[John Bercow in the Chair] — Occupied Palestinian Territories

– in Westminster Hall at 12:00 am on 5th July 2007.

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[Relevant documents: Fourth Report from the International Development Committee, Session 2006-07, HC 114, and the Government's response thereto, Fifth Special Report, Session 2006-07, HC 430.]

Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Roy.]

Photo of Malcolm Bruce Malcolm Bruce Chair, International Development Committee, Chair, International Development Committee 2:51 pm, 5th July 2007

It is particularly appropriate that you should be in the Chair for this important and timely debate, Mr. Bercow. I welcome the new Minister to his post and give him my good wishes. I wrote, on behalf of the International Development Committee, to the new Prime Minister before he took up office to ask him to beef up the Department for International Development and to give it an appropriate number of Ministers. I am glad that he has done so, and I expect that the Minister appreciates having three colleagues rather than only one, as would have been the case in the previous Administration. I look forward to hearing the Minister's reply and to the future engagements that I am sure that members of the Committee will have with him.

Obviously, events have moved on since we produced our report, and not for the better. When it was published, in January, after our November visit to Palestine and Israel, we were particularly concerned, from a development point of view, that although an increasing amount of development aid was going to the occupied territories, poverty was also increasing at a high rate. The reasons for that were not hard to find, and I shall address them, as the report has done. We said in the report that the situation was unsustainable and would deteriorate, stating:

"The danger of the current approach is that it might push Hamas into a corner which encourages violence rather than negotiation."

We also pointed out that

"Hamas now has closer links to governments like that of Iran than it had two years ago."

The events of the past two or three weeks show that that was not an inappropriate analysis. Indeed, last year, Jan Egeland described Gaza as a "ticking time bomb". Unfortunately, it has now exploded and the fallout is not yet clear. The takeover of Gaza by Hamas was brutal and unjustified, but the failure to secure recognition of its election victory may have contributed to its frustration, at least in part.

Photo of Louise Ellman Louise Ellman Labour, Liverpool, Riverside

I follow the reasoning in the right hon. Gentleman's report and in the comment that he has just made, but do not comments from Hamas about

"keeping the flame of resistance alive until our Palestinian flag will fly anew over the walls of Jerusalem, the shores of Haifa and Jaffa" indicate a Government who are not prepared to accept the existence of the internationally recognised state of Israel?

Photo of Malcolm Bruce Malcolm Bruce Chair, International Development Committee, Chair, International Development Committee

We know that, and I might come to that point later. I could retort to the hon. Lady that Israel is illegally occupying a significant piece of territory that does not belong to the state of Israel, and yet it does not always suffer the same degree of international condemnation for so doing, but I do not want to justify one wrong against another. I shall address her point in slightly more detail later.

Like all hon. Members, I am sure, I very much welcome the release of Alan Johnston this week. His kidnapping was deeply stressful and was damaging to the Palestinian cause. Clearly, Hamas will want to take credit for the release, or at least to tell the world that it indicates that it has control of the security situation in Gaza. We were unable to visit Gaza because of the security situation. The previous Secretary of State managed to get in shortly afterwards, but others have found it difficult. It is effectively a prison, sealed off by land, air and sea, with virtually no resources and no functioning economy. The question that we have to concern ourselves with is: how is the basic essence of life to be maintained there?

Our former Prime Minister, Tony Blair, is to take up the role of Quartet representative. He faces an awesome challenge and a crisis of credibility with the Palestinians, given his close ties to the Bush Administration and to Israel. How can he mobilise international assistance, as he has been specifically asked to do, let alone develop the economy of Gaza in those circumstances without talking to Hamas? He will have to do so sooner or later. If he were here, I would say to him that Hamas will have to be involved in talks at some stage, as part of the wider process, just as on the path to peace in Northern Ireland he had to talk to Sinn Fein and the IRA.

Our report, and its timing, were motivated by the fact that while international aid and the UK's contribution to the occupied territories was rising, incomes were falling and poverty was increasing, with the most vulnerable—older people, women and children—suffering the most. I shall not go into the statistics now, but they show how deeply people were affected in practical ways. As our report says, that situation was directly attributable to two facts, the first of which was the withholding of revenue from the Palestinian Authority: both the customs revenue collected by Israel on behalf of the Palestinian Authority and budget support from international donors. The second fact was the effective blockade of Gaza and the total disruption of access and movement around the west bank, both of which were imposed by the Israeli Government.

Photo of John Battle John Battle Labour, Leeds West

Our Committee's focus was the alleviation and tackling of poverty, but we cannot tackle poverty in the west bank and Gaza without considering the politics and economic realities. The right hon. Gentleman rightly pointed out that although certain groups have used blood-curdling rhetoric and carried out serious attacks of violence and terror in the past, they eventually had to be brought into talks to bring about a peace agreement. I suggest that it might not be simply his view and that of the Committee that in order to tackle poverty in the west bank and Gaza, there will have to be dialogue with all the parties, including Hamas. That might now be the wider view.

Photo of Malcolm Bruce Malcolm Bruce Chair, International Development Committee, Chair, International Development Committee

I am grateful to the right hon. Gentleman for that intervention, because that is the essence of our argument. Our report is an International Development Committee report, but I make no apology for straying into politics, because we cannot deliver development in the occupied territories without some form of political settlement. I want to know how it will be possible to deliver humanitarian assistance and support to the people of Gaza if we do not talk to the people who are in control there. I do not see how that assistance can be delivered in any other way.

The consequence of withholding aid, which might now be restored—I want to ask the Minister a few questions on that—was that the Palestinian Authority effectively collapsed. Its employees, by which I mean not only civil servants but nurses, teachers, doctors—essential workers—went unpaid, and, as a result, many went on strike. Economic activity was paralysed by the restrictions.

The Quartet is unequivocal in its requirements of Hamas and, if I may say this to Mrs. Ellman, completely equivocal in its approach to Israel. Paragraph 60 of the report specifically states:

"However, while severe pressure has been placed on the Hamas-led PA to change its policies and accept Quartet principles, no comparable initiative has been taken with the Government of Israel to encourage it to put into practice agreements it has signed up to or to end clearly identified practices which are causing poverty and suffering in Gaza."

The imbalance causes a great deal of resentment and is a practical obstacle to progress.

Photo of Louise Ellman Louise Ellman Labour, Liverpool, Riverside

The right hon. Gentleman talks as if Hamas is a normal political organisation. Is he aware that article 32 of its charter talks about the Jews' plans being

"embodied in the Protocols of the Elders of Zion"?

Is that not just one example of plain anti-Semitism?

Photo of Malcolm Bruce Malcolm Bruce Chair, International Development Committee, Chair, International Development Committee

I am sure that the hon. Lady will have many more such quotes. I want to reassure her that I endorse nothing of what Hamas says, stands for or does in terms of violence. I am not here as an apologist for Hamas; I am here as a political realist, accepting the fact that, whether we like it or not, Hamas was elected by the people of Palestine. However, it has been denied the right to have any kind of engagement.

Conditions are legitimate, but we have imposed similar conditions in the past on all kinds of movements, for example the IRA, EOKA and the Mau Mau, and ultimately, we have to deal with the facts on the ground. That is the essence of my point. I am not asking anyone to like or appreciate Hamas, but at some point we will have to talk to it. It is my belief that Tony Blair, in his position, may have to talk to it sooner rather than later.

What is the state of life in Gaza? I wonder whether the Minister can answer this direct question: is there enough food? There were indications of difficulties in that regard. Are hospitals and schools functioning? What measures are in hand to provide long-term support—access and movement? Is the temporary international mechanism—TIM—continuing or are steps in hand for salary payments to be restored directly, through the Palestinian Authority? If that happens, will they be backdated, and if so, will TIM contributions be in any way deducted from or charged to the PA? While we were there, that possibility was mooted.

On the west bank, are the number of restrictions increasing or diminishing? Is work continuing on the security fence? Is the development of E1 still on hold? Are other settlements on the west bank still expanding? Those are real questions; we need to know whether the situation has changed positively or negatively. I suspect that I know what the answers are, but if the Minister has up-to-date information, hon. Members would be happy to hear it.

I appreciate that the Department has given £1 million to the Red Cross for humanitarian relief in Gaza. Will the Minister indicate what other aid the UK is providing directly and indirectly, and whether it represents an increase compared with the previous two years?

Tony Blair faces a huge challenge if he is to move from the present crisis to establishing even the beginnings of a viable Palestinian state. I believe that Israel and the Quartet are taking a significant risk by investing their support so directly and completely in President Abbas. His Fatah party was defeated at the elections to the Palestinian Authority largely because of public disaffection with extravagance and corruption in the past.

Many Palestinians, most of whom had voted for Fatah, told the Committee that they felt they were being punished for a democratic vote. One woman told us that the UK, "Had invaded Iraq to impose democracy but refused to recognise the Palestinian democracy resulting from a free and fair election." When I put that to Tony Blair on his appearance before the Liaison Committee, he replied:

"We have recognised the Government."

That slightly surprised me. When I queried it, he said:

"We have recognised Hamas as having won the election."

He continued:

"Let us be absolutely clear what the problem is. The problem is not whether we recognise Hamas have a mandate and have won the election, the problem is that if they want money from us...we need to make sure that that money is not being used for them to buy weapons."

That is a fair point: it is our money and aid money. That issue needs to be addressed, but it does not apply to the Palestinian Authority's own money. Its money had been collected, on its behalf, on the borders by Israel and had been withheld. That was the biggest single factor in bringing about the effective collapse of the day-to-day functioning of the Palestinian Authority. The Department for International Development, among other donors, had invested so much time, effort and resources into building up that body.

There is real anger and frustration among ordinary Palestinians. I am not necessarily talking about those who support what Hamas stands for, although some might have voted for it. The Palestinians have made many mistakes for which they are paying, and Israel has legitimate security concerns, which they are addressing robustly. Nevertheless, we face a long haul, in which the ordinary, beleaguered Palestinians face unreasonable hardship, are prevented from developing their own economic salvation from what should be a productive economy, and find that Israel is free to impose disproportionate reprisals, seal off activity and continue an illegal occupation without let or hindrance. The essence of our report, and, indeed, the up-to-date comment to add to that report, is simply: how long can this go on?

Photo of Richard Burden Richard Burden Labour, Birmingham, Northfield 3:06 pm, 5th July 2007

I, too, welcome the Minister to his new position, and to this debate in particular. This is an area of the world in which I know he has a genuine personal interest. Both he and I were observers to the Palestinian parliamentary elections in January 2006. All the international observers agreed that those elections were fair and democratic. That is remarkable, given that they were taking place under conditions of occupation.

I want to endorse everything said by Malcolm Bruce, Chairman of the Select Committee on International Development, in introducing our report. The elections to which I just referred have, in many ways, formed the backdrop to its contents and to the Government's response.

I found the Government's response to our report most disappointing. It seemed to come from a script that was written before anyone had read our report and that representatives of the Departments concerned rehearsed before us during evidence sessions. As a result of those evidence sessions, we produced a report that challenged some fundamental inconsistencies in the approach hitherto adopted by not only the UK, but the EU and the Quartet. The inconsistencies and challenges that we outlined were based not on prejudice or conjecture but on the evidence that we had received in our evidence sessions and what we saw with our own eyes when we went to the area. When we produced those challenges, we got back a response that simply repeated that script complete with the same inconsistencies.

Since our report was published, significant developments have taken place, particularly arising from the Hamas takeover in Gaza two or three weeks ago. The right hon. Gentleman made the point well that, if anything, such developments make our report even stronger.

I hope that the Minister will not take this personally, but I must warn him that some of what I say will be critical. I say that not because I want to have a go, but because I want change. Yesterday's release of Alan Johnston opens up a window of opportunity for change, if only we are prepared to grasp it. With willingness to change being a watchword of our new Government in the UK, I hope that we will grasp it.

