Lord Bilimoria (CB): My Lords, I welcome SDSR 2015, which starts with a vision of a secure and prosperous United Kingdom, with global reach and influence, with the NATO target of 2% of GDP spending on defence agreed by the Government. Thank you very much. There will be an increase in the defence budget in real terms every year—thank you very much—as well as a commitment to increase and not to reduce the Army below 82,000, and to increase the RAF and Navy by 700 people. Thank you very much. Spending will be, “£178 billion over the next decade on equipment and equipment support”, increasing by 1% in real terms. This is all excellent news. The nuclear deterrent will be maintained, and the replacement of the Vanguard class with the new class. There will be an increase in, “the resources for counter-terrorism police and the security and intelligence agencies to pursue terrorists”, and, “more than double our spending on aviation security around the world”.

This is absolutely marvellous. India’s Prime Minister, Narendra Modi, on his visit last month to the UK, spoke in the Royal Gallery of three joint defence exercises between the UK and India already in one year. This is marvellous. Does the Minister agree that we should continue that?

We will be dedicating 1.2% of the defence budget to science and technology over this Parliament, and establishing, “a defence and security accelerator for government to help the private sector, allies and academia turn ideas into innovative equipment and services”.

This is absolutely brilliant—all music to my ears. I thank the noble Earl, Lord Attlee, for initiating this debate and congratulate all the maiden speakers.

The Economist has gone so far as to say that the SDSR 2015 allows Britain to reassert,

“itself as a serious military power”, and will allow it to regain some of the respect that it has lost in Washington. Given the debate and the action in Syria, both here and in the other place yesterday, there is every possibility that we will have to put boots on the ground to fight the spread of anarchy across Syria and Iraq, and we will be left in a difficult position.

The expertise in this House was demonstrated yesterday to be a hundred times that of the other place, yet we did not get to vote yesterday at all. It shows how important it is that we look ahead and recognise the effects of the so-called Black Swans. The Prime Minister said that we must expect the unexpected. Earlier this year, I was privileged to lead the debate in this House on the 200th anniversary of the Gurkhas’ contribution to the UK and India. My late father, Lieutenant-General Bilimoria, was commissioned into the 2/5th Royal Gurkha Rifles, Frontier Force, and commanded his battalion in the 1971 war for the liberation of Bangladesh, was colonel of the Gurkha regiment and president of the Brigade of Gurkhas and retired as commander-in-chief of the central Indian army.

The noble Lord, Lord Howell, spoke about soft power, the BBC and the British Council. Professor Joseph Nye of Harvard University said that a combination of hard power and soft power gives you “smart power”. SDSR 2010 was not smart—it was dumb. Quite frankly, it was negligent; we had no carriers, no Harriers, no maritime reconnaissance, cuts to our troops and means before ends. Does the Minister agree with the noble Lord, Lord West, that there has been a 30% reduction in military capability since 2010? I have been very outspoken in my criticism of the SDSR 2010, with the cuts to the troops of 80,000—you cannot even fill Wembley stadium. Prime Minister Narendra Modi spoke in Wembley stadium. Today there are barely 3,000 Gurkhas in the British Army whereas, in India, the Gurkhas are approaching 100,000. I was privileged to show General Dalbir Singh, the chief of the Indian army, from the 5th Gurkhas, around Parliament. Will the Minister confirm and reassure us that there will be no further cuts to the Gurkhas? Field Marshall Sam Manekshaw, former chief of the Indian army, said that if a man says that he is not afraid of dying, he is either lying or a Gurkha.

Yesterday, we saw the fight of the evil of Daesh, ISIL, ISIS, Islamic State or IS, whatever these monsters are called—we decided to intervene in Iraq and Syria yesterday, whereas last year we decided to intervene only in Iraq. Does the Minister agree that that was a mistake and that we should have intervened in Iraq and Syria a year ago?

Without doubt, defence of the realm is the most important role of government. We are a tiny nation with just 1% of the world’s population but thanks to the hard and soft power we have one of the most powerful defence forces in the world, so powerful that the world knows that this hard and soft power emanate from a country that is respected for and has fought for freedom, fairness, justice and liberty for centuries.

Lord Bilimoria (CB): My Lords, when Parliament was recalled in August 2013, I remember speaking on whether to intervene in Syria. I made the point that in the summer of 2003 my late father, Lieutenant-General Bilimoria, on his last visit to Britain before he passed away, was asked by a senior journalist, “General, do you think we should have intervened in Iraq?”. My father replied, without any hesitation, “No, we should only have intervened with the authority of the United Nations”. Today, as the noble Lord, Lord Owen, has said, we have the authority of the United Nations to take whatever steps are necessary to get rid of the evil that is Daesh, ISIL, ISIS, Islamic State, IS or whatever name these evil monsters are given. Last year, we made the decision to intervene in Iraq but not in Syria. I remember saying categorically at the time that this did not make sense and that it was a half-cocked measure, involving a border that Daesh does not recognise. I said that I feared we would need to revisit that measure in a few months’, or even a few weeks’, time. Here we are now, a year later. Does the Minister agree that with hindsight, we should have gone into Iraq and Syria a year ago?

A key difference between our situation now and the debates we had over the last two years is the recent publication of the 2015 SDSR. The Government have listened and they have committed to the 2% NATO spend. The SDSR of 2015 is a far cry from that of 2010. This review will strengthen our Armed Forces for situations exactly like the one we face today.

One of the primary reasons we need to intervene in Syria now is to support our allies, as we have heard, particularly after the horrific atrocities in Paris. However, as so many noble Lords have said, air attacks alone will not work. I agree with the points about the precision weapons at our disposal made by the noble Lord, Lord King, and also share the views of the noble Lord, Lord Ramsbotham, about the important role ground troops can play in the conflict. As the noble Lord, Lord Dannatt, said, we need to co-ordinate this. We must take note of what the noble Lord, Lord Hague, said in his brilliant maiden speech and accept the case for combining these strikes with Special Forces. Will the Minister confirm that? The local ground forces are not enough: they are too small and too fragmented. We need to build on what the noble Lord, Lord Owen, said. Can the Government clarify who will be leading these local ground forces and who will be co-ordinating them in a manner that renders them a viable force?

Hamish de Bretton-Gordon, one of the world’s leading chemical weapons experts, who has extensive dealings with Syria, has said that if allied forces launched a ground offensive, Daesh could be defeated in a matter of weeks. The problem, as we have seen in recent history, is that this would leave a vacuum.

We must be able to use diplomatic methods to rebuild society in a proper manner and not allow the area to descend into the kind of situation we have seen with our operations in Afghanistan and Iraq. We have spent more time there than the First and Second World Wars combined—let alone the billions of pounds spent, the lives lost and the number of wounded. The noble Lord, Lord Hague, said that we must be prepared for the possibility of partitioning the region and that we must accept the enormous political and economic changes required to achieve lasting stability throughout the Middle East. Does the Minister agree that, sadly, partitioning of the area might be necessary?

Last year, we intervened late and without the required force. I said a year ago that we may be required to intervene again. That is now the case. However, we must accept the reality that these air strikes alone will not be enough. The House of Commons Foreign Affairs Committee has said that they will have little more than “marginal effect” and are, “unlikely to be effective without reliable allies on the ground … and these would not be easy to find”.

We must go ahead with these air strikes, but let us not think that this is all that is required, or we will be back here once again in a few months’ time debating the next round of measures. Now that we are intervening in Iraq and Syria, we must do this in a fully committed way, with our eyes wide open.

