Ukraine

Lord Hammond of Runnymede Excerpts

Tuesday 10th February 2015 Commons Chamber

[The Secretary of State for Foreign and Commonwealth Affairs (Mr Philip Hammond)]

With permission, Mr Speaker, I would like to make a statement on the situation in Ukraine.

The past month has seen an escalation of violence in the eastern regions of Ukraine. Fighting has been intense around the town of Debaltseve, a strategically important rail and road hub between the cities of Donetsk and Luhansk. The Ukrainians have suffered indiscriminate missile attacks on buses in Donetsk and Volnovakha and on the port city of Mariupol. What is happening on the ground now resembles, to all intents and purposes, a small-scale conventional war. Over 5,000 people have been killed since the crisis began last spring, and over 1.5 million people have been displaced from their homes.

In recent weeks, Russia has aggravated the effects of its initial incursion by stepping up the military support it provides to its proxies. It has transferred hundreds of heavy weapons, including rocket launchers, heavy artillery, tanks and armoured vehicles; and it maintains hundreds of regular soldiers, including special forces, in Ukraine, as well as command and control elements, air defence systems, unmanned aerial vehicles, and electronic warfare systems. The Russian army is also the source of ex-regulars who resign their army posts to fight in Donbass as “volunteers”. The recent escalation in fighting would not have been possible without the military support and strategic direction that Russia provides.

In these circumstances, it is vital that all the countries who have a stake in the rules-based international system remain clear and united against Russian aggression. In Normandy last summer, we agreed with the US and our European partners that the most effective channel of communication with the Kremlin would be through a small group. This is known as the Normandy Format, comprising Germany, France as the host of the Normandy meeting, Ukraine and Russia.

Chancellor Merkel and President Hollande met President Poroshenko in Kiev last Thursday, and President Putin in the Kremlin on Friday. On Saturday, in Munich, I held meetings with Secretary of State Kerry and German Foreign Minister Steinmeier to assess the prospects for a diplomatic resolution of the crisis. On Sunday, the German Chancellor and the French President held a conference call with Poroshenko and Putin, agreeing to meet in the Normandy format in Minsk tomorrow. Their aim is to reach agreement on an implementation plan for the Minsk ceasefire agreements that the Russians entered into last September, updated, as they need to be, to reflect subsequent changes on the ground.

The UK welcomes these efforts to achieve a peaceful resolution of the situation in eastern Ukraine, while remaining sceptical of Russian commitment to such a resolution. It is clear that Putin respects strength, so Britain’s focus has been, and will continue to be, on ensuring that the EU remains robust, resolved and united on the maintenance of economic sanctions, and closely aligned with the US.

The consensus within the European Union that Russia must pay a price for its disregard of the international rules-based system remains strong. Equally, there is a clear consensus that the EU does not, and will not, recognise Russia’s illegal annexation of Crimea. The emergency EU Foreign Affairs Council on 29 January agreed to roll over all the Crimea-related tier 2 sanctions against individuals and companies. That is another clear sign that the EU remains united in its response to Russian action in Ukraine.

The package of economic sanctions which the European Union and the US has imposed on Russia, coupled with the catastrophic impact on the Russian economy of the decline in the oil price, is a critical element of the pressure on President Putin to change his behaviour. Britain was and remains at the forefront of the successful effort to build and maintain an EU-wide consensus on a sanctions regime on Russia, to the evident surprise and dismay of the Kremlin. Yesterday in Brussels I represented the UK at the EU Foreign Affairs Council, which discussed Ukraine and reconfirmed its decision to apply additional sanctions, but, at the suggestion of the Ukrainian Foreign Minister and as a gesture of support for the political process, decided to delay their entry into force until next Monday. The informal European Council of Heads of State and Government will have further discussions about Ukraine on Thursday.

The crisis has inflicted substantial damage on Ukraine’s economy. The World Bank estimates that it shrank by 8.2% in 2014. Public debt has risen sharply, foreign exchange reserves have fallen and the currency has lost nearly half its value against the US dollar. Ukraine clearly needs support from international partners to stabilise the economy, in return for which it must pursue the reforms to which it has committed under the association agreement with the European Union and the International Monetary Fund programme. Britain is providing £10 million in technical assistance to support economic and governance reforms and the humanitarian effort. The EU will make a substantial contribution to the immediate estimated $15 billion financing needs of the country, the majority of which will be provided through an IMF-led package.

We shall also continue to work through NATO to offer technical support to the Ukrainian armed forces and reassurance to our eastern NATO allies. At the NATO Wales summit last September, NATO allies sent a strong message to Russia, agreeing to maintain NATO’s long-standing capacity building work in Ukraine by setting up five dedicated trust funds for Ukraine, one of which will be co-led by the UK.

The Wales summit also agreed a readiness action plan to reassure our eastern allies. As part of the package, NATO allies agreed to a new spearhead unit—the very high readiness joint taskforce—within the NATO response force, which, supported by the newly created forward integration units in the Baltic and eastern European states, will be able to deploy at very short notice wherever they are needed.

On 5 February, NATO Defence Ministers agreed the size and scope of that mission. My right hon. Friend the Defence Secretary has announced that the UK will lead the force in 2017 and on a rotational basis thereafter. The UK also made a commitment to contribute to headquarters in Poland and Romania and the six NATO forward integration unit headquarters in the Baltic states, Poland, Romania and Bulgaria. In addition, the UK will contribute four RAF Typhoons to operate alongside Norway in support of the Baltic air policing mission.

