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House of Lords

Monday, 19 January 2009.

2.30 pm

Prayers—read by the Lord Bishop of Chester.

Energy: Nuclear Fuel Bank

Question

2.36 pm

Asked By Lord Jenkin of Roding

The Minister of State, Department of Energy and Climate Change & Department for Environment, Food and Rural Affairs (Lord Hunt of Kings Heath): My Lords, the EU has announced up to €25 million of support towards a nuclear fuel bank under International Atomic Energy Agency (IAEA) control, as proposed by the US-based nuclear threat initiative. In addition, details of the UK-led “nuclear fuel assurance”, formerly known as an enrichment bond, are being finalised.

Lord Jenkin of Roding: My Lords, while it is obviously very welcome that the European Union should have recognised the huge priority that needs to be given to this whole process during the nuclear renaissance and to contribute to the non-proliferation of nuclear weapons, can the noble Lord go a little further and tell us which of the several different proposals on the table is now the front runner? Does the UK still prefer what he called the nuclear fuel assurance proposal, formerly the enrichment bond, and, if so, what are its prospects of success?

Lord Hunt of Kings Heath: My Lords, 12 proposals have been put forward. My understanding is that a number of those proposals will fall to be considered by the IAEA over the next few months and certainly, we hope, by the end of the year. I endorse the noble Lord’s comments about the urgency of this matter. As far as I understand, the UK’s proposal is complementary to the NTI proposal. Clearly, other proposals also have to be considered, but we support the NTI proposal as well as continuing to work on the UK’s proposal.

Lord Hannay of Chiswick: My Lords, does the Minister agree that the priority must be to reduce the number of these proposals, as the objective being pursued by all those who have put forward proposals is pretty well common? We surely must winnow down these proposals. It is now five years since the Secretary-General of the UN put forward this proposal on the basis of a high-level panel, and the 2010 nuclear proliferation review conference is coming down the track. There is not infinite time for it. His noble friend said in this House last week that he was less pessimistic

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about the 2010 review conference. This is one of the jewels that will have to be in that crown if it is to be a success.

Lord Hunt of Kings Heath: My Lords, I do not disagree with the noble Lord. It is absolutely right that the 12 proposals now on the table should be considered as quickly as possible and that at the end of the day arrangements are in place under which states that wish to develop nuclear power peacefully are enabled to do so but without the proliferation of enrichment facilities. We are at one with noble Lords in our wish to see this progress. I am hopeful that discussions over the next few months will indeed enable that to take place.

Baroness Williams of Crosby: My Lords, does the Minister agree that, in the light of the recent decision by the United States in its agreement with the UAE for the importing of uranium for the purposes of civil nuclear power rather than enrichment by the UAE, we may well be on the way to a new and very exciting set of proposals for dealing with nuclear proliferation? To that, I add the recent American indication that the new Administration would support a fissile material cut-off treaty. Does he agree that these two together—the nuclear fuel bank and the fissile material cut-off treaty—could bring us very close to an answer to the horrors of proliferation and nuclear weapons?

Lord Hunt of Kings Heath: My Lords, I agree with the noble Baroness. I take this opportunity to pay tribute to her for her work with the NTI, because clearly the leadership that is being shown will be very important indeed to preventing the proliferation that she referred to.

Lord Bates: My Lords, does the Minister recognise that any storage of nuclear-enriched uranium will pose significant security and diplomatic issues? What thoughts have Her Majesty’s Government on where such a store should be located?

Lord Hunt of Kings Heath: My Lords, on the question of storage, seeking to discourage the development of enrichment facilities so that it is possible for countries that wish to develop nuclear power for energy purposes to import and have the assurance that there will be a continuing supply is a very important part of dealing with this problem. As for storage in this country, the noble Lord will know that the Government have been proactive in encouraging development of potential new storage facilities. Expressions of interest in relation to the storage proposals that have been made are being received at the moment. We are confident that we will come to an effective solution.

Lord Teverson: My Lords, the idea of a nuclear fuel bank is primarily around non-proliferation. The United Kingdom Government have been an important part of the EU3 in its negotiations with Iran. Has Iran responded positively to the idea, and do the Government intend to take it forward within that context?



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Lord Hunt of Kings Heath: Yes, my Lords, we are committed to what is described as the EU3+3 dual track strategy. Iran has a very stark choice; increasingly tough sanctions to persuade the country to change its mind, or dialogue to lead to full negotiations if the Iranians suspend their enrichment-related activities.

Lord Stoddart of Swindon: My Lords, further to the previous question, as Iran is a member of the nuclear non-proliferation treaty, does that mean that Israel, which is not a member, contributes to this sort of bank?

Lord Hunt of Kings Heath: My Lords, the UK has urged Israel to accede to the nuclear non-proliferation treaty as a non-nuclear weapons state and to sign up to a full scope safeguards agreement with the International Atomic Energy Agency.

