European Council and Nuclear Security Summit

Lord Hill of Oareford Excerpts

Wednesday 26th March 2014 Lords Chamber

[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 should like to make a Statement on last week’s European Council and this week’s summit in The Hague, which included the first meeting of G7 leaders—without Russia—in almost two decades.

Before I turn to Ukraine, let me briefly update the House on discussions on the economy, on energy and climate change, on the situation in Sri Lanka and on efforts to combat nuclear terrorism.

Our long-term economic plan is supporting the growth of a new trend, reshoring, in which jobs are starting to come back to the UK. A recent report from the EEF, the manufacturers’ organisation, found that one in six firms had brought all or part of their production to UK suppliers over the past three years. That reshoring of jobs is vital because it means that more of the benefits of globalisation can be felt by the British people, so, with the support of the CBI and Business Europe, I argued at the European Council that we could do more to develop reshoring in Britain and across Europe. The Council agreed to encourage that by doing more to cut red tape, attract investment, stimulate innovation and pioneer more work on reducing energy costs, including shale gas.

Secondly, businesses need affordable energy prices to keep pace with their competitors, so we agreed to accelerate efforts to complete the internal energy market and we agreed to improve the energy flow across the continent with more interconnections. On climate change, we want the EU to play a strong leadership role in efforts to secure a global climate deal next year in Paris. That means swift agreement on a target for reducing greenhouse gas emissions in the European Union, and I fully support the 40% target proposed. At the European Council meeting we did not reach full agreement in the EU and further attempts will be made on that later in the year.

Thirdly, on reconciliation in Sri Lanka, President Rajapaksa has failed to address the issue of the past properly, so in the coming hours the United Nations will vote on a UK-sponsored resolution for an international and independent investigation into alleged war crimes. At the Council, I secured the full backing of all EU member states for this approach and it is reflected in the conclusions of the Council. At The Hague I urged leaders from countries as diverse as South Korea, Kazakhstan, Gabon and Japan to support this crucial resolution.

On combating nuclear terrorism, which was the subject of The Hague summit, the meeting reaffirmed our determination to push through reforms of global security systems to ensure that vulnerable nuclear material does not fall into the wrong hands. This initiative, launched by President Obama back in 2010, has led to a remarkable amount of nuclear material being secured and reduced across the world, which should be commended.

On Russia’s actions in Ukraine, I had four clear objectives at these meetings: to secure an increase in the number of people subject to travel bans and asset freezes; to agree specific measures in response to what has happened in Crimea; to develop more clarity on what would happen if Russia were to take further steps to destabilise the situation in Ukraine; and to join efforts to build support for a democratic, successful and independent Ukraine. I want to say a word about each.

As I made clear in this House two weeks ago, if Russia did not engage in dialogue with the Ukrainian Government, or if those talks did not start producing results, there must be clear consequences. As a result, travel bans and asset freezes have been imposed, and last week the European Council agreed to extend these measures to another 12 individuals, bringing the total to 33—broadly the same number as has been imposed in the United States. We have cancelled the EU-Russia summit, agreed not to hold bilateral summits, and decided to block Russian membership of the OECD and the International Energy Agency. In The Hague, G7 leaders agreed that there would be no G8 summit in Sochi and no further participation in any G8 activities until Russia changed course. We agreed that there would instead be a G7 meeting in Brussels in place of the Sochi summit on the same day.

I also pushed hard on the need to reduce Europe’s dependency on energy from Russia. The G7 agreed that Energy Ministers would meet ahead of the Brussels summit, and the European Council tasked the Commission to produce a comprehensive plan for reducing Europe’s dependency on Russia by June. This work is long-term but vital. It requires new gas pipelines, new LNG terminals, more shale gas, more sources from outside Russia and greater connectivity. Above all, it requires political will and I am determined that, although the UK has almost no reliance on Russian gas, we should play our part in this important work.

