With permission, Mr. Speaker, I would like to make a statement on developments in the Litvinenko case. This is a situation that the Government have not sought and do not welcome. However, we have no choice but to address it.

The Government believe that Russia is a key international partner for the United Kingdom. We want to work with the Government of Russia and its people in tackling priority international issues such as climate change, Kosovo, Iran, the middle east peace process and Sudan. Russia plays a global role in the battles against terrorism, the proliferation of weapons of mass destruction, illegal migration, drugs and international crime. The cultural exchange between our two countries is extensive. Our bilateral trade relationship is large and growing, including considerable benefits for the City of London. British companies are making a major contribution to the Russian economy. For all those reasons we need a relationship based on trust and mutual respect.

On 28 May, the Russian authorities were presented with a formal request for the extradition to the UK of Andrey Lugovoy so that he might stand trial for the murder of Alexander Litvinenko in a British court. Let me remind the House of the relevant procedures. The Crown Prosecution Service is an independent prosecuting authority. Once the Metropolitan police have referred a case to the Crown Prosecution Service, it is then for the CPS to consider whether there is sufficient evidence to bring charges, and that it is in the public interest to do so. The CPS concluded that Mr. Lugovoy did indeed have a case to answer, and sought the assistance of the Home Office in requesting his extradition from Russia. On 6 July, the Russian deputy prosecutor general sent an official letter to the Home Secretary refusing to extradite Mr. Lugovoy. On 10 July, the Director of Public Prosecutions announced that, despite the Russian response, he continues to press for a trial of Mr. Lugovoy in England. Given the seriousness of the crime and our ambitions for our bilateral relationship with Russia, Russia’s reply to the CPS’s extradition request is extremely disappointing. It suggests that the Russian Government have failed to register either how seriously we treat this case or the seriousness of the issues involved, despite lobbying at the highest level and clear explanations of our need for a satisfactory response.

It is worth reiterating why this matters. The Metropolitan police have assembled a significant body of evidence against Andrey Lugovoy. I can confirm the following. It is alleged that this grave crime took place in London in November 2006 when Mr. Lugovoy poisoned Mr. Litvinenko by administering a lethal dose of polonium-210, a highly radioactive substance. It is part of the prosecution case that on the afternoon of 1 November, Mr. Litvinenko drank tea which he had poured, after an invitation from Mr. Lugovoy, from a teapot which was later found to be heavily contaminated with polonium-210. There is also evidence that shows a trail of polonium-210 on aircraft in which Mr. Lugovoy travelled to and from London. On 23 November, Mr. Litvinenko died in a London hospital of an acute radiation injury. The facts are therefore that a UK citizen has suffered a horrifying and lingering death; his murder put hundreds of others, residents and visitors, at risk of radiation contamination; and the UK Government have a wider duty to ensure the safety of the large Russian community living in the UK.

The deputy prosecutor general’s letter says that the Russian constitution currently bars extradition. The Russian authorities have given no indication of a willingness to work with us to address this question. The situation is not unique. For example, other countries have recently amended their constitutions to give effect to the European arrest warrant. Indeed, Russia wants the EU and the UK to open their borders to free movement of people, goods and services as part of an intensification of relations. This needs to be matched by an equal Russian commitment to cross-border judicial co-operation.

Since Mr. Litvinenko’s death, the Government’s key priority has been to ensure the integrity of the legal process in order to secure justice for Mr. Litvinenko. The Director of Public Prosecutions made it clear that the allegations against Mr. Lugovoy refer to a crime against a British citizen in London. The appropriate venue for the trial is therefore London. Moreover, both the UN and the EU have reported their concern that the law in Russia is applied selectively. There would therefore be grounds for a legal challenge against the Government over any attempt to accept a trial in Russia.

Given the importance of this issue and Russia’s failure to co-operate to find a solution, we need an appropriate response. Our aims are clear: first, to advance our judicial process; secondly, to bring home to the Russian Government the consequences of their failure to co-operate; and thirdly, to emphasise our commitment to promoting the safety of British citizens and visitors. I have therefore agreed with colleagues across Government the following steps. First, we will expel four diplomats from the Russian embassy in London. Secondly, we shall review the extent of our co-operation with Russia on a range of issues; as an initial step, we have suspended visa facilitation negotiations with Russia and made other changes to visa practice. Thirdly, international agreements mean that Mr. Lugovoy could be extradited to the UK if he travelled abroad. Fourthly, we are grateful for the strong support that we have received from EU partners and close allies, including through the EU presidency statement on 1 June. We will discuss with partners the need for future EU-Russia engagement to take our concerns on this case into account.

The foundation of an effective international partnership is a set of shared values. The measures that I am announcing are intended to uphold key individual rights and vital principles of independent judicial process. On that basis, we will continue to work with the Government of Russia for mutual benefit. I will keep Parliament informed of developments as appropriate.

I welcome the Foreign Secretary’s statement, and I say at the outset that the Opposition support the tone and substance of the Government’s response to Russia’s refusal to extradite Andrey Lugovoy. As the Foreign Secretary said, the grounds for requesting Mr. Lugovoy’s extradition are clear: he is accused of murdering a British citizen, Alexander Litvinenko, here in London, by poisoning him with radioactive material in an horrific and calculating manner that caused incalculable suffering to the victim and grievous danger to the British public. Across British politics, we are united in regarding this matter with the utmost seriousness. In such circumstances, we have the right to expect co-operation from our international partners, and Russia’s failure to extradite Mr. Lugovoy in these exceptional circumstances will only damage its reputation in the world.

I should be grateful if the Secretary of State would clarify the following points. Both Russia and the UK are parties to the 1957 European convention on extradition, and signed a memorandum of understanding on co-operation in the legal field in February last year, which included an undertaking to

“co-operate in the sphere of extradition and in other issues of mutual legal assistance.”

Can he explain what force those agreements have, if any, and have the Government referred to them in seeking Mr Lugovoy’s extradition?

The Foreign Secretary described the risk to Mr Lugovoy of facing extradition to the UK if he travels to third countries. Can he confirm that the Government will actively seek assurances from other countries that they will arrest Mr. Lugovoy if he enters their territory? In a recent interview President Putin stated that

“the request had no substance”—

that is, the request for extradition—because Britain did not provide the materials documenting the grounds on which he should be extradited. What specific additional information did the Russian side request, which it claims not to have received? Additionally, what counter-proposals have the Russian Government put forward, and what view have the UK Government taken of those proposals? Are the Government considering any other options, such as a trial in a third country?

With regard to the expulsion of the four Russian diplomats, will the Foreign Secretary clarify the seniority of the diplomats in question, and whether Russia has indicated that it will take countermeasures? He also referred to changes to visa practice. Can he indicate what changes are envisaged? Does he agree that the issue must not be simply allowed to fade? In that respect, is it not vital that we seek the utmost support from our allies and friendly nations in reinforcing the message that Russia must abide by international rules if it is to receive the assistance and co-operation it hopes for on other issues?

We welcome the news that the Government have received strong support for their stance from European Union partners and close allies. Has the Secretary of State received any indications that that support will result in concrete measures being taken by our allies to reinforce our position, and what measures are the Government seeking from them?

In its approach to international co-operation, should Russia not be mindful of the fact that it has need of the friendship and support of Britain and the EU in its aspirations to join the World Trade Organisation, its pursuit of investment in Russian oil and gas fields and its desire to purchase foreign assets? In the long term, we—like the Government—hope to see Russia maintain its status as a key international partner for the UK and we hope for improved relations, as the Foreign Secretary said, so that we can work together on the pressing issues of nuclear proliferation, middle east peace, Kosovo and Iran. Is it not clear, however, that such improved relations are going to require a more positive and co-operative approach than we have seen from Moscow in recent weeks? However much we may hope for them, an appalling crime of this nature and gravity cannot simply be overlooked.

First of all, let me say that sometimes, across this Dispatch Box, spokesmen for different parties make commitments to work together in the national interest that are taken with a pinch of salt. However, on a previous occasion, the right hon. Gentleman said that he wanted to work with the Government on interests of national interest where there could be a bipartisan approach, and today he has demonstrated that he is a man of his word in that area. His support for the Government’s approach is very significant because it sends the signal that the measures we are announcing today have support across the political spectrum in the United Kingdom. I look forward to the response of the hon. Member for Berwickshire, Roxburgh and Selkirk (Mr. Moore), who speaks for the Liberal Democrats. I hope that we can say at the end of our discussion of the statement that the measures have the support of the United Kingdom, not just the United Kingdom Government.

Let me go through the points raised by the right hon. Member for Richmond, Yorks (Mr. Hague). We perceived it as a positive step that the Russian Government wanted to sign the memorandum of understanding. However, that memorandum is an exchange of information about the extradition practices in different countries, not a legally binding instrument. I am disappointed that it does not transpire that the Russian desire to be party to it is reflected in the case that we are considering.

Secondly, the right hon. Gentleman asked about active assurances that had been sought from the Russian Government, especially in respect of the response from the deputy prosecutor general. He did not ask for more evidence, and I assure the right hon. Gentleman that substantial and sufficient information has been sent to the Russian authorities to make it clear that there is a case to answer. That is the responsibility of the Crown Prosecution Service.

The right hon. Gentleman mentioned trial in a third country, which will doubtless be raised in the next few hours. The bar that the Russians use to justify failure to extradite to this country applies equally to another country. Either there is or there is not a constitutional bar.

The right hon. Gentleman asked about the seniority of the diplomats who are being expelled. We have chosen to expel four particular diplomats in order to send a clear and proportionate signal to the Russian Government about the seriousness of the case. He also asked about visa practice and it may help if I explain the difference between the visa practice and the visa facilitation that I mentioned in the statement. Visa practice refers to officials from the Russian Government and visa facilitation refers to an attempt or desire on our part to speed up visa processes outside diplomatic circles. The latter cannot go ahead in the way in which we had hoped.

I am grateful for the right hon. Gentleman’s support for the work of our international partners. I have obviously discussed the matter with G7 and EU partners, and we will take it further at the General Affairs Council next week.

The right hon. Gentleman rightly concluded that Russia and the United Kingdom have strong shared interests and that it is strongly in Russia’s interest to have a positive and co-operative relationship with the UK. That is our desire. Russia has every right to be a full and respected partner of the international community, but with that right go responsibilities. Today is about asserting that those responsibilities as well as those rights should be exercised properly.

May I also support the measured approach of the Foreign Secretary and the shadow Foreign Secretary? Given that the recent events follow harassment of our ambassador in Moscow and difficulties for the British Council in Russia, does the Foreign Secretary believe that there is a wider problem, which relates to not only Mr. Lugovoy but a growing difficulty with Russia accepting that it must abide by international norms of behaviour towards this country and other countries? In that context, I welcome my right hon. Friend’s remarks about European Union solidarity and remind him and the House that other EU countries, especially some of the smaller ones, have also experienced difficulties with Russia in recent weeks.

