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Viscount Waverley: My Lords, I thank the noble Baroness for allowing me to intervene. It is my understanding that the first person to speak after the speaker who initiates a debate can thank that speaker. That convention then extends to all contributors. I do, of course, thank the noble Lord, Lord Blaker, but I wish to stress that I meant no ill-intent by not doing so earlier.

Baroness Williams of Crosby: My Lords, I certainly did not intend to imply any element of criticism of the noble Viscount, Lord Waverley. I wished simply to say that my thanks to the noble Lord, Lord Blaker, go far beyond the conventional response. I believe that both the terms in which he introduced this debate and the extraordinary quality of the contributions show how valuable it has been. I repeat that in no way did I intend to imply a reprimand of any other Peer in the House.

Perhaps I may begin by saying that I have had the benefit of returning from Russia very recently. I serve on the board of the Moscow School of Political Studies, which each year hosts a number of seminars for Russian parliamentarians at both the national and provincial levels. I have just completed a week of attendance at a seminar held in Golitsynu, near Moscow, where many of the issues surrounding the election of President Putin and their consequences were discussed in great depth.

Two points clearly emerged from our debates at the seminar and they shadow much of what was said by the noble Viscount, Lord Waverley, in his contribution. First, there was the absolute determination of President Putin not to allow the break-up of Russia. Clearly he

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and some of those around him believe that the Chechen war was an indication of the possibility of disintegration of the Russian Federation. One might say that perhaps almost the very first principle to which President Putin is totally and absolutely committed is that there shall be no further break-up of Russia.

I think that the second commitment to which he is absolutely dedicated is that the rule of law must apply throughout the whole of the Russian Federation. Noble Lords will have noticed the appointment of seven regional super-governors, who have the power to tell the elected governors of the 89 regions of Russia what to do. It is a very striking example of the willingness of Vladimir Putin to go a very long way and to take considerable risks to re-establish the rule of law.

Having said that, however, it is important to make a qualification. Given the Russian constitution, the rule of law implies obedience to presidential decrees, which may not have been debated or approved by the Duma. To revert to what was said by the noble Lord, Lord Ponsonby, and the noble Viscount, Lord Waverley, it would therefore be perhaps a little over-optimistic to suggest that Russia is already a complete democracy. It is a country on the way to democracy. It has not yet quite achieved that.

With regard to what the noble Lord, Lord Ponsonby, the noble Baroness, Lady Cox, and others have said about the second war of Chechnya, I would like to report back on a few other things I found in Russia—which may or may not be correct, but which go some way to bear out what the noble Baroness, Lady Cox, said.

I would give no ground to anybody who suggested that the reaction of the Russian Federation to what happened in the second war of Chechnya was in any sense proportionate to the terrible things that occurred there. The concept of proportionality, that the use of force should not exceed the challenge made to a sovereign state, was certainly breached in the case of Chechnya. The methods selected by the Russian government at the time, which involved the total destruction of a large number of cities and small towns, was, at least in western eyes today, an unacceptable reaction. It would be as if we had laid flat Belfast when we first encountered the IRA.

The noble Baroness, Lady Cox, is also right to say that the challenge in Chechnya has not been properly or fairly covered by the British media. Let me give just two examples. I did not fully appreciate, and I have less knowledge than many people in the Chamber tonight, what had happened in Chechnya and I have not visited Chechnya myself. There were two things that struck me very forcefully. One was the almost casual breach of the peace agreement reached in Khasavyurt in 1996 by the then Russian government and the leaders of Chechnya: an agreement which went a very long way to concede autonomy to the Chechen Republic on domestic matters, and which was virtually thrown aside by the Chechen leaders without any serious attempt to make it work. At least, that is certainly my impression.

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The second thing which is worth saying, especially in the light of the extraordinary and fascinating, if very disturbing, account given by the noble Baroness, Lady Stern, is that in February 1999 Chechnya reintroduced the Sharia law, which carries with it public executions and mutilations as punishment for relatively minor crimes; that, as the noble Baroness, Lady Cox, said, literally hundreds of people have been executed or mutilated under the Sharia law since February 1999 and, furthermore, that the introduction of Sharia law into Chechnya immediately put the Russian Federation in breach of its own commitment to the Council of Europe, which had led to the suspension of capital punishment in a country which had used capital punishment extensively. This led directly to a sense, on the part of the Russian Government, that its sovereignty was being challenged and indeed that its right to rule in the Russian Federation, including in Chechnya, was being challenged.

