Britain-Iran Relations

Richard Bacon Excerpts

Wednesday 12th October 2016 Westminster Hall

[Seema Kennedy]

I thank the hon. Gentleman, who always speaks very powerfully in defence of Christian minorities. As I said in my opening statement, I am not blind to what happens in Iran and the treatment of certain groups. I hope that when the Minister sums up he will address what steps Government are taking through the Foreign Office, and now through our full diplomatic relations, on that issue.

[Mr Richard Bacon (South Norfolk) (Con)]

Will my hon. Friend remind the hon. Member for Upper Bann (David Simpson) that in Iran the Majlis reserves places, not only for the Jewish community but for the Christian community, in the Majlis, so that they have a part in the legislative process. That is not well-known and is something that is rare in the middle east.

[Seema Kennedy]

My hon. Friend has made the point, and I am sure the hon. Member for Upper Bann (David Simpson) has heard it.

We cannot underestimate the wider implication of the nuclear deal for bringing Iran back into the international fold, and the joy with which the deal was greeted both on the streets of Tehran and in the wider diaspora of between 4 million and 5 million people. Shortly after that, in August, the then Foreign Secretary, my right hon. Friend the Member for Runnymede and Weybridge (Mr Hammond), visited Tehran, which is something of a feat knowing the weather at that time of year. Full diplomatic relations were resumed this September, and in the same month British Airways resumed flights to Tehran six days per week. Just a few weeks ago at the UN General Assembly, the Prime Minister met Iran’s President Rouhani, who called the joint comprehensive plan of action a basis for closer bilateral co-operation.

There are plenty of warm words between Britain and Iran, but not an awful lot has happened since implementation day. The deal promised so much to businesses in the UK that wanted to trade, and to the Iranian people who are crying out for jobs and a better standard of living. Those promises are yet to be fulfilled. Iran has great potential as a country with which to build even stronger trade and cultural links.

Literacy in Iran is 85%, and the figure rises to 97% in 18 to 24-year-olds. The country holds 10% of the world’s oil and natural gas reserves. Historically, it has suffered from low economic growth, sharp fluctuations in revenue and low productivity, which has typically led to an overdependence on oil. Of course, we see that all over the region, and I would contend that overdependence on oil is part of the region’s problem, with a restive cohort of young people who have relied far too much on hydrocarbons.

Iran is moving towards a reduced dependence on oil, as it now accounts for only 30% of Iran’s budget and, for the first time, there is a positive trade balance in non-oil goods amounting to $1 billion. The International Monetary Fund estimates that Iran’s GDP will grow by at least 4.5% over the next year, and the rial continues to strengthen. Iran is focused on reducing inflation, and has reduced the role of its central bank to facilitate that and to make exports more competitive. Inflation is down from the historic high of 59% in the mid-1990s to 8% this year.

Companies are reticent about investing in Iran even though it is a natural market for Britain to export to. There are opportunities for British trade not only in energy, but in infrastructure. Last week, the state-owned National Iranian Oil Company sold condensate to BP for the first time since implementation day. However, anyone who has travelled in Iran knows that its infrastructure is crying out for investment, and it is said that the country needs $50 billion every year to upgrade its infrastructure. There are other opportunities for exporting British goods and services, particularly training. Businesses have told me that there is a dearth of people trained in administration and management, so the country could benefit from British expertise.

The big stumbling block about which British and Iranian businesses complain—I have spoken to the Minister about this on numerous occasions—is the remaining pre-nuclear sanctions, especially those around access to finance when doing business with Iran. Any banks with United States links are banned from doing business with the country: they are rightly terrified after the $9 billion fine that was levied on BNP Paribas. Lenders are restricted to those with absolutely no dollar exposure, which is a very small pool. Will the Minister confirm what further conversations he has had with his US counterparts on reassuring US banks that they will not be subject to large fines from the US authorities?

UK Trade & Investment statements on Iran are optimistic. UKTI says:

“There is a positive outlook for UK-Iran trade relations”,

and that the UK Government

“fully supports expanding our trade relationship with Iran and we would encourage UK businesses to take advantage of the commercial opportunities that will arise”.

