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BAE staff celebrate dropped probe BAE staff celebrate dropped probe
(20 minutes later)
BAE Systems workers are celebrating after a corruption probe into a defence deal with Saudi Arabia was dropped.BAE Systems workers are celebrating after a corruption probe into a defence deal with Saudi Arabia was dropped.
The Serious Fraud Office withdrew its investigation into a £6bn defence deal with Saudi Arabia after warning it could damage national security.The Serious Fraud Office withdrew its investigation into a £6bn defence deal with Saudi Arabia after warning it could damage national security.
There had been reports Saudi Arabia was considering pulling out of a deal to buy 72 Eurofighter jets from BAE.There had been reports Saudi Arabia was considering pulling out of a deal to buy 72 Eurofighter jets from BAE.
But Liberal Democrat MP Norman Lamb,described the decision as "outrageous and disgraceful".
Labour MP Lyndsay Hoyle said BAE workers welcomed the news because they feared that jobs would have been lost.Labour MP Lyndsay Hoyle said BAE workers welcomed the news because they feared that jobs would have been lost.
"Tens of thousands of jobs were put at risk by a 1980s issue," he said."Tens of thousands of jobs were put at risk by a 1980s issue," he said.
Most of its BAE's Air Systems Business Group, which is largely based on military aircraft, is located at Warton, Preston.Most of its BAE's Air Systems Business Group, which is largely based on military aircraft, is located at Warton, Preston.
Mr Hoyle, many of whose Lancashire constituents work for BAE, added that the investigation had been going on for too long and that there remained no evidence of wrongdoing.Mr Hoyle, many of whose Lancashire constituents work for BAE, added that the investigation had been going on for too long and that there remained no evidence of wrongdoing.
Attorney General Lord Goldsmith said the SFO was "discontinuing" its investigation into BAE, Britain's biggest defence company.Attorney General Lord Goldsmith said the SFO was "discontinuing" its investigation into BAE, Britain's biggest defence company.
Lord Goldsmith said he thought that a prosecution "could not be brought".Lord Goldsmith said he thought that a prosecution "could not be brought".
He said the decision had been made in the wider public interest, which had to be balanced against the rule of law.He said the decision had been made in the wider public interest, which had to be balanced against the rule of law.
No weight has been given to commercial interests or to the national economic interest Serious Fraud Office statement What makes Eurofighter fly?No weight has been given to commercial interests or to the national economic interest Serious Fraud Office statement What makes Eurofighter fly?
Lord Goldsmith also told peers that Prime Minister Tony Blair had agreed that the continuation of the investigation would cause "serious damage" to relations between the UK and Saudi Arabia. Lord Goldsmith also told peers Prime Minister Tony Blair had agreed that the continuation of the investigation would cause "serious damage" to relations between the UK and Saudi Arabia.
The probe had related to the Al Yamamah arms deal with Saudi Arabia. BAE has denied any wrongdoing.The probe had related to the Al Yamamah arms deal with Saudi Arabia. BAE has denied any wrongdoing.
Liberal Democrat MP Norman Lamb, chief of staff to party leader Sir Menzies Campbell, described the decision as "outrageous and disgraceful". Mr Lamb, chief of staff to the Lib Dem's party leader Sir Menzies Campbell, criticised the decision.
He said: "Coming straight after a threat from the Saudis to withdraw from future business, this completely undermines the UK's reputation on good governance. "Coming straight after a threat from the Saudis to withdraw from future business, this completely undermines the UK's reputation on good governance.
"How on earth can we lecture the developing world on good governance when we interfere with and block a criminal investigation in this way?"How on earth can we lecture the developing world on good governance when we interfere with and block a criminal investigation in this way?
"I think pressure has been applied. I think it's because the inquiry has been making substantial progress that it's been brought to an end.""I think pressure has been applied. I think it's because the inquiry has been making substantial progress that it's been brought to an end."
