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The Chancellor of the Duchy of Lancaster (Lord Hill of Oareford) (Con)
My Lords, with the leave of the House I will now repeat a Statement made by my right honourable friend the Prime Minister in another place. The Statement is as follows.
“With permission, Mr Speaker, I would like to make a Statement on last week’s emergency European Council.
What has happened to the 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 a flagrant breach of international law and will incur consequences.
We agreed on a three-phased approach to stand up to this aggression and uphold international law: first, some immediate steps to respond to what Russia has done; second, urgent work on a set of measures that will follow if Russia refuses to enter dialogue with the Ukrainian Government; and third, that there should be 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 these 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. However, 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 that included other countries and organisations was one I first proposed to the Polish Prime Minister back in January.
The Council agreed that 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. So 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. Those 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 the 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. I have to say, in addition, that any campaign would be completely impractical as well as illegal. There is no proper register, no proper campaign, and the territory is covered in 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 that 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 the 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 that 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. However, 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 Ukrainian Prime Minister 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 agreed to bring forward the signing of the political part of the EU’s Association Agreement with the Ukraine, and 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 vital that Ukraine proceeds towards free and fair elections, which enable all Ukrainians, including Russian speakers and minorities, to choose their leaders freely. Britain is now providing substantial and immediate technical assistance to Ukraine to support elections and assist with reforms on public financial 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, and right for Britain”.
My Lords, I commend the Statement to the House.
Lord Hunt of Kings Heath (Lab)
My Lords, I thank the noble Lord the Leader of the House for repeating the Statement made by the Prime Minister in the other place. I join him in expressing deep concern about the situation in Ukraine. Since this matter was discussed last week, we have seen an illegal referendum announced in the Crimea, OSCE observers prevented from crossing into the region by Russian forces for four days running and, yesterday, violence on the streets against anti-Russia demonstrators.
We support the twin-track approach of encouraging dialogue and, at the same time, maximising pressure on the Russian Government. However, no one 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. Of course, 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 that it prides itself upon as an institution.
I would like to ask the noble Lord the Leader of the House about the Prime Minister’s talks with the German Chancellor. I welcome the proposal for a contact group involving President Putin and the Ukrainian Government. Does the noble Lord agree with me that Russian co-operation in the establishment of this group is an absolutely necessary, though not sufficient, signal of its willingness to resolve the crisis by diplomatic means? I welcome the things that were agreed at the EU summit. These 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 also made reference to the suspension of both visa talks and a new agreement on EU-Russia relations. These are welcome although they had already been announced on 3 March before the further developments had taken place that I referred to at the start of my remarks. Does the noble Lord therefore accept that the evidence from recent days suggests that these measures alone will be insufficient to get Russia to change course and that further action will therefore 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 in that the communiqué merely committed to “take forward preparatory work”. I welcome what the noble Lord said about asset freezes and travel bans. Will he confirm that there will be a timeframe of days, not weeks, for their implementation, particularly given that the United States is already committed to action on this?
On the EU-Russia summit, unless there is an immediate change of course by the Russian Government, surely at the very least it makes sense to suspend preparations, as has already been done for the G8 summit. Beyond this, we welcome the Prime Minister’s Statement that we need actively to look at other measures. I urge the Government in the days ahead to build support for further measures among our European and other allies to prepare for the eventuality that they may be required. Specifically, if Russia does not change course, will the noble Lord confirm that the Government will consider working with the G7 to suspend Russia from the G8, something that the Prime Minister specifically called for at the start of the crisis in Georgia?
Following the announcement that the UK Government are reviewing every outstanding arms export licence to Russia, will the noble Lord confirm the timescale for the conclusions on this issue? Will he say what scope he believes there is to get an EU-wide agreement on the issue of arms exports? Will he confirm not only that the Government are open to wider economic and trade sanctions but what the circumstances are in which he thinks they would be required? Will he specifically confirm whether he would regard it as an appropriate response to Russia using the referendum to tighten its grip on the Crimea? This would clearly represent a major step and should not be done without consideration of consequences, but does he accept that it may be necessary if we do not see the change of course that is needed from Russia?