But the level of such trade remains unclear. Indeed, the European Union traded €6.5 billion to Iran in 2015 and imported €1.2 billion, but I was unable even to find UK-specific statistics.

On the size of cover allocated by UK Export Finance, it states that

“the total cover allocated for Iran will be under continuous review”.

Will the Minister tell us how much total cover is allocated for Iran and when will that be reviewed? Furthermore, will he confirm how much of the £50 million facility guaranteeing payments to UK professional advisory service providers advising the Government of Iran has been spent? There have been a lot of warm words but seemingly little progress on opening up the market to British businesses. How many, if any, business opportunities have been identified as a result of the memorandum of understanding signed between UKEF and the export guarantee fund of Iran?

France and Germany have led delegations to Iran, but Britain, even with the strong historical links that I outlined in my introduction, has lagged behind. I know that other hon. Members share my concerns about the effects of Brexit on Britain’s relationship with Iran.

Many of the smaller businesses that seek to trade with Iran are those run by members of the Iranian diaspora in the UK—a group of approximately 83,000 people. On behalf of that group, I pay tribute to the Minister for his role in saving Persian GCSEs and A-levels earlier this year. Knowledge of Farsi is crucial to preserving cultural heritage, and it eases the process of doing business between the two countries.

Members of the Iranian diaspora—who are, for the most part, dual nationals—are justifiably concerned about their status if they visit Iran, particularly in the fevered atmosphere leading up to next year’s presidential election and following the imprisonment of several dual nationals. Can the Minister give any guidance to dual British-Iranian nationals on their visits to Iran?

Soft power, it is always claimed, is key to British foreign policy. We are said to be the leader in soft power—[Interruption.] Somebody is laughing; I always wonder where we get these stats from as well. We should be exploiting our place in the world and our deep historical roots in the middle east to strengthen and encourage British trade with the region.

When it comes to soft power away from trade, there have always been cultural exchanges between universities, and art and cultural heritage groups. A series of exhibitions at the British Museum in 2009 were well attended and involved loans from museums in Iran. Those exchanges have continued and are an essential part of building understanding between the two peoples.

We cannot underestimate the power of cultural exchange and soft power, nor of symbolic gestures. Has the Minister’s Department considered the suggestion by the Select Committee on Foreign Affairs that the Government admit their role in the coup to overthrow Mosaddegh in exchange for an apology for the storming of the British embassy in 2011?

There is no doubt that many of our regional allies, especially members of the Gulf Co-operation Council, have been troubled by the UK’s renewed relationship with Iran, which they see as a threat to their relationship with us. However, it is not in the British national interest to see this as an either/or relationship, as that does not reflect the reality on the ground. Some 500,000 Iranians live in the United Arab Emirates, 80,000 in Kuwait, 173,000 in Bahrain and many in Saudi Arabia. The value of trade between Iran and the GCC is approximately $14.8 billion. Surely it is in the UK’s national interest to be part of that flourishing trade of people and ideas between Iran and the GCC. Is it not in our national interest to dampen down some of the fevered rhetoric between Iran and its Gulf neighbours, to unite in combating the evil death cult of Daesh and to work towards stability in the region?

Another area on which Britain and Iran have worked successfully together in the past is Afghanistan, in supporting the national unity Government and on counter-narcotics. What conversations has the Minister had with his Iranian counterparts on co-operating to defeat the Taliban in Afghanistan?

In conclusion, relations between Britain and Iran are of long standing. They are complex and often immensely frustrating. I look forward to hearing the contributions of hon. Members on both sides of the House who bring great experience, expertise and passion to this important debate.

--- Later in debate ---

[Mr Richard Bacon (South Norfolk) (Con)]

It is a pleasure to serve under your chairmanship, Mr Hanson. I congratulate my hon. Friend the Member for South Ribble (Seema Kennedy) on securing the debate; I know she is passionate about this subject. When I was elected to Parliament, I never expected that years later I would have the opportunity to introduce her to the Iranian Foreign Minister, Dr Zarif, as I did earlier this year, and that she would say “This is the happiest day since I was elected.”

