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7 Feb 2007 : Column 875

That is not what we were told in December, but it is what the Attorney-General said on 1 February.

The Solicitor-General: What is the hon. Gentleman implying? Does he seriously imply that the person who made the decision—the director of the Serious Fraud Office—did not make it based on the prosecutor’s criteria of which the hon. Gentleman is well aware? Those criteria include looking at the evidence and at the public interest. It was perfectly right for the director of the SFO, and indeed for Law Officers who looked at the issue subsequently, to take a view in relation to the public interest. That is according to the rule of law. The hon. Gentleman’s innuendo, or assumption, that the procedure was improper is not acceptable.

Mr. Spellar: rose—

Simon Hughes rose—

The Solicitor-General: I shall not give way to the hon. Gentleman again, but I will give way to my right hon. Friend the Member for Warley (Mr. Spellar).

Mr. Spellar: I think that my hon. and learned Friend was slightly unfair to say that the Liberal Democrats do not have to make difficult decisions. In fact, they have to make a very difficult decision: whether to give back the £2.4 million they received from the convicted crook, Michael Brown. It would be interesting to know whether they ever intend to give back that money.

The Solicitor-General: I thank my right hon. Friend for that intervention.

Members of the House have not been kept in the dark about the reasons for the decision. There is no mystery about the main issues in the case. The Attorney-General and I have given full explanations in both Houses, answered questions and corresponded with Members of both Houses.

The key issue is the crucial importance of Saudi Arabia as a partner in the UK’s fight against terrorism. Saudi Arabia is a source of valuable streams of intelligence on al-Qaeda and other terrorist activity that may represent a threat to our citizens in this country and abroad, and to our armed forces. Saudi Arabia also plays a key role in the Government’s efforts to promote peace and stability in the middle east.

If the investigation had gone ahead, the judgment was that there was a real danger that Saudi Arabia would withdraw its co-operation on counter-terrorism. We would be deprived of a key partner in our counter-terrorism strategy and UK lives would be put at risk. The importance of the UK’s relationship with Saudi Arabia in the fight against terrorism is clear to everyone.

I want to deal with some of the ill-informed and mischievous comments made by the hon. Member for Twickenham (Dr. Cable) about the security services and the Secret Intelligence Service. His comments were ill-informed because SIS is clear about the importance of the Saudi counter-terrorist effort to the UK. It would not be possible to replicate the counter-terrorism effort that has been achieved with the Saudis on UK-Saudi aspects of the problem if it were necessary
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to work at one removed, say through the USA, or some other liaison—if that is what Members would prefer.

SIS has made it clear that it shared the concerns about the possible consequences for the public interest of the SFO investigation. SIS considered that there was a risk to the UK’s national security interests from pursuing the al-Yamamah investigation, and had been informed of the threat to curtail operations directly. At no stage did SIS or anyone else who was consulted disagree with the overall assessment that the Saudi threats were real. SIS agreed that, although it did not know for certain that the threat would be carried out, it had to be taken seriously.

Before the SFO decision was taken, the Attorney-General and I discussed the matter with the chief of SIS. His view was that the Saudis might withdraw their co-operation if the SFO investigation continued, and that they might decide to do so at any time. It was estimated that further investigation of the case would take 18 months. That would be 18 months of public pressure on the relationship between our countries, with allegations flying around in the media about the Saudi Government and questions being asked about the dealings of senior members of the Saudi Government—with no guarantee at all of prosecution.

Having been advised of that risk, the director of the SFO concluded that it was not a risk that could properly be run in the public interest and that the investigation should be halted, and he did that according to the law. The Attorney-General agreed with the director’s decision to stop the case, having regard to his own view that the case was unlikely to lead to a successful prosecution in any event. The director of the SFO’s decision was not easy, but it had to be taken. Those who criticise the decision need to ask themselves what they would have done. Would they have risked throwing away our crucial relationship with Saudi Arabia on counter-terrorism co-operation, for the sake of pursuing an uncertain case?

Andrew George: The Solicitor-General still needs to address the plausibility of the claim that the Saudis would withdraw their co-operation. Surely, they need co-operation from all international parties, given the fact they are No. 1 on the al-Qaeda hit list. Al-Qaeda’s primary aim is the elimination of the house of Saud, so does not the Solicitor-General accept that he must explain the plausibility of the claim that the Saudis would not co-operate?

The Solicitor-General: The hon. Gentleman knows the importance of our relationship with Saudi Arabia in with dealing terrorism. Those links have been established at their existing level only in recent years. The amount of information we are receiving is considerable and we want to ensure that it continues at that level. We are all well aware that the Saudis were extremely concerned about the investigation and the way in which certain senior members of their Government— [ Interruption. ] Will the hon. Gentleman stop shouting at me and listen? Perhaps then he will better understand the answer to his question.

