final decisions. We intend to make those decisions public as they are made rather than brigade them into a single announcement. Only in that way can we minimise the period of uncertainty—again this was a concern of the noble and gallant Lord—that our staff may have to face.

I turn to one other development in relation to Front Line First which was referred to by my noble friend Lord Vivian; namely, the study into defence intelligence reported at the end of July. My noble friend will understand why we shall not be making public all the measures that we propose to implement. The main one is for a major reorganisation of the central defence intelligence staff within the department. We have concluded that there is scope to increase efficiency and reduce costs through reforms similar to those which we intend to introduce in other areas. On a wider front, we have set in place comprehensive arrangements to implement each and every proposal emerging from Front Line First, subject of course to the outcome of any consultation. I can give an assurance to the House that I and ministerial colleagues in the department will remain highly committed and closely involved in this vitally important process of change.

I understand that any changes can give cause for concern, as the noble and gallant Lord quite rightly stressed, and that that concern can have major effects on the morale of our Armed Forces. But I certainly hope that the reassurances given by my right honourable friend the Secretary of State on the need for a period of stability will go some way towards helping.

Perhaps I may say a few words in response to the noble Earl, Lord Attlee, on a matter that concerns both of us; that is, the reserve forces. The noble Earl will recognise that reserve forces legislation was not referred to in the gracious Speech. As the noble Earl knows, new legislation is required to permit us to make more flexible use of our reserves in post-cold war circumstances. In the light of the fact that we are not able to bring forward legislation this year, I can now confirm that we plan to publish that draft legislation on the reserve forces in 1995, allowing time for detailed consultation on its provisions and amendment, if required, before the Bill is introduced to Parliament. However, I have to say to the noble Earl that I do not think it is likely that that will give us an opportunity to introduce legislation on this subject in the coming year.

I wish to say a few words about European issues, particularly about the own resources decision and the legislation that will be involved. The noble Baroness, Lady Blackstone, wanted to know whether the Bill could be passed without amendment or whether amendments would be possible. I have to stress to the noble Baroness—this point was picked up by my noble friend Lord Cockfield—that the whole Bill must be passed without amendment. The United Kingdom Government gave an international commitment that they would so do and they must implement that commitment. I should remind the House that both Houses of Parliament welcomed the outcome of the Edinburgh Council, on which the own resources decision will be based, and the Bill quite simply implements that agreement and our commitment to' it. The Bill will be introduced in another place tomorrow and, as I said, will implement the decisions of the 1992 Edinburgh Council, which was a rigorous settlement designed to meet the needs of the Community until the end of the century while taking into account what member states can afford. It will result only in a modest increase in the size of the Community budget.

I should like to stress the facts of what that implies. The own resources decision implies an increased cost to the United Kingdom of £75 million in 1995–96 rising to £250 million in 1999. It preserves the United Kingdom abatement which has saved us some £16 billion since 1984. It keeps our increase proportionately smaller than those of most other member states—we are now slipping down the net contributor table—and it was much better than it could have been. As noble Lords will remember, the Commission originally wanted an own resources call-up to reach a total of 1.37 per cent. of Community GNP by 1997 rather than the agreed figure, as my noble friend Lord Cockfield reminded the House, of 1.27 per cent. in 1999. If we had gone for that higher figure it would have meant an extra £8.5 billion in 1997, instead of the £1.75 billion in 1997 and £3.5 billion in 1999 under the Edinburgh agreement.

I should also point out that increases in Community spending are now slowing. The own resources decision settlement provided an average increase in Community commitments of some 3.3 per cent. per year in real terms from 1992 to 1999 as against what we have seen between 1987 and 1992 of some 5.3 per cent. I believe that the stories which are circulating which suggest a sharp rise in our net contributions between 1994–95 and 1995–96, as a result of the Edinburgh agreement, are somewhat misleading. They are in fact wrong. Implementing the own resources decision will have some effect, but it is a modest one. The underlying trend of our contributions may he upwards but that reflects an increase in our GNP growth relative to other states.

Perhaps I may say a word or two about the intergovernmental conference in 1996. I can assure my noble friend Lord Cockfield that we shall have a most positive agenda for that conference. We shall obviously want to encourage greater flexibility, enable enlargement, develop CFSP, fight fraud and entrench subsidiarity. I can assure all noble Lords that subsidiarity, whatever the noble Lord, Lord Hooson, might think, is in fact working. There were 185 registered proposals in 1990; 75 in 1993; and so far only 39 this year. We shall continue to work for greater financial discipline and we shall continue to strengthen the role of the national parliaments. We shall certainly oppose any weakening of the power of the Council of Ministers, the merging of the pillars or removal of the United Kingdom opt-outs. I certainly do not expect us to be isolated and I certainly expect plenty of support for our views.

