asked Her Majesty's Government:

What progress has been made with the Warm Front scheme to improve the energy efficiency of low-income households.

My Lords, the UK Fuel Poverty Strategy was published last November. Its first target is to seek an end to fuel poverty for vulnerable households by 2010.

The Home Energy Efficiency Scheme in England, launched in June 2000, is now marketed as the Warm Front Team. The scheme provides packages of insulation and heating measures to private sector households who receive certain benefits.

Warm Front has assisted over 350,000 households and spent £180 million on installing measures.

My Lords, while noting the progress made under the Warm Front scheme, is the noble Lord aware that the short–term nature of the contracts in England and Wales offered to the installers of heating equipment and insulation prevents them from planning ahead and retaining adequate skilled staff, which in turn has led to a substantial backlog of orders? Is the noble Lord further aware that those problems have been avoided in Scotland where longer–term arrangements are in place? Could we learn from the Scottish experience?

My Lords, we are prepared to learn from all experience but the difference between the position in Scotland and that in England is that Scottish firms are allowed to broaden the services which they offer. Therefore, it is not the contracts themselves which give them longer-term, more stable arrangements. Some of the problems that arose at the beginning of the scheme as regards the supply of insulation firms and of insulation staff have largely been overcome. We have certainly speeded up the operation in recent months. We are now on target to meet our objectives.

My Lords, the scheme was set up to target vulnerable households. Therefore, why in the other place did the Government vote against their own targets in a Private Member's Bill the other day which sought to improve conservation of energy, to assist the most vulnerable and to get rid of had landlords? Do the Government intend to support that Bill in July?

My Lords, the Private Member's Bill to which the noble Lord refers would in its present form have committed substantial resources over and above what are committed under the energy efficiency scheme and other schemes. It was therefore not appropriate for the Government to support a Private Member's Bill which had those resource implications.

My Lords, is it not a fact that this is but one of the many measures that will be needed if the Government are to come anywhere near achieving the targets set out in the PIU report for energy savings up to 2020? Is it not the case that when governments regard targets as challenging they have absolutely no hope whatever of reaching them? Is that not rather a dreadful position?

My Lords, the first part of the noble Lord's supplementary question is correct but I dispute the second part. Clearly the scheme is but one part of the programme to improve the energy performance of domestic sector households which will need to make a substantial contribution to meeting our carbon saving targets. It is skewed also to meet the social objectives which we have set out which are intended to cover all vulnerable households by 2010. There are a substantial number of other programmes, including the energy efficiency commitment, the building regulations improvements and various other schemes to improve efficiency in the domestic sector as a contribution towards the overall target. As the noble Lord will know, there are a substantial number of measures in the industrial, transport and energy sectors.

My Lords, are the Government satisfied with the statistics and research relating to the operation of the Warm Front scheme? It seems to me that there is some confusion about the number of properties that have been treated and the number of people who have been taken out of fuel poverty. If the scheme is to be successful, it needs to be flexible and good data are needed to take it forward.

My Lords, I am not aware that there is a general problem as regards identifying the relevant number of households. I refer to the initial commitment as regards social housing. The matter we are discussing is primarily related to the private sector. Broader improvements to housing facilities within the social housing sector have subsumed insulation improvements. That may be the matter to which the noble Baroness refers. However, in general, we can say confidently that the scheme has helped, as I said, 350,000 households.

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In asking this Question, I should make it clear that I am not speaking for the Front Bench on this topic.

The Question was as follows:

To ask Her Majesty's Government where they consider that the national stadium should be sited.

My Lords, the location of the national stadium is a matter for the Football Association as the project sponsor and provider of risk capital. As I explained to the House on 7th May, the FA has made substantial progress in addressing the four conditions which I outlined to the House on 19th December. I shall make a further statement to the House on the national stadium project later this week.

My Lords, I thank the noble Baroness for that reply. However, is it not the case that the plans for a national stadium capable of holding an Olympic Games have been all but abandoned? Does not the Minister agree that the £120 million of lottery money paid to the FA should be returned forthwith?

My Lords, the abandonment of athletics has not taken place. The noble Lord may be aware that a Sport England report was published last Wednesday, as I informed the House last week would happen. The report makes absolutely clear that it would be possible to build a new national stadium primarily for football and rugby league but with the opportunity to include athletics at far less cost than originally anticipated.

My Lords, as I understand it, at least two separate sets of financial negotiations remain to be completed on the funding of the ridiculously over–priced Wembley proposal. Given that, will my noble friend renew the assurance that if Wembley has still—after six years—not got its act together by the end of this month, the proposal to site the national stadium at Birmingham, Solihull, which is supported by seven out of every 10 fans and 53 out of 56 club chairmen, will seriously be taken forward?

My Lords, my noble friend thinks that a ridiculously expensive stadium is proposed for Wembley. I dispute that. For £161 million of public money, we should get a state–of–the–art stadium at Wembley. However, I reiterate, as I have done on a number of occasions to my noble friend, that the decision about where to locate the stadium is a matter for the Football Association. It will pay the vast majority of the costs. I also make clear to my noble friend and the House that should a deal at Wembley fail, significant work would be required to make the Birmingham bid practicable. As Patrick Carter's report made absolutely clear, the Birmingham proposals currently have to address a funding gap of between £43 million and £163 million. Moreover, the selected location is on a greenfield site in the green belt around Birmingham. Planning issues are therefore also involved.

My Lords, can the Minister help the House on the question of access by customers to Wembley should that site be chosen? If the proposed stadium were to be erected today, the current transport links—both road and rail—would clearly be inadequate. What does she understand are the plans to improve those links? At what rate does the speed at which customers are admitted to the stadium need to be increased? Can she also add a word on costs?

My Lords, the Government have already committed themselves to an extra £20 million of infrastructure expenditure to improve transport links. A further £21 million has been promised by the GLA. Brent Council has already cleared planning permission for improvements at the Tube station at Wembley. I believe that the facilities will be adequate to cope with the numbers of people going there.

My Lords, will the Minister say more about the athletics track, which interests us in view of the £120 million from Sport England? How long will it take to install and remove the track on each occasion, at what cost, and who will pay for that?

My Lords, the cost of installing and removing the track will be £8·5 million, which is substantially less than originally anticipated. It will take around 17 weeks, which is again substantially less than originally proposed. The earlier estimate was between 42 and 52 weeks. That would make it possible to stage major international athletics events at the new national stadium.

My Lords, on the assertion by the noble Lord, Lord Glentoran, about the £120 million paid by Sport England for a national stadium, will the Minister confirm that that was not for an Olympic stadium but for a national football and rugby stadium that was capable of accepting the World Athletics Championships, which is an entirely different proposition? If the Football Association can comply with the four conditions that the Government have laid down, many of us on these Benches do not support the Birmingham proposal but believe that Wembley is the right choice.

My Lords, I can confirm my noble friend's comments on an Olympic stadium. It is for the British Olympic Association and the Mayor of London to decide whether they wish to bid for the Olympic Games. I understand that thought and consideration are being given to that by the BOA and the mayor. However, the mayor has indicated that he wants an Olympic stadium to be built in the east of London, with facilities for a range of sports, including swimming, which would not be available at Wembley.

My Lords, bearing in mind that the Dome was good enough for the celebration of the millennium, why would it not be good enough for a national stadium? It is, after all, in the east of London.

My Lords, the Dome is not capable of housing the necessary facilities for a national football stadium or athletics events.

My Lords, did I understand the Minister to say that it will cost £8 million every time the stadium is converted for athletics and that it will take 17 weeks on each occasion? Will the stadium be usable during those 17 weeks and, if so, for what?

My Lords, when national stadia of this sort are built and used for different purposes, it always takes a substantial length of time to convert them. While the conversion is taking place, it will not be possible, so far as I understand it—I shall write to the noble Lord— to use it for other events. That is exactly what happens in stadia around the world that are used for football and athletics.

My Lords, does the Minister agree that almost every football supporter who goes to the Millennium Stadium in Cardiff recognises what a wonderful structure it is? It would be good for this country if we simply replicated the Cardiff design, put it on the Wembley site and got on with it.

My Lords, I believe that everyone involved in building the Millennium Stadium in Cardiff should be congratulated on the success of the project.

asked Her Majesty's Government:

Whether they have received any representations on the effects of the proposal to increase national insurance contributions for charities that assist the National Health Service in providing home care services for severely disabled and elderly people.

My Lords, the Government have received a number of representations from such charitable organisations. Charities play a valuable role in providing home care funded by local authorities. We believe that that role will continue to develop in the light of the substantial increases in funding for personal social services from 2003–04.

My Lords, I am grateful to my noble friend. Is he aware that, for charities like the admirable Enham Trust, providing, as they do, 24-hour care, supported accommodation and home care for chronically sick and severely disabled people, the rise in national insurance contributions will mean higher costs and cuts in staff and will lead to more so-called "bed-blocking" in NHS hospitals? Is that not hurtful to highly vulnerable people and plainly self-defeating?

My Lords, I am grateful to my noble friend for making me aware of the concerns of the Enham Trust. Of course, we are very sympathetic to those concerns, but I believe that their problems must be set in context. The increase in national insurance contributions is only 0.7 per cent of payroll nationally. Unfortunately, of the 200,000 or so staff who are involved in home care, 60 per cent work fewer than 30 hours a week. Therefore, I am sorry to say, many of them are likely to earn less than £89 per week, which is the primary threshold for national insurance contributions. Thus they will not pay any more.

My Lords, rather than doing as the noble Lord has just suggested and giving a credit to charities against their national insurance bill, would not charities far prefer to be relieved of the burden of VAT and would not the Government be far better off providing that relief?

My Lords, I believed that the noble Lord was going to ask for special treatment in relation to national insurance contributions. I understood that to be the thrust of the Question; indeed, it was the thrust of the Question. As the noble Lord, Lord Skelmersdale, knows very well, the issue of value added tax is governed by the annex to the sixth directive. We do not have the same control over these matters.

My Lords, I declare an interest as an employee of Age Concern. Given that all providers of home care—statutory, independent or private—are equally subject to provisions of employment and taxation law, does the Minister agree that the key factor is that contracts should be awarded by commissioning officers on a fully costed basis? Will the Department of Health be taking that issue into account?

My Lords, I believe that this matter goes together with the whole issue of charging. I do not believe that one can separate the contracts from the charging regime. As the noble Baroness, Lady Barker, well knows, under the Care Standards Act guidance must be issued on home care charging. The consultation period has only just concluded and we shall respond to it publicly very soon. But that, in turn, will of course have an influence on the contracts awarded to home care providers.

My Lords, can the Minister give the House an idea of how much the increase in national insurance contributions will cost the charities concerned? He says that it may be only 0.7 per cent of payroll costs. I have heard estimates of as much as £50 million.

My Lords, that is quite implausible. The figure for the whole health and social work sector in this country will be £270 million. That sum covers many times the number of staff involved in home care. Only 200,000 staff are involved in home care, including all the administrative staff. I do not know what the figure is. There is no way of knowing what it is, but it is not that quoted by the noble Earl, Lord Northesk.

asked Her Majesty's Government:

What their position is regarding badgers and bovine tuberculosis.

My Lords, tuberculosis in cattle is one of the most difficult animal health problems that we face and the increase in its incidence continues to give considerable concern. The Government are seeking to proceed on the basis of sound science drawn from independent scientific and veterinary experts. The causes of the disease are complex, but there is evidence to suggest that the badger plays a role in bovine TB. The badger field trial is designed to quantify any such role and, if it exists, to find out whether culling badgers has a part to play in controlling the disease.

My Lords, I thank the Minister for that reply. Have the researches taken into account whether other European countries have bovine TB, whether we are high in the pecking order of countries that have it, which countries do not have it, and whether the countries that have it have badgers?

My Lords, I do not have that information at present. We are certainly taking account of the spread of TB in other European countries. It appears that the growth in the incidence of TB in cattle has been greater here than in other European countries. However, I shall write to the noble Baroness with further information on the matter.

My Lords, how many farms have been affected by bovine TB in the past year, and was testing delayed due to the outbreak of foot and mouth disease?

Yes, my Lords. Throughout more or less the whole of last year a delay in veterinary testing was caused by the priority given to controlling foot and mouth disease. Since then, it is clear that there has been an increase in the incidence of bovine TB. Approximately 10 per cent of all cattle herds have been affected. The total number of individual cattle affected thus far is quite low—some 9,000 in a national herd of 8 million—but the incidence of the disease is growing in a worrying way.

My Lords, does the Minister accept that in this current environment there is a grave danger that farmers will feel under pressure and may start illegally to cull this protected species? What measures are the Government taking to restore confidence that their actions will affect the rate of TB infection?

My Lords, I hope that that would not be the response from farmers. I recognise their anxiety but it is important that we operate on a scientific basis. The group headed by Professor Bourne indicates that about four months has been lost on the Krebs trial rather than a full year, as is sometimes suggested. Over the past few months we have significantly reduced the backlog in testing. It has come down from 27,000 to 22,000, and that improvement will continue. Therefore, I hope that farmers are assured that we are moving in the right direction as rapidly as we can within the resources available.

My Lords, first, I congratulate my noble friend on raising a very important Question on the subject of badgers. To the best of my knowledge, debates on a connection between badgers and bovine tuberculosis have been going on for at least 20 years, as have attempts by the Ministry of Agriculture to find out whether there is any such connection. Is not 20 years rather a long time, and should we not have found an answer much more quickly?

My Lords, the allegation of a connection between badgers and bovine TB has, indeed, been long-running. However, the scientific basis for it has been unproven. That is why Sir John Krebs and his team proposed a scientific trial. The trial was to last five years and was set up on the robust basis of having three different parallel forms. Of course, the foot and mouth outbreak set that back slightly, but, as I said, we are still on course for a delay of only four months. We need to see the full results of that trial before we can be absolutely sure whether there is such a connection and to what degree, whether badgers are a contributing factor and what other factors are involved.

My Lords, is not there something very wrong with this country? On the one hand we have unproven allegations that MMR vaccine in human babies causes all sorts of nasty side effects and the Government are insistent that MMR is the right course to pursue; on the other, as my noble friend, Lord Onslow, pointed out, the situation as regards badgers and TB is unproven yet we continue to cull badgers.

My Lords, it is clear that there is a correlation between the growth in the number of badgers and the growth in bovine TB, but not area by area. Correlation does not mean cause. Therefore, we have to assess whether there is a causal element in the badger population. We are culling in a specific, targeted and scientific way. This is not an overall cull, and we would not engage in one. I understand the frustrations to which the noble Earl refers. I understand also the anxiety that we do not cull badgers unnecessarily. However, the experiment is designed to try to deliver a scientific basis on which we can proceed sensibly and not by allegations and rumour.

My Lords, the Minister continually mentions the scientist but only occasionally and reluctantly mentions farmers and, I would add, gardeners. Does not he think that the new department is becoming lackadaisical in producing the results of research that has been carried out for many years? Would he go into the South West and talk to some of the farmers about the effects which badgers are having at present?

My Lords, as regards going into the South West, I was at the Devon County Show on Saturday, where a number of farmers made clear to me what they thought about badgers, bovine TB and the general stance taken by the department. However, it is important that whatever we do as regards agriculture has a scientific basis. The strong scientific advice was that the trial had to run for the full five years. There has been a slight set-back; nevertheless, that must be the basis of the way forward. I believe that most farmers recognise fully that a scientific basis is needed to justify the approach to badgers which some of them would like to pursue.

My Lords, is the Minister aware that we used to have a tame badger? Is he also aware that one of my children sometimes slept in the straw with the badger and never developed any kind of TB?

My Lords, I was unaware of the sleeping arrangements referred to by the noble Baroness, and shall not comment further. Clearly, there are people who are fond of badgers. Equally, as I hear from the farmers, there are many who blame them for many of their ills.

My Lords, is the Minister aware—there is no reason why he should be—that I, too, was at an agricultural show on Friday, this time at the Royal Show in Belfast? Coincidentally, not knowing that I would be responding to this Question, I spoke about bovine TB and brucellosis, both with farmers and the department. Since the ceasing of testing for foot and mouth disease, the situation has become worse and people are concerned. Can the Minister assure the House that serious measures are being taken to catch up with the testing for those two diseases? I am not a Bertie Badger knocker, but farmers in my part of the world are convinced that there is a close association between the spread of bovine TB and badgers. Can he also tell the House, because I do not know the answer, whether bovine TB is transmissible to humans?

My Lords, in response to the last question asked by the noble Lord, bovine TB is transmissible to humans. However, the vast majority of cases which have occurred within this country are in people significantly over the age of 55 years, who probably developed the disease from unpasteurised milk rather than through contact with animals. The perceptions in Northern Ireland reflect the situation in England. Many farmers are similarly convinced. Nevertheless, I underline the need for a strong scientific basis if we are to move further down the culling road. It may well be that there is a partial causal effect. However, we are also examining other means of transmission, in particular, direct cattle-to-cattle transmission. We want to have the full results of that research before we have the final strategy.

Finally, I assure the noble Lord that we are addressing the backlog which, as I indicated earlier, has been rapidly reduced.

My Lords, would the cattle-to-cattle transmission be relevant in Cumbria? Until recently, there was no bovine TB in Cumbria but, since foot and mouth, there has been.

My Lords, I have to be careful. The answer is that it may be relevant. Although there was a significant increase in TB prior to foot and mouth— it increased by 20 per cent from a relatively low level—it is also possible that some of the latest outbreaks, particularly in areas which did not have TB prior to foot and mouth, are related to restocking. That is a matter we are examining.

My Lords, I beg to move the Motion standing in my name on the Order Paper.

Moved, That the amendments for the Report stage be marshalled and considered in the following order:

• Clauses 1 to 12,
• Schedule 1,
• Clauses 13 to 29,
• Schedule 2,
• Clauses 30 and 31
• Schedule 3,
• Clause 32,
• Schedule 4,
• Clauses 33 to 38,
• Schedule 5,
• Clauses 39 to 50,
• Schedule 6,
• Clauses 51 to 53,
• Schedule 7,
• Clause 54,
• Schedule 8,
• Clause 55.—(Lord Sainsbury of Turville.)

On Question, Motion agreed to.

moved Amendment No. 1:

Page 3, line 46, at end insert "or

(ii) that such information is military technology"

The noble Baroness said: My Lords, in moving Amendment No. 1, I shall speak also to Amendments Nos. 2 and 3. The amendments all relate to new Clause 4 inserted in the Bill on Report by your Lordships following an amendment proposed by me and my noble friend Lord Rotherwick, and by the noble Baroness, Lady Sharp of Guildford.

The purposes of these further three amendments is simply to respond to objections made by the Minister either during debate or subsequently. It is not that I agree with those objections or comments; I was perfectly happy with the clause as passed on Report. However, I want to try to accommodate the Minister and his worries and to dissuade him from having his colleagues in the other place overturn your Lordships' decision. I remind the Minister and, indeed, the House that the clause was passed by an overwhelming majority in this House of 150 to 108; that is, a majority of one-third. That majority comprised noble Lords on all three party Benches as well as distinguished Cross-Benchers, and therefore cannot be dismissed as a party political act.

The Government often pay lip service to your Lordships' House as the finest revising Chamber in the world. Just as we pay due respect to the wishes of the elected House, I believe that the Government should pay due attention to what in this case is the carefully considered and authoritative opinion of so many highly qualified Members of this Chamber with no political axe to grind; merely the wish to preserve academic freedom and maintain the status of the United Kingdom as an international centre of academic excellence.

In my closing remarks before testing the opinion of the House on Report, I said in response to some of the observations of the Minister:

"my amendment may not be perfect but it could certainly be put right at Third Reading. That would be the appropriate thing to do".—[Official Report, 18/4/02; col. 1126.]

In order to see how I could accommodate any genuine technical problems that the Government might have over the clear wishes of this House. I offered to meet the Minister to discuss them with him. I received an offer of an appointment from the Minister's office which, to my amazement, as I told the Minister when I later saw him, was cancelled within a matter of a few minutes. The second telephone call I received from the Minister's department simply stated: "Forget the previous message, the Minister is unable to see you". I thought that meant that the Minister did not wish to talk to me. I am sure that that could not be true, but I did at that stage following such a brusque push off. Therefore, I tabled my amendments to meet my understanding of the Minister's problems—ill founded as they were, as I said. It was only then that the Minister agreed to meet me as late as last Wednesday, 15th May, exactly four weeks after the Report stage of the Bill.

He then wrote to the noble Baroness, Lady Warwick, of Universities UK. That organization, I remind your Lordships, represents university vice-chancellors. The copy of the letter which he faxed to me arrived incomplete with several important pages somehow missing. I did not see what he said to her until last Friday afternoon. I cannot tell your Lordships the exact time because—the Minister may like to know—his fax machine thought the time was 32 minutes past midnight on 27th June 1996. Perhaps that is an undiscovered example of the dreaded Y2K virus, and it lurks in his office.

I shall return to that fax shortly. First, however, I should like to explain each of my amendments, which are all quite simple and which, I hope, improve the clause to the Government's satisfaction. Clause 4(1) sets out the matters on which the Government may not impose transfer of controls or technical assistance controls; in other words, what academic teaching and publication may not be prohibited. Clause 4(1)(c) limits publication and teaching where the teachers know or ought to know that the information is intended or may be used for a number of highly objectionable purposes. These include such matters as the development, operation, and so on, of nuclear, chemical and biological weapons. I shall not read out the 10 lines of the paragraph, but I remind your Lordships that the words used exactly follow Article 4 of the EC dual-use regulation.

Amendment No. 1 seeks to add the words "military technology" to that lengthy catalogue. I propose those words because of the Minister's astonishing intervention after he had lost the first technical Division on a paving amendment. In the discussion on the main amendment he stated:

"I was talking about blueprints on cluster bombs and other activities. That is exactly what the Export Control Bill will control … We have just made a large hole in the Bill by saying that if someone is an academic, he can export blueprint instructions on how to make cluster bombs, electric shock batons … and any military equipment".—[Official Report, 18/4/02; col. 1135.]

With every respect to the Minister, I find it difficult to answer such a fanciful interpretation of the new clause without using the word "nonsense". I hope that the Minister does not mind that word. I content myself by pointing out to the noble Lord and to your Lordships that the whole of the clause is governed by the phrase,

"in the ordinary course of academic teaching or research".

It would he a particularly foolhardy barrister who tried to persuade even the most gullible magistrate or jury that the manufacture of weapons is—I repeat—

"in the ordinary course of academic teaching or research".

However, leaving no "i" undotted or "t" uncrossed, I have added the words "military technology" to the list of prohibited subjects.

Amendment No. 2 is a purely housekeeping or drafting amendment which seeks to make Clause 4(2) clearer. Clause 4(2) preserves the legal restrictions on two types of publication. I hope that I have made the subsection clearer by breaking it up into its two component parts. The first part—which eventually will be lettered (a)—refers to the powers of the Comptroller-General of Patents and new paragraph (b) refers to any other enactment or common law obligation as to secrecy—for example, the Official Secrets Act.

Amendment No. 3 is new. It seeks to replace the previous subsection (4) passed by your Lordships. That made clear that there is nothing in the Act which enables the Government to prevent anyone leaving the country merely because he is possessed of certain information. It followed yet another EC directive.

However, at the belated meeting with the Minister, he expressly assured me that there were no such powers either in the Act or elsewhere, at least in relation to the export of arms and technology. He said that he would repeat that assurance today for the purposes of the record. I shall be glad to accept that assurance from him in due course.

I propose to use the space vacated by that now redundant provision with new subsection (4). Its purpose is to meet yet another of the points raised by the noble Lord—that licensing may in any case be subject to international obligations entered into by the United Kingdom. I believe that the Minister's problem —whatever it is—was anticipated by me and resolved in the wording of Clause 4(1). That states expressly that academic freedom is subject to,

"any international treaty obligation of the United Kingdom or a Directive of the Council of the European Community".

The amendment reinforces that. It also, conversely, makes clear that where any such EC law permits the transfer of technology and technical assistance, the Secretary of State shall grant any necessary licences and not leave the United Kingdom isolated and alone in a sea of secrecy and restriction which is not endured by the rest of the world. The amendment provides that where information is freely obtainable by a touch of a European button, it should not be denied here.

The amendment is, as I said, new and reflects my understanding of the Minister's views. I am sure that if your Lordships agree to the amendment, or, better still, the Minister accepts it, my colleagues in the other place will be happy to fine tune the wording if the Minister considers that necessary.

Perhaps I may now briefly turn to the Minister's letter to the noble Baroness, Lady Warwick, who I see is not in her place. The Minister gave an example of overseas students studying programmes on the modification of semi-conductor chips or medicine including toxology. The Minster admits that the professor would need to be teaching something not in the public domain. He would need to know that the student might intend to use the information for what I will in shorthand call "a bad purpose". That is exactly what Clause 4(1) and (2) spell out. They do not leave a decision to some over-zealous prosecutor.

The letter to the noble Baroness, Lady Warwick, confirms that information already in the public domain is exempt from the operation of the Act. Indeed, it is. But it most certainly was not before the new Clause 4 was added as a result of our amendment, which the Government bitterly opposed and which I infer from their present attitude they want to argue is unnecessary. Using the analogy of belt and braces, we want the law to be precisely defined and not left to the possible changing attitudes of Whitehall.

The letter to the noble Baroness, Lady Warwick, talks at great length about transfer controls and technical assistance controls in the case of dual-use technology, which the Minister says, quite rightly, are subject to European Community legislation. Clause 4 ensures that the United Kingdom keeps within the same boundaries as our European partners. The Government will not be able to achieve their apparent ambition of exercising even more stringent control over academic teaching in the United Kingdom than that which applies in the rest of the EC, and imposing on universities an impossible degree of control which they are not willing to undertake themselves.

I shall return to that point in a moment or two. The last point in the Minister's letter to the noble Baroness, Lady Warwick, referred to the new Clause 9 which was added to the Bill by the Government, obviously as an attempt to answer the new Clause 4. I mention that now in anticipation of the Minister offering it as an explanation to your Lordships. The clause simply instructs the Secretary of State to have regard to the need to avoid unreasonable restrictions. What on earth does that mean?

On Thursday 16th May—the day after my meeting with the Minister—I wrote two letters to him attempting to clarify remaining issues and I received a reply by e-mail to my home at one minute to eight o'clock on Saturday evening when, purely by chance, I was sitting at my personal computer working on these speaking notes. I was astonished at some of the contents of the e-mail. Throughout the Bill's earlier stages, the Minister vehemently denied that the Government were seeking to impose a licensing regime affecting students. The Minister said:

"subsections (2)(c) and (d) of Clause 2 do not cover the licensing of students. The clause contains no power to license students, and no such a power is contained in the — [Official Report, 18/4/02; col. 1120.]

My advisers and I believe that Clause 2 as drafted, before it was amended on Report, could definitely have been interpreted as imposing powers to require not the licensing of overseas students themselves—or indeed of United Kingdom students known to be going abroad—but their teachers to control who can be taught and what they can be taught. The Minister's reply to me stated:

"It is not currently an offence to acquire knowledge which in future could be used in connection with a weapons of mass destruction programme. That is precisely why we are introducing the controls … which will enable the government to prevent transfers of technology".

I echo the Ministers word "precisely". Before Clause 2(2) was drastically modified by our amendment, it enabled the Secretary of State to restrict the transfer of technology within the United Kingdom, including from persons who were outside the United Kingdom. Similarly, Clause 3 enables the Secretary of State to impose controls on technical assistance but, as a result of our successful amendment, that is now also subject to the new Clause 4 protecting academic freedom.

In other words, despite the Minister's denial in his email to me, it is clear that the Government still harbour ambitions to license the teaching of some subjects to some students, as is borne out by his rearguard action over Clause 4—his refusal to accept it and reluctance to discuss it with me. Similarly, the Government have consistently denied that they are imposing a responsibility—indeed, a liability—on universities to vet the motives of students seeking to study here. Yet in his e-mail, concerning offences in connection with weapons of mass destruction programmes, the Minister said:

"You suggested that … should be prevented by entry control of overseas students by the immigration authorities"—

which I had done in my letter to the Minister. He then went on to give me a lengthy explanation of why that is impractical.

Short of refusing all students from certain countries or backgrounds—which the universities obviously cannot do, and would not even if they could—how can they do what the Immigration Service, with its vast information resources, cannot or will not do? Let us consider what happened in the United States last year. Certain students took flying lessons and used the information that they obtained to turn four planes into weapons of mass destruction. The combined resources of the Federal Bureau of Investigation and the Central Intelligence Agency were unable to fathom what they were up to. Why then is it to be the responsibility of universities to vet the bona fides of overseas students when, according to the Minister, the Government cannot or will not do so?

Finally, I repeat that of the three amendments in this group, Amendment No. 2 purely tidies up the drafting and the other two are intended to do no more than meet the Government's objections—even though I do not accept that they are valid. Amendment No. 1 is intended unequivocally to answer the Minister's specious claim that academics would be free to teach their students how to manufacture cluster bombs and other weapons of mass destruction. The question for the Minister to answer, equally unequivocally, is: does he accept my compromise offer? Yes or no. I beg to move.

My Lords, during earlier stages of the Bill, I was one of those who raised concern that amendments proposed by the noble Baroness, Lady Miller of Hendon, would not fully meet the security requirements that the Bill is all about. I should again emphasise my continuing involvement, albeit in an unremunerated capacity, in Saferworld and Oxfam, both of which are closely interested in the Bill.

I thank the noble Baroness for tabling her amendments today, because they address one concern—the provision would no longer simply concern weapons of mass destruction. But with some trepidation, I suggest to her that it still does not cover dual use or non-military security goods. That is a real cause for anxiety. Furthermore, if we are serious about the Bill's purpose—and we must be—while it is vital to protect academic freedom, that cannot be at the expense of ensuring that proper controls are in force. I am still concerned that the amendments passed on Report leave some potentially dangerous loopholes, especially with regard to controls on intangible transfers.

As I understand it, under the Bill as amended, people could visit the United Kingdom and gather information that could then be used in other countries. Controlling that activity is not new. For many years, physical forms of such transfer have been controlled—for example, paper letters and computer disks containing blueprints. The extension of those controls to cover intangible means reflects the need to address new methods of communication. Who could have envisaged the introduction of e-mail in 1939 when the most recent export control legislation was passed? Surely, it is logical that the controls already in place should be extended to cover today's methods of communication. I shall be interested to hear what my noble friend has to say on that point.

My Lords, I should first say that, despite her denial of the fact, the noble Baroness, Lady Miller, and I have been meeting. Indeed, it is a sign of the closeness of our relationship that we were corresponding at eight o'clock on Saturday evening to try to resolve the issue.

I did not want to meet her originally because we were doing important work with Universities UK. It had proposed various scenarios with which it believed that academics were concerned. We wanted to test those scenarios against Clause 9 to see whether it was robust in defending academic freedom. It was, but I shall come to that in a moment.

The clause to which the amendments relate, Clause 4, has introduced some highly damaging loopholes to the Bill, as I explained on Report. As the noble Baroness said, she seeks through the amendments to deal with some of the concerns that I mentioned on Report. While grateful to her for that, I regret that the amendments do not solve the problems with Clause 4. Indeed, they could not do so, because Clause 4 simply takes the wrong approach.

It is worth going back to first principles. The Bill is about regulating exports, trade, intangible transfers and technical assistance that could have extremely serious consequences—consequences that must be the concern of any government with a responsible foreign and defence policy. The Bill can be used to impose controls only within the limits set by Clause 6 and the schedule. That means that it can be used to impose controls only on military equipment or technology, or equipment or technology whose export or transfer risks adverse consequences, such as damage to our national security or its use for human rights abuses, in terrorism or in serious crime.