The UK also remains a strong supporter of the OSCE’s monitoring mission in eastern Ukraine. We have provided funding of more than £2 million, the second largest number of monitors and 10 armoured vehicles to allow monitors to move around dangerous areas in a more secure manner.

Our policy since the start of the crisis has been to supply non-lethal assistance to Ukrainian armed forces, in line with our assessment that there must be a political solution to this crisis. We have increased our defence engagement with Ukraine and are providing additional support on crisis management, anti-corruption, defence reform and strategic communications.

We have offered three members of the Ukrainian armed forces who were wounded in the Donbass life-changing specialist medical assistance in the form of reconstructive surgery at the Queen Elizabeth hospital in Birmingham. We are providing a substantial package of non-lethal equipment to Ukraine, comprising medical kits, winter clothing and equipment, body armour, helmets and fuel. The package is focused on reducing fatalities and casualties among members of the Ukrainian armed forces.

It is a national decision for each country in the NATO alliance to decide whether to supply lethal aid to Ukraine. The UK is not planning to do so, but we reserve the right to keep this position under review. Different members of the alliance take nuanced positions on this question, and are entitled to do so. However, we share a clear understanding that while there is no military solution to this conflict, we could not allow the Ukrainian armed forces to collapse.

By its illegal annexation of Crimea and its destabilising activities in eastern Ukraine, including its direct military support of the separatists, Russia has demonstrated its disregard for international law. It is clear that President Putin respects only strength, and by standing united, using our combined economic muscle to impose significant economic costs on Russia, the international community has shown its determination to rebuff Russia’s anachronistic behaviour.

The ball is now firmly in Russia’s court. Until we see Russia complying with the terms of the Minsk agreement on the ground—withdrawing troops, stopping the flow of weapons and closing the border—there must be no let-up in the pressure. Fine words in a declaration tomorrow will, of course, be welcome, but we have seen them before. The proof of the pudding will be in actions on the ground. We will monitor the situation carefully, and we will agree to a relaxation of the pressure only when we see clear evidence of changed Russian behaviour and systematic compliance with Russia’s obligations under the original Minsk agreement.

Meanwhile, there will be no let-up in our efforts—with the US, in the EU and through NATO—to ensure that Mr Putin hears a clear and consistent message: civilised nations do not behave in the way Russia under Putin has behaved towards Ukraine, and those of us who live by the rules-based international system will be steadfast in defending it against such aggression. I commend this statement to the House.

[Mr Douglas Alexander (Paisley and Renfrewshire South) (Lab)]

I thank the Foreign Secretary for his statement, and for advance sight of it.

Although the conflict in Ukraine is clearly a geopolitical crisis, it is also a conflict of profound civilian suffering. As the Foreign Secretary has just reminded us, in a neighbouring European state more than 5,000 lives have already been lost, 5 million civilians are living in conflict-affected areas, and nearly 1 million people are internally displaced as a result of the fighting. The House was united in welcoming the Minsk agreement negotiated last year, but even after it was reached, the fighting, although it briefly subsided, did not stop. The situation has yet again deteriorated, with more than 200 civilians killed in the last week of January alone.

President Putin appears to have miscalculated the west’s commitment to sustained economic diplomacy. So long as the Russian Government refuse to change course, we must continue with a robust and united international response. With the collapse of the oil price in recent months, the sanctions still hold out the prospect of altering the calculus of risk in President Putin’s mind regarding Russian actions in eastern Ukraine.

The Foreign Secretary made it clear that, at the request of the European Foreign Minister, a decision was taken yesterday to delay the implementation of a further set of EU restrictive measures. While credible negotiations are ongoing, all efforts must be focused on ensuring that they are successful. In the absence of an agreed deal this week, however, does the Foreign Secretary believe that new EU restrictive measures, as opposed to simply an extension of existing measures, should be on the table at the upcoming EU Council meeting? In particular, in the absence of meaningful progress tomorrow, will the Prime Minister call for new tier 2 or 3 sanctions when he meets European Union leaders?

In recent days, attention has turned to the question of sending lethal arms to the Ukrainian army. I welcome the Foreign Secretary’s reassurance that the UK will continue to work through NATO to offer technical support to the Ukrainian armed forces. This weekend, he said that

“the UK is not planning to supply lethal aid”.

He repeated that statement in the House today.

The Foreign Secretary has said:

“Ukrainians can’t beat the Russian army”,

and that the policy remains “under review” by the UK Government. Given those two statements, will he tell the House in what context he envisages that Britain could decide to export lethal arms to the Ukrainians?

I welcome the recent German and French initiative to help broker an agreement between President Putin and President Poroshenko. Talks in Moscow with Russia, Ukraine, France and Germany were held alongside US Secretary of State Kerry’s visit to Kiev, and followed up by Chancellor Merkel’s visit to Washington yesterday. Further talks are scheduled in Minsk for tomorrow. The ultimate test is whether these talks are successful in ending the conflict, and it is in that sprit that I ask the Foreign Secretary about the extent of British engagement.

Does the Foreign Secretary agree that given Britain’s unique assets and alliances, we could make a key contribution to help ensure that the diplomatic effort is successful? If so, why has the UK chosen to take such a back seat in trying to resolve the crisis? The Foreign Secretary does not need to take my word for that judgment. As General Sir Richard Shirreff—the top British commander in NATO until last year—warned last weekend, the Prime Minister is a “foreign policy irrelevance” and a “bit player” on the world stage. When questioned about the former general’s comments, the Foreign Secretary rather flippantly quipped:

“Having a sort of committee of ten traipsing in and out trying to talk to the Russians would simply not be effective”.

