European Council

Monday 10th March 2014 Commons Chamber

15:35

[The Prime Minister (Mr David Cameron)]

With permission, Mr Speaker, I would like to make a statement on last week’s emergency European Council.

What has happened to Ukraine is completely indefensible. Its territorial integrity has been violated and the aspirations of its people to chart their own future are being frustrated.

This European Council sent a clear and united message to Russia that its actions are in flagrant breach of international law and will incur consequences. We agreed on a three-phase approach to stand up to this aggression and uphold international law: first, some immediate steps to respond to what Russia has done; secondly, urgent work on a set of measures that will follow if Russia refuses to enter dialogue with the Ukrainian Government; and thirdly, a set of further, far-reaching consequences should Russia take further steps to destabilise the situation in Ukraine.

Let me say a word on each of those steps. First, as a response to what Russia has already done, we agreed on some immediate steps. We have suspended preparations for the G8 in Sochi indefinitely. As I told the House last week, my view is that it would be completely wrong for a G8 summit to go ahead at all under current circumstances. We decided to stop work on a comprehensive new agreement on relations between Russia and the European Union, and we immediately suspended the talks that were under way on a more liberal visa regime in the Schengen area—the thing that Russian Ministers and business delegations have pushed for more than anything else.

Here in Britain, I have ordered an urgent review of all Government business with Russia. We have already announced that no Ministers or members of the royal family will visit the Sochi Paralympics. Many other planned ministerial-level contacts will be cancelled in current circumstances. All bilateral military co-operation is under review, with the presumption that we will suspend it, except for work carried out to fulfil international treaty obligations, such as European arms control inspections. I have ordered a review of licences for arms exports to Russia. It is hard to see how anything that could be used in Ukraine could be justified. As with other measures, it is best if possible to take these decisions in concert with our European allies.

There has been intense work to persuade Russia to come to the negotiating table with the Government of Ukraine and to discuss its stated concerns face to face. The idea of such a contact group, including other countries and organisations, was one I first proposed to the Polish Prime Minister back in January. The European Council agreed it was essential for such talks to start within the next few days and for them to deliver progress quickly. We also agreed that if Russia did not co-operate there would need to be further measures—the so-called second phase—which would need to start rapidly.

Therefore, at my instigation, the Council tasked the European Commission to begin work on additional measures which could be taken against Russia if these talks do not get going or do not start producing results. These will include asset freezes and travel bans. We are working closely with our American, European and other international partners to prepare a list of names, and these sanctions, plus the measures already agreed against Yanukovych and his circle, will be the focus of a meeting here in London tomorrow with key international partners.

There is an urgent need to de-escalate tension in Crimea. We are all clear that any referendum vote in Crimea this week will be illegal, illegitimate and will not be recognised by the international community. In addition, I have to say that any campaign would be completely impractical as well as illegal. There is no proper register or proper campaign, and the territory is covered with troops. It is completely impossible for a proper referendum campaign to be carried out. As I discussed with Chancellor Merkel last night in Hanover, Russia can choose the path of de-escalation by signalling it understands that the outcome cannot be acted on as legitimate. Chancellor Merkel and I were clear that any attempt by Russia to legitimise an illegal referendum would require us to respond by ratcheting up the pressure further.

Thirdly, and most significantly, we agreed that it was essential to stop Russia taking further unacceptable steps in Ukraine. The Council agreed that if further steps are taken by Russia to destabilise Ukraine, there will be additional and far-reaching consequences for the relationship between the Russian Federation on the one hand and the European Union and its member states on the other. The Council conclusions state that these consequences would

“include a broad range of economic areas.”

Britain played a leading role in helping to reach this agreement, including through a meeting I convened with fellow leaders from France, Germany, Italy and Poland on the morning of the Council. Such sanctions would have consequences for many EU member states, including Britain, but as I argued at the meeting, the costs of not standing up to aggression are far greater. Britain’s own security and prosperity would be at risk if we allow a situation where countries can just flout international rules without incurring consequences.

Finally, we decided to send a political message of support to the Ukrainian Government and people. The interim Ukrainian President spoke at the European Council with great power and force. The Ukrainian people want the freedom to be able to choose their own future and strengthen their ties with Europe, and they want a future free from the awful corruption that they have endured for far too long.

At the request of the Ukrainian Prime Minister, we therefore agreed to bring forward the signing of the political part of the EU’s association agreement with Ukraine, and we agreed to help Ukraine tackle corruption. The EU has now frozen the assets of 18 people linked to the former regime, and Britain has deployed a team to Kiev from our National Crime Agency to help the new Ukrainian Government go after ill-gotten funds and return them to the Ukrainian people.

It is now vital that Ukraine proceeds towards free and fair elections that enable all Ukrainians, including Russian speakers and minorities, to choose their leaders freely, so Britain is now providing substantial and immediate technical assistance to Ukraine to support elections and assist with reforms on public finance management, debt management and energy pricing. Ukraine also needs support to stabilise and repair its economy. The EU agreed unilaterally to lower trade tariffs, and to work with the International Monetary Fund on a package of financial assistance to the Ukrainian Government.

As I agreed with President Obama during our call this weekend, there is still an opportunity for Russia to resolve this situation diplomatically. It should engage in direct talks with the Ukrainians, return Russian troops to their bases in Crimea, withdraw its support for this illegal and unconstitutional referendum in Crimea, and work with the rest of the international community to support free and fair elections in Ukraine in May. No one should be interested in a tug of war. Ukraine should be able to choose its own future and act as a bridge between Russia and Europe.

Britain’s own future depends on a world where countries obey the rules. In Europe, we have spent the past 70 years working to keep the peace, and we know from history that turning a blind eye when nations are trampled over stores up greater problems for the longer term. We must stand up to aggression, uphold international law and support the Ukrainian Government and the Ukrainian people, who want the freedom to choose their own future. That is right for Ukraine, right for Europe, right for Britain. I commend this statement to the House.

15:43

[Edward Miliband (Doncaster North) (Lab)]

I thank the Prime Minister for his statement, and I join him in expressing deep concern about the situation in Ukraine.

