The latest Israel-Palestine peace talks were doomed to fail before they began

If you want the bottom line about why William Hague and other dignitaries are in Israel for sham talks about peace, look at the bottom line.

It’s a long way to go for a game of charades. William Hague is in Israel today to support US secretary of state John Kerry’s bid to re-start Israeli-Palestinian peace negotiations. With the peace process stalled since the last serious talks in 2008, Kerry is said to be "obsessed" with finding a way to solve the conflict.

But it won’t happen – not any time soon, and not with the current set of leaders in charge. There will be talks about talks, and there may even be talks. But you can bet your bottom shekel they will lead precisely where every other round of negotiations has led, from Madrid to Oslo to Camp David to Annapolis – down a dead end of continued occupation and war.

This isn’t because, as some claim, the Israel-Palestine conflict is some mind-bendingly complex problem with no ready solution. In fact, there is already a detailed plan on offer, supported by the US, the UN, the EU, the Arab League, and Israeli-Palestinian civil society, to create two states for two peoples, based on the 1967 lines with minor “land swaps”, and with Jerusalem as a shared capital.

And polls of Israelis and Palestinians show that a majority of both peoples continue to support it.

Israel’s hard-line prime minister Benjamin Netanyahu has paid lip-service to the two-state solution. But look at the small print, and it’s clear he is unprepared to make the concessions necessary to bring it about. Netanyahu refuses to consider dividing Jerusalem or to base the border on the 1967 lines – which is like negotiating a divorce settlement on the understanding that one side will keep the family home, the life savings, and the kids.

Other members of Netanyahu’s ruling coalition are more honest: “Two states for two peoples is not the government’s official position,” one bluntly said in a Knesset debate on Tuesday.

The Palestinians, meanwhile, have long made clear they support the main points of the two-state plan. We now know that, even on the most sensitive issue – the fate of refugees displaced by the conflict – they have shown they are ready to compromise by accepting that only a “symbolic” number will be allowed to resettle in Israel.

But the Palestinians’ lack of bargaining power leaves them with no way of putting pressure on an Israeli government that rejects the global consensus. And what’s more, with the Palestinian Authority kept afloat by taxes collected on its behalf by Israel, and on aid from the US and other foreign donors (which accounts for a third of its annual budget), it has no choice but to toe the line, paying lip service to a peace process that offers no hope of peace.

And that, ultimately, is the reason why both sides will engage in this US-sponsored dumb show in the full knowledge it will fail. The Palestinians must negotiate in “good faith” –  providing cover for the continued growth of Israeli settlements – because doing so is the only way to keep the money flowing. And Israel must go through the rigmarole of pretending to seek a deal because, with government budget cuts looming, it needs the $3 billion aid (plus extras) it receives each year from the US, and the international legitimacy even a fraudulent peace process provides.

If you want the bottom line about why these sham talks are taking place, look at the bottom line. Each side has too much invested in the status quo to tell Hague and the other visiting dignataries the truth: that the current “peace process” is no more than a PR process. The conflict will drag on, with no imminent end in sight. After all, why wage peace when war makes for such good business?

John Kerry and William Hague. Photograph: Getty Images

Matt Hill has written on the Middle East for the Daily Telegraph and the Independent. You can follow him on Twitter @mattrowlandhill.

Photo: Getty Images
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There are risks as well as opportunities ahead for George Osborne

The Chancellor is in a tight spot, but expect his political wiles to be on full display, says Spencer Thompson.

The most significant fiscal event of this parliament will take place in late November, when the Chancellor presents the spending review setting out his plans for funding government departments over the next four years. This week, across Whitehall and up and down the country, ministers, lobbyists, advocacy groups and town halls are busily finalising their pitches ahead of Friday’s deadline for submissions to the review

It is difficult to overstate the challenge faced by the Chancellor. Under his current spending forecast and planned protections for the NHS, schools, defence and international aid spending, other areas of government will need to be cut by 16.4 per cent in real terms between 2015/16 and 2019/20. Focusing on services spending outside of protected areas, the cumulative cut will reach 26.5 per cent. Despite this, the Chancellor nonetheless has significant room for manoeuvre.

Firstly, under plans unveiled at the budget, the government intends to expand capital investment significantly in both 2018-19 and 2019-20. Over the last parliament capital spending was cut by around a quarter, but between now and 2019-20 it will grow by almost 20 per cent. How this growth in spending should be distributed across departments and between investment projects should be at the heart of the spending review.

In a paper published on Monday, we highlighted three urgent priorities for any additional capital spending: re-balancing transport investment away from London and the greater South East towards the North of England, a £2bn per year boost in public spending on housebuilding, and £1bn of extra investment per year in energy efficiency improvements for fuel-poor households.

Secondly, despite the tough fiscal environment, the Chancellor has the scope to fund a range of areas of policy in dire need of extra resources. These include social care, where rising costs at a time of falling resources are set to generate a severe funding squeeze for local government, 16-19 education, where many 6th-form and FE colleges are at risk of great financial difficulty, and funding a guaranteed paid job for young people in long-term unemployment. Our paper suggests a range of options for how to put these and other areas of policy on a sustainable funding footing.

There is a political angle to this as well. The Conservatives are keen to be seen as a party representing all working people, as shown by the "blue-collar Conservatism" agenda. In addition, the spending review offers the Conservative party the opportunity to return to ‘Compassionate Conservatism’ as a going concern.  If they are truly serious about being seen in this light, this should be reflected in a social investment agenda pursued through the spending review that promotes employment and secures a future for public services outside the NHS and schools.

This will come at a cost, however. In our paper, we show how the Chancellor could fund our package of proposed policies without increasing the pain on other areas of government, while remaining consistent with the government’s fiscal rules that require him to reach a surplus on overall government borrowing by 2019-20. We do not agree that the Government needs to reach a surplus in that year. But given this target wont be scrapped ahead of the spending review, we suggest that he should target a slightly lower surplus in 2019/20 of £7bn, with the deficit the year before being £2bn higher. In addition, we propose several revenue-raising measures in line with recent government tax policy that together would unlock an additional £5bn of resource for government departments.

Make no mistake, this will be a tough settlement for government departments and for public services. But the Chancellor does have a range of options open as he plans the upcoming spending review. Expect his reputation as a highly political Chancellor to be on full display.

Spencer Thompson is economic analyst at IPPR