I agree with that judgment, but suggestions that Britain’s diplomatic role could only ever be part of a so-called “traipsing committee of 10”, tells us a great deal more about the Foreign Secretary than it does about the United Kingdom.

Does the Foreign Secretary agree that under past Governments of all complexions, Britain has played a leading role in diplomatic negotiations of this sort? In his statement the Foreign Secretary tried to defend the British absence from the latest talks by claiming that the Franco-German leadership role was established in Normandy last year. Nevertheless, whether last year, this year or this month, the decision to exclude Britain, or to be excluded, raises real questions and concerns on the Opposition Benches. Can the Foreign Secretary offer any more hope that Britain in the months ahead—unlike in past months—will be an active, engaged and influential part of efforts to resolve the crisis?

The starting point surely must be to remain on guard against Russia’s efforts to find and exploit weaknesses among its European neighbours. Some European states have, of course, been weakened by recession and are vulnerable to subversion, subsidy and corruption, but the challenge is surely to sustain western unity in advancing robust economic diplomacy, while continuing with a more engaged effort to find a resolution to the crisis. If that is the approach of the British Government in the months ahead, they will have our support.

[Mr Hammond]

Despite the slightly churlish remarks towards the end of his remarks, I welcome the right hon. Gentleman’s generally supportive approach to this issue, and he is right that Vladimir Putin evidently miscalculated the resolve of the international community to stand firm on this issue. That resolve did not appear without prompting, however, and required a lot of consensus building. Candidly, I will say also that the catalyst of the destruction of Malaysia Airways flight MH17 pulled some of, shall we say, the weaker brethren into line, and ensured a clear and robust alliance on this issue. In particular, the UK and the Netherlands can claim credit for having been key elements in stiffening resolve in that crucial European Council meeting last July.

The right hon. Gentleman asked a sensible question about new restrictive measures, and our priority will be to achieve an early roll-over of the tier 3 sanctions. The package of tier 3 sanctions is due to expire at the end of July, and the strongest possible signal that could be sent to the Kremlin would be an early decision to extend that sanctions period, perhaps to the end of 2015. The Kremlin’s knowledge that sanctions will continue, and—most importantly—that it will not have the leverage point of the EU, at 28 member states, having to re-agree a consensus to renew them, removes a lot of its incentives for mischief making, so that will be our priority. I expect that tomorrow, if matters have not progressed or there is bad news from Minsk, the European Council will task the European External Action Service to scope options for further sanctions.

A number of perfectly robust allies are now beginning to be slightly concerned about the scale of damage being inflicted on Russia’s economy. We want to hurt the Russians and we want them to pay a price for their aggression in Ukraine, but we do not want the Russian economy to collapse. There is now concern about the scale of damage being inflicted.

The right hon. Gentleman asked me to clarify the position on lethal aid. He is right to say that Ukraine cannot beat the Russian army—it does not have the scale of forces, and the Russian army has enormous reserves that it could potentially throw into the conflict. He asked about the circumstances in which we would supply lethal aid, but we have not defined those circumstances. All I have said is that we will not rule out the possibility of supplying lethal aid, and we want to reserve the right to review that position. In my statement I said clearly that we cannot afford to see the Ukrainian army collapse, so perhaps he will take from that a steer as to where our thinking lies.

The right hon. Gentleman asked about the UK contribution to the diplomatic effort, and there are two strands to that. There is a forward strand that includes discussions with the Ukrainians and the Russians. In my judgment—being perfectly objective about this and not waving a little flag for the sake of it—the German Chancellor is in the best position to conduct such discussions with the Kremlin. She has channels open with the Kremlin that we, the Americans, and others do not have.

The right hon. Gentleman asked about opening out the Normandy process, but if we were to open out that grouping—it is currently four: Russia, Ukraine, Germany and France—we would not be able just to insert the UK but would have to widen that group quite significantly. The United States, naturally, would say, “Well, if the UK is going to join, we must have a seat,” and other European Union partners would also expect to be present, most obviously Poland and Italy. We would therefore have a significantly wider group, and our judgment is that for this phase of the process, maintaining that Normandy format is the best way forward.

The second strand of diplomatic activity is behind-the-scenes activity to hold together the European Union consensus and ensure that the EU is aligned with the US, Australia, Japan and other partners. That is a significant diplomatic-legwork task—unglamorous but vital—and I assure the right hon. Gentleman that the UK has played a leading role in designing the sanctions packages, identifying the individuals, companies and sectors to be targeted by sanctions, and building and maintaining consensus in Brussels and around the capitals of Europe. General Sir Richard Shirreff says that the Prime Minister is a “diplomatic irrelevance”, but I suggest that perhaps he should consider carefully the meaning of the word “irrelevance” and where it might best be applied.

The right hon. Gentleman talked about Russian coercion and the energy exposure of the European Union to Russian pressure, all of which we are acutely aware of. There is also Russian corruption and the influence of Russian money in the politics of some Balkan countries—even now, one party in the recent Bulgarian general election launched its manifesto in the Kremlin, which may provide a clue, and we are acutely aware of all those things. Europe must make itself more resilient against Russian influence, and that is an important part of the agenda going forward.