Since we discussed this issue in the House last Wednesday, we have seen the illegal referendum announced in Crimea, Organisation for Security and Co-operation in Europe observers prevented from crossing into the region by Russian forces for four days running and, yesterday, violence on the streets against anti-Russian demonstrators. We support the twin-track approach of encouraging dialogue and at the same time maximising pressure on the Russian Government, but nobody looking at the unfolding situation on the ground would conclude that this is yet having the desired effect. It is on that basis that we should examine the discussions taking place, the outcome of the EU summit and the steps that should be taken in the days ahead.

It is worth saying that getting agreement among the EU 28 is always difficult, particularly when a number of member states are vulnerable to Russian action on issues such as energy. However, as we agreed last week, this is a test of EU resolve and of its commitment to uphold the rule of law, democracy and human rights—values on which it prides itself as an institution.

Let me welcome the summit measures that were agreed. Those include the unity of the EU in condemning Russia’s actions and the decision to provide support and encouragement to the Ukrainian Government, including €11 billion of aid. The Prime Minister referred to the suspension of visa talks and a new agreement on EU-Russia relations. Those measures are welcome, although they had been announced on 3 March before the developments that I referred to at the start. Does he accept that the evidence from recent days suggests that those measures alone will be insufficient to get Russia to change course, and that further action will be required?

Turning to what more needs to be done, I welcome the European Council’s decision to look at further measures, although the agreed language is weaker than we would have wished. I welcome what the Prime Minister said about asset freezes and travel bans. Will he confirm that the time frame for their implementation will be days and not weeks, particularly given that the United States is committed to such action? On the EU-Russia summit, which is referred to in the Council conclusions, surely it makes sense at the very least, unless there is an immediate change of course by the Russian Government, to suspend preparations for it, as has been done for the G8 summit in Sochi.

Beyond that, I welcome the Prime Minister’s statement that we need to look actively at other measures. I urge him in the days ahead to build support for further measures among our European and other allies to prepare for the eventuality that they will be required.

Let me ask the Prime Minister about some specific matters. Will he confirm that, if Russia does not change course, he will consider working with the G7 to suspend Russia from the G8—something that he called for specifically at the start of the crisis in Georgia in 2008? That would go beyond simply withdrawing from the preparatory talks for Sochi or from the Sochi summit itself. Following the announcement that the UK Government are reviewing every outstanding arms export licence to Russia, to which he referred, will he confirm what the time scale is for the conclusions on that issue? What scope does he believe there is for an EU-wide agreement on arms exports?

Finally, will the Prime Minister not only confirm that he is open to wider economic and trade sanctions, as he said in his statement, but tell the House in what circumstances it would be appropriate to go down that road? He said in his statement, with a reference to Chancellor Merkel, that there would need to be a ratcheting up of pressure on Russia if it used the referendum in Crimea to strengthen its hold on Crimea. Will he say specifically whether economic and trade sanctions would be appropriate in those circumstances, given that the referendum is a pressing matter and will take place in a week or so?

In conclusion, we should continue to use all possible channels to facilitate dialogue and encourage the Ukrainian Government to be as broad based as possible. We recognise the constraints on the Prime Minister in seeking to reach EU-wide agreement. However, I urge him, particularly as we approach the referendum in Crimea, to apply maximum influence on our allies, so that maximum pressure can be applied on the Russian Government. Hesitancy or weakness in the EU’s response will send precisely the wrong message. The UK has a vital position of responsibility in ensuring that that does not happen and that, instead, the EU and the US stand together in clear and united resolve. We will provide him with all the necessary support as he seeks to achieve that.

[The Prime Minister]

I thank the right hon. Gentleman for what he has said. He has welcomed our approach, which is a combination of pressure and dialogue. That is absolutely right: we should be trying to de-escalate the crisis, but an element of deterrence is required to discourage further aggressive steps from Russia.

Let me try to answer each of the right hon. Gentleman’s questions. He is right that this is a test of European resolve. It is clearly difficult, as he says, to get agreement among 28 countries. There are countries in the European Union that have a heavy dependence on Russian energy, for instance, so we have to try to bring everyone along in the argument. That is what happened at the European Council. A lot of people were expecting a strong US response and an EU response that was well behind it. That did not happen. Given everything, the EU response was a relatively good one.

The right hon. Gentleman asked whether further measures will be needed. That will obviously depend on the Russian response. We are trying to be clear, predictable and consistent in setting out what has been done, what will need to be done if the talks do not get going, and what further steps would be taken if Russia took further aggressive steps, for instance in eastern Ukraine. Setting that out in advance helps people to understand the depth of concern in the EU and the preparedness for action.

The right hon. Gentleman asked whether asset freezes would be put in place in days rather than weeks. Obviously, that depends on whether the Russians set up the contact group and start the dialogue with the Ukrainian Government. If they do not, asset freezes and travel bans will follow, and yes, that should follow in a matter of days not weeks, because the setting up of the contact group and the starting of talks is not a particularly difficult step for the Russians to take if they genuinely want to see this ended through a process of dialogue, rather than continuing with this conflict.

The right hon. Gentleman’s comment about linking the EU-Russia summit with the G8 is absolutely right. It would be unthinkable for a G8 not to go ahead while an EU-Russia summit did go ahead; these things have to be considered in tandem. He also asked whether it would be right to resuscitate the G7, rather than going ahead with the G8. If we do not make progress on a contact group and if Russia takes further steps, clearly one of the measures that we could bring forward relatively quickly would be to take a different approach by going back to a G7, rather than holding a G8, but let us hope that that is not necessary.

In relation to arms, the right hon. Gentleman made the point that we should try to take action across the EU, and I very much agree with that. I have set out today my own view about arms licences from Britain, and we will be working within the European Council to try to achieve the greatest possible common ground on this. The fact is that some countries have substantial exports to Russia, but as I said at the Council, everyone is going to have to consider things that might be painful and difficult for their own country, and I think that the countries concerned are prepared to take those steps.