My Lords, I am delighted that the Chancellor, George Osborne, has committed to the 2% target that Britain was instrumental in implementing at NATO. Our doing so was a crucial step in maintaining our capability to respond to unknown and unforeseeable circumstances, and yet the current plans the Ministry of Defence maintain for the reserves severely reduce our capabilities to respond to threats. I believe it is being used as a cost-cutting measure rather than as a means to improve our Army. It is means before ends, once again, just as it was in SDSR 2010.

The need to update our Reserve Forces is crucial. When the independent commission first investigated the Armed Forces, it noted that in 2005 the Army Reserve—then called the Territorial Army—was no longer required to support large-scale operations. Despite this, the reserve was not modified to reflect this, leaving 80 major units configured for operations. It is difficult to compare our military to America’s, given the wholly different size and nature of the Army Reserve, but in the United States, reserves make up 32% of the current army. In Australia it is 30%, and yet here in the UK it is only 16%. The Future Reserves 2020 consultation paper makes clear that the Canadian reserve force is far more prepared for active combat than our current force, drawing attention to the nature of graduate recruiting into the Army as preferable to that within our own Reserve Forces. The paper points out the effectiveness of Australian reservists in providing military aid to the civil authority for events such as the Olympics—as was required over here—in a manner instructive to the UK Army.

I thank the noble Lord, Lord Freeman, for initiating this important debate. I think the whole House would agree that reforms to modernise and upgrade our reserves are paramount. Yet I am concerned that the strengthening of the Army Reserve is primarily a cost-cutting measure rather than a military one. The integration programme has been poorly executed, to the extent that 65% of Regular Army members surveyed believe that reserves are currently not well integrated. Does the Minister recognise this? Given that the aim of the Army 2020 programme is to create a fully integrated force, this is worrying. These statistics demonstrate that the overall priority of the Government has not been to maintain the quality necessary within our Armed Forces. This is a real worry, because reserves seem to be making up for cuts in the Regular Army. For me, reserves taking the place of the Regular Army is an oxymoron. Surely the increase in reserve strength and capability should be something designed to complement the Regular Army, not replace it. Would the Minister agree?

Even with the course the Government have chosen to go down, it is essential that at no point are we left with an incapable force. Unfortunately, the current nature of the replacement programme leaves us threatened with just that. It is especially dangerous and leaves us vulnerable as a nation while the necessary transition to a more integrated force is being completed. As the noble Lord, Lord Freeman, said, the timeline of the recruitment and training of the reserves should be a cause of concern to us all. It was initially the case that the number of Regular Army members would not fall until the number of reserves had risen to compensate for the demand. Yet the projects set out in the Army 2020 plans are being used to cover for increasing weaknesses in the body of our Regular Army. The National Audit Office showed that recruitment of reserves is 67% down on required figures, and the figure for regular personnel is below target at 34%. Would the Minister confirm those figures? The figures confirm the fears that I and others have that the redevelopment of the reserves is primarily for budgetary reasons rather than military ones. Projections in this report have shown that we will only reach the 30,000 figure for reservists in 2025. In the years before achieving that objective and completing the transition to a fully integrated Army, we will be significantly less able to respond to threats. Would the Minister accept that? Such a reduced Army will mean that we are unable to exert ourselves significantly in the world or to cope with the so-called black swan events that are impossible to predict, and without the capability to respond swiftly in future years.

The United States Defense Secretary said, just recently, that Britain has always punched above its weight when it comes to our Armed Forces. Today is the 75th anniversary of the Royal Engineers’ bomb disposal unit. Today I heard Warrant Officer Karl Ley, who was awarded the George Medal for clearing more roadside bombs than anyone else in history—139, including 42 in a single village. He said that the British Army is the best-trained in the world, and he said it with pride. He said that because we are the best-trained in the world, “We train hard, we fight easy”. The British Army has to retain that culture and reputation of excellence as the best of the best in the world—something that is a matter of pride for all of us. The reform of our reserves to form a more integrated force is necessary to achieve that goal, but it should be pursued as a method to strengthen our Army capabilities, not as a method to save money and thereby weaken our capabilities.

On 3rd July, Lord Bilimoria was invited to be the Chief Guest Speaker at the Annual India Link Awards. He spoke about India-British relations and their smart power on the world stage, and his comprehensive speech (a transcript of which is available below) was extremely well received by all those present.

To cap off a wonderful night, Lord Bilimoria was also awarded with the India Link International Indian of the Year Award 2014-15, which recognised his significant achievements in the business and education sectors.

“India-Britain alliance as Smart Powers on the World Stage”

 

Your Excellency, Dr Varendra Paul, Deputy High Commissioner, My Lords, Sir Mota Singh – who has been a great inspiration to me throughout my career here in the UK, the first Indian ever to become a judge here – Dr Satyapal Sharma thank you for your welcome, and most importantly to Krishan Ralleigh and Vijay Ralleigh. It is remarkable what you have done in creating, running and publishing Indialink for twenty-one years. (applause)

I have here C.B. Patel, someone who I’ve known from the day I started in business, whose son was at Cambridge with me. And CB was saying to me just now – he has been one of the most eminent Asian publishers in this country – and he said he’s been doing it forty years, and for somebody to be here twenty-one years later, not just surviving but doing so well and having done an amazing job – hats off from CB Patel.

To give this lecture, following in the footsteps of another individual who has always inspired me, been a mentor to me, Lord Paul – thank you for what you’ve always done for the community, and I’m humbled to follow in your footsteps in delivering this lecture.

And we’ve got Bob Blackman here – a Member of Parliament who has been a great friend of the Indian community, thank you for being here as well.

There are many people I could single out, but I do want to single out one other person who’s sitting very quietly over there, and that’s Mr Sachar, the founder of the Asian Who’s Who and the Asian of the Year awards, who is always in the background, has never received recognition for what he’s done year in, year out for our community. (applause)

I take you to south India many, many years ago. There were two young brothers. The nearest school in Kerala for these brothers was in a little village six kilometres away. And the brothers would walk to school – and only the older brother got a place, the younger brother did not – the younger brother would sit outside the older brother’s classroom – and it was a hut, basically, this school – and the older brother would pass the textbooks through the window, to the younger brother.  That is the only way this younger brother could start learning. And of course eventually, the young boy got a place at school and he was very bright. He was so clever that years later, he got a scholarship to the London School of Economics. They were so poor it took the family a year to raise the money just to buy the clothes for him  to come to the UK – they had to defer his admission by a year. He came to the LSE, excelled, joined the foreign service – became head of the foreign service – and then eventually became the first dalit president of India, President Narayanan, who I had the privilege of knowing.

That story tells you that anyone can get from anywhere to anywhere. There is no stopping anyone for all the prejudices that exist, you can get anywhere. And I go back to India and I actually went to school in Trivandram for two years, to the Loyola school, a Jesuit school, when my father was commanding a battalion of Gurkhas there. And the India that I remember from my childhood was an India that was a closed country, a closed economy, inward-looking, protective. It was an India where consumers were starved of choice. It was an India which was run by a few business families, and no one else got a look-in. It was an India where people like Swraj Paul took a stand, and that took a lot of guts.

And when I set up Cobra in 1989-1990 – this is our 25th anniversary – just a little older than Indialink – I remember then, India was still that India. But I believed that India would one day open up, I believed that India would liberalise – and sure enough, in 1991 India did liberalise. Gurcharan Das, the famous author and journalist, produced a book called India Unbound. India actually was unleashed, and in spite of this liberalisation, in the 1990s the Indian political situation was very, very fluid. We had periods where you had one prime minister after another, literally one after another, and there was great instability politically, and yet in 2002 I spotted, finally, that the India growth story was taking off, and the Indian economy started to take off, where growth rates started to hit nearly 10%, well over 8%, and in 2003 I was appointed the UK chair of the Indo-British Partnership, and it was absolutely fabulous that things were finally beginning to take place.

