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Grand Committee

Thursday, 10 October 2013.

Co-operation Council for the Arab States of the Gulf

Question for Short Debate

1 pm

Asked by Lord Luce

To ask Her Majesty’s Government what is their assessment of the United Kingdom’s relationships with the countries of the Co-operation Council for the Arab States of the Gulf.

Lord Luce (CB): My Lords, this debate provides an opportunity to focus on the Government’s relationship with members of the Gulf Co-operation Council. I look forward to the contributions of noble Lords and to the Minister’s response. Much of the Middle East is in serious turmoil at a time when Britain’s role in the world has become more modest. It makes sense, therefore, to concentrate on areas and issues which best serve Britain’s interests. The stability and prosperity of the GCC states are a clear British interest, and I commend the Government for their positive approach to this region.

The Gulf is of major international economic importance. It is likely to remain so, even as international flows of oil and gas change with time. The GCC states possess 30% of the world’s crude oil reserves and 23% of natural gas reserves. Their sovereign wealth funds hold up to $1.5 trillion of assets. GCC investment in Britain was more than $2.25 billion in 2012. Our exports to these countries are more than £10 billion per annum and are increasing steadily. We have 166,000 British ex-patriots in the GCC working to strengthen our links in many areas. There are tens of thousands of students from the GCC studying in Britain.

In the wider Middle East, GCC states are now playing a major and influential role. Saudi Arabia, the UAE and Kuwait are key backers of the new Egyptian regime. Saudi Arabia and Qatar have provided vital support to elements of the Syrian opposition. Oman’s dialogue with Iran has recently taken on new significance. Britain’s relationship with these six states remains unique. We have historic connections going back, in some cases, more than 200 years. When Britain finally withdrew from responsibilities in the Gulf in 1971, there were many who forecast a quick demise of the new Gulf states, and that Iran under the Shah would be the strong, stable nation in the Gulf. As we know, the out-of-touch Shah was overthrown in 1979, to be replaced by a theocracy. The rulers of the GCC have not only survived, but remained reliable allies safeguarding the flow of oil and recently providing vital staging facilities for operations in Iraq and Afghanistan.

I first visited the Gulf in 1959. I still find it hard to grasp the scale of the transformation from traditional societies with just a few outward-looking trading ports

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to nation states with unimaginable wealth, modern cities and influence in the world. It is as though they had jumped like a grasshopper out of an historic Middle East into the modern world. In recent years, my only interest in the Gulf has been as patron of the Sir William Luce Trust at Durham University, where we have worked since 2005 with Chatham House and Ditchley Park to try to understand the pressures for change in the GCC and how those countries are dealing with it.

Earlier this year, I accompanied Richard Muir, the chairman of the trust, on a tour of Gulf countries. This visit, two years after the Arab spring, reinforced many of our conclusions since 2005. These monarchies and peoples are our historic friends; for the most part the rulers still command the confidence of those who live in their state. We must continue to give them our strong support. However, this should not be uncritical, provided we speak as friends to friends and with an informed understanding of the task and dilemmas these rulers face in bringing about change.

We need at the same time to acknowledge that each Gulf country is different. The events of spring 2011 sent a shockwave through the Gulf. Some have called it a “youthquake”, as 50% of GCC citizens are under 30. These events were a catalyst for these young people for the first time openly to question, criticise, challenge and aspire to play a role in their countries. Each Government had their own reaction. A combination of political, economic and, in some cases, repressive moves has for the time being preserved order, and these states remain basically stable. Saudi Arabia has injected $130 billion into its public sector and offered funds to help Bahrain and Oman take similar action. However, the underlying challenges for Governments are today greater than ever before. Resources of oil, gas and water are finite and being rapidly depleted, while subsidies drive up demand. Low-cost imported labour, mainly from Asia, is becoming controversial. At the same time, there is still high unemployment among the indigenous population, particularly the young, with a sharp contrast between wealth and poverty, job discrimination and some corruption.

Money on its own cannot satisfy aspirations, and Syria shows the path down which repression can ultimately lead. The GCC Governments all recognise that further political as well as economic change is an essential part of the way forward. As Lampedusa wrote,

“If we want things to stay as they are, things will have to change”.

Each of these states is seeking to evolve, each in its own way and at its own pace.

Kuwait faces a challenge as to how its Government and lively Parliament can reconcile their respective roles constructively. In Saudi Arabia, 30 women have been appointed to the Shura Council, and women will participate in the next municipal elections. Qatar might benefit from a little less foreign venture and more constitutional development, led by its new ruler. The UAE, in addition to constitutional development at state and federal level, faces the need to develop a fully independent judiciary and transparent mechanisms for handling human rights cases. Oman continues to evolve its two-chamber Parliament, which can now

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propose legislation and review audits. Oman has given its judiciary and national human rights commission independence and authority.

Bahrain is at a most critical stage and perhaps provides the real litmus test for peaceful evolution. That country has an historic tradition of tolerance between religions and sectarian groups, but faces a major challenge to remove discrimination against the Shia majority to enable all political parties in its Parliament to play a constructive role and, above all, to complete implementation of all the recommendations of the Bassiouni Independent Commission of Enquiry, so bravely set up by King Hamad. Its national dialogue between government, political parties and civic society must continue to be strongly encouraged by the British. I invite the Minister to comment on those developments.

The GCC states cannot be immune to the cross currents of the Middle East, ranging from turmoil and civil conflict in Egypt and Syria, historic Sunni-Shia tensions, the Persia-Arab rivalry, particularly between Saudi Arabia and Iran, and the broad struggle between political Islam and theocracies and secular forces. Inevitably, all these events may strengthen the voices of those who are opposed to further change. People in the Gulf value stability and are aware that they are living in young states never previously at peace within stable borders and which have moved within a generation from tradition to modernity and from poverty to great wealth. They know, too, that they are an integral part of a region still full of raw, secular, sectarian and tribal tensions.

But things cannot and do not stand still. During my tour of the Gulf states in February, I was impressed by the quality of some of the key institutions that have already evolved—including elected and appointed assemblies—the recognition by some key Ministers, parliamentarians and officials of what needs to be done, and the frankness of many of them, including some in very senior positions, in private discussion about the enormous challenges they face and their need to face up to them.

As we have recently seen elsewhere in the region, change when it comes can be violent, and violent change does not guarantee a democratic outcome. I share the view that successful transformation requires a long haul. After all, we have experienced our constitutional development over 500 years and it is hard to disagree with those in the Gulf who advocate continuous dialogue as the only means to make progress, and that this must take into account at all stages the Arab experience of the tested Majlis or Shura system of consultation. Our interest is to support this approach along a path of relentless and constant constitutional evolution and to seek to assist wherever we can with ideas, encouragement and practical help. However, we should also recognise that our action will be far more effective if it is against a background of strong friendship built on mutual respect and confidence, and that the most valuable advice may be that given in private. An absolute key is to develop a personal rapport with the leadership in all these countries and to be constructive in our relationship. The Foreign Secretary has set a good lead on this and our Arab Partnership Fund is a

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good framework within which HMG can work positively with our friends. I look forward to hearing from the Minister how this important strategy is working.

1.10 pm

Baroness Falkner of Margravine (LD): My Lords, I thank the noble Lord, Lord Luce, for the opportunity to have a debate on the countries of the Gulf Co-operation Council, and the United Kingdom’s relationship with them. This is not a frequently debated topic in our House: we spend a lot of time on the Middle East, but not so much on this particular part of the Middle East, which is, as the noble Lord pointed out, one of the most interesting, particularly during its current transformations.

I begin with some personal reflections. This morning I was involved in a seminar with a group of young Arab PhD scholars, because I sit on an advisory board which is facilitating higher education from these regions into the UK. It is led by President Martti Ahtisaari, the Nobel prizewinner and former President of Finland. When we started on this venture a few years ago, at the time of the Arab awakenings, we wanted to build capacity for leadership. The need for that was evident in the countries we were looking at in the MENA region—Tunisia, Libya, Syria, Egypt—rather than in the Gulf, where we thought that state finances were such that they did not need help. In this area we were looking to instil leadership through education, by opening mindsets.

This morning, as we were talking to the 20-strong group of scholars from universities across the UK—though principally London ones—what came home to us was that two and a half years ago, when we started this venture, these countries were in transition to democracy. Today they are all in a state of actual or impending conflict. I share that observation because it leads me to the three things I want to say about the Gulf Co-operation Council region.

The UK’s relationship with countries in this region, following our colonial past, has been seen through the prism of three substantive issues. One is energy: our energy needs, and their economic productivity through the output of oil wells and so on. The second is the region’s economics and in particular trade. The third is its security needs, and that comes back to our trade with them in terms of defence co-operation and so on.

That is all very good, although there are problems lurking in all three areas, which I will touch on briefly. However, it is because we have these narrow silos in our approach to the region that we fail to see the need for strategic depth in the most important and overarching issue in this region, which is political and constitutional governance and the requirement for reform in those areas.

In energy, particularly after its early, and I would say easy, phase of development—when infrastructure, roads, airports and so on were built—the region has failed to invest its enormous oil wealth in strategic development. Yes, you have glittering towers, but the substantive development of social and economic capital—investing in people—has not happened in the way that

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it might have done, given that the region has had 40 years of the enormous largesse of oil coming out of the ground.

The region is incredibly hungry in terms of its own consumption of hydrocarbons. People’s lifestyles are predicated on many gas-guzzling cars, air-conditioned public buildings and private homes, and so on. According to a House of Lords research paper, the UAE and Qatar have the highest per capita energy consumption in the world.

If Saudi Arabia continues with its current hydrocarbon needs, given the developing energy self-sufficiency of the United States—which, through fracking and further oil exploration, is moving closer than we expected—there will be a real budgetary crisis in the region. All countries reacted to the Arab spring or awakening—whatever word you use to describe it—by hugely increasing public subsidies and public expenditure. If one were to be kind, one would say that it was an attempt to ensure that their populations did not become restive. Some might say, more cynically, that it was an attempt to buy off unrest. The result of the dramatic increase in public expenditure is that by 2030 Saudi Arabia will require an oil price of $320 a barrel. Bahrain, which has far more significant problems—as the noble Lord, Lord Luce, mentioned—would require an oil price of $112 per barrel to break even. The oil price over the past six months has been in the range of $100 to $105 a barrel. Therefore, this is clearly not a sustainable method of continuing to evaluate development.

On the economic needs of the region, the demographics suggest an emerging crisis—an iceberg, if you will—with 50% of the population between 25 and 30 years old. Those in the 50% are far better educated than their predecessors, are accustomed to modernity and have access to information in a different way to the old, hierarchical systems that existed in the region. Coupled with this demographic time bomb is the budgetary problem of the lack of an income tax base in the region, and the problem of citizens’ employability in the private sector, which is fairly low, for a less than entirely obvious reason. It is low because it is easier to hire in the experts you need than to grow your own. Productivity in both the public and private sectors is significantly lower than in private sectors where non-nationals are employed.

There is also the issue of ghost jobs, where quotas are put in place by some of these countries to ensure that employers have to hire a certain number of nationals. That is done in terms of bookkeeping, but the nationals are not really hired; they are paid money to stay at home. The incentives are focused on numbers, which tends to distort the results. A good example was given in a Chatham House paper of a Saudi student who chose to read philosophy in order to sit on a waiting list for a public sector job. He could show that as a philosopher he could not get a private sector job but would wait for a public sector job, which would give him a better lifestyle: one-third more generous in terms of salary, and with far more time off, security of tenure, and so on. Moreover, the legal system, which requires nationals to act as agents for international companies, results in pure rentier behaviour in economic

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terms. Why would you engage in productive employment if family connections enabled you to get the contract to allow a foreign firm to be based in that country?

The final issue is the prism through which we see the region as a security dilemma. Iran has been mentioned but I wonder if too much weather has not been made of the threat from Iran. My own view is that Iran has been used as a means of ever greater defence purchases rather than as a real attempt to find peace. Surely if we do get a de-escalation of the crisis in Iran the peace dividend should result in these countries being able to look towards improving some of the other things I have mentioned.

In conclusion, I would argue that the region appears superficially to have a veneer of stability, indeed a gloss of prosperity and well-being, but a clearly defined path of economic and social development is critical. I accept the need for incremental moves and I understand that Arab society is evolutionary and not revolutionary. Unless we have moves towards better governance, greater constitutionalism and, above all, the rule of law and a respect for human rights—again, I am not asking for something revolutionary—alongside the things that these countries have pledged through the Arab charter on human rights, we will not see a stable future in the region.

1.21 pm

Lord King of Bridgwater (Con): My Lords, I join in congratulating my noble friend Lord Luce on showing a proper hereditary interest in this region in which his family’s involvement is well known. I also congratulate him on his timing. Everybody who knows the Gulf Co-operation Council and our many friends within it, with whom we have had the pleasure of working over the years in many different roles, will recognise that this is a critically important time for it. I also congratulate the Government, including the Prime Minister, the Foreign Secretary and the much regretted Alistair Burt. I am sorry to see that he has moved because I think he was extremely energetic in the work that he did but I wish Hugh Robertson well in the new responsibilities that he takes on. The Prime Minister gave a lead when he became Prime Minister in recognising and improving the contacts that had lapsed a little too much with this vital region.

It is impossible to overstate the seriousness of the present situation. One of the leaders, who had better be nameless, of one of the countries involved said that his worry was that there would be a conflagration that would split on sectarian grounds all the way from Beirut to Mumbai. Actually, I think he was wrong because the threat runs from Mali to Mumbai. The situation in Libya, echoed in the news today with the kidnapping of the Prime Minister, and the chaos in Egypt with the suggestion that ex-President Morsi might be executed, show what a tragically difficult situation those countries face. And the situation in Syria looks increasingly awful in terms of the refugee numbers, which are becoming overwhelming. They pose a real threat to Lebanon and to Jordan—not just the question of whether you can feed and nurture and provide health cover for the enormous number of refugees, but the fact that many of the refugees coming

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over the border into Jordan are taking any jobs they can get at any price and thus causing unemployment in Jordan to rise quite sharply. There are obvious tensions in that area. We have lost the stability of a major regional power in Egypt. Iraq gives us not much cause for confidence at the present time. At the moment, by and large, the GCC countries have managed to maintain their stability but they obviously face very real pressures—both the demographic pressure of the number of young people there and the threat of unemployment. I recall that when the original demonstrations took place in Tahrir Square in Egypt a huge number of people there were demonstrating about unemployment and the lack of jobs. Of course, we know that the chaos and confusion since have made their prospects vastly worse then they were even then. That will be reflected across other countries as their populations and the number of young people have increased. They face major challenges.

There are those demographic challenges, and then the challenges of what we might call social networking. Now, for the first time, whether it is Facebook, Twitter or the internet, a whole lot of people who previously were completely isolated from any adequate method of communication suddenly have these new channels of communication which are described in a very good brief from the Lords Library as “irreversible” and are a major challenge.