The right hon. Gentleman asked about the issue with Crimea, and about what consequences could follow there. It is very clear that the international community is not going to recognise that illegal and illegitimate referendum. As I said, it is a fairly farcical referendum, because people cannot get out and campaign across Crimea. There is not even a proper electoral register there, there are troops all over the territory and Ukrainian politicians are unable to travel from one part of their country to another. So the referendum is clearly not only illegal but rather farcical. Again, the answer lies in Russia’s hand, because this is about how it reacts to this illegal and illegitimate referendum. If it reacts by saying that it is somehow legitimate, consequences should follow from that.

The right hon. Gentleman asked whether we should put maximum influence on our allies in Europe to try to strengthen these statements and measures, and we will. He made the point that the EU and the US should work together, and that is exactly what I believe we achieved last week. Also, behind his questions was the idea that we should be trying strategically to make the European Union member states less dependent on Russia. Some are heavily dependent on it for oil and gas, and it is right that the European Union should spend more time thinking about that.

[Sir Peter Tapsell (Louth and Horncastle) (Con)]

Why is it acceptable for the Scottish nationalists to be granted a referendum in Scotland on constitutional arrangements dating back to 1707, but unacceptable for Russian nationalists in the Crimea to have a referendum about constitutional arrangements that date back only to 1954? Does my right hon. Friend agree that, if the Crimean referendum could be postponed until such time as international observers could be put in place to ensure that the referendum was genuine, that would be by far the most sensible solution to the problem?

[The Prime Minister]

To answer the Father of the House directly, the difference between the Scottish referendum and the one in Crimea is that the Scottish referendum is legal. It was discussed and debated in this House and in the Scottish Parliament, and we went a long way to put in place arrangements that I have described as not only decisive and fair but legal. The difference between those arrangements and the Crimean referendum is that the Crimean referendum is illegitimate and illegal under the Ukrainian constitution. That is not to say that the people of Ukraine or of Crimea cannot, over time, find a way of expressing their own preferences. That is what we have done in Scotland, and of course they can do it there too, but the way in which this referendum has come about is clearly illegitimate and illegal; that is the difference.

[Mr Jack Straw (Blackburn) (Lab)]

Against the background of thugs in Crimea blocking the admission of OSCE monitors into Crimea, what does the Prime Minister think of Russian Foreign Minister Lavrov’s claim last week that one of the ways of resolving the matter peacefully is by using the OSCE?

[The Prime Minister]

The right hon. Gentleman, who served as Foreign Secretary, speaks with great knowledge. The fact is that a number of things our Russian interlocutors have said have turned out simply not to be true. We have to be very clear in challenging them on that. Of course Russia has an interest in having a strong and positive relationship with Ukraine, which we understand and welcome, but in these circumstances some of the things that have been said about what is happening on the ground, the consequences that would follow certain actions, and indeed the point he has just made, show that they have not been entirely straightforward with us.

[Martin Horwood (Cheltenham) (LD)]

I welcome the steps that have already been taken and the option of much stronger economic sanctions, but the presence of small but visible numbers of neo-fascist thugs on the streets of Ukraine, and indeed on the TV screens of Russia, is clearly just playing into Vladimir Putin’s hands. Can we assist the Government of Ukraine in returning control of law and order on the streets to the regular police as soon as possible?

[The Prime Minister]

My hon. Friend is clearly right that in Ukraine, as in all countries, we need to see legitimate forces of law and order—the police and the military—with responsible roles, rather than militias. But I think that we should be very careful not to do what the Russians are doing, which is to exaggerate the claims they are making in order to justify some of their actions. Of course, as I have said, what we need in Ukraine is respect for all minorities and all the different languages, including the Russian language speakers. I am confident that the Ukrainian Government understand that.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

I welcome the fact that the Prime Minister has come to the House to make a statement on the European Council, something he has not done quite as assiduously as I think he should have done in the past. Did he have an opportunity to speak in the margin to other NATO members, given that he is preparing for a NATO council in September in Wales? Presumably at that stage article 5 will suddenly have acquired a new pertinence to quite a number of EU member states.

[The Prime Minister]

First, I say to the hon. Lady, for whom I have considerable respect, that I think that I have made more statements following European Councils than my predecessors, not least because their number has gone up. Every now and again we make a written statement, but normally we make an oral one.

Secondly, on the issue the hon. Lady raised, I took the time to speak to as many colleagues as I could, including a number of NATO colleagues. Obviously there is great concern, particularly from our colleagues in the Baltic states and in Poland, and I listened very carefully to what they said. I think that it is very important that we emphasise the security guarantees that NATO provides and that they should have confidence and certainty in them. I think that those countries also speak with great knowledge about what works when standing up to, and being clear about, these threats from Russia.

[Nicholas Soames (Mid Sussex) (Con)]

Although we all want to see the emergence of a reliable new Russia that abides by the rules, does my right hon. Friend agree that, in order to ensure that the costs of standing up to aggression are fully met, we need a serious rethink as we approach the next strategic defence review and the agenda of the NATO summit?

[The Prime Minister]

I think that my right hon. Friend is right. All these events should always cause us to look again at our strategy and at the decisions we have made. I think that they emphasise the importance of standing by our NATO allies and strengthening NATO. They also emphasise the importance of dealing with new threats, such as cyber. Obviously we will take all those things into account in the next strategic defence review.

[Mr Dennis Skinner (Bolsover) (Lab)]

Since the Prime Minister has become an expert on promising referendums on the EU, then postponing them, and then promising another, what right has he to tell Putin that he cannot have one in Crimea?

[The Prime Minister]

I think that I answered that question pretty comprehensively in response to my right hon. Friend the Father of the House. Of course, any country that wants to can hold a referendum under its constitution—that is what constitutions are able to deliver—but it has to be fair and legal. It is quite clear—everybody agrees, except the Russians—that this referendum is illegitimate, illegal and will not be recognised by the international community.

[Sir Richard Ottaway (Croydon South) (Con)]

With the so-called referendum due to be held on Sunday, time is not on our side. Now that Russia is far more integrated into the world economy, the most effective short-term pressure that can be applied is financial and economic, but we should not be looking just at national assets. Does the Prime Minister agree that Russian banks and corporations that are contemplating taking over Ukrainian assets in Crimea should be warned that if they go down that road, they will be denied access to western financial institutions?

