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That is not good enough, however. We must consider whether the rule of law—technically applied to mean
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that, when one has evidence, one brings a prosecution against those deemed responsible—should always prevail or whether there can be circumstances, albeit rare, when that is not proper. It has already been said that, for many years, when deciding whether to bring a prosecution, it has been necessary to ask not only whether there is sufficient evidence but whether the public interest justifies it. In the debate in another place, my noble Friend Lord Mayhew, a former Attorney-General, referred to an occasion in Northern Ireland when he was involved in a decision not to go ahead with a prosecution because of the wider public interest.

We must bear it in mind that, when we talk about our commitment to the rule of law, it is not an end in itself. It is simply a crucial method of trying to achieve a decent and just society, in which people’s rights are recognised and justice can be applied. It is not an end in itself. If there is a wider public interest, there is nothing improper about taking that into account.

The decision is not easy. It would be much more difficult to justify what has happened on the occasion that we are considering if an individual citizen’s rights had been impeded. If, for example, someone is locked up for 90 days without trial, that is not easy to justify, even if there is a wider national interest, because a person’s liberty has been removed. If someone is murdered or assaulted and, despite the availability of evidence, a prosecution is not initiated because of some wider public interest, that is disturbing because the decision impedes someone’s rights.

That is not the position that we are considering, however. Rightly or wrongly, the issue at stake is not the individual’s rights but those of society. No one disputes—indeed, the hon. Member for Twickenham agreed—that if there are legitimate issues of national security, it is right and proper for them occasionally to prevail over a decision to take a prosecution forward. The hon. Gentleman is nodding in agreement with my interpretation of his views. The question that must be addressed is: were there legitimate reasons of national security that justified the decision in this case? The honest answer is that none of us in the Chamber knows, as we are not privy to the most important intelligence information available. The Serious Fraud Office did not know. I suspect that the Attorney-General may not have known, except at second or third hand. The person who has the ultimate responsibility is the Prime Minister.

From my experience as Defence Secretary and Foreign Secretary, when I had access to intelligence information and had to deal with Saudi Arabia over the course of five years, I can say two things. First, I have no doubt that the kind of co-operation that Saudi Arabia is giving to the United Kingdom with regard to counter-terrorism measures is of enormous importance in enabling us to succeed in our objectives of dealing with terrorism. Secondly, I can comment on whether the Saudis were serious in their threats that that co-operation would cease if the inquiry continued.

Several hon. Members have said that it is absurd to argue that the Saudis would have discontinued their co-operation when their own regime is threatened by al-Qaeda. That is logically correct, but I was once told that logic was the art of going wrong with confidence, and I believe that that applies on this occasion. Anyone who understands the regime in force in Saudi Arabia
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knows that one is not dealing with a single head of state—like the Shah of Iran in his heyday—but with a royal family, a clan, who are intensely jealous of their privileges and determined to ensure that there will be no, as they would see it, unacceptable investigation of how they go about their lives.

From my experience with the Saudis, I have no doubt that they would almost certainly have carried out the threat, even if they were cutting off their nose to spite their face. That was the dilemma that the Government faced. The judgment was a difficult one, and the Prime Minister—who, I assume, ultimately gave the advice that had to be taken on board by the Attorney-General and the SFO—was right on this occasion.

Martin Horwood: The right hon. and learned Gentleman describes the investigation as perhaps unacceptable to the Saudi royal family. Would it have been unacceptable to him?

Sir Malcolm Rifkind: I have no personal reason to wish to see such an examination continue. My interest and, I should imagine, that of all hon. Members, is our national security, and whether that would have been impeded by a loss of Saudi co-operation on one of the most crucial threats to the well-being of this country. If the evidence available to the Prime Minister indicated that that would have been so—I see no reason to doubt that evidence in such a case—the proper conclusion was reached.

Simon Hughes: Does the right hon. and learned Gentleman accept that the constitutional principle on which we have all worked, which was set out by Hartley Shawcross when he was Attorney-General, is that Prime Ministers, and other Ministers, are entitled and indeed invited to make representations, but Law Officers ultimately have a separate decision to make and are entitled to come to a different view of what the public interest is?

Sir Malcolm Rifkind: I understand what the hon. Gentleman is saying, but I do not agree with the thrust of his remarks, because it is well accepted that one of the factors that Law Officers must take into account is the national interest. The greatest national interest of all is national security, and the member of the Government who has overall responsibility for national security is the Prime Minister. In practice, it is difficult if not impossible for an Attorney-General to say, “I disagree with the Prime Minister as to the national security requirements of this country.” He does not have such expertise, nor should he be expected to have it.