It is important that, in the discussion on the statement, I stick closely to the case in hand, which is that of Mr. Lugovoy and the integrity of our judicial process. However, my hon. Friend makes a good point about an issue that we could debate at greater length on another occasion: the way in which we, as part of the international community, help achieve a proper relationship between Russia and other countries, which has to be based on mutual respect. We are clear that Russia should have a respected place in the international community, but that it must exercise the responsibilities that go with membership of that community. I look forward to discussing that with my hon. Friend and the Foreign Affairs Committee in due course.

I also welcome the Foreign Secretary’s statement, but like everybody else I regret the circumstances that require him to make it. The murder of Alexander Litvinenko was a despicable crime, compounded by the perpetrator’s reckless disregard for the safety of countless others in this country and elsewhere. We agree that the lack of co-operation from the Russian authorities has forced the Government to act and we support the Foreign Secretary in all the measures that he has proposed.

May I draw the Foreign Secretary’s thoughts back to one of the points that the Chairman of the Foreign Affairs Committee just made, about the harassment of British diplomats and employees of the British Council? Does he still have concerns about that wider difficult pattern of behaviour by the Russian authorities? On the broader issue of British and European links with Russia, does he agree that, now more than ever, Europe must work through a united approach, developing a constructive relationship where possible, but also seeking to restrain Russia when it proves difficult on issues such as Kosovo?

I am grateful for the hon. Gentleman’s support. It is significant that we should have cross-party consensus on the issue. I am also grateful to him for picking me up on not addressing properly the question that the Chairman of the Foreign Affairs Committee asked about the harassment of diplomats and representatives of the British Council. Any such acts are extremely serious and completely contrary to the way in which civilised behaviour should be taken forward. That is obviously the case for diplomats, but it is also the case for the hard-working staff of the British Council, whether they be British citizens or locally hired citizens.

It may help the House if I report that the overwhelming majority of press and media comment in Russia on the work of the British Council is extremely positive. The scurrilous rumours that are put round about the council are completely without foundation. The operational work of the British Council—its priorities and its way of working—is set independently. It would be reprehensible for there to be any suggestion that its important work should be subject to any harassment or other interference.

Finally, in respect of the European Union, I shall be discussing the issue next week. We look forward to taking the issues under discussion forward with our European partners, including that of the wider bilateral relationship. My hon. Friend the Member for Ilford, South (Mike Gapes) is right that a range of countries want the issue on the agenda of European meetings, and we shall certainly contribute fully to that.

Is it not apparent that the more the Russians take the attitude that my right hon. Friend has mentioned, the more the suspicion grows that they have something to hide? In view of the circumstances, is it not also clear that if the Government had not taken this action, it would seem that we were not taking the murder of a United Kingdom citizen seriously? In all those circumstances, I congratulate my right hon. Friend on what is being done.

I am grateful to my hon. Friend for his strong support. The heinous crime of murder requires justice, and I believe that the response that we have set out today is the right one. It is a proportionate response; who it is aimed at is clear, as are the points it is trying to make and the aims that it is trying to secure. I am grateful for his support.

The Foreign Secretary has told the House that the deputy prosecutor general’s letter says that the Russian constitution currently bars extradition. I am sure that the right hon. Gentleman has taken advice from our embassy in Moscow. Is the deputy prosecutor general correct when he says that the constitution bars extradition? If it does, what is the process of amendment?

We are not entering into a legal argument with the Russian Government about the current status of the Russian constitution; what we are seeking is their co-operation in overcoming this obstacle. As I said in my statement, other countries, including Germany, have recently made amendments to their constitutions precisely to address the issues raised by the European arrest warrant. As I also said in my statement, the Russian desire is for greater interaction with the European Union and the UK. That must be on the basis of responsibilities as well as rights being properly exercised. It is on that basis that we have asked for co-operation from the Russian Government in addressing the issue. It is that co-operation that we have failed to secure.

Given the recent treatment of British gas and oil interests in Russia and the way in which gas and oil have been used for political leverage with some of Russia’s neighbours, and in the light of the Litvinenko case and the points raised by my hon. Friend the Member for Ilford, South (Mike Gapes), is the Foreign Secretary confident that Russia is still a country with which we can do business?

It is important that we continue to do business with Russia, according to clear international rules. I have spoken to the director general of the CBI today, and tomorrow I shall meet representatives of some of the major companies that do business in and with Russia. It is important that that trade should continue, because our economic relations are important. It is also the case, however, that the business that we do and the economic links that we have should be founded on clear rules, which should be respected by all sides.

I very much agree with the Foreign Secretary’s judgment in making this statement today. There are broader issues involved, however, and I expect that they will be considered in the months and years to come. In particular, there is the question of allowing individuals such as Mr. Litvinenko into the UK and giving him a passport in double quick time. This is a grave concern, not least because of the great danger that was posed to many of my constituents in central London where he resided, as the hon. Member for Berwickshire, Roxburgh and Selkirk (Mr. Moore) pointed out. The Foreign Secretary and I both have forefathers who have come to this country from abroad and decided to make their lives here and abide by the laws. Will he ensure that, when looking at people coming into this country from Russia or elsewhere, we do not allow anyone to come here who will agitate against other sovereign states?

The short answer to the hon. Gentleman’s question is yes. We must ensure that people who come here have an independently assessed legal right to be here, and that they abide by the laws of this country while they are here. When they are British citizens, they will have rights under the 1957 European convention, which will be properly exercised. Those rights are clear, and they are not a licence to call for the overthrow of Governments, as the hon. Gentleman pointed out. Any such suggestions are investigated not by me but by the independent Crown Prosecution Service, and that will be the case for any citizen of this country, whether they are of long standing or have recently arrived.

I wholeheartedly congratulate the Foreign Secretary on the approach that he has adopted today. A robust attitude is essential. We have only to read the Foreign Office’s own report on human rights abuses in Russia last year to see a catalogue including the suppression of the right of peaceful association and of non-governmental organisations and the systematic use of torture and abuse in the prison system throughout the Russian Federation. Does my right hon. Friend also worry about Russia’s recent decision to suspend its membership of the treaty on European conventional forces? Is not that a dangerous step to take?

My hon. Friend raises an important point. The treaty on conventional forces in Europe is the cornerstone of European security, and the announcement by the Russian President that he would suspend—although not withdraw—Russian engagement with that treaty is very serious. As I said in answer to an earlier question, I am addressing the Lugovoy case today, but there is a common theme here. That theme is about the rights and responsibilities that go with membership of the international community, whether in respect of legal questions or of military questions to do with conventional forces, and it is important that the Government of Russia, and every other Government, proceed on the basis of clear mutual respect of the rights of other countries as well as of their own rights and responsibilities.

Mr. Litvinenko was my constituent. When I asked the former Home Secretary to pursue this matter without fear or favour, he said that he would do so. I regard the Secretary of State’s statement today as following up on that promise to a great extent, and I welcome his remarks. I hope that Russia will see the benefit of these relationships. However, there are many questions that I do not have time to put to the Foreign Secretary today, and I wonder whether he would agree to meet me and Mrs. Litvinenko so that we can ask him those questions.

I am keen to respond positively to the hon. Lady’s questions. If they are technical, I will arrange for them to be answered clearly; and if the hon. Lady and Mrs. Litvinenko would like to meet me or my colleague the Minister for Europe, I am sure that we can arrange a meeting with one or other of us.

May I make it clear that I, too, deprecate the murder and recognise the gravity of the situation caused to Londoners by that murder? The issue before the House today, however, is whether the response is proportionate and will have the desired effect. That is where my mood differs from that of the House; I am not sure that the response will be effective. Presumably, the Secretary of State will make a statement when he reinstates the four diplomats whom he is expelling—because that will happen; it happens by creep. Everyone knows that.

Secondly, I am deeply concerned about the House’s mood, which seems to be anti-Russian, regardless of the fact that we sometimes treat the Russians very arrogantly, and that they have people who they perceive should be facing their courts in London, protected by our system. I believe that we should pause and reflect on whether our relations are spiralling down very badly. A few moments ago, my hon. Friend the Member for Rhondda (Chris Bryant) referred to Russia’s stalling on the conventional armed forces in Europe treaty and there is also the attitude to Kosovo. I think that we are on a dangerous course—[Interruption.]

Order. I think that we are on a course of asking too many supplementary questions.

It is different, though, from the rest!

No one could accuse my hon. Friend of not being different. Let me say a couple of things to him. We have thought very carefully about this, we have not rushed to judgment and we have considered all aspects of our interests, but I believe that the response that I have announced today is proportionate. Secondly, it is not about being anti-Russian; this is not an anti-Russian statement. The clear desire of the UK Government and people of the UK is to have a close, co-operative and fruitful relationship with the people and Government of Russia, but I am sure that my hon. Friend would agree that that relationship must be based on clear rules. Finally, my hon. Friend talked about how “our system” was “protecting” certain individuals, but we have laws of the land, which are guaranteed by independent authorities. Anyone who flouts those laws of the land goes contrary to those independent authorities and will be taken up on that basis.

I congratulate the right hon. Gentleman on his appointment as Foreign Secretary and endorse his proportionate response to the current crisis. The Russian Government have said that their constitution prevents them from extraditing Lugovoy, but they have offered a trial in Russia in a Russian court. The right hon. Gentleman might like to consider calling that bluff, but not in the way that the Russians are proposing. He has said correctly that having a trial in a third country would equally come up against the current Russian constitution, but that problem would not arise if a British court were permitted to hold a trial in Russia under British law. We have the precedent of the Lockerbie case in The Hague, where exactly those principles were applied. If the right hon. Gentleman and the Russian Government were interested in finding a way forward, that option should at least be considered.

I am grateful to the right hon. and learned Gentleman, who speaks with the authority of a former holder of my office, for his kind words on my appointment. I think he will find that the option he proposes—ingenious though it is—is not open to us, as it does not fall within the sort of creative work that we have been seeking with the Government of Russia. He will also recognise that, as I said in my statement, a proposal to conduct a trial in Russia could open our Government to legal challenge from our own citizens. Under whomever’s auspices the trial is carried out, that point carries a large degree of force.

The Foreign Secretary’s calm and measured words should not hide the very tough and bold decision that he has taken. This is the first fight back by any European Foreign Minister against Russia’s bullying. When you and I were young men, Mr. Speaker, it was British communists who went to the Kremlin to kneel in front of their master; now it is British capitalists who are already on the airwaves saying, “Don’t cause trouble; don’t cause trouble”. But it is the Russians who are causing the trouble—whether it be on this particular issue or in respect of the British Council, the harassment of our ambassador, Kosovo or trade—and I believe that the whole of Europe will say thank you because at long last a British Foreign Secretary is taking a clear line. Yes, it is a difficult line and, in the light of what my hon. Friend the Member for Thurrock (Andrew Mackinlay) said, a controversial line, but it is better to start as we mean to go on, and this is a very fine start indeed by someone who will prove to be a fine Foreign Secretary.

I am extremely grateful to my right hon. Friend. I look forward to his many contributions to our debates. As always, he speaks with an acute sense of history and an acute sense of the need for all European countries to recognise strong shared interests in this area. It would be wrong to be anything other than firm. No one is seeking to be macho; it is about being firm, clear and proportionate, and that is what we are seeking to do.