[The Prime Minister]

My right hon. Friend makes an important point. The three-phased approach sets out that if there are further Russian moves on eastern Ukraine or to further destabilise Ukraine, we as the European Union would be prepared to bring forward a range of economic and other sanctions which, as it states in the European Council conclusions, would cover a broad range of areas. Nothing is off the table. Of course, these things are never easy for democracies to carry out. It was pointed out at the meeting that some countries might suffer more with energy sanctions, some with financial sanctions, and some more with defence sanctions. As the European Union, and as member states, we must consider what steps would be necessary to send a clear message to Russia. My right hon. Friend’s point is a good one.

[Chris Bryant (Rhondda) (Lab)]

I am glad that the Prime Minister has scotched the idea that some seem to have that it is somehow acceptable for Russia to subsume Crimea on the basis that a majority of Crimeans speak Russian. That is the language of 1938, and it did not do very well for Czechoslovakia in the end. May I urge the Prime Minister to do one thing immediately? The United States of America has already done this, and the European Parliament has called on all countries in Europe to do so, as has the Council of Europe. Will he tell the Russian officials who were involved in the murder of Sergei Magnitsky and in the corruption he unveiled that they are not welcome in this country?

[The Prime Minister]

As ever, the hon. Gentleman speaks powerfully about these issues, and those are the sorts of things we can take into account when looking at individuals who will be affected by travel bans and asset freezes. On historical analogies—a number of people are making such points—I think that perhaps the best ones to draw are by looking at what happened to Georgia and the frozen conflicts of South Ossetia and Abkhazia, and in Transnistria. There is a pattern, and we need to interrupt it by the European Union and member states, with our American allies and others, taking a strong stance.

[Mr John Redwood (Wokingham) (Con)]

Will the Prime Minister now seek fundamental changes in EU energy policy? Some member states are far too dependent on Russian gas, and the rest of us are far too dependent on intermittent, dear and scarce sources of energy, owing to EU directives. Do we not need to get control of our power to be able to reply?

[The Prime Minister]

My right hon. Friend is entirely right. Here in the UK, we are not reliant to any significant degree on Russian supplies of gas, but some countries in Europe receive 60% or 70% more of their gas from them. As a European Union we need to think about how to make ourselves more resilient as a group of countries, and part of that will be by completing the European energy single market, which will make a difference to those countries. This is clearly a good moment to press that concern in Europe and get more done.

[Mr David Winnick (Walsall North) (Lab)]

I happen to believe that there should be a legal and responsible referendum as far as Crimea is concerned—one that is under international control and not the sort of effort the Russians are organising. Whatever views we hold about Crimea, should we not totally condemn what Russia has done? Outright thuggery against part of a neighbouring and sovereign state should certainly be condemned.

[The Prime Minister]

The hon. Gentleman is absolutely right, and we should not only condemn the Russian action, but set out the consequences that will follow. On the referendum, a number of Members of this House have taken part in election campaigns and referendum campaigns, and it is worth thinking about how practical it is to hold a referendum between now and Sunday when there is no register, no campaign, and Ukrainian politicians cannot travel round their country. It is not only illegal but literally farcical to think of that going ahead and in any way being respected, responded to, or legitimised by the Russians or anybody else.

[Dr Julian Lewis (New Forest East) (Con)]

Have the arrangements we have put in place for the safe withdrawal of troops and especially heavy equipment from Afghanistan by the end of this year in any way been affected by the tension that has arisen between us and Russia?

[The Prime Minister]

We have not received any information that would lead us to think that. If we are going to take steps—diplomatically, politically and, potentially, economically—we should take them because it is the right thing to do. We should recognise that there may be consequences from some of those things. There could be consequences for the City of London and some European defence industries, or for energy or other interests around Europe. However, we should proceed knowing that what we are doing is sensible, legitimate, proportionate, consistent and right.

[Keith Vaz (Leicester East) (Lab)]

I welcome the Prime Minister’s commitment to sign the association agreement before the elections on 25 March. A poll of Ukrainians last year showed that the vast majority want to be members of the EU. Were there any discussions about Ukraine joining the EU as a candidate country, because that could provide focus for the Ukrainians at this time of instability?

[The Prime Minister]

I have great respect for the right hon. Gentleman. There were no discussions on Ukraine’s long-term aims to join the EU. The discussion was about what progress we could make on the association agreement. It was an important debate, because European colleagues felt strongly that we could not indicate that we would have been happy to sign an association agreement with the previous President but hold back from signing one with the current Administration. We therefore came forward with the idea of signing the political part of the association agreement, lowering European tariffs as a unilateral gesture to help the Ukrainian economy, and pressing ahead with the rest of the agreement in a proper time frame.

[Jake Berry (Rossendale and Darwen) (Con)]

My right hon. Friend has spoken of the inability of Ukrainian politicians to campaign on the Crimea. Will he confirm that a referendum scratched together in 10 days at gunpoint at the behest of a foreign power can never be regarded as legitimate, fair or free?

[The Prime Minister]

My hon. Friend puts it extremely well. The referendum is obviously not free, fair or legitimate, and we should have no hesitation in saying so.

[Jeremy Corbyn (Islington North) (Lab)]

A week ago, the Foreign Secretary assured the House that there was no question of Ukraine joining NATO. Since then, we have had a steady stream of statements from the NATO Secretary-General, who has spoken at great length and expansively of expanding NATO and once more getting very close to Russia. Does the Prime Minister believe that the NATO Secretary-General should calm down a bit, and that there should be less talk of expansion, to try to de-escalate the tensions rather than increase them?

[The Prime Minister]

Ukrainian membership of NATO is not on the agenda at present, but it is absolutely right that NATO countries are responding as strongly and as clearly to the threat of Russian aggression and destabilisation as they are. We should listen particularly to countries such as the Baltic states and Poland that wanted to join NATO. We made absolutely the right decision to allow them to do so.

[Penny Mordaunt (Portsmouth North) (Con)]

Does my right hon. Friend agree that accepting a Russian seizure of part of Ukraine is against the national interests of the UK?

