The Scandals of New Labour, Part II


Quite soon Scotland Yard’s cash-for-honours (see ‘The Scandals of New Labour, Part I’) investigating team is expected to hand its dossier over to the prosecuting authorities who must decide whether anyone at No 10 Downing Street should face trial for corruption, or for perverting the course of justice. If the decision is yes, it’s accepted that Tony Blair’s reign as Prime Minister will come to an end.


But while he remains in office, he has ultimate power over the decisions of the prosecutors. It’s a remarkable reading of the British Constitution, but it’s one he has already used to suppress inquiries into the sale of the Eurofighter Typhoon to Saudi Arabia. In December last year, Blair advised the Attorney General, Lord Goldsmith, to terminate a Serious Fraud Office (SFO) inquiry into the sale because the inquiry was not in the ‘national interest.’ Honours and weaponry are closely connected in the State’s deeply secret heart.

Eurofighter is a titanically expensive air-supremacy interceptor indispensable, were the RAF to fight America or France, as nothing else dare face the F-22 Raptor, or Dassault’s Rafale. But given that rugby Tests against France are now quite civilised, that prospect is remote. And to contingent wars, Eurofighter is irrelevant. Indeed, its demand for funds is a major reason for the infantry being dangerously overstretched in Afghanistan.

Eurofighter, F-22 and Rafale exist because the arms industry in Britain and France, and the US is expert in getting governments to buy systems irrespective of present need. But there is twist here to remember: though insanely overpriced, these planes have insurance value. Their technology is so advanced that there’s no foreseeable chance of China or any remnant of the Soviet empire producing an air-supremacy challenge. Provided, of course, it doesn’t leak the software systems particularly.

At this point British Aerospace (BAe) with fierce government backing insists mysteriously on selling Eurofighters to Saudi Arabia: a corrupt monarchy with uncertain loyalties, internal and external. Its need for foreign technicians to run advanced weapons creates basic insecurity (during the Gulf War, Patriot missiles were supplied to Saudia, and the US believed details of the Patriot system reached China via its weapons-agreements with Riyadh). And few worse destinations could be found for a machine which, if not exclusive, is a deadly swindle for the taxpayers who financed it. How can it happen?

Here we encounter Al Yamamah (‘the Dove’), the elaborate Anglo-Saudi arms-trade mechanism built into the dark matter of British politics since Margaret Thatcher’s reign. Lately, its covers have been coming loose, and Tony Blair has made at least five attempts to nail them back again.

Formally, BAe is a private corporation. In practice, however, its symbiosis with the State is so close that they function as a single organism, which persuades itself to need intricate weapons and rewards itself for creating them. Conducted largely in secret, it’s not a process conducive to rational decisions, or real concern over worlds safe for democracy. Its typical products have costs which even a rich country can’t meet comfortably on its own, and Al Yamamah gives BAe a customer of last resort when others like Spain and Germany, who also don’t plan to invade America, and have cut their Eurofighter orders hang back

The Eurofighter

Though details are guarded as closely as possible, Al Yamamah’s basic character is clear: it’s a deal under which Saudi’s oil revenues are available to purchase any British weaponry on which sufficient ‘commissions’ are given.

And when is a commission a bribe? This is the subject of the SFO’s long, arduous inquiry.

Before it was called off, the inquiry found that BAe paid large sums via offshore channels, when selling aircraft to South Africa which its airforce didn’t want, and radar systems to Tanzania which it can’t afford and doesn’t need. These look enough like bribes that courts will likely eventually be asked to make the call.

Al Yamamah has been a much harder target, but last year the SFO team reached the brink of a major breakthrough. The Swiss Government, taking note of new international anti-corruption rules, accepted the SFO’s application to scrutinise the financial records of businessmen who act as middlemen for the Saudi regime. And of these the most important is Wafic Said, a Syrian-born resident in theory of Monaco and in practice of Oxfordshire. ‘Resident’ doesn’t quite do it: he is the founder of the Said Business School at Oxford University, and one of the richest, best-connected businessmen operating in Britain. Jointly with Sir Charles Powell (as he was then), the foreign affairs adviser to Thatcher, Said was the architect of Al Yamamah.

Nobody is accusing him of wrongdoing: if BAe bribes Saudi officials it isn’t necessarily with his approval. But there is strong public interest expressed by the Financial Times the Liberal Democrat opposition and many Labour members in knowing just how Al Yamamah works, and the best starting point would be for the SFO to examine Wafic Said’s records.

Possibilities of major corruption at the heart of Britain’s defence industry are damaging London’s reputation as a financial centre. More important is the need to disclose what profit target justifies putting the Eurofighter’s super-sensitive technology at risk.

This is what Tony Blair is prohibiting using powers which in British constitutional theory he doesn’t possess.

Without doubt his knowledge of Al Yamamah affairs is comprehensive: his Downing Street chief-of-staff is Jonathan Powell, younger brother of Thatcher’s Sir Charles who since 2000 has been, via the Blair recommendation, Lord Powell of Bayswater. The question is whether it is being put to proper use.

Now every UK prosecution is in the Attorney’s gift and Lord Goldsmith is a political member of Tony Blair’s Cabinet. But he is supposed to decide prosecutions not as a politician, but as a Law Officer of the Crown, and much legal ink has gone to show he must exercise that role without reference to his eminent political colleagues. Yet Blair, remarkably, says it was his decision to stop the SFO investigation, because of ‘national security’ considerations he does not disclose.

And so back to the issue of an honours prosecution. Jonathan Powell, and of course Blair himself, are at the very centre of Scotland Yard’s inquiry. Both have been interviewed by Scotland Yard: Powell’s assistant Ruth Turner has been arrested, and it’s expected that the detectives will be visiting Powell again shortly. The Lord Chancellor, Baron Falconer, has said that the Attorney General should rescue himself from anything to do with the honours inquiry. Lord Goldsmith says no, he’s staying in charge.

But the Al Yamamah case shows his independence of the Prime Minister has no real existence. If Lord Goldsmith says that the honours inquiry should be wrapped up, and his decision has nothing to do with Tony Blair, the phrase ‘credibility problem’ will acquire a plangency beyond anything yet imagined.

Launched in 2004, New Matilda is one of Australia's oldest online independent publications. It's focus is on investigative journalism and analysis, with occasional smart arsery thrown in for reasons of sanity. New Matilda is owned and edited by Walkley Award and Human Rights Award winning journalist Chris Graham.