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Viscount Waverley: before the noble Lord sits down, will he accept that there is an effective stalemate in the search for a solution and that we need to find the common ground which exists between all the participants in the dispute in the hope that the deadlock may be broken?

Lord Desai: My Lords, I agree with that without necessarily endorsing all the other things which the noble Viscount said. I agree that at present there is a stalemate. The countries are both nearly nuclear powers and we must do all we can to try to assist. But as in the case of Palestine and Israel, a nation unconnected with the past of the region, rather than Britain, may be more helpful in solving the problem.

8.16 p.m.

Baroness Park of Monmouth: I too should like to thank the two maiden speakers for their very different but deeply interesting contributions. We were extremely fortunate and I look forward to hearing from them again.

We are told in the gracious Speech that the Government attach the highest importance to national security. According to the defence statistics published

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last month, our defence expenditure for 1994-95 is estimated at 3.4 per cent. of GDP, going down to 2.9 per cent. by 1996-97. The Russian defence budget is 5.8 per cent. The Russian draft budget for 1995-96, which has just been published, allocates 21.7 per cent. of total expenditure--0.7 per cent. up on 1994--to defence. The total includes the Ministry of Atomic Energy's spending. Of course that is a draft budget, but Chernomyrdin, the Prime Minister, has already said:

    "In no way shall we squeeze or decrease defence expenditure because it is this country's holy of holies".

I thought that the defence of the realm was deemed to be the first duty of the Government in this country too, but the figures and the facts speak for themselves.

Pavel Grachev, the Russian Defence Minister, told the Russian armed forces in the Far East at the end of October that the programme to equip the army and the fleet with new, more modern types of arms would not be wound up but, on the contrary, would continue to be developed. Russia may not have electricity or money to pay the miners but it appears that it will always have money for defence.

The gracious Speech continues by saying that the Government,

    "will work to continue the process of NATO's adaptation to the changing security environment to allow it to play a wider role in protecting stability throughout Europe".

But whose will be the agenda? The partnerships for peace are both emasculating NATO and giving Russia, through its CIS partners, full power to observe and influence. There are now 30 Russian military bases in CIS countries and a number of CIS countries have joined the partnership for peace.

Grachev said in May that Russia's entry would make it possible to obtain more information about the military-political intentions, plans and actions of NATO--and to influence them in Russia's interests. He added that Russia is a superpower and, of course, would not toe NATO's line.

Just as the Ukraine and Belarus in earlier times had independent status in the UN, so there will now be a solid bloc and presence within NATO, even if at this stage only peripherally, owing allegiance to one country, Russia. There are no prizes for guessing which way its influence will be exerted should we, for instance, contemplate admitting the Visegrad countries or the Baltic states to NATO membership.

Are we already tacitly accepting the Russian right to veto, and thus acknowledging again a Russian sphere of influence? Kozyrev warned Gebhard von Moltke, the NATO Deputy Secretary General, earlier this month that the nationalists would take advantage of such ill-considered steps as the hasty expansion of NATO membership, and Russian deputies told our own visiting parliamentary delegation recently that the entry of the east European countries into the NATO bloc would be considered a threat to Russia's national interest.

It may, indeed, be premature to consider expansion, and important not to allow Russia to feel threatened. But I hope that we are remembering that the Russians have

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every interest in encouraging that view and thus exercising, effectively, a veto on almost any NATO course of action.

Could we, too, remember that the Poles, for instance, were our allies and paid dearly for it? By being seen to accept the Russian "right" to veto, and condoning the Russian tactic of destabilising NATO from within, we are also sending alarming signals which can only encourage the old Communists who are returning to political power in Poland and in Hungary and who will thus be more vulnerable to Russian pressure.

The speech goes on to say that we shall seek to enhance the role of the CSCE in Europe in conflict prevention and resolution. The CSCE is no doubt a worthy concept, but it is an emasculated 53-nation version of the UN with all its weaknesses and none of its limited strengths. It has been largely, if not wholly, ineffective both in Nagorno-Karabakh and in the Abkhazian-Georgian conflict. And it is precisely the organisation which the Russians wish to promote because it has no power to enforce.

Kozyrev said in June, after discussing the partnerships for peace with the North Atlantic Co-operation Council:

    "the main aim is to direct every effort towards the formation of a single Europe in which the main role, NATO and Russia were agreed, would go to the CSCE".
The CSCE has not yet resolved a conflict and has neither the power nor the muscle to enforce anything. It would indeed suit Russia for the CSCE and not NATO to be given "the main role in Europe", whatever that is.

Russia's whole tactic is, first, to encourage NATO to unravel and to lose its central purpose, which was and is to prevent aggression by being seen to have the power to deter and the united will to use it; and, secondly, to provide us with a reassuring substitute for the CSCE which will keep us all busy and which has the great advantage of constituting no deterrence whatever. Without a serious defence capability, it will be useless for us to have a foreign policy. We shall be seen to be completely toothless.

I am glad to note that the Government will work for the full implementation of the Conventional Armed Forces in Europe Treaty which the Russians are now challenging. It may be relevant that Russia is now to have a fighter base stationed in Armenia. Lastly, we are to maintain our nuclear deterrent. That is just as well. A new and sophisticated atomic submarine, part of Russia's new programme, completed its trials last week and will soon be joining the fleet.

I have concentrated on Russia's defence capacity, the build-up of Russia's power and ambitions and Russian tactics to manoeuvre NATO to her advantage, because our own drastic and premature defence cuts were all predicated on a weak and helpless Soviet Union. The CIS is far stronger. It is scrapping its obsolete weapons in favour of new ones, it has chemical weapons and was still manufacturing biological weapons in 1992, and it remains politically unstable. But the real threat lies in Russia's power in future to hold us all to ransom and to take back her old sphere of influence without the need to go to war, simply because we have relinquished the capacity to deter. It was our clear duty to retain a

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credible degree of force. We have not done so, and we shall pay the price for our criminal complacency and our refusal to face facts.