We must ensure that, in regulating to try to avoid those serious consequences, the Government do not damage fundamental freedoms. As I have said, the Human Rights Act 1998, which the Government enacted, has the precise function of protecting fundamental freedoms, such as the right to freedom of expression. We have, nevertheless, gone further and included what is now Clause 9 to meet the valid request of the academic community for protection of academic freedom in the Bill.

Clause 9 does not use the words "academic freedom", but it goes to the heart of what academic freedom is about, by protecting freedoms for all—not just members of the academic community—to publish or otherwise make publicly available their research. Clause 9 means that the Secretary of State could not impose unreasonable controls on the process of making information generally available to the public or on the communication of information already available to the public, without seriously risking legal challenge. No government will want to risk seeing a court strike down aspects of their export control regime.

As I said, Universities UK sent us a list of scenarios that illustrated the kind of situation about which universities were concerned. We tested them against the dummy orders and the Bill, and I have placed the department's answers in the Library. I hope that everyone will see from those that the Bill protects academic freedom.

My Lords, I have read the letter that the Minister sent to the noble Baroness, Lady Warwick of Undercliffe. One thing that worries me greatly about the department's answers is that, although they covered the case of, for example, a Pakistani student coming over and taking an MSc course in computer technology, they did not cover the case of a postgraduate student coming to work as a PhD student with a professor and participating simultaneously in the development of his research.

As the Minister knows, that happens frequently. In effect, PhD students act as research assistants to academics in developing their own work. That work is not in the public domain. Academics will not want to put their ideas in the public domain before they have formulated them. There is concern in the academic community that the Bill would restrict relationships with postgraduate students in such an environment.

My Lords, there is a question about how "public domain" is defined. I am convinced that there will be no problem for that kind of relationship. It would not be considered to be a communication of the sort for which there would have to be a licence. It would be regarded as being in the context of basic research, as that is defined in the regulations.

My Lords, I do not like to interrupt the Minister hut, having heard his answer to the noble Baroness, Lady Sharp of Guildford, I would like him to define what is in the public domain.

My Lords, the question is what is defined in the clause. As long as the communication is not of secret information to another country, it will be considered to be within the public domain or generally available to the public.

My Lords, if the work is of an applied nature, it would not, under the terms of the European directive, be defined as basic research.

My Lords, the point that I was making was that it would be within what is defined, in this case, as being publicly available. It will not be a secret communication and will not, therefore, be covered. That is why I think that the concerns of the academic community about that are unwarranted.

My Lords, the question is pertinent to our debate. First, the research described by the noble Baroness, Lady Sharp of Guildford, is not, by anybody's reckoning, in the public domain. We must ask the Minister for the Government's definition of the public domain. The Minister said that it depended on what was and what was not in the public domain. The research referred to would not be in the public domain.

My Lords, the new orders relating to intangible assets that we propose to introduce will include an exemption for basic scientific research. The point is that there would be no difference for a PhD student working in the circumstances described by the noble Baroness, Lady Sharp of Guildford, or a student being taught as in the examples that we gave. Both should be covered because the work should be publicly available. That is our legal advice.

I am prepared to go on testing the point and to consider any other scenarios that the noble Baroness or anyone else wants to raise. We will test them against Clause 9, and, if there is any doubt, we will examine the situation. However, it must be tested against what is set down. For all the scenarios that we gave, which are similar to those described by the noble Baroness, there is no problem.

My Lords, the Minister has tried hard to explain what he means, but I am as mystified now as I was at the start of the debate.

The Minister has not dealt with the example that was given by my noble friend Lady Sharp of Guildford. The professor may be engaged in applied, not basic, research and may be looking for a product process or method of operation—the definition of applied research. He may enlist the help of a PhD student with his research. The research is not in the public domain. The professor will have no intention that it should reach the public domain until he has reached a conclusion and published the results. While the research continues, it is private, as are communications between the professor and the PhD student. Will the Minister say whether that is one of the scenarios that has been considered? If not, will it be fed in?

My Lords, we must be clear about it. There comes a point at which it is no longer the case that we want the process to be totally free. For example, in cases in which a student is working on a piece of applied research and there is no intention of making it publicly available, we would have to consider licences.

The Bill must cover a situation in which an academic is giving someone information that is not for the public domain. It must deal with the secret passing on of information about the sort of military technology that we need to cover. If the information is secret to start with and is not in the public domain and if the research is applied research that could be used for the sort of things with which the Bill is concerned, we would have a different situation.

My Lords, I am sorry to intervene again. Will the Minister consider that an academic carrying out research that will lead to publication—a paper for the journal of the Institution of Mechanical Engineers, for example—will not, for the time during which the research is continuing, want other people to discover what he is up to, in case they pre-empt his results? The research is private and is between him and the research student for the time that it continues, until it gets to publication stage.

My Lords, I hate to keep coming back to the point. If the aim is to put the research into the public domain, there will be no problem. If there is a doubt about a particular aspect of the research—when it will go into the public domain, for example—that cannot be covered by Clause 9, I am prepared to consider such a case. However, I am sure that such research will be perfectly all right, provided that the purpose is to put it into the public domain.

As I say, we are perfectly prepared to debate that issue because that is what we see to be the essence of academic freedom. But I repeat that if the aim is not to lead towards a paper, that is exactly the situation in which we have to draw the line. Otherwise, we fall into the mistake—which everyone now accepts to be a mistake—of having a piece of legislation which puts all kinds of restrictions on companies not to transfer information, but promptly allows academics to do so.

I now return to the points I was making on the three amendments.

My Lords, will there be an opportunity to deal with these matters in the Commons?

My Lords, Lords amendments have to be considered by the Commons and I imagine that some Members will want to take the matter forward then.

I shall now try to explain why in essence Clause 4 takes the wrong approach and therefore why these amendments do not help. Subsection (1)(c) of Clause 4 would exempt any transfers in the normal course of academic teaching and research control. The noble Baroness, Lady Miller, has made exceptions for weapons of mass destruction and, in amendments under consideration today, for military technology. But the Bill provides the powers to impose controls on the transfer of non-military technology which could have serious consequences. For example, under the schedule, we can impose controls now on the export and transfer of technology capable of use in human rights abuses.

Perhaps I may give your Lordships a concrete example of the type of technology that we currently judge could have such a consequence. We control the export of certain paramilitary equipment and related technology. In particular, the Government announced in 1997 a ban on the export of equipment which we have evidence has been used in torture. That includes items such as electric shock belts and electric shock batons. The ban also applies to the export of the technology needed to develop, make or use these items and we intend similarly to ban its electronic transfer abroad under Clause 2 of the Bill when we have the powers to do so. It is the Government's view that it is quite unacceptable that anyone should he exempt from this ban for any reason whatever.

It can be argued, as the noble Baroness has argued, that it is not likely for the academic community to be engaged in research in this area. But, if I may say so, that is not the point. In the Government's view, it would simply be wrong in principle to have legislation under which such transfers could be carried out legally as of right.

It may well be asked, "Why not simply add the technology I have mentioned to the list of exceptions?". However, every time one makes such an attempt to close a loophole opened up by the clause, one gets closer to Clause 9. Clause 9 was carefully drafted to protect academic freedom on the face of the Bill, without opening up major loopholes in the Bill and then trying to close them up again. We consider it wrong to provide an absolute and immutable exemption in primary legislation for any and all academic research which could have the kind of consequences set out in the schedule. We therefore do not believe that the defects of Clause 4 can be remedied without essentially redrafting it in the form of Clause 9.

Perhaps I may remind the House of one additional point. These amendments today do not restore what was formerly Clause 2(2)(c) and (2)(d) to the Bill which allowed for controls on transfers of technology within the UK where there was reason to expect this would be used abroad. These subsections are essential to the integrity of the Bill Without them, we will have a glaring loophole. As noble Lords are aware, we intend to introduce a requirement to obtain a licence if someone knows or is informed by the Government that a transfer of technology is or may be used in a weapons of mass destruction programme. Without these subsections, such a requirement could not apply if the communication of this technology took place in Britain.

Turning now to another issue, perhaps I may take this opportunity to reassure the House on a point raised by an earlier version of the amendments tabled by the noble Baroness, Lady Miller, and the noble Lord, Lord Rotherwick, which they have now withdrawn. That would have inserted in Clause 4 a provision stating:

"No order under this Act shall make it an offence for any individual to leave the United Kingdom or otherwise restrict the liberty of any individual to do so".

The noble Baroness, Lady Miller, has informed me that site is now satisfied that the Bill will not allow such restrictions to be imposed, which is why the amendment has been withdrawn. However, she asked me whether I would reassure the House on that point and I am happy to do so. Let me now confirm that there is absolutely nothing in the Bill that would allow a government to make it an offence to leave this country or in any way to restrict someone's freedom to leave the country.

The noble Baroness and the noble Lord have proposed to get rid of what is now Clause 4(4) and I am pleased that they have done so because that provision, as it currently stands in the Bill, would, among other things, have effectively disabled Clause 3, a clause which the Conservative Party has previously sought to expand. But I accept that that was not the intention.

The new subsection tabled to replace it would require the Government to issue licences under any directly applicable Community provision in such a way as to meet the requirements in Clause 4(1). I am afraid that such a measure would simply be incompatible with our obligations under the European dual-use regulations. It is true that that regulation provides that licensing of the controls contained within it is the responsibility of member states. But the regulation also makes clear that member states must make those licensing decisions on the basis of certain considerations, including the EU code of conduct on arms exports.

My Lords, I am grateful to my noble friend for giving way. He mentioned controls and it might help the House if he could say what was the annual value of Britain's exports of military equipment, technical or otherwise.

My Lords, I do not have that figure to hand, but I shall be happy to write to the noble Lord and let him have it. In the discussion of the Bill, we have passed the point of debating whether we should have any controls on our exports. We are now considering the minutiae of that. However, if there are figures I can let the noble Lord have relating to the value of our exports, I shall be happy to provide them.

The new subsection tabled to replace Clause 4(4) would require the Government to issue licences under any directly applicable Community provision in such a way as to meet the requirements in Clause 4(1). I am afraid that such a measure would simply be incompatible with our obligations under the European dual-use regulation. It is true that this regulation provides that licensing of the controls contained within it is the responsibility of member states, but the regulation also makes clear that member states must make those licensing decisions on the basis of certain considerations, including the EU code of conduct on arms exports. Imposing a duty on the Secretary of State to grant certain licences in the interest of academic freedom would constitute a misuse of the licensing powers conferred by the regulations by using the powers for a collateral national purpose.

If I may conclude, it is for the noble Baroness to refine Clause 4 if she wishes. We will not oppose that. But these amendments do not make Clause 4 and a deletion of part of what was Clause 2 of the Bill acceptable. This House has done much to improve the Bill since it began its scrutiny of it in January. It was, before Report, a better Bill than when it left the other place. But in accepting Clause 4 and deleting part of Clause 2, this House has severely damaged the Bill. Therefore, the Government will have to look to the other place to put that right. As I said, we are prepared to continue the debate on Clause 9 and test any further scenarios against it, but we believe that there is no way that the defect of Clause 4 can sensibly be put right.

My Lords, before the Minister sits down, perhaps I may ask about a matter which puzzles me. I apologise if he has already covered it. Is there an intended distinction between,

"information in the public domain",

in Clause 4 and,

"information generally available to the public".

in Clause 9? I should have thought that in reality the words used in Clause 9 are a definition of the public domain.

My Lords, it is correct to say that Clause 9 was drafted by legal advisers to the Government. The phrase "generally available to the public" is more commonly used in UK law to denote things that a member of the public, with reasonable diligence, could find and gain access to lawfully. That is the distinction being made at that point. The noble Lord is right in that it takes us a long way towards defining what is meant.

My Lords, the Minister has made various points and if I can I shall try to deal with them all.

First, I am glad that the Minister is confident that the House of Commons will have sufficient time to debate the points made by his noble friend Lord Campbell-Savours. It is our experience that such debates are very short: one, two three, the debate is finished and the legislation comes back. I say that because this matter needs careful consideration. That is why we have tried, as it were, to put everything on the table today, even though we have done it before. We think that this matter is extremely important.

I should like to thank the noble Baroness, Lady Sharp, and the noble Lord, Lord Avebury, for coming right to the point of this. I think that the Minister has misunderstood what we are talking about here. It is all very well to say that ultimately the research may well be put into the public domain—which is the point he sought to make—but much research is undertaken before reaching that stage which is then abandoned and thus never reaches the public domain. Thus the point I seek to make is that research students working on these areas with professors in universities may find that they are breaking the law without even knowing that they are doing so. That is because no licence would have been obtained under the circumstances that the Minister has suggested.

Perhaps I may make one or two other points. The Minister referred again to cluster bombs, weapons of torture and so forth. I can only reiterate once more that the teaching of such technologies does not take place in the ordinary course of academic education. If anyone does become involved in this kind of thing, it is usually, or even always, done for a government department. It is undertaken with the Defence Evaluation and Research Agency. If such technologies were to be sent where they should not go, then the Official Secrets Acts would come into play. That too is not appropriate.

I say the same to the noble Lord, Lord Judd, in response to the point he raised. It is already covered. I should also like to say to the noble Lord—I hope that he will forgive me because outside this Chamber we are always extremely friendly—that I was not at all surprised at his intervention. At the start he supported what I had to say in Committee. He did not do so on Report. On another matter, that of sustainable development, he urged me to vote in favour, and on Report—when noble Lords are not supposed to intercept the Minister—he repeatedly begged his noble friend on the Front Bench to take heed. Then he did not vote for it anyway.

I think that the noble Lord likes to play a bit of a game across the Dispatch Boxes.

My Lords, the noble Baroness is a very fair combatant in debate. She would also acknowledge that I did not support the Government on that occasion.

My Lords, I certainly do acknowledge that and I said as much to the noble Lord in the corridor. However, he made a point of not opposing the Government. I suggest that might possibly be the reason why he has returned to the matter at this particular stage.

I hope that the Minister will not mind my saying that we did not have several meetings. We met once last Thursday, I with my adviser and the noble Lord with his. That meeting took place a long time after our deliberations on Report. It meant that both he and I had to work right up to the last minute on creating something suitable that could be brought before the House. I think that that is an enormous pity.

I also note his words about the letter he wrote to his noble friend Lady Warwick of Undercliffe. I too have written to her to say that I do not think that the points made by the Minister actually hold water. That is an extremely important matter.

The noble Lord said that all this has been tested against the provisions of Clause 9. I do not wish to be ungenerous with regard to Clause 9, but it can be described, if you like, as only the lowest kind of whisper of a restriction. It states only that the,

"Secretary of State shall have regard—

if he has regard, then I support that he will have regard—

"to the need"

not to be unreasonable. Secretaries of State may not be unreasonable about anything; if they are, they are subject to judicial review. They cannot be unreasonable. Furthermore, the decision is still returned to the hands of the Minister. I was not very complimentary about Clause 9 before, and I am even less complimentary now that it has been returned yet again with the suggestion that it represents the end of our deliberations.

The Minister commented that if we do seek to put this wording in place, then the Government will not oppose it. Can the noble Lord tell me whether the Government are going to accept the amendments that I have tabled today?

My Lords, I wish to make it quite clear that the Government will not seek to oppose the noble Baroness's amendments. If the noble Baroness wishes to amend the clause in this way, the Government will not stand in the way of the noble Baroness's attempt to make Clause 4 as good as she thinks it will become. If the noble Baroness wishes to put forward her amendments, we shall not oppose them because we do not seek to make things more difficult. We think simply that Clause 4, even with the proposed amendments, is quite unacceptable in that it would leave a major hole in the Bill.

My Lords, in that case, despite the fact that I was very happy with Clause 4 as passed in this House with a huge majority, I shall put forward my amendments. I have done this to help the Minister.

On Question, amendment agreed to.

moved Amendments Nos. 2 and 3:

Page 4, line 1, leave out "which otherwise affects" and insert "or (b)"

Page 4, line 13, leave out subsection (4) and insert—

"(4) Where any directly applicable Community provision imposes any controls on the transfer of technology or on participation in the provision of technical assistance, it shall be the duty of the Secretary of State to exercise such powers as he or she may have under that provision to grant such individual, global or general licences as may reasonably be required to secure that the activities excluded from control by subsection (1) may be carried out under one or more of such licences."

On Question, amendments agreed to.

moved Amendment No. 4:

After Clause 5, insert the following new clause—

"TRADE CONTROLS: ACTS OUTSIDE THE LNITED KINGDOM

(1) This section applies if—

(a) a United Kingdom person or a person ordinarily resident in the United Kingdom or a body incorporated under the law of any part of the United Kingdom does anything in a country or territory outside the United Kingdom, and

(b) the act would, if done in the United Kingdom, constitute a trade control offence (as defined below).

(2) In such a case—

(a) the act constitutes the offence concerned, and

(b) proceedings for the offence may be taken in the United Kingdom.

(3) For the purposes of this section, trade control offences are any unlicensed acquisition or disposal, the movement, or activities which facilitate or are otherwise connected with the acquisition, disposal or movement, of small arms and light weapons, and ammunition for small arms and light weapons.

(4) Other acts done outside the United Kingdom and the Isle of Man may also be defined as trade control offences, but only if they are done by a person who—

(a) is a United Kingdom person or a person ordinarily resident in the United Kingdom; or

(b) is acting under the control of a United Kingdom person or a person ordinarily resident in the United Kingdom."

The noble Lord said: My Lords, in our debate on Report on 18th April, I withdrew a similar amendment to this in order to give further consideration to the response of the Minister. Since then I have both written to and discussed the matter with him. Following on that, I have framed the amendment now before the House so as to take into account the concerns raised by the Minister in relation to what he considered the rigidity imposed in the earlier amendment in relation to trafficking in long-range missiles and instruments of torture. This has been achieved by deleting a section in the previous amendment relating to missiles and torture equipment which in practice will be adequately controlled in the proposed secondary legislation, as set out in the dummy orders.

Noble Lords should note one further change from the amendment we debated on Report, in that the current amendment extends its application to persons ordinarily resident in the United Kingdom as well as to United Kingdom persons and corporate bodies.

The underlying reason for the amendment is to protect the countless innocent civilians, mainly women and children in the developing world, who otherwise would be exposed to death or injury as a result of the activities of United Kingdom small arms traffickers. The amendment would achieve this by applying controls to the extra-territorial trafficking of small arms, light weapons and ammunition.

I should emphasise that the amendment does not call for or seek to achieve an outright ban on the trafficking of such weapons. It simply seeks that the trafficking should be subject to licence. The proposed government legislation purports to introduce controls on the trafficking of arms, but then conveniently provides a loophole by limiting its application only to UK persons conducting some or all of their trafficking while in the United Kingdom. The curious result following that is that small arms and light weapons manufactured in the United Kingdom are subject to export controls, while goods manufactured outside the United Kingdom can be freely trafficked by UK nationals and residents provided only that they remove themselves from the United Kingdom for that purpose.

I do not propose to repeat the arguments—they were fully covered in the debate on Report—but I shall touch briefly on the reasons given by the Minister for opposing the amendment. As I have stated, the first objection relating to an undesirable degree of rigidity in relation to long-range missiles and instruments of torture has been met.

The second objection relates to concerns about enacting extra-territorial jurisdiction and the difficulties faced in the enforcement of such legislation. However, such concerns are impossible to reconcile with the Government's extra-territorial legislation earlier this year in relation to corruption and their intention to introduce extra-territorial controls in relation to long-range missiles and instruments of torture. Surely if the Government believe that they can enforce control of extraterritorial corruption and trafficking in long-range missiles, they can equally enforce the control of trafficking in small arms and light weapons—that is, of course, if they have the will and determination to seriously address the issue of small arms, which they apparently no longer have.

It is difficult to avoid the conclusion that the willingness of the Government to legislate extra territorially on long-range missiles but not on small arms has less to do with the relative difficulties of enforcement than the fact that missiles propose a threat to the United Kingdom whereas small arms do not.

The third objection is that the Government are apparently deeply concerned that ill-informed UK small arms dealers based overseas may be ignorant of the law and unwittingly transgress it. The Government seem to have forgotten the presumption in law that ignorance of the law is no defence. Furthermore, the Government are not obliged to prosecute if the circumstances do not justify it. Further, the Government are unaware of the approximate number of United Kingdom arms traffickers based overseas whom they are so anxious to protect. Surely concern for an unknown number of overseas-based UK arms traffickers does not justify opening up a gaping loophole for every arms trafficker based in the United Kingdom.

None of the Government's reasons for opposition to the amendment stands up to critical analysis. One cannot help suspecting that there are other reasons or pressures for such opposition. I hope that in his response the Minister will deal with these issues or reassure the House that such suspicions are unfounded. The clear message that the proposed legislation gives to UK arms traffickers, whether based in the United Kingdom or overseas, is, "Do not traffic in the United Kingdom. But, if you traffic outside the United Kingdom, as far as we, the United Kingdom Government, are concerned, you have nothing to fear". This is the approach of a government which stated in their election manifesto:

"We will legislate to modernize the regulation of arms exports, with a licensing system to control the activities of arms brokers and traffickers wherever they are located".

The amendment is important because in the developing world small arms trafficking by UK nationals and residents has been a critical factor in leading to the deaths of countless innocent civilians. If the amendment is agreed to, it will act as an important deterrent to United Kingdom arms traffickers and will signal to other countries that the United Kingdom, which has in the past taken a leading role in international attempts to control small arms, is willing to match its words with actions, and the lives of many potential victims of arms trafficking will be protected. I beg to move.

My Lords, I support the amendment of the noble Lord, Lord, Joffe, which stands also in my name and that of my noble friend Lord Redesdale. Noble Lords who have followed the debate will know that this is the fourth time the arguments have been rehearsed. It is apparent—unless the Government make a concession today—that we have failed to persuade Her Majesty's Government of the strength of our arguments.

This amendment is of a more limited nature than the one that the noble Lord, my noble friend Lord Redesdale and I brought forward on Report. It seeks to limit the restriction on arms brokering on a world-wide basis to the small arms trade, which, as the noble Lord, Lord Joffe, indicated, is a serious international problem.

I have said before that I have some sympathy for the Minister on this issue. He is, to some extent, hoisted by the petard of his full disclosure. He could have come to the House and asked for the Bill to be passed in its current form without disclosing what the orders he proposes to bring forward under the Bill will contain. To some extent, the debate today is not about the form of the clause. We were comfortable with the clause as it was previously drafted but, armed with the knowledge contained in the dummy orders of what the Government propose to do, we are uncomfortable about not having on the face of the Bill the further restrictions suggested by the noble Lord, Lord Joffe.

However, having listened to what the Minister has said on three occasions—no doubt he will say the same today—I remain unpersuaded as to why the Government are not prepared to move on this issue. Your Lordships' House is not a place to play party politics, but in their manifesto the Government stated that they would apply arms controls to UK citizens wherever arms trading activities were performed. I do not regard the dummy orders and the refusal to introduce controls over arms brokering on an extraterritorial basis as satisfying that manifesto commitment.

It is common ground on all sides that the requirement to impose extra-territorial controls for small arms dealing would meet at least five of the six Home Office criteria for extra-territorial legislation. It is simply a question of the Government's judgment that they do not feel it appropriate to impose restrictions on an extra-territorial basis on UK citizens living and working abroad.

I do not want to detain the House very long but I hope that the Minister will offer an explanation. On Report, he conjured up a picture of a UK citizen, living abroad and working as an employee of an arms manufacturing company, who would not be aware that UK legislation prohibited the actions he was taking on behalf of his company, which were perfectly legitimate under the law of the country in which he was resident. I say "he"; I suspect most dealers in arms are still "he's". It is a non-sexist world; nevertheless they undoubtedly would normally be "he's". The Government are concerned that such a person would not be aware of the restrictions imposed upon him—whether he was living in the United States, Australia or wherever—and would not understand that what was perfectly legitimate there was prohibited under the laws of the United Kingdom.

I find that argument difficult to accept when it is applied to dealers in small arms. I find it almost inconceivable that someone who wishes to retain all the advantages of UK citizenship while living in Australia, the United States or wherever, would be unaware that there are requirements and restrictions on dealing in arms which are applicable to him while he is living in that country.

I ask the Minister to respond to the following point. We all know that in the trade of arms dealing commissions are paid. Commissions—

My Lords, I am grateful to my noble friend for giving way. He will be aware of the exception to his rule; namely, Captain Spicer, who said that he was completely ignorant of the international embargo on arms sales to Sierra Leone when he proposed to supply weapons to that country.

My Lords, I thank my noble friend for his intervention. As regards the provision of arms, let us take the example of Captain Spicer's successor. I understand that under the Anti-terrorism, Crime and Security Act the Government propose to introduce full extra-territoriality on corruption offences. It is common ground on all sides of the House that the provision on corruption offences will apply to a UK citizen whether that person is resident inside or outside the United Kingdom.

In arms dealing very heavy commissions are often paid which, by most definitions, constitute corruption. So if Her Majesty's Government are not prepared to move on this issue, we shall have a situation whereby a UK citizen living and working for a company in Australia or in the United States will not be caught by any restrictions on brokering arms under the Export Control Bill; however, under the corruption provisions, he will be expected to know that he cannot engage in the practices in which he normally engages in selling arms to the third world. Is not that a foolish position for the Government to get themselves into?

My Lords, the noble Lord, Lord Joffe, is to be congratulated on persisting with this amendment. It is crucial to the credibility of everything that we are trying to do.

There are other arguments besides those that have already been deployed. The Government have argued, for example, that it is difficult to justify drawing a distinction between small arms and light weapons on the one hand, and other weapons on the other. However, there are clear classifications on what constitutes small arms. For example, the "Joint Action on the European Union's contribution to combating the destabilising accumulation and spread of small arms and light weapons" of December 1998 treats small arms and light weapons as a special case, and its annex contains a list of items which are to be regarded as falling within this category. In addition, the fact that there has been a United Nations international conference on small arms and a UN firearms protocol surely more than adequately indicates the international importance given to them as an identifiable category and a special case.

I want to say something slightly difficult to my noble friend the Minister, whom I greatly respect. Inevitably, the longer the Government oppose this measure, the greater is the speculation as to what is really behind such opposition. Some are already asking whether it could be that there is a convenient loophole here for governments. Perhaps it is envisaged, for example, that activity of a UK offshore broker might on some occasion be of help to government. There is a considerable grey area when considering the activity of brokers in conflict zones. Brokers can indeed be a temptation to governments. I think, for example, of the recent official report by the Dutch Government on the 1995 Srebrenica massacre, which was published last month. According to the evidence from the Netherlands, US intelligence agencies secretly broke a UN arms embargo during the 1991–95 war in the former Yugoslavia by channelling arms through Islamic Jihad groups which Washington is now hunting down across Europe and Asia.

I am not implying that the UK Government are in any way involved in such activities, but if the Government do not control British dealers overseas, cynics will inevitably ask whether this is a loophole of convenience and just how far the Government in reality want to regulate all such activities. Does my noble friend not see how that doubt can arise? Or could such a loophole be left to be unscrupulously exploited at some future date by Ministers not as honourable as my noble friend the Minister on the Front Bench?

As the noble Baroness, Lady Miller, said, she is a good friend, but a stern critic. I have to say to my noble friend the Minister, and I hope that the noble Baroness is listening, that I believe that the amendment is central to the credibility and purposes of the Bill. If the Government insist on resisting the noble Lord, Lord Joffe, and if he decides to divide the House, I shall not be able to support the Government in their opposition to his amendment.

My Lords, I want to reassure the Minister that the Government are not alone on the question of arms control, in case they are feeling isolated. There are humanitarian agencies all over the world whose members work on this issue every day. I can give examples to illustrate that in some parts of Africa—for example, in Ethiopia, where World Vision has conducted a valuable survey on the impact of small arms—the gun culture is being successfully confronted by NGOs, which are often working alongside government in conflict resolution and development programmes. So the NGOs are engaged, and accordingly expect corresponding advances at international level.

I take a slightly different approach to the amendment from that of my noble friend. I feel confident that the Government are moving steadily towards the extra-territorial control of small arms brokers and trafficking as stated in the 2001 manifesto. We, on behalf of many specialised organisations and concerned individuals welcome that. We should encourage, not criticise, Ministers who represent the Government and who therefore understandably have to move one step at a time.

I have re-read the Minister's response on Report. It is arguable that he was, in fact, accepting the amendment and not rejecting it. He said:

"as I explained, the Bill would not preclude the introduction of controls along the lines of those proposed in the amendment. It would permit the Government to introduce extra-territorial controls on trafficking and brokering in small arms and light weapons should we consider that appropriate in the light of significant new developments—such as, for example, reaching international agreement to apply trade controls extra-territorially or to ban certain exports".—[Official Report, 18/4/02; col. 1145.]

When I re-read those remarks, I was much more confident than I had been the first time.

I must press the Minister again on the point on which I intervened then. Surely, if the Government are so close to recommending an extension of controls within an international agreement, it would be logical to reflect such an extension in this Bill. That would demonstrate renewed commitment to the manifesto and would he wholly consistent with the earlier response to public consultation on the White Paper, which was very favourable. It would also give a lead to the international community in line with its already prominent role in the UN programme of action and the new EU common position.

It is worth quoting the remarks of the former Foreign Secretary, Robin Cook, on 27th July 1997, when the Government took unilateral action on torture equipment. He said:

"We have considered with our European partners how they might align themselves with this policy. While there is broad support for the idea of controlling equipment which evidence shows may be used in torture … not all our partners control the export of the same equipment".

In other words, this amendment could be a catalyst to the international agreement which the Minister seeks rather than a consequence of it. I appreciate that there are subtleties in arms negotiations, but I submit that Britain's hand would he strengthened.

I noted that the Minister made no comment on the precedents which were offered last time by the noble Lord, Lord Judd, and others for extra-territorial controls in the areas of anti-terrorism, corruption, drugs, chemical weapons, sexual offences and landmines. The list is very long now.

Understandably, the Minister said that he was concerned about practicalities as well as about moral imperatives. However, on the question of enforcement, as controls will have to be in place for long-range missiles and torture equipment, we are talking of an extension of controls already in place. There is no need for a new definition of brokering, for example, or trafficking. In many countries, controls will already be in place. Taking the Minister's Australian example, if domestic jurisdiction is satisfactory, there may be no need for any further licensing.

Surely the Minister will agree that, difficult as enforcement will always be, in those other cases of corruption and so on, it was decided that practical difficulties should not stand in the way of legislation, so that UK traffickers and brokers, wherever they are, should know exactly where they stand. I remind the noble Baroness, Lady Miller, who has left the Chamber, that she has also spoken of residence in the UK, which would be another extension of this amendment. In time, we shall be able to persuade our EU and other partners, some of whom are ahead of us in this, that legislation is as important as co-operation.

In conclusion, I hope that the Minister will agree that this amendment merely continues a process that the Government have already accepted.

My Lords, in supporting this amendment, I know that I speak for my colleagues on this Bench, notably for my brother the right reverend Prelate the Bishop of Manchester, who is sitting beside me. I thought that he would be talking today and not me.

The arguments I wish to make have already been advanced and I shall not repeat them except to underline two points. First, the precedent for extraterritorial jurisdiction in pressing matters like this already exists. Secondly, I emphasise the humanitarian point: the terrible consequences of traffic in small arms and light weapons, particularly in Africa; and the cost not only to those populations but to other parts of the world, including this country. The oncosts of the use of small arms in civil conflicts is truly terrible and wasteful of every type of human resource. Every step should be taken to work effectively against it.

My Lords. I was not trying to undermine the argument of my noble friend Lord Razzall when I intervened in his remarks to point out that the case of Colonel Spicer—whom I inadvertently demoted to captain—provides an example of someone operating from the United Kingdom who set up a deal to procure weapons overseas and supply them to a third country. Colonel Spicer went to Vancouver, where he met a Thai businessman, and he arranged for the shipment of 10 million dollars-worth of light weapons to Sierra Leone in contravention of a UN embargo. Some noble Lords will remember that that led to inquiries by the Select Committee on Foreign Affairs in another place, to the commissioning of an inquiry by a distinguished High Court judge, and to the Government's getting a lot of egg on their face for allowing it to happen.

