Russia

Lord Howell of Guildford Excerpts

Thursday 16th October 2014 Lords Chamber

[Lord Howell of Guildford (Con)]

My Lords, I congratulate my noble friend Lady Falkner on bringing forward this Motion and on her excellent overview of the situation. She is absolutely right to say that this is a matter of enormous concern. The flouting of international law is always of concern and doing nothing is not an option. I think that the UK has a role in addressing the situation, but not a central role. Indeed, I do not even think that the United States has a central role to play. This is a global issue that requires the attention of all organised and responsible states that want the global order to be reasonably maintained and not undermined. Just as we think the caliphate issue, with the smashing of borders and the violation of all human rights norms, is a global matter, so this is a global matter as well. I do not even think that there is a central role for the military side, as my noble friend said, nor even is there really a central role for tit-for-tat trade wars of the kind that are going on now, nor, I fear, for western sanctions as long as other countries, including China, carry on tending to ignore them.

The real central role in this situation is going to be played by the world crude oil markets and by gas availabilities. The Russian economy today—and the power of Mr Putin and his friends—floats on a gigantic sea of oil and gas revenues. At the moment a huge surplus of oil and gas is building up throughout the world and, as one can see in the newspapers every morning, the prices of these commodities are falling very fast in some areas. That is less the case for gas because it is regional, and the big fall has been mostly in the United States—outside Europe and outside the OECD. However, the price of oil everywhere is falling fast, and I suspect will fall a great deal further. A weaker oil price will devastate the Russian economy. When Japan ceases to drink enormous volumes of oil and gas daily and gets its nuclear industry going again, which Shinzo Abe intends to do, that will mean a further dramatic weakening in demand and a further dramatic fall in oil prices. What this means is that “General Oil” and “General Gas” are the decisive players in this situation.

It also means, from the point of view of statesmanship and policy-making in the western capitals and certainly here in London, that we have to play that most difficult role of all for statesmen: a waiting game. There is not an instant solution or instant line of action which can make much difference. This is a most difficult thing of which to persuade people, because they of course want action when there is a hideous situation and when horrors such as the shooting down of the Malaysian airliner occur. This situation is not going to be settled by big battalions; it is not a Cold War confrontation, as some Cold War warriors have suggested; and, not least for reasons of oil but for other reasons which I will briefly enumerate, it requires great patience and allowing greater forces to work, which they will.

There are three other reasons. First, it is not a straightforward war but a hybrid war—it is one of those obscure, new patterns of conflict which are spread across the globe, where it is very hard to identify who the enemy is, where cyberactivity undermines activity on the ground, where soldiers who are not soldiers and not wearing uniform appear but whose involvement is denied, and where propaganda and communication begin to blur the whole situation. Secondly, the Russians have always used such techniques—they call it “maskirovka”, which is the traditional Russian way of proceeding when they are anxious to pursue their interests and it is almost impossible to pin down or categorise in terms of war, action, policies and solutions. Thirdly, there are arguments on both sides. The Russian-speaking people in the Donbass region perhaps should be allowed to have more regional autonomy. We have had these sorts of arguments here in our own affairs and we are having one now about Scotland. The home rule case for Donbass may have something in it.

The price of oil will not eventually decide the matter, because lower oil prices means—I do not want to sound controversial—higher oil prices. The lower oil price, if it lasts, will incidentally knock out the whole fracking situation in the United States, where they need at least $80 to make most of their investments worth while. Eventually, therefore, it will go wrong, but in the mean time there is a real chance that it will bring the Russian economy to its knees.

When this phase is over and when Russia comes to its senses, we will need Russia. It cannot be isolated and we cannot isolate it. The Russians say that they want a united front against terrorism and so do we all. We need the commitment and involvement of Russia, as we need that of China, India and the great new powers of Asia, in dealing with all the issues: the caliphate, the upholding of international law and so on. These matters threaten Russia, particularly that of the caliphate, just as much as they do us in the West with the danger of being penetrated by jihadism.

In the end, Russia is an inextricable part of the new global network and the new order, and there is no escape. In the end, it will have to rejoin the global system and realise that its policies are deeply self-defeating, but it requires patience, great skill and all kinds of new intelligence techniques, and it requires us waiting for the greater forces which lie above Governments and nations, such as the international oil price, to do their work.