It is against that background that this country has an important role. There is no question that the relationship of some of these countries in the Gulf with the United States has changed. I do not know whether one is reading too much into the refusal of Saudi Arabia to make a speech at the United Nations or whether it is a sign of great displeasure with the United States’ failure to, as Saudi Arabia sees it, support it both in Egypt and in Syria. That is a new development. Of course, if it is true that the effect of shale gas and oil discoveries will be that the United States is exporting more oil than Saudi Arabia by 2020, and given the fact that China has now become the major customer for Saudi Arabia, there will undoubtedly be some change of commercial interest. It is against that background that our position and long-standing relationships give us a particularly important role to play. We must support serious reform, as my noble friend has said, but we must try to ensure that it comes without the catastrophic collapse that has imposed such great hardship on the people of the countries affected.

It is against that background that we must make progress through diplomatic means. I welcome the peace conference in Geneva on the Syrian issues, and hope that it will be successful. How much better than bombing Syria to see people sitting down to a peace conference; I hope that that can make progress. I am delighted that, in the next debate, my noble friend will renew the pressure on United States Secretary of State John Kerry to launch now the initiatives to get real progress on Israel and Palestine. I also welcome very much the new initiative of my right honourable friend the Foreign Secretary, William Hague, for his proposal to establish a relationship with Iran.

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I know that our friends in the Gulf will have the greatest concerns about that initiative. They may fear that we are somehow going to betray them or let them down. Of course, one must be aware of the challenges and dangers. We must do this with our eyes open and not necessarily believe everything that Iranian leaders may say at this time. However, we must make the effort, and I warmly congratulate the Government on taking that initiative. I hope that that is one of the items that might add to future stability. Any countries with continuing governance all have a continuing interest in greater stability in that region. We should try to bring them all to the table and work as closely as we can with them all.

1.28 pm

Lord Stirrup (CB): My Lords, I, too, am most grateful to the noble Lord, Lord Luce, for securing this debate. The UK has long had important relationships with the Arab states of the Gulf Co-operation Council, and our interests remain as heavily bound up in that region as ever.

Our relationships are, of necessity, conducted largely on a bilateral basis with the states involved. The Gulf Co-operation Council, despite its name, is as much a vehicle for competition and rivalry as it is for co-operation. Nevertheless, it fulfils an important function and deserves our full support.

There are many dimensions to the UK’s relationships with the GCC states, but at the moment two issues seem to me to stand out from the rest. The first is the domestic situations in those states and the concerns within them over the continuing political developments within the region. I am thinking here less of the member states’ reactions to the events around them and more of their own political pressures although, of course, these are closely linked.

The status of the Shia majority in Bahrain—which the noble Lord, Lord Luce, has covered—is the most obvious example but the other states are experiencing their own pressures to varying degrees, as we have already heard this afternoon. The question is whether and how these internal political issues should shape our approach to the various states concerned.

We could adopt a boisterous, cheerleading approach and wave the flag for democracy. This would be a mistake, for many reasons. First, democracy can take many forms and mean different things to different peoples. After all, we cannot even agree between ourselves quite what it means. Secondly, too heavy a hand when dealing with the internal affairs of another nation can have unintended and quite counterproductive consequences. We need to tread warily. On the other hand, I do not accept the argument made by some that democracy, even in its loosest definition, has no place in certain societies and cultures. If, by “democracy”, we mean a stake in and some degree of say in the governance of a country, it seems that this is a near universal aspiration in developed and developing societies.

The shape of that democracy, however, is quite another thing. Anyone starting with a blank sheet of paper would not come up with our model. It works for us—after a fashion. Any system needs to grow from and be rooted in the culture it serves. Our understanding of the cultures of the Gulf states can be rather superficial.

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It seems that we can best serve both our interests and the interests of the international community by being supportive rather than condemnatory; by being gently persuasive rather than hectoring; and by focusing more on long-term progress than on short-term moralising.

I am not suggesting that we turn a blind eye to repression and to abuses of human rights. However, I am suggesting that our responses should be more nuanced than has sometimes been the case. To those who would say that such an approach ignores our moral responsibilities, I would reply that it is about ways and means. Do we want to achieve our strategic objectives in the region, including our hopes and aspirations for the peoples concerned, or are we just interested in scratching tactical itches? For my part, I vote for the strategic approach.

The second issue, which is external to the GCC states, is their concern—their very real concern, I believe—over Iran. The status of Iran’s nuclear programme is very much in the news, and is certainly the wolf closest to the sledge. It is, however, a symptom of a wider regional tension over the perceived development of a Persian hegemony. Religion plays into this and increasingly manifests its role through a burgeoning Sunni-Shia cold—and sometimes not so cold—war. However, that is not the only fissure between Iran and the GCC. For the regimes in the smaller states it is an existential issue. For Saudi Arabia it is more about regional dominance.

We are all concerned about Iran, but the GCC countries see the issue through a different prism from us—and, indeed, in many cases, from one another. It is important that we understand this. We all hope that recent developments within Iran, and between Iran and the international community, will produce positive results—although we would be wise not to get carried away by the more acceptable face that Iran is seeking to present to the world.

In all of this, however, we should remember our partners in the Gulf and recognise how much more closely all of this touches them. I hope that we are talking to them regularly on these developments and, more importantly, listening to them. We have expended much effort over recent years in trying to persuade our friends in the region that we have their interests at heart, that their security matters to us and that we take seriously their concerns over Iran and its nuclear programme. Those reassurances will ring somewhat hollow if we neglect their views and opinions on recent and future developments.

There are many other issues on which we should be, and frequently are, engaging with the GCC countries. However, the final point I should like to make takes my earlier plea for a more strategic approach to political development into the wider arena. It probably seems quite clear to most of us that our crucial national interests are not only closely engaged in this region today but have been so for a great many decades. But if we were to examine the practical handling of our relationships within the region over those decades, would we reach the same conclusion? Far too often we have sent conflicting signals in this regard. We have engaged, disengaged and re-engaged. We have busied

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ourselves, distanced ourselves, and then dived in again. Is it any wonder that some of our friends in the region get a bit confused about where we actually stand?

If we are serious about the region, and I think it is in our national interest that we should be, then we must take a more strategic, longer-term view of our relationships within the region. Just as important, we must give such an approach practical effect on the ground. If we want to have real presence, to have real influence, then our friends must believe that we are not only there, but there to stay.

1.36 pm

Lord Triesman (Lab): My Lords, I join others in congratulating and thanking the noble Lord, Lord Luce, for providing this opportunity and for the fine analysis which he provided—as, indeed, have other noble Lords. I, too, have visited the region many times and been struck by the amount of change that one sees almost visit by visit. I share with the noble Lords, Lord Luce and Lord King, the view that turmoil in the region is due to a very apparent set of difficulties. Indeed, I have avoided using the words “Arab spring” because I am not sure that I see it as a short-term seasonal, flowering thing; there is a very long-term set of issues to be resolved, which possibly go back to the collapse of the Ottoman Empire and other factors.

However, these are nations that are key allies. We have perhaps given them too little attention, and that may well have been true in almost the whole period from 1981 onwards. They are under stress from their neighbours and the crisis in the neighbourhood; that is clear. Yet these nations are also strategically vital for the region and for potential conflict resolution in the region. It has been said this afternoon—and it is plainly right—that economically they are important; more than half the world’s oil and gas resources are there. That is especially important for the economies of India and China, and their development in the world economy.

Everyone seems to think that this region represents a vital energy issue for the United States, but when I look at the patterns of energy supply and consumption in that country I very much doubt that that is true. West Africa—as well as fracking and issues to do with other important resources—is probably a rather more significant issue for the United States. However, the region must be important for the United States, because the state of the world economy in general is important for the United States, as we all try to trade together successfully.

Over the years I have also observed the degrees of difficulty and competition between Saudi Arabia and Iran. I suspect that since Iraq ceased to be the quarantining environment in which Iran operated, we are also seeing some traditional geopolitical issues regarding regional domination being played out. We often describe it as being simply a Sunni and Shia issue. Actually, I suspect that there is rather a more orthodox and traditional geopolitical contest going on, in which Qatar has also involved itself.

The issues may well become tighter. The noble Baroness, Lady Falkner, talked about the price of a barrel of oil. Some people in the futures market are

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predicting that we may be looking at prices way below $100, perhaps going down to the $50 to $60 range—a matter which will concern the Russians as much as anybody else. I do not know what will happen in those economies in those circumstances.

The members of the co-operation council often have grand plans, but have those plans been realised to any significant degree? It took until 2008 to create any version of a common market, and it is not a strong current theme. Diversification has not been particularly successful, as has been shown by some recent LSE studies, and the members’ external trade relationships outside the energy sector remain very difficult. Perhaps the discussions between the European Union and the co-operation council, which have not prospered so far, may be one of the ways in which international trade relations could be improved. Is it the Minister’s view that this country’s best interests are served by bilateral discussions or through the European Union’s attempts to get a common arrangement; and does she think that that will have an impact on the way in which sovereign wealth funds are deployed given the opportunities which may be present in a much wider setting? There seems to be no prospect of agreement on a common currency. I do not advocate it but it obviously makes trade relations in the council area more of a possibility.

Security is plainly vital to the council. It has obviously no wish to remain wholly dependent on the United States, but it is also significantly divided on what its common interest is and how that interest could be deployed in the region. There is no co-ordination as yet. Does the Minister have a view on that and on whether the tensions which I observe between, for example, Saudi Arabia and Qatar about who they should involve themselves with in Syria are not creating greater division than co-ordination? The possibilities for discussing political reform referred to by the noble Baroness, Lady Falkner, and others seem to me very important. They have proved to be a source of difference. The shape of reform is obscure but what is plain, as has been said today, is that it is a key strategic issue. Some of the methods used in the Gulf to impose order have revealed what one might describe as the default methods of ensuring that things remain stable. I say with great respect to the noble and gallant Lord, Lord Stirrup, that it is inevitable that we will comment on some of those human rights issues. I think he said that too. We could hardly do otherwise given the kind of Parliament that we have.

What view should we take? A stronger organisation would be of great benefit to the United Kingdom. It would also be of great benefit to the European Union if we think of it in terms of the broader economic circumstances. For the strategic reasons that have been identified this afternoon, I suspect that we would all wish to see further steps taken in modernising and evolving, particularly in constitutional arrangements, which may in the long term and with a much younger population help create the circumstances for greater stability. Young populations often do not respond as well to repression as they do to understanding what their status and location are in the organisation of the country in which they live. I hope that the Minister

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will identify the top few objectives of the United Kingdom Government. As I said earlier, would they be best handled by the United Kingdom or would they be handled more appropriately by the EU? I am not making this point to reawaken our discussions on the European Union but rather to consider what gives us the best opportunities to create the circumstances in which we might all advance. Without seeking to interfere in the affairs of these countries, are there areas where we could more appropriately offer friendly advice on security co-ordination or economic co-ordination? What might we learn from the countries? I do not think that giving advice is a one-way street. You often get a lot of advice, which is just as valuable if we take it as seriously as the advice that we might tentatively offer to others.

I conclude by saying that I hope that we can make real progress. I do not know whether the ambassadors from the Gulf states get together in London. There is a great depth of experience. The Kuwaiti ambassador has been the Dean of the Diplomatic Corps for a great many years and is a very knowledgeable ambassador. It may be that some of the fora in this country might help us in these developments. I certainly hope so, and I believe that that would be to the benefit of us all.

1.45 pm

The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi) (Con): My Lords, I should like to start by thanking the noble Lord, Lord Luce, for calling this debate. It has provided a welcome opportunity to take stock of the UK’s relationship with a region that is of enormous importance to this Government, and with which we are very close friends and partners. I pay tribute to the noble Lord for his constructive engagement with countries in the region, and my noble friend Lady Falkner and the noble and gallant Lord, Lord Stirrup, for contributing so insightfully to today’s debate. I also thank my noble friend Lord King for his warm words for my colleagues, especially Alistair Burt, who we shall all miss. This debate is also timely for me personally, having recently returned from a visit to the United Arab Emirates, Bahrain, Kuwait and Qatar, which served to highlight again that our relationships with the Gulf countries are as strong and diverse today as they have been for generations.

The debate has also served to demonstrate the complexities, contrasts and opportunities that the region presents. Over 160,000 of our nationals currently call the Gulf their home. We work with our Gulf allies on energy security, we value their help in the fight against terrorism, and they represent one of our largest global export markets. The region is home to over a quarter of the world’s sovereign wealth, a significant portion of which is invested in the UK. This shows the strength of the bilateral relationship, but of course we support discussions with the Gulf Co-operation Council at the EU level to benefit trade between the two blocs. However, our bilateral relations remain strong and important.

In response to the noble Lord, Lord Triesman, we meet regularly as a bloc. In fact, my right honourable friend the Foreign Secretary hosted his GCC counterparts

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at a lunch at the end of September, and the GCC ambassadors meet on a regular basis to connect with each other and with parliamentarians. I have been invited to a number of those occasions. We also work with the Governments of the Gulf to help us achieve our foreign policy priorities in Libya, Syria, Egypt and Yemen, to name just a few examples. So ours is a multifaceted relationship and, as the variety of issues raised today shows, one to which an hour-long debate can hardly do justice. However, I shall try to deal with some of the broader issues.

The UK’s engagement with the Gulf is at a high point. Through the cross-Whitehall Gulf Initiative, launched by my right honourable friend the Foreign Secretary in 2010, we are expanding our co-operation to unprecedented levels across the full range of issues, from culture to defence, commercial interests to education, and of course on regional security issues. We are engaged at the highest levels, with over 150 royal and ministerial visits to the region over the past two years, and frequent visits by our Gulf counterparts in the other direction, not least of which have been state visits to the UK by the President of the United Arab Emirates in May this year, the Emir of Kuwait in November 2012 and the then Emir of Qatar in October 2010. Our engagement with the region has been strengthened by the launch of formal dialogues with the UAE, Kuwait, Oman and Bahrain as part of our Gulf Initiative. Visits and dialogues are a substantial commitment, but they are a vital investment and I am pleased that they are already bearing fruit. In a highly competitive global landscape we are building strong links between our businesses, our educational institutions and our militaries. I have taken note of the words of the noble and gallant Lord, Lord Stirrup, who said that we have to take a long-term approach.

Your Lordships have heard today that the Gulf states represent a growing market for our goods. Since 2010, our trade in goods with every country in the region has increased by up to a quarter. It was worth over £11 billion last year in the region as a whole, £5 billion of that with the UAE alone. Since 2009, we have increased our exports in goods by 10%.

Gulf countries are building their infrastructure, improving their healthcare and investing in education. They are doing all of this with the help of British companies. I should add that it is over and above the normal day-to-day business support campaigns that UKTI teams in our embassies are working on to deliver British business success in that region. Inward investment, too, is growing substantially. Qatar alone has invested over £22 billion in the UK, creating jobs here and bolstering our economy.

The Government are constantly seeking new and innovative ways to work together to increase prosperity on both sides. I am delighted to say that the UK will play host to the ninth annual World Islamic Economic Forum in London at the end of this month—the first time this meeting has been held outside the Muslim world. This is an important step in our commitment to cementing the UK’s reputation as a centre for Islamic financial services.

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I discussed the forum meeting and broader Islamic finance issues with Ministers, senior officials and finance professionals across the region during my recent visit. In Dubai, Abu Dhabi, Doha, Manama and Kuwait City, the message was clear: the potential for Islamic finance is huge and growing. The interest in working with the UK is there. I am committed to ensuring that the UK benefits from this growing market.