I also wanted to underline the fact that such transactions can readily be undertaken even now. I wonder whether the Minister watches the Mark Thomas show on television. I gather that he does not. I happened to attend a recent recording of the show, at the Bedford Arms, in south London, and I should like to describe what Mr Thomas put over in the hour that we were with him. He set up a dummy company with a fax machine, an e-mail address and a letterhead and he sought quotations from a subsidiary of BAE—Heckler & Koch, from Switzerland—to supply light arms to Zimbabwe and Algeria. He showed that it was quite easy to get the company to commit itself to one of those transactions. In the other case, however, the company suggested that it might be better if the dummy company went to Finland, where the company's associates might be able to fill the order.

So Mr Thomas talked to the people in Finland and found that there was no problem at all in acquiring the weapons either in Finland or in Switzerland to sell to these sensitive destinations—Zimbabwe, where there is an embargo, and Algeria, where there is a very high casualty rate in extra-judicial executions, as the Minister is undoubtedly aware. The point is that Mr Thomas did that with absolutely no resources at all. If someone like that—who, as he himself confessed, knows nothing about the arms trade—can enter into such a venture for the first time and have no difficulty procuring weapons for transfer to such sensitive destinations, then surely we do need legislation like this.

It is clear from examples that have been given that people have genuinely engaged in such transactions. As the pages of Africa Confidential reveal, people like John Bredenkamp do procure weapons from a secure base in the home counties for transfer to countries in Africa where they are used to kill people. As the noble Lord, Lord Judd, I think, has already remarked, light weapons kill a great many more people in Africa than do the heavier weapons that occupy so much of our attention. I therefore beg the Minister to take this amendment seriously. I hope that noble Lords will pass it. If we do not, there will be a very severe gap in the Bill which we shall live to regret.

My Lords, I should like to identify a fact that dictates the course of this amendment to this clause The fact is that, every year, 5 million people, including 2 million children, are killed by small arms. Bullets kill many more people than do bombs. That destruction, coupled with the incalculable numbers who are injured by firearms, should require any international legislature to consider its powers to prevent such carnage. Four considerations therefore arise if, acting as a civilised legislature, we wish to deal with such a problem. The first is that, surely in the United Kingdom, the unlawful brokering of small arms which creates such death should be forbidden. Whether the citizen of our country who is doing it is resident here or abroad, the morality is the same, whatever the geography.

Secondly, I said that dealing should be dealt with by a legislature if it was unlawful. As I understand it, Amendment No. 4 embraces a licensing system that someone living abroad could take advantage of just as he might if he were brokering in this country. The third consideration is that a person dealing in arms is doing so for profit. It is usually a consequence of business life that one learns the law that dictates how one can make that profit. The idea that a foreign resident UK broker cannot be proceeded against because he might not know the law borders on the absurd. The fourth consideration is extra-territoriality, which is a difficult problem. I acknowledge the problem, as evidenced in the remarks at Report stage of my noble friend the Minister. However, which is better—no action at all to meet a problem, or some action that involves difficulty? A civilised country would surely choose the latter.

Those four considerations to try to overcome that fact found Amendment No. 4. We on these Benches historically have taken a firm stance against illegal brokering in arms. I propose to maintain that stance.

It appears from what the Minister said on Report that there is a solution to this problem for our national legislature, which the Government foresee. I shall identify it and invite my noble friend the Minister to confirm it. Under Clause 6 of this Bill, there are general restrictions on control powers. In other words, the Government cannot control exports unless the provisions of Clause 6 are met. The principal provision of Clause 6 is that the powers can be exercised so as to permit this country to give effect to a provision of European Community law or to an international obligation. In other words, if Europe takes concerted action against the brokering of small arms, so may we. If the international community takes a similar course, we will join it. That solution is not a perfect one.

However, I invite the Minister to confirm that this clause, which refers to a schedule to the Bill that plainly involves controlling the brokering of small arms, will be vigilantly considered by the Government, and that in Europe they will pursue European action for the kind of control that the clause envisages, as I am sure they will do internationally.

My noble friend the Minister has a great intellectual capacity to speak clearly when the occasion requires it and not to retreat into the sometimes obscure verbiage of a Ministerial brief.

We on these Benches look forward to a clear, unmistakable commitment that, by the solution I have identified or others, the United Kingdom will through this legislature control arms brokering by any of our citizens anywhere, which is unlawful and contributes to the carnage that I have identified.

My Lords, at Report stage the Minister said that France, Germany, Belgium and Holland either had or were in the process of introducing legislation to control arms brokers. The arguments behind this amendment have been well rehearsed. However, it is unfortunate that this country is not taking a lead in introducing legislation in this field, but will be following and waiting for others to take the initiative.

As the right reverend Prelate and many noble Lords have pointed out, there is a moral argument for supporting this amendment. On hearing that an arms control Bill is being considered, many in this country would believe that this provision is essential to such a Bill becoming law.

If the Government do not accept it, I very much hope that the noble Lord, Lord Joffe, will press this amendment, and we on these Benches will support him.

My Lords, I begin by assuring noble Lords that there is no other reason for our approach to the amendment tabled by the noble Lord, Lord Joffe, than that we believe it to be impractical. We are not looking to brokers to help us in some situations. We simply believe that the amendment is impractical.

Since the last debate, we have looked at the American situation. The American laws on extraterritorial brokering have been quoted a number of times. It is significant that not one prosecution has been mounted under US brokering law. That clearly confirms our feeling about the impracticality of this amendment, and I shall return to that point.

We greatly sympathise with the aims behind this amendment. However, we do not believe that it is a practical course of action; nor do we believe that it enhances our moral standing on this issue to pass a piece of legislation which cannot be practically enforced.

I turn to the question of ignorance of the law. Of course, subject to the Human Rights Act, ignorance is not a defence in UK law. That is why we use extraterritoriality very sparingly and only in areas subject to international condemnation, where any reasonable person should know that what he or she is doing is wrong.

The noble Lord, Lord Razzall, suggested that, unlike the anti-terrorism Act and the corruption measures under it, the Export Control Bill will not apply at all to a UK citizen in, for example, the United States or Australia. That is not correct. Under this Bill, a UK citizen living abroad will, under the dummy orders, be subject to controls if he trades in arms to any embargoed destination or trades in torture equipment or certain missiles.

I can tell the noble Earl, Lord Sandwich, that there is no international agreement in prospect either to ban trade in small arms or light weapons or to apply trafficking and brokering extra-territorially. For example, the dummy orders are fully consistent with the EU agreement referred to, and all the other examples that have been cited on bribery or corruption extra-territorially are associated with international agreements.

The noble Lord was quite right to assume that I do not watch the Mark Thomas programmes. However, having children who watch it, my attention is always drawn to occasions on which the Government are embarrassed by Mark Thomas, so I am aware of this particular incident. Of course, the point here is that had Mark Thomas been a real arms dealer or had the Bill been in force, as we understand it he would have committed an offence by what he did because, first, he was in the UK and, secondly, Zimbabwe is an embargoed destination. So it is perhaps as well that it was a television programme and not the real thing in this case.

My Lords, in that case, would it be perfectly in order for him to procure arms to be sold to Algeria?

No, my Lords. He would have been caught because he was doing it in England, which would clearly have made it an offence.

I turn to the more substantive point raised by my noble friend Lord Brennan.

My Lords, if, however, he held a British passport but did it from Calais, which would have taken him no more than a couple of hours to reach, it would have been legal.

My Lords, the point that is always worth remembering in these cases is that the concept that it is very easy to do this without any contact or the use of any measure in England is rather more difficult than people assume; and, of course, there is a list of embargoed destinations which covers the main areas that we want to see dealt with by this kind of legislation.

I turn to the key point made by my noble friend Lord Brennan. I want to answer his question as directly as he put it. I confirm that the Bill will allow the Government to implement any international agreement in arms trafficking and brokering, whether an EU agreement or an agreement in another forum. That is fundamental to the Bill. As the noble Lord, Lord Razzall, pointed out, we have put very transparently into the remit here the fact that at present we do not propose that the regulations should seek to control small arms brokering that takes place abroad, but this Bill gives us the power to do that. At this time we shall use it only for the three areas that I have mentioned.

The amendment proposed by the noble Lords is, of course, similar to the amendment tabled on this issue by the noble Lords, Lord Joffe and Lord Phillips, at Report stage. However, this amendment includes a new provision, allowing extra-territorial controls to be imposed on UK residents as well as UK persons. I shall in a moment return to that issue and the Government's concerns about its implications.

A further difference is that, in the light of the explanation that I gave on the specific point on Report, noble Lords have agreed to omit from the current amendment the outright statutory ban on trade in particular categories of equipment that was contained in the previous amendment of the noble Lord, Lord Joffe. I am grateful to noble Lords for recognising the Government's concern over that particular aspect of the Report stage amendment.

However, I am sorry that noble Lords remain unwilling to take on board the Government's even greater concerns about the implications arising from the central aim of the amendment; namely, to extend extra-territorial jurisdiction to trade in small arms, light weapons and ammunition. Before I expand on the nature of those concerns, I should like to remind the House that the issue before us is not a decision about doing something on arms brokering, or doing nothing. I believe, therefore, that it is wrong to present the amendment in such stark terms. It must not be forgotten that the Government are already committed to taking action on arms brokering that is truly ground-breaking. There will, for the first time, be comprehensive powers in new primary legislation that allow controls to be imposed on all arms trafficking and brokering carried out both here and, in the case of UK citizens, abroad.

We have stated that we shall use the new powers in the Bill to prohibit any UK person, wherever he is located, from trafficking and brokering in arms to embargoed destinations or trafficking and brokering in torture equipment, or long-range missiles, to any destination whatever. At the same time, we are committed to using the powers under the Bill to control anyone in the UK—be he a resident or a UK national—who wishes to trade in any military equipment to any destination. This two-pronged approach will ensure that no one in the UK will be allowed to traffic or broker in arms without a licence, and will provide further that any UK person overseas who, without a licence, engages in trafficking and brokering to embargoed destinations, or in torture equipment or in long-range missiles, will he liable to prosecution if he sets foot again in this country.

The noble Lord, Lord Joffe, cited the Government's manifesto commitment. I believe that the Government are clearly fulfilling their manifesto commitment on trafficking and brokering. The Bill provides for trafficking and brokering controls to be applied in the UK and abroad, and we are already committed to framing controls that will apply both here and overseas. I should remind the House that a small number only of other countries have so far managed to introduce any controls in this area. Therefore, the Government's commitment to legislate to control trafficking and brokering activities of UK persons both here and overseas puts this country in the front rank of nations that are prepared to take serious steps to combat the scourge of illicit trade in arms.

Consequently, it is beyond doubt that the Bill already allows tough and meaningful action to be taken against illicit arms brokering, and that the Government are already committed to taking such action in secondary legislation under the Bill. Instead, the question that needs to be asked is whether the amendment would enable the Government to tackle illicit brokering more effectively than our current proposals would allow. The Government's firm view is that not only would the amendment do little or nothing in practice to strengthen our ability to prevent the supply of arms to conflict zones, it would actually be likely also to undermine our efforts to target the serious activities that our proposed extra-territorial controls on trafficking and brokering already address. Perhaps I may explain why we hold that view.

Trafficking and brokering in arms to embargoed destinations, and trafficking and brokering in long-range missiles and torture equipment, are all activities that the Government would, in almost all cases, be seeking to prohibit in their entirety. They are all activities that are subject to widespread international condemnation. For these same reasons, we believe that any UK person, whether based in this country or settled overseas, could reasonably be expected to know that involvement in such activities would be likely to be an offence.

The same simply cannot be said of trade in small arms, light weapons and ammunition to non-embargoed destinations; nor can it be said of the wide range of activities that may facilitate such trade, such as insurance or marketing, which this amendment seeks also to control. The vast majority of such trade and services are entirely legitimate, and are carried out in full accordance with the laws of the exporting country. There is certainly no international agreement that there should be a presumption against allowing trade in small arms to responsible end–users to continue. Nevertheless, the amendment seeks to oblige the Government to assert extra–territorial control over entirely legitimate commercial transactions carried out in overseas countries. What would the effect of this be?

In the first place, it would make a criminal of any UK person settled and living overseas and involved in exports of small arms with the full blessing of his country of residence, who, for whatever reason, failed to apply also to the UK Government for a licence to go about his job. Perhaps I may give the House an example. It is slightly different from the one cited by the noble Lord, Lord Razzall: it relates to a UK national, who is settled in New Zealand, having lived there for 40 years. He has a contract to supply small arms ammunition to law enforcement authorities in Canada. He exports the ammunition to Canada in full compliance with New Zealand's laws on arms export control, and confidently believes that the business in which he is engaged is both of value and entirely legitimate. However, the instant that this amendment were to enter into force, his actions would be criminalised under UK law. He would then be subject to possible arrest and prosecution upon his return to the UK.

The same would apply in respect of a UK person settled overseas who provided insurance cover for an overseas export of small arms, without first obtaining licence to do so from the UK Government—

My Lords, perhaps I may intervene at this point. I do not believe that the Minister has dealt with our bigger concern. It is not the person living in New Zealand; we are concerned with the UK national, who is resident off-shore in a territory that is not regulated. On the Government's admission, such an individual would not be allowed to deal in secondhand torture equipment that he obtains from, say, the Chilean Government because they no longer use it. However, he would be allowed to deal in the small arms that the Chilean Government had used to shoot people after they had been tortured. That is our main worry.

My Lords, perhaps I may correct the noble Lord. The three prohibited categories are missiles, torture equipment and arms embargoes. Therefore, that person could not be dealing in such equipment.

My Lords, such an individual could not deal in torture equipment, but, under the Government's legislation, he could deal in the small arms that were used to shoot people after they had been tortured.

My Lords, I am sorry that the noble Lord has not recognised that there is a very clear distinction here. I believe that I have made it clear in all the speeches that I have made thus far; indeed, I have already drawn attention to it in this response. There is a clear distinction to be made—the only one to be made in this area—between matters where there is international condemnation, which means that people will be aware of the situation, and areas where there is clearly no international condemnation involved. That is the distinction that applies in this case, and I believe it to be appropriate.

It is well to focus on such differences. These are the kind of people over whom we would be asserting extraterritorial control. Some might point out that the UK enforcement authorities could simply decide to take no action against such persons, and concentrate on prosecuting the more unsavoury types of arms brokers or suppliers who we can all readily bring to mind. However, that will not do; indeed, it would be irresponsible in the extreme for the Government to create a category of offences—namely, unlicensed trade in small arms, light weapons and ammunition—in the full knowledge that action would only be taken on such offences, when identified, in some circumstances, which would probably be unknowable to those concerned.

It would certainly be very difficult to take a decision to prosecute in the hypothetical case that I mentioned, but routinely to ignore such technical breaches of the law would damage the credibility of the new brokering controls across the board. We simply cannot make law that is destined to be enforced only on a "pick and choose" basis. The usual result of such an approach to enforcement of a particular law is that the law for all practical purposes quickly becomes unenforceable.

Another important factor that must be considered is the very considerable difficulty that would be involved in gathering evidence to prosecute UK persons for activities carried out in overseas countries that remain entirely legal there. Successful enforcement of extraterritorial controls depends to a very great extent on securing the full co-operation of the authorities of the overseas country where an offence under UK law by a UK person is alleged to have taken place, not least in helping or allowing UK investigators to gather evidence there. However, there would almost certainly be great difficulty in securing such co-operation in order to prosecute UK persons for actions that had been carried out in an overseas country in full compliance with that country's export control laws.

All these enforcement difficulties would be made even greater by the fact that the amendment also seeks to apply extra-territorial controls to UK residents as well as to UK nationals. The effect of that would be that a foreign national ordinarily resident in the UK who carried out in his country of nationality a small arms export in full accordance with his country's laws would be subject to possible arrest and prosecution upon his return to this country. Such a sweeping assertion of extra-territorial jurisdiction on the part of the Government would be likely to attract exactly the kind of criticism that the UK has rightly directed at other countries which have extended extra-territorial controls to UK nationals for activities that do not constitute an offence in this country.

Suggestions that without the amendment the Government's response to these difficulties will be to do nothing on small arms are quite untrue. What these enforcement difficulties have done is to convince us that the course of action which is most likely to lead to successful eradication of illicit trafficking and brokering in arms is for the Government to press for international agreement. The Government are working to achieve international agreement to take action to regulate the activities of those engaged in brokering in accordance with the UN Programme of Action on Small Arms and Light Weapons agreed in July last year. And of course the EU Common Position recently agreed on trafficking and brokering has provided a basis for the framing of national legislation on trafficking and brokering across the whole EU.

I reiterate in this context the very important point that the Bill as drafted does not preclude the introduction of controls along the lines of those proposed in the amendment. Clause 5 as it stands would allow the introduction of extra-territorial controls on trafficking and brokering in small arms and light weapons and on any other equipment that falls into one or more of the categories set out in the schedule to the Bill. There is therefore no doubt that the UK would be able to implement—the noble Lord. Lord Brennan, asked about that—under the Bill extraterritorial controls on trade in small arms if changing international circumstances warranted that.

In support of the proposal to extend extra-territorial controls to legitimate trade in small arms as well as to prohibited activities, it has been argued that the United States already operates extra-territorial controls on trafficking and brokering in small arms and other military equipment, and that if the US can operate such a system the UK should be able to do so also. In this context I was interested to note recently a report on the US system of arms brokering controls published by the highly respected US nongovernmental organisation, The Fund for Peace, which actively campaigns for tougher controls on the arms trade. The report expresses great concerns over the ability of the US authorities to operate and enforce their very wide system of controls on arms brokering. It highlights the very telling fact that not one prosecution has ever been mounted under the US brokering law, either for brokering offences carried out within the United States or overseas. The report goes on to say that while the US law on paper is as comprehensive and far-reaching as it possibly could be, it will only ever be as good as its enforcement, and this the report finds to be "nil".

That demonstrates that there is a world of difference between framing very wide extra-territorial controls in legislation, which need little more than the sweep of a pen, and trying to give such controls meaning and integrity through ongoing successful application and enforcement. Let me repeat that the Government are already committed to taking very real steps to control arms trafficking and brokering both here and abroad. Under the controls we have proposed it will be an offence for any UK person overseas to traffic or broker in small arms to embargoed destinations or to a third country in the knowledge that the arms are destined for an embargoed destination. Moreover, the proposed licensing regime for trafficking and brokering in all items on the UK's Military List, including small arms and light weapons, will apply where any relevant part of the transaction—be it a single fax or telephone call—takes place in the UK. And do not forget that the Bill already contains the powers that would allow the Government to extend extra-territorial controls to legitimate trade in small arms, for example in order to implement any international agreements reached on this matter.

We believe that all these measures, combined with the measures we are taking to encourage international co-operation on this issue, will be effective in combating illicit brokering of small arms by UK nationals. In contrast, the amendment would create a set of offences in primary legislation that would be unworkable in practice and would risk undermining the credibility of the whole control regime. In view of that, I ask that the amendment be withdrawn.

My Lords. I thank noble Lords who have spoken in support of the amendment. The essence of the Minister's response is that it is impractical to impose the controls that we are discussing. However, he has not answered the question about which I wrote to him: namely, why is it practical to enforce controls on the trafficking of long-range missiles and instruments of torture but not on small arms? I have received no answer to that.

The Minister mentioned the USA and sought to gain great comfort for his case from the fact that there have been no prosecutions so far under the US brokering law. However, the test of good legislation is not the number of prosecutions which result from it but whether the activity which it seeks to address is affected. We have no information on that at all. If there was a determination on the part of the Government to impose controls on small arms and light weapons, they could enforce it. I speak from my experience as a human rights lawyer in South Africa where the government were determined to impose their will on their subjects and had no difficulty in prosecuting many of my clients who expressed their views in the United Kingdom where they were free to do so. That evidence was used in order to gain convictions in South Africa.

The Minister said that the legislation we are discussing aligns with the manifesto commitment to control small arms trafficking wherever it is carried out. That cannot be so. It covers a tiny proportion of arms, which are enumerated, but not with the most important of all from the point of view of innocent civilians in the developing world who will be exposed to the dangers of injury and death through the trafficking of arms by UK nationals. It is extraordinary that in considering the relative importance of this handful of UK arms traffickers based overseas, the Government show no concern in balancing the importance of the legislation vis-à-vis the ultimate victims of that arms trafficking.

I am not persuaded by the reasons advanced by the Minister. I wish to test the opinion of the House.

moved Amendment No. 5:

After Clause 11, insert the following new clause

My Lords, the whole House should be grateful to my noble friend Lord Campbell-Savours. He referred to the fact that the Early-Day Motion in the other place had attracted the signatures of a large number of Ministers. I hope that I am allowed to make a personal reference. My own experience, both as a Minister of State at the Foreign Office and as an Under-Secretary of State at the Ministry of Defence, albeit some time ago, leads me to see the importance and pertinence of this proposal.

It is far from self-evident why we can trust a committee of parliamentarians to scrutinise the intelligence services but cannot trust one to examine export licence applications. As my noble friend made clear, the cross-party Quadripartite Committee in the other place put forward a series of detailed proposals on how such a system could work. However, as he also made clear, so far the Government have objected to those, primarily on the grounds of constitutional impropriety, and on the grounds that the proposals would confuse the roles of Parliament and the Executive; damage commercial confidentiality; delay the licensing process and damage commercial competitiveness. The QSC has responded to those concerns comprehensively. Like many others, I can only come to the conclusion that the main obstacle is obviously a lack of political will.

The amendment provides an opportunity to show that that is not the case because the wording of the amendment tabled by my noble friend Lord Campbell-Savours could not be said to endanger any of the concerns I have just mentioned. It addresses the constitutional issues raised by the noble and learned Lord, Lord Scott, and the Government by taking the precedent established by the Intelligence and Security Committee and using it as a template. Although the defence export services committee as proposed would not go quite as far as the recommendations of the QSC—I favour the most transparent system possible—the amendment is at least an important step towards effective prior oversight by parliamentarians of arms export licence applications and, therefore, is surely to be welcomed.

As my noble friend Lord Campbell-Savours explained, it is essential to emphasise that it will he imperative to ensure that if the committee is established, it will work in parallel with the QSC and in no way as a substitute for it. The functions of the two committees will remain different and both roles are required. The defence export scrutiny committee will be a committee of parliamentarians which will provide advice to and raise concerns with the Prime Minister on specific licence applications before decisions are made.

The Quadripartite Select Committee will still perform the indispensable broader role of a full-blooded parliamentary committee in scrutinising government decisions; reviewing the annual reports of strategic exports; taking evidence in public and making recommendations for changes in policy and law. The QSC is about parliamentary scrutiny. That key role will remain as important as it has obviously become.

My Lords, in opposing the amendment I pay tribute to the noble Lord, Lord Campbell-Savours, for the energy and work which has gone into its drafting and into its much longer earlier form, and for his dogged persistence in pursuing the subject throughout the passage of the Bill.

However— I intend no disrespect to the noble Lord—I believe that the whole concept of the amendment is misconceived. No doubt the Minister will tell us when he replies how many hundreds of applications for export licences are received every year. It must be a pretty vast number judging by the high percentage that cannot be processed within the target time. There is an overwhelming volume of work for the large number of civil servants within the Department of Trade and Industry which cannot be adequately reviewed by a committee of nine. Perhaps when he replies the Minister can tell us how many staff in his department are engaged in that activity apart from staff at the Ministry of Defence, the Foreign and Commonwealth Office, the Department for Culture, Media and Sport and many other government departments which are involved in this licensing process.

There is then the problem of commercial and scientific confidentiality. It cannot be regarded as feasible that highly sensitive matters, such as those currently covered by export control, can be exposed to the scrutiny of a nominated Joint Committee of both Houses. Whether or not it is intended by the noble Lord—I am sure that it is not—the amendments could have the effect of introducing an element of political control early on; of imposing, perhaps, the political views of the members of the intended scrutiny committee on to the commercial and scientific applicants for licences, and the policy of the Government in granting or refusing them.

Such views have no place in the licensing procedure, in which the sole criterion of the Act and its 63 year-old predecessor is to guard against the "relevant consequences" set out in the schedule to the Bill: namely, as I remind your Lordships, to guard against adverse effects for the national security of the United Kingdom, its Armed Forces, and any other friendly state; adverse effects on peace, security and stability in any region of the world; the carrying out of acts facilitating production of weapons of mass destruction; and terrorism, crime and breaches of human rights.

In case noble Lords think that the idea that it could have some kind of political control is a fanciful fear, the noble Lord, Lord Campbell-Savours, mentioned today the Early-Day Motion, in which several senior government Back-Benchers are seeking to set up the committee, not merely to oversee the licensing of arms export systems in the vague way that the amendment proposes but to approve or disapprove in advance the grant of all arms export licences. The sort of wedge of which the amendment could be the thin end is clear to see.

It would he intolerable to have a nine-person appointed committee of placemen which could take over the whole of the foreign policy and defence of this country, even in disregard of our international obligations. The Government are already subject to oversight under the normal parliamentary process.

The noble Lord, Lord Campbell-Savours said that the Minister stated on Report that he regarded the amendment as an enabling one. I do not think it is. It states that,

"(1) There shall be a Committee …

(2) The Committee shall consist of …

(3) The members of the Committee shall be appointed by the Prime Minister".

and so forth. That does not make it an enabling clause.

The Minister pointed out in the last debate that if it was felt that an oversight committee was desirable, the Government could appoint one without the sanction of this legislation. I feel sure that if it were proved to be necessary, the Government would do so.

However well meaning the amendments may be—I am certain that the noble Lord, Lord Campbell-Savours, intends them to be—they are not practical, reasonable or even necessary. I imagine that they will continue to be opposed by the Government. Assuming that they are, I would find myself in the unusual position of supporting the Government. However, I am worried about saying that. As I said to the Minister in debates on the Employment Bill, whenever I supported an amendment tabled by one of his Back-Benchers, it was thrown out; and the ones that I opposed, the Minister accepted. Therefore, I do not know whether or not this is helpful.

I hope that the Minister will be able to persuade his noble friend to withdraw the amendment. The nature of the applications is so varied and the subjects so complex that I doubt whether nine polymaths could be found to qualify as the nine wise all-knowing persons that the noble Lord suggests the Prime Minister should appoint to the scrutiny committee, even with the benefit of consultation with the Leader of the Opposition.

My Lords, I have a rather different view from that of the noble Baroness. I have listened to my noble friends Lord Campbell-Savours and Lord Judd and have been impressed by the logical and detailed arguments they have used in supporting the amendment; not only that: they have pointed out that since Report stage, public and political opinion has changed in favour of having this committee.

I very much look forward to the reply by the Minister, since the committee proposed by the amendment appears to be both necessary and desirable. I thought that my noble friend covered the arguments against it in detail. However, I shall cover two points raised by the noble Baroness. She mentioned the large number of applications for licences. It is not proposed that the nine members of the committee will personally go through every single application. There will he a unit answering to it who will be given instructions to filter out those which look sensitive and need a decision by the committee.

With regard to the question of whether or not the committee will tread on sensitive toes and may infringe confidential matters, we have the example—as pointed out by my noble friend—of the Intelligence and Security Committee. Its members are sworn to secrecy and confidentially. There has been no case in which they have breached that trust.

My Lords, we, on these Benches, support the aims of the amendment. It is highly unlikely that the Government will accept it at this late stage. However, I am sure that the issue will be raised on many occasions in another place, especially by the Quadripartite Committee. I think that it is an issue to which this House will return at some stage.

My Lords, the House will remember that at Report stage said to my noble friend Lord Campbell-Savours that the Government have given his proposal careful consideration. I added that that consideration had served to demonstrate both some possible attractions of his proposal, hut also some significant problems.

As I promised on Report, the Government have continued to examine my noble friend's proposal. Moreover, I have met with my noble friend and heard more about his proposal, how he envisaged it might work and how he considered potential problems might be overcome. My noble friend has sought to provide reassurance to the Government on a number of points. I am most grateful to him for the care he has taken to address the issues that I raised on Report and subsequently at our meeting.

However, the Government remain concerned about several aspects of the proposal. We remain concerned about how a defence exports scrutiny committee (DESC) would interrelate with the Quadripartite Committee in another place. I was glad to learn at our meeting that it is now common ground between us that the membership of the Quadripartite Committee and a DESC should not overlap. However, in spite of what my noble friend Lord Campbell-Savours has said today, the Government still remain concerned that the functions of the committees would overlap. As I said before, a DESC will almost certainly need and might well seek to take on major parts of what is now the role of the Quadripartite Committee. For example, a DESC would need to undertake a degree of retrospective scrutiny of both individual cases and strategic export licensing policy, if only to investigate and discuss why its advice was, or indeed was not, followed by the Government.

Moreover, in that context I point to subsection (1) of the proposed clause, where it states that a DESC will examine the licensing process in addition to examining licence applications. Examination of the licensing process is currently a role of the Quadripartite Committee which it undertakes alongside its retrospective scrutiny function.

Leaving aside the merely practical problems which would be associated with a government being required to account for the same actions to two different committees, we have real concerns about the possibility that the two committees would give completely different advice to the Government on an identical issue.

I would not rule out the possibility that we may be able to resolve those concerns, but I detect in all the representations that the Government have received on this particular issue a similar degree of unease. Whenever we have received clear assurances that an individual or organisation believes that the two committees can work together without difficulty, those assurances have always been immediately followed by a stern assertion that the authors would totally oppose any diminution in the role of the Quadripartite Committee or in existing levels of transparency of the scrutiny process. That suggests to me that it would not be so easy to separate the different roles of the committees and that the creation of a defence exports scrutiny committee would indeed have real implications for the role of the Quadripartite Committee.

I add that the Government are also not as sanguine as my noble friend that the introduction of a DESC would not lead to increased delays and uncertainty in the export licensing process. I understand that the Defence Manufacturers Association has also expressed that concern. It has said that it is the "overwhelming view" of its members that the proposal for a DESC,

"would not be welcome, necessary or, in our view, workable in a way that did not increase delay and uncertainty in the licensing process".

I turn to the point raised by the noble Baroness, Lady Miller. We issue about 12,000 standard individual export licences a year. In terms of the number of civil servants engaged in export control, I can speak only for my department and say that we have a little over 100 officials who undertake work on export controls and non-proliferation related work. We reckon, however, that not all those 12,000 individual export licences would need to be looked at. But on the basis that has been put forward, we believe that some 4,000 licences would need to be looked at.

When I said that the Government are concerned about delays and uncertainty in the licensing process, I do not just have narrow issues of official resources in mind. The proposal has been that the DESC should consider licence applications in parallel with ministerial consideration to avoid risks of delay. Yet that runs the risk that the committee will consider applications before all information on a particular case has been gathered. Thus the Government face an unenviable alternative. If the committee considers cases in parallel, it may be forced to give advice on the basis of insufficient information. That increases the risk that the committee's advice will conflict with the Secretary of State's final decisions and thus increase legal uncertainty and delay while issues raised by the conflicting advice are resolved. If, however, the committee considers applications consecutively, once all the facts have been gathered, it is very difficult to see how that will not lead to the likelihood of delay.

I have outlined in some detail some of the Government's concerns to the House today as I was concerned to demonstrate that these issues are not straightforward. Any decision taken by the Government in this area could have profound implications for industry, for Parliament in general and the Quadripartite Committee in particular and for the good conduct of the export licensing process. While our continued examination of the proposal for a DESC since the Report stage has allayed some of our fears, new issues have come to light, such as the concern that the advice of the committee is most unlikely to remain private were a company or another interested party to seek its disclosure in judicial review. Perhaps I may say to my noble friend, Lord Campbell-Savours, that it is a question really of disclosure and not of sub-delegation that we were concerned with in the issue. Our concern is not illegal sub-delegation of power; it is that the advice of the committee is most unlikely to remain private were a company or another interested party to seek its disclosure in judicial review.