As the right hon. Gentleman said, at the centre of our comments was the contention that the boycott has been counter-productive. We do not say that it has caused the suffering of the Palestinian people, because it has not. The cause of that suffering is occupation; movement restrictions; closures; Israel's construction of a wall and of settlements on land that does not belong to it; the economic and military blockade of Gaza by Israel; and the withholding of millions of dollars of tax revenues. Our report makes it clear that, although those are the causes of the suffering, the imposition of a boycott policy on Hamas and then on the national unity Government by the Quartet has made that bad situation even worse and even more dangerous.

Photo of Malcolm Bruce Malcolm Bruce Chair, International Development Committee, Chair, International Development Committee

On the Government of national unity, will the hon. Gentleman confirm that the impression that we got from the British authorities that we spoke to, both here and in Palestine, was that if there were a Government of national unity, they would be minded to release funds? In reality, when that Government of national unity were created, no progress was made until they fell apart.

Photo of Richard Burden Richard Burden Labour, Birmingham, Northfield

That is a very fair point. The British Government started saying that we would talk to those members of the national unity Government who accepted the conditions, but not to others. That is madness; we say we want to move forward and engage in dialogue, but we once again put barriers in the way of our ability to allow dialogue to take place.

Photo of Louise Ellman Louise Ellman Labour, Liverpool, Riverside

Was it not the case that moneys were not released to the national unity Government because no commitment was given that those funds would not go to finance terrorism? Is it not a fact, now that the Palestinian President is acting in his own right, that the Israelis have agreed to release at least £300 million of Palestinian funding? Is that not a good start and an indication of good will?

Photo of Richard Burden Richard Burden Labour, Birmingham, Northfield

On the second point, we will wait and see. I welcome any release of money, but I am not sure that the money that my hon. Friend mentions has actually been released yet. Similarly, the Israelis gave a commitment to release 250 prisoners, but I am not sure that that has happened yet either, although I am aware that more arrests have been made. On the question of why no money was released, let us be clear that the boycott was put in place and maintained during a Hamas ceasefire; it was introduced not in response to terrorism, but in the context of a ceasefire. So what my hon. Friend says is simply factually incorrect.

I am clear that Hamas's military takeover in Gaza a few weeks ago was not justified, even if it does, ironically, appear to be bringing order to the streets of Gaza. However, the EU, the Quartet and ourselves are in a state of denial about our contribution to the creation of the very circumstances that unleashed the bloodshed that we have seen in recent weeks. We told the Palestinians to go down the path of democracy, but then shunned the Government who came out of the elections that we supervised. We told Hamas to turn away from violence and to commit to democracy, so it stood for election, suspended its attacks on Israel and offered a long-term ceasefire. When that happened, we ignored those changes and, as my hon. Friend made clear, we are still not admitting that they took place. Instead, we boycotted Hamas, telling it that its election would be disregarded by the outside world unless it signed up, without qualification, to the full renunciation of violence, the full recognition of Israel and the full acceptance of international agreements between Israel and Palestine.

We are absolutely right to say that all those ingredients are essential to a long-term solution, but we made them preconditions to even talking to the elected Hamas Government. We have never applied similar preconditions in other situations and we certainly do not apply them to Israel, despite the fact that it does not live up to them, as was proved in evidence before the Committee. For example, Israel has never, in practice, renounced violence in pursuit of its objectives. It also continues to violate its own obligations under international law and existing agreements through its continued occupation of Palestinian land and its construction of a wall, not along its own lawful borders, but beyond them. That was confirmed in evidence that the Committee received.

The trouble is that our boycott has provided a cover for the economic and military blockade of Gaza, which has cut off most Palestinian trade access by land, sea and air. Last month, Christian Aid reported that more than 80 per cent. of the 1.5 million Palestinians in Gaza are without a regular income. Are we trying to address that through measures such as the temporary international mechanism? Of course we are, but the bitter irony is that we are now having to spend more on emergency food and medical aid to a Palestinian population caged in by the boycott and by isolation than we ever did before we imposed the boycott. That aid is more expensive and less effective than it would have been, because we have insisted on bypassing the very institutions that we would need to use to deliver it effectively. That has helped to increase unemployment among public sector workers and to deepen poverty across the west bank and Gaza. As a result, we now have to put in even more aid to offset the effect of our own policies.

The crisis in Gaza is getting even worse. Only last week, a mother of five, aged 31, died because she was one of thousands of people who were stuck at the Rafah crossing after Israel closed the border. People were stuck outside in the searing heat, in some cases without any shelter. We should remember that the border is not between Israel and Gaza, but between Gaza and Egypt. If we are to help the people of Gaza, we must do something about that. The international community and indeed the EU are meant to have monitors there, but our ability to affect the situation seems to be hampered by whether Israel allows the border to be opened.

If we want to help President Abbas, as I think we should, we should really do something about the continuing conditions of occupation in the west bank. We should insist that the release of tax revenues happens in practice and that it goes further. We should do more about prisoners; even some of our colleague parliamentarians—some of those who were elected in the elections that my hon. Friend the Minister and I supervised—have been abducted by Israel, in contravention, once again, of international law.

Our report makes many recommendations about what Israel should do to solve such problems, and the Government assure us in their response that they regularly raise most of the issues that we have raised in our report, including illegal settlement building, the demolition of Palestinian homes and the fact that, under the EU-Israel association agreement, Israel continues to claim trade preferences for goods imported into the EU that are produced on illegal settlements, not in Israel. Apparently, such issues are regularly raised, so let us test what that has meant in practice recently.

The middle of June was a tumultuous time in Gaza and the west bank. A few days later, on 18 June, the Israeli Foreign Minister met EU Foreign Ministers, including the then Foreign Secretary, at the EU General Affairs and External Relations Council. I tabled some questions asking what issues had been raised with the Foreign Minister of Israel. One of my questions was:

"To ask the Secretary of State...what discussions she has had with the government of Israel in the week commencing 18 June on the situation in the West Bank and Gaza; and if she will make a statement."

I was assured:

"My right hon. Friend the Foreign Secretary discussed the situation in the Occupied Palestinian Territories with Israeli Foreign Minister Livni on 18 June. In the week commencing 18 June, our Ambassador in Tel Aviv had extensive discussions with the Israeli Prime Minister's Office, Ministry of Foreign Affairs and Ministry of Defence, amongst others."—[Hansard, 25 June 2007; Vol. 462, c. 212W.]

That was very good news. So what did they talk about?

Another of my questions was

"whether she held discussions with EU partners in the week commencing 18 June on Israeli settlement building on the E1 plan", which is a particular problem,

"and elsewhere in the West Bank; and if she will make a statement."

The answer was:

"My right hon. Friend the Foreign Secretary did not hold any discussions about settlement activity in the West Bank with her EU counterparts in the week commencing 18 June."—[Hansard, 25 June 2007; Vol. 462, c. 209W.]

It then repeated the mantra that settlement building is illegal.

I asked whether there had been any discussions with EU partners in that week

"regarding the effectiveness of EU arrangements for monitoring the importing into the EU of goods produced in Israeli settlements built in the Palestinian territories but labelled as made in Israel; and if she will make a statement."

The answer was:

"EU Foreign Ministers did not discuss settlement goods at the EU General Affairs and External Relations Council on 18 June."—[Hansard, 25 June 2007; Vol. 462, c. 210W.]

I asked what discussions there had been about the EU-Israel association agreement and its future. The answer I got back was:

"At the EU General Affairs and External Relations Council on 18 June my right hon. Friend the Foreign Secretary, along with other EU Foreign Ministers, discussed the peace process with Israeli Foreign Minister Livni. They discussed the current situation in the Occupied Palestinian Territories and next steps. There was no discussion of the EU-Israel Association Agreement."—[Hansard, 25 June 2007; Vol. 462, c. 213W.]

I asked whether there had been any discussion at that meeting of the

"demolition by Israel of homes in the Occupied Palestinian Territories; and if she will make a statement."

The answer that I received was:

"My right hon. Friend the Foreign Secretary has not discussed house demolitions with the Israeli government in the week commencing 18 June." ."—[Hansard, 25 June 2007; Vol. 462, c. 210W.]

I asked whether there had been any discussion of the labelling of goods on which trade preferences were claimed but which were produced in settlements built in the occupied Palestinian territories. The answer was:

"The Government have not had any discussions with the Government of Israel on these issues during the week commencing 18 June."—[Hansard, 25 June 2007; Vol. 462, c. 210W.]

That is really not good enough. I therefore ask my hon. Friend the Minister to look again at the Committee's recommendations. Let us start again, because change is possible. The Government should look at our report from scratch. Let us see what we can do to fulfil in practice, and not simply in theory, the reassurances that we got in the response to our report.

The recent speech by the then Economic Secretary to the Treasury on an economic road map was very positive. Let us take that logic forward. Dialogue works. We are rightly committed to dialogue with the Israelis, but let us also have more evidence about how to take that forward in practice with the Palestinians, not because we want to support one Palestinian faction against another, but so that we can help, from our end, to rebuild the national consensus under the legitimate President of Palestine, President Abbas. That will be vital to securing a durable peace between Israel and the Palestinians.

Photo of John Barrett John Barrett Shadow Minister, Scotland, Shadow Minister, International Development 3:20 pm, 5th July 2007

I am pleased to be called to speak today, and to see you in the Chair, Mr. Bercow. As a member of the Select Committee, you have taken a great interest in its work over many years. I congratulate the Minister as well on his new appointment. I am glad to see him as part of an expanded team responsible for one of the most important Departments of State.

I served on the Select Committee for five years, until just after the report was produced, and I have noticed great changes in that Committee. One of its members, alongside whom I served, has sadly passed away. One has been promoted to Government office, and one has defected from the Conservative party to the Labour party. The Committee not only produces effective reports; it gets up to a lot of other things as well. As I have said, the report was one of the last that I was involved in preparing, and although events have moved on considerably since it was published, it is still useful in outlining the immense challenges that we face. As Richard Burden mentioned, the Government response was disappointing. However, I shall, I hope, touch on that aspect of the matter later.

In the face of much misery in the region—we saw a lot of that during the Select Committee visit—there is some hope. The release of Alan Johnston earlier this week proves that we should never give up hope. In the future, when we see former Prime Minister Blair as a middle east envoy, I hope we will wish him, and anyone who is working towards peace in the region, well. However, we are all aware of the former Prime Minister's role in the past 10 years, and his special friendship with the US Government. I for one am left wondering what he can do that he has not tried already. Will he be a force for good, or will his presence be a red rag to a bull? US and UK foreign policy in the region has not added much to its stability in recent years.

The ultimate solution must be the two-state solution, to which the UK Government have repeatedly stated their commitment. In time, the new Prime Minister and Foreign Secretary will presumably, like their predecessors, confirm that that is still the case: that is at the heart of the report. However, that solution cannot happen if one state is non-viable. At the moment, Israeli occupation of the west bank is making it impossible. If the Palestinians have their own state, it is increasingly likely that Palestine will be a failed state before it has a chance to grow.

The facts on the ground are incontrovertible. GDP is in decline. More than 1.3 million Palestinians are still living below the poverty line. Food insecurity rose by 13 per cent. during 2006, and between 25 June and 12 October 2006, 261 Gazans died—60 of them children—following Israeli air strikes in retaliation for rocket attacks. That is more than 10 times more than during the same period in 2005. During the same period, two Israelis were killed and 15 were injured by home-made rockets fired out of the Gaza strip. The number of checkpoints and road blocks, many of which the visiting members of the Select Committee saw during their visit, has increased by 40 per cent. during 2006, and more than half of the 700 km-long barrier route has been constructed, despite the advisory opinion of the International Court of Justice, which declared the route to be in contravention of international law.

The facts of what is happening on the ground, many of which are detailed in the report and were seen by members of the Select Committee, show the difficulties that exist. Back-to-back transfers of goods at checkpoints have resulted in the destruction of fresh produce. The Select Committee Chairman, my right hon. Friend Malcolm Bruce referred to those problems and the fact that checkpoints, the barrier wall and the lack of aid getting through were destroying not only the day-to-day existence of men, women and children, but business life. That business life must develop if development assistance to the territories is to be reduced in future.