And I founded the UK-India Business Council, and I remember then India had the BJP in power in 1999-2004, and that BJP government was doing so brilliantly economically – here was the economy booming, and yet in 2004 they were thrown out. Why? When you’re economically so successful? And of course the reason was because that growth was not seen to be inclusive enough. And you then had a congress government for ten years. And I was on PM Manmohan Singh’s advisory council for five years, and I saw that government in operation. And I saw the challenges that India has. And without a doubt, India is the most diverse country in every way – in terrain, in race, in religion, in every way it is the most diverse country in the world.

And I saw that the India that had been unleashed, one thing that powered it forward to this day, is the vibrant and free press that India has – represented here in the UK by people like Krishan Ralleigh and Indialink. And I also saw India’s capabilities, with all its challenges.

But then what about this country? This country which I came to in the early eighties, was looked upon as the sick man of Europe. This country was a country with no respect in the world economy whatsoever. I was told by my family and friends in the early eighties, that if you ever decide to stay and work after your studies, remember you will never get to the top – you will not be allowed to get to the top. You will not be allowed to get to the top because there will be a glass ceiling for you.

And they were absolutely right, three decades ago. Today we see the transformation, how that glass ceiling has been shattered. Looking around this room, people have shattered that glass ceiling. Today Britain, far from being the sick man of Europe, is the envy of Europe with a hugely successful economy.

And Britain’s soft power – I could talk for hours on Britain’s soft power. The BBC – whatever we may criticise about the BBC within Britain – we should always be grateful for the BBC. The world admires the BBC. And British music – whether it’s pop music, rock music, the Beatles, Queen, the Rolling Stones, or classical music, our Royal family, our creative industries, our sport, our schools – the most famous schools in the world, Eton, Harrow – this little country with less than 1% of the world’s population came third in the Olympics and Paralympics.

I could keep going on – our universities are the best in the world along with the United States. At any one time, one in seven world leaders have studied in the United Kingdom. Including the Greek finance minister! (laughter). The former PM of India, Dr Manmohan Singh, was a graduate of both Oxford and Cambridge. You can’t buy that kind of soft power! The institutions that this country has, are just phenomenal. Just look at London’s amazing museums, the Royal Societies – just in the medical profession alone, each one of the Royal Societies – of surgeons, physicians, gynaecologists, obstetricians, oncologists, you could just go on – each one world-class.

I’m proud to be the seventh Chancellor of the University of Birmingham. Anthony Eden, when he was Chancellor of the University of Birmingham, served for twenty-seven years and continued to serve even when he was Prime Minister – that wouldn’t happen today. And later this month I will be bestowing an honorary doctorate on Ajit Seth who just stepped down as Cabinet Secretary in India.

The University of Cambridge, my alma mater, has won ninety Nobel prizes, more than any other university in the world. One college at Cambridge, Trinity College, has been awarded thirty-two Nobel prizes. Another college, where Stephen Hawking is a fellow and professor, Gonville and Caius College, where Homi Bhabha went, where Sir Dorab Tata went – thirteen Nobel prizes. This is the power of British education.

I went to Milan where the world expo is taking place as we speak, and I went to speak at the opening week of the expo with the British ambassador in Italy, with the head of UK Trade  and Investment, and I went to visit our pavilion – and every country in the world has a pavilion at the expo, they are very impressive pavilions, because these pavilions are showing off that country and its capability. And do you know the most creative pavilion by far, is the British pavilion. You walk into it, it’s like walking into a garden, and there is this huge steel structure which is a beehive, with flashing lights – and the flashing lights are the movements and behaviour of a live beehive, at Nottingham University, here, which is being transmitted over there. With the queen bee and her activities, with musical humming, replicating what a beehive is doing, in this huge structure. That is how creative we are as a country – the most creative by miles in the expo.

This is the 200th anniversary of the battle of Waterloo. I visited the battle site, just outside Brussels, earlier this year, and the Duke of Wellington – the great hero of Waterloo – his motto was, “Fortune favours the brave”. And do you know, the battle of Waterloo wasn’t just Wellington defeating Napoleon – yes, that happened, but what it really demonstrated was the power of allies. It wasn’t just the British against the French – it was the Dutch, the Germans – if Marshall Blucher, the Prussian German general, had not arrived to help Wellington, Wellington would have lost. And those allies stopped Napoleon – a brilliant man, but a man who wanted to conquer the whole of Europe – resulting in one hundred years of peace in Europe, until the dreadful First World War, the centenary of which we are commemorating. Just look at that unity and peace, and here we have Greece with its financial problems – I don’t think we should ever take for granted the European Union and the peace that it has brought in Europe.

Going back to Britain’s power – design. We are brilliant at design. The most valuable company in the world, soon to be a trillion-dollar company, the first ever, Apple. The chief designer of Apple is Sir Jonathan Ive – a Brit. Our architects – Germany is seen as the most powerful country in Europe. Well if you go and see the German parliament, the Reichstag – it was rebuilt by Lord Foster, a British architect.

The Higgs-Boson that was just discovered – by the way, Higgs is a Brit – it was discovered in Geneva at CERN, an amazing laboratory, and I was taken around CERN by Sir Tejinder Virdee – Indian origin, British professor at Imperial College, one of the heads that discovered the Higgs-Boson. And who was the other head? Professor Dave Charlton of Birmingham University. So there again, these are revolutionary findings done by people from Britain.

And by the way, when I was there I was shown the computer lab at CERN, and there was a sign saying a person who worked here discovered and created the internet in 1989 – Tim Berners-Lee, a Brit. And then there was a sign there saying in 1993 the internet would be free to use in the world. So Britain is at the heart of transforming the world. London as a financial centre, despite the financial crisis, is still the number one financial centre in the world.

And the House of Lords had a committee on soft power chaired by my noble friend Lord Howell, and speaking at the launch of this report on soft power, Lord Howell commented recently on a group of Japanese visitors given a tour of Britain, and they said what was the highlight of the visit? And they said, a visit to the Burberry store. Now there are so many British brands that are just doing so brilliantly around the world – but the British brand that Britain needs to promote more than anything else, is Britain itself – because the world does not appreciate Britain’s powers and capabilities. That’s why the Great campaign that the foreign office has got going on within Britain and around the world is necessary, and is actually becoming a huge success.

And Professor Nye of Harvard University gave evidence for the House of Lords Committee, and he said the crux of international relations today is not just whose army wins – it is also whose story wins in the information age.

And talking of armies, hard power is important as well – soft power on its own is useless without hard power. And there I think we are in a really dangerous position here in the UK, where the government is refusing to commit 2% of GDP spend on defence, which is a NATO commitment. We are one of the most powerful defence forces in the world, and yet we do not have aircraft carriers thanks to the defence review five years ago, until another five years from now. We do not have marine reconnaissance aircraft because we’ve destroyed our nimrods, and we’ve got Russian submarines coming into our waters without the capability of surveillance. We don’t have our harriers that were on our carriers. Our British army is now coming down to the level where, at 82,000, we cannot fill Wembley Stadium. And I think with all the problem we’ve got around the world, with ISIL, with what’s happening in Ukraine, we cannot afford to shrink our defence forces and we should be spending at least 2%.

This is the 200th anniversary of the Gurkhas, my father the late Lieutenant-General Bilimoria was commander-in-chief of the central Indian army but also head of the Gurkhas, President of the Gurkha Brigade in India, commanded his battalion in the liberation of Bangladesh. And a fellow Zoroastrian Parsee, Field Marshal Sam Manekshaw, called Sam Bahadur by the Gurkhas, said of the Gurkhas, “If a man says that he’s not afraid of dying, he’s either lying or he’s a Gurkha”(applause) And I was privileged to lead the debate on the Gurkhas on the 200th anniversary in the House of Lords, the day after the pageant at the Royal Hospital Chelsea, which was attended by the Queen, the Duke of Edinburgh, Prince Charles and Prince Harry.