It is hard to think of a subject on which there is more ignorance than Iran and our relations with it. The hon. Member for Strangford (Jim Shannon), for whom I have a lot of respect, spoke articulately about the persecution of Christians. When I went to the World Against Violence and Extremism conference 18 months ago, which was organised by the President of the Republic, I was surprised to be the only British person there apart from my translator, who is British-Iranian and British-born but speaks Farsi. There was a former Prime Minister of Norway; the former President Zardari, the widower of Benazir, from Pakistan; and the former Anglican Bishop of Washington, a Catholic cardinal, a professor from the Massachusetts Institute of Technology and various others from the United States. I said to our Iranian hosts, “You should target those in the United States Congress who speak out most against you and get them to come here and see what a normal country Iran actually is.”

I ended up becoming chair of the all-party group on Iran slightly by accident, when my hon. Friend the Member for Wyre and Preston North (Mr Wallace) became a member of the Government and asked me if I would do it. The reason I got involved in the group was that four years ago, in 2012, it was seriously said that this country might consider attacking Iran with bombs. I was a Member of Parliament in 2003 when we attacked Iraq, and I voted against it. The arguments made in 2012 sounded eerily familiar to me. I decided that I was not going to trust anyone else’s opinion, so I went to the International Atomic Energy Agency in Vienna, met the nuclear inspectors who were going to Iran, heard what they had to say and wrote it down in a hardback book, which I still have. They said, “We have no evidence of nuclear weapons-grade material.” It is also worth recalling that Iran is a signatory to the non-proliferation treaty, which various other countries such as India, Pakistan and Israel are not.

The real ignorance, though, stems from something else. As my hon. Friend the Member for South Ribble pointed out, our history with Iran goes back for several centuries. Relatively little of that history, particularly over the past 100 years, reflects well on this country. There are a lot of reasons, many of them good ones, why the Iranians have been very prickly towards us.

[Mr Gregory Campbell]

I ask the hon. Gentleman to reflect on what he said about his attendance at the conference. I have no doubt whatever that it would be a good thing for more people to go to Iran and see what type of country it is. However, he said that Iran could be seen as a normal country.

[Mr Bacon]

Yes.

[Mr Gregory Campbell]

Presumably he will take the opportunity to rectify that comment in the light of the litany of instances of persecution of Christians in that country.

[Mr Bacon]

No. There is persecution throughout the world. Many people think that abortion is a fundamental human right and that for a country to make it illegal is not normal. I happen to disagree with them, but the hon. Gentleman and the hon. Member for Strangford represent constituencies in which abortion is still illegal. I think that is a decision for local people to make locally, but what constitutes “normal” is actually a very wide spectrum.

The key point that needs to be understood is that after 9/11, while much of the middle east was yodelling in the street at the destruction of the twin towers and the murder of many thousands of people, including many Muslims, Iran flew its flags at half mast, held candlelit vigils and offered the United States strategic and logistical help in the fight against the Taliban, which was accepted,.

I hope the hon. Member for Strangford, as a serious religious man, will listen carefully to this: what is least understood about all these imbroglios, and indeed about what is going on in Syria, is that to the Taliban, al-Qaeda and now Daesh, the first enemy is not the west and not Christians but the Shi’a. It should come as no surprise to anyone that the Iranians are supporting the Shi’a in Syria, or that the Iranians were opposed to the Taliban who wanted to kill the Shi’a. It should come as no surprise that the Iranians were deeply opposed to al-Qaeda, which particularly attacks the Shi’a.

[Jim Shannon]

I do not disagree with the hon. Gentleman, but the point that my hon. Friend the Member for East Londonderry (Mr Campbell) and I are trying to make is that 108 Christians were arrested and imprisoned last year. That is hardly an indication of a Government that is open and inclusive of Christianity. Pastor Behnam Irani is serving a six-year prison sentence because he is a Christian who refused to accept the Muslim religion and wanted to preach to his people. That is an example of what is taking place.

[Mr Bacon]

Did the hon. Gentleman say 108?

[Jim Shannon]

Yes, 108.

[Mr Bacon]

That is exactly the same number of people who were beheaded in Saudi Arabia last year. I know that that is equally irrelevant, but let me just point out—[Interruption.]

[Several hon. Members rose—]

[Mr Bacon]

I will not give way at the moment. I have the floor, and I will not give way. This is a free Parliament and I will have my say, and what I want to say is that we will have better relations with Iran and more opportunities to influence it, including on questions of Christianity, if we talk to it.