I should let the Secretary of State know that, in relation to his appeal for a spirit of non-partisanship, the position on extradition is shared by governing parties from Scotland, Wales and Northern Ireland—by the Scottish National party, Plaid Cymru and the Democratic Unionist party. Does he agree that normal countries with normal relations have appropriate extradition proceedings? Although it is not possible to make such arrangements at present, it must be a medium to long-term aim to do so. In relation to the question of European Union co-operation, can he confirm that were Mr. Lugovoy to travel to any European Union country, he would be subject to a European arrest warrant?

I do not want to ruin the hon. Gentleman’s career by saying that he has made a good point, but he has. The basic rules of the game that he describes are in the interests of all countries. Given the way in which the Government of Russia have sought to intensify their relations, not just bilaterally with us but across the whole of the EU, I believe that they recognise that. The hon. Gentleman is correct in respect of the position of Mr. Lugovoy, in that if he leaves Russia he will be subject to arrest.

Diplomacy sometimes requires robustness; it certainly did on this occasion, and there will be widespread public support for the measures announced by the Foreign Secretary. In announcing expulsions to the Russian ambassador, I hope that the Foreign Secretary says that if the Russian Government are minded to retaliate, we shall not be deflected, but we shall continue to see the matter through if necessary. Because the murder in question came after a series of nasty murders in Russia of political dissidents and brave journalists who have criticised the Putin Government, such as Anna Politkovskaya, and because of the difficulties of obtaining rare radioactive isotopes and the skills required to transport them, many people must be worried that Russian state agencies might have played a part in the murder. If any such evidence comes to light—that would be serious, and I am not suggesting that there is necessarily such evidence—does he agree that even more robust measures will be required?

As I have said on two occasions already, I am determined today to stick to the terms of the CPS requirement for extradition. Those apply to Mr. Lugovoy and only to Mr. Lugovoy. Obviously, any other evidence that came to light would have to be considered by the CPS, but that would be a matter for it, not me.

While I recognise and agree with the robust tones of the Foreign Secretary’s statement, I do not want any more than he does to see the outbreak of another cold war. Can he tell the House how many meetings he had with the Russian ambassador here on this subject, and how many conversations he had with his Russian counterpart?

I have spoken twice to my Russian counterpart during my two and a half weeks in office, including earlier today, because I thought it right and courteous to do so before I came to the House. As I said in my statement, the Russian ambassador met the permanent under-secretary at the Foreign Office on 22 May, and has met him again today. The judicial channels have also been extensively used. If, when I get back to the office, there is further information in relation to the hon. Gentleman’s question that I have not given him, I shall write to him with further details.

The death of Alexander Litvinenko was tragic and sinister in equal measure, and his killers deserve to be brought to justice, but does the Foreign Secretary believe that anything he has said today will cause the Russians to amend their constitution and extradite those accused of Litvinenko’s murder? If he does not believe there will be any change, why did he make his statement?

Obviously I believe that today’s statement will help to advance the three aims that I set out in it; otherwise I would not have made it. I am sorry that the hon. Gentleman could not follow that clearly.

I think it important not just to send a signal, which we have done, but to take practical, concrete measures, which we have also done. Those measures are designed to make a particular point to particular people, and I believe that they will do so. They will also lead to further international engagement, which we will undertake in a serious way. However, as a number of Members have pointed out today, there is a wider relationship which needs to be founded on a clear basis of mutual respect. That applies in each case, and also in relation to the broader picture. Today’s announcement was designed to advance that relationship, and I believe it is our best hope of doing so.

I join others in welcoming my right hon. Friend’s statement. We all hope it will have the effects that he has said are intended to flow from it. I welcome the robust terms in which he said that the heinous crime of murder must be pursued, and that that pursuit could not be set aside for any other ulterior political consideration, but how does he hope to respond to the Russian authorities when they allege hypocrisy on the part of the United Kingdom Government, and in the light of the United Kingdom Government’s attitude to the murder of Pat Finucane and others?

Tempting as it is to wander into the terrain offered by the hon. Gentleman, the temptation is not great enough for me to do so. I am sorry that he has not been able to view this case, and the rights and wrongs of it, in and of itself. He indicated support for the Government’s position in this instance, and I am grateful for that. I believe that we had no option but to do what we have done, and I hope we can proceed on that basis.

Like many other Members here, I sit on the Council of Europe with Russian members of the Duma. They understand the rule of law, and it is therefore disappointing that the Russian Government do not understand the rule of law that the Foreign Secretary has presented to them. I fully support his announcement, although it is sad that it had to be made.

Last week I was telephoned by a Russian journalist about this issue. I said that we were heading towards a crisis over procedures that were not being followed by Russia. He said he believed that there was a tit for tat: that the Russians had called for the extradition of people from this country and we had refused, and that they failed to see the distinction involved in this particular case. Will the Foreign Secretary comment on that?

There is no doubt that there has been a serious attempt to muddy the waters, but I am afraid the parallel that people have sought to draw does not apply. The protection afforded to citizens here under the European convention on human rights becomes relevant because of people’s concerns about the situation in Russia, not because of their concerns about the situation here. This case is also about the situation in Russia, and about the Russian authorities’ determination to co-operate with the United Kingdom Government to bring to book someone who is alleged to have committed a very serious crime.

While I hope the hon. Gentleman will phone his Russian friend back and explain to him that it is in the gift of the Russian authorities to ensure that in all cases there are proper procedures and proper protections, any citizen of this country who is accused of a serious crime in another country can be extradited as long as that does not violate his or her rights, and that is the basis on which we proceed.

Has the Foreign Secretary received any expert advice on the likelihood of a private citizen having been able to obtain a lethal quantity of polonium-210 from anything other than a Government-controlled nuclear agency, and has he suggested to the Russian Government that if they go down the old cold war route of tit-for-tat expulsions he has something else up his sleeve? I do not, of course, expect him to specify what.

I hope that the hon. Gentleman will understand my reasons for wishing merely to refer him to the content of my statement. It would not be appropriate to go beyond that. We decided what action to take after having looked at the issues in the round. I hope that he accepts that answer.

On a point of order, Mr. Speaker. I seek your guidance on the privilege of Members in this place. During business questions last Thursday, I discussed Greenbelt, a factoring company, and in particular its bullying behaviour. It has sent threatening letters to me and my constituent, Paula Hoogerbrugge. Company representatives also contacted her employers. After business questions, its lawyers copied me into a letter that it sent to you, Mr. Speaker. I believe that that is a part of its bullying strategy to silence me, and I would be grateful if you would confirm that I have the right to raise issues that directly affect my constituents in this place and beyond.

I have not yet received any such letter, and the hon. Gentleman will understand that I would not discuss on the Floor of the House any letters sent to or by me. On privileges, I have always said after a general election and at the opening of a new Session that Members have privilege not outwith but in this Chamber during parliamentary proceedings, but that privilege should always be exercised wisely and consideration should be given to those being criticised.

On a point of order, Mr. Speaker. In respect of the Government’s housing policy, the Prime Minister said last Wednesday:

“The Minister for Housing will publish further details next week in a Green Paper to this House.”—[Official Report, 11 July 2007; Vol. 462, c. 1450.]

The Leader of the House confirmed that on Thursday, saying:

“As my right hon. Friend the Prime Minister said yesterday, we also expect an oral statement next week on the Government’s housing policy.”—[Official Report, 12 July 2007; Vol. 462, c. 1609.]

Mr. Riddell, an extremely well connected journalist, wrote this morning in The Times:

“The word spread quickly in Whitehall on Friday. All was not well with the Green Paper on plans for a big expansion of affordable housing, the flagship of Gordon Brown’s new legislative programme…So the planned announcement was being put back from this week, the 18th, until the 23rd or 24th, contrary to what Mr. Brown announced last Wednesday.”

Have you, Mr. Speaker, received any indication that the housing statement will not be made this week?

I have received no such information, and the hon. Gentleman must know that the matters he raises are Government matters, and therefore that they are not for the Chair. He can, of course, ask parliamentary questions, both oral and written.

I inform the House that I have selected the amendment in the name of the Prime Minister.

I beg to move,

That this House notes the Serious Fraud Office’s (SFO) ongoing investigation into the sale by BAE Systems plc of a military air traffic control system to Tanzania and into payments made to third parties in South Africa and other arms-related inquiries; notes with concern the consequences for the role of the Attorney General of the decision to terminate the SFO investigation into BAE Systems plc and Saudi Arabia and its implications for parliamentary accountability; believes serious damage has been done to the reputation of British business and to the credibility of the Government’s campaign against corruption in the developing world; urges the Government to cooperate fully with the United States Department of Justice inquiry into corruption allegations concerning BAE Systems plc and with other international organisations; and calls for increased parliamentary accountability and transparency concerning the Government’s dealings with the government of the Kingdom of Saudi Arabia.

I am delighted to be able to introduce another debate on the investigation of alleged corruption overseas. I have previously introduced two of them—one on 7 February, which was also an Opposition Day debate, and an Adjournment debate on 1 May. Let me first explain and justify why we wish to return to the issue. It is important, as it goes to the heart of arguments about an ethical foreign policy, the rule of law and open government.

Since we last debated these issues, there have been several important developments that we must take account of and discuss. First, there are continuing arguments about the application of the law, which have been clarified by some of the discussions in the Constitutional Affairs Committee, which my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) chairs. The BBC and The Guardian have made revelations or allegations about the wider context of the al-Yamamah project.

The hon. Gentleman mentioned The Guardian, with which his party is in a conspiracy. [Interruption.] Has he the faintest idea of the sort of damage that he and his party are doing to one of the most successful industries in the United Kingdom? Britain’s export defence industry employs around 76,000 people. Is he aware that 80 per cent. of those exports emanate from the air sector, and that BAE Systems is the most successful company? His party’s motion today is sending a signal to our competitors and commercial adversaries around the world that it does not give a damn for that industry’s employees in our country, because we shall ensure that—

Order. Interventions should be brief. The hon. Gentleman is making a speech.

As my colleagues behind me have just said, I wish that we were in conspiracy with The Guardian. I always tend to regard it as a rather pro-Government newspaper. None the less, that is not the central point.

I want to clarify the fact that we have no objection to British companies selling arms to a friendly country provided that it is done legally, is not subsidised, is on a commercial basis, and satisfies the export control regime’s proper tests. If the awaited contracts satisfy those tests, we will have no quarrel with them.

The hon. Gentleman refers to the Export Control Organisation by implication. Does he agree that for the Defence Export Services Organisation to exist in parallel with it sends entirely the wrong message about arms exports, and that we should tighten up the system to ensure that arms are not sent to unstable regimes, war zones or countries that routinely abuse human rights? Why does he not refer to that in the broader context of his comments?