[Sir Malcolm Rifkind (Kensington) (Con)]

The Foreign Secretary and I were both at the Munich security conference when Chancellor Merkel explained her position and her opposition to helping with military assistance to the Ukrainians on the grounds that, even with that assistance, Ukraine would not be able to defeat the Russians. The Foreign Secretary has repeated that observation today, but may I respectfully suggest that that is missing the point? The question at issue is not whether the Ukrainians could defeat the Russians—of course they could not. At the moment, however, as the Foreign Secretary has pointed out, the Russians are flooding in a whole supply of military equipment—heavy weapons, rocket launchers, heavy artillery, tanks and armoured vehicles—to their supporters in Donetsk and Luhansk. If the Ukrainians are deprived of the military means to defend their territory, that matter will be resolved in the next few weeks. It will be no use coming to the aid of the Ukrainian army when it has already been defeated and when the territory controlled by the Russians has greatly expanded. At this stage, the objective must surely be to impress upon President Putin that Ukraine will be able to defend itself, and therefore that, if the Russians try to resolve the matter by military means, it will take not days or weeks, but months. Against that background, would there not be a much greater likelihood that President Putin would also see the inevitable need for a political and not a military solution?

[Mr Hammond]

I am afraid that my right hon. and learned Friend and I will probably have to agree to disagree on that. The position is this: if Russia was intending to make a full-scale military push into Ukraine, it has the forces available to do it. Approximately 10,000 Russian forces are along the border with eastern Ukraine, and it has sophisticated weaponry in large quantities and air forces that could be mobilised. The Russians are already able to do that.

We judge that the intervention the Kremlin is making is carefully calculated to improve the position of the separatists on the ground and to apply pressure to the Ukrainian regime, but there has not so far been a wholesale land grab—it has been the consolidating of separatists’ positions. We judge that the Ukrainian army at the moment is able to hold the line and that, broadly speaking, it is doing so.

I have said that we will reserve the right to keep under review the question of supplying lethal aid. As my right hon. and learned Friend very well knows, many in the United States are debating openly whether a large package of military equipment assistance should be provided to Ukraine. That would clearly change the parameters of the debate. We are watching that debate very closely.

[Mr Jack Straw (Blackburn) (Lab)]

The right hon. Gentleman said in his statement that it was a national decision for each country in the NATO alliance whether to supply lethal aid to Ukraine. He is absolutely right—that is a matter of fact—but does he accept that this cannot be left to unilateral decisions by individual countries? The Russians, for certain, would regard any provision of lethal aid—I certainly do not rule that out in certain circumstances—as a consequence of collective decision making within NATO and seek to respond in a similar way.

While accepting the reality the Foreign Secretary describes—it is a national decision—what efforts is he making to ensure that there is some co-ordination, not least so that we do not end up with a situation in which, within the NATO alliance, two policies are being pursued, which the Russians would skilfully exploit?

[Mr Hammond]

I am afraid that the reality is that, if the United States decides to supply lethal aid, there will be two policies within the NATO alliance, because the German Chancellor could not have been clearer about her position, which she set out on Saturday, as my right hon. and learned Friend the Member for Kensington (Sir Malcolm Rifkind) said. This is a matter for individual national Government decision, and individual countries will make their own decisions. As far as I am aware, no countries within the NATO alliance apart from the United States are actively contemplating the supply of lethal assistance to the Ukrainians.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

Will my right hon. Friend stick to his opinion that, however well trained and equipped the Ukrainian army is, it is inconceivable that it could resist the Russian army, or even slow it down significantly, so long as President Putin determined that he was going to put in the necessary resources? Does my right hon. Friend therefore agree that the British contribution must be to remain resolute and comparatively hawkish on stepping up economic sanctions if Putin maintains his present stance of military aggression, because the President of Russia cannot protect himself against economic sanctions, and it is the only reasonable response we can make?

[Mr Hammond]

I agree with my right hon. and learned Friend. That is indeed the role we have defined for ourselves, being the most forward-leaning partner within the European Union, urging, cajoling and persuading the others about the need to remain robust. When I say that we are the most forward-leaning country, I mean that we are the most forward-leaning large country—some of our small Baltic partners are very much forward leaning on this issue.

The underlying truth is this: hon. Members know, and the history of the Soviet Union reminds us, that, in the end, we cannot ignore the economics. Russia spends something like 20% of its GDP on defence and security. That is unsustainable in the long term. A small and shrinking economy—it is much smaller than the UK economy—attached to a very large military force is ultimately an unsustainable and unstable situation.

[Mr Peter Hain (Neath) (Lab)]

I agree with much of what the Foreign Secretary says, including that President Putin is a calculating, ruthless and lethal authoritarian. Does not the whole crisis spring from the failure after the cold war ended to establish a common European security system to which Russia felt attached? Instead, there has been a kind of cold peace. Surely the way forward is a negotiated solution, or an attempt at one, in which there are limits to NATO expansion and European Union expansion in return for an end to Russian aggression.

[Mr Hammond]

The situation is that, after the cold war, when 19 ex-Soviet republics, or whatever it was, liberated themselves from the Soviet Union and became independent countries able to set their own path in the world, we sought to build a normal relationship with Russia—one in which Russia would join the community of nations and become richer and more normalised, and one in which the Russian people were able to become more prosperous. President Putin has chosen to set his face against that future and to hark backwards to the Soviet Union or perhaps to the Russian empire. We should remember that he is on public record as saying that the collapse of the Soviet Union was the worst disaster of the 20th century. Many of us would think it was one of the great achievements of the 20th century.