After I went to the British embassy in Vienna and met the British ambassador, the diplomats dropped us off outside the door of the Iranian embassy, where Ambassador Soltanieh, Iran’s ambassador to the IAEA for many years, was still in residence. I was amazed that the British diplomats, who were paid for by our constituents’ taxes, said to us at the door of the embassy, “We’ll be leaving you here—we won’t be going in. We’re polite to them when we have to be, but we have as little to do with them as possible.” I remember being shocked and thinking, “Do you think it’s just possible that if you knew the names of Ambassador Soltanieh’s grandchildren, you might have a better relationship and get more engagement?”

Hon. Members, including my hon. Friend the Member for South Ribble, have talked about commercial relations. I commend to them the speech made in this Chamber on 26 March 2014—at column 117WH of the Official Report—by the former Foreign Secretary and right hon. Member for Blackburn, Jack Straw, in which he talked about commercial trade between Iran and the United States. Despite there being no diplomatic relations, the US’s trade is going up at the same time that Iran is using commercial penalties to discriminate against other companies, particularly British companies—although I am pleased to say that Group Lotus, the largest private sector employer in my constituency, opened a car dealership in Tehran two weeks ago and sold 20 cars.

I will not concentrate on the geopolitics any more, because other Members will doubtless have things to say about that and I do not want to take up too much more time. In my remaining minutes, I will refer briefly to another matter. I have mentioned that it is hardly a surprise that Iran is involved in protecting the Shi’a. What is not known is that in 2003, through the Swiss ambassador, the Iranians made an offer to the United States that would have involved support for the Arab League’s 22-state Beirut declaration. It would have involved mutual recognition of Israel; an end to military support for Hezbollah and help with its conversion to a purely political party; and intrusive nuclear inspections. I very much regret to say that the United States rejected that offer and managed in the process to call Iran part of the “axis of evil”. It is hard to think of a more crass way to respond to such an offer. The direct consequence was the election of the hard-liner Ahmadinejad.

Iran is a very complex place. My hon. Friend the Member for South Ribble said many insightful things, but one of the most insightful was that it is not either/or situation. It is complex and nuanced, and there are plenty of people in Iran who want the relationship to fail.

Five Iranian MPs came here last year for a very successful visit. We had quite a lot happening in Westminster and Whitehall, and we took them to see a professor of literature at Cambridge for what proved to be an extremely fruitful exchange. It was a low-key visit, partly because we understood from talking to the diplomats that the Iranians were concerned that any failure of the visit would strengthen the hand of the people back in Iran who wanted to point at them and say, “You see? We told you it wouldn’t work.” In fact, the reverse occurred.

You don’t make peace with your friends; you make peace with your enemies. I do not think we should have enemies—we should try hard to work co-operatively with everyone. There is a huge amount to do on Iran. Let us not forget that, following the implementation of the joint comprehensive plan of action, the IAEA has said four times in four reports this year that Iran has met its obligations. It is not completely obvious whether we are meeting ours. I wrote to the Governor of the Bank of England about that recently, because at the moment British-Iranian registered banks that are UK-authorised and regulated are unable to do business in the UK or send and receive sterling payments. They cannot even easily pay their council tax. An Iran Air flight that lands at Heathrow has to have enough fuel to be able to take off again and land in Vienna, where it can fuel up and pay. Many other countries in Europe have managed to sort out such payments, so I hope that the Minister will address that. I know he thinks he will need the help of the Treasury, which is why I copied my letter to the Governor to the Chancellor of the Exchequer.

It is worth pointing out that on the Bank of England website, among its various roles in undertaking a wide range of policy and operational responsibilities that are vital to the functioning of a smooth economy, the Bank itself clearly states:

“It is also the role of the Banking Directorate”,

which is within the Bank of England,

“to respond to unpredictable and exceptional events in the financial system.”

I think we have an exceptional event in Iran. There is, in effect, an exceptional circumstance that requires an extraordinary solution.