I shall refer to DESO. Certainly, the export control regime needs to be tightened up, as I said from the Front Bench when the matter went through Parliament, but it is as it is. I think the hon. Gentleman’s specific point relates to DESO, and the Chief Secretary to the Treasury made the interesting observation a few days ago that it is an anachronistic body that should be closed. I shall be interested to hear during the debate how the Government respond to that.

Does the hon. Gentleman understand the sort of damage that he is doing to the industry? I have a BAE Systems plant at Samlesbury in my constituency which employs thousands of people in highly paid and skilled jobs. The only people who will get any joy from the Liberal Democrats’ motion today are our competitors.

I have already given the answer to that question to the hon. Member for Aldershot (Mr. Howarth). The hon. Member for Ribble Valley (Mr. Evans) ascribes to me a power of argument that is flattering. There are questions that must be asked, and I am sure that he would not want us to be uncritical of the arms exports regime, to which we shall refer.

We are updating the arguments, partly to allow for the legal issues, partly to allow for the allegations concerning the al-Yamamah project as a whole, partly to bring up to date the Organisation for Economic Co-operation and Development inquiry’s approach to the question, and partly to bring into the discussion the highly relevant and worrying developments in relation to the United States, which only this weekend insisted on reopening the case, and on British collaboration with that. It would probably be useful to start with an overall approach. When we introduced the debate six months ago, the key issue was the rule of law: whether it was being applied and what the law on bribery and corruption in overseas business meant. We have argued those points, and they continue to be relevant in many respects.

The underlying theme that I wish to develop concerns the broad question of parliamentary accountability and how the new thinking that the Prime Minister has introduced, which is welcome, about greater openness in government and, specifically, greater openness about security matters should apply in this area. The key argument, to which we keep returning in the debate about the Saudi project and al-Yamamah, concerns national security interests. That argument was invoked as the reason for stopping the Serious Fraud Office inquiry, for limiting the information given to the OECD and for not proceeding with or publishing the National Audit Office investigation. It is the argument that is used for not answering most of our parliamentary questions on the subject.

Let me make it clear that just as I and my colleagues respect perfectly open, honest arms exports, we fully understand and respect arguments about national security. On a personal level, as a 30-year-old civil servant I worked in the Foreign Office, and the division that I headed included, among other things, quite an important communist country at the height of the cold war. I was fully indoctrinated in the intelligence process and the Official Secrets Act and honoured its obligations. I have always been perhaps excessively deferential to arguments based on national security. However, some fundamental questions about the workings of the intelligence and security arguments need to continue to be probed, because the Government have used them in unsatisfactory ways.

I have three points on this issue. The first concerns what could be called revelations, but are in fact points from the Government’s evidence that was submitted to a recent High Court hearing brought by The Corner House and the Campaign Against Arms Trade. The Government set out—much more specifically and helpfully than when the Attorney-General and the Solicitor-General made their statements to Parliament—how the director of the Serious Fraud Office came to the conclusion that he should not proceed on national security grounds. That showed, in quite an extraordinary way, his reluctance to come to that conclusion.

There were three steps. In December 2005, there was a so-called Shawcross exercise by other Departments, which involved, I think, the Prime Minister. The director of the Serious Fraud Office and the Attorney-General rejected the recommendation that the director of the Serious Fraud Office cease to proceed with the inquiry. On 30 September—I do not think that this has been stated to Parliament, but it was stated to the court—a letter from the Cabinet Secretary to the Attorney-General and the head of the Serious Fraud Office explained that our counter-terrorist operations might be affected adversely if he proceeded with his inquiry. At that point, remarkably, not only the head of the Serious Fraud Office but the Attorney-General rejected the advice. On 30 November, the head of the Serious Fraud Office was brought together with the British ambassador to Saudi Arabia and phrases such as “Lives were at risk” were put to him. He did not immediately cease the inquiry; it required three meetings with senior officials and the ambassador before he finally agreed, on 13 December, to do so.

That is taken from the account that the Government have given of the chronology—I am not manufacturing any of it. [Interruption.] I have thought carefully about it, and it is all set out here in print. I am surprised that the Minister finds this so difficult; I am not referring to press reports.

I do not find the concept difficult to understand. I said from a sedentary position, “He thought very carefully about it.” If it took the director of the Serious Fraud Office three meetings, one would have thought that the hon. Gentleman would have been glad that it was considered seriously and over a length of time.

I am glad. It reflects well on the director of the Serious Fraud Office that he took his duties so seriously. It is clear that either he thought that the public interest in proceeding was compelling, and sufficient that he could initially ignore advice about counter-terrorism, or he found the arguments about counter-terrorism unpersuasive.

Subsequently, the director of the SFO said in evidence to the Select Committee on Constitutional Affairs, chaired by my right hon. Friend the Member for Berwick-upon-Tweed, that the one item that persuaded him to change his mind was a memorandum from the Prime Minister, to which was attached a more detailed memorandum from Sir Richard Mottram, who is a security adviser to the Government. He may not have been aware at the time, although it has since been pointed out, that that same civil servant, who I am sure is a man of enormous integrity, was, 20 years previously, private secretary to Michael Heseltine, who set up the meetings that led to the al-Yamamah agreement.Whatever Sir Richard’s competence and integrity, he was hardly disinterested.

A problem that has occurred throughout this issue is that of senior people in government—another is the head of the National Audit Office, who was also an MOD official—who, for all their high levels of competence, professionalism and integrity, do not have a disinterested position. Resurrecting my O-level Latin, I have to ask, “Quis custodiet ipsos custodes?” Who will guard the guards? I think that that is highly relevant to the present context. That is the first question that I wish to pose about the intelligence argument.

The second problem is that the argument that the counter-intelligence issues should deter an investigation sounded to us inherently implausible even six months ago because the relationship with Saudi Arabia is a two-way one, underpinned by a memorandum of understanding—I do not think that that had been made clear before—and is therefore a formal arrangement from which Saudi Arabia benefits as we do. It was unclear why one party to that agreement should imperil a bilaterally mutually advantageous arrangement.

The assertion that that argument was a compelling one has become even less plausible for two reasons. First, the embarrassment that could have been caused to senior Saudis has become history. Prince Bandar has been named and embarrassed, and all the information about his activities has now been published. If the intention was to protect him from that embarrassment, it is already history. Secondly, and much more serious, is the decision of the United States Department of Justice to intervene and to investigate. One has to ask why on earth the United States, which is leading the war on terror and which has far more reason to be concerned about maintaining its security relationship with Saudi Arabia than we have, should pursue a potentially embarrassing investigation into the relationships between BAE Systems and Saudi princes.

Will the hon. Gentleman elaborate on the independence of the US Department of Justice and its relationship with the US Administration and the extent to which the Administration could directly influence the Department of Justice on that point?

That is a very helpful intervention. The head of the Department of Justice is, I believe, a Mr. Gonzales, who is a political appointee of the Bush Administration. If the Bush Administration had any interest in safeguarding their carefully nurtured security relationship with the Saudis, surely that would have manifested itself.

I am glad that the hon. Gentleman intervened, because he made an extraordinary remark reported in the press this morning. Apparently, following a meeting with Lord Drayson, the Minister responsible for defence export sales, he urged the Government not to co-operate with the Americans in their inquiry. It is absolutely extraordinary to say that we should put at risk our most important bilateral relationship on intelligence and security matters to protect the Saudis from further embarrassment. I can only hope that hon. Gentleman was not speaking for the Minister.

May I clarify? The comment from me in The Guardian this morning came not from a discussion with the journalist from The Guardian, but was an interpretation of comments that I made to another journalist from my local newspaper. Those comments were interpreted without my consent and without any discussion between myself and the journalist from The Guardian, and the interpretation does not reflect the comments I made to the Lancashire Evening Post.

I thank the hon. Gentleman for his clarification, and I hope that he speaks for the Government. I will take it as read that the Government will give their maximum co-operation to our chief ally in this matter.

Has it not crossed the hon. Gentleman’s mind that American interest in the subject might be due to the fact that it would have liked the contracts that BAE Systems secured, and that it would do a great deal to destabilise British industry and tens of thousands of jobs across Lancashire?

Is the hon. Gentleman seriously suggesting that President Bush and his Administration are putting at risk counter-terrorist operations to placate American companies? I do not know enough about the United States to know how perverted its values are, but he seems to be making an extraordinary case.

I do not think that the issue was a consideration for President Bush, or that intelligence between the United States and Saudi Arabia would have been affected. Obviously, the intention was to get to the bottom of a commercial arrangement, because it is in certain American companies’ commercial interests to see BAE Systems struggle.

I do not understand the logic of the hon. Gentleman’s argument at all. Why on earth should the intelligence arrangements between Britain and Saudi Arabia be compromised, but not those between the United States and Saudi Arabia? That makes absolutely no sense.

Does the hon. Gentleman agree that we should not lose all sense of proportion, and that we must remember what the issue should surely be about? Does he not remember the once much-lauded phrase, “an ethical foreign policy”? If we are to have such a policy, and properly regulated arms exports, which my party and I support, surely there must be the highest standards of probity, and surely inquiries should not be stopped at the whim of the Government.

That is right, but in a way I am more positive and optimistic than the hon. Gentleman; the new Prime Minister said very clearly that he wants more transparency in government, and a more ethical foreign policy. I hope that he is as good as his word. If he is, this is an opportunity to demonstrate it.

I do not know what the Liberal Democrats have against BAE Systems specifically, or military manufacturing generally, because during the general election they threatened to stop the next tranche of Eurofighters if they came to power. Again, that would cost thousands of jobs. What do they have against BAE Systems in my constituency?

I have nothing against that company at all, and I welcome its continued commercial activity—providing, of course, that it abides by the law, as we all must.

Let me move beyond the arguments about intelligence to specific issues that have arisen in the past six months. The first relates to the legal position, and the differing views of the former Attorney-General and the Serious Fraud Office. As I said, those views were brought out by the Select Committee on Constitutional Affairs, chaired by my right hon. Friend the Member for Berwick-upon-Tweed. When the then Attorney-General made his statement to the House of Lords, it was said that the arguments for ceasing the investigation were not simply about national security. He has said that there were severe technical and legal difficulties in bringing any prosecution. Many distinguished people have pitched in and supported that argument, and I seem to remember that they included the hon. Member for Beaconsfield (Mr. Grieve), the Conservative spokesman, who is a distinguished lawyer in his own right. He put on his legal hat, as he put it, and concluded that

“On the face of it, there can be no prosecution if there was an agreement to give commission payments to certain agents of the Saudi Government, with the full knowledge of the Saudi Government, as part of the overall contractual arrangements.”—[Official Report, 7 February 2007; Vol. 456, c. 884.]

I am not a lawyer, but there seems to be an element of common sense to the idea that it is rather difficult to apply the law when one of the most senior members of the Government are involved. The problem is that the argument does not seem to have persuaded the head of the Serious Fraud Office, who persists in holding a contrary view. When my right hon. Friend the Member for Berwick-upon-Tweed conducted his inquiry, he specifically said to the head of the SFO that the Attorney-General

“stated that in his view, as opposed to yours, the ground for ceasing the investigation was that it could not lead to a successful prosecution.”

