You are here: Publications and Records > Lords Publications > Lords Hansard > Daily Hansard
Previous Section Back to Table of Contents Lords Hansard Home Page

In order for us to follow up, for example, the commitments to African countries that the Secretary of State for International Development is making and the fact that obviously the OECD is tackling difficult countries where there is now corruption—but the UK cannot now be quoted as a good example—it is necessary for us to do two things. First, publicly, we need the fullest-possible explanation to defend the British Aerospace decision. It is not for me to argue what is national interest or national security. But I think that the statement made so far by the Attorney-General asks many more questions than it answers. It surely should be a duty for us, who basically understand what the Prime Minister and the Attorney-General have to do, to try to obtain a much clearer explanation, which is as wide and as large as possible.

Secondly, and perhaps most importantly, the Government must produce a new corruption Bill. Having produced it, they must find the time to take it through Parliament and then commit real resources to the policy of eradicating international corruption wherever it is manifest, as Transparency International, which has sent some very good papers to many of us, has said. How do we do that? We promote good governance. It is a long and difficult job, but it is infinitely worth while.

12.48 pm

Lord Goodhart: My Lords, I was very impressed by the previous speech made by the noble Lord, Lord Renton of Mount Harry, particularly because Stephen Egerton, to whom he made several references, was my closest friend. I very much regret that he is not alive now because I would have had great interest in talking to him about the subject of this debate. At about 5 pm on 14 December, I was sitting at my desk in the attics of your Lordships’ House when the annunciator told me that the Attorney-General would make a Statement in a few minutes. Ironically, I was here only because I was waiting to go to the Attorney-General’s Christmas party. However, I thought that I should listen to the Statement, and what I heard frankly horrified me. It became apparent that the United Kingdom was submitting to Saudi Arabian blackmail by discontinuing the investigation into the possible bribery of Saudi officials by BAE Systems. Since then it has become apparent to me that that discontinuance was in all probability a breach of Article 5 of the OECD convention. Here I should perhaps declare an interest as a member of the advisory committee of the United Kingdom branch of Transparency International.



1 Feb 2007 : Column 358

Corruption poisons. It is a poison that does immense damage to developing states. Funds which should and could have been available to help people out of poverty are creamed off by their rulers and end up in Swiss bank accounts. The developed countries, particularly the members of the OECD, are working to cut back on corruption. That is why we have the convention, and it is why the United Kingdom became a party to it. That is also why we enacted Part 12 of the Anti-terrorism, Crime and Security Act 2001. So what do we do when the Saudis object to an investigation? We give in and terminate it.

There are some curious aspects of the decision to terminate. The Prime Minister claimed publicly that it was his responsibility. If so, that was unconstitutional. The Prime Minister should never interfere in decisions on prosecutions. The Attorney-General says that the Prime Minister did not take that decision. Under our present constitutional arrangements, as the noble and learned Lord, Lord Mayhew, pointed out, it is the Attorney-General himself as the independent head of the prosecution service who is the right person to take the decision to stop investigations on the grounds of public interest. That is because he must be in a far better position than the head of the Serious Fraud Office to decide that question. But the Attorney-General did not take that decision. He left it to the director of the Serious Fraud Office, the unfortunate Mr Wardle.

Why did we give in? According to the Attorney-General, it was on the grounds of national security. There is a suspicion that the real grounds, in the mind of the Prime Minister if not of the Attorney-General, were to protect the commercial interests of BAE Systems. There is a suspicion that the alleged danger to our security is based on evidence no more reliable than the evidence of Saddam Hussein’s possession of weapons of mass destruction. Those are suspicions—no more than that—but they are not unrealistic suspicions, and if we are to dispel them we need answers to many questions. I shall outline six of them.

First, we want to know what pressure BAE Systems put on the Government to end the investigation. Secondly, what did the Saudis say to BAE Systems or the Government would be the likely consequences of continuing the investigation? Did they make specific references to the removal of co-operation on intelligence? Thirdly, what advice or information did our security services give to the Government, and did that include any form of risk assessment? Fourthly, what advice or information did the ambassador to Riyadh give to the Government or to the SFO? Fifthly, what did the Prime Minister, the Foreign Secretary and the Defence Secretary say to the Attorney-General when they were trying to persuade him to end the investigation? Lastly, what did the Attorney-General say to the head of the SFO, and why did he not take the decision himself?

