The idea that caving to Saudi pressure to halt the SFO's inquiry could be in Britain's national interest is absurd - and disastrous.
The decision to discontinue the Serious Fraud Office investigation into BAE Systems' arms deals with Saudi Arabia was not only a "shabby, shaming day, among the most inglorious" Tony Blair has spent in office, it is also one that leaves Britain less secure.
This arms deal with Saudi Arabia will ensure that Britain remains a target for al-Qaida, is almost certainly bad for British jobs and the economy, lacks transparency and accountability, drives a coach and horses through proposed tougher measures against corruption in international business and undermines UK leadership of an international arms trade treaty. Apart from boosting the coffers of BAE Systems and its shareholders, what does Britain gain from this highly visible, seemingly unquestioning appeasement of one of the most ineffective, corrupt and authoritarian regimes in the Middle East?
There are at least four grounds for disagreeing with the Attorney General's interpretation of the UK public interest in this case.
First, it is in Britain's national interest to promote our international standing as a democratic country that values the rule of law and seeks to promote it elsewhere. This decision not only undermines confidence in UK anti-corruption legislation, but also opens the door for other countries to apply political pressure to prevent criminal investigations that might conflict with foreign policy objectives. Will the Scotland Yard inquiry into the murder of former Russian spy Alexander Litvinenko be the next casualty should Vladimir Putin decide to threaten our access to gas and oil supplies?
And where does this leave Hilary Benn, appointed in June this year as our "ministerial champion" for tackling international corruption with the support of a new taskforce including the City of London and Metropolitan police? This will now be seen as a fruitless exercise and have no credibility with either domestic opinion or other governments.
How different the wheels of justice spin in Germany, for example, where the former junior defence minister, Ludwig-Holger Pfahls, was jailed in August 2005 for two years and three months on bribery and tax evasion charges stemming from a controversial export of 36 armoured vehicles to Saudi Arabia during the 1991 Gulf war.
Second, it is in Britain's national interest to promote restraint in international arms transfers. Indeed, down at the Foreign Office, Margaret Beckett, is supposedly championing an international arms trade treaty to ban arms transfers if they are likely to contribute to human rights violations, fuel conflict or undermine development. As one of the world's leading arms exporters, this was always going to be a difficult trick to pull off. The Saudi arms deal makes it nigh impossible.
The British arms industry has long been heavily dependent on one major deal: the al-Yamamah contract to supply Tornado fighter aircraft to Saudi Arabia, which was secured only after personal lobbying by Margaret Thatcher and after high levels of secrecy and commissions were guaranteed. Al-Yamamah accounted for 62% of all UK military exports from 1997-1999, but by the end of the millennium the deal was coming to a close, increasing pressure on BAE to secure a follow-up order for the Typhoon Eurofighter.
Built by a four-nation consortium, which includes Britain's BAE, the Typhoon was delivered to the RAF a decade later than first planned (hence the change in name from Eurofighter 2000), at a total cost for the UK alone of over £19bn, £12bn more than initially projected. That is about £350 for every adult and child living in the UK, the equivalent of paying £1.1m for every job that the project is said to sustain.
Like several other controversial arms deals agreed in recent years, the export of Typhoons to Saudi Arabia will breach a series of criteria outlined in the 1998 European Code of Conduct on Arms Exports. For example, the code requires consideration of the impact of any export on the preservation of regional security. President George HW Bush's 1991 Middle East Arms Control Initiative also called for a series of proposals designed to "restrain destabilising conventional arms build-ups", since the situation in the Middle East poses "unique dangers". Despite all this, the US and UK have carried on transferring vast quantities of destabilising weapons to the Saudis.
Similarly, the code states that arms exports should be compatible with "the technical and economic capacity of the recipient country, taking into account the desirability that states should achieve their legitimate needs of security and defence with the least diversion for armaments of human and economic resources". Saudi Arabia's weapons purchases over the past 20 years have been among the largest in the world, vastly outweighing domestic technical capability, with much of the equipment being operated or serviced by UK government officials and RAF personnel. In short, Britain is effectively running the Saudi air force.