I do agree—let alone the attack on Dagestan, let alone the apartment bombings—that there were very strong reasons why Russian public opinion powerfully supported the government on the second war in Chechnya in a way that it had not done in the first war in Chechnya between 1993 and 1995.

I repeat, that does not excuse some of the extreme military methods used; but I believe that we need to look at a somewhat more balanced analysis of Chechnya than our own media have so far allowed us to undertake.

Let me say just a word about the economy, where there has been some improvement. There has been a rate of growth in the past year of 6.8 per cent and an expectation in the coming year of a rate of growth of about 5 per cent plus. There is also a bit of good news in that the oil and gas price increases enabled the Putin government to pay off substantial arrears of unpaid salaries of teachers, policemen and many others, and indeed unpaid pensioners. Although the plight of Russia remains extremely serious, therefore, with very large parts of the population still in poverty, there has been some alleviation of what was a grim situation.

Here, I part company slightly from the noble Viscount, Lord Waverley, having had the privilege of hearing Mr Illianov, the president's new economic adviser, only four days ago. Although I fully accept that he is unquestionably, in a very old-fashioned sense, a liberal, some of the propositions he has put forward under the Gref programme for virtually wiping out what remains of the social provision in Russia, frankly, disturb me greatly. This is a country in which there are already extreme inequalities. Therefore, for example, to expect most people to pay fees for education and for even the minimum health provision is, to say the least, a little disturbing. As the noble Baroness, Lady Stern, indicated, in a globalised world one cannot shut people's ill health in on themselves. The rest of us have to encounter the consequences, quite apart from our moral commitment to doing something about it.

I turn finally to the important points raised by the noble Lord, Lord Blaker, followed by the noble Lord, Lord Ponsonby, the noble Viscount, Lord Waverley,

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and others, with regard to Russia's foreign policy. I strongly agree with their remarks about national missile defence. When I was in Russia, I was told in so many words that the Russians would be extremely reluctant to amend the anti-ballistic missile treaty—and heaven knows, one understands that, especially in the light of Russia's willingness to ratify START II and possibly START III if it is encouraged so to do. But the other thing which, frankly, made my blood run a little cold was being told in the high levels of the National Security Council that Russia would have to consider "MIRVing" its existing warheads if the United States were to go ahead without any compromise being reached. I am sure that Members of this House who are aware of how weakly guarded some of the warheads are, and how dangerous is the problem of deterioration over the years, share my concern about any possibility of moving towards multiple re-entry vehicles attached to those warheads.

I conclude with three brief questions to the Minister. First, is she satisfied that Russia is being given enough help to meet fully the requirements it has entered into under the Council of Europe? Secondly, will she give an assurance that NATO will not be expanded into the Baltic states without full discussion with the new Russian Government? This is undoubtedly a matter of profound concern in that country. Thirdly, does she agree that there should be an attempt as early as possible to reach a more generous trading relationship between the European Union and Russia, including exchanges of assistance and help in the kinds of fields discussed by the noble Baroness, Lady Stern. In other words, will Her Majesty's Government do their very best in the Council of Ministers to try to create closer relations between the European Union and Russia, at a time when it is obvious that the Russian Federation is extremely keen to establish closer relations with the European Union, with which it feels itself to be historically and ultimately likely to be connected?

9.23 p.m.

Lord Howell of Guildford: My Lords, the timing of this debate could hardly be more appropriate and the quality has been very high. My noble friend Lord Blaker has done us all a great service in promoting it at this time. My noble friend began with a sobering, indeed staggering, statistic which we should do well to bear in mind; namely, that the gross domestic product of the Russian Federation amounts to less than 2 per cent of the GDP of the United States of America. The one is in the range of about 180 billion dollars, the other in the range of some 9 trillion dollars.

Of course, all these statistics are elastic. We have no real idea of what is going on in the Russian economy. Large parts of it are black and large parts are Mafia-controlled. I do not think anyone imagines that members of the Mafia are particularly assiduous in handing in official statistics denoting what they are up to. However, one can reach the sobering conclusion that Russia's economy is extremely poor; it is a very weak country in terms of exploiting its vast national

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resources, and many parts of that enormous continent are in dire straits, with people on the edge of starvation if not actually starving.

