Al-Yamamah Arms Agreement

Part of Opposition Day — [5th allotted day] – in the House of Commons at 3:39 pm on 7 February 2007.

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Photo of Martin Horwood Martin Horwood Shadow Minister (Environment, Food and Rural Affairs) 3:39, 7 February 2007

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 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 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".—[ Hansard, 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.

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

"Fully implement the new OECD 'action statement' on export credits".

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

"Informing exporters and, where appropriate, applicants, requesting support about the legal consequences of bribery in international business transactions".

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

"the UK's implementation of the OECD Guidelines for Multinational Enterprises."

According to the relevant document, enterprises should

"Enhance the transparency of their"

—companies'—

"activities in the fight against bribery and extortion."

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:

"Bribery and corruption are not only damaging to democratic institutes and the governance of corporations, but they also impede efforts to reduce poverty. In particular, the diversion of funds through corrupt practices undermines attempts by citizens to achieve higher levels of economic, social and environmental welfare. Enterprises have an important role to play in combating these practices."

If Mr. Grieve is looking for an economic argument for continuing investigations of this kind, that is it.