It has been put to me that this amendment would be only an enabling power. But I would say in response that passing primary legislation is an effective commitment to take action. I appreciate the spirit in which my noble friend has proposed an amendment which allows detailed arrangements to be made in due course, but I am afraid that the Government cannot agree that acceptance of this amendment would be anything other than a commitment to introducing the committee.

I also do not think that it is right that we should approve the amendment tonight. The Government do not think it right that the Bill should be amended at this time in this way. Our unwillingness to reach a hasty conclusion on this proposal is reinforced by the fact that, as we have said before, we are clear that the Government, were they to decide to adopt this approach, would be able to set up a defence exports scrutiny committee, in all its essentials, without a requirement for new legislation. There is no need for primary legislation, so rushed consideration of these important issues is not only highly undesirable, it is clearly also unnecessary. Given the vital issues covered by the Bill, the Government do not want to see the Bill delayed still further. It is essential that we can start the process of consultation on the secondary legislation and thereafter implementation as soon as possible so that we can ensure the UK has the export controls it needs.

Therefore, for all those reasons, the Government consider that they are unable to support the amendment. However, I would like to assure my noble friend and others in this House and interested parties elsewhere that not amending the Bill does not in any way mean, as has been suggested to me, that the issue will consequently be left to moulder in the long grass. Ministers intend examination of my noble friend's proposal to continue. It may prove possible to resolve all of our concerns. Moreover, the Government will also continue to work with the Quadripartite Committee to see whether we can take additional steps to achieve greater accountability and transparency in the export licensing process through greater cooperation with the committee. The Government are clear that the issue of how to improve the scrutiny of the export licensing process must be addressed, but we are not and cannot yet be convinced that the commitment to introduce a DESC represented by the amendment is the right or only way forward.

For all those reasons, and reminding my noble friend once again that primary legislation is not a prerequisite for the adoption of his proposal, I ask him to agree to withdraw his amendment.

My Lords, I thank my noble friend for his response. Perhaps I may say one or two words before I withdraw the amendment.

The House should ask itself a simple question: why does the system work in the United States of America? Why do a number of countries throughout the world operate prior scrutiny systems on their defence contracts which work, which are internationally recognised as working, and which are supported by their respective defence industries?

I listened to the comments of the noble Baroness, Lady Miller, with interest—especially her reference to what I suspect is an underlying suspicion of political processes and politicians' involvement in security matters. Throughout the late 1980s, I ran with the hounds in another place on the whole question of the Official Secrets Act and of abuses in which we believed government to be secretive. We rode the issue in the country; there may well be those outside or inside the House who would say that we exploited the issue. The reason that we could exploit it was that there was no structure in place to deal with the concerns of Members of Parliament. No sooner had the ISC been created than the debate effectively ended. Parliament was satisfied that while the committee was not a committee of Parliament—it was a committee of parliamentarians—at least a structure was in place to deal with the issues raised by Members of Parliament.

Defence contracts represent precisely the same case. There will be endless grandstanding in the House of Commons, exploitation of stories in the media, rumours and whatever, until we establish a structure capable of nipping the issue in the bud and dealing with the concerns of Members of Parliament. The moment that we create such a structure, we will find that much of the controversial public debate will disappear because Members of Parliament will know that there is a place to which they can go to raise their concerns—albeit in the confidential conditions inside the DESC, appointed as it would be by the Prime Minister and unable to report directly to the wider public or even to Parliament, because its reports would go to the Prime Minister and could be sidelined accordingly. There is no need for the suspicion expressed by the noble Baroness, Lady Miller. The structure works and would defuse conflict within our parliamentary arrangements.

The noble Baroness and my noble friend referred to the issue of delays. We have dealt that issue before. As I witnessed in the ISC, if we sit a group of civil servants in a room with a bunch of politicians in conditions of confidentiality to discuss, debate and ultimately advise Ministers on particular matters—in this case, contracts that they have scrutinised—that committee will develop a culture of understanding whereby, over time, the number of cases referred to it will reduce. That is the inevitable consequence of the meeting of minds inside that forum, based as it is on confidentiality.

It is that meeting of minds between politicians of all political persuasions and civil servants that is essential if the debate on who is allowed to export what is to be influenced. The committee will make no decisions; it will only issue advice to help in the process of developing policy on particular countries. My guess is that, ultimately, when the structure is set up, as I expect that it will in the end, we will be surprised by how few cases have to go before the committee.

Finally, on the question of confidentiality, the ISC never leaked. The DESC would never leak. The party of the noble Baroness, Lady Miller, will at some stage have influence on these matters in future. She should trust politicians in those conditions to be prepared to safeguard the interests of the state. There would he no abuse. My noble friend accepts that. I understand that confidentiality was not a matter that troubled Ministers, in the end, because they have learned from the operation of the ISC.

I regret what has happened tonight. The debate will continue. I thank all the Ministers who have listened to the debate as it has developed. As I told my noble friend, the Quadripartite Committee will take the matter forward. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 6:

Page 11, line 28, leave out second "equipment" and insert "goods"

The noble Lord said: My Lords, the House will remember that on Report the Government amended paragraph 1 of the schedule to ensure that it was as comprehensive as possible. Those changes included replacing a reference to the term "equipment" in paragraph 1(1)(c) with the more appropriate term "goods", which is used throughout the Bill. That change now requires a consequential amendment to be made to line 28 to ensure that when the section cross-refers to paragraph 1(1)(c), it refers to the new text, "goods", rather than the old text, "equipment". I hope that the House will agree that that minor amendment should be made and I invite the House to support it.

On Question, amendment agreed to.

My Lords, I beg to move that this Bill do now pass.

Moved, that the Bill do now pass.— (Lord Sainsbury of Turville.)

On Question, Bill passed, and returned to the Commons with amendments.

rose to move, That this House takes note of the report of the European Union Committee on the European Policy on Security and Defence (11th Report, HL Paper 71).

The noble Lord said: My Lords, the report of Sub-Committee C of the European Union Committee was presented to your Lordships' House in early February. I am glad—as, I am sure, are all members of the committee—that we now have the opportunity to debate it. Before we do so, I express thanks on behalf of the entire committee. First, I thank Dr Anthony Forster, of King's College London, who was our specialist adviser and who helpfully kept us on the right path and guided us most successfully. Secondly, I thank our Clerk, David Batt, who was helpful and constructive throughout in his assistance to us. Finally, I express my personal thanks to my colleagues on the committee, who have a vast range of experience in these matters and who were also extremely helpful throughout.

I should like to refer to one note of sadness. During our deliberations, Lord Shore of Stepney sadly died. Lord Shore gave us his typically pungent views about many matters—especially European matters. As an old friend of his who served for 10 years with him, together with the noble Lord, Lord Howell of Guildford, whom I see sitting in his place, on the Foreign Affairs Committee in another place, it was a particular sadness to us.

The report follows the sub-committee's previous report on the same subject, which was published in July 2000. At that time, the committee had as its chairmen, first, the noble Lord, Lord Howell of Guildford, and, then, the noble Baroness, Lady Hilton of Eggardon. They presided over the committee with great distinction.

The committee examined the reasons for setting up a European defence force. Although aspects of the existence of ESDP remain controversial in the eyes of some, the committee felt that it would not be constructive to go over it all again. We accepted that ESDP was with us and was being developed. We felt that it was right for the committee to embark on an inquiry into that development and the growing pains of ESDP, many of which are serious.

I shall put the sub-committee's views under five headings. First, there was a view that Europe must do more to be an effective peacekeeper and, later, peacemaker in our continent and beyond—perhaps not too far beyond. Secondly, if we are to do that, serious capability gaps must be filled. Thirdly, there will have to be significant increases in defence budgets if those gaps are to be filled and the European force is to become a serious force. Fourthly, the current command and control uncertainties must be resolved, so that a clear relationship with NATO can be established and so that confusing duplication in issues such as contingency planning can be avoided. Fifthly, there is the matter of parliamentary oversight. I shall come to that later.

The first point was that Europe must do more. Since our last report, published in July 2000, important things have happened, particularly the events of 11th September and the Afghanistan campaign. It becomes apparent that. in certain circumstances, in spite of the activation of Article 5 of the NATO pact, the United States prefers to act independently of NATO. I was very struck by a speech made by General Hagglund, the Finnish chairman of the Military Committee of the European Union. On 3rd May, he talked about the structure of ESDP. The accompanying press release says that the general noted that,

"'in the field', the allies are getting to be more of a nuisance than a benefit to the Americans. He said that this is why the USA prefers to take military action on its own, while the support from allies is more political than military".

That is an important matter, and I shall return to it.

The decisions made about defence last week by the United States and the decision taken at the NATO meeting in Reykjavik to draw Russia closer to NATO are of historic importance. In the view of most, if not all, members of the committee, it is essential that NATO remains a strong and potent organisation. There was also an almost—if not totally—unanimous view that it was essential to keep the United States as closely involved as possible in defence matters. There will, of course, be cases in which the United States will not want to get involved in operations that the European Union wants to carry out. The European Union, therefore, must be better able to operate on its own.

The second theme was capability gaps. To fill those gaps, it is essential that we have better trained military manpower in Europe. Moves in European states such as Germany towards a volunteer army are timely and welcome. Even with that, there will be an urgent need for the force to start training as an integrated force as soon as possible. A parallel was made with the advantages to NATO of having its forces train together regularly to produce an effective force.

Paragraphs 54 and 55 of the report set out the specific capability gaps that were established and recognised at the end of 2001. Two have often been highlighted. There is a lack of heavy air and sea-lift capability in Europe. There have been several hiccups in the development of the A400M. I hope that the Minister will give us the up-to-date situation on the development of the A400M, in view of German anxiety and hesitation. Assembly of that aircraft is unlikely to start until 2006, so that gap will not be filled for a long time.

People often talk about the gaps in intelligence and communications. Those gaps demonstrate vividly the extent to which United States technical capabilities have left those of Europe far behind. Those gaps must be filled through a fairly shared commitment from member states. That commitment must ensure that a state declining to join in an operation cannot be allowed to wreck the whole operation. It is no use if one state commits itself to making the tea and another commits itself to tending the wounded, while it is left to, let us say, the United Kingdom and France to fill the body bags. That will not do.

There is also the cost of Filling the gaps. All the evidence that we had led us to believe that ESDP could not become fully effective unless defence spending rose significantly across the European Union. We heard from governments—our own and others—the eternal refrain. They said that they could do it by reallocating defence resources. I think that that is nonsense, and there is a broad view among those who understand military matters that it is nonsense. It is a picture that I recall from days in government. The department may agree with the criticisms that are made, but the Treasury will not let them say it.

In paragraph 33 of t he report, we set out the changes in European states' defence spending in terms of constant United States dollars. We compare spending in 2000 with that for 2001. Those figures tell the story that only between 2000 and 2001 did Ireland and Greece increase defence spending by around 95 million dollars. However, as regards the really big players in Europe—the UK, France, Germany and Italy—in those two years defence spending reduced by more than 9 billion dollars. That says it all and that is perhaps the biggest anxiety one has about ESDP becoming really effective.

I turn to the next issue: command and control. We expressed concerns about that more than two years ago and those concerns remain. There is a great need to decide and agree the command and control arrangements both at headquarters level and in the field. The resolution of the problem is held up by the difficulty over Turkey and Greece because agreements have been reached with Turkey and the Greeks are blocking them. I hope that the Minister will be able to give us exactly the state of play in trying to reach agreement between the EU and our Turkish and Greek friends in respect of these matters.

I return to the remarks of General Hägglund made on 3rd May. He called for extensive changes to the European and United States common security system. He proposed that European Union and European parts of NATO should be linked up with each other. He suggests that:

"The organisational change in NATO would not mean an end to co-operation between Europe and the United States, the dismantlement of NATO, or giving up article 5 of the NATO charter".

Many of us would strongly agree with that aim.

He went on to ask:

"Is there any sense in maintaining two parallel crisis management organisations in the same area?",

pointing out that the enlargement of the EU and NATO will only increase the duplication of tasks.

Those are very important proposals by the man on the spot; the chairman of the Military Committee. I hope that in reply the Minister will tell us the Government's reaction to the general's comments. Will the Government review their earlier agreement to structure ESDP within the NATO roof rather than the way it is now; that is, semi-detached?

That brings me to the present state of play. ESDP has been declared operational but some say, unkindly, that the operations it can carry out will be confined to rescuing cats from trees. That is a little unkind. However, the ESDP is a long way from coping with difficult peacekeeping tasks, let alone the peacemaking tasks which come within its remit at the difficult end of the Petersberg spectrum. It was the view of the committee that there is no way that ESDP can look after the more difficult tasks before 2010.

A few weeks ago we heard stories about ESDP taking over in Kosovo. Some of us would need convincing that it would be sensible to take over such an operation for some time yet. The view of the committee is that it is vital that ESDP does not run before it can walk. If there were a failure in an operation of that kind, that would be a disaster for its credibility and for Europe's relations with the United States.

Finally, I want to comment briefly on parliamentary oversight. During the past year or so, various bids have been made on how national parliaments should carry out an oversight of the European Union defence arrangements. The WEU Assembly feels that it should have the responsibility, but Ministers in evidence to the committee said that they were opposed to it and even that they would block it. Secondly, the Belgium Senate has proposed that a new parliamentary body should be set up to deal with it. Many of us believe that that would be a step backwards. The noble Lord, Lord Williams of Elvel, and I have attended a number of meetings and between us and with others we have put a block on that proposal.

In the view of the committee, the Government put forward the best proposal. I quote from a letter dated 2nd November 2001 from the Security Policy Department of the Foreign and Commonwealth Office. It stated that in the run-up to the Inter-Governmental Conference in 2004,

"all parliamentary assemblies directly involved in broader European security and defence issues, such as the NATO Parliamentary Assembly, the WEU Assembly and the OSCE Assembly"—

where there are parliamentarians who have a wide background knowledge of these matters—

"have a role to play in providing informal scrutiny of ESDP".

The committee believed that that Foreign Office proposal was a good one and hence included it in the report. But we were sad and surprised to find that in the Government's official response to the committee's report the proposal was brushed aside in paragraph 27. Our recommendation was a direct copy of the Government's own proposals and it was strange that it was not endorsed.

I informally told the noble Baroness that I intended to raise that matter. I hope that in reply she is able to tell us that the original Foreign Office proposal made last November will be carried out and that those parliamentary bodies will be invited to carry out the parliamentary oversight in an informal way between now and the Inter-Governmental Conference. With those words, I beg to move Motion.

Moved, That this House takes note of the report of the European Union Committee on the European Policy on Security and Defence (11th Report, HL Paper 71).—(Lord Jopling.)

My Lords, first, I apologise to the noble Lord, Lord Jopling, that I inadvertently missed the first couple of minutes of his remarks. Having heard 90 per cent of what he said, I am additionally sorry because I found his comments extremely instructive. Furthermore, he expressed many sentiments with which I agree wholeheartedly. I am sure that the whole House will join me in thanking him and his committee for producing the report and in thanking him personally for introducing today's debate.

The noble Lord made some profound statements—we have known them for some time but that does not make them any less profound—about the need for a massive increase in defence expenditure by the EU members of NATO if the ESDP is ever going to be effective and, even more importantly, if the European rapid reaction force is ever going to come into effect.

I shall surprise no one by saying that I have no expectation whatever that those additional defence expenditures will be forthcoming. I have no anticipation of that whatever, particularly with respect to the Continentals. I am not sure that we in this country are doing as much as we should and that has been my view of governments of different political colours over many years. As for the others, they are largely engaged in gesture politics. The matter has not arisen recently or since last September; it has been around for many years. Those governments have no intention whatever of producing the resources because that does not accord with their priorities. They are perfectly entitled to take that view, but if we base our policies on the anticipation that additional defence resources and the sums of money mentioned in this report will he forthcoming, I think that we are deluding ourselves.

I was extremely interested in the quotations cited by the noble Lord from the writings of General Hägglund. I found myself in total agreement with them. In fact, it has been made clear for quite some time that already we are in a situation with respect to the European members of NATO such that it is impossible for them to communicate with other Allied forces, in particular with American forces, in the battle-space. It is absolutely impossible, and the gap is growing bigger by the day. Even if we were to institute an immediate, massive and sustained increase in the resources given to command and control, intelligence and communications, it would be most unlikely that we could close the gap in any time horizon that would make sense for policy-making purposes. We have already passed the point of no return.

The Americans recognise this. Personally, I have detected a sea change in American attitudes towards European contributions to defence expenditure. Last month I attended a conference in Washington at which people from the very highest levels from both the Pentagon and the State Department were speaking. It was made perfectly clear to me that the Pentagon no longer has the slightest interest in having the Europeans spend more on defence. It has given up on them and thinks that they are a damned nuisance. That came through clearly in some of the points made by the noble Lord, Lord Jopling, in quoting from General Hägglund.

One could hardly be given a more vivid illustration of this than what has happened since Kosovo. In Kosovo, the Americans flew 85 per cent of the attack missions themselves, some from Diego Garcia and some from the continental mainland of the United States. In Afghanistan, which is even further away from the United States than Kosovo, the United States flew 100 per cent of the missions and had not the slightest interest in accepting any European contribution towards attack missions or that aspect of affairs. In fact, when noble Lords have seen, as I have, Secretary Donald Rumsfeld and Secretary of State Colin Powell stand up and congratulate with straight faces the Europeans on their marvellous contribution of four AWACs aeroplanes—not over Afghanistan, God forbid, but in the skies over the United States in order to protect America from incursions from, I do not know, the Mexican or the North Korean air forces—I think that they will agree that both of those gentlemen have promising careers ahead of them as stand-up comedians when they have finished their present responsibilities.

I wish to make one other point with respect to the report. I wish to discuss the A-400M aircraft. It is a subject on which the other day I disagreed rather vigorously with the noble Lord, Lord Watson of Richmond, on the Floor of this House. I hope that he will acquit me of any discourtesy when I exploded after his remarks. I shall not say that any noble Lord ever talks rubbish, but I shall say that I thought the noble Lord less than fully informed on the matter.

The present situation as far as concerns the Royal Air Force is that it has two transport aircraft: the workhorse, tactical aircraft, the C-130K, to be replaced by the C-130J, commonly known as the Hercules. The C-130K has done marvellous work for many years. Until recently it was the backbone of our air transport fleet. It is to be replaced by the C-130J. My noble friend on the Front Bench who is to wind up our debate is as fully aware as I am of what I am about to discuss.

We had some problems with the C-130J. There were difficulties with icing, with vibration and so forth. Those have largely been eliminated and the C-130J is to come into service to replace the C-130K. We have also acquired from the United States four C-17s, aeroplanes made by Boeing; very expensive and absolutely magnificent aircraft. I have had the good fortune to be able to fly in one myself. The aeroplanes meet all the strategic transport needs of the United States. It therefore follows that this aircraft could meet the strategic transport needs of any air force.

In this country we are constantly being surprised at what can be done with a C-17. Very recently and to our pleasant surprise we discovered that it is possible to squeeze a Tornado inside the aircraft and then fly it down to the Falkland Islands for roulement purposes, with only one landing on Ascension Island, and no refuelling along the way. I have tabled a Question for the Government asking how much they expect to be able to save just from that operation. It was an unanticipated benefit.

The C-17 will carry every major piece of military equipment that this country has. We have leased four aircraft. The United States has something over 120 aircraft and will procure up to between 170 and 180. As far as I know, no other country in the world has a C-17 or has any plans to try to acquire that capability.

Now we come to the A-400M, which at present exists only on paper. It fits, as it were, in between the C-130 in respect of its carrying capability, range and speed, and the C-17. By way of a Parliamentary Question I have asked the Ministry of Defence to give me a list of the British military equipment that can be carried in a C-17, but would not be able to be carried in an A-400M. The ministry is being a little coy about giving me the Answer to that Question, but I shall get it before I am through. In any case, I have here a list of the German military equipment which cannot be carried in an A-400M, but which can be carried in a C-17.

I would not worry so much about the procurement of the A-400M were it not for the fact that an Answer is on record in Hansard for this House to the effect that, when the seven-year lease has run its course, it is the intention of the Ministry of Defence to hand back to Boeing the four C-17s, thus losing the capability we currently have, and go back to a fleet of only A-400Ms and C-130s. That is the decision to which I object most vigorously.

If I can have an assurance from the Government that that will not be the case, and that our future fleet will be composed of C-17s and A-400Ms, I can assure noble Lords that they will not hear another word of complaint from me about the A-400M. That aircraft can do certain things that the C-17 does not do. For myself, I do not think that it has quite such a good short-fuel capability; nevertheless I would settle for it. However, it is suggested that in six years' time—we are already through almost a year of the seven-year lease—we shall abandon the capability that we now have in order to take on the dubious capability of the A-400M—combined with the C-130J—which I consider absolutely preposterous.

Noble Lords might like to have an idea of quite how preposterous is this proposal. I mentioned a few days ago when I rose to speak after the noble Lord, Lord Watson, that the engines in the A-400M have had to be changed. It has suddenly been discovered that the engines designed for the aircraft, which still exists only on paper, are not good enough. That will add to the cost and no one even knows what the new engines are going to be. No one knows what will be the capability of the aircraft once it is fitted with its new engines. I see that the noble Earl, Lord Attlee, is shaking his head in dissent. We are being asked to buy a pig in a poke.

I can assure my noble friend on the Front Bench that I do not criticise Ministers for getting themselves into such an appalling position with the A-400M. We have been in similar situations with many other aircraft in the past. It is not my purpose in this debate to go through horror stories of procurement at the British Ministry of Defence. No doubt in my time I have been responsible for contributing to some of those stories over the years. However, it is a point of fact that the A-400M was designed for European operations. It was not designed to fly, for example, from Europe to Afghanistan. It can carry quite heavy kit, although not the heaviest pieces because it has difficulties with size; but when seriously heavy pieces are loaded into it, the range of the aircraft is hugely diminished because the heavier the kit on board, the less fuel it is able to carry. It was designed for the German air force to operate in eastern Europe.

I am informed that most modern defence logistics missions require a range of around 3.000 to 3,200 nautical miles. At that range, the A-400M is restricted to a payload of 25,000 kilograms. That is why I said to the noble Lord, Lord Watson, that I cannot believe that he has been fully informed on these matters. What on earth is the use of an aircraft which is supposed to satisfy the heavy lift strategic capability of the Royal Air Force when it can carry a payload of only 25,000 kilograms over the kinds of ranges necessary? It is an absurd idea. I am sure that I will have no difficulty in carrying your Lordships with me on that.

Another concern about the A-400M is its cost. It is difficult to get the facts—obviously some figures are commercial in confidence—but one can have a fairly good stab at what the plane is likely to cost. The Italians had an order for 20 and cancelled the lot. The Germans had an order for 73 and decided that they could probably afford only 40 in this year's budget and that they might be able to sign up for another 33 in next year's budget. But, anyway, they would rather someone else funded the development costs for them—which is very decent of them—so we will be expected to fund Germany's share of the development costs of the A-400M. There must be additional costs because we are having to go back to the drawing board for new engines for the plane.

I was told by very senior people in the British aeronautical industry that Germany could not conceivably afford two aircraft. It is very doubtful that it can afford one. It will be paying its share, I hope, for the Typhoon Eurofighter, although I shall he very surprised if it ultimately takes as many as it originally asked for. If at the end of Germany's budgetary difficulties—and let us assume the best; let us assume that the noble Lord, Lord Watson, gets what he wants—we get the A-400M, and Germany pays for it, there is bound to be a serious, if not catastrophic, knock-on effect with respect to other very important NATO procurement requirements as a result of Germany's budgetary problems.

The one most at risk is the Meteor, a missile which is supposed to arm both the Typhoon, the Swedish Gripen and the French Rafael. If, ultimately, the Germans go ahead with their share of funding for 73 A-400Ms, I have serious doubts as to whether they will be able to meet their share of the costs of the Meteor missile, which is much more important for this country's defence than is the transport aircraft.

The transport aircraft is low-tech basically. The C-17 is a brilliant piece of kit but it is just like an Airbus; it is a thing that you put people into; there is no brilliant technology involved. The Meteor missile is extremely hi-tech, extremely important to this country's defences, and could generate a great many defence sales.

The only assurance I hope to get from the Minister today—I am sure that I shall not get it, but it is worth asking—is that, ultimately, the Government will look again at their announced intention of sacrificing the C-17, and of going back to a situation where we do not have commonality with the Americans and have a transport fleet composed of only the A-400M and the C-130J.

This is not exclusively a defence matter. The capability of the C-17 is of extreme importance in overseas aid missions where there is a sense of urgency. A couple of years ago there were two cases where we had to get helicopters down to, in one case, West Africa and, in the other case, East Africa in a hurry.

In the case of West Africa, the planes had to be flown down—not to Sierra Leone but to the Congo, if my memory serves me right, although it may have been Sierra Leone. That must have involved half a dozen landing sites on the way and must have taken four or five days. The crews would have been exhausted and the planes would have needed immediate heavy servicing before they could he used again.

At the time of the floods in Mozambique, there was an urgent need to get helicopters there very quickly. In that case, the planes had to have their rotors taken off and they had to be flown down "bare hulled", as it were. It took quite some time to dismantle them and to put them back together at the other end. Precious time was lost—probably a day at each end. In both cases, the planes could have been flown down to meet those emergencies—one a security emergency and one a civil emergency—in a C-17. In neither case would an A-400M have been any use whatever.

My Lords, I congratulate my noble friend Lord Jopling and his committee on producing an excellent report. I take pleasure in speaking after my old friend, the noble Lord, Lord Gilbert, who spoke with enormous authority.

I wish to make three points. The first point strikes a different note. If the ESDP did not exist, I would not now want to invent it. I believe that it will not add by its existence to the military capability of Europe, and its relationship with NATO is full of difficulty. As my noble friend mentioned, duplication is only one of the problems.

Nevertheless, we have to make it work. We can do that if we give the task enough priority. It would be no good to contemplate turning back now because that would give the impression of an even greater lack of will than already exists to provide effective armed forces from European resources. It would not lead to the Europeans making a greater contribution to NATO.

My second point concerns our relations with the United States. As has already been said, it is one of the most important aspects before us. I take the view that what is needed to keep strong links between the United States and Europe in defence is for Europe to make a very much greater effort. There are plenty of reasons why the defence effort of the United States could be redirected towards other parts of the world—there are many temptations in Asia and elsewhere—and the best way to keep American efforts directed towards helping Europe is for us to make a much better effort than we have been making so far.

The best guide to the American attitude towards the ESDP is the statement attributed to President George W. Bush in answer to a question from the noble Lord, Lord Powell of Bayswater. In the minutes of evidence at question 62, the President is quoted as saying:

"The US would welcome a capable European force, properly integrated with NATO, that provided new options for handling crises when NATO chooses not to lead".

I find it difficult to judge how the machinery of the ESDP will work, on what kind of occasion the United States is likely to decide to take part and when it will decide not to take part. It seems to me that the United States is becoming reluctant to be involved in peacekeeping or humanitarian activities, but would be more inclined to take part in peace-making or antiterrorist roles. As has been said, the US is becoming choosy about its partners. It has learnt from Kosovo that if other countries are in partnership with it they may be rather too ready to disagree with American actions. But the most important factor in relations between Europe and the United States—and one cannot say this too often—is European defence spending and the effectiveness of European forces. It is to be noted that President Bush referred to a "capable" European force in the passage that I quoted.

It is dangerous and shameful that Europe, with its wealth and its vast population, cannot make a better contribution to its own defence. The most important battles that the European countries have to fight are with their own finance Ministers. I do not exclude our own Chancellor of the Exchequer from that remark. He does not display much of an inkling of the fact that, in an age of terrorism, defence and security spending, including home security, is at least as important as spending on social services and health.

My third point relates to the tasks that the rapid reaction force will face. On page 10 of the report, the Secretary of State for Defence is quoted as saying:

"the EU must develop a full military force able to project power around the world"

and the participating governments have committed themselves to the proposition that the ESDP is,

"designed not for territorial defence but for international operations".

After the end of the Cold War—which seems a long time ago now—we were led to believe that there would be a new world order. That was taken to mean relative peace. The opposite has happened, and was happening well before 11th September last year. I want to mention seven factors which have led to this situation, which I believe will continue to be relevant in the coming years, and which could lead to calls for the participation of the ESDP.

The first factor is the end of the Cold War. During the Cold War, turbulence was limited by the dominance and rivalry of the two super-powers. Smaller countries felt that, if they started small wars, those might turn into big wars. Yugoslavia is a good example. It is astonishing that Yugoslavia stayed together as one country for so long—with six different nations, and with many different languages, religions and cultures. It was kept together not only by President Tito, who died many years before Yugoslavia started to break up. It started to break up because the Cold War had ended.

The second factor is the end of empires. That has left Africa in particular in a turbulent state. It is to the credit of African countries that they have not attempted to redraw their borders. Many African borders are straight lines—the straight line indicating a colonial border, a line drawn to suit the wishes of the colonial territory, not a natural border between different tribes, for example. To the credit of the African countries, they have resisted that temptation. I hope that they will not surrender to it in the future. That would be very dangerous indeed. However, what is now taking place in a number of African countries is a scramble for riches—mineral riches, timber and so on. They have surrendered to tribal rivalries—I refer, for example, to Zimbabwe and Rwanda—and they have produced some failed states, Somalia being one example. So there is plenty of turbulence there.

The third factor which may lead to a demand for the presence of the ESDP is that peacekeeping forces tend to stay for much longer than they are expected to be needed. One reason is that the disputes that they have been sent to help relieve tend to continue longer as reassurance is given by the presence of the peacekeeping force. Cyprus is a good example. British troops have been in Cyprus since 1964. Bosnia is a more recent case.

Another factor which will lead to a demand for forces such as the ESDP is the explosion in the number of states in the world which are now independent. When the United Nations was formed, it had 50 members. There are now 190, and many of those are very small. I remember that, about 20 years ago, a study was made in the Foreign Office of the minimum population size necessary to enable a state to survive independently. The conclusion was that a population of 1 million was the minimum. For 20 years now, there has been a small independent territory in the Pacific with a population of 10,000. It recently became a member of the United Nations. I refer to Tuvalu. There are many other independent countries with populations of less than 1 million. These examples have given fuel to the Scottish Nationalists and to people in Quebec who want independence, and will continue to have an effect.

The fifth point is that many countries have separatist movements; for example, Iraq, Turkey, Georgia (I refer to Stalin's Georgia, not to Jimmy Carter's) and, in the Pacific, Kiribati and Vanuatu, which are tiny little countries with populations of no more than 200,000. They have independent movements in some of their islands. Similarly, a serious war has been going on in the Solomon Islands. I do not mention these specific cases as ones in which I expect the ESDP to be involved; that would be going rather a long way geographically—but they are examples of the sort of tendency that we have to expect in many parts of the world. The western Sahara is another example of an area which has an independence movement. It is a good deal closer to home and could possibly become relevant to European forces one day.

Sixthly, there is the factor of world-wide terrorism, which has been encouraged by the speed and ease of communication. It is a problem of which we are very much aware and which will certainly continue for quite a long time.

Seventhly, I want to end with a question to the noble Baroness who will reply to the debate. It relates to a Written Answer given by her predecessor, the noble Baroness, Lady Scotland of Asthal, on 2nd May last year, which is headed:

"Humanitarian Crisis: Proposals for International Action".