Senior members of the Saudi Government were concerned about the nature of allegations from people such as the Liberal Democrats. There were constant innuendos and allegations but little evidence was
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provided. The SFO investigated the matter for a considerable period—about two years—and when the decision was made to discontinue the investigation it did not have sufficient evidence to prosecute. The SFO would have required at least a further 18 months simply to find out whether it was in a position to prosecute, and even then it may not have been able to do so.

The hon. Gentleman and his colleagues seem content, despite their limited knowledge compared to that of the SFO, to decide that there was guilt on almost all sides. That is the politics of innuendo and allegation—the sort of political opportunism that we have come to expect from the Liberal Democrats, but which is being developed at a brand new level today, to judge from the comments of the hon. Member for Twickenham. I have not had the opportunity to watch the hon. Gentleman strut his stuff in that way before; the innuendo and allegations were traipsing from his lips. People were being accused of all sorts of things and he did not provide the evidence to substantiate that. He suggested a number of examples of events that happened. If he had read with care the statements that the Attorney-General and I made, and the view of the director of the Serious Fraud Office, he would have been aware that the examples that he gave were pre-2002, when the new legislation came in. Basing its view on that information alone, the SFO would not have been in a position to put forward the sort of case that it ought to have done.

Dr. Cable: Surely the Solicitor-General is aware that, before 2002, it was still an offence to engage in false accounting and bribery in the United Kingdom and those were among the matters that were being investigated.

The Solicitor-General: There were investigations going on and the SFO was clear that they would have taken another 18 months, and yet the hon. Gentleman stands in the House and seems to hold the view that he can conclude that all sorts of improper things were being done by people who, at least, have a right to expect that a Liberal Democrat would take the view that someone was innocent until proved guilty. But he is prepared to say, in effect, that people were being corrupt. He needs to be able to substantiate that and I have not heard anything from him that does.

Rob Marris: May I take my hon. and learned Friend back to when he referred to the Attorney-General coming to the decision that the investigation was going nowhere? The SFO was investigating under the law that the Government tightened in 2002. Does he share my surprise at the position of the hon. Member for Twickenham (Dr. Cable)? The hon. Gentleman said that British Aerospace openly said, “Yes, we paid, but it was to the Saudi Government. It was all out in the open” and he said that everything in Saudi Arabia is in the public domain. Does that approach not suggest that, after a two and half years, because everything was out in the open and there had been no prosecution brought in this country, and that the investigation was just dragging on and going nowhere?

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The Solicitor-General: The Attorney-General spent not, as the hon. Member for Twickenham put it, a few hours, but several days—I well remember him taking home large bundles of files for considerable periods of time—going through the detail. I spent quite a considerable time looking at the evidence as well, although, I have to confess, not as long as the Attorney-General. He formed the view that it was unlikely for legal as well as other reasons that a prosecution would succeed. It is the case that the director of the Serious Fraud Office thought that there might be some ability to continue investigating and that it might be able to prosecute, but that was likely to take a further 18 months and there were consequences for Britain’s national and international security relationships, which were, in our view, likely to be damaged.

Mr. Ellwood: The Solicitor-General is making the case for security concerns in relation to Saudi Arabia. Were the Serious Fraud Office to continue this investigation, what would be the consequences for the delivery of the 72 Eurofighters?

The Solicitor-General: My hon. Friend the Minister for the Middle East will be able to deal with that when he winds up. That is one of the issues that he may well wish to address. Perhaps I could leave that to him, if the hon. Gentleman will allow me.

The hon. Member for Twickenham mentioned an alleged plea bargain. I am told that the company was never invited to make guilty pleas in relation to this matter. That possibility was, however, considered by the SFO. The Attorney-General did not object to it, but had some doubts about whether it would succeed. In the event that course was not followed, because in the meantime the director of the Serious Fraud Office had decided to stop the case on national security grounds.

I will deal briefly with the next matter, because I am not sure that it is a matter for me at all and I am sure that others will deal with it at greater length. In relation to the report by the Comptroller and Auditor General, it is the case that this is not a matter for the Government. The Chairman of the Public Accounts Committee has made the position clear on a number of occasions. The report is covered by parliamentary privilege and our approach is, of course, to comply with that. The report refers to confidential arrangements between the Governments of the UK and Saudi Arabia. The report has not been published because publication would breach the pledge of confidentiality and would therefore harm our bilateral relationships.

Simon Hughes: The Solicitor-General has raised the issue that the Attorney-General raised last week in the House of Lords. On what date did the director of the Serious Fraud Office contemplate, to use the words of the Attorney-General,

and on what date was the decision taken that that course should not be pursued?