No one pretends that this is easy or that we will solve all the problems overnight, but I invite Members to join the all-party group and support our endeavours for better relations. We have an interesting meeting coming up on 18 October with Sir William Patey, the former British ambassador to Saudi Arabia; Professor Ali Ansari from the University of St Andrews; Jack Straw himself; and Michael Stephens, a research fellow from the Royal United Services Institute. They will be talking about Iran-Saudi relations, which is the real fulcrum of the problem that we have in the middle east.

[Several hon. Members rose—]

--- Later in debate ---

[Dr Matthew Offord (Hendon) (Con)]

I congratulate my hon. Friend the Member for South Ribble (Seema Kennedy) on securing the debate. I introduced a debate on human rights in Iran on 28 June. I do not intend to repeat all the issues that were raised then. Given the amount of time I have, I shall concentrate on two issues: the information that emerged over the summer about a massacre in 1988, and Iran’s regional aggression.

It has become known that, in 1988, the Iranian regime executed more than 30,000 people. Many of them were political prisoners held in jails. Some were people who had been released from jail, having served their sentence, but who were then summarily recalled and executed.

The majority were serving prison sentences for political activities or, as I said, had already finished their sentences. After a fatwa was issued by Ayatollah Khomeini, the wave of executions began in late July 1988 and continued for a few months. Many of those killed refused to repent their beliefs and as such were executed. What action is the Minister taking to ensure that the regime in Tehran not only acknowledges what happened but takes action to ensure that those responsible, many of whom are still in power, are brought to justice? Will the Minister ask the United Nations High Commissioner for Human Rights, the UN Human Rights Council and the UN Security Council to order an investigation to achieve that?

I turn to some issues that have arisen in the past 15 months, since the nuclear deal was agreed. I was very much against the deal. I was disappointed that the issue of human rights was decoupled from the deal, because that was a missed opportunity to put pressure on the Iranian regime. I think it was a vainglorious attempt by President Obama to secure a legacy—a legacy that will not actually be achieved. We have seen that with the number of people that Iran has continued to execute over the past 15 months. My hon. Friend the Member for South Norfolk (Mr Bacon) talked about abortion and what is and what is not normal. It is not normal to execute nine-year-old girls.

[Mr Bacon]

I did not say it was.

[Dr Offord]

I never suggested that my hon. Friend said it was, but I am saying that it is not normal to execute nine-year-old girls, or boys at the age of 15 or, indeed, to gouge out anyone’s eyes. It is not normal to execute people in the ways and numbers in which they are currently being executed in Iran. There has been much comment in the debate about the different sections of Iranian society that have been persecuted, including the Sunnis, the Kurds and the Baha’i. I received an email from the National Union of Journalists about its brothers and sisters in Iran who are not able to undertake their work as journalists and are not in a free civil society. I do not feel that that is normal either.

In July this year, the UK’s ambassador to the United Nations expressed his concern about Iran’s regional aggression, declaring that the ballistic missiles tested by Iran are designed to deliver nuclear weapons. In his speech to the UN Security Council, Ambassador Rycroft made it clear that Iran’s

“continued testing of ballistic missiles which are designed to be capable of carrying nuclear weapons is destabilising to regional security and inconsistent with Resolution 2231”,

as others have said already.

In the past 12 hours or so, there has been much comment in the media about the Foreign Secretary’s comments, in yesterday’s debate on Syria, about the role of Russia. But Russia is not the only game in town. Russia may have what we might call interests in—or may interfere in—Ukraine and Syria, but Iran interferes in and has much greater interests in other parts of the region. It interferes not only in Yemen, but in Syria, Lebanon, Iraq and Afghanistan. The tentacles from Tehran continue to spread. That has been allowed and achieved as a result of the nuclear deal unfreezing assets that the Revolutionary Guard and others are using to cause dissent in the region.

[Kit Malthouse (North West Hampshire) (Con)]

It is a great pleasure to serve under a fellow Liverpudlian, Mr Hanson.

I rise to speak in this debate because, for me, Iran represents a fork in the road for British foreign policy. Yesterday, we saw highlighted starkly the limits of the isolation and damnation until the point of intervention policy of the past 20 years. Given that we cannot afford, militarily, socially or financially, to do the same again, our approach to Iran is critical.