Let me say in conclusion that we should continue to use all possible channels to facilitate dialogue, encourage the Ukrainian Government to be as broad-based as possible and recognise the constraints on the Prime Minister in seeking to reach EU-wide agreement. However, we urge the Government, particularly as we approach the referendum in Crimea, to apply maximum influence on our allies so that, in turn, maximum pressure can be applied on the Russian Government. Hesitancy or weakness on the part of the EU about its response will send the wrong message. The UK has a vital responsibility in making sure that that does not happen and that, instead, the EU and the US stand together in clear and united resolve. The Opposition will provide the Prime Minister with all the necessary support as he seeks to achieve this.
Lord Hill of Oareford
My Lords, I am grateful for the comments of support from the noble Lord, Lord Hunt of Kings Heath, and I agree with his concluding remarks about the responsibility that the British Government have—in particular the Prime Minister—in trying to pursue the twin-track approach in the way that the noble Lord described by working with both the United States and our partners in the European Union. I believe that the Prime Minister has been doing that assiduously in recent days.
I agree very much with the remarks that the noble Lord made at the beginning of his response about the importance of the contact group. It is, I suppose, our overriding aim at the moment to try to get that work taken forward and to apply pressure on the Russians to become involved in that process, because ultimately getting them and the Ukrainians to talk directly together is the most sensible way forward.
The noble Lord was concerned about whether the measures already announced were insufficient and he asked whether further action would be required if the Russians continue to behave in the way in which they have behaved in recent days. The honest answer to that is that the steps that Britain, the EU, the United States and others take will depend on the response that Russia gives. We are trying to be clear, consistent and predictable in setting out our position on that and on what would happen if Russia took further steps to destabilise Ukraine. That is what lies behind the idea of having a three-step, phased approach.
So far as travel bans and the freezing of assets are concerned, whether we move to that stage will depend on whether Russia agrees to the setting up of the contact group that we discussed. If Russia does not accept that, the Prime Minister has made it clear that travel bans and asset freezes would follow. He has also been clear that that should be able to happen within days rather than weeks, as the noble Lord asked me.
As to whether it would make sense to suspend preparations for the EU-Russia summit as well as for the G8, it is the Government’s view that it would make sense for those measures to be considered in tandem and that the summit should not go ahead under the current circumstances. In response to the noble Lord’s question, we would look at all our options. As to whether we should suspend Russia from the G8, if progress is not made in setting up the contact group a step that could be taken would be to bring forward the revival of the G7, which would send a very clear message to the Russians. However, it would be better if things did not come to that and if we could resolve the issue through diplomatic means.
So far as the arms licences and the timescale are concerned, the Government are keen to review that issue across the EU to create the greatest amount of common ground that we can. So far as Britain is concerned, as the Statement made clear, the Prime Minister has already given instructions that a review of arms licences between Britain and Russia should be carried out immediately.
I can confirm that broader economic and trade sanctions are being considered. If the referendum in Crimea is approved and endorsed by Russia, the Government’s position on it is extremely clear: we cannot accept the referendum as legitimate. We think that it would be essentially farcical. There is no electoral register, there is no ability for people living within Crimea to travel from one side of the region to another and it would be impossible to have a proper campaign in the time available. If, despite that, Russia were to respond to the referendum and claim that it was legitimate, then the kind of broader trade and economic sanctions to which the noble Lord referred would certainly be considered.
Baroness Falkner of Margravine (LD)
My Lords, I, too, join in thanking the Leader of the House for that rather cautious Statement, but perhaps caution is the order of the day at the moment. I would like to press him on two matters. One is the composition of the contact group. We heard last week of the formation of the group and, indeed, in today’s Statement we are told that the Prime Minister was considering this back in January. Would the contact group be an EU initiative comprising just EU countries or would it be a wider group of countries that are slightly more disinterested and possibly therefore have more leverage with Russia? The noble Lord will be aware that when I asked my Question about Ukraine on 27 February when the Russian action was just beginning, I asked whether the good offices of the United Nations Secretary-General would be employed. I urge the Leader of the House to take that message back. However, it may well be more significant to have a contact group that comprises the wider international community rather than just the EU countries that he has mentioned. Can he tell us his thinking in this regard?