Secondly, it was important to take specific measures in response to what has happened in Crimea. This was a sham and illegal referendum conducted at the barrel of a Kalashnikov. Both the European Council and the G7 leaders made very strong statements condemning the illegal referendum and condemning Russia’s illegal attempt to annex Crimea in contravention of international law and specific international obligations. Both meetings were clear: the international community will not recognise either. The European Council also agreed rapidly to implement economic, trade and financial restrictions on occupied Crimea, accepting Crimean goods only if they came from Ukraine, not Russia.

Thirdly, both the G7 and the European Council sent a very clear message to President Putin that it would be totally unacceptable to go further into Ukraine. The international community remains ready to intensify sanctions if Russia continues to escalate this situation, and I pushed hard at both meetings to secure greater clarity on what this should mean. The G7 agreed that this could include co-ordinated sectoral sanctions that would have an increasingly significant impact on the Russian economy; and for the first time, the EU Council tasked the European Commission to prepare measures that would have far-reaching economic consequences. Russia has a clear choice to make. It does not have to continue on this path. Diplomatic avenues remain open, and we encourage the Russian Government to take them.

Finally, both meetings reaffirmed the strength and breadth of international support for the Ukrainian Government and their people. It is clear what needs to happen. We need a broad and generous International Monetary Fund package of financial assistance to help the Ukrainian Government stabilise and repair their economy. We need a Ukrainian Government who reach out to the regions and respect the rights of Russian-speaking minorities. We need an association agreement between the EU and Ukraine; that is now signed, but it needs to be backed by reduced tariffs on Ukrainian goods. We need international support for free elections, which enable all Ukrainians to choose their leaders fairly. Britain will support all of these things.

Russia’s violation of international law is a challenge to the rule of law around the world and should be a concern for all nations. We have to be clear how unacceptable it is and to see through these economic sanctions and consequences. Otherwise, we will face similar situations in similar countries with a similar sort of unacceptable behaviour. Britain must continue to play its part in standing up to Russia’s actions, pressing for Russia to change course and helping the Ukrainian people in their hour of need. I commend this Statement to the House”.

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[Lord Hill of Oareford]

My Lords, I am very grateful for the overall tone of the comments made by the noble Baroness the Leader of the Opposition and for the substantive support that she offered. I think that it is important that the Government and the Opposition are completely aligned in our response to this crisis.

I am glad that the noble Baroness mentioned in passing work done on tax transparency. Although the Statement glossed over it, it is in the conclusions of the European Council meeting. There were some concrete steps taken at the Council by Luxembourg and Austria. It is a long-term grind to make further progress, but work is being taken forward in the Council and in the OECD. The European Council represented further substantial progress on that.

On the steps taken by the Government in respect of Sri Lanka, I know that my right honourable friend the Prime Minister has worked extremely hard with a whole range of countries, both at the European Council meeting and at the summit in The Hague, to build support for Britain’s position and backing for the UN resolution. That vote is due to be held shortly and, if it is carried, as we very much hope, it is mandatory that the review to which the noble Baroness referred goes ahead. I do not have the precise timetable yet, but I am sure that it will become clear after the UN Security Council has met. I agree with what the noble Baroness said about the restraint shown by the Ukrainian Government and about the importance of pressing ahead with signing association agreements with Moldova and Georgia. Alongside the work we are doing with Ukraine on this, it is important to do the same with Moldova and Georgia and on an accelerated timescale.

The difference between the names on the EU and the US lists of travel bans and asset freezes boils down to the EU approach, which is that the individual named on the list has to have a direct, demonstrable link with the action taken in Crimea. The EU has to act under that legal process and that is why we have specifically targeted Russian politicians and those with a direct role in Crimea. The noble Baroness asked about the reference to EU sectoral sanctions and what kinds of sectors are being looked at as part of the EU discussions. The EU Council statement talks about there being a wide range of sectors, but the Prime Minister made it clear earlier that these would have to include energy, financial services, trade and arms. The important point is that the Council agreed that the Commission should start work on it straightaway, which was a good step forward. I note and agree with her welcome for the suspension of Russia from the G8.

On her final question, we also welcome, as a positive step, the recent meeting between the Ukrainian and Russian Foreign Ministers. When the Prime Minister met Ban Ki-moon yesterday he urged that further such contacts be encouraged and that the UN should do whatever it can to bring Russian and Ukrainian Ministers together.

