Watchdog chief warns Saudi arms probe 'must be re-opened'

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Tony Blair: continuing the investigation would have had a 'devastating' effect on relations with Saudi Arabia

The decision to halt a corruption inquiry into a huge arms deal with Saudi Arabia will do "irreparable damage" to the UK's reputation and must be reversed, the Labour MP who heads an arms export watchdog has said.

Roger Berry, chairman of the Commons Quadripartite Committee, said he believed the Government had broken its own anti-bribery laws by pulling the plug on the Serious Fraud Office's investigation of the multi-million pound contract with BAE systems.

Prime Minister Tony Blair defended the move yesterday, saying allowing it to continue would have had a "devastating" effect on relations with the Gulf kingdom.

The Organisation for Economic Co-operation and Development (OECD) is carrying out an inquiry into whether the decision breached Britain's responsibilities to root out corruption.

Making bribes has been a criminal offence in the UK since 2002 when it signed up to an international anti-bribery convention.

Mr Berry told BBC Radio 4's Today programme: "I think we have got to press for clarification as to whether or not the Government, as I believe is the case, are in breach of their own laws in relation to tackling bribery.

"To sign the OECD convention and then effectively turn a blind eye to it is not the way people expect governments to behave.

"It is going to cause irreparable damage to the UK's reputation as an anti-corruption champion and I think the Government ought to re-open the investigation into this very important case."

Yesterday, the Foreign Office insisted the Secret Intelligence Service, MI6, shared Government concerns about the consequences of continuing the inquiry.

It issued a statement following a report that MI6 chief Sir John Scarlett had refused to sign up to a Government dossier backing that assessment to be presented to the OECD.

The Guardian quoted Whitehall sources as saying MI6 and the Security Service, MI5, possessed no intelligence that the Saudis would end co-operation.

According to the newspaper, the agencies simply warned such a breach would be damaging to British security if it were to occur.

It said Sir John refused to back an early draft of the dossier saying MI6 endorsed Mr Blair's assessment.

The language in the dossier was subsequently altered, the paper said.

The Foreign Office statement did not comment directly on whether the dossier had been changed but said MI6 was satisfied with the final version.

"We are not prepared to go into any detail about intelligence issues but can confirm that SIS, in common with other UK agencies and departments, was consulted in preparing the Government's response to the OECD and was content with the outcome," the spokesman said.

The decision to halt the inquiry was taken amid mounting reports the Saudis were reportedly threatening to take future defence equipment contracts away from the UK because of their anger that their royal family was being dragged into the SFO probe.

At his monthly Downing Street news conference yesterday, Mr Blair said he remained convinced any rift with the Saudis over the SFO investigation would have had serious consequences for the UK.

"I can absolutely assure you that there is no doubt whatever in my mind - and I think in those of any of the people who have looked at this issue - that having proceeded with this, the result would have been devastating for our relationship with an important country with whom we co-operate closely on terrorism, on security, on the Middle East peace process," he said.

"That is leaving aside the thousands of jobs which would have been lost which is not the consideration in this case, but I just point it out."

 

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