My other point concerns the 21 February transition. It may well be worth considering now what measures from that transitional agreement might be applicable. Regarding the elections to be held on 25 May, it would seem legitimate to reflect that at this time, when intense diplomacy is required and when any miscalculation on the part of any country could result in an upping of the stakes, we should consider urging the Ukrainian Government to go for talks through a contact group or to have direct talks with Russia, rather than rushing to elections on 25 May, perhaps sticking to the agreement of 21 February to have elections a little later and, when those elections come, to offer protection for all minorities. I look forward to hearing my noble friend’s response.
Lord Hill of Oareford
I understand the points made by my noble friend about the composition of the contact group. When my right honourable friend the Prime Minister talked to President Putin yesterday, he made the point that the precise format and composition of those talks is slightly less important than getting them going. I am not able to give a precise answer as to who the participants might be because that would clearly be part of any negotiation and discussion that would need to take place. However, the points made by my noble friend will clearly be taken on board and listened to by the Foreign Office as we go forward, as will her other point about the transitional agreement and so on. At the moment, all these areas are in a state of flux, so I am clearly not able to answer with the kind of precision that my noble friend or others might request. However, at the moment our priority is certainly to seek to bring about a de-escalation. The best way of doing that, whatever its precise form, is to find a way of the Russians and Ukrainians talking directly to each other.
Lord Grocott (Lab)
My Lords, of course it is right that the Government should say that we cannot have constitutional change, and certainly not territorial change in the boundaries of any country, under duress or the threat of force. However, I would like some clarification on the Government’s position in respect of a referendum in Crimea. Again, the Government are quite right to say that the logistics of any referendum make it impossible or unrealistic for it to take place within a week or so. However, if it becomes the settled view of the people of Crimea or indeed any other country that the present constitutional arrangements are not to their liking, then surely it cannot be the Government’s permanent position that we will, as a matter of principle, say that we will reject that in all circumstances and at any cost.
Lord Hill of Oareford
Whatever form a referendum might take, it needs to be consistent with what is set out in the constitution of Ukraine itself. The simple point about the proposals for the referendum in Crimea is that it is utterly inconsistent with the Ukrainian constitution, which should control it—apart from some of the other practical points to which the noble Lord has already referred, including that when OSCE monitors and others have turned up to try to see the situation, they have been turned back at gunpoint.
Lord Howell of Guildford (Con)
Has my noble friend noted some of the commentaries, particularly in the United States, where people still seem to think that we are fighting the Cold War? Will he join others in seeking to explain that the approach by our right honourable friends and our fellow European Governments in looking at the economics of the situation are a much more subtle and effective way of bringing pressure to bear on Moscow and Russia? Does he recall that the Russian economy really floats and survives on a sea of revenue from gas and oil? It may be a supplier, but suppliers need customers. This is the language in which we should bring to bear our efforts to improve Russia’s behaviour and make it more sensible in dealing with a very complex and difficult issue in the Crimea and in Ukraine.
Lord Hill of Oareford
My noble friend makes, as one would expect, a number of extremely pertinent and wise remarks which underline the fact that the importance of financial and trade sanctions should not be underestimated. There are those who seem to suggest that this is some kind of empty threat, but as my noble friend has illustrated forcefully, it is not an empty threat at all. That is why those options are all being considered. At the European Council meeting the member countries made it clear that those options would be considered if we needed to turn to them.
Lord Lea of Crondall (Lab)
On the question of elections, is it not the case that if a country is divided very much on communal lines and identities itself in terms of nationalism, religion or, indeed, history and geography, as it does, elections which have been taking place under the present constitution—whether it is Tymoshenko or Yanukovych, whereby a result of 51% to 49% means winner takes all—do not work? I know enough about Ukraine to know that this has been coming for some time, because it does not work. Not only does it not solve problems, it exacerbates them. The United Kingdom has experience of something analogous, and I am talking about Northern Ireland. We all know that there are no easy answers but we found that instead of just having elections at 51% to 49%, along with Dublin—which is the equivalent of Moscow in this analogy—we brought people along, step by step, to power sharing. I do not know whether I can ascertain from the Leader of the House whether our experience here would be rather useful in discussions with our colleagues, and indeed with the people, in Ukraine. Can he say whether that experience has been brought to bear, and if not, would it be useful to do so?