As has been mentioned already, Israel's withholding of the Palestinian Authority's revenues and the withdrawal of budgetary assistance have come to an end, and the Israeli Government have agreed to release some of the funds to the authority. However, I do not believe that the international community put sufficient pressure on the Israeli Government to do that earlier. The freezing of funds, coupled with the western economic boycott, had crippled the Palestinian Authority, depriving key workers of pay.

The key problem throughout has been the use of aid as a political tool; that does not work. It would be easier to understand Israel's withholding of such aid for political reasons if there were a track record of such action yielding political results. In reality, the withholding of aid has only worsened the situation in the west bank and increased feelings of distrust among many Palestinian people. The temporary international mechanism has been established, and perhaps the Minister will be able to tell us how that is developing now and what is happening.

Practical programmes to combat poverty in the Palestinian community are desperately needed, but we have a ridiculous situation in which some projects funded by UK and EU taxpayers are being blown up by the Israeli Government. When I was last in Palestine, I saw the remains of a bombed Palestinian police station, which was full of computers supplied by the UK Government—the UK taxpayer—to help to combat crime. One reason given to us for the attack, at the time, was that it was to deal with an unknown terrorist: to kill a terrorist who was being held at that police station. He fled when the building collapsed. Such contradictions are commonplace there.

Aid alone, however, will not solve the problem. In the report and in the Government's response, it emerges that Palestinians are the most aided people on the planet. If aid solved problems, we should not be having today's debate. We need real moves forward to make Palestine a viable place for inward investment, trade and economic development. On paper, the occupied territories enjoy a liberal market and trading regime; in reality, both internal economic activity and external trade are hugely disrupted every day. Encouraging words are useless unless they are backed by action. That leads me to the double standards applied in our treatment of Israel and Palestine.

Although severe pressure, including the withdrawal of humanitarian assistance, has been placed on Hamas and the Palestinian Authority, no comparable pressure has been put on Israel to meet its obligations under international treaties. The Government point out in their response to the Select Committee's report that the Quartet is asking nothing more than the renunciation of violence and recognition of Israel's right to exist. I accept that, but I argue that what each side does is more important than what people say. That very point was confirmed in an exchange, during a Select Committee evidence session, between the hon. Member for Birmingham, Northfield and a Mr. Gooderham. He was asked:

"So the theory is more important than the practice. That is what you are saying?"

Mr. Gooderham replied:

"I think it is, yes. I think so long as you have an organisation that is committed to violent means to achieve its political ends, then, yes."

The final comment from the hon. Member for Birmingham, Northfield was:

"So you withdraw aid to the Palestinians because theoretically Hamas is committed to violence, even though they are not actually committing violence, but you do not do anything to Israel if they are theoretically in favour of the Roadmap, even if they are not abiding by their obligations under it?"

The reply was yes: and that is what is happening on the ground. Hamas may regularly state its desire to wipe Israel off the map, but it is in no position to do so. Israel, on the other hand, does not explicitly call for the destruction of Palestine and often talks a good talk. Yet its wall-building programme, the theft, I would say, of natural resources, and the expansion of settlements amount to doing that by stealth.

I should like the Quartet to focus less on what is said and more on what is done by both sides. Israeli policy on settlements and the building of the wall are dividing the country and enforcing an effective apartheid on the Palestinian people. The details of the construction of settlements in map 1 in the report show, as well as access roads, razor wire, the domination of demand on water supplies and the strategic location of the settlements on hilltops. Those developments are the actions of a regime that has ended all hope for many Palestinians that the west bank will ever become their homeland in a meaningful way, unless those settlements are removed.

Many of the report's recommendations are identical to those made back in 2004. That shows the absolute lack of any positive movement, despite a number of token gestures. Although it is important that the international community puts appropriate pressure on Hamas to change its position and renounce violence, that is better done through dialogue, rather than using isolation and intimidation.

We only have to look to Ireland to see the importance of getting rival factions round the negotiating table. Much has been made of the part that the former Prime Minister played in the resolution of the long-running problems in Northern Ireland, but we must remember the role of those leaders who were prepared to get round the negotiating table with people they clearly despised.

Photo of John Battle John Battle Labour, Leeds West

This is an important matter—we are discussing the politics of the situation and the difficulty of having dialogue with people who use violence—but the hon. Gentleman and all of us may recall that the business of getting people to move away from violence and to get round a table and have dialogue is incredibly complex, difficult and takes place by stages. That does not always mean handing over guns immediately, but may involve intermediaries to negotiate that difficult process over a long period. That does not pre-empt the possibility of dialogue.

Photo of John Barrett John Barrett Shadow Minister, Scotland, Shadow Minister, International Development

The right hon. Gentleman makes an important point. The process is long drawn out. It has taken many years to get to the present stage, and clearly it will be many years before anything like a solution is found, but steps along the way—even small steps—are important.

In the end, if development assistance to the occupied territories becomes a thing of the past—that is what we all want—and there is peace in the region, the economy can again grow and support those who live there. We will get there only if there is leadership on all sides, with leaders who are prepared to negotiate without resorting to violence and leaders who show that they have a vision for a peaceful future. Let us hope that, if there is another such report from the Select Committee in three years, we will have moved on further than during the past three years.

Photo of Louise Ellman Louise Ellman Labour, Liverpool, Riverside 3:32 pm, 5th July 2007

This report is strong and well documented, and I have no doubt that the humanitarian and economic conditions described in considerable detail are unacceptable. The major issue that we must all address is how the situation can be changed. I believe that the report, well documented as it is, does not fully comprehend the reasons for the situation. It acknowledged in a number of different places that Israel has security problems, but it does not sufficiently understand the nature of Hamas, and it does not address the reasons for the situation, so that they can be addressed and rectified.

Comment has been made during the debate on the conditions that Hamas has failed to fulfil: the acceptance of the existence of the state of Israel, the acceptance of previous agreements, including the road map, and the renunciation of violence. Before progress can be made in resolving a deeply complex and unacceptable situation, it is important to recognise that Hamas is not a normal political organisation. Indeed, it is clear from Hamas statements recently, as well as in its charter and its actions, that it inspires ideological hatred based on religion.

Article 7 of the charter states:

"The Day of judgment will not come about until Moslems fight the Jews (killing the Jews)".

Article 22 states:

"With their money they stirred revolutions in various parts of the world... They were behind the French Revolution, the Communist revolution... With their money they formed secret societies, such as Freemasons, Rotary Clubs, the Lions...for the purpose of...achieving Zionist interests."

Article 13 states:

"There is no solution for the Palestinian question, except through Jihad. Initiatives, proposals and international conferences are all a waste of time".

Article 32 refers to Zionists and Jewish plans embodied in the protocols of the elders of Zion.

Those statements are all embedded in the Hamas charter. They do not refer to the past. Although the charter was put together relatively recently, they are very much alive. On 3 June this year, the Palestinian information centre in Gaza stated:

"Keep the flame of resistance alive until our Palestinian flag will fly anew over the walls of Jerusalem, the shores of Haifa and of Jaffa."

Perhaps even more disturbingly, on 29 June this year, Hamas TV showed to young children in the Palestinian territories that are under the control of Hamas a Mickey Mouse-type cartoon character called Farfur being beaten to death by Israelis, Jews were called dogs, and Farfur was depicted as a martyr, teaching the cult of death. I have watched that cartoon, and what it underlines is unacceptable. It teaches hatred and the cult of death to young children.

Photo of Richard Burden Richard Burden Labour, Birmingham, Northfield

The document to which my hon. Friend refers is appalling, but does she believe that the existence of appalling statutes, documents, constitutions and so on should preclude talking or engaging in dialogue with anyone from the organisations involved? If she believes that, does she think it would have been reasonable for the Palestinians to refuse to engage with or talk to the Israelis because of the constitution of the Jewish National Fund, which said—she will correct me if I am wrong—that it should be a matter of principle that only Jewish labour should be employed on land owned by the fund, which is most of the land of Israel.

Photo of Louise Ellman Louise Ellman Labour, Liverpool, Riverside

My quotations illustrate the fundamental nature of Hamas, not one of its policies. I do not think that, on its own, that is a reason not to talk to someone, but failure to recognise the existence of the state of Israel at a time when Hamas is firing rockets on civilians outside Israel—2,000 rockets have been fired since the settlers left Gaza—tells me about the nature of the organisation.

A third of the state of Israel consists of non-Jewish people, who are employed, have full civilian rights and include members of the Knesset and Ministers of the state. Questions could be asked about many individual countries, but the nature of the state of Israel is to have equal citizens.

I believe that there is a way forward, which is to look at economic co-operation between the Palestinian Authority and Israel with international support on the basis of peace and acceptance of two states: Israel and Palestine. The way to do that was shown by this country when a special Palestinian conference was held in London in 2005, at which the Palestinian private sector declaration was signed with the Israelis and involved the World Bank. That put together proposals to develop the economy of and business in the Palestinian Authority and to involve the private sector. At a meeting hosted in Tokyo in March this year, a Japanese initiative launched a proposal to build a new industrial park on the west bank, and the Japanese pledged major investment there.

Negotiations are taking place between Israel and British Gas, which I hope are close to fruition, to supply Israel with gas from outside Gaza, with the royalties going to the Palestinian Authority. Work is going on with the Peres Centre for Peace and the Palestinian organisation, PalTrade. The World Economic Forum launched the Israeli-Palestinian Business Council in May this year. Those are all examples of economic co-operation that can take place between those authorities.

Photo of Malcolm Bruce Malcolm Bruce Chair, International Development Committee, Chair, International Development Committee

There are obviously many examples of constructive co-operation between Palestinians and Israelis in a business context, but does the hon. Lady not accept that, for such co-operation to deliver real economic benefits, all the restrictions need to be removed to enable economic transactions to take place? After all, Wolfensohn put his personal money into greenhouses in Gaza, and the people had to throw the produce away, because Israel would not allow them to the market. We had many examples of businesses on the west bank that simply could not get their people to work or their products even to the local markets, because of the restrictions. If Israel will not withdraw from the west bank and allow freedom of movement, none of that economic co-operation will deliver long-term benefits.

Photo of Louise Ellman Louise Ellman Labour, Liverpool, Riverside

I agree that, to enable economic initiatives to flourish, there must be freedom of movement and a normalisation of relations, which means that there must be a peace treaty—an agreed peace on agreed borders. The International Development Committee's report on a number of occasions acknowledges Israel's security issues, but it fails to acknowledge that some of the restrictions, including those on movement, borders and other problems, relate to security. For example, a number of references have been made to the security barrier. It would be much better if there were no need for any such barrier and if there were an agreed boundary, but it must be acknowledged that, since the barrier was put up, there has been a 70 per cent. reduction in civilian deaths by suicide bombings and a 90 per cent. reduction in incidents. Clearly, it has some relevance to the security situation.

I agree with several hon. Members that any solution must be found through negotiation, peace and on the basis of mutual recognition. I ask them to remember that 8,000 Israeli settlers withdrew from Gaza, but that, since that withdrawal, more than 2,000 rockets have been fired from Gaza at Israeli civilians. That is not a very good Palestinian response to withdrawal. However, it is paramount that an effort to restart negotiations takes place.

Our former Prime Minister has a new and special role as special envoy to the middle east, and his remit concentrates heavily on economic development and on supporting the Palestinians in building up their governance. All that activity is important, but for it to flourish, it needs peace and negotiations. I hope that that will happen. Anybody who has a genuine concern about the humanitarian plight of the Palestinians and, indeed, of the Israelis knows that the way to a solution is through peace, negotiation and mutually respected and acknowledged countries.

Photo of Ann McKechin Ann McKechin Labour, Glasgow North 3:42 pm, 5th July 2007

I also welcome my hon. Friend Mr. Malik to his new role as a Minister in the Department for International Development, and I wish him every success. As a member of the International Development Committee, I endorse the report's recommendations, which our Chairman, Malcolm Bruce, set out and amplified in his own contribution.

I am reminded not only of the Committee's visit to the west bank last November, but of my earlier visit to the Gaza strip as part of a parliamentary delegation organised by the Labour Middle East Council a few years ago. Visiting Gaza, one is struck by how small a piece of land it actually is. It is one of the most densely populated areas in the world, and it is strewn with rubbish and graffiti. People literally live on a rubbish tip. It is a place of constant fear, tension and suspicion, but the fate of the children of that area has made an indelible mark on me, and it is something that I shall never forget.