Britain has amazing capability in manufacturing as well. We have world-beating capabilities in manufacturing, but on the other hand our manufacturing is now just 10% of GDP.

We have parliamentarians now of Indian origin, represented by Lord Loomba here, Lord Paul. In 1987 when I was at Cambridge, I remember great celebrations because we had an Indian MP elected here in the UK, for the first time since India’s independence, Keith Vaz. The first Indian MPs going back to 1892, were all Parsees: Dadabhai Naoroji 1892, Sir Mancherjee Bhownaggree 1895, Shapurji Saklatvala 1922. One liberal, one conservative, one labour – and I am the first Zoroastrian Parsee in the House of Lords and I am a cross-bench peer so I have squared the circle! (laughter)

And there was one hereditary peer, Lord Sinha – those were the four Indian parliamentarians before India’s independence. Then there was a big gap, then Lord Chitnis who was at Birmingham University with my mother, a liberal peer – that was it until Keith Vaz in 1987. And I remember we celebrated the 25th anniversary of this first group of ethnic minority MPs in 1987 – in 2012 we stood on the steps of Westminster Hall, and there were sixty-nine of us on those steps. From four, to five, to sixty-nine. We’ve come a long way but we’ve got a long way to go.

Indian food we’ve been eating this evening – Cobra beer – all part of India’s soft power.

If you visit Imperial College right here in Kensington, in the middle of the college there is a tower in the quadrangle called the Queen’s Tower. In 1887 it was erected to commemorate the Golden Jubilee of Queen Victoria. The first Buckingham Palace garden party was held to celebrate Queen Victoria’s Golden Jubilee. And there at the bottom of this tower, the plaque reads ‘Her Majesty, Queen Victoria – Empress of India’ – the biggest and most powerful empire the world has ever know. And yet now there is no empire. Now the army is less than Wembley Stadium’s capacity.

And we had the visit of General Dalbir Singh Suhag who is now the chief of the Indian army, from my father’s regiment, the Fifth Gurkha Rifles Frontier Force – and I was with the General here, and I said “General, how big is the Indian army today?” 1.3 million. So India has huge hard power – India needs  huge hard power. India is in an area of huge instability, and historical issues with neighbours,  issues with Sri Lanka, issues in liberating Bangladesh, issues with China, with Pakistan – India needs hard power, and PM Narendra Modi has made that a priority.

When it comes to manufacturing, it may be 10% of our GDP but PM Narendra Modi has the “Make in India” initiative where he is targeting an increase in manufacturing from 16% to 25% of GDP. And I think we should have a target of getting our manufacturing in this country to a specific percentage in the way that India has.

And talking about UK-India, I was in India  – I arrived back today and I was driving from Chandigarh via Haryana to Delhi. Driving down an amazing four-lane highway. Suddenly on the left, between Chandigarh and Delhi, we came to a town called Karnal. Karnal is not a huge city, it’s a town – and there I saw the most impressive Jaguar Land Rover showroom I have ever seen – in the world! Owned by the Tatas – and today I was with the Jaguar team – and Jaguars are great cars, I think Farokh you drive a Jaguar as well – and nobody wanted to buy Jaguar Land Rover in 2008, nobody but the Tatas – their sales fell off a cliff in the financial crisis – but they stuck by it, invested in it, in design, in innovation. I was with their chief engineer today – today Jaguar Land Rover makes more profit every year than they paid for the whole company, when nobody wanted to buy it in 2008 (applause)

And the strongest form of India’s soft power, by the way, is sitting in this room – the people of Indian origin who are now reaching the top of every field, whether it’s Governors in the United States of America, some of the wealthiest and most successful businessmen in the world, whether it’s people right here in this room – the Indian community is reaching the very top. Mastercard is run by an Indian, Ajay Banga; the new head of Deloitte, the firm of accountants, is an Indian; and I could go on, Indians now leading the world..

And of course with our two countries we’ve got cricket putting the two countries together, and no better example than my childhood hero, my lifelong hero, Farokh Engineer who’s here with us today (applause) and I’ll never forget when I first met him when I came as a student to this country and I remember, at an event at the High Commission, I was so excited about it, and I said to him ‘ You know you’re my childhood hero – I remember you as the best wicket keeper in the world’ He said ‘No no no I wasn’t the best wicket keeper in the world – I was the VERY best!’ (laughter) I knew here is somebody where a journalist said to him, “Like Don Bradman you made a century before lunch, didn’t you?” He said ‘no I didn’t I made it by hitting the first ball for six after lunch!’ He was 94 not out before lunch. This is a legend, so Farokh, thank you for being here and for being an inspiration to us all (applause) 

And of course India’s soft power, I could go on – Bollywood, Indian music, Indian classical music – Indian classical dancing – we’ve seen Polomi who performed such a beautiful dance – let’s give her a huge round of applause again (applause)

Ravi Shankar – I remember once when Ravi Shankar was speaking at the Nehru Centre, and I met him – what a legend. There he spoke about about how he communicates with an audience. He said anyone can play an impressive raga, and with great flourish, any well-trained sitarist can do that – he said, I can do that, that’s not how I’ve connected with my audience. Every string I pluck, plucks every heart of every individual in the room. That was what made him the greatest ever Indian classical musician. Those legends that India has.

Yoga! I was privileged when Prime Minister Modi made the UN have international Yoga Day on 21st June which is the summer equinox, and we had the High Commissioner in parliament and I had my fellow parliamentarian including Bob Blackman who was witness to this, we conducted Yoga in parliament. (applause) We had mindfulness, meditation, office yoga in our suits, which you can do at your desk, breathing exercises, from Shri Shri Ravi Shankar’s institution, and Wellington College where my older daughter goes to school, named after the Duke of Wellington, created by Queen Victoria – every child at Wellington College is taught mindfulness, and that of course, all from India.

And as a chancellor of University of Birmingham on the other hand, I have one bone to pick with this government, and the coalition government. And that is the immigration policy. I think that is harming UK-India relations, I think it’s harming Britains’s soft power. And I’ve seen at universities the damaging rhetoric, when Theresa May said… ‘I want every foreign student to leave the day they graduate’ George Osborne the chancellor had to step in and say no, we will not do that. Taking away the two-year post-graduation work visa from foreign students – that was a mistake. Including foreign students in immigration figures and setting a net immigration target in the tens of thousands is wrong. Foreign students are not immigrants, they’re here as students, one of the biggest exports that Britain has – £13 billion – they enrich our universities, build generation-long links, and we should not jeopardize that at all. We should be encouraging foreign students. And the British public love the fact that we have foreign students here. If you ask the British public and survey them, do you think foreign students should be allowed to work in the UK after graduation, 75% of them say yes, they should be allowed to work. So I think the government is out of tune there, they should clamp down on illegal immigration, but when it comes to foreign students we should be setting targets to increase the number of international students, especially from countries like India.

The Premier League – Manchester United has shops in India. Indians now follow British football. The exchange of academics between universities is phenomenal. I just launched an initiative with the British Council called Generation UK-India, where 25,000 British students are now going to go and experience India over the coming years. Hundreds of them a year have started doing ‘Experience India’ and they all want to go back.

The Sirius program which I helped launch is encouraging foreign graduates to come and open their businesses here in the UK. And entrepreneurship in India, look how it’s flourishing – Narayana Murthy and the charitable work that he does. Azim Premji of Wipro and thousands of schools that he has funded – this is an inspiration to us all.