All this has been made worse, not better, by the fact that when the new dawn came and communism was overthrown, Russia was then deluged with exceptionally stupid economic advice from many sources in the West that failed to connect with the realities of the Russian people and their needs. The result has been that Russia is poorer today by far than it need have been. Certainly, the damage to the reputation of economists—that was already pretty low—has been vast, although few of them admit it. That is the first fact that I wanted to share with your Lordships this evening as we come to the end of this debate.

The second fact is a rather obvious one: we are dealing not just with a country but with a vast, disparate collection of races and nations stretching from the centre of Europe through to the Sea of Okhotsk and to the northern islands of Japan. This is something so much greater and larger than any other so-called "nation state" on earth, so we need to be careful about assuming that one can apply the rules of nation states and democratic procedures and make judgments on that basis as if Russia were like anywhere else. It is not. It is extremely difficult to control, as successive rulers of Russia have found, and the present rulers are no different.

We have heard very wide and very well informed comments from people like my noble friend Lady Cox who is familiar with what is going on in Chechnya. We know that the problem of control that the new President Vladimir Putin and his team face is more intense than ever. They are facing a very serious difficulty. It is true that the Chechen Republic used to be called a gangster republic, so they have plenty of justification for being concerned. Whether the Russians have justification for some of the methods they have used is, I think, much more doubtful. There can be no doubt that what is going on in Chechnya, and what has been going on in both wars there, is a process of erosion, rebellion, disintegration and lawlessness which has spread to Dagestan and which could develop in the other five Caucasian republics and elsewhere, which, unless checked, would mean the unravelling of the entire Russian Federation. Those who want to see the Russia of today held together—it is a strange creation: a mixture of the old European Russia and the imperial Russia of the Tsars—have to fight for their lives and for their vast extended nation to see that these rebellions are curbed.

That is the awful, grim scene that faces the rulers in Moscow. Although one does not forgive some of the hideous methods used, one does understand the position that they face, what used to be called in the days of Vietnam a "domino" effect. Perhaps it is better to call it a "ripple" effect because the domino effect turned out to be a false theory. The ripple effect is that if Chechnya goes, so other vast interests of the Russian Federation go, including the oil interests that have been rightly mentioned. The whole Russian orbit of influence in central Asia and near Asia will begin to

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crumble, as will the confidence and the hopes of the nation itself. That is the scene about which we must be realistic.

There have been enormous achievements and Russia is full of absolutely brilliant and dazzling people. But it is never very clear—even today, dare I say, with a new president—who is the boss of this vast and disparate area that stretches from Europe to Asia. Russia is always looking for a strong man to get a grip on things. Along comes Mr Putin, and high hopes are pinned on him. I think that he understands as well as anyone else that merely preaching democracy from Moscow or mixing with all the glitterati and the think-tanks in the various Moscow brasseries is not going to rule Russia.

For that reason Mr Putin has sent military envoys (as he calls them) with sweeping powers to get a grip on the regions and to take on some governors who otherwise would entertain warlord tendencies and think of ways to disregard Moscow's rule. Mr Putin must be very tough if he is to do this. He has used tough language and threatened the use of missiles against Afghanistan. He has issued a number of decrees in a fairly brisk manner. We shall see more of that, but it will go hand in hand with continuing tensions and difficulties not only in Chechnya but in other republics and semi-autonomous areas of the former Soviet Union. I believe that this will be a long process in which Moscow will face a constant challenge as to whether it handles these difficulties by politics and religion or, as in the case of Chechnya, by the most direct military means, which I believe to be a huge mistake.

Looking at Russia in those slightly gloomy terms, the question is: what are our interests and those of the United States and other European powers? Why does President Clinton spend time with this entity which in terms of its economic clout and importance is smaller than Belgium? The answer is obvious: Russia still has an enormous nuclear arsenal and weaponry. Beyond that, at the moment President Clinton needs something from the Russians. As my noble friend Lord Blaker aptly pointed out, the question is whether the Russians will agree to the modification of the ABM Treaty of 1972, as the Americans hope, in order to allow President Clinton to authorise the beginning of the NMD programme which must start fairly soon. That programme may not work, but it will be expensive. The view of the Americans, which I understand, is that we are moving away from the old world of mutual deterrence to a new and, if it works, potentially better world of the total neutralisation of nuclear missiles, in particular those in the hands of rogue states which believe they can hold the world to ransom.

