HL Deb 02 May 2001 vol 625 cc750-90

6.18 p.m.

Lord Howell of Guildford

rose to call attention to developments in relations between the United Kingdom and the United States; and to move for Papers.

The noble Lord said: My Lords, I hope that your Lordships will regard it as timely and appropriate that we should be discussing today the theme of US-U K relations. It is certainly the case that the new Bush administration has just completed its first 100 days. Whatever one feels about some of the decisions and views that have emerged from Washington, no one can say that those 100 days have been dull. On the contrary, they have been enlivened by some extremely intense debate on some of the new policy positions being taken up by the Bush team.

On this side of the Atlantic, all around Europe, a good deal of shrill invective has been vented about Mr Bush and his team. They have been branded as "isolationists" and "cowboys". Another phrase used was that they are the "toxic Texans". A number of other cries of dismay have come from those whose preconceptions and presumptions about the ways in which global policy should be formed were being rudely interrupted.

On the Left and centre Left, I heard expressions of dismay that here was a candidate, a governor, who campaigned as a "compassionate conservative", who has turned out to be a conservative. I for one do not find it difficult to unite those two concepts. Experience proves that any administration or government who opt for low taxes and tax reduction end up helping the poor and those most in need of care rather more effectively than governments who are committed to high taxation, in particular when those high taxes are borne by the poorest people. I believe that there might be a lesson in that for our own Government. Indeed, that has been confirmed by the most recent figures published by the Office for National Statistics. They show that the gap between rich and poor is widening as more taxes are piled on.

As to the charge of isolationism, I believe that to be a nonsense based on no facts or groundwork. The new Bush team is highly internationalist. Its members are realists. Their tone and approach is different from their predecessors in the Clinton White House administration. Furthermore, they are very much moved and informed by concerns about energy matters. One would expect that, given the background of some of them, and given the reality of the fact that America is moving into what has been described—with perhaps a little hyperbole—as an energy crisis. If it is not a crisis, certainly America's reliance on imported oil is now heavy. I said only the other day from this Dispatch Box that that reliance is now twice what it was 20 years ago when I had some responsibility for energy matters. Imports have risen to above 60 per cent. This exposes America to the intense need to conserve its own appetites, to ensure that its supplies are secure and reliable, and to develop its domestic supplies. That may be not unrelated to the decision that the administration seem to have taken on the Kyoto Protocol, which I shall address in more detail later.

In my speech to open the debate, I shall concentrate on four areas of US/UK relations as well as US/EU relations, since on this side of the Atlantic we operate in the EU context. These are first, security issues; secondly, attitudes in Washington to the European Union integration process and the role of the UK in Europe—which I believe to be changing; thirdly, the whole question of economics which, given the American slowdown, is rather crucial to us all; and, fourthly, environmental issues and the Kyoto Protocol decision.

I shall turn first to security matters and deal with the European security strategic defence project. I hope that it will not be denied that there is no doubt at all that the United States administration now in office in Washington dislike and are confused by plans for the new so-called Rapid Reaction Force. I believe that it has every right to be confused because it has received a number of conflicting messages. Furthermore, the administration must be puzzled by the change in mood from only a couple of years ago.

Recently, I was reading the interesting book written by the noble Lord, Lord Shore of Stepney, entitled Separate Ways: the Heart of Britain, in which the noble Lord reminds us of exactly what was said by the Prime Minister only two summers ago about defence in Europe. The Prime Minister came to the House of Commons and stated that the goals of defence: will not be achieved through merging the European Union and the WEU or developing an unrealistic common defence policy. We therefore resisted its unacceptable proposals from others. Instead, we argued for—and won—the explicit recognition, written into the treaty for the first time, that NATO is the foundation of our and other allies' common defence". He went on to say that, the UK saw its future defence not in the European Union but in NATO". As I said, that was the thinking two summers ago, but it has gone now. We seem to have embarked on a completely new and not very clear tack. It is one that is constantly being confused by authoritative pronouncements which appear to contradict those of Her Majesty's Government.

General Kelche, the Chief of the Defence Staff in France, recently said to the Select Committee in another place, why should we have to go through NATO to select an option?". We have heard General Hagglund, the new chair of the EU Military Committee comprising 130 planning staff, state that: We are not talking about a subsidiary of NATO. This is an independent body". Given messages of that kind, it is not surprising that Washington fears that there is a danger that NATO will be undermined. I think that its representatives are right to hold those fears. If the spirit of the Nice Treaty prevails—in its codicils it specifically considers separate planning arrangements, both pre-decision planning and operational planning, which are two separate phases—this will be the biggest breach between the United Kingdom and the United States, as well as between Europe and the United States, in 50 years. That is what the Americans now most fear. We should not go into this except with clear minds as regards what is intended and what is being planned. We should not rely on ambiguity to allow us to finesse and slip through the situation.

The second issue of security which I should like to discuss is that of missile defence, the Anti-Ballistic Missile Treaty and the view set out only last night by the President of the United States to the National Defence University. Personally, I am puzzled by the reluctance of many people in Europe to support this project and the idea of a new umbrella combined, as the President pointed out in his speech, with a substantial reduction in existing missile arsenals. The new umbrella would respond to the new contexts—technological and political—in which nuclear weapons and weapons of mass destruction are now being deployed around the globe.

Of course Russia and China will say immediately that they do not like this. Russia will do that because it is playing for a negotiating position and because it is the possessor of the second largest arsenal of weapons. Furthermore, the Russians are good chess players. China will voice concerns for the even more obvious reasons that it is in the business of missile production and export, along with arms production and export on a massive scale. Anything which gets in the way of those activities will be objected to. We were reminded of that this morning by the noble Lord, Lord Chalfont, when he spoke to the BBC. He said that one should not be at all surprised that China has spoken out against this move into the new world—one into which I believe that we have to move.

As regards the fondness generally expressed in the EU—and demonstrated in some parts of our own body politic here in London—for mutual assured deterrence (the old order) I find it curious that so many who were once opposed to it now wish to hang on to it. Even more curiously, they do not understand that new technology has completely redistributed the patterns of power which govern the use and projection of nuclear weapons, nuclear missiles and missiles carrying other terrifying warheads. It is my view that, in this new context, the British Government should be completely forthright in pledging the necessary support required by the United States. We should ensure that we allow the adaptation and upgrading of Fylingdales, which will be necessary for the forward sensors for the project to develop in the way now outlined by President Bush. I do not understand—perhaps I do understand, but I deplore—the reluctance to speak out boldly on this matter, but rather to take cover behind the argument that a precise proposal has not been made and so forth. The Americans need a firm pledge of support and we should provide it.

Doubts expressed by Washington about what the Europeans are up to seem to extend to the entire European integration process. The Americans have long admired and encouraged the idea of the European Union as a pillar, an Atlantic partner. Kennedy produced the idea of an Atlantic partnership some 40 years ago. However, that is one thing. If this is going to turn Europe into a rival superpower with its own competitive ambitions, I think that that is quite something different. I am not surprised that a good many Americans are having second thoughts about the whole undertaking.

I do not know what they make of what I regard as Chancellor Schröder's proposed highly undemocratic reforms for European governance, but I am sure that they view with contempt certain European Union posturing on foreign policy, of which this latest attempt to upstage the Americans over North Korea is, I think, a sad and rather pathetic example.

The Americans want, as should the British, co-operation in Europe, not dangerous rivalry. They do not want dangerous rivalry over whether the euro will be a rival currency to the dollar; over whether protectionism will be a rival to American trade policy; over whether a defence policy will rival American hegemony. This is not the language of partnership; it is the language of competition and rivalry. We should step well clear of such language and achieve a secure and good policy in relation to the United States.

As to the economy, there has been a sharp US slow-down. It is ludicrous to suggest, as some people have, that we will be immune from the slow-down. Forecasters say that they are surprised. All that tells me is that they are wrong again; that they are looking at the wrong indicators. In one area I agree with the European Central Bank and the much criticised Mr Duisenberg. The US theory that jiggling with interest rates—or fiddling with abstracts, as the US Treasury Secretary calls it—can offset recession and slow down or alter the business cycle is deeply misplaced. Central banks are much more marginal than their pretensions suggest, and the ECB is quite right to stick to its lathe and to realise that it does not have the power to switch Europe into a recovery mode merely by altering short-term interest rates.

As to Kyoto and the treaty on greenhouse gases, the American reaction should not be a surprise. Congress was never going to accept the passage of the whole package. The US is very concerned with its energy needs at the moment and the rejection of the protocol in its previous form was bound to come. We on this side of the House support the Kyoto process—although the scientific basis for it may not be wholly secure in all aspects—and we are very glad that the United Kingdom is hitting its targets. This is due, of course, to the move away from coal-fired generation, which has been going on for some years.

The task now is to negotiate in a friendly and understanding way with the Americans because a credible alternative to Kyoto exists. This will be important. I do not have time to elaborate on it now, but I hope that the noble Baroness or other Ministers will ensure that that message reaches the Deputy Prime Minister. It does not seem to have reached him so far.

At the end of the Cold War, a number of people thought that the Atlantic linkage, the relationship with the United States, would matter less; that there would be more inclination for countries to do their own thing. Experience has shown that the relationship matters more than ever in a disordered and fluid world with changed power centres. It matters more also because of the enormous vigour of the US economy. It is taking a break now, but it has driven the entire global system forward with great benefit to millions of people—despite the kind of riots that we saw yesterday—over the past decade.

At the same time, anti-Americanism is latent in Europe. One sees it in a number of aspects and attitudes all around us. In my view, it is directly against UK interests to see that anti-Americanism fostered and inflamed. Avant-garde European policymakers talk about rejecting American culture. In fact, the USA today embodies and conserves some of the best of our values and principles better, possibly, than the European region. I was very interested in a television series organised by Lucy Worsthorne—Old New World—which makes the point that we need to look in America to find the best values that we want to preserve in Europe.

The time has come to rid ourselves of prejudices about America and to renew the UK/US partnership—and indeed the US/European Union partnership—and to back the American concerns, not by dividing NATO but by expanding it, ideally to include the Baltic states. The US needs engagement in Europe as much as we need the United States. Within Europe, that applies to the UK most of all. The government who forget that will not be lightly forgiven. My Lords, I beg to move for Papers.

6.35 p.m.

Lord Hunt of Chesterton

My Lords, I welcome this opportunity to debate the close and complex relations between the US and the UK. It enables me to highlight the constructive policies and action of the Government in working with the rest of Europe in developing a mature and more equal relationship with the United States. Like many others in the UK., I and my family have enjoyed living and working in the USA—in our case, off and on for 30 years, from the turbulent times in the 1960s to the technological transformation of the 1990s.

The relations with the USA of individuals and political parties are usually coloured by how they look at American practices and customs. Like many on the left, I could not and cannot understand the highly unequal and ineffective social welfare arrangements in the United States. It was the fear that the UK might move in that direction that first drove me into politics and the Labour Party after returning from the United States.

Over the years since then, the Labour Party and the Labour governments have not disappointed me or their many supporters. They have not only maintained and strengthened our welfare state but have been proud to associate themselves with the other countries of Europe and the idea of a social Europe with overarching human rights legislation. We can be proud that this is presented to the world as an alternative to that offered by the American state. If anything, this message needs to be made even more strongly by the Government. The views of the Opposition on this point continue to be rather confused.

