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Lord Howell of Guildford: My Lords, I did not say "Iraq". I said "Iran will get its nuclear weapons". It is a very different thing.

Lord Hannay of Chiswick: My Lords, I thank the noble Lord, Lord Howell, for that. But I also said "Iran", and that I do not think we can afford to shrug our shoulders and say that Iran will get its nuclear weapons.

Time does not permit me to say a great deal about the current situation in and around Iraq. I will mention only one point, relating to regional security. For far too long, the Gulf has been an area of instability. Each of the three principal regional players—Iran, Saudi Arabia and Iraq—have faced off against each other. Now there ought to be an opportunity to set off on a new course, to consider how this sub-region can find a basis for co-operation and confidence building, and could gradually reduce the rivalries and mutual threats which have contributed to the feeling of insecurity which has prevailed. After all, Iraq desperately needs the co-operation of its neighbours if it is to find stability. But its neighbours equally desperately need a stable and unthreatening Iraq if the mistakes of the past are not to be repeated. Clearly, too prominent a role by non-regional powers in any attempt to establish sub-regional co-operation is likely to be counter-productive, but it would be helpful to hear from the Minister how she views the prospects in this respect.

In concluding, I would like to return to the issue of Britain's intelligence assets and the report by the noble Lord, Lord Butler. We often in this House praise the professionalism and courage of our Armed Forces, and rightly so. They are our main line of defence. But they are not the only guarantors of our security and, in the shadowy struggle against the forces of international terrorism in which we are now engaged, it is already clear that the use of military force will be the exception, and that intelligence-based pre-emptive action through police co-operation on a worldwide basis will be the crucial determinant of success or failure. After all, if you reflect on it, the only case of the use of military force so far in the struggle against terrorism took place after the events of 9/11, and after intelligence-based pre-emptive action had proved wanting. So we depend on the professionalism of our security services.

Having worked alongside the intelligence services for more than 40 years, I believe them to be as good as any in the world. But they will not remain so if we do
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not give them our full support and backing—not just in material terms, although that is vital, but also in terms of political and moral support. Mistakes were made on this occasion, and not only by the intelligence services. They must now be remedied. But, as with our Armed Forces, let us be no more stinting of praise when it is due, than we are of criticism.

Lord Clement-Jones: My Lords, I mentioned earlier that I visited Iraqi Kurdistan this August as a guest of the Kurdistan regional government. In passing, I must say that I admire the impeccable sang-froid of Mr O'Brien and the Minister's private offices. Despite telling them of my plans, asking for travel advice for both Turkey and Iraq in two telephone calls, I was not briefed or rung back. Either they were quite rightly very confident about the region and its security or it is an illustration of just how dispensable opposition politicians are so far as concerns the private offices of Ministers.

Your Lordships need little reminder that the Iraqi Kurds helped the coalition forces during the invasion. They are the only people who gave direct military support, and are one of the few instinctively pro-Western Muslim societies.

The political structure of the region was essentially founded in the period after the no-fly zone and safe haven was imposed by the US and UK—John Major must take a great deal of credit for that—after the Kurds of northern Iraq had suffered appalling hardship at the hands of Saddam Hussein on several occasions, particularly at Halabja and during the so-called Anfal campaign, when 4,000 villages were destroyed by Saddam Hussein's troops.

In contrast to those terrible times, the future is bright for the region. It is probably the only place in Iraq about which one can say that here and now. With little resource other than border tolls and an inadequate proportion of the UN Oil for Food money, the KRG has done wonders in starting to build a modern infrastructure. They have built a religiously tolerant, secular, pluralistic democratic society. It is notable that many of the Cyhaldean Christians retreating from the bombs in Mosul are taking refuge in Iraqi Kurdistan. Women comprise 45 per cent of the undergraduates in the region's universities. There is a free press.

It is now by far the most stable and secure part of Iraq. No US or UK soldier has been killed in the region. The transport infrastructure is rapidly improving, with quality roads being constructed. Hawler (Erbil) International Airport is due to open shortly, both for cargo and passengers. Great progress has been made in providing universal education at primary, secondary and tertiary levels in Kurdistan, even in the smallest village, and in adult education.

There are other building blocks yet to come into place which are important and need to happen, but where the timing is less certain. Agreement will be needed between the PUK, which controls Sulemania province, and the KDP, which controls Dohuk and
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Erbil provinces, to form a joint administration. Regarding the return of oil-rich Kirkuk province to Iraqi Kurdistan, although not contained in the Transitional Administrative Law, there appears to be an understanding between the KRG and the central interim government on a process for return which should start in the relatively near future with the repatriation of dispossessed Kurds and culminate in a referendum. But the outcome is uncertain and Kirkuk remains unstable—a political battle probably lies ahead.

There appears to be a commitment from international donors and the interim government for the funding and construction of the Beckhma dam, which will have a major impact on agriculture in the region and generate hydro-electricity for the whole of Iraq. But that is a major project costing some 500 million dollars and it is unclear just how much of the money committed by donors to Iraq has yet been received. Agreement on ownership of oil assets and share of oil revenues is also further down the track but, as Nechirvan Barzani, the Prime Minister of the region, has indicated, that is a matter of negotiation.

