asked Her Majesty’s Government:

Whether they will press for further economic and financial sanctions by the United Nations against Iran.

My Lords, we are considering a range of options with the E3+3 partners. That process is still at an early stage, and I am not going to speculate on the outcome. However, we will want to discuss measures that have a wider impact, and Iran is already in effect sanctioning its own economy through its defiance in the face of the international community, which is discouraging international investment.

My Lords, does the Minister agree that the United States appears to be moderating somewhat its policy towards Iran and North Korea? Is he aware that a very senior official of the State Department recently described the agreement on denuclearisation by North Korea as a template for negotiations with Iran, and that he said that a military conflict with Iran was neither desirable nor feasible?

Nevertheless, Iran presents serious problems. Is it not necessary that further steps are taken? I agree with the Minister on that. Will he consider further economic and financial measures?

My Lords, real progress has been made with North Korea, and the regional neighbours have been extremely important in that process; China has obviously played an important role. We need to continue to put that kind of pressure on Iran as well, both in the region and internationally.

As matters stand, under the unanimous United Nations Security Council Resolution 1737, there is the possibility of a considerable extension of sanctions, should that prove necessary. We are not at the end of diplomacy, but the introduction of further sanctions is under active discussion.

My Lords, the Minister will be well aware of the intense pressure within right-wing circles in Washington for tighter and tighter sanctions on Iran, building up into a confrontation where there is finally a military attack. Can he reassure us that Her Majesty’s Government are adopting due caution towards that pressure, with a recognition that the Iranian political system is complex and the current Government would be strengthened by aggressive opposition from the outside, and that we need to do our best to reintegrate Iran into a regional approach to a more stable Middle East?

My Lords, we have been insistent that diplomatic work should continue. Alongside that, we have said that if there was not compliance with United Nations international decisions, there would need to be an increase in the sanctions regime, and the Security Council has agreed with that. We have also been clear on whether this is moving towards some military phase. The Prime Minister said on 6 February that:

“Nobody is preparing for military action and nobody wants military action”.

Those words were not all that far away from what Defense Secretary Robert Gates said in the United States on 2 February, and that broadly is a position I have been able to reassure the House about on a number of occasions.

My Lords, my noble friend will recall that in the 1980s the most effective pressure on the apartheid regime in South Africa was not public sanctions from the United Nations and the European Union but private sanctions, particularly the refusal of the Chase Manhattan Bank to roll over loans for the apartheid regime. Does he think there are parallels here? Is it true that, as reported, the Foreign Office has counselled banks in the United Kingdom and private institutions against further investment in Iran?

My Lords, as I said in my Answer, the private sector is no doubt having a real impact on the Iranian economy. I also said that I did not wish to be drawn into the details of the issues we are discussing with our partners, largely because I want to achieve the same unanimity that was achieved around the Security Council resolution. We have a bit of work to do on that, but unanimity on this is what will cause the breakthrough. If some people feel they can splinter away from that position, the Iranian Government need take no account of any of us.

My Lords, given that unanimity is going to be difficult to achieve in the Security Council, what is the Government’s attitude to another option—pressed on us, I think, by the United States—that we in the European Union should of our own volition apply certain financial sanctions, as the noble Lord has indicated, which the Americans have been applying for a long time? Are the Government examining that?

My Lords, I acknowledge that the sanctions that the United States private sector and Administration have applied show considerable signs of success. I do not accept, however, that there is no or a small prospect of unanimity. I was told that there was unlikely to be unanimity about Resolution 1737; in fact, there was unanimity. The discussions have been going well through the latter part of January and through February, and I believe that we can reach a unanimous position. We will have to take account of the successes others have had when we consider the prospects for particular sanctions.

My Lords, may I ask my noble friend’s advice? I was at the Jeddah Economic Forum in Saudi Arabia last week when this question came up. How would he answer the accusation that we are engaging in double standards in doing everything that we can within the United Nations to stop Iran developing a nuclear capability while doing nothing about Israel's undoubted nuclear capability? Much as many people are against what is happening in Iran, the fact that so many in the region perceive a double standard undermines the position.

My Lords, my noble friend will be aware at first hand that there has been a good deal of discussion with the Government of Israel about the desirability of having a nuclear-free area throughout the Middle East. The existence of nuclear weapons in any part of the Middle East encourages others to consider following that option. But we have a straightforward priority: we do not want to see nuclear proliferation and least of all do we want to see it in regimes that may be undemocratic, unstable or liable to threaten or consider wiping out other nations in their region.