Before I continue, I acknowledge and reiterate the fact that, for our own safety and for that of the Iranians, we cannot waver on the question of Iran gaining nuclear weapons. It needs to understand that working with the P5+1 is vital, because it is far better to deal with us in a rule-bound international system than to chance its hand with other, perhaps more powerful, nations in the region. For our own part, we cannot allow the Iranians to trigger a proliferation race across the whole middle east and add layer upon layer to existing nuclear states’ deterrence calculations. That would be a recipe for disaster, especially in a region where civilian control over military arsenals is imperfect and the experience of safety issues is less developed.

Following the deal, it was pleasing to see the reopening of the embassy and the risks of a nuclear standoff far more remote than we had feared a few years earlier. I, too, remember the cover of The Economist in February 2012, and the headline “Bombing Iran”. It seems that sanctions worked in Iran, but it could be argued that we saw their limits. They arguably forced the end of the Ahmadinejad Government and brought forward a more conciliatory one in Rouhani’s Government, but it is unrealistic to expect the people to blame only their own Government for their hardship and it is imprudent to weaken the position of Rouhani versus hardliners.

From now on, perhaps we should attempt to build bridges to generate good will. We need to change the calculation of interests in Tehran so that the costs of a combative approach are seen as being far greater than those of a co-operative one. Yes, that signal should be sent with strength and not appeasement, but it does require us not to be openly hostile. Progress can be made, and it should be, not least because we know that our own western liberal culture is a kind of benign Japanese knotweed. It is invasive, and it starts in no better place than at the intellectual level, in academia. Although we are right to acknowledge the regime’s oppressive treatment of academics and disregard for the principles of free speech and free exchange that are so vital to academic debate, Iran still has a highly educated population, as others have pointed out—I gather it has 97% literacy among the young—and the potential to reach and surpass its previous achievements is there, if we engage.

Some promising moves are already under way in academia. For example, the School of Oriental and African Studies has just introduced the option of an exchange or visit to Iran as part of a course; the University of Cambridge has just signed a direct exchange agreement with the embassy; the British Institute of Persian Studies has a Tehran institute; and SOAS and the Universities of Edinburgh, Oxford and St Andrews all now offer Persian at degree level. Such trusses of co-operation can help to build and strengthen the bridge of understanding between the UK and Iran, which can only aid relationships at a political level.

More of the same would be positive. We should not forget that President Rouhani himself is a product of the University of Glasgow and does not have the same hostility towards the UK as his predecessor. He speaks English with a Scottish accent—or so I am told. This is cheap diplomacy, but it can build links among people in our societies that enhance the level of understanding among Governments. Business links, tourism and investment will surely follow. I agree with my hon. Friend the Member for South Norfolk (Mr Bacon) that we cannot allow the US to declare itself the world’s financial policeman. Our firms should not fear US sanctions for following UK law.

If we acknowledge that our diplomacy can gradually change Iran and its stance towards the world, we must acknowledge at the same time that Iran has enormous influence in the middle east. Given how deeply it is in our interests to see a stable and prosperous middle east, and how great the costs of failure are, as we are seeing, we cannot ignore the opportunity that engagement with Iran offers. Put simply, even if it seems to follow from our current configuration of alliances that we should be hostile, to be so would be to give in to “enemy of my enemy”, or rather “friend of my enemy is my enemy” thinking, in its crudest form.

[Mr Bacon]

Is my hon. Friend as surprised as I am that many people seem to be surprised that Iran would wish to exercise influence in its region? That is what all countries do in relation to their neighbours.

[Kit Malthouse]

It comes as no surprise to me, and of course it is reinforced by the hostile posture that the west has had thus far. Whenever we are hostile to countries—whether it is Russia or wherever—the first thing they do is turn inwards and look to their immediate region for defence. So it is no surprise that Iran has done the same.

