A major criminal investigation into alleged corruption by the arms company BAE Systems and its executives was stopped in its tracks yesterday when the prime minister claimed it would endanger Britain's security if the inquiry was allowed to continue.
The remarkable intervention was announced by the attorney general, Lord Goldsmith, who took the decision to end the Serious Fraud Office inquiry into alleged bribes paid by the company to Saudi officials, after consulting cabinet colleagues.
In recent weeks, BAE and the Saudi embassy had frantically lobbied the government for the long-running investigation to be discontinued, with the company insisting it was poised to lose another lucrative Saudi contract if it was allowed to go on. This came at a time when the SFO appeared to have made a significant breakthrough, with investigators on the brink of accessing key Swiss bank accounts.
However, Lord Goldsmith consulted the prime minister, the defence secretary, foreign secretary, and the intelligence services, and they decided that "the wider public interest" "outweighed the need to maintain the rule of law". Mr Blair said it would be bad for Britain's security if the SFO was allowed to go ahead, according to the statement made in the Lords by Lord Goldsmith. The statement did not elaborate on the nature of the threat.
BAE claimed that it was about to lose out on a third phase of the Al-Yamamah deal, in which the Saudis would buy 72 Typhoon aircraft in a deal worth £6bn. The Saudis had also hinted that they would do a deal with the French instead if the inquiry pushed ahead. A 10-day ultimatum was reportedly issued by the Saudis earlier this month.
The national interest, as defined by New Labour, involves not embarrassing Britain's state-supported arms industry, the Saudi government, and by implication, the British government. With investigators "on the brink" of a crucial discovery, what could Blair possibly be up to his neck in for him to publicly intervene against the "rule of law"?