So before  I conclude, I do want to talk about one individual, Mahatma Gandhi. C.B. and I were talking about Gujarat – Lord Paul says he’s just been recently – I was in Ahmdabad and Gandhinagar earlier this year and I went to Mahatma Gandhi’s ashram. And there you have some of his old papers, which were brought out and it was a privilege to see them. And his whole thing was about right against might. He took on the whole British Empire and beat it, with right against might. And I always say in business, it is better to fail doing the right thing, than to succeed doing the wrong thing. And Mahatma Gandhi was a great inspiration. And keeping a country together – it is a miracle that India stays together. It is so diverse. And here, a small country like the UK, there is a danger of the UK falling apart, with the SNP now having 56 MPs whose sole objective is to break away from the United Kingdom. With the In or Out EU Referendum coming up here in Britain, I think we need to keep things together.

So before I conclude I’d just like to read this poem, my favourite poem – we just sang the Indian national anthem, well that was written by Rabindranath Tagore, a Nobel laureate from India, and my favourite poem of his is this:

Where the mind is without fear
And the Head is held high
Where knowledge is free
Where the world has not broken up into fragments by narrow domestic wars
Where words come out from the depth of truth
Where tireless striving stretches its arms to earth’s perfection
Where the clear stream of reason has not lost its way into the dreary desert sand of dead habit
Where the mind is led forward by thee into ever-widening thought and action
Into that heaven of freedom my father 

Let my country awake

(applause)

That poem says it all about the UK, about India, about Europe. And Prime Minister Narendra Modi , he’s got a plan about democracy , demography, demand, he’s got his dreams, he says that India’s changing fast, growing fast, moving faster than expected, learning even faster, India’s readier than ever before, and yet India’s challenges are as great as ever.

Corruption still has not been eradicated, the License Raj still exists. It is a challenge, it is huge. PM Modi is all-powerful and yet he lost an election under his nose in Delhi, and now we’ve got the Bihar elections coming up this year. I contributed to a book called ‘The New Bihar’ by N.K. Singh – and in that we were trying to see how did Bihar, the state where we have a brewery – we now brew Cobra in Punjab, Haryana and Bihar – and when I started brewing in Bihar, people said, Karan you’re going to Bihar? Are you serious? Have you got armed guards? Have you got kidnap insurance? And of course they were talking about the Bihar of over a decade ago. The Bihar now under Nitish Kumar, to his credit, crime went down six times in six years. Bihar is now a completely different Bihar to the perception people have. And it’s about governance, it’s about growth, it’s about inclusiveness, it’s about investment.

And I’m delighted that PM Modi is now going to be coming to the UK. I hope it’s definite – I believe it’ll be later this year in the autumn, because the last official PM visit we had from an Indian PM, I chaired the UK-India Investment Summit between PM Tony Blair and Dr Manmohan Singh at Lancaster House in 2006. So my message to PM Modi is please come to Britain, we’re waiting to receive you.

Earlier this week, I was driving from the brewery in Bihar to Patna, through rural India. And there I saw four mobile phone masts in a village, and there as the sun was setting, I saw three buffaloes with children riding on their backs, returning from the fields to the village. Hundreds of millions of mobile phone users, the biggest in the world – Vodafone is now number two in the world thanks to India. And there juxtaposed with that, children on buffaloes – a scene you would have seen thousands of years ago in India. That is the magic of India, that is the miracle of India.

PM Narendra Modi is a brilliant orator in Hindi, and in his speeches he often uses the word takhat – strength, power, and Professor Joseph Nye of Harvard University says that if you have the combination of hard power and soft power, you have smart power. And I think Britain has smart power. And I think India has smart power. Together we can be the smartest of powers.

And so, where Mahatma Gandhi is concerned, I conclude, I was very proud to be on the committee which set up the statue, we had our first meeting in July and the statue was built in March – government can move quickly when it wants to. And my favourite quote of Mahatma Gandhi’s, if I may paraphrase it – is this – because I believe in India and the UK and their potential, together in the future, because:

Your beliefs become your thoughts,

your thoughts become your words,

your words become your actions,

your actions become your habits,

your habits form your character,

and your character determines your destiny.

Thank you very much Krishan, and congratulations to you.

(applause)

 

My Lords, last week, when I asked the chief of the Indian army, General Dalbir Singh Suhag—from my late father Lieutenant General Bilimoria’s regiment, the 5th Royal Gurkha Rifles—what is the strength of the Indian Army today, he said 1.3 million. Yet today we have cut the British Army to 80,000—not even enough to fill Wembley Stadium. I thank the noble Lord, Lord Sterling, for initiating this debate. As he said, the Chancellor has now asked for a further £500 million cut in defence spending even before SDSR 2015.

 

The US Defense Secretary, the head of the US army and the US President have warned Britain about the impact of defence cuts in no uncertain terms. In the debate I was privileged to lead on the 200th anniversary of the Gurkhas last week, I asked the Minister to confirm that there would be no more cuts to the Gurkhas. They are now down to 3,000. Even when pressed, the Minister could not tell us that they would be protected. I find this deeply worrying.

 

It has also just been revealed how out of tune the Government are with the public when it comes to defence. PwC has just prepared a report titled Forces for Changeafter surveying the public’s views on defence. I declare my interest: PwC is the auditor of the Cobra Beer Partnership, my joint venture with Molson Coors. The PwC report says that 53% of the public want defence spending to be increased beyond the current £37.4 billion. Only 16% want the defence budget cut. Some 37% believe the cost of funding the military helps strengthen the economy. Frighteningly, 53% feel the Armed Forces are weaker than 20 years ago.

 

Words from the public that recurred throughout the survey were alarming: “underfunded”, “overstretched” and “unequipped”. The strategy of compensating for cuts in the numbers of full-time soldiers with reserves, as we heard from the noble Baroness, Lady Smith, is an oxymoron. Reserves are meant to be reserves and we have seen the challenge of recruiting high-quality reserves. Will the Minister confirm this? The PwC report said that 72% of the public had a positive view of the Armed Forces, and 69% rate the Armed Forces as trustworthy versus only 23% when it comes to Parliament. Some 65% also felt that modern threats are the biggest threats to the UK: terrorist groups, cyberattacks, known unknowns and unknown unknowns. No one predicted 9/11. No one predicted the Arab spring. No one predicted Libya. No one predicted Syria. Barely a year ago no one had heard of Islamic State.

 

As we have heard before, Britain has amazing soft power: the BBC, our universities—I could go on. But soft power alone, without hard power, is useless. As Professor Joseph Nye of Harvard University said, a combination of hard power and soft power gives you smart power. SDSR 2010 was the opposite of smart. Quite frankly, it was negligent. We have no carriers, no Harriers, no maritime reconnaissance, cuts to our troops—means before ends. I urge the Government to be in tune with the British public, to listen to our steadfast ally, the United States, which has spoken out at the highest level, and to commit to the NATO 2% of GDP defence spending.

 

To conclude, this debate is on the eve of the 200th anniversary of the Battle of Waterloo. The Duke of Wellington’s motto was, “Fortune favours the brave”. One word the public mentioned above any other in the PwC report about our wonderful, best of the best, cherished Armed Forces—the best in the world—was the word “brave”. I challenge the Government to be brave.

My Lords, yesterday I was privileged to attend the Gurkha pageant held at the Royal Hospital Chelsea, where I was proud to be a commissioner for six years.