What have we and President Clinton discovered in dealing with Mr Putin? As the noble Viscount, Lord Waverley, said, it is early days and it is difficult to see what will happen. Like many of his advisers, Mr Putin is extremely clever and agile in the world of diplomacy and politics. He has convinced a large part of the European establishment that Russia has a genuine case against the modification of the treaty; that somehow it will badly affect the Russian position and that if there are to be changes, big concessions will be

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required. He and his colleagues have talked of the possibility, which was referred to by the noble Baroness, Lady Williams, of Russia having to develop its weapons. Some of Mr Putin's advisers have even talked about a new arms race. It has been hinted that there may be some sympathy from the Chinese who also dislike the whole idea of the modification of the ABM Treaty. In the past few days Mr Putin has visited Rome and said that the answer is a common missile system for the whole of Europe. That has echoes of Mr Gorbachev and the reference to the common European home. No one has said who is to pay for it, but the cost will be vast.

Mr Putin appears to have secured some big concessions from President Clinton. During his visit to this country, he also appears to have persuaded the Prime Minister and the Government that Russia has a case which should be taken into account in our talks with the Americans and that future Russian sensitivities are very important and should be considered. That is a pretty remarkable achievement by Mr Putin who has very little behind him. Russia's economy, which is minuscule, is nearly wrecked. I do not go as far as to say that it is all bluff, but the truth is that Russia lacks the money even to modify and maintain its present rocket systems. We do not even know the state of half of the missiles in its silos, and it certainly does not have the money to develop new arms systems. To that extent, Mr Putin cannot possibly carry out that aspect of his threat or negotiating stance.

We should like to know from the Minister—perhaps not tonight but later on—where the British Government stand on the NMD issue. We told Mr Putin that there are worries, but the Prime Minister also told the Americans that we shall allow Fylingdales to be upgraded. I am not sure whether one can play both ends against the middle. I believe that we should either support or not support the Americans in this matter.

My view is that the Russians have nothing to worry about in modifying the treaty. We must be positive and friendly with Russia, help it to get through the agonising difficulties that lie ahead, and open all trade routes. However, we should not fall for the old-fashioned bluster and narrow nationalism which one hears in parts of the Moscow establishment and which has no place in today's international order.

Therefore, I pay tribute to the dexterity of the Russians, their brilliant diplomacy and their ability with very few resources to achieve a great deal. However, in my view we must not be deflected by that from sensible security developments and from building as stable a post-Cold War system as possible which could lead finally to a world free of the real threat of nuclear war which characterised the Cold War years.

9.35 p.m.

The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Scotland of Asthal): My Lords, I, too, add my voice of thanks to the noble Lord, Lord Blaker, for instituting this very

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timely debate. Perhaps I may say respectfully that the speeches from all noble Lords have been of extremely high quality. I believe that it does honour to the House when such a broad-ranging issue is debated so well.

The noble Lord, Lord Blaker, raised three critical issues: first, economic relations; secondly, nuclear missile defence and the Anti-Ballistic Missile Treaty; and, thirdly, the concern with regard to sidelining Russia. Those issues were echoed by virtually all noble Lords who followed. They raised the need for balance and the need to respond appropriately to Russia in all her complexity.

Of course, we have a new government in Moscow. As a number of noble Lords have already said, that new government are beginning to reveal their intentions and policies. There has been significant activity in the UK/Russia relationship, with progress towards a strong and frank partnership. However, the bloody conflict in Chechnya continues to undermine Russia's progress towards democracy and respect for human rights.

Some noble Lords may have seen the speech that my right honourable friend the Foreign Secretary, Robin Cook, made at Chatham House last February on foreign policy and national interest. In that speech he argued that in the modern world globalisation required more bridges and fewer barriers; that the global interest was becoming the national interest; and that the global community needed universal values. Therefore, Britain had adopted a conscious policy of critical engagement with other countries: the pursuit of political dialogue wherever it can produce benefits.