The head of the SFO, who had had several months in which to reflect, and who had no doubt received legal advice, replied:

“He certainly took that view. I took a slightly different view. I took the view that I would prefer to continue the investigation, to obtain the evidence, before making a final decision”.

It is important that we understand whether it is the Attorney-General who is right or the head of the Serious Fraud Office, a very senior official, who, unlike many of the other people involved in the argument, has no political axe to grind, so we must take his views seriously. If the Attorney-General, the Government and the Conservative spokesman are right, there are serious implications. The first is that we have a highly defective law governing bribery in overseas countries, which in many cases simply cannot be applied. That raises the question as to why the head of the SFO is spending taxpayers’ money pursuing further investigations, which, among other things, include South Africa, where the alleged recipient of money is none other than the vice-president, and where precisely the same argument about principles and agents could be advanced as is being advanced in the case of Saudi Arabia. If the law is defective, do the Government propose to change it? There was nothing in the sketch of the Queen’s Speech that indicated that an improvement was coming, but if the Government really believe that the law is inadequate and cannot be applied, do they have any plans to change it.?

Will the hon. Gentleman elaborate on the changes to the law in 2001 and the extent to which that has influenced the debate, the extent to which events took place before and after the change in the law, and whether we are considering matters pre-2001 or post-2001?

I have not seen the evidence, so I do not know the answer to that question. I think that most people assume that there is an element of both. Certainly the 2001 legislation was a genuine attempt to incorporate the Organisation for Economic Co-operation and Development convention into British law. The problem that we now seem to have is that it cannot be applied, or certainly cannot be applied in cases where major figures in a recipient Government are involved. That is the issue. I do not know the answer and I hope that the Solicitor-General might be able to clarify that.

The hon. Gentleman asserted some time ago—I have taken this time to track it down—that it was only the Select Committee’s inquiry that disclosed the difference between Mr. Wardle and the Attorney-General. That is utterly wrong. The Attorney-General disclosed that difference of opinion about a point of law in the House of Lords when he first went there within minutes of the director of the SFO making his announcement. The hon. Gentleman should know that a process has been under way for some time to try to improve the corruption law, the Law Commission is seized of the job of doing exactly that and will produce a consultation document later this year, and that we hope for a draft Bill to be attached to it shortly thereafter with a view to legislating. It is not that the law cannot be applied, but it must be improved on and it will be.

That is a helpful clarification. On the first point, of course the hon. and learned Lady is right that the difference of view surfaced earlier. I simply mentioned it because the head of the SFO persisted with his arguments several months after the event, presumably having reflected a great deal upon it. Her final comment is helpful and positive.

The first major set of developments relates to those arguments, the second relates to the allegations—if that is what they are—by the BBC and The Guardian about the fuller aspects of the al-Yamamah inquiry. When I first mentioned the dreaded name The Guardian a few moments ago, several hon. Members jumped to their feet with outrage that we should be giving any credibility to this issue at all. However, although that newspaper is not particularly friendly to the Liberal Democrats, it is a serious newspaper, which gives the full power of editorial support to this particular story. But more important than that is the role of the BBC, which did, after all, lose a director-general and a chairman because it had not done its homework correctly on an important and sensitive issue a few years ago. I find it difficult to believe that it would have lent its credibility to a story of this kind unless it had carefully sourced and checked it.

No one has suggested that there is a contrary version of events, so let us assume for the moment that in the case of the al-Yamamah contract, what happened is broadly what has been described in that account. It means that, effectively, there are two sets of corruption allegations. Perhaps corruption is too loaded a word in this context, so let us say that there are two sets of problems. The Serious Fraud Office investigated the first problem, which dates back to a specific complaint. It originated in Robert Lee International, an intermediate company, which provided services to the Saudi royal family. There was a whistleblower, Edward Cunningham, who went to the SFO with his evidence, which was the basis on which the inquiry was launched.

The investigation by the BBC and The Guardian makes a much bigger and more substantial allegation, and it reaches to the heart of government: it is not simply a matter of a relationship between a company and a named individual. The allegation is that £1 billion was paid over a 10-year period at three-monthly intervals into one of two accounts in Riggs bank in the United States under the name of Prince Bandar. He is a very important figure in the Saudi regime. He was named first not in that investigation: I mentioned his name in an Adjournment debate a few weeks before, because it was clear that, where he was concerned, some extraordinary developments had occurred. It had been pointed out to me that, for example, in the period since July 2006, he visited this country 14 times in a private jet that landed at an RAF air base, and that he had six meetings with Foreign and Commonwealth Office officials and undisclosed meetings with others.

That is clearly somebody who was at the heart of our official relationship with the Saudi Government. There exists a very close relationship between an individual and the British Government, and the same individual is named in the context of the very large payments in this case. I stand to be corrected, but I understand that Prince Bandar is currently the head of intelligence in Saudi Arabia, and that he has held major roles in that Government, including that of ambassador to the United States.

If the accusations cited are in any way correct, they raise major issues about the role of our Government and their conduct and accountability. We are all operating in the dark, and I have no other evidence, so let me describe what it is argued took place in the context of Prince Bandar and the payments. The House will forgive me if I read for a few moments, because the process is complex and we all need to understand it:

“According to legal sources familiar with the records, BAE Systems made cash transfers to Prince Bandar every three months for 10 years or more. BAE drew the money from a confidential account held at the Bank of England that had been set up to facilitate the Al-Yamamah deal…Both BAE and the government’s arms sales department, the Defence Export Services Organisation (Deso),”

which we have just discussed,

“allegedly had drawing rights on the funds, which were held in a special Ministry of Defence account run by the government banker, the paymaster general. Those close to Deso say regular payments were drawn down by BAE and despatched to Prince Bandar’s account at Riggs...Under the terms of a previously unknown MoD instruction from the department’s permanent secretary, Sir Frank Cooper, the payment deal would have required Deso authorisation.”

It is just conceivable that that is all fantasy, dreamed up by somebody in the bath trying to sell a few more newspapers, but that is improbable. It is a well sourced story that appears entirely consistent with what many independent sources have argued in the past. If the story is true, or even approximately true, it raises issues about two major arms of government. First, there is the financial arm, which is the Treasury and the Bank of England. In the past, I asked the then Chancellor of the Exchequer whether he would explain his role in the matter, but of course, he transferred the questions to the Ministry of Defence, arguing that it was nothing to do with him. He has also said publicly that he knew nothing about it. I am sure that he did not, because the arrangement would not have operated at that level. As has been acknowledged in parliamentary answers, an account was run through the Bank of England. That raises important questions of public accountability about who monitored that account, who was responsible for it and what their level of seniority was, and we deserve answers.

Will the hon. Gentleman identify what crime he is saying has been committed?

No crime has been committed that I am aware of. If enormous sums of money are swilling through Government Departments, surely it is an elementary requirement of our system of government that somebody is accountable to Parliament to explain that and to answer parliamentary questions. The Opposition parties should ask those questions, rather than trying to suppress them.

The heart of the matter does not lie in the Bank of England or the Treasury; it lies in DESO. The account that I have quoted went on to say:

“Before the investigation was abandoned, the SFO interviewed Alan Garwood, head of DESO. Sources close to the arms sales unit say that he and…the commercial director of the Saudi project were questioned about the reasons for authorising the payments.”

In order to make sense of what happened on the al-Yamamah project, we need to know much more about DESO. As far as I understand it, DESO operates in an extraordinary way. It is paid a fee of 2 per cent. of the value of transactions by the Saudi authorities in order to conduct business on behalf of a British company. It is a Government Department that is headed up by somebody who is on secondment from a company linked to BAE Systems earning a fee from a foreign Government for commercial work. It may be that that is entrepreneurial activity in government that we should applaud, but surely somebody should explain the mechanisms and be accountable for them. Is 2 per cent. too much or too little? Where are the accounts relating to that extraordinary business?

What is at issue here is a question of parliamentary accountability that we have a duty to pursue. In my view, nobody has more of a duty to pursue it than the Public Accounts Committee. I am sorry that he is not here, but the hon. Member for Gainsborough (Mr. Leigh) intervened very early in my speech on the last occasion we considered the matter to explain why the Public Accounts Committee did not wish to publish the original report into the al-Yamamah project, which he admitted that he had never read. None the less, he felt very strongly that the PAC should not publish that report. He said that

“the National Audit Office is concerned with the Government and not private companies”.—[Official Report, 7 February 2007; Vol. 456, c. 863.]

However, we now know that the Government are critically involved in all aspects of the operation, so, of course, the PAC must reopen the issue and investigate it as well as referring to its inquiry.

As a result of the exchanges involving the hon. Member for South Ribble (Mr. Borrow), we have already touched on the third new issue that has arisen, which relates to the US Department of Justice. The United States is a close ally, but it also has strict laws governing overseas corruption—they were introduced rather sooner than ours in the Foreign Corrupt Practices Act 1977. Inquiries have been initiated, and perhaps they were prompted by competitor companies of BAE Systems—it is possible that there is a commercial motivation.

As far as the journalists who are looking at the matter can establish, the motivation is concern not with the big al-Yamamah architecture, which I have just described, but with a narrow set of transactions—the so-called red diamond payments—under which BAE Systems paid money for services, such as hospitality, for its friends and which flowed through US jurisdiction on this occasion. We do not know whether there is any basis to those inquiries, but it is surely necessary that the British Government give an absolute commitment to maximum co-operation, which means the sharing of files and the evidence that they acquired, because how else is our reciprocal set of obligations with the Americans to be honoured?

The fourth new issue that has arisen relates to our relationship with the OECD. At its March meeting, two months after our original debate, the OECD working group on bribery reached the following conclusions:

“the OECD Working Group on Bribery reaffirmed its serious concerns about the United Kingdom’s discontinuation of the BAE Al Yamamah investigation and outlined the continued shortcomings in UK Anti-Bribery legislation. It urged the UK to remedy these shortcomings as quickly as possible and decided to conduct a further examination of the UK’s efforts to fight bribery.”

The OECD, in a peer group assessment of our progress, is highly critical of what the Government have done in this department, and will no doubt report in due course.

The aspect of the OECD investigation that leaves a particularly nasty taste is the allegations that have been made within the OECD itself that the Government did not pursue this in a completely detached manner. When I raised this in the Adjournment debate, the Foreign Office Minister who responded gave a very robust reply in which he categorically denied all the dirty tricks allegations that have been made, and did so with such conviction that I completely accepted what he said. None the less, a month later, officials from the OECD told the press—this is from a different newspaper; not the wicked Guardian again but The Independent—

“‘The dirty tricks boys were all at work’, said a senior OECD official who asked not to be named. ‘There was a lot of pressure on a lot of people.’”

I completely accepted the Government’s assurances on this. However, will they explain what they are doing to assure the OECD, whose officials continue to argue that their reputations are being traduced by British officials, that they are pursuing their relations with it in a proper way?