The noble Baroness said:

"We firmly believe that we have shared responsibility to respond when confronted with massive violations of international humanitarian law and crimes against humanity … We have spent the past year trying to build the broadest possible consensus around a set of ideas on the conditions and circumstances that make international action appropriate … The key elements of our ideas are … when faced with an immediate humanitarian catastrophe and a government that has demonstrated itself unwilling or unable to halt or prevent it. the international community should take action … Our consultations will continue".—[Official Report, 2/5/01; col. WA 279.]

That seems to me to be a big potential expansion of the responsibilities that the democratic world would be taking on if we followed that route. Can the Minister indicate the results of the consultations referred to a year ago? It seems to me that the kind of task foreshadowed in that reply would be relevant to the ESDP.

To sum up, it is unlikely that there will be any shortage of situations over the years leading to ESDP involvement. What I find surprising is that in this situation the Prime Minister, who was one of the inventors of the ESDP, is giving so little prominence to European defence.

My Lords, it has been exhilarating and fascinating to serve on the sub-committee. Several things happened during its consideration of the issue. As the noble Lord, Lord Jopling, will remember, our first evidence was taken on 26th April, when we heard from lain Duncan Smith, who was then shadow Secretary of State for Defence. His role has changed since then and I hope that, in this matter at least, perhaps some of his views have changed, too. As the noble Lord, Lord Jopling, has said, the late Lord Shore of Stepney was a member of our sub-committee. Those of us who sat in the committee when he was participating will long recall how robust and pertinent many of his questions were. For those of a European persuasion, such as myself, his questions were also sometimes extremely challenging.

Then in September came the terrorist attacks against New York and Washington, which have led to a radically changed situation. As has already been said, Article 5 of the NATO treaty was activated but not used. As a direct consequence of September 11th, there has been a significant change in the relative positions of Russia and the United States and the areas of agreement between then. The vast gap between United States and European military capability has been vividly demonstrated. It is worth considering for a moment that if the two attacks of September 11th had not been against New York or Washington, but had been against Canary Wharf, the business skyline of Frankfurt am Main or La Défense in Paris, what would or could have been the European response?

The events of September 11th greatly influenced the report, serving as a warning against dancing on the head of a pin. There is a fondness for theological nicety about the alleged Atlanticist or communautaire tonality of ESDP. That is surely much less important than the stark reality of European under-investment in defence and the European inability to produce real capability from what we spend. The figures have often been given in this House. Europe has approximately 15 to 20 per cent of the American capability from an expenditure of around 60 per cent of US levels.

In that regard, I felt that the noble Lord, Lord Gilbert, dismissed with a wave of the hand the contribution of the continentals. While I in no way condone the percentages of GDP being given to defence in the European Union, it is worth noting, as the report does, that France's contribution as a percentage of GDP, even in 2000, was 2.6 per cent, as against the United Kingdom's contribution of 2.4 per cent. Neither percentage is acceptable, but it is important to achieve a proper perspective. In real terms, the French have been spending somewhat more than we have. We must be careful, particularly on grounds of anxiety about Anglo-American relations, not to be dismissive of what is happening on continental Europe, because we are also greatly dependent on that.

In the light of September 11th and the warnings only yesterday from the American Government of possible horrors to come, the Helsinki goal of 60,000 troops able to be committed within two months and sustained for 12 months hardly seems excessive. I shall not try to argue the case for the A-400M, nor did I feel that the noble Lord was in any way discourteous; simply that perhaps that he had not heard my questions as accurately as I had hoped, but there we are.

The ESDP proposals are exceedingly modest. Ensuring that we deliver the percentage of GDP spending that is necessary to make a reality of those very modest objectives is clearly an overriding priority.

I have two observations to share. First, ESDP is intergovernmental and the positions of three governments are critical. Paragraph 27 of our report recognises that

"The driving forces behind the ESDP have been Britain and France and it was the Anglo-French declaration at St Mato in December 1998 that made possible the launch of the ESDP at Helsinki one year later".

A little further on, in paragraph 32, the report judges that,

"Decisions in Berlin will be central to the overall success of the ESDP initiative".

In the conclusions, in paragraph 88, the report regrets that,

"meeting the headline goal is disproportionately dependent on Britain, France and, in the future, Germany".

It may be a disproportionate contribution and that may be regrettable, but it is a fact. It is important that we look at that disproportionate dependence against the history of European post-war co-operation and subsequent integration.

We all recognise that Franco-German reconciliation was at the heart of the building of the European construction. The basis of that Franco-German reconciliation was the mutual realisation in both countries that nothing less than the merger of the coal and steel industries—which was the start of the whole operation—would be sufficient, not to meet the challenges of the future, but to overcome the past. That was the crucial insight that triggered the entire process. Today, nothing less than a new and profound accommodation of interests between Great Britain and France and Germany will enable us to deal not with the past, but with the future.

Such an accommodation of interests does not exclude the interests of others, including the applicant states. Important in that context are the interests and perspective of Turkey. Without a firm basis of shared and common interests by Britain, France and Germany, I fear that each of the three will become footloose in Europe, attracting alliances of the willing and the unwilling in the diplomacy of European integration. That prospect would be hugely damaging. Its effects on the development of European defence capability would be at best disruptive and at worst disastrous. We do not want the big three footloose in subsidiary alliances within the European construction.

To provide Europe with the lead that has so long been historically furnished by Franco-German reconciliation would not be arrogant on the part of the three; it would be the acceptance of an historic obligation.

My second observation is that the historical differences in attitudes to the transatlantic relationship taken by France and the UK are rooted in part in their different experiences of the Second World War. However, they are also based to some extent on different conclusions that were drawn in France and the United Kingdom on the Suez misadventure. In the United Kingdom, there was a conclusion that never again should we stray too far from US endorsement. In France, there was a conclusion that never again should the country be so dependent on United States agreement, acquiescence and support. Neither conclusion is any longer relevant.

There are no colonial issues for Britain or France to pursue either with or in the face of American interests or opinion. The need rather is for Europe to demonstrate that we are willing and able to bear the costs, and that we possess the competence to look after our own backyard and—if need be, collectively as well as individually—to participate in the United States-led tasks of protecting and projecting the interests of democracy worldwide. It cannot be in the long-term interests of Europe that our relationship with the United States beyond Europe is entirely on a bilateral basis and on the basis of choice and initiative from the American side but not ours.

The Prime Minister's assertion that we are—I think I quote him correctly—not a superpower but a pivotal partner has been much discussed. The real imperative is perhaps not that Europe should seek in any way to be a military superpower—clearly there is no prospect of that, and it is not the aim of ESDP, which as I said is extremely modest in what it proposes—but that Europe should indeed be a pivotal partner. When giving evidence to our Select Committee, General Naumann put it in a very striking way. His phrase was that,

"We must make Europe the indispensable partner for the indispensable nation",

the indispensable nation being the United States of America, and Europe being the indispensable partner.

Indispensable is a critical adjective. It is an adjective that currently does not attach to our position. Make it attach and we are in a different situation. For that to happen, Germany must deliver—I think that this view was taken quite strongly in the Select Committee—on its commitment to a rapid reaction force of 150,000 troops, all volunteers, able and equipped for deployment on Petersberg tasks by 2007. Noble Lords who are aware of' the structure of the German armed forces will know that the creation of a rapid reaction force of 150,000 volunteers, not call-ups, specifically for that task would be the single biggest change in the German defence structure. I believe that it is an essential building block, much more important than the A-400M, in building the credibility of the proposed initiative.

If such a change were to happen, the relationship with the United States also would change. Our report concluded that,

"It would he extremely damaging to the EU/US relationship if … ESDP … simply created new institutions, from which the US were excluded, with no real development of new European military capabilities".

Quite so; however, the report went on to say that,

"US governments cannot expect"—

or demand—

"increases in European defence expenditure and simultaneously resent the implications of this".

ESDP will progressively give rise to a new and changed agenda between the EU and the US. That is well overdue. September 11th has not only changed the context of this report, which it clearly has; it has created a situation in which Europe and the United States have to share more equally both power and cost.

My Lords, this report and the debate we are holding on it are timely. Europe's fledgling security and defence policy remains a crucial piece of unfinished business, a part of the jigsaw without which the Union's efforts to develop a common foreign policy will be gravely weakened. In recent months, the policy has seemed somehow becalmed, with problems facing it both on the military front—the crucial issue of capabilities on which this report throws some welcome if justifiably critical light—and on the diplomatic front, where the problem with Turkey has been replaced by one with Greece. It is time then to take stock and look at the way ahead.

The first point worth making is that the basic case for equipping the European Union with the capacity, both institutional and military, to undertake the range of peace operations known as the Petersberg tasks has, if anything, strengthened as time has passed. It is only too clear now that Europe, already the main player in the different Balkan peace operations—in Bosnia, Kosovo and Macedonia—is going to have to bear even more of that burden in the future. The United States is increasingly heavily occupied elsewhere. It is equally clear that the countries of the Balkans, whose instability and turmoil disfigured the 1990s, are as yet far from able to complete the transition from war and ethnic strife without the assistance of an international military presence. Meanwhile, elsewhere in the world, we are being reminded again and again that peacekeeping operations are an essential part of post-conflict action by the international community.

It would be good to say that, as the case for ESDP has strengthened, so have the capabilities to carry it out. However, as this report makes clear, that would be only a modest part of the truth. As the 2003 deadline for readiness comes closer, the damage to the credibility of the force from the continuing shortfalls in capabilities increases. There are of course reasons, perhaps more rightly called excuses, for such shortfalls, such as the world recession and the cycle of elections in many of the main European Union countries. By the second half of this year, these excuses and alibis should be a matter of the past. It will then be of the greatest importance and urgency to fill the remaining gaps and to move ahead with the tasks to achieve continuing readiness. It will be equally important to iron out the remaining obstacles to achieving a seamless co-operation between the European Union and NATO. The cost of failure to move ahead in this way will be severe, whether in terms of the European Union being unable to pull its weight in the next phase of Balkan peace consolidation, in Macedonia, or in terms of the failure of the European Union's common foreign policy to be seen to project power, not just words.

There is a brief reference in the report—to which the noble Lord, Lord Jopling, referred—perhaps a slightly cursory one, to the key matter of democratic accountability for Europe's security and defence policy. Neglect of this aspect, complex and sensitive though it is, would be most unwise. If troops are to be put at risk, then there must be a proper democratic underpinning back at home to give their actions full and unstinting support. To do otherwise would be to programme a disaster. It is not surprising that the European Parliament is putting itself forward for this role. However, even if it should play some part in achieving democratic accountability for ESDP, it cannot on its own do it all. ESDP has, rightly, a strongly intergovernmental structure, and decisions to commit troops will be taken by the individual national governments. These governments are of course answerable for their actions not to the European Parliament but to national parliaments.

So what is needed, I would suggest, is a hybrid solution which brings together representatives of national parliaments with those of the European Parliament. Such a body could either be a more sharply focused form of the proposal for a second chamber of the European Parliament, or it could perhaps be something a bit less ambitious—a sort of European Union committee for foreign and security policy. It could either be limited to ESDP, or it could range more widely over the whole field of Europe's common foreign policy, where the issue of democratic accountability is every bit as pressing as it is for ESDP. The convention on Europe, now meeting in Brussels, is surely the ideal place to air such proposals and to ensure that, when the 2004 intergovernmental conference does meet, the ground has been properly prepared. It would be good to hear from the Minister, in her reply, some reaction to the suggestions I have just made.

In conclusion, I should like to say a few words about the broader political context of ESDP. I noted in the report an exchange between my noble friend Lord Powell of Bayswater and the Secretary of State for Defence, in which the former asked whether it may not eventually be necessary to reconsider and to decide that ESDP had not been a very good initiative. We should be under no illusion about the damage that such a course would cause, not only to the British Government, which, laudably in my view, have been a driving force in ESDP from the outset, but to the European Union as a whole and also to NATO.

The latter point may at first seem surprising. However, I believe that it is true. How would NATO be strengthened, if a dozen of its members turned back with their tails between their legs and admitted openly that they had been unable to muster the relatively limited capabilities required for ESDP? Does anyone seriously believe that those countries would then be able to remedy those deficiencies on behalf of NATO, when they had just failed to do so for the European Union, or that their governments and parliaments would vote for the funds to strengthen NATO, which they had withheld from the European Union? Of course they would not. Is not the most likely outcome a weakening of the European pillar of NATO and an exacerbation of transatlantic tensions over burden sharing? If that analysis is correct, a great deal rides on the success of this venture. The hard fact is that we are rather more than halfway across the river on ESDP. To turn back now would be an act of folly.

My Lords, as a member of the sub-committee, as our deliberations continued I found myself asking whether we were really talking about defence. We were certainly talking about security, and the Government's response mentioned security. However, I was always under the impression—emphasised by all the witnesses whom we heard—that the defence of the territorial integrity of most European Union countries who are members of NATO was assured by NATO. Therefore, defence, in that sense of the word, is not presently on the agenda.

I recognise, and some of our witnesses said, that without a European defence policy, we could not have a common European foreign policy. If we consider what a defence policy (in the sense of replacing NATO) would mean for the European Union, I am sure that every Chancellor of the Exchequer or every Finance Minister in Europe would throw up his hands in horror and say, "There is absolutely no way in which we can reproduce NATO as a European venture". That, therefore, is the point from which we start. As the noble Lord, Lord Watson, quite rightly said, ESDP, such as it is constructed, is a very modest venture; but it comes to the relations between the European Union and other NATO members and the US within the NATO concept.

I understand what noble Lords and many of our witnesses have said; namely, that the United States, particularly after 11th September, became rather disinterested in NATO and the technological gap in warfare, the planning, the administration, the logistics. As General Hägglund—quoted by the noble Lord, Lord Jopling—said, "We are just a nuisance rather than being a help". It is quite remarkable that after the NATO Council took the decision to invoke Article 5 following the events of 11th September, the United States said, "Thank you very much, but we are really not terribly interested in having any European contribution to certainly the planning, or possibly even at later stages".

I may be wrong, but I detect that since that time there has been a slight change of emphasis. We now have the proposed agreements with Russia and NATO, which I believe have begun to change the US interest in NATO. It seems to me—I advance this proposition and many noble Lords may wish to correct me—-that the United States has started to take an interest in NATO, not as a defence organisation but as a political organisation that involves Russia. The way to involve Russia is to bind it into the international community, and binding Russia into the international community would be a way of selling the abandonment of the ABM Treaty and the national missile defence programme, and indeed ensuring only a muted protest over possible action in Iraq. Therefore, if NATO is becoming a political organisation rather than a defence organisation, and if that is what the United States wants, we need in some way to strike a balance between NATO's Article 5 responsibility for the defence of territorial integrity and the political community's responsibility that now seems to arise from it.

There is still no doubt that the United States would like European countries to make a greater contribution to crisis management or whatever crisis the world may meet. There is no doubt that Europe in its present state, however defined, has a very limited capability for doing so, and the report pointed that out. Equally, there is no doubt that however great the expenditure on defence in European countries, there will be no closing of the technological gap between European countries and the United States of America—not a chance.

Europe therefore has a rather difficult game to play—it is a difficult hand: to do more, and yet to ensure that the US does not lose interest in the whole enterprise. To develop the Hägglund proposal, which would separate the European Union and NATO from, as it were, US NATO, would in my view be precisely to go down the wrong track. As our report indicated, institutions in Europe that were to be created without US participation would greatly upset the US and would, in my opinion, make the US less committed to the main principle of NATO. Therefore, I am not in favour of General Hägglund's proposals, as I read them, but we shall no doubt hear more about them.

With this difficult hand to play, what can Europe do? Clearly, the United States will not want to do certain things. The noble Lord, Lord Blaker, instanced a number: humanitarian projects; a spill over of old colonial problems; many crisis management areas in respect of which we do not need heavy lift, missiles or the whole panoply of US technology. The US may say, "In that case, we are not interested. You get on and do it yourself".

We obviously had some difficulty defining what the Petersberg tasks were, because it is rather difficult to predict what may come in the future. Nevertheless, we took the view that when the ESDP was declared operational at Laeken, it was in respect only of certain humanitarian tasks that we could carry out possibly now, but had nothing to do with peacekeeping or even peacemaking in the future, without US help.

There is another category of operation in respect of which I believe the European Union and its associated allies may make themselves not indispensable, in General Naumann's terms, but valuable to the US: that is, the Afghanistan situation, where the US has all the missile technology and capability required to drop bombs on anyone on a sixpence. What the US does not like to do is put troops on the ground. There are all sorts of historical reasons for that; indeed. I shall not go into the Vietnam situation. We are quite happy to put troops on the ground. According to my latest intelligence from Washington, some of the US troops who were on the ground in Afghanistan were not entirely up to the job. In fact, both our troops and the French troops are extremely good at that sort of job.

There is a sort of interim area where the US takes command of a peacekeeping operation and where we can provide the necessary troops on the ground, with the right mentality to get in and ensure that all the bombs that have been rained on the place do not go to waste. That is another dimension, which I do not believe the committee mentioned in its report. However, it is something that is worth taking into account.

Can Europe do any of this? At present, the answer is: not very easily. Noble Lords have described what is required; for example, a greater defence expenditure, and so on. From some of the evidence that the committee heard, I would argue that the fundamental requirement is inter-operability within our defence forces in the European Union, and beyond. If you have inter-operability, you can at least get a number of troops on the ground if they are trained properly—inter-operable. You can get troops on the ground in support of operations, be they led by the European Union or by the United States.

I would also argue that the whole concept of Russia and NATO has slightly changed the political dimension. We should be thinking about Russia as a possible partner in some of these operations. Up until now, the Russians have played a limited role. However, if there is really to be a 20 rather than a 19 plus one in NATO, Russia could contribute very seriously to the operations that we have in mind.

I believe that our report defines a very broad agenda. It is one that is for ever moving; indeed, only last week more elements emerged that would move that agenda. How that agenda is even met is also moving. All I can say is that our report, under the leadership of the noble Lord, Lord Jopling, illustrated some of the problems that we may meet. It also pointed to some of the ways towards what might be a successful conclusion.

My Lords, this is the first report that I have completed as a member of the EU Sub-Committee on common foreign and security policy. I am fortunate to be serving on that committee under the chairmanship of my noble friend Lord Jopling, who so comprehensively introduced this debate on the report. I am most grateful to my fellow members of the committee for their tolerance of a new member, especially as they have very distinguished records in the fields of defence and foreign affairs. I only hope that that tolerance will be extended by other distinguished noble Lords this evening.

However, there is one point that I wish to make in this debate. I would not wish the debate to pass without referring to the need, in my opinion, to ensure that all members of the European Union—present and future; and both large and small—feel that they have a genuine part to play in the European policy on security and defence. I do not intend to enter into further argument as to whether it should be done through NATO or the European Union. As the report makes clear, the existence of the SDP is acknowledged and recognised, and is no longer a matter of debate—at least in this report.

Suffice it to say, I am firmly on the side of those who argue that it is appropriate for the European Union to seek to have a capability to carry out the suggested tasks. Indeed, I suggest that some of the nations may feel more comfortable within the European Union than in NATO, and more inclined in that structure to increase and meet the necessary expenditure.

The report makes it clear that the burden of the increased contribution falls disproportionately on Britain, France, and, perhaps in the future, Germany. But that increased contribution will not be achieved if we give the impression that our fellow members of the European Union have no forces worth considering; for example, if they are of doubtful reliability, and fit only for guarding palaces. I share the view of my noble friend Lord Jopling that the burden should be fairly spread, but I doubt whether the smaller nations, and, indeed, some of the larger ones, will ever match the contribution of the United Kingdom and of France. Indeed, I do not believe that they will ever have the resources nor—dare I say it?—the ambition to be in a position to stand shoulder to shoulder with the big players in the big operations. They are willing to contribute, although perhaps only in humanitarian tasks and as peacekeepers. But after any conflict the latter will be an essential role to fulfil as it will release forces from other nations, enabling them to be used for other purposes.

I suggest that there is some evidence of a willingness by nations to make this kind of contribution. Staff from the Library of the House were kind enough to give me some information in this respect. In the Gulf War, five European Union nations participated, the smallest of these was Belgium, which provided a frigate, two minesweepers, two landing ships, and six C-130 planes. A number of what are now applicant states also participated by providing a medical unit, a hospital ship, and chemical warfare experts. In Bosnia, the Bosnian forces had contributions from all European Union states, except Denmark and Luxembourg. Again, applicant states made contributions, even with small numbers. For whatever reason, figures for Kosovo do not appear to be available. However, in the Afghanistan operations, 12 European Union states are contributing to peacekeeping operations, together with at least one applicant state. These have been, and are, valuable efforts, however large or small. I believe that they should be encouraged and not in any way demeaned.

The problems of ESDP are identified in the committee's report. Clearly, they need to be addressed; they are considerable. Of course, I support the report's recommendation and conclusions, because I wish to see the initiative succeed.

My Lords, it is time for us to go on the attack about defence, in particular about the scepticism directed towards the European security and defence policy of developing a rapid reaction force. But in that attack, perhaps I may start, first, at home with the role of the House of Lords.

In what I believe to be an excellent 11th report in so far as it goes, we in Sub-Committee C, so ably led by the noble Lord, Lord Jopling, call for an improvement in parliamentary scrutiny of ESDP at both national and European levels. The inadequacies of the working practices of this House mean that many EU reports fail to find proper debating time in this Chamber. Indeed, we are debating today, in May, what we thought at Christmas. Therefore, I strongly support the call to be made in tomorrow's debate on the working practices of the House that the reports of Select Committees should be tabled on time, and in time to make a difference. If we are to be an active and influential legislature, we must speak early and often.

I move to my second point of attack. Our July 2000 report welcomed the common European security and defence policy in general, and, in particular, the initiative of creating an EU rapid reaction force. Moreover, we noted that,

"the CESDP does not envisage the creation of a European army".

Despite this, when the matter became a political hot potato in the autumn of 2000, the chippier and cheaper end of the press, as well as the broadsheets, failed to recall our pronouncements. Doubtless that was partly our fault in failing effectively to communicate our report to the press, but worse was to follow.

Instead of exploring some of the real challenges and opportunities presented by the RRP initiative, the press embarked upon a campaign of misrepresentation and obfuscation talking of little else than this mythic European army. Can we ever hope for the day when the press might at least read the arguments prepared painstakingly by a public body such as your Lordships' Select Committee on EU defence and security policy? And am I alone in believing that ill-informed rhetoric of the kind that depicts the RRF as a European army under the control of Brussels bureaucrats not only distorts reality but actually detracts from Britain's and Europe's best interests?

Thirdly, I repudiate the view, peddled well beyond the red-neck press by some political and defence commentators, that in terms of defence matters NATO is a sleek greyhound at peak fitness while the EU is a mongrel of doubtful descent and malignant motive, that we should uncritically accept the one while cavilling at the other—NATO good, Europe had. To counter that misconception of NATO being in little need of reform, I am encouraged that our noble colleague Lord Robertson of Port Ellen, in his role as NATO chief, is actively seeking to cut by one half the current complement of 400 committees poring over paperwork today at NATO headquarters in Brussels—an attack on bureaucracy normally reserved for the other end of Belgium's capital city. But my more material point is this: in the common defence of European and western interests there is no need to choose between NATO and the EU, between, as it were, Washington and Brussels. As a nation Britain should studiously court both sets of allies. Those who seek to divorce us from our European friends and encourage us to elope with our American friends fail to understand that in matters of defence and security bigamy is the better policy.

Fourthly, in that marriage of true defence and security minds which we conduct with our American cousins, we should not hold back from the occasional plain speaking when we think that our friends are wrong. In paragraph 90 of our report we rightly advise that ESDP requires a new agenda to be forged between the USA and the European Union. We go on to warn that it would he damaging if new institutions were formed under the ESDP which excluded the United States, thereby imperilling our current relationship. But—and this is my point—we also assert that,

"US governments cannot expect increases in European defence expenditure and simultaneously resent the implications of this".

In other words, it is for the US to put up or shut up. It should clearly state whether it approves and supports the rapid reaction force or whether it does not. And if, as our report passionately demands, all EU countries do increase defence expenditure, our American cousins must recognise that the quid pro quo is for the EU to be treated as an equal partner. EU Military Committee chairman General Hägglund's observation that,

"The EU allies are getting to be more of a nuisance than a benefit to the Americans in the field"

should give us all pause to think about the future nature of the transatlantic relationship and the proper balance of duties and resources that each may bring to the mess table. Europe must spend more money on defence and America must spend more time on consulting.

That brings me to my fifth and final point. Our report rightly supports increased defence expenditure by Britain and the European Union if we are indeed to fulfil the ambitions of the ESDP initiative and its headline goals. That is a sine qua non. I congratulate this British administration on being the first government for many years, however slenderly, to increase defence spending. But that assertion for increased spending is prefaced by an important passage in paragraph 87 of our report where we demand more effective use of defence expenditure in the various EU states. We call for greater specialisation of roles and improved inter-operability, and improved procurement practices to ensure t hat the ESDP is properly resourced. These thoughts arise from contributions from several of our witnesses, including the Secretary of State himself, but they are best elaborated in the written submissions presented by Sir Michael Alexander, Sir Timothy Garden and by Professor Keith Hartley. The latter, for instance, declares that the EU's armed forces are characterised by massive duplication of defence ministries, by duplicate armies, navies and air forces together with duplication of their training, support services and bases. As a result Europe fails to maximise opportunities from developing economies of scale.

Professor Hartley also identifies the EU's defence industries, which typically comprise too many firms developing too many similar weapons which are produced at too small a scale of output to make viable national markets. He cites combat aircraft as an example. The Swedish Gripen, the French Rafale and the four-nation Eurofighter add up to wasteful duplication. If all six nations combined their efforts, there would be considerable savings in R and D and production costs associated with an order, say, for 1,000 aircraft. That in turn would begin to approach the US scales of output where, in the case of the joint strike Fighter, the US total planned requirement is 2,852 units. Like the United States, we in Europe should think big.

In addition, there are enormous opportunities to make further savings which could then be directly converted to additional defence expenditure if the European Union collectively adopted policies of developing a single European market in defence equipment; expanding OCCAR into a fully blown EU procurement agency; encouraging individual nations to specialise; and, say, for the RRF, if we collectively fund new weapons and force structures in such areas as satellite communication, surveillance systems, nuclear deterrence and ballistic missile defences.

If we do not embark upon such reforms, Messrs Alexander and Garden point out that in 15 years' time, with constant defence expenditure, frontline services will be only half the size they are today. Thus, they propose a pro rata European defence funding arrangement, whose beneficial effects would include exposing those countries which are currently free-riding as well as encouraging each EU country to prefer to improve their own military capability rather than contribute money which boosts jobs and industries in other EU states. Alexander and Garden also animadvert to the distinctly low key incentives that have hitherto characterised NATO's push for greater intra-NATO co- operation—another example of the failure of NATO to embrace reform.

The crunch has come. I am wedded to t he need for real additional defence spending. I acknowledge the very considerable political difficulties associated with the remedies I am advocating. Nor do I fail to foresee the fevered reaction that these ideas will provoke among some of the media and among some commentators. But now is the time for hard answers to difficult questions. If we really believe in strengthening Europe within NATO, gaining parity of esteem with our American colleagues and providing for Britain, Europe and the West armed forces fit for the differing challenges of a post-9/11 world in the 21st century, we have to embark upon a long march of change and modernisation now—our enemies will not wait.

My Lords, to face the challenge of international terrorism it is absolutely vital that the European Union nations recognise that spending on defence has been insufficient over the past five or six years, that we should take steps to increase it, and that we should follow the lead given by the American Congress and secure a substantial increase in defence expenditure. It is also part of our democratic responsibility in this Parliament that if we are to maintain—I believe that it is vital that we do—that defence within the European Union is part of the intergovernmental pillar, we scrutinise at all stages all aspects of European defence and security policy.

It is in that light that I welcome the report and congratulate those members of the Select Committee who brought it to the House. It contains a great deal of extremely interesting and important information, particularly in the body of evidence.

I agree with my noble friend Lord Hannay that this is no time to abandon the hope of realising a sensible European security and defence policy. I still have profound anxieties about some important aspects of it, but I take some comfort from the fact that it is not yet set in stone. Since the Nice negotiations, there have been continued discussions within the European Union and NATO and there is not yet agreement in either body.

The noble Lord referred to the considerable anxiety about the continued disagreement between Turkey and Greece. I hoped that he would go on to talk about the problem of the Cyprus negotiations, on which he is a considerable expert. It is extremely worrying that there is still disagreement in that important flank of NATO and Europe. It was always going to be one of the vexed and difficult problems. Let us hope that it will be resolved.

The most important issue that is still not yet resolved relates to the planning functions between the European Union and NATO. The Prime Minister, when visiting President George W Bush at Camp David on 23rd February, had to convince the new President and his Administration that the new policy was not going to damage NATO's interests. The new President rather cleverly quoted back the Prime Minister's interpretation publicly at their joint press conference. He said of the Prime Minister:

"He also assured me that the European defense would no way undermine NATO. He also assured me that there would be a joint command, that planning would take place within NATO, and that should all NATO not wish to go on a mission, that would then serve as a catalyst for the defense forces moving on their own".

That interpretation, unfortunately, is not what was agreed at Nice, although I hope that it will be agreed in the negotiations that are taking place.

However, the facts remain and the true picture was revealed by President Clinton's former head of the CIA, James Woolsey, speaking in Washington after the Nice negotiations, when he discussed its consequences. He said:

"The one and only thing that the United States asked of our European friends was not to establish a separate and independent military planning capability. And, of course, that is precisely what they did".

The Select Committee took evidence on 13th December from General Klaus Naumann, a German who has a very distinguished record as head of the military committee of NATO. He said:

"In my view, it would be wrong to establish under the auspices of the European Union a new and independent planning capability. That would be a duplication of effort. You should find arrangements between NATO and the European Union so that the European Union could avail itself of the existing capabilities within the NATO command structure. That should be possible, in my view. That is the most appropriate way to do business".

And so it is. Until that issue is resolved, European security and defence policy should not come fully into effect.

I offer counsel on prematurely deploying a rapid reaction force. General Naumann and others referred in evidence to the fact that the rapid reaction force will not reach its full capability by the promised date of 2003. Indeed, he went on to warn that it could take until 2010 before it had reached its full capability. We are aware of a discussion between the Secretary of Defense and the Foreign Secretary because documents on their exchange of views were leaked. The Secretary of Defense earlier this year was very concerned that we should change from a NATO deployment in Macedonia to an EU deployment. The Foreign Secretary, despite sharing his anxieties in that regard and believing that the approach did not make any military sense, nevertheless urged that if we got into a situation of isolation and only we were opposing that approach, we should sit on our anxieties, stomach our feelings and go along with it. I do not think that that is the way to proceed, although I know that the Foreign Office often feels that that is the way forward in the European Union. However, to deploy a rapid reaction force before it is properly equipped and sustainable could do great damage to European security and defence policy. It could even result in what the Secretary of Defense feared: NATO having to come in and rescue it.

The Macedonian situation is still very fragile. As I understand it, the Americans are not arguing for NATO to come out of Macedonia; they wish it to stay there. They wish—understandably and for very good reasons—for the European countries to take a bigger load in terms of SFOR in Bosnia and KFOR in Kosovo and Macedonia. They do not wish to change the arrangement by which NATO operates in all three countries. Frankly, the approach makes no sense; they did not oppose the European force—Germans and French—coming in to play the major role in KFOR. However, it is a fact that they are relying on a large amount of NATO intelligence and NATO computer capabilities, and on many other aspects of NATO. It is extremely foolish to allow political ideology to ratchet up deployment. There is too much political rhetoric and not enough military realism already in many of the discussions about European security and defence policy. We must be very careful in that regard.

Like the noble Lord, Lord Harrison, I believe that it is perfectly possible to bring together the contributions of the European Union and the United States on defence. It is perfectly possible to build a serious relationship between the European Union and NATO.