Perhaps I may now turn to the more exciting and constructive aspects of our relations. Since its inception, the United States has provided to the world a veritable cascade of innovation—social, political, cultural and technological. The British have not only benefited hugely from these developments, as the noble Lord, Lord Howell, quite rightly emphasised, but, through our great creativity, we have participated and contributed to them. One thinks of Tom Paine in the 18th century and his seminal contributions to openness in the United States; Charlie Chaplin in films; the inventor of the jet engine; and even the world-wide web. The USA is always generous in its acknowledgements, as I know it is in its reports of hurricane predictions and the superior accuracy of those from the UK Met Office.

A vital aspect of the future of US/UK relations concerns how the UK manages its business and technology policies in the face of the highly competitive practices of the US Government. How is the UK Government working to meet this challenge? My comments are based upon my experience as a scientist, a civil servant and as director of a small company. I declare an interest.

Through increased government support for the UK's involvement in world-leading European science and technology projects—in biology (such as the Genome), in space, in nuclear (such as CERN at Geneva), in plasma physics (such as the European TORUS at Culham), and climate prediction research—UK scientists and industry are competing and collaborating with the US on equal terms. This is essential to ensure a proper international debate and open arrangements for the new scientific problems and technologies, such as climate change and global positioning satellites.

This is also the best way in which we can help the USA, which will ultimately suffer and probably make the wrong decisions if it dominates excessively the world. We have the worrying new dimension of the United States international technology policy with its threatened unilateral abrogation of international treaties of climate, and now arms, control.

In negotiating with the USA on these treaties—I again echo some of the remarks of the noble Lord, Lord Howell—it is very important that the UK Government should emphasise the industrial aspect, and particularly the support of Kyoto by many industries such as the major energy corporations. In a recent statement at Nice, a senior technology representative of Shell commented on the fact that it is the constraints of Kyoto which is driving forward the technology.

My second point on this aspect of our relations concerns the dissemination of information, especially that of commercial value. On the one hand, the USA has an admirable policy of openness about government data which greatly benefits the competitiveness of US science and industry. The UK is moving slowly in this direction through international agreements and our new Freedom of Information Act, both, of course, stimulated by the USA. However, in these respects, I believe that we still remain a poor relation, as the Royal Society has noted in its representations to the Government.

On the other hand, the US is using its international law and organisations and its own restrictive practice to inhibit certain uses of scientific data and commerce, and is even having a big impact on agriculture and medicine in developing countries. Compared to the US, there is a different approach to intellectual property rights in Europe and in the rest of the world. The Government need to emphasise and publicise these differences and to win the argument both in this country and abroad.

My third point is that if you talk to US businessmen they will tell you that their government and all their agencies are probably the best in the world at supporting their business. I am afraid that in my many interactions with UK business I have never heard a similar sentiment expressed—although I am well aware of the enormous efforts made by our civil servants in the DTI and the Foreign and Commonwealth Office in regard to many projects and companies. To indicate the difference between the UK and the USA, perhaps I may tell your Lordships a story about my dealings with a Minister in the previous government. He admonished me for suggesting that UK agencies should be working in that direction. He said, "That is the sort of thing they do in France and the United States".

So there is more to do by way of enabling our Government and all their agencies to work and to compete with the United States. The present Government have made a good start. We should be confident about their continuing success as we enter a new and difficult phase.

6.41 p.m.

Lord Wallace of Saltaire

My Lords, listening to the interesting speech of the noble and Lord, Lord Howell of Guildford, I was reminded of a remark that I greatly enjoyed made by Peter Rodman, now a member of the new administration, to a congressional committee a couple of years ago: Rather than joyously falling in behind American leadership, the Europeans are seeking to counter American hegemony". I believe that the noble and Lord, Lord Howell, would like the British to fall in joyously behind American leadership. I should prefer Britain to be a partner of the United States, not a follower—and in order to be a partner with the US we need to be a partner with our European allies.

The first few months of every new US administration are a shock to transatlantic relations. Some of us can remember the strange period when we went from Nixon to Ford, to Carter, to Reagan, all in a period of about seven years, with each new team coming over and saying, "Forget about what our predecessors told you. This is the line you have to follow". The new Bush administration has appointed a mixture of the reliable, the expert and the experienced alongside ideologues, America-firsters and the purely self-interested. It will take us some time to discover which group has emerged on top, and on which issue.

But the first signs are not entirely encouraging. Insistence that the rest of the world should closely follow the rules of international law—as in transatlantic disputes over trade—while asserting that America itself cannot be constrained by rules negotiated with others represents a claim to moral and political supremacy which none of America's allies can accept. The influence of American business over policy seems excessive: on energy and the environment, on military procurement, and on trade. Almost no one in Washington seems to recall Bush's repeated campaign promise that the United States needs to be "humble" in the deployment of its power in order to co-operate with its partners and allies. The message that British Ministers and political leaders need to carry to the new administration is that it is in America's interests to work with its allies and not to take repeated unilateral initiatives and demand that its allies follow.

My noble friend Lady Williams will say more about the new administration's approach to missile defence and the abrogation of the ABM treaty. I merely want to remark on the dangerous language used to dismiss treaties as "relics" when they no longer suit immediate political interests. If all states start to pick and choose which treaties they will continue to observe, we shall really be in trouble. The North Atlantic Treaty is, after all, 23 years older than the ABM treaty. Should that be considered a relic too?

The depth of concern over the missile defence proposals in Europe seems to me entirely rational, partly because we see in Washington a perception of the world as fundamentally hostile to the United States—irreconcilably hostile, composed of rogue states, terrorists etc. We even see, as in one submission to Congress, the idea that selling an American software company to the Dutch suggests that it might fall into the hands of a potentially hostile state.

The noble Lord, Lord Lester, will say more on American attitudes to the International Criminal Court and to international law and human rights. Again, I merely want to note the recklessness with which conservative groups in Washington are now lobbying to wreck the OECD initiative on offshore financial centres—justified on the ideological grounds that lower taxation is an existential good, that tax evasion is therefore justifiable and that the collapse of multilateral efforts to limit tax evasion will force democratic European states to move away from welfare spending and public investment. That is deeply irresponsible and aggressively unilateral. I hope that the Bush administration will resist the pressure from its Right.

Every new US administration sparks off articles in the British press about the future of the US/UK special relationship. I wish that the British could get away from the fixation about having a special relationship with the United States. America has several special relationships with other countries: with Israel—perhaps the most special of all; with Mexico—particularly important for a Spanish-speaking former Governor of Texas; with Germany—the relationship which the first President Bush deliberately emphasised as being more important than the US relationship with Britain, as transatlantic partners in leadership.

There was a very special relationship between the US and British governments which grew out of the common experience of the Second World War. But that generation retired 30 years ago. Beyond the shared language, Britain as a country attracts no special respect or attention within Washington, except through the peculiar alliance between the libertarian Right in the United States and in Britain, which attempts to capture the Conservative Party for a free market ideology which is revolutionary but which lacks common sense. What remains of the old special relationship, and of the Cold War privileged position of Britain as the unsinkable aircraft carrier on this side of the Atlantic, is a limited nuclear relationship and a group of intelligence agreements.

The UK/USA Agreement is a relic of a long-lost age: signed by the US and Britain in the immediate post-war years in the face of an evident enemy, when Britain was still an imperial and global power. Fifty-four years later, 10 years after the collapse of the Soviet Union, there is no longer a justification for Britain to accept an agreement that gives American intelligence agencies extra-territorial rights on British soil without any form of accountability to the British Parliament. That is a negation of British sovereignty far more direct than the limitations on sovereignty which Conservatives complain of as flowing from our membership of the EU.

The noble Lord, Lord Howell of Guildford, made much of the dangers of the current European defence proposals. These are modest proposals to fulfil modest Petersberg tasks. They are long overdue and they respond to American demands for the European allies to carry a larger share of the common defence burden, repeated over decades. It is absurd and against British interests for lain Duncan Smith and others from the Euro-sceptic Right to go round Washington think-tanks and congressional committees attempting to persuade the Americans that this is a dangerous innovation and should be resisted. The noble Lord, Lord Howell, says that the United States is confused. Well, his party is helping to add to the confusion.

It is rational for the United States to run down its forces in Europe, perhaps even to withdraw them over the next 10 years. Yesterday I read an interesting piece on how President Eisenhower did indeed foresee that the United States would withdraw all its forces from Europe by 1962—which was entirely rational in his terms. The European region, apart from the former Yugoslavia, is thankfully now a zone of peace which no longer needs a major US military contribution. European states should be able to manage the security of their own region on their own, transforming NATO into a broader security organisation. We cannot preserve in aspic the NATO of the 1950s. If we attempt to do so, NATO itself will become a museum piece.

So I believe in a US/UK partnership with an active British engagement. But it must be an equal partnership. It must therefore be a partnership in which we are solidly rooted within the European pillar of the alliance and can therefore make our voice heard.

Lord Marlesford

My Lords, before the noble Lord sits down, I wonder whether he can confirm whether or not I heard him correctly. Did he say that there are significant figures in the United States who are advocating, or justifying, tax evasion? If I am correct, would the noble Lord be kind enough to give the House some examples?

Lord Wallace of Saltaire

My Lords, I recommend that the noble Lord reads the article by Amity Shlaes in yesterday's Financial Times which dealt precisely with this subject and a number of articles published in the International Herald Tribune, especially one by Reginald Dale which I particularly remember over the past two weeks. There is, indeed, a very active lobby in Washington that wishes the United States to sabotage the current OECD initiative. The argument is precisely that it is entirely open and acceptable for corporate bodies to avoid paying taxation by operating through off-shore financial—

Lord Marlesford

My Lords, I thought that the noble Lord used the word "evasion". However, if it was "avoidance", I shall withdraw my intervention. Can the noble Lord confirm which word he means?

Lord Wallace of Saltaire

My Lords, we could have much discussion on the issue at another time. The line between avoidance and evasion depends partly on how international regulations are drawn. That is precisely why the United States wishes the current initiative to collapse.

6.50 p.m.

Lord Desai

My Lords, I am grateful to the noble Lord, Lord Howell, for initiating today's debate. In a sense, I was puzzled as to why he did so. It reminded me of what Lord Whitelaw once said about stirring up apathy. I do not believe that there was any problem that I could have imagined between our relations with the United States, or as regards the US/European relationship. However, by talking incessantly about there being problems, the party opposite is making the situation worse—I mean the party opposite, not the party oblique. I have learned this little bit of geometry.

I turn to the activities of the Shadow Secretary of State for defence and foreign affairs in going to Washington and saying things that are really not the kind of comments that those in opposition parties should make when they are abroad. Indeed, the noble Lord, Lord Wallace, put it much more politely than I would have done. Had we made such remarks when we were in opposition, the Conservative Party would have denounced us for betraying the nation, and so on. I believe that the Conservatives have confused the American Government about the role of the rapid reaction force. They have exaggerated its importance and then asked them to disown it.

The American administration are new; and all new administrations have a learning curve. As yet, the Bush administration are very low on the learning curve. They have not sorted out their policies, even those regarding the national missile defence. A first proper statement was made only yesterday because, quite rightly, there was a defence review—and we do not even know the results of that review. The administration are tentatively thinking about national missile defence. As far as I know, every time that anything has been said from across the water about national missile defence, the British Government have welcomed it. We have not opposed it; indeed, we are willing to consider it.