I would like to reassure the noble Baroness, Lady Blackstone, and my noble friend Lord Beloff, that we are not outsiders in the European Community. We are not the pariahs that she seems to suggest that we are and we have actually achieved a great deal by our negotiating and methods of dealing. We do not always lose the arguments. I can give a long list of negotiating successes including the enlargement—which is something which we originally proposed—the GATT Uruguay round, the Edinburgh own resources decision; subsidiarity (which I have also just mentioned), and the social protocol where I believe the noble Baroness and I will simply have to agree to differ on opting-out. I believe that it was a great success for this country. There was also the 1988 Budget discipline decision.

Lastly, the noble Baroness pressed me on when and if we shall join monetary union. She seemed to imply that I might be evasive in responding on that point. I can assure the noble Baroness that I am not going to be evasive. Put very simply, it is a matter for Her Majesty's Government, as the noble Baroness knows, and Parliament to take a decision if and when they have to. It is not an issue which is before us now. I say to the noble Baroness that I suspect that it looks unrealistic for 1997. That is certainly not just the view of Her Majesty's Government. The president of the European Monetary Institute said just that on 14th November.

I turn now to the question of aid and the Pergau arms sales. I start by re-stressing all the points made by my noble friend Lady Chalker and underlining everything she said on aid and our aid record. I have to repeat to the House in particular that I do not believe that I can emphasise enough that there is quite simply no link between aid projects and defence contracts in Indonesia, Jordan, Oman or in any other markets which noble Lords care to mention. Allegations of that sort are quite simply untrue. They are based on spurious correlations between provisions of aid and arms sales. I totally reject the allegations made by the noble Baroness and others on this issue that our aid projects are linked in any way to arms sales.

If I may, I should like to say a word or two about arms sales. The noble Lord, Lord Mayhew, suggested that we should be trying to remove arms sales from all parts of the world. The theme of the speech of the noble Lord, Lord Judd, was that somehow they were intrinsically wicked in themselves and we should not be involved in them. I have to say - I think that many noble Lords recognise this - that all states have a right to self-defence, recognised by Article 51 of the United Nations Charter, and that countries need defence equipment to exercise that right. The United Kingdom's exports of defence equipment are responsible. We consider applications for licences to export defence equipment on a case-by-case basis against established criteria, including internationally agreed guidelines. The criteria include human rights. Perhaps I may also stress that they would include questions such as excessive military expenditure. They include such matters as regional stability and the economic and technical capacity of the recipient state. We do not export equipment that is likely to be used for internal repression.

As the noble Lord, Lord Judd, was prepared to admit, the United Kingdom wants to see more and greater transparency and responsibility in conventional arms transfers. The UN register of conventional arms was set up after a personal initiative of the Prime Minister. We are currently involved in multilateral discussions on new arrangements to promote transparency and responsibility in conventional arms transfers. I have to say that I believe that much of the recent media interest in the United Kingdom's defence exports has been both ill-informed and hysterical.

Perhaps I may also briefly re-emphasise some points about our aid programme. We maintain a very substantial aid programme, whatever the noble Lord, Lord Judd, says. It is now the sixth largest in the world and has risen by some 10 per cent. in real terms since 1987–88. The aid budget is some £2.2 billion. In 1993 our aid was 0.31 per cent. of GNP, but that is still above the average of all the other OECD donors. More importantly, some 80 per cent. of our bilateral aid goes to the poorest developing countries, a higher proportion than that of any other G7 donor. Perhaps I may also refer the noble Lord to private investment, which can have equally beneficial effects as aid from governments. The UK's direct private investment in developing countries is consistently around half the EC overall total, and for 1992 was estimated to be some £1.7 billion.

As I said at the beginning, it would be very difficult to cover all the subjects that have been raised; there have been a great many. But perhaps I may say a word or two about the United States lifting its arms embargo on Bosnia. I sensed general agreement in the House on that and I was grateful for the support of the noble Lord, Lord Mayhew, for Her Majesty's Government's policy here. Obviously, I understand the worries that it raises in relation to our general NATO relations. We have seen a very changed environment in NATO over the past few years and the removal of the certainties of a few years ago will mean that we shall have to work harder to ensure that NATO continues to serve our interests as it has done so well over the previous 40 years.