Iran: Human Rights

Question

2.43 pm

Asked By Lord Corbett of Castle Vale

The Minister of State, Foreign and Commonwealth Office (Lord Malloch-Brown): My Lords, we made over 40 representations and statements in 2008, bilaterally and through the EU. The most recent representation took place on 31 December, when the French, acting as presidency of the EU, summoned the Iranian ambassador in Paris to convey our serious concern about the recent treatment of Dr Shirin Ebadi. Other recent EU declarations have focused on reports of mass executions, stonings, the persecution of human rights defenders and other key human rights concerns.

Lord Corbett of Castle Vale: My Lords, I thank the Minister for the continuing pressure that the Government are putting on the mullahs over their continuing human rights abuses, and particularly for the work that was done at the United Nations on the report of the Commission on Human Rights at the back end of last year. Is he aware that 1,000 people, including children, have been hanged since August 2005 and 44 in the past month alone? Brutal punishments also include stonings to death, limb amputation without anaesthetics and eye-gouging. Is it not time that the UN added sanctions on these human rights issues to those already in place over other matters?

Lord Malloch-Brown: My Lords, my noble friend catalogues all too grimly and accurately the horrific human rights situation in the country. Iran executes the second highest number of people in the world— 320 last year. It executed kids—minors—and, despite an apparent ban in 2007, stonings appear to have

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resumed recently. We are aware of the difficulties that we all have in finding a coherent way of dealing with Iran—the previous Question addressed that in some ways—but there is no doubt that human rights must be part of our dialogue.

Baroness Knight of Collingtree: My Lords, I assure the Minister that there is very great interest in both Houses of Parliament on this matter and very strong support for what the noble Lord, Lord Corbett, said. Will he consider following the example of the French ambassador and call in our representative from Iran to talk to him about the widespread concern on this matter?

Lord Malloch-Brown: My Lords, I will certainly make sure that our envoy is fully aware of the concerns of this House and the other place. On the recent visit here of the Iranian Deputy Foreign Minister, my colleague Bill Rammell raised these very issues. We made sure that Iran is in no doubt about the concerns of all of us.

Baroness Uddin: My Lords, perhaps I may express my dismay at the treatment of Shirin Ebadi and the catalogue of human rights violations that my noble friend Lord Corbett listed. However, does the Minister agree that it is better to ensure that we continue the dialogue? Does he believe that the new incumbent President Obama will make some difference to the dialogue that may take place in the near future?

Lord Malloch-Brown: My Lords, my noble friend touches on a real truth, which is that the dialogue with Iran has been reduced to this vital issue of nuclear weapons and that Iran is quite dismissive of our efforts to raise other issues. We need to arrive at a point where the dialogue covers a broader number of subjects and from which we can engage with Iran effectively on these appalling atrocities.

Baroness Falkner of Margravine: My Lords, does the Minister agree that, 30 years since the Iranian revolution, we in the West have tried all sorts—demarches, engagement and disengagemen—and have put just about everything on the table? Rather than using megaphone diplomacy, particularly at this time of flux in Iran, which is due to the forthcoming elections, does he agree that sometimes the sotto voce approach would perhaps gain more? I can only endorse the view—does he agree?—that dialogue is the way forward and that we should use other, more subtle means, rather than backing Iranian forces that are based outside that country: those here in the UK and in the US.

Lord Malloch-Brown: My Lords, I thought that the noble Baroness was subtle until the last part of her question. Many human rights defenders in Iran ask us to support them when they get into trouble, but not to pre-emptively speak up for them before that, because

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that, although it does not literally become a kiss of death, nevertheless means that they become targeted, risk imprisonment and so on.

Lord Howell of Guildford: My Lords, as regards a coherent way of dealing with Iran in the coming phase of international affairs, is it not right to say that although we will probably have to engage with this revolting regime on various crucial strategic matters, we should never for a moment forget the kind of list that the noble Lord, Lord Corbett, reminded us of, which by all standards—even mediaeval standards—is fairly disgusting? We should use every opportunity, while we have to engage and discuss nuclear issues and other things, to remind Iran and the world that these are completely unacceptable standards and that this regime will make itself a pariah of the world, until and unless it improves its human rights record in this area.

Lord Malloch-Brown: My Lords, I think that the noble Lord is correct. That is why engaging the regime on an array of issues that go broader than just the nuclear is not, as some have feared, a strategy of appeasement but a recognition that this regime, in many facets of its behaviour, exhibits at its core that it is an authoritarian regime which brooks no criticism and seeks a military power in order for it to dominate its region. We have to put all these issues on the table and deal with it in a tough and realistic but pragmatic way.

Lord Anderson of Swansea: My Lords—

Baroness Sharples: My Lords—

The Minister of State, Department of Energy and Climate Change & Department for Environment, Food and Rural Affairs (Lord Hunt of Kings Heath): My Lords, it is this side’s turn.