Finally, let me look forward. Much of this is history. Things have happened in the past that are perhaps regrettable and do not comply with the standards that we currently expect in terms of anti-corruption behaviour. Nevertheless, it is possible for the Government to turn a corner on all this and to pursue their future investigations in a way that reflects the spirit, as well as the letter, of the original OECD provisions. Part of the proof of how the Government are approaching this will be how they deal with their future investigations; I think that six are lined up. I shall briefly enumerate them so that Ministers can indicate whether they are still live and whether they will be pursued by the head of the Serious Fraud Office.

The first case relates to Chile and the accusation of the £1 million payment to General Pinochet that was unearthed by a Chilean judge pursuing tax evasion. General Pinochet is of course dead, and was presumably the principal witness in that inquiry, so is the case still being pursued? The allegations in relation to Romania relate to the £7 million commission on a £116 million naval contract. The case in South Africa concerns a much bigger contract, where the difficulty is that a very senior figure in the South African Government is involved.

The case in Tanzania is particularly important because it relates to the full thrust of Government policy in Africa, which is to encourage good governance. The original corruption allegations related to a large payment by BAE Systems on an air traffic control arrangement that was opposed at the time by the current Prime Minister and the then overseas development Secretary. What has made it topical is that the alleged middleman, a Mr. Vithlani, has subsequently been named in Tanzania in accord with two other major corruption inquiries relating to a presidential jet and a military truck. Those who are concerned with honesty and probity in Tanzania are looking anxiously at whether the British Government will pursue their own inquiries.

In Jersey, an investigation was proceeding for several years into large payments made by Sheikh Hamad bin Jasim bin Jaber ath-Thani, who is Qatar’s Foreign Minister. I understand that those investigations have now been discontinued. It was alleged in the Jersey press that that happened because of pressure from Britain, but that is entirely hearsay. However, it is important to appreciate whether the Qatar inquiry is proceeding.

Those are past inquiries, and as several hon. Members with constituency interests have intervened to say, there are potentially big contracts on the way. It seems to me that there is one simple way in which BAE Systems, with Government support, may ensure that the taint hitherto associated with many arms contracts is removed from any contract achieved or jobs secured. The mechanism to do that, which has been suggested by Transparency International, means that we should put the past on one side, and have an arrangement whereby an independent organisation, such as Transparency International or someone nominated by it, can vet contracts in order to certify that they have been achieved without bribery, and to establish that new contracts, whatever may have happened in the past, are entirely above suspicion. That seems to me a perfectly plausible and praiseworthy initiative, and I shall be interested to hear the Government’s reaction to it.

Looking forward, if the Government pursue their investigations into those other allegations, which I think are still live, and if a mechanism can be found to ensure that any accusation of bribery is removed from future contracts, it is possible to move on from the episode in question. I hope that the Government will take into account the fact that we are in new territory—

Will the hon. Gentleman give way?

I am just coming to a conclusion, so let me finish.

What is required is a major step forward in terms of parliamentary accountability, in which the Select Committee on Public Accounts and other Select Committees of the House are able to investigate, in a more transparent way than in the past, many of the accusations that have been made and which appear to have substance.

I beg to move, To leave out from “House” to the end of the Question, and to add instead thereof:

“supports the Government’s stance against international corruption; welcomes the action it is taking to tackle it; and recognises that the decision to discontinue the Serious Fraud Office (SFO) investigation into BAE Systems plc and Saudi Arabia was taken by the Director of the SFO alone for reasons of national and international security.”.

When the Liberal Democrats speak, money swills through Departments. The word “implausible” can be used liberally about the Prime Minister, the director of the Serious Fraud Office, the Attorney-General, senior civil servants and—very nearly—the Select Committee on Public Accounts. Prosecutions are stopped on a whim, and unsourced allegations from nameless people in newspapers are enough to rebut what Ministers of State have said in this House. An evidence-free zone surrounds the Liberal Democrat Front Benchers on this issue, and today we have heard a barrel-load of conspiracy theories that would disgrace a juvenile anorak.

I welcome the opportunity to respond to this debate. On the fundamental question of the Serious Fraud Office investigation nothing has changed, although we have had a number of debates on the matter in this House. I am going to take the opportunity to deal in some detail with the basis of SFO director’s decision to stop the investigation in question, since clearly—let me put it as politely as I can—somebody still has questions about it.

The decision was taken precisely according to the requirements of our current, unwritten constitution. No Government have, to date, changed these requirements, which have existed for a very long time—probably as long ago as when the Liberal Democrats were last in office, a period which is into three figures and growing. A question may emerge whether it will subsist for 100 years to come, which is at least the length of time it would take for the Liberals to get back into power on today’s showing—if anyone ever trusts such a totally disreputable set of peddlers of appalling scandal. The decision was taken by Robert Wardle, the director of the SFO. The SFO had been investigating for two and a half years whether officials were bribed to win the al-Yamamah contract for BAE Systems. Its view was that approximately another 18 months of investigation were necessary to decide whether there would be a prosecution. Unlike the other prosecuting authorities, the SFO is an investigatory body too.

The then Attorney-General, Lord Goldsmith, agreed with Mr. Wardle’s decision to halt the investigation. Lord Goldsmith had undertaken a Shawcross exercise before the decision. That exercise is undertaken when the Attorney-General consults ministerial colleagues on the public interest implications of proceeding with a prosecution—or, in the case that we are considering, an investigation. It is a well established and wholly legitimate procedure, which Sir Hartley Shawcross articulated in 1951, when he was Attorney-General.

Will the hon. and learned Lady give way?

I shall not give way during my account of the facts. After that, I shall do so.

rose—

As I said, I shall give the hon. Gentleman ample opportunity to intervene later, but I shall go through the facts first because so many attempts have been made to obfuscate what truly happened that it is vital that the public understand who is firing with ridiculously bent bullets from the Opposition Benches.

Mr. Wardle explained to the Constitutional Affairs Committee the nature of the Attorney-General’s superintendence role over the SFO. He said that he would brief the Attorney-General and the Solicitor-General on specific cases as a matter of routine— perhaps complex ones or those in which the public interest was likely to be important. He said that he did so in the al-Yamamah case and that the Attorney-General first initiated a Shawcross exercise in December 2005, consulting various Ministers. The hon. Member for Twickenham (Dr. Cable) tried to make something sinister of that, so let me make clear what happened. At that stage, views were expressed about the commercial implications that might flow from the investigation, but the Attorney-General concluded that it should proceed.

Let me mention the Organisation for Economic Co-operation and Development convention on combating bribery of foreign public officials in international business transactions, which we signed in 1997. Article 5 provides that investigating and prosecuting the bribery of foreign public officials shall

“not be influenced by considerations of national economic interest”

or

“the potential effect upon relations with another State”,

hence the decision in December 2005 that commercial interests should not be relied on as a reason for stopping the SFO investigation.

In 2006, Mr. Wardle said that evidential issues and the public interest re-emerged as questions. He ultimately decided that, although he would like to continue the investigation to ascertain whether charges could have been brought, he came to know of issues that made him reach the following decision:

“To continue the investigation was in my view likely to cause grave damage to the public interest, to national security, and I fully accept that the result of the investigation would be uncertain.”

Before that decision, Mr. Wardle consulted the Attorney-General, who received further views on the public interest in the form of a memorandum from the Prime Minister, which Mr. Wardle saw. Of course, I took no part in that decision, but I have now seen the memorandum from the former Prime Minister. It makes clear his view that developments in the SFO investigation could have given rise to a genuine and immediate risk of a collapse in UK-Saudi security, intelligence and diplomatic co-operation and that that was likely to have seriously negative consequences for the UK public interest in terms of national security and our highest foreign policy objectives in the middle east. The then Prime Minister was clear that the decision was a matter for the independent prosecuting authority, but felt that he would fail in his duty if he did not bring those issues to the Attorney-General’s attention.

The former Prime Minister set out the centrality of Saudi Arabia and co-operation with its authorities to our efforts to protect British lives, and the risk of such co-operation being withdrawn. The document is some pages long and it goes into specific detail, which makes it compelling. It also deals with defence and foreign policy issues and states that the Secretary of State for Defence confirms the defence issues, and that both he and the Foreign Secretary share the Prime Minister’s overall assessment of the damaging impact of the SFO investigation. That assessment is formed on the basis of advice from the Government’s most senior national security official advisers. The Prime Minister’s minute was accompanied by further assessments from very senior officials, including Sir Richard Mottram.

rose—

Wait for it.

Will the Solicitor-General give way?

I will not.

Those are not documents that could weigh lightly. Mr. Wardle told the Constitutional Affairs Committee that he had two subsequent conversations with the ambassador. Let me turn to that issue, because it is a subject of some—forgive me for using the term—scurrilous criticism of Mr. Wardle. What he did was to see those documents. He subsequently had two conversations with the ambassador, on 8 and 12 December—he had already had one conversation about the issues. At those meetings, he was able to probe the issues as much as he wished. Mr. Wardle is a professional lawyer at the head of an investigation and prosecuting body. I would expect him to be able to probe expertly the ambassador’s position not only on the centrality of Saudi Arabia but on the likelihood of the breakdown of relations, which would offer danger to national security.

Mr. Wardle told the Constitutional Affairs Select Committee:

“I was satisfied, on what I had been shown and certainly the conversations I had with our ambassador…that the co-operation would have been withdrawn. In fact…I would have been satisfied it would have been. Certainly there was a very serious risk.”

Asked by the hon. Member for Chichester (Mr. Tyrie), a Committee member, whether he thought everyone else would agree or whether others might not, Mr. Wardle said:

“I do not think it was finely balanced.”

Mr. Wardle was asked about Saudi benefits from an exchange of intelligence—the very point in a thunderstorm of allegations from the Liberal Democrats that the hon. Member for Twickenham raised. Mr. Wardle said that the question “Were the Saudis bluffing?” was something that he went into in his conversations with the ambassador. From what he was told, they were not.

Mr. Wardle has been clear that the decision was his. While he properly consulted the Attorney-General in his statutory superintendence role, he has made it clear that he came under no improper pressure from the Attorney-General. Mr. Wardle has said, again to the Committee that the right hon. Member for Berwick-upon-Tweed (Mr. Beith) chairs, that he had “no problem with the way the government has handled this” and that the then Attorney-General had acted “absolutely professionally” and played “with a straight bat”.

Mr. Wardle of course knew the state of the investigation, the input of expertise, the time that the SFO had already devoted to it and the £1.3 million estimated cost. He certainly understands the public interest in prosecuting corruption, since that is what he spends most of his life doing. Many of his cases are overseas corruption investigations. He has, with Lord Goldsmith, recently obtained blockbuster funding from the Treasury to investigate oil-for-food corruption in connection with the Saddam regime in Iraq. Mr. Wardle accepted in evidence to CASC that the decision had damaged the SFO’s reputation for dealing with corruption. He will therefore have quite obviously taken that danger into account as well. There can be no doubt that he was in the best possible position to balance competing considerations and come to a conclusion as to where the public interest lay.