Many children had visible signs of malnutrition, and many were psychologically scarred by the continuous violence that surrounded them, as one could witness in the frequent aggressive behaviour of small boys in the street. There were also fading signs of any hope for their future. That was three years ago, so I struggle to imagine how much worse the situation has become for those children over the past 12 months.

In the unique political debate that applies to the Palestinian territories, the international community has struggled to align the recognised principles of humanitarian relief and development. Those principles, which are applied elsewhere, have to come up against some very undesirable Governments and political Administrations. Sudan and Zimbabwe are just two that spring to mind, and only this week, the Committee took evidence on the continuing conflict in northern Uganda, where the international community has to engage in dialogue with the Lord's Resistance Army—an organisation that has committed some of the worst atrocities known to man. At times, we must make difficult decisions with organisations and Governments who lie on different parts of the scales on issues such as democracy, human rights and corruption.

However, we are discussing Palestine, so we apply a different set of principles to that situation. The international community took an immediate, absolutist approach by withdrawing all direct aid to the Palestinian Authority, even though it was widely recognised that public sector employment was a key element in maintaining the economy. The public sector was the largest employer and the biggest spender, employing more than 161,000 people, who, in turn, it was estimated, supported more than 1 million people in the population. The inevitable plummet to disaster, which we are witnessing, does not give the international community any credit. We have to ask whether we need to make some fundamental changes. Not paying up to 80,000 security staff proved to be catastrophic; it meant letting loose 80,000 people with guns on the streets. Imagine being a woman or a child in Gaza, faced with that situation on an hourly and daily basis.

Yesterday in Parliament, Mr. Alastair Crooke, the UK director of Conflicts Forum, gave a talk to the Council for Arab-British Understanding. He has worked with, among others, former President Bill Clinton and Senator Mitchell to try to find solutions to the middle east problem. His analysis was particularly depressing, but he pointed out that the election result was very difficult for Fatah to cope with, because it believed that it had a natural leadership of the Palestinian Authority. It also proved difficult for anyone in the international community to accept the result of an election that it had encouraged.

The international community's reaction precluded the necessary dialogue to try to form a transition to a secure environment and a peaceful democracy. It encouraged Fatah to claw back powers from the Palestinian Government, and it funded an increase in the presidential forces and their training. That shows us that aid is not necessarily neutral; it certainly was not in Palestine. We must assess whether we made the right decisions, because as Mr. Crooke said, throughout the whole middle east region, tension is building upon tension, fear upon fear, suspicion upon suspicion. If we do not step back and try to relieve the tension, mistrust and fear, we will move towards a potential world catastrophe on a level that we have not seen since the world wars that afflicted the 20th century. That must make us step back.

Yesterday, as my hon. Friend Richard Burden stated, the release of Alan Johnston represented one small step and one small sign of hope. I commend the remarks of our new Foreign Secretary yesterday. They represented a nuanced and balanced approach, and I hope that we can build on that and on the statements by other new members of the Cabinet, such as the Secretary of State for Children, Schools and Families, who, in his former position as Economic Secretary, made last month a very good speech about economic development in Palestine.

The Government and other members of the international community should consider three small steps now. There is the issue of the temporary position, which cannot prevent the social and economic collapse that is happening now. It is by definition temporary. There have been welcome changes involving work with the Ministry of Finance this year. We must consider further that situation and the question of public employees and their salaries, which is vital to the stability of the economy, particularly in the Gaza strip.

John Barrett mentioned the situation regarding border posts, which is an absolutely key point. We witnessed on the west bank last November the utter madness of so-called back-to-back crossings, whereby people have to unload their lorry and carry their goods by hand or in a small trolley to another lorry across the road. The process was chaotic and actually seemed to be insecure—at one point, someone was told, "Well, it's just bags of flour. Don't bother opening them, just carry them across anyway." There was no electronic testing or physical testing of the products. My impression was that the system was designed simply to frustrate.

Photo of Malcolm Bruce Malcolm Bruce Chair, International Development Committee, Chair, International Development Committee

It is worth emphasising that the back-to-back crossing that we watched was between two parts of Palestinian territory. It was not on a frontier, but was internal, within the west bank.

Photo of Ann McKechin Ann McKechin Labour, Glasgow North

I absolutely agree with the right hon. Gentleman. What is worse is that people repeatedly face long delays at crossings, manual checks and young army staff who seem to have received little training and have little understanding of how to look for security items. However, the state of Israel has one of the most advanced and sophisticated defence industries in the world. It is a world leader in electronic defence equipment, yet it seems to be incapable of devising a sophisticated checkpoint system.

As we witnessed in Northern Ireland in the time of the troubles, the United Kingdom had the most sophisticated defence posts in the world. No one likes defence posts or checkpoints. However, in the case of Northern Ireland, that technology at least allowed them to cause the minimum of disruption, which allowed the economy to proceed fairly normally and caused as few queues as possible, so that people were not tied up for half a day or a whole day at a time, or told to turn back, because that day was just not suitable. Taking some simple steps to improve the efficiency of those posts could help the many law-abiding citizens who find their lives frustrated day after day, and—if I might say so to the previous speaker, my hon. Friend Mrs. Ellman—help improve the security of the state of Israel and that of the entire region generally.

I am reminded of a story, which the chief executive of the Augusta Victoria hospital in East Jerusalem told us when we met him, of a 10-year old boy with cancer who was trying to get into the hospital, but whose mother was turned back at the checkpoint. The boy was put into a taxi on the other side and had to be driven, unaccompanied and suffering from cancer, to enter the hospital, where no one knew who he was or where he had come from, except that he was seriously ill. The human rights of children should be paramount in any consideration on humanitarian relief. Small steps to alleviate such callous disregard for human rights should be key.

Finally, support for the Palestinian private sector needs to given now, not at an indefinite point in the future, when we think it might be appropriate to invest. It is difficult to strike a balance between humanitarian relief in an ongoing conflict and development. However, we need to support and maintain those businesses and organisations, some of which we met on our visit and which are struggling against all the odds that we can imagine in a business setting, and to keep them alive. If we allow them to die, close down or be destroyed, the task of eventually entering Gaza and trying to rebuild it will be one hundred times more difficult and we will have lost the skills, the expertise and the will to drive the economy forward.

There are still people in Palestine who want to do that and long for the day when they can transact their businesses normally. If we could take some small steps towards making their lives more productive and fruitful, we would send out the signals that are necessary. As my right hon. Friend John Battle stated, those are the small steps that we need to take now if we are going to keep the peace alive. Otherwise, we will simply build up tension, fear and aggression, and be left with a consequence that none of us here would want to face.

Photo of Lynne Featherstone Lynne Featherstone Shadow Secretary of State for International Development, Shadow Spokesperson (Communities and Local Government), Liberal Democrat Spokesperson (International Development), Liberal Democrat Spokesperson (Communities and Local Government) 3:55 pm, 5th July 2007

I welcome the Minister to his place and wish him every success.

The Liberal Democrats are fully committed to a two-state solution, as are all parties in the House. Both Israel and Palestine have the right to viable and secure states, recognised internationally and by their neighbours. Recent events show that that remains a distant prospect. The international community has not applied itself to peace in the way that this intractable conflict demands.

The election of Hamas to the Palestinian Authority in 2006 was unexpected and, to those who wish to see a lasting peace in the region, hardly welcome, given Hamas's track record. However, the election was, like it or not, the outcome of a clear democratic process. As we have heard, the Quartet laid down three key principles: renouncing violence, recognising Israel and respecting previous agreements. They are wholly reasonable demands and sooner or later they will have to be met. However, preconditions and setting barriers even to beginning a process are not conducive to reaching that outcome. We strongly oppose the decision to suspend aid to the territories, particularly because no method of delivering aid was in place at that point.

The methods of Hamas are inimical to peace, and the commitment to the obliteration of Israel a fundamental barrier to a lasting settlement. However, during my relatively short time in politics, I have never known groups to begin with a moderate statement. Any negotiating position starts at the extreme—what Hamas says is foul and unacceptable, but then we have heard foul and unacceptable things before, from groups that are now part of a democratic, established Government.

So far, the attempts to force Hamas into recognising Israel by undermining its support among Palestinian people have failed. Of course, the ultimate responsibility for the recent events in Gaza can lie only with Hamas and Fatah. However, the international community has absolutely no progress to celebrate, because the marginalisation of the political wing—the wing through which there was some possibility of negotiating with Hamas—has failed.

I was therefore disappointed by the Government's response to paragraph 17 of the report, which states:

"We believe that the international community is right to place pressure on Hamas to change those policies which militate against a peace process...this would best be achieved through dialogue and engagement rather than isolation. The danger of the current approach is that it might push Hamas into a corner which encourages violence rather than negotiation", as it has. The report continues:

"The international community must also ensure it is not bolstering one faction against the other and thereby increasing the risk of internal strife."

Wise words as far as they go, but the Government's response does not really acknowledge what the report is saying and does not envisage that some sort of engagement with Hamas is now vital if we are to make any progress. The Government rightly point out that Hamas needs to renounce violence and recognise Israel's right to exist. As I have said, that must be part of a process. To set a barrier so high that we know that it is impossible for Hamas to start on that journey will not deliver the result that we all want and that I am sure Israel wants. However, for many Palestinians Hamas has a mandate, and we cannot ignore that fact.

Rather than seeing things in black and white, and imposing sanctions on people for having cast a vote, we must look at the reasons that Hamas was elected in the first place and the conditions for that result. One huge reason was the perceived corruption of various elements in the Palestinian Authority and the dominant Fatah party. It is clear that some of the votes were protest votes against Fatah, which bolstered Hamas. Also, Hamas is not a stupid organisation—it uses opportunities. It provides essential services, such as schools, hospitals, food and housing in the occupied territories, which neither the Palestinian Authority nor the Israeli civil administration was providing, thereby creating dependency ties. Hezbollah did the same in Lebanon. If the "civilised" west takes away people's ability to survive, no wonder a vacuum is left for others to rush into. The electorate's decision seems to have been influenced less by foreign policies and more by Hamas's domestic policies.

In a striking example of the importance of dialogue, the Palestinian Authority's and Fatah's lack of progress in reaching a peace deal with Israel also pushed people towards Hamas. Furthermore, although I congratulate Israel on having disengaged from Gaza as a unilateral initiative, that was inevitably seen in the Palestinian territories not to have been the result of negotiations with the Palestinian Authority or Fatah. Fatah therefore looked weak, and victory could be claimed by Hamas.

Photo of Louise Ellman Louise Ellman Labour, Liverpool, Riverside

Is the hon. Lady suggesting that the Israelis should not have withdrawn from Gaza?

Photo of Lynne Featherstone Lynne Featherstone Shadow Secretary of State for International Development, Shadow Spokesperson (Communities and Local Government), Liberal Democrat Spokesperson (International Development), Liberal Democrat Spokesperson (Communities and Local Government)

No, of course I am not; perhaps I did not explain myself brilliantly. I was saying that because the withdrawal was unilateral and had not been negotiated between the Palestinian authorities and Israel, it offered Hamas the opportunity to claim credit.

We also need to realise that Hamas is a movement with many voices, and the voices inside the occupied territories often disagree with the leadership in Syria. The Government must not rule out dialogue and discussion with all elements. On the issue of the recognition of Israel, we must note that Hamas had been doing well in the municipal elections in the occupied territories before its victory in the Palestinian legislative elections. Several Palestinian mayors have been Hamas members who have had no choice but to deal with the Israeli authorities, given the state of occupation under which the Palestinians live. I regard that as a hopeful sign: if we can get the process started now, Hamas may one day recognise and work with Israel at the other end of the process.

Let us remember that before the Israeli-Palestine Oslo accords were signed, Arafat and the Palestine Liberation Organisation were also classed as terrorist. At that time, various international actors started dialogues with the PLO, which was offered incentives and moderated. Israel herself was talking to the PLO behind closed doors at Oslo, and the declaration of principles was signed. What has happened since has not been perfect for various reasons—including internal failings on both sides—but it has been a step in the right direction and has showed that listening, dialogue and exchange are the only way forward and the only way to avoid further radicalisation and marginalisation.