Throughout the pageant, my eyes welled up with childhood memories of being brought up among the Gurkhas—it all came flooding back. My late father, Lieutenant-General Faridoon Bilimoria, was commissioned into the 2/5th Royal Gurkha Rifles, Frontier Force, and commanded his battalion in the 1971 war for the liberation of Bangladesh. His battalion suffered heavy losses and casualties, including officers I had known and grown up with as a child. How ironic that a couple of decades later I would found a brand, Cobra beer, which we supply to thousands of Indian restaurants in the UK, the vast majority of them run and owned by Bangladeshis.

I am on the commemoration committee of the Memorial Gates on Constitution Hill and was chairman of the committee for six years. These gates exist because of the amazing tenacity of one individual, my noble friend Lady Flather. The Memorial Gates commemorate the contribution of the 5 million volunteers from the Indian subcontinent, Africa and the Caribbean. Inscribed on the ceiling of pavilion next to the gates are the names of the Victoria Cross and George Cross holders, three of whom were from my father’s battalion, the 2/5th Gurkhas—one posthumous.

Gaje Ghale VC and Agansing Rai VC were living legends, who I was fortunate to have grown up with and have been inspired by for the rest of my life. Agansing Rai VC was subedar-major when my father was commanding his battalion. Legend has it that when my father, as a young captain in a remote area in north-east India, received the telegram of my birth, Gage Ghale was next to him and jumped for joy. The ground shook, because he was such a large man.

What I learned about the Gurkhas really quickly is that they are the kindest, most caring and most gentle people. For example, when I took my South African possible future wife on her first visit to India, my father’s retired driver, Bombahadur, who continued to serve with my father at retirement, took me aside and said, “Baba, you should marry her!”. My father’s beloved Gurkha had given his approval, and of course then there was no question but that I was marrying Heather.

However, these kind gentle people in peacetime are the fiercest warriors mankind has known. Just reading the citations of the Gurkha VCs makes your jaw drop with feats that are, quite frankly, superhuman. Sir Ralph Turner, a former officer of the 3rd Gurkhas, had written:

“Bravest of the brave, most generous of the generous, never had country more faithful friends than you”.

We are celebrating the Battle of Waterloo and the 200th anniversary of the Gurkhas’ service in the same year. I visited the site of the Battle of Waterloo earlier this year. If the Duke of Wellington had had Gurkhas among his troops, the Battle of Waterloo would not have been won on the playing fields of Eton or because Blücher came to the rescue; it would have been won because Napoleon’s troops, including his beloved Imperial Guard, would have been running in fear back towards Paris, fleeing from the fierce Gurkhas, just as the Argentinians did in the Falklands.

It was disheartening when I first spoke about the Gurkhas in this House in 2008 to start the fight for the Gurkhas who had served in Britain for four years to have the right to stay on in the UK if they wished to do so. It seems so unfair that a person could work for a company for four years and have the right to stay indefinitely, and yet someone who was willing to commit the ultimate sacrifice was not, at that time, allowed to. After that debate—I thank the noble Lord, Lord Lee, who initiated the Bill—Joanna Lumley, whose father had served in the 6th Gurkhas, came to the fore and spearheaded a public battle that generated an outcry among the British public, who were overwhelmingly appalled at this injustice and unfairness. I will never forget in one television interview how Joanna Lumley humiliated the then Home Office Minister, Phil Woolas. Of course, we won the day and justice was delivered.

We should never take for granted what these amazing men have done in the past 200 years for Britain and India. I have been very outspoken in my criticism of the SDSR in 2010, when cuts were made to the Army that I believe were negligent, cutting the number of Army troops to 80,000—not even enough to fill Wembley Stadium. Today, there are barely 3,000 Gurkhas in the British Army, with the Gurkha regiments amalgamated into one, the Royal Gurkha Rifles, with just two battalions, and some in the Queen’s Gurkha Signals, the Queen’s Gurkha Engineers and the Queen’s Own Gurkha Logistic Regiment.

However, in India, the Gurkha regiments left with the Indian army after India’s independence have flourished, with six battalions per regiment, an additional regiment formed—the 11th Gurkhas—and Gurkhas serving in all other arms of the army as well. There are approaching 100,000 Gurkhas serving in the Indian army, recruited from Nepal and India, who, after they retire, settle in both India and Nepal. They are a vital backbone of the Indian army. Will the Minister agree that the 200th anniversary celebrations of the Gurkhas are for the British and for India? It was a privilege today to show General Dalbir Singh Suhag, Chief of the Army Staff of the Indian army, around Parliament—all the more for me because he is also from the 5th Gurkhas. When my father was commander-in-chief of the central Indian army, an army of 350,000 strong, I always felt it meant more to him to be president of the Brigade of Gurkhas and colonel of his regiment.

Could the Minister commit, where the Prime Minister is unwilling to in this dangerous world that we live in, to the NATO commitment of 2% of GDP spent on defence? Could the Minister also reassure us and confirm that there will be no further cuts to the Gurkhas? I look forward to the forthcoming SDSR report and hope that this time it is not about means before ends but about looking carefully at the needs first. It is our duty to look after the veterans, and I commend the work of the Gurkha Welfare Trust and all that it does for Gurkhas to live out their lives with dignity. Can the Minister confirm the commitment for future support of the Gurkha Welfare Trust to continue the wonderful work that it does? Will the Government reassure us?

His Royal Highness the Prince of Wales, who was present at the pageant, said:

“The Brigade of Gurkhas is more than just a fighting force, it is also—in every sense of the word—a family”.

Particularly at this time, with the devastating earthquakes by which so many Gurkhas have been affected so tragically, does the noble Earl feel that we are doing enough to support the Gurkhas in Nepal? Will the Minister confirm that? Our thoughts and prayers go out to all those affected in the two disastrous, tragic earthquakes. Major-General Ashok Mehta, my father’s second-in-command, said:

“Two hundred years of distinguished soldiering have put a halo around the Gorkha in the hall of fame. In this hour of national calamity it is the Gorkha-ness of the Nepalis that will be the greatest enabler to confront the monumental tragedy”.

In my own company, Cobra Beer, I sent out 200 hundred letters to our Nepalese restaurant customers straight after the first earthquake to offer our support to raise funds, and I am delighted to say the restaurants have raised almost £200,000. That is the wonderful spirit of giving in our country.

A fellow Zoroastrian Parsee, Field Marshal Sam Manekshaw—popularly nicknamed by the Gurkhas as “Sam Bahadur”—said:

“If a man says he is not afraid of dying he is either lying or is a Gurkha”.

Prince Harry, who was also present at the pageant yesterday, said that,

“there was no safer place than by the side of a Gurkha”.

This is the Ayo Gorkhali, or “Here come the Gurkhas”, the cry of the Gurkhas—the finest fighting force the world has ever known. The Gurkha motto is:

“It is better to die than be a coward”.

On the 150th anniversary of the regiment of the 5th Gurkhas in 2008, which took place at Sandhurst—I am proud to be a member of the regimental association— I heard a prayer written by the Reverend Guy Cornwall-Jones, whose father served in the 5th Gurkhas. That prayer said:

“Oh God, who in the Gurkhas has given us a people exceptional in courage and devotion, resplendent in their cheerfulness, we who owe them so much ask your special blessing on them, their families and their land. Grant us thy grace to be faithful to them as they have been faithful to others”.

As a nation, we can never thank the Gurkhas enough. We will be eternally grateful to them.

Lord Bilimoria went on to detail the threats to the UK’s soft and hard power, which include the repeated budget cuts inflicted on Britain’s cultural and defence institutions, and noted the areas in which the UK continues to excel.

My Lords, I congratulate the noble Lord, Lord Howell, and his committee on this excellent report, Persuasion and Power in the Modern World. In fact the report shows why we need a permanent foreign affairs committee in this House.

In his evidence to the Select Committee, Professor Nye said that in today’s international relations it is, “not just whose army wins, it is also whose story wins in an information age”.