I am clear on one thing: at no stage is it in the European interest to alienate the United States and in particular the young future leaders of the American armed services. I detect a growing anxiety among serious American military leaders of the rank of colonel, or thereabouts, about NATO. They do not feel that it is being taken seriously. They are worried about the tendency for political pressures to decide the pace of enlargement. They were worried by the extent of political interference, with the NATO targeting strategy, over Kosovo. They are now extremely concerned that some people in Europe seem to think that it is possible to build a defence force that would somehow work in opposition to American foreign policy or to conduct foreign policy with defence support against the national interests of the United States. There is no doubt that one has to choose; one cannot have an alliance of the depth and magnitude of NATO and keep open one's option in some circumstances to operate independently. The two are interlocked and intermingled.

I turn to the subject of the Galileo project. The European Union will now spend billions of euros in putting up satellites in order to run a GSP system. I am like a number of people. My own little sailing boat operates a system for which I do not pay other than for the gadget. I do not pay each time I tap into the American satellites overhead which position my boat remarkably accurately. I am aware of the fact that the system does not provide total accuracy because the Americans do not wish someone else to have that capacity. But it serves a useful and commercial function.

Yet we are now embarking on a course of duplication. What is the reason for that? The French argue that the Americans might suddenly opt out of the whole system, leaving us with nothing in a dire emergency. But if we follow the logic of that argument, we would not buy any American equipment in the future and would opt out of all aspects of interoperability within NATO.

That French attitude, which underpinned too many of the negotiations in the few months immediately prior to Nice, must he challenged by the British Government. No other government will do it. Prior to Nice, considerable anxieties about what was coming out in relation to planning were expressed by the Dutch and Germans and by senior European officers in NATO. Somehow those doubts and anxieties were swept aside, yet their predictions were completely fulfilled.

Noble Lords may be interested in a speech which General Sir Rupert Smith made recently in Parliament. He indicated that in present circumstances even a rapid reaction force risks being deployed in dangerous circumstances in which one must operate with a much higher level of sophistication than some people seem to imagine. Peacekeeping is not only a soft option; one needs sophisticated equipment. We suffered in Bosnia for nearly two-and-a-half years through being unable to deploy even artillery because that was considered too strong an armament for the UN forces to have at their disposal.

We need to recognise that a rapid reaction force exposed in a situation such as one might encounter in Macedonia might be under considerable threat. We owe it to the servicemen who might serve in those forces to ensure that they are properly equipped, that they have full and total back-up, and that they do not in any way risk their lives for a politically motivated position.

I return to the value of NATO. Its real value is that over 50 years we have learnt to work together and plan together on military operations. We have reached a degree of trust among young officers which is built up in the early years and is then passed on when they become senior officers and reach staff rank and the rank of general.

We have transposed that decision-making structure to other parts of the world. Essentially, it was a NATO structure that went into the war against Iraq when it invaded Kuwait. Of course, a NATO structure was involved in Kosovo, but it was one that underpinned many of the UN efforts in the former Yugoslavia; and it could still do so. In my view, it may provide a useful way of ensuring a Middle East settlement: NATO could be deployed into the Middle East in order to arrange for a two-state solution between Palestine and Israel.

Perhaps only American forces would be involved in such a deployment. As was the case in Afghanistan, the Americans would not want—at least, in the initial stages—the involvement of too many other countries. In that way, they would be freer to make their command and control procedures. But we should consider the value of a NATO force in which Turkey would be represented in a deployment in Palestine, ensuring no counter-insurgency across the borders and no long-term threat of invasion. We have only to consider the value of what we have already seen in the Balkans, where NATO was deployed, first, in IFOR, then in SFOR and then in KFOR. On each occasion, Russian troops were present, working within the framework and command structures of NATO.

I believe that this debate will be only the first of many on the vexed question of a European security and defence policy. We do not have it right at present. There are profound anxieties in the Pentagon about the current situation. They are not to be dismissed lightly and they are not to be dismissed purely as indicating a belief that Europe can act by itself. We know, and have been taught by history, that twice in two world wars United States forces have had to come into Europe. They stayed from 1947 onwards. It is a remarkable tribute to successive presidents and leaders of the American armed forces that they have stayed for that length of time.

Now NATO faces new challenges, and that is rightly pointed out in the Select Committee report. But let us remember all those who, following the fall of the Berlin Wall, wrote in 1989 and 1990 that there was no need for NATO. What have the past 10 years shown us? They have shown the absolute, essential necessity of NATO, and not only in an aggressive way but as the bridge across to eastern European countries and, above all, to Russia.

Were I to have to choose, I know exactly what I would opt for. I would maintain NATO and not the European defence attempt at creating a security and defence force. I believe that it is possible to marry them, but we need to be cautious and careful. We need to proceed with due speed and due deliberation. Let us stop the political rhetoric. Let us match our words with financial action and with careful military advice.

My Lords, it is always a considerable challenge to follow a noble Lord with the eminence and experience of the noble Lord, Lord Owen. On many occasions this House has benefited constructively and thoroughly as a result of his contributions.

I have been interested in European Community affairs since about 1970. On occasion, I have found myself in argument with people from all kinds of political parties—sometimes from the Conservative Party and sometimes from my own. However, I have noticed that when I have ventured to criticise policies concerned with the enlargement of Community trade or the machinery by which that is accomplished, I am always answered by the same observation. I am told, "Look, we have had peace in Europe ever since the last war. Therefore, there cannot be very much wrong with the way in which we have managed to achieve that, however controversially it may have been done". On a number of occasions I have dissented from that argument for a number of specific reasons, some of which I have ventured to inflict upon your Lordships.

However, I now say that, before we can pass a definitive judgment on the very grave matters dealt with in the report, we need to be a little more introspective. We have to begin to challenge the way in which we have thought and the way in which we have arrived at our conclusions. In particular, in this House there is a necessity for querying the whole basis upon which we have accepted many of the arguments. We assume that the generalities, which have been mainly harmless so far, are correct without probing behind the way in which policies are put forward, put into operation and monitored. Often, we have forgotten the human factor, which is the personal factor in politics. It does not take abstract arguments in papers but active thinking by individuals who work on certain fixed assumptions; at least they appear to be fixed attitudes.

I refer in particular to today's debate, which has its real origins around the time of Maastricht when, for the first time—not in italics but in small and modest type— there was put forward a proposition that Europe should have a "security and defence policy". However, "defence" was in rather smaller type than the rest of the words. Since that time, policies have been put forward in order to achieve a greater degree of unanimity and co-operation between member states without pausing to think whether that is the right way to go forward and without taking into account the personal attitudes, fortunes and conditions of work of those civil servants who are supposed to implement such policies. The attitude of a civil servant, particularly if he is in a fairly close colony, as most of them are in Brussels, has a profound effect upon his ordinary output. There is a tendency to regard the establishment of a committee, its appropriate financing, correct provision for its welfare, entertainment, housing and children's education as factors to be taken into account, as, for example, in the existing defence policy.

The existing defence policy largely originated with Jacques Delors and is based on the supposition that such policies can be determined by the organisation rather than by the countries or representatives involved. It is thought that, if at the end of two or more hours, with appropriate refreshments, a committee arrives at a conclusion, progress has been achieved. Overshadowing such matters in the European Commission, for example, is the logical desire, about which I make no particular criticism, to become the government of Europe.

The extent to which the documents produced by the Commission and various other bureaucrats are influenced by subjective matters we shall not know. However, we should not assume that they do not exist, as, for example, in the establishment of a common security and defence policy. One knows that the defence policy of any country must be determined not necessarily in collaboration with many other people but by the government of the country concerned, sustained—it is hoped in a democracy—by the people that vote it into office.

To what extent does the European Commission believe that its own future interests will be advanced towards its eventual centralisation as the government of Europe by the policies, for example, which it recommends to others in regard to the development of defence? The report is an example of that. If I were to comment on it in detail, I would probably want to commend to noble Lords a detailed reading of the speech that fell from the lips of my noble friend Lord Gilbert which brought us down with some unpleasant bumps.

We have received reports from Select Committees which have heard evidence from people who are here for a few hours and whose qualifications and knowledge may be subject to question. We have tended more and more to become committee people. To reach agreement in committee and to publish an intelligible report is reckoned to be a real achievement. I am sure that those who take part in such exercises are convinced, as for example in the current case, the 11th report, that they are a valuable adjunct to the defence of Europe. They are nothing of the kind.

Some of the speeches we have heard today—most, in my estimation, have been very good—have endeavoured to survey the real scene as seen independently, and which differs considerably one from the other. I have been here throughout the debate and have observed that the influence of China has not yet apparently been taken into account. While we were busy doing the tour d'horizon of the United States and Russia we somewhat neglected the question of China. Yet China will have a considerable influence on the development of our affairs over the next 10, 20 or even 30 years.

In short, there has to be an initial reappraisal by all of us, including myself. We must re-examine the state of affairs and the likely developments on the basis of what is happening in the real world as distinct from the world we have deluded ourselves we are in to our advantage.

I sincerely hope that the report will provoke considerable argument and discussion. If it does that, it will have performed a valuable service to the country as a whole. Nothing is more necessary at this time than that we should reappraise the attitudes we have hitherto taken. When we examine all the surrounding circumstances we shall come to the conclusion that, just because a committee meets, publishes reports and associates with and spawns other committees—all human activities—it does not necessarily mean that the right decisions have been made.

The right decisions have been made in the field of defence, except in more recent years when expenditure on armaments has become unpopular. I am quite convinced that we must bring ourselves up to a standard that is more consistent with the obligations that have largely been thrust upon us by our history, which, I remind your Lordships, has so far been remarkably successful.

My Lords, I am rarely surprised in your Lordships' House. However, today has, on a number of occasions, been an exception. But before I proceed to state why, I should also like to congratulate my noble friend Lord Jopling on introducing this important debate and to take the opportunity to congratulate all noble Lords who served on the Select Committee and who have produced this comprehensive and insightful report.

The further development of a European security and defence policy (ESDP) and the establishment of a European rapid reaction force is a matter which has potentially far-reaching implications for NATO, for the transatlantic relationship and for our long-term security as a whole. That relationship must consistently be scrutinised. It is therefore vital that we have as many opportunities as possible to consider and to question the Government on the direction which the ESDP is taking.

On both sides of the Atlantic we are agreed that, over the longer term, a rebalancing of the security burden through improved European defence capabilities is essential if we are to preserve the transatlantic partnership, and be able to address real security challenges in the 21st century. For that reason, I have for many years supported greater European defence capability and greater European defence cooperation, but with one critical proviso: it should be within NATO, not outside it.

However, the ESDP's trajectory is proving far from smooth in that respect. There, if I am not mistaken, some of your Lordships may be developing the argument that so long as the role is circumscribed and de minimis we need pay only passing attention to the delicate relationship between ESDP and NATO. It is still not apparent to me whether this latest generation of greater European defence co-operation in the incarnation of the European rapid reaction force is simply another milestone down this well-trodden path, or whether it is headed in another direction altogether. A tricky balancing act has evolved between the need to keep in check a suspected agenda to create a defence capability independent of NATO and to weaken transatlantic ties, while encouraging improved European defence capabilities that will serve as a bridge and not as a barrier to closer relations between the EU and NATO.

There remain real concerns that these proposals will undermine NATO in spite of the Government's promises to the contrary. There are genuine fears that this yet may prove, as the noble Lord, Lord Owen, stated, to be a political initiative rather than a military one. I am sure that the Minister will agree that this is a deeply complex subject. There is little doubt that if it is handled ineptly it could impact disastrously on NATO. As the Select Committee pointed out in its report:

"To succeed, the ESDP will require a new agenda between the European Union and the United States. The responsibility for such an agenda rests with both sides. Further enlargement will transform both NATO and the EU and if mishandled this may adversely affect the future development of ESDP and tine EU's relationship with the United States".

The US has consistently called for a number of critical conditions. While it supports the concept of the European strategic defence initiative (ESDI), it has made it clear that the development of this capacity must, "complement and strengthen NATO", and must not emerge at the expense of the transatlantic link. The US has long argued against EU autonomous force planning structures, making it clear that the rapid reaction force should be pursued as much as possible through the established NATO defence planning and Partnership for Peace mechanisms, meshed fully with the Defence Capabilities Initiative and, since St Maio, it has issued a number of warnings about the dangers of the pursuit of autonomy for its own sake.

However, the messages coming out of Europe remain very confused indeed. In Britain, we are told that European defence is firmly anchored in NATO. But elsewhere in Europe, they are told that it is to be independent and autonomous. In Britain, we have long been told:

"The idea that this will be an independent standing force set aside from NATO is nonsense".—[Official Report, Commons, 11/12/00; col. 365.]

We have been told that,

"European defence cannot be a rival to NATO, it has to be a complement to it and this is exactly what happened".

And we have been told that,

"provided that the force is not an independent military planning capability and a rival to NATO, its establishment is in America's interest".—[Official Report, Commons, 11/12/00; col. 365.]

But the view from elsewhere in Europe is very different. Across the Channel, it has been openly acknowledged that the creation of a European rapid reaction force is part of a bigger, political picture. Javier Solana, the EU's High Representative, too has called for an EU defence policy that includes,

"an autonomous capability, independent of the Atlantic Alliance".

Faced with this cacophony of confusion from Europe, what conclusion should our partners in NATO, most particularly America, reach? The noble Lord, Lord Owen, was right: the Nice Presidency Conclusions in December 2000, together with its many annexes, is still the most accurate compass we have to guide us. But the direction it points to is far from clear.

Annex 7, the standing arrangements for consultation and co-operation between the EU and NATO, declares that there must be "full respect" for the "autonomy of EU decision-making", that each organisation will be,

"dealing with the other on an equal footing",

and that,

"the entire chain of command must remain under the political control and strategic direction of the EU throughout the operation, after [it adds] consultation between the two organisations".

That clearly indicates that the European military structures set up under the ESDP are completely separate and autonomous from NATO. NATO has no right of refusal on EU defence operations; there are no formal and binding ties between the EU and NATO; and no control by NATO at any point. The Government have been warned of that time and time again, not least by your Lordships in their report which we are considering today. The report stated that it would be,

"extremely damaging to the EU/US relationship if the ESDP initiative created new institutions from which the US were excluded, with no real development of new European military capabilities".

I hope that the Minister will outline what action the Government are taking to prevent that and what her interpretation is of Annex 7, which—I repeat—states that,

"the entire chain of command must remain under the political control and strategic direction of the EU throughout the operation".

I say to the noble Lord, Lord Watson, that this is not the voice of an indispensable partner to the indispensable nation. At the end of the day, every nation has but one defence budget and one set of forces. There is only one pool of resources from which NATO and the EU can draw in future military operations. This initiative risks asset stripping the one to clothe the other.

The objective for the ESDP should be to improve our collective capability and to increase the range of options for solving European security problems; and to reinforce the complex web of interlocking relationships and partnerships that define the architecture of European security in the 21st century. That means more capabilities for NATO operations, a more effective EU ability to manage crises where NATO is not engaged, and a more balanced partnership between the US and Europe.

Honesty and clear-headedness are absolutely necessary with regard to the aims and motives behind the European rapid reaction force. A political case with a potential hidden agenda—a challenge to American dominance of NATO; the establishment of a rival power bloc; and the move to what the President of the European Commission, Romano Prodi, has habitually called the European army—is to be strongly resisted. Political project or military, in either case the rapid reaction force can be no more than a paper tiger if Europe's leaders do not put their money where their mouths are.

NATO's Secretary-General, the noble Lord, Lord Robertson, has emphatically rejected suggestions that NATO has been marginalised and that its future is in doubt. But he has acknowledged that without action to close the credibility gap, NATO faces the future as a two-tiered alliance, with Europe the pygmy to America's well-armed behemoth. Europe is still a long way from bearing anything like its fair share of the cost of its defence, let alone an effective independent defence capability.

What indications are there that our European partners are prepared to expend the necessary resources to increase defence spending to a level at which it can create a credible 50,000 strong rapid reaction force that is not disproportionately dependent on three out of 15 countries to be dispatched to conflict zones in which the United States declines to take part? I hope that when she winds up the debate, the Minister will tell us what progress has been made in that respect, without which greater defence burden sharing simply will not be possible, which in itself poses a threat to the transatlantic relationship.

My Lords, like others, I should like unreservedly to congratulate the noble Lord, Lord Jopling, on the report and the manner in which he introduced it tonight. When he joined us in the House, I had the privilege of speaking immediately after his maiden speech and I said that I knew that we were in for interesting times. The report is a good indication that I was right. I should also like to thank all the other members of the committee, who have obviously been having an interesting time together considering some profoundly important matters.

At the outset, I make what seems to me to be a self-evident point. I have never understood how it is possible to envisage having a common European foreign policy unless security and defence are taken equally seriously, because they are part and parcel of the same task.

I have read the report with great interest and in some ways have been even more intrigued to listen to members of the committee reflecting on their own deliberations this evening. I hope that it is not arrogant if I suggest that from those deliberations and the reflections this evening, certain priorities will deserve the continued attention of the House.

First, the absolutely basic point that has been emphatically made is that if we will the ends, we must will the means. If the endeavour is serious, the resources must be available and the disciplines must be present. It would be a strange paradox if in going down the road of closer co-operation in the European context we were inadvertently to undermine the effectiveness of British, French and German forces. They are the standard to which the others must work. Commitment must be real.

If I were to pick one practical suggestion that may have disproportionate practical significance for the future of that work together, it is that it is high time that we envisaged the establishment of some kind of European staff college, so that people could together develop the disciplines to lead, work and manage operations together—not simply that they concede some co-operation from the strength of their own national positions, but how professionally they are thinking together about how they make a success of the task.

The second point that has come across clearly and is profoundly significant is the importance of this development for our relationship with the United States and, indeed, with NATO. It is difficult to separate the two issues, but perhaps I may first comment on the dimension that concerns relationships with the United States. In a powerful speech that brought back a lot of memories from when I had the excitement of working with him as his Minister of State, the noble Lord, Lord Owen, talked about the strength of the experience of committed co-operation in NATO over the years. If he were with us—he is unable to be at present—I should have told him that that was true, but that that occurred in the context of an intellectual reality concerning what NATO was about, what was the purpose of NATO, what were the priorities of NATO as an organisation, what NATO was defending and what were the threats to NATO.

It is almost dangerous to talk about the need to continue that discipline of the relationship if we are ducking the issue of redefining, in the new realities, what is the purpose, the task, the threats, why it matters and what we are defending. In that sense, there is a real intellectual—I apologise for using that word again; it is not often used in this place and not always smiled upon when it is—dimension to the strength of that relationship. We in Europe should not be reticent in advancing our interpretation of the world in which we live—not in antagonism to the United States but in order to try to build a really strong relationship for the century ahead.

If I were to pick just one mega-issue that deserves our attention, it would be our difference of emphasis. Our American cousins, faced with the new realities of international terrorism, are arguing that the priority is to organise militarily to secure the global situation militarily against existing threats. It is clear that in Europe there is anxiety that that position is oversimplified. There is anxiety in Europe, with all our experience, that if all that is to be achieved, it must be built; it cannot be imposed. It is a process of winning people to a commitment to order and co-operation, not of telling them what must he the order, what is required of them and what form the co-operation must take. We must build that experience together. I would go further and say that I find little evidence—if any—in history of any case in which imposed order has not eventually fractured at considerable expense. The lesson of history is that we must build order together.

That is just one issue about which it is terribly important to talk honestly with our cousins in the United States. But if we are to carry credibility, it must be clear that we are not just gassing about it but prepared to provide the muscle for whatever is necessary ourselves. Of course the noble Lord, Lord Owen, was right to draw attention to the fact that in two world wars the United States came to Europe's rescue; and, much more recently, all of us in Europe bear some shame that we were unable to deal with some issues in our own backyard until the Americans committed themselves and challenged us to do it properly. Even then, we were able to do so only with considerable American input. There is a tremendous challenge. It is not either/or, hut there are two sides to the relationship, and that is important.

I get a little worried sometimes that there seems to be a requirement for intellectual reticence. It seems that we must not speak out because we will threaten everything. That forces us towards an unhealthy situation in which any kind of commitment—genuine analysis and identification of real priorities— may appear to be antagonism because things can be put only in a confrontational way. We are not working together at the processes of exchange and deliberation. That is the first point that I wanted to make.

With regard to NATO and the emphasis to be put on it in the overall situation, I make no apologies for again making a point that I have made several times in the House. In the old days of the Cold War we knew what we were defending and what the threat was, as we perceived it. When we talk about NATO now, we must be careful that we know what we are defending.

I am genuinely ambivalent about this myself, but I am sure that one of' the highest priorities is to win Russia round into a position of responsibility and partnership in managing world affairs and that it is sheer stupidity to try to sideline her. The challenge is to bring Russia on board and make her central to the management of world affairs. In doing that, however, we must not duck the issues. I have been exposed to the realities of Chechnya. It is not just that what Russia is doing and the way in which she is doing it are unacceptable in the context of what NATO exists to defend; it is counter-productive because it provokes the thing that we say we want to protect ourselves against. It plays into the hands of the extremists. In welcoming Russia and encouraging her to come on board, we must be candid about what is unacceptable and not simply put out the hand of friendship unquestioningly. In international affairs, as in personal affairs, real friendship is based on candour.

Two other issues have come out strongly from the report. One is Europe beyond the European Union. As a member of the delegation to the Parliamentary Assembly of the Western European Union, I know how much it matters to parliamentarians in countries outside the European Union. If we are to have security in the European theatre, it will depend on more than the members of the European Union. I have argued that we cannot impose order; we must win it. We must co-operate with those outside the European Union. That issue has not been fully resolved. We are at a bit of an impasse as to what the role of those countries will be. We must give it serious attention.

There is also the democratic deficit, to which the noble Lord, Lord Hannay of Chiswick, and others referred. I agree with him that it is a crucial matter. If defence and security are to be handled by governments, much of the accountability will be in the parliaments of member states. That is not enough. If we are considering a collective endeavour, it is important that parliamentarians from different member states can come together in some meaningful and effective forum and deliberate together on the implications of what is proposed, what is necessary and how we should respond.

There is one other issue. It has been conspicuous by its absence from our deliberations this evening. How does all this relate to the role of the United Nations and the Security Council? I may be old-fashioned about it, although sometimes I think that I am avant-garde. If we are to build a world order in the way in which I have suggested—by winning it, not imposing it—any action must, whenever possible, have the authority of the global community as a whole. That is why the UN Security Council is so important. It must not be perceived that there are a few nations trying to manage the world—that would cause great resentment—or impose their priorities on the rest of the world. There must be deliberations in which—as far as is possible, for we cannot be stupidly idealistic—most of the world's population is involved. We need an expression of global authority for any action that is undertaken.

Lastly, I shall pick up a point made by my noble—and good—friend Lord Williams of Elvel. He opened up a debate on security. One thing that has been brought home to us this evening is that security is not just about military spheres. It is about economic policy, social policy, trade policy and environmental policy. It is about a range of policy matters in which the European Union already plays a significant role. It would be disastrous if we considered the military dimensions in a separate, watertight compartment from the rest of the global challenges to which the European Union is endeavouring to respond. The important thing is to ensure that they are part of a common analysis and a common understanding of the challenges.

My Lords, I felt honoured to serve on the committee. We were extremely fortunate in both our chairmen, our Clerk and our advisers.

One of the wisest of the many distinguished people who gave evidence to the committee was General Klaus Naumann of Germany. I noticed that he was, unsurprisingly, quoted by several noble Lords in the debate. In our report of July 2000, it is recorded that he said

"What we need in Europe are capabilities and not new institutions".

He was concerned that,

"expectations had been created for which we could not pay the bill".

That concern was borne out by the Government's recent response to our latest report. It says:

"The emphasis must be on clever spending rather than just greater spending".

In the report now under review, some 18 months later—after the events of 11th September—General Naumann said:

"If we really want to think through the consequences of 11th September, we should try to identify European component force elements which could really supplement American capabilities so that the European contribution to a contingency operation would really become indispensable to the Americans. With that, I think, we could establish a link which could really strengthen the connection between Europe and the United States of America".

He thus identified three of the major issues that had concerned the committee for the past two years: capabilities, rather than proliferating committees and infrastructures; the will to pay for defence; and the need to ensure that what is done strengthens rather than severs ties between the United States and Europe. A fourth matter of deep concern is how to ensure the parliamentary accountability of the ESDP. That remains an unresolved issue, all the more important when we compare the statement made at Laeken in 2001 that the EU was now,

"through the strengthening of its capabilities, both civil and military, able to conduct some crisis management operations"

with the knowledge that the considerable increases needed in defence budgets are still lacking, to say nothing of the necessary command and control infrastructure, training and so forth. At Laeken, the EU was confident that it would be,

"in a position to take on progressively more demanding operations as the assets and capabilities at its disposal continue to develop".

With regard to planning structure, we are told that there is plenty of action, with no fewer than 40 ECAP groups working to remedy military capability shortfalls. The difficulty is that although 104 of the 144 targets have been met they are the easy ones; the 21 most difficult and most militarily significant remain unmet. The Government's rather ingenuous response to the committee's proposal that capability targets should be prioritised was that,

"A more detailed system of prioritisation might risk improvement in other areas being delayed or deferred indefinitely".

That echoes the statement made in respect of whether each country could meet its share of the headline goal for the provision of enough troops to sustain an action. We were told that nations were not required to specify how many of the troops would be conscripts and, therefore, of limited value, given their training, experience and availability. There is thus a certain unreality even about the preliminary theoretical definition of resources. Britain and France, and eventually Germany, will be the only serious contributors. Without them it is difficult to envisage any military operation being mounted. However, until those governments have faced the need not merely to spend their present defence budgets wisely but to increase them, neither an EU nor any possible NATO operational task seems likely to be met, since we have only one set of assets whether for NATO, the EU or the UN. It is not reassuring to be told, as we have been in the latest government response, that,

"quantitatively, while EU defence spending has not risen, the slide in EU defence spending has stopped".

The committee is further concerned about the training and the military command and control infrastructure, as distinct from the many committees and working groups, without which no serious EU operation, however limited, could effectively be undertaken. We look forward to hearing the outcome of the crisis management exercise due to be held this month and in due course those planned for 2002, though neither exercise will involve troop movements, which may be just as well for our own hard-pressed forces. Moreover, we are told that,

"training to ensure the readiness of personnel for operations will remain the responsibility of member states",

which seems an unpromising way of producing a cohesive and effective force. I hope these exercises will make plain where the Navy and the Air Force, as well as the troops, fit in. Their role remains, I believe, unclear to them.

However, there have been sea changes in the European climate since the events of 11th September which will, I believe, require Europe to rethink the ESDP —not necessarily to abandon it but certainly to rethink it. The threat of terrorism and of asymmetric warfare initially placed NATO and Article 5 in the forefront of European thinking and the relationship with America was given special value as a defence issue.

However, Europe's response quickly moved to counter-terrorism measures under the justice pillar, an enhanced role for Europol and, sadly, not least to such precipitate and ill-thought-out measures as the European arrest and extradition warrant. In the Government's response to our first report of July 2000, they had stressed that while the aim was for the EU to have a strengthened capacity for military crisis management, the EU also had,

"the ability to deploy a range of tools in crisis management—diplomatic pressure, economic sanctions and visa ban lists. The Political and Security Committee … will play a key role in co-ordinating the range of the EU's crisis management activity".

I have to say that it has scarcely distinguished itself so far as concerns the use of such sanctions against Zimbabwe.

Two major developments may result in a change of direction and even of agenda in the field of crisis management by the EU. The first, as mentioned by other noble Lords, is the new relationship between Russia and America, the proposed partnership in missile defence and a much more positive association of Russia with NATO. For a while at least—though not for ever, since Russia's long-term strategy must always be to try to become the dominant power in Europe—Russia may use her European links more to promote her economic interests than to drive a wedge between Europe and America, as she has been trying to do with Mr Solana's quiet support for a long time.

There is plenty to he done in the fields of economic development, the environment and social justice, and indeed in such civil aspects of counter-terrorism and frontier controls which will continue to justify a close European relationship with Russia while leaving arms proliferation and control and defence against the common enemy of asymmetric terrorism to new US-Russian and NATO-Russian working partnerships. I do not exclude the possibility that Russia might provide troops for limited European operations in due course, as it did in Kosovo and elsewhere. I hope that Russia's agenda will no longer be, as it has been for the past two years, helping the French to weaken US links with Europe through NATO and creating an autonomous force for that purpose.

The other development, evidently enjoying the tacit support of Mr Solana, is a remarkable proposal, reported on 3rd May and mentioned at some length by our chairman, the noble Lord, Lord Jopling, of the Finnish chairman of the Military Committee of the EU for a new EU-NATO partnership,

"to deal with crisis management and terrorist activities in Europe and nearby areas, and … to take part in long-term peace-keeping operations and humanitarian operations outside Europe".

However, this would, in General Hägglund's plan, include only the European members of NATO, thus at a stroke excluding the US and Canada and, for the foreseeable future Turkey, a vital element not only because of its military strength but because it is an Islamic state.

Despite the general's statement that this would not mean an end to co-operation between the US and Europe, or the dismantling of NATO, or giving up Article 5, it seems to me only too likely to have the potential to drive the US into isolation just when we should be strengthening relations, and just when there is a real hope through the new US-Russia relationship and Russia's new status in NATO of moving to greater stability in Europe. While it has always made sense, given the limited capability of most of the EU allies and the general reluctance to spend money on defence, to use NATO's infrastructure and expertise rather than creating more and more new institutions, there is much to be said for stopping to think about the operation of the ESDP and where and how it might be truly effective before any further probably unreal commitments are made.

Stopping to think requires not only scrutiny—and scrutiny has revealed the serious lack of resources and of proper command and control—but democratic accountability to national parliaments. That is a real problem. It is a vital area of the national interest and it is still conspicuously lacking. We must clearly recognise, as does our report, that though the ESDP could eventually, if properly resourced, do some genuinely useful things, it must be discouraged from claiming a greater role too soon, and it must strengthen, not weaken, NATO.

Finally, in any re-evaluation of the situation which may take place, I think we need to remember that the continued existence of a strong NATO is vital. It, too, needs reform since much of its machinery has become cumbersome, but as a recent report by European Sub-Committee A on the role of EU aid in the Balkans states trenchantly:

"NATO is the key institution in the maintenance of regional security in south eastern Europe. Its vital role as guarantor of peace and guardian of regional treaty obligations is a consequence both of its military capability and the deterrent effect that this has on squabbling in the region".

The report goes on to quote the EU Aid Strategy, as elucidated by Commissioner Patten in July 2001. He said:

"An ambitious vision like ours also requires close partnerships with other key players—with NATO, whose military commitment will be crucial for many years to ensure the security necessary for peace to take a strong hold".

My Lords, perhaps I may first state how much I enjoyed being a member of Sub-Committee C. I thank the chairman, the noble Lord, Lord Jopling, and my fellow committee members for making it such fun.

The ESDP and the ESDP initiative should be a key ingredient of any serious debate on defence policy and defence spending. I welcome the report's statement that Europe should do more to develop a credible and serious—I stress "credible and serious"—military capability. It has been said many times that not only is the military gap between America and Europe already very wide, but it is almost getting wider by the day. If the tempo of operations increases—there are signs that it will—we must try to reduce that gap.

I agree with what was said by the noble Lord, Lord Williams of Evil. I am sorry, not "Evil"—but perhaps that was a Freudian slip! I apologise for that error. I agree with the noble Lord, Lord Williams of Elvel, that we will never catch them up. At present, Europe is not capable of operations in its own backyard, let alone in the fight against international terrorism. Until we improve our military capability, it is unlikely that we will influence American policy and thinking.

There is a danger that the European Union seems to be devoting more time to structures and organisations rather than trying to give greater clarity to the operational challenges which our forces might face in the future. That has become increasingly important since the events of 11th September and the ongoing fight against international terrorism. We ought to develop what the threat scenarios might be— I know that it is difficult to pin those down—and then look at what we will need in terms of capability and command and control arrangements to match those threats.