[The Prime Minister]

My hon. Friend makes an important point. We should define what our national interest is in this instance, and I think it is that Britain benefits from there being a world where countries obey the rules and where there is a rules-based global system. We are an international country—a country that relies on the world’s markets being open, and on countries obeying norms and standards of behaviour. We know what price is paid if we turn a blind eye when such things happen: we build up much bigger problems for the future.

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

At the critical moment a few weeks ago, and during the street protests in Kiev, the Foreign Ministers of Germany, France and Poland represented the European Union. Why was Britain absent from that group? Was it a deliberate choice of the UK Government, or was it a reflection of our threat to leave the European Union in three years’ time?

[The Prime Minister]

We strongly supported the work that the Foreign Secretaries of Poland, Germany and France did. They had the strong support of the UK Foreign Secretary, who was in Brazil at the time of that meeting. That meeting was important, but if anyone wants to say that Britain has somehow not played a leading role in bringing together international action on the crisis, they would have quite a hard argument to make. The Foreign Secretary was the first leading politician to get to Kiev and listen to the politicians themselves after the events. We helped to co-ordinate that important EU statement, and we are helping to bring the United States and the EU together on a concerted set of actions. I commend all the work my Foreign Secretary has done.

[Sir Tony Baldry (Banbury) (Con)]

I refer to the answer to our right hon. Friend the Member for Wokingham (Mr Redwood). Does the Prime Minister agree that recent events demonstrate the need for the UK to be as energy self-sufficient as possible, to maximise the returns from North sea oil and gas, and to utilise fully the potential of UK fracking to help ensure that the UK can be as energy self-sufficient as possible?

[The Prime Minister]

My right hon. Friend makes a strong argument. Britain has a diverse source of energy supplies—we have North sea oil and gas, we have long-term supply contracts with countries such as Qatar, we have our nuclear industry which we are now reinvigorating, and a large investment in renewables. One of the arguments that colleagues were making at the European Council was that we should encourage the US to start exporting some of its gas. That would be hugely beneficial and something that we should support, but in my view it raised the question why the European Union is not doing more to support and promote recovering unconventional gas. We should be doing that ourselves in order to enhance our energy security, and that goes for all the countries of the European Union.

[Helen Goodman (Bishop Auckland) (Lab)]

Can the Prime Minister tell the House what the international community might do to protect the Crimean Tatars? By the same token, what message have the British Government given to the new Ukrainian Government about the protection of Russian minorities?

[The Prime Minister]

The hon. Lady makes an important point. In all our dealings with the Russians and with the new Ukrainian Government, we have set out the importance of making sure that the new Ukrainian Government are inclusive and that the Ukrainian elections give proper rights to minorities and to Russian speakers. As I say, we emphasised that point to the Russians as well, and obviously the Tatars in Crimea are a case in point.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

I join my right hon. Friend in his condemnation of Russian action and duplicity in Ukraine. How does he think the west can help de-escalate, given that Ukrainian society is deeply divided and the present Government represent only one faction and are unelected? Should we not call for new elections in Ukraine—the election of a national Government—and should we not take the EU association agreement off the table as an unnecessary provocation in the current situation?

[The Prime Minister]

The best way that Britain can help to de-escalate this crisis is by encouraging a talks process. That is why we came up with the idea of a contact group to help Russia and Ukraine talk to each other in the company of important European powers and organisations, and that is what we should push very hard. However, I take issue with my hon. Friend’s description of the Ukrainian Government. The Ukrainian Parliament had to react to the fact that the President left the country, and it took constitutional steps to put a transitional Government in place. That transitional Government have said it is important to respect the rights of Russian speakers and minorities, and they have had that point put to them by others as well. I do not think it is fair in any way to blame the European Union for this crisis. The European Union rightly has partnership and neighbourhood approaches to its neighbours but these are voluntarily entered into, and it is right that the European Union has those arrangements.

[Pete Wishart (Perth and North Perthshire) (SNP)]

I thank the Prime Minister for his statement and early sight of it. Notwithstanding his response to the right hon. Member for Blackburn (Mr Straw), does he share my disappointment at the way the OSCE has been treated and prevented from carrying out an important task on the ground? What extra support can the UK Government give the OSCE to ensure that it does that vital task?

[The Prime Minister]

We will keep supporting the OSCE in the work that it does. The hon. Gentleman is right that the way potential observers and observer missions have been treated is appalling. They should be there; they play a vital role. We will do everything we can to support them. The fact that they are not being allowed in is a material consideration in thinking about the steps that we take next.

[Several hon. Members]

rose—

[Mr Speaker]

Order. The hon. Member for The Wrekin (Mark Pritchard) has perambulated across the Bench from its middle to its end. Some people might think it is almost as difficult for me to keep an eye on him as it is for the Government Whips. I call Mr Mark Pritchard.

[Mark Pritchard (The Wrekin) (Con)]

I have a Panel of Chairs meeting to attend—I am grateful for being appointed to the panel.

Instead of listening to the criticism of some Opposition Back Benchers, the Prime Minister should be commended not only for his statement but for his leadership on this issue in Europe along with the Foreign Secretary. On the issue of European unity, is it not the case that while Germany, Hungary and the energy axis aligned with Russia might agree on phase 1 on the European strategy, phases 2 and 3 may be more challenging?

[The Prime Minister]

I am grateful for what my hon. Friend says. All those countries—Hungary included—signed up to the European Council conclusions that were extensively debated around the table at that meeting, so they are committed. It states clearly that if further steps are taken to destabilise Ukraine, the European Union will take steps covering a range of economic areas. Nothing is ruled out from those areas. Yes, it will be difficult, but I am confident that were that eventuality to come to pass, we would be able to respond appropriately.

[Alison McGovern (Wirral South) (Lab)]

Further to the point made by my right hon. Friend the Leader of the Opposition and the right hon. Member for Croydon South (Sir Richard Ottaway), it is good to hear the Prime Minister talk about asset freezes. He said in his statement that the Council has asked the European Commission to begin work on these additional measures. What work will the UK Government do to support the Commission in that, and what conversations has he had with our European partners on this specific subject?