After President Abbas expelled Hamas from Government and set up an emergency Administration, the United States, Israel and the European Union chose to restore direct funding to the Palestinian Authority and its emergency Government. We welcome that resumption of funding. However, we cannot ignore the reality on the ground: there are now two de facto Governments, in Gaza and the west bank. The influence of the emergency Government is of little or no consequence in Gaza; it is therefore essential that aid should be delivered to avert humanitarian catastrophe. The European Union must play its part in that. At this point, I should raise the issue of the Rafah crossing. Whatever the politics, that involves cruel and unusual treatment for those stuck in an impossible situation on the border.

The already difficult economic situation in the occupied territories was made worse by the withdrawal of funding to the Palestinian Authority Government. The international community has a duty to find a way of ending the economic and political marginalisation of the political wing of Hamas. Otherwise, we will simply exacerbate the situation.

The temporary international mechanism was flawed. It was, of course, better than nothing at all, but without the Government apparatus it had little chance of delivering meaningful impact. Given that many essential workers are going unpaid and that the organs of government are being starved of funds, the resulting situation should surprise nobody. Financial aid is essential to the ordinary Palestinians of Gaza, who are most affected by those events but have least say in them. New efforts are needed to persuade the Israelis to release more of the money that they have been holding back for the past year, although we are delighted that some of it is now to be released.

Europe has an immense role to play in the region; arguably, it has never maximised its influence. The European Union is both Palestine's largest aid donor and Israel's largest trading partner. Europe must find a strong common position on Israel-Palestine and use a singular voice to help find a solution to the conflict.

The report paints a stark picture of economic growth and private-sector development. The current state of play in the Israeli-Palestinian conflict requires that the Palestinian people, their basic services and what exists of their institutions, are supported through donor aid. That position is untenable. The Government have to realise that the simple provision of aid, on which the Palestinian population so heavily depends, relates to the lack of a viable economy. Aid can help to bring a resolution to the conflict only if it is channelled into projects that promote economic growth and institution building in the occupied Palestinian territories and is complemented by a serious effort by the international community to bring about a fair and sustainable resolution to the conflict.

Such a resolution might not—perhaps could never—give each side what it wants, but it could be enough for both sides to have peace and prosperity. Economic growth in the occupied Palestinian territories is essential and could show the benefits of peace. Collective sanctions against all Palestinians just create more desperation, lack of faith in the international community as peace brokers and lack of faith in the future. They also create an atmosphere in which extremists can thrive and prosper by providing basic services such as food aid, hospitals and schools. Nobody else is providing those services, so dependency ties are created.

What I have learned from looking at such situations around the world is that intransigence delivers nothing—it means that absolutely nothing can change. Recently, I visited the middle east, both Israel and the west bank, and my overriding sense was that it is the ordinary people on both sides who suffer greatly. To respond to an issue raised today, I should say that one thing that surprised me was that although the security blocks on the Palestinian west bank were indeed awful, the Palestinians whom I talked to still put the blame on the Palestinian Authority for deliberately retaining the better passes for those in senior positions. I am concerned that there is still a degree of corruption.

I went to a school by the Kalandia refugee camp to visit some 15-year-old girls who were having a workshop that aimed to build their capacity to vocalise their feelings. We are influenced by the media around us, and when I asked them what was the biggest barrier in their lives, I was expecting them to say that it was the corrupt Palestinian Authority or the Israelis who were making their lives a misery. However, they actually said that the biggest barrier was their culture; they were expected to get married and have babies at age 15. That brought it home to me that in such territories people are trying to live lives with all sorts of issues to counter. I hope that the international community can take the process forward without intransigence on any side. If we in this Chamber can agree on that, perhaps there is a way forward.

Photo of Mark Simmonds Mark Simmonds Shadow Minister (Health) 4:08 pm, 5th July 2007

May I begin by saying how pleased I am to see you in the Chair this afternoon, Mr. Bercow? I also welcome the Minister and congratulate him on his appointment. We Conservatives are pleased that the Department for International Development has expanded—indeed doubled—its ministerial team. Although the number of Ministers has gone from two to four, I am sure that this Minister will have no shortage of issues on his desk. I am sure that he will find the job extremely rewarding; it is one of those rare departmental positions from which a Minister can make a real, immediate and lasting impact. I wish him well. Finally, we Conservatives were delighted at the release of Alan Johnston. We hope that he manages to find his feet again, and are delighted that he is back with his family.

Malcolm Bruce, the Select Committee Chairman, should be congratulated on the Committee's thorough and prescient report. He introduced what is—let us be honest—an emotive and impassioned subject in his usual measured way. We have seen this afternoon that passions run high on both sides of the argument. He eloquently set out many of the issues in an articulate and detailed way. He was right to highlight the problems that have been exacerbated by continued building in the west bank and to highlight Israel's legitimate security concerns. I am sure that he would be the first to acknowledge that the international community needs to work together to find a satisfactory resolution to the problem or serious regional problems could well develop. I would certainly advocate discussions with Syria and the other main players in the region that need to engage with the issue, too.

We then heard from Richard Burden, who is passionate and knowledgeable about the subject. He seemed surprised at the Government's response to the Committee's report and its pre-meditated content. I was not particularly surprised when I saw the response, and I suspect that other members of the Select Committee were not particularly surprised either. He rightly mentioned the security barrier, which is an emotive issue. As Mrs. Ellman mentioned, there have been significant reductions in terrorist atrocities as a direct result of the construction of the barrier. However, as I saw when I was in Palestine, it divides some Palestinian communities. When I was there, a pregnant lady wanted to get to hospital to give birth and she was not allowed to do so. Some serious issues need to be addressed on both sides of the divide. All that I would say to the hon. Member for Birmingham, Northfield is that to enable a satisfactory solution to that immensely complex issue, there needs to be a balanced view and an understanding of the issues on both sides. One of the depressing things that I found when I went to Israel/Palestine was that at a senior level and a political level, that balance was not there. It is present in both sets of populations and we need to build on that to try to find a satisfactory solution.

We then heard from John Barrett, who is knowledgeable about international development issues. He mentioned Tony Blair's appointment; we think that he will have problems generating traction on the Palestinian side, but of course we wish him well. If he can play a role in trying to engage the United States in this fundamental issue he will have played a significant part. There is no doubt that the disengagement of the US Administration in trying to find a satisfactory solution to the middle east situation has led to an exacerbation of many of the problems. The hon. Gentleman was also right to highlight the severe decline of the gross domestic product of the Palestinian areas.

We then heard from the hon. Member for Liverpool, Riverside, who is a passionate and knowledgeable advocate of the view that she expounded. She was right to highlight the fact that the situation is complex and point to some of the appalling quotes from what Hamas and its supporters have said. There is more to democracy than winning elections, and once Hamas had won the election it needed to establish the rule of law. It needs to benefit and build a pluralistic civil society. It needs a commitment to peaceful dialogue. She was right to highlight the issue of hatred, which still exists on both sides. It needs to be eradicated, if possible, through constructive and sophisticated dialogue.

We then heard from the hon. Member for Edinburgh—

Photo of Mark Simmonds Mark Simmonds Shadow Minister (Health)

Forgive me; that was a big mistake. We heard from Ann McKechin, who is very knowledgeable in such matters. She is a regular contributor to international development debates and her contribution is always welcome, illuminating and knowledgeable. She was right to highlight the appalling conditions, particularly in Gaza. I was interested that she mentioned northern Uganda, which is the only place in the world that I have visited where I have seen conditions worse than those in Palestine.

The hon. Lady was right to highlight the plight of children and the importance of the public sector in building capacity to provide not only services but a boost to the economy, and to allow people to be paid for the work that they do. However, I would suggest that that is not only about supporting the private sector, but about stimulating and enhancing it. It is only through wealth creation that jobs will be created and poverty alleviated, and that there will be a greater understanding and bond between those on the different political sides.

Other hon. Members have rightly highlighted the appalling conditions in the Palestinian territories. Aid accounts for one quarter of the annual gross domestic product. I think that I am right that the Palestinian territories are the highest per capita recipients of aid in the world. Poverty rates in Gaza and the west bank doubled last year even before Hamas seized control of Gaza: 56 per cent. of those in the west bank and 87 per cent. of those in Gaza were living in poverty. Unless the international community can do something quickly, those statistics will deteriorate even further.

The key to a lasting settlement between Israel and Palestine is security, and the Select Committee was right to highlight the

"fundamental relationship between Palestinian economic viability and Israeli security."

Intense and urgent action needs to be taken to achieve a lasting peace between the Israelis and the Palestinians. Peace in the region in totality may not hinge merely on the creation of a Palestinian state, but it is the most significant pillar.

We in the Conservative party believe that three key things need to be addressed quickly. First, we need to find an acceptable way to continue the delivery of aid to the Palestinian population in Gaza under the temporary international mechanism. Secondly, we need to support and channel communication between President Abbas and Prime Minister Olmert aimed at improving conditions in the west bank and Gaza, despite the fact that President Abbas's Administration has, by his own admission, credibility problems with some of the Palestinian population. Thirdly, there need to be urgent diplomatic efforts by the Quartet and the Arab quartet to seek a way forward. Any way forward requires Hamas to make a credible movement towards the acceptance of the Quartet principles.

I have to say to the hon. Member for Birmingham, Northfield that it would be difficult for any British Government, irrespective of their political colour, to approve the use of British taxpayers' money for an organisation that has not yet renounced violence and still does not acknowledge the right to exist of the group with which it is supposed to negotiate. Those fundamental steps must be made before direct engagement with Hamas can take place.

Photo of Richard Burden Richard Burden Labour, Birmingham, Northfield

I think that I follow what the hon. Gentleman is saying, but perhaps he could address the point made by my right hon. Friend John Battle about stages. The hon. Gentleman ran two things together: the use of taxpayers' money for a Government or organisation, and the issue of engagement. When Hamas offers long-term ceasefires and talks about accepting Israel as a reality, do those moves go far enough? Absolutely not, but are they not grounds for saying that we should start to talk about things, see what they mean and see whether we can get things to move forwards?

Photo of Mark Simmonds Mark Simmonds Shadow Minister (Health)

I understand the hon. Gentleman's points, and argue in return that an issue needs to be addressed. Of course, things need to take place in stages, but it would be difficult for the UK Government to have a direct conversation with an organisation such as Hamas. Other players in the region should be having that dialogue: Syria is one and Iran is possibly another, although it has perhaps been involved in a negative way with what has happened recently in Gaza. The regional players and the Arab quartet need to be involved in far greater detail and to a greater degree than they have been to date.

We welcome the resumption of the transfer of taxes to the new Palestinian Authority, as well as the unfreezing. I understand that some money was sent on Sunday, that more was sent yesterday and that some will be disseminated through the public sector—but only in the west bank, not in Gaza. We need to return to that and it would be helpful if the Minister could explain the UK Government's position. It is essential that some money should circulate in the economy, or the people of Palestine will have no chance of generating economic growth and decent reasonable livelihoods.

It needs to be acknowledged that DFID has made a contribution in Palestine. Since 1996, it has provided £372 million of aid. In 2006-07 alone, DFID allocated £30 million for the Palestinian territories, of which £24 million has been disbursed via the temporary international mechanism, non-governmental organisations and international agencies. DFID has also allocated funds via the global conflict prevention pool for water resource management, policing advisory services and strengthening the capacity of civil society.

Only last month, the then Secretary of State for International Development announced that £1 million would be channelled through the International Committee of the Red Cross for immediate humanitarian need. It would be helpful if the Minister could say whether that money has been allocated and whether it is actually reaching the people for whom it was intended.

Poverty alleviation, economic growth and foreign direct investment are impossible without the ability to trade. The Palestinian territories are hindered in their ability to trade by restrictions on the movement of people and goods. That point has already been made. Steps must be taken to ensure that at checkpoints there are legitimate, fair and efficient means to enable the swift movement of people and goods, while defending Israel's right to security. The lack of such means is a major reason why Gaza's economy shrank by up to 10 per cent. in 2006 and poverty rates are growing.