Therefore, I do not know why this alarm and despondency is being spread around by the noble Lord, Lord Howell. I do not believe that there is any problem about national missile defence, as between us and the Americans. I also believe that there is no problem with the rapid reaction force. Again, there are clear accounts of where the joint planning will be carried out—for example, whether it will be at national or at NATO level. There was a long article on the subject in the Financial Times just two days ago, which I recommend to noble Lords. I do not have time to go into all the details involved.

We must stop exciting things that are actually not worth disturbing. The relations between the US and the UK are good; indeed, they continue to be good. What we need is a little cross-party co-operation in order to keep them good, rather than this unilateral attempt to go across the Atlantic and undermine, so to speak, the stance of the British Government who are in a difficult position. I shall tell noble Lords why I believe that to be so important. Given globalisation, about which the noble Lord, Lord Howell, knows a great deal, it is most important that relations between the United States and the European Union should not in any way be derailed. We shall need much co-operation in the forthcoming round of the WTO talks. We cannot fall apart. If we do so, the pace of globalisation will be altered. It is not in our interests at any stage to start exaggerating the differences between the United States and the European Union or those between the US and the United Kingdom.

If we stop the process of WTO enlargement, expansion and deepening, there are forces in the United States, in Europe and elsewhere that do not like globalisation. They will take the opportunity to stop the process. As I have said several times, I strongly believe that globalisation is the best hope for the poor of the world. Therefore, this is more important than narrow party interest. The US and the EU must stay on very good terms with one another, despite all the quarrels that they have about hormone beef, bananas, and many other matters. We must stay together.

The United Kingdom has a very good role to play precisely because it has strong ties with the US—I shall not use the expression "special relationship"—and because we are an important member of the European Union. Therefore, we have formed a sort of bridge. Again, I believe that we should emphasise the variety of ways in which the UK Government can play a crucial role in building the bridge and in keeping the US and EU glued together in a trade partnership. That will be the most important element for the WTO. If that is lost, things will get very bad. The world was once globalised, and then it de-globalised; the result was the First World War. We cannot afford any kind of battles now because the situation is much worse. I believe that it is best to emphasise friendship and cooperation rather than alarm and despondency.

I should like to make a few further remarks. I turn, first, to slowdown. I do not quite agree with the noble Lord about the US slowdown. The first quarter figures of US GDP show that perhaps there has not been a slowdown. Again, I am not normally a friend of central bankers, but I believe that Alan Greenspan has read the situation correctly in this instance. His aggressive interest rate cutting, somewhat followed by the MPC here, was a good move. The European Central Bank can do whatever it can do; that is not the issue. However, I believe that the current monetary policy of the United States has succeeded in averting a slowdown. That is good.

I see from the Clock that my time is running out, so I shall conclude by making one point. Yes, there is a good deal of common culture between us and them. I welcome that fact. However, as friends, we should also be critical in those values; for example, I do not believe that we share the President's love for capital punishment. I certainly do not share it. In terms of human rights protection, we should point out to the US that that is a violation of the Universal Declaration of Human Rights. It is our right to say so. I shall stop on that kind of conciliatory note.

6.59 p.m.

Lord Howe of Aberavon

My Lords, it is interesting to follow the noble Lord and to identify the very large area of common ground between him and my noble friend Lord Howell as regards his opening speech. The noble Lord was quite right to warn against hysteria and over-reaction, especially to a new government in their post-campaign stage. He was quite right also to stress the huge importance of the transatlantic inter-continental partnership. I would not, of course, endorse everything said by the noble Lord, Lord Desai; indeed, he would be astonished if I were to do so. However, I should like to start off on a conciliatory note.

I move on to my central point, which really amplifies one made by the noble Lord, Lord Wallace. I refer to the so-called "special relationship", about which the noble Lord, Lord Desai, also spoke. It is of huge importance for us not to mislead ourselves by having false expectations of that phrase, as is so often the case. Lest that should seem unfriendly, I should stress that it is certainly not my intention to be so.

I have many interests to declare. I am on the advisory councils of two American financial institutions, one university and one law firm. They all emphasise the links between our two countries. Indeed, the law firm link is one of the strongest because of the strength of the Anglo-Saxon legal tradition which we share and which has brought great benefit to many other parts of the world. Again, the English language and our common culture are of enormous importance. There are other matters that are of diminishing importance, as the noble Lord, Lord Wallace, rightly identified. The nuclear relationship, which is crucial to us for as long as it lasts, is of diminishing, if any, significance to the United States. The intelligence relationship is much more important to us than it is to the United States.

I want to emphasise that none of these links gives, or should be allowed to give, us any assurance of a huge special clout in our relationship with the United States on major issues which are of importance to its national interest. The early warning sign which led to some understanding of that occurred way back in the Suez crisis. Colleagues in the more recent administration of which I was a member will well remember the impact upon our position of what happened in Grenada when there was no doubt whatsoever that not only was there no effective consultation but it was consciously avoided. The special relationship did not count for anything then. Therefore, it is important for us not to overrate our own standing, as we may be tempted to do.

The real truth about the transatlantic UK/US relationship was well identified way back in 1962 when Harold Macmillan set out in a long pamphlet his reasons for launching the first attempt to join the European Community. He stated: If we remain outside the European Community, it seems to me inevitable that the realities of power would compel our American friends to attach increasing weight to the views and interests of the Community, and to pay less attention to our own". He stated that if we followed that path we would lose influence both in Europe and in Washington.

The same point has been carefully and sensibly repeated not by all American ambassadors to this country but certainly by Ambassador Raymond Seitz, who emphasised the central point that, America's transatlantic policy is European in scope. It is not a series of individual or compartmentalised bilateral policies … 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". That seems to me to be the central argument we must understand which shapes the hugely important and continuing UK/US relationship.

There are, of course, times when this impression appears to have been altered significantly. Sometimes particular statesmen in Europe acquire a standing in the United States which appears to shift the intercontinental perception. I suppose someone like Hans-Dietrich Genscher, who was in office for years, by his sheer experience enhanced German input during his period in office. There is no doubt whatsoever that the enduring experience, achievement and personality of my noble friend Lady Thatcher certainly heightened Britain's impact during her period in office.

Some might have cherished the illusion that the arrival of the present Prime Minister at No. 10 heralded the development of a new personal relationship, partly because of the Blair/Clinton relationship and partly because of the sheer scale of his electoral success. However, expectations of that kind have been increasingly disappointed on both sides of the Atlantic. I was struck by an observation of the American author, Owen Harris, in an article in his journal, The National Interest, where he describes the Prime Minister as a kind of British Gorbachev, in that he believes that statesmanship consists of taking flying leaps into the future without any clear idea of where one will land". That is paralleled by the rather extraordinary way in which he set off in almost unseemly pursuit of President Putin in Russia and the fluency with which he talks of the European Union as a super-power. One has to be realistic when trying to build these relationships.

I emphasise the most important point in the American/European relationship which we need to develop—here to some extent I differ from my noble friend—and that is not to point to the difficulties in developing the security and defence initiative and not to identify the insurmountable problems of developing what was originally an Anglo-French scheme for a rapid reaction force, but to emphasise the overwhelming need for us to succeed in that in a way that is acceptable to the United States.

My noble friend was entirely right to draw attention to the points which are causing concern in the United States. However, as my noble friend Lord Hurd pointed out in a speech about a month ago, if we can develop that project it will enable us above all to galvanise the quality and quantity of European input into its own defence. There is tremendous American interest in that. Of course we must do it in a fashion that is NATO friendly and which can be made to work within the alliance. The command structures and the emergency plans must be worked out. There must be an agreement which will placate the Turks.

The project is exactly the kind of mechanism through which we could and should fulfil our role in the transatlantic relationship, using the United States/United Kingdom relationship to strengthen the capacity of Europe to come together. I sometimes despair of the extent to which our European partners fall short of our expectations in that respect. However, that is no reason to give up and conclude that we should abandon the project because the Americans do not like it. It is in their and our interests that it should succeed and it is an important facet in the US/UK relationship within our European framework.

7.6 p.m.

Lord Lester of Herne Hill

My Lords, it is a privilege to follow the wise words of the noble and learned Lord, Lord Howe of Aberavon, with which I entirely agree. I am delighted by the prospect of his being joined in this House by his much better half. We shall soon hear her independent wise counsel.

I cannot be accused of anti-Americanism. Relations between my immediate family and the United States are close and intimate. We have all benefited from graduate education there, thanks to the generosity of American foundations. I have returned there again and again. When Roy Jenkins was Home Secretary and I was his Special Adviser in 1974, we visited the States together to learn about equality legislation, freedom of information legislation and policy on criminal justice.

What we learned was valuable. It was derived from a public philosophy shared on both sides of the Atlantic by those committed to democratic government, the effective protection of human rights and the rule of law, internationally and nationally. It was a philosophy exemplified by the way in which great Justices such as John Marshall, Holmes, Harlan, Brandeis and Cardozo developed judicial review and the values of the American Bill of Rights and English common law, protecting the individual and minorities against the tyranny of majorities and the abuse of power by public officials.

Those civic values continue to inspire liberal democrats of whatever party everywhere and are shared by our European allies. But the vicissitudes of elective, politics have given effect at present to a different set of values in the governing class in the United States—those exemplified by President Bush's administration and by the British Conservative Party under current management. Their values include a troubling failure to recognise that the most pressing and difficult problems that beset the world do not respect national frontiers; that the problems of nuclear proliferation, over-population, energy depletion, environmental degradation, racism, terrorism, drug trafficking, organised crime and abuses of human rights require supranational co-operation and supervision and effective international safeguards and remedies.

Nothing exemplifies the gulf between the two public philosophies better than the debates about the International Criminal Court. President Bush's administration refuse to ratify the statute of the court and the British Conservative Party bizarrely opposes UK ratification unless and until the United States ratifies the statute.

There are enlightened and informed voices in the United States that need to be heeded. The American Bar Association has called for the States to ratify and to enact appropriate domestic legislation. Mr Monroe Leigh, former Legal Adviser to the State Department and to the Defence Department, wrote on 21st February to the Chairman of the House Committee on International Relations to rebut the views expressed by a number of distinguished former Cabinet officers. His letter was supported by 10 former presidents of the American Society of International Law including its honorary president and former United States judge on the International Court of Justice, Stephen Schwebel, who tried to teach me what I know of public international law at Harvard Law School.

