The Lib Dems call for the publication of the NAO report into the Al Yamamah arms deal and highlight the damage done to British business by the decision to end a probe into the deal.

Vince Cable, Liberal Democrat Deputy Leader

Moving the motion, Dr Cable said: “

‘That this House

• notes the Serious Fraud Office’s (SFO) ongoing investigation into the sale by BAE Systems plc of a military air traffic control system to Tanzania and other arms-related inquiries;
• further notes that the SFO has ceased its investigation into BAE Systems plc and Saudi Arabia;
• calls for an independent inquiry into the reasons for the ending of the SFO investigation of the Saudi Arabian export sales;
• requests that there be laid before this House any papers or reports held by the Comptroller and Auditor General relating to the Al Yamamah arms agreement between Her Majesty’s Government and the Government of the Kingdom of Saudi Arabia that have been prepared for committees of this House but not yet laid before it or published;
• and reaffirms the obligations of the United Kingdom under the Organisation for Economic Co-operation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.’

“I think that this will be a wide-ranging debate on the whole al-Yamamah saga, but that it will focus specifically on the Government’s decision to discontinue the investigation into BAE Systems last month.

“The position of the Liberal Democrat party is that the Government’s decision has done enormous damage, which has undermined the rule of law and Britain’s reputation within the Organisation for Economic Co-operation and Development as a country that applies international law. It has also undermined both our reputation in the developing world -where the Government, through the Chancellor and the Secretary of State for International Development in particular, lecture on corruption- and that of honest, good British companies that are trying to apply the law, whether in relation to financial services or manufacturing. It has also undermined the position of the House because of the anomalous situation in respect of the unpublished Public Accounts Committee report of 15 years ago, which, I understand, no Member present -including you, Mr. Deputy Speaker, and the Chairman of the Committee- has ever read.”

He went on to say: “The report was suppressed in 1992, but it is now clear that the reason had nothing to do with national security, because the whole al-Qaeda operation was not in flow then -indeed, it was on our side. The Chairman of the PAC at the time was Bob Sheldon, who said that the report would have embarrassed the Saudis, but how could that possibly have happened? Everything about commissions and bribery in Saudi Arabia is in the public domain already.

“It appears that Crown Prince Sultan has been one of the main recipients of the funding. He was described on television by his own nephew as the most corrupt Minister in the world. I cannot imagine that the House of Commons Clerks, or the Comptroller and Auditor General, could craft a more damaging phrase.

“The details of the corruption in Saudi Arabia are presented in many publications, but I recommend the one by Mr. Sandy Mitchell and his collaborator Bob Hollingsworth. Mr. Mitchell was a Glaswegian medical technician who was arrested and charged with terrorism because the Saudi Interior Minister, Prince Naif, wanted to pretend that al-Qaeda terrorism was committed not by Saudis but by ‘British intelligence and the Jews’.

“That was the opinion of one of Britain’s allies. Mr. Mitchell was detained in prison for three years, brutally tortured and sentenced to be executed?not by the humane method of beheading but by crucifixion. He has, of course, been released, as that sentence was ludicrous even by Saudi Arabian standards of judicial inquiry, but he is a very angry man. He is very angry with the Saudis, but also with the British Government, who dragged their feet repeatedly and made it clear that his plight, and that of his fellow suspects, was far less important that the pursuit of an arms contract in Saudi Arabia.

“If all those facts are known and in the public domain, why are the Government concerned about keeping the report hidden? It may be that it establishes that no criminal offence has been committed: that is what the Chairman of the PAC says, although I think that he has not read the report, but why can it not be shown to us? What is being concealed? That concealment is making the House look utterly foolish. I and my colleagues believe that the report should be published now.”

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Martin Horwood, Liberal Democrat MP for Cheltenham

Mr Horwood said: “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: ‘Bad governance can be caused or made worse by the actions of rich countries and their companies. For every bribe taken, there has to be a bribe giver’.

“He said: ‘we can and must do more.’

“He said: ‘Our new anti-corruption action plan will help us to do that by investigating and prosecuting bribery cases’. -[ Official Report, 26 October 2006; Vol. 450, c. 1739.]

“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.”

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Simon Hughes, Liberal Democrat Shadow Attorney General

Simon Hughes said: “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 countryin 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.”

He concluded: “We on the Liberal Democrat Benches are clear what we should have and what we as a country would benefit from: a change in the decision not to publish the NAO report; an inquiry into the events leading up to the decision to discontinue the investigation into the BAE and Saudi Arabian arms deals; a tough new corruption Act that will give us much more effective tools for dealing with corruption at home and abroad; a change in the constitutional relationship between Law Officers, the Government and Parliament; and a restoration of the principle that the national interest of the UK is to defend, uphold and promote the rule of law above everything, so that we have a reputation for integrity at home and abroad. In the words of my noble Friend Lord Garden last week, ‘is it not time to think again where the national interest lies? The national interest is to promote the rule of law and re-establish the United Kingdom’s international reputation.’ [ Official Report, House of Lords, 1 February 2007; Vol. 689, c. 364.]

“That is why we tabled the motion and I hope that colleagues on both sides of the House will support us.”

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Vote on the Liberal Democrat motion

The House divided: Yes 74, No 309

The Lib Dems supported the motion

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The government motion was agreed without a vote.