As regards the effect of the US policy shift on Operation Sharp Guard, I have a sneaking feeling that the noble Lord slightly overblew its significance. We are certainly confident that the operation in the Adriatic can continue to be effective, sad though the US decision is. I think that I should say further and very simply in terms of our own policy that, if there was a total lift of the embargo by the United Nations, there would be no way in which we could continue to keep our forces in Bosnia and the former republic of Yugoslavia. Put very simply, there can be no lift-and-stay policy.

I appreciate that there has been a vast array of matters that I have not addressed in the time available this evening. I know that the noble Lord, Lord Mayhew, would like me to develop further his arguments on nuclear proliferation, but perhaps I can do that by correspondence. I have not touched upon Palestine, Hong Kong, Cuba, the Ukraine, Kashmir or the many points relating to human rights. In view of the time, I hope that noble Lords will bear with me if I now move on and say that I should like to end by paying tribute, as my noble friend Lord Wade of Chorlton did yesterday when moving the humble Address, to the men and women of our Armed Forces.

As I made clear when I opened, the debate has been wide-ranging and extensive. It has covered a vast array of matters. It is right that on occasions we should try to cover all matters relating to foreign affairs and defence in one evening. There will be further opportunities to debate these matters, focusing in greater detail on specific concerns. Nevertheless, I believe that on occasions such as this we should remember just how much our security and future depend upon the men and women who serve in the Armed Forces.

Our Armed Forces are deployed throughout the world on a wide variety of dangerous and difficult jobs. It is obviously not possible to mention them all, and by touching on just a few I wish in no way to disparage the duties and actions of others in other parts of the world. I shall start by mentioning those in Bosnia in the former Republic of Yugoslavia as they face their third winter in that theatre where their achievements in humanitarian relief have been dramatic and for which - dare I say it? - they have not received the praise or coverage of the press which they deserve.

I should mention also those in Northern Ireland where we have now seen soldiers serve in dangerous conditions in aid of the civil power for some 25 years. It is their largest peacetime commitment. They have prevented countless terrorist attacks. They have saved the lives of many people, both Catholic and Protestant, at great risk to themselves. Above all, they have, with the help of the community, prevented terrorists on both sides from achieving their aims through violence. Let us hope that the peace process can continue and that that pressure on the Armed Forces can in time be reduced.

Let us also remember those in Rwanda where some 600 military personnel have made a major contribution to UNAMIR, as well as all the others engaged in United Nations roles of one sort or another. There are more than 7,500 in Cyprus, Iraq, Kuwait, Georgia, Rwanda and the former Republic of Yugoslavia.

The noble Baroness, Lady Blackstone, asked how many we could currently place at the disposal of the United Nations. The noble Baroness will obviously not expect me to answer that question, and I do not believe that I can. Each case will be considered on its merits. I can say that our record speaks for itself. Those 7,500 soldiers engaged, as I said, in what one might refer to as blue-beret operations or in support of United Nations Security Council resolutions, show how much the UK is committed to the support of UN operations.

Baroness Blackstone

My Lords, I am grateful to the noble Lord for giving way. He must have misunderstood what I said if he implies that each case stands on its merits. My question was about standby forces and what the UK Government will consider committing to standby forces. That is not a matter of considering each case on its merits. I accept that the Government may not yet have made decisions about that; but I should hope that at some time in the future we can be told what is the Government's position.

Lord Henley

My Lords, I am sorry if I misunderstood the point behind the noble Baroness's remarks. I shall take them up and possibly write to her on that matter. I was trying to show to the noble Baroness—and I am sure that she will be the first to agree with me—that we have a very fine record of supporting UN operations. Those 7,000 or 8,000 men and women speak very much for themselves.

To all those men and women, whether in the Army, Navy or Air Force, we owe a great deal. It is right that on behalf of Her Majesty's Government I should place on record what we owe them. At the same time, knowing the concerns expressed by the noble and gallant Lord and by the soldiers, sailors and airmen themselves following both Options for Change and the defence costs study Front Line First—there have been legitimate concerns about their future—it is right that I should repeat the assurances given both by my right honourable friend the Secretary of State and my right honourable friend the Prime Minister that the big upheavals in the Armed Forces are now over. The Armed Forces are now of an optimum size for today's uncertain world and there will be no new cuts to our front line capability.

Our Armed Forces have justifiably built up an extraordinary reputation for efficiency and professionalism throughout the world. We can quite rightly be proud of them and reliant that they will continue to serve in the best interests of this country's security and wider interests in an uncertain world.

Lord Strathclyde

My Lords, on behalf of my noble friend Lady Blatch, I beg to move that this debate be now adjourned until Tuesday next.

Moved, That the debate be now adjourned until Tuesday next. —(Lord Strathclyde.)

On Question, Motion agreed to, and debate adjourned accordingly until Tuesday next.