The joint letter explained that the testimony opposed to the creation of the International Criminal Court, suffers from a fatal misconception as to fundamental principles of international law. This is the assumption that if the opponents of the ICC succeed in preventing the International Criminal Court from coming into existence, or even in preventing the United States from becoming a party, they will have saved American officials and service members from trial in a foreign court if charged with one of the crimes within the limited jurisdiction of the proposed new court: i.e., genocide, war crimes and crimes against humanity". The letter continues: Seldom in the course of public discussion of a great national issue have so many great and good former officials been so misinformed about fundamental principles of international law. Without some international agreement to the contrary, the American airmen shot clown, for example, while carrying out a bombing mission over foreign territory, will under customary international law be subject to the territorial jurisdiction of the target state. The point we make is that unless there is agreement to the contrary, every high American official, whether military or civilian, when that official enters the territory of a foreign sovereign, is subject to its jurisdiction if he or she violates its laws. This is true now; it was true when the twelve distinguished signatories served their country in the past. It will be true in the future whether officially serving the United States abroad or not. The same is true, incidentally, for every American tourist travelling abroad and reciprocally for every foreign tourist visiting the United States. We believe the American negotiators have done an outstandingly effective job in negotiating a Treaty which protects both the national security interests of the United States and the individual rights of American nationals, including those in military service abroad. We dissent only from the continuing attempts of the U.S. negotiators to obtain agreement for the exemption of nationals of the United States and of other non-parties from the jurisdiction of the proposed court. This exceptional demand has been repeatedly rejected by our principal allies in NATO, many of whom also have troops at risk outside their homelands. The persistence of the United States in pressing this demand for exemption, can only exacerbate relations with our allies and undermine the cohesion of the alliance". After some further argument, the letter concluded that, if and when the new Court exercises its jurisdiction it must do so subject to a list of due process protections for the accused which are at least as comprehensive as the American Bill of Rights—in certain cases even more detailed and specific. For all these reasons we believe the Treaty is consistent with the security interests of the United States and the due process interests of U.S. citizens. Accordingly, we as current and former Presidents of the American Society of International Law (as well as the current Honorary President)—but speaking only in our personal capacities—favour U.S. acceptance of the Treaty without change in the text". Let us hope that this wise and well-informed advice is heeded by American Republicans and British Conservatives, in the interests of the international rule of law and effective protection of the peoples of our troubled and dangerous world.

7.13 p.m.

Baroness Crawley

My Lords, I, too, am grateful to the noble Lord, Lord Howell of Guildford, for initiating this most important debate in which we can examine crucial elements of our relationship with the US. In that relationship, I am clear that the United Kingdom operates on the world stage as a leading and fully paid up member of the European Union. Yet, unlike the noble Lord, Lord Wallace of Saltaire, I am not defensive about calling it a "special relationship". I believe that we have a cast-iron, industrial-strength relationship—or perhaps we should call it a "partnership"—with the United States and that we shall always continue to do so. My daughter's recent wedding in San Francisco's City Hall has given me a whole new take on the phrase "special relationship".

As the noble Lord, Lord Desai, and the noble Lord, Lord Howell, said, our shared history creates the strong ties of kinship between Britain and North America which are an immense asset to us in the modern world. That has been recognised and acted on by our Government. As the United States and Britain, we are each other's closest allies, but our value as an ally to our friends in Washington is in direct proportion to our influence with our partners in Europe.

I do not accept, and never have done in my 15 years in elected European politics, that our European identity diminishes our Britishness; neither, I believe, does it diminish our ties with America—in fact, quite the opposite. Yet there are those who would seek to drive a wedge between ourselves and our European partners in the dynamics of that cast-iron relationship that I believe we have with the United States. Indeed, some Eurosceptics now argue that Britain's destiny lies outside Europe as part of the English-speaking world and as a member of NAFTA. The reason that over 4,000 US companies have located here in Britain is because they want to export to Europe. If they wanted only to sell to NAFTA, they would have stayed at home. Our strong relationship with our EU partners enhances the special relationship with the United States.

The noble Lord, Lord Howell, sought to raise as a problem the question of European defence. I disagree with the thrust of his argument although I accept his remarks about the anxieties which may be prevalent in the US at present. As we know, it was agreed at Nice to give the European Union the capacity to conduct military operations in response to international crises when NATO is not engaged. The report agreed at Nice explicitly states that this does not involve the creation of a European army. Therefore this latest myth—that the European defence will weaken NATO and undermine our relationship with the United States—needs exploding. The fact is that better European capabilities will strengthen the contribution of the European countries to NATO as well as the EU.

I touch on another aspect of our US/UK relations. There are those politicians who claim to have Britain's best interests at heart. Yet we are told that they have recently been criticising—some might even say bad-mouthing—this country to anyone in the United States who will listen to them. As we are all too aware, the tourism industry in some of our regions is under severe pressure and jobs are under great threat because of the foot and mouth outbreak. I chair the West Midlands Regional Cultural Consortium. This week we received a report of the current difficulties that face the tourism industry in my region. It makes sober reading. We need our American visitors to keep coming to our great attractions and our historic sites such as Stratford and Warwick Castle. Those visits have become part of the American experience in our country. The last thing this country needs is political representatives, who should know better, warning off American visitors, claiming that our countryside is closed, our food is not safe and our country is washed up.

Finally, I share the unease expressed by many noble Lords about some aspects of the first 100 days of the Bush administration. As well as the abandonment of the Kyoto Protocol, there has also been a rolling back of work-safety measures as well as policy developments which favour large corporations at the expense of the little man and woman. These measures are not good news to many of America's European allies. But we must also realise—here I agree with the noble Lord, Lord Howell—that US policymakers have their own frustrations with some of those allies. I refer, for instance, to US perceptions of foot-dragging on enlargement; and the distinctly underwhelming military capabilities of the EU countries, as evidenced during the Kosovo air campaign, to name but two factors. As the noble Lord, Lord Howell, said, Britain and America need to open up an even stronger dialogue to overcome those points of difference about global norms and governance. I am optimistic that there is good will on both sides for that to happen.

7.20 p.m.

Lord Wright of Richmond

My Lords, I, too, am grateful to the noble Lord, Lord Howell, for giving the House this opportunity to debate perhaps the most crucial aspect of the Government's current foreign policy: namely, our relations with the new United States administration.

Those who have heard me speak in previous foreign affairs debates will not be surprised if I concentrate on a subject that deserves more attention than it sometimes receives in the House—the situation in the Middle East, and most particularly the highly dangerous situation in the Arab occupied territories of Palestine.

Having spent two years of my diplomatic service career in Washington exchanging views on the Middle East on a daily basis with the United States administration, I know how closely our two governments have always kept in touch about that part of the world, which has such vital implications for our mutual interests, even if our approaches have not always been closely in line.

I hope that the Minister will be able to tell us about the more recent contacts and discussions between our two administrations at official and ministerial level on the current situation in the Middle East since President Bush was inaugurated. The House has had several opportunities to hear from the Government and to debate the respective policies of the United States and British Governments towards Saddam Hussein and the question of sanctions against Iraq. We also had a useful opportunity last week to discuss the current situation in Iran. I therefore hope that the Minister will be able, on the basis of contacts and discussions with Washington, to give us some reasons to hope that the United States administration is fully seized of the serious dangers in the current situation in the occupied territories and that it is readier to use its influence in the Arab-Israel dispute than it seemed to be in the first few weeks after the inauguration.

I hope that the Minister might also be able to tell us something about Mr Shimon Peres' current diplomatic efforts and give us her assessment of whether they are likely to bring some alleviation to the suffering of both sides from the violence that has erupted since Mr Ariel Sharon's infamous and provocative visit to the Dome of the Rock last September.

The Minister and her predecessor have reiterated on several occasions in the past few years the view of Her Majesty's Government that Israeli settlement policy constitutes a serious infringement of international law. I hope that she can tell us something of our exchanges with the United States administration on this subject, given the appalling infringement of human rights that the continued presence and expansion of those settlements has caused for their Palestinian neighbours. I have often wondered whether those American Jews who become Israeli settlers in the Occupied Territories have any concept of the illegality of the settlements that they are helping to expand or of the real dangers that Israeli settlement policy under successive governments poses for them. As long as those settlements continue to expand, what sort of future can their children or their grandchildren expect?

We should not underestimate the deep resentment and anger that the repeated ill treatment and expropriation of Palestinians in the Occupied Territories is causing among even the most moderate Arabs in Palestine. Mr Sharon is on record as saying that the security of Israel is his first priority. That is understandable. It must be a matter of deep concern to all Israel's friends and supporters. However, I question whether Israel's security is likely to be enhanced by the policies and the systematic breach of human rights that the Israeli Government have been pursing since Mr Sharon became Prime Minister. Is it not time that Mr Sharon's supporters in Washington—who are the only people who can exert any effective influence on him—tried to persuade him that there is no greater threat to Israel or to her settlers, now and in the future, than the continued expansion and development of settlements in the occupied territories and the wanton destruction of Palestinian farms and orchards, often under the slender pretext that olive trees, many of which have taken generations to become profitable, are being used to hide terrorists?

It is worth noting that there have been a few encouraging signs in recent weeks. First, the United States Government have been unusually prepared to describe the recent Israeli action against Gaza as excessive and disproportionate. Secondly, Yasser Arafat is now showing genuine determination to try to reduce and restrain the violence on the Palestinian side. I strongly believe that unless and until the Israeli Government take the admittedly difficult political decision to Freeze any further Jewish settlement of the Occupied Territories, and, hopefully, to withdraw, there is little hope that Yasser Arafat's calls for moderation can be effective.

I shall be interested to hear the Government's views on those issues and whether they see any prospect of getting Washington to persuade the Israeli Government that their present settlement policy is doing nothing to further security in the West Bank and Gaza, or even in Israel itself. I believe that it is having the opposite effect. The noble Lord, Lord Howell, emphasised the importance of resisting the tendency to anti-Americanism. In the same vein, I hope that my remarks will not be regarded as anti-Israel. I sincerely believe that Israel's own interests argue for a change of policy.

7.27 p.m.

Lord Waddington

My Lords, it is a great privilege to follow the noble Lord, Lord Wright. I enormously respect his intellect and his expertise. However, I shall not speak about the same subjects as he has dealt with. I shall talk about two very different matters—Kyoto and European defence.

We all read the papers over the weekend. The polls seemed to show that, in the eyes of the American public, the President has made a good start. I suspect that they like a man who does not flannel and who says what he believes rather than what he imagines people might want to hear. We should be pleased, because President Bush's economic policies, particularly his determination to cut taxes and to cut government spending as a proportion of GDP, offer the best hope of preventing America drifting into recession, to the disadvantage of us all.

However, there are some dangers. An EU wedded to a mixture of socialism and corporate capitalism and an America imbued with the spirit of free enterprise are not natural soul mates. Disagreements could fuel the long-standing European resentment of American economic and military dominance, which in turn could encourage America into a damaging isolationism—although I sincerely hope that it will not.

There have been plenty of recent examples of anti-Americanism here as well as in Europe, warping judgment and souring debate. It surfaced in the other place, where some truly infantile remarks have been made about the President and Kyoto. In 1997, the Senate voted 95 to nil against even considering ratification of a Kyoto deal that exempted 80 per cent of the world. Today, Democrats and Republicans alike would be even less likely to give the green light to Kyoto, because, following spectacular economic growth in the past few years, it would mean America having to cut emissions by more than 40 per cent, which could not be done without catastrophic effects on the American and the world economy.

It is absurd to talk of the President giving way to pressure from the oil industry when in fact he was facing up to the political arithmetic and recognising that to attempt to implement Kyoto when America is facing an economic downturn and an energy shortage would be an act of supreme folly.

Therefore, now that the President has faced facts, everyone can get to work in America to develop an alternative energy strategy, allowing for growth and conservation. Now that the administration has made clear that it is not turning its back on the whole issue of global warming but will attend future talks on the subject, what is needed in Europe is less self-righteous anger and more appreciation of America's difficulties and encouragement to her to find a way forward.

Neither has the proposal for a European rapid reaction force helped relations between Europe and America or, thanks to the Prime Minister's leading role in the matter, relations between Britain and America. Shortly after the initiative was unveiled, Mr Cook insisted that, the American President, Defence Secretary and Secretary of State have all warmly endorsed the initiative". Since then, he has continued to assert that the administration is quite happy. However, when he says that, he is inviting us to ignore completely statements of concern made time and time again by people in authority in America. Concern there indeed is; confusion there indeed is; and it has not been generated by shadow Ministers visiting Washington.

