Queen’s Speech Debate

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Department: HM Treasury
Wednesday 11th June 2014

(10 years, 6 months ago)

Lords Chamber
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Lord Truscott Portrait Lord Truscott (Non-Afl)
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My Lords, I welcome the reference in the gracious Speech to achieving peace and stability in Ukraine. I wish the new Ukrainian President, Petro Poroshenko, well in securing a peaceful settlement based on greater autonomy for parts of eastern Ukraine and respect for the linguistic rights of ethnic Russians. Crimea is a special case, a historical anomaly that has been Russian since the days of Catherine the Great, with only a relatively short interlude under Kiev’s sovereignty when it was gifted to Ukraine in 1954. It is home to Russia’s strategically vital Black Sea fleet in Sevastopol. Its current status is non-negotiable for Moscow—it is their Falklands.

In my view, a full-scale military incursion into eastern Ukraine would occur only in the event of very heavy loss of life among ethnic Russians living there, which I do not think is likely. As I wrote in my book, Russia First, in 1997:

“For over two hundred years Russia has had a love-hate relationship with the West. All signs now show that Russia is leading towards more comfortable and familiar territory away from the West, developing a ‘Russia First’ policy and its own ‘Tsarist’ solutions with profound effects on domestic and foreign policy”.

I conclude that nothing has changed much in the intervening 17 years. The only surprising thing about the Ukrainian crisis was that the West was surprised.

In recent years, Moscow has sought to diversify its energy flows away from passing through Ukraine, developing Nord Stream and attempting to bring on South Stream, and latterly pivoting to the east, with its $400-billion 30-year gas deal with Beijing. The Russian Federation is presently the largest exporter of oil and gas to the European Union, supplying it with around one-third of each. Energy accounts for nearly two-thirds of Russia’s total exports, with the EU being its biggest customer. But the cooling of the political relationship between the EU and Russia is changing the energy security landscape. A race to diversify energy supplies is now on, with Europe looking to alternative pipelines to bring gas from Azerbaijan and central Asia, with possible future shale gas supplies from the US and the development of renewables, liquefied natural gas and new nuclear in some cases. Meanwhile, the EU Commission is seeking to block the South Stream pipeline project to reduce Europe’s dependence on Moscow.

Russia is seeking to open up new energy markets in the Far East, particularly China. This may affect the financial viability of LNG projects in the region, as more Russian gas is piped to China’s domestic market. The question will become: who will win the race to diversify energy supplies, Europe or Russia? The mutually beneficial arrangement of the past, with virtually guaranteed supplies, is no longer a given. The reaction of the West, slipping back into Cold War mode and rhetoric, has not been inspiring. It has at times appeared like an existential crisis, harking back to the certainties of the Soviet era. Taking on Moscow is familiar comfort territory for the West. Yet the crucial challenges now facing our societies in the 21st century are social, economic and environmental, and the wider threat of Islamic fundamentalism and the far more potentially destabilising territorial disputes in the South and East China Seas. These are the areas on which the United States and its European allies should be focusing. Washington’s much vaunted “pivot to Asia” appears temporarily derailed, as the old zero-sum game of Europe’s nation states again holds sway.

Western foreign policy is the weakest that I have seen it since the end of the Second World War, which is worrying with a world that has just one hyper-power. If the Taliban regain control of Afghanistan, and al-Qaeda Iraq, it will come back to haunt us. International terrorism and cyberwarfare are less tangible by nature than conflicts among nation states, but they have a potentially massive impact on the stability of our societies. Recently, we commemorated the 70th anniversary of the Normandy landings. It should remind us not only of the massive sacrifice of that time, but of what can be achieved when nation states unite to defeat evil.

I look forward to a diplomatic and political solution to the crisis in Ukraine, and to former allies again working together to tackle the real challenges facing this interconnected and interdependent world.