The Government's response to the Select Committee report states that they accept that

"shrinking market access and lack of free movement are the main constraints to growth in the Occupied Palestinian Territories."

DFID funded the investment climate assessment, which concludes that progress must be made in the following areas:

"re-establishing movement and access, while maintaining Israeli security...improving the investment climate; and...developing the capacity of enterprises."

Has any progress been made since that assessment was undertaken, despite the current change of circumstances in Gaza? If not, what change of policy is DFID putting in place to cope with the new Hamas regime?

The report concludes that the European Union's association agreement in the Palestinian territories is ineffective and hinders the movement of goods in and out of the territories. It states that steps need to be taken to ensure that the procedure at checkpoints is legitimate and efficient. What are the Minister and his officials doing to put pressure on the European Union to ensure the effective operation of the association agreement?

The report also states that there are discussions with the European Commission about how best to take forward the World Bank's finding that the Rafah trade corridor, referred to earlier, could be used to provide high returns for Palestinian exports. Has any progress been made on greater use of the Rafah trade corridor to negate the suffering that many people are undergoing because of the closure of the limited access through it?

The Karni crossing used to handle between 200 and 300 trucks a day and is a vital trade route to Gaza. Is DFID still working with the Foreign Office and the Ministry of Defence to support the US security co-ordinators' work there, for both commercial goods and people? Another fundamental factor in the depression of the Palestinian economy has been the fact that while almost 45,000 Palestinians used to work in Israel every day, for security reasons that figure is now almost zero.

We accept that events have overtaken much of the report, but it would be helpful if the Minister addressed the following points about the current humanitarian situation, UK funding and DFID's strategy on the Palestinian territories. As I have said, Israel has agreed to resume the monthly transfer of taxes to the new, Fatah-led Palestinian Authority. We welcome that step. The Quartet has agreed to lift the economic embargo on direct assistance to the Palestinian Authority. Will the Minister provide more details? Will the direct budgetary support begin immediately? If so, how much of DFID's budget will be given? Will it be in addition to the temporary international mechanism, or will it act as a replacement? How will DFID monitor the money to ensure that it is spent for the purposes for which it was originally intended?

Currently, the money delivered under the temporary international mechanism is channelled through the office of the President. However, the greatest poverty exists in Gaza, and the whole purpose of the mechanism was to circumvent the Hamas structures of government. How will the funds that are being put into the mechanism be delivered in Gaza if the circumvention of the Hamas political apparatus is to continue? The mandate for the mechanism ends on 20 September and has already been extended four times. Does the Minister expect it to be extended again and, if so, for what period?

There is clearly an immediate necessity to get humanitarian assistance into Gaza in particular. What is the Minister's assessment of the humanitarian situation, and are the funds being sent through various mechanisms, whether the Red Cross or the United Nations, reaching the front line? He will be aware that there was a UN appeal for roughly $450 million. Of the money that was pledged, how much did the UK contribute and how much was delivered by other international donors?

The initial country assistance plan put together by DFID stated its objectives as

"more effective, accountable and inclusive Palestinian institutions...humanitarian and development assistance delivered more effectively" and enhanced prospects for peace. I am sure that all hon. Members would agree about that. DFID claims that those objectives have not changed since the election of Hamas in January 2006. Is that still DFID's view, and is it making progress towards those objectives in the changed circumstances, particularly in Gaza?

The priority for the Palestinian territories and Israel must be security and stability in the middle east. There is a blueprint as to the way forward, which was almost agreed at Taba. Palestine in particular must ensure economic growth and the ability to trade, which will contribute to the alleviation of poverty. Sadly, recent events in Gaza make a two-state solution less likely in the immediate future, more complex and more difficult to achieve.

The fact has been highlighted that there is no one person any more who represents the Palestinian people. I urge the Government to provide well targeted, accountable development assistance that is carefully monitored to ensure that it reaches those who most require support and assistance. They should also work with the international community not just to deliver humanitarian assistance but rebuild Palestinian public services and assist in the development of trade, economic growth and security. Those are the combining factors that will ultimately lead to a satisfactory political solution and the significant alleviation of poverty that is much needed in the Palestinian territories.

Photo of Shahid Malik Shahid Malik Parliamentary Under-Secretary, Department for International Development 4:26 pm, 5th July 2007

I was expecting Hywel Williams to be in the Chair—I fear that my reputation precedes me. May I say, Mr. Bercow, that yours certainly precedes you? It is the most unexpected of pleasures to have you in the Chair for my maiden debate as a Minister. You are one of those politicians who command respect for their integrity right across the House.

I shall first respond to the various contributions, which have been extremely useful and, importantly, based on personal experience. That makes them much more powerful and relevant. I commend the Chairman of the Committee, Malcolm Bruce, for his frank and candid approach to the debate. For obvious reasons, he is well respected in the field of international development. He is right that international aid cannot in itself lead to sustainable economic growth in the occupied Palestinian territories. Like him, I welcome the release of Alan Johnston and the role played by both President Abbas and Ismail Haniya and Hamas.

The right hon. Gentleman was right to say that the situation is fluid, given recent events. On whether there is a sustainable solution, the truth is that in the long term there can be no such solution in that part of the world without the inclusion of Hamas. At the same time, Hamas must be clear that it has obligations. The Quartet has set out principles and we expect them to be adhered to.

I shall deal in my closing remarks with the questions that the right hon. Gentleman raised about the temporary international mechanism. On the situation of people living in the Gaza strip, we know, for example, that 70 per cent. of the population are food-insecure.

I believe that it was the right hon. Gentleman who raised the issue of the Rafah border. Certainly, one of our colleagues did. If it was not him, my papers are a little muddled. None the less, I shall deal with the matter now. The Foreign Secretary will be speaking with his Egyptian counterpart over the next couple of days. He hopes to get some movement on a situation that, clearly, is unacceptable from anybody's perspective.

My hon. Friend Richard Burden has a clear passion in this area. It is a passion that I share and that I believe every Member in this Chamber shares, by virtue of their attending this debate. He has done some interesting and valuable work in trying to move forward issues that, on occasion, are clearly contentious but that need to be raised and discussed none the less.

I had the privilege of being alongside my hon. Friend and other colleagues when we acted as international observers of the Palestinian elections in January 2006. They were, without doubt, the best elections that I have experienced in my life. I wrote in the New Statesman that Nablus was more like Notting Hill. There was a kind of carnival atmosphere, and there were more women out on the streets than anybody else. That was probably the peak of Palestinian optimism in the past couple of years. It is tragic that between January 2006 and July 2007 we moved to where we are now.

On Hamas, I reiterate that the Quartet has set out its three principles, which deal with non-violence, the recognition of Israel, and respecting and accepting existing agreements. My hon. Friend asked about the clearance revenues. The amount of $120 million has already been released to the new Palestinian Government, and I am happy to tell him that the total amount that we believe ought to be released is circa $800 million. It is certainly the position of this Government that the entirety of that money needs to be released.

Photo of John Battle John Battle Labour, Leeds West

I congratulate my hon. Friend and neighbour on his appointment and wish him well. I thank him for allowing me to intervene.

To follow up on the remarks of Lynne Featherstone, is the Minister in a position to say whether any of the money that has been released has gone to medical care? I believe that we would all agree that insisting that appropriate medical care reaches people, whether combatants or not, and whatever the conflict, is an absolute priority. Our report recommended that with regard to doctors' and nurses' salaries and medical provisions for hospitals and clinics in the occupied territories, the withholding of funds should be lifted. Has that now happened or is it happening today? Medical needs should have been exempted months ago, when our report was published.

Photo of Shahid Malik Shahid Malik Parliamentary Under-Secretary, Department for International Development

I thank my right hon. Friend for that intervention. In his constituency—in fact, across Leeds—he is known not as right hon. but as right on. He usually is right on, and this case is no exception.

My right hon. Friend raises an important issue, and I shall deal with some aspects of it in my closing speech. There is a new political reality, and it might well present opportunities for us to look at some situations in a rather different way. However, I do not want to pre-empt anything that has not yet happened. I shall wait for my right hon. Friend the Foreign Secretary and my other right hon. Friend—and boss—the Secretary of State for International Development to continue their discussions. I know that the Prime Minister himself is keen to look at the new political reality and see how we can take best advantage to move forward the peace that we all want.

As well as the revenues, I am pleased to say—indeed, I will probably repeat this, or try not to, in my speech—that more than 130 truckloads of food and humanitarian supplies have been delivered to Gaza. What is really needed now is for the Gaza borders to be opened and, as I believe others have said, for imports and exports to start to flow.

On the arrest of Palestinian Cabinet Ministers, this Government's position is clear: they ought to be charged or they ought to be released. The current state of affairs is not acceptable. Indeed, on 30 May, the Quartet asked for their release.

Photo of Andrew Slaughter Andrew Slaughter PPS (Sir Digby Jones, Minister of State), Department for Business, Enterprise & Regulatory Reform, PPS (Lord Malloch Brown, Minister of State), Foreign & Commonwealth Office

I am sorry that I have not been able to make the speech that I wanted to make this afternoon. Unfortunately, acceleration of business on the Floor of the House meant that I had to deal with matters there, and I have come back here to find that this business is also collapsing. Unfortunately, it has been one of those days. I shall not try to make my speech under the auspices of an intervention, Mr. Bercow, but I hope that I may be given a moment to raise one point in relation to what the Minister has just said. I congratulate him on his appointment. As someone from his intake, I am pleased to see him up there.

What the Quartet says and what it does, and what the British Government say and what they do, seem to be very different. The discrepancy between the Government's stated policy and action on the ground is profound. I had the opportunity to spend five days on the west bank about six weeks ago. Some of the issues that were dealt with in the earlier part of the debate, when I was here—the separation barrier, checkpoints, settlements, settler roads, controls on access, annexation of east Jerusalem, and what is happening in the centre of Hebron—are all matters that the Quartet and the British Government have expressed concern about and have said are illegal acts. The difficulty is that all those problems persist and are being accelerated. What are the Government actually going to do rather than say to curtail the Government of Israel in what is, in effect, the destruction of the possibility of a two-state solution by the cantonisation of the west bank?

Photo of Shahid Malik Shahid Malik Parliamentary Under-Secretary, Department for International Development

I thank my hon. Friend for that intervention. He is right to raise that issue, and I shall deal with some aspects of it in my speech. He is right to say that ultimately it is actions, not words, that will give confidence and hope, but it is through dialogue with all the parties that we get the action that he wants and that I am sure everybody in this Chamber wants as well.

Photo of Louise Ellman Louise Ellman Labour, Liverpool, Riverside

I would like to add my congratulations to my hon. Friend on his position. Does he agree that, although the points made by my hon. Friend Mr. Slaughter are relevant, the solution lies in the resumption of negotiations on the peace process? Does he also agree that it is totally unbalanced to blame Israel alone for the breakdown of a negotiated peace?

Photo of Shahid Malik Shahid Malik Parliamentary Under-Secretary, Department for International Development

My hon. Friend is correct. It takes all sides to work together to make peace, and although we can argue about which element has the greater share of blame, ultimately all sides must have some discomfort if we are to achieve peace in the region—Lord knows there is enough discomfort there at the moment.

John Barrett was right to raise the potential of a failed state, as he termed it. He also spoke about the temporary international mechanism, which was mentioned by other hon. Members. The TIM will continue until the end of September, and President Abbas has welcomed that. It will play an essential role in delivering aid to Palestinians in the west bank and in Gaza. The UK and the EU are currently exploring other ways of providing support directly to the Palestinian Authority.

It is right to say that leadership is critical and that moving the situation forward requires people who are willing to take risks and show leadership. In any crisis such as this there are opportunities, and it is up to people to grasp those opportunities. The hon. Member for Edinburgh, West was, probably not for the first time, right in much of what he said. The UK Government must provide an even-handed approach to all sides of the conflict and ensure that all sides adhere to their international obligations.