My right honourable friend the Foreign Secretary went on to argue that the biggest challenge for that policy of critical engagement was developing the right strategies to accommodate post-Soviet Russia as a willing partner in the global economy and in global security. The election of the new president, with the prospect of change in the Russian political climate, offers a significant opportunity to push forward that policy and our relations. Both the Prime Minister and the Foreign Secretary have made a personal commitment to making that happen. This year has seen a remarkable level of bilateral contact between the UK and Russia, from the Prime Minister's two meetings with President Putin in the space of four months to the frequent contacts at Foreign Minister and senior official level. Neither side can be in much doubt about the views of the other on the key issues of the day.

As a result, there is a realism on both sides over the scale of the challenges ahead if Russia's transformation to a market economy is to be achieved and supported by the Russian population. I believe that a number of noble Lords—the noble Lords, Lord Blaker, Lord Ponsonby and Lord Howell—rightly raised the issue of how that economy can be supported and what needs to be done.

Russia faces a crushing budgetary burden—notably a welfare system which provides benefits for two-thirds of the population. It also has a huge military establishment, including 5,000 strategic nuclear

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warheads, of which the noble Baroness, Lady Williams, made mention. That establishment is funded by an economy smaller than that of Switzerland, a point rightly highlighted by the noble Lord, Lord Blaker.

President Putin assured the Prime Minister that he is determined to create the conditions needed to unlock confidence and investment to kick start long-term sustainable growth. We welcome that. He also said that he wants to maintain political stability and improving living standards. Those statements are encouraging, but we shall look for early action and implementation of reform in key areas. Early agreement to Part II of the tax code and to money laundering legislation would be useful steps. The advice and technical assistance that we have provided to Russia is designed to help to address those huge problems.

We echo the concern expressed by all noble Lords about the economy. Of course there are questions. Has reform started, and where is it going? We know that the jury is out on that, but the initial signs are good—the appointment of economic reformers to key ministries; co-operation with the International Monetary Fund on new programmes; and the appointment of liberal economic advisers to work on the economic reform programme. We shall have to wait for those programmes to be agreed with the International Monetary Fund and implemented, but the signs are there. The economy has started to pick up. There has been 3 per cent growth of GDP in 1999.

The noble Lord, Lord Blaker, raised an interesting issue as regards what was done to engage Russia before Pristina. Perhaps I may say, in response, that we need to draw attention to the role played by General Sir Michael Jackson in resolving that situation. As a result, Russia was engaged and we learnt valuable, cogent lessons which improved and enhanced our ability to work. Whatever the genesis, the result, thankfully, was positive.

I turn to the issue of NMD, which has been highlighted by a number of noble Lords. We need to recognise four issues in relation to the American position. First, they have not made a final decision as to whether or not they wish to employ NMD. There are four criteria which they will apply: first, the recognition of the threat (we now have the agreement of the Russians that there is, indeed, a threat); secondly, the technical ability to set up the system and whether it will work; thirdly, cost; and fourthly, international opinion.

As regards all those issues, other than the acknowledged threat, the jury is still out for the Americans too. Contrary to the indication given by the noble Lord, Lord Howell, they have not asked for us to upgrade Fylingdales. That request has not yet been made. We are trying to engage both sides so that each understands the anxieties and concerns of the other. We hope to enhance their opportunity to understand one another and, therefore, to come to a reasonable agreement as a way forward. We note that the ABM Treaty has been amended before, satisfactorily. We stress to both sides that it could be amended again if

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they so choose. We recognise that we are not parties to that treaty and therefore do not have a direct voice. However, we have an opportunity to speak, it is to be hoped with a degree of cogency and support, for a valuable solution.

There is thus a window of opportunity to engage Russia under her new presidency. The UK is determined to seize this opportunity and encourage better links with a more open and constructive Russia. The problems, though, are huge. Several noble Lords have alluded to the areas where Russia continues to pursue policies which run counter to our aims and principles.

