Queen’s Speech Debate

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Department: HM Treasury
Wednesday 11th June 2014

(9 years, 11 months ago)

Lords Chamber
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Lord Kerr of Kinlochard Portrait Lord Kerr of Kinlochard (CB)
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My Lords, it is always a pleasure and a difficulty to follow the noble Lord, Lord Ashdown. I agree with much of what he said. However, I wish to address a particular issue raised by the noble Lords, Lord Jopling and Lord King, that of Ukraine. If I could catch the Minister’s attention, I would remind her that she told us in her speech that we deprecated the attack on Crimea and the destabilisation of the Donbass and that we welcomed President Poroshenko’s election. I agreed with all that. What I did not hear from her was a policy or a strategy. Sanctions are a very useful support for a strategy but not a substitute for one. I would like to hear a little more about what we are trying to achieve and how we are going about it.

Like the noble Lord, Lord King, I do not think one can approach this without talking to Mr Putin. We need to know what he wants. If Mr Putin wants to break up Ukraine, and really meant that new doctrine about Novorossiya, then there is no deal to be done. If he really means that Ukraine must have no relationship with the European Union, then there is no deal to be done. However, I do not think that even he believes that the association agreement with the European Union prevents a grown-up trade relationship between Ukraine and Russia—which of course it does not. It permits Ukraine to have as many other free trade areas as it likes, and the Russians did not object during the four years in which it was negotiated between Ukraine and the European Union. It is the customs union into which the Russians have spatchcocked Belarus and Kazakhstan that creates the incompatibility, because in that customs union those three countries—Russia, Kazakhstan and Belarus—have conferred negotiating powers on the centre, and none of them can now form a free trade agreement with, say, Ukraine or the European Union. However, Mr Putin knows all that. I do not know what he really wants and it surely is an important policy aim to find out.

Last time we talked about Ukraine, I mentioned to the noble Lord, Lord Wallace of Saltaire, who presided over the debate, that it might be worth his thinking about talking to Mr Poroshenko and to Mr Putin about the precedent of the Austrian state treaty. The noble Lord gave me a rather dismissive brush-off at the time. I will just make eight quick points in the hope that his doppelganger, the noble and learned Lord, Lord Wallace of Tankerness, might be prepared to ask the brilliant young women in the Box for a considered reaction this time. I apologise to the noble Baroness, Lady Falkner, for the tautology, as all young women in the Foreign Office are brilliant by definition. I will not say that all people from the Foreign Office are brilliant, for obvious reasons, but the young women are extremely brilliant.

First, the Austrians took the initiative and negotiated the treaty in 1955 with the Russians. Secondly, it was premised on the neutrality of Austria. President Poroshenko is not asking to join NATO, although he is saying that he wants Ukraine to join the European Union one day. Thirdly, it guaranteed the rights of the minority communities in Austria. Fourthly, it prohibited Nazi organisations. Fifthly, it left Austria free to negotiate its own external relations, and 40 years later Austria joined the European Union. Sixthly, it prohibited foreign troop deployments or bases, and 40,000 Soviet troops left within a month. Seventhly, outside powers, including us, were brought in as guarantors and nobody lost face. Eighthly, it worked—to the benefit of Austria and all of us.

If Mr Poroshenko means what he said in his inauguration speech, the points that he raised would be covered in an agreement along the lines of the Austrian state treaty. And it seems not inconceivable that even Mr Putin might be prepared to accept that he could follow a precedent set by Mr Molotov. This is a shot in the dark—I do not know—and there may be many better ways of achieving conflict prevention and resolution in Ukraine. However, we have to try. It is not enough to threaten and say, again and again, “There will be consequences”. We need to talk to the Russians, talk to the Ukrainians and see whether a solution can be brought about. That is my recommendation.