I think that the right hon. Member for Gordon spoke about engaging with the national unity Government. This Government did engage with those elements of the national unity Government that were prepared to accept the Quartet principles. That might not be exactly what the right hon. Gentleman was looking for, but it would be unfair to say that there was not engagement with the national unity Government.

My hon. Friend Mrs. Ellman was right to talk about the constitutions and other things that exist on bits of paper. Obviously, people who say that their objective is the destruction of the Jews are despicable, and nobody in this room could possibly want to see that on any bit of paper. This Government will not tolerate anti-Semitism or any other form of discrimination. My hon. Friend was also right to talk about Hamas in the context that she did because it will be a constant reminder about the challenge that Hamas faces if it wants to move forward. I slightly disagree with her about the wall, because I would say that Israel has the right to build any wall that it wishes, if it feels that that would give it extra protection. However, that wall can only be within Israeli territory and cannot be on occupied territory where it patently contravenes international law.

Photo of Andrew Slaughter Andrew Slaughter PPS (Sir Digby Jones, Minister of State), Department for Business, Enterprise & Regulatory Reform, PPS (Lord Malloch Brown, Minister of State), Foreign & Commonwealth Office

It is the Government's stated position that in so far as the wall trespasses on to the west bank, it is illegal. Would the Minister go further than that and recognise that the principal purpose of the wall is to allow the expansion of illegal Israeli settlements on the west bank and as part of that process to incorporate Palestinian farmland and Palestinian settlements? Putting Palestinian settlements within the wall would, of course, negate the whole security argument. On that basis, will the Minister make it clear that the Government's position is that the wall should be withdrawn to the green line and on to Israeli territory?

Photo of Shahid Malik Shahid Malik Parliamentary Under-Secretary, Department for International Development

I shall deal with some of that in my closing speech, but I will say that the Government's position is actually quite clear.

Photo of John Bercow John Bercow Conservative, Buckingham

Order. I apologise for interrupting the Minister, but for the avoidance of doubt, this is his closing speech.

Photo of Shahid Malik Shahid Malik Parliamentary Under-Secretary, Department for International Development

Sorry. Let me rephrase my point: at the moment I am dealing with responses to hon. Members and the prepared text is en route. Unfortunately, some of my remarks may be repeated, but it is better that they are repeated than omitted. The position of the Government is clear: we consider the future for the region to be a two-state solution based on the pre-1967 borders. That has not shifted for a number of years, since the previous Prime Minister gave the commitment in 2001. Thank you, Mr. Bercow, for reminding me that this is indeed the closing speech and that I do not get two bites of this particular cherry.

My hon. Friend Ann McKechin gave a moving insight into the reality of life in the occupied Palestinian territories. Her description of Gaza as being literally a rubbish tip was very powerful, and I say to her that that is an indictment on all of us. We all need to do so much more to eradicate the poverty and hardship that are the reality for people who live in Gaza and the west bank. She spoke with much common sense, which is not unusual for her. Sadly, that seems to be a commodity that is, on occasions, in short supply in this part of the world.

The difficulties of everyday life under occupation were highlighted extremely well by my hon. Friend and she is right to speak about support for the Palestinian private sector. Let us be clear: there can be no viable Palestine without a diverse economy, and the private sector will play a crucial role in that. She was right to say that small steps will be important as we move forward.

Lynne Featherstone was right to stress the importance of the democratic process that took place. Her analysis of the success of Hamas and of the issues around corruption, frustration and protest was spot on. She also raised the issue of the Rafah crossing. I think that I have dealt with that already. The Foreign Secretary will in the next few days ring his Egyptian counterpart to try to bring some relief to a situation that clearly ought not to exist.

Photo of Richard Burden Richard Burden Labour, Birmingham, Northfield

I am very much enjoying my hon. Friend's closing speech. He has mentioned the Rafah crossing on two occasions and I am pleased that the Foreign Secretary will raise that with his Egyptian counterpart. Given that the closure of the Rafah crossing is an action not of the Egyptian Government but of the Israeli Government, will he also raise it with the Israeli Government?

Photo of Shahid Malik Shahid Malik Parliamentary Under-Secretary, Department for International Development

As ever, my hon. Friend raises a pertinent point. I am sure that he will have noticed that I am not yet the Foreign Secretary.

Photo of Richard Burden Richard Burden Labour, Birmingham, Northfield

Perhaps the Minister can pass on the message.

Photo of Shahid Malik Shahid Malik Parliamentary Under-Secretary, Department for International Development

Given that some of the Foreign Secretary's team are here today, I am quite sure that that important message will be conveyed.

The hon. Member for Hornsey and Wood Green was right to talk about the desperation that can push people to extremism, but I must say also that nothing can ever justify violence. I am not suggesting for a second that that is what she was saying, but it is an important statement that we cannot make often enough. It must be our job in part to try to eradicate the hardship that leads to such desperation and vulnerable people engaging in extremism and ultimately violence.

After the Good Friday agreement, I had the privilege to be appointed by the late Secretary of State for Northern Ireland as a commissioner for the Equality Commission for Northern Ireland. Those three years taught me that peace and prosperity go hand in hand, which is why it is correct that we are having this debate at this time, given the new reality that potentially exists in that part of the world.

Last but by no means least, I shall turn to Mark Simmonds. In my prepared text, I hope that I shall deal with many of his points. His reputation precedes him—and I do not mean that negatively. I was told to expect machine gun questions, but it was not as bad as I had expected. Maybe he was being kind and gentle because this is my first time speaking for the Government. Everybody in DFID welcomes the Committee's stance on the number of DFID Ministers. Personally, of course, I have much for which to be grateful. With my inclusion, we have doubled the capacity of the ministerial team—although I am not so sure that we have doubled the intellectual capacity. There is a new political reality, but the truth is that we do not really know what that holds. We know that there is a real opportunity to get things moving in a way in which, over the past year and a half or so, we have been unable to do for a host of reasons. That in itself will generate much discussion.

The hon. Gentleman asked a question about the involvement of Arab states. I think that it would be in everybody's interests to attempt to revive the 2002 Beirut declaration. I know that he and his party support that position. That potentially gives us an opportunity to begin some of that incredibly important work. The International Committee of the Red Cross has a well-established programme in the Gaza strip and the £1 million that has been signalled has already gone to those in the Gaza strip who will benefit.

There is now a significant opportunity to look at budgeting. Since June 2006, in addition to that £1 million, another £15 million of bilateral Government aid has gone in via the TIM to support front-line Palestinian health services, allowances for Government workers and the operation, maintenance and repair of water, sanitation and electricity services. In April, an additional £15.6 million went to the United Nations Relief and Works Agency, which has helped to provide essential services such as health, education and housing to 4.1 million Palestinian refugees in the west bank, Gaza, Lebanon, Jordan and Syria. Some 70 per cent. of the population of the Gaza strip are refugees who will benefit directly from that assistance.

On DFID's objectives, the country assistance plan has not been changed. We are supporting and looking constantly to further peace and humanitarian assistance, but better aid remains critical to poverty reduction for Palestinians. DFID continues to support Lieutenant-General Dayton, the US security co-ordinator, in his efforts to improve movement across the Karni crossing.

Let me belatedly congratulate the International Development Committee on its report. It was an excellent read, or at least the summary of the summary was an excellent read. On a serious note, it was an excellent read. I congratulate it also on securing this really important debate at a crucial time. I welcome its work on this important issue and am pleased to say that the Government agree with many of its conclusions.

I would like to take the opportunity to join hon. Members in welcoming the release of Alan Johnston. I extend our best wishes to his family, friends, work colleagues and loved ones. It is welcome news from a part of the world where, sadly, good news is rather scarce. I acknowledge the role played by President Abbas and, indeed, Ismail Haniya and Hamas.

I thank hon. Members for their kind remarks on my new appointment. I shall speak from the heart: by and large, I think that all parliamentarians, and especially members of the International Development Committee, get involved in politics because they want to, and believe that they can, change the world. I am so privileged and utterly humbled to be playing a small role in a Department whose mission is nothing less.

This is a deeply troubling time for the occupied Palestinian territories. The political uncertainty, economic decline and worsening insecurity of the last year culminated in June, in the violent takeover of Gaza by Hamas, which has had serious political and humanitarian consequences. The majority of people want a peaceful two-state solution. I believe that even those who seem less keen on one must realise in their hearts of hearts that it is the only show in town.

I want to make it clear that violence—especially the violence that we have seen recently—is completely unacceptable; summary executions, attacks on hospitals, the abuse of captives and so on have no role to play in the occupied Palestinian territories or indeed anywhere else.

Along with my Government colleagues, I want to express my full support for President Abbas and his emergency Government headed by Prime Minister Fayyad. The priority for us now is to help in the best way we can. The former Secretary of State for International Development, who is now my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs, spoke to Prime Minister Fayyad to explore how we can do that. We fully support the conclusions of EU Foreign Ministers on the need to develop the conditions necessary for urgent practical and financial assistance.

We must ensure that help reaches the 1.3 million people of Gaza. In that context, the Israeli decision to allow humanitarian access is most welcome. Since 15 June, more than 130 truckloads of basic food and humanitarian supplies have got through. That will help, but for Gazans to start rebuilding their lives, they need more than the very basics. They need to be able to buy fruit and vegetables, fresh milk and baby formula. For Gaza's people to have money in their pockets, the economy needs to function. That means not only importing but exporting goods. We are pressing Israel to ensure full humanitarian access to Gaza and to allow trade as soon as possible.

What about the future? In many ways, the destiny of Hamas is in its own hands. We continue to call on Hamas to adhere to the Quartet principles: committing to non-violence, recognition of the state of Israel and acceptance of previous agreements. Ultimately, all parties must surely realise that sustainable peace can be attained only through dialogue that helps to create a common understanding. Bullets, bombs, killings and mayhem are exactly what ordinary people on all sides wish would cease.

Despite the current crisis in the occupied Palestinian territories, we must not forget the underlying problems that have prevented peace with Israel. Blame for the violence in Gaza lies with those who have chosen to pursue their aims through violence, but as we know too well, the responsibility for bringing a resolution to the Israeli-Palestinian conflict is spread much more widely.

For Israelis, the consequence of militant Palestinian violence is a life marred by fear. Last year, 23 Israelis were killed by the violence both inside and outside the occupied territories. In the past six years, 3,500 rockets have fallen on the Israeli town of Sderot—I hope that I pronounced that correctly—causing 10 deaths. Many people in Israel feel under attack. The threat is reinforced by the failure of Hamas to meet international principles, and its violence in Gaza has merely exacerbated the situation.

In 2006, 661 Palestinians died as a result of Israeli military action. In the same period, the Palestinian economy contracted by about 10 per cent. One of the main causes was Israel's decision not to pass on the VAT and customs revenues that it collects for Palestinians—about $55 million a month. That starved the Palestinian Authority of more than half their revenue, leaving them unable to pay their workers, on whom one quarter of Palestinians depend for their family's livelihood. Businesses suffered because the Palestinian Authority simply could not pay bills. This week, Israel made its first payment in 15 months, of $120 million, to the emergency Palestinian Government. We call on Israel to release the remaining funds as soon as possible.

Withheld revenue has been the immediate cause of Palestinian economic decline, but the longer-term cause is Israeli security restrictions on movement. The average west bank Palestinian has been unable to visit friends or family in Gaza since 2000. Almost 550 roadblocks and checkpoints in the west bank limit the movement of goods and people from one town to another. That makes trade impossible: the cost of transporting a container from Gaza to the west bank is as much as that of moving it from the west bank to China. That has huge consequences for the economic, cultural and social fabric of Palestinian life.

Israel's security concerns are legitimate and must be addressed, but the presence of almost 500,000 Israeli settlers throughout the occupied west bank, including East Jerusalem, means that the security restrictions affect the whole west bank economy. The barrier winds its way around settlements, placing 10 per cent. of west bank land inside Israel, as has been said. Roads reserved for settlers make transport between cities for Palestinians in the west bank virtually impossible. Many colleagues have had the misfortune to witness that at first-hand; mercifully, we do not have to witness it every day.

