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Friday, December 15, 2006

It's The Money Stupid

Buried beneath the media hype over the report into Princess Diana's death, was news that the Serious Fraud Office (SFO) has decided to drop its investigation into BAE Systems over the Al-Yamamah deal.

The government intervened in this long running investigation, and proclaimed that "national and international security" took precedence.

The probe, which focused on alleged slush funds for senior Saudis, had caused a major diplomatic row and threatened billions of pounds worth of British arms trade with Saudi Arabia.

The SFO said:

"This decision has been taken following representations that have been made both to the attorney general and the director of the SFO concerning the need to safeguard national and international security

It has been necessary to balance the need to maintain the rule of law against the wider public interest. No weight has been given to commercial interests or to the national economic interest
."

Despite further assurances that this was a "national security matter" from the Prime Minister, who had earlier been interviewed by police in the cash for honours scandal (the first serving prime minister to ever be interviewed by police), cynics are of the view that economic considerations played a very large part in the ditching of this investigation.

Britain's reputation for financial probity is easy to squander, but will be very hard to earn back.

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