[The Prime Minister]

We will hold a meeting tomorrow that will include representatives from the European Commission and from Britain, to go through and look in detail at which individuals could potentially be named. There should be maximum co-operation between the various European countries and European organisations about this.

[Mr Crispin Blunt (Reigate) (Con)]

Europe is littered with potential conflicts like that now afflicting Crimea. Is my right hon. Friend clear that the security of the whole of Europe depends on countries obeying the rules in this area, and while Russia remains outside those rules, she must be made to pay a very serious economic price?

[The Prime Minister]

My hon. Friend is right. As I have said, we have these frozen conflicts that we still struggle with across Europe. We are making a concerted effort to ensure that this does not turn into another one. We have to accept that there will be real and quite painful consequences for European countries if we have to go ahead with sanctions, but we should do so because it would be a greater evil to allow this situation to continue.

[Mr Dave Watts (St Helens North) (Lab)]

Has the Prime Minister carried out any review of whether Russians are already moving their assets outside the UK before any freeze is introduced?

[The Prime Minister]

I have not seen any evidence of that. Sometimes the City of London is unfairly painted as somewhere that does not have tough rules on money laundering. It does. It is painted as somewhere that does not have tough rules on transparency. It does. Part of the G8 agenda was aimed at making sure that we get greater transparency, particularly on issues such as tax. We will take the necessary steps, if that becomes appropriate, and the City of London will play its full part.

[Bob Stewart (Beckenham) (Con)]

The Baltic republics border on Russia and they have substantial Russian populations. My right hon. Friend has already hinted that they must be somewhat nervous. They are NATO members, so does he think it appropriate that NATO should reaffirm the principle of collective security for all its members?

[The Prime Minister]

The collective security approach is at the heart of NATO, and we should reaffirm it every time NATO countries meet. Looking back, was it right to allow Latvia, Lithuania, Estonia, Poland and other countries to join the European Union and NATO? Yes, it was. It gave them the security and stability to make economic progress, combat corruption and have the sort of free and open societies that the House supports. They draw a lot of strength and succour from that, and we should not forget it.

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

The Prime Minister is right to say there is a pattern to President Putin’s aggressive expansionism. Is the right hon. Gentleman not concerned that the measures he has committed to, or set out as possibilities, may prove insufficient to disrupt that pattern? Will we not look back with great regret if this emboldens Russia to continue on this path, potentially to the door of NATO members themselves?

[The Prime Minister]

If we pursue the steps we are contemplating and the steps the EU has agreed to take in a strong, predictable and consistent way, we can demonstrate to Russia that there is a pathway where it chooses dialogue and diplomacy to settle these issues, rather than further destabilisation. That would be the right outcome. I do not think that this approach is doomed not to work, for the simple reason that there are long-term costs to Russia in not recognising the importance of its economic and diplomatic relationship with Europe. For instance, we talk a lot about Russian gas. Yes, Europe is reliant on Russian gas to the tune of 25% of the EU market as a whole, but approximately 50% of Gazprom’s sales are to Europe. There are, therefore, strong arguments to say that Russia needs a sensible relationship with Europe more than Europe needs a sensible relationship with Russia. We should not talk ourselves down in any way. If we are tough, predictable and consistent we can help to emphasise to Russia that she should choose a path of diplomacy, not conflict.

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

Does my right hon. Friend agree that one of the excuses for President Putin unleashing his troops in Crimea was that he wanted to protect the Russian minorities? When the Prime Minister next contacts the Ukrainian interim Prime Minister, will he urge him to broadcast and do whatever he can to promote an inclusive message to every citizen of Ukraine that they have nothing to fear from him, either as an interim Government or as an elected Government, and will he also urge the BBC to broadcast that inclusive message?

[The Prime Minister]

My hon. Friend makes a very good point, which is that we should keep saying to the interim Ukrainian Government, and indeed to any new elected Ukrainian Government, that they should respect the rights of minorities and the rights of Russian speakers. We should also uncover how much of the propaganda we have been told about these sorts of things is made up, exaggerated and fabricated. We must not let the Russians get away with a propaganda campaign that says that were it not for the action of Russian troops in Crimea there would somehow have been an appalling bloodbath. I do not think that that is the truth at all, and we should challenge that at every opportunity.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

The Prime Minister made reference in his statement to the importance of stabilising the new Ukrainian economy, and to the role of the EU and the International Monetary Fund. Can he give us more information on when the EU will be bringing forward a clear timetable and the milestones for the release of the financial assistance package?

[The Prime Minister]

The hon. Lady asks a very important question. The EU, rightly, is being guided by the IMF team in Ukraine. The IMF has the real expertise on what is needed in terms of conditions, guarantees and undertakings on economic reforms to release an IMF programme. The majority of the EU money is conditional on that IMF programme going ahead.

[Andrea Leadsom (South Northamptonshire) (Con)]

Has the Prime Minister been able to assess reports that up to £100 billion was stolen by the previous Ukraine regime? What steps is the EU Council making to try to retrieve that money? Do we need more international action to ensure that offshore banks take very seriously their duty to check where money is coming from to avoid authoritarian regimes impoverishing their countries?

[The Prime Minister]

My hon. Friend’s point is absolutely key. As I said in the House last week, the reaction of the Ukrainian people against their former President was as much about being against corruption, and the massive larceny that has taken place on an industrial scale in that country, as it was about making a statement on whether to move closer to Europe or in another direction. I have seen reports of vast sums and figures. We should redouble our commitments to get to the bottom of whether we can recover any of the stolen money and return it to the Ukrainian people. In our international and diplomatic work, and in our aid work, we should redouble our efforts to tackle corruption right across the world.

[John Cryer (Leyton and Wanstead) (Lab)]

The Prime Minister will be aware that the European Union consistently supported the breakaway of Kosovo from Yugoslavia. Does that not hand a fairly useful argument to Russia, which will deploy it consistently with regard to Crimea?

[The Prime Minister]

Obviously the Russians do use that argument, and we hear it frequently. The events to which the hon. Gentleman has referred happened under an earlier Government, but the point that I would make, very much in their defence, is that there was a clear and present danger to the Kosovans who lived in Serbia. There was a real danger there, and we had to act in order to avert it. The steps that have been taken from that point onwards have been taken in a very deliberate and consistent way.

