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Mr. Dalyell: Will the Government consider the critical question of pumping equipment, without which it might be impossible to implement resolution 1153?

Mr. Fatchett: My hon. Friend makes a valid point, which I understand. I have regular meetings with representatives of the Iraqi Opposition, and that is one of the points that they have made about the nature of the infrastructure in Iraq. We shall certainly take their points and that made by my hon. Friend into account.

This is a double-headed debate, so I shall now refer to Iran. I probably ought to congratulate my hon. Friend on his technique of opening up two issues in one debate, which shows great parliamentary skill and diligence.

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He made some important points about our relations with Iran and asked a number of detailed questions, which I shall come to.

First, we welcome the changes that appear to be taking place in Iran and the election of President Khatami. We hear the noises and see the potential warming of relationships. We hope that those changes will develop constructively in the region and more generally. There are some positive signs, and we are watching them. We welcome Iran's decision to ratify the chemical weapons convention. It is important, and we certainly applaud it. We also welcome Iran's condemnation of terrorism and the terrorist attacks in Algeria and Egypt. Again, those are extremely positive signs. We hope that Iran will continue to move in that direction. As we have said on many occasions, we are prepared to judge the new regime not by the rhetoric of the past, but by its record and what it achieves and sets out to do in future.

All students of Iran--my hon. Friend probably stands equal to all of us in that respect--will be fascinated by the internal political processes there. Clearly, a struggle for dominance, in terms of values and ideology, is taking place, and we shall watch that struggle and encourage those who want a more open Iran that will engage with the international community.

My hon. Friend asked about the European Union and the United Kingdom presidency; progress has already been made. Our tactics have to be double-headed. We have to ensure that we encourage positive developments within Iran, while being cautious about other developments and characteristics of the regime there, to ensure that we get the balance right between the two.

My hon. Friend will be delighted to know that at the General Affairs Council in February, under the British presidency, European Union Foreign Ministers decided to increase the level of political contact with Iran, by lifting the ban on bilateral ministerial visits imposed after the Mykonos verdict last year. Therefore, the European Union is sending a first, encouraging sign to the regime in Iran that we certainly want to encourage a warmer relationship, but some caution still runs alongside that. We are also discussing how and at what level political contacts with Iran should be enhanced. My hon. Friend questioned the level of those contacts--that matter is under discussion within the European Union. In principle, the issue is how we enhance discussion and not necessarily whether we should do so. Clearly, there is no veto on developing those contacts.

We are prepared to welcome the positive signs, but we want more concrete and positive indications from the Iranian Government in certain areas. We shall be considering the following areas of caution. First, we have to be sure that the Iranian Government are not involved in the development of weapons of mass destruction. If they intend to come back more closely into the international community, they could make it abundantly clear that no programme for weapons of mass destruction is being carried out there. I am sure that my hon. Friend shares that objective. It will be an important element in the development of relationships.

Secondly, we have to be clear that the Iranian regime is not continuing to sponsor terrorist activity on its own initiative. That has happened, and it is crucial that it should not in future. Much of that terrorism has been designed to subvert the middle east peace process. Again,

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we must ensure that the Iranian Government are not sponsoring terrorism with that purpose. My plea on that issue is: yes, we shall be cautious, but we want progress from the Iranians and a clear indication that they are not the sponsors of terrorism within the region or elsewhere in the world.

My hon. Friend mentioned Salman Rushdie and asked whether we could refer to another Islamic country to intervene in the case. The fatwa against Salman Rushdie remains a significant impediment to better relations between Iran, the United Kingdom and the European Union. It is totally alien to our values for one state to declare what is in effect a death sentence against a citizen of another state. It is wholly alien for us to negotiate in any way or conciliate about our own basic values. Salman Rushdie's right to publish and his freedom of speech are crucial elements in our political democracy, and we therefore should not allow those basic rights and principles to be negotiable. Therefore, we await a positive response from the Iranian regime on the issue. We know what the regime has said in the past, and it has not gone far enough.

My hon. Friend's suggestion was constructive--that we should look for a third country--but I do not think that it is the way to make progress with Iran. The best way to make progress on the fatwa and other issues is through direct contact between Iran, the European Union and the United Kingdom. The fatwa and Salman Rushdie will be key elements in the development of the relationship, and they must be tackled by the Iranians in discussions with the United Kingdom and our European Union partners.

It has been a pleasure to respond to the points raised by my hon. Friend, who is a keen observer of the middle east and has a good knowledge of the countries and the region. We are determined to show that we are even-handed in our approach to the region, and have clearly set out our position and our values in relation to Iraq. As my hon. Friend said, we look forward to the day when Iraq will again assume its position in the middle east commensurate with its history, its potential for the future and the abilities and expertise of its people. There could be no better middle east than one in which Iraq was free, democratic and pluralistic and had the ability to play that full role in the region, and one in which Iran was readmitted to the international community and felt part of it, reflecting its values.