What has been done has done severe damage to the worldwide battle against corruption and to the international standing of this country. I believe it is important enough to need a thorough and dispassionate inquiry into the circumstances leading to the termination of this investigation. This is more serious than the events which gave rise some 15 years ago to the Arms

1 Feb 2007 : Column 359

to Iraq inquiry. The question is: was there a threat to national security so severe as to justify overriding the rule of law, and to justify breaking the obligations of this country under both our domestic and international law? Or was it the case that the Government were guilty of obstructing the course of justice by blocking further investigations? We need and must have an inquiry into these circumstances.

12.55 pm

Baroness Northover: My Lords, this Government place great emphasis on international development. When they chaired the G8 and held the presidency of the EU, that was their theme. The Make Poverty History campaign reinforced that. At the G8 in Gleneagles, they emphasised not only what the West could do, but what developing countries might do themselves. High on that agenda was tackling corruption. So when DfID published its White Paper last summer, following on from Gleneagles, its overarching theme was good governance, and the Secretary of State for International Development was made the Minister for tackling corruption.

Introducing the DfID White Paper in the Commons last October, Hilary Benn said that,

He was in no doubt that corruption went both ways—the givers as well as the recipients of bribes. Again I quote:

The UK, he pledged, would renew its admittedly poor efforts in tackling this. Yet on 14 December the Attorney-General stated his desire to,

That balance was seemingly struck by abandoning the SFO investigation into BAE Systems. Surely the noble Lord, Lord Skidelsky, is right about the absolute nature of the rule of law. What is the British interest here? Succumbing to foreign pressure? British companies having the reputation for bribery?

The Attorney-General stated that he had consulted the Prime Minister and the Foreign and Defence Secretaries, or was it the other way around? Did the Prime Minister approach him first? But if he felt it was appropriate to consult his political colleagues, did he consult the Minister tasked with fighting international corruption? It seems that he did not. On Tuesday, I had an Answer to my Written Question on that. DfID’s response stated that Hilary Benn’s role,



1 Feb 2007 : Column 360

Hilary Benn said in a reply to my colleague Alistair Carmichael in the Commons on 24 January that:

So do we understand from that that the SFO is to be at arm’s length from politicians on operational matters? What of the other Ministers, even the Prime Minister? The Written Answer to me concludes by saying:

We have heard that one of the public interest considerations related to information on terrorists. If so, and if it was appropriate to consult these Ministers, why was the Home Office not asked, or the Department of Trade and Industry on whether this decision would jeopardise the reputation of the City? Here I note that Hermes, Britain’s biggest pension fund, has said that it threatens the country’s reputation as a leading financial centre and would have a high long-term cost for business and markets. Can the Minister let us know whether he did consult the Department of Trade and Industry, and if so, what advice he received? What did the Foreign Secretary say about precedents? What will happen on Tanzania or South Africa? Might we decide to call off the SFO inquiries there because we suddenly need Tanzania’s or South Africa’s vote at the UN, perhaps on an invasion somewhere because we feel that that is in our national interest, and maybe they are siding with China, tied in with it over trade.

The Saudi ambassador to the UK says that corruption must not be condoned. So is this about preserving BAE? We do not know.

What does the Attorney-General think Hilary Benn should report to the Prime Minister this month on his new area of responsibility? Should he report the concern expressed by the OECD secretary-general about,

The Prime Minister wrote in the foreword to the DfID White Paper that,

Indeed.

said Hilary Benn,

Indeed.

The noble Earl, Lord Sandwich, spoke of double standards. If we are not to assume that this is what we are facing, could the Attorney-General explain to the House how the actions that he took just before Christmas in relation to BAE and Saudi Arabia can possibly square with the apparent sentiments so clearly expressed by his colleagues?



1 Feb 2007 : Column 361
1.01 pm

Lord Stoddart of Swindon: My Lords, I, too, congratulate the noble Baroness, Lady Williams, on bringing this matter before the House today. Like other noble Lords and many other people, I was very worried about the intervention of the Prime Minister into this matter and I tabled a number of Written Questions. Perhaps I may summarise them. I asked:

and what were the precedents. Secondly, I asked:

and, thirdly,

I received the following reply from the Attorney-General:

Because I thought I must have heard wrongly, I looked at the transcript of the Prime Minister’s monthly press conference on 16 January. I fear I shall have to quote extensively from it. It states:

Yet the Attorney-General said that the Prime Minister did not take the decision. It is quite clear from the Prime Minister’s own mouth that he did take the decision. He mentioned the Attorney-General only once in the whole of that questioning. So I have to come to the conclusion that the Prime Minister improperly used his influence and, in doing so, has undermined the good name of this country abroad.