[Neil Carmichael (Stroud) (Con)]

I noted the Prime Minister’s earlier answers in connection with energy. Does he agree that Britain could make a really important contribution by encouraging other nation states to be as liberal and competitive as possible in relation to energy, in order to strengthen his case for saying that Russia needs Europe more than Europe needs Russia?

[The Prime Minister]

My hon. Friend has made an important point. If countries liberalise and open up their energy markets, they can secure greater diversity of supply, greater competition, and unbundling between producers and distributors, all of which can help to provide a more resilient set of energy conditions. We are encouraging such action throughout Europe, not least through the completion of the energy single market.

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

Last week the Foreign Secretary said that the chances of the United Kingdom signing a multi-technical co-operation agreement with Russia were now greatly reduced. The Prime Minister says that he wants to be tough. Is he now going to rule out the signing of that agreement?

[The Prime Minister]

As I have said, we are reviewing all our military co-operation with Russia. Obviously, the arrangements that we will want to continue are those linked to international arms agreements, inspections and the like, but I think that there will be an increasingly strong case for cancelling other arrangements. I repeat that I think that it is worth our doing this in conjunction with other European Union member states. I think that we maximise our influence and leverage in this regard if we act together, and I am keen that we should do so.

[Sir Edward Leigh (Gainsborough) (Con)]

The Prime Minister is right to stress the importance of history. For instance, ultra-nationalist Lviv was once 80% Polish Lvov, and before that was Lemberg in the Austro-Hungarian empire. I wonder whether the Prime Minister—with his well-known charm, diplomatic skills and all the rest, and with no obvious self-interest, as a Briton—can act as a bridgehead between those in the European Union who want to alarm Russia by detaching Ukraine from traditional spheres of influence and Russian imperialists. I should have thought that he could play a very useful role in promoting diplomacy and good relations.

[The Prime Minister]

I am very grateful for my hon. Friend’s suggestion. I have spoken to President Putin, I think, four times since the crisis began, and one of the points that I always make is that Britain understands—and I think many in the European Union understand—that Russia has a very close interest in what happens in Ukraine, and wants to have a strong relationship with it in the future. The point that I make—and tried to make in my statement—is that this should not be a tug of war between Russia and Europe, but should be a chance for the Ukrainian people to decide their own future. They could easily choose a future in which they act as something of a bridge between Europe and Russia, and we should be actively encouraging that. We should be saying to the Russians, “Of course we want a Ukraine where Russian speakers and minorities are properly treated, and a Ukraine which has a proper relationship with both Russia and the European Union.”

[Nic Dakin (Scunthorpe) (Lab)]

Can the Prime Minister comment on whether his party is still sitting in the same political grouping as President Putin’s United Russia in the Parliamentary Assembly of the Council of Europe? If it is—and it may well not be—what is he going to do about it?

[The Prime Minister]

I can satisfy the hon. Gentleman by saying that that is no longer the case.

[Mr John Baron (Basildon and Billericay) (Con)]

Events in Crimea are reminding us yet again that powerful countries which are not necessarily friendly to the west are not only increasing their defence spending, but are prepared to project their capability. Was there any discussion, or indeed recognition, in the European Council of the need to raise defence spending from its present low levels?

[The Prime Minister]

We were very much discussing the diplomatic, political and economic steps that needed to be taken, rather than any military steps, but I agree with my hon. Friend that it is important for us to maintain a proper level of defence spending. Britain has one of the top five defence budgets anywhere in the world. However, I think that even more important than the amount of money that we spend are the capabilities that we buy with that money. It is very important for us to modernise the way in which we spend our money, and we should encourage all European countries to do that as well.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I appreciate that last week the UN special envoy to Ukraine ran into some difficulties, but what discussions have taken place about the UN’s role in the escalating crisis in Crimea?

[The Prime Minister]

It is important that the UN is at the centre of this, not least because it makes it even more difficult for the Russians to slide away from their responsibilities—they often appeal to the UN and cite the UN charter when making their arguments. Therefore, the UN should be part of the contact group that would include the EU, the United States and European countries such as the UK. In that way, the UN can play a major role in helping to pursue a path of talks and diplomacy, which is the right way to de-escalate the conflict.

[Henry Smith (Crawley) (Con)]

Obviously, the EU Council meeting was dominated by events in Crimea, but on a related matter can the Prime Minister update the House on the association agreements with Georgia and Moldova?

[The Prime Minister]

We want to see these association agreements proceed. As I said in answer to an earlier question, the EU has different instruments for having friendly relations with neighbours and other nearby countries. It is right to pursue those and to offer such agreements, so on all those cases we should see progress. As was the case with Ukraine, we should not sign these agreements without thinking carefully about the steps that we expect the countries to take at the same time.

[Nick Smith (Blaenau Gwent) (Lab)]

Given that OSCE observers have been prevented from crossing into Crimea by armed men, what steps is the Prime Minister taking to persuade President Putin to agree the mandate for the OSCE’s monitoring mission?

[The Prime Minister]

I spoke to President Putin most recently on Sunday morning. One of the points I made to him was the importance of ensuring that the OSCE is properly handled and allowed to continue its missions. This is part of the argument we need to have with the Russians about how to get off the track that they are on and to get on a diplomatic, political and talks track. The OSCE, which is an organisation they respect, should be part of that.

[Charles Hendry (Wealden) (Con)]

The Prime Minister will be aware that, as a result of the policies he has put in place, our trade with Russia has grown dramatically in recent years and there are now over 600 British companies operating in Russia. Does he agree that, even in times of political stress, it should be a last resort to jeopardise those links, not just because of their economic importance but because they are a vital way of improving understanding between our countries?