I was in India, speaking on smart power, soft power and hard power—I am glad the committee made those connections—and I visited Mahatma Gandhi’s ashram. I reflected that if you are talking about soft power there is no better example than Mahatma Gandhi. One of his great quotes is “The battle of right against might”. He inspired Nelson Mandela. He has inspired so many people. I am delighted to say that on Saturday 14 March we will be unveiling a statue of Mahatma Gandhi in Parliament Square with the Indian Finance Minister and our Prime Minister. That is wonderful news.

There are so many examples of India’s soft power. One is yoga. There is going to be an international yoga day on 21 June. We should have yoga in Parliament. Another is Bollywood films. You could go on. We have heard example after example of the soft power that we have here in Britain. There is the BBC, to which almost every speaker has referred—and wow, this is the House of Lords, where we have the former director-general of the BBC, the noble Lord, Lord Birt, speaking so brilliantly about it. Then there is the British Council. I have been privileged to work with the British Council. It does amazing work and its budgets keep getting cut.

When we talk about soft power, it is also, in India’s case, the 25 million people of Indian origin around the world who are now reaching the very top—running some of the biggest companies in the world. The dean of the Harvard Business School is an Indian. The head of MasterCard is an Indian. The new head of Deloitte’s is an Indian. It goes on. That is also power. The British diaspora around the world is a huge source of power for us.

However, the worrying aspect of this, particularly in today’s world, is hard power. That is where this country—a tiny country with less than 1% of the world’s population—still has one of the most of the most powerful and effective defence forces in the world. Yet we had an SDSR in 2010 that was appalling, negligent and neglectful. We cut our Armed Forces brutally. We got rid of our aircraft carriers and our Harriers. As one of the world’s leading defence powers, we are without carrier capability in today’s environment. We needed them for Libya and we need them tomorrow. We do not have them. Who knows when they will arrive: perhaps in five years’ time if we are lucky. We also got rid of our Nimrods, while right under our noses the Russians are sending their submarines. We could do with those Nimrods. Yet we physically, brutally, destroyed those aircraft. I was at Wembley Stadium seeing Chelsea win the other day. Our army would not fill Wembley Stadium. That is shocking. To think that we could make this up by recruiting 30,000 reserves is wrong. Reserves are meant to be reserves. It is an oxymoron to say that reserves are permanent forces. We have, in any case, had difficulty recruiting them. That is very negligent. Are the Government committed to spending 2% of GDP on NATO now and in the future, with no further cuts to the Armed Forces going forward?

The Indian Prime Minister, Narendra Modi, is now one of the most powerful people in the world, with an outright majority in India. He is a brilliant orator in Hindi—I would say one of the best orators in the world. In one of his speeches in India he kept using the Hindi word “takhath”, which means strength or power. He was talking about hard power, soft power and smart power.

In this excellent report, almost every one of the witnesses testified that the Government’s new visa policies are harming the assets that build the UK’s soft power. In fact, the editor of the Economist, John Micklethwait, was scathing about how increased visa restrictions and costs have affected UK commerce, describing the system as—I use his words—“bananas” and “suicidal”. He said: “All you need to do is to talk to businesspeople or, indeed, students in any other country who want to come and spend money here … It is completely useless in terms of recruiting people”.

I can vouch for that. It is the impression that we have created. Today, I was proud to host an event on international students, chaired by my noble friend Lord Hannay, with the Russell group in Parliament. Thirty-four per cent of academic staff at our Russell group universities—I am proud to be chancellor of the University of Birmingham, a Russell group university—are of non-UK nationality. Nineteen per cent of the undergraduates at Russell group universities are from outside the UK and—wait for this—47% of postgraduates are international students. That is how valuable they are to us. I know it; I was an international student myself when I came to this country. I know how difficult it was to raise the money to pay for the education over here. Yet, as a percentage of GDP, Britain spends half as much as the United States on higher education. As a percentage of GDP, we spend less than the OECD and EU averages on higher education.

When it comes to research and development and innovation—another great soft power—we way underspend as a percentage of GDP. Cambridge University, with 19 Nobel prizes, has won more Nobel prizes than any other university in the world. That is how well we do as a country. Yet we make it so difficult for international students, who bring in £14 billion. Education is one of our best exports and higher education is one of our strongest areas of soft power. In the United States it was found that of all patents registered at the country’s top 10 patent-generating universities, 76% had a foreign-born inventor. One of the founders of Google is foreign.

Yet you look ahead and you see the difficulty created by and the rhetoric that comes from—I am sorry to name her specifically—the Home Secretary. Forget Nigel Farage—even he objected to the vans telling illegal immigrants to “Go home”. When a £3,000 bond was proposed for all foreigners from countries such as India, alarm bells rang around the world. There were headlines in Indian newspapers when the Home Secretary stated that foreign students should leave the day after they had finished their studies.

The Bangalore Mirror said:

“Come to the UK: Graduate, and then get the hell out!”.

The Times of India’s headline was:

“UK to ‘kick out foreign graduates’ to curb immigration”.

Is that the rhetoric that we want from the jewel in the crown of our higher education soft power?

We should introduce exit checks immediately. Can the Minister confirm that exit checks are carried out, whereby passports—EU and non-EU—are scanned for everyone coming into and going out of the country through our ports? When that happens, we will have more control over our borders.

Our music industry and our sports, with the Premier League, Chelsea and Manchester United, produce household names around the world. Does the Minister agree that we should set a target to increase the number of international students? I believe that we should have a specific target to do so every year. Also important are our creative industries. The Royal Family, too, was mentioned by the noble Baroness, Lady Hooper. Seventy-one per cent of Americans rate the Royal Family in terms of popularity. That figure is almost as high as it is here, at 77%.

I hope that the SNP never gets into power, because getting rid of Trident would be the most negligent act in this country.

My noble friend Lord Hannay said something about Britain punching below its weight. I am sorry; I normally agree with my noble friend but I think that Britain is a country that continually punches well above its weight. Our capability in every area lies at the heart of this debate, whether in high-end manufacturing, aerospace, beer, universities, the creative industries, film, music or our institutions. We are the best in the world.

However, what underpins it all—I conclude with this—is that there is one thing in the world that we are respected for more than anything else, and that is integrity. It was described to me best by our noble and right reverend friend Lord Williams, the former Archbishop of Canterbury, when he said that integrity comes from the Latin word “integer” or “integrum”, which means whole, complete and not fragmented. It means that you can stand up to the light and the fire and be absolutely pure, and this country has integrity.

 The Select Committee on Soft Power and the UK’s Influence report Persuasion and Power in the Modern World is available here.

My Lords, in his first Budget in 2010, the Chancellor said that the Government would,

“have debt falling and a balanced structural budget deficit by the end of this Parliament”.

—[ Official Report , Commons, 22/6/10; col. 168.]

Despite the Chancellor’s tough talk about austerity and cutting public expenditure, the reality is that public expenditure as a percentage of GDP has continued to increase. I thank the noble Viscount, Lord Younger, for leading this debate.

Yesterday, it was announced that the Government will spend £746 billion in 2015-16, rising to £765 billion in 2018-19, compared with £692 billion in 2010. Government spending is increasing and, as a percentage of GDP, our national debt is rising. According to the OBR, it will now peak at 81% of GDP in 2015-16. This means that the Chancellor will completely miss his target to ensure that net debt is falling relative to GDP by 2015-16.