Of course, our prosperity goals will be best achieved in a secure and stable environment. Our Gulf allies sit in a troubled region. The problems were eloquently set out by my noble friend Lord King and the noble and gallant Lord, Lord Stirrup. We are proud to have stood by our Gulf allies at times of crisis and need, most notably in Kuwait in 1991. We have strong defence relationships, with military assets and personnel based across the region. The UK continues to provide expertise and equipment. We value the contribution that Gulf countries make to our security too, particularly through our close co-operation on counterterrorism issues. We share a common threat from international terrorism, which we deal with together. Gulf countries are showing leadership in countering the threat. Both Saudi Arabia and Abu Dhabi have established impressive models. We are also expanding our co-operation in international aid, working on joint aid projects with Qatar in Sudan and with the UAE in Somalia and Afghanistan, to name but a few.

Our strong friendship with Gulf nations enables us to have open and honest discussions where our views differ, in particular on the important issue of human rights and democracy. We are always ready to speak out as a matter of principle, and the Foreign Office’s annual report on human rights pulls no punches. We continue to press, at every level of diplomatic engagement, for practical, realistic and achievable reforms to improve the human rights situation across the region. Gulf states were not immune from the growing hopes which spread across the region in 2011. Countries in the Gulf, as elsewhere in the world, are finding ways to adapt to the changing aspirations of their people.

I agree with the noble Lord, Lord Luce, that the Bahrain Independent Commission of Enquiry was an unprecedented move by the Bahrain state, and King Hamad in particular. We are committed to supporting a Bahraini-led reform process, and have provided assistance in torture prevention, the judicial process, community policing and civil service capacity building, to name but a few. We welcome the progress that has been made, but we are also clear there is still more that needs to be done. We will continue to press the Bahraini authorities for further action.

Since the Arab spring we have emphasised to our Gulf partners the importance of stability based on the building blocks of democracy: a voice, a job, an independent media and the rule of law. We are constantly pressing for progress—I know because I have done so myself—and we are supporting our Gulf colleagues when we see it. However, we also understand that reform takes time. We are seeing Kuwait building a more vibrant Parliament; Saudi Arabia has, for the first time, appointed 30 women to the King’s advisory council, and we are helping Bahrain by training the police and supporting the judicial system.

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I am also grateful to the noble Lord, Lord Luce, for his kind words on the Arab Partnership Participation Fund. Through this fund, administered by the Foreign Office, we will provide UK expertise, technical support and seed funding to a variety of Gulf state countries to build the capability of public servants to respond effectively to the changing economic and political challenges facing the region.

Every time I visit the region I am struck by the genuine affection in which Britain is held. My Gulf counterparts speak fondly of the UK and their memories are long. Many of them have spent time here and see it as their second home. Our relationships have strong foundations of a shared history, but the focus of this Government is about making sure that we use those strong foundations to build a strong future. Our allies sit in a complex part of the world, one which is undergoing seismic shifts. It is a region of great diversity and of great promise, and we will continue to work tirelessly to ensure that the UK remains a key partner and a strong ally.

1.54 pm

Sitting suspended.

Israel and Palestine

Question for Short Debate

2 pm

Asked by Lord Stirrup

To ask Her Majesty’s Government what assessment they have made of prospects for progress towards an agreement between Israel and Palestine on a two-state solution.

Lord Wallace of Saltaire (LD): My Lords, before we start, two speakers have scratched. This would allow us to stretch to four minutes for the other speakers, if that huge addition to the length of their speeches might please noble Lords.

Lord Stirrup (CB): My Lords, I am most grateful for this opportunity to discuss the current status of the Middle East peace process, and I am particularly grateful that so many eminent and knowledgeable noble Lords will be lending their expertise to the subject over the next hour.

An hour is of course far too short a time in which to do justice to the importance and complexity of the issues involved. Nor would I expect the Minister to disclose the detailed nature and status of the ongoing Israeli-Palestinian negotiations, even if the UK was aware of them, which I rather doubt. We must trust that the US Secretary of State and his team will do their utmost to secure a successful outcome, recognising that we have little direct influence on the process.

However, if that is so, then what purpose might we set ourselves in this debate here today? We could, of course, remind ourselves of the many difficulties involved: the delineation of boundaries, the settlements, the status of Jerusalem, the right of return and so on. For my part, however, I will focus on three issues where I

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think we could and should go beyond just enthusiastic support for Secretary Kerry, where UK intellectual effort, advocacy and, in some cases, practical involvement might add value to the whole endeavour.

The first of these issues concerns the fundamental proposition that there should be a two-state solution. This has been questioned in the past, and there continue to be voices, perhaps increasing in number, arguing against it. The Foreign Secretary has himself suggested that time may be running out for a two-state solution. That must of course raise the question of what happens if time does indeed run out: what comes next? Some suggest that the time for such a solution is in fact long past—that some sort of single-state solution is the only realistic way forward. Many of these voices, although by no means all, are in Israel. But is it conceivable that an Israeli state that incorporated the present Occupied Territories could remain both Jewish and democratic?

If the right of Palestinian refugees to return to their previous homes is a device to undermine the state of Israel through demographics, as some would argue, then surely a one-state solution would achieve the same end, perhaps even more decisively. The UK Government remain committed to a negotiated two-state solution. This leads me to two conclusions. The first is that the UK needs to engage intellectually with those who argue against such a proposition. We should add our voices to a continuing international effort in this regard, rather than just assuming that the argument has been won for good and all. The second is that we need to do all we can to ensure that the window for a two-state solution remains open for as long as is necessary. While of course we want to engender a sense of urgency, we should be careful about suggesting the existence of cliff edges—or closed windows, if you prefer—lest we paint ourselves into an intellectual corner.

We all hope that something substantive emerges from the current negotiations, but long years of weary experience counsel us to rein in our expectations. In situations such as this, one has to combine long-term optimism with a grimly realistic short-term outlook. However, if the UK view is truly that the window for a two-state solution will soon close, then long-term optimism becomes Panglossian, and we should therefore be thinking now about alternatives, unpalatable though they might be. Is this truly the ground on which we wish to stand? I rather doubt it, and I certainly doubt the wisdom of even hinting at such a thing. The lessons of history suggest that, in cases such as this, one must never give up, never despair, no matter how dark the road might become.

The UK’s position, and therefore its message to others, should surely be that no matter how long it takes, no matter the setbacks, the international community must and will keep coming back to the issue, will keep bringing the parties back together, and will keep banging their heads against the brick wall until the wall one day starts to crumble.

The second issue that I want to raise concerns an important precondition for any enduring agreement between the Israelis and the Palestinians. In political negotiations such as these, it is not sufficient for the

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leaders to agree upon the terms of a solution. They have to be able to carry with them sufficient of their constituents to enable them to turn any agreement into political reality on the ground. They will never convince everyone, but they need sufficient popular support to sustain them through what will no doubt be difficult and controversial times.

Much of this task will of course fall to the politicians on either side, but I suspect that they will need all the help they can get. So we should think hard about which international actors could wield the kind of influence necessary to condition the debates within both Israel and Palestine. The United States certainly has a role to play here. However, it no longer, I suggest, has quite the economic and moral strength that in old days might have helped it move heaven and earth. The UK is certainly no better placed in terms of direct influence; but perhaps our influence with third parties might be of some use in such an endeavour.

The contribution of the Arab League nations, even when somewhat divided, was an important factor in the recent resumption of talks. They and other countries in the region will continue to be important in the development, and particularly in the acceptance, of any solution. We have many friends among these countries with whom we might constructively engage over the coming months, in support of both the peace process itself and the means by which any agreement might be implemented.

With regard to the Israelis, I regret that we have even less direct influence than with the Palestinians. We seem to have allowed relations between our two countries to enter a sort of limbo. Indeed, it took me most of my tenure as Chief of the Defence Staff to persuade the Foreign Office that I should be allowed even to visit my Israeli counterpart.

I am pleased to say that things have improved somewhat in recent years but we are still playing catch-up, and we are seeing today the difficulties that playing catch-up presents for us when we seek to influence invents within the world. We do, though, have many individuals in the UK who maintain important contacts within Israel. Perhaps we need to think about mobilising this community in support of the current process, and exploring how it might contribute to the debate in Israel. This is no doubt already happening in an ad hoc fashion, but is there not some way we can mobilise this important resource to make up, at least in part, for our lack of direct national influence?

The third issue that I want to touch on is the question of security. One does not have to be a military genius to understand that Israel’s pre-1967 borders were a strategic nightmare. If we were simply to return to this situation, give or take elements of land swap, without providing a greater degree of defensive depth for Israel, then we would be putting in place an inherently unstable arrangement—one that in time would be highly likely to fail. On the other hand, Israel’s demand to exercise unilateral control over Palestinian airspace and in the Jordan Valley does not sit comfortably with the notion of Palestinian sovereignty.

Some have suggested that the answer is to involve NATO. However, the Israelis are very sceptical about such an arrangement. They view with an understandably

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jaundiced eye the international community’s record in the Lebanon, and would be loath to put their security in the hands of such a force in the Jordan Valley. I believe that the question of airspace control can be worked out relatively easily. There are many examples of allies—which is what Israel and Palestine would have to be—pooling responsibility for air defence and putting in place the necessary arrangements for unified airspace.

With regard to the Jordan Valley, only a degree of international involvement is likely to soothe Palestinian sensitivities. However, international involvement has to be what the Israelis are prepared to accept, even if reluctantly. This is an issue on which General Allen, the previous Commander of US Central Command, is currently working for Secretary Kerry. It is also an issue in which the UK has great expertise and to which it might make a significant long-term contribution. With that in mind, has the Ministry of Defence undertaken any discussions on the subject with the Pentagon? Has the ministry begun any assessment of the likely contribution that the UK might make to an international force? Of course these are early days, and we would not want to get ahead of ourselves, let alone of the negotiations. However, it is an area where some preliminary analysis could be of value, and certainly it is an issue on which we should be liaising closely with the Americans.

There is much else to be said about the Israeli-Palestinian negotiations, but I will close with a wider observation. We seem to be witnessing—finally—the unravelling of the San Remo decisions and of the other attempts to tidy away the detritus of the Ottoman Empire after the First World War. The UK played a major role in that process. Although we may now be somewhat diminished on the international stage, we have an obligation to do all in our power to help address the consequent problems. Practical support for a continuing and enduring effort to resolve the Israel-Palestine issue must surely be the cornerstone of such efforts.

2.11 pm

Lord Judd (Lab): My Lords, I am sure that I speak for many in the debate when I say that it has been a particular privilege to hear the noble and gallant Lord introducing it so masterfully, with a résumé that was a showpiece of objectivity and constructiveness.

I declare an interest as chairman of the Middle East Committee of the Inter-Parliamentary Union, where we try to bring together Palestinian and Israeli politicians for dialogue. I have just returned from one such meeting. It also gives me the opportunity to visit the region, which I have done several times in the past year, meeting a good cross-section of parliamentarians, and indeed of political leaders, both in Israel and the Palestinian territories.

I will make a couple of observations. The first is that we should have learnt by now that enduring peace cannot be imposed, and that the danger is that if outside interests, however powerful, significant and critical to the outcome, slip into the error of thinking that they can manage the situation and manage a solution, we will be making trouble for the future. I think that the noble and gallant Lord was arguing that

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a solution has to belong to a sufficient cross-section of people; it must be owned. I look no further than Northern Ireland, where we have a very good example from our own history of putting that principle into practice. There is a difference between facilitating and masterminding negotiations; we forget that at our peril.

The second thing to remember—again, Northern Ireland is an extremely good example—is that if you are to have a successful outcome, a lot that is going on at ground level is important. It has often been overlooked, but in the lead-up to the initiating of the peace process in Northern Ireland, a lot of work went on among women, for example, at community level. This was terribly important in drawing more people—we have never been able to draw everybody—into a feeling of positive participation in the process, and in enabling them to influence events. Therefore, if we are to make a contribution—the noble and gallant Lord was absolutely right—we must not sit around agonising like a Greek chorus but must get on with offering practical advice and help.

One thing that we should facilitate is round-table discussions on issues such as women’s issues, climate change and its implications, and the problems of youth, into which we should draw, as far as we can, representative people from key elements in both communities. That could be immensely helpful, but, again, it can be done properly only if we have an endorsement of the process by the leaders in both countries, otherwise it looks as though we are just meddling and interfering.

An interesting thought I have heard expressed recently is that we might try to encourage, in third countries, scholarships and support for youngsters from Israel and the Occupied Territories in order that they can experience higher education mutually and together in the same place among others. This could make a powerful contribution.

I have made these observations, but of course there are many other issues such as human rights, the treatment of youngsters in the conflict and so on, which are acute problems that have to be resolved because they are aggravating everything. However, I suggest that the contextual elements in the process are indispensable.

2.15 pm

Lord Palmer of Childs Hill (LD): My Lords, I have just come back from a visit to Israel and the West Bank, visiting many places including Jerusalem, Tel Aviv, Ramallah and Rawabi. I thank the noble and gallant Lord, Lord Stirrup, for tabling this debate and for his forensic analysis and detailed strategy which I unhesitatingly agree with. It is extremely positive that the two sides are back in the room. This is the first time that there has been a formal and sustained bilateral negotiation since 2008. Both sides have expressed their commitment to bringing about a final resolution to all aspects of the conflict. Although the parties face considerable challenges, there are reasons for hope. This is the feeling I have brought back from Israel and from the Palestinians. Both sets of negotiators are experienced in the process. Israel’s lead negotiator, Tzipi Livni, is Israel’s leading advocate of reaching an

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agreement with the Palestinian Authority. Her party’s election campaign stressed the importance of finding a solution to the conflict based on two states.

Prime Minister Netanyahu has, not always but repeatedly, spoken of his commitment to a two-state solution, which was so well advocated by the noble and gallant Lord, Lord Stirrup. He has spoken increasingly of the threat to Israel arising from the emergence of a binational state that could threaten Israel’s existence as a majority Jewish state. That is the clearest indication yet that he believes in an agreement based on two states for two peoples. It is in Israel’s best interests as well as those of the Palestinians. I must also acknowledge the work of the US and the personal commitment of US Secretary of State John Kerry.

An example of how a viable Palestinian state is being created came in a heartwarming visit last week to Rawabi, the first Palestinian planned city. It is the largest private-sector project ever to be carried out in Palestine. Initially, it will be home to 25,000 residents, and ultimately to 40,000 people. It is located 9 kilometres north of Ramallah and it needs a wider access road and a more assured water supply—points that I took up with the Israelis and our own helpful embassy in Tel Aviv.

A much improved atmosphere between the Israelis and the Palestinians has been created by the resumption of talks. A joint press conference was held following a meeting at the end of September of the Ad Hoc Liaison Committee on economic support for the Palestinian Authority at the United Nations in New York. It was attended by Israel’s Minister for Strategic Affairs and the finance Minister for the Palestinian Authority. The cordial nature of the joint press conference would have been unimaginable just a few months ago. Israel announced a number of measures to assist the Palestine economy, which included 5,000 new permits for Palestinians to work in Israel, bringing the total number of Palestinians earning a living from the Israeli economy to 100,000. It has extended the opening hours of the Allenby crossing between the West Bank and Jordan for goods and people, and it has already implemented 4 million extra cubic metres of water for the West Bank and had promised 5 million cubic metres more a year for Gaza. It has also agreed Abu Mazen’s request to allow the import of building materials to Gaza.

