Azerbaijan and the South Caucasus

Lord Spellar Excerpts

Wednesday 22nd June 2011 Westminster Hall

[Mr John Spellar (Warley) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I have been in a number of debates with you, but never with you in the role of a mute, so this is a new experience.

This debate, apart from being very interesting, has shown the value of delegations of Members of Parliament. If I may say so to the Minister, that is a message that needs to be heard both by the Foreign Office and by the House authorities. Participation in such delegations enables hon. Members to expand their horizons and brings a much more well informed atmosphere to the debates in the House in their various venues.

I congratulate the hon. Member for Harrow East (Bob Blackman) on securing this debate on a country and region—the wider subject of the debate—that receives too little attention considering its crucial location, importance and, as we have heard, potential for conflict. It is also significant in terms of European energy supplies. I make no apology for highlighting that fact. When President Obama was speaking just outside this Chamber in Westminster Hall recently, he dealt head-on with the issue of the importance of energy supplies to countries when he observed of the middle east that the west squarely acknowledges that

“yes, we have enduring interests in the region—to fight terror, sometimes with partners who may not be perfect; to protect against disruptions of the world’s energy supply.”

It is a perfectly proper aspect of foreign policy that we should be concerned about that.

As has been mentioned, both Britain and the EU have considerable interests in that regard. The EU countries are considerably helped by the diversity of supply, both from the existing pipelines and, potentially, from the Nabucco pipeline providing a route for gas, not only from Azerbaijan but from the Caspian region as a whole. That gives the promise of a more balanced and diverse gas supply for western Europe and, we hope, will avoid some of the problems that Europe has experienced with interruption of supply, which has periodically caused such difficulties, particularly in the accession states. That problem will potentially be exacerbated by the recent decision of Germany to shut down its nuclear reactors, with the inevitable and immediate impact on gas demand in Europe.

Therefore, the situation that I have described is good news for those countries and for us. The hope is that as the European region gets more competitive sources of supply and more diverse sources of supply, we will also start to see more stabilisation of prices, rather than some of the spikes in prices that we are seeing and the way in which, bluntly, those are exploited by the ever-greedy utility companies to introduce substantial increases in the charges for domestic gas supplies in particular. That will be important for us all. It is therefore encouraging that the EU will be supporting the Azerbaijan Government to move the Nabucco project ahead.

In that context, it was pleasing to see the report this month that the EU Energy Commissioner had characterised Azerbaijan as “the EU’s key partner” on regional energy projects, while delivering endorsements of the Nabucco project. It was also reported earlier this month that the legal framework for the pipeline had been finalised, with the support of the relevant Ministries of the transit countries: Austria, Bulgaria, Hungary, Romania and Turkey. All that is extremely welcome news.

Britain, of course, also has a significant role. I partly take issue with the hon. Member for Wimbledon (Stephen Hammond) on project management. AMEC, for example, has been a major presence in Azerbaijan for some time, operating out of Baku. Perhaps it has been there so long that he does not look on what it is doing as a recent innovation, but it has been immensely successful and is seen as a major partner by the Azerbaijanis.

[Stephen Hammond]

I recognise that there are 175 companies beyond BP in Azerbaijan. My point was not about those that are there already, but that there are significant opportunities, particularly in areas where we have a worldwide competitive advantage.

[Mr Spellar]

There is always opportunity, but we should equally recognise when people are taking advantage of that opportunity. The hon. Gentleman rightly points out that BP is a major supplier, but this is about more than being first among equals. The UK accounts for some 52% of all foreign investment in Azerbaijan. BP’s stake is enormous. It will be one of the largest terminals that it will be operating on behalf of the Azerbaijanis.

Reference has rightly been made to the very significant presence in British tertiary education institutions from Azerbaijan. I have seen an estimate that some 80% of Azerbaijani students who study abroad study in the UK. That was highlighted by my hon. Friend the Member for Bradford South (Mr Sutcliffe). In the strategic context, we must remember the importance of Azerbaijan as a route for supplies and forces going into Afghanistan. That is not insignificant in terms of Britain’s interest.

We must also consider the broader security situation. Nagorno-Karabakh has been mentioned. In many ways, that is a synonym for many of the difficulties faced right across the south Caucasus. We are aware of the recent history. What was said about the end of the cold war? It led to a period of less threat and less peace. Certainly the region that we are discussing experienced that. I am thinking of the two wars in Nagorno-Karabakh, with Armenia and Azerbaijan, and the considerable number of displaced persons. The hon. Member for Harrow East rightly drew attention to the UN resolutions. He also mentioned the Minsk group, which is currently the main forum for resolution of the conflict, although we have to recognise that, unfortunately, progress has been fairly limited in that context.

This debate is particularly timely, in that the meeting on Nagorno-Karabakh has been taking place in Kazan, I think, yesterday and today, with Azerbaijan, Armenia and Russia. I hope that the Minister will be able to enlighten us on that. We obviously hope that there has been progress, but it would be interesting to be updated on whether there has been any progress or developments at that meeting.

Before I yield to the Minister—I want him to have the full amount of time to deal with the many points that have been made—I want to sound a cautionary note. We should accept that in the Caucasus, progress will quite often take more time than we would hope. It will be slow—certainly slower than we would hope— and evolutionary. Russia may no longer be one of the two superpowers, but it is still, not only in its own estimation but objectively, a major and very significant power, a P5 member and a nuclear power. It is also clearly the regional power and has very clear interests in what it would regard as the near abroad. Therefore, its views, interests and perspectives have to be taken fully into account. That is the reality not only for the countries of the south Caucasus, but for those countries that are engaged there diplomatically or economically. It is therefore crucial that we have full engagement with Russia, recognising its legitimate interests but also representing ours, as well as the understandable concerns of other countries in the region. I hope that the Minister will be able to report the Government’s actions in this regard.

The debate has demonstrated the considerable interest that Members of Parliament take in Azerbaijan, and they are very well informed about it. We look forward to the Minister’s reply.