I remind the House that within days of Mr Cook's original statement, the then Defence Secretary, Mr Cohen, was making plain his concerns. His successor, Donald Rumsfeld, has repeatedly raised worries that the rapid reaction force will "endanger NATO", "inject instability" and "put at risk something special".

Although our Government have asserted repeatedly that the force would not be independent of NATO and would not act without the agreement of NATO, and although Mr Blair personally assured the President at their meeting in America that there would be a joint command and that the planning would take place within NATO, all those statements have been flatly contradicted not only in statements by European leaders but by the plain words of Annex VII of the Presidency report on European security and defence policy after Nice. I remind the House that that refers to, the development of consultation and co-operation between the EU and NATO in full respect of the autonomy of EU decision-making". to, the EU keeping NATO informed of the general progress of an operation"; and to, the entire chain of command having to remain under the political control and strategic direction of the EU throughout the operation". I have no doubt that the Americans would like the countries of Europe to pay more for their own defence and peace-keeping. But they know full well that France's policy has long been to undermine American influence in Europe and that many leaders in the EU believe, as does President Chirac, that—I quote the President— the EU cannot fully exist until it possesses autonomous capacity for action in the field of defence". It is a sad and sorry tale. One can only hope that wiser counsels will prevail and that this or another government will work to bring about a change in what at present is bound to damage NATO. However, currently things seem to be moving quickly in the wrong direction with, first, the appointment of a general from Finland—outside NATO—to chair the EU's permanent military committee; secondly, the French Chief of Staff, General Kelche, saying that the force must be declared operational by the end of the year, even if agreement is not reached with NATO, and that it must have its own planning staff; and, thirdly, General Wesley Clark reporting to the Senate Foreign Relations Committee that talks are currently taking place back-stage in the EU in relation to the EU considering refusing to share crucial information with NATO and having its own command and staff organisations. No one can be happy about any of that.

7.35 p.m.

Lord Hooson

My Lords, although I welcome the initiative of the noble Lord, Lord Howell, in tabling this Motion, I believe, as he knows from my views about the matter, that it would have been more valuable to consider the relationship, and the developments in that relationship, between the United States and the European Union. In my experience, today that is increasingly the way that most Americans consider us—that is, as part of the European Union.

There is not the slightest doubt in my mind that a great feeling of affinity exists between the United States and Europe. Obviously, we have areas of mutual interest. However, I believe it is fair to say that, although we emphasise the special relationship between our country and the United States, other parts of Europe are also expressing their special relationship with the United States. Of course, we have the additional advantage of sharing with the US a common language and a common background. In particular, the basis of American democracy and civil rights lay in the knowledge of, and often the reaction against, what had developed here.

The Library of this House obtained for me the tabulation of population by selected ancestry group and region from the American census. The American census was taken in 1990 and the figures were collated. Another census took place recently, but the figures will not all be collated and published until 2002. However, according to the information supplied to the Library by the American Embassy, it is not thought that many changes will occur, apart from a considerable increase in the Hispanic ancestry group.

It is interesting to look at those figures because it gives us an idea of the basis for the affinity between America and Europe. It will not surprise some people to know that by a long way the largest ancestry group is the German one. In the census, the figure for German ancestry was found to be 58 million, far out-distancing, for example, Italian ancestry at 14.5 million and Irish ancestry at, surprisingly, nearly 39 million.

So far as concerns our country, very few people put down their ancestry as British but many more listed it as English. There were also entries for Scottish, Scottish-Irish, which I presume to be the Ulster connotation, and Welsh ancestry. If those figures are added together, they do not begin to reach the figure for German ancestry. However, added together, they create the second largest group at approximately 47 million people.

When one looks at the table, one sees that there is a relationship with every country in Europe. From Scandinavia to Russia down to the Mediterranean, all countries are represented in the ancestral groups of the United States. That, of course, is the basis of the great importance of the union and alliance between North America—indeed, the Americas—and Europe.

Perhaps I may address the question of security. Years ago when I was the defence spokesman for the Liberal Party in another place and when I received valuable advice from the noble Lord, Lord Chalfont, who, in those days, was not in the House but gave me guidance, we used to regard the Atlantic Alliance as having two pillars: the North American pillar, which was already established, and the European pillar, which everybody hoped would be established. Eventually, the goal became the achievement of a balance between the two pillars; they would both contribute in important ways to the security of Europe and the United States. Although the American pillar is in place, we have singularly failed in Europe, whether as independent sovereign states or as the European Union, to create that second pillar. It is high time we did so.

My second point relates to trade. The EU is eventually going to become—indeed, it already is—a huge economic power. It will in time rival the Americans, although there is no rivalry as such about it. It is essential to establish the basis of the relationship between the United States and the Americas, as she seeks to create a free trade area in her region. We have created a free trade area in Europe. The chances of success for a peaceful, established and secure future for the world depend on the alliance between the United States, which will lead in the Americas, and the European Union, which will lead in this region. Our contribution must be to ensure that the European Union is effective. If we fail to support the basis of the relationship and the affinities that exist between the United States and Europe, we shall have let the world down.

7.42 p.m.

Baroness Park of Monmouth

My Lords, I, too, am very grateful to my noble friend Lord Howell for initiating this most interesting debate. I am also grateful to the unknown person who has conferred "Lordship" on me!

Both the Foreign and Commonwealth Office review and the defence policy review for this year recognise that Britain's strategic partnership with NATO remains fundamental to the interests of Britain and the United States and that NATO and the continuing engagement of the United States in Europe continue to be the primary means of ensuring British and European collective security and defence.

With the strong support of Harry Truman, General George Marshall, Dean Atcheson and our own Ernest Bevin, NATO was formed after the Soviet Union had rejected the Marshall Plan for herself and her subject peoples, had invaded Czechoslovakia and had been prevented from seizing Berlin by the 323-day American and British airlift. Since that shield was created, we have had peace. NATO guaranteed the marriage of defence and détente. West Germany was brought into NATO as early as 1954.

I had the honour to serve for a time in SOE instructing and briefing a special force, the Jedburghs, which was created to jump into occupied France before, during and after D-Day to support and direct the efforts of the Resistance in Europe. Many later operated against the Japanese in the Far East. The Jedburghs were three-man teams—two officers and a wireless operator—of which one was British, one was French, Belgian or Dutch and one was American. We have met at intervals ever since and we are still close friends.

NATO has created rather similar bonds. Lord Ismay once called it: The decent club where friends can fight and even agree". I have gone on having that relationship with Americans throughout my life. However, we should never take friends for granted. There is now, as the noble Lord. Lord Hooson, said with far more detail than I can offer, a very significant Hispanic element in the United States. It is, however, largely a Latin American Hispanic element, which has no special affinity with the Anglo-Saxon or even the European world and which shares neither language nor legal and other traditions with us. The growing number of Chinese, Vietnamese, Korean and Japanese Americans look to the Pacific, not across the Atlantic. Both their economic interests and the potential threat from a new and aggressive superpower lie there. This is not therefore the moment to take American support for, or even interest in, our policies for granted. The special relationship, though not unique, does exist, but it is being tested now, not least by the Russian strategy in Europe and the evident wish of both the French and perhaps the Germans to assert the autonomy of the new European force.

I shall not cite the abundant evidence—my noble friend Lord Waddington did so to great effect—in the various Council annexes of the EU intention to plan, direct and operate independently of NATO. Unfortunately, those who created the text did not take the admirable advice that was given when the Atlantic Treaty was framed; namely, that it should be, written in such simple language that even a milkman in Omaha can understand it". I fear that the newly appointed Finnish head of the EU military committee also seems to suffer from a certain lack of understanding.

What concerns me, and is likely to concern Washington, is the quiet, unpublicised and virtually unacknowledged special relationship that the EU high representative, Mr Solana, is building under the umbrella of the common strategy on Russia with Russia precisely in the area of European security for which the special status of Russia with NATO under the Founding Act was designed. Solana has proudly claimed that that is a very intensive and important relationship. At the EU summit in Paris in October 2000 the Russian press reported that Solana, Presidents Chirac and Putin and Señor Prodi approved a document in which Russia expressed readiness to co-operate with the EU on defence and security; they thought that it was important to create a single security system in Europe. The causes that gave rise to NATO no longer existed. Ivanov, the Russian spokesman, added that the EU and Russia share the same views on the American proposals relating to the ABM treaty and the NMR.

The Minister of State did not, when asked, remember anything about that agreement but later wrote to confirm that we had been consulted. He said that it was a declaration and, a purely political text which imposes no legal obligation on either the EU or Russia—it meets the objectives that we should seek to involve potential partners in European crisis management, not least Russia, by engaging in dialogue on European security issues". It was published as a joint declaration but does not appear among any of the annexes to the Treaty of Nice.

The declaration states—I quote only part of it—that: In order to give substance to the strategic partnership between the European Union and the Russian Federation … we decided to institute specific consultation on security and defence matters at the appropriate level and in the appropriate format". It stated that an aim was: To develop strategic dialogue on matters particularly in regard to security which have implications for the Russian Federation and the European Union". It also referred to the aim to: Extend the scope of regular consultation at expert level on the issues of disarmament, arms control and non-proliferation, and promote cooperation in operational crisis management". The implementation of those decisions will be a priority.

Apart from crisis management, those are precisely the issues for which NATO created the Founding Act to provide a mechanism for discussion with the Russians. The EU is thus enabling Russia both to make NATO's role redundant and to open a door for Russia to achieve access to intelligence and strategic planning that NATO knows how to contain but which the EU does not. Russia is entitled to extend her influence in Europe in every way in which she can, but does anyone doubt that her object is to bring about the withdrawal of the US from Europe and to frustrate US policy? She will use the relationship with the CFSP and with Solana to advance her view on the NMR as a European view. Arms control and non-proliferation are on the agenda. Robert Schuman said of NATO when the Atlantic Treaty was signed that: Only a potential aggressor would have any grounds for considering itself threatened by the Treaty". I submit that that is relevant to the present Chinese and Russian opposition to the NMR, which is also a defensive mechanism, as I believe Her Majesty's Government have recognised.

What will be on the agenda at the next EU-Russia summit in Moscow in May, and what happened at Stockholm? The Russians will lose no opportunity to drive a wedge between the EU and the US. Can we afford to allow Mr Solana's initiative to pre-empt or to commit us to—or at the least to associate us, as a member of the EU, with—policies that could have as a result the undermining of NATO? Who will be representing the EU, and therefore us, in the discussions about arms control and arms proliferation with a country which is still selling nuclear weapons and know-how to potential aggressor countries and which has still not disposed of one ounce of the 40 tonnes of chemical weapons that it holds?

It will not be surprising if the US—without whose support, particularly in the realm of intelligence, we shall be in great difficulty—should begin to consider withdrawal from the affairs of Europe. Already the same people who led the campaign against the stationing of SS-20s in Europe many years ago are beginning to emerge once more. We have no Sakharov today to warn us.

7.50 p.m.

Baroness Maddock

My Lords, as someone who has had an active interest in energy efficiency and the role it plays in protecting our environment for over 30 years, in this important debate I want to concentrate my comments on how our relationship with the US can proceed in the light not only of the breakdown in the climate change talks in The Hague last year, but also of the more recent comments by President Bush on the Kyoto Protocol.

