To ask Her Majesty’s Government what progress has been made in the past 12 months on the proposal to set up an international nuclear fuel bank controlled by the International Atomic Energy Agency.

My Lords, the EU has announced up to €25 million of support towards a nuclear fuel bank under International Atomic Energy Agency (IAEA) control, as proposed by the US-based nuclear threat initiative. In addition, details of the UK-led “nuclear fuel assurance”, formerly known as an enrichment bond, are being finalised.

My Lords, while it is obviously very welcome that the European Union should have recognised the huge priority that needs to be given to this whole process during the nuclear renaissance and to contribute to the non-proliferation of nuclear weapons, can the noble Lord go a little further and tell us which of the several different proposals on the table is now the front runner? Does the UK still prefer what he called the nuclear fuel assurance proposal, formerly the enrichment bond, and, if so, what are its prospects of success?

My Lords, 12 proposals have been put forward. My understanding is that a number of those proposals will fall to be considered by the IAEA over the next few months and certainly, we hope, by the end of the year. I endorse the noble Lord’s comments about the urgency of this matter. As far as I understand, the UK’s proposal is complementary to the NTI proposal. Clearly, other proposals also have to be considered, but we support the NTI proposal as well as continuing to work on the UK’s proposal.

My Lords, does the Minister agree that the priority must be to reduce the number of these proposals, as the objective being pursued by all those who have put forward proposals is pretty well common? We surely must winnow down these proposals. It is now five years since the Secretary-General of the UN put forward this proposal on the basis of a high-level panel, and the 2010 nuclear proliferation review conference is coming down the track. There is not infinite time for it. His noble friend said in this House last week that he was less pessimistic about the 2010 review conference. This is one of the jewels that will have to be in that crown if it is to be a success.

My Lords, I do not disagree with the noble Lord. It is absolutely right that the 12 proposals now on the table should be considered as quickly as possible and that at the end of the day arrangements are in place under which states that wish to develop nuclear power peacefully are enabled to do so but without the proliferation of enrichment facilities. We are at one with noble Lords in our wish to see this progress. I am hopeful that discussions over the next few months will indeed enable that to take place.

My Lords, does the Minister agree that, in the light of the recent decision by the United States in its agreement with the UAE for the importing of uranium for the purposes of civil nuclear power rather than enrichment by the UAE, we may well be on the way to a new and very exciting set of proposals for dealing with nuclear proliferation? To that, I add the recent American indication that the new Administration would support a fissile material cut-off treaty. Does he agree that these two together—the nuclear fuel bank and the fissile material cut-off treaty—could bring us very close to an answer to the horrors of proliferation and nuclear weapons?

My Lords, I agree with the noble Baroness. I take this opportunity to pay tribute to her for her work with the NTI, because clearly the leadership that is being shown will be very important indeed to preventing the proliferation that she referred to.

My Lords, does the Minister recognise that any storage of nuclear-enriched uranium will pose significant security and diplomatic issues? What thoughts have Her Majesty’s Government on where such a store should be located?

My Lords, on the question of storage, seeking to discourage the development of enrichment facilities so that it is possible for countries that wish to develop nuclear power for energy purposes to import and have the assurance that there will be a continuing supply is a very important part of dealing with this problem. As for storage in this country, the noble Lord will know that the Government have been proactive in encouraging development of potential new storage facilities. Expressions of interest in relation to the storage proposals that have been made are being received at the moment. We are confident that we will come to an effective solution.

My Lords, the idea of a nuclear fuel bank is primarily around non-proliferation. The United Kingdom Government have been an important part of the EU3 in its negotiations with Iran. Has Iran responded positively to the idea, and do the Government intend to take it forward within that context?

Yes, my Lords, we are committed to what is described as the EU3+3 dual track strategy. Iran has a very stark choice; increasingly tough sanctions to persuade the country to change its mind, or dialogue to lead to full negotiations if the Iranians suspend their enrichment-related activities.

My Lords, further to the previous question, as Iran is a member of the nuclear non-proliferation treaty, does that mean that Israel, which is not a member, contributes to this sort of bank?

My Lords, the UK has urged Israel to accede to the nuclear non-proliferation treaty as a non-nuclear weapons state and to sign up to a full scope safeguards agreement with the International Atomic Energy Agency.