I do not think we can compromise with somebody whose avowed intention is to exercise control over independent neighbouring countries in such a way that they cannot determine their own future, whether that is a future aligned with the European Union and NATO or a future aligned with Russia and other allies. That must be for those people in those independent countries to choose for themselves.

[Martin Horwood (Cheltenham) (LD)]

I strongly welcome the clarity of the Foreign Secretary’s statement and his commitment to a united European response to the invasion. Does he agree that it is vital to pursue the diplomatic path, but equally important to ensure that diplomacy does not simply provide the space and time for the great chess player Putin to weaken Ukraine, regroup and attack again at a later date?

[Mr Hammond]

That is the great risk—that the Russian objective is simply to achieve a frozen conflict, and a situation in which, de facto, Russia exercises very extensive leverage over Ukraine, and Ukraine operates not as a truly independent sovereign nation, but as a semi-independent nation. We have seen Russian attempts elsewhere to manage frozen conflicts.

I sometimes think that one of the diseases we suffer from in the west is tidy-mindedness. We tend to think of conflicts such as this one as things that have to be solved and that have to have an end. I suspect that the mindset in the Kremlin is that the Russians can have any number of those conflicts, and that they can remain open, simmering for ever. That would suit them quite nicely.

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

It sounds to me as if President Putin is getting exactly what he wants. The right hon. and learned Member for Kensington (Sir Malcolm Rifkind) was absolutely right. I was at Munich, too. Not only was it obvious that the UK’s views were utterly irrelevant—nobody in the room asked what the United Kingdom thought—but it was clear that Chancellor Merkel was not going to arm the Ukrainians. More remarkably, she did not mention the possibility of further sanctions. The Secretary of State said that we should not weaken Russia any further. It seems to me that we are not supplying arms and not applying any more serious sanctions, with the explanation that that would destabilise Russia even further. If so, Putin will have got what he wanted.

[Mr Hammond]

No. If the existing sanctions are rolled over for a further period, the pressure on Russia will be maintained. It is not the case that we have imposed a bunch of sanctions that are not having any effect, and now we should be asking whether we should impose more. We have imposed a bunch of sanctions. Alongside the declining oil price the absence of access to the capital markets is having a crippling impact on Russia.

While the hon. Lady was listening to Mrs Merkel in the room at Munich, I was talking to the Iranian Foreign Minister, so I did not listen to the speech, but I spoke to the German Foreign Minister afterwards. We are actively discussing the maintenance and extension of the sanctions regime with the Germans. Of course, they want to explore the opportunity that tomorrow’s meeting, if it goes ahead, might offer, but the Germans, and the German Chancery in particular, are robust. They have been admirably robust on the case for maintaining sanctions.

[Sir Gerald Howarth (Aldershot) (Con)]

This is a very serious and growing crisis. As my right hon. Friend knows, I have consistently warned that Russia plans to complete its illegal annexation of Crimea by forming a land link. Are Her Majesty’s Government content for that to happen? If not, at what point do we exercise that demonstration of strength, which the Foreign Secretary mentioned Mr Putin respects, to show we are no longer prepared to see him completely redraw the boundaries of Europe?

[Mr Hammond]

Sometimes we underestimate the influence that we have collectively. If Russia wanted to force a land link to the Crimea, it easily has the military capability in the area to do so and would have done so some time ago. However, it understands clearly that there would be a significantly higher price to pay. In circumstances where it is already suffering very significant impacts from the international response to its behaviour, it has shown no inclination to use the military capability it has in the area to achieve that objective.

[Angus Robertson (Moray) (SNP)]

We wish Chancellor Merkel and President Hollande well in their search for peace. I personally wish my constituents from RAF Lossiemouth well. They have been deployed to the Baltic as part of the air policing mission. In the past few years, the Russians have been restructuring their armed forces around professional personnel and units that are deployable, based entirely around deployable personnel. What analysis has been done by the UK Government on the reports that have emerged in recent days that the Russians are extending the period in which their conscripts are being made to serve, and what impact that may have on the situation in Ukraine?

[Mr Hammond]

I am not aware of any specific analysis relating to the Russian decision on the conscription period. I suspect that that may reflect a demographic challenge that the Russian Federation faces. It has a dramatically ageing population and it is clear that maintaining force numbers when there are declining cohorts of young men will be a challenge. However, the hon. Gentleman is absolutely right. The Russian military has been modernising and professionalising itself. There are now two parts to the Russian armed forces: a mass conscript body and an elite professional force. In our military planning, we need to be conscious of that evolution.

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

NATO was formed originally so that no aggressor could try to pick off one country after another without knowing that he would immediately be at war with the major powers. Is it not vital that we maintain the distinction between NATO countries and non-NATO countries? Is not the best way to reinforce the impression of the strength of NATO to give an open-ended commitment in future, as we have in the past, that we will spend 2% of GDP—the NATO recommended minimum on defence?