This leads to my third point that it is in Britain's national interest to balance "UK/Saudi security, intelligence and diplomatic cooperation" in the war on terror with the pursuit of political reform in Saudi Arabia. There is a strong public perception in the Arab world that the ruling Saudi family is corrupt and exists in mutual dependency with the west. This has led not only to increased support for al-Qaida but also to fears of a palace coup. More recently, a steady stream of Saudis have become involved in the insurgency in Iraq, a further indication of the depth of support for radicalism in the Saudi state. Reconciling the tension within Saudi Arabia between an internal radical Islamic stance and an external pro-western policy can only be made more difficult by a further arms deal with the UK government.
Finally, it is also in Britain's national economic interest to remove the costly subsidies that underpin such arms deals. Lord Goldsmith's claim that "no weight has been given to commercial interests or to the national economic interest" carries no credibility whatsoever. Large defence export contracts have helped to ensure BAE's continuing viability, but at a significant cost for Britain. By 2003, for example, £1,015,166,892 of Saudi debt was guaranteed by the UK Export Credit Guarantee Department (ECGD), mostly for military exports. And industry claims that 50,000 UK jobs are at stake are pure fantasy. The Eurofighter consortium's own report (The Industrial and Economic Benefits of the Eurofighter Typhoon, June 2006) states that Eurofighter sales to Saudi Arabia would secure around 11,000 jobs throughout the whole of Europe. Fewer than 5,000 of these jobs would be located in the UK.
Moreover, studies by the MoD's own chief economist have suggested that a halving of military exports from Britain would lead to an increase in the numbers employed, as investments shift to less capital-intensive activities elsewhere in the economy. Because of the level of subsidy offered by the government to defence exporters (up to almost £1bn a year, for an industry that accounts for less than 2% of exports), the exchequer and the wider economy would clearly benefit from a shift in resources.
It is now almost 12 months since then defence minister, John Reid, signed the latest multi-billion-pound arms deal with Saudi Arabia. The deal has profound political and security implications - and the high likelihood that it is being underpinned by publicly-funded subsidies. Yet, with the exception of a few political commentators (such as George Monbiot) and a handful of parliamentary questions from Liberal Democrats, the silence from our guardians of truth and accountability has been deafening.
When the late Robin Cook took over foreign policy in 1997, in the wake of the arms-to-Iraq scandal, the promise was that things would be different. A stronger ethical or moral compass would guide Britain's relations with the rest of the world. Today, such an approach is needed more than ever, not only to enhance Britain's tarnished international reputation as result of an illegal war in Iraq, but also to dampen some of the poisonous thinking at home that led to the London terrorist bombings. An ethical foreign policy would also make Britain more secure. Unfortunately, Britain's ethical foreign policy appears to have been finally buried by the Attorney General's statement in the House of Lords yesterday.
Dr Ian Davis is executive director of the British American Security
Information Council (BASIC). With offices in Washington, DC and London, BASIC provides independent research, analysis, and advocacy on nuclear and WMD non-proliferation, missile defense, the international weapons trade, and global security issues. BASIC acts as a transatlantic bridge for policy makers and opinion formers on these issues, and seeks to promote public awareness of security and arms control in order to foster a more informed debate leading to creative and sustainable solutions.
Ian has a rich background in government, academia, and the non-governmental organization (NGO) sector. He received both his Ph.D. and B.A. in Peace Studies from the University of Bradford, in the United Kingdom. He has made high-level presentations in Washington, D.C. and in Europe on WMD non-proliferation and transatlantic security issues.
His publications include: The Regulation of Arms and Dual-Use Exports: Germany, Sweden and the UK, SIPRI/Oxford University Press (2002); Sailing Into Uncharted Waters? The Proliferation Security Initiative and the Law of the Sea, BASIC Research Report (2004); and Unravelling the Known Unknowns: Why no Weapons of Mass Destruction have been found in Iraq, BASIC Special Report, (2004).
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