There is much more, which I will probably not have time to list even though our three minutes has been extended. However, I agree with the noble and gallant Lord that three issues exist and that we must all continue to emphasise a two-state solution, not allowing anyone to get off the track, wherever in the world they are, whether in Israel or among the Palestinians. It has to be an enduring agreement, and I hope that my noble friend the Minister will reply with a cautious, positive assessment of prospects for a lasting peace.

2.20 pm

Lord Hannay of Chiswick (CB): My Lords, ever since President Obama’s new Secretary of State, John Kerry, began, as his top priority, to reassemble the well-worn components of that oxymoron known as the Middle East peace process, he has been subjected

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to a deluge of denigration, disparagement and weary cynicism from the serried ranks of pundits, many of whom have broken their teeth on that problem over the years. Now, with the removal of Syria’s chemical weapons and the convening of a Geneva 2 conference aimed at ending the Syrian civil war taking centre stage, that chorus is, if anything, louder. Is that disparagement justified as simple, common-sense realism, or is it a short-sighted unwillingness to recognise an opportunity where one really exists? I unhesitatingly argue the latter, which is why I welcome the noble and gallant Lord’s initiative in initiating this debate.

One reason for thinking that there is an opportunity, oddly, is because the Arab-Israeli dispute is not, for once, the focus of diplomatic preoccupations in the Middle East. That could be an advantage. In the past, excessive public focus on the issue has often led to the rhetorical radicalisation of the respective negotiating positions of the parties. Perhaps all concerned should reflect on whether they can be quite so sure that the outsiders on whom they rely will be ready to pull their chestnuts out of the fire in some future conflagration.

That thought could concentrate the minds of the Israelis, whose US backers seem increasingly dubious about any direct military involvement in the Middle East. It could also concentrate the minds of the Palestinians, whose Arab backers are focusing their efforts on other problems—domestic in the case of Egypt, and international in the case of Saudi Arabia. It could also influence Hamas, which is increasingly bereft of external support. If those trends get the direct parties to the dispute to focus on their own negotiating positions, and on compromises that they will need to strike if a peace deal is to be achieved, the prospects for progress could be improved.

Then there are more classical arguments for giving this renewed effort to reach a negotiated solution a real chance. We should not delude ourselves; the fact that the Arab-Israeli dispute is not currently centre stage does not mean that it has lost any of its explosive potential. Indeed, the fact that we almost certainly face several decades of instability in the Middle East, as the aftershocks of the Arab awakening work themselves out, only increases that potential. Meanwhile the continued Israeli settlement building on the West Bank inevitably pushes the situation towards insolubility and drives Israel towards something that it is no hyperbole to call an apartheid regime. These outcomes must surely be avoided if they possibly can be.

Are there any new elements that could usefully be injected into the process without destabilising it? One such idea might be to give more serious consideration to the guarantees that could be entrenched, both for Jewish minorities in a future Palestinian state, and for Arab minorities in Israel. This aspect has been neglected for far too long. Does it really make sense to think that every single Jewish settler will need to be removed—by force if necessary—from the territory of the Palestinian state, and that the substantial Arab population of Israel should be treated for ever as second-class citizens? I doubt it. That said, the logic of the situation is that outsiders—influential as they inevitably are and will be, and necessary as effective supporters and perhaps guarantors of any negotiated solution—should be less

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prominent than they have been in the negotiating process. Rather than negotiating, they should be talking with all those who will need to be party to any settlement. I urge—as I have done an awful lot of times—that we should be ready to talk to anyone who is prepared to operate within the scope of the Arab peace initiative. That should include Hamas.

It will be interesting to hear the Government’s views on this, and I hope that we will not remain, as we were in the past, too chained to the axle of American policy. The US is in a different position from us and I hope that we will be able, with our European partners, to play an active role in the months ahead.

Lord Wallace of Saltaire (LD): My Lords, we are very tight on time. If noble Lords could be very strict in sitting down as soon as they see the four minutes come up, I should be grateful.

2.25 pm

Lord Anderson of Swansea (Lab): My Lords, another US-sponsored peace initiative; again hopes are raised. I follow the noble and gallant Lord in his theme of “never despair”, but it was sad to learn that the Foreign Office tried to put obstacles in the way of him visiting his Israeli counterparts. The broad lines of a settlement are clear; the logistics are not. The international community has tried unsuccessfully the politics of little steps and the politics of the big bang.

I pose three questions. First, is there any serious alternative to a two-state solution? Surely, one state based on the federal principle or a parallel state structure is politically unrealistic. Nor is the status quo a long-term alternative. I recall sitting recently on a beach in Tel Aviv witnessing families enjoying the good life. One can see the short-term attractions of that, but demography puts a major shadow over the longer term. For Israelis, any alternative has major risks. Golda Meir said something like, “If our enemies destroyed their weapons, there would be peace. If Israel did so, there would be no Israel”. Israel points out, of course, the divided Palestinian groups, the reaction to the Gaza withdrawal and the constant Palestinian anti-Israel propaganda. Palestinians see the settlers increasing their stranglehold on both the West Bank and Israeli politics.

The second question is what, then, are the difficulties in making progress? Last year, Tom Phillips, a former British ambassador in both Israel and Saudi Arabia, wrote a most perceptive article in Prospect magazine, with the headline:

“There may never be peace”.

He gave 10 reasons why the chances of a solution had grown bleaker over the past six years. Surely the fundamentals of the problem remain the same. John Kerry is certainly very active but even the great persuader, President Clinton, failed, and there is no Rabin or Olmet on the scene.

Are there any signs of hope? Clearly at the margins, there are indeed such signs. Negatively, the PA has not, as threatened, taken Israel to the International Criminal Court after the authority’s victory at the UN. Secondly, President Netanyahu has released some prisoners and promised more investment, both in the West Bank and

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now in the gas fields in Gaza. There are welcome developments in the PA economy. The signs that Iran is coming in from the cold, an “Iran spring”, may remove a perceived existential threat to Israel—as may the promised removal of chemical weapons from Syria. The Arab peace initiative has just been reaffirmed. The Arab spring can, of course, work either way.

Yet with all the problems, the efforts are worth while, as the noble and gallant Lord has said. The precedents of Northern Ireland and South Africa are encouraging but it is difficult to counter persuasively the pessimistic conclusions of that old Middle East hand, Tom Phillips, who concluded:

“Failure is the most likely outcome”.

2.28 pm

Lord Williams of Baglan (CB): My Lords, I welcome this debate and commend the noble and gallant Lord Stirrup for tabling it. Like all Members of the Committee, I welcome the efforts of Secretary of State Kerry in taking forward this process. One is conscious, however, of the many other crises he is handling—above all, the Syrian civil war with all its appalling ramifications throughout the Middle East. For progress to be made on a Middle East settlement, President Obama will need to use substantial political capital, which may be depleted as a result of the current congressional and budgetary crisis.

It is important to remember that we have been here many times before. I myself participated as part of the British delegation at the Annapolis conference called by President George W Bush in November 2007. Talks subsequently followed, led by the then Secretary of State, Condi Rice, with the Israeli Government of Ehud Olmert coming close to a temporary agreement in its dying days in office. I am conscious of the fact that none of the speakers before me have mentioned the quartet—the body which is seen to oversee and support the Middle East peace process. I wonder if that is the right body to do so any longer. It is one which curiously excludes one member of the P5, namely China, and also Arab countries. I believe that if Arab countries were involved in a remodified quartet, it would lock the Arab peace initiative of 2002 into the negotiation process.

I take this opportunity to welcome the prisoner releases that have been made by Prime Minister Netanyahu, which were truly painful for him and for the Israeli Government, and I look forward to a further 26 releases on 29 October. I welcome, too, the economic progress that is being made in the wake of the reinvigorated peace talks. This is long overdue. We have been here before and the outcomes have not always been what we would have hoped and certainly fall far short of economic transformation. This morning’s edition of the Financial Times carries very welcome news that a long-stalled project which involves a British company, BG, off the shores of Gaza, has now received positive support from the Israeli Government. I would welcome any news that the Minister might have in that regard. If this is confirmed, I would see it as a strong signal and I would encourage the Israeli Government to be more generous on economic and social measures that it could make on the West Bank.

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It is often said that time is running out on the Middle East peace process. My own view is that time is running out for Israel on this. Earlier this year we lost a Palestinian Prime Minister, Salam Fayyad—a former IMF economist and a man of extraordinary stature—who resigned. Abu Mazen, President Mahmoud Abbas, is now well into his late 70s. How long will he remain as Prime Minister? It is doubtful whether any significant Palestinian leader after these men can command the political presence to push forward a peace agreement, a process which will be as painful for the Palestinians as it will for the Israelis. A future leader will not have the political strength to do this. Now is the time to move forward and this will require great political courage on all sides, above all from the Israeli Prime Minister Benjamin Netanyahu.

2.33 pm

Lord Turnberg (Lab): My Lords, according to the polls, most people in Israel and Palestinian territories strongly believe that a peaceful two-state solution is highly desirable and, although expectations are very low, there may be one or two reasons to be slightly less pessimistic. First, talks are going on in secrecy and so far there have been no significant leaks, so that gives no one an opportunity to start sniping. Secondly, expectations are very low so no one will be too surprised at failure. Thirdly, the Arab League seems keen to see some resolution to the terrible impasse that has bedevilled Middle East politics for so long. Fourthly, Hamas might be in a less strong position to undermine any peace deal as they have been significantly weakened by the recent actions by the Egyptians to block their arms-smuggling tunnels.

However, there are very many problems, of which I shall mention just a few: Israel is distracted by the greater danger to its survival from Iran and Syria and may not be giving these negotiations their full priority. It is also painfully aware that its experience of withdrawal from Gaza was not a complete success. Its demands for security on its eastern border with a new Palestine will be very tough—they may indeed be too hard for the Palestinians to swallow. Withdrawal from the settlements and re-housing of huge numbers of settlers will not be a trivial task. Optimism in Israel is not running high.

On the Palestinian side, they are in an even more difficult position. The population desperately needs peace and a land of its own, but the leadership has not always shown willingness to accept a Jewish state. Its rhetoric in the state media has been all about a return to the whole of the land occupied by Israel as well as the West Bank. Perhaps significantly, it cannot be unaware of the impact that a peace deal with Israel would have on its relations with its Arab neighbours to the north. All those regard Israel as the sworn enemy that they seek to remove from the map of the Middle East. Mahmoud Abbas must know how dangerous a peace deal would be to him personally as he remembers the assassination of Sadat when Egypt signed a peace deal with Israel. Hamas is unlikely to make life comfortable for him even in its weakened state.

Against this pessimistic background, what might the UK usefully do in support of a two-state solution? We are of course very limited, but there are some

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things that are worth our effort. First, we should exert what influence we can on the Arab League to support Abbas and convince him that it will stand by him if he strikes a deal—here, I echo the noble and gallant Lord, Lord Stirrup. Abbas desperately needs that support, and we have some influence with those countries.

Secondly, we should encourage the USA to keep at it despite its Syrian and Iranian distractions, and make sure that it impresses on the Israelis how important it feels it is that they should do a deal now. It should explain that America’s interest in the Middle East may not be so strong in the future as it becomes less dependent on its oil. The opportunity for American support for Israel may not last all that long. Meanwhile, we should refrain from levelling unhelpful criticism at either side while they are in this tricky phase of discussion. We need to think carefully about whether the criticism will help or hinder the discussions.

These negotiations give little room for optimism, but the fact that they are going on at all is vastly better than a continuing stand-off. Meanwhile, we should use what limited resources we have to help both sides.

2.37 pm

Lord Weidenfeld (CB): My Lords, if Britain and Europe wish to influence the course and outcome of the talks between the leaders of Israel and Palestine, diplomatic pin-pricks and untimely press attacks can have only an adverse effect. The European boycotting of Israeli goods, remotely traceable to beyond the Green Line, is a great mistake and controversial because it also hits Arabic economic interests.

The Israelis feel that that their gesture of releasing 26 Palestinian prisoners serving long, enduring life sentences has so far been accepted without reciprocation or appreciation. A closer look at the biographies and charge sheets of the released prisoners reveals a roll call of the most heinous crimes, resembling some of the horrors to which we have now, alas, become accustomed on the Syrian front.

President Abbas in his recent speech to left-wing members of the Israeli Knesset on a visit to Ramallah said remarkable, reassuring things about the current negotiations. He thought that peace could be achieved within nine months; he tactfully avoided such themes as settlements, right of return or an international campaign against Israel at the United Nations. These are all very good things, but it is important to remember one thing—here, I must disclose that I have all my life been very much involved with Israel. At a very early stage, I was even involved as the chef de cabinet of President Weizman and had a ring-side seat at some of the negotiations with Abdullah of Jordan, who came very close to an agreement then. I can say that the idea of a two-state solution was a dogma of the Zionist redemption. One of the great tragedies was that after the 1968 war, which was imposed on Israel, there was an absence of any agreement on the part of the Arabs about what they wanted. There were the three “noes” in Khartoum—no to peace, no to recognition, no to negotiation—that created a sort of no man’s land at the beginning of the settlement issue. On the other

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hand, General Sharon’s remarkable feat in getting all the Israeli settlers removed from Gaza shows what can be done.

I think that Prime Minister Netanyahu, who I know extremely well and who has been on an ideological odyssey, is now absolutely determined that a two-state solution is the only possibility. I think that this country and Europe could alleviate the situation by being much more lenient and understanding of the affairs of Israel. The initiatives now being undertaken in Ramallah and the negotiations between Tzipi Livni and the Palestinians’ opposite numbers have a chance of success. We have to stand by and be genuine neutrals and sympathetic, not partisan spectators.

2.41 pm

Lord Triesman (Lab): My Lords, I am grateful to the noble and gallant Lord, Lord Stirrup, for giving us the opportunity of having this conversation. We remain firmly in support of the two-state solution. I do not think there is a difficulty in holding a discussion of other kinds of plans, of alternatives, but I would be disappointed if we were distracted by that process from the two-state solution.

I have tried in the past few days to get a careful, hard-headed assessment of current prospects from those who are most closely involved. I want to focus on two elements, one political and the other economic. On the political one, it is hard not to say anything other than it is great to see the three-year hiatus in the peace negotiations finally broken by the efforts of Secretary of State John Kerry and his intention to reach a deal—comprehensive, as he described it, rather than interim—by April 2014 and to know that there are more frequent meetings taking place in which the United States has a far greater involvement and is very pro active. Those who are closest to the process have described John Kerry as being plainly, personally, deeply committed in driving the process. I use the words that they have used to me, and I applaud and congratulate that.

Of course, it may fail. The point has been made today that past predictions of breakthroughs have not always come on stream as we would have wished. Condoleezza Rice expressed that view, as many of us will remember, in 2008. But this is a serious United States push. That is what we demanded they should do, and that is where we should offer our encouragement.