Britain is increasing its help to the Baltic states. We are making aircraft available to them for air policing. More generally, we are striving to reassure our partners in Latvia, Lithuania, Estonia and Poland that Britain, like other countries, believes in their membership of NATO and the guarantees we have given them as part of that. We will work with them to secure the future of Europe, as we have done in the past.

[Baroness Falkner of Margravine (LD)]

My Lords, does my noble friend share my concern about the new Russian nationality law that will give Russian citizenship to all ethnic Russians everywhere in the world? This will have profound implications for not only the Baltic states, which he has mentioned, but the central Asian republics. Although he has touched on the role of NATO, will he assure the House that the Government will now look at very concrete measures to reinforce NATO’s operational and military capabilities across the board?

[Lord Hill of Oareford]

I take the first point that my noble friend made. I can certainly say that, as part of the whole range of conversations that we are having and the pressure that we are seeking to apply through our involvement in NATO, we will certainly work to keep that pressure up and build as strong an alliance as we can to send the Russians the kind of message that my noble friend refers to.

[Lord Stirrup (CB)]

My Lords, is it not clear that the worst outcome for Russia would be for it to realise, as the years progress, that it has gained Crimea by losing Ukraine? However, the development of a viable and vibrant Ukraine will be a massive challenge going well beyond issues of funding, important though they are. Did any discussions take place in the EU Council about the development of potential mechanisms to help Ukraine address issues such as corruption, constitutional development and economic development? Have Her Majesty’s Government given any thought to such mechanisms?

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[Lord Hill of Oareford]

The noble Lord made two extremely important points. The first, on the short-term gain of Crimea and the long-term loss of Ukraine and what that means, is what lies behind a lot of Russia’s reaction.

On tackling corruption and the support one can give Ukraine to help it build a more viable future, it is absolutely right that at the European Council and in other meetings the importance of tackling corruption and giving practical help to the Ukrainians to address that problem has been towards of the top of the list of priorities. There is also the question of financial help. We have agreed to the immediate unilateral lifting of tariffs, which should lead to €500 million-worth of trade benefit flowing into Ukraine. Those concrete trade and anti-corruption measures are very much part of our overall response.

[Lord Howell of Guildford (Con)]

Turning to energy issues, does my noble friend accept that while it makes obvious good sense to build a better infrastructure for energy connectors throughout Europe so that oil and gas can flow and markets can work, we need to be rather careful about allowing too much centralisation and dictation of energy policy at national level by the EU? Is he aware that the net effect of EU policy at the moment is vastly to increase coal burning throughout Europe—including a lot of lignite, which is the dirtiest coal of all—and to raise energy costs for industry to levels that are seriously impacting on jobs and investment? Should we not distinguish between the areas where we need more Europe for physical infrastructure and those where we need rather less Europe to manage a flexible energy policy that does not crucify our industries and create more fuel poverty?

[Lord Hill of Oareford]

I agree very strongly with my noble friend on that and with the distinction he draws. It is one of the reasons that, when the European Council was looking towards targets for 2030, Britain made very clear its case that any such target does not bind the behaviour of individual member states or constrain their flexibility in how they go about doing so.

The other point that emerged from the discussions, of which I hope my noble friend will approve, is the emphasis on seeking to develop other sources of energy—whether that is shale gas or other developments—which will reduce our dependency, and the EU’s dependency, on Russia, which is clearly very much to be desired.

[Lord Soley (Lab)]

Can we remind the Russians that they have a duty to protect the rights of those people in Crimea who do not want to accept Russian citizenship, particularly those in the former Ukrainian forces who have been forced either to leave Crimea or to accept Russian citizenship, and also to offer compensation if they are going to make them move? It is an important right which the Russians have accepted in other areas. Can we also remind some members of the UN, particularly China, that no other country will sign up to give up its nuclear weapons if there is a breach of the 1994 agreement that the territory of Ukraine would be respected if it gave up its nuclear weapons?