Lord Goldsmith saw the same documents, knew the investigation and obviously understood the purpose and need for corruption prosecutions for the greater good. He agreed with Robert Wardle’s decision to halt the investigation. Lord Goldsmith was concerned that any prosecution might not succeed. Mr. Wardle would have preferred to try for further evidence and said only that the outcome was uncertain, and so they differed on that. Mr. Wardle took the decision. The Attorney-General’s difference was on whether, since our law of corruption involves the need to show payment to an agent without the approval of the principal, the payments to senior officials in this case might have been made to, or with the knowledge or consent of, the relevant principals—a matter of evidence. In the event, this difference of view was not tested, because of Mr. Wardle’s decision to halt the investigation on national security grounds.

The process that I have described is exactly what our constitution requires to happen, and the decision is evidenced by all concerned to have been taken independently, on information from a variety of sources that led Mr. Wardle to conclude as he did. I have set this out extensively because there has been innuendo upon innuendo, yet when the facts are thus set out, the innuendo is shown to be without any foundation. I hope now that it will now stop.

The hon. and learned Lady has referred extensively to the Select Committee. She has somehow implied that for the Select Committee to ask Mr. Wardle, who was an excellent witness before the Committee, a whole series of questions about how the decision had been arrived at—very similar questions to those that my hon. Friend the Member for Twickenham (Dr. Cable) has asked today—involved some kind of innuendo. Surely asking questions is an entirely proper means, both in that process and in this debate, of establishing the facts of the matter.

I have suggested absolutely no such thing. I have relied on the evidence. I am glad that the right hon. Gentleman agrees that Mr. Wardle was an excellent witness. I have spoken to him, and I would expect him to be an excellent witness and a wholly reliable figure. I see the right hon. Gentleman nodding. Can he not curb the excessive desire of those on his Front Bench to refer to what Mr. Wardle said as “implausible”, when his own view conflicts with that by finding him an impressive witness? In my view, the inquiry by the Constitutional Affairs Committee was penetrating and drew out essentially what I have just put forward—namely, that this decision was taken independently after a great deal of independent thought by the expert who was best placed to take the decision.

The Solicitor-General has just stated that she hopes the mud-slinging and constant returning to this issue will stop. Does she accept that if that does not happen, it will have a commercial impact on BAE Systems, its workers and its future orders? Carrying on in this manner is jeopardising thousands of jobs.

The hon. Gentleman makes his own point.

There was one particular part of the story that did not come out in the evidence to the Constitutional Affairs Committee, but which did come out in the Government’s written case in the judicial review. This involved the separate exercise at the end of September 2006 in which the Attorney-General’s office received further representations from the Cabinet Secretary about the public interest and raised the possibility of Saudi Arabia’s co-operation on counter-terrorism being prejudiced. Nevertheless, at that stage the Attorney-General decided that the investigation should continue. That point did not come out in the evidence to the Select Committee. What precisely changed between 30 September and the separate exercise in December?

I have told the House what forces prevailed when the decision was taken. Surely that is the important point. I have no doubt that issues were raised, re-raised and considered, but it is clear that at some point this came to a head and a decision had to be taken on whether we should jeopardise our national security.

The OECD has scrutinised the decision and the basis on which it was taken. The SFO and other UK authorities have co-operated fully with the OECD. Indeed, the OECD issued a press release expressing its appreciation of the openness with which we have given our explanations, although hon. Members would not suspect that for a minute, given what we have heard from the Liberal Democrats today. We are satisfied that the decision made by Mr. Wardle was compatible with the OECD anti-bribery convention. We do not believe that the convention was intended to stop national authorities acting to protect their national security.

Opposition Members referred earlier to a legal challenge. That legal challenge brought by the Corner House resulted in the view that we were entitled to act to protect our national security—that must be a commonplace to everyone but the Liberal Democrats—which was borne out by Mr. Justice Collins, who refused permission for judicial review. He said the challenge was “bound to fail” on the basis that

“it is clear that national security must prevail and that no State could be expected to take action which jeopardises the security of the State or the lives of its citizens”.

The claimants have now sought to renew their application for permission at an oral hearing, but the SFO will continue to resist the challenge. The head of the OECD Secretariat, Professor Michael Pieth, has himself apparently accepted that the OECD convention allows cases to be stopped on national security grounds, although he added the rider

“in an extreme case of necessity”.

I am not sure on what basis he chose to add that qualification, but it should not be thought, asserted or pretended that the OECD has reached any finding that the halting of the SFO investigation amounts to a breach of the convention. It has not. It is, in any event, not the job of the OECD to inquire into individual cases or to act as any sort of judicial body. The UK remains a strong supporter of the OECD convention, and the UK authorities are co-operating with the OECD’s review, which is about our anti-corruption laws in general.

Mention has been made of an investigation in the United States. The Home Office, as the central authority for these purposes, has received a request for mutual legal assistance from the United States. That request is receiving appropriate consideration in accordance with procedures and the relevant law. Any decision on that request will ultimately be a matter for the Home Secretary. Beyond that, I cannot comment at this stage.

I should like to speak about the future. I obviously accept that this case has been controversial—although not, I venture to suggest, as controversial as the Liberal Democrats would have us believe by stirring it up. I have tried to be as open as I possibly could be with the House today about the basis on which the director of the SFO took his decision. The same applies to the former Attorney-General and Solicitor-General, who went straight to Parliament when the decision was made, and they have been equally open in the numerous debates that have taken place in both Houses.

I think we need to consider, however, whether there are ways in which these issues can have brighter light thrown on them, perhaps at an earlier stage. As the House knows, the Prime Minister has committed the Government to a programme of constitutional reform, with the express intent of being as open and transparent as possible and of divesting the Government of powers that can be exercised by Parliament or with closer parliamentary supervision. It is well worth considering whether other ways can be found of informing Parliament about cases of this sort—in particular, those cases where decisions are taken on the basis of sensitive intelligence that cannot be made public.

I imagine that the Government would be in an altogether more comfortable position at large if we were able to say that, notwithstanding the total personal integrity and total constitutional propriety with which this advice was given, we had exposed material that underpinned it to a thoroughly security-checked group of Members of Parliament of all parties. That would have to be a group of people in whom obviously the public, but equally the security services and the prosecution authorities, had confidence.

I can say that the former Attorney-General himself provided information about such a case, in which a similar decision had been made—similar in the sense that it was a decision not to prosecute in the public interest. He recently gave to the Intelligence and Security Committee some background material that contextualised the decision and the legal reasoning behind it. It may be that more use could be made of such a mechanism or other options may be available.

The House will further know that, following the programme of constitutional reform set out in the Green Paper “The Governance of Britain”, we will shortly issue a consultation document on the role of the Attorney-General and the Solicitor-General: they have identical powers and responsibilities, save that on the current configuration they are accountable to different Houses. One aspect of that consultation will concern the Attorney-General’s responsibility for criminal prosecutions, and the Law Officers’ accountability to Parliament. As part of that consultation, the Attorney-General and I will be happy to consider any proposals on such topics.

I should remind the House of what strong action the Government are taking against corruption world-wide. First, we are committed to reform of our law. That is far from straightforward. A draft Bill was subjected to pre-legislative scrutiny by a Joint Committee of both Houses in 2003—I was on that Committee, and if there is to be blame for delay, I shall have to share some of it as a Back Bencher, as we did not support that form of the Bill. We thought that it could be improved, and we sent it back. The Government responded, but the issues are hugely difficult, and we have asked the Law Commission to research the issues and prepare a draft Bill. That will include consideration of the experience of other countries that have implemented international conventions in this area. We have asked the Law Commission to prioritise that, and have made additional resources available to expedite it. It aims to produce a consultation document this autumn, with a report and draft Bill in 2008.

Meanwhile, let me set out the SFO’s vigorous pursuit of international corruption. My hon. Friend the Minister for the Middle East will say more later about broader steps that we have taken and are taking. The SFO, however, is pursuing a large number of cases, including some relating to BAE Systems.

One such case concerns allegations of corruption in relation to a joint venture within the Czech Republic between BAE Systems and Saab to lease fighter planes to the Czech air force in 2002. The Swedes have started their own investigation, with the assistance of the SFO. On 10 May this year, the SFO called for a meeting at the headquarters of Eurojust at The Hague, with members of the Czech investigation team. The SFO tabled a proposal for a more co-ordinated approach to aid the investigation, which was agreed. Since then, there has been active co-operation, and meetings of the Czechs, Swedish prosecutors and the SFO took place last month in London.

The SFO is also investigating allegations of corruption, again in relation to BAE Systems, within the state of Romania. The case concerns a contract to sell refurbished frigates to the Romanian navy in 2002. Again, excellent support has been afforded by the Romanian authorities and a letter of request has resulted in a visit to Romania by SFO investigators, during which excellent co-operation was achieved.

An investigation is also taking place of a contract awarded by the Government of Tanzania in 1993 to upgrade its air traffic control systems. The contract was with Siemens Plessey, which was acquired by British Aerospace in 1998. The Prevention of Corruption Bureau of Tanzania has commenced its own investigation. The SFO has given considerable technical and legal support and advice to that body. SFO lawyers with junior counsel, an investigator and an experienced Ministry of Defence police officer visited Tanzania in May. Three members of the PCB are currently working on the investigation and are spending July at the office of the SFO, where they are receiving support and training.

Given that the Government and the SFO are pursuing all these additional investigations with regard to BAE Systems, does it not seem ridiculous that the Opposition should make such a big fuss over the al-Yamamah deal? As my hon. and learned Friend clearly outlines, the Government’s commitment is forthright.

The Government’s anti-corruption commitment is well known everywhere except on the Liberal Democrat Front Bench.

Another investigation concerns corruption in South Africa relating to the sale in 1999 of Hawk and Gripen jets to the South African air force. In June, an SFO team visited Pretoria and held a series of meetings with the national police authority, getting strong support.

The SFO is currently investigating nine other overseas corruption cases, not including the oil-for-food investigation, for which special ring-fenced funding has been agreed. The SFO mutual legal assistance section is giving sustained support to investigations in a number of other jurisdictions, including Zambia and Kenya as well as to the judicial inquiry in Uganda investigating allegations of mismanagement surrounding the Global Fund to Fight Aids, Tuberculosis and Malaria.

The SFO is widely acknowledged as a lead player in international investigations and provides support and training to anti-fraud and anti-corruption bodies in less developed jurisdictions. It is entirely right that the BAE Systems decision is contextualised in that way.

Finally, Mr. Wardle and the former Attorney-General and Solicitor-General, in respectively taking and advising on, in good faith, a decision, which it was their duty to do, were bound to land in controversy, probably whichever way they decided. If there are ways in which, in particular, democratically elected representatives of other parties can be more fully informed on such occasions, it may prevent scandalmongering of the kind that we have seen today, and more broadly it will be in the public interest.

In the ways that I have proposed or in other ways, we are open to suggestion in the spirit of openness and transparency that underpins the Green Paper “The Governance of Britain”. Now that I—like my predecessors and those of my noble Friend the Attorney-General—have done my best to be as open and transparent as it is possible to be within the terms of the current constitutional arrangements, I hope we can look forward to fair input and constructive support in our quest—in this area of the law as well as others—for a sound constitution for the 21st century.