Lord Hill of Oareford
The focus of the discussions last week was on prior questions about the need to set up a contact group, the legitimacy of the referendum, the steps that the EU would take and all the rest of it, rather than the minutiae—it is not minutiae, it is an important point—of how Ukraine would organise its own electoral system. I take the noble Lord’s point about some of our own experience, but I do not think that it is our task to try to prescribe how Ukraine carries out its own elections. The most important thing at the moment is that its constitution should be respected and its people should be able to make a decision themselves about the kind of future they want.
Lord Hylton (CB)
My Lords, I welcome the Statement, but will the Government give special thought and consideration to the position of the Crimean Tartars? After all, they suffered greatly under Stalin and have considerable reasons to be nervous now. For example, will the OSCE meet the Crimean Tartars and help them work out suitable future arrangements?
Lord Hill of Oareford
My Lords, all sides of the House—certainly the Government—absolutely understand the significance of the point that the noble Lord has made about the position of the Crimean Tartars and the particular difficulties they have. We are certainly following developments in Crimea closely, including any impact specifically on the Crimean Tartars. I understand that our embassy in Kiev spoke recently with Mustafa Jemilev, who is one of the leaders of the Tartars. That was expressly for the purpose of expressing the support of the British Government and establishing contact during these difficult times.
Lord Cormack (Con)
My Lords, has the Prime Minister and his colleagues in the European Union considered the possibility of seeking a meeting with President Putin to discuss the sort of issues that the noble Lord, Lord Grocott, touched on? A properly supervised referendum with international observers might offer a way forward. Bearing in mind that the future peace of our continent depends on stable relations with Russia, surely it is crucial that we do everything possible, as I am sure my right honourable friend the Prime Minister is doing, to defuse tensions and ensure that civilised dialogue can take place.
Lord Hill of Oareford
I agree with my noble friend that it is important to de-escalate the situation as much as we can and as rapidly as possible. It is certainly the case that my right honourable friend the Prime Minister has been in direct contact with President Putin to discuss these issues and to press the case for establishing a contact group—which is, indeed, the most effective way of de-escalating the situation. I accept and agree with my noble friend that it is important to do what we can to defuse the situation. In that regard, I am sure that the House would agree with the proposition that the Ukrainian Government and people have been remarkably restrained in their response to the situation and done everything that they can not to rise to the bait. In accepting the wish to de-escalate, I think that we need to make it clear—and the Prime Minister has been making this clear—that if Russia chooses not to go down that route, consequences will follow, and we will be prepared, along with the Americans and the EU, to take whatever steps are necessary to make it clear that we cannot tolerate this kind of behaviour.
Lord Boateng (Lab)
The last time that this House gave detailed consideration to events in the Crimea, some 23,000 British and imperial soldiers died. There is still no fitting memorial to those soldiers in the Crimea. Will Her Majesty’s Government, when the heat and dust of this matter has died down, give serious consideration to the funding of the Crimea war memorial appeal?
Lord Hill of Oareford
I have sympathy with that proposition and the contribution that British soldiers have made in all kinds of spheres through our imperial and colonial history. However, at the moment, the Government’s focus is on trying to resolve this crisis and on making sure that we do not need another memorial to many more people who have been slaughtered. I am sure that others will have heard the noble Lord’s remarks.
Lord Taylor of Goss Moor (LD)
Does my noble friend agree that President Putin has undoubtedly drawn the conclusion from Georgia that the effective establishment of the status quo there is a green light for attempting the same in the Ukraine, and in the Crimea in particular? While I welcome the Statement, is not the most important message to get across that today’s heat and anger will not turn into a shrug of the shoulders a few weeks or months down the line?