[The Prime Minister]

My hon. Friend makes an important point. I support a good relationship between Britain and Russia and have taken steps as Prime Minister to try to put that in place. We have huge issues and difficulties between us still, not least the Litvinenko measures that remain in place, and clearly this is going to be a major impediment to a strong relationship between Britain and Russia, unless Russia takes the diplomatic path. We should hope that it does and work towards encouraging it to do so. If that happens, I see no reason why important economic relations, as we have discussed, could not continue.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

Is it not important to emphasise time and again that to divide Ukraine simplistically into Russian-speakers and Ukrainian-speakers is not a representation of the true situation? There are communities, families and individuals who are both Ukrainian and Russian-speaking. It is important to recognise the rights of minorities across Ukraine and to recognise the rights of different regions, but is not that intermingling of culture and languages a reason why there needs to be a commitment to a united and independent Ukraine?

[The Prime Minister]

I echo every word that the hon. Gentleman has said. It is important to recognise how many Russian speakers in Ukraine have said that they support a strong and independent Ukraine and do not welcome Russian intervention. As I have said, we should not fall into the trap of believing a lot of the Russian propaganda—a lot of what we have heard has turned out to be just that.

[Richard Drax (South Dorset) (Con)]

I congratulate my right hon. Friend and the Foreign Secretary on all they have done. As I see it, the key is the port of Sevastopol. If Ukraine continues to look to the west, how do we square that circle with the Russians, who have concerns about its use and access to the Mediterranean?

[The Prime Minister]

The point I would make, and indeed have made, to President Putin is that a proper, independent, prosperous Ukraine will want to emphasise its links and relationship with Russia as much as its links and relationship with the EU. Clearly, there were pre-existing agreements in place for the Russians to have their Black sea port in Crimea and there is no reason why those things should not continue. What we need to get back to, as I have said, is a diplomatic track where Ukraine and Russia can have sensible conversations about the future.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

Further to the question of my hon. Friend the Member for West Dunbartonshire (Gemma Doyle), does the Prime Minister not think it might be more reassuring for the British public if he were completely to rule out any sharing of military and technical information with the Russians for the foreseeable future?

[The Prime Minister]

I think I have given a fairly clear answer, which is that we are reviewing all the military relations and contacts between Britain and Russia. I have said that export licences for anything that could be used in Ukraine would obviously be very difficult to justify and that we should continue with the military co-operation where it is about, for instance, inspections mandated under international treaties. I have also said that we should take this area of military co-operation and, with our European Union partners, try to agree on a set of principles that would follow as part of either phase 2 or phase 3, as I set out.

[Rehman Chishti (Gillingham and Rainham) (Con)]

I very much welcome the statement by the Prime Minister. Russia is a member of the United Nations Security Council and it is violating the UN charter by violating another country’s sovereignty. Russia has also in the past vetoed United Nations humanitarian action around the world. Is it the right time to look at reforming the UN Security Council and its vetoing system?

[The Prime Minister]

My hon. Friend raises a subject that can get diplomats talking for ever and ever, possibly without a conclusion. I think that what this demonstrates is the need to consider at the UN Security Council resolutions that may require Russia to show her colours in this regard. I remember a number of occasions when Russia, and indeed China, have talked about the importance of non-interference in the affairs of another nation state, yet what we see here is interference in the affairs of another sovereign nation state, Ukraine.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

Further to the Prime Minister’s response to my hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson) on the International Monetary Fund, Ukraine is facing economic collapse, and Gazprom is threatening to cut off gas supplies. There is an urgency that does not seem to be recognised in the IMF timetables. What efforts are the Prime Minister and the EU making to get it to address the urgent need for financial assistance?

[The Prime Minister]

The hon. Gentleman makes an important point and I discussed this specific issue with Chancellor Merkel last night in Hanover. The IMF has the ability to move very quickly, should it judge it necessary, to support Ukraine’s economy and national finances. There is a team there at the moment which is looking at the sort of programme that could be put together, but even before a programme becomes deliverable, if it needs to step in and act faster, it can.

[Christopher Pincher (Tamworth) (Con)]

My right hon. Friend is absolutely right to say that Russia’s energy supplies give it tremendous muscle in eastern Europe and in other parts of Europe too. That has been reiterated many times this afternoon. Specifically, over the medium term will he encourage the development of the southern corridor gas and oil pipelines from the south Caucasus across Turkey and into southern Europe—pipelines promoted by BP, which will go a long way to helping to develop diversification of Europe’s energy landscape?

[The Prime Minister]

My hon. Friend makes a very important point. Diversifying Europe’s energy supplies requires looking at what action we can take to link Europe to some of the supplies in the Caucasus. I remember discussing this issue with President Aliyev when I met him recently, and I know the Foreign Secretary has had those discussions as well. This is part of a larger pattern of diversifying Europe’s energy supplies and making us more resilient in this sort of situation.

[Andrew Gwynne (Denton and Reddish) (Lab)]

Further to the question asked by my hon. Friend the Member for Edmonton (Mr Love), Gazprom has already warned Ukraine that it may cut off gas exports unless it pays back the $1.89 billion debt it owes. Surely now is the time for the timely transfer of financial support to allow Ukraine to pay off that debt to prevent a repeat of 2009, but what contingency plans are in place should that not happen?

[The Prime Minister]

Clearly, Ukraine needs to pay its bills, as well as paying its pensioners and funding its Government to ensure—[Interruption.] I know that the hon. Member for Bolsover (Mr Skinner) misses the old days of the Soviet Union, but perhaps he will stop speaking from a sedentary position for five minutes. It is important that Ukraine pays its bills, and an IMF programme and IMF action can help that to happen.

[Huw Irranca-Davies (Ogmore) (Lab)]

Sometimes it is the weight of small diplomatic acts, as well as the large, that make a breakthrough that can help. Back in 2008, the Prime Minister, then the Leader of the Opposition, made the bold pledge to withdraw his MPs, as well as, I hope, the people who sit in the other place, from the European Democrat Group in the Parliamentary Assembly of the Council of Europe, following the invasion of Georgia. Is it now right to think about membership of that group again, following the issues in Ukraine and Crimea?

[The Prime Minister]

It just shows that in politics, even if you give a straight answer to a straight question, you can still get the question again. I thought I said a minute ago that we have made sure that the Russians are out of the group that we sit in as part of the Council of Europe. We have taken that step, which is the right step. There may be steps for other political parties to think about taking now.