I congratulate the Solicitor-General on her new role.

The motion is very widely drawn. It is much too widely drawn for our liking. It is too scattergun in its approach, and, dare I say, plenty of heat and too little light are emanating from the Liberal Democrats. The motion is too vague to receive our support today; however, we think it appropriate to debate the issue of dealing with overseas corruption and to review past events, not least in an attempt to establish a new consensus on the pressing issue of addressing bribery and corruption. In that context, I should make it clear that the Conservative party believes there is a need for further and clearer legislation to tackle overseas corruption.

Let me begin by saying something about the Tanzania contract, which is mentioned first in the motion and which we believe to be a relatively clear-cut issue. In 2001, the British Government were asked to consider applications for export licences for the sale to the Tanzanian Government of a military-level air traffic control system. The system cost some £28 million, and the heavily indebted Tanzanian Government took on more debt to secure it. The International Monetary Fund told the then Prime Minister, Tony Blair, that it was very concerned about the impact of the purchase on Tanzania’s external debt burden. Despite the opposition of all the most informed, respected and qualified observers, approval for the licences was forced through what I understand to have been a divided Cabinet by the Prime Minister. Last year the Serious Fraud Office and the Ministry of Defence began investigating the deal for alleged corruption. It appears that we are talking about £12 million of commissions, some 29 per cent. of the contract value being in commissions.

The Conservative party remains very concerned that the Tanzanian contract has damaged this country’s reputation for fighting corruption. That is why my hon. Friend the Member for Sutton Coldfield (Mr. Mitchell) called a debate on the issue as long ago as 30 January this year. I thank the Minister for taking the opportunity to tell the House today what point the investigations have reached, although I am not entirely sure from what she said that they have moved much further forward.

Corruption and bribery legislation in the United Kingdom has of course been under scrutiny for some time. Existing English law is based on the common-law offence of bribery and a range of add-on statutory offences. The scope of United Kingdom bribery offences was extended to bribes offered outside the United Kingdom by part 12 of the Anti-terrorism, Crime and Security Act 2001. However, as it seems to apply only to United Kingdom companies and not to foreign subsidiaries of such companies, its worth is limited.

Proposals for reform were made as a result of the Law Commission’s 1998 report, and in December 2005 the Government started a consultation on the reform of corruption laws. In March this year, however, the Home Office announced that no consensus had emerged from the consultation, and that the Law Commission would be asked to undertake a further review. In parallel with the Government’s efforts and in order to facilitate discussion of the need for comprehensive legislation, an alternative proposal was introduced as a Private Member’s Bill in the House of Lords in November last year. At this stage it is unlikely to translate into legislation. Nine years down the road and despite all the usual new Labour anti-corruption spin and promises, we are not even close to new anti-corruption legislation. Has that become a priority now that a new new Labour regime is in place? The Solicitor-General addressed that issue in her earlier remarks, but will she commit to such reform being a priority?

I have already said that we have asked the Law Commission to prioritise that. We have given it extra resources and when we receive its consultation document, which we hope and expect will be accompanied by a draft Bill, we will give it all priority. I should add that it is not for want of trying that the Government have not managed to change this law. Proposals were scrutinised in depth, including by Conservative Members in the Joint Committee on the draft corruption Bill, and they were sent back. I hope that our efforts have made the law—when it comes—better than before.

I thank the Solicitor-General for the confirmation that that is a priority.

On the al-Yamamah contract, the 1985 deal took three years to complete and involved the sale of fighters and trainer jets, the construction of two airbases and a range of other equipment and training, provided by more than 3,000 British experts stationed in Saudi Arabia. The contract is reported to have been worth some £40 billion to the UK over the last two decades, and it has secured our country’s position as one of the world’s top defence experts. The contract was renewed in 1992, after the Saudis agreed to buy another 48 Tornado fighters, and in 2005, in the deal’s third stage, the British agreed to sell up to 72 Typhoon planes.

The Serious Fraud Office launched an inquiry into allegations surrounding the al-Yamamah contract. SFO officers seized documents and arrested and interviewed some BAE Systems officials. The SFO discovered details of commissions being paid via Swiss bank accounts, although BAE and the Saudis have always denied any wrongdoing. The Saudi Government have also expressed anger at investigations into members of the Saudi royal family.

In December 2006, the then Attorney-General, Lord Goldsmith, stated that the SFO would discontinue its investigation. The SFO maintains that it was its own decision to pull out of the inquiry prompted by concerns over potential damage to national security, as opposed to its being forced to do so by the then Attorney-General. Lord Goldsmith stated that all relevant agencies were clear about the importance of UK-Saudi relations in the fight against terrorism. He said that if that co-operation were lost, there would potentially be damage to UK national security.

Some have argued that the SFO was told to stop the investigation because another multi-million pound deal with the Saudis might be lost. That is particularly relevant as it would constitute a breach of article 5 of the Organisation for Economic Co-operation and Development convention on combating bribery of foreign public officials in international business transactions. Its key words are:

“Investigation and prosecution of the bribery of a foreign public official…shall not be influenced by considerations of national economic interest”.

However, the then Attorney-General and the director of the SFO—and the Solicitor-General again today—have claimed that the decision was not based on commercial interest, and the then Attorney-General made it clear in the other place on 1 February that he did

“not believe that the convention does, or was ever intended to, prevent national authorities from taking decisions on the basis of such fundamental considerations of national and international security.”—[Official Report, House of Lords, 1 February 2007; Vol. 689, c. 378.]

We do not dispute that interpretation of the convention, but the Liberal Democrats must say whether they do, and cut through some of the confusion they have caused.

There is, however, a further question: to what extent were there fundamental security issues? On 16 January, a report in The Guardian suggested that Sir John Scarlett, head of MI6, will not endorse the idea of British national security being at risk as a result of the probe, and that MI5 had no evidence that Saudi Arabia would sever its security links with the UK. However, following the report, the Foreign Office stated:

“Contrary to the Guardian article, SIS (MI6) shared the concerns of others within the government over the possible consequences for the public interest of the SFO investigation.”

On 18 January, Lord Goldsmith stated that all relevant agencies were clear about the importance of UK-Saudi relations in the fight against terrorism and that if that co-operation were lost, there would potentially be damage to UK national security. The hon. Member for Twickenham (Dr. Cable) spells out the deliberations of the Attorney-General and the head of the SFO, but we understand that ultimately the SFO maintains that it decided to pull out of the probe and that it was not forced to do so by the then Attorney-General—although the Attorney-General has the technical power to do that. I note that the Solicitor-General has today given further details of the national security implications, which was helpful. The Attorney-General had another reason to end the probe. He said in the other place that he was

“sceptical about the evidential basis”.

He also said that after clearing his diary and spending some three days reviewing the evidence in detail with SFO investigators, and then taking leading counsel’s advice, he

“formed the conclusion that, ultimately, this case was not going to succeed”.—[Official Report, House of Lords, 1 February 2007; Vol. 689, c. 380.]

We ultimately accept that position, and would not want to spend yet more millions of taxpayers’ money on a trial doomed to failure from the start.

The Government also spoke about the problem of getting evidence from Saudi Arabia in a scenario in which no one from BAE Systems or Saudi has said that they had done anything wrong.

The point that the hon. Gentleman has not taken into account is that the director of the SFO disagreed with the Attorney-General’s assessment of the likelihood of success in an eventual prosecution. It is not just a political point; it is an important point about what the law said at the time and what evidence there was.

The hon. Gentleman is right, as the Solicitor-General said that he was. I do not think there is any dispute that there was a difference of opinion between the SFO and the Law Officers, but it seems that there was a progressive discussion, which eventually came to a conclusion.

My understanding is that Mr. Wardle believed that there was a possibility of a prosecution if the investigation continued, not that he had the evidence to justify a prosecution, nor that he believed that there would be a prosecution. It was the Attorney-General’s view that there was not and would not be enough evidence for a prosecution.

That is right. The Attorney-General came to the House of Lords and said that there were two planks to the decision. On one, he had a difference of opinion with the SFO. That has come out, and more details have been provided today, for which we should be grateful.

The Liberal Democrats’ motion states that

“serious damage has been done to the reputation of British business”.

The issue is complicated by the fact that it is not just a case of a private company contracting with the Saudi Arabian Government. As my hon. Friend the Member for Beaconsfield (Mr. Grieve) said:

“It is a relationship package at a Government-to-Government level rather than an ordinary commercial agreement.”—[Official Report, 7 February 2007; Vol. 456, c. 881.]

Furthermore, it is plain that the cultural view of bribery—or shall we call it greasing the wheels?—has changed dramatically in the UK since al-Yamamah was first signed more than 20 years ago. That cultural change was represented by the 1997 OECD convention. We could spend much time looking at the nature of agency payments, but as over-generous and distasteful as those payments and the related corporate entertainment may have been, and as many good headlines as were created for the tabloid press as a result, there seems to be inadequate evidence, after much investigation, to prove that a crime was committed.

On 7 February, my hon. Friend the Member for Beaconsfield, the shadow Attorney-General, concluded that there was no evidential basis for the Attorney-General having been involved in any wrongdoing in relation to the closure of the investigation. I see no reason to change our position now, but if any additional and significant information is available, it should be handed over to the relevant authorities for consideration.

The Liberal Democrats’ motion refers—their Front-Bench spokesman did not—to

“the consequences for the role of the Attorney General”.

However politically convenient it may be for them to attribute blame to the Attorney-General, we believe that there is insufficient evidence to sustain such an assertion.

Moreover, the Lib Dems seem to be missing the real issue, which is that what constituted the public interest was and is cultivated not by the Attorney-General, but by the Prime Minister, the Foreign Secretary and the Cabinet, all of whom have been remarkably quiet on the issue. My right hon. and learned Friend the Member for Kensington and Chelsea (Sir Malcolm Rifkind) said:

“If the ultimate reason for the decision was national security, it would be for neither the SFO nor the Attorney-General but the Prime Minister to express a view on the matter. It would be the Attorney-General, reflecting the view of the Prime Minister, who would then have discussions with the SFO.”—[Official Report, 7 February 2007; Vol. 456, c. 886.]

The Solicitor-General today set out some more detail from the Prime Minister’s memorandum, for which we were grateful. However, I note that it has been released now rather than at an earlier stage. I feel that the Government could have been more transparent in that regard.

When Robert Wardle was asked who took the decision and was told that the Prime Minister had asserted that he had, apparently he replied that it was his view that he had taken it.

I thank my hon. Friend for that clarification. Do the Lib Dems not realise how convenient it must be in practical terms for the current Labour Cabinet to let the ex-Attorney-General be the primary target for their criticism? Do the Lib Dems believe, in constitutional terms, that removing the Attorney-General and Solicitor-General from Parliament would mean that their accountability to Parliament would improve? I would say that it would not. As they would not be able to speak in Parliament, the Law Officers could even more easily be used as a scapegoat by the Cabinet if things were to go wrong.