As hon. Members have already said, Iran today is without doubt troublesome and destructive; some appalling things happen there. However, that will continue to happen and Iran will continue to be troublesome and destructive, even if we continue our tough line. Surely it cannot be in our interest to adopt an aggressive stance towards Iran at a time when there is an uncertain Saudi Arabian leadership transition, a worsening Syrian war and Russian aggression. The prize of a warmer relationship between Britain and Iran is too great not to try for it. The real prize is preventing Tehran’s alignment with Moscow from crystallising, and a de-escalation of the proxy fight between Iran and Saudi Arabia that has enflamed Syria, Iraq and Yemen. We should not take that alignment as set in stone, especially given that we have so much more to offer Iran than Russia or the Syrian Government do. We should try. Succeed, and the whole region starts to look very different and a less threatening place. One would not expect Saudi Arabia to be as confident without the west at its back. Détente between the two would beckon. Our relations with Lebanon would also improve. The resolve of Assad to win could diminish and with less backing for and more restraint of the Revolutionary Guard and Hezbollah, Israel, crucially, would be safer. That would be a great prize indeed, and a boon even if half-achieved.

Moving away from the arena of great power politics, however, one could also note that too much of the conversation about Iran today proceeds on the basis that the current Government are a temporary evil to be waited out. As in 2012, our rhetoric has failed to move on from Iraq, even if our belligerence has. We cannot expect Iran to trust us if we occasionally let slip that we would attack it if we felt sufficiently strong, brave or bored. In the Iranians’ calculation, the case for proliferation must look incredibly strong. In their position, we would do it, so we must change their position. Indeed, signalling, as the US did, that we have no intention of ever working with Iran was one of the most damaging errors the west has ever made, as my hon. Friend the Member for South Norfolk said. President Bush used absolutist language that had no place in state-to-state relations and, given our alignment with the US, we are implicated in that unhelpful position. That makes for a poor foundation for fruitful relations with a country of nearly 80 million people, most of whom hunger for engagement.

From the time of the revolution, Iran has been consistently portrayed as the regional “bad guy”; the west was even happy to excuse Saddam Hussein’s attacks upon it. However, as Lord Temple-Morris has noted in the other place, the bulk of ordinary Iranians want to be connected to the west and are not ideologically anti-American. They watch the BBC via illegal satellite dishes and I gather that in 2013 nearly 2 million of them voted by telephone in the Iranian version of “The X-Factor”, broadcast from the UK. The existence of this class—this plurality of voices—which we can help without over-offending the Government, steadily and carefully over the years to come can bring the change in Iran that the ayatollahs will find irresistible.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Tobias Ellwood)]

I thank all hon. Members who have participated in what has been an excellent debate. I begin by thanking my hon. Friend the Member for South Ribble (Seema Kennedy) for what I thought was a powerful and emotive, but very sober, reflection on Britain’s relationship with Iran. The duality of the situation that we face with Iran at this juncture was reflected in the contributions right across the field.

I was pleased that my hon. Friend the Member for South Ribble began by highlighting the history and the context in which we find ourselves today. We sometimes rush into these debates, looking at the details, without first appreciating or reminding ourselves of that bond. It is perhaps more relevant in the countries in the middle east. To them, the bonds that existed in the past are very important—we perhaps gloss over them, and we should remind ourselves. I appreciate that my hon. Friend reminded us of what happened in the 1800s and before, as our English naval capability was strengthening its ties and its trade relationships with India, Iran and the Trucial agreement that took place with the Gulf nations—indeed, the role of Persia in the great game—were all part of the tapestry that created those bonds, which were furthered by the discovery of oil and the beginnings of what is today BP. There is a legacy and history that ties us together and of which we should be reminded, as we look to embark on a new relationship following the important, generational change and opportunity that Iran now has with the nuclear deal.

We were reminded of the size of the diaspora in this country, which is connected to what happened in the 1979 revolution—about 85,000 people are directly connected with Iran. We were also reminded of the 2016 elections. Without delving too much into domestic matters, I was buoyed by the outcome of those elections and the change in the approach and direction of travel in the Majlis and in the Assembly of Experts. We are seeing the country take positive steps.

My hon. Friend the Member for North West Hampshire (Kit Malthouse) highlighted the very educated, very young population, who are as aware as anybody of what is happening in the rest of the world and are expressing a desire to have a good, solid, positive and responsible relationship within their own country, the region and the rest of the world. That is what the bulk of ordinary Iranians are asking for. The issue is—dare I say?—the old guard, who at the moment very much recognise a desire for change in their country, but are unsure of how to embark on the next steps and how to adapt to the change the people of their country are demanding of them.