If we are to influence Russia, we see no alternative but to discuss our disagreements openly and seek to encourage a more positive course. The prize—a Russia integrated and engaged with the rest of the international community on the basis of shared beliefs and values—would be of considerable benefit to the peace, security and stability of Europe and the wider world. I welcome all the comments made by noble Lords in appreciating that reality. It would enable us to tackle the problems that are high on the global agenda more effectively, from drugs to the environment to crime. That is very much our vision. It will not be easy, but there is much at stake and much to try for.

If I may, I shall deal briefly with some of the more specific questions raised by noble Lords, and start first with the noble Baroness, Lady Stern, who, in her very erudite exposition, raised the recent Human Rights Watch report on Chechnya. It makes disturbing reading and we share many of its concerns. We have repeatedly urged Russia to ensure full and transparent investigations of human rights abuses and we agree with Human Rights Watch that it is vital that Russia should resolve the details delaying the return of the Organisation for Security and Co-operation in Europe's assistance group to Chechnya, and the arrival of the three Council of Europe secondees to the office of the Presidential Representative on Human Rights in Chechnya.

The noble Baroness, Lady Stern, together with the noble Baroness, Lady Cox, also raised the serious problems of tuberculosis, HIV and AIDS. The UK is active on those issues. We are sponsoring two pilot projects in Tomsk, one of which was mentioned by the noble Baroness, Lady Cox, to tackle TB, plus a project to reduce transmission of HIV among injecting drug users. The noble Baroness, Lady Stern, asked about the proposed World Bank loan to assist with TB-related problems in Russia. I can tell your Lordships that a 150 million dollar loan has been agreed over 10 years. That loan should be approved by the autumn of this year and disbursement will begin early in 2001.

We are also active in penal reform. The Foreign and Commonwealth Office funded a penal reform project for Russia and eastern Europe worth £250,000. It helps prisoners to share best practice, including self-sufficiency schemes, and DFID is planning a project of alternatives to imprisonment which will work in two or three pilot regions in Russia. Like the noble Baroness,

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we welcome the amnesty for 120,000 prisoners announced on 26th May, but are concerned that that will not fully address the problems of overcrowding and medical problems, though it does include those of TB.

Perhaps I may come to the wider arena. Britain will work hard to ensure that Russia is a key partner in the G8 and to develop relationships with NATO and the EU. But in turn we need to be able to point to evidence of Russian preparedness to work with the international community constructively on areas of shared concern—Chechnya, proliferation and the Balkans—if we are to develop the sort of partnership that we want. But we absolutely agree with the noble Lords, Lord Blaker, Lord Ponsonby, the noble Baroness, Lady Cox, and others that our response to the challenges with which Russia will be faced must be a balanced one. We are determined to maintain that balance. I can assure the noble Baroness, Lady Cox, that we will never side with terrorism or with terrorists.

Some criticised the UK engagement with Russia and President Putin as being over-hasty, given the war in Chechnya. I believe that was mentioned by the noble Viscount, Lord Waverley. We have real disagreement with Russian policy, and its conduct in Chechnya, as the noble Baroness, Lady Williams, said, is unacceptable and produced grave humanitarian suffering. Nor, without a political settlement, will it produce Russia's stated objective of defeating terrorists. But we believe that engagement rather than isolation enables us to bring the message home to Russia. Six months ago, for instance, Russia was vehemently opposed to any international involvement in Chechnya. Since then, the OSCE, the Council of Europe, the EU and others have sent senior representatives to the region. I can tell the noble Lord, Lord Blaker, that the commission is working on the ground. We have not yet received a report but things appear to be going well so far as we are aware.

There are many issues with which we need to engage Russia. In conclusion, perhaps I may deal with the three raised by the noble Baroness, Lady Williams. First, she raised the matter of assistance and help that we give to Russia with the Council of Europe. We are giving full assistance. The UK assistance has been focused very much on human rights. The EU TACIS programme has been refocused since December on those issues. In relation to the NATO expansion to the Baltic States, Russia has no veto on the NATO enlargement. We made it clear that all states have the chance to apply for membership, but NATO and Russia have a full relationship in which all subjects are being discussed.

As regards our EU trading relationship, that is governed by the Partnership and Co-operation Agreement, which provides opportunities for discussion on all aspects of trade, including tariffs and quotas. There is much to do with our relationship. But I welcome the positive comments made by all noble Lords and the balanced way in which they represented the challenges and the successes that we need to look for in our relationship with Russia.


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