Goldsmith attacked for ending BAE inquiry

The Attorney General Lord Goldsmith faced sustained criticism over his role in the decision to end a corruption inquiry into a multi-billion pound Saudi arms deal.

Peers said the decision to drop the investigation into BAE Systems exposed weaknesses in the Attorney General's dual role as a senior law officer and a Government minister.

Harriet Harman, the Constitutional Affairs minister, demanded that the Attorney General publish his traditionally secret legal advice. She will use a speech tomorrow to declare that greater openness is needed to bolster confidence in the law officer's advice. She will say: "It is a contradiction in terms to have an accountable office holder who is not able to publish to those to whom he is accountable the advice he has given."

Lord Goldsmith has faced controversy after announcing the decision to drop a two-year Serious Fraud Office (SFO) inquiry into the al-Yamamah arms deal with Saudi Arabia before Christmas, despite arguing that continuing the investigation risked jeopardising national security and damaging relations with the Gulf state. BAE Systems denies allegations that it established a £60m slush fund to help secure the deal in the 1980s.

Yesterday Lord Goldsmith denied claims that Number 10 pressured him into dropping the investigation. He insisted the decision to drop the fraud inquiry had been taken by the SFO alone. But yesterday he faced calls for the office of Attorney General to be reformed, amid claims that the decision had damaged Britain's reputation abroad.

Lord Lester of Herne Hill, the Liberal Democrat peer, said: "The weaving and ducking, buck-passing and hand-wringing involving the Prime Minister, the Attorney General, the SFO and the Security Services as to why and how and at whose behest the criminal investigation was halted are a shambles."

He added: "Surely a member of the Government and a politician should not be in a position to decide whether to prosecute for a highly political offence, involving alleged corruption?"

Baroness Kennedy of The Shaws, the leading human rights lawyer, said: "We have been told that the decision over BAE Systems was based on diplomacy and security but have not had much evidence that it was about security. It seems that we were really anxious not to offend the Saudi princes, given the mess over Iraq."

The crossbench peer Lord Skidelsky added: "You either have a rule of law or you don't. It cannot be left to the Government or a statutory agency to decide the circumstances under which a particular law applies. That gives the Government licence to break the law whenever it wants to."

Baroness Williams of Crosby, the Liberal Democrat peer, said: "What are the consequences of all this? First the weakening of the battle against corruption, not just in the OECD area but in all those developing countries we have been addressing in lofty tones about good governance. The double standards are glaring. Second in an industry widely thought to pay huge 'bungs', where some companies have been working very hard to improve their reputation, the Attorney General's announcement has done great damage."

Lord Goldsmith said diverting decisions over investigations to a civil servant would prevent parliament from holding him accountable. He said: "The SFO is actively pursuing its investigations into a number of allegations of corruption, including BAE. I have told them that they should pursue those cases vigorously. It is important, and I have tried to send out a clear message, that no company or individual is above the law."