On the economic front, which is being led by Tony Blair on behalf of the quartet, it may very well be that the quartet’s role is now being expressed more in the economic construction, and that is a very useful thing to do. Any political success will have to be underpinned by economic advance. People will feel an ownership of a new kind of economy. They will have an interest in each other’s success. That is vital. The eight-point plan in the economic initiative—and I strongly recommend it to the noble Lords: it is well worth reading—covers construction, including the institution of personal mortgages; agriculture; tourism; telecoms; power; water and light manufacturing. These are all building blocks of a viable economic future. They have been drawn up with the active engagement of the Palestinians and the Israelis. They have been supported by the global investment

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world and by international donors. The United Kingdom has a proud record of being a significant international donor in that environment. We should be proud of that.

Building two states will, of course, focus on land, boundaries and security, but it should also focus on economic and other institution-building. That is where there is going to be a chance of designing a real future and resilience in that future. The plan that has been guided by the work of leading global consultants is perhaps the most serious that we have seen yet. It is a plan: it is accomplishing a plan which is the hard thing; making one is often the easier part of the process. It is absolutely critical, however, and I hope that in our Parliament we will be cautious about any further name-calling or unhelpful criticism, rather than putting our shoulders behind what seems to be the most serious effort that we have seen in a very long time.

2.45 pm

The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi) (Con): My Lords, I would like to begin by thanking the noble and gallant Lord, Lord Stirrup, for giving us the opportunity to debate this subject. I know that the Middle East peace process is a subject of deep interest to those here today and to the House generally. I would also like to thank the noble and gallant Lord for leading the UK delegation with Sir John Scarlett at the recent UK-Israel security seminar held at Wilton Park. This is important work that enables us to better understand Israel’s security concerns and explore how these could be resolved in the context of the Middle East peace process. We look forward to the next conference in January of next year.

As my right honourable friend the Foreign Secretary has made clear, progress towards peace through the two-state solution is needed urgently. The ongoing events in the Middle East that have so consistently dominated world media continue to focus all of our minds on the need for peace between the Israelis and the Palestinians. We therefore warmly welcome the resumption of talks between Israeli and Palestinian negotiators in Washington on 30 July, and the resumption of formal negotiations on 14 August, with a view to resolving all final status issues.

The UK firmly supports a negotiated settlement leading to a safe and secure Israel living alongside a viable and sovereign Palestinian state based on 1967 borders with agreed land swaps, Jerusalem as the shared capital of both states, and a just, fair and agreed settlement for refugees. This is the only way to secure a sustainable end to the conflict, and it has wide support in this House and across the world. We strongly believe that achieving such a solution is in the interests of Israel, the Palestinians and the wider region. Of course I note the worries of the noble Lord, Lord Anderson, and the concerns voiced by the noble Lord, Lord Williams, but as I said earlier this year, this is a decisive year; this is the best chance in a decade—and perhaps the last chance—of ending this conflict. Britain will be there every step of the way. I hear the concerns

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of the noble and gallant Lord, but as the situation on the ground continues to deteriorate, it is increasingly clear that time to achieve a two-state solution is now running out.

It is with this in mind that the American Administration have carefully set out the foundations for negotiations to begin. Secretary Kerry worked hard with both parties leading into the resumption of negotiations, emphasising the difficult choices that lie ahead. We do not underestimate the challenges involved, a point that we have made clear to both parties. We continue to applaud the commitment Secretary Kerry has made. I echo the words of the noble Lord, Lord Triesman, on Secretary Kerry: his passion, determination and commitment were obvious for all to see when he spoke at the United Nations General Assembly.

It is also the courageous leadership shown by both Prime Minister Netanyahu and President Abbas, and the commitment of negotiators on both sides, that has enabled these negotiations to resume. In this regard, we welcome the decision taken by Israel on 28 July to release 26 Palestinian prisoners in advance of talks. The noble Lord, Lord Weidenfeld, referred to this. The negotiating parties have been disciplined in maintaining a coherent single-track model of negotiation. They have been meeting regularly. At the negotiator level, they have had several rounds of direct bilateral talks, and the US special envoy has been party to a number of these. At the same time, information about the discussions has been well protected from release to the outside world, which we believe is both positive and necessary to reduce the risk of disruption to the process. We continue to support the aims and objectives of the quartet, which we believe are aligned with UK interests.

The noble Lord, Lord Turnberg, asked about the Arab League. The UK is working closely with the Arab League countries in support of the peace process. We agree on the importance of working with all international partners to achieve a successful deal and it is clear that the Arab states have an important role to play. We warmly welcome the Arab League’s decision earlier this year to reaffirm the Arab peace initiative and its contribution to the resumption of talks. We are closely engaged with Arab partners and others in the international community to support efforts to achieve a just and sustainable peace.

Looking ahead, it is clear that determined leadership from the United States will remain critical in the months to come. I note the practical suggestions of the noble Lord, Lord Judd. Britain will do all it can to support the parties and the US in their efforts to achieve a negotiated peace, and we have already played an active role. In September, President Abbas visited London for meetings with my right honourable friends the Prime Minister and the Deputy Prime Minister. In both cases, the Middle East peace process was at the very top of the agenda. President Abbas also met my right honourable friend the Foreign Secretary and Secretary Kerry. In his subsequent statement, my right honourable friend the Foreign Secretary reiterated to President Abbas that Britain is committed to supporting,

“the Palestinians, Israelis and the United States to achieve this agreement and the lasting peace that the people of the region need and deserve”.

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We will continue to work with all our international partners, including the quartet, the Arab League and the European Union, to support efforts to achieve a just and sustainable peace. Of course, we know the path ahead will be difficult. As Secretary Kerry has noted:

“There is no shortage of passionate sceptics”.

So the immediate political focus between the Israelis and the Palestinians should be on building trust as they take forward the negotiations. Reaching agreement on final status issues necessarily involves detailed discussion about refugees, Jerusalem, borders, security arrangements and Jewish settlements in the West Bank and East Jerusalem. These issues, especially that of refugees in Jerusalem, are complex, and making progress on them will require difficult choices to be made by both sides.

To avoid drift, Secretary Kerry has explicitly required negotiations to be concluded within nine months, and maintaining the momentum is crucial to meeting this deadline. We therefore welcome Secretary Kerry’s recent announcement that talks are due to intensify in the coming weeks. We will continue to support Palestinian state-building efforts ahead of a deal, including by fostering private sector-led, sustainable economic growth in the West Bank. We also welcome the steps taken by Israel referred to by my noble friend Lord Palmer and the noble Lord, Lord Weidenfeld. These steps are positive and we look forward to further progress in the days and months ahead, including on some of the issues to which noble Lords referred, such as the rights of minorities, which were mentioned by the noble Lord, Lord Hannay.

I conclude by thanking noble Lords again for their participation in this debate. We will take every opportunity to promote a peaceful two-state solution, which is important not just for the security of the immediate region but of the UK too. The groundwork has been laid, so we now look to President Abbas and Prime Minister Netanyahu to continue their strong political leadership, and we will provide support wherever necessary. In parallel, we will continue to call on the European Union, the Arab League and other international partners to unite behind Secretary Kerry’s efforts and do everything possible to support decisive moves for peace.

We are at a critical juncture. Either there is a movement towards peace with strong regional and international support or all of us face an uncertain and potentially dangerous future. Developments since the Arab spring have made progress even more pressing, not least in light of the threat posed by the conflict in Syria and the current events in Egypt. Maintaining the status quo is neither desirable nor practical. The Government therefore remain committed to supporting the efforts of the parties and their shared commitment to reaching a permanent status agreement within the agreed goal of nine months. We firmly believe that if both parties continue to show bold leadership, peace via a two-state solution is achievable.

2.53 pm

Sitting suspended.

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Transport: Bus Services

Question for Short Debate

3 pm

Asked by Lord Bradshaw

To ask Her Majesty’s Government what plans they have to increase the use and quality of bus services.

Lord Bradshaw (LD): My Lords, I thank all noble Lords for their magnificent punctuality, which should be the precursor of this debate. It is my great pleasure to welcome my noble friend Lady Kramer as the Minister. I am sure that her advent here will be warmly welcomed throughout the House. It is also a good thing to note that the Department for Transport has today issued a statement about the Better Bus Area Fund, with new additions to it in Merseyside, York, Nottingham and the west of England. This money has been competed for and is to go towards improving bus services according to those proposals put forward by authorities which were deemed to be the best.

I shall start by talking about the reimbursement of concessionary fares. This is still a bone of contention. I remember when the noble Lord, Lord Adonis, was the Secretary of State, he invited a party of bus operators to see him. We had a full and frank discussion, but unfortunately it did not actually result in anything. The consequence is that there is a lot of ill feeling among bus operators that they are not getting a fair return for the services rendered. They should be neither any better off nor any worse off, but some of them are in fact considerably worse off. Unfortunately, that disadvantage is felt most severely by small and medium-sized operators, not the big five. They have the opportunity to cross-subsidise and utilise the swings and roundabouts. However, I have received a letter from a bus operator in Norfolk who is quite adamant that his operation is not getting adequate reimbursement. The letter states, “Certainly in my area, now with the highest proportion of over-60s among its population of anywhere in England, there are longer routes where the scheme comprehensively underpays any reimbursement, and this is causing services to be reduced or cut entirely”. I think that we are all conscious of the fact that it is not fair or reasonable to offer elderly people bus passes on the one hand and to remove their bus services on the other.

I want to ask the Minister whether she will take another look at what is going on and possibly meet with some more bus operators with, I hope, a better result than was the case after my last meeting. This is an important issue. I know that all the political parties are gearing themselves up to offer, at the next general election, to do something about young people’s fares. There is much justice in that, particularly following the raising of the school leaving age and so on. However, bus operators will not co-operate unless they feel that they are being treated fairly in respect of concessionary fares. Again, it is important that something is done about this because we should be reaching out to people when they reach the age when they can buy

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motor cars. It is rather important that they do not buy them because of the congestion that affects many of our towns and cities. This is the first issue I want to bring home, and I hope that the Minister will agree that we should have some discussions with operators.

The second issue that I wish to debate is profitability. The word “profit” has been bandied about recently as a thoroughly dirty word, yet any enterprise that is progressive needs profit to invest money. The bus companies have not been slow to invest money. They have much more modern, environmentally friendly and cleaner vehicles than they had a few years ago, which—thinking of the next debate—cannot be said of all train operators. However, some people are now describing “profit” as a dirty word.

I have been involved in the management of bus companies. I know that bus companies in both the public and private sectors have to earn a profit, otherwise they will not have money to invest. Where profits are at a reasonable level and companies are investing money, we should not pretend that allowing the public sector to take over the routes, which was more or less set out by Maria Eagle at the Labour Party conference, is a way forward at all. Reducing the bus operators to penury is not a very good policy. I can remember—because I am very old—what Greater Manchester buses were like when they were in public ownership. The buses ran late; they were filthy-dirty; the staff were thoroughly disobliging; and the service cost the ratepayers a lot of money.

We know that the authority in Tyne & Wear, for example, is trying to go forward with a quality contract scheme. The arithmetic of it seems to be very faulty. I know that there is a procedure that has to be gone through to convince the senior traffic commissioner that a scheme is good and will benefit taxpayers and bus users. The Government should be very careful that they get good, sound reasons for any change that takes place. I fancy that it will be a long struggle. The bus companies believe that their rights are being sequestrated without compensation, and the likelihood is that the case will go right to the Court of Human Rights in Strasbourg if the scheme is not properly formulated.

Competition is necessary, but all attempts to regulate it through competition authorities have proved very expensive and ineffective. If the Minister looks back through the records of the Office of Fair Trading and the Competition Commission, she will see that they investigated the bus industry probably more than all the other industries in the country put together. It cost a huge amount of money and took up a huge amount of management time, and I do not think that any result was worth a row of beans.

Could not the traffic commissioners have a more active role in regulating any predatory behaviour that arises? The commissioners have to accept a registration. Before they accept that registration, they will know that Bill Bloggs proposes to run a bus three minutes in front of Bill Smith’s, after which there will be a long gap. That sort of thing does not need a genius to spot, and is extremely destructive of the network and public confidence.

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Local government has a very active role in keeping streets clear of obstructions, be they parked cars or road works which seem to infest all our roads. I believe that when a traffic commissioner calls in a bus operator for not operating within the margins—margins which are going to be tightened up to mean no minutes early and nearly 100% on time, which is a very high target—the traffic commissioner should also summon the local authority at the same time to make sure that it is playing its part in the bargain because, unlike with the railway, the streets are separate from the operator. At least with the railway they fall within one armful with the Office of Rail Regulation.

There are a few things that might interest the Minister and I would be very happy to talk in more detail. This is the time of year when I raise the question of the bus industry which needs consideration.

3.11 pm

Baroness Scott of Needham Market (LD): My Lords, I start by thanking my noble friend Lord Bradshaw for tabling and introducing today’s debate, which has become a sort of annual fixture. It is a real pity that the importance of buses to the public is not reflected in the interest that the House takes in public transport generally and buses in particular. It is not just a courtesy at this point to say how much I welcome the presence of my noble friend Lady Kramer at the Dispatch Box. I have known the noble Baroness for many years and I know that her hands-on experience of transport, particularly the financing of it, is going to be of real benefit to the House, to the department and to the Government, so she is very welcome.

I wish to focus my few remarks today on the question of rural bus services, which is a topic close to my heart. Like many Members of this House, I split my time between my home in the country in a village of fewer than 200 people, and my flat in London, which is close to a main road along which around a dozen services run about every five minutes during the day and then continue to run through the night, so the contrast is very stark. About seven years ago when the gentleman who is now my husband first came to see me in Suffolk, he asked the Londoners’ question: “When is the next bus?”. “Thursday”, I told him. “We don’t need real-time passenger information; we just need a calendar”. Now my village does not have a bus service at all and I do not have a problem with that. When I was first elected to the county council in 1993, I recall looking at bus routes where the per-passenger subsidy was greater than a taxi fare, and that is clearly untenable. However, people who live in small villages still need to access services and not everyone can run a car. In my village the answer has come in the form of demand-responsive transport. It is called Suffolk Links and it is run by a not-for-dividend-profit organisation called Optua. Using a mixture of paid and volunteer staff it provides a very good service to villages like mine and, while it is not as convenient as a car, it is very much better than a weekly bus and much cheaper than a taxi.

These demand-responsive services are suffering from a combination of local authority cuts, regulatory burdens and an unhelpful financial regime, so I would appreciate

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it if the noble Baroness could perhaps write to me setting out what the Government’s current thinking is on the demand-responsive transport sector. It is becoming quite urgent as there is now very real pressure on these services because of the withdrawal of bus services from larger communities which in my day on the council would not have been considered marginal. Central government cuts to local authorities and to the bus operators’ support grant, along with changes to the concessionary fares scheme, have meant that many services are no longer seen as viable. Close to us in Suffolk is the village of Stowupland. It has a population of around 1,800 so it is a decent size. Due to its previously good bus links—it had an hourly service—it has a large population of retired people. There are also quite a number of people in the village living in socially rented housing. Having lost their weekend and evening services some time ago, First has recently announced the withdrawal of all bus services from the village. This is a terrible blow to the many people who rely totally on buses will have a major impact on the fabric of the village.

