My Lords, I welcome this opportunity to say a few words about the report on the EU drugs strategy by Sub-committee F and, in doing so, pay tribute to the effective and experienced leadership of our chairman, the noble Lord, Lord Hannay.

We need to be realistic about the competence of the European Union and the objective of its drugs policy. It is not clear from the Government's response whether they agree that neither of the two main objectives of the 2005-12 strategy, the reduction of demand and supply, has been achieved. According to the independent evaluation by the RAND Corporation, although there have been reductions in demand for cannabis and recently a slight decrease in cocaine consumption, there is little evidence on whether these successes can be attributed to the strategy and its action plans. It goes on to say that if there are trends on the supply side, there is no evidence that they can be attributed to the strategy or its action plans. That does not mean that the 2005-12 strategy was not of some value, but that we need more focused objectives, as has been said already, than the 158 actions in the strategy's so-called "wish list". The Government say that while it is necessary to articulate broad ambitions and guiding principles, they should be,

"underpinned by specific, and where possible, measurable objectives".

The preparation of the next drugs strategy, which has to be ready by the end of 2012, falls on to the agenda of the Cyprus presidency over the next six months. With all respect to Cyprus, the APPG for Drug Policy Reform suggests that the Justice Directorate, which has the responsibility for drug control policy at EU level, should be taking the lead. It would be useful to hear from my noble kinsman the Minister what mechanism there is for the presidency to seek its input, and indeed that of the largest member states where drugs are a huge problem, in formulating the draft.

On the Government's refusal to sign and ratify the convention on money laundering for the second time of asking, does my noble kinsman have anything to say about the scandal of HSBC's dealings with Mexican drug barons, revealed in a US Senate report published on Monday, which was referred to by the noble Lord, Lord Hannay? Here, as in the US, financial institutions and their employees face civil and criminal penalties for failing to properly file suspicious activity reports. What steps are being taken to ensure that the SARs regime is not being widely flouted by HSBC here as it obviously was over there? Does he think that this disgraceful conduct reveals a need for tightening EU legislation on money-laundering?

One important recommendation by the committee on which the Government agree, for instance, is that greater use should be made of Europol's databases. The Government say that they are calling for more voluntary information sharing between member states, but this is an area in which there could be a specific objective, to increase the proportion of information routed through Europol's liaison bureau which is cross-checked with their central databases. There is no reason why that should not become routine, with specific encouragement, such as the publication of the percentage that is so cross-checked, broken down by member state.

The Government agree that the EU could do far more to reduce the supply of drugs through encouraging producing countries to diversify their agricultural economies away from illegal drugs. The Government quote the success of the UK-led project in Helmand province, Afghanistan, for supplying wheat seed to 160,000 farmers, and they say they are working to make alternative livelihood programmes sustainable for the long term. How can this be done, can my noble kinsman explain, after the UK has withdrawn from Afghanistan? If my noble kinsman says the scheme does not require the British presence, why is it working only in Helmand? Why is this a specifically UK project, when we are talking about an added emphasis in EU development policies? Can my noble kinsman quote any large-scale agricultural diversification projects sponsored by the EU in Latin America, and is there scope for co-operation between the EU and the US in this area which is so clearly of mutual benefit?

As the noble Lord, Lord Hannay, has already said, one alarming development which has occurred during the present EU strategy is the appearance of an ever-increasing array of new psychoactive substances, the NPSs. The EMCDDA, whose work, as the noble Lord, Lord Hannay, said impressed the committee greatly during our visit to Lisbon, reports that in 2011, 49 NPSs were notified, compared with 41 in 2010 and a mere 24 in 2009. The European Commission says that it will propose stronger EU legislation on these products, which are freely sold on the internet and in clubs, taking into account scientific evidence on the risks that they pose. Mephedrone and BZP, for instance, are identified as potentially harmful, but how can we or the EU satisfactorily assess the effects of substances coming on to the market at such a rate, particularly when some of them may have cumulative or delayed-action consequences for the user? Would my noble friend say if we attended the EU-US meeting in June on new drugs, and what conclusions were reached there?

As an aside, what is the Government's current thinking on the drug khat? A thoughtful article by Howard Swains in the Independent magazine suggests that banning khat would mean the imprisonment of more Somalis, damaging their job prospects and creating a recruiting ground for al-Shabaab. However, regulating supply and applying health and safety Laws to the mafrish where khat is chewed would help both legitimate suppliers and consumers. Probably the UK is the largest market in Europe for this drug and we could pave the way for European regulation, perhaps also for other relatively less harmful drugs as well as khat. The Government responded to the committee's suggestion of exploring alternatives to banning new psychoactive substances-such as regulating them as we do alcohol and tobacco-by saying that they were going to publish an NPS action plan in May. Will the Minister say whether our proposal has been taken up and how the Government action plan dovetails with the Commission's report on the information exchange, risk assessment and control of NPSs, published on 11 July?

As has already been mentioned, the Committee recommended prioritising the evaluation of harm reduction strategies. The Government replied that there must be caution in the absence of more robust and comparable evidence. It would be a mistake to neglect the Portuguese and Czech experience and similarly other member states could benefit from the development of an evaluation framework setting out the evidence base and assessing the value for money of our own 2010 drugs strategy. It should be a matter for discussion whether this is best achieved by promoting a European area network on illicit drugs to improve co-operation in drugs research-as the Government suggest-or perhaps by extending the remit of the EMCDDA. The EMCDDA already reports on drugs research, as for example on the use of supervised injectable heroin treatment for a small group of heroin users formerly thought to be untreatable. One thing is certain and that is that the problem of dangerous drugs is international. The Committee and the Government are agreed on the value of a comprehensive EU drugs strategy and the framework it creates for practical co-operation between member states.