Job fearsJob fears
It emerged earlier this month that French and Saudi officials were in talks over a possible alternative deal, which could scupper the BAE sale.It emerged earlier this month that French and Saudi officials were in talks over a possible alternative deal, which could scupper the BAE sale.
The Saudi government was reported to have been angered by the SFO investigation into allegations of a slush fund for members of the country's royal family.The Saudi government was reported to have been angered by the SFO investigation into allegations of a slush fund for members of the country's royal family.
Lord Goldsmith said that both Mr Blair and Defence Secretary Des Browne had argued that carrying on the investigation would harm intelligence and diplomatic co-operation with Saudi Arabia, in turn damaging the UK's national security.Lord Goldsmith said that both Mr Blair and Defence Secretary Des Browne had argued that carrying on the investigation would harm intelligence and diplomatic co-operation with Saudi Arabia, in turn damaging the UK's national security.
No one is going to win any Saudi business until this SFO investigation ends Senior defence executive UK defence firms' fearsNo one is going to win any Saudi business until this SFO investigation ends Senior defence executive UK defence firms' fears
Responding to the announcement, BAE Systems said: "After over two years of what has been a thorough investigation by the SFO, we welcome the statement made today by the Attorney General in the House of Lords."Responding to the announcement, BAE Systems said: "After over two years of what has been a thorough investigation by the SFO, we welcome the statement made today by the Attorney General in the House of Lords."
BBC business editor Robert Peston says that major UK companies - both arms firms and other manufacturers - have voiced fears that they stood to lose other lucrative deals should the probe have continued.BBC business editor Robert Peston says that major UK companies - both arms firms and other manufacturers - have voiced fears that they stood to lose other lucrative deals should the probe have continued.
The SFO said its decision had been taken "following representations that have been made both to the Attorney General and the Director of the SFO concerning the need to safeguard national and international security".The SFO said its decision had been taken "following representations that have been made both to the Attorney General and the Director of the SFO concerning the need to safeguard national and international security".
It added: "No weight has been given to commercial interests or to the national economic interest."It added: "No weight has been given to commercial interests or to the national economic interest."
Saudi contractsSaudi contracts
The Al Yamamah contract with Saudi Arabia is thought to have been worth £40bn to BAE Systems over the past two decades.The Al Yamamah contract with Saudi Arabia is thought to have been worth £40bn to BAE Systems over the past two decades.
Saudi Arabia said in August that it planned to buy 72 Eurofighters to replace its range of Tornado jets, which were also made by BAE.Saudi Arabia said in August that it planned to buy 72 Eurofighters to replace its range of Tornado jets, which were also made by BAE.
Liberal Democrat constitutional affairs spokesman Simon Hughes said: "From the moment investigations began, it was clear that they would not be popular in Saudi Arabia.Liberal Democrat constitutional affairs spokesman Simon Hughes said: "From the moment investigations began, it was clear that they would not be popular in Saudi Arabia.
"But to pull the plug halfway through, and when real progress was just being made, is the worst of all possible outcomes."But to pull the plug halfway through, and when real progress was just being made, is the worst of all possible outcomes.
"It is not in the interests of a successful British defence industry, of British exports, or of British diplomatic interests around the world that we cannot now show that our legal system is above undue influence or improper pressure.""It is not in the interests of a successful British defence industry, of British exports, or of British diplomatic interests around the world that we cannot now show that our legal system is above undue influence or improper pressure."
But Shadow Defence Secretary Liam Fox said: "We made it clear that because of the commercial issues involved we wanted the SFO to make a rapid decision about whether to continue their inquiry or whether to bring it to an end.But Shadow Defence Secretary Liam Fox said: "We made it clear that because of the commercial issues involved we wanted the SFO to make a rapid decision about whether to continue their inquiry or whether to bring it to an end.
"Having decided there is no case to answer, it will be welcomed by all those concerned.""Having decided there is no case to answer, it will be welcomed by all those concerned."