[Mr Hammond]

As my hon. Friend knows, at the Wales summit all NATO partners signed up either to maintaining that level, for those who are already spending 2% of GDP on defence, or to making progress towards achieving that level. My hon. Friend is absolutely right that the cornerstone of our security in the UK is the article 5 guarantee. Our allies and partners in the Baltic states are acutely conscious that their position is different from that of Ukraine, simply because they are inside NATO and benefit from the article 5 guarantee. He is absolutely right that we need to maintain the clear distinction between the guarantee that we extend to NATO, which is absolute, and the opprobrium we heap on those who launch the kind of attacks we have seen on non-NATO members, but we will deal with attacks on non-NATO members in a different way from attacks on NATO members.

[Mike Gapes (Ilford South) (Lab/Co-op)]

The commitments to give support to the front-line states in the Baltic and Romania, Poland and Bulgaria, and very firmly to enforce and maintain article 5 are absolutely vital at this time. Can it be made absolutely clear to the British public that we are in a very, very potentially dangerous situation given the pattern of Russia’s behaviour—Georgia, the frozen conflict in Transnistria and behaviour towards Armenia in trying to get it away from the European Union—and that we face a fundamental problem here unless there is a change of behaviour by Putin?

[Mr Hammond]

I agree with the hon. Gentleman. I am almost sick of hearing myself say it, but this is not just a Ukraine problem. This is a Russia problem. Even if the problem in Ukraine solved itself tomorrow, we would still have a Russia problem. Other former Soviet Union republics are looking nervously at the scope for Russian intervention or interference in their affairs. The disappointment is that public opinion, neither in the UK nor in other EU countries, appears to have understood the significance of this threat. I was personally hoping that the events in the Crimea and the threat to gas supplies might have galvanised German public opinion into feeling willing to support a more forward-leaning German response on strategic and defence matters, but the opinion polling suggests that attitudes have hardly moved at all since the incursion in Ukraine. Hopefully, we can have a cross-party consensus to alert public opinion to the significance of this challenge to the established international order.

[Mr John Whittingdale (Maldon) (Con)]

Does my right hon. Friend agree that, while the immediate priority must be to try to stop the bloodshed in eastern Ukraine, if Ukraine is to have a future and avoid complete financial collapse it will require an international bail-out on a scale that is not yet under discussion, as well as very urgent political and economic reform to deal with the endemic corruption at every level throughout the country?

[Mr Hammond]

I am grateful to my hon. Friend and I thank him for the important work his all-party group on Ukraine does to maintain Anglo-Ukrainian relations. He is right that Ukraine is going to need massive international support, but it cannot be delivered unconditionally. We cannot pour the money of our taxpayers and our international financial institutions into the sink of corruption that is, frankly, the Ukrainian economy at the moment. Ukraine has to make progress on sorting out the endemic corruption if we are to be able to support it towards a better economic future.

[Jeremy Corbyn (Islington North) (Lab)]

I thank the Foreign Secretary for his statement. I wish the summit well and hope some good comes out of it. May I take him back to the answer he gave to my right hon. Friend the Member for Neath (Mr Hain)? There is an issue that goes back to the early 1990s, when there was an agreement that Ukraine would become independent and non-aligned—it would not join NATO. In return, Russia would respect its neutrality and divest itself of nuclear weapons. That was a very good statement and very good progress. Does he not think that there would be a better chance of reaching some kind of agreement with Russia if there was a clearer statement that NATO does not intend to expand into Ukraine, and that in return Russia should withdraw from its border regions, so that we do not build up to two huge armed forces meeting in central Europe yet again?

[Mr Hammond]

On that last point—two huge armed forces meeting in central Europe—the hon. Gentleman will know that NATO has refrained from stationing non-national NATO troops in the front-line new NATO member states precisely to avoid that build-up. It is part of the Russia-NATO agreement to avoid that build-up of forces in a confrontational way. I am personally rather reluctant to dictate to independent third countries what they can and cannot do. I think Ukraine is perfectly entitled to aspire to membership of the EU or NATO if it chooses to do so. However, it is very, very clear that membership of either organisation would be many, many years away. Ukraine would have a huge amount of work to do before it was ready for membership of either organisation.

[Duncan Hames (Chippenham) (LD)]

I welcome the Foreign Secretary’s clear articulation of the economic limits to Russia’s stance, but what is his assessment of the economic impact on Ukraine’s ability to sustain its position and the period of conflict with Putin’s proxies?

--- Later in debate ---

[Mr Hammond]

The Ukrainian Government are facing significant financial constraints. As the hon. Gentleman will know, they entered a Government-to-Government agreement on the supply of gas from Russia that required them to prepay and clear some old gas debts. That is why we are focused, alongside the strategic channel, on facilitating the $15 billion facility from the IMF, to which the EU will contribute $2.3 billion. That will give the Ukrainians some breathing space. They have to get their economy in order, deal with the corruption issues and make essential reforms, and if they do so, $15 billion will not be the last of it; it will be the first instalment of an ongoing support programme for the country.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Does the Foreign Secretary agree that the guarantee of peace in Europe and the world has been largely based on a strong EU and NATO and the strong defence capacity of this country? Does he believe that the reason some people say we are peripheral to the main foreign policy discussions in Ukraine at the moment has been the weakness of our support for the EU and NATO and the fact that we have had to be begged by President Obama not to run down our military forces any further?

[Mr Hammond]

I shall take that question in two parts. I agree with the first part. It is important that we have a strong EU response. We have already demonstrated, in relation to Iran, that the economic weapon can be a hugely important strategic tool. The EU and the US together represent about 46% of the world’s GDP, so if they align to impose economic sanctions on a third party, they will have an impact. We have shown that that is an important strategic weapon. NATO, of course, remains the cornerstone of our hard defence, and we must maintain the strength of that organisation, including by maintaining European NATO members’ level of defence spending in order to make a fair contribution and balance that of the US.