I start from a belief that everyone should recognise the fragility of our environment and the impossibility of maintaining current lifestyles without damaging it. I believe that governments have a responsibility to set a framework to enable individuals to respond to the need to reduce pollution and so protect our planet. But as has already been alluded to by my noble friend Lord Lester of Herne Hill, such matters cannot be contained within national boundaries. We therefore need to work with others to introduce clear environmental objectives into all international institutions to ensure that we have action across the globe.

There have been climate cycles in the past. But there is evidence accumulating to suggest that the changes we have been experiencing are occurring faster and on a larger scale than any climate cycle in recent times. The chairman of the Intergovernmental Panel on Climate Change now says that scientists are convinced about global warming by a majority of 98 to two or 99 to one. It is unfortunate that President Bush seems to agree with the one to two per cent. Since the US, with barely five per cent of the world's population, is responsible for one-quarter of its carbon dioxide emissions, that is serious. One of the most devastating effects of global warning is the threat of flooding. It is somewhat ironic, therefore, that one of the areas under threat is Miami—the state that returned President Bush to the presidency.

When Kyoto was originally negotiated in 1997, each industrialised country agreed to meet reduction targets, based on 1990 emission levels, and set the date of 2010. The world target was 5.2 per cent. The US agreed to reduce by 7 per cent and the UK by 12.5 per cent. Since that time many of the major players have produced their programmes as to how they intend to meet their targets. We produced ours last autumn and agreed to cut greenhouse gases by 23 per cent. But as has already been alluded to, the previous US administration did not endorse any similar type of programme. Now there is a forecast in the US that there will be a 40 per cent rise in its emissions by 2010.

Many people have spoken about the special relationship between the UK and the US and how it has changed over the years. But with others in the Chamber I believe that, in the matter of Kyoto, our relationship with Europe is important in trying to bring about a change. I am not saying that the EU can save the world. But it is big enough to start the cycle of negotiation turning in another direction on Kyoto.

I want to highlight three main areas. First, President Bush believes that implementing the Kyoto Protocol will damage the American economy. Not for the first time I am grateful to the research done by Andrew Warren, director of the Association for the Conservation of Energy. His research shows that America could be every bit as wealthy today, if not more so, if it ensured that every time a new product was bought or a new building erected and refurbished, the most energy-efficient option was adopted. On average, Americans waste one dollar in every three that they spend on buying fuel. I am advised that consumption has been rising in America and it is now double for every person compared with Europe. If we cut out the profligacy, we would have a more resourced, productive society; fossil fuel consumption would be reduced and it would be relatively simple to meet the Kyoto criteria.

Secondly, we should be trying to persuade the new government in America not to act too hastily in these areas. Already they have announced a 33 per cent reduction in their energy efficiency programme. That is disappointing because their own government General Accounting Office showed that over the past 20 years or more there has been a fourfold saving from any investment made in those areas.

Again—this too was alluded to earlier by another noble Lord—President Bush declared an energy crisis in America, pointing in particular to California and the availability of electricity. Yet he is poised to block new rules designed to save electricity used by air conditioners and washing machines. Those new standards had been mandated by Congress and developed with manufacturers. We also hear that he is considering allowing millions of acres of US public land and offshore waters that were previously off limits to be opened up to drillers.

Thirdly, I come to the proposed meeting in Bonn in July at which we and others intend to try to keep the Kyoto Protocol on the road. It is important to persuade the US Government that if they have views on this matter, they must table them well in advance of that meeting. If they bring them up a few days before the meeting we shall end up with the same debacle that we had at The Hague.

I hope that the Government are broadly in agreement with those views and look forward to hearing from the Minister.

7.57 p.m.

Lord Chalfont

My Lords, it is not just a convention to thank the noble Lord, Lord Howell of Guildford, for initiating this debate. It is a most important debate and has been, for the most part, an extremely good debate. I am only sorry that, for a debate of this kind, it is such a thin House. It is a sad reflection on our priorities that more people attend this House to talk about a football stadium than about one of the most important parts of the whole of our foreign policy.

I set out my stall at the beginning. I regard the United States as our closest, most important and most powerful ally. Anyone who takes a realistic view of the world power structure would be unwise to ignore the fact that this ally of ours is the world's only superpower. Let us not despise entirely the principles of realpolitik; this is our most important ally. To suggest that we have no special relationship is a misunderstanding of what "special relationship" means.

I shall return to that at the end of my brief remarks. But at this point I want to say this. If there is a special relationship in no other field, there is a special relationship in the world of intelligence—one of the most important elements in the formulation of foreign and strategic policy. We have a relationship with America in the field of intelligence which no other country in the world shares. Those of us who have a taste for recent history need only look to the battle for the Falklands to realise that without American intelligence, and without our relationship with the Americans, that campaign might have gone a very different way.

The noble Lord, Lord Howell of Guildford, made a reference to anti-Americanism. It is undeniable that a good deal of that exists, some of it even in this House. Of course I would not accuse the noble Lord, Lord Wallace of Saltaire, of anything so crude as anti-Americanism. But anyone listening to his remarks tonight might have come to the conclusion that he is not an unqualified admirer of our American allies. Incidentally, perhaps not on an entirely serious subject, if the noble Lord, Lord Wallace, really makes no distinction between tax evasion and tax avoidance, I would not want to employ him as my tax accountant—or perhaps, on second thoughts, I would!

I should like to mention two aspects of the relationship that we are discussing. It will come as no surprise to noble Lords that they are the European strategic defence initiative and the missile defence programme. I certainly take a different view on the ESDI from that taken by the noble and learned Lord, Lord Howe. Indeed, I go as far as to say that everything that I wanted to say about this lamentable and ill-advised venture has already been said by the noble Lord. Lord Waddington.

I make only one peripheral comment. I wish that the Government would stop telling us that everybody in America is happy about it and agrees with it. I wish that they would also stop telling us that our policy in this matter is exactly the same as that of the French Government. Frankly, that is poppycock. We all know perfectly well that there are people in the United States who are extremely worried about this initiative. The Government may be able to quote people who are in favour of it. I can quote an equal number of people who are extremely worried about it. Similarly, it is no good the Government telling us that the French attitude towards this and our own, in terms of separate planning, separate intelligence and separate command structures are identical; they are not. One has only to read the French press to realise that in many cases the two views are diametrically opposed.

These are complex matters on which, as we all know, there are different views. I do not suggest that either one is right or entirely without fault. However, let us at least admit that there are differences and set about trying to resolve them.

I shall not bore your Lordships further with my views on missile defence except perhaps to say that one of the most important points to note is the paucity and poverty of some of the arguments against it. One which is constantly reiterated is that if the Americans continue with this, the Chinese will start working on their own ballistic missile programme. The Chinese have been working on that for years. To know that, it is necessary only to read the White Papers issued from Beijing. The Chinese have ambitions to be a world power. As part of that they are building up a ballistic missile capability and have been doing so for some considerable time. To suggest that they might do that if the Americans set up a national missile defence is to misunderstand totally the realities of world power.

My other point concerns the old chestnut of the Anti-Ballistic Missile Treaty. That is regarded by some people with a tenuous grasp on reality as a cornerstone of world stability. It is nothing of the kind. It is an obsolete relic of the Cold War. It was designed to make the populations of the west and the Soviet Union vulnerable to each other's missiles. It was the doctrine of mutual assured destruction. It was condemned as immoral in those days by the very same people who are complaining because we are trying to move away from it and away from massive retaliation to defence.

I have come to the end of my brief remarks. Perhaps I may return to the question of the relationship with the United States of America. We have other allies in Europe and elsewhere. However, I repeat that it would be unwise to dismiss too readily the fact that the United States is our most important and most powerful ally. We have ties of history, language, law and religion and of such vulgar matters as geo-politics and strategy. As I have said, we have other allies. However, I firmly believe that if we do not cherish this relationship with our most powerful ally and look after it with great care, we shall live to regret it.

8.7 p.m.

Baroness Williams of Crosby

My Lords, I, too, thank the noble Lord, Lord Howell, not only for instigating this debate but for his introduction, which was of great interest. For fear of being charged as an unqualified admirer of the United States, which I am not, perhaps I should briefly declare my interests.

For 12 years I have been a professor at the John F Kennedy School at Harvard. I am a member of the Advisory Council of the Council on Foreign Relations. I am a trustee of the Century Foundation and a member of the board of Rand Corporation Europe. I could go on, but I shall not.

However, I make these comments in order to make clear that in my view, and I believe in that of most of my American friends and colleagues, unqualified admiration is not what they ask for. They are too grown-up, too mature and too wise to want anything of the kind. If they want a relationship with us, it is not that of master and poodle but of two mutually respectful and intelligent friends who are free to say to one another what they believe. Therefore, I am not an unqualified admirer but a great qualified admirer of the United States.

In the years after the war the United States made a contribution so visionary, generous and far-sighted that there has been little like it in the entire history of the modern world. I put that on record for fear that anybody may decide or try to pretend that I am other than a great admirer of America and of what she has achieved.

During the Cold War we had a single enemy and a single purpose. The United States was absolutely central to the opposition of that enemy and the achievement of that purpose. Nobody doubts that. However, as my noble friend Lord Lester stated, the end of the Cold War brought with it a completely different set of challenges. As recently as yesterday, the spokesman for the new American administration said in terms that the world of today is a very different world from that of the Cold War: one which has changed everything, and where there are multiple and complex challenges, civil wars, failed states, famine, disease, AIDS and, alas, global warming, people trafficking and much else. As my noble friend said, that can be addressed only by multilateral responses which go beyond the borders of every nation state.

In the UK we were somewhat unilateralist in our approaches to foreign policy in the decades between the wars. To our great detriment, between 1919 and 1930 we believed that we could effectively run unilateralist foreign policy. We learnt after the war that those foreign policies had to be multilateralist. That is a lesson we have learned within NATO since 1949, within the European Union since 1972, with the Commonwealth over the post-war period and with regard to peacekeeping under the United Nations. Therefore, it is not surprising that we should suggest to our American ally, which until recently has been profoundly multilateralist, that we will not find answers to the world's problems in unilateralism.

My noble friends Lady Maddock and Lord Lester have already pointed out the necessity for multilateral approaches. However, I turn to two issues in particular. The first is the Rapid Reaction Force. I mention that precisely because there have been many charges and counter-charges made across the Floor of this Chamber tonight. Perhaps it is wise to begin by quoting directly from the communiqué of NATO in April 1999. This is what it states about the Rapid Reaction Force. I shall quote from it, not least because of the remarks of the noble Lord, Lord Waddington, which I have to say, with respect, were somewhat misleading. It states: We acknowledge the resolve of the European Union to have the capacity for autonomous action so that it can take decisions and approve military action where the Alliance as a whole is not engaged. We therefore stand ready to define and adopt the necessary arrangements for ready access by the European Union to the collective assets and capabilities of the Alliance for operations in which the Alliance as a whole is not engaged militarily as an Alliance". Please note that they refer both to an autonomous power and to the power of the European Union.

I believe that the muddle has arisen from two sources. One is the change in administration, which has meant that the new one has said different things. We can quote to and fro for ever, but that is the truth. The second is that we have had a muddle—and I believe that it could be cleared up—about when the European Union is free to act on its own. That is why we in my party strongly believe in a right of first refusal; in other words, NATO should say clearly whether it wants to be involved or not. If it is, it should have a veto over the use of any NATO machinery by the European Union if it does not approve of the action. That I believe to be the de facto position. That is simply de jure as well.

