British Government referred to the European Commission over BAE

1.10.00pm UTC (GMT +0000) Mon 12th Feb 2007

The Liberal Democrats are referring the British government to the European Commission over the abandonment of the investigation into BAE Systems' dealings in Saudi Arabia. This follows a Commission answer to a question from Chris Davies MEP, that non-action by a member state could be regarded as sanctioning of the payment of bribes. If the Commission finds that its rules have been broken, the government could face a potentially unlimited fine.

Liberal Democrat Deputy Leader said "On the face of it the British government may well be in breach of European competition rules. It is a fundamental principle of our membership of the EU that we compete fairly. If it could be shown that the British government's inaction in this area and the dropping of the SFO investigation gave BAE an unfair advantage then this would constitute a serious breach of the law."