The Solicitor-General: I cannot remember the precise date. It would probably be about the end of the first
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week of December. That is my recollection of when I first heard that possibility floated, but it was no more than that. I would have to check again because I was not directly involved in some of those discussions. Let me write to the hon. Gentleman. In terms of when that course was no longer pursued, the answer is obviously when a decision was made on 14 December not to pursue it. The director of the Serious Fraud Office had indicated his view to us on 13 December. At that point, it was effectively no longer on the table. I am not sure, in a sense, in real terms, that it ever was. It was something that was discussed, but action was never taken on it. I am not aware of any offer that was ever made in relation to a plea bargain. It was merely considered, but the director of the Serious Fraud Office took the view that it should not be pursued.

Mention has been made of the Organisation for Economic Co-operation and Development anti-bribery convention. Let me make this clear: the Government remain entirely supportive of the convention. The SFO director and the Attorney-General are firmly of the view that the decision taken in relation to the Saudi case was wholly compatible with article 5 of the convention. We do not believe that the convention does, or was ever intended to, prevent national authorities from taking decisions on the basis of fundamental considerations of national and international security and we do not believe that we or any other state would have signed up to the convention on that basis.

Stopping the SFO al-Yamamah case does not mean that we are backing off from our commitment to tackle international corruption. On the contrary, we are clear that we need to redouble our efforts. No company is above the law. The SFO is actively pursuing a number of investigations into suspected international corruption involving BAE systems. I do not prejudge any of those investigations. BAE denies corruption in relation to those matters and it is right that it should be given the benefit of the doubt, as should all defendants. For the information of the House, the countries affected are South Africa, Romania, Tanzania and the Czech Republic. There are also inquiries in Chile and Qatar. The SFO is also engaged in seven other cases involving suspected bribery or corruption overseas, as well as fraud. They include investigations relating to Bosnia, Nigeria, Zambia, Costa Rica and Egypt. Those too are active cases. For example, in the Costa Rica case, relating to PWS reinsurance, on 30 January, the SFO and officers of the newly formed City of London police overseas corruption unit executed warrants at six sites in the UK and arrested four people. The Attorney-General has told the SFO that it should pursue those cases vigorously. The clear message is that no British company or individual is above the law or immune from action in this area.

Mr. MacNeil: Is the situation that, at the beginning of December, plea bargaining was being considered in some shape or form and then a couple of weeks later the investigation was terminated?

The Solicitor-General: When a decision was made, quite properly and in accord with the law, the director of the Serious Fraud Office believed that national security and the public interest required him to discontinue that investigation. Quite properly, there was some discussion in the SFO in relation to the plea bargain consideration, which was merely a contemplation rather than anything
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much more than that. But that was not done—I am told that no plea was offered to the company. If the hon. Gentleman has information to the contrary, he should say so. I am acting on what the SFO tells me: there never was a plea bargain, in effect, on offer. It was not there and so, in a sense, some of this discussion is otiose.

The Government are also taking other action in relation to international corruption. The Secretary of State for International Development is co-ordinating the work. The UK anti-corruption action plan was approved at the end of July 2006. That plan focuses on the critical actions needed to investigate and prosecute bribery overseas, eliminate money laundering, recover stolen assets, promote responsible business conduct in developing countries, and support international efforts to fight corruption.

I conclude by saying that, ultimately, this case comes down to the question of whether the SFO should have continued an investigation that risked the UK’s national security. The director took the right decision to halt the case. Those Members who would have liked the investigation to continue regardless of the risk to lives and security should have the courage to say so. It is now time for them to put up or shut up. For too long, we have had the politics of innuendo—the gently shaking head that says questions must be asked about the integrity of decision-makers. Well, scepticism has its place, but a surfeit of it brings cynicism and political opportunism where the integrity of every decision-maker is constantly in question. I believe that that slippery politics can itself lack integrity. It enables the purveyors to attack decisions and duck defending their own position.

Mr. Beith: On a point of order, Mr. Deputy Speaker. Is it in order to question the integrity of other hon. Members, irrespective of whether it comes from the Government Front Bench or anywhere else?

Mr. Deputy Speaker: I would say to the right hon. Gentleman that the comment was not directed at an individual hon. Member, so I took it more as a general comment than one that should be reproved. [Interruption.] Order. The right hon. Gentleman does, however, give me the opportunity to say that temperate, moderate language has always been the hallmark of our debates.

The Solicitor-General: I am grateful, Mr. Deputy Speaker, and I hope that my comments were temperate. I could think of other things that I would like to say, but I am prohibited by your rightful running of operations in the House from saying them. I did feel that some of the comments made by the hon. Member for Twickenham were not appropriate.

The issues in the case are real and serious. It was undoubtedly a very difficult decision for the director to make and subsequently for the Law Officers to consider. Those in positions of responsibility have an obligation to make decisions that are in accord with the rule of law—and that is what happened. Meanwhile, other cases are being actively pursued and our commitment to tackling international corruption remains as strong as it ever was.

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