During the last couple of minutes I want to refer quickly to the missile defence issue, to which the noble Lord, Lord Chalfont, referred. The ABM treaty is all we have. I do not believe for a moment that is it a relic. It is all we have and all we shall have for the six or seven years before any missile defence can be brought into operation. These will be dangerous years, because unquestionably no one expects even the initial stage of missile defence—the so-called Alaskan first stage—to be achieved before 2008 or 2009. The Americans do not claim that; no one claims that.

What then will protect the world in the intervening period? The answer must be the network of multilateral arms control agreements which exist at the present time. The system is also technically insecure. So far there has been no evidence of technological success and it may take more than seven or eight years to achieve it.

The second danger is, quite straightforwardly, that there is an undermining of the deterrence principle. That could be a good thing but in the short run it is highly probable that Russia and China will attempt to build up their offensive deterrent forces if they fear that there is no multilateral solution to the problem presented by national missile defence. The noble Lord, Lord Chalfont, to whom I listen always with respect because he is greatly knowledgeable, referred to rearmament by China. It is worth pointing out that China has about 20 nuclear warheads at the present time. Rearmament means going from 20 to something more like an effective nuclear missile force.

Furthermore, there are nuclear powers, frighteningly India and Pakistan, referred to by American foreign policy experts as the most dangerous region in the world. It would be highly dangerous for those countries to remain outwith the multilateral arms control network that exists at the present time. And there is some reason to believe that they are being persuaded to consider joining in with those multilateral structures.

Last of all, there is what one might describe as the dangers of a Maginot Line mentality, where we take action against the threats a previous time, failing to recognise that the most dangerous weapon of terrorists could well be the suitcase full of anthrax or the box full of Sarin gas.

For all those reasons, it is not unfair to suggest that there should be full consultation at the present time. We hope and believe that by "consultation" the United States means that nothing is yet set in steel; that it is still possible to alter the details of what it proposes; that it will truly listen to its allies, who in turn will truly take what it says very seriously. And within that context both the United Kingdom and Denmark are of central importance. Without their co-operation in improving the early warning systems it would be difficult to mount an effective missile defence or even a theatre missile defence. That means that both of them will be involved in either supporting or breaking the ABM treaty effectively by proxy.

In conclusion, I believe that the overwhelming responsibility of the United Kingdom, and with that, of the European Union—and here I want to refer in particular to the speech of the noble and learned Lord, Lord Howe of Aberavon—is to persuade the United States that any missile defence advances should be made within the context of the multilateral arms control agreements of the world. God help us if that does not happen at a time when Russia still has a huge arsenal of nuclear weapons and of fissile materials. If Russia cannot be brought within the ambit of a new arms control system—and one addresses the problems of the post-war and post-Cold War world—she could become a dangerous source of nuclear materials to some of the more dodgy states in the world.

Finally, I want to respond to what was said by the noble Baroness, Lady Park of Monmouth, who speaks with great experience. It is true that under the Nun-Lugar system, which tragically the Bush Administration is proposing to cut hack, there was a degree of co-operation between the United States and Russia at the level of precise knowledge about nuclear weapons, and about the retention and protection of those weapons, which goes far beyond anything to which the noble Baroness referred. The United States showed great imagination in trying to calm, soothe and involve the Russians in greater co-operation on arms issues. I believe that it is a model and an example that we would be well advised to follow.

Lord Chalfont

My Lords, before the noble Baroness sits down, perhaps I may acknowledge her powerful and lucid piece of advocacy. Will she confirm that there can be no question of Britain and Denmark doing anything that is against the ABM treaty because it is signed only by the United States and the Soviet Union? No other country can possibly break it.

Baroness Williams of Crosby

My Lords, I accept what the noble Lord said. He will notice that I said by proxy.

8.16 p.m.

The Earl of Northesk

My Lords, I, too, thank my noble friend Lord Howell for initiating today's debate. I should add that I am ordinarily resident in the United States. Whether or not that improves my understanding of the issues before us tonight I leave to the judgment of others. However, based upon the contributions of some of your Lordships I am not sure I should be too optimistic about that.

Let me say at once that I have enjoyed tonight's debate. Not surprisingly, it has covered a lot of ground and I hope only that I can do it justice. Like my noble friend Lord Howell, I begin with the European Rapid Reaction Force, a topic expanded on by a number of other noble Lords. It is well known that we on these Benches are opposed to the establishment of a European defence identity that is independent of NATO. As an aside here, current speculation of the £1.2 billion-worth of cuts in the defence budget begs the question whether we will be in a position to honour the contributions to that the force which the Defence Secretary committed us to in November of last year. No doubt the noble Baroness the Minister will in due course offer the customary reassurances that our concerns are misplaced; that the proposals are, as the noble Lord, Lord Wallace, insists, "modest".

However, the mood music of our European partners persists in painting the picture of a structure outside NATO. For example, General Kelche, the French Chief of Defence Staff, recently said: European politicians need to know what is going on. They need to be able to select options and then conduct operations. Why should we have to go through NATO?". Against that background, we should not be surprised that concerns are manifest in America about the way in which the agenda is developing. My noble friends Lord Howell and Lord Waddington have provided ample evidence of that. Here I would make a simple point. Some noble Lords have suggested that the Shadow Cabinet is in some way directly responsible for the confusions about this in Washington. But is it not the case that the Government are much better placed by definition to allay American concerns than we on these Benches are to, as it were, "stir it up"? Therefore, what reassurances has the Foreign Secretary, even the Prime Minister, offered to the Bush administration? Surely, if there is really no cause for alarm about this in the United States, the Government have both the wit and resources to explain that. How are the Government satisfying the wish of the noble Baroness, Lady Crawley, that "the myth be exploded"? I believe that, as the noble Lord, Lord Chalfont, pointed out, the concerns in the US about this matter are both legitimate and real.

Following on from that, there is the very much wider issue of the approach of the Bush administration to European integration. Mr Clinton's commitment to foreign policy was one of the hallmarks of his presidency, but inevitably Mr Bush is a very different person. There are no more cosy soirees about the third way. Perhaps, therefore, we should not be too surprised if we detect a certain cooling of enthusiasm within the US towards Europe. As my noble friend Lord Howell said, much of the rhetoric in Europe at the moment is a source of amazement in America. Yes, Europe is creating the single market, but to the perception of many in America—here my experience is somewhat at odds with that of the noble Lord, Lord Hooson—the culture of European integration is antipathetic to their entrepreneurial instincts and democratic traditions.

To many in America there appears to be an increasing prevalence within Europe of sniping at the US, which my noble friend Lord Howell described as "shrill invective". Is it not credible to suppose that this is having an effect on American attitudes? As a commentary on that I give an example. I hasten to add that I gave notice to the Minister about my interest in this matter. There is increasing American irritation, from the President down, about the way in which the Commission seems to be attempting to impose its regulatory framework for data privacy upon the US, particularly because in many respects it is deemed to be contrary to the American constitution. But from our perspective in the UK what should really worry us about it is that it has the potential severely to damage the competitiveness of the City. I hope that the noble Baroness will be able to comment on that in due course.

As for the economic situation, despite recent figures for growth the US is not out of the woods yet. Mr Bush's chief economic adviser warned today that America could still face a recession. As he has said, it continues to be "hard to tell" whether the current slowdown will see the economy suffer its first contraction in a decade. It may be that there is further American irritation, perhaps even scepticism, with Europe here, as with the failure of the ECB to take action on interest rates for the benefit of the world economy.

President Bush's speech yesterday on his administration's plans for ballistic missile defence guarantees the topicality of this debate, and many noble Lords have referred to it. I believe that it is worth quoting directly from the observations of President Bush: We need a new framework that allows us to build missile defense to counter the different threats of today's world. To do so we must move beyond the constraints of the 30-year-old ABM … Treaty". It is perhaps also worth making the point that even the Prime Minister accepts that the character of the threat to global security has changed. As he observed in February, There are a number of states now—some of them not very stable—that have got a nuclear capability … It is one of the most difficult problems that the world faces, and we underestimate its significance at our peril". Despite that acknowledgement, we express concern that the Government have approached BMD with such equivocation. The views of the former Foreign Office Minister, Peter Hain—I wonder why he was moved—speak volumes in this context. That the Foreign Secretary has today expressed approval of President Bush's commitment to consultation is perhaps a step in the right direction, but do not the Government believe that our national interest would be better served by being more proactively engaged with the US in the development and deployment of BMD? Of course, the issue raises difficulties with respect to the 1972 treaty, and it is right to be aware of the sensitivities of our fellow Europeans, of Russia and of China. We believe that that makes it all the more important that the UK Government assume their traditional role of, as it were, bridging the gap in opinions on both sides of the argument.

A number of noble Lords, notably my noble friend Lord Waddington, referred to the vexed topic of the Kyoto Protocol. I agree with the noble Baroness, Lady Maddock, to the extent that progress on issues such as that can be made only by international agreement (and, in terms, that was the virtue of the 1992 Earth Summit in Rio de Janeiro). We on these Benches regret the opposition of the Bush administration to Kyoto, but, in common with the inference of the noble Lord, Lord Whitty, during Question Time a couple of days ago, we are sanguine about it. As my noble friend Lord Waddington made abundantly clear, the reality is that the chance of Kyoto being ratified by the US legislature was, and is, negligible. It is extraordinary that so many appear to advocate that the Bush administration should work against the grain of their democratic process.

We believe that we should continue to strive to meet our own Kyoto targets. At the same time, the Government should entertain constructive talks with America not only to recognise its particular difficulties in that context but also to take the matter further. As John Prescott has said, The President of the United States has said that he accepts the need for action to combat climate change".—[Official Report, Commons, 24/4101; col. 149.] It is perhaps surprising, therefore, that, although he was knocking on an open door, he singly failed to make any progress on the matter during his recent visit to Washington. On his return he announced to another place (at col. 152) that he, did not have a meeting with the Administration, nor did I seek one when I visited Washington". Is that not an extraordinary way to conduct negotiations on what the noble Lord, Lord Whitty, described as probably the most important issue to face world leaders"? More seriously, can the Minister advise the House how the Government intend to take this matter forward proactively with the Bush administration, or do they intend to let it cool on the back burner until July in Bonn?

I conclude with the observation of President Bush yesterday: Together, we can address today's threats and pursue today's opportunities". While that was an invitation aimed very much at Russia, should not its tone inform our own approach to America? As my noble friend Lady Park said, we should never take friends for granted. However the noble Lord, Lord Wallace, may wish to represent the approach of these Benches to the US as "followership", we believe that that would ensure a proper partnership of equals and serve the interests of the people of both the UK and the US.

8.27 p.m.

Baroness Scotland of Asthal

My Lords, I join all noble Lords by warmly thanking the noble Lord, Lord Howell, for tabling this most important Motion. I also thank noble Lords who have made such valuable contributions to the high quality of the debate.

I start by reassuring the noble Lord, Lord Howell, that the United Kingdom has not, and never will, participate in anti-USA posturing. He can be confident that Her Majesty's Government will steer a course far from that. I agree with the noble Lord, Lord Wallace of Saltaire, that the United States has a number of important relationships. I also agree with the noble Lord, Lord Hooson, that US citizens share a wide European ancestry; and some other European states would claim a greater number of ancestors than the UK.