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[Lord Hill of Oareford]

The noble Lord makes two very important points. The consequence of Russia’s actions is that, in any international relationship of that sort, why would anyone believe its word, given that in 1994 it freely entered into the negotiations that the noble Lord mentioned, which guaranteed the integrity of Ukraine and the future of its nuclear weapons?

[Lord Lawson of Blaby (Con)]

My Lords, I welcome the Prime Minister’s recognition that it is necessary and desirable to press ahead as fast as possible with the development of the UK’s indigenous shale gas resources, not merely because it will be good for the economy, but on geopolitical grounds because it will lessen the West’s reliance on Russian gas. However, is it not shameful that so far there has been only one exploratory well drilled in this country and that the industry is clear that the reason for the snail’s pace of progress is the mind-boggling bureaucratic complexity of the regulatory system in this country? Is it not time that the Government put their money where their mouth is and sorted this out?

[Lord Hill of Oareford]

I agree with my noble friend’s point on the contribution that shale gas can make to the geopolitical balance of power and to increasing our collective independence, which I think is absolutely right. I also agree with him about the other benefits that it could bring to the economy, and the sooner we can crack on with it, the better.

[Lord McConnell of Glenscorrodale (Lab)]

In addition to the issues of government capacity mentioned earlier, there are also long-standing issues here about the relationship between the majority and the minority in Ukraine that were not resolved and are at least partly behind what has happened over recent weeks. Those issues exist also in Moldova and a number of other places in that part of the world. I wonder what the Government are doing in the EU, and perhaps through the OSCE as well, to try and get more urgency into discussions about those conflicts that are in abeyance but are still there under the surface, in order to avoid a similar situation happening elsewhere.

[Lord Hill of Oareford]

I accept the force of what the noble Lord says, and as I said in my reply to the noble Baroness, Lady Royall, so far as Georgia and Moldova are concerned, one of the ways in which we are seeking to take that forward and accelerate it is by bringing forward the signing of the accession agreements. I very much take the noble Lord’s point and we need to address that in every way we can.

[Baroness Williams of Crosby (LD)]

May I ask the Minister two quick questions? First, with regard to the Nuclear Security Summit, can he say whether there is any movement forward whatever in the negotiations on the Fissile Material Cut-off Treaty? Clearly that is a crucial part of controlling nuclear materials—where they go and so forth. Secondly, on the issue of the rather more generous procedure that we have adopted towards giving visas—particularly for people who are interested in doing business in this country—will the Home Office take a very careful look at those visas if they are being offered to Russians, to make sure that they are not Russians who have supported the things that the Russian Government have recently done?

[Lord Hill of Oareford]

On the second point, I am sure I can give that undertaking in the sense that clearly the Government want to make sure that whoever ends up being on their list of those proscribed under the travel bans or has their visa turned down, that is an appropriate list and we will consider all the people who might potentially be on it. I do not think that the last word on this subject has yet been spoken, so I take that point.

On my noble friend’s first point about the detail and progress the Bill has made in the Hague on nuclear matters, I will need to talk to brainier people than me to find out whether the specific point she raised was indeed covered and whether any progress was made there. As I understand it, the main focus of the discussions was on seeking to take further steps in tackling potential terrorism threats. I will follow up that point and perhaps we can have a word once I have written to the noble Baroness.

[Lord Elton (Con)]

My Lords, the summit has rightly concentrated on containment at this stage, but clearly prevention would have been very much better. Should we not learn very quickly the lessons that have brought this to pass before Russia exploits the protection of new-citizen ethnic minorities in other neighbouring states? Can my noble friend therefore tell me and the House when Her Majesty’s Government were first aware of the threat that this takeover was going to take place? Secondly, what steps did Europe and this country take during the vigorous courtship of the Ukraine in trade and economic terms to discuss the terms of this with the Russians and reassure them as to the extent of our intentions? Finally, the whole of history shows that the only way to prevent the use of military force by an aggressor is to have an equivalent or nearly equivalent force oneself and to be seen to be ready to use it. The way to prevent a war—to not have to fight a war—is to be evidently ready to do so. Are these lessons being taken on board?