Lord Anderson of Swansea: My Lords, historically, Persia/Iran has a proud record in the field of education and tolerance, even from the time of Cyrus, yet we know that the Baha’i community is prevented from attending universities and, now, apparently even from attending schools. That is contrary to the obligations incurred by the Islamic republic under the Universal Declaration of Human Rights and, indeed, under Article 33 of the International Covenant on Economic, Cultural and Social Rights. Whether it be sotto voce or through the United Nations agencies, what are we doing to remind Iran of its international obligations in respect of the Baha’i?

Lord Malloch-Brown: My Lords, I assure my noble friend that we and the EU have raised these matters regarding the Baha’i, as well as others. We are very concerned about the seven Baha’i leaders currently under arrest—a matter that has already been raised in this House. No one in Iran can be left in any doubt about our concern for these individuals and about the persecution of their religion.



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Economy: Exchange Rate

Question

2.51 pm

Asked By Lord Barnett

The Financial Services Secretary to the Treasury (Lord Myners): My Lords, the Pre-Budget Report 2008 states:

“Export volumes growth in 2009 is forecast to be 0 to 1/2 per cent, but as growth in the UK’s export markets recovers and the effects from sterling gradually encourage more companies to pursue export opportunities, growth is forecast to pick up in 2010 and further in 2011”.

The Pre-Budget Report also mentions that,

on prices, but it states that inflation is expected to return to target in 2011 as other factors exert downward pressure.

Lord Barnett: My Lords, I think that I thank my noble friend; I am not sure that that answers my Question. Does he accept that the depreciation of the currency is positively helpful as a step towards economic recovery in the sense that it will help to get us out of the recession rather quicker than would have been the case without that correction of the currency? Can he assure us that he will leave the currency to find its own level and not seek to manage it in some strange way that I am not sure about?

Lord Myners: My Lords, the adjustment that we have seen in the value of sterling should be helpful to British exporters, including, in particular, the very large manufacturing sector, to which my noble friend Lady Whitaker referred last week. It should also mean that opportunities emerge for domestic manufacturers to supply domestic demand which has previously been met by production from overseas. I assure my noble friend that the Government’s monetary policy will continue to pursue the framework that has successfully been in place since 1987—namely, to target inflation and not an exchange rate.

Lord Tebbit: My Lords, I want to ask the Minister again. Underneath that mass of verbiage, was the Answer to the noble Lord’s Question, “Yes, it’s good” or “Yes, it’s bad”? Which was it?

Lord Myners: My Lords, within the verbiage to which the noble Lord, Lord Tebbit, refers, I have answered the questions with as much care as I can. I certainly rest assured that, although he accuses me of verbiage, he will not be accusing me of laziness—a description that he has applied to a new member of his Front-Bench team in the other House.



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The benefit of a lower exchange rate is enhanced export competitiveness and an ability to provide more demand for domestic production than from overseas sources. That is what I said earlier; I repeat it.

Lord Newby: My Lords, the noble Lord said that the Pre-Budget Report assumed that exports would start growing in the second half of the year. What is the Government’s current estimate as to when the economy as a whole will start growing again?

Lord Myners: My Lords, the Government are required under the Industry Act to place economic forecasts before Parliament on two occasions in a year and no doubt my friend the Chancellor of the Exchequer will do so at the time of the Budget.

Lord Higgins: My Lords, would the noble Lord agree that if we were members of the European single currency it would not have been possible for us to cut interest rates in the way which the Government have, and that that would not have been likely to assist economic recovery? As far as the exchange rate is concerned, would he agree that the effect depends on the elasticity of demand for exports and imports? Have the Government made an up-to-date estimate of these?

Lord Myners: My Lords, I agree with the observation of the noble Lord, Lord Higgins, that we are free to set our own interest rates. As a member of the single currency, we would be bound to the single-currency interest rates. On his second question, the Government’s forecasts take account of elasticities of demand and supply in terms of their effect on the trade account.

Lord Peston: My Lords, is my noble friend aware that in economics we rarely have a laboratory experiment with respect to the exchange rate? The exchange rate plunged in 1992 when we left the ERM. For four years from then our share of world exports rose continuously. Therefore the answer to my noble friend’s Question is very simple and straightforward: it is good and it is not bad. The more interesting question is: what is the likely path of the exchange rate this year? If noble Lords opposite want some free financial advice and fancy a punt, my guess is that the forward purchase of sterling over the coming year will be highly profitable.

Lord Myners: My Lords, I am not sure there was a question there. We are all reassured, however, that we can rely upon the Peston family for advice.

Lord Cobbold: My Lords, does the Minister agree that devaluing sterling is short-changing our depositors and that competitive devaluations were a very damaging feature of the 1930s?


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