Lest noble Lords think that I am focusing too much on Suffolk, North Yorkshire County Council is consulting on a proposal to cut a further 25% of bus support, and Dorset 28%. In Norfolk, the popular Coasthopper service is to be cut by a third; that is perhaps what my noble friend Lord Bradshaw was referring to. These are all rural counties and many small communities will be badly hit by this level of cuts. We need to remember that 10% of the rural population does not have access to a car. Those people will suffer increased isolation and have real problems trying to access essential services. It is all very well for the Chancellor to stand up at his conference and say that jobseekers are going to have to go to the jobcentre daily, but how on earth are rural claimants to get there? There is a desperate lack of joined-up thinking in all of this.

As another example, most Suffolk villages, even the smallest, have a group of a dozen or so council houses which were built after the war. They were built at a time when land was cheap and families were larger, so on the whole they are quite big. It is therefore not always easy to find tenants for them. Having no access to bus services is not going to make it any easier to find tenants for these houses, especially when you couple that with the changes to housing benefit, which are making larger properties much harder to let.

I would like the noble Baroness to outline for us how the Government’s role in bus policy is currently being defined. Is there still a role for government or is it simply being left to a combination of market forces and cash-strapped local authorities to deal with? I wonder whether the Department for Transport is aware that there is a real perception that the Government are no longer supportive of the bus industry and its needs. We have heard the questions about the changes to the concessionary fares scheme and the bus service operators grant, which have not helped the bus industry one bit. The mood music really is important. For example, Eric Pickles’ proposal that people should be allowed to park on the road for 15 minutes is just plain daft. A succession of cars parking for 15 minutes is as bad as one being parked there for the whole day. If it blocks

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the road and makes the smooth running of buses and cars and safe pedestrian crossing more difficult, it is a very silly idea. Billing it as a pro-high street measure reveals a failure to understand the dynamics of people and traffic on high streets.

There is another area about which I am concerned, and I would be interested to know whether the department has had consultations and discussions with the Department for Education and the Department for Transport on home-to-school transport. In rural areas this has always been provided by a combination of large and small operators using the same buses on the school runs and the service runs. As the services are disappearing, the school runs by themselves will almost certainly not be viable for the operators. This is particularly key where there are smaller operators in the rural areas, because they are the ones who are finding the going tough and withdrawing from the industry altogether. Councils have a statutory obligation to provide home-to-school transport, so they could, ironically, end up having to run a bus fleet in order to get children to school, which would be very much more expensive than subsidising transport. I would like to know a little more about that.

Finally, it would of course be churlish not to welcome the Government’s Better Bus Areas programme, particularly the announcement today. My heart sings for Merseyside and so on. However, my plea to the Government, particularly to the noble Baroness, is not to forget rural areas. People rely on buses and they will be badly impacted by these changes.

3.18 pm

Lord Berkeley (Lab): My Lords, I am grateful for the opportunity to say a few words in the gap. It is extraordinary hearing the noble Lord, Lord Bradshaw, and the noble Baroness, Lady Scott, talk about rural bus services. Where I live in Cornwall, exactly the same thing is happening: buses are being cut. I do not have a car; I have a bicycle, but not everybody who does not have a car can go by bike. The problems are the same in my area.

This also comes back to the debate we had on the Question in the Chamber yesterday about new roads, the problems of resurfacing existing roads, filling in potholes and so on. The Minister who answered for the Government, the noble Lord, Lord Popat, said that local authorities have got a big budget for this. However, the problem is that local authorities’ budgets are being cut all the way round and that applies to the budgets for buses and road surfacing. I do not buy into this continuing mantra, which comes not just from this Government but has been going on for years, that everything central government does is perfect whereas everything done by local authorities is rubbish and should be cut down or given to somebody else because they can do it better. We have a long way to go in this regard and the problem with rural buses is extremely serious.

I also want to refer briefly to bus lanes, particularly in the context of city centres. I do not think that we have discussed them recently, but there has been a lot of debate over the summer, particularly in London, about cyclists being killed by trucks and trucks being

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required by the mayor to put extra safety equipment in place. I refer particularly to tipper trucks as opposed to articulated lorries. The safety equipment is a good idea and may possibly help to prevent a few accidents. However, the real problem is enforcement. These trucks are allowed into London and I believe that they can be fined £200 a day if they do not have the right equipment fitted. How will the mayor ensure that the enforcement is sufficiently rigorous to make the owners of these trucks comply with the regulations? How will he ensure that bus lanes are kept free for buses, and for cyclists if they are allowed in them?

Pedalling or driving round London, whether in a bus or a car, you see endless examples of cars, vans and trucks being parked in bus lanes when they should not be there. They may be 24/7 bus lanes or they may apply just in the morning and evening rush hours, but illegal parking in them dramatically constrains the reliability of buses. The bus drivers are very good and do their best, but the whole point of bus lanes is to provide greater reliability for passengers, drivers and operators. However, that does not exist. Before we bring in too many more regulations in this area we should have a strong go—government, local authorities, police; whoever’s job it is—at making sure that the existing regulations are properly enforced and are seen to be enforced by the public. I would love to see a car illegally parked in a bus lane have a ruddy great big ticket put on it and be subject to a big fine. The driver would not do that again, but at the moment, most people think, “Well, what’s the point?”. I shall be very interested to hear what our new Minister has to say. I warmly congratulate her on her appointment and I look forward to working and debating with her in the future.

3.23 pm

Lord Rosser (Lab): I start by thanking the noble Lord, Lord Bradshaw, for securing this debate. His comments seemed to have as much to do with Labour Party policy as government policy. I agreed rather more with the thrust of the comments of the noble Baroness, Lady Scott of Needham Market, and, of course, with those of my noble friend Lord Berkeley. I also take this opportunity to congratulate the noble Baroness, Lady Kramer, on her appointment as Transport Minister, a subject on which she has considerable knowledge and experience, not least through the prominent positions she has held over a number of years as a Liberal Democrat in London. If, by any chance, the Minister feels that she has had to wait a long time since becoming a Member of this House to speak in a debate from the government Dispatch Box, then, like the proverbial comment about the arrival of buses, she now finds that, after the wait, two debates have arrived together one behind the other. In warmly welcoming the Minister to transport debates, I take this opportunity to express my thanks to the noble Earl, Lord Attlee, who, as a Whip, has spoken for the Government up to now on transport matters, and who in my experience has always been a very courteous and approachable person with a genuine sense of humour.

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Some questions have already been raised in this brief debate about the Government’s policy and their approach to the bus industry, and we wait to see whether the Minister’s arrival is likely to mean any change in approach. I should like her to confirm that there will be no change in one area: that neither party in the coalition Government has any plans to withdraw the current concessionary bus passes for senior citizens. It would be helpful if she could confirm that that is the position.

We know that, outside London, local bus passenger numbers fell again last year, this time by 2.5%, with bus mileage outside London also falling again, this time by just under 1%. Mileage on services financially supported by local authorities, accounting now for 20% of the total, has fallen even further: by an estimated 8% over the latest year and 17% in the past two years. There is no need to guess which government policy has led to that state of affairs. If you make cuts of a quarter in local transport funding and a fifth in direct subsidies to support essential routes, it is bound to have an adverse impact, as has already been said in this debate.

The Campaign for Better Transport has said that a great many local authorities have looked or are looking to buses as an area in which to make cuts, with some councils planning to lose all their supported services. A fifth of such services have already gone. The position in London is different. Around half of all bus journeys in England are made in London, where the 2012-13 total was broadly unchanged from the previous year at approximately 2.3 billion, following years of growth. Likewise, vehicle mileage is up in London. In London, bus services are operated by private companies but regulated by Transport for London. In England outside London, services are operated on a purely commercial basis or with financial support from transport authorities.

The Department for Transport produces regular statistics on the bus industry. The most recent statistics, I think dated last month, appear to tell us that total costs in 2012-13 were at broadly the same level in real terms as in the previous year, and that operating costs for local bus services in England outside London have fallen by 2% since 2008-09. However, the next paragraph in the document, unless I have misread it, tells us that, despite this, the latest figures show that bus fares continued to increase at a rate greater than inflation in the year to March 2013. The heading for this very brief paragraph on bus fares is, “continued above-inflation increases”, which may of course be the explanation for why the paragraph on fares has been kept so brief by the Department for Transport.

What the official statistics also tell us is that women are more likely to use buses than men, that males and females aged between 17 and 20 made more bus journeys than any other age group among the categories within the DfT’s statistics in 2012, and that those in the lowest household income group make the most bus journeys, accounting for more than half of all bus journeys in Great Britain. It is therefore not clear on which groups who are not qualified for free concessionary travel the impact of—I use the Department for Transport’s own wording—“continued above-inflation increases” falls most heavily at a time when we continue to have the cost of living increasing at a faster rate than wages.

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The Government also claim that they are trying to get young people into work or full-time higher education, while ignoring the fact that the Government have trebled university tuition fees, scrapped the education maintenance allowance and hammered the Future Jobs Fund. The Department for Transport statistics also tell us that the “continued above-inflation increases” in bus fares have a disproportionately greater impact on the very group—namely, the 17 to 20 year-olds who the Government say they want to get into education, employment or training, and who may well need to travel by bus to do so—than on any other age group. If bus fares are too costly, the opportunities for young people to take up opportunities in education, work or training are going to be reduced and restricted. That in itself imposes further costs on the nation and on taxpayers. The Government can hardly claim that bus deregulation outside London has been successful, except perhaps for the five major bus companies who control more than 70% of the UK bus market and do not appear to be feeling the pinch to the same extent as many of their passengers. I note, however, the comments by the noble Lord, Lord Bradshaw, about the position of smaller operators and concessionary fares, and await with interest what the Minister has to say in response.

The noble Lord, Lord Bradshaw, has given his views on Tyne and Wear. Tyne and Wear is pursuing quality bus contracts to get a better deal for passengers. Contrary to the tenor of the comments of the noble Lord, I believe that they should be encouraged, as should other local transport authorities who want to go down the same road: planning the local bus network, raising the level of services and tackling the issue of fares, including fares for young people.

Other local transport authorities may prefer partnerships with local bus companies, and there are examples of where this has been very successful. However, it should be for the local transport authorities, who are accountable, to decide which road to take. The Government should not appear to side with bus companies, who do not seem to like quality contracts, through funding arrangements which militate against local transport authorities that want to go down that path.

Government policy on buses has been a failure. One hopes that the reason the Minister has been brought in to replace her Liberal Democrat colleague in the department is to oversee a change in policy which leads to increasing passenger usage of buses outside London and to a better deal for bus passengers, who, while in the main not well off, are among those bearing the brunt of the cost-of-living increases.

3.31 pm

The Minister of State, Department for Transport (Baroness Kramer) (LD): My Lords, I thank your Lordships for the debate so far. It is an extraordinary privilege for me to be here today. I could not open in any other way than to thank the noble Earl, Lord Attlee, who so stalwartly responded to questions, many of them from people present at today’s debate. He may not have a large shoe size, but his are nevertheless large shoes to fill; I feel that as I stand here.

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I also had a joke to open with. However, the noble Lord, Lord Rosser, has taken advantage of me and talked about my facing two debates today already. Instead, I will make just one statement, because I want it to be absolutely clear: this Government have no plans to withdraw concessionary fares for older and disabled people. They are enshrined in law and that remains the position. I want to make that clear before we discuss any other issues.

We can all agree that buses play a vital role in our economy: 4.6 million bus journeys were made on local buses in England in 2011-12. They are essential for people to get to work and to education. They are a lifeline for many people, enabling them to socialise. Over half of those outside London who rely on the bus do not have access to a car. Studies such as those from the University of Leeds have reinforced the importance of buses to a healthy and growing economy, and that is surely something we all support.

While there has been some suggestion, particularly from Lord Rosser, that the situation is bleak, I suggest that there is evidence to the contrary. Customer satisfaction with bus journeys is high: 84% of passengers are satisfied with their service. We all want to see that figure improved, but let us not deny that that is a mark of success, particularly compared to the past. Under-21s make up a third of bus passengers; as a group they are often fascinated by the car, yet they are accepting the bus as a way to travel. Use among the over-60s is also increasing, especially as a result of the national concessionary pass.

Moreover, the Government remain committed to improving bus services, and expenditure on buses reflects that. This year the Government spent £1 billion on the concessionary travel entitlement and £340 million on direct subsidies to bus operators in England. We have allocated over £300 million to major bus projects in the last year, and we have provided £70 million, through the Better Bus Area fund, for improvements in 24 local authority areas.

Let me pick up the issue of demand-responsive transport, raised by my noble friend Lady Scott of Needham Market. We have allocated £20 million to support community transport. This is an area of real interest and challenge because it is going to take an intelligent and innovative approach to work out how to provide transport to areas where demand is irregular and sporadic. It means that local authorities will have to bring together the community, so that many others in the community—the voluntary services and stakeholders—can try to look for answers to this. It is one of the reasons why the Government have said that the answers have to be found in the local community, which understands the local problems, rather than imposed constantly from Whitehall. She also raised the home-to-school transport issue. I need to understand that better, and I promise to try to do so.

The Government have provided £600 million for the Local Sustainable Transport Fund and £95 million for four rounds of the Green Bus fund, but we can still do better. The Government’s Green Light for Better Buses sets out our plans for buses. The proposals include reforming bus subsidy, improving competition, improving local authority capability in tendering—and

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let us not underestimate the difference that can make—incentivising partnership working and multi-operator ticketing, which is a particular interest of mine, and making access to bus information and ticketing easier for all. Perhaps some of that is a result of my London experience.

There is no doubt that we are operating in challenging economic times. The Government must ensure that the bus market is still attractive to all operators, large and small—precisely the point raised by my noble friend Lord Bradshaw. They must find ways to allocate funds fairly, while keeping in mind the best value for money for taxpayers. There is a balance and it is not necessarily an easy set of answers.

The bus service operators grant, paid to bus operators, has historically been provided in a blunt, untargeted way, related to fuel consumption. But from January 2014, the bus subsidy previously claimed by operators of non-commercial services will be devolved to local authorities. I hope that that will drive forward that kind of innovation and new thinking. That money will be ring-fenced until 2017 to ensure stability and will allow local authorities to make the best local-level decisions about the provision of non-commercial bus services.

As several noble Lords around this table have said, some local authorities have argued that they can make the bus subsidy deliver better value for money by working in partnership with their bus operators to grow the bus market. We can all agree that Reading and Nottingham are fine examples of the sort of excellent bus service that can be achieved through that kind of partnership. The noble Lord, Lord Rosser, acknowledged that. It is precisely what the four new Better Bus Areas, which I announced today in a Written Ministerial Statement, are intended to test; I thank my noble friend Lord Bradshaw for his kind comments on that. The policy relies strongly on partnership with commercial bus operators, rather than contractual relationships. That is a significant element of a more positive approach.

