“I am going to begin by talking about the current position. At the moment we are in a knife-edge situation. We have the IAEA Board that agreed, a few weeks back, to refer the Iranian case to the UN Security Council. The Americans have been pushing for this for some years and have been thwarted, at least in the short term by the European Union’s efforts to try and negotiate an agreement. I will talk a lot more about that later. But we are at the situation where the IAEA Board has agreed to refer it to the Security Council. The Security Council will consider the case after the IAEA Board next week receives the report from El Baradei, the Secretary General of the IAEA on the current situation.

What does that mean? It means that we have a situation where it is very likely that in the next few weeks the Security Council will consider the situation and will consider action. It is very likely that in the immediate term that will involve some form of discussion around sanctions. We are at the cusp of quite an important point in the diplomatic game that has been played over the last few years. I use that word “game” advisedly.

I want to start by talking about what is at stake here. I think all of you will understand that there are big stakes here, otherwise you wouldn’t be here today. I think that under the current trajectory that we have been witnessing over the last few years, it is quite safe to say that there are two likely outcomes of this scenario. The first is that Iran indeed gains a nuclear weapons capability. I emphasis “capability” - that is not the same as having nuclear weapons. In the long term that means that they will be able to produce fissile materials that they could at some point in the future use to produce nuclear weapons. This will be a negative development for several reasons. The first is that it will undermine the possibilities of peace in the Middle East and will encourage other countries in the Middle East to go down a similar route. It will also have global implications because it will demonstrate that the Nuclear Non-Proliferation Treaty is weakening and is at the point of collapse. It is difficult to over-emphasise that problem at this stage.

We can point the finger of blame at a whole different variety of factors in this game when it comes to the Non-Proliferation Treaty. Last year there were a number of countries, notably the Americans, the Egyptians and, indeed, the Iranians themselves, who obstructed any sort of agreement at the Non-Proliferation Review Conference in May. But if Iran acquires the capability to acquire nuclear weapons at short notice, that will definitely undermine the Non-Proliferation Treaty and any possibility of disarmament and make it very likely that other countries will seek to acquire nuclear weapons.

The other thing to say on the Non-Proliferation Treaty is that the current situation is also arising out of a lack of respect by the existing nuclear weapons states to the Non-Proliferation Treaty. There are obvious aspects to that but the one I want to focus on in particular is the lack of respect or expectation on the part of the Americans and Europeans of the capability of the Atomic Energy Authority themselves to apply safeguards and guarantee that Iran is not able to convert its capability into nuclear weapons. This itself is a challenge to the whole bargain of the Non-Proliferation Treaty, which is that the nuclear weapons states have agreed eventually to get rid of their nuclear weapons and provide nuclear power technology to non-nuclear weapons states in return for the non-nuclear weapons states not developing nuclear weapons. They are not allowing Iran to develop a nuclear power capability because they do not actually, in the end, agree with the Non-Proliferation Treaty – the consequences of it. It is very important to emphasise that. In terms of who is undermining the Non-Proliferation Treaty here the finger of blame points in both directions, potentially.

That’s one scenario. The other scenario is, of course, sanctions leading on to military action. I will go on to the reasons why I think sanctions themselves will inevitably lead to military action but I want to focus firstly on the consequences of military action in the immediate and medium term. Now I have heard from a lot of people that they don’t believe that the Americans are capable of military action because they are too bogged down in Iraq. Let me scotch that immediately, right here and now. The Americans have the capability over the next 24 hours, should they choose to do so, to deliver 20,000 independently targetable missiles on Iran from their aircraft carriers in the Persian Gulf and from their aircraft bases in eleven countries that surround Iran currently. They have Stealth bombers based in Diego Garcia that can reach Iran in a matter of hours and deliver Stealth missiles and they have two carrier groups within the Persian Gulf. This is serious.

The Americans are certainly bogged down when it comes to the Army within Iraq, but the Navy and the Air Force are far from bogged down. Indeed, when you look at the situation in Washington at the moment, where there are big budget debates going on around where the defence budget is allocated, you can quickly see that there is a strong motivation for the air force and the navy to make a strong case that the army shouldn’t have everything.

If they do strike Iran, they will not simply be looking to take out a few targets. The nuclear establishment within Iran is well dispersed so we are talking about many targets and we are also likely to be talking about the targeting of scientists, the actual individuals, not just the actual installations. The reason being that if you take out the installations, that sets back Iran a few months, at best a year or two. If you take out the people, that sets them back a lot longer. So we are looking at likely targets, we might call them collateral damage in the public relations exercise, but they will be quite deliberate, at certain residential areas within Iran.

Now the consequence of the action, quite apart from the obvious destruction and the deaths of thousands of people, perhaps tens of thousands, is that it will pull the Iranian population full solid behind the Government who will then, of course, very quickly regroup and will perhaps, engage in some asymmetric response – using their links with other non-governmental groups such as Hezbollah, or they might try to attack the oil routes through the Straits of Hormuz, which would be extremely difficult to defend despite the overall military superiority of the American forces. Or they may do something else that we are entirely unaware of. The nature of asymmetric warfare is that it is extremely difficult to predict how people will respond but the capability for asymmetric warfare is significant.