My other point relates to the Shawcross letter. As I understand it, Sir Hartley, who was an Attorney-General in the first post-war Labour Government, devised a list of criteria that he felt should apply to a prosecution. He decreed that political colleagues should be consulted to obtain all the relevant facts, including the effect of any prosecution, successful or not, on public order or morale. He also insisted the decision must not be influenced by political considerations or pressure from colleagues. Clearly he did not believe that political considerations should come into it and, certainly, he would not have believed that his doctrine or his letter should allow a cover-up of commercial and political chicanery. That is what has happened in this case.

I hope the Attorney-General will have another look at the Answer he gave to my very relevant Question, if I may say so, and correct any mistake that he may have made in giving such a reply.

1.09 pm

Lord Garden: My Lords, I remind your Lordships of my participation in the Transparency International project on the prevention of corruption in the official arms trade.

Corruption is corrosive to both society and the individuals engaged in it. It takes two parties to engage in corrupt practices: those who do the bribing and those who modify their actions having received the bribes. Once corrupt practices become accepted at any level of any Government, they are extraordinarily difficult to eliminate. Corruption undermines the relationship between officialdom and the citizen, and is an attack on democracy. Thus, when we claim a role in promoting democratic values around the world, we have a special responsibility to prevent corruption.

When I look at the security aspects that are central to the Attorney-General’s arguments, I have deep concerns. The European Union recognised the real security threat corruption poses when, in the global strategy document of December 2003, the member states, including the United Kingdom, said:



1 Feb 2007 : Column 363

That EU strategy was all about dealing with the threats we face in the years ahead, including terrorism. It was therefore astonishing to me, as it obviously was to other noble Lords who have spoken in this debate, when on 14 December—when, again fortuitously, I was in the Chamber—the noble and learned Lord came to argue the reverse case. He told us that the national interest with respect to security from the terrorist threat outweighed concerns about the rule of law.

Whether or not the allegations against BAE Systems ultimately would have proved well founded, the suspension of the investigation on the grounds of national security interests raises for me deep concerns about our long-term strategy for combating terrorism. There are a number of adverse effects in this case. First, we know that the extreme form of Islamic militancy that has led to al-Qaeda has its roots in Saudi Arabia. One of the methods of gaining support among the wider population is to bring to the notice of the people the claim that the Saudi leadership is corrupt. The way that this investigation has been stopped will reinforce those perceptions, whether they are right or wrong.

Secondly, it is suggested that the Saudi Government have threatened to withdraw intelligence support to help us combat terrorism. If that were the case, would it not in effect mean that they were threatening us with terrorism? That allegation is hardly conducive to good UK-Saudi relations. In any case, many of those close to the intelligence world would argue that Saudi Arabia is a net gainer in terms of intelligence exchanges about terrorist threats. It needs our support in order to meet its very real terrorist problem.

Thirdly, there is the question of the lesson other countries will take from all of this. They can presumably now assume that they can demand from the British Government illegal concessions in totally unrelated areas by squeezing the intelligence flow. Does that not put us at greater risk as well?

Fourthly, around the world corruption will increase, as our example of claiming national security interest is followed by others. That corruption in turn will undermine the development of democracy, lead to more conflict and, in the longer term, rebound on us through terrorism.

I would argue that it cannot be in the national security interest to appear to turn a blind eye to the possibility of corruption. We explored the issue at some length in the debate on the DfID White Paper on 11 January. I asked some questions that were not answered, and I will repeat one of them, which I hope the noble and learned Lord will be able to answer. What now is the position for British companies operating in Saudi Arabia today? Can they confidently bribe with the blessing of the British Government? They need to know what their position is in the light of this decision.

Many in the defence field believe, rightly or wrongly, that it was not primarily a security issue, but a question of the continuation of the lucrative Al Yamamah project. If commercial interests were a factor in the decision, the reaction in the City of London, the

1 Feb 2007 : Column 364

United States and South Africa—and it is spreading further—now indicates that British business may be the loser in the long term rather than the winner. Not only that; think about BAE Systems. Our major aerospace company is left tainted by allegations that have not been resolved. We find ourselves criticised by the OECD, and I do not doubt that when the Global Corruption Index is next published we will find ourselves rather lower in the pecking order.

Next Section Back to Table of Contents Lords Hansard Home Page