In the meantime, there is a degree of trust between the KRG and individual members of the central government in Baghdad because the deputy Prime Minister and foreign Minister are Kurds and because the Prime Minister, Dr Allawi, is very familiar with Iraqi Kurdistan and has many friends in the region. As an act of faith the KRG has been prepared to forgo revenues that previously they had regarded as being essential for the administration of Kurdistan, namely the border tolls, and assign those to central government on the basis that the central government will in future allocate funds fairly to them.

Another building block not yet in place is the future shape of the legal system after the TAL (the provisional constitutional agreement reached before handover by the Central Provisional Authority) gives way to a new permanent constitution and legal system. The contents of the TAL and its acceptance by the members of the transitional government are, however, highly significant: acceptance of Kurdish as an official language; specific recognition of the Kurdistan regional government and its current functions, particularly over policing and security; and the right of the Kurdistan regional assembly to amend laws, except those falling within the exclusive competence of the federal government.

However, there is no guarantee that it will apply after the elections due to be held next year. As the Minister said, a new permanent constitution needs to be agreed. One of the stumbling blocks for the US, UK and the CPA has been the failure to understand the nature of the federal way forward for Iraq. In the UK we have what might be called asymmetrical federalism, with Scotland, Wales and Northern Ireland and the intended English regions having very different powers; likewise, in Canada. There is no neat solution in Iraq but any constitutional settlement there must recognise the political, social and economic contribution that
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Iraqi Kurdistan can make to the country and ensure that it retains the degree of autonomy that it has achieved at such a historically high price.

Given so much progress and the co-operation between the KRG and the transitional government, you would have thought that the British Government would be doing their bit to help Iraqi Kurdistan with its development. Yet, as we have heard from the Minister today, they are not even planning to set up a consulate in Erbil. The FCO has, or intends to have, consular facilities in Basra, Baghdad and Kirkuk, all of which are far less secure than Erbil, the administrative centre of Iraqi Kurdistan and its fastest growing city.

Visas are mostly required by business people in Iraqi Kurdistan who wish to come to the UK to do business. In June, UKTI—UK Trade and Investment—sponsored jointly with the Kurdistan Development Corporation a direct investment conference which the KRG Prime Minister, Nechirvan Barzani, attended. Mr O'Brien, the DTI/FCO Minister, welcomed the participants to it. The failure to install a consulate is a complete contradiction of the enlightened approach of UKTI. It amounts to shooting British business in the foot; yet it appears to have been done on cost and security grounds. Is this a case of the FCO, as ever regarding the Kurds and Iraqi Kurdistan, listening to the wrong advice?

Needless to say, I hope that the Government will adopt a more helpful attitude, try to solve some of the problems now facing Iraqi Kurdistan and help it to develop economically. The consulate is one matter; another is using its influence in the EU to ensure that Turkey improves conditions at the Khabur border point with Iraq. When I crossed in August this year I found that essentially nothing had changed since a piece was written in 2001, which describes the run down towns from Diyarbekir to the Kurdistan border, "shabby and threatening border controls", and where,

In summary, the piece said:

I felt exactly the same sentiments. My return journey was, if anything, worse, with border guards describing my literature about agriculture and education as a "problem", because it mentioned the words "Iraqi Kurdistan".

Border traffic is restricted by the Turkish Government to 750 trucks a day. Currently it takes four days for a truck to pass through from the Iraqi side of the border to Turkey. These are not administrative processing problems. The Iraqi Kurdistan side of the border can process 3,000 trucks a day. Currently Turkey, as a threat to Iraqi Kurdistan, is also proposing to build a new border point with Iraq through Turkomen populated territory and to close the existing border. Economic development in the Kurdish areas of south-eastern Turkey is reported by the independent commission on
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Turkey to be taking place, but it is certainly not very apparent. It appears that the Turkish military is now resorting once again to clearing Kurdish villages in the name of security, continuing an oppressive policy that has been carried out for the past 15 years.

I have visited Turkey many times in the past 30 years and I admire many of the developments that have taken place there. I respect it as a staunch member of NATO and I am keen to see it as a fully fledged member of the EU. In particular, I hope that the EU summit agrees this December to start negotiations for accession. However, it is vital that the UK and other member states make Turkish entry conditional on a change of approach to both its own Kurdish people and the Kurds of Iraqi Kurdistan. There are enlightened voices in the Turkish Government and they must be given every encouragement to accord full human rights, a free press, autonomy and economic development to their Kurdish population in south-eastern Turkey. Turkish companies are playing a major role in Iraq generally, but particularly in Iraqi Kurdistan, so it is greatly in Turkey's economic interest to recognise the economic potential of the region.

The KRG and the major parties in Iraqi Kurdistan do not have separation from Iraq on their agenda. Kurds elsewhere, particularly in Turkey, are much more interested in economic development than separation. I hope that this Government above all recognise the realities in the way that they treat the region in their policies.

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