We have a perception of austerity that has simply not been matched by reality. Yesterday, the Chancellor acknowledged that we are at least another four years away from that target. To build on what the noble Lord, Lord Skidelsky, said, if we are borrowing £300 billion more than the Chancellor said he would in 2010, why should anyone believe him this time around? The OBR has predicted that public expenditure is going to have to fall to 35.2% of GDP by 2019-20—the lowest level since the 1930s. Let us remember that the 1930s were pre-welfare state days. Can the Minister confirm that that is really achievable?

In order to achieve those cuts, it is predicted by the OBR that the defence budget, which is already negligently too low, will have to be cut by 60%. Can the Minister confirm that that might have to happen, although it is hoped that it never will. However, I was delighted to hear that the Government will be giving money to veterans, including £2 million for the Gurkhas. I was privileged to have been brought up with the Gurkhas. My late father, Lieutenant-General Bilimoria, was commissioned to the 2nd Battalion, Fifth Gurkha Rifles (Frontier Force), and was president of the Gurkha Brigade when he was commander-in-chief of the Central Indian Army. I was privileged to have been brought up with two Victoria Cross holders from birth—they were living legends. Therefore, I thank the Government for doing that.

However, it is the low level of interest rates for a prolonged period, at the level of 5% that led to the financial crisis from which we suffered. Yet today we are being propped up by interest rates that are 10 times lower—at 0.5%. Government borrowing has been increasing year on year and expenditure on debt interest has contributed to it. It is more than £1.27 trillion and is costing us £1 billion a week—more than the entire defence budget.

Does the Minister agree that interest rates might have to rise? The Governor of the Bank of England made a ridiculous statement that he would start increasing interest rates when unemployment fell below 7%. Unemployment is at 6% now and interest rates have not gone up, but they will go up at some stage, and if they do the debt interest levels will go up. The SNP made the mistake in its budgets with the oil price and its budgets are shot to tatters at the moment. Will the Minister give his views on future interest rates?

Wearing my hat as chancellor of the University of Birmingham I have seen that our higher education sector is one of the jewels in our crown. I am delighted that the Government are about to announce loans for postgraduate studies. On the other hand, we highly underinvest in higher education as a proportion of GDP compared with the OECD, the EU and America. On R&D and innovation, the patent box is all very well—it is stored—but if we invested the same proportion of GDP as countries such as America, the OECD and the EU, we would help our productivity hugely. Our current account deficit has reached 5.2% of GDP, which is worse than Italy and France. Our fiscal deficit of 5% is almost double that of the United States, let alone Germany which has just 0.2%.

As the noble Lord, Lord Adonis, said, skills are so essential. I am proud to be an ambassador for Studio Schools. Last month I opened the Vision Studio School in Mansfield. That is the sort of initiative that I am glad the Government are backing. Tax breaks to apprentices are excellent but, on the other hand, the word “entrepreneurship” was completely missing from the SME Bill. Entrepreneurship should be the cornerstone of our future growth. I launched the 10th anniversary of the Cambridge University Centre for Entrepreneurial Learning this week. That is what we should be backing. The Sirius campaign, backed by UKTI, bringing young entrepreneurs to Britain to develop their businesses, is a great initiative that the Government should be doing.

The Government are doing a lot, but are they doing enough on the big things? We have a tax system that is so complicated that the tax code is now 17,000 pages long. The Office of Tax Simplification is an oxymoron. Our corporation tax rate is low but our income tax rate is too high. Capital gains tax is too high. The Indian restaurant industry which we supply and the Bangladesh Caterers Association UK are constantly complaining about VAT and asking for it to be reduced. Our hospitality and tourism industries say that VAT is far too high. We do not have a competitive tax system.

The noble Lord, Lord Rose, in his excellent speech, spoke about confidence. We need confidence, productivity, and a better educated and more entrepreneurial workforce who think globally. Government expenditure should be at a believable rate: 35% is unachievable; 40% would be a realistic rate. We could then balance our books and have an educated, productive, confident and enterprise-based economy so that, even as 1% of the world’s population—that is all we are—we can continue to punch above our weight.

The Joint Intelligence Committee report says that the Syrian regime has used chemical weapons 14 times since 2012, and yet the noble Lord, Lord Robertson, in a brilliant speech, said that with 100,000 lives lost and 2 million refugees, we have not intervened, but now we want to do so. The noble Lord, Lord Dannatt, in another brilliant speech, said that we have held back all these years from intervening in Syria but now, this week, the drums of war have been banging. So what has happened? This awful chemical attack is the straw that has broken the camel’s back.

We have not intervened so far but there is a point to consider which nobody has raised yet. Although we are expected to intervene, in 2010 the Government, in the SDSR, cut our Armed Forces. They got rid of our aircraft carriers. I was in India just recently. India has aircraft carriers. It might be getting new ones, but it has kept its old ones until it gets the new ones. We have cut our Harriers. We have cut our Nimrods. We have cut our troops. We are reliant on reserves, and yet now we are expected to intervene. I said in 2010, three years ago, that we did not know what was going to happen next. What happened next? Libya. What happened after that? The Arab spring continued. What happened after that? Mali. What happened after that? Oh, the Olympics. We needed our troops in the Olympics.

We do not learn. We feel that we can just call on our troops. As the noble Lord, Lord Dannatt, and the noble and learned Lord, Lord Mayhew, said, we expect our troops just to perform—“Switch, go, fight: give up your lives. Make the ultimate sacrifice”. But what about the nation; is it behind us? We know that the country is completely not behind intervention in Syria.

We are caught between a rock and a hard place. We feel that we have to do something. We have our allies, the Americans, who for a century have stood by us and saved this country. We feel that we have to support them. However, in Iraq the biggest mistake in 2003 was that we had not thought through what would happen afterwards. We imagined that everything would be fine. We had not thought of the aftermath, we had not planned it. As the noble Lord, Lord King, asked, did we plan on the retaliations that would take place? I was an ambassador for the London Olympics and we were celebrating on the steps of Trafalgar Square on 6 July 2005. We all know what happened the next day, on 7/7.

We know that if there is a clear strategy, it is very effective. In the first Gulf War, in Kuwait, we were in there and then out of there, mission accomplished. My father fought in the liberation of Bangladesh, when there was an East Pakistan and a West Pakistan. India waited and planned for over a year. The Prime Minister was putting pressure on the army chief but he said, “No. When I’m ready we’ll go in”. They went in and the job was done in two weeks. Here, however, we go and intervene. We say that we will do it in a proportionate manner. As we have heard, however, what about Russia, what about China, what about Iran, what about Lebanon? What about all the domino effects? We will take proportionate measures but will we get a proportionate reaction? Just yesterday the Iranian Supreme Leader, Ayatollah Ali Khamenei, said:

“The Middle East region is like a gunpowder store and the future cannot be predicted. If President Obamagets stuck in this trap, he will certainly leave behind bad memories of his presidency. The intervention of America will be a disaster for the region”.

Those are threatening words. President Obama says that a red line has been crossed. But I question the Government’s judgment. They have cut our budgets, cut the Armed Forces and then want to rush in and intervene without even waiting for the UN inspectors’ reports. I do not understand it. Yet we have this wonderful House, with the brilliant speeches that we have heard, one after the other, and we are not even to have a vote today. The other place will have a vote but we will not. The expertise of this House is 100 times that of the other place and we do not even get a vote.

Every day we delay action, we feel guilty. A humanitarian crisis is getting worse every single day. It is only natural that we want to intervene, but we should only do that when we have exhausted all other opportunities and have a proper strategy that we have thought through. Then we can do it. In conclusion, I have always been taught that a fool makes a mistake, makes a mistake again and does not learn. A sensible person makes a mistake, learns from it and does not make it again. A wise person learns from other people’s mistakes and does not make a mistake in the first place. It is too late for us to be wise, but let us at least be sensible. Otherwise we will be foolish and the consequences will be disastrous.