Nord Stream 2

Stewart Malcolm McDonald Excerpts

Tuesday 17th July 2018 Westminster Hall

[Stewart Malcolm McDonald (Glasgow South) (SNP)]

I, too, congratulate the hon. Member for The Wrekin (Mark Pritchard) on securing this debate. I can only lament that more Members are not present to take part in it, because it is without doubt important, and the timing should be on all our minds. We sit here on the fourth anniversary of the shooting down of MH17. Four years ago to the day, 298 people were killed, and only last week G7 Ministers said that Russia needs to account for its actions in that murderous affair. In May of this year a Dutch-led investigation concluded that the Government of Russia were, without doubt, responsible for the incident.

In his opening remarks, the hon. Gentleman said that it might seem peculiar that we are having a debate about a pipeline that is many hundreds of miles away, but in the rest of his speech he outlined why it is not peculiar at all. Indeed, the chair of the all-party parliamentary group, the right hon. Member for Maldon (Mr Whittingdale) followed up on that. The debate is an important one for all of Europe and, indeed, for anyone who believes in western democracy and democratic institutions—to which I shall return later.

Earlier this year, just a couple of months ago, I had the pleasure of visiting Ukraine with colleagues from the Scottish National party. We spent time in the capital and in eastern Ukraine, going as far as Avdiivka, much to the horror of the British ambassador in Kiev—I can see the Minister looking at me disapprovingly, but I made it back. Nord Stream 2 came up all the time—in fact, literally from the first meeting we had—with the Deputy Speaker of the Parliament, the Foreign Relations Committee, the British-Ukrainian friendship group, several other Members of Parliament and civil society activists. All of them wanted to talk about Nord Stream 2, very much in the same terms used by the two previous speakers.

The big question is: where will the money go? What will it be used for? What will this instrument of hybrid war be used to do? Yes, of course it will be used to deteriorate further the situation in Ukraine—there is no doubt that it will be used economically and politically against Ukraine—but I believe, as does the Speaker of the Parliament of Ukraine, that the money will be used to further undermine western democracy and democratic institutions across the western world.

It is popular in some quarters to be anti-western, but I think that western democracy is something worth fighting for—[Interruption.] I rather suspect that I am about to be cut off, but I shall keep going until you tell me otherwise, Sir Edward. The Government must have made an assessment of the situation. It cannot simply be the case that they believe that Nord Stream 2 is not really a matter for them. It must be, given the clear and obvious danger that the Government of Russia present.

[Sir Edward Leigh (in the Chair)]

Order. I understand that there will be two Divisions, so we will resume as soon as all the participants in this debate get back to this Chamber after the second Division.

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On resuming—

[Stewart Malcolm McDonald]

Well, that was worth it, Sir Edward. Before we stopped for the Divisions, I was saying that the Government must have taken into account what the money that the Russian Government gain from the Nord Stream project will be used for. The Speaker of the Parliament of Ukraine believes it will be used to finance right-wing groups all across the continent of Europe that seek to undermine democratic institutions, national Governments and Parliaments, and the big international institutions on which we all rely, such as NATO and, of course, the European Union.

I will bring my remarks to a close, because I am conscious that more votes are coming up, but the line that we would like the UK Government to take is very clear. They should oppose the Nord Stream 2 project and be at the front of an international campaign to halt it in its tracks. It was somewhat galling to see the US president at the NATO summit leading on that issue in the way he did. It deeply pains me to say it, but what he had to say was absolutely right. However, given the scenes that followed in Helsinki, it cannot be left to the White House to stop this project in its tracks. I say to the Minister, who is eminently qualified, highly experienced and a former oil trader, no less—I cannot think of a Minister in the Government who is better placed to do what I am asking—to show us some muscle and ensure that this project stops now, before it is too late and we all regret it.

--- Later in debate ---

[The Minister for Europe and the Americas (Sir Alan Duncan)]

I express my gratitude to my hon. Friend the Member for The Wrekin (Mark Pritchard) for securing this debate. I recognise his long-standing commitment to foreign policy and security issues, particularly in this region. I am also very grateful for the very constructive comments made by other hon. Members. I will try to respond to the points.

I start by saying that President Trump’s criticism of Germany’s energy relationship with Russia at the NATO summit drew the world’s attention to the proposed Nord Stream 2 gas pipeline. Hon. Members who have followed the issue will know that the Government have been clear about our own significant concerns, which we have expressed both in public and in private.