As the report makes clear, progress has been made towards developing elements—I stress the word "elements"—of the EU reaction force of some 60,000 troops, capable of deployment within 60 days and sustainable for one year. The trouble is that 60 days is probably too long; one year is probably too short. Furthermore, those 60,000 troops earmarked by the European nations do not take into account the numbers that the European nations have already deployed on operations.

I also have some reservations about Europe's ability to turn those headline numbers into a cohesive and capable force able to take on serious, complex and dangerous military operations. Others have already made the point that it would be a serious mistake if the political desire to be seen to be good Europeans led us to believe that Europe had a serious military capability. As the noble Lord, Lord Owen, made clear, there is a danger that rhetoric and reality are not marching in step. It would be disastrous if we had a premature deployment.

Certainly we need greater clarity about what is meant by the Petersberg tasks. It is clear from the evidence given to the committee that they mean different things to different people. That may be all right for grand talk in Foreign Offices—I hope that the Minister will forgive me for those words. However, I also have to say that I thought the Foreign Office response to the report was very disappointing. If we do not define more accurately the type of task that Europe is capable of undertaking, we could risk operational failure.

In addition, we need to think through the implications for the ESDP of the dramatic events of 11th September. The fact that since then the ESDP appears to have gone on to radio silence means, I assume, that governments are giving themselves over to serious rethinking—or certainly I should like to think so.

The report rightly brought out the importance of making more effective use of defence expenditure. It highlighted the possible greater role for specialisation, improved interoperability and improved procurement practices. I sense that there may be some scope for role specialisation, but it would be dangerous to go too far down that path. If a nation decided not to take part in a particular operation, as the noble Lord, Lord Jopling, made clear, we could end up with an operational capability gap, which could be a serious one.

One area in which I believe that the report makes an important point is that we ought to make a determined effort to improve interoperability. Eventually huge savings could be made if, for example, we were able to use the same artillery ammunition; use the same air-to-air refuelling and, where possible, some common vehicles. The more that we can reduce the need for European nations to rely solely on national operational logistic support, the greater will be the savings. Furthermore, it could lead to greater operational efficiency. However, the difficulties in achieving this are that different nations re-equip their forces at different times; the need to support national defence industries, and that any reorganisation always first requires huge sums of money.

I strongly endorse what the report has to say about command and control arrangements. The desire to establish a European military capability must not allow the shortcomings of the proposed arrangement to be swept under the carpet. The more complex and dangerous a military operation, the more important is the need for an effective, responsive and robust command and control structure. We should not forget that two of the major lessons of Bosnia were, first, the West's lack of political will to deploy early enough and, secondly, that the UN is not capable of commanding complex, fast-moving and dangerous military operations. At the moment, the only organisation that has in place a proper, geo-political structure that starts at the top level, moving down from the geo-political level through to the military operational levels of command and then on to the military tactical levels of command and thus to the soldiers in the field, is NATO. One would get rid of that, I believe, at one's peril. It would be ironic if the ESDP initiative helped to undermine NATO and further encouraged US unilateralism.

Reference has been made to the comments of General Hagglund. I have to say that I have not read the whole transcript and I am not quite sure about some of his suggestions. However, he has certainly made some eye-catching remarks. He said that he saw extensive changes to the EU/American common security system; that the EU/European parts of NATO should be linked up; that the US would become responsible for the defence of North America and world-wide crisis management, as well as rooting out international terrorism at its source. The last is a pretty demanding task in itself. He saw too a reduction in the need for military alliances and their usefulness. Perhaps I may make one or two comments on those.

First, the original idea was that the European pillar of defence should be within NATO. The European ESDP initiative has set up an EU military committee hut, as the report makes clear, getting that relationship right is enormously important. I hope that General Hagglund was not suggesting that NATO has reached the end of its usefulness. Of course it needs to improve in certain areas; certainly it has to become more responsive and it needs to learn not to micro-manage. The Europeans are probably more guilty of this than are the Americans. Micro-managed military operations, once the military plans are in place, are not to be encouraged. Furthermore, NATO has the only really effective pot/mil structure; it has considerable assets in terms of its planning and operational staff and its members have been working together for a number of years. That could not have been more clearly demonstrated than when, as other noble Lords have pointed out, its members worked together during the Gulf War and, more recently, in the air war in Kosovo. So I hope that General Hagglund's remarks will be studied carefully because at this stage I think that we need to be cautious about saying whether or not they are sensible.

The report rightly mentions the need to recognise that there is a wide gulf in the standards of training, operational effectiveness and working practices between the European nations which might contribute to the ESDP. I have to say that I disagree with those who suggest that the Americans could do it from the air while we, the Europeans, should do it on the ground. That would he disastrous and would lead to great tensions in any relationship between NATO, within NATO, or elsewhere.

I return to the point about differing standards of training, operational effectiveness and working practices. Those do not matter too much when working at the lower end of the spectrum of conflict, but if the going gets tough and we commit our Armed Forces to fight alongside forces that are not competent, I suggest that we would he making a bad political and national mistake. I recognise the great sensitivity of this issue, but it is not one that should be swept under the carpet.

In all that I have said I have tried to stick to the military aspects of the ESDP. I remain a very strong supporter of the trans-Atlantic link and I recognise that for too long, even during the time of the Cold War, Europe has hidden behind the military capability of the United States. I strongly support the concept that Europe, in a military sense, should do more. But if Europe is going to do more, it has to recognise the military mountain which it has to climb and, not least, the need to increase defence expenditure and all that that will mean. I only hope that the European Union has the political will to take that step. What would be awful is if the ESDP turns out to be a damp squib lacking any military muscle, and as a result does great damage to NATO, thus weakening the United States/ United Kingdom relationship.

My Lords, I should like to thank my noble friend Lord Jopling and all those on his committee for the comprehensive and excellent report that they have produced. I agree that the European nations must do more to contribute to peace and security, but there are many matters still to be resolved before it can be assessed whether the current proposals will ensure that the ESDP becomes an effective policy. I agree with General Naumann, to whom I always pay particular attention, when he says that Europe needs capabilities not new institutions, a point mentioned by my noble friend Baroness Park. NATO is still an effective organisation and it is therefore essential that the ESDP creates capabilities to strengthen and not to rival the Atlantic alliance.

Although Laeken announced that the EU were operationally ready to cover the full spectrum of the Petersberg tasks, that is clearly not the case in relation to defence spending and commitment to improve capabilities. Although some progress has been made by some countries, including the United Kingdom, there is still a lack of will in Europe to resolve the identified weaknesses in the shortfall of essential equipment; the requirements for command, control and intelligence; establishing geographic limitations; defining the Petersberg tasks in an unambiguous way; and the lack of training, field and command post exercises, which has been mentioned by so many noble Lords.

The EU objective to take over from NATO the peace-keeping mission of Amber Fox in Macedonia is considered unrealistic among the military from both NATO and the EU. The Secretary of State has said that our commitments are already placing severe strain on our Armed Forces. We would not therefore be able to contribute troops to any operation in Macedonia. At this stage, it is inconceivable to think that an EU operation can take place in the Balkans otherwise than in close co-operation with NATO and resorting to its assets. There is minimal co-operation between the EU and NATO, and the EU as an independent force has neither access to nor a communication channel with NATO. Until all these aspects are resolved, it would be most unwise to deploy the EU for military operations.

Defence spending has fallen in 12 EU countries, including the United Kingdom. Only three countries—Germany, Greece and the Netherlands—have shown a marginal increase. It is an inevitable fact that without increased expenditure there can be no improvements to capabilities; and without the improved required capabilities there can be no viable EU military force. There is no sign at all that EU countries are willing to produce the money, and at a meeting of Foreign Ministers at Reykjavik last Tuesday there was no agreement given to providing more money.

In November last year at the Capabilities Conference it was agreed that there remained 40 capability shortfalls. Some of this shortfall of equipment is in the areas of air-to-air refuelling, sea and air heavy lift, secure communications, suppression of enemy air defences and intelligence, all of which are essential if an EU military force is to function efficiently.

Many of the capability shortfalls require long procurement cycles and there is little doubt that, even if decisions were taken this year, the equipment would not come into service before 2012. Buying off the shelf is one way to speed up the introduction of this equipment. For example, EU countries could rent the US C-17s, as we have done, to provide the heavy air lift. The A-400M is years away and, as the noble Lord, Lord Gilbert, said, is there any need for it when the C-17 is already in service?

All air forces need modernisation and many of them lack an all-weather, day and night attack capability. There is a need for more modern, stand-off and precision-guided ammunition.

The EU has no effective command and control systems and the intelligence, surveillance and reconnaissance equipment is under-developed. There is a requirement for unmanned aerial vehicles such as Global Hawk and there is a shortage of electronic warfare systems.

Command of the EU military force should be exercised by DSACEUR. For smaller missions, the command and control could be vested in the lead nation concept, with one EU nation providing a national headquarters augmented by other nations, as has been set up for ISAF. Any suggestion of establishing an EU headquarters would be disastrous and would lead to an integrated European command structure which would compete with NATO. None of us could afford to have two competing command structures, especially as this would alienate the United States of America. In any event, NATO is the organisation that has everything to offer and would be involved in major operations. There is no doubt in my mind that the NATO planning staff should be used and the command and control organisation should come from NATO if we are not to aggravate the US by doing what it specifically asked us to avoid—that is, the setting up of duplicate systems.

Finally, I turn to recent developments by Russia and the chairman of the EU Military Committee, General Hagglund. As I understand it, his view is that the EU and the European parts of NATO would he linked up with each other and the new organisation would deal with crisis management and anti-terrorist activities in Europe and nearby areas. The new EU-NATO would take part in long-term peacekeeping operations and humanitarian missions outside Europe. However, the United States, for its part, would be responsible for the defence of Northern America and world-wide crisis management missions, as well as rooting out terrorism at the source. I believe that this would be a disastrous step and would be the end of NATO.

A NATO-Russian council will be inaugurated at a special summit in Rome later this month in which Moscow will be an equal partner with the allies on such issues as terrorism, arms control and crisis management. Russia has not given up wishing to be a major power in Europe and this could be a step towards its long-term aim of creating a pan-European security structure, thus weakening the link between Washington and alliance members on this side of the Atlantic.

In conclusion, the only country that stands in the way of Russia becoming a major power in Europe is the United States. To weaken the American dominance in Europe seems to me to remain a feature of Russian policy. One expression of American influence in Europe is NATO. For that reason, I believe it will continue to find ways to weaken NATO.

If things continue as they are, transatlantic ties will further slip and a greatly expanded NATO will change from a cohesive military alliance into a loose political alliance stretching from the Atlantic to the Urals. ESDP will place an additional commitment on our already over-committed forces. Without increased expenditure, without the allocation of essential and improved equipment, and without agreement to include NATO planning staffs and command structures. ESDP, in my opinion, will not be successful.

My Lords, I welcome this very timely report. It has produced a clear commentary from the Government and I am happy to support their response. Perhaps my noble friend the Minister will forgive me if I put my own headline on their response: Rome was not built in a day.

Paragraph 5 on page 2 of the Government's response points out that in Laeken the EU declared that,

"the EU is now able to conduct some crisis management operations",

and that,

"the Union will be in a position to take on progressively more demanding operations, as the assets and capabilities at its disposal continue to develop".

Is that not precisely what the chairman of the committee, the noble Lord, Lord Jopling, was asking for when he used the phrase that we should walk before we run? There is some correspondence there.

Another example is contained in paragraph 33 of the Government's response in relation to Bosnia. It states:

"The Government is pleased that the Bosnia Peace Implementation Council Steering Board on 28 February accepted the EU proposal to take over from the UN-led International Police Task Force in Bosnia, whose mandate expires at the end of December. This will be the first civilian ESDP operation".

This is one of the reasons why I wished to make a short contribution to the debate. As the noble Baroness, Lady Park, mentioned, Sub-Committee A has made some relevant comments about the history of the Balkans and the challenge for the future.

As my noble friend Lord Judd mentioned, there is a great deal of overlap between security, economics, social development, good governance, the police, immigration, the Mafia, and so on. The Petersberg tasks are: humanitarian assistance, peacekeeping, crisis management and so on. Within the stability pact for the Balkans there are also the other pillars of economic and social infrastructure and the whole range of developments that are termed "good governance".

The report contains some interesting figures which are relevant to the debate. The EU countries—that is, not the EU per se, but EU plus bilateral—spend 1 billion euros a year on aid to the West Balkans. They spend 5 billion euros a year on security expenditures, which are defined as expenditures on military needs, as I understand it, over and above the units based at Aldershot—I believe that that is how they do the arithmetic. There is an interesting Catch-22 relationship between those two figures. Not only is it relevant to this debate; it requires a little more exploration in this context.

If it were possible to put out bush fires before they became dangerous, clearly we should be spending less taxpayers' money. One of the issues in Europe which has not been strongly highlighted is its attempt to develop joined-up thinking about what kind of EU road map embraces the security, the police, the good governance, the economic and social infrastructure and so on. I believe everyone would agree that—whether it is a matter of smart money, clever money or whatever money was referred to by the noble Baroness, Lady Park—we shall not make any progress if we simply think of it as "more money". That was the noble Baroness's point. I might go in a slightly different direction in terms of being a strong: supporter of these European developments, but the need to integrate them in joined-up government is an important perception.

The Catch-22 situation must somehow be broken down. We cannot begin to contemplate running down security expenditures until there is progress on the socio-economic front; and we shall not make such progress unless we retain security expenditures. That is why, for the foreseeable future—"foreseeable" is the correct adjective—we must collectively keep our forces in Bosnia and Kosovo, and no doubt pro tem in Macedonia. That is against a background of important political settlements, such as the reluctant acceptance of the constitution in Macedonia. If I may be so bold as to suggest this, in the context of the Balkans, if we revisit any of the boundaries, we shall go right back to square one with demands for a greater Serbia, a greater Albania or a greater something or other. That will put us in the fire all over again.

There is scope for the report to have been somewhat more upbeat about the substantial progress that has been made in the architecture of the ESDP since the historic breakthrough at St Malo in December 1998. I do not know whether there is a school of thought in this House that we somehow regret any rapprochement between Britain and France on the grounds that we have been fighting each other for 1,000 years. I was a member of the Franco-British Council for about 10 years. I remember that we were always trying to get the military of Britain and France to come together. It was very difficult—almost as difficult as it was to bring the two countries together on agricultural matters; in fact, it was slightly easier in relation to military matters. But a great historic moment was reached when, at St Malo, Britain and France put their names to a joint document. Why can we not welcome that? It may provoke the noble Lord on the Bench opposite to suggest that all of this is too "top down". But in terms of realpolitik, building on some basis with France— and with Germany—is historically important.

I remind myself of what was said in 1952 when the idea of Europe began. We said: "It will not work. It is far too ambitious. Let's wait for them to fall flat on their face, and then they will realise that the Brits were right after all". I think that we have learnt a little since then on other matters. We should welcome what lies behind this—even though I do not think that France has been mentioned in the debate without the implication that it is "perfidious France", to mix my country caricatures.

One of the new developments is summed up in paragraph 39 of the report. It states:

"new USA geo-political priorities suggest EU governments can no longer assume American military support when US interests are not directly engaged".

That is a chilling comment. If that is not an incentive for European governments to "get real", I do not know what is. The comment cuts both ways. The noble Lord, Lord Jopling, will correct me if I am wrong, but it is endorsed in the report in the sense that it is stated as self-evident as one of the new developments, possibly in connection with the events of 11th September but as a fact of life. If it is a fact of life, we must ask ourselves whether it is totally reconcilable with the statement that has been added at the end of the report in paragraph 90:

"To succeed, the ESDP needs American political and practical support. This should never be forgotten".

Is that so? Is there not a sense that we are on the cusp of change in the transatlantic relationship because of the statement made in paragraph 39?

In any event, going along with the United States in the next 20 years or so cannot be simply one-way traffic militarily any more than it has been economically. That is not only because of the reason that I have cited. In addition, Europe can look forward to a bigger GDP than the United States—far bigger than any other nation or grouping—and can have a greater sense of its own weight and influence. To use a familiar metaphor, that will be a change from the time when we had simply to hang on to the apron strings of the United States. The logic goes both ways. We need to get some of the other countries up to at least 2 per cent of GDP on defence expenditure precisely because we cannot just rely on hanging on to the apron strings of the United States.

I do not know what the political architecture has to be to achieve that 2 per cent. The report refers to a defence council of the European Council of Ministers. I do not know what the pros and cons of that are, but we need some focus in the Council of Ministers to lobby for that 2 per cent and to monitor how far it is coming along. Perhaps my noble friend the Minister has something to say about that.

Many Labour Members of this House and the other House would not, until recently, have been making too many speeches in favour of increasing defence expenditure. Of course, we are taking advantage of the report, which emphasises that these increases are very much for the other European countries, but it is clear from out debate last week, in which I took part, that tremendous overstretch is on the agenda here.

Perhaps we need to clarify our terms on the remark by the noble Baroness, Lady Park, about all the money coming out of the same pot. Security and aid expenditure comes out of the taxpayers' pot. In what sense should we be making the point about European countries—

My Lords, I ought to explain that I said that our military assets are common to the NATO tasks, the ESDP tasks and the UN tasks. I do not think that I said anything about a common money pot. I should be delighted to have a common money pot, but I did not say that.

My Lords, I thank the noble Baroness for her clarification. I must not have a dialogue with her, but I should like to know about the doctrine of one set of assets being committed to NATO and it not being permissible to say that those assets can simultaneously be used for ERRF without double counting—I hope that that is not paraphrasing. Does not that doctrine apply equally to the United States? The Pentagon does that all the time. It has assets that can be NATO assets and can be other assets. I do not see why we should not use the same doctrine as the Pentagon.

My concluding point on enlargement concerns the important section of the report on Turkey, which relates to resources as well. I comment partly in the light of a parliamentary visit to Ankara that I participated in a couple of weeks ago. Turkey is of immense strategic importance, but of equally great importance as a relatively successful secular society with an Islamic tradition. From the Balkans to Afghanistan, the relevance and role of the Turks is unquestionable and I trust that there will be some progress on the matters that have been referred to. Am I not right that the issue concerning Turkey is no longer about ESDP but the fact that the Greeks tend to overplay their hand in the Council of Ministers on these matters? It would be a good idea if the EU could progress with its discussions with Turkey not only on this matter but eventually towards EU membership. I regret the statement made in London last week by Mr Stoiber, a candidate for Chancellor of Germany, who seemed to question whether Turkey was qualified on more general grounds to be a member of the EU.

My Lords, I begin by reminding the House that I have a peripheral interest in the topic. I also thank my noble friend Lord Jopling for introducing this debate and his chairmanship of the committee. The noble Lord, Lord Lea of Crondall, talked about military relations with France. He may be interested to hear that my former TA battalion is spending its annual camp in France this summer.

Many noble Lords have raised the issue of inadequate EU defence expenditure. In the Cold War, we met almost all technical threats. We could afford to do so because we had a superior economy. Now, of course, thankfully, there is no direct threat to our territorial integrity. So we must now decide how much we can afford to spend and then live within that budget. Unfortunately, we are trying to do just a little bit more, and that causes all the pain. Additionally, we have the 3 per cent year-on-year cost savings on top of the excellent Strategic Defence Review.

The noble Lord, Lord Watson, quite properly compared French and UK defence expenditure. He was absolutely correct in that. However, in NATO and the EU, only French and United States defence expenditure are comparable with that of the UK. I am not convinced that we in the UK should increase our defence expenditure. I believe that we already spend more than our fair share. I also believe that the SDR is the answer to our defence requirements; the plan just needs to be properly funded. The report also reminds us that US defence expenditure is nearly twice that of the EU states put together. Worse than that, however, as many noble Lords have remarked, is the fact that EU nations' capability is generally pathetic compared with that of the US.

What is the reason for that? As the noble Lord, Lord Harrison, observed, we waste money and resources. We duplicate research and designs. We have, for example, the Leclerc main battle tank, the Leopard main battle tank and the Challenger main battle tank. We also duplicate capability and favour indigenous manufacturers. The noble Lord, Lord Williams of Elvel, mentioned the problem of interoperability, a problem that has been around a long time, even in NATO days. Each country tends, for example, to develop and manufacture its own range of logistics vehicles.

In the NATO context, however, the UK Government are showing the way by buying the Oshkosh tank transporter, which is built in the US. The noble Baroness, Lady Symons, will have had a great part to play in that. I think that she is very courageous, and that it is the right way of going. The US is building 1,000 of the vehicles, and we want slightly fewer than 100. What is the point of developing our own tank transporter when the Americans are themselves building 1,000 of them? We shall also gain the benefit of their logistic tail, without having to create one for a very specialised piece of equipment.

Anything we do in the EU must complement and not duplicate NATO and US efforts. The report recognises the deficiencies in strategic heavy airlift. Currently, the UK cannot airlift a Warrior armoured infantry fighting vehicle except by means of the C-17. The noble Lord, Lord Gilbert, in his powerful and significant speech, talked about strategic heavy lift and mentioned the limit of 25,000 kilos over 3,000 miles for an A-400M. Of course, 25,000 kilos is about the weight of a Warrior. However, the NATO inventory already has a strategic heavy airlift—the C-17. They are in service with the RAF, as the noble Lord, Lord Gilbert, has told us, and the RAF loves them. The noble Lord described the C-17's utility, and the noble Baroness, Lady Symons, is now vigorously nodding in relation to the point.

The C-17 is much bigger than a C-130. Indeed, the loading ramp on a C-17 will carry the entire load of a C-130. The two aircraft also have a similar runway requirement. We can be sure that the Boeing Aircraft Company spent an awful lot of money developing the C-17. The EU is to repeat this development programme. As noble Lords are aware, the Airbus company is to develop and build about 190 A-400M aircraft. However, as the noble Lord, Lord Gilbert, pointed out, we shall also have to develop within the EU a new turboprop engine, because none exists in the EU. We could probably get one from the US. However, is not developing a turboprop engine for just 200 aircraft a rather high-risk project? Will the Minister say whether she is confident that the engine can be manufactured within Europe?

The UK has one of the widest ranges of overseas operations, and yet our staff determine that we need only 25 A-400M. The French, however, say that they need 75; the Germans say about 74, but their Parliament is very wobbly to say the least; and smaller countries are having two or three each. I understand that the cost of an A-400M is supposed to he about 80 million dollars and the cost of a C-17 about 200 million dollars. I stand to he corrected. For a variety of reasons, I am not absolutely sure about the figures. I believe that those are ball park figures. Surely, the Boeing Aircraft Company would offer the EU a very competitive price on their C-17 project in order to capture the market. Of course, the Boeing Aircraft Company will have covered all its development costs, which will be fully amortised on the US spend.

I confess that I am not an expert in aviation. I am more experienced in land-based logistics. If I had to buy a fleet of trucks and had a choice between Mercedes, offering me a vehicle that was ill service, and some other manufacturer who said that he had a vehicle on paper, which he could develop for half the price, but that he did not have an engine for it, I would be a wincy bit suspicious. Does the Boeing Aircraft Company know something that we do not know? But why does the EU need about 190 of these large aircraft at a total cost of about 16 billion dollars? I hope that that is not just a numerical figure that would cover the development costs.

The noble Lord, Lord Gilbert, referred to the utility of the strategic airlift, particularly the C-17. If we in the EU went down the C-17 route, the in-service date for a capability would be mid-2004, rather than, as the noble Lord, Lord Bach, told me in a Written Answer, "around the end of the decade" for the A-400M.

I would be rather more convinced about the ESDP itself if it had, say, 50 C-17s in a European strategic airlift organisation, based in mainland EU. The cost would be only about 10 billion dollars, compared with 16 billion dollars, because we would not be buying so many aircraft to cover the development costs. The utilisation of those aircraft would be much higher, rather more like an airline utilisation rate than an air force utilisation rate, and what operation would require more than 50 C-17s to support it?

The noble and gallant Lord, Lord Inge, referred to an operation capability gap if an EU state decided not to take part. But that would not be a problem for a European strategic airlift organization, since the ESDP organisation would rely only on a few personnel from each country. It would not stop the ESDP having that strategic airlift capability. I believe that if we went down the C-17 route, we could quickly tick off another capability shortfall. Incidentally, in case any noble Lord is worried, I have never knowingly been briefed by Boeing on the C-17 or the A-400M.

The noble Lord, Lord Williams, also mentioned possible contributions from Russia. If 50 C-17s were not enough to support an operation, the Antonov AN124 is a very large transport aircraft, bigger than a C-17, and if we had a relationship with the Russians on heavy airlift, that could be quite fruitful for them as well.

In conclusion, I believe that the A-400M is being built for all the wrong reasons. It duplicates and wastes defence expenditure and effort, and ultimately it will cost at least as much as the C-17. I am sure that the Minister, as Minister of State for Defence and Procurement, was heavily involved in this project, and, as she is double-hatted—FCO and DTI—I suspect that she still has a finger in the pie.

It is possible for our Government to stop the project at this point. However, I do not believe that they will, because it would damage their EU credibility.

My Lords, I was a member of the committee when it produced this valuable report. I thoroughly enjoyed the experience. We have had an interesting and wide-ranging debate this evening, with a great deal of talk about the A-400 and the C-17. If we really need some heavy-lift capability quickly, we should do what the Germans did to get their forces to Afghanistan; namely, hire an Antonov. Re-engined Antonovs could be made available much more quickly, but there are all sorts of political inhibitions about all of these procurement issues.

When the noble and gallant Lord, Lord Inge, referred to "Lord Williams of Evil", I regretted that he did not go all the way and refer to the noble Lord as "Lord Axis of Evil", which would have been better. All these phrases trip so readily off the tongue, very often in slightly misleading ways, so that we are never quite sure which axis of evil we are talking about; indeed, noble Lords may have seen the wonderful American email that referred to other available axes such as the, "axis of the not terribly evil, but not very good", and so on.

The subject of our debate is extremely significant. The danger for the British Government, as well as for other European governments, that we risk missing the headline goals to which the European governments committed themselves in December 1999 to meet by January 2003, is real. There is no questioning the fact that the United States Government and the US media will provide some very dispeptic comment on a severe failure to miss that goal. There is a remarkable lack of any sense of urgency across the European Union on the issue, which I much regret.

I therefore believe this report and this committee to be significant. There is a range of significant and important subjects for this sub-committee to address. The common foreign and security policy is now one of the most active areas of European co-operation. European Union governments are co-operating on a whole range of issues, more or less effectively—for example, Russia, Turkey, Africa, Cyprus, and the Middle East.

The question of parliamentary accountability was raised by a number of noble Lords. One problem we face is that there are few available alternatives to national parliamentary scrutiny. The WEU Assembly is not really very appropriate. Some sort of joint committee between the European Parliament and national parliaments may take that one step forward, but all noble Lords who have been involved in COSAC (the Conference of European Affairs Committees) may echo what one noble Lord said to me just the other day, after having just returned from a COSAC meeting, "It was awful". Clearly, for the time being, we need to rely on our own national parliamentary scrutiny committees, working as far as we can with others, because that is the best that we have.

However, there is a limited capability for parliaments to focus public debate in this area, unless governments also stimulate such debate. I much regret that the British Government, who were the prime mover in the San Malo initiative, have since then failed to maintain the lead that they then took. My party actively welcomed the San Malo initiative. We regret that the British Government—our Prime Minister, our Secretary of State for Defence and our Foreign Secretary—have not maintained the pressure on our partners and allies across the Channel to ensure that they do fulfil the promises that they made.

Britain is the obvious country to lead in this respect. As several noble Lords have observed, there is an underlying American suspicion of French motives. Britain sees itself as maintaining the bridge between the United States and Western Europe. There is an obvious British approach that one could adopt here. Tony Blair launched the Lisbon process on economic co-ordination, which by publishing economic statistics was to be a form of ensuring that we bench-mark each other's performance; that we each follow best practice; and that we name and shame those who fail to follow best practice. It seems to me that that is the approach that the British Government should be taking here.

As the noble Lord, Lord Bowness, observed, it is very difficult to obtain proper figures on which countries contributed what to the conflicts in Kosovo, in Bosnia or in Afghanistan. The figures that I have on Afghanistan are slightly different from those obtained by the noble Lord, Lord Bowness. I have 13 member states contributing with at least a few troops, and three candidate countries. However, I am sure that that is not very different. Incidentally, when looking at the Afghanistan figures, the Danes come out remarkably well—a large contingent of special forces as well as a contingent in ISAF. It is the Belgians, who most wanted to declare that ESDP was operational, and the Italians, the Spanish and the Portuguese who are the laggards in that respect. I should love to hear a Minister of the British Government remark to Mr Berlusconi that there is no such thing as a free dinner. If you want to be invited to a dinner at No. 10 to talk seriously about European defence, you are supposed to have a budget and a level of military effectiveness which comprise a ticket for entry.

I should like to see the British Government publish the relevant figures as far as possible. Then we shall be able to see who is making most progress. In some areas there is clearly considerable progress being made. Some noble Lords may have seen the report of the discussion between Rudolph Scharping and senior German officers about overstretch within the German armed forces now that they have over 12,000 troops outside the country. That is a radical change and a radical improvement. It suggests that at least in some members of the European Union matters are moving fast. Of course, as a number of noble Lords have said, the shortfall arises in equipment, above all in the kit which gets the troops to their destination, the weapons systems needed to ensure superiority and the communications networks to hold the forces together.

A number of noble Lords have mentioned transatlantic relations and implications for transatlantic relations. I did not entirely recognise the picture which some noble Lords gave of the current state of transatlantic relations. First, we have to recognise the long-term trends. American priorities are now, in foreign policy and military terms, outside Europe. It is much more important to be in Central Command than in SHAPE. Many noble Lords who have read Wesley Clark's book or have heard him talk will understand that when he was stationed in Brussels at SHAPE he felt himself to be very much outside the Pentagon loop. The noble Lord, Lord Owen, referred to the junior officers whom it is important for us to cultivate. There are, however, many fewer of them in Europe than there were 10 years ago. That is part of our problem in maintaining links with the US armed forces.

NATO has become much less popular in the Pentagon partly because of the latter's perceptions of what happened in Kosovo, which are often rather different from those of British officers who were involved, but also because of the sense that NATO stands for consultation whereas coalitions of the willing are American led. We should all be a little concerned about the current mood in Washington towards unilateralism and, indeed, about the current mood of anti-Europeanism which one sees in the American media, which we also need to be actively concerned to argue against. I follow what the noble Lord, Lord Lea of Crondall, said about the importance of approaching the transatlantic relationship as an active dialogue, in which we have to make our case a great deal more effectively. But we should not assume that we have to follow the current American administration wherever it may lead us, even necessarily into Iraq.

The case for an increase in defence spending has to be made. It is not easy to make it across Europe to the European public. I note that the British Conservative Party does not at the moment propose an increase in British defence spending. That shows how difficult it is to make a very difficult case. In 1990–91, General Naumann was particularly active in that regard because he felt—as I recall him saying on one occasion—that unless he defined a new role for the German armed forces their budget would fall entirely through the floor. I remember that a senior Belgian diplomat said some years later that the reason the Belgians wanted to be included in any collaborative operation that was going was that otherwise they could not justify spending money on defence when no one threatened Belgium except through 10 other countries on the way.

The rationale for an increase in European defence spending has not yet been made. If a greater defence effort were just to contribute to US defined operations, the incentives would not be strong. There is no direct threat to the European region. The question is: what contribution should European governments make separately or collectively to the indirect threats from outside Europe? Questions of state collapse are involved. We have already been engaged in that regard in south-eastern Europe, but what about beyond, in Africa or the Caucasus? The Americans have adopted a role in Georgia and Armenia, but perhaps the European states should be more actively involved in those regions. What long-term role is there in military terms for European governments in Asia and, most sensitively of all, the Middle East? What role is possible for European governments in the Middle East, given that the United States wishes to define western policy towards the Middle East, and European governments—and, even more, European publics—are not entirely happy with that?