It is simply not true, however, that we are peripheral in this debate. It is true that we are not leading the discussions with Mr Putin. Mrs Merkel talks to him in Russian, and he talks to her in German; they have common languages and communicate with each other. We should use the best channel available, and that communication channel is the best available for that part of the task. We, on the other hand, are focusing on maintaining the backbone of the EU. Any of my EU colleagues who have been present in the Foreign Affairs Council meetings will confirm that we have been boringly insistent on the need to maintain these sanctions, however long the discussions take. We cannot afford casually to reduce our stance, because the Russians will take any sign of weakness or division, and open it out in a way that will be fatal to our position.

[Sir Edward Leigh (Gainsborough) (Con)]

With respect to my right hon. and learned Friend the Member for Kensington (Sir Malcolm Rifkind), there is no point making war-like noises unless we are prepared to engage in war and see our sons and daughters die. The reason European public opinion is so relaxed is that we do not have a great stake in this matter. We talk about, “Putin this, Putin that”, but it is not just him; the overwhelming majority of Russians believe, for better or worse, that eastern Ukraine is inhabited by Russians who want to be autonomous and for centuries have been associated with Russia. If we go down the route advocated by my right hon. and learned Friend, we will have war without end. Russia could be in Kiev within four days. Surely we should support the present Foreign Secretary and the German Chancellor in trying to find a peaceful solution based on an autonomous eastern Ukraine.

[Mr Hammond]

My hon. Friend could hardly expect me to disagree with that last sentiment. His point about Russian public opinion is, of course, true. Sadly, nationalism is easy to whip up, and at the moment Mr Putin is riding on a tide of nationalist sentiment, but as we move through 2015 and the consequences of his actions begin to bite on Russian consumers—let us remember that the entire burden of the economic sanctions and the decline in the oil price is effectively being transferred to Russian consumers in the depreciation of the rouble—they will find life getting very difficult, and I suggest that such a level of public support might not last.

[Mr Frank Roy (Motherwell and Wishaw) (Lab)]

There are many thousands of Ukrainians and people of Ukrainian descent living in all parts of the UK, and obviously they are becoming ever more worried for the safety of their family and friends. Will the Foreign Secretary ensure that the UK-based Ukrainian organisations can make representations to the Foreign Office and will be kept informed as the situation unfolds?

[Mr Hammond]

Yes, I assure the hon. Gentleman that they do make representations to the Foreign Office, and of course we take them into account. I should be clear, however, that we have excellent communications with the Ukrainian authorities. I met the President and the Foreign Minister of Ukraine the week before last at the Auschwitz commemorations. We have regular dialogue with them, and they are hugely active in their engagement with the EU and hugely appreciative of how we collectively have responded to their plight.

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

Will my right hon. Friend describe what he thinks a successful outcome to the French and German-led talks with Russia would look like? Would it involve the de facto partition of Ukraine, and how would that be anything else than a permanent reward for Russian aggression?

[Mr Hammond]

No, a good outcome would not look like that. It would look like an agreement to a ceasefire and a withdrawal from the current lines of contact, along the lines already suggested, and not just an agreement to its happening tomorrow, but evidence by the end of the week that Russian forces were pulling back; it would look like an agreement on the effective policing of the Russian-Ukrainian border so that once Russian equipment had moved back across the border into Russia, there was an effective, transparent regime for monitoring further equipment crossing the border; and it would look like an explicit withdrawal of Russian support for and endorsement of the separatist forces.

[Mr Christopher Chope (Christchurch) (Con)]

If it does not look like that, what will happen? It is clear already that Russia denies it even has troops in eastern Ukraine, and the Speaker of the Duma denied at the recent meeting of the Parliamentary Assembly of the Council of Europe that Russia was even a party to the Minsk agreement and protocol, saying it was a mere bystander. What will happen? Russia could be playing for time, and in the meantime the frozen conflict is increasing. What will my right hon. Friend do to ensure that something happens? For starters, how about expelling Russia from the Council of Europe for being in breach of its statutes?

[Mr Hammond]

We do not know the Russian game plan—one difficulty is the absence of a debate about this in Russia; it is one man making all the decisions. We do not know whether Mr Putin has agreed to this process over the last few days because he has seen the light, understood the pressure on him and genuinely wants to find a solution, or because there is an EU Council meeting on Thursday. Traditionally, his tactic has been to ramp up the rhetoric of peace ahead of Council meetings, and then to drop it like a stone afterwards. In response to my hon. Friend’s specific question, however, the single most effective measure we could take to signal our continued displeasure at the failure of this initiative would be to extend the tier 3 sanctions to the end of 2015. That would send a clear message to the Russians.

[Sir Oliver Heald (North East Hertfordshire) (Con)]

Does my right hon. Friend agree that there is an opportunity for peace at present, and that by suspending further sanctions, having Chancellor Merkel, who understands Russian interests, negotiating, and not at this stage reinforcing the Ukrainians, rather than proceeding with further economic pressure, particular given Russia’s circumstances at the moment, there is the chance of an honourable peace that the Russians would be wise to accept?