[Lord Hill of Oareford]

I can tell my noble friend that those lessons are being taken on board, which is why the range of measures that has been taken has been taken. The Government have sought a balanced and phased response to the situation as it has developed, ratcheting up the pressure over time as necessary. On the build-up to the current situation—what happened at which point—the truth is that it developed extremely quickly, and the EU and others have had to respond equally quickly as it has developed. However, I understand the burden of my noble friend’s points; that is why NATO and the security that it can offer are so important in this context.

[Lord Pearson of Rannoch (UKIP)]

My Lords, further to the answer that the noble Lord has just given, is it not true that Russia had made clear for years that it could not and would not tolerate Crimea coming under the sphere of influence of the European Union? Was Brussels therefore wise to offer Ukraine an eastern association agreement, complete with defence aspects? Surely the EU has thus caused the present crisis, and not Russia.

[Lord Hill of Oareford]

I know that the noble Lord is often ready to blame the EU for a whole range of matters. However, it is hard to argue in this case that the situation that has developed, with the aggression shown by Russia and its breaking of international treaties freely entered into in the past, can be laid at the door of the EU.

[Baroness Royall of Blaisdon]

My Lords, the noble Lord, Lord Pearson, was not in the Chamber for the Statement that was given by the Minister at the beginning. It is therefore a bit rich that he should come in.

[Lord Jopling (Con)]

My Lords, on the importance of making available non-Russian sources of hydrocarbons, what thought was given to and what proposals made about the importance of Georgia? If we wish Kazakh, Azeri or Caspian hydrocarbons to be available to Europe, it is essential, bearing in mind the impasse between Azerbaijan and Armenia, that new pipelines through Georgia are made available so that those hydrocarbons can flow without going through Russian territory.

[Lord Hill of Oareford]

My Lords, there were certainly a lot of discussions about how to address the kind of issue to which my noble friend refers—how to improve the flow and tackle some of the problems by increasing interconnections. On the specific examples that my noble friend gave, I would be very keen to talk to him. Perhaps we can discuss that further.

[Lord Goodhart (LD)]

My Lords, as I said to Members of your Lordships’ House some days ago, Russia should be allowed to support Crimea. Crimea is a body that has been separate from Ukraine for more than 200 years, and Ukraine has dealt with it in a careless and unsatisfactory way as a part of that country. Ukraine took over patronage of Crimea from Russia only in the 1950s. In all reality, Crimea has been entitled to take part in what has happened in the past few days, and it should be allowed to continue to do that.

[Lord Hill of Oareford]

I have to say to my noble friend that that is not the view of Her Majesty’s Government or of most people in this House. Whatever the history—and I accept my noble friend’s point about the history of the region—the fact is that agreements entered into freely under international law have been flouted. The basis for the so-called referendum was illegal and illegitimate, so I am afraid I cannot accept the point that we can allow these things to stand.

[Lord Stoddart of Swindon (Ind Lab)]

My Lords, instead of expelling Russia by calling a special meeting of the G7, would it not have been wiser to call a special meeting of the G8 and allow the Russian President, Mr Putin, to give his point of view and be challenged on it? Secondly, was it wise for the European Union to intervene in the uprising or demonstration—call it what you will—handing out goodies and European flags? Was that not likely to frighten the Russians, who believe that the European Union has expansionist policies to the east? Finally, will the EU prevail on its friends in Ukraine not to threaten to reactivate its nuclear weapons and ask Ms Tymoshenko not to threaten to obliterate Russia?

[Lord Hill of Oareford]

The Ukrainian Government have generally behaved with remarkable restraint during the situation and I think the boot is on the other foot. On the noble Lord’s point about the G8—or the G7—inviting Mr Putin along, asking him to give us the benefit of his views and trying to talk him out of them, would not have been a very productive exercise. It is not the case that the EU and the US bilaterally, and countries individually, have not been seeking discussions with the Russians. Throughout this process, while seeking to apply pressure, we have also sought to provide as many routes as possible towards de-escalation, which is why we have been very keen that talks should take place. However, given what has happened, the idea that the way forward is to send out messages that we consider the behaviour of President Putin and Russia acceptable, and will sit down and talk to him as though nothing has happened, is not a realistic option.