As the noble Lord, Lord Rosser, has said, Better Bus Areas are quite distinct from quality contract schemes, where, in effect, the local authority follows something much closer to a London model. I feel very strongly that local authorities and local communities should be making the decision about which way they should go on this. If I understood the noble Lord, Lord Rosser, he took that position as well. Some will go one way and some will go another, but I believe that it is absolutely vital that Whitehall does not try to pretend that it understands the needs of each local community. Providing that flexibility to go in two directions seems to be something that we should see as a strength, not as a weakness.

I also want to stress that the Government are committed to protecting the national bus travel concession. I talked about that and made a very clear statement. I love my freedom pass; I suppose I should declare that I have one in case that could be considered a conflict of interest. I know that it changes people’s lives.

A number of people, including the noble Lord, Lord Rosser, recognise that there is a serious issue of

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young people’s travel, and it is a complex area. While there is no statutory obligation to provide discounted travel to young people, many commercial and publicly funded reductions are available. I make it clear that this is an area that I want to explore. I think that we could do a lot more work in this area and see what possibilities there are, because I take on board many of the issues that have been raised here. I congratulate those local authorities—I think that Brighton is one example—which have provided discounted fares to young people. We therefore have a beginning point for seeing what the impact is and for putting a great deal more thought into this.

Let me try in the minutes that I have left to make sure that I have covered some of the issues that were raised—where I have not, I will of course write to noble Lords. My brain is not yet trained to grasp every point in the way that it should be and, I hope, eventually will be.

On the reimbursement of concessionary fares, the underlying principle, as the noble Lord, Lord Bradshaw, said is: no better off and no worse off. It is an EU regulation and there is plenty of guidance around all this. I am very happy to meet those who think that it is not working effectively, but I should point out that, at the end of a process, bus operators can appeal to the Secretary of State on this issue—indeed, during the past two years, the number of those appeals has fallen, so this may be less of a problem than we might initially fear. I agree, however, that getting that sorted is very helpful if we are going to start thinking through the issue of concessions for young people.

On traffic commissioners and their role in competition, I am sure that I was handed a note and, if I was, I cannot find it. However, I shall pick that up; I am not yet familiar with the issue of traffic commissioners and what they do. Obviously, because they are regional, they can have an impact in a way that I should be aware of, so I will come back and answer that question.

The noble Lord, Lord Berkeley, talked about bus lane enforcement. In London, on TfL roads, that is obviously a matter for the mayor; otherwise, it is a matter for local authorities. From personal experience, I think that most people seem to regard enforcement as ruthless rather than soft. There are certainly successful examples, such as in York, which has employed enforcement officers. This is another area where we must look to local communities to work out how it can be done within their own community. I would be hesitant about Whitehall trying to suggest that there is one way to carry out enforcement, but I take the point that the noble Lord makes.

I again apologise if I have missed any points that noble Lords may have made. I will cover them in letters—we will go back through Hansard and make sure. I assure the Committee that the Government believe in buses. Our vision is for a better bus service with more of what passengers want. We want punctual, interconnected services; we want them greener; it is essential that they become fully wheelchair-accessible; and we need widely available smart ticketing. I know from the experience of London what an impact some of those “soft issues” can have on the effectiveness, the attractiveness and the success of a bus service. A more

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attractive, more competitive and greener bus network will encourage more passengers, cut carbon and create growth. I believe that those are grounds on which we can all agree.

The Deputy Chairman of Committees (Lord Faulkner of Worcester) (Lab): I am afraid that I shall have to ask noble Lords to contain their impatience until 4 pm. The rules of the Grand Committee do not allow the next debate to start before the appointed time, even though I look around and see that every speaker is here. I am afraid that I have no discretion on that.

3.44 pm

Sitting suspended.

Railways: East Anglia Network

Question for Short Debate

4 pm

Asked by Baroness Scott of Needham Market

To ask Her Majesty’s Government what plans they have for investment in the rail network in East Anglia.

Baroness Scott of Needham Market (LD): My Lords, I thought that I would start with a Michael Caine moment. Not a lot of people know this, but the east of England is one of only two regions that make a net contribution to the Treasury. That is quite interesting, because when people talk about English regions, they talk about Leeds, Manchester and Newcastle. They do not think about Norwich, Chelmsford and Ipswich. It is a really impressive feat, particularly when you consider the rather poor investment in road and rail infrastructure that the east of England has had for the past half-century.

I wish to focus my comments today on just part of the region: the counties of Norfolk, Cambridgeshire, Essex and of course my home county of Suffolk. I am really pleased to see that those areas are all represented by speakers in today’s debate. Hertfordshire and Bedfordshire are of course within the eastern region in government terms, but in rail terms they are quite a separate region, so I will leave them to one side. I want to try to make the case for more strategic investment in our region. Given her background, I know that the Minister will bring a real understanding of the issue and of the importance of investment.

Many parts of our regional rail infrastructure have had no modernisation in the past half-century. Much of the rolling stock is now 40 years old. Recent problems with the franchise holders and now with the franchise process itself have resulted in a miserable passenger experience for far too many people in our region. Passengers are being asked to pay higher fares every year, but experience a worse service overall. The award of an interim franchise to Greater Anglia, which has now been extended for a short period, has meant that investment in rolling stock, which is so desperately needed, cannot be made. It has improved the reliability of the service, but faces an uphill struggle against problems caused by poor infrastructure; notably signalling,

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which brought the entire line into London to a complete halt on Tuesday this week. I would appreciate an update from the Minister on the question of the franchise for our region.

It does not have to be like this. A few years ago, one of the very worst areas in our region was the misery line from Southend to Fenchurch Street, which has now been transformed by new investment. Right through the region and particularly on the main lines, keeping costs down in the old BR days resulted in a number of inadequate stretches of track. I am really pleased that some of these false economies have now been rectified. It is not on the tip of everyone's tongue, but the completion of the Beccles loop, which cost £4 million, has been transformative. On the East Suffolk line, usage has gone up 12% since December, because the Beccles loop and the associated signalling have enabled an hourly train service to run. That indicates how a relatively modest investment can pay dividends.

The eastern regional economy is driven by centres of growth in Cambridge, Norwich, Ipswich, Colchester, Chelmsford and Southend, supported by the market towns and their rural hinterland. Our region also plays a key part in driving forward the capital’s economy. That is especially true of Essex. At its most basic, without the tens of thousands of people who endure a daily commute into London from Essex, our entire economy would grind to a halt. Cambridge, Norwich, Ipswich, Colchester, Chelmsford and Harlow are already hubs of science, innovation and new technology.

East Anglia’s ports have an unparalleled opportunity to develop the offshore energy industry. Felixstowe is already the fourth largest container port in the world and has created around 40,000 jobs in the area. If it is to compete with Antwerp and Rotterdam, it needs infrastructure that is fit for purpose. Some improvements have been made, but further improvement to the Felixstowe to Nuneaton freight corridor is an essential part of ensuring the continued growth, given the congestion on the adjacent A14. Investment in the Ipswich chord is another good start but we need to continue investing. I am very pleased to see the noble Lord, Lord Berkeley, in his place today and speaking in this debate. He has done more to keep rail freight on the agenda than anyone else in the country.

East Anglia is one of the fastest-growing parts of the UK. Both commuters and long-distance travellers are growing in number on all the routes under discussion, both to London and between towns and cities in the region. More housing is planned—about 360,000 more houses in the four counties over the next planning period. When I talk to planners across the region, they say that they are concentrating the building, the new-housing growth, in areas with good access to the rail network. Of course, this is good transport planning, but only if the network has the capacity to cope with the growth.

Network Rail is currently basing assumptions on a 75% growth in passenger use over the next 30 years. This simply does not accord with the growth in recent years, and is considered by people who know to be a serious underestimate. The burgeoning economic strength of the region is being increasingly threatened by gridlock, congestion, and capacity shortfall on the network.

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Local business and quality of life are being undermined. Rail investment has transformed other parts of East Anglia.

I have mentioned the misery line, but the introduction of the Cambridge express service and other improvements on the King’s Lynn-to-London route have made a massive difference. They can unlock areas for sustainable housing and business growth. We need significant but not unrealistic investment in additional infrastructure and rolling stock, including tackling congestion in and around London Liverpool Street and lines to the north through north London, Essex, and Hertfordshire.

In Cambridgeshire, the Ely North junction is a bottleneck which causes problems throughout the network in our part of the region. This really needs to be unlocked to allow the growth of regionally significant routes, including freight. In Suffolk, a passing loop at Wickham Market would further improve the East Suffolk line and will be absolutely essential if Sizewell C gets the go-ahead. This needs to be coupled with more frequent inter-regional services.

A longer-term aspiration for the region, and one which has been talked about since long before I first came into local government in the early 1990s, is the east-west rail link, a link between Cambridge and Oxford. It is not about linking the two old rivals but about providing access between the south-west and south Midlands to the east of the country in a way which bypasses London and releases valuable capacity there.

The rolling stock on the main line is simply not fit for purpose. The Great Eastern main line is badly in need of new intercity stock or new and refurbished trains. We have a hotchpotch of rolling stock which has been scraped together from the rejects of other areas. It has an average age of 25 years. Greater Anglia has made some improvements in cleanliness which are greatly welcome, but, with the uncertainty of the franchise in recent years, travelling on our main line trains can be a pretty unpleasant experience, with tatty seats, malfunctioning doors, and, even worse, malfunctioning toilets.

It is not really just about the links between the main towns and cities. I live close to a market town, and I am very well aware not only of how important rail is to the prosperity of my town but also of the importance of branch lines to many of the smaller market towns. These lines across our four counties offer commuter, tourism, and everyday travel opportunities for communities. This connectivity can be further exploited to offer further economic opportunities and housing growth if the services were faster and more frequent.

Services are operated with basic trains, which, in many cases, have serious accessibility constraints. Line speeds are often poor and impaired by issues such as single sections and level crossings. Experience has shown that improving core services, frequency, speed, and so on vastly increases rail usage. The many different users of the lines to Southminster, Braintree, Sudbury, Harwich, Felixstowe, and so on would all increase in number if these constraints were improved.

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These lines have been much promoted by thriving community rail partnerships, such as the Crouch Valley, the Gainsborough, Mayflower, Wherry, and Bittern lines. There are 11 community rail lines in Suffolk which have been really successful in raising the profile of the railway locally and in some cases doubling the number of passengers using them. Just to echo the point made by the Minister in the previous debate on buses, they really show the value of harnessing local involvement, because community rail partnerships are harnessing this enthusiasm, recruiting volunteers to work with local authorities in the rail industry, securing improvements to the appearance of stations, and so on. It has involved a lot of hard work by dedicated people.

But they can only go so far and in the end it comes down to the need for the continuation and security of local authority funding to keep the work of these community rail partnerships going, and the need for additional rolling stock to accommodate the greater number of passengers being carried.

I hope I have been able in this brief time to make a case for more investment in our thriving region and for the fact that it could produce even more revenue for the Exchequer than it currently does. I look forward to hearing contributions from other noble Lords and from my noble friend the Minister.

4.10 pm

Baroness Jenkin of Kennington (Con): My Lords, I thank my noble friend for securing this debate and for giving us the opportunity to explore some important issues. My interest in this debate is that of a passenger—a regular passenger but thankfully not a commuter—on the London Liverpool Street to Norwich line. My own station is Hatfield Peverel between Chelmsford and Witham. As my husband is the Member of Parliament for Harwich and North Essex, I am even more acutely aware of what a big issue this is for all MPs and commuters on this line. The annual season ticket from Hatfield Peverel is now £4,696, which out of taxed income is a lot of money for an unreliable and very overcrowded service.

The eastern regional economy is driven by the centres of growth in Cambridge, Norwich, Ipswich, Colchester, Chelmsford and Southend and supported by smaller market towns. This burgeoning economic strength is increasingly threatened by the hopeless gridlock, congestion and capacity shortfall on our transport network. Local businesses and quality of life are undermined. Commuters on the Greater Anglia franchise who commute on the Great Eastern main line have long been let down by underinvestment and the whole of the east of England has suffered for too long from the effects of this underinvestment. These commuters are effectively paying to subsidise rail services elsewhere as the franchise hands £110 million a year over to the Treasury. They also suffer from frequent delays and problems on the line as congestion and signalling problems impact on them on a regular basis. Indeed, I was in the Clerk of the Parliaments’ office earlier this week and was told by the PA who travels from Hatfield Peverel of the terrible delays on Tuesday

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due to signalling failure, as mentioned by the noble Baroness. The region’s passengers deserve a better service and value for money for the fares they pay.

Investing in infrastructure and services—such as improvements to tracks to boost capacity and to reduce delays and congestion, new trains, and better passenger services such as wi-fi and refreshments—could potentially unlock £3.7 billion of economic growth for the region. This economic analysis was put together in the GEML capacity study report. I congratulate the region’s MPs who have all got together to publish a rail prospectus to further the campaign for investment in rail services and infrastructure. The prospectus outlines the measures needed to support economic growth and job creation in the region through the railways. These measures are intended to deliver regular services between London and Ipswich with journey times brought down to 60 minutes and between London and Norwich with journey times brought down to 90 minutes—also known as the “Norwich in Ninety” campaign. The prospectus has been supported by councils, business groups and rail user groups in the region and I understand the Secretary of State for Transport has been engaged with this process, meeting MPs and organisations to discuss the plans.

In Network Rail’s strategic business plan for control period 5—investment period 2014-19—it has committed to spending around £2.2 billion in the east of England. The infrastructure improvements include works to signals, new switches and crosses, and the remodelling of Bow Junction near Stratford to increase capacity. The region will also benefit from Crossrail coming to Shenfield. All these investments are welcome but further investment is needed to boost this economic corridor. In particular, commuter and freight capacity on the GEML will be enhanced considerably by introducing four-tracking north-east of Chelmsford. I am sure my noble friend Lord Hanningfield will have more to say about that. This new infrastructure could be put in place to coincide with the development of Beaulieu Park and a proposed new station being constructed there. I pay tribute to my honourable friend in the other place, indeed my own Member of Parliament, Priti Patel. She has been working closely with Essex County Council, Chelmsford City Council, the Essex chambers of commerce, Network Rail and Abellio Greater Anglia to develop a strong economic case for this new infrastructure, recently holding a meeting with them in Chelmsford. Other improvements that are being pressed for include: new, refitted or fully refurbished rolling stock; an increased frequency of services; improvements to branch lines; increased parking capacity at train stations; and track upgrades throughout the GEML to enable services to travel at 110mph to speed up journey times. The new Greater Anglia franchise is due to be in place from October 2016. The franchising process also presents an opportunity to secure new improvements to the train services in the region.

The east of England has suffered for too long from the effects of underinvestment in its rail network. The time is now overdue to rebalance this regional anomaly. Modern growth demands effective rail links to drive a balanced innovation economy, to facilitate sustainable

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housing and development, and to support an international transport network. I look forward to the Minister’s response to the points that I and others raise in this debate.

4.15 pm

Lord Berkeley (Lab): I am very grateful to the noble Baroness for achieving this debate. For me, the East Anglia rail network is one of the most important parts of the network in our country. I declare an interest as chairman of the Rail Freight Group. I will not talk just about freight but about Sizewell, which is in the region. Most speakers have commented on the lack of sufficient track on most of the network. Most places are two-track, except the Felixstowe branch which is a single track. As the noble Baroness has said, Felixstowe is a very successful port.