Simon Hughes rose—

Sir Malcolm Rifkind: I am conscious of the limited time, and I hope that I will be forgiven for not giving way again.

On this occasion, I accept the Prime Minister’s judgment. However, we should not need to have this debate. We should have a society in which the view of the Prime Minister and the Law Officers on such issues is automatically accepted. It is one of the legacies of Iraq, the decisions taken at that time and the whole atmosphere created by the judgments and misjudgments made that even when the Prime Minister and Law Officers assure
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the House that national security would have been threatened, many hon. Members find it almost impossible to accept their good faith. That is perhaps the real tragedy of the issue that we are discussing today.

3.39 pm

Martin Horwood (Cheltenham) (LD): I am conscious of the time, so I shall try to be brief.

This is a vital debate. The Government argued quite aggressively that there was a national interest in the case being dropped, and even that such a decision was compatible with the OECD convention on combating bribery of foreign public officials in international business transactions. Those are highly debatable points, and I am inclined to agree with the hon. Member for Kingswood (Roger Berry) in disputing them, but mine is a different argument. My argument is that there were simple and vital reasons to continue the investigation, and that they were not considered.

On 24 January, I questioned the Secretary of State for International Development. In answering, he revealed—astonishingly—that he had not been consulted by the Attorney-General over the dropping of the BAE Systems case. He rather disingenuously suggested that that was because the only material conversation was taking place between the Attorney-General and the Serious Fraud Office, but of course that was not the case. The Attorney-General sought the advice of the Foreign Secretary and the Secretary of State for Defence, and also the views of the Prime Minister. In fact, the Prime Minister was extremely generous with his views: the answer to a question from my hon. Friend the Member for Richmond Park (Susan Kramer) revealed that he had “updated” advice in September 2006 and again in December 2006. He had given his views on three occasions.

The one Minister who was not consulted was the very Minister who was charged with pursuing Government policy on corruption and bribery in international corporate deals. Let me, for a moment, praise Government policy, because Government policy on bribery and corruption in this particular respect is very good on paper. Let me give the House chapter and verse. On 26 October, the Secretary of State for International Development set out the reasons for the anti-corruption plan very eloquently. He said:

He said:

He said:

In other words, there is a virtue in prosecuting bribery cases even when it is otherwise inconvenient to do so. They should be pursued, and there is a national interest in pursuing them.

Let us examine the detail of the United Kingdom action plan to combat international corruption. It states that we should

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That document—there is quite a paper trail here—talks of

That is rather difficult to do. It is rather difficult to demonstrate the consequences of bribery if the consequence is nothing when a case is dropped. Of course, we cannot and would not want to assert that there was definitely bribery in the precise case involving BAE Systems that was investigated by the Serious Fraud Office, but that cannot be demonstrated because the case was not seen through to its end.

The second paragraph of the action plan talks of strengthening

According to the relevant document, enterprises should


What better way to demonstrate transparency than by seeing such investigations through to their logical conclusion? We would all hope that, in the case of BAE Systems, its innocence would be demonstrated.

The OECD document goes on to explain why this is so important. It says:

If the hon. Member for Beaconsfield (Mr. Grieve) is looking for an economic argument for continuing investigations of this kind, that is it.

Mr. Grieve: The hon. Gentleman makes an important point, but another point concerns the definition of what constitutes corruption. There is an argument that we badly need a new corruption Act, and that point has been made on many occasions, but unless or until we have a new corruption Act we are left with the existing legislation. As I have said, given the scope of the existing legislation I am left with the impression that the OECD is likely to have some difficulty in concluding that what was taking place in relation to Saudi Arabia constituted an offence.

Martin Horwood: I think the hon. Gentleman is stepping on the SFO’s territory here. I do not think that was actually the reason why the case was dropped. What I have said about the impact on overseas development and the overall economic welfare of our relations with many other nations begins to illustrate the scale of the damage done by the Government’s actions in this case. Not only have we damaged the well deserved reputation of British companies for transparency and honesty, not only have we appeared to kowtow before an undemocratic monarchy with an abysmal human rights record, not only have we damaged our own credibility in the OECD to the detriment of other negotiations within that
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organisation, and not only have we damaged the credibility of the SFO by putting it under exactly the kind of political pressure that is expressly forbidden by article 5 of the OECD convention, but we have damaged the very work that DFID Ministers, staff and partners around the world have laboured tirelessly to deliver.