However, I depart from the noble Lord, Lord Wallace, in his contention that the special nature of the relationship vests solely in the breasts of those who fought together in the two world wars. I remind the noble Lord that the depth of that relationship now vests in younger breasts and that in the past 50 years we have continued to stand shoulder to shoulder in theatres of war, culturally and in other arenas, including marriage which was alluded to by my noble friend Lady Crawley. I also agree with my noble friend Lord Desai that this relationship should transcend party.

Although I disagree with the comments of the noble and learned Lord, Lord Howe, about my right honourable friend the Prime Minister, I most warmly welcome his balanced, sage approach. I assure him that we shall not overrate but shall value our relationship. I also assure the noble Baroness, Lady Park of Monmouth, that we shall not take that relationship for granted either. We need balance in this as in all things. The relationship is fundamentally strong because it is based on close ties between our peoples at every level. Our political systems are founded on a shared outlook and shared values: freedom, free speech and free trade. They go beyond individual issues of policy.

The relationship is fundamental to our economies and to our strategic interests. The US is our closest ally and biggest export market. We are the biggest investors in each other's country. The relationship will continue to be strong because: first, our vital national interests coincide now as much as they ever did; secondly, Britain's strategic partnership with the US in NATO remains fundamental to the national security of both our countries; and, thirdly, our leading role in the European Union enhances the relationship between Britain and the USA. That was alluded to by the noble Lord, Lord Howe.

In this global era, the relationship increasingly covers the breadth of public policy. We face similar challenges and are eager to learn from each other. We have much to learn from each other, particularly in education, which is a top priority for both the UK and US Governments. We also have experiences to share in areas as diverse as welfare reform, the fight against crime and drugs, the IT revolution, poverty reduction. urban regeneration and transport systems. For example, we have used the experience of several US states to reform our UK welfare system towards helping people to help themselves and by making work pay.

My right honourable friend the Prime Minister was the first European leader to meet President George W Bush at Camp David in February. My right honourable friend the Foreign Secretary has also met his opposite number, General Powell. Good working relationships have already been established.

The trade and investment relationship between the UK and the US is hugely important. I was glad that this issue was raised by my noble friend Lord Hunt and that he sought to emphasise the importance of science and technology. I would reassure my noble friend that Her Majesty's Government are, through BCI, the Foreign and Commonwealth Office and DTI doing all they can to promote British business and science and technology. British interests in many of the 50 states individually outweigh our interests in most other countries. Last year Britain sold £28 billion worth of goods to the American market. We sell more to Boeing than we do to many countries. Five thousand six hundred American companies see Britain as their base in the European single market. My noble friend, Baroness Crawley, was right to highlight this aspect.

I say to the noble Lord, Lord Waddington, that there are occasional disagreements between us over trade, but the numbers are tiny and the disputes can be solved. On 11th April, the European Commission and the United States' trade representative reached an understanding in the long-running and damaging Bananas dispute. Many noble Lords will recognise the light I feel in that resolution. This is very welcome. Both sides deserve our congratulations and support.

I say to the noble Lord, Lord Lester, that he was right to raise the differences of view in the United States in relation to the ICC. The views of the legal fraternity are important and there is a genuine debate on that issue. That debate has not been concluded and will go on. We need not be too pessimistic about the long-term outcome.

Many noble Lords have rightly raised the issue of climate change. I share noble Lords' concerns that climate change is one of the most challenging international issues we face. I agree with the noble Baroness, Lady Maddock, in that regard. The science is accepted. To say anything different would be akin to defending the idea of a flat earth. But we need to work through differences. "Working" means that we have to understand partners' reservations and unease. We cannot ignore the recent developments in the US climate change policy. The lack of US commitment to the Kyoto Protocol is a huge disappointment. But it will not prevent the United Kingdom and the EU from continuing to work for ratification and entry into force. We must also seek ways to bring the United States on board sooner rather than later. We shall therefore be working hard with EU colleagues, the US and negotiating partners in the umbrella group and developing countries to agree rules at the next climate change talks in July in Bonn. I can certainly reassure the noble Earl, Lord Northesk, about that issue.

Many noble Lords rightly concentrated on the international security dimension. The noble Lord, Lord Howell, talked of a new track and confusion. I must say to the noble Lord that no such confusion lies between us and the USA. I do not know whether the noble Lord wishes it were otherwise. I cannot believe that be does. But in defence co-operation we are building the European Security and Defence Policy on solid foundations. President Bush—I hope the noble Lord will believe that he is of sufficiently high calibre to be trusted and relied upon as expressing the American view—supports our ambitions for ESDP.

After meeting the Prime Minister, when ESDP was discussed in detail, President Bush said that, the United States welcomes the European Union's European Security and Defence Policy, intended to make Europe a stronger, more capable partner in deterring and managing crises affecting the security of the transatlantic community". The US Secretary of State, General Powell, who I am sure the noble Lord would say should be given credibility, said: We welcome a more integrated, robust and stronger Europe … Our Allies are in the midst of important efforts to improve their defence capabilities. We will support any such efforts as long as it strengthens NATO, not weakens it". So I can assure the noble Lord, Lord Chalfont, that we do not say that there are no differences between the plethora of people who have thought it right to express a view. What we do say is that if one looks at the EU's collective expressed view and the US view, there is agreement. We need to concentrate on developing and enhancing that agreement.

A number of noble Lords have spoken on the subject of missile defence. The noble Lord, Lord Waddington, commented on what has been said by my right honourable friend the Foreign Secretary. Therefore, perhaps I should quote some of the statements made. Yesterday, the Foreign Secretary said: We welcome President Bush's commitment to early consultations at a senior level on missile defence. President Bush has made clear his wish to develop a new framework for the US relationship with Russia. It is good news that President Bush spoke to President Putin. And we welcome the President's commitment to reductions in US nuclear weapons. The important issue is the clear commitment we have seen to work together with allies and with Russia. We will work closely with the Bush Administration as we always do—as close allies, with common strategic interests". Earlier today in the other place my right honourable friend the Prime Minister said: I welcome the fact that President Bush has made it clear that there will be consultations, not only with allies, but also with the Russians". So I can assure the noble Lord, Lord Howell, that we have recognised for some time that missile defence can play a role in responding to the threat posed by the growing proliferation of weapons of mass destruction and missiles for their delivery. We look forward to continuing consultations with the US team in relation to those matters.

This is the support of a partner and an ally. I would agree with the noble Baroness, Lady Williams, that a true friend is not an uncritical one. We need to be able to identify the bear traps and give our friends early warning to help them to ensure that they avoid them and we must play our part to facilitate a better understanding of each other. Comity is worth working for. It is not in British interests for our closest ally to feel vulnerable to attack or to be deterred from taking action in regional crises. It is not in British interests to say to the US, "The answer is yes, now what is the question?" The USA understands our position and we understand theirs.

My right honourable friend the Foreign Secretary recently met US Secretary of State, General Powell, at NATO Headquarters. General Powell gave a strong affirmation of the new US administration's commitment to the alliance, and said that NATO would remain the bedrock of the US relationship with Europe. He added that the alliance had provided the foundation for over 50 years of peace and prosperity for its member states and was as critical today as ever. He also voiced support for the European Security and Defence Policy, which strengthens the alliance and adds to European capabilities, and emphasised US determination to consult fully on missile defence.

So I can reassure the noble Baroness, Lady Park, that she need have no fear that the history which brought NATO into being will ever be forgotten or dishonoured;, certainly not by the party of Ernest Bevin. I say to the noble Earl, Lord Northesk, that a decoupling from NATO is not, has never been, and will never be within our contemplation.

In Britain today we have a Government who are both pro-European and pro-American; a Government who have finally done away with the false proposition that we must choose between two diverging paths—the transatlantic relationship or Europe. We believe that this is not just in Britain's interest, but also America's and Europe's. And we use our position as a leading member of the EU actively to serve as a bridge between Europe and America, consistently rejecting isolationism and protectionism and advocating engagement and openness with the wider world.

What has the past 50 years taught us? It was right that the noble Baroness, Lady Williams, in her usual eloquent and erudite way, raised this issue. It has taught us that we are stronger when we build multilateral alliances; we are stronger when we build multifaceted policies; when we work together for the common good; when we talk and share. It is not a lesson that we would lightly forget. We have neglected none of our friends, be they old or new—in the Commonwealth, Europe or across the Atlantic—and we are not about to change.

The noble Lord, Lord Wright, raised the issue of the US position in terms of the Israeli-Arab difficulties. The issue of settlement is a sensitive one. That has formed part of our contacts with the new US administration about the situation in the Middle East. For example, the Foreign Secretary raised Israel's settlement policy in his conversation with the US Secretary of State, Colin Powell, on 18th April. On Monday 30th April, my right honourable friend the Prime Minister's personal envoy, my noble friend Lord Levy, raised the issue with senior US contacts during meetings in Washington to discuss the Middle East.

The US position of settlement was restated by a State Department spokesman on 20th March, who made it clear that continued settlement activity does not contribute to peace and stability. The US, like the UK, is opposed to all unilateral actions which make achievement of a permanent agreement more difficult. Our clear view is that settlements are illegal under international law and an obstacle to peace. Our EU partners and the international community share our position. The UK Government call on the Government of Israel to stop all settlement activity in the occupied territories, including East Jerusalem. It is an issue that will continue to have great importance.

Lastly, I turn to an issue touched on by the noble Earl, Lord Northesk, in relation to the data protection difficulty. He asked a number of questions about that. I can certainly reassure the noble Earl that the European Commission has made a formal finding that the US safe harbour arrangements provide an adequate level of data protection for the purposes of Article 25 of the Data Protection Directive 95/46/EC and that transfers of personal data from the United Kingdom to organisations ill the United States which have made a formal commitment to comply with the safe harbour principles will be taken as meeting the requirements of the data protection principle in Schedule 1 to the Data Protection Act 1998. I hope that gives the noble Earl some comfort.

The debate has centred on agreement about the importance of the nature of our relationship and anxiety about some of the changes and differences that we have had in the recent past. The noble Lord, Lord Howe, was right to refer to the views expressed by the US ambassador to the UK, Raymond Seitz, in 1994. With your Lordships' leave, I should like to repeat those words, because they are worth repeating. He said: America's transatlantic policy is European in scope. It is not a series of individual or compartmentalised bilateral policies, and never has been. 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". I wholeheartedly agree with him. An influential voice gets heard. Concerns that noble Lords have raised about climate change and missile defence will be heard. The decisions of the US will be made on what they have heard. Nothing has yet been writ in stone.

A false question does not become less false the more often it is asked. There is no decision to be made by Britain between the EU and the US. To pretend anything different is to act in a way that is more harmful to the United Kingdom's national interest than anything else.

8.46 p.m.

Lord Howell of Guildford

My Lords, it remains for me to thank most warmly both the Minister and all those who have taken part in the debate. All speakers seemed to agree that the Atlantic relationship is in transition. Some speakers seemed to conclude that, nevertheless, everything is fine; others suggested that there are storm clouds ahead. I confess that I belong to the second category. In such conditions, my advice would be to carry an umbrella and, if possible, wear a raincoat or mac. I beg leave to withdraw my Motion.

Motion for Papers, by leave, withdrawn.