In spite of that—I say “in spite of”, although there is an hourly passenger service on the Felixstowe branch—Felixstowe is achieving 30 trains in each direction on the single track, which is a credit to the port, Network Rail and others. The noble Baroness mentioned the chord that allows the trains to go straight from Felixstowe to Peterborough and Nuneaton without reversing. I call it the bacon factory chord which is a much nicer name. It will make a great difference to the volume.

It is a lovely challenge to have all the jobs at Felixstowe but the intermodal traffic by rail is forecast to at least double, probably more, in 20 years. Whether it will go to Felixstowe, London Gateway or Southampton is a matter for debate. I know that the port will work very hard to get a good market share of that. A new rail freight terminal has just opened at Felixstowe. I do not know whether any noble Lords went to the opening. I could not go myself but I was told that it was very good. However, there Felixstowe is, connected to a single track, which needs to be doubled quickly. It is not a difficult job as it goes mostly through fields. A lot of improvements have already been done to the bacon factory chord, Ipswich, Nuneaton through Peterborough. The gauge has been enhanced to take the nine-foot six-inch boxes on standard wagons and the signalling is being improved. A few other things also need doing.

The next stage is to have the line electrified. Around six months to a year ago, the Government announced an electric spine from Southampton, which will be very useful for freight and which we all welcome. However, there should also be an electric spine from Felixstowe, which would improve the capacity. It would obviously reduce the emissions that there are from the diesel trains. It would also enable more freight trains from Felixstowe to the Midlands and the north-west to avoid going along the North London Line in London. Our colleagues in London are not very happy about having all those freight trains. It is rather odd to have freight trains going through virtually the centre of a major capital city. That suggestion would help a great deal.

Electrification needs to be on the agenda in a firm programme, whereby the train operators will invest in the electric locos necessary. It is really good news that in the past month Direct Rail Services announced the order for the first new electric locomotives probably for 25 years. The beauty of them is that they also have

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a diesel donkey engine in them so that they can do the last mile into terminals. It needs doing, and it needs doing properly and planning in advance. For me, freight is a very important part of the East Anglia region. I am sure that those who are keen to see better passenger services will be pleased that more freight in the future will probably go a different way rather than through London.

As regards Sizewell, a big nuclear power station will probably go ahead and will employ a large number of people. I have been talking to EDF, the developer, about whether it could try to avoid too much damage to the local roads in Suffolk and the area by making more use of the railways. I know there has been an improvement in Beccles, which is good but it probably needs double tracking, where there is none, from Woodbridge or somewhere around there.

There are two reasons for doing this. One is to get the workers to work. Why cannot they go by bus or car? Of course they can, but in a great big traffic jam, which would be very bad for all the other users. Why could there not be a bit of a link? It would be the old, original link to Aldeburgh, extended into the Sizewell site to run passenger services for the workers—the commuters, if you like—from Ipswich or wherever. I see that as a big Section 106 improvement, which I hope the local authorities will push for. I think they will.

The second reason for making more use of the railways is, of course, to try to stop too many deliveries coming by road. This was done very successfully in the construction of terminal 5, and it was done reasonably successfully for the Stratford Olympics. All the bulk materials can come and go—they can go by sea as well now. In the construction of terminal 5, when it came to bringing things such as desks, basins and all the smaller things that you would not necessarily bring by rail, there was a series of consolidation centres around the country, wherever was convenient for the manufacturing or supply. The contractors called up for what they wanted the day before, and the goods were sent down by train overnight. It just needed a rail terminal in the area.

The combination of passenger and freight benefits for Sizewell and for the residents who live around there would be immense. I hope the Government will encourage EDF to look at that very positively when it comes to the planning process, and make it all part of a Section 106 agreement. Again, I am very pleased to welcome the new Minister to this debate and I look forward to what she has to say.

4.21 pm

Lord Bradshaw (LD): I do not live in East Anglia, but because one of my grandchildren has recently gone to University in Norwich, I have sampled the passenger service. It was really quite a shock: it was so shabby—I think that is the word I would use to describe it. It did not seem to be like an inter-city service at all. The point I want to make is that the new franchise is due to be let in 2016. It is important that plans are made to find new rolling stock. Rolling stock off the east coast, which is called mark 4 rolling stock,

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is pretty good and would be very good if it were refurbished. It could be used to revolutionise the East Anglian service and the electric locomotives could go there as well, because the department has ordered the IEP trains—the express inter-city trains from Hitachi—to work the east coast services. I will not go into that saga—it has been much discussed—but whichever this franchisee is, it should be in the position where it negotiates with the suppliers of the rolling stock. This is not a process in which the Department for Transport needs to be or should be involved.

Rolling stock companies were set up and they were supposed to own or provide the rolling stock. The train operator was supposed to be what is called “asset light”. It was supposed not to own the track and not to own the rolling stock. Therefore, it could make decisions about hiring the rolling stock which was best for that route. I hope that the franchising process can be put in train sufficiently early for the potential franchisees to agree with the rolling stock companies what they want to do the job. There will be surplus rolling stock which they will be able to use. It is not the sort of thing for which the department has the skills necessary to actually make this happen. I am sure that these trains, if refurbished, would be a huge lift to the area because they have half their life left. I know that is not as good as new trains but it would be an improvement.

I urge the Minister to get the franchising process moving and, when the franchise is let, to let it for a longish period. Particularly in recent years, franchisees have been given short-term extensions during which they cannot possibly be expected to invest. They might apply a coat of paint, clean the trains and hire a few staff, but they cannot invest. The problem is the disjuncture between the long life of railway assets—40, 50, 60 or 70 years—and the very short franchises. The franchise should be long enough for the franchisee to see some return on his money. However, the franchise should not be extended unless there are means in place by which the franchisee is held to account for punctuality, cleanliness and reliability. Reliability is particularly important, because it is the long delays that upset people. Let us have a sort of quality partnership, whereby the franchisee gets a long franchise in return for achieving what is expected, both in return to the Treasury and in quality.

4.26 pm

Lord Hanningfield (Non-Afl): My Lords, I too thank the noble Baroness, Lady Scott, for obtaining this debate. It gives us all the chance to voice our views and suggestions on how we might improve railways in the eastern region. I also congratulate the Minister on her appointment. As this is one of her first debates, I hope that she will take a particular interest in improving railways in the east.

I am getting on a bit in years, and I have probably been using the railways in the eastern region longer than anyone in this Room. My mother came from a little town called Holt in north Norfolk. The only rail service in Holt today is a steam engine you can take from Sheringham to Holt. I used to go regularly to Holt with my mother during the war, and I have cards

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sent by my mother to my father saying: “Paul and I will be at Chelmsford station at two o’clock on Saturday afternoon”; I was a two year-old at the time. Since then, I have been using the trains very frequently, coming to London to attend meetings of the National Farmers Union, local government—as most people know—the Association of County Councils, the Local Government Association, and now the House of Lords. I have been a regular user of the railways in the east for 70 years.

I do not think the railways are as good now as they were when I was a two year-old. The service is very unreliable at times. Most people have mentioned the signalling problems. I was one of those caught up in them on Tuesday; the delays were initially an hour. Most Lords have mentioned reliability, and we do not have reliability in the eastern region. Every week there is a disruption to the train service. On Tuesday it was pretty bad because the signals problems were not just in Chelmsford, but in Rochford as well. The whole of Essex, and right up to Norwich, was at a standstill for a long while on Tuesday morning.

It seems to me that in this day and age improving signalling should not be beyond us. Surely, given the technology we have now, signalling could be improved, and virtually all these delays are due to signalling. If some investment could be put into signalling now, we might have a better and more reliable service without billions of pounds of investment. As noble Lords have said, the eastern region is a net contributor, so money spent on signalling now might solve the problems in the short term.

The noble Baroness, Lady Jenkin, mentioned the station at Chelmsford. That is another improvement that could solve a lot of problems. The developers will build the station, at no cost to the national Exchequer or even to the rail companies serving the station. There needs to be is a loop just north of Chelmsford back towards Witham. Then the trains could sit in the loop while others came up and down the line. There will be a large car park there which will stop the enormous congestion in Chelmsford at peak times. That could solve a lot of the problems in the eastern region, so I hope that the Minister will take that one up and pursue it, because that could do a lot of good.

Many noble Lords have mentioned rolling stock. I agree with the noble Lord, Lord Bradshaw, that our service is pretty shabby, but we could do with a few more shabby coaches rather than none at all. Often, the trains are very short. I now often catch the train at Ingatestone. This was not first thing in the morning, it was about 10 am. The lord-lieutenant and I were standing on the platform, two elderly Peers. We got on the train and there was nowhere to sit down, so we both had to stand up. I felt ill and collapsed on the floor and the lord-lieutenant was holding me up, trying to support me. Initially, no one gave us their seats or anything. Then we were offered a seat and, fortunately, I was helped off the train at Stratford. I must say that the attendants at Stratford station were very good. It was because of the size of the train at 10 am that we had to stand up. So it seems that we could do something better with rolling stock now, rather than waiting years for it.

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Those are the particular issues: the rolling stock, the station at Chelmsford and please can we get someone to do something about signalling? Everyone has spoken about the growth in the eastern region. As an Essex man, I know about the growth in Essex in Chelmsford and Witham and, as the noble Baroness, Lady Jenkin, said, the whole of the county is buoyant. At 6 am, the platform was virtually six deep with people waiting to come to work in London. This is one of the new Minister’s first debates. Let us have her take a particular interest and see whether we can solve some of our problems in the eastern region as soon as we can.

4.31 pm

Baroness Brinton (LD): My Lords, I, too, congratulate my noble friend Lady Scott of Needham Market on securing this debate, and the noble Baroness, Lady Kramer, on her appointment as Minister. It has been fascinating listening to noble Lords who are much more expert on the complex technical issues of the rail network than I am or will ever be. However, there is one area in which I have become more experienced than I might have wished over the past few years, and that is disability access to trains and stations, where more investment in the rail network is essential. But it is not just about money; it is also about attitude at the top of the train operating companies. I hope that your Lordships will allow me to stretch the scope of the Question for Short Debate today to include the train operating companies that cover the east of England region, despite the earlier comments of my noble friend Lady Scott, not least because my experience is over the whole of the east of England and I think that some points bear comparison.

I shall start by saying that the staff of whichever train operating company I have had to ask for assistance have been unfailingly helpful. Sadly, the services offered are somewhat mixed. Starting with wheelchair access, the east of England train operating companies all set out their offer on their websites and are proud to say that most of their larger stations are step-free and have barriers suitable for a wheelchair to go through, but that is only as good as the lifts at the station. Intermittent faults on a lift are an irritant to someone with a stick and a case, but to someone with a wheelchair, that station becomes a no-go zone. At Watford Junction, a lift went out of service 10 days ago and we were told at the time that it would be mended within three days. It is still out of service. We have been told that someone has written off for a part, but we have no idea when service will resume. The alternative route to that platform, which is the main west coast line down to London, means that you have to come out of the station, go all the way round it and under a tunnel, climb up a steep hill into the car park, and then get a member of staff to unlock the gate for you in order to access the platform.

Then there is the vexed issue of ramps on to trains. Disabled passengers travelling home in the evening can usually find support at the London terminus, but people tell me that they have occasionally arrived at their destination and there is no staff member to meet them, certainly not to put up a ramp. A staff member pointed out to me that it was helpful that I lived at a

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main station with 24-hour staff. What people do when staff are there for only part of the day or, worse, at unmanned stations, is a real issue. At another station that I have had occasion to use, if you are in a wheelchair you have to wait until the train has left the station to be escorted down a ramp, across the rail track and up the ramp on the other side. That is clearly not safe in this day and age.

Not all disabled people are in wheelchairs. I tend not to use a wheelchair on trains unless I have to. Many disabled people rely on sticks and crutches. The modern trend for beautiful forecourts—King’s Cross, Watford Junction and, just out of the region, Birmingham New Street—rightly addresses the issue of flat surfaces and wide, automatic doors. However, the amazing new hall at King’s Cross, which I use frequently, has positioned the disabled priority seats for waiting in a place where you cannot see the departure boards. The seats are right underneath them, so you have to get up and move to find out the platform your train will arrive at. They have not thought about the walking disabled and how they will get to and from the station. The taxi drop-off at King’s Cross is great, but if you want to get a taxi once you have come off a train at King’s Cross, you have to stand and queue with everyone else. I have done that for up to 15 minutes.

The recently opened forecourt at Watford Junction had neither a disabled drop-off point nor a pick-up space near the station. The new provision removed the disabled spaces beside the forecourt and put them on the other side of the bus station. When I first inquired about that, I was told that all disabled people use wheelchairs, and that wheelchairs and access do not matter as long as there is a path. Let me tell you that after four months they now have a disabled drop-off and pick-up point, but they had real problems in understanding that people with blue badges carry the badges with them, so people coming to pick them up do not have the badge. When they are accosted, they have to say—my husband is expert at this—“My wife will be along in a minute and will show you her badge then”. Good practice in this area includes Euston and St Pancras, where they have separate queues and priority access for disabled passengers, and it is well signposted.

I will move briefly to access on trains. The old rolling stock seats are really difficult for people who have difficulty getting up and down. If you use a mobility buggy rather than a wheelchair, some companies ask you to move into a seat. I would be in real trouble if that happened because I find getting up and down difficult. All companies now have priority seat arrangements. However, they rely on the public understanding the little sign behind the seat that says, “Please give up this seat if available”. More often than not, I have to ask people to give up their seat. Southern Trains and London Midland labels are easily accessible. Those on Greater Anglia and First Capital Connect services are a disgrace. In the rush hour, it can be even harder. The commuting public do not want to look at you if you need a seat. I have been reduced to tears on two occasions. Staff were brilliant at helping, but, again, often on a crowded train they are not there. The TOCs feel better because they offer priority cards, but they need to do more than publicise where the seats

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are and they should have advertisements to encourage people to give up their seats if they are needed. The @nogobritain campaign, run by Channel 4, has been brilliant at exposing these problems.

The report card on access is very mixed. Where is the accountability? Can government departments help to join up the thinking to get the train operating companies to provide a good service? We need more trains that are a smooth ride, not a stop-start service held at a red signal, for people with disabilities.

4.38 pm

Lord Marlesford (Con): My Lords, I am grateful for the chance to say a few words in the gap. When I was a schoolboy after the war, living in Suffolk, we had a wonderful stopping service. It was a direct line between Liverpool Street and Lowestoft. I would get out at Wickham Market and change to a little steam train that went to Framlingham. I would get out at Marlesford. Sometimes I was allowed to stand on the footplate, and I would be met by my mother with a pony and cart at Marlesford station.

My next real experience of rail was that for five years I was on the board of British Rail Anglia. It was the worst commercial experience I have ever had; it was so frustrating. The quality of the management was just not there—and the key is management. There has been talk about producing good franchises. When considering who you should give a franchise to, it is necessary to look at the management and the targets that they are prepared to set themselves. Let them be judged by those targets. Interview the management. We all know that if you are in the advertising world and you decide to hire an advertising agent, you do not just see the agency, you see the person who is going to handle the account, so insist on that. It is a matter of buying a good franchise by doing it properly, and that has not been done.