The Solicitor-General: The hon. Gentleman is making some interesting points, and they are points that we had to consider in relation to the decision made by the director of the SFO and the view taken of that by the Law Officers. We had to consider the impact that there might be on our international reputation and the burden we faced in seeking to pursue allegations—which is what they were—of corruption, as against what was on the other side of the scales, which was the legal requirement to consider the public interest and the national security of this country. I assure the hon. Gentleman that the issues he mentions were considered, but he is setting out only one side of the case in regard to them, whereas the problem was that there were other issues on the other side of the scales.

Martin Horwood: I am grateful for that reply, but I do not see any evidence that the issues were truly considered. The Minister responsible for pursuing the anti-corruption action plan was not even consulted, as he has clarified to the House. Therefore how on earth can the Government have considered fully the implications of that side of the public interest argument? That Minister has made the case powerfully in Parliament that, by seeming to hold back on the prosecution of bribery and corruption cases ourselves, we give permission to other companies and other countries to take a softer line too.

The arguments made by the Attorney-General in another place appear to be inhabiting an Alice in Wonderland world where people can contradict themselves within seconds. At one point he said that UK-Saudi security relations were an important factor, and he then said, in relation to obeying the OECD convention that prohibits taking into account relations with other states, that we did not do so—he used a phrase similar to that. I am amazed that anyone can contradict themselves within seconds in that way and expect no one to notice. Luckily, 130 campaign groups and charities around the world did notice, from India’s Public Interest Research Centre to the Jordan Transparency Forum to our own branches of Amnesty International, Oxfam, Friends of the Earth and Transparency International. They all called on the UK Government to abide by their own policies and to reopen the investigation. The Liberal Democrats noticed, too, as have Members of all parties who share our concerns.

There might have been a national interest consideration that weighed in favour of dropping the case, but there was also a considerable and vital national and international interest in continuing it and, shamefully, I do not think that that was even considered.

3.48 pm

Simon Hughes (North Southwark and Bermondsey) (LD): The decision to call this debate has proved worth while. The hon. Member for Beaconsfield (Mr. Grieve) rightly confirmed that the subjects it addresses are worth debating. I will seek to deal with comments
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made by colleagues in the course of the debate and with other matters that my hon. Friend the Member for Twickenham (Dr. Cable) was criticised for not dealing with, but which he did not deal with because we have adopted a double-handed approach with one Member opening and another winding up so we shared out the work between us.

I want to try to establish the reason why we say that the matter under discussion is of important public interest for various reasons. As has been agreed, the matter dates back to a contract first entered into in the mid-1980s. It was a significant contract that turned out to be worth a significant amount of money. My hon. Friend the Member for Twickenham made the case that whether it is in the long-term interests of this country that that deal between BAE Systems and the Saudi authorities was entered into, and then continued as it has been since, was controversial at the time and, like the decisions taken recently, can only be viewed in the round. Of course a contract for jobs in this country in an industry in which we have expertise involving a large employer with a good reputation is potentially beneficial—of course a contract with an ally, whatever its failings, is potentially beneficial. However, from the beginning there was independent evidence—the Bank of England is as good a witness to call as any—that this was not an unqualified bonus: that it was not thought to be an unarguably beneficial contract. At the end of this exercise, only time will tell and only full information being revealed will show us whether the national interest has, on balance, been served by the contract, which began back in the 1980s.

Nobody on the Liberal Democrat Benches has ever argued that—where we can do so legitimately and properly, at home or abroad—we should not seek work and contracts for British companies. It is not part of our case that we should not have a defence industry, and we have argued in support of strengthening our conventional defence, not weakening it. Nobody has argued that we should not have dealings with other countries. Our argument is about how matters have progressed, what the public know and whether, in the end, those involved have stayed on the right side of the law.

It was not Liberal Democrats who—to use the Solicitor-General’s phrase—started a campaign of innuendo. Allegations surfaced back in the 1980s, which is why the National Audit Office, as the watchdog of public finance, held an inquiry on Parliament’s behalf and brought its report to the Public Accounts Committee. Yes, it was a long time ago, and I accept that it is a decision for Parliament, not the Government, as to whether an NAO report is published. However, it is important to publish the report because, although it may or may not tell us something about the early history of these dealings, this is the only time in the NAO’s history that such a report has not been published. The current Chairman of the Public Accounts Committee said in an intervention that he, having been briefed, believes that nothing suggested that there was corruption or that offences were committed by the Ministry of Defence. If so, that is all the more reason why the report should be released.

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