From a domestic point of view, and that of sheer national interest, Nord Stream 2 would not particularly affect the flow of gas into our own homes. The UK has a diverse and dependable gas supply. The vast majority comes from our own production and from imports from stable producers such as Norway and Qatar. Only about 1% comes from Russia. If we were faced with an interruption to our current supply, we would not be dependent on Russian gas. In such circumstances, we could increase imports of liquefied natural gas and import from many different alternative producers. So Nord Stream 2 would not have a direct impact on the energy security of our own country, but it could have serious implications for other European countries and for Ukraine in particular. There are also serious, wider, strategic implications around the proposed construction of the pipeline.

Last year, 37% of the European Union’s gas imports originated in Russia and some member states were wholly dependent on Russian supplies, so we recognise that Russia will remain a major player in the European gas market. However, we do not believe that Nord Stream 2 is necessary to meet future European demand for gas.

A number of our European partners have raised concerns about the potential impact on European energy security if 80% of Russian gas supplies were to be concentrated through a single entry point into the EU. The Government share those concerns. At a time when Europe should be diversifying energy supply, Nord Stream 2 risks entrenching dependency on Russian gas in the European energy market for decades to come. It would increase Russia’s ability to use energy as a political tool in a manner that could go to the heart of certain countries’ economic wellbeing.

To counteract that, it is essential that European countries support initiatives that diversify and strengthen the wider European gas market. To that end, we support, for instance, the southern gas corridor that would bring gas from Azerbaijan into the EU. That project offers increased diversity of supply to south-eastern Europe and it would contribute to enhanced energy security across the wider continent.

Proposed amendments to the EU gas directive, which are under discussion, would also help to alleviate the risks associated with Nord Stream 2, as they would require Nord Stream 2 and all other interconnected pipelines between EU member states and third countries to be fully compliant with EU rules. We support efforts to implement those amendments, as they will help to ensure a level playing field and a competitive market for gas in the EU.

As has been mentioned, the potential impact of Nord Stream 2 on Ukraine is a particular concern and has come to dominate the strategic assessment of this proposed project. Ukraine hosts the largest existing transit pipeline for Russian gas, and transit fees made up 2.3% of Ukraine’s GDP last year. If constructed, Nord Stream 2 would divert supplies away from Ukraine, with significant consequences for its economy. Furthermore, Russia has historically used gas as a political tool against Ukraine, for instance causing serious gas disruptions in 2006, 2009 and 2014-15. At one point, Russia threatened to do so again this year. So Ukraine’s energy system would only become more vulnerable if it was replaced by Nord Stream 2 as a transit route.

The current gas transit agreement between Russia and Ukraine expires in December 2019. It is essential that there is a new agreement in place beforehand, to provide long-term certainty for the Ukrainian Government and the Ukrainian people. I welcome Chancellor Merkel’s statements in April that Nord Stream 2 has a political dimension and would not be possible without clarity on the future transit role of Ukraine. I also welcome the EU Commission’s efforts to facilitate gas transit negotiations between Russia and Ukraine.

I take this opportunity to reiterate our long-standing and unwavering commitment to Ukraine. The UK is, and will remain, one of Ukraine’s strongest supporters. We provide political and practical support that strengthens Ukraine’s sovereignty and resilience. Over the next year, we will provide another £35 million in technical and humanitarian support to Ukraine. We will press on with training the Ukrainian armed forces, to strengthen their ability to defend their country. We will help Ukraine to counter Russian disinformation; we will help Ukraine with reforms to its energy market; and we will work closely with the Ukrainian Parliament’s fuel and energy committee.

[Stewart Malcolm McDonald]

Forgive me, Sir Edward; this question is certainly related to the debate, although it may not seem so on the face of it. Can the Minister say whether any of the support that the Government plan to give, now and in future, involves resolving the ludicrous visa situation that exists?

[Sir Alan Duncan]

That is slightly tangential, as the hon. Gentleman admitted in his first sentence. Wherever I go, visas are a serious diplomatic problem. They cause a lot of upset in many countries when people, quite rightly and with reasonable intent, wish to travel here, but find that it is very expensive, it takes a long time and it is sometimes very inefficient.