[Mr Hammond]

My hon. and learned Friend is right. The key term is that there is a chance for “an honourable peace”. We understand that face will be important to Mr Putin. The German Chancellor grew up in East Germany under Russian control, so she understands the Russian mentality and how to engage with the Russians to try to reach a constructive solution. I am optimistic that we may see something coming from these discussions, but I will not believe it until I see it being delivered on the ground.

[David Tredinnick (Bosworth) (Con)]

Is my right hon. Friend aware that President Putin’s grievances with the west can be traced back to the comments of the US Secretary of State James Baker at the time of the negotiations over the reunification of Germany, when he categorically said that there would be

“no extension of NATO’s jurisdiction or NATO’s forces one inch to the East”.

Having gone to Moscow and met President Yeltsin with John Major, at his request when he was Prime Minister, and having personally talked to President Gorbachev in Moscow, I tell my right hon. Friend that I think we completely underestimate Russia’s security concerns and insecurity. The very minimum we are going to need for a negotiated settlement is a land corridor to Crimea, which most Russians believe to be part of Russia—whatever administrative changes President Khrushchev introduced.

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[Mr Hammond]

I do not underestimate Russian paranoia, as Russia’s fears of encirclement are an historical phenomenon. Living as we do in a free, democratic NATO member state, we all know that NATO represents no offensive threat to anyone. That is not the way NATO works. It would be inconceivable that public opinion in the NATO countries could be persuaded to support any kind of offensive action against a peaceful neighbour. So Russia has nothing to fear from NATO. As for a land corridor, I have to say to my hon. Friend that I do not think it is our business to sit here discussing whether bits of the Ukraine’s sovereign territory should be given away to a foreign power. If the Ukrainians want to negotiate territory with the Russians, it is of course their prerogative to do so, but it is certainly not for us to do.

[Mr Jonathan Djanogly (Huntingdon) (Con)]

I personally would support further immediate economic sanctions led by the EU, but, whatever happens there, for how much longer can we in this country allow Russian nationals to have the benefit of secure and fine living here and to enjoy our banking facilities, for example, while their country wages war and terrorises people on our own continent?

[Mr Hammond]

Many Russians living in this country are not exactly friends of the current regime. Indeed, some of them live in pretty much permanent fear of the long arm of the current regime, so I do not think we should tar all Russians with the same brush. We need to be clear that while we have a fundamental disagreement with Mr Putin’s Government, we do not have a fundamental disagreement with the people of Russia. In the medium to long term, we must want to see Russia joining the international community of nations, becoming a normalised economy and the Russian population getting richer, more integrated and freer as the populations of the eastern European countries that lived under the Soviet yoke for so long have now done.

[Richard Drax (South Dorset) (Con)]

I agree with my right hon. Friend that a full-scale invasion could be mounted by Russia if she wanted to—she has the resources and there is nothing we could do about it. Her policy is “softly, softly catchee monkey”—not full-scale invasion, which would of course alert NATO, whose reaction to that would be far more aggressive than it has been to date. I agree, too, that jaw-jaw is better than war-war. However, there surely comes a time when the jaw-jaw no longer works, and we have to ensure that NATO’s counter-measures are up to the standard to meet such a threat. Let me reiterate a point made by my hon. Friend the Member for New Forest East (Dr Lewis) that we in this country and the rest of NATO must meet this minimum 2% commitment to NATO. I hope my right hon. Friend can tell us today that this will be in our manifesto for the general election.

[Mr Hammond]

It is not my role to write the election manifesto for the Conservative party, and still less to announce the details of it from this Dispatch Box today. I have a certain degree of sympathy for what my hon. Friend says, as he will be well aware. It is essential to maintain our defences against Russia’s asymmetric aggression, but it is also important to understand that economic sanctions are now a weapon in our toolbox alongside military forces. We have used them against Iran, and we are using them in respect of Ukraine. They are part of the new pattern of asymmetric warfare. We should hone and nurture these sanctions so that we can use them effectively in the future.

[Henry Smith (Crawley) (Con)]

I welcome my right hon. Friend’s statement. What discussions have taken place with Latvia, which currently has the presidency of the EU and indeed is a Baltic neighbour of Russia and former Soviet republic?

[Mr Hammond]

We have excellent relationships with our Latvian counterparts. I recently visited Latvia because it holds the current presidency. Various UK Ministers will be in Riga over the course of the next weeks and months. I had a discussion in Brussels yesterday with the Latvian Foreign Minister. As one of the Baltic states, Latvia is quite forward leaning on these issues, but in its role as EU president it takes a more measured position, stewarding the EU. We have good relations; we well understand the Latvian position; we greatly appreciate the insight that its knowledge of its Russian neighbour allows us.

[David Morris (Morecambe and Lunesdale) (Con)]

It seems to me that the current sanctions are having a limited effect in halting the incursions into Ukraine. What will happen if these current sanctions fail? Further sanctions are implied, so what would those sanctions look like?

[Mr Hammond]

We have two levels of sanctions in place at the moment. We have sanctions targeted on individuals and companies—named individuals and companies—that include asset freezes, travel bans and so forth. Then we have the tier 3 sanctions, which are sectoral. These impose prohibitions on the export of goods and on trade with certain sectors of the Russian economy. In particular, there is an exclusion of Russian institutions, public and private, from the capital markets of the free world. We could clearly extend both lists if we chose to do so. We have to make a judgment about the balance of economic harm. There are costs to us as well as costs to Russia, so we need to target our sanctions carefully to make sure that the balance of harm is to the disadvantage of the Russians.