The other aspect, of course, is that it will be utterly counter-productive because the very first thing the Iranians will seek to do is to acquire nuclear weapons, at the earliest stage possible and they would probably withdraw from the Non-Proliferation Treaty. They would see this as totally justified in the light of a completely unprovoked and overwhelming military action. So we have the probability, the likelihood, if there is military action, of a long-term military conflict over many years, and perhaps decades. This is a situation that we need to avoid at all costs.

I want to take a step back here before I think sanctions will inevitably lead to military strikes. Firstly I want to have a look at the Iranian position. Now, the Iranian Government claims quite clearly that its nuclear developments are focused entirely on a civil energy capability. The problem, of course, is that such an energy capability is inherently and unavoidably dual use in nature. It is by the very nature of uranium enrichment and reprocessing – if one engages in it - that it is very easy and simple to take it one step further and to use exactly the same technology to develop the fissile material for nuclear weapons purposes as it is to develop low enriched uranium or reprocess the plutonium after the use in the nuclear power reactor. Of course, it is absolutely hypocritical for virtually any country on the planet to say that nuclear power should not be developed by the Iranians because pretty much every developed country is considering at this very moment expanding its own nuclear power programme. In this country we are on the brink of making such a decision and indeed it makes the negotiating position of the Europeans and the Americans very difficult indeed. They cannot say to the Iranians: “You cannot have nuclear power.” This is clearly and obviously a sovereign decision but I would like to indulge you for a minute or two to look into why the Iranians would want to nuclear energy.

It has been said that Iran has the second largest oil and gas reserves on the planet. That is true.

But it is equally true to see that the population in Iran has doubled since the Revolution and energy consumption in Iran has quadrupled and they haven’t finished their industrialisation process so this is a trajectory that will continue for some time yet. There is an enormous hunger for energy in Iran just as there is within India and China. This is one of the great challenges of our society globally today – how we are going to meet this enormous energy consumption over the next few decades. But there are alternatives. The Iranian Government’s plans are to build somewhere between seven and eight nuclear power plants to produce 7/8 megawatts of electricity. There is potential for hydro power alone of 43 megawatts if sufficient investment were sunk into that. There is almost unlimited potential for solar power if enough investment were sunk into solar panels and let’s not forget that a large amount of Iran is desert. There is massive potential for renewables and if we are to engage in a serious conversation I feel that it is important to present the alternatives and not just say: “Thou shalt not have.” There are alternatives and Iran could play a very important role globally in developing and exporting such technologies because the technology prowess of the Iranians is very sophisticated and I think we need to play that.

Let’s look at the motivations for nuclear weapons because, believe you me, if Tony Blair were running the government in Iran he would have developed nuclear weapons decades ago. The Iranians are surrounded, as I said earlier, by American forces in eleven neighbouring countries. The Americans have a policy of regime change when it comes to Iran and, indeed, they have demonstrated a willingness to use military action to achieve such regime change in two neighbouring states very recently.

Let’s compare it with Trident for example, where we are considering replacement of Trident where everyone assumes the decision has already been made. Britain faces no such external threat and no such justification for having a nuclear weapons system and yet we are telling Iran that they cannot. Israel, next door, has nuclear weapons and is, indeed, intent on using some sort of military action if you take their statements at face value, in the very near future against Iran if the Americans do not act before they do. Pakistan has nuclear weapons and there is a clear demonstration that nuclear weapons bring some sort of status within the international community otherwise why else does Britain continue to hold its nuclear weapons.

So there is a motive there, if we look at it from western perspectives. Then if we look at the strength of Iran’s position in this negotiating situation – we often think that Iran is the weaker side in these negotiations but let’s look at the oil and the gas (the second largest reserves on the planet). There is a growing hunger for such energy across the world. The Indians and the Chinese, in particular, are very interested in developing these reserves. If Iran loses its support and connections with Europe it need only face east and immediately there are almost limitless amounts of investment from the Chinese and, indeed, the Indians to develop those oil and gas fields. If we look at what has happened with Iraq and Afghanistan, two neighbouring countries historically hostile to Iran, they have been taken out by the Americans. The Saudi regime has been playing a much more positive and friendly approach to Iran and, I might add, in the face of American criticism for doing so. The Iranian position here is a great deal stronger diplomatically.

And if we look at President Ahmedinejad’s situation, he is very strongly bolstered by the fact that there is almost universal support – forgetting my statements earlier about renewable energy – and no debate within Iran around its rights to nuclear power. And this is not new to Ahmedinejad – Khatemei and, before him, Rafsanjani, was promoting a nuclear programme and, of course, Ahdmedinejad, whatever one says about the nature of the elections, was elected on a radical ticket. He does have some legitimacy behind his position.

