David Robertson, Business Correspondent
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Saudi Arabia will wait for Gordon Brown to become Prime Minister before signing a £20 billion deal to buy Eurofighter Typhoon jets from BAE Systems, The Times has learnt.
Negotiations for the sale of 72 fighter jets are believed to be progressing well but the Saudis want the deal endorsed by Britain’s next Prime Minister.
The contract between the two governments is expected to be signed in late June or early July once a new leader is chosen by the Labour Party.
Last year the Saudis threatened to scrap the deal if the Serious Fraud Office continued an inquiry into BAE’s sale of Tornado jets in the 1980s. Diplomatic relations between the two countries began to recover only after the Government shut down the SFO investigation on the ground of national security.
With Tony Blair set to leave Downing Street soon, the Saudis want the next Prime Minister, expected to be Mr Brown, to endorse the Eurofighter deal.
This will be taken as a broader reaffirmation of the UK-Saudi relationship after last year’s breakdown in relations.
A source close to the negotiations said: “The most important thing for the Saudis is trust and they felt badly burnt by the SFO inquiry.”
The Eurofighter sale will be called Al-Salam and is one of the largest defence orders won by BAE.
A memorandum of understanding was signed by the UK and Saudi governments last year, but progress on a formal contract was derailed by the SFO inquiry. The SFO was looking into allegations of bribery and corruption in BAE’s dealing with Saudi officials, including members of the royal family. The allegations related to the Al-Yamamah oil-for-arms deal, which began in 1986 and has so far been worth £43 billion to BAE.
Al-Salam will further develop BAE’s role in Saudi Arabia as the company expects to build up to 48 of the aircraft there.
The remaining Typhoons will be built by BAE’s factory in Warton, Lancashire. The cost of the jets is forecast to be approximately £5 billion with a further £5 billion spent on equipment and weaponry. Maintenance and servicing will provide BAE with a long-term stream of income worth a further £10 billion.
The Government has been negotiating the sale of the Typhoons for a number of years with Des Browne, the Defence Secretary, and his predecessors Geoff Hoon and John Reid, visiting Saudi Arabia regularly. Mr Blair is also understood to have visited the kingdom twice to discuss the contract. By comparison, Mr Brown, the front-runner to replace Mr Blair, has had little involvement and, given the political sensitivity of this deal, the Saudis want him to endorse it publicly.
Separately it emerged yesterday that Mike Turner, the chief executive of BAE, earned £2.4 million last year, a 50 per cent increase on 2005.
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Come on Gordon sign the contract or tell the Saudis you will Lets protect our workers who are the most important thing along with the country. Any one who thinks the deal is corrupt have never lived in the real world or been in business Back Britain. Stop whinging you out there
Ian spencer, bournemouth, UK
There's always been slush money in one form or another in all major business and no legislation can or will stop it, so let's accept the world as it is and get the aircraft contracts confirmed and signed. Then an awful lot of men and women will breathe a sigh of relief in the knowledge their livlihood is secure for a few more years.
Chris Goodman, Fareham, England
Perhaps Brown will have the courage to reinstate the BAE corruption enquiry and in doing so to remove the tarnish from the once-admired Britsh reputation for honesty and fair dealing.
Geoff Wilson, Oxnard, USA
Isn't the real story about what the SFO Inquiry turned up and how it was brushed under the carpet for money and influence?
JMac, Providence, United States
What, pray tell me, is "the permissible future" - [Chris, Essex, UK]??
John Roberts, Seaford, England
Might just be that they've seen the western politician game of "I didn't sign that, my predecessor did!?" once too often.
They can think they are in control if they like, just so long as they're forking out 20billion squid and providing badly needed jobs, we can play along with the charade can't we?
How many communities/industries in western countries have been decimated by manufacturing jobs going over seas. Lesser of 2 evils me thinks. Less gung ho more ho ho.
Dean Butler, Brizvegas, Australia
I wonder, does anyone see a problem with supplying defense systems to a country that, despite it being the largest petroleum supplier in the world, provides financial support and training for terrorism, specifically al Qaeda?
Otis Boone II, Sacramento, California/USA
Is this some sort of joke? The Saudis are good at delaying us, will they actually sign the contract in the permissible future? It's ridicious that they can stop an official police investigation into their dealings, which has now been kindly shuffled under the carpet. Now we must obey again. Brown as prime minister? You have got to be kidding us, where will the corruption end?
Chris , Essex, UK
Ever get the feeling that everyone else but the UK government is one step ahead in any and every negotiation, appropos of Iran.
Matt C, London,
Are the British people about to suffer another ourageous move over which they have no control whatsoever? Surely the individuals who run this 'system' of ours must realise that Gordon Brown has proved himself to be no friend to the British people. Allowing him to step into No 10 Downing Street in this 'stage-managed' way is totally un-democratic. It is akin to installing a Hitler or Stalin at the helm, where he can smash his oversized boots ( in which he is already far too big) down on our heads. It stinks!!
D. O'Rorke, Farnham, Surrey
Apropos the article - isn't it most probable that the Saudis believe Blair was personally responsible for what they considered an actively hostile act in setting the SFO on them?
They appear to have concluded that this episode started and ended with Blair. That compared to past and prospective future relations it was an abberation. However in waiting for Brown - or whoever - they wish to be sure - and have signalled that - that there has been no systemic change.
Bob T, London, UK
Good news for the U.K. but it`s a pity we have to wait untill Brown, if or when takes office. I used to think any change from Blair would be an improvement but now Brown seems likely to be a change for the worse.
Denver Watt, Osakaj, UK
Good for the U.K. but it`s a pity we have to wait untill if or when Brown takes office. Do the Saudis think Brown would be a change for the better. Althougth it`s hard to imagine who could be worse than Blair. But Brown deserves the chance to emulate what Jim Callahagn did in May 1979.
Denver Watt, Osakaj, UK
"Saudis hold back on signing BAE deal until Brown in No 10"
Then it is unlikely that this deal will go ahead
Mark R, coventry,
Good for the UK but it`s a pity we have to wait untill if or when Brown takes office. Do the Saudi`s think he is an improvement on Blair. Or maybe they want him to emulate what Jim Callahagn did in May 1979.
Denver Watt, Osaka, UK