Lord Hill of Oareford
I agree with the force of what my noble friend has said. That is why it is proposed, not only by Britain but across the EU and by the United States, that there should be a phased response whereby appropriate steps can be ratcheted up depending on the circumstances and the reaction of the Russians. That should help militate against the danger my noble friend sees of us turning our back when the immediate dust settles, which we all hope it will.
Baroness Meacher (CB)
My Lords, I fear I may make some slightly controversial comments, although I do not wish to do so. Having worked within the Russian Government over several years in the 1990s—funded and supported by our own Foreign Office—I was conscious of the extraordinary humiliation of the Russian people as a result of the loss of so many territories at that time. Of course the situation in Crimea is extremely dangerous and incredibly undesirable. However, if we can look at the situation through Russian eyes, we should be conscious that they have the idea that Ukraine, their neighbour, their friend, their backyard, will become ever more allied to the European Union and that their naval base—well, where are we with that?
The only question I wish to raise with the Leader of the House is whether he feels that the Ukrainian Government have done enough to reach out and reassure the Russian people within Crimea—and, indeed, within their own territories—that they are citizens and part of the Ukraine. The impression I have is that their language law and the exclusion of all Russian speaking people from the Government was incredibly provocative and unhelpful. Can the Leader of the House assure us that behind the scenes a great deal of work is being done to encourage greater acceptance by the Ukrainian Government of their Russian people?
Lord Hill of Oareford
My Lords, I understand the sense of historical perspective and the points made by the noble Baroness about Russian history going back a very long time. Having said that, I do not think it excuses or detracts from the fundamental point that we cannot stand by if international agreements upheld by a range of countries are defied. I know that she was not saying that.
On her specific point, I agree that the more we are able, without deviating from the fundamental need to defend the rule of law, to demonstrate that the Ukrainians are sensitive to Russian concerns, the better. I take that point. The noble Baroness will therefore be encouraged by the action taken by the acting Ukrainian President to veto the introduction of the kind of language law to which she referred which played exactly into those prejudices. That is an encouraging step to have taken. As I said earlier, the Ukrainians have been quite remarkable in the restraint that they have shown in recent weeks and months in the face of often quite direct provocation.
Lord Davies of Stamford (Lab)
My Lords, I am quite concerned about a number of aspects of the Statement. First, I regret the distinction being made between the phase 2 and phase 3 sanctions. The implication seems to be that, if Russia limits itself to annexing the Crimea without attacking the rest of Ukraine, the cost will be limited to the phase 1 to the phase 2 sanctions, which are not very onerous. I fear that, given the psychological and strategic importance of the Crimea, Mr Putin might think that the acquisition was rather a good deal on that basis.
Secondly, I am dubious about the idea of announcing asset seizures on a contingent basis in advance. If we need to seize these assets, by the time we get around to doing so they may have been removed from our jurisdiction. Would it not be more sensible to seize the assets in the first place and then negotiate the basis on which that seizure could be lifted?
Thirdly, has the Minister given consideration to, as a major sanction, the possibility of freezing Russian banks out of the interbank market? I am not going to ask whether or not that will happen or whether it was agreed in the EU Council for the obvious reason I have just mentioned in another context, but I would be grateful for his assurance that this matter has been or will be carefully considered. It amounts to instructing European and North American banks, when swaps and deposits with Russian banks mature, not to renew them.
Lord Hill of Oareford
I can confirm to the noble Lord that the Government and their allies will consider a range of possible sanctions which may well include the kind of measures to which the noble Lord has referred. When that work goes on, I am sure that people will think about those kinds of issues.
On the issue of phasing, as the noble Lord will know, it is difficult to be too precise in every respect at this stage about what measures will be taken precisely and in what circumstances. It will depend on what steps the various players take. It is a situation in flux. The Government and their allies, overall, were attempting not to box people in too early but to give people routes out and to have phased and gradated responses. However, we want to be clear in the final calculation that if, despite our best endeavours, Russia persists in this course of action, there will be serious consequences.