Many hon. Members, but specifically my hon. Friend the Member for Hendon (Dr Offord) and the hon. Member for Strangford (Jim Shannon)—who I will call my honourable friend in this context and who has persistently and consistently raised the issue—spoke of the importance of the plight of Christians and other minorities such as the Baha’is. That shows the duality that we face here. There is an opportunity for trade, engagement and so on but there is still much work to do in other areas. We have to decide how we fit into that— how to balance that interest and opportunity while taking advantage of greater engagement and conversation to encourage change in those other critical areas.

As with other debates, I will write to my hon. Friends and hon. Members in reply to their specific questions, particularly where I do not have the answers right now. That is not a cop-out; it will allow me to give hon. Members answers in depth. I will focus the rest of my time on the questions posed by my hon. Friend the Member for South Ribble, who began by talking about the trade opportunities that exist.

We should not ignore the fact that this is the biggest new market to open up in a decade. Trade is certainly growing. Since the nuclear deal and the relaxation of sanctions, our bilateral trade has increased. I pay tribute to the Prime Minister’s envoy, Lord Lamont, who has done a sterling job in bringing leaders, for instance Foreign Minister Zarif, to meet parliamentarians and business people. That helps to create the atmosphere where business can be conducted. Lord Lamont has taken delegations out to Tehran as well.

There are clearly huge areas of opportunity, not just in hydrocarbons and traditional areas. There has been little spending on infrastructure in Tehran for more than three decades. We have a role that we can play, if we choose, but as has been expressed across the board, there is a massive hindrance at the moment. There is a huge hurdle at the moment in the form of legacy sanctions and US sanctions connected to the banking sector, which prohibit US passport holders from being able to do business—or make them worried to do business—for fear of triggering US sanctions. I have had discussions with John Kerry—with the Americans and others—and we came close to having a meeting with the Office of Foreign Assets Control, which is the US Treasury committee that focuses on this issue. We were not successful in getting that meeting, but we will persevere to make that happen. John Kerry and the director of OFAC, John Smith, said that they do not stand in the way of business being permitted in the context of the joint comprehensive plan of action. However, businesses, including big British banks, have raised the cautionary concern that US passport holders do not feel confident at the moment to go and do business in Tehran. The Government understand that we need to resolve that issue urgently.

We are also offering financial support. The Bank of England’s role was mentioned, and we have other financial services. Given the experience of the City, we are offering Tehran advice and support on how it can introduce anti-money laundering programmes and counter the financing of terrorism. We want to ensure that those products are in place as its own financial services develop.

[Mr Bacon]

The Minister mentioned the Americans. It is comforting to everyone that he came close to securing a meeting with OFAC, but it would be even more comforting if he had actually secured it, so I hope he succeeds in doing so. Is he worried, as I am, that the United States, despite not having diplomatic relations with Iran, is acting in a way that secures its own commercial interests at the expense of other western partners? It is noticeable that Germany and France are both putting pressure on the United States and reminding it to lift the sanctions, as it is supposed to do in accordance with the JCPOA obligations.

[Mr Ellwood]

My hon. Friend makes an important point. In fact, we discussed that matter in some of the forums we had with leaders who have come over from Iran. I am very much focused on going back to that committee. Unfortunately, the very people who wanted to attend felt that they might trigger the sanctions simply by being at the meeting to discuss this matter. That is the cautionary environment that we now face.

My hon. Friend the Member for South Ribble mentioned the consequences of Brexit. Let me remind everyone that, although we are backing away from direct involvement in the European Union itself, Britain is not stepping back from trying to solve the problems of the day. Britain will step up to the plate, whether on Ebola in Sierra Leone or on trying to get a nuclear deal. Although we will not be part of the EU in the future, Britain will participate in those important matters because that is who we are and what we want to do. Outside or inside the EU, Britain has a role to play on the international stage, and we will continue to pursue striking international deals, as we did with Iran.

The hon. Member for Hornsey and Wood Green (Catherine West) asked whether our embassy has the capacity to grow and whether we have the capability. Absolutely, we do. As trade starts to develop, all embassies will make an assessment of where things are moving and where developments are taking place. We have now got an embassy with a full ambassador in place, so that is already happening.