On Iran, the signs are encouraging. We are cautious, but we are opening up the relationship. We need to be confident that the Iranians will move in the right direction and make it possible for us to remove that caution.

Mr. Dale Campbell-Savours (Workington) rose--

Mr. Fatchett: Does my hon. Friend want to intervene?

Mr. Campbell-Savours: I shall wait and see.

Mr. Fatchett: All right.

Again, I congratulate my hon. Friend the Member for Linlithgow on introducing the subject. In the 20 or so minutes that I have been speaking, I hope that I have been able to set out clearly the Government's position. I shall probably have disappointed my hon. Friend yet again in some of my remarks. One thing about our relationship is that at least I consistently disappoint him, so he will

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probably have known exactly what I was going to say on one issue, but perhaps I have managed to say something new and fresh on the other, and he will be pleased with that.

Mr. Campbell-Savours rose--

Mr. Deputy Speaker (Mr. Michael Lord): The hon. Gentleman ought not to intervene after the Minister has completed his speech in a debate of this sort.

Mr. Campbell-Savours: On a point of order, Mr. Deputy Speaker. I understood that under the procedures I was able to do so.

Mr. Deputy Speaker: No, this is not that sort of debate.

Mr. Dalyell: My hon. Friend had my permission.

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Mr. Deputy Speaker: Even so, the Minister had completed his speech and summed up. However, if the hon. Member for Workington (Mr. Campbell-Savours) wants to make a brief contribution, he may do so.

Mr. Campbell-Savours: On a point of order, Mr. Deputy Speaker. I have now lost my half a minute and my opportunity to speak, and I strongly object.

Mr. Deputy Speaker: The occupant of the Chair ruled last week on a similar position, and I have made the position clear. This is a half-hour debate for one Back Bencher to put his point to the Minister and for him to respond.

It being Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.

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Oral Answers to Questions

WALES

The Secretary of State was asked--

Uniform Business Rate

1. Mr. Blunt: What representations he has received from Welsh businesses regarding the future of the uniform business rate. [33426]

The Parliamentary Under-Secretary of State for Wales (Mr. Peter Hain): Several representations, as part of our regular consultations with Welsh businesses.

Mr. Blunt: When the new national assembly is in place, is it possible that the uniform business rate could be a useful source of revenue for the assembly and Welsh councils, in addition to the resources already provided?

Mr. Hain: We are, in common with our counterparts in England, reviewing the business rate. We will consult businesses closely about it because several representations have been made on its reform. I am sure that the outcome will assist Welsh businesses, which are benefiting from a Wales run by a Labour Government.

Mr. Rowlands: Is my hon. Friend aware that companies in my constituency are much more concerned about possible cuts in European structural funds? Will he pay as much attention to that as to business rates?

Mr. Hain: Yes, I will. My hon. Friend raises an important point because today's news from Brussels is very disturbing. I will make sure, as will the Secretary of State, that Ministers in Wales bat hard for Wales and fight our corner to get a good deal from Brussels on the structural funds. Wales is one of the poorest regions of Europe. Our gross domestic product is only 80 per cent. of the European average, and we should qualify for objective 2 status. Many of our communities in west Wales and the valleys, such as my hon. Friend's constituency, should qualify for objective 1 status. We will bat hard to achieve that.

Mr. Llwyd: Given that the Government are supportive of local government, should we not now be thinking of giving more discretion back to local authorities in setting business rates? The problem is that there is often not enough sensitivity to smaller firms and firms that have just started up. Is it not time to remove the dead hand of central Government and to revert to the way things were?

Mr. Hain: Businesses have suffered from the dead hand of a Tory Government for nearly two decades. We are consulting small businesses in Wales about the balance of the new structure. There is a demand for local autonomy, but there is equally a concern that Welsh businesses do not suffer costs additional to those in England. We will consult generally on the matter, and with Welsh businesses very closely.

Mr. Öpik: Given the difficulties in my constituency following the closure of D. C. Evans in Newtown and

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MDM in Machynlleth, is the Minister prepared to discuss the uniform business rate and other issues directly with sacked staff on his forthcoming visit?

Mr. Hain: I am indeed willing to discuss those and other issues. I am due to meet the hon. Gentleman in his constituency. Nevertheless, many Welsh businesses welcomed yesterday's Budget, which was an enormous boost for business and enterprise in Wales. It should give businesses cause for optimism amid the many difficulties from which they have suffered in the past 18 years.


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