One challenge for the international community is to show the Palestinian people that we have not forgotten them—we have not. We are providing support through the EU's temporary international mechanism. Built on initial work by the UK, that has helped 150,000 Palestinian families—about 1 million people. It has ensured that health and education services have continued and it has provided fuel to ensure that power is provided to medical facilities, water and sewerage plants serving 1.3 million people.

Photo of Andrew Slaughter Andrew Slaughter PPS (Sir Digby Jones, Minister of State), Department for Business, Enterprise & Regulatory Reform, PPS (Lord Malloch Brown, Minister of State), Foreign & Commonwealth Office

The Minister has been generous with his time. He said that he hoped that the Palestinian people thought that the British Government had not forgotten them. I fear that people probably do think that the British Government have forgotten them. The statistics that he has given perhaps reveal that. I am thinking of the inequality of arms, quite literally, and the power that the Government of Israel have in relation to the Palestinian Authority.

The Minister gave the figure of 10 per cent. Is he aware that the World Bank report published in May said that access to 50 per cent. of the west bank was restricted for Palestinians, and is he aware that the Secretary of State for Children, Schools and Families made a speech a few weeks ago, when he was still the Economic Secretary to the Treasury, in which he said that Palestinian gross domestic product was only 7 per cent. of Israel's and the average Palestinian income was only 6 per cent. of that of an Israeli? Are the Government not falling into the trap, in trying to be balanced, of not being balanced at all? They are giving equal weight to the Government of Israel and the Palestinian Authority in these matters, whereas in fact almost all the infringements that prevent the economic and political operation of a Palestinian state are as a result of the actions of the Government of Israel.

Photo of Shahid Malik Shahid Malik Parliamentary Under-Secretary, Department for International Development

I thank my hon. Friend for that intervention. He makes a criticism that I think many people will genuinely make. Sometimes it may be unhelpful to get into the issue of quantum. I accept fully that any objective person can consider the situation that I am painting as I speak and make their own analysis of it and draw their own inference from it. That is what my hon. Friend is doing. I was aware that the former Economic Secretary made those remarks; I happened to be present at the time and they are quite stark remarks, which should make us all face the reality of what is going on in Israel and the occupied Palestinian territories and should fuel us to do even more to try to bring lasting peace and solve a problem that simply will not go away.

The 40th anniversary of the occupation is almost upon us. I can understand fully why people who are suffering in that part of the world believe that they are being neglected, but I can assure my hon. Friend Mr. Slaughter that the Government do not believe that we could ever neglect the issue of the middle east. With regard to conflicts that need to be settled around the world, my personal perspective is that this one is probably No. 1. We need to understand that we live in an interdependent world. If we can get some hope in the middle east and bring some kind of just resolution for all parties concerned, that will take out much of the anguish and anxiety that we see, which affects not only the middle east but all parts of the world.

DFID and other European donors have so far given £188 million through the TIM, which shows that the international community can make a real difference when it works together. The Select Committee's report makes a timely and valuable contribution. As usual, it has listened carefully to the evidence and provided considered advice. We agree that working outside the Palestinian Authority has added to the risk of its institutions failing. Following the appointment of the new Government of Prime Minister Fayyad we, along with the rest of the EU, are urgently looking at ways of working directly with them.

Ultimately, development for the Palestinian people depends on there being an end to the conflict. As the report notes,

"there is a fundamental relationship between Palestinian economic viability and Israeli security. The benefits from the achievement of both would be mutual."

A two-state solution—a viable state of Palestine alongside the state of Israel with both being secure and respected within recognised borders—remains the only way for Israelis to live in peace and for Palestinians to live in dignity and to prosper. That solution must remain our aim, but it increasingly looks to be at risk. Although people broadly agree on what it will take, despair and disillusion is evident on all sides. Our challenge is to restore hope that peace is possible.

Photo of John Barrett John Barrett Shadow Minister, Scotland, Shadow Minister, International Development

The biggest problem in relation to a two-state solution is the violation of the property rights of the Palestinians in the west bank. To have lost one's land and then be told, "Let's discuss potential compensation," is similar to how it would be for the Minister if someone took his house from him, against his will, and then said, "Let's discuss a price." Does he agree that the settlements on the west bank are a major problem?

Photo of Shahid Malik Shahid Malik Parliamentary Under-Secretary, Department for International Development

I thank the hon. Member for—his constituency escapes me for a split-second, but only for a split-second, I promise—Edinburgh, West, of course. It is better to check than to get it wrong. For the record, that comment was not aimed at anybody. The hon. Gentleman is right: the settlements are completely unacceptable. The Government's position is, as I have already stated, for pre-1967 borders to be observed. I hope that that gives him some comfort regarding where we are coming from.

Photo of Shahid Malik Shahid Malik Parliamentary Under-Secretary, Department for International Development

I shall continue to be generous, as it is my first outing.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

I apologise that I was not here for the first part of the debate, as I had a constituency engagement. I congratulate the Minister on his appointment. I am interested in his last point. Is he saying—I hope that he is—that the Government's position is that the settlements on the west bank must be removed as part of a peace process, rather than yet more Palestinian land having to be given up in return for a potential settlement in the future?

Photo of Shahid Malik Shahid Malik Parliamentary Under-Secretary, Department for International Development

I am not going into the detail today, but am speaking about the principle. The detail will be negotiated and discussed between the parties who are directly involved. I am making a basic point about our position. We want to see a viable Palestinian state, on the pre-1967 borders, side by side with a secure, safe and confident Israeli state.

My hon. Friend Jeremy Corbyn has helped me to move to my next point. Ultimately, only the Israelis and Palestinians can make peace. The Palestinian leadership must work hard to resolve the current situation. It must restore calm, it must open internal dialogue and it must demonstrate that it is capable of providing a competent Administration.

Israel must also play its part. As a first step, it must urgently release the remaining Palestinian revenues and provide adequate access into and out of Gaza. It should then ease movement and access restrictions in the west bank, and take a hard look at its policies on settlements, which are contrary to international law and threaten the viability of an agreed two-state solution. Actions from both Governments are needed. The current crisis might suggest that peace is further away than ever, but they could also choose to see it as an opportunity. For the sake of both ordinary Palestinians and Israelis, it is an opportunity that they must not fail to grasp.

I end by sharing an anecdote with the Chamber, which is about being positive. There is a lot of negativity around this subject, for obvious reasons. I was there as part of a delegation back in 1993. You are probably thinking that I was too young to be there, Mr. Bercow, or perhaps you are not, but I was there none the less. It was day seven, and the Oslo peace accord had just been announced. When one is there when something like that is happening, one thinks, "Is this really happening? Is it momentous, is it big, is it small?" At the time we relied on the seven o'clock news or the nine o'clock news to tell us what was going on in the world, or I certainly did, so when one is there and something like that happens, one thinks that it is too much of a coincidence.

It was day seven. We had visited a number of Israeli organisations in Jerusalem and elsewhere, and we were in the Gaza strip in the unofficial headquarters of the Palestine Liberation Organisation. At the time, Arafat et al were in Tunis and the delegates were in New York. We were with the PLO official who was the most senior in Gaza at the time, unofficially, when a camera crew came bursting in and a journalist thrust a mike in his face and said, "This peace—people are saying that it's nothing and that the PLO have sold out. What do you say to that charge?" The PLO leader composed himself and said, "You are right; it is nothing, but the Palestinian people have never even been offered nothing before. We are going to take this nothing and we are going to build something with it." If they can be as positive now as they were then, and God knows they need to be, we can make some progress. The tunnel is long and dark, but if we intend to get through it, we need to focus on the light at the other end.

Photo of Malcolm Bruce Malcolm Bruce Chair, International Development Committee, Chair, International Development Committee 5:16 pm, 5th July 2007

I do not intend to delay the House any longer, but I want to thank all those who have taken part in this good, useful and timely debate. I thank also the Minister for his courteous and detailed responses, with which—I hope that he takes this in the spirit in which it is meant—he has acknowledged that we are in an uncertain situation that has changed even since the report. I do not criticise him for being unable to answer fully some of the questions that were asked, but I hope that he will consider the debate and write to hon. Members, or the Committee, if he feels that he can share additional information with us. Important points have been raised, and we would like to hear about how the TIM is going to progress, what it will mean in practical terms on the ground and how matters in Gaza will be dealt with in this difficult situation. I hope that he can update us on those points.

I have a few more quick points. The point that Jeremy Corbyn made in his intervention is very relevant here. It has to be taken on board, bluntly and squarely, that the situation with the settlements on the west bank is impossible if there is to be a solution. I want to quote from the evidence that David Shearer, the head of the UN Office for the Co-ordination of Humanitarian Affairs in Occupied Palestinian Territories, gave to the Committee. When talking about the road blocks on the west bank, he pointed out:

"Pretty much all of those blocks lie on the roads that lead to settlements—90-something per cent. of them. In other words, if a road is running to a settlement it is usually blocked for Palestinian traffic."

The lesson from that is simple: the reason why the Palestinians cannot move around the west bank is because the Israelis are protecting illegal settlements, which, if they were not there, would not require the restrictions that the Palestinians face. That is a fundamental, irrevocable fact. If Israel is not forced to acknowledge and respond to it, there will be no peace and there will be no point in aid and development, because there will be no viable Palestinian economy.

Photo of John Bercow John Bercow Conservative, Buckingham

Order. I must emphasise that I have tried to be indulgent to the hon. Gentleman, not least because of the circumstances that took him away from Westminster Hall, but this intervention must be substantially briefer.

Photo of Andrew Slaughter Andrew Slaughter PPS (Sir Digby Jones, Minister of State), Department for Business, Enterprise & Regulatory Reform, PPS (Lord Malloch Brown, Minister of State), Foreign & Commonwealth Office

I am most grateful, Mr. Bercow, and I shall make a short point. Does the right hon. Gentleman accept that the position on settlements is worse than he was saying, because, alongside the active construction of settlements, which I saw at first hand, the demolition of thousands of Palestinian homes is taking place on Palestinian land?

Photo of Malcolm Bruce Malcolm Bruce Chair, International Development Committee, Chair, International Development Committee

The hon. Gentleman says "water". That is a very serious issue. The construction of the security fence on Israeli territory is perfectly legitimate, but the way that it wiggles around and wanders across the west bank is divisive and obstructive, and it makes normal life impossible.

I agree with Richard Burden that we should try to give support through and with President Abbas, but we should do so with a clear understanding that he does not speak for all the Palestinian people and that he is not the sole representative. His Prime Minister Fayyad, who is a very respected man internationally and an able economist, stood in the elections and his party got 2.5 per cent. of the vote. He does not have democratic legitimacy. We must therefore acknowledge that we cannot assume that by dealing with President Abbas, giving him the money, working directly with him and pretending that Hamas does not exist, we have somehow solved the problem. We may have got the Government that we want, but it was not the one the Palestinians elected.

Photo of Louise Ellman Louise Ellman Labour, Liverpool, Riverside

Does the right hon. Gentleman accept that if, as we hope, negotiations start, but the response to them is as before, whereby Palestinians from whichever party launch suicide attacks on Israeli civilians, that would have a negative impact on the chances of peace?

Photo of Malcolm Bruce Malcolm Bruce Chair, International Development Committee, Chair, International Development Committee

Of course it would. The fact that that activity has reduced involves a more complex analysis than simply discussing the building of the security fence. The hon. Lady should take that point on board. As a counter to her point, I should say that Israel might think that the way to deal with Gaza is to mount a military invasion and to reoccupy it, but that would not to add to an atmosphere of peace and reconciliation.

I believe that our Committee has put into the public domain some relevant facts. They are still valid and still represent the fundamental basis of the problem. I hope that the Government, with their new Ministers and format, and indeed with our former Prime Minister involved, will take stock and reconsider some of their position. They should try to find a way of unblocking some of the rigidities of their position, so that we do not just ask for movement from Hamas. There needs to be movement from the Quartet that shows good will on both sides. That might move us forward. We have an obligation to give the poor people of Palestine a chance to develop. They have the will and ability to do so, but they do not have the chance .

Question put and agreed to.

Adjourned accordingly at twenty-one minutes past Five o'clock.