Let us look at the American strategy now. We have a situation where, since the Revolution, the Americans have had quite a consistent strategy themselves towards Iran, one simply of isolation. They have been working consistently and throughout the years to try and isolate the Iranian regime across the international community, to work for regime change and to provide assistance to any opposition that would play the game with them. Of course this is counterproductive because the moment Americans support you, you lose legitimacy within your own country. If only the Americans would realise that they might play a more interesting game.

The European strategy has often been seen as a sort of ‘good cop/bad cop’ situation: the Americans threaten in the background and the Europeans negotiate. Let me tear that one down very quickly because the Europeans are only prepared to engage on their own terms. Anything the Iranians say is just not listened to; there is a deaf ear. The Iranians have made it quite clear from the outset and at every point along the route, that they are not prepared to give up their ambitions towards enriching uranium and having a full fuel cycle. The Europeans have not heard that one jot and every proposal that they have come up with has ignored that demand, and indeed any other demand the Iranians have made.

They have been negotiating essentially on the grounds that you get somewhere in negotiations by threatening somebody and then by offering them piecemeal bits in return, and calling that negotiation. That is not negotiation. They have been far more focused, indeed, on repairing the damaged transatlantic relationship post the Iraq war and using this as a way of doing so than they have been in trying to find a solution to the crisis with Iran. That means that their position has been moving steadily closer and closer towards that of America and that was a movement that pre-dated Ahmedinajad’s election. So despite the efforts to blame Ahmedinajad, to some extent quite rightly, for raising the stakes and the heat in this crisis, it is far from Ahmedinajad who has the sole blame in this situation.

I was going to talk about why sanctions are not going to work. Sanctions are not going to work, as they didn’t in the Iraqi case, but for very different reasons. Sanctions will not work because it will be quite clear to the Iranian population that the people who are hurting them are not their own government but the people who are imposing the sanctions. Sanctions will not work because, quite simply – as I said earlier – there are enormous energy markets to the East, people who are seeing the imminent peak oil price about to go into triple figures per barrel; it is going to be extremely expensive and oil is going to turn into a strategic asset. Those countries that have significant reserves are going to be much stronger on the international scene than they have been in the past and the Indians and Chinese, although they may well be prepared to play the game with the Americans up until now, I cannot see them agreeing to significant sanctions, that would harm their own economic progress. Their own economic progress is their number one economic priority. And if they did sanction Iran it would hurt them as much as it would hurt the Iranians themselves. So we are starting to talk about minor targeted sanctions. These do not work in the Iranian case because the leadership d not have personal investments in the west and they do not travel to the west, generally speaking, so the usual sort of targeted sanctions are not appropriate in this sort of situation. If we do see the imposition of sanctions, it will simply be a delay to having to consider what is to be done next and the further we go into conflict and deepening the rift between Iran and the west, the more difficult it will be to open the windows of opportunity that I am going to outline to you now, very quickly.

The first thing is, of course, to switch away form threats to incentives. There are plenty of incentives we could offer to the Iranians, both to the government and to the people themselves. There is a very strong interest among the Iranian population for developing much closer cultural, personal and economic links with the west. They are actually far more pro west -–if you look at the public opinion polls – that the west has an image of Iran. If there is going to be a rapprochement it will come sooner from the Iranians than it will from us so it is up to us to try and change western opinion towards Iran.

We need to develop engagement; we need to have genuine dialogue, cultural exchanges. We, personally, within civil society, have a responsibility here as well as pressuring our own governments to act. We need to inject a certain respect into negotiations rather than the threats we have been using up until now. How do we see Iran? Do we see Iran as a bunch of mad mullahs who are about to use any opportunity possible to get back at the west – images that are totally inappropriate to today’s Iran, or do we see this as an opportunity not as a threat?

We could engage in negotiations and move definitely towards slowing them down in their pursuit of potential nuclear weapons capability. The CIA themselves have estimated that Iran is ten years away even without any sanctions or without any constraints at all, in their development. We have time here. If we have the inspections that the Iranians have already agreed to in principle; if we have a much more positive relationship where the additional protocol and other safeguards agreements are put in, then it will lengthen that time way beyond ten years. We need to be focusing on the reprocessing side, not on enrichment. This is rather technical but reprocessing is a much faster route to nuclear weapons than enrichment and is also not absolutely necessary to the full nuclear power programme. We need to be focusing on that and not on the red line of enrichment that the Iranians have already said they are not prepared to negotiate on.

And we, of course, need to engage ourselves in taking the Non-Proliferation Treaty and our own non-proliferation responsibilities more seriously. Israel, Britain – all these countries – provide a challenge towards the non-proliferation regime and we need to move away from our contribution to undermining non-proliferation.

Just to wrap up, the overall perspective chimes very closely, I think, with the overall perspective of the whole concept of the Ministry for Peace because, in the end – at the big picture level – we can either see the world as an area of threat and challenge and exploitation of resources, or we can see it as opportunity, collaboration and co-operation. Iran provides a very important crucial opportunity for change as well as threat and a problem that we, ourselves, are as complicit in creating as any other actors in this game.”