8.25 p.m.

Lord St. John of Bletso: My Lords, earlier this year the world looked on in wonder as South Africa was transformed into a new-born democracy. Where many had expected bloody revolution and conflict, there suddenly appeared national reconciliation and, amazingly, peace. A number of noble Lords acted as observers during the April elections. I am sure that they would testify to the remarkable nature of the historic events that culminated in the inauguration of Nelson Mandela as the new state president.

Seven months on, the world's gaze has moved on and massed legions of international media have found new stories. Yet, South Africa's greatest challenge is just beginning--the building of a new nation at the foot of Africa. Ever mindful of the enormous task that lies ahead for President Mandela and his Government of National Unity, I was particularly pleased that Her Majesty's gracious Speech pledged to continue the Government's support for,

    "consolidation of a peaceful and stable democracy in South Africa".
Britain retains both a secure interest and a special influence in South Africa's future. British investment in that country currently has an estimated market value of £9 billion to £10 billion, more, in fact, than British investment in the whole of the rest of the African continent.

The most visible expression of those links will certainly be Her Majesty's planned visit to South Africa during March next year. Such an event will bestow a unique seal of approval for the new nation. Certainly the Prime Minister's recent visit was a great success and, following South Africa's recent return to the Commonwealth fold, Her Majesty will be assured of a most warm and enthusiastic welcome.

Clearly President Mandela has an uphill battle on his hands --not only to endeavour to meet the high expectations of many of the peoples in South Africa, but also to upgrade and improve education, training, housing needs, hospitals and, of course, the reduction of poverty through the creation of jobs. Those objectives were, to a large degree, incorporated in the White Paper on the reconstruction and development programme of the Government of National Unity, the so-called RDP programme. Many observers have suggested that the RDP programme is unrealistic. However, I believe that with a concerted international assistance programme, the ambitious targets for housing, employment and living standards can be realised.

The targets have not just been plucked out of the sky. Instead, they have been rigorously assaulted by a wide range of committees, task forces and forums established throughout South Africa to facilitate co-operation and consultation before implementation of the reconstruction and development programme. Of course there have been problems as well. An ambitious housing programme with the aim of building 1 million homes within the next five years has yet to gather steam as the Government carefully weigh up the merits of self-build schemes

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against fully developed estates. The former are quickly delivered but can easily grow into urban slums, while the latter are more costly but also more likely to meet the public's expectations.

With estimates in South Africa of one-in-four blacks living in squatter camps, with over 40 per cent. having no access to clean water, with about 50 per cent. of all black South Africans being illiterate and about 25 per cent. not being in school, the challenges for Nelson Mandela are immense.

However, a lot of assistance has been and is continuing to come from Her Majesty's Government and the international community. When I was in South Africa recently I read that by the middle of September almost 11 billion rands--that equates to about £2 billion--had been received in foreign aid since the Government of National Unity took office in May. I have always contended, though, that it is not just monetary aid but logistical, practical assistance that is needed in South Africa. I shall give an example.

One of President Mandela's pre-election promises was to provide a meal a day for all black schoolchildren. However, when it came to the logistics of implementing this ambitious scheme in all the provinces and regions, it became an administrative and practical nightmare. It was then that he called on the assistance of one of the largest food manufacturing companies to help out. It consulted many of the education and health authorities throughout South Africa and came up with the solution of a peanut butter sandwich! This group has profited in that not only is it now providing the bread, margarine and peanut butter, but also many jobs have been created in the informal sector in the making and the distribution of these peanut butter sandwiches in all the schools around South Africa. In fact within just four months almost 3½ million black children are receiving their meal a day. This is just one small example of how the Government's objectives can be met through co-operation with the private sector.

What I believe is important to appreciate in South Africa is that for many years the ANC was a protest party and hence had limited practical hands-on political experience when it came to power this year. I feel it is remarkable what it has managed to achieve in just this short amount of time. I welcome the Prime Minister's pledge of £100 million in aid to South Africa over the next three years. The impact of British support has been keenly felt in many areas, not least in the establishment of sound local government, health, agricultural policy, the creation of employment opportunities and the gradual integration of the new defence force, arguably one of the greatest challenges facing the new South Africa today.

The recent establishment, on the instigation of the Minister, the noble Baroness, Lady Chalker, of the British South Africa All Party Parliamentary Group will be furthering the objective of consolidating a peaceful and stable democracy in South Africa. I would have liked to talk on the issues of law and order, more specifically the major problem of violent crime in South Africa, as well as the relationship between the unions (more specifically, COSATU) and the Government, as well as the economic prospects for South Africa, but as

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the twenty-eighth speaker in today's lengthy debate, I feel it is only right that I curtail my remarks and bring my speech to a close.

Clearly there is, and shall be, no quick fix to the problems and challenges facing the new South Africa. President Mandela and also Vice-President F. W. de Klerk have embarked on a remarkably successful journey of national reconciliation. The threat from the Right-wing that once appeared capable of destabilising the entire population and the entire transition has been defused if not destroyed.

The Government have begun the lengthy and potentially divisive task of thrashing out a final constitution for the country. All over the country the transformation is quietly continuing with residents of white suburbs and black suburbs finding ways to co-operate in local government and integrating state schools and hospitals. The miracle is continuing quietly in South Africa. My conclusion is, better a steady start than a false start in this exciting new era for South Africa.

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