We must recognise that there are real tensions in transatlantic relations. They concern the preference for air power among the American forces as opposed to occupying the ground; the use of weapons for intervention and an exit strategy as opposed to the British approach, which involves staying the course and being involved in nation-building; and the preference for military power as opposed to financial assistance. In an interesting article in the Washington Post last week, Fred Bergsten discussed the need for the United States to understand that American burden-sharing also required the United States to spend more on development assistance and state reconstruction. The United States currently spends one-third of what the European Union spends, and most of its development assistance goes to strategic countries, such as Israel, Egypt and Turkey.

We need a European rationale and a transatlantic dialogue, which may have to be vigorous at times. Clearly, considerable improvements are needed. The British Government should suggest—-no one else will do so—that a floor must be put under European defence spending and that pressure must be brought to bear on those who are lowest to begin to raise their spending from that floor.

However, given that there is no public support for much of an increase in defence spending, we must get greater effectiveness through closer integration. That is what Air Marshal Sir Timothy Garden and Sir Michael Alexander have been powerfully arguing. We therefore need shared training, shared bases and new initiatives on support and joint forces. Again, Her Majesty's Government could be doing a great deal more in that regard and they could be advancing many more initiatives. For example, I refer to integrating the logistical chain for expeditionary forces of the sort that we now have in Afghanistan; to shared facilities for air-to-air refuelling, on which the British Government are currently going it alone; and to the Police Action Plan—I hope that the sub-committee will turn its attention to that and I point out that the British Government have a useful record in terms of the number of police whom we have been able to second to the forces, although we have some way to go.

The underlying question is: what do we want those forces for? What sort of threats do we believe we are facing? The noble Lord, Lord Judd, was almost the only noble Lord who suggested that the wider framework is the one that counts. I suggest that, above all, we need the force for the higher level Petersberg tasks. We need to look at Africa and some parts of Asia, where weak states are threatened with collapse. Where we have relevant skills, we need to help to prevent state collapse and to begin to rebuild. That also means that we should campaign much more actively against the sale of arms to those regions. The initiative, "Anything but arms", was an excellent way forward. Part of what is mistaken about the current American thrust towards greater high technology is that American arms companies also want to sell those weapons abroad. The last thing that one should currently wish to do is to encourage the proliferation of advanced western weapons in unstable regions of the world, although they are the regions that want to buy them.

The European security and defence policy was above all a British initiative. Our interests and our prestige are at stake. The impact on transatlantic relations of a failure to meet the headline goals next year will be severe. If Her Majesty's Government do not take the lead in reminding our continental partners of how important this issue is, who will?

My Lords, like many others in this debate, I congratulate the sub-committee on producing an excellent and stimulating report under the skilled chairmanship of my noble friend Lord Jopling. Indeed, I am proud that I had a passing association with the earlier work of this very well informed and expert committee.

Like the noble Lord, Lord Owen, I particularly welcome the reference to, and emphasis on, scrutiny by, and accountability to, national Parliaments and the need for that to be toughened not only in the area of defence decisions but in other decisions as well. It seems to me that the report is itself an example of the need to bring back to national Parliaments the thinking behind intergovernmental decisions—indeed, of all the decisions—taken in the name of the European Union. I believe that that is the right way to go. National Parliaments are the sole source of legitimacy for the Union and its structures, and I hope that we hear no more nonsense about remote second Chambers. Indeed, the debate in your Lordships' House should have put paid to that. Another Select Committee demonstrated all the fallacies and weaknesses of such an idea.

For me, European security and defence policy is more of a journey than a clear policy. It has been, and continues to be, a zigzag journey at that, with no very clear destination. If there were clear destinations before 11th September last, they certainly are not clear now. At a very high-powered conference at Chatham House last autumn, where all the leading players in the European defence scene spoke or were present. I was struck by the important conclusion that was reached. They said:

"The EU seems at present to lack an overall strategic concept".

They went on to comment:

"The number of senior European military appointments made recently give rise to possible confusions over unity of command".

I shall come to that point later. But there can be no doubt that, in terms of where we are heading and what the goals are, the clarity is lacking.

Perhaps I may make it absolutely clear that, from this side, we have always supported a stronger European wing, branch or end of NATO. Indeed, the NATO initiative was called a "European strategic defence initiative"—ESDI. We have always supported that. As the noble Lord, Lord Lea of Crondall, said in a moment of candour, from way back, when the Labour Party was singing a quite different tune, we were arguing for a very strong European pillar of NATO. We give full support, as we have done all along, to NATO's defence capability initiative, which is intended to do what everyone in this debate has said it should do. It should develop European defence in the six crucial areas of deployability and mobility, logistics, effective engagement, command and control, survivability and, perhaps above all, interoperability. Those things are necessary. We back them totally. There has never been any doubt about that except in the mouths of some of our critics. I should not like any doubt about that to be perpetuated in this debate.

But the real issues today are the questions of defence spending in Europe and how that will he raised to at least the levels of those of Britain and France, or something approximating that level, rather than limping along at the present, much lower levels. I see that the Government's reply says that the slide has stopped. I wonder whether it has. It would certainly be interesting to hear a little more support for that contention from the noble Baroness when she replies. Therefore, the first issue is defence spending in Europe and questions of cash and resources.

The second issue is the reform of NATO. It must he reformed in the new conditions that we face. But the question arises as to how it can be enlarged without weakening it, which is obviously a danger that concerns the Americans. I believe that we shall hear more from President Bush about that next week. Above all, there is the question of further integration, not so much of the EU but of NATO, based on the type of trust to which the noble Lord, Lord Owen, referred and on a vastly expanded basis of so-called "soft security". That means, of course, the intelligence, communications and knowledge input which lies behind all modern warfare. That is the task: to create, as my noble friend Lady Park said, an integrated ESDP which supplements and reinforces the NATO system and in no way appears to weaken it or to go on a separate track. Those are the two tasks upon which all our energies should be focused.

Against that background, what are we to make of the rapid reaction force, if that is what ESDP now means? People see it in different ways. I agree with the noble Lords, Lord Watson and Lord Harrison, who said that it is a modest affair; it is very modest indeed. At best it is modest; it will almost certainly take a long time properly to get on the road. As indicated by the noble and gallant Lord, Lord Inge, and by the report, that may take several years. That is at best. At worst, one could fairly and objectively say that it has already created and is creating a number of new problems which, possibly, we could have avoided if we had concentrated on the two major tasks I have mentioned.

It has caused many problems with Turkey being out of the EU but right at the heart of NATO, as instanced in paragraph 42 of the report in a telling series of comments. It could he argued that it has caused problems in Ireland, where the Nice Treaty was voted down in a referendum—largely, it appears, because it did not want to be involved in military arrangements which would involve the sullying of Ireland's neutrality. It has created a whole class of would-be insiders and outsiders. It leaves out Canada, which has hardly been mentioned in the debate. Imagine leaving out Canada, the country which came to save Europe at Vimy Ridge in the First World War and has played a central part in post-war security. Yet somehow we have to rearrange matters to ensure that Canada is not left out of this project. It has created a whole range of immature and bitter criticisms from the gentry, the grandees of Brussels. It has generated, as none of us can deny, a strong and continuing aroma of anti-Americanism.

General Hägglund has been much quoted in this debate for his interesting comments. I do not agree with all he said. However, we must ask with him whether there is any sense in maintaining two parallel crisis management organisations. That is from the man who is, indeed, chairman of the EU Military Committee. The rapid reaction force—this modest affair— has certainly created new institutions, which have proliferated. We have a plethora of committees. We have the Political and Security Committee; the EU Military Committee; the EU military staff committee; and there are suggestions—not in the report—and references to the fact that others are calling for still more committees. There are many pledges and much rhetoric. However, there have been no new forces or capabilities brought forward as a result of all those efforts. Yet that is what Europe needs if we are to see a strong European pillar.

On the contrary, as noble Lords with far greater expertise than I have remarked, the technology gap with the United States grows wider all the time because of the fantastic coincidence of a whole range of new technologies, available world-wide but used in the United States, being brought together to carry forward concepts of weaponry and warfare to entirely new and unfamiliar levels. That has left critical shortfalls which the much quoted, forthright and sensible General Naumann tells the committee at paragraph 56 are not being addressed and are unlikely to be addressed. They will remain yawning wide. One cannot exclude from that the state of the United Kingdom's Armed Forces, with their underequipment and overstretch. As my noble friends Lord Vivian and Lord Attlee and the noble Lord, Lord Gilbert, have pointed out, there are serious deficiencies. So we are not immune in that regard either.

Much stronger defences are needed in order to build up that NATO pillar and to build up our homeland defence in the new conditions where—here I disagree with some noble Lords—there is a direct territorial threat to this nation and to all European land masses. Together with these thoughts is the St Malo commitment—which I still regret as the noble Lord forecast I would—by the Government which was for,

"a capacity for autonomous action",

as a step towards European unification. That was a distraction from the urgent tasks which, as almost all noble Lords have recognised, are essential. Along with that distraction there has been much talk of the Petersberg tasks. What are they? Paragraph 48 of the excellent report states that they are all things to all people. It quotes one witness as saying that they are unrealistically vague. The truth is that after September 11th (9/11) those well-meaning tasks enunciated at Petersberg are completely out of date.

Everyone knows that all serious military tasks from now on—indeed from 9/11 onwards—will be increasingly complex and linked through global connections with globalised terrorism. The terrorists networks do not say, "Well, that is someone else's war; we shall not turn up there"; they are to be found in the midst of Chechnya, right down in Rwanda, and everywhere where evil, civil war or killing is at work. The infection of globalised terrorism will be there and will need to be addressed by the same kind of equipment and forces. One cannot go around with a little pair of scissors cutting out the minor tasks and saying, "We will look after those ones and someone else will deal with the big stuff". That is a totally wrong approach.

My Lords, may I just be sure that I understand the noble Lord? Was he suggesting that Al'Qaeda has some role in Rwanda?

My Lords, I said that terrorism with an international linkage is evident in the central African area, certainly in the DRC, but also in Rwanda and other parts of Africa. Yes, I was saying that it is everywhere. It would be hard to find a place where this infection has not been caught in local crises.

There is the argument that 9/11 has driven the United States to a preference for going it alone. Indeed, the noble Lord, Lord Wallace of Saltaire, warned us about his impression of what is being said in Washington. Therefore, the argument goes, there must be an EU alternative which must also go it alone. I regard that whole line of thinking as a spurious fantasy. First, even the United States, with its 13 carrier forces and its budget increase this year the size of the whole of our defence budget and so on, cannot go it alone against world terrorism because world terrorism is an internal issue which needs intimate understanding of the internal political workings of a whole range of societies, cultures and religions. For that it needs the help of many nations, large and small.

Secondly, the European Union is incapable—I agree with the noble Lord, Lord Williams of Elvel—of meeting the United States' capacities and technology. Anyway, there is no need; it would be ridiculous duplication to do so. We would indeed be going along the path which the noble Lord, Lord Owen, mentioned with regard to the Galileo project and unnecessary and expensive duplication instead of integrating and building up a coherent NATO system which can meet all the modern challenges.

If there is US despair at the moment, it is not because of a lack of autonomous European defence but because the rapid reaction force with all its political trappings and rhetoric is taking Europe's eye off the ball. We all know that this is a dangerous new world which requires new thinking. Mr Cheney has said that the next hit by terrorists is not a question of "if" but of "when". He said that it would be in the United States; but it is just as likely to be in the United Kingdom. We are just as likely to be the next target.

Against that chilling background, the military tasks are clear. Indeed, they are set out well in the MoD's New Chapter, which argues that we now need forces that prevent, deter, coerce, disrupt and destroy. Clearly—this is my argument, not that of the MoD document—for that, we need a strong European end of NATO and strong homeland defences. We need NATO to reinvent its own structure and to embrace all the resources that we can mobilise in Europe.

The RRF contribution to either of those aims is questionable and its goals are obscure and political. The sooner that the Government return to the real tasks, the better. As Marc Grossman, the US Under-Secretary in the State Department, said the other day, for Europe, it all comes down to cash and hard choices. The Government must now make those hard choices. Unless they do, these dangerous times will come to be seen not as the time of seizing opportunities and preparing for the dangers ahead, but as the years that the locusts ate.

My Lords, I, too, thank the noble Lord, Lord Jopling, for introducing this debate and all the members of his committee for the hard work and professionalism that they dedicated to their task. I also thank all of your Lordships who participated in the debate for their contributions. Of course, I agree with what the noble Lord, Lord Jopling, said about our sad loss in not having my late noble friend Lord Shore with us this evening.

A number of your Lordships remarked that the terrible events of September 11th last year have made us all more aware of how vulnerable we are to challenges to our security and of the role that crisis management can play in providing the bedrock for that security. The European security and defence policy is about crisis management and security issues. Crisis management is about bringing stability, and stability is essential to allow people to get on with their lives and to build their societies and economies. Stable societies offer people the chance to look to the future with hope and, on the whole, are less likely to be breeding grounds for terrorism. I applaud my noble friend Lord Judd for placing our debate in that context.

I remind your Lordships that recent missions in Sierra Leone, East Timor, Bosnia and Kosovo have all shown that peacekeeping is possible and can be effective. The recent independence of East Timor and elections in Sierra Leone have demonstrated the fruits of such operations. But of course, as a global player, it is right that the EU should share responsibility for such activity. As many of your Lordships, including the noble Lord, Lord Vivian, remarked, the past decade has shown that successful crisis management demands different tools, capabilities, strategies and tactics at different times.

So my noble friend Lord Judd was right: at the strategic level, the ESDP will complement existing EU tools—humanitarian and development aid, diplomacy, and trade. They must all be deployed. But at the operational level, ESDP has the unique potential to draw on military and civilian crisis management capabilities—policemen alongside peacekeepers—under the political control of a single body.

The Government welcome your Lordships' report on the European security and defence policy and we share the overriding priorities reflected in it. I assure the noble and gallant Lord, Lord Inge, that we are still listening to a number of points that were raised.

I turn first to the issue of military capabilities. Your Lordships' report reiterates that military capabilities count most, not structures—a point made forcefully by my noble friend Lord Gilbert and the noble Lord, Lord Vivian. The Government agree emphatically with that. Without enhancing European military capabilities, military structures lack meaning. I strongly agree with what the noble Baroness, Lady Park, said. General Naumann's points were right in that respect.

To many outside your Lordships' House, military capabilities are perhaps a less interesting aspect of the European security and defence policy. However, as the noble Lord, Lord Jopling, implied, capability is the fundamental building block. The Government continue to believe that, without harnessing the EU's economic strength to create a pool of military capabilities, the EU's ability to contribute to global security will remain limited. For example, as the noble Lord, Lord Jopling, and my noble friend Lord Gilbert said, EU nations lack enough heavy-lift aircraft to transport troops and equipment to a crisis quickly. Although there is no shortage of European troops, we still do not have ways of getting them into theatre quickly enough. That hampers our ability as Europeans to play our role in international crisis management.

While the UK and others wait for the Airbus A400M aircraft to be delivered to fill that shortfall, we are leading the way to fill the heavy airlift shortfalls in the interim by leasing the four C17 aircraft to which my noble friend referred. Others in the EU are following by seeking to lease the Antonov AN124 aircraft from the Ukraine. However, we must take into account the ability of that aircraft to land and be maintained and its manoeuvrability in any theatre. I remind the noble Earl. Lord Attlee, about those points.

That is an example of the way in which the UK works with EU partners to provide the nuts and bolts needed for military crisis management. I agree with my noble friend. Lord Gilbert, that it is not yet enough, but I remind him that every plane and every military project has, at some point, been what he described as a paper project. We both know that from our former roles as Minister for Defence Procurement. I also remind my noble friend and the noble Earl, Lord Attlee, that there are break clauses in our arrangements for the A400M. If we do not reach the targets for delivery dates and capability, the UK can exercise its option to seek alternatives.

To stimulate the kind of military capability to which so many noble Lords referred, the EU set itself an ambitious goal in 1999. That goal was not as modest as the noble Lord, Lord Watson of Richmond, or my noble friend Lord Williams of Elvel suggested. The Helsinki headline goal is important. It means that, by 2003, EU member states should be able to deploy collectively up to 60,000 troops within 60 days and keep that number in theatre for at least a year. I assure the noble Lord, Lord Moynihan, that we already have enough troops; what we need to work on is heavy lift capability and several of our strategic weapon systems. Those matters are being addressed, and I am assured that we are on track.

I listened carefully to the noble and gallant Lord, Lord Inge, who said that 60 days was too long and one year was too short. For some projects, that will be true, but it is important that, nonetheless, we have a goal in place towards which we are working as a valuable launchpad for what we are trying to do.

We agree with the Select Committee's assessment that reaching the headline goal by 2003 is a challenging target. The goal needed to be challenging to motivate the kind of change in spending priorities required to enhance European military capabilities. My noble friend Lord Bruce of Donington was right: it is not committees that count, it is real capabilities. Like my noble friend, Her Majesty's Government want to see real improvements. The EU has made some progress in enhancing military capabilities. By last November's capabilities improvement conference, EU member states had met 104 of the 144 capability target areas listed in the headline goal.

I heard what the noble Baroness, Lady Park of Monmouth, said about how we had done the easy ones first and left the difficult ones for later, but I do not believe that the targets are modest. They are realistic, and we are working steadily towards them. They will be difficult to meet. I make no bones about that. I ask the noble Lord, Lord Watson of Richmond, and my noble friend Lord Williams of Elvel, not to think that we have a modest challenge ahead of us. Of those 40 shortfall areas, about half are significant. Work is in hand to address all 40 but the EU has agreed a European capabilities action plan to be implemented by panels of national experts. Eighteen of those panels are already active. I agree with the noble Lord, Lord Bowness, in a very thoughtful contribution, that an effort is being made to improve European capability on those issues.

As the noble Lord, Lord Jopling, said, the committee asked whether the hulk of the burden for capabilities improvement continues to fall disproportionately on the United Kingdom and France. That point was reiterated by the noble Lord, Lord Watson of Richmond. I am pleased to be able to report to your Lordships, and in particular to my noble friend Lord Gilbert, that the imbalance to which your Lordships point is gradually shifting. I acknowledge that it is a gradual shift, but it is none the less discernible. For example, the Dutch are spending an additional 136 million euros on European capability upgrades. They have announced up to 952 million euros-worth anew programmes between 2002 and 2011 to achieve the headline goal. Likewise, Finland invested some 67 million euros extra in equipment specifically for use in crisis management operations. Those are tangible investments.

That leads me to correct a widely held misconception. I am grateful to my noble friend Lord Harrison for his remarks about the notion of a European army. We have discussed the matter on many occasions, but your Lordships' report often refers to the European rapid reaction force whereas no such force exists. It is the capability that we are trying to secure, not a standing force. It is more than mere semantics because there is no desire for a standing EU force of command structure. The EU will use existing NATO or national capabilities. EU member states and third countries will decide nationally whether to make available their national capabilities for operation under ESDP—just as they do at present for NATO, for the UN or for a coalition of the willing.

Many of your Lordships led by the noble Lord, Lord Jopling, and well supported by the noble Lords, Lord Howell of Guildford, Lord Harrison, Lord Owen and Lord Vivian, argued eloquently and robustly that we need to increase and sustain our defence spending to fulfil these capability shortfalls. I noted the notable and cogent points put by the noble Earl, Lord Attlee, which were not quite on the same side of the argument.

European defence spending has levelled out in the past year. We, the UK, are actively engaging other EU partners diplomatically to maintain and in some cases to increase defence spending. NATO figures show a different picture from that painted in the committee's report and I would like to write particularly to the noble Lord, Lord Howell, who concentrated his remarks in that area, and to the noble Lord, Lord Jopling, giving details of that matter and to place a copy in the Library of the House.

We believe that the UK has done its part in keeping European defence spending buoyant. Not only is it true that we have stopped the decline in defence spending which took place under our predecessors, but we are now spending more. Between 2000–01 and 2003–04, UK defence spending will have risen in real terms for the first time in more than a decade.

My Lords, is it also true that as a percentage of GNP it has fallen from 2.8 to 2.4 per cent?

My Lords, that is of course because we are improving GNP, or GDP, which I am happy to acknowledge. The fact is that in real terms the Armed Forces have more to spend than they used to have. The point which the noble Earl was trying to make is that spending more is not enough. EU member states need to spend more on the right things; for example, more on equipment and less on conscript forces.

Moreover, we need to spend smarter, to use the jargonistic phrase. But we are doing that. We are spending more on equipment; for example, in two key capability target areas we have increased our spending. We have increased it in response to the airlift capacity, which has increased by some 60 per cent since the Strategic Defence Review, and we are buying four further roll-on roll-off ships to increase our heavy sea-lift capacity by around 2,000 per cent.

However, defence spending does not always deliver quick results. My noble friend Lord Lea of Crondall was right in saying that making defence spending go further is always a slow process. Even in the United States it is a slow process. Many noble Lords have pointed out that the United States is increasing its defence expenditure. Thus the defence budget will increase, but not necessarily in the sense of providing additional resources.

Of course we have had to make some difficult choices about how we spend the available money. Now other EU member states are also looking at the way in which they are utilising their finances. Defence reviews under way in Germany, the Netherlands. Belgium, Sweden and Finland are recommending more deployable, mobile and flexible forces. Italian and Greek reviews are also in progress. France and Spain will have completely professional armed forces by the end of this year. The noble Lord, Lord Jopling, reminded us that that will be the case in Germany. In addition, Italy, Greece and Portugal are reducing the number of conscripts in relation to their professional personnel. The Netherlands, Belgium and Luxembourg have already completed the professional aspect of their armed forces.

My noble friend Lord Williams of Elvel was quite right to point out that we in Europe have a difficult hand to play. But to use my noble friend's analogy a little further, the question we have to ask is this: what can we do to improve the quality of our cards and to play our hand more effectively? We are not the only country looking at this aspect. EU nations are examining new ways of using their existing resources far more effectively, pooling and improving the interoperability of our forces and equipment. We believe that that will achieve economies of scale. I agree wholeheartedly with my noble friend Lord Williams, and, indeed, with the noble and gallant Lord, Lord Inge, on the importance of interoperability. For example, Germany and the Netherlands have announced that they will collaborate to provide some existing German aircraft with air-to-air refuelling capability. As the noble and gallant Lord, Lord Inge, made clear, it is a difficult task to achieve, but it is one to which we must dedicate a great deal of time and thought.

We look also to collaborative procurement initiatives, which we have seen taken forward in OCCAR. I agree with many noble Lords who have wondered whether OCCAR is going to be truly effective, but better procurement and cutting down duplication, time and costs are absolutely vital, a point stressed by my noble friend Lord Harrison. Although OCCAR is still in its early days, it does provide us with a means of moving forward on those important procurement issues.

I turn now to whether the ESDP is really now up and running. There have been some improvements in capability, but are those improvements adequate to allow the ESDP to claim that it is now operational? I think that the answer to the question is a qualified "yes", but within clear limits. The EU has recognised that capability shortfalls will have an impact on what the ESDP can do in the short term.

The noble Lord, Lord Blaker, raised the question of consultation and when action on humanitarian issues would be appropriate. In December 2001 at Laeken, the EU declared that, through the continuing development of the ESDP and the strengthening of its capabilities, both civil and military, and the creation of the appropriate EU structures, the EU is now able to conduct some crisis management operations. However, at this initial stage of the development of the ESDP, the European Council at Laeken also made it clear that the Union will be in a position to take on progressively more demanding operations as the assets and capabilities at its disposal continue to develop. If the noble Lord were to ask me whether that was the only forum within which these issues are being addressed, I would say of course it is not. They are also being addressed in NATO and the UN.

I wish to address an issue on which many noble Lords concentrated; that is the relationship between the ES DP and NATO. The relationship with NATO is absolutely crucial. That point was raised by almost all noble Lords who participated in our debate. All pointed out that the links between NATO and the EU are integral to ensuring that the EU does not duplicate NATO planning structures and that rivalry does not ensue.

Noble Lords will have heard on many occasions Ministers come to the Dispatch Box and make the point, but I shall make it again this evening. The ESDP is designed to complement NATO; NATO will remain the cornerstone of our territorial and defence security. I listened carefully to the points made by the noble Lord, Lord Owen, but I genuinely do not believe that we shall have to choose between NATO and the ESDP. The whole point is that they should be complementary. However, I do agree with what was said by the noble Lord, Lord Wallace of Saltaire. The relationship must not be taken for granted. It needs to be fostered and constantly reinforced and I believe that working relationships between the MoD and the Pentagon do exactly that. NATO will also continue to have a role in crisis management, but ESDP will offer the international community a further option and will act when NATO as whole is not engaged.

A number of noble Lords mentioned the meeting of NATO Foreign Ministers in Reykjavik last week. NATO remains alive to the same issues as ESDP. I agree with my noble friend Lord Williams that we saw a number of UK objectives met in three key areas— NATO-Russia relations, NATO enlargement and reform of NATO. Like my noble friend Lord Harrison, the Government very strongly support the plans of the noble Lord, Lord Robertson, for a modernised NATO, with improved command, force and headquarters structures. This will be essential if an enlarged NATO is to continue to be an effective military alliance.

Equally, NATO will benefit from ESDP. Nations have one set of forces, and improvements in national capability can and must benefit both the ESDP and NATO.

My noble friends Lord Judd and Lord Williams referred to the NATO-Russia council. The points which were agreed in Reykjavik on 14th May were very important. Given the shortage of time, perhaps I may write to my noble friends on the important points that were made about the future of the relationship and place a copy of my letter in the Library.

Let me now say something about the EU-NATO links, the Berlin Plus and the whole axis of arguments about what is happening between Turkey and Greece at the moment. Of course there are complex angles to the EU-NATO relationship. It is not a straightforward issue, as many noble Lords pointed out. At the Barcelona European Council, the EU Heads of Government and State announced that the EU would be available to take over the NATO mission in the former Republic of Macedonia. But two conditions were applied: first, that such a force would be needed; and, secondly and crucially, that the EU-NATO links would have to be in place. That was a vital condition in relation to the points made by the noble Lord. Lord Owen, and, to a lesser extent, by the noble Lord, Lord Moynihan. I stress that that was a crucial point in the conditionality placed on that issue.

As the House will know, EU-NATO links— or Berlin Plus in shorthand—are necessary to give the EU assured access to NATO planning and presumed access to NATO's assets and capabilities. Without these, the ESDP will not be able to take on the more demanding crisis-management operations.

The Government share your Lordships' concerns over the difficulties that we have faced in securing the Berlin Plus arrangements referred to by the noble Lord, Lord Jopling, but commitment to Berlin Plus in both the EU and NATO remains overwhelming. The noble Lord, Lord Hannay, concentrated most of his remarks on this point, hut I can say to him that we remain confident that both organisations will be able to meet the concerns of Turkey and Greece to their mutual satisfaction. The United Kingdom will certainly be working hard with the Governments of both countries to try to help them to resolve their differences. I hope that gives some assurance to the noble Lord.

A number of points were raised by the noble Lords, Lord Moynihan and Lord Owen, on the question of the command and control of EU crisis-management operations. We must remember that we are talking here about Petersberg tasks. They are not—I repeat not—issues surrounding Article 5 of NATO. At the top level the picture is clear. The noble Lord, Lord Moynihan, is right: the EU Council has political control, delegated when appropriate to the Political and Security Committee. The ELI crisis-management exercise in 2003 will help to clarify the way in which the Committee of Contributing Nations will interact with the Political and Security Committee to run an operation.

The argument in relation to this issue is: what happens at operational level? At that level, the command and control takes two forms. Because the EU does not have its own operational command structure, it can use either NATO, in the form of SHAPE, or it can use an EU nation's own structures. In short, either the EU will ask NATO to plan and command an operation or it will ask a framework nation, such as the United Kingdom, to use its operational headquarters to do so. I say to both noble Lords that there is no decision to create an independent military operational planning capability. Either NATO is used, or one of the countries involved in the operation. I say to the noble Lord, Lord Howell of Guildford—we have discussed this matter many times previously—that European capability kicks in only when NATO as a whole is not engaged.

The noble and gallant Lord, Lord Inge, raised questions on monitoring and training which ought to be touched upon. He has particular expertise given his history in this area. It has been agreed that in the earliest stages of EU force development the training of troops would be conducted by nations and by NATO. We fully anticipate that in due course NATO will want to adapt its major exercises to enable EU nations to work to prove headline goal interoperability. I hope that that is of some comfort to the noble and gallant Lord.

Finally, perhaps I may address the points about how ESDP might be held to account to supra-national legislatures—a point on which the noble Lord, Lord Jopling, concentrated a large part of his remarks. Nations are individually responsible for decisions about the deployment of national military personnel and assets. It is right, therefore, that the principal form of parliamentary accountability should remain with national parliaments. We believe that this is the right course in fulfilling the commitment to accountability, and it is important to consider how this is then taken forward into the future.

As I am sure the noble Lord is well aware, the question will be dealt with under the convention on the future of Europe and its subsequent intergovernmental conference in 2004. It would be premature to speculate on the outcome of that. I strongly agree with the remark by the noble Lord, Lord Hannay of Chiswick, that to take such a decision now would indeed be premature. I am sure that many noble Lords believe that it could possibly pre-empt the decisions that are being taken at the moment on the future of Europe.

In the mean time, I assure the noble Lord, Lord Jopling, and other noble Lords who raised the point, that the European Parliament, the WEU Assembly and other relevant bodies will continue to fulfil their current functions.

I shall write to the noble Lord, Lord Howell of Guildford, about the points that he raised on Canada. I thought that he was entirely wrong. It has not been left out, but perhaps I may write to him on the point.

In conclusion, I have listened carefully to what has been a wide-ranging and, as so often on this subject, an enormously well-informed debate. I am very grateful to your Lordships for the comments and suggestions that you have made. I believe that the Government will want to take much of this on board as the ESDP develops. What is clear, however, from the debate is that the ESDP is a necessary tool as part of the foreign policy apparatus of the United Kingdom within the EU and a much-needed tool within the international community when we turn to crisis management.

The Government thank the committee for its report and commend it to the House.

My Lords, a few moments ago, my friend, the noble Lord, Lord Williams of Elvel, sent me a note which said:

"The debate has been interesting enough for you to make a full wind-up".

In view of the lateness of the hour, I shall resist that temptation to become a parliamentary windbag. However, I should like to thank all those who have spoken, and in particular the Minister for an outstanding reply. She covered a huge amount of ground in a relatively short time. I make only one comment to her. I should have liked to hear a little more about the Government's reactions to General Hägglund's remarks two weeks ago, but perhaps at some stage we can pursue that a little further.

All members of the committee will be grateful for the generally warm welcome that our report has received. I have heard no serious criticism. I want to refer to only one query, which was raised by the noble Lord, Lord Lea of Crondall. He said that he felt that there was some incompatibility between paragraphs 39 and 90. Frankly, I am not able to recognise that incompatibility. Paragraph 39 says that the European Union must do more and must do it better, because the United States may not always be involved in various tasks. Paragraph 90 says that on some occasions ESDP may well need United States political and perhaps practical support, whether through advice or intelligence back-up—that is relevant remembering the Falklands campaign—or on contingency planning in the event of an operation going through a degree of escalation or serious extension of the crisis that is being dealt with. I am afraid that I therefore do not recognise the incompatibility referred to by the noble Lord, but maybe we can discuss that on another occasion.

I have detected wide support in the debate for the conclusions of the report. My old friend the noble Lord, Lord Judd, said at the end of his remarks that he felt that the House would return to the issue. I believe that the committee and the House most certainly will return to it from time to time.